Court Opinion

ID: 4187002
Source: CourtListenerOpinion
Date Created: 2017-07-18 15:17:49.608931+00
Date Added: 2024-06-11T14:40:00.257725
License: Public Domain

FILED
                                                                      JULY 18, 2017
                                                               In the Office of the Clerk of Court
                                                             WA State Court of Appeals, Division III

         IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                            DIVISION THREE

JEREMY J. MOBERG,                )
                                 )                   No. 34390-1-111
                Appellant,       )
                                 )
     v.                          )
                                 )
TERRAQUA, INC., a/k/a TERRAQUA   )                   UNPUBLISHED OPINION
ENVIRONMENTAL CONSUL TING;       )
MICHAEL B. WARD a/k/a MICHAEL B. )
WARDSKI; and UNKNOWN             )
CORPORATION,                     )
                                 )
                Respondents.     )

      SIDDOWAY, J. - Jeremy Moberg sued Terraqua, Inc. for whom he worked for

over a decade, and its owner, Michael Ward. He claims Terraqua misclassified him as an

independent contractor, thereby avoiding the company's financial obligations as an
No. 34390-1-111
Moberg v. Terraqua, LLC

employer; reneged on oral offers to give him ownership in the company; and delayed for

months in delivering his final paycheck. The trial court dismissed his claims on summary

judgment. He appeals dismissal of his claims alleging state wage law violations and

entitlement to an ownership interest based on theories of promissory estoppel and unjust

enrichment.

       Terraqua's alleged promises of an ownership interest were too indefinite and Mr.

Moberg's evidence of unjust benefit is insufficient to support his promissory estoppel and

unjust enrichment claims. But under the test for employee status that we apply to his

wage claims-whether, as a matter of economic reality, he was dependent for fish

ecology work on Terraqua-material facts are disputed. We reverse dismissal of the

wage claims and remand for further proceedings.

                     FACTS AND PROCEDURAL BACKGROUND
       Terraqua is a small business established in 1995 that provides fisheries research

and consulting. Michael Ward is its sole owner and principal officer. After working for

Terraqua as an intern in college, and then through an employment service firm, Jeremy

Moberg began working for Terraqua under a direct contract in 2001. He continued

entering into annual contracts with it to serve as a fish ecologist nearly every year until

2011. Terraqua declined to enter into further contracts with Mr. Moberg after the 2010

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contract expired on June 30, 2011.

       In September 2011, Mr. Moberg sued Terraqua, asserting four claims for relief.

One claim, alleging violations of several of Washington's labor laws, was viable only if

Mr. Moberg had been an employee of Terraqua. Yet all ofTerraqua's contracts with Mr.

Moberg characterized him as an independent contractor.

       Following the conduct of discovery, Terraqua moved for summary judgment

dismissing all of Mr. Moberg's claims. In support, it filed a 49-page declaration of Mr.

Ward and much shorter declarations from Holiday Sloan (Mr. Ward's ex-wife and a

former co-owner and officer of Terraqua); Mr. Moberg's ex-wife; and three individuals

(Joseph Ezell, Loren Doner, and Rueben Miller) who, like Mr. Moberg, had worked for

Terraqua under contracts characterizing them as independent contractors. Terraqua's

declarations included many attacks on Mr. Moberg as a person and an employee, and

addressed the fact that when he was not working for Terraqua, he had other business

ventures, including growing marijuana at a time when it was not legal. The declarations

of Messrs. Ezell, Doner, and Miller expressed satisfaction with being characterized by

Terraqua as independent contractors. Terraqua also presented evidence that Mr. Moberg

had spoken favorably in the past of his independent contractor relationship with the

company.

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       Ms. Sloan, who "essentially ran the business" for Mr. Ward between 2007 and

2010, when he took a sabbatical, testified in her declaration as to why Terraqua "used the

independent contractor business model":

                T erraqua used the independent contractor business model because it
       is common in our industry, especially among small businesses, and because
       it is an easy way to involve multiple people on the same project with
       minimal coordination effort required and it kept the administrative burden
       on the individual subcontractors' businesses rather than Terraqua.

Clerk's Papers (CP) at 962, 961.

