Court Opinion

ID: 4430195
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:37:20.360777+00
Date Added: 2024-06-11T14:27:22.698755
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0225-17T2

JULIO PENDOLA,

           Petitioner-Appellant,

v.

MILENIO EXPRESS, INC.,
d/b/a CLASSIC,

     Respondent-Respondent.
_______________________________

                    Argued June 26, 2018 - Decided October 26, 2018

                    Before Judges Nugent and Accurso.

                    On appeal from the Department of Labor and
                    Workforce Development, Division of Workers'
                    Compensation, Claim Petition No. 2014-31102.

                    Pablo N. Blanco argued the cause for appellant (The
                    Blanco Law Firm, LLC, attorneys; Pablo N. Blanco, on
                    the brief).

                    Robert M. Gilbert argued the cause for respondent (Law
                    Offices of Styliades and Jackson, attorneys; Robert M.
                    Gilbert, on the brief).

PER CURIAM
      The Division of Workers' Compensation dismissed Julio Pendola's claim

petition for compensation benefits against Milenio Express, Inc. d/b/a Classic,

on the basis that Pendola was not Classic's employee. Pendola appeals, claiming

he established an employment relationship because his work was an integral part

of Classic's business and controlled by the company. We agree and reverse.

      Pendola, an auto cab driver in Newark, fractured his ankle in 2014 picking

up a customer. The facts of Pendola's accident and injury are not at issue in this

appeal.1 The parties agreed to bifurcate the trial, with the court first addressing

whether Pendola was an employee of Classic or an independent contractor. Only

two witnesses testified, Pendola and Veronica Solano, a Classic supervisor.

      Pendola testified he had worked exclusively as a driver for Classic since

2003, at first driving someone else's car. When he purchased his own car, a

Crown Victoria, he consulted with Classic. Classic required that he paint the

car silver, the color assigned the company by the City, and affix the Classic logo

to the sides and front of the car, along with the company's telephone number.

The company also required that he purchase a two-way radio to be installed in

the car. Pendola testified he paid for all of those expenses as well as for his

1
  We note, however, that the injury was a serious one, requiring surgery.
Pendola had no other insurance and medical bills of over $63,000, some of
which were paid by charity care.
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medallion, gas, maintenance on his car and liability insurance. The company

told him where to pick up customers and supplied him with business cards,

receipts and vouchers, "whatever we needed to work," all bearing the Classic

logo.

        Pendola explained he was not permitted to pick up passengers off the

street as a taxi driver would. The only passengers he was permitted to pick up

were those dispatched through Classic. He testified he paid Classic $150 a week

and was permitted to keep all of his fares. He estimated he grossed between

$500 and $700 a week. He could work whatever hours he chose. Pendola

testified that Classic had rules for drivers, which they enforced. Asked what

kind of rules, he said, "Like you had to get well dressed. Keep the car clean.

Be polite with the people . . . [and] [b]e on time on the pick ups." If a driver

failed to follow the rules, he would be suspended.         Pendola said he was

suspended a couple of times for picking up another driver's fare or being late for

pick-ups. He testified that on those occasions he was suspended for a few hours

or the rest of the day. He also claimed Classic stopped letting some drivers work

after "they got nasty."

        Pendola testified Classic was owned by six people and the company had

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over 100 cars. Driving for Classic was Pendola's only job and it represented his

only source of income for his entire tenure.

      Solano testified that Classic, although owned by one individual, her

cousin, was "more of like a family business." "The people that supervise are

family members" and "[m]ost of the family members also have vehicles working

with the company." Solano testified that although she did not drive, her husband

did, and they had "two more drivers" who rent the cars and pay the couple a

weekly fee.

      Solano testified that Classic is a "dispatching service." The drivers are

"called independent owners/operators" who have their own cars, their own

medallions and Classic charges them "a weekly dispatching fee for the service."

