Opinion
October 24, 1967
Appeal by the employer from a decision of the Unemployment Insurance Appeal Board which sustained an initial determination of the respondent that the appellant is liable for contributions. The determination appealed from rests on the theory that the appellant purchased the business of a "covered" employer and thereby became liable as a successor employer. (Labor Law, § 560, subd. 1.) At the time of the taking of testimony the respondent's representative offered in evidence a so-called form 1A-5 which is an "Employers Report of Contributions", dated and filed with the Department of Labor on April 30, 1965 by Jofil Realty Corp. as employer and showing wages subject to contribution for the period of January 1, 1965 to March 31, 1965. This form recites on its face that it sold all of its business to the appellant herein. No other evidence was offered on the issue of whether or not the Jofil Realty Corp. was a covered employer and the appellant objected to the acceptance in evidence of this form. The fundamental issue in both the administrative proceeding and on this appeal is whether or not the form 1A-5 constituted substantial evidence that the Jofil Realty Corp. was a covered employer. The filing of the form 1A-5 reasonably indicates that the Jofil Realty Corp. considered itself liable for payments and it is substantial evidence of that fact. However, as to inferences of actual liability for contributions, it can be inferred that the Jofil Realty Corp. had become liable under sections 560 or 561 of the Labor Law or equally that Jofil Realty Corp. had simply filed gratuitously. The facts establish the appellant as a successor employer, but there is no proof as to whether it is a successor to a covered employer, as provided by the statute. The exhibit in evidence does not show a payment of $300 or more in any calendar quarter by the prior employer, which is one of the factors necessary to make such prior employer a covered employer liable for contributions; an essential requirement under section 560 to make a successor — the appellant — liable. This particular form in no way establishes the fact of actual liability. It seems probable that if the corporation filing the report had ever filed one showing liability under section 560 Lab. of the Labor Law or an approved election under section 561 Lab. of the Labor Law, the respondent would be able to produce such a form. We have recently discussed the elements involved in determining the issue of substantial evidence ( Matter of Paulsen [ Catherwood], 27 A.D.2d 493, 495) and an application of those principles to the present case shows that the determination of the board was arbitrary and capricious on the question of whether or not the appellant was a successor employer of a covered employer. The secondary factual issue in this case was whether or not the appellant had an employee and on this issue there was substantial evidence to support the finding of the board. Decision reversed, with costs, and matter remitted for further proceedings not inconsistent herewith. Gibson, P.J., Herlihy, Aulisi, Staley, Jr., and Gabrielli, JJ., concur in memorandum by Herlihy, J.