Dynometrics v. ades/enriquez

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

DYNOMETRICS INC., Appellant,

v.

ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an agency,

and

JULIE ENRIQUEZ, Appellees.

No. 1 CA-UB 22-0042
FILED 3-19-2024

Appeal from the A.D.E.S. Appeals Board
No. U-1737637-001-B

REVERSED AND REMANDED

COUNSEL

Meagher + Geer P.L.L.P., Scottsdale
By Spencer T. Proffitt
Counsel for Appellant

Arizona Attorney General’s Office, Tucson
By Jennifer Blum
Counsel for Appellee Arizona Department of Economic Security

Lewis Roca Rothgerber Christie LLP, Phoenix
By Heather Stanton
Counsel for Appellee Julie Enriquez
 DYNOMETRICS v. ADES/ENRIQUEZ
Opinion of the Court

OPINION

Judge Daniel J. Kiley delivered the opinion of the Court, in which Vice Chief
Judge Randall M. Howe and Judge Jennifer M. Perkins joined.

K I L E Y, Judge:

¶1 Dynometrics, Inc., dba Comfort Keepers (“Comfort Keepers”)
challenges the decision by the Appellate Services Administration Appeals
Board (the “Appeals Board”) of the Arizona Department of Economic
Security (“ADES”) awarding Julie Enriquez unemployment benefits
chargeable to Comfort Keepers. Because ADES made its award without
addressing the merits of Comfort Keepers’ argument that Enriquez was not
its employee, we reverse and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

¶2 This case arises from Enriquez’s application for
unemployment benefits after the death of “Maria” (a pseudonym), to whom
Enriquez had provided caregiving services.

¶3 Maria was a recipient of health care benefits through the
Arizona Health Care Cost Containment System (“AHCCCS”). AHCCCS
recipients who qualify for long-term care services are allowed to select their
caregivers, who receive payment for their services through providers such
as Mercy Care. Recipients usually choose family members to serve as their
caregivers.

¶4 When Maria became eligible for long-term care services under
her Mercy Care plan, she asked that Enriquez be hired to provide
caregiving services to her. Before Enriquez began providing care to Maria,
she entered into a written agreement with Comfort Keepers which
provided in relevant part:

You are being offered employment by Comfort Keepers per a
direct request made by [Maria] to be her/his Family Care
Attendant. You also came to Comfort Keepers specifically to
be hired to provide care for [Maria] and no other clients of
Comfort Keepers. You understand and agree that you are not
available to work for or on any other clients of Comfort
Keepers and no other work will be offered to you.

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Opinion of the Court

Under circumstances such as this, when Comfort Keepers
does not have complete control of the hiring and termination
decisions of an employee; specifically when the hiring
selection is made by a client not employed by Comfort
Keepers, you agree to resign, quit and otherwise make
yourself unavailable for any type of work with Comfort
Keepers if:

• your employment should end because [Maria] no
longer wants you to be her/his Family Care Attendant,
• or if [Maria] no longer qualifies for care giving services
with Comfort Keepers,
• or any other reason why your employment ends with
Comfort Keepers which is not a direct result of a
decision made by Comfort Keepers.

I, Julie Enriquez, have read and understand the above, and I
understand this will affect my rights to file for unemployment
insurance against Comfort Keepers.

(Emphasis omitted.) Enriquez and a representative of Comfort Keepers
signed the agreement in December 2016. Enriquez then served as Maria’s
caregiver, providing feeding, bathing, and other services in the home they
shared. Enriquez submitted weekly timesheets to, and received paychecks
from, Comfort Keepers.

¶5 After Maria died in March 2021, Enriquez applied for
unemployment benefits. A deputy determined that Enriquez did not
qualify for benefits, explaining,

You have not shown that you attempted to adjust your
grievance with your employer before you quit or that you quit
for compelling personal reasons. You voluntarily left work
without good cause in connection with your employment.

¶6 Enriquez appealed the deputy’s determination to the ADES
Appeal Tribunal, see Ariz. Admin. Code (“A.A.C.”) R6-3-1503(A), stating
that she did not “quit” and “was not offered a new job” after the “patient
[she] was taking care of . . . passed away.”

