Opinion
No. 1 CA-IC 12-0059
03-19-2013
CARLOS VALENZUELA-MORA Petitioner, v. THE INDUSTRIAL COMMISSION OF ARIZONA Respondent, E TALIC CONTRACTING, INC. Respondent Employer, SPECIAL FUND DIVISION/NO INSURANCE SECTION, Respondent Party in Interest.
Hendrickson & Palmer, P.C. By Adam P. Palmer Attorneys for Petitioner Jerome, Gibson, Stewart, Stevenson, Engle & Runbeck, P.C. By Darryl Engle Attorneys for Respondent Employer Industrial Commission of Arizona Legal Division By Kathryn E. Harris Attorneys for Respondent Party in Interest
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. 20112-240001
The Honorable Anthony Halas, Judge
AFFIRMED
Hendrickson & Palmer, P.C.
By Adam P. Palmer
Attorneys for Petitioner
Phoenix Jerome, Gibson, Stewart, Stevenson,
Engle & Runbeck, P.C.
By Darryl Engle
Phoenix Attorneys for Respondent Employer Industrial Commission of Arizona Legal Division
By Kathryn E. Harris
Attorneys for Respondent Party in Interest
Phoenix HALL, Judge ¶1 This is a special-action review of an Industrial Commission of Arizona decision affirming the decision upon hearing, findings, and award for non-compensable claim. Because we find that the evidence of record supports the Administrative Law Judge's (ALJ) determination that Carlos Valenzuela-Mora (claimant) was not "regularly employed" by E Talic Contracting, Inc. (E Talic), the respondent employer, we affirm the award denying his claim.
FACTUAL AND PROCEDURAL BACKGROUND
We consider the evidence in the light most favorable to upholding the award. Hahn v. Indus. Comm'n, 227 Ariz. 72, 74, ¶ 5, 252 P.3d 1036, 1038 (App. 2011).
¶2 On August 10, 2011, claimant filed a worker's report of injury with the Industrial Commission of Arizona alleging that he had sustained an industrial injury while working for E Talic on July 9, 2011. ¶3 Todd K. Farnworth, MD, a board-certified plastic surgeon, evaluated Claimant on the date of injury and concluded that he had suffered a fracture of his upper left extremity as well as a nasal fracture after falling off a ladder. Dr. Farnworth operated on claimant to correct his displaced nasal fracture and septal deviation. ¶4 On September 30, 2011, the Special Fund Division of the Industrial Commission of Arizona issued a Notice of Determination denying the claim. ¶5 Claimant appealed, and the ALJ held a two-day hearing in February 2012, to determine whether claimant was entitled to a compensable claim. ¶6 Claimant testified that Elvedin Talic (Talic), owner of E Talic, had picked up claimant and claimant's acquaintance, Julio Cesar Cordova, from a Carl's Jr. parking lot and hired them to clean and repair apartment complexes on July 9, 2011. Claimant stated that Talic explained the work would "require considerable time" and they would be paid twelve dollars an hour and work between eight and ten hours a day. At the first apartment complex, Talic provided claimant and Cordova with a power saw, hammers, nails, and a ladder, and instructed them to cut a hole in the roof. According to claimant, after he completed that job in approximately one hour, Talic drove him to a second job site at another apartment complex and asked claimant to clean the roof. Talic provided claimant with all the equipment he needed, including a ladder, a backpack blower, garbage bags, and a rake. Claimant testified that after cleaning the roof for about three or four hours, he started climbing down the ladder when the ladder slipped, and he fell approximately ten feet. A resident of the apartment complex called 9-1-1 and claimant was transported to the hospital by ambulance. Claimant stated that he broke his left arm and nose, and injured an eye, right forearm, left knee, two ribs, and mouth. He was admitted to the hospital, released after two days, and instructed not to work. Claimant testified that he has not been able to work since his injury. ¶7 Claimant stated that Talic offered to pay a portion of his medical bills and provide him with work. Claimant testified that he believed he was hired by Talic as an employee and not an independent contractor because Talic provided all the tools and because he was hired for an indefinite period of time. ¶8 Talic testified that he is the owner of E Talic, which he incorporated in June 2010, and the nature of the business is to perform "handyman jobs" and "general construction work." He explained that he obtained work through homeowner associations, friends, and word-of-mouth. He claimed he worked approximately 100 hours per month doing painting, brick work, tile work, clean-up work, and other general construction work. Talic stated that he had no regular, part-time or full-time employees and did not have anyone consistently or permanently on his payroll. He elaborated he only hired people for a single job; the longest time period he hired a worker to help him was one week; and he did not know in advance when he needed to hire someone. Talic found the workers through construction