Opinion
NOT TO BE PUBLISHED
PROCEEDINGS to review a decision of the Workers’ Compensation Appeals Board. (W.C.A.B. No. ADJ1642575 [MON 0336492])
Early, Maslach & Van Dueck, Maureen D. Krislov, Carlos Hilario; Veatch Carlson, Stephen K. Nakata for Petitioners.
Hinden & Breslavsky, Diana Marsteiner, Leon Y. Kleyman for Respondent Juan Jose Ayala
Neil P. Sullivan, Vincent Bausano for Respondent Workers’ Compensation Appeals Board.
BOREN, P.J.
The Workers’ Compensation Appeals Board (Board) found Juan Jose Ayala was an employee of Guillermo Duenas, while performing landscaping work at Duenas’s private residence.
We find there was no dispute Ayala was hired by Duenas, and thus was presumptively an employee. However, we find the Board erred in not properly considering whether Ayala was an excluded employee and outside the coverage for workers’ compensation benefits, under Labor Code section 3352, subdivision (h). That statute excludes from coverage some employees who otherwise may be eligible to receive workers’ compensation benefits. Such noncovered employees include those who work at a private residence and whose duties are incidental to the ownership or maintenance of the residence, and who do not meet certain threshold hours or wages during the 90 days immediately preceding the date of injury. We find Duenas satisfied his burden of proof to support a finding that Ayala was excluded as an employee pursuant to section 3352, subdivision (h). Accordingly, we annul the Board’s decision and remand for further proceedings as necessary and consistent with this opinion.
All further references to statute are to the Labor Code unless otherwise stated.
DISCUSSION
I. Facts and procedural background
Duenas hired Ayala to do landscaping work. Francisca Tellez, the mother of Ayala’s girlfriend, was called to testify on behalf of Ayala. She was present at the first meeting with Ayala and Duenas. She stated that there was never any discussion regarding the number of jobs that would be assigned.
Ayala testified that he first worked for Duenas on April 22, 2005, at some apartments. He did landscaping and worked for six days. He finished the job on or about April 28, 2005. Ayala testified that he received $300 in cash, a $200 rent reduction, and a $20 bonus.
Ayala was next assigned a job to work at some “home sites” in Pomona. Ayala mowed the lawn and cleaned the site. Ayala testified that this job took two days to complete and he received $300 cash.
After the work at the home sites was completed, Duenas then hired Ayala to work at Duenas’s private residence in Chino Hills. Ayala testified he was injured on the job after about two hours of work.
Duenas testified that he did not pay Ayala for the work done at the job assignment at his residence in Chino Hills. He had expected the work, which was to remove a berm and plant new flowers, would have taken three to four days maximum. He had agreed to pay $80 a day for all the job assignments. Duenas testified that he owned the apartment buildings, the home sites in Pomona were owned through a partnership, and he owned and occupied the single-family dwelling in Chino Hills.
The workers’ compensation judge (WCJ) found the only relevant period of employment was at Duenas’s private residence, where Ayala claimed he was injured. The WCJ found the other two work assignments were on behalf of a corporation and a partnership. He found Ayala was excluded as an employee pursuant to section 3352, subdivision (h), because he did not work the requisite number of hours or earn the minimum wages as required by the statute for those employed by an owner of a residential dwelling and whose duties were incidental to the ownership, maintenance or use of the dwelling.
The WCJ stated that the apartments were held by a corporation. The paraphrasing of Duenas’s testimony in the record states that Duenas “owns” the apartments. The conflict cannot be reconciled except to say that nothing in the record indicates the apartments are owned by a corporation.
The Board rescinded the findings of the WCJ. The Board found Ayala was presumed to be an employee pursuant to section 3357, since he rendered service for Duenas. However, the Board did not address the applicability of section 3352, subdivision (h), stating instead that the “WCJ made no preliminary finding that applicant was a ‘person defined in subdivision (d) of section 3351, ’ and no evidence was admitted to prove the elements of that subdivision.”
II. The board erred in relying strictly on section 3357 for a decision on the issue of employment
In its decision upon reconsideration, the Board reached its determination that Ayala was an employee based on section 3357. That section provides: “Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.”
The Board found that Duenas offered no evidence to rebut the section 3357 presumption of employment, and thus found Ayala was an employee at the time of his alleged injury. The Board also found the WCJ made no preliminary finding that Ayala was a “person defined in subdivision (d) of section 3351, ” which is a foundational requirement for the applicability of section 3352, subdivision (h).
