Title: Hughes v. Industrial Commission

State: arizona

Issuer: Arizona Supreme Court

Document:

113 Ariz. 517 (1976) 558 P.2d 11 Charlotte HUGHES, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, Alice Nedelec (Alice's House of Real Estate), Respondent Employer. No. 12804-PR. Supreme Court of Arizona, En Banc. December 15, 1976. *518 Robert Morrison, Sierra Vista, for petitioner. John H. Budd, Jr., Chief Counsel, The Industrial Commission of Arizona, Phoenix, for respondent. Richard L. Klauer, Phoenix, for respondent employer. HAYS, Justice. We took jurisdiction in this case by granting a Petition for Review. The opinion of the Court of Appeals in Hughes v. Industrial Commission, 27 Ariz. App. 152, 551 P.2d 962 (1976), is vacated. The sole question is whether a real estate salesman is an employee of a real estate broker for the purposes of the Workmen's Compensation Act, A.R.S. § 23-901, et seq. The respondent employer, Alice Nedelec, was a real estate broker who employed the petitioner, Charlotte Hughes, as a receptionist, and also employed two or more real estate salesmen.[*] The respondent Nedelec carried no workmen's compensation coverage and urges that the real estate salesmen associated with her were independent contractors rather than employees. She further contends that the following statute provides an exception which applies to her and her associates: In determining whether an individual is an employee or an independent contractor we must look to the right to control the method of reaching a desired result reposed in the employer. El Dorado Ins. Co. v. Ind. Comm., 25 Ariz. App. 617, 545 P.2d 465 (1976); Reed v. Ind. Comm., 23 Ariz. App. 591, 534 P.2d 1090 (1975). It is not the exercise of the power to supervise and *519 control, but rather its existence which is to be considered. Scott v. Rhyan, 78 Ariz. 80, 275 P.2d 891 (1954); Ind. Comm. v. Meddock, 65 Ariz. 324, 180 P.2d 580 (1947). The hearing officer at the conclusion of the Industrial Commission hearing found that the petitioner, Hughes, had failed to meet her burden of showing that the real estate salesmen were employees rather than independent contractors. He further found that by reason of this failure the Commission was without jurisdiction to grant relief on the claim. Prior to discussing the basic issue here, we reiterate a principle which guides us in the interpretation of Workmen's Compensation Law. Since this law was enacted to provide compensation for those injured in business or industry, it should be liberally construed to accomplish that purpose. Hight v. Ind. Comm., 44 Ariz. 129, 34 P.2d 404 (1934); Ind. Comm. v. Farm & Home Food Service, Inc., 5 Ariz. App. 339, 426 P.2d 808 (1967). This concept includes a liberal interpretation of the word employee under the Workmen's Compensation Act. Ind. Comm. v. Farm & Home Food Service, Inc., supra. We cannot agree with the conclusions of the hearing officer that respondent Nedelec was not subject to the provisions of A.R.S. § 23-901 and § 23-902, and that the Commission was without jurisdiction to grant relief. The petitioner relies heavily on the case of Faith Realty & Development Co. v. Industrial Comm. of Colo., 170 Colo. 215, 460 P.2d 228 (1969). In that case the Colorado Supreme Court relied principally on the Colorado statutes licensing and controlling real estate brokers and salesmen, stating: The provisions of A.R.S. § 32-2101, et seq., as regards the broker-salesman relationship are analogous to those of the Colorado statute. In both cases (1) a broker must retain the license of each salesman he employs; (2) the license must be returned to the Real Estate Commissioner when the licensee leaves the broker's employ; (3) the license of a broker or salesman is subject to revocation if the licensee represents, or attempts to represent without consent, a real estate broker other than his employer. A reading of the Arizona real estate statute, supra, indicates that it is replete with references to the brokers and salesmen as employer and employee. The hearing officer apparently decided that the following facts indicated an independent contractor relationship: The foregoing ignores a salient point. The real estate act, supra, gives the broker control of the salesmen, and the relationship of broker and salesman was terminable by either party at will, which is hardly the role of the independent contractor. This court in First Nat. Ben. Soc. v. Sisk, 65 Ariz. 1, 173 P.2d 101 (1946), said: The respondent Commission in its Motion for Rehearing on the Court of Appeals opinion decries the position of the Faith Realty case, supra, in construing the *520 Workmen's Compensation statute in pari materia with the real estate statute. Black's Law Dictionary sets forth the following definition of pari materia: Obviously the two above-indicated statutes do not relate to the same matter. Statutes are not interpreted in a vacuum either, and legal relationships mandated by one statute cannot be ignored in interpreting another. We find support for our position in this case in McClain v. Church, 72 Ariz. 354, 236 P.2d 44 (1951). In this earlier pronouncement by the Arizona Supreme Court, it was held that real estate salesmen were employees under the Unemployment Compensation Act. In that case the court noted that the legislature had removed real estate salesmen from coverage under the Act after the claim arose. The factual background of the McClain case in regard to the relationship of broker and salesmen parallels our case here. Although the language of the Employment Security Act, Ch. 124, 1941 Sessions Laws, differs from the Workmen's Compensation Act, we find the previous opinion most persuasive. In holding as we do, we are aware that other jurisdictions have taken a contrary position. See Florida Ind. Comm. v. Schoenberg, 117 So. 2d 538 (Fla.App. 1960). See also McGinniss v. Frederick W. Berens Sales, Inc., 308 A.2d 765 (D.C. App. 1973), where the court in a personal injury case indicated that each case should go off on the basis of the specific facts to determine whether the real estate salesman was an employee or an independent contractor. The broad-brush portrayal of dire consequences flowing from the position taken here as extensively enumerated in respondent Commission's Motion for Rehearing can be readily remedied by the legislature if in their wisdom they consider it necessary. The award of the Industrial Commission is set aside. CAMERON, C.J., STRUCKMEYER, V.C.J., and HOLOHAN and GORDON, JJ., concurring. [*] A.R.S. § 23-902(A) was amended in 1973 to apply the workmen's compensation law to employers with one employee.