Ibrahim v. Mkts llc/special Fund

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

HAMZAH IBRAHIM, Petitioner Employee,

v.

THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,

MKTS LLC, Respondent Employer,

SPECIAL FUND DIVISION/NO INSURANCE SECTION,
Respondent Party in Interest.

No. 1 CA-IC 24-0004
FILED 10-08-2024

Special Action - Industrial Commission
ICA Claim No. 20213340180
The Honorable Rachel C. Morgan, Administrative Law Judge

AFFIRMED

COUNSEL

Broening Oberg Woods & Wilson PC, Phoenix
By Kelley M. Jancaitis, Brian A. Weekley
Counsel for Petitioner Employee

Industrial Commission of Arizona, Phoenix
By Afshan Peimani
Counsel for Respondent
James F. Mahoney PLC, Scottsdale
By James F. Mahoney
Counsel for Respondent Employer

Arizona Attorney General’s Office, Phoenix
By Sophia Cox
Counsel for Respondent Party in Interest

MEMORANDUM DECISION

Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge Maria Elena Cruz and Judge Andrew M. Jacobs joined.

T H U M M A, Judge:

¶1 This case turns on whether Hamzah Ibrahim was an
employee of MKTS, LLC., when he was injured. Following an evidentiary
hearing, an Industrial Commission of Arizona (ICA) Administrative Law
Judge (ALJ) determined that Ibrahim was an independent contractor, not
an employee, and on that basis denied his claim. Because Ibrahim has
shown no error, the award is affirmed.

FACTS AND PROCEDURAL HISTORY

¶2 Ibrahim was seriously injured when a semi-tractor trailer
truck he was driving rolled over while on a haul for MKTS, a general freight
carrier. It was Ibrahim’s first trip working as a driver for MKTS. He filed a
claim with the ICA, but MKTS denied responsibility arguing Ibrahim was
not an employee. MKTS based its denial on a “Company Truck Driver
Independent Contractor Agreement” that set forth terms of Ibrahim’s status
as a truck driver for MKTS.

¶3 At an evidentiary hearing, both Ibrahim and MKTS’ owner
Mazin Jardak testified about the relationship. The ALJ did not find
Ibrahim’s testimony to be credible and found Jardak’s testimony was
credible. This court defers to those determinations, viewing the facts in a
light most favorable to upholding the award. See Lovitch v. Indus. Comm’n,
202 Ariz. 102, 105 ¶ 16 (App. 2002). Application of the law to those facts,
however, is reviewed de novo. See Young v. Indus. Comm’n, 204 Ariz. 267,
270 ¶ 14 (App. 2003).

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¶4 The evidence received at the hearing shows that MKTS is a
long-distance trucking company. In September 2020, Ibrahim and MKTS
entered into the Agreement to provide services described as “Truck
Driver.” Although Ibrahim would be paid weekly, the Agreement included
no rate of payment. The Agreement allowed MKTS to keep the final week’s
pay if sufficient notice was not provided. Ibrahim had to provide a vehicle
and any equipment, tools and materials needed to perform the work. He
was required to “follow the stated speed limits” and keep a paper log “on
hand.” He was also required to maintain a log “through truck tablets” and
was prohibited from using a cell phone for that purpose. The Agreement
also states that Ibrahim and those who work with him will comply with
licensing and permitting requirements, that MKTS will not provide
unemployment or workers’ compensation insurance and that MKTS will
not withhold payroll taxes.

¶5 Ibrahim could terminate the Agreement at any time with 14
days’ written notice. MKTS could terminate the Agreement immediately
without notice for any “act exposing [MKTS] to liability to others for
personal injury or property damage, causing delay in delivery, being not
on time for work schedule.” Jardak testified that he explained the
Agreement to Ibrahim before he signed it. Although the Agreement states
that it was to take effect on the signatures of both parties only Ibrahim
signed the Agreement.

