Transferring Title to LLC - Posted by Team Prosperity

And the illegal can sue you - Posted by John Merchant

Posted by John Merchant on August 05, 2007 at 10:47:41:

Frank is right on it being hazardous to pick up the Home Depot “hanger on” for your odd jobs.

Not only is he/she more likely to sue you because he/she has no financial backup, that IA is in no way prohibited from suing in the USA just like you or I could file a suit.

Logically the IA couldn’t sue or otherwise take advantage of our judicial system, but not true as many USA citizens have learned to their sorrow when they have been sued by the IA.

They sure can … - Posted by Frank Chin

Posted by Frank Chin on August 06, 2007 at 04:10:08:


I was just sued by one TWICE!!

Hired this fella as a subcontractor in the tryout period, that can last a few months. Gave the guy a chance to submit docs for employment, i.e., driver’s license, Social Security card, and green card.

Meanwhile, his work is not up to par, and also never came up with his documents, giving the excuse each time that he left it home. But when he told a police officer who asked him for his license, and said he left it home, and when the officers offered to drive him to his house to get it, with him replying that he doesn’t have the keys to his apartment on him, that I figured he really doesn’t have any documents.

Had an idea in his thick head that he’s entitled to several thousand dollars severance pay. So he went to small claims on one occasion to sue me for back pay, and another for “lost equipment”.

While we’re talking about insurance requirements, I carry GL insurance, and I know I’m covered, and the carrier would not squawk on a claim if I use licensed drivers to drive customer’s cars around, and then something unfortuante happened.

What if this guy’s been drinking, hit someone with a car and injured himself in the process??

Well, the carrier would certainly deny my claim since I didn’t check his driving history. and from my experience with the NY State WC people, WC wouldn’t pay either, as they need a valid SS#. And if a case like this goes to a jury, I don’t think I’ll get too much sympathy from any judge or jury for hiring an illegal, with no business to drive, driving around putting everyone in danger.

But, now I’m the bad guy for letting him go. Some people told me to call up INS, or whatever they call themselves nowasdays, on him.

Should I?? The wife tells me just to go on, not to waste any more time on this guy.

And this is another good hypothetical example of carrying insurance, having an LLC, and still be in legal peril since:

  • I haven’t met the insuer’s requirements for verifying worker’s docs.
  • Even if I have WC, given what they told me, they won’t pay, but the hospitals would surely come after me personally on WC claims despite an LLC, because state law says they can.


  • If you’re insured, make sure you know all the requirements, and WHAT is covered.
  • If you rely on LLC’s, know the exceptions are and when they can come after you personally.

Frank Chin

Re: They sure can … - Posted by Rich-CA

Posted by Rich-CA on August 06, 2007 at 21:58:22:

WC is a very tricky area. I get the “California RE Law Review” by Bob Bruss. A recent court decision stated that if a worker is working without a license in a licensed trade (like the roofer) the law considers them your employee for WC claims. The case involved a tree trimmer (IA) who fell and electrocuted himself (but survived). The court said that he was an employee even though he was hired as a day laborer.

People just don’t understand what kind of risk they take when they hire an IA. No way of knowing what the skill level is, for certain they know nothing of doing work to code, and you get to pay for those shortcomings if anything goes wrong.

CA Sup.Ct held injured wrkr NOT employee - Posted by John Mechant

Posted by John Mechant on August 10, 2007 at 14:04:38:

I did a quick Google scan and found this case and also found that CA Supreme Court reversed the lower court and held that the homeowner was NOT liable under CA WC laws and the injured itenerant worker was NOT homeowner’s employee.

Here’s the decision:

Homeowner Who Hired Unlicensed Contractor Shielded from OSHA, California Supreme Court Rules

August 18, 2003

Back to Industry Newsletters

By Scott S. Shepardson
Thelen Reid Brown Raysman & Steiner LLP

Homeowners in California can breath a little easier after a recent decision by the California Supreme Court. It held that a residential property owner who hired an unlicensed contractor to trim a tree was not liable for failure to comply with Cal/OSHA safety requirements governing the work. Fernandez v. Lawson, 2003 DJDAR 7411.