       Mr. Ward's declaration acknowledged that Terraqua's classification and use of

independent contractors was examined but not challenged in a 2009 audit by the Internal

Revenue Service (IRS). He also acknowledged that after terminating its relationship with

Mr. Moberg, Terraqua "transition[ ed] to a more employee-dominant business model over

the 2011 to 2013 time period." CP at 483. Mr. Ward attributed the company's revised

"employment" of workers to growth in Terraqua's business and resulting changes in its

administrative needs and demands, rather than to any belief that workers had previously

been misclassified. Messrs. Miller and Doner both acknowledged in their declarations

that they ceased to be treated as independent contractors by Terraqua in spring 2012,

becoming seasonal employees thereafter. Both claimed the change in status went hand-

in-hand with changes in their working relationship with T erraqua.

      Most important for present purposes is the evidence Mr. Moberg presented in

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opposition to the motion for summary judgment and whether a jury could reasonably find

it supports his contention that he was, in fact, an employee. Mr. Moberg testified that

Terraqua's post-2012 "employees" did the same work they did when they were

subcontractors and that the company's transition to "employing" the workers is evidence

they had been misclassified earlier. But for the most part, his response keyed off this

court's 2010 decision in Anfinson v. FedEx Ground Package System, Inc., which held as

a matter of first impression that "employ" and "employee" under the Washington

Minimum Wage Act (MWA), chapter 49.46 RCW, have the broad "economic reality"

meaning applied under the federal Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C.

§§ 201-219. Anfinson, 159 Wn. App. 35,244 P.3d 32 (2010), aff'd, 174 Wn.2d 851,281

P.3d 289 (2012). That meaning has been characterized as "comprehensive enough to

require its application to many persons and working relationships, which prior to [the

FLSA], were not deemed to fall within an employer-employee category." Walling v.

Portland Terminal Co., 330 U.S. 148, 150-51, 67 S. Ct. 639, 91 L. Ed. 809 (1947).

       Mr. Moberg's opposition materials addressed the six factor test adopted in

Anfinson, which is used by a majority of the federal circuits to determine as a matter of

economic reality, whether a worker is dependent on the business to which he renders

service or is, instead, in business on his own. The six nonexclusive factors are:

       ( 1) the permanence of the working relationship between the parties;
       (2) the degree of skill the work entails;

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       (3) the extent of the worker's investment in equipment or materials;
       (4) the worker's opportunity for profit or loss;
       (5) the degree of the alleged employer's control over the worker;
       (6) whether the service rendered by the worker is an integral part of the
           alleged employer's business.
159 Wash. App. at 52.

       On the matter of the permanence of his working relationship with Terraqua, Mr.

Moberg testified that he worked for Terraqua "for twelve straight years; from 1998

through June of 2011." CP at 422. He testified and provided documentary evidence that

Mr. Ward directed him to identify himself in communications with Terraqua's main

client, the Bonneville Power Administration (BPA), as Terraqua personnel. He testified

that anytime he authored a publication, Mr. Ward insisted he identify himself as working

for Terraqua.

       He testified that in several of the years he worked for Terraqua, he did so without

a written contract. Mr. Ward's own declaration acknowledged having no signed contract

with Mr. Moberg for the periods 7/2007-6/2008, 7/2009-6/2010, and 7/2010-6/2011, but

stated there had been verbal agreements with Mr. Moberg to extend prior contracts into

those periods, including agreement to negotiated increases in Mr. Moberg's hourly rate of

pay.

       Mr. Moberg testified he never freelanced as a fish ecologist during the period he

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worked for Terraqua, performing that work only for Terraqua. He testified that although

his contracts stated he had the right to work for others, Mr. Ward made it clear that if Mr.

Moberg sought fish ecology consulting work elsewhere, his contract would be

terminated, which was Terraqua's prerogative with 14 days' notice.

       On the matter of the degree of skill the work entails, Mr. Moberg testified that

during the field season (spring through fall), he would gather data and manage other

employees in the field, while in the off-season, he worked on publications, quantifying

and assuring the quality of data, scheduling, budgeting, and other tasks.

       On the matter of the extent of the worker's investment in equipment or materials,

Mr. Moberg testified that Mr. Ward and Terraqua supplied him with all the tools needed

to do field work, describing the types of gear provided. He testified he would "routinely

purchase this gear for Terraqua on the Terraqua company credit card." CP at 424.

Although Mr. Moberg acknowledged owning a computer and using it to do work for

Terraqua, he testified that office work was not a significant part of his work for Terraqua,

the company paid him to use his computer, and Terraqua supplied him with all of the

office supplies he needed for his work. He testified Terraqua paid for all of his training.

