Court Opinion

ID: 4656781
Source: CourtListenerOpinion
Date Created: 2021-02-02 21:11:36.092509+00
Date Added: 2024-06-11T08:01:02.704605
License: Public Domain

[Cite as Bill Jackson Roofing, Inc. v. Ohio Dept. of Job & Family Servs., 2021-Ohio-284.]

                              IN THE COURT OF APPEALS OF OHIO

                                   TENTH APPELLATE DISTRICT

Bill Jackson Roofing, Inc.,                          :

                 Appellant-Appellant,                :
                                                                             No. 20AP-189
v.                                                   :                   (C.P.C. No. 19CV-9006)

Director, Ohio Department of Job and                 :            (ACCELERATED CALENDAR)
Family Services,
                                                     :
                 Appellee-Appellee.
                                                     :

                                            D E C I S I O N

                                     Rendered on February 2, 2021

                 On brief: Brouse McDowell LPA, Terry W. Vincent,
                 Anastasia J. Wade, Nicholas Kopcho, and Shelby Rainer, for
                 appellant. Argued: Anastasia J. Wade.

                 On brief: Dave Yost, Attorney General, and Laurence R.
                 Snyder, for appellee. Argued: Laurence R. Snyder.

                   APPEAL from the Franklin County Court of Common Pleas
DORRIAN, P.J.
        {¶ 1} Appellant, Bill Jackson Roofing, Inc. ("Jackson Roofing"), appeals from a
decision and entry of the Franklin County Court of Common Pleas affirming a decision of
the Ohio Unemployment Compensation Review Commission ("UCRC") finding Jackson
Roofing to be a liable employer under unemployment compensation law. For the following
reasons, we reverse the common pleas court decision and remand this case to the common
pleas court with instructions.
I. Facts and Procedural History
        {¶ 2} Jackson Roofing provides roofing services to clients in northeast Ohio.
Beginning in 2018, appellee, the Ohio Department of Job and Family Services ("ODJFS"),
No. 20AP-189                                                                              2

conducted an audit for years 2015, 2016, and 2017, triggered because of delinquencies or
missing reports from Jackson Roofing's account. On March 27, 2019, ODJFS issued the
results of the audit providing that Jackson Roofing failed to report and pay for several
individuals in its Unemployment Compensation Quarterly Tax Returns. These individuals
were reclassified as employees and the tax returns were amended. Jackson Roofing filed a
request for reconsideration. The Director of ODJFS issued a reconsidered decision on
June 5, 2019. In that decision, the Director determined seven of the individuals included
in the original determination were not employees and should be excluded from liability but
that Jackson Roofing did not provide sufficient evidence to establish that the other workers
identified as misclassified during the audit were free from direction and control by Jackson
Roofing. Therefore, the Director affirmed the audit conclusion that the remaining workers
were considered covered employees as defined by R.C. 4141.01.
       {¶ 3} Jackson Roofing appealed the Director's reconsidered decision to UCRC.
After two telephone hearings before a UCRC hearing officer (August 21 and September 5,
2019), UCRC, which operates under ODJFS, issued a decision affirming the Director's
reconsidered decision.
       {¶ 4} Jackson Roofing appealed UCRC's decision to the Franklin County Court of
Common Pleas. On March 4, 2020, the common pleas court affirmed UCRC's decision.
II. Assignments of Error
       {¶ 5} Jackson Roofing appeals and assigns the following two assignments of error
for our review:
              [I.] THE COURT OF COMMON PLEAS ERRED BY
              EMPLOYING AN INCORRECT STANDARD TO REVIEW
              THE COMMISSION'S MISCON[S]TRUCTION OF THE
              STATUTE.

              [II.] THE COURT OF COMMON PLEAS ABUSED ITS
              DISCRETION IN AFFIRMING THE COMMISSION'S
              DECISION BECAUSE THE DECISION WAS NOT
              SUPPORTED BY EVIDENCE ON THE RECORD.

