NO. 90-551 IN THE SUPREME COURT OF THE STATE OF MONTANA 1991

MURLAND W. SEARIGHT and VIRGINIA SEARIGHT, Petitioners and Appellants,

BONNIE JEAN HOWELL, wage claimant, and the COMMISSIONER OF LABOR AND INDUSTRY, State of Montana, Respondents and Respondents. CLERKOFSUPREMECOURT STATEOFMONTANA

APPEAL FROM: District Court of the Eleventh Judicial District, In and for the County of Flathead, The Hohorable Thomas Honzel, Judge presiding.

COUNSEL OF RECORD: For Appellant: Murland Searight, Columbia Falls,Montana For Respondent: Darrell S. Worm; Ogle & Worm; Kalispell, Montana Daniel B. McGregor,Department.of Labor & Indust-ry, Helena, Montana

Submitted on Briefs: March 7, 1991 ~ecided:April 22, 1991 Filed:Justice Fred J. Weber delivered the Opinion of the Court.

This appeal arises from a Department of Labor and Industry decision awarding respondent, Bonnie Jean Howell, $1,110.14 in wages and the same amount in penalty. The District Court for the Eleventh Judicial District, Flathead County, affirmed the Hearing Officer's decision. Mr. and Mrs. Searight appeal. We affirm. We restate the issues presented as follows: 1. Whether the Department of Labor and Industry possessed jurisdiction to award wages to Ms. Howell. 2. Whether the Hearing Officer applied the proper standard of proof. 3. Whether the District Court erred in concluding that Ms. Howell'swage claimwasnotbarred by thedoctrine of res judicata. On October 29, 1986,Bonnie Jean Howell (Ms.Howell) filed a wage claim against Mr. and Mrs. Searight (Searights) with the Department of Labor and Industry (Department). The claim, filed solely in Ms. Howell'sname,also demanded wages forher two sons. The Department split the claim and considered that portion pertaining to Ms. Howell at a hearing held on June 4, 1987. The Hearing Examiner held in favor of Ms. Howell after making the following findings of fact: 1. Ms. Howellwas employed by the Searights from April 8, 1985 through May 17, 1985 (Stipulated Fact.) 2. Ms. Howell has received $250.00 from the Searights in the form of a personal check for $150.00 and $100.00 cash (Stipulated Fact.) 3. A list of chores was provided by the Searights for Ms. Howell to perform at the rate of $5.00 per hour

### (StipulatedFact.) 4. 

### The Searights hired Ms. Howell to house-sit their home and toperform certain chores while they were on an extended trip to China. 5. Prior to employment, a verbal employment agreement wasmade betweenVirginia Searightand Ms. Howell. Also involved and affected by the agreementwereMs. Howell's sons, Carl Howell and Robert Howell. Ms. Howell was to receive $20.00 per day or $150.00 per month for housesitting. In addition,and as shown above in Stipulated Fact, Ms. Howell was to receive $5.00 per hour forwork performed relative to a list of chores provided by Ms. Searight. Robert Howell was to 

### receive $10.00 per day forplaying with theSearight'sdog and Carl Searightwas 

### to receive $1.00 per day for grooming the dog and cleaning up after the dog. (NOTE: The payment or nonpayment of services performed by Carl Howell and Robert Howell is not at issue in this matter; their employment agreements are mentioned only to clarify the employment agreement of [Ms.Howell].) 6. 

### Ms. Howell recorded hours worked relating to the additional chores to be performed at the rate of $5.00 per hour. 7. Ms. Howell claims the following: House sitting 

### - 5 weeks plus 5 days at $150.00per week 115 hours worked at $5.00 per hour 575.00 Less certain items received by Ms. Howell 72.00 Less $250.00 received by Ms. Howell 250.00 Total owed to Ms. Howell $1,110.14 The Hearing Officer concluded that the Searights owed Ms. Howell $2,220.28inwagesand statutory penalty and orderedpayment accordingly. The Searights petitioned for judicial review from the Order of the Hearing Officer. The District Court affirmed the HearingOfficer'sdecision. TheSearights filed amotion tovacate judgment which the District Court subsequently denied. TheSearights appeal.

Whether the Department of Labor and Industry possessed jurisdiction to award wages to Ms. Howell. The issuesraised on appeal in t.hiscase are questions of law. In reviewing questions of law, this Court will merely "determine if the agency's interpretation of the law is correct, instead of applying the inappropriate abuse of discretion standard". Steer Inc.

