Michigan Supreme Court Lansing, Michigan

Marilyn Kelly, Chief Justice

Michael F. Cavanag h
Elizabeth A. Weave r

Maura D. Corriga n Robert P. Young, Jr. Stephen J. Markma n Diane M. Hathaway,
J ustices 

# Order

December 4, 2009

137987

JAMES A. LOOS, JR., Plaintiff-Appellee,

v SC: 137987 COA: 275704 WCAC: 05-000246 J.B. INSTALLED SALES, INC., a/k/a J.B.
SUPPLY and ACCIDENT FUND INSURANCE COMPANY OF AMERICA, Defendants-Appellants,
and

ROBINSON ROOFING, Defendant-Appellee.

________________ _______________ __________/

On November 4, 2009, the Court heard or al argument on the application for leave to appeal the November 20, 2008 judgment of the Court of Appeals. On order of the Court, the application is ag ain considered. MCR 7.302(H)(1 ). In lieu of granting leave to appeal, we REVERSE the judgment of the Court of Appeals and REINSTATE the
decision of the worker’s co mpensation magistrate. The Court of Appeals improperly
held that income tax record s regarding whether the plaintiff was paid wages or nonemployee compensation are irrele vant to the question of wh ether the plaintiff is an employee under MCL 418.161(1)(n). Such reco rds are directly relevant to the question of employee status. Blanzy v Brigadier , 240 Mich App 632 (2000); Betancourt v Ronald
Smith , 1999 ACO #608. Based on the Court of Appeals erroneous legal conclusion in this case, it mistak enly concluded that the Work ers’ Compensation Appellate Commission (WCAC) had properly performe d its administrative appellate review function. The WCAC improperly reversed the magistrate’s decision based on a de novo assessment of the record and application of incorrect legal principles regarding whether the plaintiff was an employee. Mudel v Great Atlantic & Pacific Tea Co, 462 Mich 691, 700 (2000).

C AVANAGH , J. ( concurring in part and dissenting in part ).

I concur with the majority’s statement th at tax records are relevant to the question of whether a plaintiff is an employee unde r MCL 418.161(1)(n). However, because II, Corbin R. Davis, Clerk of the Mi chigan Supreme Cour t, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court.

_______________________________________ __ Clerk December 4, 2009

1201 2

believe that the Workers’ Compensation Appellate Co mmission (WCAC) properly performed its appellate review function, I resp ectfully dissent and would affirm the result reached by the Court of Appeals.

Plaintiff fell from a roof and sustaine d injuries while working for Robinson Roofing, which had contracted w ith J.B. Installed Sales, Inc., (J.B.) to perform roof work. Plaintiff sought worker’s compensation bene fits from J.B. under MCL 418.171. The magistrate found that plain tiff was an independent contr actor, and therefore denied benefits, because plaintiff’s tax records rev ealed that his earnings from Robinson Roofing were reported as non-employee earnings; his Social Security reco rds indicated that plaintiff was not an employee of Robinson Ro ofing; his hospital records indicated that plaintiff identified himself as self-employed; Robinson Roofing did not inform J.B. that it had any employees, as required by their contract; and plaintiff used some of his own tools while working for Robinson Roofing. The WCAC reversed in a unanimous decision, stating that “the statutory language [of MCL 4 18.161(1)(n)] makes it clear that the proper focus is on the plaintiff’s actions and not th e parties’ labels.” 2006 ACO 309, p 6. I

agree.

The Worker’s Disability Compensatio n Act defines “employee” in MCL 418.161(1)(n). The statute states th at a claimant is an employee “if the person in relation
to this service does not maintain a separate business, does not hold himself or herself out to and render service to the public, and is not an employer subject to this act.” MCL 418.161(1)(n) (emphasis added). Given the statutory language, I agree with the WCAC that the proper focus is on th e conduct of the person seeki ng benefits rather than the
labels attached to the relations hip by the parties. Robinson Roofing’s “labeling” that it had no employees, plaintiff’s “l abeling” of himself as self-e mployed, and plaintiff’s tax records, which were filed based on a Form 1099 that was supplied by Robinson Roofing,
should not have been the focus of the magist rate’s analysis. Thus, I believe that the WCAC did not misapprehend its administrative appellate review when it determined that the magistrate applied its findings of fact to a misconception of the law. Because I believe that the WCAC did not misapprehen d its administrative appellate role in reviewing the magistrate’s decision, and th ere is evidence to support the WCAC’s decision, I would affirm the result reach ed by the Court of Appeals. See Holden v Ford
Motor Co , 439 Mich 257, 26 8-269 (1992).

K ELLY

, C.J., and H ATHAWAY

, J., join the statement of C AVANAGH , J.