Jarrett v. LIRC

• Decision Date: 25 January 2000
• Docket Number: No. 99-1413.,99-1413.
• Citation: 233 Wis.2d 174,607 N.W.2d 326,2000 WI App 46
• Parties: John E. JARRETT, Plaintiff-Respondent, v. LABOR & INDUSTRY REVIEW COMMISSION, Defendant-Co-Appellant, B & D MOTORS, INC. and Regent Insurance Company, Defendants-Appellants.
• Court: Wisconsin Court of Appeals

233 Wis.2d 174

2000 WI App 46

607 N.W.2d 326

John E. JARRETT, Plaintiff-Respondent, v. LABOR & INDUSTRY REVIEW COMMISSION, Defendant-Co-Appellant, B & D MOTORS, INC. and Regent Insurance Company, Defendants-Appellants.

No. 99-1413.

Court of Appeals of Wisconsin.

Submitted on briefs November 24, 1999.

Decided January 25, 2000.

On behalf of the defendants-appellants, the cause was submitted on the briefs of Walter D. Thurow and Jennifer M. Collingon of Thurow Law Offices of Madison. On behalf of defendant-co-appellant, there were briefs by James E. Doyle, attorney general, and Jerome S. Schmidt, assistant attorney general.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of James T. Runyon of Runyon Law Offices of Tomahawk.

Before Cane, C.J., Hoover, P.J., and Peterson, J.

¶ 1. HOOVER, P.J.

The Labor and Industry Review Commission appeals a judgment of the circuit court holding that LIRC misapplied the law by not initially determining whether John Jarrett was a common law independent contractor and remanding for further proceedings.¹ LIRC contends that the circuit court misconstrued WIS. STAT. § 102.07(8)(b) (1993-94)² by holding that the initial determination whether a person is an independent contractor in worker's compensation matters is initially determined under the common law, and only then, if applicable, under the criteria in subsec. (8)(b).³ LIRC claims that the legislature intended to supplant the common law and that subsec. (8)(b) is the exclusive test for determining independent contractor status under the Worker's Compensation Act. LIRC further asserts that the record supports the commission's finding that all subsec. (8)(b) criteria were satisfied. We agree and therefore reverse the judgment.

BACKGROUND

¶ 2. On December 15, 1994, while driving a semi-truck, Jarrett was rear-ended by another semi and sustained injuries to his back and shoulder. At the time of the accident, Jarrett was working under contract for B & D, a trucking firm. His worker's compensation claim against B & D gave rise to this appeal.

¶ 3. Jarrett began his relationship with B & D in 1992 under a lease agreement. At that time, he owned his truck and contracted to be paid 75% of the gross receipts on the routes he drove. Jarrett paid his own fuel, maintenance, road repair costs and other expenses. He had his own federal tax identification number. Jarrett made the truck repairs he was able to do himself, and he kept his records at home. Although B & D controlled where Jarrett would pick up his load, Jarrett generally decided which routes he would take. Jarrett had the right to turn down a load. He also carried his own worker's compensation policy, but excluded himself from its coverage.

¶ 4. In June 1993, Jarrett executed an "Independent Contractor Contract" with B & D. The contract provided he "shall be and remain an independent contractor." It further provided that Jarrett "has and at all times shall retain the management of the Equipment for the duration of this Contract and shall have the exclusive right to control and direct the methods and means of performing Contractor's obligations under this Contract." Jarrett was also responsible for his various costs of doing business, including taxes, worker's compensation insurance, and the costs and expenses incident to performing the contract.

¶ 5. In 1993, Jarrett purchased a new semi-truck tractor and put the title in B & D's name. Jarrett did so to prevent the Internal Revenue Service from filing a lien upon the truck for taxes Jarrett owed. B & D made installment payments for the tractor, but deducted the payments from Jarrett's checks until it was paid for and then transferred the title to him. Jarrett continued to be responsible for the maintenance, repairs and other upkeep on the truck. If B & D serviced or repaired the truck, Jarrett was billed for the work. He generally kept the truck at his house.

¶ 6. After his accident, Jarrett applied for worker's compensation benefits from B & D. LIRC determined that the nine criteria of WIS. STAT. § 102.07(8)(b) constituted the sole test for independent contractor status under the Act and that because Jarrett met those criteria he was an independent contractor and not entitled to benefits. Jarrett appealed to the circuit court, which reversed and remanded for further findings. LIRC appeals the circuit court's judgment.