       On the matter of the worker's opportunity for profit or loss, Mr. Moberg testified

he was always paid hourly, so there was "no way for me to profit more or experience loss

based on efficiency/inefficiency in the work I did .... If I worked more hours I would

get paid more money ... like any employee." CP at 425.

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       On the matter of the degree of the alleged employer's control over the worker, Mr.

Moberg testified he took direction mostly from Mike Ward, but also from Holiday Sloan,

as to how to complete his work. He testified:

       I was not free to choose how to allocate my hours. Mike Ward directed me
       on how to allocate my hours. Often times Mike Ward directed me to
       change my hours from one billing category to another. Also, I was required
       to schedule all the field workers and Mike Ward would approve or reject
       my schedules.

CP at 424. He testified that Mr. Ward "tightly controlled" his hours and often would tell

him to stop working for various reasons. CP at 425. He testified that Mr. Ward required

that he approve Mr. Moberg's schedule and hours worked. He supported these

contentions with electronic mail communications between himself and Mr. Ward.

       On the matter of whether the service he rendered was an integral part of the

alleged employer's business, Mr. Moberg testified that during the years he worked for

Terraqua, he was part of a small core group of personnel. The type of services he

claimed to have provided, as earlier described (data gathering, field work managing, data

analysis and publication, scheduling and budgeting) were described as part and parcel of

what Terraqua clients purchased from the company. In Mr. Ward's own declaration, he

had described Terraqua as helping client agencies "meet their electrical production and

fish and wild life obligations ... by doing thorough and precise science that is also cost-

efficient for our clients." CP at 481.

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       Mr. Moberg's opposition materials demonstrated that during the period he worked

for Terraqua, the company had only two employees: its management employees, Mike

Ward and Holiday Sloan. He argued that the two employees could not and did not

perform the company's core "science" work for clients.

       Mr. Moberg also submitted deposition testimony of Ms. Sloan and Mr. Ward in

opposition to summary judgment. The testimony, and an exhibit, identified what Ms.

Sloan told an IRS auditor in 2009 about the terms of its independent contractors' work

for the company. According to Mr. Moberg's opposition materials, much of what Ms.

Sloan told the IRS was false. He testified to eight examples of falsehoods.

       The deposition testimony established that by the time of Mr. Ward's deposition,

Terraqua had gone from treating only Mr. Ward and Ms. Sloan as employees to treating

10 of its workers as employees. Finally, Mr. Ward identified the type of invoice Mr.

Moberg was required to submit to get paid for his work for Terraqua, including the

mileage and other expenses that he was allowed to have reimbursed by the company.

       Reply declarations of Mr. Ward and Ms. Sloan submitted by Terraqua emphasized

the less than full-time nature of Mr. Moberg's work for Terraqua, and the fact that Mr.

Moberg's billings represented only six percent of Terraqua's gross receipts in his latter

years working for the company. Terraqua's counsel argued that Mr. Moberg should not

be heard to disclaim seven contracts he signed reciting his independent contractor status,

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Moberg v. Terraqua, LLC

nor should the court ignore the fact that Mr. Moberg filed his income tax returns as self-

employed, relying on that status to claim deductions that might not otherwise have been

available to him.

       Turning to Mr. Moberg's claims that he had been promised by Mr. Ward to be

made a "partner" in Terraqua, the defendants offered a transcript of Mr. Moberg's

deposition, in which he testified as follows about the alleged promise:

      [There were] conversations about, you know, "If we build this field
      component, you know, it's a lucrative thing. It's how businesses make
      money. And, you know, we could-we'll get to a point where we'll make
      you a partner."
             That was kind of an ongoing theme over the years.

CP at 844.

      It was general. It was an assurance that, as I was growing his company,
      that I would receive the benefits of that through some sort of partnership
      ownership. It wasn't really spelled out, it was more of an assurance. It was
      verbal promises, and I always had the expectation that they would be
      fulfilled.

CP at 845.

      Well, I don't know what [the partnership ownership] would look like. I had
      no concept. All I knew was that I had been putting a lot of work into the
      growth and success of Terraqua and that I would at some point benefit
      through that through ownership, through solid salaries, and a commitment
      that I knew that I would continue to work there and continue to grow the
      company.

CP at 846.

      It was just throughout the--it was throughout the years, on more of a-you
      know, it was obviously never a formal commitment.

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CP at 851.

