Bill Jackson Roofing, Inc. v. Ohio Dept. of Job & Family Servs.

[Cite as Bill Jackson Roofing, Inc. v. Ohio Dept. of Job & Family Servs., 2021-Ohio-284.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Bill Jackson Roofing, Inc., :
Appellant-Appellant, :
No. 20AP-189
v. : (C.P.C. No. 19CV-9006)
Director, Ohio Department of Job and : (ACCELERATED CALENDAR)
Family Services,
:
Appellee-Appellee.
:
D E C I S I O N
Rendered on February 2, 2021
On brief: Brouse McDowell LPA, Terry W. Vincent,
Anastasia J. Wade, Nicholas Kopcho, and Shelby Rainer, for
appellant. Argued: Anastasia J. Wade.
On brief: Dave Yost, Attorney General, and Laurence R.
Snyder, for appellee. Argued: Laurence R. Snyder.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, P.J.
{¶ 1} Appellant, Bill Jackson Roofing, Inc. ("Jackson Roofing"), appeals from a
decision and entry of the Franklin County Court of Common Pleas affirming a decision of
the Ohio Unemployment Compensation Review Commission ("UCRC") finding Jackson
Roofing to be a liable employer under unemployment compensation law. For the following
reasons, we reverse the common pleas court decision and remand this case to the common
pleas court with instructions.
I. Facts and Procedural History
{¶ 2} Jackson Roofing provides roofing services to clients in northeast Ohio.
Beginning in 2018, appellee, the Ohio Department of Job and Family Services ("ODJFS"),
No. 20AP-189 2
conducted an audit for years 2015, 2016, and 2017, triggered because of delinquencies or
missing reports from Jackson Roofing's account. On March 27, 2019, ODJFS issued the
results of the audit providing that Jackson Roofing failed to report and pay for several
individuals in its Unemployment Compensation Quarterly Tax Returns. These individuals
were reclassified as employees and the tax returns were amended. Jackson Roofing filed a
request for reconsideration. The Director of ODJFS issued a reconsidered decision on
June 5, 2019. In that decision, the Director determined seven of the individuals included
in the original determination were not employees and should be excluded from liability but
that Jackson Roofing did not provide sufficient evidence to establish that the other workers
identified as misclassified during the audit were free from direction and control by Jackson
Roofing. Therefore, the Director affirmed the audit conclusion that the remaining workers
were considered covered employees as defined by R.C. 4141.01.
{¶ 3} Jackson Roofing appealed the Director's reconsidered decision to UCRC.
After two telephone hearings before a UCRC hearing officer (August 21 and September 5,
2019), UCRC, which operates under ODJFS, issued a decision affirming the Director's
reconsidered decision.
{¶ 4} Jackson Roofing appealed UCRC's decision to the Franklin County Court of
Common Pleas. On March 4, 2020, the common pleas court affirmed UCRC's decision.
II. Assignments of Error
{¶ 5} Jackson Roofing appeals and assigns the following two assignments of error
for our review:
[I.] THE COURT OF COMMON PLEAS ERRED BY
EMPLOYING AN INCORRECT STANDARD TO REVIEW
THE COMMISSION'S MISCON[S]TRUCTION OF THE
STATUTE.
[II.] THE COURT OF COMMON PLEAS ABUSED ITS
DISCRETION IN AFFIRMING THE COMMISSION'S
DECISION BECAUSE THE DECISION WAS NOT
SUPPORTED BY EVIDENCE ON THE RECORD.
III. Analysis
{¶ 6} In its first assignment of error, Jackson Roofing contends the common pleas
court erred by employing an incorrect standard to review UCRC's misconstruction of the
statute. In its second assignment of error, Jackson Roofing contends the common pleas
No. 20AP-189 3
court abused its discretion in affirming UCRC's decision because it was not supported by
evidence in the record.