STANDARD OF REVIEW

¶ 7. On appeal, we review LIRC's decision, not the circuit court's. See Margoles v. LIRC, 221 Wis. 2d 260, 264, 585 N.W.2d 596 (Ct. App. 1998). We examine two issues. Initially, we address the test to be applied when determining independent contractor status under the Act. This concerns the meaning of WIS. STAT. § 102.07(8)(b), a question of statutory interpretation. The second issue involves the application of the correct legal standard to the facts. The two issues have different standards of review.

[1-3]

¶ 8. The ultimate goal of statutory interpretation is to ascertain and give effect to the legislature's intent. See Stockbridge Sch. Dist. v. DPI, 202 Wis. 2d 214, 219, 550 N.W.2d 96 (1996). We first look to the statute's language. See Cary v. City of Madison, 203 Wis. 2d 261, 264, 551 N.W.2d 596 (Ct. App. 1996). Sections of statutes should not be read in a vacuum, but must be read together in order to best determine the statute's plain meaning. See In re J.L.W., 143 Wis. 2d 126, 130, 420 N.W.2d 398 (Ct. App. 1988). If a statute is clear on its face, our inquiry ends, for we are prohibited from looking beyond the unambiguous language the legislature used. See In re Peter B., 184 Wis. 2d 57, 71, 516 N.W.2d 746 (Ct. App. 1994). However, if the language is ambiguous, we may look to the statute's history, scope, context, subject matter and object to discern legislative intent. See Lake City Corp. v. City of Mequon, 207 Wis. 2d 155, 163, 558 N.W.2d 100 (1997). Statutory language is ambiguous if reasonably well-informed individuals could differ as to its meaning. See Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 662, 539 N.W.2d 98 (1995).

[4]

¶ 9. Whether LIRC properly interpreted the statute is a question of law, and we are not bound by the commission's interpretation. See id. at 659. However, we give varying degrees of deference to an agency's interpretation, depending on the circumstances. See id. at 659-60. Our supreme court has identified three distinct levels of deference granted agency decisions: great weight deference, due weight deference and de novo review. See UFE Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996). Which level is appropriate "depends on the comparative institutional capabilities and qualifications of the court and the administrative agency." Id. (citation omitted).

¶ 10. The parties differ over the appropriate level of deference we should accord LIRC's interpretation. LIRC contends that it is entitled to great weight deference, while Jarrett claims it is entitled to no deference. We need not decide, however, which level of deference is appropriate here because under either, we are satisfied that LIRC's interpretation is consistent with the legislature's intent, as evidenced by the legislative history of WIS. STAT. § 102.07(8)(b).

[5-7]

¶ 11. After determining the applicable law, we review de novo LIRC's application of that law to the facts found. See Local No. 695 v. LIRC, 154 Wis. 2d 75, 82, 452 N.W.2d 368 (1990). In so doing, however, we may not substitute our judgment for that of LIRC as to the evidence's weight or credibility. See WIS. STAT. § 102.23(6). Instead, we examine whether the findings of fact are supported by substantial and credible evidence, and if they are, we may not set them aside. See WIS. STAT. § 102.23(6); Princess House v. DILHR, 111 Wis. 2d 46, 54, 330 N.W.2d 169 (1983). Under this standard, if there is relevant, credible and probative evidence upon which a reasonable factfinder could rely to reach the conclusion, the finding must be upheld. See Princess House, 111 Wis. 2d at 54. The burden is less than the preponderance of the evidence in that any reasonable view of the evidence is sufficient. See id. at 52-53.

ANALYSIS

1. The test for independent contractor.

¶ 12. LIRC contends that the proper analysis for determining whether an individual is an independent contractor under the Act is to apply the statutory criteria in WIS. STAT. § 102.07(8)(b). Under its analysis, if the statutory requirements are met, the inquiry ends. In response, Jarrett argues that LIRC must first consider the common law criteria for determining whether a worker is an independent contractor or an employee. Jarrett reasons that LIRC applies the statutory criteria only if it first concludes that he is an independent contractor under the common law analysis. We conclude that both arguments present reasonable interpretations, and therefore the statutes are ambiguous.⁴ ¶ 13. WISCONSIN STAT. § 102.07(8) provides:

"Employe" as used in this chapter means:

(8)(a) Except as provided in par. (b), every independent contractor is, for the purpose of this chapter, an employe of any employer under this chapter for whom he or she is performing service in the course of the trade, business, profession or occupation of such employer at the time of the injury.

(b) An independent contractor is not an employe of an employer for whom the independent contractor performs work or services if the independent contractor meets all of the following conditions:

1. Maintains a separate business with his or her own office, equipment, materials and other facilities.

2. Holds or has applied for a federal employer identification number with the federal internal revenue service or has filed business or self-employment income tax returns with the federal internal revenue service based on that work or service in the previous year.

3. Operates under contracts to perform specific services or work for specific amounts of money and under which the

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