Opinion
DOCKET NO. A-3845-12T2
12-09-2014
RANDOLPH PERRY, Petitioner-Respondent, v. ROBERT HOROWITZ STABLE, Respondent-Appellant/ Cross-Respondent, and RANDOLPH PERRY, Petitioner-Respondent, v. NEW JERSY HORSE RACING INJURY COMPENSATION BOARD, Respondent-Respondent/ Cross-Appellant.
Daniel A. Lynn argued the cause for appellant/cross-respondent (Braff, Harris, Sukoneck & Maloof, attorneys; Mr. Lynn, on the brief). Michael I. Deutsch argued the cause for respondent Randolph Perry. Joseph G. Fuoco argued the cause for respondent/cross-appellant (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Richard J. Williams, Jr., of counsel; Mr. Fuoco, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Simonelli, Guadagno, and Leone. On appeal from the Department of Labor and Workforce Development, Division of Workers' Compensation, Claim Petition Nos. 2005-2948 and 2005-21819. Daniel A. Lynn argued the cause for appellant/cross-respondent (Braff, Harris, Sukoneck & Maloof, attorneys; Mr. Lynn, on the brief). Michael I. Deutsch argued the cause for respondent Randolph Perry. Joseph G. Fuoco argued the cause for respondent/cross-appellant (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Richard J. Williams, Jr., of counsel; Mr. Fuoco, on the brief). PER CURIAM
Randolph Perry, a licensed horse owner and trainer, agreed to train horses for Robert Horowitz Stable (Horowitz) at the Meadowlands Race Track. In January 2004, Perry slipped on a patch of ice and sustained serious injuries. Perry filed claim petitions with the Division of Workers' Compensation (Division) against Horowitz and the New Jersey Horse Racing Injury Compensation Board (Board).
The judge of compensation found that Perry was totally disabled, a "horse racing industry employee," and entitled to workers' compensation benefits. The judge ordered the Board to pay Perry $52,000 in temporary disability benefits and dismissed Horowitz. The Board appealed, and we reversed, concluding that Perry was not an employee of the owners of the horses that he trained. Perry v. N.J. State Racing Indus., No. A-4766-05 (App. Div. Sept. 5, 2007) (slip op. at 7), certif. denied, 193 N.J. 223 (2007).
On remand, the Board filed a motion seeking reimbursement from Perry under the doctrine of unjust enrichment, which the judge denied. The judge then granted Perry's motion to reopen his claim against Horowitz and found that Perry was an employee of Horowitz. Horowitz now appeals claiming, (1) the judge of compensation lacked jurisdiction to rehear the issue of employment following our remand; (2) Perry was not an employee under the Workers' Compensation Act, N.J.S.A. 34:15-1 to 142, but rather an independent contractor; (3) the judge erroneously restored the workers' compensation claim against Horowitz; (4) the judge erroneously found Perry totally disabled; and (5) if Perry is totally disabled, the judge incorrectly found the Second Injury Fund could not be joined as a party.
The Board cross-appeals and seeks reimbursement from either Perry or Horowitz.
I.
Horowitz argues that we resolved the issue of Perry's employment status when we concluded in the prior appeal that Perry was an independent contractor. The issue on that appeal was whether Perry was covered by the Board's workers' compensation policy as a "horse racing industry employee" under N.J.S.A. 34:15-131. The issue of Perry's employment status with respect to Horowitz was not before us, because Perry did not cross-appeal the dismissed claim against Horowitz.
It is clear that the Division has the inherent power to "reopen judgments for fraud, mistake, inadvertence, or other equitable ground." Beese v. First Nat'l Stores, 52 N.J. 196, 200 (1968). Because the specific issue of Perry's employment status with respect to Horowitz was not before us, and because the judge of compensation found sufficient equitable reasons to reopen the judgment, we find no error in restoring Perry's claim against Horowitz.
II.
Although authorized to restore Perry's claim against Horowitz, the judge of compensation was not free to disregard our reasoning in determining that Perry was not an employee of the Board in analyzing Perry's employment status with respect to Horowitz.
We use two tests to determine whether an individual is an employee or an independent contractor: (1) the "control test" and (2) the "relative nature of the work test." Pollack v. Pino's Formal Wear & Tailoring, 253 N.J. Super. 397, 407 (App. Div.) (quoting Smith v. E.T.L. Enters., 155 N.J. Super. 343, 350 (App. Div. 1978)), certif. denied, 130 N.J. 6 (1992).
Under the "control test," several factors need to be considered to determine whether an employer-employee relationship exists. Some of these factors include "evidence of the right of control, right of termination, furnishing of equipment, and method of payment." Aetna Ins. Co. v. Trans Am. Trucking Serv., Inc., 261 N.J. Super. 316, 327 (App. Div. 1993).
Under the "relative nature of the work" test, the focus is on whether there is (1) "substantial economic dependence" upon the employer by the employee and (2) a "functional integration of their respective operations." Ibid. (quoting Smith, supra, 155 N.J. Super. at 352).
