February 15, 2012 – Jackson Construction, Inc., A New Mexico Corporation, and Paul Jackson, Qualifying Party for Jackson Construction Inc. v. Glenn R. Smith, in his capacity of Director, State of New Mexico Workers’ Compensation Administration, No. 30,454

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Filing Date: 	February 15, 2012
NO. 30,454
JACKSON CONSTRUCTION, INC.,
A New Mexico Corporation, and
PAUL JACKSON, Qualifying Party
for Jackson Construction Inc.,
Petitioners-Appellees,
v.
GLENN R. SMITH, in his capacity of
Director, STATE OF NEW MEXICO
WORKERS’ COMPENSATION
ADMINISTRATION,
Respondent-Appellant.
APPEAL FROM THE DISTRICT COURT OF OTERO COUNTY
Jerry H. Ritter, Jr., District Judge
Robert M. Doughty II, P.C.
Robert M. Doughty II
Alamogordo, NM
for Appellees

Workers’ Compensation Administration
Roberta Y. Baca, Assistant General Counsel
Albuquerque, NM
for Appellant

OPINION
HANISEE, Judge.
{1} 	Paul Jackson is the sole owner of Jackson Construction, Inc. (JCI), a New
Mexico-licensed general contractor. 	JCI does not employ any workers or executives
other than Mr. Jackson, who serves as JCI’s president and sole board member. 	In
2008, Mr. Jackson affirmatively elected to exempt himself from coverage by the
Workers’ Compensation Act (the Act). 	We are asked to decide in light of Mr.
Jackson’s election, whether JCI remains subject to the Act and must nevertheless
procure workers’ compensation insurance. 	We hold that JCI is required to do so
under a plain-meaning reading of NMSA 1978, Section 52-1-6(A) (1990), which
states that the Act “shall apply to all employers engaged in activities requir[ing a
construction license] . . . regardless of the number of employees.” (Emphasis added.)
We thus reverse the district court’s decision and affirm the order of the Workers’
Compensation Administration (the WCA).
I. 	STANDARD OF REVIEW
{2} 	The issue on appeal concerns the scope of Section 52-1-6(A), which defines the
classes of employers that are subject to the Act. 	We must ascertain whether the
Legislature intended those classes defined in Section 52-1-6(A) to encompass
construction corporations such as JCI, whose only employees are executives that have

2
opted out of the Act’s coverage. The issue is one of statutory construction, which we
review de novo. Republican Party of New Mexico v. New Mexico Tax. & Rev. Dep’t,
2010-NMCA-080, 	¶ 	8, 	148 	N.M. 	877, 	242 	P.3d 	444, 	cert. 	granted,
2010-NMCERT-008, 148 N.M. 943, 242 P.3d 1289. 	Our approach to statutory
construction is to first examine the plain meaning of the statute at issue. If the plain
meaning is clear—“not vague, uncertain, ambiguous, or otherwise doubtful”—we
apply the statute as written, without second guessing the Legislature’s selection from
among competing policies or differing ways of effectuating a particular legislative
objective. State ex rel. Helman v. Gallegos, 117 N.M. 346, 352, 871 P.2d 1352, 358
(1994).
II. 	DISCUSSION
A. 	The Plain Meaning of Section 52-1-6(A) Subjects JCI to the Act
{3} 	Section 52-1-6(A), reads as follows: 	“The provisions of the Workers’
Compensation Act . . . shall apply to employers of three or more workers; provided
that act shall apply to all employers engaged in activities required to be licensed
under the provisions of the Construction Industries Licensing Act . . . regardless of the
number of employees.” (Emphasis added.) There are two prongs to the portion of this
section relevant to determining which construction entities are subject to the Act: (1)
the entity must be an employer under the Act, and (2) the entity must engage in