¶7 Enriquez and Kim Senff, a representative of Comfort Keepers,
appeared without counsel at a hearing before the Appeal Tribunal in

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Opinion of the Court

September 2021. The administrative law judge (the “ALJ”) began by
identifying “[t]he purpose of the hearing” as

to hear the claimant’s appeal from the Determination of the
Deputy . . . finding that the claimant quit the job without a
good cause and was denied benefits. That’s the issue for
determination today, separation from employment. Separation
from employment breaks down into some sub-issues[:]
whether the claimant quit with or without a good cause;
whether the claimant was discharged with or without
misconduct; or whether the claimant had established a
compelling personal reason to quit.

(Emphasis added.) Significantly, the ALJ did not identify whether Enriquez
was an employee of Comfort Keepers as an issue to be addressed at the
hearing.

¶8 The ALJ then placed Enriquez and Senff under oath and
asked them questions. When he asked Enriquez if she “quit” or was
“discharged,” she replied, “I didn’t quit and I didn’t discharge [sic], because
my client died on the 2nd of March.” When the ALJ asked Enriquez if she
“ask[ed] Comfort Keepers if [she] could be employed giving care to anyone
else” after Maria’s death, she replied in the negative, stating that she “didn’t
think about it at the time.” Enriquez explained that she had been “in the
middle of grieving” Maria’s death while simultaneously “dealing with”
funeral arrangements “and stuff like that.” Enriquez reiterated, however,
that she “had no intention at all to quit” when Maria died. There was no
“other reason” for her separation from Comfort Keepers, she testified,
“besides the passing of [her] patient.”

¶9 During the ALJ’s questioning of Enriquez, the following
exchange occurred:

ALJ: All right. When you were working for Comfort
Keepers, were you working as an employee?

Enriquez: Uh, it’s kind of hard to explain because . . .

ALJ: Well, before we get into, too far into the
[inaudible] just ask you some simple questions. Who cut your
check, was it the client you were working for or . . .

Enriquez: Comfort Keepers.

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Opinion of the Court

ALJ: . . . was it Comfort Keepers? Okay.

Enriquez: I got paid through Comfort Keepers.

Although Enriquez thus did not complete her answer when the ALJ asked
if she was an employee of Comfort Keepers, the ALJ never returned to that
subject or invited her to complete her answer. Instead, he moved on to other
subjects.

¶10 The ALJ then began to question Senff. She testified that,
consistent with the terms of Enriquez’s written agreement with Comfort
Keepers, her engagement ended upon Maria’s death. “[O]f course, her job
would end then,” Senff stated, “because [Maria] no longer can get the care.”

¶11 Senff also testified that Maria directed her own care and
selected Enriquez as her caregiver. “Mercy Care clients through AHCCCS,”
Senff explained, “can decide what their own direct care is gonna [sic] be,
and then they can ask the employer to hire a specific caregiver to take care
of them.” The Mercy Care clients, in other words, “are actually doing the
hiring.” Comfort Keepers’ role, Senff went on, was limited to reviewing the
timesheets Enriquez submitted, issuing her checks, and billing Mercy Care.
When the ALJ asked, “it sounds like you’re working almost as a temporary
agency employing caregivers for specific patients, is that a fair
comparison?”, Senff replied, “Yeah.”

¶12 Before concluding the hearing, the ALJ asked Enriquez and
Senff if they had “anything else [they] would like to tell [him],” to which
they both answered no.

¶13 After the hearing, the ALJ issued a written decision “set[ting]
aside the deputy’s ruling that [Enriquez] quit this employment without
good cause,” determining instead that Enriquez “was discharged from this
employment, but not for . . . misconduct.” The ALJ made no express
findings about the circumstances and conditions of Enriquez’s caregiving
to Maria or whether Enriquez was an employee of Comfort Keepers as
opposed to an independent contractor. Instead, the ALJ assumed
Enriquez’s employee status, finding that she “was last employed as a
[c]aregiver by the employer, a home health care agency,” that the
“employer hired [Enriquez] at the request of one of their patients to serve
as a home health aide,” and that “the employer separated [Enriquez]” when
“the patient passed away.” Enriquez “did not wish to quit,” the ALJ found,
and the “employer initiated the separation” without offering her the
“option of continuing work.” Accordingly, the ALJ concluded that

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Opinion of the Court

Enriquez “qualifies for benefits” and that the “employer’s account is subject
to charges for benefits paid” to Enriquez.

