Accord Human Res., Inc. v. Indus. Claim Appeals Office of Colorado

• Decision Date: 27 May 2010
• Docket Number: No. 09CA1356.,09CA1356.
• Citation: 275 P.3d 697
• Parties: ACCORD HUMAN RESOURCES, INC., Petitioner, v. INDUSTRIAL CLAIM APPEALS OFFICE of the State of Colorado, and Colorado Division of Unemployment and Training, Respondents.
• Court: Colorado Court of Appeals

275 P.3d 697

ACCORD HUMAN RESOURCES, INC., Petitioner,

v.INDUSTRIAL CLAIM APPEALS OFFICE of the State of Colorado, and Colorado Division of Unemployment and Training, Respondents.

No. 09CA1356.

Colorado Court of Appeals, Div. V.

May 27, 2010.

The Nugent Law Firm, P.C., Brian M. Nugent, Fort Collins, Colorado; Rothgerber Johnson & Lyons LLP, Jaclyn K. Casey, Denver, Colorado, for Petitioner.

No Appearance for Respondent Industrial Claim Appeals Office.

John W. Suthers, Attorney General, Laurie Rottersman, Assistant Attorney General, Denver, Colorado, for Respondent Colorado Division of Unemployment and Training.Opinion by Judge LICHTENSTEIN.

Petitioner, Accord Human Resources, Inc. (Accord), seeks review of a final order of the Industrial Claim Appeals Office (Panel). In that order, the Panel reversed a hearing officer's decision holding that the Division of Employment and Training (Division) lacked authority to treat five related Accord entities as a “single employing unit,” combine their unemployment tax accounts into a single account, and retroactively collect allegedly delinquent taxes for the years 2002 through 2007.

Because we conclude that the hearing officer correctly determined the Division lacked authority to treat the separate Accord entities as a single employing unit or a single employer, we set aside the Panel's decision and remand with instructions to reinstate the decision of the hearing officer.

I. Background

Accord is a professional employer organization based in Oklahoma and operating in many states, including Colorado. Over time, Accord formed other organizations including Accord Human Resources of California, Inc., Accord Human Resources of California II, Inc., Accord Human Resources of New York, and Accord Human Resources of Colorado, Inc., all of which are licensed to do business in Colorado.

The Division assigned each Accord entity a separate unemployment insurance tax account number. However, following a 2004 transfer of a large number of employees from Accord to Accord Human Resources of Colorado, Inc., the Division conducted an investigation of the tax accounts for those entities. That investigation culminated in a 2007 tax “liability determination” in which the Division combined the five separate Accord entity unemployment tax accounts into a single account with a blended experience rating and retroactively imposed “delinquent” taxes and interest totaling $543,988.29 for the years 2002 through 2007.

Accord appealed the tax liability determination and the matter proceeded to a hearing. Although the Division's tax liability determination referenced two statutory provisions that allegedly supported the determination, at the hearing the Division stipulated that one of these provisions, currently codified as section 8–76–104, C.R.S.2009,¹ was not applicable, and that the sole statutory grounds for combining the separate Accord tax accounts and imposing delinquent taxes was section 8–70–114(1), C.R.S.2009.

The Division argued that section 8–70–114(1) authorized it to treat the separate Accord entities as a “single employing unit” based on issues of common ownership and control, to combine their respective tax accounts into a single account, and to retroactively assess taxes based on the newly created single account. However, the hearing officer concluded that nothing in the language of section 8–70–114(1) gave the Division this authority. The hearing officer further determined that, because each Accord entity met the statutory definition of an “employer,” the Division was required by statute to maintain a separate tax account for each entity. See § 8–76–103(1)(a), C.R.S.2009. Consequently, the hearing officer reversed the Division's tax liability determination.

The Division appealed the hearing officer's decision to the Panel. Focusing on a statement in the hearing officer's decision that “the Accord entities should be considered a single employing unit for the purposes of determining an individual's entitlement to unemployment insurance benefits,” the Panel concluded that section 8–70–114(1) also authorized the Division to treat the Accord entities as a single employing unit for purposes of tax liability. Accordingly, the Panel reversed the hearing officer's decision and reinstated the Division's tax liability determination.

II. Analysis

Accord contends the Panel erred in concluding that section 8–70–114(1) authorized the Division to treat the separate Accord entities as a single employing unit or to otherwise consolidate their separate tax accounts. We agree.

