Metro Renovation, Inc. v. State Dept. of Labor

• Decision Date: 16 February 1996
• Docket Number: No. S-94-047,S-94-047
• Citation: 249 Neb. 337,543 N.W.2d 715
• Parties: METRO RENOVATION, INC., Appellee, V. STATE OF NEBRASKA DEPARTMENT OF LABOR, Appellee, Dan Dolan, Nebraska Commissioner of Labor, Appellant, and Russell L. Leininger, Claimant, Appellee.
• Court: Nebraska Supreme Court

Page 715

543 N.W.2d 715

249 Neb. 337

METRO RENOVATION, INC., Appellee,

V.

STATE OF NEBRASKA DEPARTMENT OF LABOR, Appellee Dan Dolan, Nebraska Commissioner of Labor, Appellant and Russell L. Leininger, Claimant, Appellee.

No. S-94-047.

Supreme Court of Nebraska.

Feb. 16, 1996.

Syllabus by the Court

1. Administrative Law: Judgments: Appeal and Error. Under Nebraska's Administrative Procedure Act, an appellate court reviews the judgment of the district court for errors on the record and will not substitute its factual findings for those of the district court where competent evidence supports those findings.

2. Administrative Law: Judgments: Appeal and Error. When reviewing an order of the district court under the Administrative Procedure Act for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

3. Administrative Law: Judgments: Time: Appeal and Error. The Administrative Procedure Act provides that proceedings for review shall be instituted by filing a petition in the district court of the county where the action is taken within 30 days after the service of the final decision by the agency.

4. Administrative Law: Jurisdiction: Appeal and Error. The Administrative Procedure Act's phrase "action taken" is defined by the site of the first adjudicated hearing of a disputed claim.

5. Administrative Law: Appeal and Error. Under Neb.Rev.Stat. § 84-917(5) (Reissue 1994), when a petition for judicial review of an administrative agency's decision is filed in the district court on or after July 1, 1989, the review shall be conducted by the court without a jury de novo on the record of the agency.

6. Parties: Appeal and Error. It is a general rule that a party cannot complain of error which that party was instrumental in bringing about.

7. Courts: Rules of the Supreme Court. When an opinion of the Court of Appeals which has been designated for permanent publication is the only Nebraska case which addresses an issue, it may, under the provisions of Neb. Ct. R. of Prac. 2E(4) (rev.1993), be cited for whatever persuasive force it may have, but it does not constitute binding precedent.

Appeal from the District Court for Douglas County; Richard J. Spethman, Judge. Reversed and remanded with directions.

John F. Sheaff and John H. Albin, Lincoln, for appellant and for appellee State Department of Labor.

Mark Quandahl, of Brumbaugh & Quandahl, P.C., Omaha, for appellee Metro Renovation, Inc.

WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ.

PER CURIAM.

Nebraska's Commissioner of Labor (Commissioner) appeals a district court ruling that all carpenters utilized by Metro Renovation, Inc. (Metro), between January 1, 1988, and July 31, 1992, were independent contractors and that, therefore, Metro was not liable for unemployment insurance contributions for those carpenters. We reverse, and remand for further proceedings.

ASSIGNMENTS OF ERROR

In substance, the Commissioner's assignments of error claim that the district court for Douglas County erred in (1) finding that it had jurisdiction to hear Metro's petition for judicial review, (2) applying the wrong standard of review, and (3) holding that the Commissioner's decision was arbitrary, capricious, and unsupported by the evidence.

The Commissioner also claims that the district court's final order is contrary to law and unsupported by the evidence.

STANDARD OF REVIEW

Under Nebraska's Administrative Procedure Act, an appellate court reviews the judgment of the district court for errors on the record and will not substitute its factual findings for those of the district court where competent evidence supports those findings. George Rose & Sons v. Nebraska Dept. of Revenue, 248 Neb. 92, 532 N.W.2d 18 (1995); Slack Nsg. Home v. Department of Soc. Servs., 247 Neb. 452, 528 N.W.2d 285 (1995). When reviewing an order of the district court under the Administrative Procedure Act for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. Wagoner v. Central Platte Nat. Resources Dist., 247 Neb. 233, 526 N.W.2d 422 (1995); Sunrise Country Manor v. Neb. Dept. of Soc. Servs., 246 Neb. 726, 523 N.W.2d 499 (1994).

FACTS

Following an investigation and a hearing in Omaha, the Commissioner found that certain carpenters utilized by Metro were employees of Metro and that, therefore, Metro was liable for unemployment insurance contributions on account of those carpenters.