¶14 Comfort Keepers petitioned the Appeals Board to review the
Appeal Tribunal decision, see A.A.C. R3-6-1504, arguing that Enriquez’s
caregiving services to Maria ended upon the latter’s death and “through no
fault of [Comfort Keepers].” Comfort Keepers also stated that Maria, not
Comfort Keepers, had “direct[ed] her care” as well as the “hours and
location” of services. In support of its petition, Comfort Keepers attached
Enriquez’s timesheets and a copy of A.R.S. § 23-613.01(A), which defines
“employee.”

¶15 The Appeals Board adopted the ALJ’s findings of fact and
legal conclusions and affirmed the Appeal Tribunal decision. The Appeals
Board expressly declined to address whether Enriquez was an employee of
Comfort Keepers because Comfort Keepers raised the issue in reliance on
“documents not in evidence and . . . arguments that were not presented at
the Appeal Tribunal hearing.”

¶16 Comfort Keepers applied for appeal to this Court, arguing
that Enriquez was not an employee under the statutory definition. We
granted the application for appeal. We have jurisdiction pursuant to A.R.S.
§ 41-1993(B).

DISCUSSION

¶17 Comfort Keepers challenges the Appeals Board’s decision
awarding Enriquez unemployment benefits chargeable to Comfort
Keepers. “We view the evidence in the light most favorable to upholding
the Appeals Board’s decision and will affirm if the decision is supported by
substantial evidence.” Johnson v. Ariz. Dep’t of Econ. Sec., 247 Ariz. 351, 355,
¶ 12 (App. 2019) (citation omitted). Further, “[w]e defer to the Appeals
Board’s findings of fact unless they are arbitrary, capricious, or an abuse of
discretion.” Id. “An agency abuses its discretion when it misapplies the law
or fails to consider the relevant facts.” Simmons v. Ariz. Dep’t of Econ. Sec.,
254 Ariz. 109, 111, ¶ 10 (App. 2022) (cleaned up).

¶18 Under Arizona’s Employment Security Act, A.R.S. §§ 23-601
to -799.01, unemployment benefits may be paid to individuals who lose
their jobs through no fault of their own under one of several
statutorily-defined circumstances. See A.R.S. § 23-771. Such benefits are
funded in part by contributions paid by employers. See A.R.S.
§§ 23-612, -701, -704(A). ADES “maintain[s] a separate account for each
employer,” crediting each account for all contributions and other payments

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made. A.R.S. § 23-727(A). Subject to certain statutory exceptions,
unemployment benefits “paid to an individual” are “charged against the
account[]” of the individual’s employer. A.R.S. § 23-727(C). An employer’s
required contributions are initially calculated as a percentage of wages the
employer pays in a calendar year but are calculated at a higher rate if
unemployment benefits are determined to be chargeable against the
employer’s account. A.R.S. §§ 23-728, -729.

¶19 To be eligible for unemployment benefits, a claimant must,
inter alia, have been paid wages for “insured work,” which, in turn, is
defined as “employment for employers.” A.R.S. §§ 23-619, -771(A)(6). The
term “employment” is defined as “any service of whatever nature
performed by an employee for the person employing the employee.” A.R.S.
§ 23-615(A). An “employee” is a person who “performs services for an
employing unit and who is subject to the direction, rule or control of the
employing unit as to both the method of performing or executing the
services and the result to be effected or accomplished.” A.R.S.
§ 23-613.01(A); accord A.A.C. R6-3-1723(A) (same). The statutory definition
of “employee” expressly excludes an “individual who performs services as
an independent contractor.” A.R.S. § 23-613.01(A)(1).

