Court Opinion

ID: 3996948
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:54:59.488091+00
Date Added: 2024-06-11T14:18:45.537996
License: Public Domain

I am unable to concur in the majority opinion because I find in it what seems to me to be a departure from the construction we have given to the definition of "employment" by the unemployment compensation act, in that it holds that all independent contractors and those whom they secure to perform services are without the coverage of the act for the reason that there does not exist between them and the one served the common-law relationship of either master and servant or principal and agent, and that it limits the coverage of the act to the latter two relationships.
After the passage of our unemployment compensation act and acts of those of other states containing a similar statutory definition of "employment," the courts divided (and have continued to do so) upon the question as to who were covered by the acts. One school of judicial thought adopted the view that the acts applied only to those who sustained towards each other the common-law relationship of either master and servant or principal and agent, while another adopted a view that it was intended by the lawmakers to, and the statutes defining "employment" did, enlarge the scope of that term, and that it included many individuals who would have been otherwise excluded from the benefits of the acts by the former concepts of master and servant and principal and agent as recognized by the common law. We adopted the latter view in McDermott v. State,196 Wash. 261, 82 P.2d 568, and continued to do so in many subsequent cases and as recent as Unemployment CompensationDepartment v. Hunt, 22 Wash. 2d 897, 158 P.2d 98.
Shortly after the McDermott case, we decided WashingtonRecorder Pub. Co. v. Ernst, 199 Wash. 176, 91 P.2d 718. In that case it was held that newsboys who purchased newspapers from the publisher and resold and delivered them to their customers were independent contractors, and that, as the common-law relationship of master and servant between the publisher and the newsboys did not exist, they were not in employment under the act. The reasoning of *Page 195 
the court was to the effect that the term "employment" covered only the common-law relationship of master and servant.
In a dissenting opinion, attention was called to the conflict with the McDermott case. In the light of subsequent events, it is unfortunate that the court did not rehear the case En Banc
and definitely determine whether the statutory definition of employment, in its broader aspects, should be followed, or whether the restricted view of the extent of that term should be the future rule of decision. The Recorder case has never been expressly overruled, but whenever its doctrine has clashed with the doctrine of the McDermott case and other subsequent cases, it has either been distinguished or held not to apply, and in some cases members of the court have been reluctant to expressly overrule it in so far as its doctrine conflicted with the other cases. If the Recorder case had decided that, inasmuch as the real relationship between the publisher and the newsboys was that of vendor and vendee, as suggested in Mulhausen v. Bates, 9 Wash. 2d 264,  114 P.2d 995, the newsboys were not in employment, a correct result would have been reached. What has caused later trouble was the expressions used to the effect that the act covered only those who sustained the relationship of master and servant, and that if one was an independent contractor he was not in employment under the act.
I feel that the effect of the majority opinion is to adopt the doctrine of the Recorder case and repudiate that of theMcDermott case and the long line of cases following it.
An independent contractor and those he may secure to render services are prima facie in employment as that term is used in the unemployment compensation act whenever they perform services for remuneration.
Section 19 (g) (1) and (5) (i) (ii) (iii) of the act, Laws of 1937, chapter 162, p. 610, provided as follows:
"(1) `Employment,' subject to the other provisions in this subsection, means service, including service in interstate commerce, performed for wages or under any contract of hire, written or oral, express or implied. . . . *Page 196 
"(5) Services performed by an individual for remuneration shall be deemed to be employment subject to this act unless and until it is shown to the satisfaction of the director that:
"(i) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
"(ii) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprises for which such 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 contract of service."
The factual situation in this case must be gathered from the testimony of the two officers of the appellant who testified. They stated they did not exercise any control over the musicians and did not have any right to do so; but these statements were to a great extent their conclusions and do not negative the fact that, as a legal proposition, the appellant had the right of control over them while they were playing for its dances. The fact that appellant may not have exercised any such control, but delegated that duty to another, is immaterial. It was stated that the appellant paid the director and he in turn paid the musicians. The appellant knew that the musicians had to receive the union scale of wages, and the amount of money paid each week included the total of this scale of wages and what the director received for his services. The giving of all of the money to the director was only a matter of clerical convenience to the appellant. The net result was just the same as if the director and each individual musician had been paid directly by appellant. If the director had failed to pay the musicians, they would have had the legal right to have recovered their wages from the appellant. The chief appeal examiner who saw these witnesses and heard them testify was in a much better position to weigh their testimony and draw inferences and conclusions from it than we are. *Page 197 
We have held many times that the administrative determination of the facts in a proceeding of this kind is conclusive on the courts unless such determination is wholly without evidential support, or is wholly dependent upon a question of law, or is clearly arbitrary and capricious. Unemployment CompensationDepartment v. Hunt, 17 Wash. 2d 228, 135 P.2d 89, and cases cited therein. When the whole relationship of the appellant and the various musicians and their acts and conduct are considered, it seems to me that under the above rule this court should accept the findings of fact and conclusions based thereon of the department.
