Now Courier v. Dept. of Workforce Dev.

• Decision Date: 08 August 2007
• Docket Number: No. 93A02-0611-EX-1033.,93A02-0611-EX-1033.
• Citation: 871 N.E.2d 384
• Parties: NOW COURIER, INC., Appellant, v. REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and Tommy Jones, Appellees.
• Court: Indiana Appellate Court

871 N.E.2d 384

NOW COURIER, INC., Appellant, v. REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and Tommy Jones, Appellees.

No. 93A02-0611-EX-1033.

Court of Appeals of Indiana.

August 8, 2007.

Steven A. Pletcher, Rebecca S. Smith, Scopelitis, Garvin, Light & Hanson, Indianapolis, IN, Attorneys for Appellant.

Steve Carter, Attorney General of Indiana, Elizabeth Rogers, Deputy Attorney General, Indianapolis, IN, Attorney for Appellees.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

NOW Courier, Inc. ("NOW") appeals the order of the Unemployment Insurance Review Board of the Indiana Department of Workforce Development ("the Board") that determined that Tommy C. Jones was entitled to unemployment compensation benefits.

We reverse and remand.

ISSUE

Whether the order must be reversed because NOW was not allowed to assert Jones' ineligibility for unemployment compensation benefits based upon a statutory exception.

FACTS

From January 19, 2005 through May 15, 2006, Jones provided a motor vehicle and his courier delivery services to NOW. Subsequently, Jones filed an application for unemployment compensation benefits, naming NOW as his employer. On June 28, 2006, a claims deputy at the Department of Workforce Development ("Department") determined that Jones was entitled to benefits. The notice thereof, sent to Jones and NOW, stated that NOW had "failed to provide sufficient information to establish the discharge was the result of willful misconduct"; that therefore Jones was determined to be "not discharged for just cause"; and that "[u]nless otherwise disqualified," Jones was "eligible to receive weekly" benefits. (App.22). The notice further advised that the determination would become final on July 10, 2006, unless NOW appealed by requesting a hearing before an Administrative Law Judge ("ALJ").

On July 10, 2006, NOW filed with the Department its request for a hearing before an ALJ, stating its reason for "disagree[ment] with the determination" of Jones' eligibility as follows:

Tommy C. Jones was an independent contractor and is not eligible for unemployment benefits. Tommy C. Jones' independent contractor agreement was terminated due to his willful misconduct.

(App.23). In addition to the foregoing request for a hearing, NOW's counsel sent a letter via facsimile and hand delivery to the Department elaborating on this asserted ineligibility — that "Jones was an independent contractor who contracted with NOW Courier to provide transportation services" and had never "been an employee of NOW," and that pursuant to the statutory exception of Indiana Code § 22-4-8-3.5, Jones was "not eligible for unemployment benefits." (App.25, 26). Legal analysis in this regard was included, as well as the independent contractor agreement between Jones and NOW.

The "Notice of Hearing" advised that the hearing before an ALJ was scheduled for August 4, 2006, on the "Issue: Whether the employer discharged for just cause." (App.47). Linda Gorman, NOW's human resources manager, testified that NOW was a federally- and state-licensed motor carrier. Gorman further testified that on May 12, 2006, Jones had given a female employee of one of NOW's customers a greeting card with an enclosed $50.00 bill. According to her affidavit, the female employee considered it "an unprovoked, inappropriate advance," and reported it to her employer, the customer. (Ex. 2). Gorman testified that the customer "brought the card and the fifty dollar bill" to NOW and reported the matter, whereupon NOW terminated its "contract" with Jones for "a breach of contract." (Tr. 3).

After eliciting Gorman's testimony that NOW was a federally- and state-licensed motor carrier, and that Jones was an independent contractor, NOW attempted to offer evidence regarding the "specific exception" in Indiana law that "makes ... exempt from unemployment compensation eligibility" an owner-operator driver for a motor carrier. (Tr. 5). The ALJ stated that "that issue" could not be added. (T. 5). When NOW moved that the offered evidence be included "on the record," the ALJ said, "No, because that's not relevant" and that he "was not going to take it." (Tr. 6). According to the ALJ, "for right now, he's an employee who's covered." Id.

Jones then testified that in his daily stops at the customer's business, he had never made any improper advances to the employee; that the employee had sought his friendship during a difficult time in her life and he had simply given her $50 to go out and have a good time. On August 10, 2006, the ALJ issued its decision, which stated that the only issue to be resolved had been whether "the employer" discharged Jones for just cause, and because NOW "failed to sustain its burden of proof" to the contrary, Jones "was not discharged for just cause." (App.59, 60). The decision stated that an appeal could be made to the Board, and that the appealing party could "request to submit" additional information not presented at the ALJ hearing. (App.59).

