Estate of Suskovich v. Anthem Health Plans, Va.
| Citation | 553 F.3d 559 |
| Decision Date | 22 January 2009 |
| Docket Number | No. 08-1070.,08-1070. |
| Parties | ESTATE OF Anthony J. SUSKOVICH, Plaintiff-Appellant, v. ANTHEM HEALTH PLANS OF VIRGINIA, INC., Anthem Insurance Companies, Inc., Anthem Life Insurance Company, Health Management Systems, Inc., Orientation Benefit Administrators, Inc., the Wellpoint Companies, Inc., Wellpoint, Inc., and its Pension and Welfare Benefits Plans, the Fiduciaries and Administrators of the Plans, and Trasys, Inc., Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Croall (argued), Porter, Wright, Morris & Arthur, Cincinnati, OH, for Defendants-Appellees.
Before CUDAHY, FLAUM, and SYKES, Circuit Judges.
Until his sudden death in 2006, Anthony J. Suskovich worked as a computer programmer for WellPoint, a health insurance company, and Trasys, an information technology (IT) company. In exactly what capacity he worked for those two companies is the subject of this present case. Suskovich's estate claims that he was a regular employee, and worse, one that was not paid overtime or enrolled in benefits programs for which he was eligible, and who owes state and federal tax agencies various taxes that WellPoint and Trasys should have withheld. WellPoint and Trasys claim that Suskovich was an independent contractor, and thus ineligible for benefits or overtime, and that he owes back taxes because of his own failure to file proper tax returns or pay his withholding taxes. After the district court granted summary judgment to WellPoint and Trasys, the estate brought this appeal.
For the following reasons, we affirm the district court's grant of summary judgment.
Suskovich was a computer analyst and programmer who worked, at various points over ten years, with one of the defendants in this case, WellPoint/Anthem ("WellPoint"). WellPoint is a related group of companies that provide health care coverage to clients throughout the United States. In 1995, Suskovich formed his own Indiana corporation, Indy Imaging, Inc., which he listed on his resume as "Indy Imaging, Inc. d/b/a Anthony J. Suskovich." WellPoint retained Suskovich and other IT professionals to work on the company's IT team in 1996. While no record exists of any contractual agreement between Suskovich and WellPoint, Suskovich stated on a form he used to access WellPoint's computer system that he was a "contractor," and he billed WellPoint for his time on an invoice form that he had created, stating that he was a "salesperson" who sold "computer consulting" to WellPoint. He was paid at an hourly rate of $60, resulting in an annualized salary of about $200,000, and received no benefits. For tax purposes, his salary was reported on a 1099 form rather than a W-2.
Suskovich was retained for limited durations, usually about six months, although these limited engagements were often rolled over into new engagements. WellPoint stopped retaining Suskovich in 1999, but because of his expertise with various IT issues, sought to bring him back in 2000. Due to the company's new vendor consolidation program, Suskovich could only be retained if his services were offered through a preferred vendor. At this point, Suskovich began his relationship with the other defendant in the present case, Trasys, Inc., which agreed to bring Suskovich on as part of their team of IT professionals working with WellPoint. He was compensated for his time by submitting invoices to WellPoint, which would then approve them and return them to Trasys, which in turn paid Suskovich. Again, for tax purposes, Trasys issued Suskovich a 1099 form rather than a W-2. The 1099 forms that WellPoint and Trasys issued Suskovich listed his income as "nonemployee income" or "other income."
In February 2001, Suskovich signed an "Independent Contractor Agreement" with Trasys; this was apparently the first time that Suskovich and Trasys had put Suskovich's relationship to the company in contractual form. Trasys labeled the writing as an independent contractor agreement, but the form contained terms that could refer to both an employment relationship and an independent contractor relationship; for instance, it referred to "wages" and consideration for "employment," but was also an agreement that only extended for a temporary period of time, and that began with the words "Trasys offers to contract you...." As before, Suskovich would have to submit his hours to WellPoint and have them approved before he could receive any compensation from Trasys. Suskovich was paid $62 an hour under the agreement, and received no other benefits.
Throughout his time with WellPoint and Trasys, Suskovich worked on a variety of projects, and occasionally worked on different projects for different divisions of WellPoint at the same time. For instance, in 2001 Suskovich was working on mainframe issues for WellPoint's Federal Employee Program while simultaneously working on a print-mail project for a different division. In 2005, Suskovich entered into an agreement with Anthem Health Plans of Virginia to work on a Medicaid subrogation project; Suskovich did not go through Trasys when arranging this work, but rather drafted and submitted an "Agreement for Consulting Services with WellPoint Virginia" in which he described himself as an independent contractor and that nothing in the contract should be construed as creating an employer-employee relationship. Under the terms of the agreement, Suskovich was responsible for all income tax, unemployment insurance, and withholding. Anthem Health Plans of Virginia issued Suskovich a 1099 form rather than a W-2, and the other divisions of WellPoint and Trasys were apparently unaware of this additional work.