The services performed by the musicians were not performed for the director or for his benefit. They were performed at the request of appellant and for its benefit, as the music played was necessary in order that the dances could be conducted. All the director did was to select the music and guide the musicians while playing. Both the director and the musicians rendered services within the meaning of the act, and they were performed for wages. This is sufficient to bring all of them within the terms of the act, even though the director may have been an independent contractor under the common-law definition. This being the case, the act applies to the appellant unless the evidence shows that it brought itself within all of the three exceptions above set forth, and the burden was upon appellant to do this to the satisfaction of the commissioner.
It seems clear, as was found by the department, that the directors and musicians were not free from control of the appellant, and that appellant had the right of control over them. The appellant controlled the hours in which their services were required and would have had the legal right to dismiss any musicians whose conduct was improper. The appellant had the right to terminate the services of all of the parties upon giving two weeks' notice; it had control over the times when and the place where the dances were conducted; it owned, maintained, and heated the place where they were held; advertised the dances; sold tickets; received the proceeds therefrom, and controlled the admission of *Page 198 
those who attended the dances. The proceeds from the sale of tickets became a part of the general funds of appellant and were used in promoting its activities. There is no evidence in the record that the directors or musicians furnished or played music for anyone other than appellant. When these factors are all considered, it seems very clear that the appellant has not brought itself within all of the exceptions above set forth.
The form of the questions asked at the hearing before the appeal examiner and the replies given sought to convey the idea that the musicians were serving the director, were paid for their services by him, and were under his exclusive control. The officers of appellant who testified were interested witnesses. We have often held that a trier of fact is not obligated to believe the testimony of an interested witness in its entirety even though it was not contradicted, and may draw inferences from his testimony different from what he may say and arrive at conclusions of fact at variance with such testimony. The trier of fact must interpret the testimony of the witnesses in the light of the whole situation that is unfolded to him, and draw his ultimate conclusions. The appeal examiner did all of this, and after reading all of the record I cannot see how it can be said that the departmental determination that the musicians performed services for wages paid to them by appellant through the musical director, and that appellant did not bring itself within all of the three exceptions above quoted, was wholly without evidential support, or was wholly dependent upon a question of law, or was clearly arbitrary and capricious.
The commissioner, upon review of the decision of the appeal tribunal, reached the same conclusion on the facts as the trial examiner did, and so did the trial judge when the case was heard before him.
It also seems to me that there is a much more simple solution of the question involved here than existed by the approach made to it by the department, and I think it is the theory upon which the parties originally acted. The real situation was that the appellant desired to obtain music for *Page 199 
its dances, and its officers selected and employed someone to find and secure the services of musicians; and that, in whatever they did, the so-called orchestra leaders were nothing more than agents of the appellant; that the agents hired the musicians to render services for it and they were its employees.
The judgment should be affirmed.
BLAKE, J., concurs with GRADY, J.
MALLERY, J., did not participate.
                  [Department One. November 27, 1945.]
GRADY, J.
After the opinion of the court in this case was filed, and before the remittitur was handed down, the appellant filed a motion asking that the court determine the amount of a fee to be paid to its attorney out of the unemployment compensation administration fund. In the opinion, we held that the appellant was entitled to a refund of unemployment compensation taxes paid by it from March 16, 1937, to June 30, 1942, and reversed a judgment of the superior court which had affirmed the order of the appeal tribunal denying any refund. The appeal tribunal had affirmed the decision of the commissioner.
It is the contention of the appellant that, in view of Rem. Supp. 1943, § 9998-106 (i), it is incumbent upon this court to fix a reasonable attorney's fee to be paid out of the unemployment compensation administration fund for services rendered by its attorney because the decision of the commissioner was reversed.
The pertinent portions of this section are as follows:
"It shall be unlawful for any attorney engaged in any such appeal to the courts as provided herein to charge or receive any fee therein in excess of a reasonable fee to be fixed by the Superior Court in respect to the services performed in connection with the appeal taken thereto and to be fixed by the Supreme Court in the event of an appeal thereto, and if the decision of the Commissioner shall be reversed or modified, such fee and the costs shall be payable *Page 200 
out of the Unemployment Compensation Administration Fund. In the allowance of fees the Court shall give consideration to the provisions of section 15 (b). In other respects the practice in civil cases shall apply. Appeal shall lie from the judgment of the Superior Court to the Supreme Court as in other civil cases. In all court proceedings under or pursuant to this act the decision of the Commissioner shall be prima facie correct, and the burden of proof shall be upon the party attacking the same.
"Whenever any appeal is taken from any decision of the Commissioner to any court, all expenses and costs incurred therein by said Commissioner including court reporter costs and attorney's fees and all costs taxed against such Commissioner shall be paid out of the Unemployment Compensation Administration Fund."
It is the contention of the respondent that Rem. Supp. 1943, § 9998-106 (i), in so far as attorney's fees are concerned, does not apply to proceedings for a refund of taxes paid into the unemployment compensation fund because of Rem. Supp. 1943, § 9998-114 (e), the pertinent portion of which is as follows:
"The issues raised by such petition shall be heard by the appeal tribunal, established in section 6 of this act [§ 9998-106d], in the same manner and in accordance with the same procedure as is prescribed for appeals from benefit determinations, including the procedure set out in section 6 [§ 9998-106a et seq.] for review by the Commissioner and court:Provided, That the provisions of section 6 (g) [§ 9998-106g] shall not apply to hearings before the appeal tribunal or appeals to the courts involving assessment disputes, as to such hearings and appeals, the practice in civil cases shall apply, nor shall the provisions of section 6 (i) [§ 9998-106i] or 15 (b) [§ 9998-115b] relating to the fixing of a reasonable fee for the services of counsel or duly authorized agents, apply to hearings on assessments or appeals to the courts involving assessment disputes."
[6] In tracing the history of the legislation providing for attorney's fees under the unemployment compensation act, Rem. Rev. Stat. (Sup.), § 9998-106 (i), it will be found that, in controversies arising over claims for awards out of the compensation fund, provision was made that it should be unlawful for an attorney engaged in any appeal *Page 201 
to the courts to charge or receive any fee therein in excess of a reasonable fee to be fixed by the courts in the case. It was also provided that, if the decision of the commissioner should be reversed or modified, such fee would be payable out of the administration fund. Another section of the act, Rem. Rev. Stat. (Sup.), § 9998-114(d) provided that an employer who had paid contributions into the fund might make application for a refund thereof, but no provision was made for attorney's fees in connection therewith. Subsequent legislation on the same subject, chapter 253, Laws of 1941, p. 908, Rem. Supp. 1941, § 9998-114(f), provided the same procedure should be had as prescribed for hearing appeals from benefit determinations, and this is the basis for the argument made that whenever the decision of the commissioner is reversed or modified an attorney's fee shall be allowed.
In considering this aspect of the case, it must not be overlooked that, when the legislature provided for the allowance of attorney's fees, it created a substantive right as distinguished from a procedural remedy, but attached that right only to benefit claims and did not attach it to claims for refund. If there existed any doubt in this respect, it was definitely removed by the proviso to § 10 of chapter 127, Laws of 1943, p. 327, Rem. Supp. 1943, § 9998-114 (e), above quoted. The proviso specifically excludes from appeals to the courts involving assessment disputes the provision of the law relating to attorney's fees.
The cases we have decided on the subject of attorney's fees under the unemployment compensation act (State v. Christensen,18 Wash. 2d 7, 137 P.2d 512; St. Paul  Tacoma Lbr. Co. v.Department of Labor  Industries, 19 Wash. 2d 639,144 P.2d 250), considered benefit claims, and the court did not have before it any question of refund. In the case of In re Jullin,ante p. 1, 158 P.2d 319, 160 P.2d 1023, the court had before it a benefit claim, and the question decided was the order of procedure to be taken by the department when such a claim was made. Subsequent to the decision of the case, the court decided that, as a claim for benefits was before the court, the part *Page 202 
of the statute relating to attorney's fees in cases of benefit claims applied, and an award was made. There was no question of refund involved in that case.
We conclude that, in proceedings on appeal from the department involving adjustments of assessments and refunds, attorney's fees to be paid out of the unemployment compensation fund cannot be fixed or awarded by the court.
The motion is denied.
BEALS, C.J., STEINERT, and JEFFERS, JJ., concur.