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Department of Labor and Industry v. Workers' Compensation Appeal Board (Lin and Eastern Taste)

Commonwealth Court of Pennsylvania

February 17, 2017

Department of Labor and Industry, Uninsured Employers Guaranty Fund, Petitioner
v.
Workers' Compensation Appeal Board (Lin and Eastern Taste), Respondents

          SUBMITTED: November 4, 2016

          BEFORE: HONORABLE ROBERT SIMPSON, Judge, HONORABLE JULIA K. HEARTHWAY, Judge, HONORABLE JOSEPH M. COSGROVE, Judge.

          OPINION

          JULIA K. HEARTHWAY, Judge.

         The Commonwealth of Pennsylvania, Department of Labor and Industry, Uninsured Employers Guaranty Fund (Fund) petitions for review of the March 23, 2016, order of the Workers' Compensation Appeal Board (Board), which affirmed the October 28, 2015, decision of the workers' compensation judge (WCJ) awarding Fu Xiang Lin (Claimant) benefits on remand pursuant to the Board's previous order of January 6, 2015, and which made the Board's January 6, 2015, order final. Because we determine that Claimant was not an employee of Eastern Taste at the time of his injury, we reverse.

         On March 28, 2011, Claimant was injured while doing remodeling work for Eastern Taste, a restaurant that had not yet opened for business. (Findings of Fact (F.F.), Nos. 1, 5c.)[1] Claimant subsequently filed a Claim Petition against Eastern Taste, and later, a Notice of Claim against the uninsured employer, Eastern Taste. (F.F Nos. 2-3.) Claimant then filed a Claim Petition against the uninsured employer and the Fund. (F.F. No. 4.)

         During the litigation before the WCJ, the issue of whether Claimant was an employee of Eastern Taste was bifurcated from the medical issues of the claim. (Reproduced Record (R.R.) at 37a-38a.). Claimant testified on his own behalf. Eastern Taste presented the testimony of Kon Bin Wang (Wang), the restaurant owner's husband, and Gheng Renkuar (Renkuar), who was also working on remodeling the restaurant. (F.F. Nos. 6a, 7a.) Based on the testimony, the WCJ found that the critical facts were essentially undisputed and made the following findings: a. Eastern Taste is a restaurant, not a construction business.

b. The Claimant was hired to do remodeling before the restaurant had ever opened.
c. The most experienced person on the job in the construction business was the Claimant.
d. The owner's husband was in charge of what needed to be done.
e. The Claimant was paid on a per diem basis to do it along with three others.
f. The Claimant used his own tools and van. The owner's husband provided tools and materials as well.

         (WCJ's F.F. Nos. 9a-f.) The WCJ further determined that: (i) Claimant was not an employee of Eastern Taste Restaurant; (ii) Claimant's work was not in the regular course of the business of Eastern Taste; and (iii) Claimant's employment was casual in nature.[2] (F.F. Nos. 10-12.) The WCJ concluded that Claimant failed to sustain his burden to prove that he was an employee of Eastern Taste. (Conclusions of Law (C.L.) No. 2.) The WCJ also determined that Claimant was not considered an employee under the Construction Workplace Misclassification Act (CWMA).[3] The WCJ reasoned that the CWMA does not apply as Eastern Taste is not in the construction industry. (C.L. No. 4, WCJ's opinion (op.) at 4.) Consequently, the WCJ denied Claimant's Claim Petitions filed against Eastern Taste and the Fund.

         Claimant appealed the WCJ's decision to the Board. On January 6, 2015, the Board issued an opinion in which it concluded that Claimant was an employee of Eastern Taste. (Board's 1/6/15 op. at 5.) The Board also concluded that Claimant's employment was not casual in nature. (Board's 1/6/15 op. at 5-6.) Accordingly, the Board reversed the WCJ's decision and remanded the matter to the WCJ for necessary findings and conclusions for an award of compensation and litigation costs, if any. (Board's 1/6/15 op. at 8.)