We clearly explained why we concluded that Perry is not an employee of the Board:
First, he is not in a "servant" role with respect to those owners. Second, although Perry is compensated for his work, he does not receive wages. There is no evidence in the record that he receives a W-2 or 1099 form from any of the owners. There are no deductions or withholdings from his compensation. These would be indicia of employment. Third, Perry submits a monthly bill to those owners for whom he has performed services. This is indicative of an independent contractor. Lastly, Perry's work arrangements do not meet the "right to control" or "relative nature of the work" tests . . . . We note that Perry rents stalls directly from the Meadowlands Racetrack in which he performs his work with the horses. Once again, this is indicative of an independent contractor, i.e. "one who carrying on an independent business,
contracts to do a piece of work according to his own methods, and without being subject to the control of his [client] as to the means by which the result is accomplished, but only as to the result of the work."
[Perry, supra, No. A-4766-05 (slip op. at 7-8) (internal citations omitted).]
Although Perry did not submit monthly bills to Horowitz, every other pertinent fact we used to determine Perry's independent contractor status with respect to the Board is applicable to Horowitz. Perry did not receive wages, nor did he receive a W-2 or 1099 form from Horowitz. There were no deductions or withholdings from Perry's pay either. These similar facts suggest that Perry is also an independent contractor with respect to Horowitz.
Perry relies on Hoag v. Brown, 397 N.J. Super. 34 (App. Div. 2007), to support his claim that Horowitz exercised extensive control over the methods used to train Horowitz's horses, including specifying how many miles the horses would run, how to care for the horses' feet, and how much the horses were to be fed. We find this reliance misplaced.
In Hoag, the plaintiff was an employee of Correctional Medical Services, Inc. (CMS) and sued the State under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to -49 (LAD). Id. at 38. CMS contracted with the State to provide counseling services to inmates. Id. at 39. At issue was whether the plaintiff was an employee of the State, because the lack of an employment relationship precludes liability under LAD. Id. at 46-47. We found that a jury could conclude that the State exercised substantial control over the plaintiff's work environment and reversed the trial court's dismissal of the complaint. Id. at 48-53. CMS's selection of employees and subcontractors was subject to State approval, all of CMS's personnel files were made available to the institutional superintendent, CMS had to consult with the State before discharging an employee and had the ultimate right to approve dismissal, and the plaintiff's daily work was monitored. Id. at 48-49. We noted additional examples of control:
Plaintiff attended a State-sponsored employee orientation, training sessions mandated by the State, and conferences that were jointly attended by CMS and State employees. She attended committee meetings with prison administration and was required to attend prison staff meetings to report on mental health issues. In turn, prison staff also attended various meetings held by CMS staff. Plaintiff's job description required her to promote a positive working relationship with prison staff and to comply with employee standards of the facility at which she was assigned.
[Id. at 49.]
It is clear that Hoag is readily distinguishable from the present case based on the level of control. The State in Hoag exercised extensive control over the plaintiff's daily work and training.
Horowitz's level of control did not rise to the level of control seen in Hoag. Unlike the plaintiff in Hoag, Horowitz did not have a recurring training relationship with Perry. Aside from instructions related to the amount of miles to jog the horses and how to care for their feet, Perry had discretion to control other aspects of the training routine.
Furthermore, Horowitz did not furnish any equipment or stalls, nor did he provide Perry with food to feed the horses. Perry would purchase the food himself. Moreover, Horowitz never specified the type of food to feed the horses. Although Horowitz did specify how much to feed his horses, Perry fed the horses less because he "didn't believe in giving [the horses] that much [food]." Therefore, Perry's work arrangement with Horowitz does not satisfy the "right to control" test.
Likewise, Perry's arrangement with Horowitz fails the "relative nature of the work" test. Perry's work arrangement did not create a "substantial economic dependence" upon Horowitz. In fact, Perry relied on multiple owners for income over a forty-year career. In 2003, the year before the accident, Perry earned over $50,000 in income as a trainer. Indeed, depending on Perry's financial situation at a given time, he would charge owners accordingly: "If I needed the money, I would [train the horses] for less. If I didn't need it, I would charge more." For all of these reasons, Perry cannot be considered an employee with respect to Horowitz or any other owner.
Because we hold that Perry is not an employee of Horowitz, we need not address the remaining arguments presented by Horowitz.
III.
On its cross appeal, the Board argues that if we reverse the finding that Perry was an employee of Horowitz, then it is entitled to reimbursement for paying Perry $52,000 in temporary disability benefits. We agree.
The Board notes, in its brief, that Perry sued the New Jersey Sports and Exposition Authority in a civil action for the same injuries sustained on January 19, 2004. We affirmed the jury verdict awarding Perry $1.7 million. See Perry v. N.J. Sports & Exposition Auth., No. A-1965-06 (App. Div. Aug. 12, 2008).
The Board paid Perry $52,000 in temporary disability benefits, because the judge of compensation held that Perry qualified as a "horse racing industry employee" under N.J.S.A. 34:15-131. We reversed that judgment, ruling that Perry was not a "horse racing industry employee" as a matter of law. Perry, supra, (slip op. at 7-8).
To satisfy the requirements of an unjust enrichment claim, the party against whom relief is being sought must have received a benefit that would be unjust to retain. VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994). Because Perry is not an employee of the Board or Horowitz, he is not entitled to any benefit in this case, was unjustly enriched, and may be required to reimburse the Board in the amount of $52,000.
Reversed and remanded for proceedings consistent with this opinion. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION