Opinion
1-21-0819WC
07-15-2022
TILE ROOFS, INC., Appellant, v. THE ILLINOIS WORKERS' COMPENSATION COMMISSION et al., Steven Qualizza, Appellee.
This order was filed under Supreme Court Rule 23(b) and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County No. 20L050082 Honorable John J. Curry Jr., Judge Presiding.
JUSTICE CAVANAGH delivered the judgment of the court. Presiding Justice Holdridge and Justices Hoffman, Hudson, and Barberis concurred in the judgment.
ORDER
CAVANAGH, JUSTICE
¶1 Held: (1) The Illinois Workers' Compensation Commission's (Commission) finding of the existence of an employee-employer relationship is not contrary to law. (2) The Commission's finding of an employee-employer relationship is not against the manifest weight of the evidence.
¶2 On May 26, 2017, claimant, Steven Qualizza, filed an application for adjustment of claim for injuries to his right leg, foot, and person as a whole, suffered while working for respondent employer Tile Roofs, Inc. on April 13, 2017. Claimant sought a ruling to determine the existence of an employee-employer relationship, pursuant to section 19(b) of the Workers' Compensation Act (Act) (820 ILCS 305/19(b) (West 2016)).
¶3 An arbitrator conducted a hearing on September 11, 2018, and issued a decision on November 7, 2018, finding (1) claimant was not an employee at the time he sustained his injuries and (2) no other legal theory would impose liability on respondent for claimant's injuries.
¶4 On January 13, 2020, the Commission issued a unanimous decision (1) reversing the decision of the arbitrator, (2) finding claimant had proven an employment relationship with respondent, and (3) remanding the matter to the arbitrator for further proceedings.
¶5 Respondent sought judicial review in the circuit court of Cook County, which court confirmed the Commission's decision in a written order on July 2, 2021. This appeal followed.
¶6 We affirm the circuit court, confirming the Commission's decision.
¶7 I. BACKGROUND
¶8 Following is a recitation of the facts relevant to this appeal taken from the evidence adduced at the arbitration hearing on September 11, 2018.
¶9 Prior to claimant's association with respondent, claimant worked for Mortenson Roofing Company (Mortenson) as a foreman/superintendent managing roofing projects. Mortenson and respondent are related companies, as they work out of the same building and are owned by a husband and wife, Mike Lucas (Mike) and Mary Lucas, respectively. Over his career, claimant developed special skills required to install various types of metal, slate, and tile roofs.
¶ 10 At Mortenson, claimant (1) ordered materials for the roofing projects he managed, (2) set up the job sites, (3) scheduled Mortenson employees to work on the project, (4) managed Mortenson employees relative to the projects, and (5) interacted with the general contractors on the projects to schedule the work of his crew. Claimant had little control over who made up his crew, as Mike or the office manager determined who would constitute claimant's crew. Claimant did not have the authority to hire or terminate Mortenson's employees. Claimant did, however, record the employee's hours worked at a job location, as well as his own.
¶ 11 Mike, generally via the office manager for Mortenson, assigned claimant to each project, which assignments he could not refuse unless claimant was absent for a vacation or a similar reason. Mortenson provided claimant with a company-owned vehicle, which he drove to work each day and drove home at night. Mortenson paid for the vehicle's fuel, and for claimant's hotel stays when the projects were too far away from home to travel back and forth. Mortenson provided most of the tools claimant required to complete his tasks. While working for Mortenson in this capacity, claimant was a member of a labor union, and his payroll checks were for an amount net of federal and state payroll taxes. Mortenson paid the union directly for claimant's insurance, instead of deducting an amount from claimant's gross wages.
¶12 In the spring of 2015, claimant retired from the union, and began working on smaller but similar roofing projects. And, respondent, instead of Mortenson, began paying claimant. Claimant generally continued working the same number of hours, and on the same schedule. Neither claimant's job duties nor responsibilities changed. Claimant still oversaw and directed crews of Mortenson's employees, and still ordered job-related materials for which Mortenson would pay. Claimant did not hire or oversee crew members who were not employees of Mortenson or respondent. Mortenson still paid the members of the crews working for claimant. Mortenson also continued to provide claimant with a vehicle, for which Mortenson paid the fuel, and paid for claimant's hotels when he was away from the local area for work.