{¶ 7} Jackson Roofing argues that during the time period in question, Jackson
Roofing retained the roofers as independent contractors for different projects. UCRC found
these 28 individuals were covered employees under R.C. 4141.01. Jackson Roofing
contends the common pleas court failed to review UCRC's legal analysis independently
since UCRC misconstrued R.C. 4141.01 and that the record did not support UCRC's
findings.
{¶ 8} Jackson Roofing appeals pursuant to R.C. 4141.26(D)(2) which states:
The court may affirm the determination or order complained
of in the appeal if it finds, upon consideration of the entire
record, that the determination or order is supported by reliable,
probative, and substantial evidence and is in accordance with
law. In the absence of such a finding, it may reverse, vacate, or
modify the determination or order or make such other ruling
as is supported by reliable, probative, and substantial evidence
and is in accordance with law. The judgment of the court shall
be final and conclusive unless reversed, vacated, or modified on
appeal. An appeal may be taken from the decision of the court
of common pleas of Franklin county.
{¶ 9} Under R.C. 4141.26(D)(2), a decision of UCRC may be appealed to the
common pleas court, which may affirm the decision if it finds, based on a review of the
entire record, that the decision is supported by reliable, probative, and substantial evidence
and is in accordance with law. BNA Constr., Ltd. v. Dir., Ohio Dept. of Job & Family Servs.,
10th Dist. No. 16AP-317, 2017-Ohio-7227, ¶ 24. If the common pleas court finds UCRC's
decision is not supported by reliable, probative, and substantial evidence and is not in
accordance with law, it may reverse, vacate, or modify the decision, or make such other
ruling as is supported by reliable, probative, and substantial evidence and is in accordance
with law. R.C. 4141.26(D)(2).
{¶ 10} On appeal to this court from a decision of the common pleas court, we apply
a narrower standard of review. As to issues of fact, we review the common pleas court's
decision for abuse of discretion. Id. at ¶ 25. In this context, "[t]o find an abuse of discretion,
we must conclude that the trial court's decision is without a reasonable basis and clearly
wrong." Miracle Home Health Care, LLC v. Ohio Dept. of Job & Family Servs., 10th Dist.
No. 20AP-189 4
No. 12AP-318, 2012-Ohio-5669, ¶ 18; see also Humanus Corp. v. Dir., Ohio Dept. of Job &
Family Servs., 10th Dist. No. 19AP-764, 2020-Ohio-6940. "Absent an abuse of discretion
on the part of the common pleas court, this court is obligated to affirm its judgment."
Stouffer Hotel Mgt. Corp. v. Ohio Unemp. Comp. Bd. of Rev., 87 Ohio App.3d 179, 183
(10th Dist.1993). However, this court's review of questions of law is plenary. BRT
Transport, LLC v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 14AP-800, 2015-Ohio-
2048, ¶ 15.
{¶ 11} Ohio employers pay contributions into Ohio's unemployment compensation
fund. R.C. 4141.23(A). The definition of "employer" includes any individual or entity that
"[h]ad in employment at least one individual." R.C. 4141.01(A)(1)(a). "Employment" is
defined as "service performed by an individual for remuneration under any contract of hire,
written or oral, express or implied * * * unless it is shown to the satisfaction of the director
[of ODJFS] that such individual has been and will continue to be free from direction or
control over the performance of such service, both under a contract of service and in fact."
R.C. 4141.01(B)(1). The burden of proving entitlement to the independent contractor
exemption is on the employer. Peter D. Hart Research Assocs., Inc. v. Admr., Ohio Bur. of
Emp. Servs., 10th Dist. No. 95APE06-736 (Dec. 28, 1995), citing G. McConnell v. Admr.,
Ohio Bur. of Emp. Servs., 10th Dist. No. 95APE03-262 (Oct. 5, 1995).
{¶ 12} R.C. 4141.01(B)(2)(k) includes as employment "[c]onstruction services
performed by any individual under a construction contract * * * if the director determines
that the employer for whom services are performed has the right to direct or control the
performance of the services and that the individuals who perform the services receive
remuneration for the services performed." R.C. 4141.01(B)(2)(k) lists 20 factors to be
considered in assessing direction or control and provides that UCRC must presume that the
employer has the right of direction and control if 10 or more of the factors apply.