¶6 MKTS retained Ibrahim after he passed drug screening and
driving tests. At that time, Ibrahim had a commercial driver’s license and a
required medical certificate but did not own a truck. Two months after
signing the Agreement, Ibrahim contacted Jardak and said he was ready to
work. MKTS then leased a truck from Penske (a company Ibrahim selected)
and subleased that truck to Ibrahim, which Ibrahim intended to use to make
runs between Phoenix and Salt Lake City. MKTS installed electronic
equipment in the truck that tracked and logged mileage as required by
federal law.

¶7 Jardak testified that drivers typically are paid 85 percent of
the price MKTS charges its customers per trip, with MKTS keeping the
remainder. Ibrahim was required to make truck lease payments and
reimburse MKTS for the electronic log equipment rental. Ibrahim
purchased fuel using an MKTS card and reimbursed MKTS. Those are
considered “expenses” of driving. Ibrahim also reimbursed MKTS for cargo
liability insurance it supplied. Jardak testified that MKTS held the last
payment for two weeks after a driver stops working in case the driver
receives a traffic ticket.

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¶8 Jardak emphasized that drivers can decline trips and need not
drive exclusively for MKTS. Ibrahim was injured during a one-way
delivery to Utah. Had Ibrahim wanted to haul freight on the return trip, he
would have to get another load from MKTS or another carrier.

¶9 MKTS argued that Ibrahim was an independent contractor
because MKTS had no right to control how Ibrahim accomplished the task
for which he was hired – the transfer and delivery of goods. MKTS
contended that any requirements imposed on Ibrahim were mandated by
federal regulations regarding motor carriers hauling freight. MKTS
emphasized that Ibrahim could “grow [his] fleet” of trucks and hire drivers
who drove for him, like other independent contractors. Ibrahim countered
that MKTS was not entitled to the statutory presumption in favor of an
independent contractor relationship because the written Agreement did not
comply with A.R.S. § 23-902(D). He also argued he was an employee
because the services he was providing were “integral” to MKTS’ business
and because MKTS “cannot contract [] out the very heart of [its] business.”
The Special Fund also argued Ibrahim was an employee based on factors it
contended showed MKTS had the right to control Ibrahim’s work.

¶10 The ALJ concluded that Ibrahim was not MKTS’ employee.
The ALJ cited multiple factors showing Ibrahim’s independence, including:
(1) entering the Agreement but not reporting for work until two months
later; (2) providing his own truck subleased from MKTS; (3) choosing the
truck rental company; (4) expenses being deducted from payment and (5)
MKTS did not require certain routes or hours. The ALJ also noted that
Ibrahim agreed to obtain his own workers’ compensation coverage.
Accordingly, the ALJ concluded that a statutory rebuttable presumption of
independent contractor status applied, see A.R.S. § 23-902(D), and ruled in
MKTS’ favor.

¶11 In requesting reconsideration, Ibrahim again argued that the
Agreement did not meet statutory requirements and could not support the
presumption of independent contractor status. Most notably, both parties
did not sign the Agreement. He then re-urged his argument that the
relationship between MKTS and himself had the earmarks of an employer-
employee relationship. After MKTS responded, the ALJ summarily
affirmed. This statutory special action followed.1

1 The Special Fund Division/No Insurance Section of the ICA did not
submit argument to this court.

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DISCUSSION

¶12 This court defers to the factual findings of the ALJ but reviews
questions of law de novo. See Young, 204 Ariz. at 270 ¶ 14. The court may
independently assess whether an injured worker is an employee or an
independent contractor based on the totality of facts and circumstances.
Cent. Mgmt. Co. v. Indus. Comm’n, 162 Ariz. 187, 189 (App. 1989) (citing
cases). The language of a contract between a company and an injured
individual is not determinative, but it is one factor to consider. Santiago v.
Phoenix Newspapers, Inc., 164 Ariz. 505, 508 (1990) (citing cases). To further
the remedial purposes of workers’ compensation law, courts interpret the
term “employee” broadly and liberally. See Schaeffer Trucking v. Indus.
Comm’n, 141 Ariz. 408, 410 (1984). A court, however, should not “impose
burdens and liabilities which are not within the terms or spirit of the
[workers’ compensation statutes].” Meno’s Constr., L.L.C. v. Indus. Comm’n,
246 Ariz. 521, 526 ¶16 (App. 2019) (citations omitted) (internal quotation
omitted).

