Court Opinion

ID: 7803541
Source: CourtListenerOpinion
Date Created: 2022-08-25 16:01:48.880758+00
Date Added: 2024-06-11T16:29:40.179835
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

FERNANDO GARDEA SOLIS (Deceased) by Mayra Trevizo for herself as
     surviving spouse and for minor children*, **, ***, Petitioners,

                                        v.

     THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,

DSL LOGISTICS, LLC*, ROPERS TRANSPORT, LLC**, DUNCAN & SON
                 LINES***, Respondent Employers,

  NATIONAL INTERSTATE INSURANCE CO***, Respondent Insurance
                         Carrier,

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

                             No. 1 CA-IC 21-0046
                              FILED 8-25-2022

               Special Action - Industrial Commission
                    ICA Claim No. 20180-960090*
                                No. 20180-960091**
                               No. 20193-250053***
                     Carrier Claim No. 1313324***
      The Honorable Rachel C. Morgan, Administrative Law Judge

                            AWARD AFFIRMED
                                COUNSEL

Joel F. Friedman PLLC, Phoenix
By Joel F. Friedman
Counsel for Petitioners

Industrial Commission of Arizona, Phoenix
By Gaetano J. Testini
Counsel for Respondent Industrial Commission

Norton & Brozina PC, Phoenix
By Rachel Parise Brozina
Counsel for Respondent Duncan & Son Lines, Inc., and Respondent Carrier

Baumann, Doyle, Paytas & Bernstein, PLLC, Phoenix
By Gary T. Doyle
Counsel for Respondent DSL Logistics, LLC

Legal Division
Industrial Commission of Arizona, Phoenix
By Scott J. Cooley
Counsel for Respondent Party in Interest

                        MEMORANDUM DECISION

Presiding Judge Jennifer M. Perkins delivered the decision of the Court, in
which Judge James B. Morse Jr. and Judge Michael Brown joined.

P E R K I N S, Judge:

¶1             The surviving spouse and minor children of Fernando Gardea
Solis bring this statutory special action to review the Industrial Commission
of Arizona’s finding that their death benefits claim is non-compensable. For
the following reasons, we affirm.

           FACTUAL AND PROCEDURAL BACKGROUND

¶2           Solis was the sole owner of Ropers Transport, LLC (“Ropers”)
when he died. He spent many years driving a semi-truck to haul cargo
containers between southern California ports and Arizona. Before 2016, he
worked as an employee-driver for Duncan & Sons Lines, Inc. (“Duncan”),

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                SOLIS et al, v. DSL. et al/SPECIAL FUND
                          Decision of the Court

an interstate cargo carrier that transported goods for DSL Logistics, LLC
(“DSL”). Duncan and DSL shared office space and had some corporate
officers and owners in common.

¶3             DSL is a freight broker that arranges cargo transportation
with about 900 motor carriers. DSL owns no trucks but it sets pickup times,
drop-off times, and locations with its customers and then hires carriers to
transport the cargo. DSL collects payments from customers and then pays
its carriers upon delivery.

¶4             In 2016, Solis purchased a semi-truck from Duncan and
formed Ropers. Duncan financed the loan for Solis’s truck. Solis contracted
with DSL to transport goods on the same route that Solis drove for Duncan.
Their written agreement (“Agreement”) identified DSL as a federally
licensed freight broker and Ropers as a federally licensed motor carrier. The
Agreement states DSL may offer shipments for Ropers to haul, but Ropers
must use its own equipment. DSL did not have to offer work to Solis, but if
it did, Solis agreed to accept a minimum of three transports per week, per
truck. The Agreement did not prohibit Solis from working with other
brokers or shippers.