3
activities requiring a construction license. There appears to be no dispute that JCI
meets the criteria under the second prong, in that JCI engages in activities requiring
a properly maintained construction license. Accordingly, we focus our analysis on the
first prong, whether or not JCI is an employer under the terms of the Act.
{4} 	The Act provides a definition of employer that states “‘employer’ includes any
person or body of persons, corporate or incorporate . . . employing workers under the
terms of the Workers’ Compensation Act.” NMSA 1978, § 52-1-15 (1989) (emphasis
added). The Act then defines worker as:
As used in the Workers’ Compensation Act . . . , unless the
context otherwise requires, “worker” means any person who has entered
into 	the 	employment 	of 	or 	works 	under 	contract 	of 	service 	or
apprenticeship with an employer, except a person whose employment is
purely casual and not for the purpose of the employer’s trade or business.
The term “worker” shall include “employee” and shall include the
singular and plural of both sexes.
Section 52-1-16(A). Reading Section 52-1-6(A) within the context of the provided
definitions, it is apparent that for a construction employer to be subject to the Act, it
must employ at least one “worker.” Applying the definition to the traditional form of
third-party construction labor is straightforward enough. But applying the definitions
to owners, shareholders, and executives of corporations proves more difficult. Given
Section 52-1-6(A) and its one-worker requirement for construction companies, the
question whether JCI is subject to the Act turns on whether Mr. Jackson can be

4
counted as a worker. 	Because the Act does not itself resolve this question, we
consider it to be ambiguous in this respect and must now ourselves determine when
an officer, shareholder, or executive is considered a “worker” under the Act. See N.M.
Dep’t of Health v. Compton, 2001-NMSC-032, ¶ 18, 131 N.M. 204, 34 P.3d 593
(noting that when the court is confronted with legislative silence on a particular issue,
we resort to other statutory construction aids, keeping in mind that our goal is to
facilitate the operation of the act in question and any specified goals of the
Legislature); see also Sunwest Bank v. Nelson, 1998-NMSC-012, ¶ 14, 125 N.M. 170,
958 P.2d 740.
{5} 	For guidance, we turn to Garcia v. Watson Tile Works, Inc., 111 N.M. 209, 803
P.2d 1114 (Ct. App. 1990). Garcia provides an instructive framework for analyzing
whether officers, shareholders or executives are counted as “workers” in determining
if an employer is subject to the Act. 	Garcia recognized three distinct classes of
personnel associated with entities potentially subject to the Act: 	(1) non-worker
executives, (2) executive employees, and (3) workers. 	Id. at 210-11, 803 P.2d at
1115-1116. 	With respect to the first category, this Court held that non-worker
executives are not to be counted in determining which employers are subject to the
Act under Section 52-1-6(A). 	Garcia, 111 N.M. at 210, 803 P.2d at 1115. 	But
executive employees and workers are to be counted—even when those executive

5
employees use the opt-out provision as contained in NMSA 1978, Section 52-1-7
(2003). Garcia, 111 N.M. at 210-11, 803 P.2d at 1115-16 (“We note that subsection
E of Section 52-1-7 specifically provides that those who elect not to be covered are
nonetheless to be counted in determining whether the employer comes within the
Act.”).
{6} 	With respect to the case at bar, the record below supports the finding that Mr.
Jackson is an executive employee. While the WCA’s findings could be mistakenly
construed to conclude that JCI had no workers—including Mr. Jackson, such an
interpretation is contradicted by (1) the recitation of facts in both parties’ briefs, (2)
Mr. Jackson’s own affirmative election form, and (3) his testimony during the
administrative hearing. The WCA’s brief states, “[JCI] is comprised solely of one
employee, Paul Jackson[.]” 	JCI’s brief is also in accord, stating, “Paul Jackson
considers himself as the ‘executive employee’ of [JCI.]” Additionally, Mr. Jackson
signed and filed an affirmative election form with the WCA establishing that “I,
PAUL DOUGLAS JACKSON, am a ‘worker’ as defined in [the Act, and] I am
employed by JACKSON CONSTRUCTION, INC[.]” 	And finally, Mr. Jackson’s
own testimony before the WCA maintained his position that he is the “executive
employee” of JCI. Given the substantial evidence in the record and the absence of any
to the contrary, we think the more accurate construction of the WCA’s findings is that

6
JCI did not employ any workers apart from Mr. Jackson. As an actual employee, Mr.
Jackson would therefore not fall under the class of executives recognized in Garcia
as non-workers.
{7} 	JCI largely agrees that Mr. Jackson is an executive employee and that a reading
of the plain language of Section 52-1-6(A) in concert with Section 52-1-7 would result
in Mr. Jackson being counted to determine JCI’s one-worker status. 	JCI instead
focuses its argument on two related points: 	(1) Mr. Jackson’s affirmative election
form should exempt him from being considered as JCI’s worker, as a matter of policy,
and (2) a reading of the plain language of the statute would contravene legislative
intent and result in an absurdity (i.e. requiring entities to maintain insurance, even
when their only qualifying employee has elected to forego coverage). 	We are not
persuaded by either argument.
B. 	An Executive Employee Affirmative Election Does Not Exempt the
Employer From Being Subject to the Act
{8} 	JCI’s argument that Mr. Jackson’s affirmative election form should exempt him
from being considered as JCI’s worker is based on the following two rationales: (1)
the definition of employer includes an inherent requirement that qualifying workers
“be covered by workers’ compensation insurance,” and (2) Mr. Jackson is the sole
shareholder of JCI and should be treated as a sole proprietor, rather than an employee.
While we agree that the definition of employer requires that the entity “employ[]