¶20 “[D]etermining whether an individual who performs services
is an employee” for purposes of unemployment benefits requires an
“examin[ation]” of “all material evidence pertaining to the relationship
between the individual and the employing unit.” A.A.C. R6-3-1723(D).
“The fundamental criterion” in determining the existence of an employer-
employee relationship, however, is “the extent of control the principal
exercises or may exercise over the agent.” Santiago v. Phx. Newspapers, Inc.,
164 Ariz. 505, 508 (1990). Factors to consider in assessing the extent of
control exercised over the worker include whether the worker “is required
to comply with” the employing unit’s “instructions about when, where and
how he is to work”; whether “the worker is required to account for his
actions” by submitting “reports bearing upon the method in which the
services are performed”; and whether the employing unit determines the
“hours of work” and “the amount of time the worker spends working.”
A.A.C. R6-3-1723(D)(2)(b), (c), (h), (j). Other factors to consider in assessing
the extent of the employing unit’s control are whether the worker retains
the “right to perform services for others”; whether the worker may
“use . . . other workers” to perform the services; and whether the worker or
the employing unit supplies the necessary “tools, equipment, [and]
materials.” A.R.S. § 23-613.01(A).

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Opinion of the Court

A. Comfort Keepers preserved its challenge to Enriquez’s
employee status by adequately raising the issue in its petition for
review to the Appeals Board.

¶21 Comfort Keepers argues that the Appeals Board’s
“determination should be reversed” because Enriquez “was not an
employee of Comfort Keepers at any time,” and so its “account should not
be charged for her termination.” At a minimum, Comfort Keepers asserts,
this Court should “remand” to ADES for “additional investigation and
findings of fact.”

¶22 In response, ADES and Enriquez (collectively, “Appellees”)
argue that this Court lacks jurisdiction to consider Comfort Keeper’s
challenge to Enriquez’s status as its employee because Comfort Keepers
purportedly failed to raise it in its petition for review to the Appeals Board.

¶23 Appellees are correct that this Court lacks jurisdiction to
consider an issue in an unemployment benefits case that was not raised in
the petition for review to the Appeals Board. A.R.S. § 41-1993(B) (“An issue
may not be raised on appeal that has not been raised in the petition for
review before the appeals board.”); see also Barriga v. Ariz. Dep’t of Econ. Sec.,
541 P.3d 1159, 1166 ¶ 25 (2024) (holding that court lacked jurisdiction to
consider issue that appellant did not raise “until he sought review from the
court of appeals”). But the record does not support Appellees’ contention
that Comfort Keepers did not challenge Enriquez’s status as its employee
in its petition for review to the Appeals Board. In its petition, Comfort
Keepers asserted that Maria, not Comfort Keepers, “direct[ed]” the “care”
that Enriquez provided to her, as well as the “hours and location” of
Enriquez’s services. Comfort Keepers also attached a copy of A.R.S.
§ 23-613.01(A), which defines “employee” as one “who performs
services . . . subject to the direction, rule or control of the employing unit.”
The information Comfort Keepers submitted to the Appeals Board can only
be interpreted as a claim that Enriquez was not its “employee” as the term
is statutorily defined. The petition thus preserved the issue for review. See
Shea v. Maricopa County, 528 P.3d 471, 476, ¶ 20 (2023) (rejecting challenge
to sufficiency of notice of appeal and noting courts’ “preference to look to
substance rather than to form when interpreting procedural devices”); cf.
Neal v. City of Kingman, 169 Ariz. 133, 136 (1991) (holding that the notice of
appeal of zoning decision need not “contain any ‘magic words’ or comply
with technical rules of court pleading” but need only, “in some fashion, give
fair notice of what will be challenged on appeal”).

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B. Comfort Keepers did not waive its challenge to Enriquez’s
employee status by failing to raise the issue before the Appeal
Tribunal.

¶24 Appellees next argue that, jurisdictional considerations aside,
Comfort Keepers waived its claim that Enriquez was not its employee by
failing to present it to the Appeal Tribunal.

¶25 When the underlying facts are not in dispute, a finding that a
claim or argument was waived is a legal determination that is reviewed de
novo. First Fin. Bank, N.A. v. Claassen, 238 Ariz. 160, 164, ¶¶ 16-17 (App.
2015). For several reasons, we reject Appellees’ assertion, and the Appeals
Board’s finding, that Comfort Keepers waived its challenge to Enriquez’s
employee status by failing to raise it at the hearing before the Appeal
Tribunal.