       I don't think people use the word "promise" when they promise something,
       but I was assured that my extra effort, which was really a lot of work and
       determination to be successful for Terraqua, that I was encouraged with the
       proposition-you could call it a promise-that I would at some point have
       a documented partnership/ownership/employment relationship.

CP at 870.

      Terraqua's motion for summary judgment was granted. The trial court concluded

in part that Mr. Moberg's independent contractor status while working for Terraqua was

not genuinely disputed.

      Mr. Moberg appeals the dismissal of the wage related claims he asserts as an

employee (claims under the MWA, chapter 49.46 RCW; "Wage Payment Act" (WPA),

chapter 49.48 RCW; and "Wage Rebate Act" (WRA), chapter 49.52 RCW, arguing that

whether he was Terraqua's employee for those purposes is genuinely disputed. He also

contends he demonstrated that genuinely disputed facts require trial of his promissory

estoppel and unjust enrichment claims.

                                         ANALYSIS

      An order granting summary judgment is reviewed de novo, "considering the

evidence and all reasonable inferences from the evidence in the light most favorable to

the nonmoving party." Keck v. Collins, 184 Wn.2d 358,370,357 P.3d 1080 (2015).

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Summary judgment is appropriate where there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter oflaw. CR 56(c).

                      I. CLAIMS UNDER STA TEWAGE AND HOUR LAWS 1

       The record does not reveal a quantification of overtime wages Mr. Moberg claims

not to have been paid, but he did assert a claim for unpaid overtime in opposing summary

judgment. Overtime is required by RCW 49.46.130 to be paid to employees working

longer than 40 hours in a workweek. As previously observed, the test of employee status

for purposes of chapter 49 .46 RCW is whether the worker is an employee "as a matter of

economic reality" in the sense that "the individual is dependent on the business to which

       1
         Terraqua makes a preliminary argument that Mr. Moberg's opening brief violates
several rules of appellate procedure and we should treat him as having waived all his
claims.
        Terraqua is correct that Mr. Moberg's opening brief fails to set forth relevant facts.
Nonetheless, his briefing is clear that he is appealing the trial court's grant of summary
judgment dismissing his state wage and hour, promissory estoppel, and unjust enrichment
claims because, he argues, he demonstrated disputed facts that require trial. Given the de
novo nature of review of a summary judgment, that points us directly to the parties'
affidavits and other evidentiary submissions. "In a case where the nature of the appeal is
clear and the relevant issues are argued in the body of the brief and citations are supplied
so that the court is not greatly inconvenienced and the respondent is not prejudiced, there
is no compelling reason for the appellate court not to exercise its discretion to consider
the merits of the case or issue." State v. Olson, 126 Wn.2d 315,323, 893 P.2d 629
(1995).
        Terraqua also argues that Mr. Moberg did not allege violations of the MWA or the
WPA in his complaint, but the complaint includes a claim for unpaid overtime, see CP
1064 at paragraph 26, and in addition to generally alleging a failure to pay wages in
violation of state law, see id., cites RCW 49.52.050 and .070 (the WRA), and RCW
49.48.030 (the WP A} as a basis for relief. See id. The wage claims were also addressed
in the parties' summary judgment briefing. See, e.g., CP at 157, 227-28, 231.

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No. 34390-1-III
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he renders service"-the test applied to claims arising under the FLSA. Anfinson, 159
Wash. App. at 51.

       Over the years, Mr. Moberg signed seven contracts that identified him as a

"subcontractor" of Terraqua and stated he would "function as an independent

Subcontractor, with rights to control the means of performing the services listed herein

and to perform services for other clients." CP at 582-611. But federal cases applying the

FLSA do not attach importance to the employer's label for its employees, and because

the MWA is based on the FLSA, federal authority under the FLSA provides helpful

guidance. Drinkwitz v. Alliant Techsystems, Inc., 140 Wash. 2d 291, 298, 996 P.2d 582

(2000). "[A]n employer's self-serving label of workers as independent contractors is not

controlling." Brock v. Superior Care, Inc., 840 F.2d 1054, 1059 (2nd Cir. 1988).

       One reason for attaching no importance to the employer's label is that different

tests control whether one is an independent contractor or employee for different purposes,

so even if the parties agree on the label, it is not clear what they mean by it. "The

distinction between independent contractors and employees arose at common law to limit

the principal's vicarious liability for the misconduct of a person rendering service to the

principal." Anfinson, 159 Wash. App. at 51. "In this context, the principal's supervisory

power was crucial because '[t]he extent to which the employer had a right to control [the

details of the service] activities was ... highly relevant to the question [of] whether the

employer ought to be legally liable' for the worker's actions." Id. (alteration in original).

