Warren v. Board of Appeals

HornEy, J., delivered the opinion of the Court. The principal question raised by this appeal is whether Wilson C. Warren (the appellant), a registered land surveyor, was an employer within the meaning of the Unemployment Insurance Law (UIL) during the period from January 1, 1958, until July of 1959. The executive director of the Department of Employment Security (D.E.S. or department), having raised the question on his own motion, subsequently determined, on the evidence produced at a formal hearing before the hearing officer, that the appellant was an employer and that he must report the names and amounts earned by his employees and pay contributions thereon as required by ⁷ law. The employer appealed first to the Board o!

Appeals of the D.E.S. and then to the Circuit Court for Howard County. The board of appeals affirmed the determination of the executive director and the court affirmed the decision of the board, whereupon the appellant appealed to this Court. Although the appellant has listed thirteen contentions in a haphazard sort of way, the questions presented fall into three categories: (i) those concerning procedure; (ii) those concerning the facts; and (iii) those concerning the applicable law. The facts are not complicated.

In 1951 the appellant reported to the D.E.S. that he was engaged in the business of surveying. From 1951 through 1957, he reported the employees he had, declared their wages and paid contributions thereon. Beginning with the first calendar quarter of 1958, he filed quarterly returns showing there had been no employment. The department accepted these reports until, on the return for the fourth quarter of 1958, he noted that he was carrying on his business without employees and instead was using only “occasional assistance from associates, part-time helpers or independent contractors.” This information caused the department to surmise that the appellant was probably misusing the terms “associate” and “independent contractor,” and, since a “part-time helper” is covered under the law, it was thought that the failure to report any employment and wages for the year 1958 was in error.

And when efforts to have the appellant settle the matter with a field representative proved unsuccessful, the case was referred to the legal department and a subpoena duces tecum was issued to compel the appellant to appear before the hearing officer with his records of payments of money to others for services rendered. At the hearing on July 22, 1959, before the hearing officer, the appellant testified that he had been in business as a surveyor during the year 1958, and admitted that he had had several persons help him with his work. But the only record of any practical use produced in obedience to the subpoena was an income tax return for that year showing that ⁸ he had taken credit for $709.52 as having been paid to “associates” for services rendered during the period covered by the tax return. The appellant claimed that the persons thus employed were casual employees and as such were not covered by the UIR.

The appellant conceded that his son (who was over twenty-one years of age), two high school students and two other persons had rendered services during the period in question. None of these persons was reported to the D.E.S. as employees and no contributions were paid on the remuneration received by them for services rendered. Such other facts and circumstances concerning the issues and procedures involved in this proceeding will be stated from time to time as the occasion may require. The pertinent procedural provisions of the statute include: Section 8 (d) of Art. 95A of the Code of 1957, which provides in part that the executive director, on his own motion or on the application of an employing unit, shall “on the basis of facts found by him determine whether an employing unit is an employer and whether services performed for it constitute employment, and the contribution rate to be assigned to an employer”; that an employer may appeal to the board of appeals as a matter of right; that the board shall afford the parties (employer and executive director) a “reasonable opportunity for a fair hearing”; and that the decision of the board shall be final “unless the employing unit * * * initiates judicial review.” Section 15 (c), among other things, provides that an aggrieved employer may secure a judicial review of the action of the board of appeals by appeal to the circuit court of the county in which the employer does business; that in any judicial proceeding under this section the findings of the board “as to the fact, if supported by evidence and in the absence of fraud, shall be conclusive and the jurisdiction of [the] court shall be confined to questions of law”; and that an appeal may be taken to this Court.

(i). Questions Concerning Procedure. When the board of appeals answered the petition and ap ⁹ peal of the appellant filed in the circuit court, the appellant demurred to the answer. The court overruled it.

The action of the court was proper. The conventional answer did no more than deny the allegations of the petition and appeal and demand strict and legal proof thereof and correctly avers that the findings of the board, absent a showing of fraud, were conclusive on the court. The demurrer—which in substance had simply reiterated and argued some of the reasons previously stated for taking the appeal—was clearly inappropriate in that it did not comply with Maryland Rule 345 (and Rule 301). After the appeal to the lower court had been heard the appellant sought an extension of time for the filing of a memorandum on the law and the board of appeals, in answer to the petition, opposed the extension.

The appellant demurred to the answer. This demurrer, since it was likewise impertinent and irrelevant, was also properly overruled. The appeal to the circuit court was set for a hearing at Ellicott City on Tuesday, May 31, 1960, but the appellant, although he was fully aware of the date of trial and that the three-day Memorial Day holiday would begin on Saturday, May 28, did not request subpoenas for the witnesses (all of whom were residents of Baltimore City) he claimed were material to his case until Friday, May 27. When none of the witnesses appeared at the hearing, he moved for a postponement, but the court refused to grant it.