¶26 First, the parties’ presentations at the hearing before the
Appeal Tribunal must be viewed in light of the ALJ’s opening remarks. The
ALJ began the hearing by telling the parties that the reason for Enriquez’s
“separation from employment” was “the issue for determination today.”
(Emphasis added.) Because the ALJ identified the reason for the
discontinuance of Enriquez’s services as the sole issue to be addressed,
neither party can fairly be faulted for focusing on that issue, to the exclusion
of others, in presenting their evidence and arguments. See Volk v. Brame, 235
Ariz. 462, 467, ¶ 15 (App. 2014) (noting that due process requires that
litigants be given an opportunity to be heard in a meaningful manner on
“the issues the decision maker appears to regard as important”) (citation
omitted).

¶27 Second, identifying issues and eliciting evidence at a hearing
before the Appeal Tribunal is not the responsibility of the parties alone.
Hearings before the Appeal Tribunal are non-adversarial proceedings
whose purpose “is to gather sufficient information” on which to base “a fair
and intelligent decision upon the claim.” Emp. Sec. Comm’n v. Doughty, 13
Ariz. App. 494, 497 (App. 1970). Unlike the factfinder in an adversarial
proceeding, which is typically “not responsible for developing the record,”
State v. Walker, 159 Ariz. 506, 510 (App. 1989), the ALJ in an unemployment
benefits case must actively elicit evidence when necessary to create an
adequately developed record, A.A.C. R6-3-50190(A)(1) (“The adjudicator
must obtain all pertinent evidence reasonably available to make a non-
monetary determination.”); A.A.C. R6-3-1503(B) (“The Appeal Tribunal
shall conduct all hearings . . . in a manner that shall ascertain the substantial
rights of all the interested parties.”); Cramer v. Emp. Sec. Comm’n, 90 Ariz.

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350, 355 (1962) (holding that in “both original and appellate
determinations,” ADES must “actively . . . press the interested parties to
produce all relevant proofs . . . and, when necessary, independ[e]ntly . . .
take steps to get the facts . . . when the record made by the parties is
unsatisfactory”) (citation omitted). The Appeal Tribunal’s obligation to
“take more than a passive role in the fact finding process,” Doughty, 13 Ariz.
App. at 497, is particularly important when, as here, unrepresented parties
present evidence which, though equivocal, signals the need for further
inquiry into the claimant’s entitlement to the relief sought.

¶28 In her testimony, for example, Enriquez did not claim to be an
employee of Comfort Keepers. When the ALJ asked if she was, Enriquez
replied that her relationship with Comfort Keepers was “kind of hard to
explain.” Enriquez’s ambiguous answer should have prompted the ALJ to
ask follow-up questions to clarify the nature of the parties’ relationship. See
Cramer, 90 Ariz. at 355 (noting ADES’s responsibility to “get the facts to
assure the correct discharge of its duty properly to allow or disallow
benefits”) (citation omitted). At a minimum, the ALJ should have allowed
Enriquez to complete her answer rather than interrupting her to move onto
a different line of questioning.

¶29 Comfort Keepers, too, presented evidence that raised doubts
about Enriquez’s employee status. Senff testified that Mercy Care clients
such as Maria determine “what their own direct care” will be; that Maria,
rather than Comfort Keepers, hired Enriquez; and that Comfort Keepers’
only role was to provide billing and payroll services. Senff’s testimony,
which Enriquez never disputed, suggested that Comfort Keepers did not
exercise the kind of control over Enriquez necessary to establish an
employer-employee relationship. See Santiago, 164 Ariz. at 508; see also Smith
v. Ariz. Dep’t of Econ. Sec., 128 Ariz. 21, 28 (App. 1980) (“The factor which
distinguishes an independent contractor from an employee is that only the
latter is subject to the control of the employing unit as to the method of
performing the work.”). Although Comfort Keepers did not expressly
articulate the legal significance of Senff’s testimony, the ALJ should have
recognized its potential significance and inquired further into the nature of
the parties’ relationship. See Entrepreneurs Found. v. Emp. Dep’t, 340 P.3d 768,
773 (Or. Ct. App. 2014) (stating that an ALJ’s obligation to develop the
record in an unemployment benefits case ensures that “relevant evidence
does not go unpresented because of the ignorance or inexperience of a
party”) (citation omitted).

