Court Opinion

ID: 4307540
Source: CourtListenerOpinion
Date Created: 2018-08-27 13:05:20.021371+00
Date Added: 2024-06-11T14:41:21.112629
License: Public Domain

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   BLOSSOM’S ESCORT, LLC v. ADMINISTRATOR,
       UNEMPLOYMENT COMPENSATION
                 ACT, ET AL.
                  (AC 40041)
                DiPentima, C. J., and Alvord and Beach, Js.

                                  Syllabus

The plaintiff appealed to the trial court from the decision of the Employment
   Security Board of Review affirming the decision of an appeals referee,
   which affirmed the decision of the defendant Administrator of the Unem-
   ployment Compensation Act that the plaintiff was liable for certain
   unpaid unemployment compensation contributions under the Unem-
   ployment Compensation Act (§ 31-222 et seq.). The plaintiff provided
   flag escort services for oversized vehicles and assigned requests for such
   services to various contractors. In March, 2008, P, who had performed
   as an escort vehicle operator for the plaintiff, filed a complaint with the
   administrator claiming that the plaintiff had failed to pay him appropriate
   unemployment compensation benefits. Because the plaintiff had not
   reported wages for P, the administrator conducted an audit for the
   applicable period from January 1, 2006 through December 31, 2007. In
   2008, an amendment (Public Acts 2008, No. 08-150) to the statute ([Rev.
   to 2007] § 31-222 (a) (5) (O)] that sets forth the types of services that
   are exempt from the definition of employment under § 31-222 took effect,
   which, under certain circumstances, exempted services performed by
   operators of escort vehicles. The amendment became effective June 12,
   2008. By a determination letter dated July 7, 2008, the administrator
   concluded that the plaintiff employed P and several others during the
   audit period within the terms of § 31-222 and, thus, that the plaintiff
   potentially owed $ 26,812.05 plus interest for unpaid unemployment
   compensation contributions. After the trial court remanded the matter
   to the board to make factual findings concerning the applicability of
   the amendment to the statute and further proceedings before the admin-
   istrator and board were held consistent with the remand order, the trial
   court rendered judgment dismissing the plaintiff’s appeal, from which
   the plaintiff appealed to this court. The plaintiff claimed that the trial
   court improperly concluded that the amendment to § 31-222 (a) (5) (O)
   was inapplicable to the present case. Held that the trial court properly
   dismissed the plaintiff’s appeal from the board’s decision; because the
   audit period predated the June 12, 2008 effective date of the amendment,
   the exemption contained in P.A. 08-150 could not be applied to the
   plaintiff’s drivers during the audit period, and although the administrator
   informed the plaintiff of its liability for unemployment compensation
   benefits following the effective date of P.A. 08-150, the date of the
   determination letter did not trigger the application of the amendment,
   as the audit period referenced in the determination letter was the time
   frame during which the named individuals provided services and was
   therefore the time period during which the plaintiff’s obligation to make
   unemployment compensation contributions arose, and that obligation
   under § 31-222 existed until the legislature amended it.
          Argued March 14—officially released August 28, 2018

                            Procedural History

   Appeal from the decision of the Employment Security
Board of Review affirming the named defendant’s deci-
sion that the plaintiff was liable for unpaid unemploy-
ment compensation contributions, brought to the
Superior Court in the judicial district of Hartford and
tried to the court, Hon. Henry S. Cohn, judge trial
referee; judgment dismissing the appeal, from which
the plaintiff appealed to this court. Affirmed.
  Jeffrey J. Holley, for the appellant (plaintiff).
  Richard T. Sponzo, assistant attorney general, with
whom, on the brief, were George Jepsen, attorney gen-
eral, and Philip M. Schulz, assistant attorney general,
for the appellee (named defendant).
                          Opinion