¶13 “An independent contractor is not an employee [under]
workers’ compensation law.” Danial v. Indus. Comm’n, 246 Ariz. 81, 83 ¶ 12
(App. 2019). Arizona’s workers’ compensation law defines an employee as
a worker whose work “is a part or process in the trade or business of the
employer” and over whose work the hirer retains supervision or control.
Ariz. Rev. Stat. (A.R.S.) § 23-902(B)(2024).2 An independent contractor, by
contrast, is a worker who is “not subject to the rule or control” of the hirer
and is “engaged only in the performance of a definite job or piece of work.”
A.R.S. § 23-902(C). “The distinction between an employee and independent
contractor . . . rests on the extent of control the employer may exercise over
the details of the work.” Cent. Mgmt. Co., 162 Ariz. at 189. This requires
consideration of the “totality of the facts and circumstances of each case,
examining various indicia of control.” Anton v. Indus. Comm’n, 141 Ariz. 566,
571 (App. 1984) (quoting Home Ins. v. Indus. Comm’n of Ariz., 123 Ariz. 348,
350 (1979)).

¶14 When an independent contractor relationship is desired, the
parties may enter into a written agreement that complies with A.R.S. § 23-
902(D). Among other things, A.R.S. § 23-902(D) requires that both parties
sign the independent contractor written agreement. The Agreement here is
signed by Ibrahim but not MKTS. Thus, it does not comply with subsection
(D). Nor does the statute allow for “substantial” compliance; to fully benefit

2 Absent material revisions after the relevant dates, statutes and rules cited

refer to the current version unless otherwise indicated.

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from the statutory presumption, subsection (D) requires “a fully completed
written agreement that satisfies the requirements” of that statute. A.R.S. §
23-902(D). The ALJ, therefore, erred by applying the statutory presumption.

¶15 Because this court makes a de novo decision on the legal
question of the parties’ relationship, that error is not dispositive here. This
court will analyze the relationship under A.R.S. § 23-902(B) and (C), which
focuses on the right to control the worker. Thus, we consider the evidence
without applying the subsection (D) presumption.

¶16 In Home Insurance, the Arizona Supreme Court identified
factors indicating the right to control, noting that none are conclusive:

duration of employment; the method of
payment; who furnishes necessary equipment;
the right to hire and fire; who bears
responsibility for workmen’s compensation
insurance; the extent to which the employer
may exercise control over the details of the
work; and whether the work was performed in
the usual and regular course of the employer’s
business.

123 Ariz. at 350. In addition,

any supervision or control exercised by an
employing unit to comply with any statute, rule
or code adopted by the federal government, this
state or a political subdivision of this state or
any requirement of licensing, professional or
ethical standards may not be considered for the
purposes of determining the independent
contractor or employment status of any
relationship or individual for the purposes of
this title.

A.R.S. § 23-1602. Therefore, compliance with federal law (including federal
motor carrier requirements) is not an indication of control by MKTS.

¶17 The most significant factor favoring an employer-employee
relationship here is the nature of Ibrahim’s work. Ibrahim’s work as a driver
for MKTS was in the usual and regular course of MKTS’ long-haul trucking
business, not incidental or ancillary to it. That said, very little indicia of
control are present here. Ibrahim was responsible for supplying a vehicle

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and all tools necessary to complete the work. The fact that he leased a truck
and other equipment from MKTS, and borrowed funds from MKTS for fuel
purchases, does not favor an employee relationship, as Ibrahim remained
legally responsible for those necessities. Neither do the delivery time and
place requirements indicate MKTS control, as those details are dictated by
the nature of the work. MKTS did not mandate specific routes or driving
hours. Any requirements by MKTS were those mandated by motor carrier
regulations.