{¶ 13} The R.C. 4141.01(B)(2)(k) factors include:
(i) The employer directs or controls the manner or method by
which instructions are given to the individual performing
services;
(ii) The employer requires particular training for the individual
performing services;
No. 20AP-189 5
(iii) Services performed by the individual are integrated into
the regular functioning of the employer;
(iv) The employer requires that services be provided by a
particular individual;
(v) The employer hires, supervises, or pays the wages of the
individual performing services;
(vi) A continuing relationship between the employer and the
individual performing services exists which contemplates
continuing or recurring work, even if not full-time work;
(vii) The employer requires the individual to perform services
during established hours;
(viii) The employer requires that the individual performing
services be devoted on a full-time basis to the business of the
employer;
(ix) The employer requires the individual to perform services
on the employer's premises;
(x) The employer requires the individual performing services
to follow the order of work established by the employer;
(xi) The employer requires the individual performing services
to make oral or written reports of progress;
(xii) The employer makes payment to the individual for
services on a regular basis, such as hourly, weekly, or monthly;
(xiii) The employer pays expenses for the individual
performing services;
(xiv) The employer furnishes the tools and materials for use by
the individual to perform services;
(xv) The individual performing services has not invested in the
facilities used to perform services;
(xvi) The individual performing services does not realize a
profit or suffer a loss as a result of the performance of the
services;
(xvii) The individual performing services is not performing
services for more than two employers simultaneously;
No. 20AP-189 6
(xviii) The individual performing services does not make the
services available to the general public;
(xix) The employer has a right to discharge the individual
performing services;
(xx) The individual performing services has the right to end the
individual's relationship with the employer without incurring
liability pursuant to an employment contract or agreement.
{¶ 14} Jackson Roofing argues that UCRC found 11 of the factors present (factors i,
iii, iv, v, vi, ix, xi, xii, xvi, ixx, and xx) and therefore presumed the individuals were
employees but that UCRC improperly applied the facts of this case or misconstrued the
meaning of four factors (factors i, iv, ix and xvi), thus, should not have found the
presumption exists and that the individuals were employees. It further argues that 6 factors
should have weighed in its favor (factors i, iv, ix, xi, xii, and xvi). UCRC argues that in the
"reasoning" section of its decision, UCRC found support for at least 14 factors and the
evidence in the record supports each of those 14 factors. UCRC further argues the record
contains substantial, reliable, and probative evidence supporting a finding that Jackson
Roofing meets 16 of the 20 factors.
{¶ 15} UCRC's decision provides, as follows:
ISSUE # 1
Were individuals: Jeff Belt, Ricky Burgett, Eric Close, Earl
Connard, Paul Davis, Jessie Demyan, Geoff Dilik, Frank
Donovan, Ian Healy, Chas Jackson, Matthew Jett, Brent
McClung, Desmond Moore, Larry Moretto, Jason Palagyl,
Tyler Petrilio, Adrian Robinson, Justin Scealf, Jay Stafford,
Bill Stoehr, Steve Whelan, Eric Anderson, Peter Dagnese,
Lloyd Gunter, Thomas Higgins, Michael Keffer, John Turner,
and Matthew Harmon engaged in covered employment?
***
REASONING
The issue in this case is whether twenty-eight individuals who
have provided roofing services for Bill Jackson Roofing, Inc.
should be considered covered employees under the Ohio
Unemployment Compensation Law. The Ohio Revised Code,
Section 4141.01(B)(2)(k), as cited above, provides that when
No. 20AP-189 7
determining whether individuals who work in the
construction industry, such as the roofers in question, are in
covered employment, the twenty factors outlined in that
section should be considered. In reviewing these factors, the
Hearing Officer makes the following findings:
The roofers are required to comply with the instructions of Bill
Jackson Roofing, Inc. regarding when, where, and how they
are to perform the services. Bill Jackson Roofing, Inc. does not
require particular training for the roofers. Roofing services
are part of the regular business of William Jackson Roofing,
Inc. Roofing requires that services be provided by a particular
worker, in that the roofer did not have another individual
perform the work in their stead. Bill Jackson Roofing, Inc.
hires and pays the wages of the roofers.