Asked about the company's requirement that the drivers paint their cars silver

and carry the Classic name and phone number, Solano explained that the "[t]he

City of Newark Taxi Division requires that each company have a color" and that

Classic had been assigned "the silver color for many years." "So if they're going

to work with our transportation company they have to have our color; they have

to have our logos." Solano further explained that the drivers also "have to have

the Newark license in the back in case there's an accident . . . then the other

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person can actually see what company it is, what the auto cab license number

is."

       Solano testified that Classic is not a taxi service but an auto cab company

and that its customers have to "call our office . . . for the ride." She explained

that at the time of Pendola's accident, Classic "had two different [radio] channels

at [its] office besides the phone operators." 2 When a driver

             would want to start to work[,] he would turn on the
             radio and he would listen to the dispatcher calling out
             the jobs and if he was close to one of those jobs he
             would what we say "punch for the ride" or "request the
             ride."

                   He would press his microphone. The number
             would come up at the office so we would know that he
             was requesting that job. He would be put in a list along
             with the other people that are requesting the ride, and
             then the dispatcher will assign the ride according to
             who was next on the list, who was waiting longer for
             the next ride.

       Solano explained that Classic does not "force [the drivers] to go and pick

up a certain fare. That's up to them. They're their own boss." She also testified

that "[t]he rules that [the drivers] have to follow . . . are pretty much the ones

that we enforce according to what [the] Taxi Division requests." Although

2
  Since the accident, Classic has abandoned two-way radios and now dispatches
drivers via computer tablets the drivers purchase themselves.
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testifying that Classic enforced the rules in order to "try to help [the drivers]

out" by avoiding tickets issued by the Taxi Division, she conceded "[o]f course,

we want our customers to have nice vehicles, clean vehicles, proper attired

drivers, you know." Solano testified if a driver violated the rules, Classic "put

them out for [two] hours." She provided an example of a customer calling and

telling her "[t]he vehicle that I'm riding in right now is extremely dirty and has

a hole in the floor." Solano said "[s]o I called the driver and I said: A customer

is telling me that you have this and that. You need to come here so we can look

at the vehicle, and you are going to be out until you do so. You have [two]

hours."

      When asked whether Classic routinely inspected the drivers' cars, Solano

responded: "We have — we don't really do it but we have certain people that

check the vehicles and if they see that there's something they will call us and

they'll tell us: That person needs to go to a car wash. The car is dirty." She

testified that Classic did not furnish any equipment for the drivers but provided

them with Classic "business cards, receipts, vouchers for credit cards that they

would need" and sometimes purchased key chains and pens for them "to give to

the customers." Solano also explained the company advertised its transportation

service via a website and has "an app for our customers . . . to request service."

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She testified that Classic has no written agreements with the drivers and "[t]hey

don't receive a 1099 or anything from us. They're not our employees." She did,

however, concede that Classic drivers were not free to pick up fares in a silver

Classic car dispatched through another company, explaining "[t]hey're auto cabs

and that's how it works."

      Applying the twelve-factor Pukowsky3 test, the framework the Court

adopted "for assessing a worker's employment status in the context of social

legislation" in D'Annunzio v. Prudential Insurance Co. of America, 192 N.J.
110, 122-24 (2007), and "endorse[d] for purposes of determining whether the

Compensation Act applies" in Estate of Kotsovska ex rel. Kotsovska v.

3
  Pukowsky v. Caruso, 312 N.J. Super. 171, 182-83 (App. Div. 1998). The
twelve factors are as follows:

            (1) the employer's right to control the means and
            manner of the worker's performance; (2) the kind of
            occupation-supervised or unsupervised; (3) skill; (4)
            who furnishes the equipment and workplace; (5) the
            length of time in which the individual has worked; (6)
            the method of payment; (7) the manner of termination
            of the work relationship; (8) whether there is annual
            leave; (9) whether the work is an integral part of the
            business of the “employer[”;] (10) whether the worker
            accrues retirement benefits; (11) whether the
            “employer” pays social security taxes; and (12) the
            intention of the parties.