¶5            The Agreement required Ropers to obtain any licenses or
certificates needed to operate as a motor carrier. Ropers also had to
maintain its own general liability insurance, motor vehicle insurance, trailer
insurance, cargo insurance, and workers’ compensation insurance. Ropers
invoiced DSL on a fee-per-transport basis. The Agreement identifies Ropers
as an independent contractor with “exclusive control and direction of the
work [Ropers] perform[ed] pursuant to this Agreement,” including
supervision of any employees Ropers hired. Ropers could not assign others
to perform the transportation services or transport any other property while
transporting a shipment for DSL. The parties agreed to a one-year term with
automatic renewal, unless either party provided a thirty-day notice to
cancel.

¶6            DSL issued a federal income tax form 1099 to Ropers, which
had its own tax identification number, to account for payments from 2016
and 2017. Solis used funds from the DSL invoices to make payments on his
semi-truck loan to Duncan.

¶7            In April 2017, Solis died in an accident while hauling cargo on
his familiar route. His widow and dependent children filed unsuccessful
workers’ compensation death benefits claims. They protested their claims’
denial, and the Industrial Commission held a hearing before an

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administrative law judge (“ALJ”). The ALJ’s sole inquiry was whether DSL
or Duncan, or both, were Solis’s employers under workers’ compensation
law when the accident occurred.

¶8           The ALJ heard testimony from Solis’s widow and DSL’s Vice
President of Operations and reviewed other evidence. The ALJ concluded
Ropers was an independent contractor and thus Solis was not an employee
subject to DSL’s workers’ compensation coverage. After an administrative
review affirmed the award, this appeal followed.

                               DISCUSSION

¶9             We address only whether Solis was an independent
contractor or an employee under A.R.S. § 23-902, a question of law we
review de novo. See Special Fund Div./No Ins. Section v. Indus. Comm’n, 172
Ariz. 319, 321 (App. 1992). We view the evidence in the light most favorable
to upholding the award. Munoz v. Indus. Comm’n, 234 Ariz. 145, 147, ¶ 2
(App. 2014).

¶10           Dependents of an employee killed in the course of his
employment are entitled to compensation. A.R.S. § 23-1021. “A factual
predicate for recovery, however, is the existence of an employer-employee
relationship. An independent contractor is not an employee for purposes of
workers’ compensation law.” Danial v. Indus. Comm’n, 246 Ariz. 81, 83, ¶ 12
(App. 2019). Rather, an independent contractor is:

       A person engaged in work for a business, and who 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.

A.R.S. § 23-902(C).

¶11           In determining whether a claimant is an employee or
independent contractor, we focus on whether the prospective employer had
a right to control the details of the claimant’s work. Danial, 246 Ariz. at 83,
¶ 13. We consider the totality of the circumstances of the parties’ business
relationship and look to “indicia of control,” such as “the duration of the
employment; the method of payment; who furnishes necessary equipment;
the right to hire and fire; who bears responsibility for workmen’s

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                          Decision of the Court

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. at 83–84, ¶¶
13–14 (citation omitted).

¶12            The record shows neither DSL nor Duncan exerted control
over Solis’s work. Solis worked on a job-by-job basis, and he did not receive
a salary or hourly wage. Solis used his own semi-truck, burned his own
fuel, and relied on his own insurance. DSL had no authority to hire and/or
fire employees working under Solis’s direction. DSL also exercised no
control over how Solis completed his jobs. As the freight broker, DSL
merely dictated the pickup and dropoff times based on its agreements with
customers.

¶13           Solis’s surviving family members admit DSL did not exert
sufficient control over Solis’s work to establish an employer-employee
relationship. But they contend that DSL and Duncan, as “alter ego entities,”
combined to control Solis’s work for him to be considered their employee.
While the companies shared business offices and corporate officers, they
did not exercise any “combined” authority over Solis’s work. Solis may
have depended on Duncan and DSL to operate Ropers because Duncan
sold and financed Solis’s semi-truck and DSL offered hauling
opportunities. But these arrangements do not rise to the level of control
inherent to an employer-employee relationship. We agree with the ALJ’s
finding that Solis was an independent contractor.

                              CONCLUSION

¶14          We affirm the award.

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

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