Apparently the appellant, in requesting postponement made no effort to comply with the provisions of Rule 527 c, relating to the testimony of absent witnesses, as he might have done if the testimony of such witnesses were material, competent and proper. Since the granting of postponement was discretionary, and no abuse has been shown, we cannot say that the court erred in refusing to grant the motion. With regard to the request for an extension of time within which to file his memorandum on the law, the appellant further contends that it was error for the court to limit the filing time. In the absence of a local rule regulating the time, the matter would be within the sound discretion of the court.

Certainly the refusal to extend the time further did not, as the ¹⁰ appellant claims, constitute a denial of a fair trial or the right of the appellant to his day in court. The final procedural question concerns the payment of costs. The appellant contends that the appellee should pay them because “the case is of great importance to the administration of the law.” The claim is not well founded. In the absence of an order of court providing otherwise, the rule is that “the prevailing party shall be entitled to the allowance of court costs” in the lower court.

Rule 604 a; Sinclair Estates, Inc. v. Chas. R. Guthrie Co., 223 Md. 572 , 165 A. 2d 775 (1960). The same is true with respect to the costs in this Court. See Rule 882 a.

(ii). Questions Concerning The Facts. The lower court, at the hearing before it, refused to permit a witness for the appellant to express an opinion “concerning the irregularity of the proceedings” before the hearing officer. The court also sustained an objection to a question aimed at ascertaining whether the field representative of the department (G. Calvin Whiteley) was “an officer or committee member in any political organization” or whether he was “a candidate for any elective office.” Since both questions were clearly irrelevant to the subject of the appeal, the rulings of the court were proper.

The appellant claims that the actions of the D.E.S. were unwarranted, overzealous, prejudicial, fraudulent and capricious. Even if these contentions are properly before us, there is no evidence to support them and they are based only on those things the appellant (without legal justification) disapproved of or found fault with concerning the lawful actions of the executive director, the field representative, the hearing officer and other persons constituting the personnel of the department, as well as the chairman and executive secretary of the board of appeals and the general counsel to the department. None appears to have any real bearing on whether the finding of fact was supported by the evidence or whether there was fraud. The claim of prejudice was based only on the charge of the appellant that the department had already made up its mind that he was liable for the tax.

The claim ¹¹ of fraud was based only on his assertion that the notice of hearing to discover whether there was coverage was fraudulent because it purported to be a “petition” by the appellant when in fact it had been initiated by the department. Both of these claims, as were those merely asserting without more that the actions of the department officials and employees were unwarranted, overzealous and capricious, were clearly without merit. It was the duty of the department to establish if it could that the employer had one or more persons in his employ performing services for him. The burden of proving that such services as were rendered were not in covered employment was on the appellant.

It is further contended that the lower court erred when it applied the statutory tests (which will presently be discussed) to the employees of the appellant. Apparently the claim is—since he contends that the “associates” were not hired for wages but shared in the profits and losses—that he was not an employer. However, since the appellant admits that he was the only registered surveyor involved, it is clear that the lower court, in applying the tests as it was bound to do, correctly pointed out in its opinion (a) that those who helped him with the surveying projects had to be under his direction and control; (b) that the services performed for him by others were in furtherance of, and not outside of, the usual course of his business; and (c) that there was nothing in the records (either before the hearing officer, the board of appeals or the lower court) to indicate that the persons who were performing services for the appellant were customarily engaged in independently established occupations of the same nature as surveying. The next to the last contention as to the facts, that the opinion of the lower court is contrary to the facts, also lacks substance.

Regardless of whether the appellant “commenced business in 1951” or later, he admits that he testified before the board that he had “done survey work for many years.” And, even though the 1958 income tax return of the appellant was introduced as evidence to show that he had “associates” there was no reason why the board could not deduce from ¹² that fact—since he had taken credit for payments made to them for services rendered—that such “associates” were in covered employment. Finally, even if the question is before us, the record does not disclose that the claimed delay in requesting “amended” reports for the four quarters of 1958 was in any way prejudicial to the appellant. (iii). Questions Concerning The Applicable Raw.

As to the claims of unconstitutionality, it is contended that the title to the amendment (Chapter 36 of the Acts of 1956) changing the title of Article 95A from “Unemployment Compensation Raw” to “Unemployment Insurance Raw” was defective because the title as changed does not describe the statute sufficiently. The