A continuing relationship exists between Bill Jackson
Roofing, Inc. and the roofer that contemplates continuing or
recurring work, even if not full-time. Bill Jackson Roofing,
Inc. does not require that work be performed on its premises,
but does require it to be performed at the client's location.
Bill Jackson Roofing requires the roofers to make and submit
written reports regarding the hours work[ed] and services
provided after each project is completed. Bill Jackson pays the
roofers for hours worked. Bill Jackson Roofing, Inc. does not
pay expenses for the roofers. Bill Jackson Roofing, Inc. does
not furnish tools for use.
The roofers are not at risk of experiencing loss as a result of
the performance of such services. The roofers may be
performing services for a number of persons at the same time.
The roofers are permitted to make their services available to
the general public. Bill Jackson Roofing, Inc. has the right to
discharge the roofer. The roofers have the right to end the
relationship with Bill Jackson Roofing, Inc. without incurring
liability pursuant to an employment contract or agreement.
As outlined above, the individuals providing services as
roofers for Bill Jackson Roofing, Inc. meet more than ten of
the twenty factors for covered employees as set forth [in] the
Ohio Administrative Code, Section 4141-3-05.1 Pursuant to
the statute, the employer for whom services are performed has
the right to direct or control the performance of the services if
1UCRC cites the Ohio Administrative Code but applied R.C. 4141.01(B)(2)(k) because the case involves
construction services.
No. 20AP-189 8
ten or more of the following criteria apply. The preponderance
of the evidence indicates that the individuals who worked as
roofers are employees under the Ohio Unemployment
Compensation Law.
(Oct. 9, 2019 UCRC Decision at 4-6.)
{¶ 16} Jackson Roofing notes that UCRC's written decision did not specify the
evidence supporting UCRC's determination as to each factor. We note that the common
pleas court decision also did not specify the evidence it found to be reliable, probative, and
substantial that supported UCRC's decision. The common pleas court decision contained
no discussion of the 20 factors nor of the evidence, or lack thereof, in the record pertaining
to the 20 factors regarding each of the 28 employees Jackson Roofing claims were
misclassified. The common pleas court simply summarized the arguments of the parties,
but made no specific reference to the evidence which it found to be reliable, probative, and
substantial. The common pleas court summarily concluded:
The Appellant did not establish that the evidence relied upon
by the Commission was "internally inconsistent, impeached by
evidence of a prior inconsistent statement, rest upon improper
inferences, or are otherwise unsupportable." Ohio Historical
Soc. v. State Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993).
* * * This Court will not substitute its judgment for that of the
agencies [sic] finder of fact.
***
The Appellant, is asking the Commission to answer a negative.
The Appellant is asking: where is the evidence that the
Commission relied upon to show that said individuals were
employees? In response, the Commission is stating: Where is
your evidence that they are not employees. The Appellant had
the burden first and the Commission has determined that it
failed to meet that burden.
(Mar. 4, 2020 Common Pleas Court Decision at 4-5.)
{¶ 17} Unfortunately, the common pleas court's decision and judgment entry is
insufficient and does not permit this court to conclude that it conducted its review as
required pursuant to R.C. 4141.26(D)(2). The decision does not permit us to conduct a
meaningful appellate review.
No. 20AP-189 9
{¶ 18} The common pleas court appears to justify the lack of review and discussion
of the evidence with the requirement that the burden of proving entitlement to the
independent contractor exemption is on the employer. The court also seems persuaded by
appellee's argument that "[n]either the lower court nor this Court may reweigh the
evidence in the first instance as requested by Appellant." (Appellee brief at 20.)