The Board noted the parties agreed all issues were bifurcated except the issue of “employment.” The Board cited California Code of Regulations, title 8, section 10492 to reason that since the parties limited the issue to employment the Board may determine only that issue. (§ 5815.) They reasoned further since the determination of employment was decided, they correctly never reached the applicability of sections 3351, subdivision (d) and 3352, subdivision (h), and thus cannot be said to have impermissibly combined the hours worked and the earnings received by Ayala at other work sites to overcome the residential employee exclusion.
“The pleadings shall be deemed amended to conform to the stipulations and statement of issues agreed to by the parties on the record. Pleadings may be amended by the Workers’ Compensation Appeals Board to conform to proof.” (Cal. Code Regs., tit. 8, § 10492.)
“Every order, decision or award, other than an order merely appointing a trustee or guardian, shall contain a determination of all issues presented for determination by the appeals board prior thereto and not theretofore determined. Any issue not so determined will be deemed decided adversely as to the party in whose interest such issue was raised.” (§ 5815.)
Duenas correctly argues that the presumption of employment pursuant to section 3357 was not raised at trial, but only in Ayala’s Petition for Reconsideration. Duenas argues due process requires notice and an opportunity to be heard. (Rea v. Workers’ Comp. Appeals Bd. (2005) 127 Cal.App.4th 625, 643.) Accordingly, Duenas contends he was never given an opportunity to rebut the presumption.
It is undisputed that Ayala was hired by Duenas and rendered services at his private residence. Duenas did not allege Ayala was an independent contractor. Both sections 3351, subdivision (d) and 3352, subdivision (h) were explicitly listed on the pretrial conference statement, and both were relied upon by the WCJ in the Findings of Fact. Moreover, Ayala filed a Petition for Reconsideration of the Findings of Fact, contending he was an employee under section 3351, subdivision (d) and section 3357, and met the wage and hour requirements so he was not an “excluded” employee under section 3352, subdivision (h).
Section 5502, subdivision (e) provides if the parties are unable to resolve issues at the mandatory settlement conference, a pretrial conference statement must be filed noting the specific issues in dispute.
“Section 3357 creates a presumption that any person rendering service for another, other than an independent contractor, is an employee, unless expressly excluded. Among the persons expressly excluded from the definition of employee are those persons who perform services for homeowners as defined in subdivision (d) of section 3351 and have worked only a minimal number of hours (52) or earned a minimal amount of wages ($100) during the 90 days before they were injured. (§ 3352, subd. (h).)” (Furtado v. Schriefer (1991) 228 Cal.App.3d 1608, 1615.)
Based on this record, the parties presented evidence and based their arguments on the applicability of section 3351, subdivision (d) and 3352, subdivision (h). The Board erred in not considering the application of those statutes in reviewing the Findings of Fact, which found Ayala did not meet either prong of section 3352, subdivision (h), and thus his claim was barred.
III. The facts are sufficient to make a determination as to the applicability of sections 3351, subdivision (d) and 3352, subdivision (h)
The Board acknowledged the application of sections 3351, subdivision (d), and 3352, subdivision (h) were explicitly raised at the mandatory settlement conference, but indicated they did not address the application of those statutes because the record was not adequately developed.
Section 3351 provides: “‘Employee’ means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed.... [¶]... [¶] (d) Except as provided in subdivision (h) of Section 3352, any person employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant.”
Section 3352 generally sets forth “employee” exclusions and subdivision (h) provides in relevant part: “Any person defined in subdivision (d) of Section 3351 who was employed by the employer to be held liable for less than 52 hours during the 90 calendar days immediately preceding the date of the injury for injuries, as defined in Section 5411, or... who earned less than one hundred dollars ($100) in wages from the employer during the 90 calendar days immediately preceding the date of the injury... as defined in Section 5411....” The employer has the burden of proof to establish “[t]hat an injured person claiming to be an employee was an independent contractor or otherwise excluded from the protection of this division where there is proof that the injured person was at the time of his or her injury actually performing service for the alleged employer.” (§ 5705, subd. (a).)
“The date of injury... is that date during the employment on which occurred the alleged incident... for the consequences of which compensation is claimed.” (§ 5411.)
