W.C. No. 4-268-404Industrial Claim Appeals Office.
June 18, 1998
FINAL ORDER
The respondents, Unique Development Inc. (Unique Inc.) and Unique Development II L.L.C. (Unique Limited) seek review of an order of Administrative Law Judge Friend (ALJ), which determined the claimant was their employee at the time he sustained a work-related injury, and ordered the respondents to pay benefits and penalties on account of the injury. We affirm.
The ALJ’s pertinent findings of fact may be summarized as follows. Unique Limited is a company organized for purposes of developing residential housing units known as “Sundown Ridge.” Unique Inc. is a corporation whose main function is to administer the business of Unique Limited. Brian Sweeney, (Sweeney) an employee of Unique Limited, hired the claimant to perform framing at Sundown Ridge commencing February 1, 1994. On February 22, 1994, the claimant suffered a compensable leg injury arising out of and in the course of his employment. As a result of the injury the claimant was unable to return to his regular job duties. Therefore, the ALJ awarded temporary total disability benefits based upon an average weekly wage of $673.96. Further, the ALJ determined there was insufficient evidence to establish a differentiation between Unique Inc. and Unique Limited because they did not operate as separate entities. Consequently, the ALJ determined that the claimant was an employee of both respondents, and held them jointly and severely liable for the claimant’s benefits. In so doing the ALJ rejected the respondents’ argument that the claimant was an “independent contractor.” Rather, the ALJ found that the claimant was not customarily engaged in the framing trade as an independent contractor, because the claimant did not use a trade name, the claimant did not advertise as an independent contractor, the claimant did not have employees, and Unique Limited paid the claimant in his individual name.
I.
On review, the respondents first contend the ALJ erred in finding claimant was their “employee” and not an independent contractor. We perceive no error.
The respondents do not dispute that the claim is governed by former § 8-40-202(2), C.R.S. 1993, which applies to injuries sustained on or after April 12, 1993, and before July 1, 1995, the effective date of Senate Bill 95-072 (SB 72). See 1993 Colo. Sess. Laws, ch. 103 at 355. The applicable version of §8-40-202(2) provides that:
“any individual who performs services for pay for another shall be deemed to be an employee, irrespective of whether the common-law relationship of master and servant exists, unless such individual is free from control and direction in the performance of the service, both under the contract for performance of service and in fact and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed.” (Emphasis added).
Accordingly, the claimant established that he was the respondents’ “employee” by proof that he performed services for the respondents in exchange for a wage. Once the claimant established this relationship, the burden shifted to the respondents to prove the claimant was not an employee by showing the claimant was free from control and customarily engaged in an independent trade.
Whether the respondents sustained their burden of proof was a question of fact for resolution by the ALJ. Locke v. Longacre, 772 P.2d 685 (Colo.App. 1989); Weld County Kirby Co. v. Industrial Commission, 676 P.2d 1253 (Colo.App. 1983); §8-40-102(2), C.R.S. 1993 (appropriate to consider unemployment insurance case law in determining employment status). Accordingly, we are bound by the ALJ’s determinations if supported by substantial evidence and plausible inferences drawn from the record. Section 8-43-301(8), C.R.S. 1997; F.R. Orr v. Rinta, 717 P.2d 965 (Colo.App. 1985). Furthermore, this standard requires that we defer to the ALJ’s credibility determinations, and his assessment of the sufficiency and probative value of the evidence.
A.
The respondents admit that Sweeney was an agent of Unique Limited with authority to oversee the “daily management” of the construction at Sundown Ridge. The respondents also concede that Sweeney had actual authority to hire independent contractors to work at Sundown Ridge. However, the respondents argue that the ALJ erroneously found Sweeney had “apparent authority” to hire the claimant as their “employee.” We are not persuaded.
The respondents essentially concede that Sweeney was authorized by them to hire individuals to perform services for pay at Sundown Ridge. This concession supports the ALJ’s finding that the claimant sustained his initial burden to prove he was their employee.
Further, the ALJ could, and did, reasonably infer from the claimant’s testimony and the testimony of the respondents’ witness, Daniel Brown, that Sweeney had apparent authority to hire the claimant as the respondents’ employee. (Tr. pp. 7-8, 29, 32) Johnson v. Chilcott, 658 F. Supp. 1213 (Dist. Colo. 1987); Kuehn v. Kuehn, 642 P.2d 524 (Colo.App. 1981) (an agent acquires apparent authority to act when his principal caused third parties to believe the agent is so authorized). Moreover, Brown admitted that his brother, the vice president of construction, ratified Sweeney’s decision to hire the claimant. (Tr. p. 39). Consequently, the issue becomes whether the respondents proved the claimant was in fact, free from control and customarily engaged in an independent business.
B.
To be “customarily engaged in an independent business,” the worker must “actually and customarily provide similar services to others at the same time he or she works for the putative employer.” Carpet Exchange of Denver, Inc. v. Industrial Claim Appeals Office, 859 P.2d 278 (Colo.App. 1993). The purpose of this test is to protect the security of workers who receive substantially all of their earnings from one employment. Barge v. Industrial Claim Appeals Office, 905 P.2d 25 (Colo.App. 1995).
Contrary to the respondents’ argument, evidence the claimant worked as a framer for 10 to 12 years before the injury did not compel the ALJ to find the claimant was engaged in an independent trade or business. This is true because the claimant testified he never worked as an independent contractor during that time, he was previously paid an hourly wage for framing, he did not have a trade name, did not advertise his services, and he did not have an employer tax identification number. (Tr. pp. 11, 12). This testimony amply supports the ALJ’s finding that the claimant was not customarily engaged in an independent business at the time of the industrial injury, and thus, the ALJ’s finding must be upheld See Savio House v. Dennis, 665 P.2d 141 (Colo.App. 1983).
