Hat Six Homes v. STATE, DOE

• Decision Date: 06 July 2000
• Docket Number: No. 99-102.,99-102.
• Citation: 6 P.3d 1287
• Parties: HAT SIX HOMES, INC., Appellant (Petitioner), v. The STATE of Wyoming, DEPARTMENT, OF EMPLOYMENT, UNEMPLOYMENT INSURANCE COMMISSION, Appellee (Respondent).
• Court: Wyoming Supreme Court

6 P.3d 1287

HAT SIX HOMES, INC., Appellant (Petitioner), v. The STATE of Wyoming, DEPARTMENT, OF EMPLOYMENT, UNEMPLOYMENT INSURANCE COMMISSION, Appellee (Respondent).

No. 99-102.

Supreme Court of Wyoming.

July 6, 2000.

Representing Appellant: Les Bowron of Beech Street Law Office, Casper, Wyoming.

Representing Appellee: Gay Woodhouse, Attorney General; John W. Renneisen, Deputy Attorney General; Gerald W. Laska, Senior Assistant Attorney General; and Joe Scott, Senior Assistant Attorney General.

Before LEHMAN, C.J., and THOMAS, MACY,¹ GOLDEN, and HILL, JJ.

THOMAS, Justice.

After quitting her situation at Hat Six Homes, Inc. (Hat Six), Dawn Welch (Welch) filed for unemployment benefits under Wyoming law. The Wyoming Department of Employment, Unemployment Insurance Commission (Commission) referred the case to an appeals examiner to make findings of fact and determine the correct application of the law. The first question for this Court to resolve is the sufficiency of the evidence in the contested case hearing to sustain the findings of fact by the appeals examiner. That determination leads to a corollary issue concerning the failure of Hat Six to sustain its burden of establishing the statutory factors articulated in Wyo. Stat. Ann. § 27-3-104(b) (Lexis 1999), which it must do to exclude Welch from the status of an employee for purposes of unemployment benefits. Ultimately, the Commission ruled that Welch was entitled to benefits, and Hat Six brought the case before the district court for judicial review of the decision of the agency. The district court entered an order affirming the agency, and Hat Six appealed to this Court. We hold that there is sufficient evidence to support the findings of fact made by the appeals examiner, and those findings of fact support the ruling that Hat Six did not satisfy its burden of proving the requisite statutory factors to exclude Welch from the status of an employee. The Order Affirming Agency Decision entered in the district court is affirmed.

This statement of the issues is found in the Appellant's Brief, filed on behalf of Hat Six:

A. Whether substantial evidence exists in the record to support the District Court's finding that Claimant was an employee as opposed to an independent contractor.

B. Whether substantial evidence exists in the record to support the District Court's finding that Claimant quit her job with good cause.

This Statement of the Issues is found in the Brief of Appellee Wyoming Department of Employment, Unemployment Insurance Commission:

A

Whether Unemployment Insurance Commission Decision No. C-6607-98, which held Dawn Welch to be an employee of Hat Six Homes, Inc., covered by the employment security law, is supported by substantial evidence?

B

Whether Unemployment Insurance Commission No. C-6607-98, which held Dawn Welch to have quit her most recent employment with Hat Six Homes, Inc., with good cause directly attributable to employment is supported by substantial evidence?

Welch worked at Hat Six from September of 1996 until November 14, 1997. She did not sign, nor was she offered, a contract. Welch's initial duties were answering phones, greeting customers, and keeping the office orderly. Before long, she was allowed to conduct sales of manufactured homes, perform income analyses of prospective customers, and assist the customers in filling out credit applications. Welch explained to the appeals examiner that her job title was housing consultant.

During the material period, Welch was paid an hourly wage, and she also received a bonus based upon the sales of homes by Hat Six. Welch's hourly wage was increased when the federal minimum wage was raised. During the course of her association with Hat Six, no federal employment-related taxes were withheld, and Welch admitted that she filed a self-employed Form 1099 with the Internal Revenue Service. She explained that the Form 1099 was furnished to her at Hat Six, and was premised upon the advice of the vice-president that she was a contract employee and the assistance of the Hat Six bookkeeper, who also prepared Welch's personal income tax return.

During the time she worked at Hat Six, Welch also was enrolled at Casper College. This required some flexibility in her schedule at work. Hat Six claims that Welch was free to come and go as she pleased, and was not required to report to work at any specified time. Welch contends, however, that her schedule was prepared in advance, and she was not free to come and go as she pleased. She also asserts that she was required to get approval for time off and sick days.

