National Resort Mart, Inc. v. Hitchcock

• Court: Missouri Court of Appeals
• Writing for the Court: Joseph M. Ellis
• Citation: National Resort Mart, Inc. v. Hitchcock, 88 S.W.3d 459 (Mo. App. 2002)
• Decision Date: 28 June 2002
• Docket Number: No. WD 60417.,WD 60417.
• Parties: NATIONAL RESORT MART, INC., Appellant, v. Christina HITCHCOCK, Defendant, Division of Employment Security, Respondent.

Page 459

88 S.W.3d 459

NATIONAL RESORT MART, INC., Appellant, v. Christina HITCHCOCK, Defendant Division of Employment Security, Respondent.

No. WD 60417.

Missouri Court of Appeals, Western District.

June 28, 2002.

Larry G. Luna, Branson, Jeffrey Siegel, Co-Counsel, Kansas City, for Appellant.

Ronald J. Miller, Jefferson City, for respondent.

Before JOSEPH M. ELLIS, Presiding Judge, EDWIN H. SMITH, Judge and VICTOR C. HOWARD, Judge.

JOSEPH M. ELLIS, Judge.

National Resort Mart, Inc., ("National Resort") appeals from the order of the Labor and Industrial Relations Commission ("the Commission") determining that Christina Hitchcock was an employee, not an independent contractor, and was, therefore, entitled to receive unemployment benefits.

National Resort is a franchise of Century 21 that lists time-share interests for sale. Christina Hitchcock was employed by National Resort's office in Kimberling City, Missouri. She was hired as an agent/telemarketer to obtain listings for the company. The Kimberling City office was staffed by another agent, a broker/manager, and a secretary.

Hitchcock worked for the company for about a year, from February 1999 until March 2000. Her job was to contact individuals who wanted to sell time-share interests and convince them to list with the company. Hitchcock received a commission for each listing she obtained, but did not receive a regular salary or hourly wage. She earned a commission regardless of whether the listed time-share actually sold. A portion of Hitchcock's commission check went to pay a franchisee fee to Century 21.

The company provided Hitchcock with names of potential clients, or "leads," that she was expected to contact by telephone. She was generally given a worksheet that provided the individual's name, phone number, and other contact information. Hitchcock used the worksheets to contact the prospective clients and try to convince them to list their time-share with the company. If the individual agreed to a listing, Hitchcock would record certain information about the property on the worksheet and obtain the client's credit card number for payment. She would return the worksheets to the secretary after completing a call, and the worksheets would be forwarded to the company's contract department. If an individual did not agree to list with the company, Hitchcock would make a notation on the worksheet and return it to the secretary.

The office was open from 9 a.m. to 5 p.m., and while Hitchcock was permitted flexibility in her schedule, she was required to call the company's main office in Hot Springs, Arkansas, if she was going to leave early for personal errands. The company required notice so that it would know that calls should not be transferred to her office. Hitchcock was also required to call the secretary if she was going to be late. Hitchcock completed most of her work at the office, but did briefly install a business phone line into her home so that she could contact clients that were not available before 5 p.m. She later had the phone line disconnected because she was not generating enough work at home to justify the expense.

Hitchcock was terminated from her job for lack of work. On December 19, 2000, she filed a claim for unemployment benefits. On January 31, 2001, the Division of Employment Security ("the Division") mailed a notice to National Resort stating that Hitchcock was entitled to wage credits, for the purpose of determining her claim for benefits, in the following amounts: $7,391.06 for the quarter ending September 30, 1999; $10,040.04 for the quarter ending December 31, 1999; and $7,237.20 for the quarter ending March 31, 2000. The Division also mailed a notice stating that Hitchcock was a National Resort employee from February 10, 1999, through June 30, 1999, and that National Resort had failed to establish that Hitchcock was an independent contractor.

National Resort notified the Division that it intended to appeal both decisions. On May 10, 2001, there was a hearing by telephone conference on both issues before an appeals referee of the Division. On May 22, 2001, the appeals tribunal affirmed both issues in two separate written decisions. On June 29, 2001, the Commission issued two orders affirming and adopting both decisions. This appeal follows.

In its only point on appeal, National Resort argues that the Commission erred in determining that Hitchcock was not an independent contractor and was, therefore, entitled to unemployment benefits. National Resort claims that the Commission misapplied the law in determining that Hitchcock was an employee because Hitchcock was not under the control of National Mart, as defined by pertinent Missouri law.