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       The purpose of distinguishing employees from independent contractors is

substantially different when a statute provides remedial protections to workers. Id. at 50-

51. The result is a substantially different definition of employee. Under the MWA, an

employee includes any individual "permit[ted] to work" subject to statutory exceptions,

none of which apply here. RCW 49.46.010(2); Anfinson, 174 Wash. 2d at 867. "This is a

broad definition." Id.

       Another reason for attaching no importance to an employer's label is that an

employee is not permitted to waive employee status, so the fact that a worker signs

contracts stating he or she was an independent contractor is not dispositive. Rochicheaux

v. Radcliff Material, Inc., 697 F.2d 662, 667 (5th Cir. 1983) (citing Donovan v. Am.

Airlines, Inc., 686 F.2d 267,269 n.3 (5th Cir. 1982)). Even the worker's subjective

opinion that he is a businessman rather than an employee does not change his status. Id.

(citing Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1315 (5th Cir. 1976)). Similarly, the

fact that an employee is issued a Form 1099 and reports his income and expenses as a

sole proprietor for tax purposes is also not controlling. See Olson v. Star Lift Inc., 709 F.

Supp. 2d 1351, 1356 (S.D. Fla. 2010).

       Mr. Moberg also asserts claims under the WP A and WRA, which prohibit

employers from wrongfully withholding or diverting an employee's wages. RCW

49.48.010, 49.52.050. Those laws incorporate the "Industrial Welfare Act" definition of

employee. RCW 49.48.082(5)(b). Under the Industrial Welfare Act, chapter 49.12

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RCW, '" [e]mployee' means an employee who is employed in the business of the

employee's employer whether by way of manual labor or otherwise." RCW

49.12.005( 4).

       Below, both parties assumed that "employee" as used in the WP A and WRA

should receive the same construction as the term's meaning under the MWA. Given the

remedial purpose of the statutes-both providing protections to workers-we assume

without deciding that this is correct. 2 But cf Ebling v. Gove 's Cove, Inc., 34 Wn. App.

495,498, 663 P.2d 132 (1983) (relying on a tort case, Hollingbery v. Dunn, 68 Wash. 2d 75,

411 P .2d 431 (1966), for the common law right to control test in applying the WRA, but

with no indication that anyone suggested some other test might apply).

       As earlier observed, courts consider the following nonexclusive factors to

determine whether an individual was an employee or an independent contractor:

       2
         We assume rather than decide the issue because it was not briefed by the parties.
See RAP 12.1. Nonetheless, we note that the remedial purpose of the WRA "is to protect
the wages of an employee against any diminution or deduction therefrom by rebating,
underpayment, or false showing of overpayment of any part of such wages. The act is
thus primarily a protective measure, rather than a strictly corrupt practices statute." State
v. Carter, 18 Wn.2d 590,621, 142 P.2d 403 (1943) (emphasis omitted). Our Supreme
Court has characterized the MWA, WP A, and WRA, as a "comprehensive scheme"
evidencing the legislature's strong policy in favor of payment of wages. Schilling v.
Radio Holdings, Inc., 136 Wn.2d 152,157,961 P.2d 371 (1998). It also appears that the
Washington Department of Labor and Industries applies the economic realities test to
determine worker status under the WRA. See SUCHI SHARMA, w ASH. STATE DEP'T OF
LABOR & INDUS., EMPLOYMENT STANDARDS PROGRAM OVERVIEW 9, (undated),
http://wastatecouncil.shrm.org/sites/wastatecouncil.shrm.org/files/
SHARMA%20Labor%20and%20Industries.pdf [https ://perma.cc/P7 65-JPQS].

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       ( 1) the permanence of the working relationship between the parties;
       (2) the degree of skill the work entails;
       (3) the extent of the worker's investment in equipment or materials;
       (4) the worker's opportunity for profit or loss;
       (5) the degree of the alleged employer's control over the worker;
       ( 6) whether the service rendered by the worker is an integral part of the
            alleged employer's business.

Anfinson, 159 Wash. App. at 52. No one of these factors is dispositive; rather, the test is

based on a totality of the circumstances. Superior Care, 840 F.2d at 1059.