Metro petitioned the district court for Douglas County for judicial review of the Commissioner's decision. The Commissioner demurred to Metro's petition, claiming that the district court for Douglas County lacked jurisdiction to hear Metro's petition for judicial review. That court overruled the demurrer.

The facts are not in dispute. Metro is a general contractor engaged in the remodeling and renovation business. Once a contract has been awarded to it, Metro engages workers to perform the construction work required at various jobsites. One such worker during the period in question was Russell L. Leininger, a representative carpenter in this case.

The evidence is undisputed that some carpenters engaged by Metro were treated as employees. These carpenters were paid an hourly wage. These workers were covered under Metro's insurance policy, workers' compensation, and unemployment insurance. In contrast, other carpenters engaged by Metro, such as Leininger, were treated as independent contractors. They submitted invoices to Metro every 2 weeks for their services provided at each jobsite. Leininger billed Metro for his services at the rate of $10 per hour. Metro did not withhold any taxes from money due these "independent contract" carpenters, nor did it pay any workers' compensation insurance premiums on account of these carpenters. Each of these carpenters was experienced and performed at the jobsites without supervision. Metro only told these "independent contract" carpenters the address of the jobsite, the work needed, and the deadline for their work to be completed. Each such carpenter supplied his or her own vehicle and tools and was not paid any expenses. Metro provided all of the materials for the jobs.

Metro maintained an office and workshop in Omaha. Although some work was done in the workshop by the "independent contract" carpenters, the great majority of Metro's business was conducted at various jobsites.

The district court reversed the decision of the Commissioner that Metro was liable for unemployment tax on the independent contract carpenters and further found that "all carpenters employed by Russell Leininger [sic] during the period in question were independent contractors and not employees under Nebraska Revised Statute 48-604(5) (1988)." (Emphasis supplied.) The Commissioner timely appealed the district court's ruling to the Nebraska Court of Appeals.

Pursuant to our authority to regulate the caseloads of the appellate courts, we removed this case from the Court of Appeals' docket to this court's docket.

ANALYSIS

Initially, we address the Commissioner's restated first assignment of error that the district court for Douglas County lacked jurisdiction to hear Metro's petition for review. The Administrative Procedure Act is dispositive. As applicable here, it provides that "[p]roceedings for review shall be instituted by filing a petition in the district court of the county where the action is taken within thirty days after the service of the final decision by the agency." (Emphasis supplied.) Neb.Rev.Stat. § 84-917 (Reissue 1994).

The Commissioner argues that the phrase "where the action is taken" should be interpreted to mean "where the decision is made." The Commissioner's principal office is located in Lincoln, and it is ultimately the Commissioner who adopts or rejects the recommendation of a hearing officer as to whether unemployment insurance premiums are due from an entity utilizing workers. Under the Commissioner's interpretation of § 84-917, every petition for judicial review of whether an entity must pay unemployment insurance premiums must be filed in the district court for Lancaster County. We find the Commissioner's interpretation of § 84-917 is in error.

Before July 1, 1989, Neb.Rev.Stat. § 48-650 (Cum.Supp.1986) provided that a petition for judicial review of the Commissioner's determination of an employer's unemployment insurance contributions had to be filed in the district court for Lancaster County. See, 1941 Neb. Laws, ch. 94, § 5, p. 392; United Laboratories, Inc. v. Sorensen, 220 Neb. 412, 369 N.W.2d 647 (1985); Whitehouse Energy Savers v. Hanlon, 214 Neb. 572, 334 N.W.2d 802 (1983). That is no longer true. Section 48-650 was amended to provide, effective July 1, 1989, that petitions for judicial review of administrative agency decisions "shall be in accordance with the Administrative Procedure Act." See § 48-650 (Reissue 1993).

We have held that the Administrative Procedure Act's phrase "action taken" is defined by the site of the first adjudicated hearing of a disputed claim. Bd. of Ed. of Keya Paha County v. State Board of Education, 212 Neb. 448, 323 N.W.2d 89 (1982). See, also, Downer v. Ihms, 192 Neb. 594, 223 N.W.2d 148 (1974). In Downer, the initial denial of welfare benefits and the administrative review hearing occurred in the plaintiff's county of residence. We found that under the internal regulations governing the Department of Public Welfare:

The sole event that may occur in other than the county of the residence of the affected person is the consideration by the director of his decision. Even that is not mandated by statute for if the hearing is held before the director, as the statute authorizes, then presumably he might also make his decision in the county of the...