Section 288.210 sets forth our standard of review:

The findings of the commission as to the facts, if supported by competent and substantial evidence and in the absence of fraud, shall be conclusive, and the jurisdiction of the appellate court shall be confined to questions of law. The court, on appeal, may modify, reverse, remand for hearing, or set aside the decision of the commission on the following grounds and no other:

(1) That the commission acted without or in excess of its powers;

(2) That the decision was procured by fraud;

(3) That the facts found by the commission do not support the award; or

(4) That there was no sufficient competent evidence in the record to warrant the making of the award.

Kansas City Power & Light Co. v. Seamy, 28 S.W.3d 891, 894 (Mo.App. W.D.2000) (quoting § 288.210).

The Commission's findings of fact are conclusive if supported by competent and substantial evidence and absent fraud. Mo. Shelfco, Inc. v. Labor and Indus. Relations Comm'n, 849 S.W.2d 245, 248 (Mo. App. W.D.1993). We follow a two-step inquiry to determine whether the Commission's findings of fact are supported by competent evidence. Asaro v. Div. of Employment Sec., 32 S.W.3d 623, 626 (Mo. App. W.D.2000); Kansas City Power & Light Co., 28 S.W.3d at 894.

In the first step, the court examines the whole record, viewing the evidence and all reasonable inferences drawn therefrom in the light most favorable to the [decisions], to determine if the record contains sufficient competent and substantial evidence to support the award. If not, the Commission's award must be reversed. If there is competent and substantial evidence supporting the award, the court moves to the second step, where it views the evidence in the light most favorable to the award, but must consider all evidence in the record, including that which opposes or is unfavorable to the award, take account of the overall effect of the evidence, and determine whether the award is against the overwhelming weight of the evidence.

Asaro, 32 S.W.3d at 626 (quoting Forms World, Inc. v. Labor & Indus. Relations Comm'n, 935 S.W.2d 680, 684 (Mo.App. W.D.1996)).

While we defer to the Commission's findings of fact, our review of the application of the law to the facts is de novo. Stover Delivery Sys., Inc. v. Div. of Employment Sec., 11 S.W.3d 685, 688 (Mo App. W.D.1999). When the case involves primarily a question of the application of the law to the facts, we give no deference to the Commission's conclusions. Id. National Resort argues that the Division misapplied the law; thus, our review of the application of the law to the facts is de novo.

The issue in this case is governed by Chapter 288, which requires Missouri employers to make unemployment tax contributions for their employees. Id. Section 288.034.1¹ defines "employment" as follows:

"Employment" means service, including service in interstate commerce, performed for wages or under any contract of hire, written or oral, express or implied, and notwithstanding any other provisions of this section, service with respect to which a tax is required to be paid under any federal unemployment tax law imposing a tax against which credit may be taken for contributions required to be paid into a state unemployment fund or which, as a condition for full tax credit against the tax imposed by the Federal Unemployment Tax Act, is required to be covered under this law.

National Resort first argues that Hitchcock is excluded from the definition of employment pursuant to § 288.034.12, which states that certain types of work are not considered employment. Specifically, National Resort notes that § 288.034.12(16) excludes certain real estate agents from the definition of employment when they meet the following criteria:

Services performed by a licensed real estate salesperson or licensed real estate broker if at least eighty percent of the remuneration, whether or not paid in cash, for the services performed rather than to the number of hours worked is directly related to sales performed pursuant to a written contract between such individual and the person for whom the services are performed and such contract provides that the individual will not be treated as an employee with respect to such services for federal tax purposes.

National Resort claims that Hitchcock's services are similar to a real estate agent and that the exception should apply to her. `The appeals tribunal rejected this argument, noting that subsection sixteen only applies to licensed real estate salespersons or brokers and that Hitchcock does not fit either category. The record supports this finding; National Resort's representative testified that a license is not required in Missouri to list or sell time-shares, and there was no evidence even suggesting that Hitchcock was, or needed to be, licensed.

National Resort next contends that Hitchcock was an independent contractor. Section 288.034.5 sets forth the test for determining whether an individual is an employee or an independent contractor:

Service performed by an individual for remuneration shall be deemed to be employment subject to this law unless it is shown to the satisfaction of the division that such services were performed by an independent...