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Knapp v. Defiance Therapeutic Massage & Wellness Center, LLC

Court of Appeals of Ohio, Third District, Defiance

May 14, 2018

ALISSA M. KNAPP, ET AL., APPELLEES,
v.
DEFIANCE THERAPEUTIC MASSAGE & WELLNESS CENTER, LLC, APPELLANT.

          Appeal from Defiance County Common Pleas Court Trial Court No. 16-CV-43656.

          Mark S. Barnes for Appellant

          Eric A. Baum for Appellees

          OPINION

          PRESTON, J.

         {¶1} Appellant, Defiance Therapeutic Massage & Wellness Center, L.L.C. ("Defiance Therapeutic"), appeals the judgment of the Defiance County Court of Common Pleas affirming the Unemployment Compensation Review Commission's ("Commission") determination allowing claimant-appellee's, Alissa M. Knapp ("Knapp"), application for unemployment compensation benefits. For the reasons that follow, we affirm.

         {¶2} Knapp's employment as a massage therapist with Defiance Therapeutic was terminated on September 25, 2015. (Doc. No. 1, Ex. B). After her employment was terminated, Knapp filed an application for unemployment compensation benefits. (Doc. No. 4).

         {¶3} On November 20, 2015, appellee, the Ohio Department of Job & Family Services ("ODJFS"), approved Knapp's application for unemployment compensation benefits. (Id.). On December 10, 2015, Defiance Therapeutic appealed ODJFS's decision approving Knapp's application for unemployment compensation benefits. (Id.). On December 30, 2015, ODJFS issued its redetermination reversing its initial determination allowing Knapp's application for unemployment compensation. benefits (Id.). On January 5, 2016, ODJFS issued an order vacating its December 30, 2015 redetermination. (Id.). That same day, it issued a redetermination allowing Knapp's application for unemployment compensation benefits. (Id.). Defiance Therapeutic appealed ODJFS's redetermination on January 26, 2016. (Id.).

         {¶4} On January 28, 2016, Defiance Therapeutic's appeal was transferred to the Commission. (Id.). After telephone hearings on February 22 and April 13, 2016, the Commission issued its decision on May 2, 2016 affirming ODJFS's determination. (Id.). On May 23, 2016, Defiance Therapeutic requested that the Commission review its May 2, 2016 decision. (Id.). On June 8, 2016, the Commission denied Defiance Therapeutic's request for review. (Id.).

         {¶5} On July 6, 2016, Defiance Therapeutic appealed to the Defiance County Court of Common Pleas the Commission's denial of its request for review of its May 2, 2016 decision affirming ODJFS's determination allowing Knapp's application for unemployment compensation benefits. (Doc. No. 1).

         {¶6} Defiance Therapeutic filed the administrative file on August 18, 2016. (Doc. No. 4). Defiance Therapeutic filed its brief on October 31, 2016. (Doc. No. 10). ODJFS filed its response to Defiance Therapeutic's brief on March 13, 2017. (Doc. No. 19). On April 18, 2017, Defiance Therapeutic filed its reply to ODJFS's response. (Doc. No. 22).

         {¶7} On October 31, 2017, the trial court denied Defiance Therapeutic's appeal and affirmed the May 2, 2016 decision of the Commission. (Doc. No. 23).

         {¶8} Defiance Therapeutic filed its notice of appeal on November 27, 2017. (Doc. No. 24). It raises one assignment of error for our review.

         Assignment of Error

         The Trial Court Erred in Affirming the Decision of the Review Commission that Appellee Alissa M. Knapp was an Employee of Defiance Therapeutic, as Said Decision is Unlawful, Unreasonable, and Against the Manifest Weight of the Evidence.

         {¶9} In its assignment of error, Defiance Therapeutic argues that the trial court erred by affirming the Commission's decision approving Knapp's application for unemployment compensation benefits because the "Commission's decision finding [that Knapp] worked in covered employment at Defiance Therapeutic Wellness Center under R.C. 4141.01(B)(1) is unlawful, unreasonable, and against the manifest weight of the evidence." (Appellant's Brief at 22). That is, Defiance Therapeutic challenges the Commission's conclusion that Knapp was not an independent contractor of Defiance Therapeutic.