III. Analysis
       {¶ 6} In its first assignment of error, Jackson Roofing contends the common pleas
court erred by employing an incorrect standard to review UCRC's misconstruction of the
statute. In its second assignment of error, Jackson Roofing contends the common pleas
No. 20AP-189                                                                                    3

court abused its discretion in affirming UCRC's decision because it was not supported by
evidence in the record.
       {¶ 7} Jackson Roofing argues that during the time period in question, Jackson
Roofing retained the roofers as independent contractors for different projects. UCRC found
these 28 individuals were covered employees under R.C. 4141.01.                Jackson Roofing
contends the common pleas court failed to review UCRC's legal analysis independently
since UCRC misconstrued R.C. 4141.01 and that the record did not support UCRC's
findings.
       {¶ 8} Jackson Roofing appeals pursuant to R.C. 4141.26(D)(2) which states:
               The court may affirm the determination or order complained
               of in the appeal if it finds, upon consideration of the entire
               record, that the determination or order is supported by reliable,
               probative, and substantial evidence and is in accordance with
               law. In the absence of such a finding, it may reverse, vacate, or
               modify the determination or order or make such other ruling
               as is supported by reliable, probative, and substantial evidence
               and is in accordance with law. The judgment of the court shall
               be final and conclusive unless reversed, vacated, or modified on
               appeal. An appeal may be taken from the decision of the court
               of common pleas of Franklin county.

       {¶ 9} Under R.C. 4141.26(D)(2), a decision of UCRC may be appealed to the
common pleas court, which may affirm the decision if it finds, based on a review of the
entire record, that the decision is supported by reliable, probative, and substantial evidence
and is in accordance with law. BNA Constr., Ltd. v. Dir., Ohio Dept. of Job & Family Servs.,
10th Dist. No. 16AP-317, 2017-Ohio-7227, ¶ 24. If the common pleas court finds UCRC's
decision is not supported by reliable, probative, and substantial evidence and is not in
accordance with law, it may reverse, vacate, or modify the decision, or make such other
ruling as is supported by reliable, probative, and substantial evidence and is in accordance
with law. R.C. 4141.26(D)(2).
       {¶ 10} On appeal to this court from a decision of the common pleas court, we apply
a narrower standard of review. As to issues of fact, we review the common pleas court's
decision for abuse of discretion. Id. at ¶ 25. In this context, "[t]o find an abuse of discretion,
we must conclude that the trial court's decision is without a reasonable basis and clearly
wrong." Miracle Home Health Care, LLC v. Ohio Dept. of Job & Family Servs., 10th Dist.
No. 20AP-189                                                                                  4

No. 12AP-318, 2012-Ohio-5669, ¶ 18; see also Humanus Corp. v. Dir., Ohio Dept. of Job &
Family Servs., 10th Dist. No. 19AP-764, 2020-Ohio-6940. "Absent an abuse of discretion
on the part of the common pleas court, this court is obligated to affirm its judgment."
Stouffer Hotel Mgt. Corp. v. Ohio Unemp. Comp. Bd. of Rev., 87 Ohio App.3d 179, 183
(10th Dist.1993). However, this court's review of questions of law is plenary. BRT
Transport, LLC v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 14AP-800, 2015-Ohio-
2048, ¶ 15.
       {¶ 11} Ohio employers pay contributions into Ohio's unemployment compensation
fund. R.C. 4141.23(A). The definition of "employer" includes any individual or entity that
"[h]ad in employment at least one individual." R.C. 4141.01(A)(1)(a). "Employment" is
defined as "service performed by an individual for remuneration under any contract of hire,
written or oral, express or implied * * * unless it is shown to the satisfaction of the director
[of ODJFS] that such individual has been and will continue to be free from direction or
control over the performance of such service, both under a contract of service and in fact."
R.C. 4141.01(B)(1). The burden of proving entitlement to the independent contractor
exemption is on the employer. Peter D. Hart Research Assocs., Inc. v. Admr., Ohio Bur. of
Emp. Servs., 10th Dist. No. 95APE06-736 (Dec. 28, 1995), citing G. McConnell v. Admr.,
Ohio Bur. of Emp. Servs., 10th Dist. No. 95APE03-262 (Oct. 5, 1995).
       {¶ 12} R.C. 4141.01(B)(2)(k) includes as employment "[c]onstruction services
performed by any individual under a construction contract * * * if the director determines
that the employer for whom services are performed has the right to direct or control the
performance of the services and that the individuals who perform the services receive
remuneration for the services performed." R.C. 4141.01(B)(2)(k) lists 20 factors to be
considered in assessing direction or control and provides that UCRC must presume that the
employer has the right of direction and control if 10 or more of the factors apply.
       {¶ 13} The R.C. 4141.01(B)(2)(k) factors include:
              (i) The employer directs or controls the manner or method by
              which instructions are given to the individual performing
              services;