{¶ 19} It is true that the burden of proving entitlement to the independent
contractor exemption is on the employer. However, it is still incumbent upon the common
pleas court to conduct its appellate review of the commission's decision. "In [an R.C.
4141.26(D)(2)] review, it is incumbent upon the trial court to examine the evidence."
(Emphasis added.) Eisenhour v. State Unemp. Comp. Bd. of Rev., 10th Dist. No. 97APE03-
349 (Aug.12, 1997). Furthermore, although UCRC is correct that it is not the role of this
court of appeals to reweigh the evidence, it is incorrect in arguing that the common pleas
court may not reweigh the evidence.
{¶ 20} In its decision, the common pleas court quotes Ohio Historical Soc. v. State
Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993). Ohio Historical Soc. addressed a
common pleas court's standard of review and role in reviewing an administrative appeal,
pursuant to R.C. 119.12, which is similar to the common pleas court's standard of review
and role in reviewing an administrative appeal pursuant to R.C. 4141.26(D)(2) in that the
court may affirm the decision of the administrative agency if it finds the order is supported
by reliable, probative, and substantial evidence and is in accordance with law.2 Ohio
Historical Soc. relied on the Supreme Court of Ohio's reasoning set forth in Univ. of
Cincinnati v. Conrad, 63 Ohio St.2d 108, 109-12 (1980), and Andrews v. Bd. of Liquor
Control, 164 Ohio St. 275 (1955). In Conrad, the Supreme Court stated:
This appeal concerns the scope of review available to a Court of
Common Pleas in an administrative appeal pursuant to R.C.
119.12. Although this court has addressed this issue in the past,
2 We observe the difference between R.C. 119.12(K) and 4141.26(D)(2) regarding the common pleas court's
ability to consider additional evidence. Pursuant to R.C. 4141.26(D)(2): "In such appeal, no additional
evidence shall be received by the court, but the court may order additional evidence to be taken before the
commission, and the commission, after hearing such additional evidence, shall certify such additional
evidence to the court or it may modify its determination and file such modified determination, together with
the transcript of the additional record, with the court." R.C. 119.12(K) states: "Unless otherwise provided by
law, in the hearing of the appeal, the court is confined to the record as certified to it by the agency. Unless
otherwise provided by law, the court may grant a request for the admission of additional evidence when
satisfied that the additional evidence is newly discovered and could not with reasonable diligence have been
ascertained prior to the hearing before the agency."
No. 20AP-189 10
an examination of the record in this cause indicates that further
clarification is necessary.
As to the authority of a Court of Common Pleas upon review of
an administrative order, pursuant to R.C. 119.12, such section
provides, in pertinent part, that:
"The court may affirm the order of the agency complained of in
the appeal if it finds, upon consideration of the entire record
and such additional evidence as the court has admitted, that
the order is supported by reliable, probative, and substantial
evidence and is in accordance with law. In the absence of such
a finding, it may reverse, vacate, or modify the order or make
such other ruling as is supported by reliable, probative, and
substantial evidence and is in accordance with law."
In Andrews v. Bd. of Liquor Control (1955), 164 Ohio St. 275,
paragraph one of the syllabus, this court held that a Court of
Common Pleas must, in an appeal pursuant to this section,
appraise all the evidence "as to credibility of witnesses, the
probative character of the evidence and the weight to be given
it, and, if from such a consideration it finds that the * * *
[administrative] order is not supported by reliable, probative,
and substantial evidence and is not in accordance with law, the
court is authorized to reverse, vacate, or modify the order * * *."