         On remand, the WCJ entered an order, dated October 28, 2015, granting Claimant's Claim Petition and awarding benefits to Claimant. (R.R. at 141a.) The Fund then appealed to the Board and requested that the Board's January 6, 2015, opinion be made final for the purpose of appealing to this Court. (R.R. at 143a-45a.) On March 23, 2016, the Board issued an opinion making its January 6, 2015, order final, and affirming the WCJ's decision dated October 28, 2015. (R.R. at 149a-52a.)

         The Fund now appeals to this Court.[4] The Fund argues that the WCJ's April 17, 2013, decision was supported by substantial evidence, and that the Board exceeded its authority by reweighing the evidence and engaging in impermissible fact-finding. The Fund further argues that the Board erred by relying on its impermissible "findings" to conclude Claimant was an employee.

         In order to determine if the Board engaged in fact-finding, we must review the Board's "findings" and any inferences therefrom against those made by the WCJ to determine if they are consistent. In doing so, we are necessarily tasked with reviewing the WCJ's findings to determine if they are supported by substantial evidence. In other words, "we examine the entire record to see if it contains evidence a reasonable person might find sufficient to support the WCJ's findings." Edwards v. Workers' Compensation Appeal Board (Epicure Home Care, Inc.), 134 A.3d 1156, 1161 (Pa. Cmwlth. 2016). "Further, we must view the evidence in the light most favorable to the prevailing party and give it the benefit of all inferences reasonably deduced from the evidence." Id. at 1161-62. "[I]t is irrelevant whether the record contains evidence to support findings other than those made by the WCJ; the critical inquiry is whether there is evidence to support the findings actually made." Id. at 1161 (quotation marks and citation omitted). If so, "the findings must be upheld, even though the record may contain conflicting evidence."[5] Id.

         In explaining that Claimant met his burden to establish that he was an employee, the Board stated that "[a]lthough Claimant had experience in the construction industry, it was as an employee; he did not engage in his own construction business." (Board op. at 5.) The Board also stated that Claimant was not hired as a contractor to do anything specific, and his position, therefore, was a general laborer. Finally, the Board stated Claimant was "under the supervision" of Wang. (Board op. at 5.) We will examine the basis for the Board's findings seriatim.

         With respect to Claimant's experience in the construction industry, the WCJ found only that Claimant had worked for the past four years for Stone King[6] doing remodeling and that he had done remodeling for 15 years. (F.F. No. 5k.) This finding is supported by Claimant's testimony. (R.R. at 44a, 55a.) In light of this WCJ finding, it would be fair for the Board to conclude that Claimant worked in the role of employee for four years with Stone King. But neither the WCJ's findings nor the record support the Board's conclusion that all of Claimant's construction experience was in the role of employee. It was error for the Board to expand the breadth of the WCJ's finding in this regard where the record does not support that expansion. Additionally, even if the Board's conclusions about Claimant's past status were supported by the record, his status in the past is of very limited significance.

         Likewise, the Board's assertion that Claimant "did not engage in his own construction business" cannot be fairly extended to his entire remodeling career. We recognize that the WCJ stated, in the context of Claimant's work for Eastern Taste, that there was no evidence that Claimant had established a business in which he had a proprietary interest. (WCJ's op. at 4.) Though the lack of a proprietary interest in a business is a factor to be considered, [7] this factor standing alone is legally insufficient to warrant a conclusion that Claimant was an employee of Eastern Taste.

         With respect to whether Claimant was hired to do anything specific, the WCJ found "Claimant was hired to do remodeling …." (F.F. No. 9b.) The Fund contends that while Wang testified that Claimant was not hired for any specific tasks within the remodeling project, Claimant was hired specifically for the remodeling project. At the hearing, Claimant was asked what he was hired to do. (R.R. at 32a.) Claimant responded by giving examples of the work he was performing, such as tiling the floor and putting something on the ceiling, and stated that he was doing interior remodeling. (R.R. at 32a.) Additionally, while Wang stated that Claimant was not hired for anything specific, Wang also stated that he told Claimant to do whatever the blueprint said. (R.R. at 79a-80a.) Moreover, both Claimant and Wang testified that Claimant was not expected to work in the restaurant once the remodeling was completed. (R.R. at 49a-50a, 59a, 73a.) Thus, viewing this evidence in the light most favorable to the prevailing party and giving it the benefit of all inferences reasonably deduced therefrom, Edwards, a person could reasonably conclude that Claimant was hired specifically for remodeling. Consequently, the WCJ's finding that Claimant was hired to do remodeling is supported by substantial evidence, and therefore, was binding on the Board. The Board erred by disregarding the WCJ's finding and substituting its finding that Claimant was not hired to do anything specific from which it inferred, also erroneously, that Claimant's position was that of a general laborer.