¶ 13 In December of 2016, claimant formed Quantum Edge, LLC, to receive payment from respondent for claimant's work. Mike asked claimant earlier in the year to form such an entity, but claimant was resistant to the idea. Mike advised claimant he would not be paid until he formed an LLC. In fact, respondent failed to pay claimant for ten weeks prior to claimant forming the LLC. After forming the LLC, claimant continued performing the same duties he had previously. Claimant continued to supervise a crew of workers, and Mortenson continued to provide claimant with a company-owned vehicle and pay for his hotels when the job was outside of the local area. The tools claimant used generally were owned by Mortenson, as they always had been.
¶ 14 Claimant created invoices for his LLC, which he submitted to respondent for payment. The invoices (1) described the work performed as "Consulting Sheet metal layout," (2) billed for services on an hourly basis, and (3) contained a line item and charge for "Expense Office supplies, fuel, misc." The payments received pursuant thereto were for a gross amount, showing no deduction for payroll taxes. The LLC never received payment for any work other than from respondent, nor was claimant paid personally after leaving the union by any person or entity other than respondent.
¶ 15 Claimant also obtained a tax identification number for the LLC, which was not his social security number. Claimant did not, however, purchase a workers' compensation insurance policy for the LLC. Though Mike testified he told claimant he would need to purchase such a policy, claimant denied Mike gave him such direction.
¶ 16 On April 13, 2017, the day of the accident at issue, claimant was working on a project located in Fontana, Wisconsin, on which he began work in July 2016 under the previous payment arrangement. The roof at this residence was made of standing seam zinc, which required claimant to receive specialized training. Claimant, and a foreman employed by Mortenson, underwent such training at the job site on August 10, 2016, which training Mortenson paid for both to receive.
¶ 17 Though claimant testified he performed layout and installation on the roof project in Fontana, he admitted he previously said in a recorded statement he was a consultant for the project and only performed layout work there. Claimant also described his status in the recorded statement as "mostly an employee" of respondent and explained the LLC and related payment arrangement was created simply so he could obtain some tax benefits.
¶ 18 II. ANALYSIS
¶ 19 A. Standards of Review
¶ 20 Whether the Commission considered the appropriate factors in determining that an employee-employer relationship existed is a question of law which we review de novo. Diaz v. Illinois Workers' Compensation Comm'n, 2013 IL App (2d) 120294WC, ¶ 21.
¶21 Whether the Commission considered and applied certain facts in determining that an employee-employer relationship existed is a question of fact which we review under the manifest-weight-of-the-evidence standard. Ware v. Industrial Comm'n, 318 Ill.App.3d 1117, 1122 (2000). In considering the factual question, we do not "reweigh the evidence, or reject reasonable inferences drawn from it by the Commission, simply because other reasonable inferences could have been drawn." Durand v. Industrial Comm'n, 224 Ill.2d 53, 64 (2006). The Commission's factual findings "are against the manifest weight of the evidence only when an opposite conclusion is clearly apparent-that is, when no rational trier of fact could have agreed with the agency." Id. It is the province of the Commission "to assess the credibility of witnesses, resolve conflicts in the evidence, assign weight to be accorded the evidence, and draw reasonable inferences from the evidence." Hosteny v. Illinois Workers' Compensation Comm'n, 397 Ill.App.3d 665, 674 (2009).
¶ 22 B. Whether the Commission Utilized the Correct Analysis
¶ 23 Respondent argues the Commission, in considering whether claimant established an employee-employer relationship, was required to analyze the factors discussed in Roberson v. Industrial Comm'n, 225 Ill.2d 159, 175 (2007). Respondent claims the Commission "completely ignored" these factors, and adopted an incorrect standard because the Commission based its decision on the substance of the relationship between claimant, respondent, and Mortenson. We disagree.
¶ 24 Ultimately, in fact, the determination of the existence of the employee-employer relationship is based on the totality of the circumstances, and not a strict application of any specified factors. Id. at 174-75. In other words, "[n]o rule has been, or could be, adopted to govern all cases in this area." Id. It is a fact-specific inquiry, and the factors urged by respondent as mandatory considerations are merely meant to "help determine" the existence of the employment relationship. Id. No one factor drives the outcome, and the weight of each varies depending on the work involved. Id. at 175. These factors are:
"whether the employer may control the manner in which the person performs the work; whether the employer dictates the person's schedule; whether the employer pays the person hourly; whether the employer withholds income and social security taxes from the person's compensation; whether the employer may discharge the person at will; and whether the employer supplies the person with materials and equipment." Id.
