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Southwest Appraisal Group, LLC v. Administrator, Unemployment Compensation Act

Superior Court of Connecticut, Judicial District of Ansonia-Milford, Milford

August 12, 2015

Southwest Appraisal Group, LLC
v.
Administrator, Unemployment Compensation Act

MEMORANDUM OF DECISION RE AMENDED APPEAL

John W. Moran, Judge Trial Referee.

The plaintiff, Southwest Appraisal Group, LLC, runs an automobile damage appraisal business. #100.31, p. 159. Its clients, which are insurance companies, contact the plaintiff when they receive damage claims from parties holding insurance policies; the plaintiff then contacts a licensed appraiser to provide a damage estimate. #100.31, p. 159. The plaintiff was audited in 2011 by the administrator, who determined on April 25, 2011, that a number of the plaintiff's appraisers--specifically, Michael Gerber, Scott Kehoe, Russell Mansfield, Andrew Patrick, Philip Zembruski, and Sam Draco--were employees during the years of 2009 and 2010 and not independent contractors. #100.31, pp. 1-2. Pursuant to this determination, the administrator found the plaintiff liable for contributions of $2486.73 plus interest for this period. #100.31, p. 1.

The plaintiff appealed this decision; #100.31, pp. 64-65; and a hearing before a referee for the Employment Security Appeals Division was ultimately scheduled for February 23, 2012. #100.31, p. 71. The referee issued her decision on April 12, 2012. In it, she held that the plaintiff had demonstrated part A and part C of the ABC test but had failed to demonstrate part B.[1] It, therefore, affirmed the administrator's decision and dismissed the appeal. #100.31, pp. 116-21. On April 30, 2012, the plaintiff appealed the referee's decision to Employment Security Appeals Division Board of Review (the board). #100.31, p. 123. The board issued its decision on January 25, 2013. In it, the board generally adopted the referee's findings of fact, subject to a few modifications and additions. #100.31, p. 163. It held that the plaintiff had established that all three parts of the ABC test were met with respect to Gerber, Mansfield, and Zembruski. With respect to Draco, Kehoe, and Patrick, however, the board held that, although the plaintiff had met parts A and B, it had not established part C; therefore, it was required to find an employment relationship between the plaintiff and these appraisers. #100.31, pp. 159-63.

On February 22, 2013, the plaintiff appealed to this court. #100.31, p. 167. It filed its petition and the record on March 11, 2013. On March 18, 2013, pursuant to Practice Book § 22-1(c), [2] the plaintiff moved for the board to prepare and verify a transcript of the hearings, which was granted by the court, Hiller, J.T.R., on September 23, 2013. On November 18, 2013, the administrator filed the transcript. On December 12, 2013, following two motions for extension of time, the plaintiff filed its motion to correct with the board. The board issued its decision on the motion to correct on April 11, 2014, in which it granted the motion in part and denied it in part. On April 24, 2014, the plaintiff filed both an amended petition and its claims of errors with respect to the board's decision on the motion to correct.

Both parties have submitted briefs. The plaintiff filed its brief on August 15, 2014, the administrator submitted its brief on October 16, 2014, and the plaintiff filed a reply on November 25, 2014. The court heard argument on April 15, 2015.

Additional facts will be discussed as needed.

" [T]he purpose of the statute . . . is to protect those who are at risk of unemployment if their relationship with a particular employer is terminated." JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, 265 Conn. 413, 420, 828 A.2d 609 (2003). " [T]he [unemployment compensation] act is remedial and, consequently, should be liberally construed in favor of its beneficiaries . . . Indeed, the legislature underscored its intent by expressly mandating that the act shall be construed, interpreted and administered in such manner as to presume coverage, eligibility and nondisqualifaction in doubtful cases. General Statutes § 31-274© ." (Citation omitted; internal quotation marks omitted.) Mattatuck Museum-Mattatuck Historical Society v. Administrator, 238 Conn. 273, 278, 679 A.2d 347 (1996). " [A]lthough the Unemployment Compensation Act should be construed liberally in favor of beneficiaries in order to effectuate its purpose, it should not be construed unrealistically in order to distort its purpose." F.A.S. International, Inc. v. Reilly, 179 Conn. 507, 516, 427 A.2d 392 (1980).

" [R]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency's findings of basic fact and whether the conclusions drawn from those facts are reasonable . . . Neither this court nor the trial court may retry the case or substitute its own judgment for that of the administrative agency on the weight of the evidence or questions of fact . . . Our ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion . . . [A]n agency's factual and discretionary determinations are to be accorded considerable weight by the courts." (Citation omitted; internal quotation marks omitted.) JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, supra, 265 Conn. 417-18.

In its appeal, the plaintiff makes two claims. First, it argues that the board erred in failing to find certain facts as requested in its motion to correct. Second, it asserts that the board improperly determined that the plaintiff had not sufficiently demonstrated that Draco, Kehoe, and Patrick were customarily engaged in an independently established trade, profession, occupation, or business of the same nature as those services that they performed for the plaintiff.

I

MOTION TO CORRECT

The plaintiff first asserts that the board erred in failing to find certain facts. Specifically, it argues that the following facts should have been found: (1) Kehoe did business in 2009 and 2010 under the name Scott H. Kehoe Services; (2) Draco considered himself an independent auto appraisal and a subcontractor; (3) Draco's independent auto appraisal business would continue without his relationship with the appellant; (4) Kehoe and Patrick were holding their services out to the public; (5) Kehoe, Patrick, and Draco were engaged in their own independent auto appraisal businesses; and (6) each appraiser is engaged in his own auto appraisal business.

In the present case, the board generally adopted the referee's findings of fact. #100.31, p. 163. These findings of fact, as modified by both the board's initial decision and its decision to grant in part the plaintiff's motion to correct, are as follows:

1. [The plaintiff] operates an auto damage appraisal business and provides appraisal services to various insurance companies. The insurance companies contact Southwest Appraisal Group to inspect damaged vehicles of their insured clients after filing of a damage claim.
2. [The plaintiff] uses licensed independent appraisers to perform the work. The insurance industry requires that auto damage appraisers possess a valid MVPD Appraiser license. These licenses are renewed every two years.
3. [James] Murphy [the owner of the plaintiff] found appraisers through word-of-mouth from body shops. He also placed ads for appraisers on social media sites such as Craigslist.com. He selected appraisers based on their years of experience.
4. During the period in question, Murphy used licensed appraisers Andrew Patrick, Russell 'Jay' Mansfield, Michael Gerber, Philip Zembruski, Sam Draco, and Scott Kehoe, to perform the appraisals. Murphy is also a licensed appraiser and performs appraisals on occasion.
5. Each appraiser maintains his own license and tools to perform the work. The appraisers also have business cards. They maintain their own faxes, computers, and copiers.
6. [The plaintiff] provided no training, training materials, or uniforms to the appraisers.
7. Each appraiser negotiated their rates with Murphy. They are paid $40.00 or $45.00 for each appraisal, and $25.00 or $30.00 for each supplemental visit, based on their personal arrangement with Murphy.
8. Murphy provides ADP Collision Estimating software to the appraisers. [The plaintiff's] insurance agency clients require this software. It is essentially a price list that helps the appraiser determine costs. [The plaintiff] provided no training for using this software.
9. Murphy assigns the appraisers to clients based on their geographical location. The appraisers contact the insured customer to determine where to inspect their vehicles. They set up their own daily schedules. They travel to the customer's homes, offices, or other sites of the customer's choosing. They perform no work at the employer's location. Murphy does not supervise or inspect their work. [Murphy ...

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