            [Ibid. (citation omitted).]
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Liebman, 221 N.J. 568, 576, 595 (2015), the compensation judge concluded

Pendola was not an employee of Classic. The judge found Classic "exercised

very little control over the means and manner of [Pendola's] performance." He

noted that although Pendola was required by the "Taxi Division to paint his

vehicle silver and to place the name 'Classic'" and the company's phone number

on it, "he was otherwise left on his own to drive and pick up fares and

unaccountable to Milenio/Classic."     The judge noted Pendola set his own

schedule and was free to accept or reject the fares dispatched to him by Classic.

      The judge also found Classic did not supervise Pendola, that he was

required to have an auto cab license and comply with the rules of the Taxi

Division, that he furnished his own car and that, although he had been

"associated with" Classic for eleven years, it was "only to the extent of being a

driver of an auto cab which was dispatched by Milenio/Classic." The judge

further found Pendola received no salary from Classic but was required to pay a

dispatching fee of $150 per week. As to factor seven, the manner of termination

of the relationship, the judge found that Pendola "would only be prohibited from

operating an auto cab by the Taxi Division for failing to comply with the Taxi

Division rules and regulations, which would result in the revocation of his auto

cab license by the Taxi Division." The judge found there was no annual leave.

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      As to factor nine, whether Pendola's work was an integral part of Classic's

business, the judge found Classic's business was "dispatching [Pendola] and

drivers of auto cabs."    He found Classic was not dependent on Pendola,

reasoning that were he "not available to transport a fare, another cab driver was

waiting to do so. No one driver was essential to the effective functioning of the

business."

      The judge further found that Pendola did not accrue retirement benefits

and Classic did not pay social security taxes. As to the final factor, the judge

found "based upon the arrangement" between the parties, "it is clear there was

no intention that petitioner was to be an employee of Milenio/Classic."

      Pendola appeals, arguing the compensation court underestimated the

degree of control Classic exercised over its drivers relevant to factor one of the

Pukowsky test and misconstrued critical factor nine, representing the "relative

nature of the work test," which measures "the extent of the economic

dependence of the worker upon the business he serves and the relationship of

the nature of his work to the operation of that business." Marcus v. E. Agric.

Ass'n, Inc., 58 N.J. Super. 584, 603 (App. Div. 1959) (Conford, J.A.D.,

dissenting), rev'd on dissent, 32 N.J. 460 (1960). We agree.

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      Because the question before us involves an interpretation of law and the

legal consequences of established facts, our review is de novo. Manalapan

Realty, L.P. v. Twp. Comm. of Twp. of Manalapan, 140 N.J. 366, 378 (1995).

The Supreme Court has reiterated on numerous occasions that our State's

comprehensive statutory scheme of workers' compensation coverage "for the

compensation of injured workers 'is remedial social legislation and should be

given liberal construction in order that its beneficent purposes may be

accomplished.'" Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33, 42 (2008)

(quoting Torres v. Trenton Times Newspaper, 64 N.J. 458, 461 (1974)).

      As the Court held in D'Annunzio, and reiterated in Kotsovska, "when

'social legislation must be applied in the setting of a professional person or an

individual otherwise providing specialized services allegedly as an independent

contractor,' the trial court should consider three factors: '(1) employer control;

(2) the worker's economic dependence on the work relationship; and (3) the

degree to which there has been a functional integration of the employer's

business with that of the person doing the work at issue.'" Kotsovska, 221 N.J.

at 594 (quoting D'Annunzio, 192 N.J. at 122); see also Hargrove v. Sleepy's,

LLC, 220 N.J. 289, 310 (2015) (emphasizing those three of the twelve Pukowsky

factors as most pertinent when applying socially remedial legislation).