7
workers under the terms of the Workers’ Compensation Act,” we disagree that the
language requires that 	all 	counted workers actually be eligible for workers’
compensation insurance coverage. Section 52-1-15.
{9} 	There are several instances in which a worker is counted to determine whether
an employer is subject to the Act but is not ultimately covered under the Act’s
provisions. See, e.g., Howie v. Stevens, 102 N.M. 300, 302, 694 P.2d 1365, 1367 (Ct.
App. 1984) (recognizing that an illegally employed minor would presumably be
counted to determine application of the Act to the employer but has the right to
circumvent the Act’s coverage and pursue remedies in tort), Garcia, 111 N.M. at 211,
803 P.2d at 1116 (holding that past employees who were regularly employed are still
to be counted to determine worker minimums even though those workers are now no
longer employees and thus ineligible for coverage). But the most important example
is contained in Section 52-1-7(E) itself, which mandates that executive employees are
to be counted, even if they have “filed an affirmative election not to be subject to [the
Act].”
{10} 	JCI argues for a construction of Section 52-1-7(E) that would limit its reach to
only those non-construction employers with three or more workers. We disagree that
Section 52-1-7(E) is meant to apply so narrowly. As discussed above, construction
employers must also employ a specific number of workers to be considered

8
employers—at least one. 	Furthermore, the two clauses of Section 52-1-6(A) are
contained in the same sentence, and the Legislature has provided no structural
evidence that they are to be read separately. Finally, Section 52-1-7(E) contains no
express language indicating that its reach only applies to one clause of the sentence
contained in Section 52-1-6(A), but not the other. 	Rather than re-structuring the
Legislature’s language in such a result-oriented manner, we give it its plain import:
Executive employees may exempt themselves from coverage but are still counted in
determining whether their employer is subject to the Act.
{11} 	As for JCI’s second point in support of its contention that Mr. Jackson’s
affirmative election form should exempt it from coverage, we are similarly
unpersuaded. JCI goes to great lengths, as did the district court below, to analogize
Mr. Jackson’s corporate position as sole shareholder and lone employee to that of a
sole proprietor. While we have no precedent suggesting why such an analogy should
matter, both JCI and the district court rely for support on a past decision of the Second
Judicial District Court, Jogi v. New Mexico Workers’ Comp. Admin., No. CV 2007-
08948, slip op. (N.M. Dist. Ct. Feb. 29, 2008). We remind counsel that decisions of
the district court, even in their appellate capacity, have no precedential effect in this
Court. Inc. Cnty of Los Alamos v. Montoya, 108 N.M. 361, 364, 772 P.2d 891, 894
(Ct. App. 1989) (“Unpublished case law from state district or federal courts is

9
instructive, but not binding on this court.”). This is true even where, as in Jogi, this
Court subsequently denied a petition for writ of certiorari. 	State v. Myers,
2011-NMSC-028, ¶ 25, 150 N.M. 1, 256 P.3d 13 (stating that a denial of a writ for
certiorari does not “indicate any affirmation or adoption of law” and has no
precedential value).
{12} 	Without suggesting any approval for the decision rendered in Jogi, we note that
its facts are distinguishable from those in the case before us. In Jogi, a sole proprietor
named Bjorn Jogi operated the construction company Bjorn Construction. 	The
company never employed any workers other than Mr. Jogi, who affirmatively elected
to exempt his company from the Workers’ Compensation Act. After an administrative
hearing, the WCA found Bjorn Construction subject to the Act. Mr. Jogi appealed to
the Second Judicial District Court, which reversed and held that Bjorn Construction
was not an employer under the Act.
{13} 	While there are similarities between Mr. Jogi’s sole-proprietor-run construction
company and Mr. Jackson’s solely owned and operated construction corporation, the
affirmative election forms filed in each case are distinct and appear to seek entirely
different legal ends. Mr. Bjorn’s affirmative election form was entitled, “Exemption
for Construction Industry Licensees Who Are Not Employers (Sole Proprietors or
Partners),” which appears to affirm that Bjorn Construction is not to be considered an