              (ii) The employer requires particular training for the individual
              performing services;
No. 20AP-189                                                                  5

           (iii) Services performed by the individual are integrated into
           the regular functioning of the employer;

           (iv) The employer requires that services be provided by a
           particular individual;

           (v) The employer hires, supervises, or pays the wages of the
           individual performing services;

           (vi) A continuing relationship between the employer and the
           individual performing services exists which contemplates
           continuing or recurring work, even if not full-time work;

           (vii) The employer requires the individual to perform services
           during established hours;

           (viii) The employer requires that the individual performing
           services be devoted on a full-time basis to the business of the
           employer;

           (ix) The employer requires the individual to perform services
           on the employer's premises;

           (x) The employer requires the individual performing services
           to follow the order of work established by the employer;

           (xi) The employer requires the individual performing services
           to make oral or written reports of progress;

           (xii) The employer makes payment to the individual for
           services on a regular basis, such as hourly, weekly, or monthly;

           (xiii) The employer pays expenses for the individual
           performing services;

           (xiv) The employer furnishes the tools and materials for use by
           the individual to perform services;

           (xv) The individual performing services has not invested in the
           facilities used to perform services;

           (xvi) The individual performing services does not realize a
           profit or suffer a loss as a result of the performance of the
           services;

           (xvii) The individual performing services is not performing
           services for more than two employers simultaneously;
No. 20AP-189                                                                                 6

              (xviii) The individual performing services does not make the
              services available to the general public;

              (xix) The employer has a right to discharge the individual
              performing services;

              (xx) The individual performing services has the right to end the
              individual's relationship with the employer without incurring
              liability pursuant to an employment contract or agreement.

       {¶ 14} Jackson Roofing argues that UCRC found 11 of the factors present (factors i,
iii, iv, v, vi, ix, xi, xii, xvi, ixx, and xx) and therefore presumed the individuals were
employees but that UCRC improperly applied the facts of this case or misconstrued the
meaning of four factors (factors i, iv, ix and xvi), thus, should not have found the
presumption exists and that the individuals were employees. It further argues that 6 factors
should have weighed in its favor (factors i, iv, ix, xi, xii, and xvi). UCRC argues that in the
"reasoning" section of its decision, UCRC found support for at least 14 factors and the
evidence in the record supports each of those 14 factors. UCRC further argues the record
contains substantial, reliable, and probative evidence supporting a finding that Jackson
Roofing meets 16 of the 20 factors.
       {¶ 15} UCRC's decision provides, as follows:
              ISSUE # 1

              Were individuals: Jeff Belt, Ricky Burgett, Eric Close, Earl
              Connard, Paul Davis, Jessie Demyan, Geoff Dilik, Frank
              Donovan, Ian Healy, Chas Jackson, Matthew Jett, Brent
              McClung, Desmond Moore, Larry Moretto, Jason Palagyl,
              Tyler Petrilio, Adrian Robinson, Justin Scealf, Jay Stafford,
              Bill Stoehr, Steve Whelan, Eric Anderson, Peter Dagnese,
              Lloyd Gunter, Thomas Higgins, Michael Keffer, John Turner,
              and Matthew Harmon engaged in covered employment?