         {¶10} "An applicant seeking unemployment compensation benefits submits to ODJFS an application for such benefits along with information in support of his or her claim." Henderson v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin No. 12AP-154, 2012-Ohio-5382, ¶ 5, citing McGee v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin No. 09AP-680, 2010-Ohio-673, ¶ 9. "Initially, ODJFS makes findings of fact and conclusions of law as to whether the applicant is entitled to unemployment compensation benefits." Id., citing McGee at ¶ 9, citing R.C. 4141.28(B). "Such decision is subject to an appeal to the commission for a de novo hearing." Id., citing McGee at ¶ 9, citing R.C. 4141.281(C)(1) and (3).

         {¶11} "A party dissatisfied with the commission's final determination may appeal to the appropriate court of common pleas, which shall hear the appeal on the record certified by the commission." Id. at ¶ 6, citing McGee at ¶ 10, citing R.C. 4141.282(H).

Pursuant to R.C. 4141.282(H), "[i]f the court [of common pleas] finds that the decision of the commission was unlawful, unreasonable, or against the manifest weight of the evidence, it shall reverse, vacate, or modify the decision, or remand the matter to the commission. Otherwise, the court shall affirm the decision of the commission."

Id., quoting McGee at ¶ 10.

         {¶12} "This standard of review applies to all levels of appellate review in unemployment compensation cases." Id. at ¶ 7, citing Tzangas, Plakas & Mannos v. Ohio Bur. of Emp. Servs., 73 Ohio St.3d 694, 696-97 (1995). "Applying the same standard of review at both the common pleas and appellate court levels does not result in a de novo review standard." Id., citing Tzangas at 697. "In reviewing commission decisions, a court may not make factual findings or determine witness credibility." Id., citing Tzangas at 696, citing Irvine v. State Unemp. Comp. Bd. Of Rev., 19 Ohio St.3d 15, 18 (1985). "Factual questions remain solely within the province of the commission." Id., citing Tzangas at 697. "Similarly, a court may not substitute its judgment for that of the commission." Id., citing McCarthy v. Connectronics Corp., 183 Ohio App.3d 248, 2009-Ohio-3392, ¶ 16 (6th Dist), citing Irvine at 18. "The fact that reasonable minds might reach different conclusions is not a basis for reversing the commission's decision." Id., citing McGee at ¶ 11, citing Tzangas at 696. "Instead, a court must 'determine whether [the Commission's] decision is supported by the evidence in the record.'" Id., quoting Tzangas at 696, citing Irvine at 18. "Judgments supported by some competent, credible evidence on the essential elements of the controversy may not be reversed as being against the manifest weight of the evidence." Id., citing Houser v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin No. 10AP-116, 2011-Ohio-1593, ¶ 7, citing Carter v. Univ. of Toledo, 6th Dist. Lucas No. L-07-1260, 2008-Ohio-1958, ¶ 12, citing CE. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (1978), syllabus.

         {¶13} "This court's focus is on the commission's decision, rather than on that of the common pleas court." Id. at ¶ 8, citing Howard v. Electronic Classroom of Tomorrow, 10th Dist. Franklin No. 11AP-159, 2011-Ohio-6059, ¶ 12, citing Moore v. Comparison Mkt, Inc., 9th Dist. Summit No. 23255, 2006-Ohio-6382, ¶ 8. "Thus, our task is to review the commission's decision and determine whether it is supported by evidence in the certified record and is unlawful, unreasonable or against the manifest weight of the evidence." Id., citing McGee at ¶ 12.

         {¶14} Accordingly, the issue before us is whether the Commission's determination that Knapp worked in covered employment with Defiance Therapeutic is against the manifest weight of the evidence because it is not supported by some competent, credible evidence, or, conversely, whether it is unlawful or unreasonable. See Clark v. Ohio Dept. of Job & Family Servs., 2d Dist. Montgomery No. 25257, 2012-Ohio-5311, ¶ 7.

