Opinion
W.C. No. 4-261-540
March 17, 1997
ORDER OF REMAND
The claimant seeks review of a final order of Administrative Law Judge Wheelock (ALJ) insofar as it determined that he was an employee of the uninsured respondent, Integrity Business Services, Inc. (IBS), determined his average weekly wage and failed to impose certain penalties. IBS seeks review of the ALJ's order insofar as it determined that IBS was the claimant's employer and increased the claimant's compensation based on its failure to carry insurance. We set the order aside and remand for entry of a new order.
This matter was before us previously. In our Order of Remand dated July 26, 1996, we set aside the ALJ's previous order dated November 28, 1995. We specifically directed the ALJ to determine whether the claimant was an employee of Red Oak Carpet Center (Red Oak) under the doctrine of estoppel. We also directed the ALJ to determine whether Red Oak was the claimant's "statutory employer" under § 8-41-401(1)(a), C.R.S. (1996 Cum. Supp.).
Our July 26 order contains a lengthy statement of the facts, and we will not repeat them here. On remand, the ALJ entered an order dated September 23, 1996, which incorporated the findings contained in her November 28 order. The ALJ also made additional findings of fact pursuant to our order of remand.
The ALJ specifically concluded that the claimant was not an employee of Red Oak under the doctrine of estoppel, and had no reasonable basis for believing that he was. In support, the ALJ found that, although the claimant received one check from Red Oak, he received a "series of checks" issued by IBS. Further, the ALJ found that at the time the claimant was hired by Mr. O'Neil he signed a number of documents indicating that IBS, not Red Oak, was the employer. Finally, the ALJ pointed out that the claimant gave conflicting testimony concerning whether or not he believed he was working for Red Oak.
The ALJ also found that the claimant failed to carry his "burden of proof" to establish that he was a statutory employee of Red Oak. Specifically, the ALJ found that, although the claimant testified that he worked as a carpet installer, the claimant "offered no evidence as to whether or not the normal business of Red Oak involved installing carpet."
I.
On review, the claimant and IBS contend that the ALJ erred in finding that the claimant was not Red Oak's employee under the doctrine of estoppel. They argue that the evidence does not support the ALJ's determination. We are not persuaded by this argument.
In Olsen v. Industrial Claim Appeals Office, 819 P.2d 544(Colo.App. 1991), the court held that a claimant may be treated as an employee if the putative employer's "conduct causes the worker reasonably to believe that he or she is being employed." As we indicated in our prior order, determination of this issue is largely a factual matter for resolution by the ALJ. Consequently, we must uphold the ALJ's order if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. (1996 Cum. Supp.).
Here, the evidence was conflicting and subject to varying inferences concerning whether or not Red Oak engaged in conduct which led the claimant "reasonably to believe" that he was an employee of Red Oak. The ALJ rejected this theory because there was evidence that the claimant received a number of checks from IBS, signed several documents indicating that he was an employee of IBS, and at one point testified that he "didn't have an understanding" of who the employer was. (Tr. p. 26).
Under these circumstances, we cannot say the ALJ erred as a matter of law in determining that the claimant did not become Red Oak's employee under the doctrine of estoppel. The ALJ's pertinent findings of fact are supported by the evidence, and we decline to substitute our judgment for her's concerning the weight and credibility of the evidence. Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995). The mere fact that the evidence might have supported contrary findings is immaterial on review. May D F v. Industrial Claim Appeals Office, 752 P.2d 589 (Colo.App. 1988).
II.
The claimant and IBS also contest the ALJ's determination that the claimant was not Red Oak's statutory employee. Specifically, they argue that the ALJ erred in finding that the claimant failed to carry the burden of proof because there is "no evidence" that Red Oak's normal business operation involved the installation of carpet. We agree with this argument, and therefore, remand for entry of a new order on this issue.
