Court Opinion

ID: 4150588
Source: CourtListenerOpinion
Date Created: 2017-03-07 16:07:38.343443+00
Date Added: 2024-06-11T14:49:55.200235
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

               RICHARD J. PERCY, a single man, Petitioner,

                                        v.

     THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,

               KLARRA M. DANIELE, Respondent Employee,

  SPECIAL FUND DIVISION/NO INSURANCE SECTION, Respondent
                       Party in Interest.

                             No. 1 CA-IC 16-0021
                               FILED 3-7-2017

                    ICA Claim No. 20151-730441
                      Carrier Claim No. NONE
       The Honorable Jonathan Hauer, Administrative Law Judge

                                  AFFIRMED

                                   COUNSEL

Law Offices of Donald W. Hudspeth, P.C., Phoenix
By Craig W. Broadbent, Christopher Ford
Counsel for Petitioner
Snow, Carpio & Weekley, PLC, Phoenix
By Brian A. Weekly
Counsel for Respondent Employee

Industrial Commission of Arizona, Phoenix
By Stephen D. Ball
Counsel for Respondent Party in Interest

                        MEMORANDUM DECISION

Judge Patricia K. Norris delivered the decision of the Court, in which
Presiding Judge Kenton D. Jones and Judge Paul J. McMurdie joined.

N O R R I S, Judge:

¶1            In this special action from an Industrial Commission of
Arizona (“ICA”) award and decision upon review, Petitioner, Richard J.
Percy, and Respondent Party in Interest, the Special Fund Division/No
Insurance Section (“SFD”), argue the Administrative Law Judge (“ALJ”)
should not have found that Respondent Employee, Klarra Daniele, was an
employee of Percy. Reviewing the ALJ’s decision and award under the
governing standards of review, we disagree. See Young v. Indus. Comm’n,
204 Ariz. 267, 270, ¶ 14, 63 P.3d 298, 301 (App. 2003) (appellate court defers
to ALJ’s factual findings but reviews questions of law de novo) (citation
omitted); Lovitch v. Indus. Comm’n, 202 Ariz. 102, 105, ¶ 16, 41 P.3d 640, 643
(App. 2002) (appellate court considers evidence in a light most favorable to
upholding ALJ’s award) (citation omitted). Therefore, we affirm the award.

             FACTS AND PROCEDURAL BACKGROUND

¶2           Starting in 2012, Daniele began working for Percy and his
business Femwrestlingrooms.com, a custom order, female model wrestling
video company (collectively, “Percy”). Percy’s clients order custom
wrestling videos from his website, selecting various models/performers to
perform in the video, the length of the video, and the various wrestling
techniques the models/performers should use.

¶3           On February 2, 2015, a model/performer injured Daniele
while the two were performing a wrestling technique during a video shoot.1

              1The   parties do not dispute that Daniele suffered an injury.

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                   PERCY v. DANIELE/SPECIAL FUND
                          Decision of the Court
At that time, Percy was a “non-insured employer.” Daniele applied for
workers’ compensation benefits on June 11, 2015, which the ICA denied on
July 17, 2015. Daniele requested a hearing on the denial of her application
for workers’ compensation benefits. At the hearing, Daniele, Percy, and
another model/performer, who had worked for Percy, testified. After the
hearing, Daniele, Percy, and the SFD each filed a post-hearing brief
addressing whether, at the time of Daniele’s injury, she was working for
Percy as an employee or was, instead, working for him as an independent
contractor.

¶4            After the parties filed their post-hearing briefs, the ALJ issued
an award concluding, based on the totality of the circumstances, that
Daniele was an employee of Percy. The SFD and Percy timely requested
administrative review of the ALJ’s decision, but the ALJ summarily
affirmed the award.

                               DISCUSSION

¶5            On appeal, Percy argues, first, the ALJ gave greater weight
than appropriate to whether Daniele’s work was in the regular course of
Percy’s business, gave too little weight to Daniele’s independence from
Percy’s business, and gave too little weight to Daniele’s performance of
definite jobs and the piecemeal nature of her work. The SFD similarly
argues the ALJ gave inappropriate weight to several factors, asserting
“more factors weigh in favor of a finding that Daniele was an independent
contractor rather than an employee.” We reject these arguments.

¶6            “Employee” and “independent contractor” are defined by
statute. Under Arizona Revised Statutes (“A.R.S.”) section 23-902(B) (2016),
“[w]hen an employer procures work to be done for the employer by a
contractor over whose work the employer retains supervision or control,
and the work is a part or process in the trade or business of the employer,
then the contractors . . . are . . . employees.” Conversely, under A.R.S. § 23-
902(C)

              A person engaged in work for a business, and
              while so engaged is independent of that
              business in the execution of the work and not
              subject to the rule or control of the business for
              which the work is done, but is engaged only in
              the performance of a definite job or piece of
              work, and is subordinate to that business only
              in effecting a result in accordance with that
              business design, is an independent contractor.