The case arose when the homeowner, Lawson, hired Anthony’s Tree Service to trim a 50-foot palm tree at his home for $450. Lawson was not aware that a contractor’s license was required to trim trees more than 15 feet tall. Also, the owner of Anthony’s, Eliseo Lascano, had presented Lawson with a business card bearing what appeared to be a contractor’s license number. In fact, neither Anthony’s nor its employee who was to perform the tree trimming, Miguel Fernandez, had a contractor’s license. While trimming the tree, Fernandez fell and was seriously injured.

Fernandez asserted that he was Lawson’s employee by operation of Labor Code §2750.5 because Anthony’s was an unlicensed contractor. Accordingly, he sought worker’s compensation benefits from Lawson. Lawson’s homeowner’s insurer denied coverage because Fernandez had not worked for Lawson long enough to meet the statutory definition of an employee eligible for benefits.

Fernandez then sued Lawson for violation of the California Occupational Health and Safety Act, Labor Code §6300, et seq. Before trial, Lawson moved for and was granted summary judgment on the ground that Cal/OSHA requirements did not apply to non-commercial tree trimming at a private residence. On appeal, the Court of Appeal overturned the trial court’s decision, holding that trimming of a 50-foot palm tree was not a household domestic service and thus was not excepted from Cal/OSHA requirements. Lawson appealed that ruling.

The California Supreme Court reversed the Court of Appeal. It noted that Cal/OSHA does not define what constitutes a household domestic service. The Cal/OSHA statutory scheme does, however, except several broad categories of employees, including federal agencies, maritime workers and railroad workers. The court reasoned that the exception for household domestic service workers also should be construed broadly. It noted that the Industrial Welfare Commission defined household occupations to include all services related to maintenance of a private household, including gardeners. “The term household domestic service implies duties that are personal to the homeowner.”

The court noted there was no indication that Lawson wanted the tree trimmed for any commercial purpose. Thus, it was more appropriate to consider the work a household domestic service excluded from OSHA requirement. The court also noted that public policy and practical considerations made it extremely unlikely that the Legislature intended to subject homeowners to the rigors of complying with Cal/OSHA requirements when hiring domestic workers to perform work around their homes.

Accordingly, the court refused to hold the homeowner liable for violations of Cal/OSHA requirements after hiring an unlicensed contractor to trim trees in a non-commercial setting. It is important to note that there could be a different result if the homeowner operated a business from his home because a court then could consider the work a commercial activity that was governed by Cal/OSHA.

Got cite for that CA decision? - Posted by John Merchant

Posted by John Merchant on August 09, 2007 at 08:17:04:

Please post the court citation as I’d like to read that decision.

As we all know, CA can lead the nation in whacky laws and decisions.

Thanks for the research, John - Posted by Frank Chin

Posted by Frank Chin on August 11, 2007 at 05:20:01:


Good work John.

Having read it through, it would appear that if Lawson was not the “owner occupant”, but instead the landlord of a SFH rental, and Fernandez injured himself while trimming the tree, then it would be considered a “commercial” activity.

And I wonder how CA law differs from NY law holding “officers” of entities responsible for not having WC when they should have.

And in using small contractors to do work at rentals, I often do not request insurance information. Only when I did larger jobs that I requested them, and have been told the “insurance lapsed”.

Now, WC is required of licensed contractors in NY, BUT exempt for one man operations. So, it leaves the “non owner occupant” landlord exposed to risks, even insured and with an LLC.

And with hospitals broke and looking for money, I would imagine they have people on ataff well acquaitned with WC laws, and won’t hestitate to hassle me if someone like Fernandez fell from a tree, even long after someone like Fernandex may have moved back to Mexico.

Frank Chin

Re: CA Sup.Ct held injured wrkr NOT employee - Posted by Rich-CA

Posted by Rich-CA on August 10, 2007 at 15:06:16:

I will find that newsletter. The case in question is more recent than 2003.

Re: Got cite for that CA decision? - Posted by Rich-CA

Posted by Rich-CA on August 09, 2007 at 09:44:45:

Sorry. If I go back through the newsletters I can dig it up, but the reason I only cite the newsletters rather than something more specific is that my memory will retain general info like what was said (high level not details) and where I found it. I’d have to go back and look it up, but never seem to find time for that (not being an attorney).

For the latest in CA decisions and their impact I strongly suggest the Bob Bruss (who is an attorney) California Real Estate Law newsletter. Some of the decisions make a great deal of sense and a few are bogus.