         {¶15} On May 6, 2016, the Commission issued a written decision, which included the following pertinent findings of fact:

[Knapp] began performing [massage therapy services for Defiance Therapeutic] with the understanding that she would be an independent contractor. [Knapp] did not sign an independent contractor agreement with Carrie Radzik [("Radzik")], managing member[, ] but rather agreed to pay a share of the revenue she brought in, excluding tips. [Knapp] was given access to the facility via a security code and was able to set her own hours. [Knapp] was responsible for providing her own liability insurance. [Knapp] never discussed the prospect of performing work at another facility and had the flexibility to work the hours she chose.
[Knapp] was asked to fill-in for the receptionist to answer the telephone or schedule appointments when the receptionist was not available. [Knapp] did not solely schedule appointments for herself when she filled in. [Knapp] was responsible for cleaning the linens she used and was asked to clean linens used by the other individuals who provided services. [Knapp] was informed as to a specific way to fold the linens. With respect to opening and closing, [Knapp] was informed of certain expectations which included opening and closing the blinds at or by certain times, turning on an outside light when leaving for the day and ensuring the back door is properly and completely shut.
During the period that [Knapp] provided services she was asked to pay Worker's [sic] Compensation premiums and was encouraged to attend regular staff meetings. During the time she provided services the employer introduced a handbook which contained expectations with respect to reporting for work no later than thirty minutes prior to their first appointment, an approval process for changing schedules, a corrective access procedure, checking facility voicemail, and backroom cleaning responsibilities. The backroom responsibilities included cleaning the back area, labeling food in the refrigerator, and specific laundry instructions which included when laundry should be started, how to best dry the laundry and specific folding instructions.
[Knapp] brought some clients to the facility when she began performing services. She was required to complete documentation regarding the services which were placed in client charts. When [Knapp] was separated she was not permitted to remove client files, including information regarding the clients she brought to the facility in March, 2010.

         (Doc. No. 1, Ex. B); (Doc. No. 4).

         {¶16} Based on those facts, the Commission concluded that an employer-employee relationship existed between Defiance Therapeutic and Knapp within the meaning of the statute. In particular, based on the application of the 20 factors under Ohio Adm.Code 4141-3-05 (B), the Commission concluded that Defiance Therapeutic "did have the right to control" Knapp. (Id.); (Id.). Regarding the application of those 20 factors, the Commission reasoned:

[Defiance Therapeutic] operates a spa and the acupuncture services [sic] performed by [Knapp] were essential to the profitability of the company. Those services were an integral part of the regular functions of the company. There were a number of examples of control that were not typical in a business to business relationship. [Knapp] answered the telephone when the receptionist was not present, scheduled others [sic] appointments, and performed filing as needed. She further cleaned and folded laundry not used by her and the client's [sic] she serviced, and was not permitted to take her client files when the employment relationship was severed. [Knapp] did not have a written independent contractor agreement but rather was governed by a manual which set forth opening and closing procedures, refrigerator cleaning, and other subjects that are not typically covered in a typical business to business relationship. In addition, [Knapp] engaged in a continuing relationship, was paid regularly, was not permitted to bring substitutes and had to pay money towards Worker's [sic] Compensation coverage.

(Id.); (Id.).

         {¶17} After reviewing the record, we conclude that the Commission's determination that Knapp worked in covered employment with Defiance Therapeutic is not unlawful, unreasonable, or against the manifest weight of the evidence. "R.C. 4141.01(B)(1) defines 'employment' 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 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.'" Henderson, 2012-Ohio-5382, at ¶ 11, quoting R.C. 4141.01(B)(1).

         {¶18} Consistent with the statutory definition of "employment" under R.C. 4141.01, Ohio Adm.Code 4141-3-05(A) provides, in relevant part:

"[A] worker is in employment when an 'employer-employee' relationship exists between the worker and the person for whom the individual performs services and the director determines that:
(1) The person for whom services are performed has the right to direct or control the ...

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