sites, friends, and other contractors. He said that between June 2010 and August 5, 2011, he hired day laborers to help him for a total of sixteen days. Talic stated that he had not hired anyone since August 5, 2011, because he was able to complete the work by himself. Talic estimated that he hired extra labor for approximately five percent of his jobs. ¶9 Talic stated that he met claimant at The Home Depot when claimant approached him for work. Talic said he had a "little job" of cleaning an apartment complex roof that would take approximately three or four hours to complete. He instructed claimant to meet him at the apartment complex the following day and he told claimant he would pay him two hundred dollars. Talic said that claimant provided the necessary equipment, a ladder and broom, to perform the work. He said he was not on the property when claimant was injured. Talic gave inconsistent statements about how much money claimant subsequently asked Talic to pay for the medical expenses he incurred as a result of his injuries: Talic said $5000 on the first day of the hearing and $10,000 on the second day of the hearing. ¶10 Talic testified that he had hired Cordova as a day laborer on July 25, 2011, for a "one-time deal" of four days. ¶11 Cordova testified that he first met Talic on approximately July 4-7, 2011. Cordova said that he did not provide any of his own tools and used only tools owned by Talic to complete the work he was hired to do, such as constructing gutters and wood frames. Cordova explained that Talic paid him between ten and twelve dollars an hour. Cordova testified that on July 9, 2011, both he and claimant used Talic's equipment to perform the work. Cordova said that he remained at the first job site when Talic drove claimant to a second job site. Cordova was informed of claimant's injuries several days later. Despite Talic's assertions he had only hired Cordova for four days, Cordova asserted he worked for Talic more than thirty days. ¶12 The ALJ noted he had "significant difficulty" in deciding this case because claimant's and Cordova's testimony "contained ambiguities rendering relevant factual findings less than certain." Further, the ALJ found much of Talic's testimony "was evasive and rife with inconsistencies and internal contradictions, and was not supported by any other evidence, and was simply not credible." Despite finding that much of Talic's testimony was not believable, the ALJ found that claimant failed to show by a preponderance of the evidence that E Talic "regularly employed" workers as required by A.R.S. § 23-902(A) (2012). Therefore, the ALJ concluded that E Talic was not subject to the Workers' Compensation Act (the Act), Arizona Revised Statutes (A.R.S.) sections 23-901 through -1104. Accordingly, the ALJ denied the claim. ¶13 Claimant requested a review of the ALJ's decision upon hearing. The ALJ affirmed his decision upon hearing and findings and award for non-compensable claim. Claimant timely appealed. ¶14 We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(2) (2003), 23-951(A) (2012), and Arizona Rule of Procedure for Special Actions 10.
DISCUSSION
¶15 Claimant argues on appeal that E Talic is an employer that regularly employed workers pursuant to A.R.S. § 23-902(A) and is therefore subject to the Act. ¶16 We deferentially review all factual findings. PFS v. Indus. Comm'n, 191 Ariz. 274, 277, 955 P.2d 30, 33 (App. 1997). We review de novo conclusions of law, such as whether an employer is subject to the Act. Putz v. Indus. Comm'n, 203 Ariz. 146, 148, ¶ 9, 51 P.3d 979, 981 (App. 2002). A claimant bears the burden of proving by a preponderance of the evidence that he sustained a compensable industrial injury. Larson v. Indus. Comm'n, 114 Ariz. 155, 159, 559 P.2d 1070, 1074 (App. 1976). ¶17 Pursuant to A.R.S. § 23-902(A), "every person who employs any workers or operatives regularly employed in the same business or establishment under contract of hire" are employers that are subject to the Act. "'[R]egularly employed' includes all employments, whether continuous throughout the year, or for only a portion of the year, in the usual trade, business, profession or occupation of an employer." Id. ¶18 Because the Arizona Legislature "did not intend to require self-employed workers who work essentially alone to provide coverage for the rare instance in which they hire an occasional worker," an employer is subject to the Act under A.R.S. § 23-902(A) "only when he employs at least one employee in the regular course of his business. If the employer ordinarily does not regularly employ any workers—if he hires only occasionally and unpredictably—he is not subject to the Act." Donahue v. Indus. Comm'n, 178 Ariz. 173, 178, 871 P.2d 720, 726 (App. 1993). ¶19 Although the ALJ found much of Talic's testimony unbelievable, he nonetheless could not "detect a hiring plan by Talic to obtain labor for E Talic . . . that is anything but occasional and unpredictable, particularly prior to July 9, 2011 . . . ." The ALJ therefore found that claimant had not proven E Talic's status as an employer pursuant to A.R.S. § 23-902(A) and denied his claim. ¶20 Claimant's reliance on Modern Trailer Sales of Arizona v. Industrial Commission, 17 Ariz. App. 482, 498 P.2d 556 (1972), as support for his argument that E Talic regularly employed workers, is misplaced. Modern Trailer involved a corporate employer that employed two full-time employees as well as short-term employees twenty-five percent of the time. Id. at 484, 498 P.2d at 558. Additionally, as discussed in Putz, 203 Ariz. at 150, ¶ 21, 51 P.3d at 983, because the business in Modern Trailer operated
