Petro-Hunt, LLC v. Department of Workforce Services

2008 UT App 391, 197 P.3d 107, 616 Utah Adv. Rep. 7, 2008 Utah App. LEXIS 380
CourtCourt of Appeals of Utah
DecidedOctober 30, 2008
Docket20080002-CA
StatusPublished
Cited by3 cases

This text of 2008 UT App 391 (Petro-Hunt, LLC v. Department of Workforce Services) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petro-Hunt, LLC v. Department of Workforce Services, 2008 UT App 391, 197 P.3d 107, 616 Utah Adv. Rep. 7, 2008 Utah App. LEXIS 380 (Utah Ct. App. 2008).

Opinion

OPINION

GREENWOOD, Presiding Judge:

{1 Petitioner Petro-Hunt, LLC (Petro-Hunt) appeals the Workforce Appeals Board's (Appeals Board) conclusion that Bambi Elliot was a Petro-Hunt employee, not an independent contractor, and her wages are therefore subject to unemployment insurance taxes. We affirm.

BACKGROUND

12 Elliot worked for Petro-Hunt, an oil and gas exploration company, from approximately September 2005 to January 2006. While working for Petro-Hunt, Elliot "generally performed work that fit within the duties of landmen." In the oil and gas industry, landmen typically assist companies with acquiring land and mineral leases, performing due diligence on those leases, and performing other lease-related assignments. Landmen can be company employees, conducting most of their work at the company site, or "contract landmen," performing most of their duties out in the field and at local courthouses. This case calls into question whether Elliot was a company landman or a contract landman.

1 3 Prior to working for Petro-Hunt, Elliot performed landman services for two other companies, Hingeline Land and Title (Hinge-line) and Bowman and Associates (Bowman). Bowman had contracted to provide landman services for Petro-Hunt; however, in September 2005, Petro-Hunt canceled the Bowman contract. At approximately the same time, Petro-Hunt hired several of Bowman's employees, including Elliot. Elliot was specifically hired by Petro-Hunt to work on the Paradise Leases, an endeavor that was projected to last one year. 1 Under the terms of her contract with Petro-Hunt, Elliot received $200 per day in compensation, $15 per day as a per diem, and 44.5¢ per mile for all miles driven with her personal car. The contract categorized Elliot as a broker and independent contractor, and contained confidentiality *110 and non-compete clauses. Petro-Hunt did not withhold any taxes for Elliot and provided her with 1099 independent contractor tax forms.

14 As part of her responsibilities for Pe-tro-Hunt, Elliot was expected to perform due diligence on the Paradise Leases. She reviewed lease title documents and records, completed data entry, compiled reports and spreadsheets, filed documents, made copies, and answered phones and emails. She worked in the company's office in Ephraim, Utah, during regular business hours, working approximately forty to sixty hours a week. To complete her assignments, Elliot worked primarily from her own laptop computer, on which she "assimilated, consolidated, and organized the data and reports submitted by the field landmen." While she was with Pe-tro-Hunt, Elliot did not advertise her services and she "did not indicate she wished to obtain any other clients because she was working full-time for Petro-Hunt."

15 At the close of the Paradise Leases project, in January 2007, Elliot was released from her employment with Petro-Hunt. She worked for Baseline, another oil and gas company, for approximately three months, then filed for unemployment compensation in April 2007. Robert Goodwin, a field auditor for the Utah Department of Workforce Services, investigated the status of Elliot's employment, and in the spring of 2007, concluded that Elliot "performed a personal service for Petro-Hunt," the service she provided constituted "covered employment," and, thus, Petro-Hunt was required to pay unemployment insurance taxes for the wages it had paid to Elliot.

16 Petro-Hunt appealed Goodwin's decision, and on September 6, 2007, an administrative law judge (ALJ) presided over a hearing on the matter. Two days prior to the hearing, Petro-Hunt filed a motion seeking a continuance and permission to conduct discovery "in the form of interrogatories, requests for the production of documents and a deposition of [Elliot]." The ALJ denied Pe-tro-Hunt's motion and proceeded with the hearing.

T7 After the September hearing, the ALJ issued findings of fact and conclusions of law, in which she determined that Elliot provided covered employment services for Petro-Hunt and, accordingly, the wages Petro-Hunt paid to Elliot were subject to unemployment insurance taxes. Petro-Hunt appealed the ALJ's decision to the Appeals Board. After additional briefing, the Appeals Board unanimously affirmed the ALJ's decision. Petro-Hunt appeals.

ISSUES AND STANDARDS OF REVIEW

T8 Petro-Hunt argues that by denying its motion for formal discovery and a continuance, the Appeals Board violated its right to due process "and fits] ability to prepare and conduct a defense." While Pe-tro-Hunt categorizes this discovery issue as a constitutional question, the proper standard of review for the Appeals Board's discovery ruling is abuse of discretion. See Utah Code Ann. § 63G-4-403 (Supp.2008) (stating that appellate court shall grant relief if, among other reasons, "the ageney action is ... an abuse of the discretion delegated to the agency by statute"); of Salt Lake Citizens Congress v. Mountain States Tel. & Tel. Co., 846 P.2d 1245, 1255 (Utah 1992) (holding that administrative ageney "acted arbitrarily and capriciously in denying petitioners' request for discovery").

19 Petro-Hunt also asserts that the Appeals Board erred by refusing to adopt Texas law that classifies landmen as independent contractors and by failing to properly apply "principles of Utah law" regarding independent contractor professions. And final ly, Petro-Hunt challenges the Appeals Board's ultimate conclusion that Elliot was a Petro-Hunt employee as opposed to an independent contractor. "This court will reverse the Board's ultimate determination [on whether Elliot was an employee or an independent contractor}, and upset its intermediate conclusions, only if we conclude they are irrational or unreasonable." Tasters Ltd., v. Department of Employment Sec., 868 P.2d 12, 19 (Utah Ct.App.1998).

ANALYSIS

I. Due Process

1 10 Petro-Hunt argues that it was denied due process because the Appeals Board re *111 fused to allow it the opportunity to conduct formal discovery. Its argument is based on the following two principles: First, that entities subject to an administrative hearing have "a due process right to receive a fair trial in front of a fair tribunal," and second, that "the modern rules of civil procedure were developed and subsequently adopted by each level of the judiciary from federal and state courts to administrative agencies." (Emphasis added.) As discussed below, neither of these two principles support Petro-Hunt's assertion of error.

T11 While it is true that "every person who brings a claim ... at a hearing held before an administrative agency has a due process right to receive a fair trial in front of a fair tribunal," Bunnell v. Industrial Comm'n, 740 P.2d 1331, 1333 (Utah 1987), we cannot say that this fairness requirement necessarily includes a constitutional right to formal discovery in administrative proceedings. Cf.

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Bluebook (online)
2008 UT App 391, 197 P.3d 107, 616 Utah Adv. Rep. 7, 2008 Utah App. LEXIS 380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petro-hunt-llc-v-department-of-workforce-services-utahctapp-2008.