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O'Neill v. Martori

Supreme Court of Arizona

December 27, 1949

O'NEILL et al.

Judgment affirmed.

H. S. McCluskey, Phoenix, attorney for appellant The Industrial Commission of Arizona, Robert E. Yount, Phoenix, and Donald J. Morgan, Phoenix, of counsel.

Jennings, Strouss, Salmon & Trask, J. A. Riggins, Jr., Henry S. Stevens, Rex H. Moore, Phoenix, attorneys for appellees.

Udall, Justice. La Prade, C. J., and Stanford, Phelps, and De Concini, JJ., concurring.


Udall, Justice.

Page 995

[69 Ariz. 271] The Industrial Commission of Arizona (appellant-defendant) has appealed from a judgment of the Superior Court of Maricopa County in which the court set aside and vacated certain findings of fact and orders theretofore entered by the Commission in re policy No. 12452 issued to appellees, Martori Bros., Distributors.

The appellees (plaintiffs below), a copartnership, are growers and shippers of [69 Ariz. 272] agricultural products and as such are employers subject to the Arizona Workmen's Compensation Act. A.C.A. 1939, § 56-901 et seq. Their agricultural operations were fully covered by a continuing policy of insurance (0006 classification) issued to them by the Commission some three years prior to the commencement of this action. The Commission, being dissatisfied with pay roll reports submitted and premiums paid by appellees, made an investigation of their books whereupon it issued an order, dated December 17, 1947, assessing additional premiums in the sum of $ 11,761.23 against said employer. These premiums were assessed upon the theory that the employer had in its employ additional employees whose wages had not been reported for premium purposes. The employer denied that it was liable for this additional premium, insisting that the pay roll used by the Commission was made up of employees of independent contractors who were expressly excluded from coverage under the terms of the policy of insurance. The issue, therefore, was whether the pay roll classifications used were those of its employees or the employees of independent contractors.

The employer resisted the order and under the provisions of Section 56-908, A.C.A. 1939, moved for a rehearing asserting that the Commission had exceeded its jurisdiction. A hearing was granted and certain minor items of the billing were eliminated, following which the Commission, on April 30, 1940, reaffirmed its previous order, entered a further order demanding payment of premium and made findings of fact and an order in relation thereto. Appellees, on May 13, 1948, commenced an action in the Superior Court to vacate both of said orders; the Commission filed an answer and the parties then stipulated that the cause should be submitted to the Court for decision upon the pleadings and the transcript of the record as heretofore submitted to the Superior Court and filed in the cause by the defendants, together with the supplemental record filed in said cause by the defendants. After the matter had been fully briefed and argued, judgment was entered for appellees, setting aside the Commission's findings and orders. This appeal followed.

The rather voluminous record presented to the Superior Court consisted of the Commission's complete file, including the transcript of the testimony of the only three witnesses interrogated, i.e., Joseph Martori and Frank Condello, two members of the partnership, and Paul E. Plummer, an auditor and investigator for the Commission. Both the trial court and the Commission had the benefit of numerous pronouncements of this court as to the proper legal tests to apply in distinguishing independent contractors from employees, Industrial Commission v. Meddock, 65 Ariz. 324, 180 P.2d 580, and Blasdell v. Industrial Commission, 65 Ariz. 373, 181 P.2d 620, being two of the latest decisions. We see no [69 Ariz. 273] occasion to either restate these legal principles or to set out at length the evidence adduced at the hearing.

The Commission takes the position that it had the right to, and did, reject the testimony of the employer that the persons for whom the Commission is now claiming the additional premiums were employees of independent contractors. It asserts that its findings, conclusions of law and orders were based upon the statutes, rules and orders of the Corporation Commission, rules incorporated in its policy of insurance, the testimony of its auditor, its audit reports, certain claims for compensation

Page 996

benefits theretofore paid under said policy, and the reasonable inferences to be drawn from the whole thereof. It contends that the findings of fact of the Commission, if supported by competent evidence, must be affirmed by the Superior Court unless the trial court can say as a matter of law that the findings and the order of the Industrial Commission are unreasonable and unlawful and without reasonable support in the evidence, regardless of the fact that the Court may entertain different views as to the weight of the ...

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