Gatewood v. Railroad Retirement Bd.

• Decision Date: 08 July 1996
• Docket Number: No. 95-9537,95-9537
• Citation: 88 F.3d 886
• Parties: Roth A. GATEWOOD, Petitioner, v. RAILROAD RETIREMENT BOARD, Respondent.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 886

88 F.3d 886

Roth A. GATEWOOD, Petitioner, v. RAILROAD RETIREMENT BOARD, Respondent.

No. 95-9537.

United States Court of Appeals Tenth Circuit.

July 8, 1996.

Kevin M. Fowler of Frieden, Haynes & Forbes, Topeka, Kansas (Lynn S. McCreary and John C. Frieden of Frieden, Haynes & Forbes, Topeka, Kansas, with him on the brief), for Petitioner.

Thomas W. Sadler, Assistant General Counsel, Railroad Retirement Board (Catherine C. Cook, General Counsel, Stephen A. Bartholow, Deputy General Counsel, and Michael C. Litt, General Attorney, Railroad Retirement Board, with him on the brief), for Respondent.

Before EBEL, KELLY and HENRY, Circuit Judges.

PAUL KELLY, Jr., Circuit Judge.

Petitioner Roth A. Gatewood appeals the decision of the Railroad Retirement Board ("Board"), which affirmed on reconsideration the Board's initial decision to reject appellant's claim for railroad service and compensation. The Board rejected appellant's claim that his records be corrected to reflect his service as an employee of the Atchison, Topeka and Santa Fe Railway ("ATSF") for the periods January 1, 1980 through December 31, 1987 and August 1, 1989 through November 31, 1992. The Board denied Mr. Gatewood eleven years and four months of credited railroad service for these periods under the Railroad Retirement Act of 1974, 45 U.S.C. §§ 231-231v, dismissing his claim for the period January 1, 1980 through December 31, 1987 for untimely filing and denying his claim for the period August 1, 1989 through November 31, 1992 on the ground that Mr. Gatewood was an independent contractor rather than an employee. We affirm in part and reverse in part.

Background

Mr. Gatewood was hired as an attorney by the ATSF law office in Topeka, Kansas in 1962. In 1968, Mr. Gatewood was promoted to the position of Assistant General Attorney of ATSF, and in 1973, he was promoted to General Attorney of ATSF. On January 1, 1980, the personnel of the ATSF law department in Topeka were transferred from the ATSF payroll to the payroll of Santa Fe Industries, Inc., the parent company of ATSF. Mr. Gatewood remained in the same office after this transfer, and he performed the same duties as an attorney on behalf of ATSF as he had performed while on the ATSF payroll. Later, in January 1984, Santa Fe Industries was merged into the Santa Fe Southern Pacific Company, and the legal personnel in the Topeka office were again transferred, this time to the payroll of Santa Fe Southern Pacific. Again, Mr. Gatewood and the rest of the legal staff at the Topeka office continued to provide legal services to ATSF in the state of Kansas. In March 1988, ATSF reestablished its law department, and Mr. Gatewood was transferred back to the ATSF payroll where he remained until he retired from ATSF in July 1989.

Following his retirement, Mr. Gatewood contracted to perform legal services for ATSF beginning on August 1, 1989. For the one-year term of the agreement, ATSF agreed to pay Mr. Gatewood $70 per hour subject to monthly billings, with a guaranteed minimum of 80 hours per month, for total guaranteed compensation of $67,200 for the contract period. The agreement stated that Mr. Gatewood would "perform these legal services as an independent contractor, i.e. an attorney in private practice, and not an employee of the Railway Company." Nevertheless, under the agreement, ATSF supplied Mr. Gatewood with secretarial service and reimbursed his reasonable travel expenses for trips away from Topeka. Moreover, while not provided under the agreement, ATSF supplied Mr. Gatewood with free office space during the period he worked under the contract. After the initial one-year contract term expired, Mr. Gatewood's arrangement with ATSF continued without a written extension through November 1992.

While working under contract for ATSF from August 1, 1989 through November 30, 1992, Mr. Gatewood operated as "of counsel" to a law firm in Wichita. Through this arrangement, Mr. Gatewood was able to receive coverage under the firm's malpractice insurance policy, and the firm was able to create the appearance that it had an office in Topeka. However, throughout this period, Mr. Gatewood restricted his practice exclusively to matters involving the railway. He performed no services for the firm's other clients, he was not involved in the firm's operations, and he did not derive any income from the firm or share in the firm's expenses.