However, Andrews also pointed out that R.C. 119.12 does not
contemplate a trial de novo in the Court of Common Pleas by
the following language, at 279-280:
***
"The legislative purpose, generally to authorize a Common
Pleas Court to weigh the evidence on an appeal from an
administrative agency, is indicated by other statutes, as well
as by our decisions construing them. Thus, after the holding of
this court in Farrand v. State Medical Board (1949), 151 Ohio
St. 222, 85 N.E. 2d 113, the General Assembly amended what is
now Section 119.12, Revised Code, to provide for such
authority. Andrews v. Board of Liquor Control, supra (164
Ohio St. 275, paragraph one of syllabus). Furthermore, in
adopting Section 2506.04, Revised Code, in 1957, the General
Assembly even used the words 'preponderance of * * *
evidence' to emphasive [sic] this purpose."
In Andrews, this court acknowledged that determining
whether an agency order is supported by reliable, probative
and substantial evidence essentially is a question of the absence
No. 20AP-189 11
or presence of the requisite quantum of evidence. Although
this in essence is a legal question, inevitably it involves a
consideration of the evidence, and to a limited extent would
permit a substitution of judgment by the reviewing Common
Pleas Court.
In undertaking this hybrid form of review, the Court of
Common Pleas must give due deference to the administrative
resolution of evidentiary conflicts. For example, when the
evidence before the court consists of conflicting testimony of
approximately equal weight, the court should defer to the
determination of the administrative body, which, as the fact-
finder, had the opportunity to observe the demeanor of the
witnesses and weigh their credibility. However, the findings of
the agency are by no means conclusive.
Where the court, in its appraisal of the evidence, determines
that there exist legally significant reasons for discrediting
certain evidence relied upon by the administrative body, and
necessary to its determination, the court may reverse, vacate or
modify the administrative order. Thus, where a witness'
testimony is internally inconsistent, or is impeached by
evidence of a prior inconsistent statement, the court may
properly decide that such testimony should be given no weight.
Likewise, where it appears that the administrative
determination rests upon inferences improperly drawn from
the evidence adduced, the court may reverse the administrative
order.
(Emphasis added.) Andrews at 109-12.
{¶ 21} "The standard of review for an appellate court reviewing a decision of the
commission appealed pursuant to R.C. 4141.263 is more limited. Regarding factual
questions, an appellate court does not weigh the evidence but, rather, only determines
whether the common pleas court abused its discretion." Valentine Contrs., Inc. v. Dir.,
Ohio Dept. of Job & Family Servs., 10th Dist. No. 15AP-86, 2015-Ohio-5576, ¶ 14, citing All
Star Personnel, Inc. v. State of Ohio, Unemp. Comp. Rev. Comm., 10th Dist. No. 05AP-
522, 2006-Ohio-1302, ¶ 13, citing Kate Corp. v. Ohio State Unemp. Comp. Rev. Comm.,
3We note that the standards of appellate review for decisions of UCRC pursuant to R.C. 4141.26 regarding an
employer's contribution to Ohio's unemployment compensation fund differs from the standards of appellate
review for decisions of UCRC pursuant to R.C. 4141.282 regarding an employee's eligibility for unemployment
benefits. See also Humanus Corp., and Tzangas, Plakas & Manos v. Admr., Ohio Bur. of Emp. Servs., 73 Ohio
St.3d 694 (1995).
No. 20AP-189 12
10th Dist. No. 03AP-315, 2003-Ohio-5668, ¶ 7; Prime Kosher Foods, Inc. v. Admr., Bur. of
Emp. Servs., 35 Ohio App.3d 121, 122 (10th Dist.1987). Yet, without any discussion of the
20 factors, its interpretation of the same or the evidence presented regarding the 28
employees in its decision, that is what the common pleas court has left this court to do—
examine, appraise, and ultimately weigh the evidence. We will not.
IV. Conclusion
{¶ 22} Accordingly, we decline at this time to address the merits of Jackson
Roofing's assignments of error. We reverse and remand the decision and judgment to the
Franklin County Court of Common Pleas with instructions to conduct its review, pursuant
to R.C. 4141.26(D)(2), so that this court may conduct a meaningful appellate review of its
decision, within the scope of our duties pursuant to R.C. 4141.26(D)(2).
Judgment reversed
and cause remanded with instructions.
KLATT and NELSON, JJ., concur.