       Viewing the evidence in the light most favorable to Mr. Moberg, genuine issues of

material fact exist as to most of the six factors. As to the matter of the permanence of the

working relationship between the parties, "Employees usually work for only one

employer and the relationship is continuous and of indefinite duration. Independent

contractors often have fixed employment periods and transfer from place to place as

particular work is offered to them." Harper v. San Luis Valley Reg'/ Med. Ctr., 848 F.

Supp. 911, 914 (D. Colo. 1994) (citations omitted). Terraqua emphasizes the one-year

fixed duration of its contracts with Mr. Moberg; Mr. Moberg emphasizes the fact that the

contracts were routinely renewed. In Usery, 527 F.2d at 1314, the court dealt with a

similar situation: the status of operators of laundry pick-up stations who had one-year

contracts that were routinely renewed. There, the court found the duration of the

relationship suggested dependence on the employer rather than satisfaction with a

contractual relationship, because none of the operators had a true business operation they

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could offer to other laundry facilities-all the operators could transfer was their own

labor. Id. This factor weighed in favor of employee status. Id.

       Terraqua points to evidence that Mr. Moberg was happy working for Terraqua,

which it contends explains the length of their contractual relationship. It also points to

his contractual right to work for others, although Mr. Moberg's declaration raises a

question of fact whether he could have exercised that right without having his contract

with Terraqua terminated. Federal courts applying the permanency factor generally give

more weight to the actual length of the working relationship than to the contractual right

to terminate it. Hopkins v. Cornerstone Am., 545 F.3d 338, 345 (5th Cir. 2008).

       As to the matter of the degree of skill the work entails, the "skill" at issue here is

not technical skill, because a variety of skilled workers who do not exercise significant

initiative in locating work opportunities have been held to be employees. Superior Care,

840 F .2d at 1060 (citing cases). It is, instead, whether the worker uses entrepreneurial

skill to secure contract employment. See id. Neither party briefed the factor in these

terms. It is undisputed, however, that Mr. Moberg never secured contract employment as

a fish ecologist for anyone else during the years he worked for Terraqua.

       As to the matter of the worker's investment in equipment or material, "Large

personal investments are more representative of an independent contractor than an

employee. Such investments include 'large expenditures, such as risk capital, or capital

investments, and not negligible items or labor itself."' Perez v. Super Maid, LLC, 55 F.
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Supp. 3d 1065, 1077 (N.D. Ill. 2014) (quoting Dep 't of Labor v. Lauritzen, 835 F.2d
1529, 1537 (7th Cir. 1987). In weighing this factor, "courts must compare the worker's

investment in the equipment to perform his job with the company's total investment."

Keller v. Miri Microsystems LLC, 781 F.3d 799, 810 (6th Cir. 2015). We consider the

capital investment in light of the broader question-whether it signifies the worker's

economic independence-and may discount capital investment in items that the worker is

likely to have for personal use, such as a vehicle and a computer. Id.

          Terraqua emphasizes the fact that it did not maintain work space for its

subcontractors, and that Mr. Moberg maintained his own. But Mr. Moberg's work and

storage space were in his home. Terraqua also points to capital investments that Mr.

Moberg made in business activities other than fish ecology work, such as farming. It

cites no authority, nor did we find any, that a worker's activities unrelated to the type of

service he is hired to perform for the employer is relevant in determining this or any other

factor.

          Most significant is Mr. Moberg's testimony that apart from his computer and

vehicle, Terraqua provided him with the tools needed to do field work, including

specialized gear like GPS 3 units, fish electro-shockers, total stations and other surveying

equipment, data loggers, dry suits, wet suits, snorkel and masks and nets, among others.

          3   Global Positioning System.

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It also reimbursed all his mileage. He testified that he would "routinely purchase this

gear for Terraqua on the Terraqua company credit card," with Mr. Ward's approval. CP

at 424. While Terraqua argues that it was client agencies like the BPA who actually paid

for the gear, BPA did so pursuant to its contract with Terraqua. As between Terraqua and

Mr. Moberg, it was Terraqua who held the BP A contract and thereby the ability to make

the gear available. As a result, Mr. Moberg was not required to make large capital

investments himself.