On February 22, 1993, Mr. Gatewood filed a claim under the Railroad Retirement Act for railroad service and compensation. The Board subsequently denied Mr. Gatewood's claim with respect to the periods at issue in this appeal. The Board dismissed Mr. Gatewood's claim for credit for the months of January 1980 through December 1987 on the ground that it was barred by the four-year statute of limitations in Section 9 of the Railroad Retirement Act, 45 U.S.C. § 231h. The Board denied Mr. Gatewood's claim for the months of August 1989 through November 1992 because it found he was an independent contractor and not a covered employee under the Railroad Retirement Act and the Railroad Unemployment Insurance Act. Subsequently, on Mr. Gatewood's motion for reconsideration, the Board affirmed its initial decision dismissing Mr. Gatewood's claims. This appeal followed.

Discussion

This court has jurisdiction to review decisions of the Railroad Retirement Board under 45 U.S.C. § 231g. That section incorporates the standard of review under the Railroad Unemployment Insurance Act, which states that "[t]he findings of the Board as to the facts, if supported by evidence and in the absence of fraud, shall be conclusive." 45 U.S.C. § 355(f). This court held long ago that the "judgments [of the Board] are final and conclusive if supported by substantial evidence and if free from arbitrary or capricious conduct." Utah Copper Co. v. Railroad Retirement Bd., 129 F.2d 358, 361 (10th Cir.), cert. denied, 317 U.S. 687, 63 S.Ct. 258, 87 L.Ed. 550, 551 (1942). Our view of this standard has not changed. Once we determine that the Board's factual findings are supported by substantial evidence and its decision is not based on an error of law, our task is complete. Accord Bowers v. Railroad Retirement Bd., 977 F.2d 1485, 1488 (D.C.Cir.1992).

I.

We first address the issue of whether the Board's decision to reject Mr. Gatewood's claim to receive service credit for the eight years from January 1980 through December 1987 was based on substantial evidence and a proper interpretation of the applicable law. The Board claims that because Mr. Gatewood did not file his claim for railroad service until February 22, 1993, the four-year statute of limitations found in Section 9 of the Railroad Retirement Act, 45 U.S.C. § 231h, prevents Mr. Gatewood from compelling the Board to alter his service records for the months at issue.

Section 9 of the Railroad Retirement Act requires employers under the Act to file with the Board returns of compensation for their employees. 45 U.S.C. § 231h. The regulations promulgated under the Railroad Retirement Act require that employers must file these reports annually by the end of February of the year following that for which the report is made. 20 C.F.R. § 209.6(a). Covered employees may bring any errors in the Board's records to the attention of the Board "within four years after the day on which return of the compensation was required to be made;" after such time, the Board's records "shall be conclusive." 45 U.S.C. § 231h. After the four years expire, the Board is no longer required to alter its records in response to an employee complaint. Pawelczak v. United States, 931 F.2d 108, 110 (D.C.Cir.1991).

A.

Mr. Gatewood argues primarily that the four-year statute of limitations does not apply in this case because 45 U.S.C. § 231h by its language only applies to restrict protests regarding compensation, and not to the issue of service records. See 45 U.S.C. § 231h. We disagree. While service is not explicitly mentioned in the statute, the terms "service" and "compensation" are closely interrelated throughout the Railroad Retirement Act and the regulations promulgated thereunder. The statute defines "years of service" as "the number of years an individual as an employee shall have rendered service to one or more employers for compensation." 45 U.S.C. § 231(f)(1); see also 20 C.F.R. § 210.3(a) (defining a "reported month of service" as "any calendar month ... for which an employee receives compensation for services performed"). Similarly, "compensation" is defined as "any form of money remuneration paid to an individual for services rendered as an employee." 45 U.S.C. § 231(h)(1). Mr. Gatewood seeks to persuade the court that service is defined in terms of "payment" and not "compensation," citing the definition of "service" found at 20 C.F.R. § 210.2. Such an interpretation ignores the statutory and regulatory provisions cited above which clearly demonstrate that service and compensation are interrelated concepts.

Moreover, the regulations promulgated by the Board strongly suggest that contests regarding both service and compensation are subject to the four-year statute of limitations in 45 U.S.C. § 231h. While the statute only refers to "returns of compensation," it is clear from the regulations that the annual report provided by the employers is "an annual report of the creditable service and compensation of employees." 20 C.F.R. § 209.6(a) (emphasis added). This is obviously the same report that is discussed in 45 U.S.C. § 231h, and we are convinced that the four-year statute of limitations applies to any contests regarding errors in the annual report.

Mr. Gatewood also suggests that 20 C.F.R. § 210.7(g), which requires employers to retain original service records for five years after the due date of the report, "is certainly indicative of the Board's acknowledgment that contests relating to creditable railroad service are indeed not subject to the four year statut...