As we indicated previously, the question of whether an employer is a "statutory employer" under § 8-41-401(1)(a), depends on whether the contracted work is part of the employer's regular business "as defined by its total business operation." In resolving this issue, ALJ's should consider "the elements of routineness, regularity, and the importance of the contracted service to the regular business of the employer." Finlay v. Storage Technology Corp., 764 P.2d 62 (Colo. 1988).
Obviously, application of this test is dependent on the facts of each individual case. Consequently, we are obliged to uphold the ALJ's determination if supported by substantial evidence. Section 8-43-301(8). Substantial evidence is probative evidence which would support a reasonable belief in the existence of facts supporting a particular finding, without regard to the existence of contradictory evidence or contrary inferences. F. R. Orr Construction v. Rinta, 717 P.2d 965 (Colo.App. 1985). Under this test, circumstantial evidence which supports a particular inference is as valid as direct evidence. Electric Mutual Liability Insurance Co. v. Industrial Commission, 154 Colo. 491, 391 P.2d 677 (1964). Moreover, in determining whether there is substantial evidence to support a particular finding, we may not convert a finding that there is "no evidence" into a finding that there is "no credible" evidence. Hall v. Industrial Claim Appeals Office, 757 P.2d 1132 (Colo.App. 1988).
Here, although there may be no direct evidence concerning Red Oak's regular business operation, there is circumstantial evidence from which it might be inferred that Red Oak's total business operation involved the installation of carpet. Mr. O'Neil testified that Red Oak went into business in July of 1994. (Tr. p. 76). The claimant's injury occurred in March 1995, and the claimant had been employed as a carpet installer for approximately five weeks prior to the injury. (Claimant's Exhibit B). Thus, Red Oak's business operation required the services of a carpet installer for at least one ninth of Red Oak's short existence. This evidence, taken with the fact that the contract between Red Oak and IBS allowed Red Oak to determine the "daily activities" which needed to be performed, supports an inference that Red Oak's "regular business" operation routinely and regularly required the installation of carpet.
Moreover, the claimant and O'Neil testified that O'Neil went to Denver and recruited the claimant to work for Red Oak. (Tr. pp. 8, 79). Because O'Neil was charged with the hiring and firing of employees needed to perform services for Red Oak, it may logically be inferred that O'Neil believed carpet installers were a necessary and important feature of Red Oak's staff.
Under these circumstances, the record does not support the ALJ's finding that there is "no evidence" that the normal business of Red Oak involved the installation of carpet. Because the ALJ may have failed to consider relevant circumstantial evidence, the matter must be remanded for entry of a new order concerning this issue.
On Remand, the ALJ need not hold an additional hearing to resolve the issues. Our prior order of remand did not require the ALJ to hold an additional hearing, and she need not do so now.
Considering this disposition, we decline to consider the other issues raised by the parties. Obviously, proper resolution of these issues may depend on the ALJ's conclusions concerning the statutory employer issue.
IT IS THEREFORE ORDERED that the ALJ's order dated September 23, 1996, is set aside, and the matter is remanded for entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. Dean
Copies of this decision were mailed March 17, 1997 to the following parties:
William C. Wright, 2875 Lone Feather, Colorado Springs, CO 80909
Kevin O'Neil, Red Oak Carpet Center, 4250 Hancock, Colorado Springs, CO 80911
Integrity Business Services, Attn: Mike McQuiddy, 7150 Campus Dr., Ste. 325, Colorado Springs, CO 80920
Allied Mutual Insurance Co., Attn: Kristine Shaddox, P.O. Box 5190, T.A., Denver, CO 80217-5190
Employer Compliance Unit, Attn: Rebecca Greben (Interagency Mail)
W. Thomas Beltz, Esq. Daniel A. West, Esq., 729 S. Cascade Ave., Colorado Springs, CO 80903 Chad J. Hessel, Esq., 101 N. Cascade Ave., Ste. 400, Colorado Springs, CO 80903 (For Integrity Business Services)
Ted A. Krumreich, Esq. John Lebsack, Esq., 1225 17th St., 28th Flr., Denver, CO 80202 (For Red Oak Allied Respondents)
By: _______________________________