Wis.LIRC UC Decision: Fondren, Leonard - August 14, 1997 - EE 409 - s.108.02(12)(a) - Ice cream truck driver to whom ice cream manufacturer leased ice cream truck was not "performing services" for the employer

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

LEONARD FONDREN, Employe

DARA ICE CREAM CO INC, Employer

UNEMPLOYMENT COMPENSATION DECISION
Hearing No. 97600288MW

An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on the applicable law, records and evidence in this case, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The appellant, Dara Ice Cream Company, Inc., is a corporation in the business of selling ice cream. The appellant also leases vehicles in its business. The appellant purchases and sells ice cream mainly to vendors. Some ice cream is also sold in stores. Vendors are the individuals who sell the ice cream to the public. Vendors lease vehicles from the appellant. All of the appellant's vendors lease the appellant's vehicles. Vehicles consist of old post office vehicles which have been converted into ice cream trucks. The trucks play music to attract customers, primarily children.

The appellant entered into a lease agreement with the claimant on July 5, 1995 (exhibit 1). The lease provides that the claimant will lease the appellant's vehicle for the term of July 5, 1995 to July 12, 1995. The claimant leased a vehicle until July 30, 1995. The lease amount was $35 per week. The claimant leased the vehicle two separate times, once for a month and the second time for a couple of weeks. The claimant also purchased ice cream from the appellant. The appellant did not keep track of how much the claimant purchased from the appellant in 1996.

The claimant was responsible for paying gas for the vehicle and obtaining a vendor's license. The appellant had no control over where the claimant sold ice cream, when the claimant sold ice cream, or how much ice cream the claimant sold. The claimant did not have to buy all the ice cream he sold from the appellant. Some vendors buy from the appellant, some buy from grocery stores, and some buy from other places. The appellant could not do anything about the fact that the vendors bought ice cream from others. There was no required limit on the amount of ice cream the vendor had to purchase or the amount of ice cream that had to be sold. If a vendor did not sell some ice cream the appellant might accept the ice cream for what the vendor owed the appellant. Otherwise, vendors sold to each other. There was no requirement that the appellant buy back the ice cream.

The issue to be decided is whether the claimant performed services for the appellant as an employe.

Wisconsin Statute 108.02 (12)(a) provides that an employe is an individual who is or has been performing services for an employing unit, in an employment, whether or not the individual is paid directly by such employing unit. Wis. Stat. � 108.02 (15)(a) defines employment as "any service . . . performed by an individual for pay."

An individual found to be performing services for pay, in an employment, under Wis. Stat. � 108.02 (12)(a), will not be deemed an employe if the appellant demonstrates that the individual satisfies the criteria set forth in Wis. Stat. � 108.02 (12)(b). (1 ) The criteria contained in that statutory exception relate to whether the claimant has performed services in an independent business. A mandatory requirement is that the individual hold or apply for an employer ID number or have filed business or self-employment income tax returns based on the services at issue in the previous year.

The lease agreement itself has no relationship to the performance of services. It is simply an agreement by the claimant to pay the appellant a set amount per week for the use of the appellant's vehicle. A review of that lease indicates that it is directed to the vehicle, and protecting the appellant's rights in the vehicle, and setting forth the claimant's obligations relative to the vehicle. The lease does not refer to, nor does it appear to be related to, the performance of services for pay. Such a lease arrangement where the claimant pays the appellant for the use of the vehicle cannot be viewed as performance of services by the claimant for which he is paid by the appellant, even indirectly.

It is the department's burden to establish that the claimant performed services for pay for the appellant. The commission finds that the department has not met that burden in this case. One critical fact was not determined at the hearing, namely, whether the claimant was required to buy any ice cream from the appellant in order to lease the appellant's ice cream truck. Absent such finding, or a finding that it would have been economically unfeasible for the claimant to have bought all his ice cream elsewhere, the commission finds that the department has not established that the relationship was any more than a wholesaler-retailer relationship.

Certainly, the fact that the claimant leased a vehicle from the appellant was to the appellant's benefit but there is nothing that indicates that the lease requires the claimant to sell the appellant's ice cream, or any designated amount of the appellant's ice cream. The only way it could be said that the claimant was receiving pay for "service" was by the money he received from individuals who bought his ice cream. Yet, this is true of any wholesaler or retailer relationship. The commission cannot find that the lease agreement, since it does not on its face or in its operation require the claimant to buy the appellant's ice cream, changes the wholesaler-retailer relationship to an employer-employe relationship.

The commission therefore finds that the claimant did not perform services for the appellant as an employe within the meaning of Wis. Stat. � 108.02 (12)(a).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the claimant did not perform services for the appellant constituting employment for unemployment benefit purposes.

Dated and mailed August 14, 1997
fondrle.urr : 132 : 5 EE 409

/s/ Pamela I. Anderson, Chairman

/s/ David B. Falstad, Commissioner

MEMORANDUM OPINION

The commission did not consult with the administrative law judge regarding witness credibility and demeanor. The commission's reversal is based on reaching a different legal conclusion when applying the law to the facts.

cc:
ATTORNEY ROBERT SWANSON
HARTING BIELAJAC SWANSON & KOENEN

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Footnotes:

(1)( Back ) Despite the appellant's assertion in its petition, the administrative law judge applied the correct statute to this case. Changes occurring in Wis. Stat. � 108.02 (12), as they apply to benefit cases, are applicable to benefit years beginning after December 31, 1995. The claimant in this case began his benefit year after December 31, 1995, and therefore the new statutory provisions apply in this case.