¶30 Although the ALJ completed his examination of both
Enriquez and Senff by asking if they had “anything else [they] would like

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Opinion of the Court

to tell [him],” this single, open-ended question was hardly adequate to
discharge the ALJ’s duty to ensure that the record was fully developed. On
the contrary, the testimony of both Enriquez and Senff should have
prompted the ALJ to direct specific questions to the witnesses to
“obtain . . . pertinent evidence reasonably available” to determine the
nature of the relationship between the parties. See A.A.C. R6-3-50190(A)(1).
The ALJ’s failure to ask such questions left an inadequate record on which
to determine Enriquez’s entitlement to unemployment benefits chargeable
to Comfort Keepers.

C. The Appeals Board abused its discretion by failing to
consider Comfort Keepers’ argument that Enriquez was not its
employee.

¶31 After the Appeal Tribunal made its decision on an insufficient
record, the Appeals Board compounded the error by finding that Comfort
Keepers waived its right to dispute Enriquez’s employee status. In
declining to address the issue because Comfort Keepers raised it for the first
time on review, the Appeals Board asserted that its function is merely “to
review the record of the testimony and other evidence” presented to the
Appeal Tribunal “to determine whether the [ALJ’s] decision is supported
by the record.” The Appeals Board added that it

does not accept additional information unless it can be shown
that such information could not have been presented at the
Appeal Tribunal hearing with the exercise of due diligence, or
unless the facts of the case establish some unusual
circumstance that justifies adding to the record. This record
does not establish either ground.

The Appeals Board’s narrow view of its role in the administrative process
is contrary to Arizona law.

¶32 ADES is responsible for administering unemployment
benefits laws with fidelity, ensuring that the law is applied as intended by
the Legislature. See Valencia Energy Co. v. Ariz. Dep’t of Revenue, 191 Ariz.
565, 575, ¶ 29 (1998) (noting the “axiom that an administrative agency . . .
must execute the law as it is written”). This duty requires, among other
things, that ADES award benefits only to those entitled to receive them and
charge such benefits only against the accounts of employers responsible for
them. Whether a claimant and an employing unit had an employer-
employee relationship is, therefore, the threshold issue in every
unemployment benefits case. See Beaman v. Superior Prods., Inc., 89 Ariz. 119,

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124 (1961) (the “threshold issue” in cases under the Employment Security
Act “is whether or not there exists an employer-employee relationship”).

¶33 Like the Appeal Tribunal, the Appeals Board has an
obligation to base its decisions on facts established by an adequately
developed record. Cf. Prebula v. Ariz. Dep’t of Econ. Sec., 138 Ariz. 26, 28 n.4
(App. 1983) (“[T]he appeals board is not bound by the factual findings of
the appeal tribunal and may make additional or contrary findings of fact.”).
If, as here, the Appeals Board determines that the issue of a claimant’s
relationship to the employing unit was not raised or adequately addressed
at the hearing before the Appeal Tribunal, the Appeals Board must take
steps to remedy the deficiency in the record, either by ordering
supplementation of the record on review or by remanding the case for the
taking of additional evidence. See A.R.S. § 23-672(C); see also A.R.S.
§ 23-671(E)-(F) (authorizing the Appeals Board to “[s]et aside the decision
of the appeal tribunal and remand . . . to another appeal tribunal for review
and decision,” “[o]rder the taking of additional evidence,” or “[r]emove the
proceedings to itself” and “order the taking of additional evidence”).

¶34 The Appeals Board’s role is not, in other words, analogous to
that of an appellate court reviewing the judgment of a trial court. In judicial
proceedings, it is the litigants, not the judges, who generally “define the
scope of inquiry” and marshal the evidence “on which the judicial
judgment is ultimately based.” Fed. Commc’ns Comm’n v. Pottsville Broad.
Co., 309 U.S. 134, 142 (1940). The litigants are responsible for developing
arguments and adducing evidence on which to stake their positions
because our judicial system is adversarial in nature and thus “designed
around the premise that the parties know what is best for them.” S. Point
Energy Ctr. LLC v. Ariz. Dep’t of Revenue, 251 Ariz. 263, 268, ¶ 26 (App. 2021)
(citations omitted), vacated in part on other grounds 253 Ariz. 30, 39, ¶ 38
(2022); see also Greenlaw v. United States, 554 U.S. 237, 243 (2008) (“In our
adversary system, . . . we rely on the parties to frame the issues for decision
and assign to courts the role of neutral arbiter of matters the parties
present.”). The nature of the adversarial system generally requires appellate
courts to confine the scope of their review to the record the parties
developed before the trial court. See, e.g., State v. White, 194 Ariz. 344, 354,
¶ 44 (1999) (“Our adversarial system properly and necessarily precludes
injection of new issues on appeal.”).

