Albert E. Domanski v. Anthony J. Celebrezze, Secretary of Health, Education and Welfare,defendant-Appellant , 323 F.2d 882 ( 1963 )

O’SULLIVAN, Circuit Judge

(dissenting).

I must respectfully disagree with the-holding of the majority opinion. In the-course of the administrative processing' of Domanski’s claim, the matter was referred to a trial examiner. From the-testimony and documentary evidence, such examiner made findings of fact.. While there appears to me to be some-inconsistencies in such findings of fact, the trial examiner’s ultimate finding impresses me, as it did the District Judge, as presenting a factual situation from which an employer-employee relationship follows as a matter of law. The critical, finding is:

“By 1955, the claimant’s son-in-law found that his insurance work: had increased and had become more-competitive, and he was thus required to put more time in his usual! calling. Accordingly, he was unable-to perform as many services about, the house as he did previously and the claimant assumed more duties. At his request, he was paid $5.00 each Saturday for these services. * * * If the claimant did not perform the chores about the home, it would have been necessary to hire another for this purpose. The son-in-laio also considered the claimant as his employee.” (Emphasis added.)

I do not consider that the Secretary and his trial examiner are any more at liberty to disregard their own findings-of fact than we are. They cannot disregard the legal consequences that flow-from such facts.¹

The statute providing the benefits involved here, defines an employee as “any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee.” (Emphasis added.) Title 42 U.S.C.A. § 410(k)(2).. The statutory definition is somewhat expanded by the regulations of the Social Security Administration.²

The trial examiner’s decision does not question that here the alleged employer, Gougeon, had the right of control and direction of his alleged employee, his father-in-law, both as to method and result. The trial examiner found that, for the additional burden of work cast upon him by his son-in-law’s increased attention to his insurance business, Do-manski requested money compensation in addition to his keep. His request was granted and the son-in-law agreed to pay the requested amount “for these services.”

These facts being undisputed, I believe that the final inference or conclusion to be placed on them as to the employer status was one of law. While on the review in the District Court, “The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive * * (Title 42, U.S. C.A. § 405(g)), the legal consequences that arise from such facts are properly matters of law for the court. Carroll v. Social Security Board, 128 F.2d 876, 881 (C.A.7, 1942); Miller v. Burger, 161 F.2d 992, 993 (C.A.9, 1947).

In my opinion, the District Judge’s order did not intrude upon the fact finding prerogative of the Secretary. The brief of the Secretary in this Court proceeds upon the assumption that we deal with undisputed facts. He avers, “The basic facts are not in dispute * * * the secretary’s action is predicated on the very facts submitted by or on behalf of petitioner.”

The testimonial record made in the administrative proceeding would have permitted a finding of fact foreclosing Domanski’s claim. Even though the oral and written statements of Doman-ski and Gougeon were not met by direct contrary proof, and there was no direct testimonial contest of the claimed Saturday $5.00 payments, a fact finder might, indeed, have been dubious and on the whole record found the facts against Domanski’s version. Such is the prerogative of a fact finder. Andrew Jergens Co. v. Conner, 125 F.2d 686, 689 (C.A.6, 1942). While the fact that neither the employer nor the employee made any current payments or returns of social security tax would not, by itself, forbid a finding that the needed employer-employee relationship did exist, Ewing v. Black, 172 F.2d 331, 6 A.L.R.2d 948 (C.A.6, 1949); Rhoads v. Folsom, 252 F.2d 377, 379 (C.A.7, 1958), such fact, with other circumstances, could have been weighed by the fact finder in considering whether the entire claim of employment and payment of wages was a fabrication. The trial examiner, however, accepted as truth the claim that pay for extra services to be performed was requested by Domanski and that Gougeon agreed to, and did, pay for such services in an amount and for the period necessary to qualify Domanski. The statute which permitted Domanski’s entrance into the District Court forbade that court from setting aside any such finding of fact, if supported by substantial evidence. 42 U.S.C.A. § 405(g).

In arriving at the decision made, the trial examiner and the Secretary had to determine Domanski’s eligibility for benefits upon the basis of its own findings of fact. From the basic facts which he did find and which in his address to this Court he states “are not in dispute” the Secretary drew what I consider an erroneous conclusion of law. I agree with the District Judge, who, accepting the Secretary’s finding of fact, stated:

“In the opinion of the Court, this oral agreement for wages, followed by periodic payment of the agreed wage for the increased and more arduous work performed by plaintiff, constituted in law a contract of employment and established an employer-employee relationship within the meaning of the Act.”

The application of our Social Security laws may, indeed, in specific cases, appear to be overly generous to some of its beneficiaries. However, if correction is needed, it should come by Congressional action.

I would affirm the judgment.

1 . “Neither the terms of the Social Security Act * * * nor the implications of policy * * * give the Board judicially unreviewable authority to exclude from wages what as a matter of law are wages.” Justice Frankfurter, concurring in Social Security Board v. Nierotko, 327 U.S. 358, 371, 66 S.Ct. 637, 644, 90 L.Ed. 718.

2 . 20 C.E.R.. § 404.1004(c)

“ (1) Every individual is an employee if under the usual common-law rules the relationship between him and the person for whom he performs services is the legal relationship of employer and employee. (Emphasis added.)

“(2) Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished.”