A. Standard of Review

We may set aside the Panel's decision if the decision is erroneous as a matter of law. See § 8–74–107(6)(d), C.R.S.2009. We review an agency's conclusions of law de novo. See Davison v. Indus. Claim Appeals Office, 84 P.3d 1023, 1029 (Colo.2004); see also Bell v. Indus. Claim Appeals Office, 93 P.3d 584, 586 (Colo.App.2004) (appellate court reviews de novo the Panel's ultimate legal conclusions). Our de novo review extends to an agency's interpretation of statutes. See Benuishis v. Indus. Claim Appeals Office, 195 P.3d 1142, 1145 (Colo.App.2008).

B. Issue Preservation

As a threshold matter, we reject the Division's assertion that Accord is precluded from challenging the Division's treatment of the separate Accord entities as a “single employing unit” or from arguing that only “employers” are subject to taxation under the statutory scheme and that each employer is entitled to its own tax account number.

These issues were raised and argued extensively before the hearing officer and were an integral part of the hearing officer's decision. The record also reflects that Accord filed a responsive brief to the Division's brief before the Panel specifically addressing the former issue.

The Division also asserts that Accord “waived any objection” to the hearing officer's determination that the Accord entities should be considered a single employing unit for benefits purposes by failing to appeal that determination to the Panel. However, because Accord prevailed before the hearing officer, it was not required to appeal any particular determination by the hearing officer, much less one that did not impact the overall decision. Indeed, Accord was not even required to file a responsive brief before the Panel. See Dep't of Labor & Employment Reg. 11.2.15.12, 7 Code Colo. Regs. 1101–2 (providing that the Panel “may, in its discretion, permit the non-appealing party to file a brief in response to the brief filed by the appealing party”). In any event, Accord specifically argued in its brief to the Panel that each of the Accord entities was a separate employing unit and that section 8–70–114 “did not justify the Division's consolidation of the[se] separate employing units.”

Under these circumstances, we conclude these issues have been preserved for our review in this appeal.

C. The Division's Alleged Authority Under Section 8–70–114(1)

The parties do not dispute that each of the Accord entities met the statutory definitions of both an “employing unit,” see § 8–70–114(1), and an “employer.” See § 8–70–113(1)(a)(II), C.R.S.2009. The Division, nevertheless, argues that based on issues of common control or common ownership among the Accord entities, the following sentence in section 8–70–114(1) gave it authority to treat the separate Accord entities as a single employing unit and assign them a single tax account:

All individuals performing services within this state for any employing unit that maintains two or more separate establishments within this state shall be deemed to be employed by a single employing unit for all the purposes of articles 70 to 82 of this title.

We interpret a statute to give effect to the intent of the General Assembly, and to effectuate legislative intent, we first look to the plain and ordinary meaning of the words the General Assembly has chosen to utilize. See Ortega v. Indus. Claim Appeals Office, 207 P.3d 895, 898 (Colo.App.2009); see also Dubois v. Abrahamson, 214 P.3d 586, 587 (Colo.App.2009).

Here, we perceive nothing in this language of section 8–70–114(1) that gives the Division authority to treat separate statutory employing units as a single employing unit based on elements of common ownership or control.

Rather, this provision presumes the existence of a single employing unit and merely provides that if the single employing unit maintains two or more “establishments” within Colorado, individuals performing services within the state for those establishments are deemed to be employed by the single employing unit for all purposes. See Dewhurst v. Indus. Claim Appeals Office, 148 P.3d 378, 380 (Colo.App.2006) (noting that section 8–70–114(1) “merely defines an employing unit for purposes of determining benefits for those working in Colorado and describes one situation in which such a worker will be deemed to have been employed by a single employing unit”).

Insofar as the Division urges an interpretation of this provision that equates multiple “establishments” with multiple “employing units,” we reject such an interpretation. By using both of these terms in the sentence, the General Assembly understood the difference between them and intended that they have different meanings. See Robinson v. Colo. State Lottery Div., 179 P.3d 998, 1010 (Colo.2008) (use of different terms signals an intent on the part of the General Assembly to afford those terms different meanings); see also Winakor v. Annunzio, 409 Ill. 236, 99 N.E.2d 191, 194 (1951) (analyzing substantially similar sentence contained in Illinois unemployment statute and rejecting assertion that separate “establishments” of a particular business may be regarded as individual “employing units”).

Thus, contrary to the Division's argument and the Panel's order, we conclude that section 8–70–114(1) did not give the Division authority to treat the various separate Accord entities as a single employing unit based on elements of...