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                   PERCY v. DANIELE/SPECIAL FUND
                          Decision of the Court
In interpreting these statutory definitions, Arizona courts have recognized
that the distinction between an employee and an independent contractor
rests on the employer’s right to control the employee. Home Ins. Co. v. Indus.
Comm’n, 123 Ariz. 348, 350, 599 P.2d 801, 803 (1979). In deciding who has
the right to control, Arizona courts have identified several factors or
“indicia,” including:

              the duration of the employment; the method of
              payment; who furnishes necessary equipment;
              the right to hire and fire; who bears the
              responsibility for workmen’s compensation
              insurance; the extent to which the employer
              may exercise control over the details of the
              work, and whether the work was performed in
              the usual and regular course of the employer’s
              business.

Id. No single factor is dispositive, and courts look to the totality of the facts
and circumstances. Munoz v. Indus. Comm’n, 234 Ariz. 145, 150, ¶ 16, 318
P.3d 439, 444 (App. 2014) (citation omitted). Because the workers’
compensation statutes are remedial in nature and designed to provide
compensation to injured persons, we apply a liberal construction of those
statutes. Henderson-Jones v. Indus. Comm’n, 233 Ariz. 188, 192, ¶ 10, 310 P.3d
976, 980 (App. 2013). Nevertheless, we will not “interpret” the statutes to
provide benefits when, under the facts and the law, an injury is not
compensable. Id.

¶7             As an initial matter, we reject Percy’s argument that in
considering the totality of the circumstances, the ALJ misapplied the law.
The ALJ examined the totality of the circumstances, applying several of the
factors listed above. Further, in arguing that the ALJ misapplied the law,
Percy, and to a lesser extent the SFD, are essentially asking this court to
reweigh the evidence presented to the ALJ. This court, however, does not
reweigh the evidence. Perry v. Indus. Comm’n, 112 Ariz. 397, 398, 542 P.2d
1096, 1097 (1975). As we discuss, the ALJ appropriately evaluated the
totality of the circumstances surrounding Daniele’s work for Percy in
determining that she was his employee.

¶8            At the hearing, Percy testified he owned the wrestling ring,
the cameras, the costumes worn by the models/performers—30 to 40
bikinis and 20 one-piece suits—and various props used in filming the
videos. Percy supervised the production of the videos and retained the right
to hire or terminate the models/performers. He also taught the
models/performers how to perform the various wrestling techniques.

                                       4
                   PERCY v. DANIELE/SPECIAL FUND
                          Decision of the Court
Percy also testified that he could not operate his business without the
models/performers he hired.

¶9            Daniele testified, without objection, that Percy directed what
persona she should portray and dictated what color her hair should be.
While filming the videos, Percy provided “complete direction” on scripts.
He also directed when to start and stop shooting and if a scene needed to
be redone. Percy also did the post-production editing and uploaded the
videos to the website. Although Daniele was free to do other work, she
started working for Percy in 2012 and her work for Percy was “almost like
an everyday thing” and was “very, very steady.” Indeed, Daniele testified
that “right before” she was injured, she and Percy had discussed “making
my job with him more full time.”

¶10            Given the evidence presented at the hearing, we agree with
the ALJ that Percy retained the right to control and supervise the
models/performers. See Home Ins. Co., 123 Ariz. at 350, 599 P.2d at 803 (“The
right to control or supervise the method of reaching a specific result
determines whether an individual is an employee or an independent
contractor.”) (citations omitted). Percy’s business could not operate without
the models/performers, and he regularly directed the models/performers
during the video shoots to fill his clients’ orders. Because the evidence at
the hearing established that Percy had the right to control the details of
Daniele’s work, and indeed exercised that right, Daniele was Percy’s
employee and not an independent contractor.

¶11           Percy also argues the ALJ failed to give a negative inference
to Daniele’s failure to disclose her tax records. We reject this argument.

¶12           At her deposition, Daniele was asked for a copy of her 2014
tax returns. However, neither Percy nor the SFD questioned Daniele about
her tax returns at the hearing. Indeed, Percy did not raise the issue of
Daniele’s tax returns until this appeal. And, although the SFD raised her
failure to provide the tax returns in its post-hearing brief, Percy did not. By
the time the SFD raised the issue of Daniele’s tax returns, the record before
the ALJ had closed. See Ariz. Admin. Code (“A.A.C.”) R20-5-159 (award
shall be based upon record as it exists at conclusion of hearing).
Furthermore, neither Percy nor the SFD served interrogatories on Daniele
seeking production of the tax returns under A.A.C. R20-5-144, and neither
Percy nor the SFD moved to compel the production of the tax returns under
A.A.C. R20-5-145(B). Therefore, the ALJ properly issued its award without
finding a negative inference.

                                      5
          PERCY v. DANIELE/SPECIAL FUND
                 Decision of the Court
                      CONCLUSION

¶13   For the foregoing reasons, we affirm the ALJ’s award.

                AMY M. WOOD • Clerk of the Court
                FILED: AA

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