Court Opinion

ID: 4090252
Source: CourtListenerOpinion
Date Created: 2016-10-18 15:02:30.373089+00
Date Added: 2024-06-11T13:13:05.017667
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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                         ELPIDIO VEGA RANGEL,
                                Petitioner,

                                       v.

                  THE INDUSTRIAL COMMISSION OF
                            ARIZONA,
                            Respondent,

                           ERNESTO LUEVANO,
                            Respondent Employer,

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

                            No. 1 CA-IC 16-0005
                             FILED 10-18-2016

              Special Action - Industrial Commission
                  ICA CLAIM NO. 20151-180082
      The Honorable Anthony Halas, Administrative Law Judge

                           AWARD SET ASIDE
                               COUNSEL

Elpidio Vega Rangel, Phoenix
Petitioner

Industrial Commission of Arizona, Phoenix
By Jason M. Porter
Counsel for Respondent ICA

Industrial Commission of Arizona, Phoenix
By Stephen D. Ball
Counsel for Respondent Employer/Carrier

                     MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Jon W. Thompson and Judge Edward W. Bassett joined.1

J O H N S E N, Judge:

¶1           This is a special action review of an Industrial Commission of
Arizona ("ICA") award of a non-compensable injury. Elpidio Vega Rangel
argues the administrative law judge ("ALJ") erred by finding he failed to
meet his burden to show that Ernesto Luevano was an employer under the
Workers' Compensation Act. For the reasons that follow, we set aside the
award.

             FACTS AND PROCEDURAL BACKGROUND

¶2          According to the evidence before the ALJ, Rangel lived in a
home owned by Luevano.2 The monthly rent was $525, but since 2009,
Luevano allowed Rangel to live rent-free in exchange for services. Rangel

1      The Honorable Edward W. Bassett, Judge of the Arizona Superior
Court, has been authorized to sit in this matter pursuant to Article VI,
Section 3 of the Arizona Constitution.

2      "We will affirm a Commission decision if it is reasonably supported
by the evidence after reviewing the evidence in a light most favorable to
sustaining the award." Lovitch v. Indus. Comm'n, 202 Ariz. 102, 105, ¶ 16
(App. 2002).

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            VEGA RANGEL v. LEUVANO/SPECIAL FUND
                     Decision of the Court

was responsible for collecting rent from the tenants in nine other nearby
homes owned by Luevano, making repairs to all the homes, painting and
cleaning the homes after tenants moved out and before other tenants
moved in, maintaining the common areas of the properties, and generally
"keep[ing] an eye on things." Luevano supplied Rangel with a credit card
for maintenance expenses, for which Luevano paid the bill. Although
Rangel did not have a set work schedule, he had to be available all day,
every day, for repairs. This arrangement continued for at least five years,
except for a few short periods when Rangel was out of town. During those
times, Rangel was responsible for paying his rent, although Luevano does
not remember ever collecting any rent from Rangel.

¶3           One night in 2014, two tenants called Rangel to complain
about suspicious people in the property parking lot. Rangel went to the
parking lot to investigate, and there confronted six people. After an
exchange of some sort, Rangel was shot three times, sustaining multiple
injuries.

¶4            Rangel filed a claim for workers' compensation, which the
Special Fund Division/No Insurance Section of the Industrial Commission
of Arizona denied. Rangel protested the denial and requested a hearing.
At the hearing, Luevano and the No Insurance Section asserted three
arguments: (1) Luevano is not an employer under the Workers'
Compensation Act because his primary occupation is not that of a landlord
and he does not regularly employ people in the property management
business; (2) Rangel was not an employee under the Act because his work
was sporadic and subject to no definite terms of employment; and (3)
Rangel's injury did not arise out of and in the course of his employment.

¶5            In his Decision Upon Hearing, the ALJ found Rangel failed to
show that Luevano was an employer under the Act. The ALJ did not
address the other two arguments Luevano and the No Insurance Section
raised. Rangel requested review and the ALJ affirmed his decision. This
special action timely followed.

¶6            This court has jurisdiction pursuant to Arizona Revised
Statutes ("A.R.S.") sections 12-120.21(A)(2) (2016) and 23-951 (2016) and
Rule 10 of the Arizona Rules of Procedure for Special Actions.3

3     Absent material revision after the relevant date, we cite a statute's
current version.

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             VEGA RANGEL v. LEUVANO/SPECIAL FUND
                      Decision of the Court

                                DISCUSSION

¶7           We defer to the ALJ's factual findings, but review de novo the
determination of whether an employer-employee relationship existed.
Henderson-Jones v. Indus. Comm'n, 233 Ariz. 188, 191-92, ¶ 9 (App. 2013).

¶8             To be entitled to benefits under the Arizona Worker's
Compensation Act, a worker must have been "in the service of an employer
subject to the Act at the time of the injury." Id. at 192, ¶ 11. A claimant bears
the burden of establishing all elements of the claim by a preponderance of
the evidence. Special Fund Div./No Ins. Section v. Indus. Comm'n, 172 Ariz.
319, 324 (App. 1992).

¶9             Employers subject to the Act include "every person who
employs any workers . . . regularly employed in the same business . . . under
contract of hire." A.R.S. § 23-902(A) (2016). The term "regularly employed"
includes "all employments, whether continuous throughout the year, or for
only a portion of the year, in the usual trade, business, profession or
occupation of an employer." Id.

¶10           A business need not be profitable or entrepreneurial to bring
an employer within the Act. See Greenway Baptist Church v. Indus. Comm'n,
130 Ariz. 482, 484 (App. 1981) (church can be employer for the purposes of
the Act). An employer who is "regularly using his [worker's] labor in a
commercial enterprise" is subject to the Act. Griebel v. Indus. Comm'n, 133
Ariz. 270, 273-74 (App. 1982) (homeowner who paid handyman to work on
home but who had no intent to exploit his labor by reselling home at a profit
not an employer subject to Act).

¶11          The ALJ heard evidence that Luevano works full time at a
manufacturing company, and that the homes he owns and rents out are an
hour's drive from his own home. Luevano testified he purchased the
houses as investment properties, although he does not always make a
profit.

¶12          On the record presented, the dozen rental properties Luevano
owns are a commercial enterprise constituting a "trade, business, profession
or occupation" that renders him an employer for purposes of the workers'
compensation laws. See Greenway, 130 Ariz. at 484. The ALJ erred by
concluding that because Luevano had a full-time job elsewhere, he was not
also engaged in the business of property management. That Luevano's
property management business was not his main source of income, or that
it may not have been consistently profitable, is not dispositive. The
properties Luevano owned and rented out constituted such a significant

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            VEGA RANGEL v. LEUVANO/SPECIAL FUND
                     Decision of the Court

enterprise that, as landlord, Luevano was willing to forego rent on one of
the units in exchange for Rangel's agreement to live on-site and perform a
variety of services with respect to the other properties. Under § 23-902(A),
Luevano plainly was an "employer" with respect to his ownership and
maintenance of the rental properties.

                              CONCLUSION

¶13          For the foregoing reasons, we set aside the award.

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

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