¶18 Ibrahim argues that the misapplication of the presumption
affected the ALJ’s credibility findings. The record, however, does not
support that argument. The record also fails to support Ibrahim’s argument
that MKTS exercised any more control than was necessary to comply with
motor carrier regulations. Furthermore, several facts that Ibrahim contends
are evidence of an employer-employee relationship are not, such as MKTS’
transportation of Ibrahim from Las Vegas to Phoenix to fill out employment
paperwork, assisting Ibrahim with English translation of documents,
procuring his preferred route to provide full-time work, or Ibrahim’s move
from Las Vegas to Arizona to start work for MKTS.

¶19 Citing Anton and Central Management, Ibrahim contends that
because he was hired to provide services that are the “very heart” of MKTS’
business—long haul trucking—that single factor by itself outweighs the
other factors tending to show an independent contractor relationship. The
law, however, is to the contrary. The nature of the work is one of several
factors to weigh and balance, even if it might weigh heavily at times. The
fundamental test is the right to control how the work is performed: “The
right to control or supervise the method of reaching a specific result
determines whether an individual is an employee or an independent
contractor.” Home Ins., 123 Ariz. at 350. “In deciding whether a worker is an
employee we look to the totality of the circumstances and the indicia of
control.” Santiago, 164 Ariz. at 510.

¶20 In Anton, a woodcutting business hired a woodcutter and,
after the woodcutter was injured, the woodcutting business claimed the
woodcutter was an independent contractor. See 141 Ariz. at 568. The court
recognized the woodcutter was hired to perform an integral part of the
hirer’s regular business. Id. at 573. In that circumstance, the court noted “the
relative nature of the [woodcutter]’s work bears heavily on the question of
whether the [woodcutter] is an employee or an independent contractor.” Id.
at 572. The court noted the substantial control the business exercised over
the woodcutter, even requiring the woodcutter to use a saw and not an axe.
Id. at 570-71. The court concluded the woodcutter’s job was “an ongoing

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basic employment activity of the business owner as opposed to an
incidental part of the owner’s normal operation,” id. at 573, to find the
woodcutter was an employee and not an independent contractor, id. at 574.

¶21 In Central Management, a taxi service operated, maintained,
controlled and presented to the public vehicles that were leased as the usual
and regular course of its business. 162 Ariz. at 190-91. Drivers who leased
vehicles from the taxi service were thus engaged in the regular course of
the taxi service’s business and not simply leasing the vehicles. Id. That
factor, along with “additional indicia of control,” justified affirming the
ALJ’s determination that the drivers were employees rather than
independent contractors. Id. at 191-92.

¶22 Outside the core function of Ibrahim’s work, there are no
significant indicia of control by MKTS. Setting aside federal regulation
mandates, as Arizona law requires, and the requirements integral to the
task itself (such as specific times for pickup and delivery and destinations),
MKTS had minimal rights to control Ibrahim and how he accomplished his
work. He was not limited to a particular route or specific times to drive. He
was free to deliver the cargo in any way that ended in a timely, undamaged
arrival at the destination. He was not required to lease a truck from MKTS
and was free to use some other vehicle, either borrowed, bought or leased.
And while MKTS allowed him to use its fuel card, Ibrahim was responsible
for reimbursing that cost. MKTS did not supply any of Ibrahim’s costs of
doing business.

¶23 Under Arizona worker’s compensation law, the evidence here
does not show that MKTS had a right to control Ibrahim’s work to the extent
that an employer-employee relationship was created rather than the
independent contractor relationship urged by MKTS.

CONCLUSION

¶24 The award is affirmed.

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

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