¶35 In administrative proceedings, by contrast, the “primary
responsibility for identifying and developing the issues” rests not on the
parties but on the agency. Sims v. Apfel, 530 U.S. 103, 112 (2000).
Accordingly, the principles that warrant limiting the scope of an appellate

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court’s review to the trial court record do not apply to the Appeals Board’s
review of Appeal Tribunal decisions. See id. at 110 (noting that the “wide
differences between administrative agencies and courts” militate against
“reflexively” applying principles governing “the relationship between
lower and upper courts” to administrative proceedings) (citation omitted).

¶36 Recognizing that new evidence may come to light and new
issues may arise over the course of an administrative proceeding, the
Legislature has expressly authorized the Appeals Board to consider
evidence and resolve issues in the first instance as long as it affords due
process to all parties. A.R.S. § 23-674(A) (“All interested parties to a hearing
before the appeal tribunal or the appeals board shall be given reasonable
notice . . . and . . . an opportunity for hearing. The notice shall state the . . .
issues involved but . . . if subsequent amendment of the issues is necessary, they
shall be fully stated as soon as practicable, and opportunity shall be afforded
all parties to present evidence and argument with respect thereto.”) (emphasis
added); A.R.S. § 23-674(D) (“The tribunal and the appeals board may admit and
give probative effect to evidence which possesses probative value . . . . The
tribunal and the appeals board may utilize their experience, technical competence
and specialized knowledge in the evaluation of the evidence presented to them.”)
(emphasis added).

¶37 This is not to say, of course, that the Appeals Board and the
Appeal Tribunal serve duplicative functions. Appeals Board reviews are
not de novo proceedings, and a party dissatisfied with an Appeal Tribunal
decision has no unfettered right to raise new issues or arguments on review.
Instead, a party seeking review of an Appeal Tribunal decision must allege
one or more of the grounds set forth in A.A.C. R6-3-1504(A). But evidence
bearing on the threshold issue in unemployment benefits cases—whether
the claimant was an employee of the entity whose account is to be
charged—necessarily comes within the scope of that rule, which authorizes
“an interested party” to petition for review of, inter alia, a prejudicial “abuse
of discretion” or “error in law” by the Appeal Tribunal or any “[o]ther good
and sufficient grounds.” A.A.C. R6-3-1504(A)(1)(b), (e)-(f). The Appeals
Board erred by invoking the waiver doctrine to affirm the Appeal Tribunal
decision based on a plainly incomplete record instead of taking the
measures authorized by statute and rule to ensure an adequate factual
record. Cramer, 90 Ariz. at 355.

D. Comfort Keepers’ challenge to Enriquez’s employee status
cannot be resolved on the present record.

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Opinion of the Court

¶38 Comfort Keepers asks us to reverse the Appeals Board’s
decision and hold, as a matter of law, that Enriquez was not its employee.
In support of its position, Comfort Keepers asserts that A.R.S. § 23-613.01
creates a presumption that an in-home caregiver is not an employee and,
therefore, is not entitled to unemployment benefits.

¶39 Section 23-613.01(A)(7) excludes from the definition of
“employee” home care service providers who “contract[] with a person
other than as an employee, whether directly or through an agent, to furnish
. . . life assistance services . . . such as . . . personal care.” By its terms, the
statute applies to the relationship between the caregiver and the care
recipient. Because the nature of the working relationship between Enriquez
and Maria is not at issue in this appeal, Section 23-613.01 does not apply
here.