         With respect to whether Claimant was "under the supervision" of Wang, (Board op. at 5), this, too, was neither the WCJ's finding, nor a fair inference therefrom. The WCJ's findings of fact simply state that Wang was "in charge of what needed to be done." (F.F. No. 9d.) In his discussion, the WCJ states that Wang told Claimant "what he wanted done" and Claimant's job "was to do it[, ]" explaining "[t]his is essentially the same relationship that property owners typically have with painters, plumbers, electricians, carpenters and other remodelers. These specialists bring their time and expertise." (WCJ's op. at 4.)

         Wang testified that he got the blueprints from the architect and provided them to the workers. (F.F. No. 6f; R.R. at 78a.) Wang testified that he was not in charge of the construction process, and that he did not direct Claimant's specific work activities because Claimant was the experienced remodeler. (F.F. Nos. 6f; R.R. at 78a, 82a.) Indeed, Wang had no construction or remodeling experience and testified that he did not know anything about construction. (F.F. No. 6f; R.R. at 73a.) Wang testified that he was just there to buy materials when needed. (R.R. at 78a.) Further, Claimant testified that at the time of his injury, Wang was out buying welding sticks. (F.F. No. 5i; R.R. at 46a.) Renkuar also testified that Wang was in charge but that Wang never told Renkuar what to do on the construction site. (F.F. Nos. 7a & c; R.R. at 89a-90a.) Viewing this evidence in the light most favorable to the prevailing party and giving it the benefit of all inferences reasonably deduced therefrom, as we are required to do, [8] a reasonable person could conclude that Wang "was in charge of what needed to be done" in a manner similar to that of property owners and specialists, such as painters, plumbers, etc., as explained by the WCJ. In essence, when the WCJ's statement is taken in context of this explanation, the reasonable inference from this finding is that Wang was in charge of what needed to be done only in terms of the overall goal of the project and not in a step-by-step, supervisory capacity.

         In sum, the Board exceeded its authority by making "findings, " which, at a minimum, went beyond those made by the WCJ. Arguably, the evidence might support some of the statements made by the Board. However, this is immaterial as the record supports the findings made by the WCJ. See Moberg v. Workers' Compensation Appeal Board (Twining Village), 995 A.2d 385 (Pa. Cmwlth. 2010); see also Edwards, 134 A.3d at 1161 (stating that it is irrelevant whether the record contains evidence to support findings other than those made by the WCJ). Because the Board engaged in impermissible fact-finding and then relied on those "facts" to support its conclusion that Claimant was an employee, the Board erred and its conclusion cannot stand.[9] Importantly, although the question of whether one is an employee is a question of law, it must be answered based on the unique facts of each case. Universal Am-Can, Ltd. v. Workers' Compensation Appeal Board (Minteer), 762 A.2d 328 (Pa. 2000). The Board did not base its legal conclusion on the facts as found by the WCJ, and that was error.

         Having found that the Board erred by engaging in new fact-finding and drawing new inferences, and having further found that the WCJ's findings of fact are supported by substantial evidence and inferences reasonably deduced from such evidence, we are now tasked with determining whether the evidence, nonetheless, was sufficient to legally conclude Claimant was an employee of Eastern Taste. Because the determination as to the existence of an employer/employee relationship is a question of law, on this issue, our scope of review is plenary and our standard of review is de novo. Edwards. The Fund argues that based on the WCJ's binding findings of fact, the WCJ properly concluded that Claimant was not an employee of Eastern Taste. We agree.

         Whether one's status is that of an employee or independent contractor "is a crucial threshold determination that must be made before granting workers' compensation benefits." Universal Am-Can, 762 A.2d at 330. This is because independent contractors cannot recover benefits under the Workers' Compensation Act (WC Act).[10]Edwards. The claimant bears the "burden to establish an ...


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