¶25 Given this list is not exclusive of the factors to be considered, and is intended to assist, but not control, the analysis of the existence of the employee-employer relationship, we find no error in the Commission's analysis. The Commission considered explicitly, among other things and discussed further below, factors relating to (1) claimant's duties and responsibilities, (2) how respondent paid claimant, (3) whether respondent withheld payroll taxes, (4) whether respondent furnished claimant equipment and tools, (5) who provided the needed materials, (6) who provided claimant's transportation and hotels, and (7) who provided training to claimant.
¶ 26 Contrary to the Commission's explicit indication that such factors were considered, respondent insists the Commission failed to consider that (1) respondent paid claimant on an hourly basis, (2) respondent did not withhold payroll taxes, (3) respondent provided most of claimant's tools, and (4) claimant could order materials for the projects for which respondent paid. Thus, we find respondent's argument that the Commission "completely ignored" the Roberson factors simply disingenuous.
¶ 27 Therefore, we find no error in the method used by the Commission in its analysis. The Commission conducted a totality-of-the-circumstances review of the evidence, and explored many facets of the relationship between claimant and respondent. Given the question is fact-specific, and there is no rule to govern the determination, we cannot say the Commission acted inappropriately.
¶ 28 C. The Employee-Employer Relationship
¶29 Respondent asserts the Commission's finding of an employee-employer relationship is against the manifest weight of the evidence. In considering the question, we construe the term employee "broadly." Ware, 318 Ill.App.3d at 1122. Further, the nature of the work in relation to respondent's general business is "of great significance." Id. We also examine "the method of payment, the right to discharge, the skill the work requires, which party provides the needed instrumentalities, and whether income tax has been withheld." Id. Though we consider how the parties describe the status, it is a "factor of lesser weight." Id.
¶30 The Commission found claimant was a de facto employee, and the corporate formality existed on paper only. In short, the Commission found the substance of claimant's relationship to respondent and Mortenson never changed after claimant retired from the union or after claimant formed the LLC. At the outset, the Commission noted the relationship between respondent and Mortenson, calling them "the Lucas entities." The Commission considered (1) claimant continued to supervise crews comprised of Mortenson employees, (2) claimant still ordered equipment and materials for the roofing projects either for respondent or Mortenson, (3) Mortenson continued to furnish most of claimant's tools, (4) respondent or Mortenson still provided a company vehicle to claimant and paid for its fuel, (5) Mortenson still paid for claimant's hotels when he stayed out of town for projects, and (6) Mortenson provided the training claimant needed for the zinc roofing project at issue. Each of these, and the totality of them, support the Commission's determination claimant was respondent's employee.
¶31 The Commission also noted claimant possessed specialized roofing skills, including those desirable on projects involving less common roofing materials. Though the projects tended to be smaller after retiring from the union, the Commission recognized claimant was performing the same type of work and his duties and hours did not change, whether claimant was working individually or through his LLC. The Commission thought it noteworthy respondent was the only client of claimant's LLC, which billed respondent for claimant's services on an hourly basis. The LLC's invoices, it noted, also included a line item for supplies, fuel, and other expenses. The Commission also acknowledged respondent paid the LLC's invoices in full, without deducting payroll taxes.
¶32 Thus, of the factors called out by our various courts bearing on the employee-employer question, the Commission specifically discussed (1) the nature of claimant's work and that it was an integral part of the services respondent and Mortenson provided to their customers, (2) respondent, and formerly Mortenson, paid claimant on an hourly basis, (3) the specialized skills claimant possessed and respondent's and Mortenson's need for those, (4) Mortenson's furnishing, during all periods, the tools and equipment claimant needed to perform his duties, and (5) respondent did not withhold payroll taxes from the payments to claimant's LLC.
¶ 33 Without the existence of a rigid rule governing the issue and considering the totality of circumstances, we cannot say a conclusion other than claimant was an employee is clearly evident. It is the Commission's province to weigh the evidence and to draw inferences therefrom. We will not disturb the Commission's conclusions related to these considerations simply because we could reach a different result. A rational trier of fact certainly could agree with the Commission's conclusion. Therefore, the Commission's finding of an employee-employer relationship is not against the manifest weight of the evidence.
¶ 34 III. CONCLUSION
¶ 35 The Commission's decision is not contrary to law or against the manifest weight of the evidence. For all the foregoing reasons, we affirm the circuit court's order, which confirmed the Commission's decision.
¶36 Affirmed.