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State, Division of Workers' Comp. v. Titan Enters., LLC

Supreme Court of Alaska

November 28, 2014


Petition for Review from the Alaska Workers' Compensation Appeals Commission, Laurence Keyes, Chair. Alaska Workers' Compensation Appeals, Commission No. 11-011.

Aesha Pallesen, Assistant Attorney General, Anchorage, and Michael C. Geraghty, Attorney General, Juneau, for Petitioner.

David A. Nesbett, Nesbett & Nesbett, PC, Anchorage, for Respondents.

Before: Fabe, Chief Justice, Winfree, S towers, and Bolger, Justices. Maassen, Justice, not participating.


Page 317

FABE, Chief Justice.


The Alaska Workers' Compensation Board fined an uninsured employer a substantial amount because the employer had since 2005 operated for a significant period of time without carrying statutorily required workers' compensation insurance. This was not the employer's first failure to carry the required insurance. On appeal, the Alaska Workers' Compensation Appeals Commission affirmed part of the Board's decision, but it reversed the Board on the amount of the fine and remanded the case to the Board for further proceedings. The employer then asked the Commission for an award of attorney's fees as a successful party on appeal. The State, Division of Workers' Compensation, which had initiated the Board proceedings, opposed the award on the basis that it, too, had been successful on a significant issue. The Commission awarded the employer full fees of approximately $50,000. The Division petitioned for review of the fee award, and we granted review. Because the Commission failed to consider the Division's partial success in the appeal, we reverse the Commission's decision and remand for further proceedings.


Todd Christianson is the sole owner of several businesses, including the three involved in this proceeding: Titan Enterprises, LLC; Titan Topsoil, Inc.; and CCO Enterprises, LLC.[1] At various times Titan has failed to carry workers' compensation insurance, in violation of Alaska law. According to the Board's decision in this case, Titan had

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at least one employee injury when it was uncovered, and Christianson paid out of pocket for that injury. The Board found that Christianson and his businesses had " a long history" of work-related injuries, with 13 reported injuries; the most serious was a leg amputation, which happened when the business was insured.

Alaska Statute 23.30.075(a) requires an employer to either buy workers' compensation insurance or provide proof that it is capable of self-insurance for workers' compensation claims. Failure to maintain workers' compensation insurance may subject an employer to criminal penalties.[2] In addition, beginning in 2005,[3] the legislature gave the Division of Workers' Compensation the authority to investigate employers without the required coverage and to initiate proceedings before the Board to fine these employers.[4] Alaska Statute 23.30.080(f) permits the Board " to assess a civil penalty of up to $1,000 for each employee for each day an employee is employed" while an employer is uninsured. The money generated by any fines is deposited in the Workers' Compensation Benefits Guaranty Fund,[5] created in 2005; [6] when money is available, the Fund pays the claims of injured workers whose employers do not have compensation coverage.[7]

The Division began proceedings against Titan in 2008 for failing to carry workers' compensation insurance and failing to provide proof of workers' compensation liability coverage. Titan came to the Division's attention when " a routine records check" showed that Christianson's companies' insurance policies had been cancelled in March 2006, " for nonpayment of premium." The records also showed Titan had not obtained a new policy until October 2007; that policy was cancelled in early January 2008. Christianson paid out of pocket for an uncovered injury to a worker in 2006. The Division investigated Titan at that time but closed its file without requesting a Board hearing.

The Board held two hearings on the Division's petition. Neither party was represented by counsel before the Board: Christianson represented himself and his companies, and Christine Christensen, an investigator, represented the Division. The parties presented conflicting evidence about the length of Titan's lapses in coverage and the reasons for them. They also disputed the extent to which Christianson observed corporate formalities and kept the ...

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