¶40 In the alternative, Comfort Keepers asks us to reverse the
Appeals Board’s decision and determine, on the present record, that
Enriquez “was not Comfort Keepers’ employee” as that term is “statutorily
defined.” See Simmons, 254 Ariz. at 111, ¶ 10. For their part, Appellees urge
us to affirm the Appeals Board’s decision as supported by sufficient record
evidence.

¶41 Enriquez bears the burden of establishing her eligibility for
the benefits she claims. See Ross v. Ariz. Dep’t of Econ. Sec., 171 Ariz. 128, 129
(App. 1991). (“A claimant generally has the burden of proving that she is
eligible for unemployment benefits.”). Contrary to Appellees’ assertion, the
record does not contain substantial evidence to support a determination
that Enriquez is entitled to benefits chargeable to Comfort Keepers. In her
testimony at the hearing before the Appeal Tribunal, Enriquez did not even
claim that she was a Comfort Keepers employee, asserting instead that her
relationship with Comfort Keepers is “kind of hard to explain.”

¶42 Moreover, the record contains no evidence that Comfort
Keepers exercised any degree of control over the services Enriquez
provided to Maria. The record contains no evidence, for example, that
Comfort Keepers set Enriquez’s work schedule or gave her instructions
about when, where, or how to provide caregiving services. See Smith, 128
Ariz. at 28 (“Control is present when the individual is required to comply
with instructions about when, where and how he is to work.”) (citation
omitted). Likewise, although Enriquez submitted timesheets to Comfort
Keepers reflecting the dates and hours she worked, the record contains no
evidence that Comfort Keepers required Enriquez to report on the services
she provided. See id. (“If regular oral or written reports bearing upon the

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Opinion of the Court

method in which the services are performed must be submitted to the employing
unit[,] it indicates control in that the worker is required to account for his
actions.”) (emphasis added) (citation omitted).

¶43 Admittedly, Comfort Keepers’ written agreement with
Enriquez uses the terms “employee” and “employment.” But the language
of the parties’ written agreement, though relevant, is not conclusive;
“[c]ontract language does not determine the relationship of the parties.”
Santiago, 164 Ariz. at 508; see also A.A.C. R6-3-1723(D) (noting that although
“written contracts between the individual and the employing unit” may be
“review[ed]” when considering the unit’s “right to control” the individual,
“the substance, and not merely the form[,] of the relationship must be
analyzed”).

¶44 ADES argues that Comfort Keepers conceded Enriquez’s
employee status by using the term “employee” to refer to Enriquez in its
petition for review to the Appeals Board. We disagree. Comfort Keepers’
use of the term “employee” when referring to Enriquez is not dispositive.
After all, whether a worker “is an independent contractor [or an employee]
is a conclusion of law,” Anton v. Indus. Comm’n of Ariz., 141 Ariz. 566, 569
(App. 1984) (emphasis omitted), and a party’s assertions on questions of
law cannot bind ADES or this Court, see Word v. Motorola, Inc., 135 Ariz. 517,
520 (1983) (noting that parties “cannot stipulate as to the law . . . and bind
the court”) (citation omitted).

¶45 Although the record lacks evidence sufficient to establish
Enriquez’s entitlement to unemployment benefits chargeable to Comfort
Keepers, we decline Comfort Keepers’ invitation to resolve that issue
against her. The hearing transcript reflects that the ALJ expressly told the
parties that the only issue to be determined was the reason for Enriquez’s
“separation” from Comfort Keepers. Enriquez cannot fairly be faulted for
adhering to the ALJ’s directive instead of presenting evidence on a different
issue, i.e., whether she was an employee of Comfort Keepers to begin with.
Moreover, the transcript reflects that after the ALJ asked Enriquez if she
was an employee, he interrupted her before she could complete her answer.
Because neither party had an adequate opportunity to present evidence on
the threshold issue of whether Enriquez was an employee of Comfort
Keepers, this case must be remanded for further proceedings to determine
Enriquez’s eligibility for benefits and whether such benefits are chargeable
against Comfort Keepers’ account.

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Opinion of the Court

CONCLUSION

¶46 We reverse the decision of the Appeals Board and remand for
further proceedings in conformity with this decision.

AMY M. WOOD • Clerk of the Court
FILED: AA

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