              ***

              REASONING

              The issue in this case is whether twenty-eight individuals who
              have provided roofing services for Bill Jackson Roofing, Inc.
              should be considered covered employees under the Ohio
              Unemployment Compensation Law. The Ohio Revised Code,
              Section 4141.01(B)(2)(k), as cited above, provides that when
No. 20AP-189                                                                                      7

               determining whether individuals who work in the
               construction industry, such as the roofers in question, are in
               covered employment, the twenty factors outlined in that
               section should be considered. In reviewing these factors, the
               Hearing Officer makes the following findings:

               The roofers are required to comply with the instructions of Bill
               Jackson Roofing, Inc. regarding when, where, and how they
               are to perform the services. Bill Jackson Roofing, Inc. does not
               require particular training for the roofers. Roofing services
               are part of the regular business of William Jackson Roofing,
               Inc. Roofing requires that services be provided by a particular
               worker, in that the roofer did not have another individual
               perform the work in their stead. Bill Jackson Roofing, Inc.
               hires and pays the wages of the roofers.

               A continuing relationship exists between Bill Jackson
               Roofing, Inc. and the roofer that contemplates continuing or
               recurring work, even if not full-time. Bill Jackson Roofing,
               Inc. does not require that work be performed on its premises,
               but does require it to be performed at the client's location.

               Bill Jackson Roofing requires the roofers to make and submit
               written reports regarding the hours work[ed] and services
               provided after each project is completed. Bill Jackson pays the
               roofers for hours worked. Bill Jackson Roofing, Inc. does not
               pay expenses for the roofers. Bill Jackson Roofing, Inc. does
               not furnish tools for use.

               The roofers are not at risk of experiencing loss as a result of
               the performance of such services. The roofers may be
               performing services for a number of persons at the same time.
               The roofers are permitted to make their services available to
               the general public. Bill Jackson Roofing, Inc. has the right to
               discharge the roofer. The roofers have the right to end the
               relationship with Bill Jackson Roofing, Inc. without incurring
               liability pursuant to an employment contract or agreement.

               As outlined above, the individuals providing services as
               roofers for Bill Jackson Roofing, Inc. meet more than ten of
               the twenty factors for covered employees as set forth [in] the
               Ohio Administrative Code, Section 4141-3-05.1 Pursuant to
               the statute, the employer for whom services are performed has
               the right to direct or control the performance of the services if

1UCRC cites the Ohio Administrative Code but applied R.C. 4141.01(B)(2)(k) because the case involves
construction services.
No. 20AP-189                                                                                8

              ten or more of the following criteria apply. The preponderance
              of the evidence indicates that the individuals who worked as
              roofers are employees under the Ohio Unemployment
              Compensation Law.

(Oct. 9, 2019 UCRC Decision at 4-6.)
       {¶ 16} Jackson Roofing notes that UCRC's written decision did not specify the
evidence supporting UCRC's determination as to each factor. We note that the common
pleas court decision also did not specify the evidence it found to be reliable, probative, and
substantial that supported UCRC's decision. The common pleas court decision contained
no discussion of the 20 factors nor of the evidence, or lack thereof, in the record pertaining
to the 20 factors regarding each of the 28 employees Jackson Roofing claims were
misclassified. The common pleas court simply summarized the arguments of the parties,
but made no specific reference to the evidence which it found to be reliable, probative, and
substantial. The common pleas court summarily concluded:
              The Appellant did not establish that the evidence relied upon
              by the Commission was "internally inconsistent, impeached by
              evidence of a prior inconsistent statement, rest upon improper
              inferences, or are otherwise unsupportable." Ohio Historical
              Soc. v. State Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993).

              * * * This Court will not substitute its judgment for that of the
              agencies [sic] finder of fact.

              ***

              The Appellant, is asking the Commission to answer a negative.
              The Appellant is asking: where is the evidence that the
              Commission relied upon to show that said individuals were
              employees? In response, the Commission is stating: Where is
              your evidence that they are not employees. The Appellant had
              the burden first and the Commission has determined that it
              failed to meet that burden.