   PER CURIAM. The plaintiff, Blossom’s Escort, LLC,
appeals from the judgment of the trial court, rendered
in favor of the defendant, the Administrator of the
Unemployment Compensation Act (administrator), dis-
missing the plaintiff’s appeal from the decision of the
Employment Security Appeals Division, Board of
Review (board), affirming the decision of the appeals
referee, which affirmed the decision of the administra-
tor that the plaintiff was liable for unpaid unemploy-
ment compensation contributions under the
Unemployment Compensation Act (act), General Stat-
utes § 31-222 et seq. On appeal, the plaintiff claims that
the court improperly affirmed the decision of the board
because a then recent statutory amendment, General
Statutes (Rev. to 2007) § 31-222 (a) (5) (O), as amended
by No. 08-150 of the 2008 Public Acts, exempted the
claimant, Richard Peck,1 and certain other individuals
from the definition of ‘‘employee’’ under the act. We
affirm the judgment of the trial court.
   The following facts and procedural history are rele-
vant to our resolution of this appeal. The plaintiff pro-
vided flag escort services for oversized vehicles
traveling within or through Connecticut. The plaintiff
would assign requests for such services to various con-
tractors. In March, 2008, Peck, who had performed ser-
vices for the plaintiff as an escort vehicle operator, filed
a complaint with the administrator claiming that the
plaintiff had failed to pay him appropriate unemploy-
ment compensation benefits. The plaintiff had not
reported wages for Peck and, as a result, the administra-
tor’s field unit conducted an audit for the applicable
time period, from January 1, 2006 through December
31, 2007.
   In 2008, the legislature enacted Number 08-150 of
the 2008 Public Acts (P.A. 08-150) which, in § 43 (O),
exempted services performed by operators of escort
vehicles, under certain circumstances, from the defini-
tion of ‘‘employee’’ for purposes of § 31-222.2 See Gen-
eral Statutes (Rev. to 2007) § 31-222 (a) (5) (O), as
amended by No. 08-150 of the 2008 Public Acts.3 This
amendment became effective June 12, 2008.
   By a determination letter dated July 7, 2008, the
administrator concluded that the plaintiff had employed
Peck and other individuals within the terms of § 31-222
(a) (1) (B) (ii),4 during the audit period from January
1, 2006 to December 31, 2007, and that the ‘‘potential
amount’’ the plaintiff owed for unpaid unemployment
compensation contributions was $26,812.05 plus inter-
est.5 The plaintiff appealed to the appeals referee from
the administrator’s July 7, 2008 determination. In a Feb-
ruary 2, 2009 decision, the appeals referee affirmed the
July 7, 2008 determination of the administrator. The
appeals referee noted that the parties requested only
that he address the issue of whether the amendment
codified in P.A. 08-150 was the controlling law to be
applied to the July 7, 2008 determination of the adminis-
trator. The appeals referee concluded that the amend-
ment did not apply retroactively to the named
individuals who worked for the plaintiff between Janu-
ary 1, 2006 and December 31, 2007. The plaintiff
appealed that conclusion to the board. On November
12, 2010, the board affirmed the referee’s decision and
dismissed the appeal.
   On November 23, 2010, the plaintiff appealed the
board’s dismissal to the trial court. On January 8, 2015,
the court remanded the matter back to the board ‘‘to
institute factual findings regarding the applicability of
the amendment to the claims against [the plaintiff].’’
(Footnote omitted.) The court stated: ‘‘The board
argues that the court should simply decide that the
amendment does not apply and affirm the board. [The
plaintiff] states that if the amendment is not in effect,
then it will not pursue the matter further, but if it does
apply, then it stands ready to prove that the amendment
as a factual matter exempts it. . . . The court, how-
ever, would prefer to have the agency provide its factual
findings to the court in advance of its determination of
the applicability of the amendment.’’ (Footnotes omit-
ted.) In its remand order, the trial court retained juris-
diction to review the matter in full at the conclusion
of the administrative appeals process.
   On January 28, 2015, the board remanded the matter
to the administrator ‘‘to conduct further proceedings
and to issue a new decision.’’ The board noted that it
did not retain jurisdiction. By letter dated April 24, 2015,
the administrator concluded on remand ‘‘that none of
the escort drivers providing services to [the plaintiff]
during the time period covered in the original determi-
nation [January 1, 2006 through December 31, 2007]
would be exempted from covered employment by the
application of Public Act No. 08-150.’’ The plaintiff
appealed the administrator’s decision regarding the
applicability of the amendment to the appeals referee.