During his time with WellPoint, Suskovich worked in a cubicle at WellPoint, with a computer supplied to him by the company. He apparently did not have a direct supervisor and worked under the WellPoint employee who was supervising whatever project he was working on. He occasionally worked offsite, but was expected to work at WellPoint's offices and to answer to the supervisors on his projects.
Sometime in August 2005, WellPoint informed Suskovich that they would not be keeping him on past the end of the year; in mid-September, they declined to renew his contract through Trasys. WellPoint was attempting to train one of their in-house programmers in the work that Suskovich was doing for them, but when getting her an outside training program proved to be too difficult, WellPoint asked Suskovich to train her. Suskovich began looking for additional work at this time, and WellPoint was disappointed with his efforts in training the in-house employee and attending his project meetings. WellPoint told Trasys that they would replace Suskovich with someone from another vendor if he did not improve his performance, and Trasys then told WellPoint that Suskovich's performance would improve.
Suskovich continued to look for other work, and approached Tom Eberhard, who had previously an independent contractor with WellPoint but who had accepted an offer of employment from the company and had risen to a managerial role over some of the projects Suskovich worked on. Eberhard, along with another former IT contractor, Bruce Jeschke, who had also become a full-time employee of WellPoint, had made various attempts over the years to coax Suskovich into working for the company directly. In late 2005, Suskovich asked Eberhard if he had any work for him. Eberhard told him that he had no need for any contract work but did discuss the possibility of full-time employment with WellPoint. Suskovich's initial salary demand was apparently too high, however. Before Eberhard had a chance to negotiate, Suskovich contracted pneumonia and passed away suddenly.
Before his death on January 1, 2006, the IRS was investigating Suskovich because of his failure to file tax returns for several years. In response Suskovich filed delinquent tax returns for 1999-2002, and tax returns for the 2003 and 2004 tax years. On those returns, he listed himself as a self-employed computer consultant, and claimed that he derived his income from his computer consulting business. He also claimed substantial business deductions, again related to his computer consulting business. After the investigation, Suskovich agreed to a monthly levy on his income from the IRS, although at the time of his death he had not paid the full amount of his back taxes, including $100,000 in tax debt to the IRS and approximately $33,000 in tax debt to the state of Indiana.
Suskovich's wife sought relief from this outstanding debt as an innocent spouse, but the IRS denied her request. In March 2006, Kathy Suskovich, as the personal representative of Suskovich's estate, filed the present lawsuit. The estate initially sought declaratory relief in the form of a judgment that Suskovich was an employee of WellPoint and then a joint employee of Trasys and WellPoint. On the basis of that determination, the suit also sought a monetary award for compensation that Suskovich was supposedly denied under the Fair Labor Standards Act and other benefits that Suskovich was denied under the Employee Retirement Income Security Act, as well as indemnification for Suskovich's tax liabilities. The estate moved for summary judgment on April 6, 2007, and WellPoint and Trasys likewise moved for summary judgment on all counts. In December 2007, the district court denied the estate's motion for summary judgment and granted summary judgment to WellPoint and Trasys, finding that Suskovich was an independent contractor rather than an employee. This appeal followed.
The estate's appeal raises three issues. First, the estate claims that the district court mistakenly found that the deciding factor with...
To continue reading
Request your trial
-
Callahan v. City of Chi.
...points out, the FLSA uses a much broader definition of “employee” than is found at common law. SeeEstate of Suskovich v. An them Health Plans o f Va., Inc., 553 F.3d 559, 565 (7th Cir.2009) ; see also Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (19......
-
Siegel v. Shell Oil Co.
...issue as to any material fact and that the movant is entitled to judgment as a matter of law." Estate of Suskovich v. Anthem Health Plans of Va., Inc., 553 F.3d 559, 563 (7th Cir.2009) (quoting Fed. R. Civ. P 56(c)). A genuine issue of material fact exists if "the evidence is such that a re......
-
Spiteri v. Russo
...relationship" will be important to determining whether a plaintiff is an independent contractor); Estate of Suskovich v. Anthem Health Plans Of Va., Inc., 553 F.3d 559, 568 (7th Cir. 2009) (finding on summary judgment that the plaintiff "never enjoyed any guarantees that his work would exte......
-
First Midwest Bank v. City of Chi.
...to give testimony. Federal Rule of Evidence 601"creates a broad presumption of competency." Estate of Suskovich v. Anthem Health Plans of Va., Inc. , 553 F.3d 559, 570 (7th Cir. 2009). "Competency of a witness to testify ... is a limited threshold decision ... as to whether a proffered witn......
-
Witness
...place and that an agreement was reached was their own self-serving testimony. Estate of Suskovich v. Anthem Health Plans of Va., Inc. , 553 F.3d 559, 570-71 (7th Cir. 2009). The Indiana Dead Man’s Statute states, in brief, that in a case where an executor or administrator of an estate is a ......