10
employer. 	Mr. Jackson’s form on the other hand, was entitled “New Mexico
Executive Employee Affirmative Election Form,” which appears to exempt only Mr.
Jackson from coverage, not JCI as a whole.
{14} 	The 	difference 	is 	likely 	rooted 	in 	the 	legal 	distinction 	between 	sole
proprietorships and corporations. A “corporation is a legal entity, separate from its
shareholders, directors, and officers[, who] are not personally liable for the acts and
obligations of the corporation.” Stinson v. Berry, 1997-NMCA-076, ¶ 17, 123 N.M.
482, 943 P.2d 129. While a sole proprietor is simply “a single individual who owns
all the assets of a business, is solely liable for its debts and employs in the business
no person other than himself.” Section 52-1-7(F)(2). We thus remain unconvinced
that the reasoning used in Jogi should be imported to the case at bar.
C. 	The Interpretation of the Statute Is Neither Absurd nor Contrary to
Legislative Intent
{15} 	JCI’s final argument is that the provision of the act that requires companies to
provide coverage for injured workers—whose only employees are exempt from
coverage—to nonetheless procure insurance, is absurd and does not serve the
Legislature’s purpose. The argument fails for at least two reasons: (1) the coverage
is not superfluous as JCI asserts, and (2) rational policy arguments exist for the
Legislature’s adoption of a bright-line rule that subjects all construction employers to
the Act.

11
{16} 	Contrary to JCI’s assertion that requiring construction corporations like itself
to obtain coverage would contravene legislative intent, we point to several instances
in which such coverage would be useful and protective of workers. As Mr. Jackson
acknowledged during his administrative hearing before the WCA, if a construction-
related accident occurred and his subcontractor was not in compliance with the Act,
JCI as general contractor could be held liable to the injured worker under certain
circumstances. Related to this point, Mr. Jackson also acknowledged that he did not
routinely execute formal contracts with his subcontractors, nor did he ensure
definitively that his subcontractors carried the required workers’ compensation
coverage. 	Second, situations can develop between a general contractor and a
subcontractor, such that the general contractor inadvertently becomes a “constructive
employer” of the subcontractor’s employees. 	See Harger v. Structural Servs., Inc.,
121 N.M 657, 660-61, 916 P.2d 1324, 1327-28 (1996) (recognizing the creation of
“constructive employer[s]” under NMSA 1978, Section 52-1-22 (1989)).
{17} 	With respect to JCI’s assertion that our construction of Section 52-1-6(A)
results in an absurdity, we point to rational policy arguments in support of such a rule.
The Legislature’s decision to adopt a rule that requires a heightened standard of
participation by small construction employers can be attributed to the inherent
dangerousness of construction activity. While we cannot know for certain that our

12
Legislature’s focus was to address dangerousness due to the lack of subject-specific
legislative history in New Mexico, other States have cited that rationale as supporting
similar changes to their own workers’ compensation acts. See, e.g., Ficocelli v. Just
Overlay, Inc., 932 So.2d 1230, 1233 (Fla. Dist. Ct. App. 2006) (“[I]n 1989, the
legislature extended coverage to employees of construction industry employers who
employ one or more employees . . . to ensure that workers performing inherently
dangerous work in the construction industry would be covered, even when they are
working for small employers[.]”). Interestingly, the changes in our own Act requiring
increased participation by small construction companies occurred shortly after the
change by the Florida legislature. See § 52-1-6 (“[E]nacted by Laws 1990 (2nd S.S.),
ch. 2, § 4.”). 	Finally, such a rationale certainly supports the election by our
Legislature to focus on the nature of a business’s activity—construction—rather than
its size, and can be seen as neither absurd nor contrary to the Act’s purposes.
VI. 	CONCLUSION
{18} 	We construe Section 52-1-6(A) to require all incorporated construction
employers to abide by the strictures of the Act, even those who employ only executive
employees that have elected to individually opt out of coverage under Section 52-1-7.
We thus reverse the district court and affirm the WCA’s determination that JCI as a
construction employer is subject to the Act and must procure the required workers’

13
compensation insurance.
{19} 	IT IS SO ORDERED.
J. MILES HANISEE, Judge
WE CONCUR:
LINDA M. VANZI, Judge
TIMOTHY L. GARCIA, Judge