The appeals referee framed the issue before him as
‘‘whether the [plaintiff] would still be liable for contribu-
tions if the administrator applied the test set forth in
. . . § 31-222 (a) (5) (O), as amended by Section 43 (O)
of Public Act No. 08-150.’’ In a memorandum of decision
dated May 31, 2016, the appeals referee sustained the
plaintiff’s appeal and reversed the April 24, 2015 deci-
sion of the administrator. The appeals referee held that
the escort drivers who had provided services for the
plaintiff during the relevant time period would be
exempt from the definition of ‘‘employee’’ under the
relevant amendment to the act, § 31-222 (a) (5) (O), if
it were applied. The appeals referee ordered the admin-
istrator ‘‘to reimburse the [plaintiff] from contributions
already paid in an amount required by law.’’
  On June 9, 2016, the administrator appealed to the
board from the decision of the appeals referee. The
administrator argued that § 31-222 (a) (5) (O), as
amended, did not apply to the drivers in this case. The
board affirmed the decision of the appeals referee that
the escort drivers who provided services for the plaintiff
during the relevant time period would be exempt from
the definition of ‘‘employee’’ if the amendment were
applied. The board certified to the trial court the record
of the proceedings following the court’s December 31,
2014 remand order.
   Following the board’s decision on remand, the trial
court rendered a decision on January 9, 2017, dismissing
the plaintiff’s November 23, 2010 appeal. The court held
that ‘‘the issue on this appeal is . . . a legal one: the
right, not of a claimant, but the administrator for contri-
butions when the determination letter was sent after the
amendment. Regardless of the date of the determination
letter, the general rule is that where an employer
incurred liability for unemployment insurance taxes
under a statute, a subsequent amendment of the statute
to exempt the employer from payment of further taxes
does not operate retroactively to relieve the employer
of liability incurred before the effective date of the
amendment.’’ This appeal followed.
   The plaintiff claims that the court improperly con-
cluded that the amendment to § 31-222 (a) (5) (O) in
P.A. 08-150 was inapplicable to the facts of this case.
The plaintiff emphasizes that it does not claim that the
amendment should be applied retroactively, but rather
argues that the triggering event for purposes of applying
the new statutory amendment was the issuance of the
July 7, 2008 determination letter. The plaintiff contends
that, prior to the issuance of the determination letter,
there had been no formal finding that the named individ-
uals were employees rather than independent contrac-
tors. It argues that the determination letter triggered
legal proceedings and triggered the plaintiff’s payment
obligations. The amendment should apply in this case,
the plaintiff argues, because the amendment was in
effect at the time the determination letter was issued.
The administrator argues that the amendment cannot
be applied retroactively to the plaintiff’s liability for
unemployment compensation contributions for a time
period of January 1, 2006 through December 31, 2007,
which occurred before the effective date of the amend-
ment. We agree with the administrator.
   ‘‘If . . . the issue is one of law, the court has the
broader responsibility of determining whether the
administrative action resulted from an incorrect appli-
cation of the law to the facts found or could not reason-
ably or logically have followed from such facts.
Although the court may not substitute its own conclu-
sions for those of the administrative board, it retains
the ultimate obligation to determine whether the admin-
istrative action was unreasonable, arbitrary, illegal or
an abuse of discretion.’’ (Internal quotation marks omit-
ted.) Mattatuck Museum–Mattatuck Historical Society
v. Administrator, 238 Conn. 273, 276, 679 A.2d 347
(1996).
   The issue raised by the plaintiff is whether the July
7, 2008 determination letter was the event that triggered
the application of the amendment. In that determination
letter, the administrator informed the plaintiff that its
employment of certain individuals within the terms of
§ 31-222 (a) (1) (B) (ii) during the audit period triggered
its obligation for unpaid unemployment compensation
contributions. Although the administrator informed the
plaintiff of its liability for unemployment contributions
following the effective date of P.A. 08-150, which
exempted the plaintiff’s escort drivers from the act,
the date of the determination letter did not trigger the
application of the amendment. The audit period refer-
enced in the determination letter, January 1, 2006
through December 31, 2007, was the time frame during
which the named individuals provided services and is,
therefore, the time frame during which the plaintiff’s