       As to the matter of a worker's opportunity for profit or loss, the relevant inquiry is

whether Mr. Moberg had an opportunity for profit or loss that depended on his own

efficiency and managerial skill. See Hughes v. Family Life Care, Inc., 117 F. Supp. 3d
1365, 1371 (N.D. Fla. 2015). Managerial skill does not exhibit itself through working

additional hours, which is analogous to an employee's ability to work overtime.

Scant/and v. Jeffry Knight, Inc., 721 F.3d 1308, 1316-17 (11th Cir. 2013).

       Terraqua argues that Mr. Moberg's contracts did not require full-time

employment-a matter of some dispute, since in discovery responses, Mr. Moberg

testified that he would not have had time to work for others. In any event, Terraqua

argues that because the work was not full-time, Mr. Moberg had the ability to develop

economic opportunities unrelated to the science he performed solely for Terraqua-

opportunities such as his farm and a marijuana growing operation. Here again, Terraqua

cites no authority that a less than full-time worker's ability to take on unrelated work is

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relevant to dependence on an employer for the work that is at issue. To the contrary,

federal cases hold that less than permanent full-time employment is indicative of

independent contractor status if the lack of permanence is because the worker is

successfully marketing his relevant skills to others-which is not the case here. It is not

indicative of independent contractor status if it is due to "operational characteristics

intrinsic to the industry," such as employers who use seasonal or part-time workers.

Superior Care, 840 F .2d at 1060-61.

       As to the matter of the employer's control over the worker, what is significant is

whether the employee "exerts such a control over a meaningful part of the business that

she stands as a separate economic entity." Scantland, 721 F .3 d at 1313. Workers'

control over the hours when they work is not indicative of independent contractor status.

Dole v. Snell, 875 F.2d 802, 806 (10th Cir. 1989) (noting that flexibility in work

schedules is common to many businesses and is not significant in and of itself); accord

Doty v. Elias, 733 F.2d 720, 723 (10th Cir. 1984). In addition, if workers work from

home or offsite, an employer's lack of control is not particularly significant. Donovan v.

Dia/America Mktg., Inc., 757 F.2d 1376, 1384 (3d Cir. 1985)).

       It does not matter that the control exercised by an employer might be dictated by

regulations or by a customer's demands. As the Eleventh Circuit explained in Scant/and,

"Business needs cannot immunize employers. . . . If the nature of a business requires a

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No. 34390-1-III
Moberg v. Terraqua, LLC

company to exert control over workers ... then that company must hire employees, not

independent contractors." 721 F .3d at 1316.

       While Terraqua emphasizes the parties' contract language that Mr. Moberg will

function "with rights to control the means of performing the services listed herein," the

list of services required by the contract and other terms reflect aspects of Terraqua's

control. CP at 611 (emphasis added). For instance, Mr. Moberg's last, 2010-11 contract

included the following provisions:

   •   Terraqua identified the services and tasks to be performed, and that they must be
       performed in a "workman like fashion,"
   •   Terraqua dictated the format in which Mr. Moberg would invoice for work, when
       he could invoice, when he would be paid, and the documentary support he must
       retain to support expenses, and
   •   Terraqua identified Mike Ward as the person who would provide
       "[ s]ubcontractor' s direction."

CP at 611-12. Mr. Moberg's declaration in opposition to summary judgment provided a

number of examples of the "subcontractor's direction" that he received from Mr. Ward.

       Finally, as to the matter of whether Mr. Moberg's work was integral to Terraqua's

business, it obviously was; Terraqua's core business-conducting science for clients-

was performed by its subcontractors. Terraqua admitted at summary judgment that Mr.

Moberg's work was integral to its business.

       Considering all, reasonable jurors could find that the parties' contractual

characterization of Mr. Moberg as a subcontractor was not based on economic reality but

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Moberg v. Terraqua, LLC

that Terraqua "used the independent contractor business model," as Ms. Sloan put it, as a

matter of convenience and cost savings. Mr. Moberg's evidence was sufficient to raise a

genuine issue of material fact whether, under the totality of circumstances, he was

misclassified as an independent contractor and should have been treated for purposes of

the MWA, WP A, and WRA as an employee.

                                II. PROMISSORY ESTOPPEL

       To prevail on a claim of promissory estoppel, a party must demonstrate five

elements:

       "(1) [a] promise which (2) the promisor should reasonably expect to cause
       the promisee to change his position and (3) which does cause the promisee
       to change his position (4) justifiably relying upon the promise, in such a
       manner that (5) injustice can be avoided only by enforcement of the
       promise."