While she was working at Hat Six, Welch did not sell homes for any other seller of manufactured homes. She distributed business cards, which listed both her name and Hat Six. In locations other than her place of employment, she often spoke to potential customers about the homes for sale at Hat Six. However, all actual sales occurred on the Hat Six premises.

Welch left her situation at Hat Six due to what she characterized as a "hostile work environment * * *." Welch testified that the president of Hat Six regularly touched her under her shirt and behind her knees in an unwelcome manner, and continued this behavior after she asked him to stop. Additionally, the behavior of the vice-president of Hat Six created a tension that "could [be] cut * * * with a knife * * *." Welch testified to several occasions on which the vice-president yelled and screamed at customers, another employee, and even the president of Hat Six. On some occasions, office supplies and equipment were thrown about and broken by the vice-president. Welch determined to end her employment voluntarily when her concerns about the behavior of the president and vice-president were not remedied.

Following the termination of her association with Hat Six, which she asserted was an employment relationship, Welch filed a claim for unemployment benefits with the Wyoming Department of Employment, Employment Resources Division (the Division). Her claim was presented in accordance with the regulations of the Commission. See Wyo. Stat. Ann. § 27-3-401 (Lexis 1999). Welch's claim was denied by the Division, and Welch filed a timely appeal. The matter then was referred to the Division's appeals examiner, and the appeals examiner found Hat Six was chargeable for benefits to be paid to Welch, ruling that Welch was an employee of Hat Six, not an independent contractor, and that Welch had good cause to terminate her employment. The matter then was appealed to the Commission for a panel review. The Commission remanded the case to the appeals examiner, ordering that additional evidence be taken on the issue of employment and the issue of good cause for leaving. A second hearing was conducted, and the appeals examiner again found that Welch was an employee of Hat Six and had good cause to quit her employment. This decision also was reviewed by the Commission, which affirmed the decision. Upon the petition of Hat Six, the case then was the subject of judicial review by the district court. This appeal follows from the Order Affirming Agency Decision entered in the district court.

The Wyoming Administrative Procedure Act governs this Court's review of decisions by the Commission. Wyoming Dept. of Employment, Unemployment Ins. Com'n v. SF Phosphates, Ltd., 976 P.2d 199, 201 (Wyo. 1999); Employment Sec. Com'n of Wyoming v. Western Gas Processors, Ltd., 786 P.2d 866, 870 (Wyo.1990). The review provision reads:

(c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:

(i) Compel agency action unlawfully withheld or unreasonably delayed; and

(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:

(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law (B) Contrary to constitutional right, power, privilege or immunity;

(C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;

(D) Without observance of procedure required by law; or

(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

Wyo. Stat. Ann. § 16-3-114(c) (Lexis 1999).

In reviewing unemployment benefit cases, we have said:

The standard of review of an agency determination is well-established. Unemployment benefit cases involving contended misconduct normally present mixed questions of law and fact. Henson v. Employment Sec. Dept. of State, 113 Wash.2d 374, 779 P.2d 715 (1989). See generally Natrona County School Dist. No. 1 v. McKnight, 764 P.2d 1039 (Wyo.1988). A reviewing court is "confined to the matters explicitly referenced in W.S. 16-3-114(c) and W.R.A.P. 12.09." Cook v. Zoning Bd. of Adjustment for the City of Laramie, 776 P.2d 181, 184 (Wyo.1989).

"On appeal from a district court's consideration of an agency action, this court is not bound by the conclusions of the reviewing court. Rather, using the same evidentiary materials and the same review standards as the district court, we conduct an independent inquiry into the matter, just as if it had proceeded directly to us from the agency."

Southwest Wyoming Rehabilitation Center v. Emp. Sec. Com'n of Wyoming, 781 P.2d 918, 920 (Wyo.1989). (Accord Employment Sec. Com'n of Wyoming v. Bryant, 704 P.2d 1311, 1314 (Wyo.1985) and Matter of North Laramie Land Co., 605 P.2d 367, 373 (Wyo.1980).) Our deference for findings of fact is reserved for the fact-finder which, in this case, is ESC. Department of Revenue and Taxation of State of Wyoming v. Casper Legion Baseball Club,

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