from a fixed location, [it] predictably required yard maintenance. Thus, in the ordinary conduct of its business, Modern Trailer knew that on an ongoing and regular-though intermittent-basis it would require additional labor up to twenty-five percent of the time. Considering the nature of Modern Trailer's business, its customary or regular use of short-term employees constituted an established mode of operation that made it subject to the Act.Unlike the employer in Modern Trailer, E Talic did not employ full-time workers, and did not operate from a fixed location, which would have required regular maintenance. Further, Modern Trailer's estimate of the percentage of time it hired short-term employees was significantly higher than the five percent of the time that Talic approximated he hired extra labor. Thus, Modern Trailer fails to lend support to claimant's argument on appeal. ¶21 The facts of Putz, however, are similar to those here. Putz involved a contractor, Putz, who worked independently the majority of the time performing home repair and construction trade for his business, Northern Construction. 203 Ariz. at 147, ¶ 2, 51 P.3d at 980. Putz hired a retired welder to assist him for approximately four days to help construct a prefabricated metal building. Id. at ¶ 3. The welder fell from a ladder on his third day on the job and sustained multiple injuries. Id. We stated the issue as being whether Putz regularly and customarily employed at least one worker or whether he hired extra laborers in an unpredictable and occasional manner. Id. at 150, ¶ 20, 51 P.3d at 983. We determined that "the work [was] varied, unpredictable, and dictated by customers' demands and assignments[,]" as evidenced by Putz's projects over one year in which he hired extra labor for twenty-four days in a four-month period and eight days of extra labor in the subsequent eight months. Id. at 150, ¶ 22, 51 P.3d at 983. Thus, because Putz hired extra labor "only occasional[ly] and unpredictabl[y]," he was not subject to the Act. Id. at 150, ¶ 22, 51 P.3d at 983. The facts of this case are analogous to Putz because, like Putz, Talic hired extra labor on an as-needed short-term basis in an unpredictable and occasional manner. ¶22 In reviewing the evidence of record, we cannot conclude that the ALJ clearly erred in his determination that E Talic's hiring practices were occasional and unpredictable. Because E Talic did not regularly employ workers under A.R.S. § 23-902(A), it is therefore not subject to the Act. ¶23 Claimant also maintains that E Talic, the business, regularly employed Talic, the owner, and therefore qualified as an employer pursuant to A.R.S. § 23-902(A). Claimant failed to raise this argument until his request for review of the ALJ's decision upon hearing, and we are therefore not required to consider it. See Magma Copper Co. v. Indus. Comm'n, 139 Ariz. 38, 47-48, 676 P.2d 1096, 1105-06 (1983) ("[T]he time for presentation of evidence is at the hearing before the Commission. . . . [The Request for Administrative Review] is not the point at which affirmative matters creating new factual issues should be raised."). Even if we were to consider claimant's argument, we would reject it. Claimant is essentially asserting that the owner of a corporation or sole proprietorship is a "regularly employed" employee of the business. Regardless of whether that may be correct for other purposes, we perceive nothing in A.R.S. § 23-902(A) that persuades us that the legislature intended that the sole owner of a corporation or a sole proprietorship must be considered as being "regularly employed" for purposes of § 23-902(A), thereby bringing all such business arrangements within the purview of the Act. Cf. A.R.S. § 23-901(6)(i) (2012) ("The sole proprietor of a business subject to this chapter may be deemed to be an employee entitled to the benefits provided by this chapter on written acceptance, by endorsement, at the discretion of the insurance carrier of an application for coverage by the sole proprietor.").
CONCLUSION
¶24 For the foregoing reasons, we affirm.
______________
PHILIP HALL, Judge
CONCURRING: ___________
MARGARET H. DOWNIE, Presiding Judge
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MAURICE PORTLEY