Wash. Educ. Ass'n v. Dep't ofRet. Sys., 181 Wash. 2d 212, 224-25, 332 P.3d 428 (2014)

(alteration in original) (quoting Havens v. C&D Plastics, Inc:, 124 Wash. 2d 158, 171-72,

876 P.2d 435 (1994)). "Importantly, '[p]romissory estoppel requires the existence of a

promise' that is 'clear and definite.'" Wash. Educ. Ass 'n, 181 Wash. 2d at 225 (alteration in

original) (quoting Havens, 124 Wash. 2d at 172). "This court has adopted the Restatement's

definition of 'promise': 'A promise is a manifestation of intention to act or refrain from

acting in a specified way, so made as to justify a promisee in understanding that a

commitment has been made.'" Id. at 225 (quoting RESTATEMENT (SECOND) OF

CONTRACTS § 2( 1) (AM. LA w INST. 1981)). But "[a] statement of future intent is not

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No. 34390-1-111
Moberg v. Terraqua, LLC

sufficient to constitute a promise for the purpose of promissory estoppel. An intention to

do a thing is not a promise to do it." Elliott Bay Seafoods, Inc. v. Port ofSeattle, 124 Wn.

App. 5, 13, 98 P.3d 491 (2004).

       Mr. Moberg asserts promissory estoppel as a basis for enforcing Mr. Ward's

alleged promise to make him a partner ofTerraqua. But Mr. Moberg's own deposition

testimony as to statements made by Mr. Ward, reproduced above, establishes only that

Mr. Ward made statements of future intent. Mr. Moberg himself admits that no formal

commitment was ever made, that the terms were not discussed, and the issue was one to

be worked out in the future. Such statements are too vague for a court to enforce.

       Mr. Moberg's evidence does not raise a question of fact as to whether a clear and

definite promise was made-an essential element of promissory estoppel. On that basis

alone, summary judgment was proper.

                                  III. UNJUST ENRICHMENT

       A party may bring a claim for unjust enrichment to recover the value of a benefit

retained even absent any contractual relationship, if fairness and justice require it. Young

v. Young, 164 Wn.2d 477,484, 191 P.3d 1258 (2008). The party must prove three

elements: "(1) the defendant receives a benefit, (2) the received benefit is at the plaintiffs

expense, and (3) the circumstances make it unjust for the defendant to retain the benefit

without payment." Id. at 484-85.

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No. 34390-1-111
Moberg v. Terraqua, LLC

        Mr. Moberg claims he conferred on Terraqua the benefit of his "dedication, long

hours and hard work." Br. of Appellant at 16. The result, he claims, was to expand ~eld

work and increase Terraqua's revenue, as evidenced by an increase in the value of

Terraqua's contracts with the government from $42,141 in 2003 to over $1,000,000 in

2011.

        It is clear the contracts Terraqua entered into increased in value. But Mr. Moberg

provides no evidence that it was his efforts that resulted in the increase and no viable

argument why the increased business should be viewed as an injustice to him rather than

as Mr. Ward's reward for sound hiring and management decisions. "[T]o defeat a motion

for summary judgment, a party must present more than '[u]ltimate facts' or 'conclusory

statements."' SentinelC3, Inc. v. Hunt, 181 Wn.2d 127,140,331 P.3d 40 (2014) (second

alteration in original) (quoting Grimwood v. Univ. of Puget Sound, Inc., 110 Wash. 2d 355,

359-60, 753 P.2d 517 (1988)).

        Mr. Moberg's citation to Duckworth v. Langland, 95 Wash. App. 1, 3-4, 988 P.2d
967 ( 1998) is inapposite. Duckworth relates to the enforceability of an oral partnership

agreement. The issue here is whether Mr. Moberg conveyed a benefit to Terraqua that it

would be unjust for Terraqua to retain without reimbursing Mr. Moberg. Dismissal of the

unjust enrichment claim was proper.

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No. 34390-1-III
Moberg v. Terraqua, LLC

                                        IV. COSTS

       Under RAP 14.2, the party who substantially prevails on appeal is entitled to costs.

Because each party prevailed on significant issues, we decline to award costs.

       We reverse summary judgment dismissal of the MWA, WPA, and WRA claims;

affirm dismissal of the promissory estoppel and unjust enrichment claims; and remand for

further proceedings consistent with this opinion.

       A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.

WE CONCUR:

                                   j

Pennell, J.

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