### v. DOR (1990), -P.2d 

### -, 47 St.Rep. 2199, 2200. TheSearights maintain thattheDepartment lacked jurisdiction in this case because Ms. Howell was not an employee but an independent contractor. They urge that under Foster v. Commissioner of Labor and Indus. (1987), 225 Mont. 246, 731 P.2d 1313, the Hearing Officer could not award back wages to an independent contractor. The Searights also contend that. Ms. Howell's labor constituted household or domestic service which is excluded from the definition of llempl~ymentlT under Montana's unemployment insurance statutes. Ms. Howell maintains first that the "independent c~ntractor'~ argument was not raised during 

### the proceedings before the Department, and is thus,beyond the scope of judicial review under 2-4-702(1)(b)

### , MCA. We agree. Section 2-4-702(1)(b)

### , MCA, provides: A party who proceeds before an agency undor the terms of a particular statue shall not be precluded from questioning the validity of that statute on judicial review, but such party may not raise any other questiog not raised before the asencv unlessit is shown to the 

### satisfa-ction 

### of th.gee=~]r:t

### that

### there--~~~_-good c,ause 

### f-zfailure to raise the question before the aqencv. (Emphasis added). The independent contractor issuewas addressedby theDistrict Court as follows: Whether a person is an employee or an independent contractor isa factual question. If [the Searights]had raised the issue of whetherMs. Howellwas an independent contractor and had presented evidence on that issue, the hearing officerwould havebeen required tomake specific findings on that question which the Court could then review. Here, [the Searights] did not raise the issue nor did they present any evidence regarding it. More importantly, [the Searights] stipulated that Ms. Howell was employed by them. The Court concludes, therefore, that [the Searights] cannot now raise the issue of whether Ms. Howell was an independent contractor. We conclude that 5 2-4-702(1)(b), MCA, is determinative here. We affirm the District Court inholding that the Departmentpossessed jurisdiction to award wages to Ms. Howell.

Whether the Hearing Officer applied the proper standard of proof. In his conclusion regarding the sufficiency 

### of the evidence presented before him, the Hearing Officer stated: The Searightsdid not keep any hourly records as to the amount of time spent by Ms. Howell working on the chores forwhich she was to be paid $5.00 per hour. Ms. Howell proved by reasonable inference that she worked hours forwhich shewas not compensated. The Searights did not disprove these hours. See Garsjo vs. (sic) Department of Labor, 562 P.2d 473 (Mont. 1977). The Searights contend that the Hearing Officer applied the incorrect standard of proof and that the preponderance of the evidence would havebeen theproper standardto apply. Ms. Howell maintains that while the Hearing Officer observed that theSearightshad notkepthourly time records,Ms. Howellkeptrecords and submitted a summary of her records in support of her claim. She contends that Garsjo does not create a different standard of proof, but rather, endorses the use of circumstantial evidence to establish a reasonable approximation of the hours worked in constituting substantial evidence to support a claim. SeeHolbeck

v. Stevi-West, Inc. (1989),240 Mont. 121, 125-126, 783 P.2d 391, 394-395. Here, Ms. Howell presented exhibits which detailed the work done. She kepttrack of exactlywhat shedid each day and howmuch time was spent on it. As the Department argues, this evidence, coupled with Ms. Howell's testimony and the stipulated fact that she was employed from April 8, 1985 through May 17, 1985, clearly constituted substantial evidence to support the Hearing Officer's conclusion. See Garsjo and Holbeck. We hold that the Hearing Officer applied the correct standard of proof. I11 Whether the District Court erred in concluding that Ms. Howell'swage claimwasnotbarred by thedoctrine of res judicata. The Searights contend that the findingsand conclusions of the separate proceedings involving Ms. Howell's sons are contrary to the findings and conclusions in this case, and thus, the doctrine of res judicata requires accepting those findings and conclusions

over those entered here. They argue that the findings of fact established that the employments of Ms. Howell, Carl and Robert

were for the identical time period, at the identical location,

### under one agreement,by the identical family members. The doctrine of res judicata applies when (1)

### the parties or their privies are the same; (2) 

### the subject matter of the action is the same; (3) the issues related to the subject matter are the same; and (4) the capacities of 

### the person are the same in referenceto the subject matter and the issues between them. PhilCO Feedsv. 1stNat'lBank inHavre (1989),238

### Mont. 414, 777 

### P.2d 1306. Theparties arenot the same in the two cases. They are only of the same family. Here,Ms. Howell is the wage claimant. In the previous case, Ms. Howell's sons, Carl and Robert, were the 

### claimants. 

### In the case at bar, the issue iswhether Ms. Howell is owed unpaid wages for work performed pursuant to express orders. In the sonstcase, the issue was whether they were owed wages at all for caring for the Searightstdog. We hold that the District Court was correct in ruling that the doctrine of res judicata did not bar Ms. Howelltsclaim. Affirmed.

Chief Justice