The Board cited Desy v. Workers’ Comp. Appeals Bd. (1991) 56 Cal.Comp.Cases 316 (Desy) (writ denied) in terms of the elements required for section 3351, subdivision (d). In Desy, a son employed his father, whose primary work was in the field of insurance, to do substantial remodeling at his residence. The father was paid a salary and room and board. He was injured approximately three months after he had begun working and had already expanded a number of rooms. The Board found that the father was not eligible for benefits because the work he performed, remodeling, was incidental to ownership, maintenance, and use of dwelling, but excluded him as an employee under subdivision (a) of section 3352. (Desy, supra, 56 Cal.Comp.Cases at p. 317.) The Board added that the father had not worked the minimum number of hours preceding the date of injury required, under section 3352, subdivision (h), for those employees included under section 3351, subdivision (d), to be entitled to workers’ compensation benefits. (Desy, supra, 56 Cal.Comp.Cases at p. 317.) There is no real parallel between the work situation described in Desy and that here.
Section 3352, subdivision (a) excludes as an employee any person defined in subdivision (d) of section 3351, who is employed by his or her parent, spouse, or child.
Scott v. Workers’ Comp. Appeals Bd. (1981) 122 Cal.App.3d 979 (Scott) further defines the parameters of “employment.” Scott was hired to assist in building a personal residence for another individual. Scott was injured in the course of his work. Scott had worked less than 52 hours during the 90 days before the injury. Thus the Board found he was excluded from the statutory definition of employee pursuant to section 3352, subdivision (h). (Scott, supra, 122 Cal.App.3dat p. 984.) The court annulled the Board’s decision, finding Scott did not qualify as a person whose duties were incidental to the ownership, maintenance, and use of the dwelling. The court reasoned the legislative history of section 3351, subdivision (d) shows it was intended to cover casual employees, not in the course of the employer’s trade or business, such as housecleaners, babysitters, or part-time gardeners. (Scott, supra, 122 Cal.App.3dat p. 985.) The court also found building a house is not a casual activity and the language in section 3351, subdivision (d) contemplates a completed dwelling or one sufficiently complete to be occupied as a residence. (Scott, supra, 122 Cal.App.3dat p. 985.) The work Ayala did for Duenas is much more of the casual variety than the kind of work Scott performed.
Stewart v. Workers’ Comp. Appeals Bd. (1985) 172 Cal.App.3d 351 (Stewart) discusses the factors to consider regarding section 3352, subdivision (h). A handyman was injured when he fell off the roof of the homeowner’s garage. The homeowner, Mrs. Stewart, raised the affirmative defense (or exclusions) of sections 3351, subdivision (d), and 3352, subdivision (h). The Board found the handyman was a covered employee, reasoning the homeowner derived income from rental of part of her residence, so repairing the roof was in the course of the homeowner’s business. (Stewart, supra, 172 Cal.App.3d at p. 353.) The court annulled the Board’s opinion. It noted that the facts were undisputed, that an employment relationship existed and the injury arose out of and in the course of employment. The court stated that the question remained as to whether the worker was a covered employee, which was a question of law. (Id. at p. 354.) The court opined if the work performed was in the course of the homeowner’s business, liability for compensation would attach. (Ibid.) The court found that Mrs. Stewart, in the ownership and rental of part of her house used to supplement her income, was not engaged in a business within the meaning of the workers’ compensation act. (Stewart, supra, 172 Cal.App.3d at pp. 354-355.) The court held that although the worker may have earned more than $100 within the previous 90 days, he was excluded from protection of the workers’ compensation act through section 3352, subdivision (h), because he had worked less than 52 hours within that time. (Stewart, supra, 172 Cal.App.3d at p. 356.)
Here, the only issues were the application of definitional and exclusion statutes. What may or may not have been Duenas’s “business” was either not discussed or perhaps not reported. (No verbatim transcript of the trial was presented to us--merely a summary of testimony.) Nor was there evidence of what connection there was between the job Ayala performed at the apartments and that performed at Duenas’s private dwelling. The clear facts were he worked only a couple of hours at the Duenas house, was injured, and was not paid for that job. Certainly Ayala was hired for work on a very limited basis and his employment at the house was only as a casual worker.
