Sca Enters. Inc. v. Comm'r Labor (In re Courto)

• Decision Date: 22 March 2018
• Docket Number: 524569
• Citation: 159 A.D.3d 1240,74 N.Y.S.3d 108
• Parties: In the MATTER OF the Claim of Nicholas A. COURTO, Respondent. SCA Enterprises Inc., Appellant. v. Commissioner of Labor, Respondent.
• Court: New York Supreme Court — Appellate Division

159 A.D.3d 1240

74 N.Y.S.3d 108

In the MATTER OF the Claim of Nicholas A. COURTO, Respondent.SCA Enterprises Inc., Appellant.

v.Commissioner of Labor, Respondent.

524569

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: February 16, 2018

Decided and Entered: March 22, 2018

Fox Rothschild LLP, New York City (Glenn S. Grindlinger of counsel), for appellant.

Christopher Hammond, Cooperstown, for Nicholas A. Courto, respondent.

Before: McCarthy, J.P., Egan Jr., Devine, Clark and Rumsey, JJ.

MEMORANDUM AND ORDER

Rumsey, J.Appeals from two decisions of the Unemployment Insurance Appeal Board, filed May 20, 2016, which ruled, among other things, that SCA Enterprises Inc. was liable for unemployment insurance contributions on remuneration paid to claimant and others similarly situated.

SCA Enterprises Inc. is engaged in the business of connecting appraisers with its clients, which are insurance carriers, to assist in processing automobile damage claims across the United States. Although it conducts the majority of its business through designated franchisees who perform appraisals in specific geographic regions, it also utilizes independent appraisers in areas that are not covered by its franchise agreements. SCA uses a computerized operating system, known as the dashboard, to match franchisees and independent appraisers with assignments that are posted by its insurance carriers. Claimant, doing business as New Hartford Appraisal Service, is an independent appraiser who obtained assignments through SCA and filed a claim for unemployment insurance benefits after those assignments ended. The Department of Labor issued initial determinations finding that claimant was eligible to receive benefits as an employee of SCA and that SCA was liable for unemployment insurance contributions on remuneration paid to claimant and others similarly situated. Following protracted hearings, an Administrative Law Judge sustained these determinations. The Unemployment Insurance Appeal Board affirmed, and this appeal by SCA ensued.

Initially, it is well-settled that the existence of an employer-employee relationship turns on whether "the employer exercises control over the results produced or the means used to achieve the results," with the latter being more important ( Matter of Empire State Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 N.Y.3d 433, 437, 912 N.Y.S.2d 551, 938 N.E.2d 984 [2010]see Matter of Berger [Gail & Rice, Inc.–Commissioner of Labor], 143 A.D.3d 1024, 1025, 39 N.Y.S.3d 533 [2016], lv denied 29 N.Y.3d 905, 80 N.E.3d 402 [2017] ). Notably, incidental control over the results, without further evidence of control over the means, is insufficient (see Matter of Hertz Corp. [Commissioner of Labor], 2 N.Y.3d 733, 735, 778 N.Y.S.2d 743, 811 N.E.2d 5 [2004] ; Matter of Mitchell [Nation Co. Ltd. Partners–Commissioner of Labor], 145 A.D.3d 1404, 1405, 44 N.Y.S.3d 567 [2016] ). Furthermore, although the existence of an employment relationship is a factual issue for the Board to resolve, the Board's decision must be based upon substantial evidence consisting of "proof within the whole record of such quality and quantity as to generate conviction in and persuade a fair and detached fact finder that, from that proof as a premise, a conclusion or ultimate fact may be extracted reasonably—probatively and logically" ( 300 Gramatan Ave. Assoc. v. State Div. of Human Rights, 45 N.Y.2d 176, 181, 408 N.Y.S.2d 54, 379 N.E.2d 1183 [1978] ; see Matter of Mitchell [Nation Co. Ltd. Partners–Commissioner of Labor], 145 A.D.3d at 1406, 44 N.Y.S.3d 567 ; Matter of Stiefvater Real Estate Inc. [Commissioner of Labor], 34 A.D.3d 1176, 1177, 826 N.Y.S.2d 766 [2006], lv denied 8 N.Y.3d 807, 833 N.Y.S.2d 426, 865 N.E.2d 843 [2007] ).

Upon reviewing the evidence presented here, we conclude that substantial evidence does not support the Board's finding that an employment relationship existed between SCA and the independent appraisers, including claimant. SCA's business centers around the dashboard, as this is the portal through which it matches appraisers with assignments generated by its insurance carrier clients. SCA locates potential independent appraisers through job...