2017 Ohio 7227
Ohio Ct. App.2017Background
- ODJFS audited BNA Construction after a tip and reclassified numerous workers (formerly 1099 contractors) as employees, finding ~$1,000,000 in underreported wages and assessing unemployment tax liability.
- Auditor reviewed limited documentation, could not complete most audit tests, and relied on a March 26, 2014 telephone interview with owner Horatio Lucero to complete a 20-factor questionnaire under R.C. 4141.01(B)(2)(k).
- Dispute arose over who participated in that call (auditor said BNA's attorney was present; Lucero said attorney was not and he needed an interpreter). BNA's counsel sought to withdraw as counsel because he believed he had become a material witness.
- The commission held multi-day hearings, heard testimony from the auditor, Lucero, and several workers, and concluded at least ten statutory factors supported employee classification; the commission affirmed the director’s reconsidered decision.
- The Franklin County Court of Common Pleas affirmed the commission, finding no abuse of discretion in denying additional continuances and that the commission's decision was supported by reliable, probative, and substantial evidence. This court affirmed.
Issues
| Issue | Plaintiff's Argument (BNA) | Defendant's Argument (ODJFS / Commission) | Held |
|---|---|---|---|
| Whether the continuance requests were timely (made after hearing began) | BNA: requested continuance (June 3) to obtain new counsel after auditor's testimony made counsel a witness | ODJFS: request occurred after hearings had already begun; commissioner had already granted/denied scheduling adjustments | Court: request was made after the hearing had begun; overruling BNA on timeliness |
| Whether denial of continuances and advising Lucero he could represent BNA forced unauthorized practice of law / prejudiced BNA | BNA: denial prevented it from presenting attorney's testimony and coerced choice between inadequate representation or exposing Lucero to unauthorized practice | ODJFS: commission provided options and had discretion; administrative rules allow non-lawyer company representatives; no prejudice shown | Court: no abuse of discretion or prejudice; affirmed denial of further continuances |
| Whether auditor properly applied R.C. 4141.01(B)(2)(k) 20-factor test | BNA: auditor’s process was unreliable (short call, inconsistent testimony, didn’t contact workers individually) and questionnaire wasn’t applied individually to each worker | ODJFS: auditor followed statute, completed 20-factor assessment, commission heard witnesses and weighed evidence | Court: commission applied the 20-factor test, credited evidence; common pleas court did not abuse discretion in finding substantial, reliable, probative evidence supporting the decision |
| Whether overall commission decision was supported by substantial, reliable, probative evidence | BNA: challenges auditor credibility and sufficiency of evidence to meet ten-factor presumption | ODJFS: hearing record contained testimony and exhibits supporting findings; credibility determinations are for the commission | Court: affirmed — record supports commission’s findings; appellate review does not reweigh credibility |
Key Cases Cited
- State v. Unger, 67 Ohio St.2d 65 (trial court continuance/discretion standard)
- Henize v. Giles, 22 Ohio St.3d 213 (administrative non-lawyer representatives not engaged in unauthorized practice of law)
- Stouffer Hotel Mgt. Corp. v. Ohio Unemp. Comp. Bd. of Review, 87 Ohio App.3d 179 (10th Dist.) (appellate deference to agency factfinding)