In Cedillo v. Workers’ Comp. Appeals Bd. (2003) 106 Cal.App.4th 227 (Cedillo), cited by Ayala, a worker was excluded from the definition of employee, pursuant to section 3352, subdivision (h), for failure to meet the threshold hour or wage requirements in that section. Rodriguez had been hired by Cedillo, an illegally unlicensed and uninsured roof contractor. Rodriguez began work for Cedillo in June 1995, worked three or four days a week, and was paid $60 per day for work at different locations. Cedillo had also contracted with his neighbor Reyes to repair the roof of Reyes’s house. Rodriguez began work on the roof of Reyes’s private residence per Cedillo’s direction. He had worked about 14 hours and earned $65 on Reyes’s home, when he was injured crossing the street. Because Cedillo was unlicensed, there was a rebuttable presumption pursuant to section 2750.5 that Cedillo was an employee of the homeowner, Reyes. At trial, the issue addressed was the application of section 2750.5 and section 3352, subdivision (h), as to the determination of whether Rodriguez was also an employee of Reyes. The court found Cedillo had no claim against Reyes since he did not meet the hours requirement of section 3352, subdivision (h), and therefore, could not be an employee of Reyes. Accordingly, the court determined “that for purposes of the workers’ compensation law, Mr. Rodriguez was not Mr. Reyes’s employee [but] Mr. Rodriguez was Mr. Cedillo’s employee.” (Cedillo, supra, 106 Cal.App.4th at p. 237.) The evidence was solid that Cedillo employed Rodriguez in the regular pursuit of his business, a business for which a license was required. Since Cedillo was uninsured, the court directed the Uninsured Employers Benefits Trust Fund to pay Rodriguez benefits. (Ibid.) No similar evidence was presented or made an issue regarding Duenas’s business, whatever that may have been.
There is a rebuttable presumption that a worker performing services for which a license is required, or who is performing a service for a person who is required to obtain a license, is an employee rather than an independent contractor. (§ 2750.5.)
The court reasoned that section 2750.5 supplements the definition of employee and independent contractor but does not override those definitions. (Cedillo, supra, 106 Cal.App.4th at p. 234.)
ANALYSIS
In the instant case, there was no dispute Ayala was hired by Duenas and rendered services. Thus, there was a presumption Ayala was an employee. However the issue of employment does not end with an analysis of section 3357. Once that threshold was met, the Board should have addressed the affirmative defense raised by Duenas, and addressed in the WCJ’s Findings of Fact, as to whether the facts supported a finding that Ayala was excluded as an employee pursuant to sections 3351, subdivision (d), and 3352, subdivision (h).
A witness for Ayala testified that each contract of hire was negotiated separately and that there was not one continuous contract for hire. Ayala’s assignment on the alleged date of injury was indisputably at Duenas’s private residence. Ayala’s work duties were incidental to the ownership, use or maintenance of the dwelling since it was cosmetic landscaping work.
Ayala testified as to the hours he worked and his earnings at each work assignment. In the Findings of Fact, the WCJ stated “the facts are clear” that Ayala did not meet his burden of proof to show that he fell within the hours and wages exclusion in section 3352, subdivision (h). Thus, his claim was barred.
The Board, in the December 30, 2009, response to this court’s inquiry, pondered whether Duenas was the sole shareholder of the corporation, a majority shareholder, or a substantial shareholder of the corporation that owned the apartments. The Board also pondered the nature of the partnership that owned the home sites, and whether Ayala was employed by Duenas through a partnership or corporation.
At the July 14, 2008, trial, Duenas testified that he owned the apartment building at which Ayala worked and that the home sites where Ayala worked were owned by a partnership. Duenas managed the apartment building and the home sites where the landscaping work was done, but there was no other evidence regarding ownership of those properties or his profession. However, the WCJ did indicate in his Findings of Facts that the apartments were owned by a corporation.
After submission of the July 14, 2008, trial, the WCJ determined further testimony was needed and vacated the submission. Further testimony was taken on November 17, 2008, and Ayala had the opportunity to provide additional testimony. Ayala did not recall Duenas to testify. Ayala did not rebut the finding he was excluded as an employee pursuant to section 3352, subdivision (h).
DISPOSITION
We hold Ayala was not a covered employee within workers’ compensation plan. The decision of the Board is annulled. Respondent Ayala’s request for attorney fees and costs pursuant to section 5801 is denied.
We concur: DOI TODD, J., CHAVEZ, J.