obligation to make unemployment compensation con-
tributions arose. This obligation under § 31-222 existed
until the legislature amended it. Because the audit
period predated the June 12, 2008 effective date of the
amendment, the exemption contained in P.A. 08-150
would not apply.6 Accordingly, we conclude that the
court properly dismissed the plaintiff’s appeal from the
board’s decision.
      The judgment is affirmed.
  1
     Peck was a nonappearing defendant at trial and is not involved in this
appeal. We refer in this opinion to the administrator only as the defendant.
   2
     General Statutes § 31-222 (a) (1) (B) defines ‘‘employment’’ in relevant
part as any service performed by ‘‘(ii) any individual who, under either
common law rules applicable in determining the employer-employee rela-
tionship or under the provisions of this subsection, has the status of an
employee. Service performed by an individual shall be deemed to be employ-
ment subject to this chapter irrespective of whether the common law rela-
tionship of master and servant exists, unless and until it is shown to the
satisfaction of the administrator that (I) such individual has been and will
continue to be free from control and direction in connection with the perfor-
mance of such service, both under his contract for the performance of
service and in fact; and (II) such service is performed either outside the
usual course of the business for which the service is performed or is per-
formed outside of all the places of business of the enterprise for which the
service is performed; and (III) such individual is customarily engaged in an
independently established trade, occupation, profession or business of the
same nature as that involved in the service performed. . . .’’ ‘‘This statutory
provision is commonly referred to as the ABC test, with parts A, B and C
corresponding to clauses I, II and III, respectively. . . . [U]nless the party
claiming the exception to the rule that service is employment shows that
all three prongs of the test have been met, an employment relationship will
be found.’’ (Citations omitted; internal quotation marks omitted.) Southwest
Appraisal Group, LLC v. Administrator, Unemployment Compensation
Act, 324 Conn. 822, 832, 155 A.3d 738 (2017).
   3
     General Statutes (Rev. to 2007) § 31-222 (a) (5) (O), as amended by P.A.
08-150, sets forth the following exemption: ‘‘No provision of this chapter,
except section 31-254, shall apply to any of the following types of service
or employment, except when voluntarily assumed, as provided in section
31-223. . . . Service performed by the operator of an escort motor vehicle,
for an oversize vehicle, overweight vehicle or a vehicle with a load traveling
upon any Connecticut highway pursuant to a permit required by section 14-
270, and the regulations adopted pursuant to said section, provided the
following conditions are met: (i) The service is provided by an individual
operator who is engaged in the business or trade of providing such escort
motor vehicle; (ii) The operator is, and has been, free from control and
direction by any other business or other person in connection with the
actual performance of such services; (iii) The operator owns his or her own
vehicle, and statutorily required equipment, and exclusively employs this
equipment in providing such services; and (iv) The operator is treated as
an independent contractor for all purposes, including, but not limited to,
federal and state taxation, workers’ compensation, choice of hours worked
and choice to accept referrals from multiple entities without conse-
quence. . . .’’
   4
     See footnote 2 of this opinion.
   5
     In 2009, the parties agreed that the total amount due to the administrator
was $33,640.91.
   6
     The plaintiff does not argue that the amendment should be applied
retroactively and we agree that it is not subject to retroactive application.
‘‘General Statutes § 55-3 . . . states: No provision of the general statutes,
not previously contained in the statutes of the state, which imposes any
new obligation on any person or corporation, shall be construed to have
retrospective effect. . . . [W]e have uniformly interpreted § 55-3 as a rule
of presumed legislative intent that statutes affecting substantive rights shall
apply prospectively only. . . . [S]ee also Reid v. Zoning Board of Appeals,
235 Conn. 850, 859 n.6, 670 A.2d 1271 (1996) ([i]t is a rule of construction
that legislation is to be applied prospectively, unless the legislature clearly
expresses an intention to the contrary).’’ (Citations omitted; footnote omit-
ted; internal quotation marks omitted.) D’Eramo v. Smith, 273 Conn. 610,
620–21, 872 A.2d 408 (2005). ‘‘[T]he retroactive application of a law occurs
only if the new or revised law was not yet in effect on the date that the
relevant events underlying its application occurred.’’ State v. Faraday, 268
Conn. 174, 197, 842 A.2d 567 (2004).