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                                       10
      Here, of course, there was no dispute regarding Pendola's economic

dependence on Classic. Pendola had been driving for Classic for eleven years,

and it was his sole source of income. Although one could debate whether the

requirement that Pendola paint his car silver and display prominently the Classic

name and phone number was indicia of control by Classic or merely enforcement

of Newark auto cab regulations, other aspects of the relationship point

unequivocally to a significant level of control by Classic over its drivers.

      Besides requiring its drivers install a two-way radio in the cars, at their

expense, the drivers were subject to Classic's rules as to which drivers would

receive a dispatched fare. Drivers were not free to pick up any nearby passenger

calling Classic for a ride. They were required, pursuant to rules established by

Classic, to request the ride from the dispatcher, who would decide which driver

would pick up the passenger based on how long the driver had waited since his

last fare. Further, as explained by Classic supervisor Solano, when customers

complained about the condition of a car, a supervisor would immediately contact

the driver and tell him, "[y]ou need to come here so we can look at the vehicle,

and you are going to be out until you do so. You have [two] hours." The

testimony demonstrated not only that Classic maintained rules for its drivers,

but that it enforced them.

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                                       11
      Even more important, however, we conclude the judge of compensation

misapplied factor nine, "whether the work is an integral part of the business of

the 'employer.'" Pukowsky, 312 N.J. Super. at 183. As Justice LaVecchia

explained in D'Annunzio, that factor "allows for examination of the extent to

which there has been a functional integration of the employer's business with

that of the person doing the work." 192 N.J. at 123.

            Several questions elicit the type of facts that would
            demonstrate a functional integration: Has the worker
            become one of the "cogs" in the employer's enterprise?
            Is the work continuous and directly required for the
            employer's business to be carried out, as opposed to
            intermittent and peripheral?         Is the professional
            routinely or regularly at the disposal of the employer to
            perform a portion of the employer's work, as opposed
            to being available to the public for professional services
            on his or her own terms? Do the "professional" services
            include a duty to perform routine or administrative
            activities? If so, an employer-employee relationship
            more likely has been established.

            [Id. at 123-24.]

      Asking those questions here, in our view, makes plain the functional

integration of Pendola's work into Classic's business. It cannot be seriously

disputed that Pendola was one of the "cogs" in Classic's operation. His work as

a driver willing to provide the rides Classic arranged was essential to the success

of its business. The work of the drivers was certainly continuous, Classic

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                                       12
operated twenty-four hours a day, and thus needed many drivers day and night

to carry out its operations. Drivers such as Pendola could not use their own

silver Classic car to pick up fares dispatched from competitors of Classic or

those attempting to call them directly. The drivers were thus prohibited from

using their own cars to further any business but Classic's. And although a

driver's passengers or hours might vary, the daily routine of picking up Classic's

customers and delivering them to their destinations throughout Newark did not

change.

      We agree with Pendola that the judge of compensation's finding that

Classic's business was limited "solely [to] dispatching [Pendola] and drivers of

auto cabs" is not supported by the evidence.        Although Solano began her

testimony by asserting that Classic was only "a dispatching service," she also

referred to it as a "transportation company" and the riders as Classic's customers,

who Classic wooed with web ads, apps, keychains and pens with the company's

name and "nice vehicles, clean vehicles" and punctual, "proper attired drivers."

We also agree with Pendola that the judge of compensation erred in finding that

Classic was not dependent on Pendola because if he "was not available to

transport a fare, another auto cab driver was waiting to do so."               The

compensation judge's finding that "[n]o one driver was essential to the effective

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                                       13
functioning of the business" misapprehends the test. The point, of course, is that

Classic was dependent on Pendola and other drivers like him. That the business

required multiple drivers to operate does not reduce Pendola's importance to

Classic's business or make him any less a "cog" in Classic's enterprise.

D'Annunzio, 192 N.J. at 123. Accordingly, we conclude that application of the

Pukowsky test establishes Pendola as an employee of Classic under our workers'

compensation laws.