Moreover, under § 8-40-202(2) the respondents must prove the claimant was free from control and customarily engaged in an independent business to establish the claimant was an independent contractor. Thus, the ALJ’s finding that the claimant was not customarily engaged in an independent business supports his conclusion that the respondents failed to sustain their burden to prove the claimant was not their employee at the time of the injury.
It follows that we need not consider whether the record supports the ALJ’s finding that the respondents exercised control over the claimant’s work. Furthermore, the provisions of SB 72 took effect July 1, 1995, and are not applicable to this claim. 1995 Colo. Sess. Laws, ch. 112 at 345; Rosa v. Industrial Claim Appeals Office, 885 P.2d 331 (Colo.App. 1994) (changes in substantive law are prospective only). Therefore, we do not address the respondents’ arguments concerning the amendments enacted by SB 72 and currently codified at § 8-40-102(2), C.R.S. 1997.
II.
The respondents also contend the ALJ lacked authority to determine that Unique Inc. is an instrumentality of Unique Limited, and thus, they argue the ALJ erred in finding the claimant was an employee of Unique Inc. and Unique Limited. Again we disagree.
The ALJ has jurisdiction to determine whether the claimant was entitled to workers’ compensation benefits, and if so “by whom.” Oxford Chemicals Inc., v. Richardson, 782 P.2d 843
(Colo.App. 1986); Hoffman v. Aero Mayflower Transit, Inc., W.C. No. 4-108-582, October 11, 1995, aff’d. Aero Mayflower Transit, Inc., v. Hoffman, (Colo.App. No. 95CA1882, August 22, 1996) (not selected for publication). Insofar as there was conflicting evidence concerning the identity of the claimant’s employer, the ALJ was authorized to resolve the conflict, and drawn reasonable inferences from the evidence.
Mr. Brown’s testimony supports the ALJ’s determination that there is no significant distinction between the operations of Unique Inc. and Unique Limited. (Tr. pp. 28-29, 31, 38). This is also evidenced by the claimant’s written framing “Proposal” to “Unique Development” dated February 28, 1994, which was accepted by Sweeney.
Furthermore, the record contains an invoice marked Exhibit C, which reflects the purchase of materials by Unique Inc., which were delivered to the claimant. Taken as a whole, the record contains substantial evidence to support the ALJ’s finding that the claimant was an employee of both Unique Limited and Unique Inc. Moreover, we may not reweigh the evidence on review, and decline the respondents’ invitation to do so. Delta Drywall v. Industrial Claim Appeals Office, 868 P.2d 1155 (Colo.App. 1993).
III.
Lastly, the respondents contend the ALJ applied the wrong legal standard in determining the claimant’s average weekly wage. The respondents point out that, where, as here, the claimant is paid on a “piecework” basis, the claimant’s average weekly wage is to be computed in accordance with § 8-42-102(2)(e), C.R.S. 1997. That statute requires the ALJ to calculate average weekly wage by taking the total amount the claimant earned in the twelve months
preceding the injury and dividing that by the number of pay periods the claimant was employed during those twelve months.
However, § 8-42-102(3), C.R.S. 1997, states that where “the foregoing methods” cannot fairly compute the claimant’s average weekly wage because the claimant has not worked a sufficient length or time or for any other reason, the ALJ may compute the average weekly wage in “such other manner” as will fairly determine the claimant average weekly wage. Thus, the ALJ has broad discretion to calculate a fair wage under the unique circumstances of the case. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993).
Here, the ALJ implicitly determined the claimant’s average weekly wage could not be fairly computed under § 8-42-102(2)(e) because the claimant worked for the respondents only 22 days before the industrial injury. (Finding of Fact 10). Therefore, the ALJ exercised his discretion under § 8-43-102(3), and determined average weekly wage by dividing the claimant’s total earnings during this employment by 22.
Under the circumstances presented here, we cannot say the ALJ erred in the exercise of his discretion. Consequently, we lack grounds to interfere with the ALJ’s determination of average weekly wage. See Hall v. Home Furniture Co., 724 P.2d 94
(Colo.App. 1986) (order based on exercise of discretion may not be set aside in the absence of an abuse of discretion).
IT IS THEREFORE ORDERED that the ALJ’s order dated October 23, 1997, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL ____________________________________ David Cain ____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate thisOrder is commenced in the Colorado Court of Appeals, 2 East 14thAvenue, Denver, CO 80203, by filing a petition for review with thecourt, with service of a copy of the petition upon the IndustrialClaim Appeals Office and all other parties, within twenty (20)days after the date this Order is mailed, pursuant to section8-43-301(10) and 307, C.R.S. 1997.
Copies of this decision were mailed June 18, 1998 to the following parties:
David Saunders, 23 E. 6th Ave., Longmont, CO 80501
Unique Development, Inc., c/o C. Edward Jones, Esq., 5613 S. Prince St., Littleton, CO 80120
G. Daniel Brown, Managing Partner, Unique Development II, L.L.C., 5235 Sky Trail, Littleton, CO 80123
Marlin Burke, Esq., 1700 Broadway, Ste. 1800, Denver, CO 80290 (For the Respondent)
C. Edward Jones, Esq., 5613 S. Prince St., Littleton, CO 80120 (For the Respondent)
John Evangelisti, Esq., 1120 Lincoln St., No. 711, Denver, CO 80203 (For the Claimant)
William J. Macdonald, Esq., 1890 Gaylord St., Denver, CO 80206 (For the Claimant)
BY: _______________________