(Mar. 4, 2020 Common Pleas Court Decision at 4-5.)
       {¶ 17} Unfortunately, the common pleas court's decision and judgment entry is
insufficient and does not permit this court to conclude that it conducted its review as
required pursuant to R.C. 4141.26(D)(2). The decision does not permit us to conduct a
meaningful appellate review.
No. 20AP-189                                                                                                 9

        {¶ 18} The common pleas court appears to justify the lack of review and discussion
of the evidence with the requirement that the burden of proving entitlement to the
independent contractor exemption is on the employer. The court also seems persuaded by
appellee's argument that "[n]either the lower court nor this Court may reweigh the
evidence in the first instance as requested by Appellant." (Appellee brief at 20.)
        {¶ 19} It is true that the burden of proving entitlement to the independent
contractor exemption is on the employer. However, it is still incumbent upon the common
pleas court to conduct its appellate review of the commission's decision. "In [an R.C.
4141.26(D)(2)] review, it is incumbent upon the trial court to examine the evidence."
(Emphasis added.) Eisenhour v. State Unemp. Comp. Bd. of Rev., 10th Dist. No. 97APE03-
349 (Aug.12, 1997). Furthermore, although UCRC is correct that it is not the role of this
court of appeals to reweigh the evidence, it is incorrect in arguing that the common pleas
court may not reweigh the evidence.
        {¶ 20} In its decision, the common pleas court quotes Ohio Historical Soc. v. State
Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993). Ohio Historical Soc. addressed a
common pleas court's standard of review and role in reviewing an administrative appeal,
pursuant to R.C. 119.12, which is similar to the common pleas court's standard of review
and role in reviewing an administrative appeal pursuant to R.C. 4141.26(D)(2) in that the
court may affirm the decision of the administrative agency if it finds the order is supported
by reliable, probative, and substantial evidence and is in accordance with law.2 Ohio
Historical Soc. relied on the Supreme Court of Ohio's reasoning set forth in Univ. of
Cincinnati v. Conrad, 63 Ohio St.2d 108, 109-12 (1980), and Andrews v. Bd. of Liquor
Control, 164 Ohio St. 275 (1955). In Conrad, the Supreme Court stated:
                 This appeal concerns the scope of review available to a Court of
                 Common Pleas in an administrative appeal pursuant to R.C.
                 119.12. Although this court has addressed this issue in the past,

2 We observe the difference between R.C. 119.12(K) and 4141.26(D)(2) regarding the common pleas court's
ability to consider additional evidence. Pursuant to R.C. 4141.26(D)(2): "In such appeal, no additional
evidence shall be received by the court, but the court may order additional evidence to be taken before the
commission, and the commission, after hearing such additional evidence, shall certify such additional
evidence to the court or it may modify its determination and file such modified determination, together with
the transcript of the additional record, with the court." R.C. 119.12(K) states: "Unless otherwise provided by
law, in the hearing of the appeal, the court is confined to the record as certified to it by the agency. Unless
otherwise provided by law, the court may grant a request for the admission of additional evidence when
satisfied that the additional evidence is newly discovered and could not with reasonable diligence have been
ascertained prior to the hearing before the agency."
No. 20AP-189                                                                     10

           an examination of the record in this cause indicates that further
           clarification is necessary.

           As to the authority of a Court of Common Pleas upon review of
           an administrative order, pursuant to R.C. 119.12, such section
           provides, in pertinent part, that:

           "The court may affirm the order of the agency complained of in
           the appeal if it finds, upon consideration of the entire record
           and such additional evidence as the court has admitted, that
           the order is supported by reliable, probative, and substantial
           evidence and is in accordance with law. In the absence of such
           a finding, it may reverse, vacate, or modify the order or make
           such other ruling as is supported by reliable, probative, and
           substantial evidence and is in accordance with law."

           In Andrews v. Bd. of Liquor Control (1955), 164 Ohio St. 275,
           paragraph one of the syllabus, this court held that a Court of
           Common Pleas must, in an appeal pursuant to this section,
           appraise all the evidence "as to credibility of witnesses, the
           probative character of the evidence and the weight to be given
           it, and, if from such a consideration it finds that the * * *
           [administrative] order is not supported by reliable, probative,
           and substantial evidence and is not in accordance with law, the
           court is authorized to reverse, vacate, or modify the order * * *."
           However, Andrews also pointed out that R.C. 119.12 does not
           contemplate a trial de novo in the Court of Common Pleas by
           the following language, at 279-280:

           ***

           "The legislative purpose, generally to authorize a Common
           Pleas Court to weigh the evidence on an appeal from an
           administrative agency, is indicated by other statutes, as well
           as by our decisions construing them. Thus, after the holding of
           this court in Farrand v. State Medical Board (1949), 151 Ohio
           St. 222, 85 N.E. 2d 113, the General Assembly amended what is
           now Section 119.12, Revised Code, to provide for such
           authority. Andrews v. Board of Liquor Control, supra (164
           Ohio St. 275, paragraph one of syllabus). Furthermore, in
           adopting Section 2506.04, Revised Code, in 1957, the General
           Assembly even used the words 'preponderance of * * *
           evidence' to emphasive [sic] this purpose."