On August 28, 2006, NOW filed a request for appeal to the Board. On August 31, 2006, NOW moved "leave to introduce additional evidence" to the Board. (App.61). Specifically, NOW asked to introduce evidence of

— NOW's federal- and state-motor carrier authority;

— the independent contractor agreement between Jones and NOW;

— Jones' IRS Form 1099 showing that he was not paid wage income by NOW;

— the Indiana statutory exemption, Indiana Code § 22-4-8-3.5;

federal and state regulations proving the exemption's applicability to Jones;

all of which the ALJ "would not permit NOW Courier to introduce ... for the record." (App.62). The proposed additional evidence was included with this filing. On September 8, 2006, NOW further sought to add as evidence for consideration by the Board the transcript of the hearing before the ALJ "to show that NOW Courier was denied the opportunity to make a full record of its arguments that Tommy C. Jones is not eligible for unemployment benefits." (App.102).

On September 26, 2006, the Board issued its decision. The Board denied NOW's request to submit additional evidence and its request for a hearing. It also adopted the decision of the ALJ and affirmed the ALJ's determination that Jones was entitled to benefits.

On October 13, 2006, NOW filed with the Board its notice of intent to appeal and request for transcript. NOW also argued that the Board's refusal of its request to submit additional evidence and for a hearing had denied NOW its substantive and procedural due process rights; and that the Board's determination that Jones was entitled to unemployment compensation benefits was contrary to law because Jones held "exempt status as an independent contractor under Ind.Code § 22-4-8-3.5." (App.120-121).

DECISION

NOW argues that the Board's decision is contrary to law because it was denied due process — specifically, the opportunity to litigate the issue of Jones' exemption from eligibility for unemployment compensation benefits based upon a statutory provision. We agree.

When a decision of the Board is challenged as being contrary to law, we consider whether the evidence is sufficient to sustain its findings of fact, and whether the findings are sufficient to sustain the decision. McHugh v. Review Bd. of the Ind. Dep't of Workforce Dev., 842 N.E.2d 436, 440 (Ind.Ct.App.2006) (citing Ind.Code § 22-4-17-12(f)). Accordingly, we review "(1) determinations of specific or basic underlying facts; (2) conclusions or inferences from those facts, or determinations of ultimate facts; and (3) conclusions of law." Id. The board's findings of fact are generally conclusive and binding on us. Penny v. Review Bd. of the Ind. Dep't of Workforce Dev., 852 N.E.2d 954, 957 (Ind. Ct.App.2006). However, when an appeal involves a question of law, we are not bound by the Board's interpretation of the law. Id.

The fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner. Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). Whether the requirements of due process have been satisfied is a question of law. See Holmes v. Randolph, 610 N.E.2d 839 (Ind.1993) (notice provisions of statutes for towing, impoundment and disposal of abandoned vehicles do not violate due process); see also Lincoln v. Bd. of Comm'rs of Tippecanoe County, 510 N.E.2d 716, 725 (Ind.Ct.App.1987) (notice by ordinary mail did not violate due process), abrogated on other grounds by McDillon v. Northern Ind. Public Serv. Co., 841 N.E.2d 1148 (Ind.2006). Hence, we review de novo the issue of whether NOW was denied due process. See Penny, 852 N.E.2d at 957.

Indiana statutes governing the unemployment compensation system are found in Article 4 of Title 22. For the purpose of eligibility for benefits, "employment" is defined, see I.C. § 22-4-8-1, and expressly "include[s]" certain additional specific services performed. I.C. § 22-4-8-2. However, in section 22-4-8-3, the statutory scheme then provides that "employment" for the purpose of eligibility "shall not include" certain other specified services. I.C. § 22-4-8-3. An additional provision states that "employment" for the Article 4 unemployment compensation system "does not include an owner-operator that provides a motor vehicle and the services of a driver to a motor carrier under a written contract that is subject to IC 8-2.1-24-22, 45 IAC 16-1-13, or 49 CFR 376." I.C. § 22-4-8-3.5.

When an individual files a claim for benefits, an initial "determination of the individual's status as an insured worker" is made; the employer is furnished with notice thereof and that a hearing before an ALJ may be requested within ten days, in which period the employer also "shall notify" the Department of "any facts which may affect an individual's eligibility." I.C. § 22-4-17-2. NOW timely requested a hearing before an ALJ. Further, in that request to the Department, it expressly challenged Jones'...