      We are not the first panel of this court to conclude that Classic's drivers

are its employees and not independent contractors.       In 1999, another panel

considering the same question concluded that "according to the criteria of the

'relative nature of the work' test, each of Classic's taxicab [sic] drivers was an

integral part of its total operation and that they were therefore 'employees' for

purposes of workers' compensation." Santos v. Classic Sedan Limo, Inc., A-

5356-97 (App. Div. July 2, 1999) (slip op. at 8), certif. denied, 163 N.J. 12

(2000).

      The petitioner in Santos was shot by a passenger dispatched by Classic.

Santos, slip op. at 1.   Santos owned his own cab, which was painted the

company's silver color and had "Classic Sedan Limo" and the company's

telephone number displayed on its doors, like all the cabs dispatched by Classic,

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                                       14
in order "to convey the impression that they were a fleet of taxis operated by a

single company." Id. at 2. We explained how the service worked as follows:

                  Classic placed a listing for taxi services in the
            telephone yellow pages, and perhaps elsewhere,
            advertising the availability of its taxis.       Classic
            maintained a dispatcher who received customers' calls
            for taxis and undertook to broadcast each call to
            whomever of its nearby drivers had been waiting the
            longest since his last fare. To receive these calls, each
            driver was required to purchase a prescribed radio from
            Classic. Classic's drivers were permitted to accept only
            passengers assigned to them by the dispatcher.

            [Ibid.]

       We noted the company maintained an extensive set of rules, which it

enforced by "suspending" drivers who violated them. Id. at 3. We explained

that "[t]he dispatcher would not assign waiting passengers to a suspended driver,

thus effectively docking his pay during the period of his suspension." Ibid. We

noted Santos owned and paid for his own cab, keeping the fares he collected and

paying for "gasoline, repairs, insurance, and a fee of $150 a week to Classic,"

making him "financially dependent on his affiliation" with the company. Id. at

3-4.

       We found Santos' relationship with Classic satisfied both the "right to

control" test as well as the "relative nature of the work" test, finding "Classic

possessed and exercised the power to control Santos in his performance of his

                                                                        A-0225-17T2
                                      15
work," and that he was "economically dependent on Classic." Id. at 5-6. We

specifically rejected the judge of compensation's finding "that Classic is 'in the

business of soliciting fares for the owners of the cabs,'" noting the judge also

observed "that Classic was 'holding [itself] out to the public as . . . a safe[,]

reliable source of transportation' and that it was important for the drivers to

maintain uniform standards and discipline to assure that the 'overall operation

functioned.'" Id. at 8. We found those "observations show that Classic was in

the business of providing transportation, not merely dispatching. There would

be no customers to dispatch in return for the owner-drivers' weekly payments if

steps were not taken to assure that the total enterprise provided satisfactory

service to the public." Ibid. We thus concluded "that according to the criteria

of the 'relative nature of the work' test, each of Classic's taxicab drivers w as an

integral part of its total operation and that they were therefore 'employees' for

purposes of workers' compensation," thereby reversing the contrary finding of

the compensation judge. Id. at 8-9.

      In its brief and at oral argument, Classic made no attempt to explain why

our prior opinion is no longer binding on the company. See Raymond v. N.J.

State Parole Bd., 221 N.J. Super. 381, 384 n.1 (App. Div. 1987) (noting that

"[w]hile an unpublished opinion does not have stare decisis effect, it is

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                                        16
nevertheless binding as against a party . . . whose conduct is thereby prescribed."

(citing R. 1:36-3)). Its only response is the one relied on in its brief that "it

should be noted that [Santos] was a 1999 decision and things have changed

considerably in the taxicab business since the rendering of that decision."

Perhaps so, but it is nevertheless apparent that at the time of Pendola's accident

at least, the relationship between Classic and its drivers remained remarkably

constant.

      Reversed and remanded for further proceedings not inconsistent with this

opinion.

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