           In Andrews, this court acknowledged that determining
           whether an agency order is supported by reliable, probative
           and substantial evidence essentially is a question of the absence
No. 20AP-189                                                                                            11

                or presence of the requisite quantum of evidence. Although
                this in essence is a legal question, inevitably it involves a
                consideration of the evidence, and to a limited extent would
                permit a substitution of judgment by the reviewing Common
                Pleas Court.

                In undertaking this hybrid form of review, the Court of
                Common Pleas must give due deference to the administrative
                resolution of evidentiary conflicts. For example, when the
                evidence before the court consists of conflicting testimony of
                approximately equal weight, the court should defer to the
                determination of the administrative body, which, as the fact-
                finder, had the opportunity to observe the demeanor of the
                witnesses and weigh their credibility. However, the findings of
                the agency are by no means conclusive.

                Where the court, in its appraisal of the evidence, determines
                that there exist legally significant reasons for discrediting
                certain evidence relied upon by the administrative body, and
                necessary to its determination, the court may reverse, vacate or
                modify the administrative order. Thus, where a witness'
                testimony is internally inconsistent, or is impeached by
                evidence of a prior inconsistent statement, the court may
                properly decide that such testimony should be given no weight.
                Likewise, where it appears that the administrative
                determination rests upon inferences improperly drawn from
                the evidence adduced, the court may reverse the administrative
                order.

(Emphasis added.) Andrews at 109-12.
        {¶ 21} "The standard of review for an appellate court reviewing a decision of the
commission appealed pursuant to R.C. 4141.263 is more limited. Regarding factual
questions, an appellate court does not weigh the evidence but, rather, only determines
whether the common pleas court abused its discretion." Valentine Contrs., Inc. v. Dir.,
Ohio Dept. of Job & Family Servs., 10th Dist. No. 15AP-86, 2015-Ohio-5576, ¶ 14, citing All
Star Personnel, Inc. v. State of Ohio, Unemp. Comp. Rev. Comm., 10th Dist. No. 05AP-
522, 2006-Ohio-1302, ¶ 13, citing Kate Corp. v. Ohio State Unemp. Comp. Rev. Comm.,

3We note that the standards of appellate review for decisions of UCRC pursuant to R.C. 4141.26 regarding an
employer's contribution to Ohio's unemployment compensation fund differs from the standards of appellate
review for decisions of UCRC pursuant to R.C. 4141.282 regarding an employee's eligibility for unemployment
benefits. See also Humanus Corp., and Tzangas, Plakas & Manos v. Admr., Ohio Bur. of Emp. Servs., 73 Ohio
St.3d 694 (1995).
No. 20AP-189                                                                           12

10th Dist. No. 03AP-315, 2003-Ohio-5668, ¶ 7; Prime Kosher Foods, Inc. v. Admr., Bur. of
Emp. Servs., 35 Ohio App.3d 121, 122 (10th Dist.1987). Yet, without any discussion of the
20 factors, its interpretation of the same or the evidence presented regarding the 28
employees in its decision, that is what the common pleas court has left this court to do—
examine, appraise, and ultimately weigh the evidence. We will not.
IV. Conclusion
       {¶ 22} Accordingly, we decline at this time to address the merits of Jackson
Roofing's assignments of error. We reverse and remand the decision and judgment to the
Franklin County Court of Common Pleas with instructions to conduct its review, pursuant
to R.C. 4141.26(D)(2), so that this court may conduct a meaningful appellate review of its
decision, within the scope of our duties pursuant to R.C. 4141.26(D)(2).
                                                                    Judgment reversed
                                                   and cause remanded with instructions.

                            KLATT and NELSON, JJ., concur.