FILED
JULY 18, 2017
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
JEREMY J. MOBERG, )
) No. 34390-1-111
Appellant, )
)
v. )
)
TERRAQUA, INC., a/k/a TERRAQUA ) UNPUBLISHED OPINION
ENVIRONMENTAL CONSUL TING; )
MICHAEL B. WARD a/k/a MICHAEL B. )
WARDSKI; and UNKNOWN )
CORPORATION, )
)
Respondents. )
SIDDOWAY, J. - Jeremy Moberg sued Terraqua, Inc. for whom he worked for
over a decade, and its owner, Michael Ward. He claims Terraqua misclassified him as an
independent contractor, thereby avoiding the company's financial obligations as an
No. 34390-1-111
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employer; reneged on oral offers to give him ownership in the company; and delayed for
months in delivering his final paycheck. The trial court dismissed his claims on summary
judgment. He appeals dismissal of his claims alleging state wage law violations and
entitlement to an ownership interest based on theories of promissory estoppel and unjust
enrichment.
Terraqua's alleged promises of an ownership interest were too indefinite and Mr.
Moberg's evidence of unjust benefit is insufficient to support his promissory estoppel and
unjust enrichment claims. But under the test for employee status that we apply to his
wage claims-whether, as a matter of economic reality, he was dependent for fish
ecology work on Terraqua-material facts are disputed. We reverse dismissal of the
wage claims and remand for further proceedings.
FACTS AND PROCEDURAL BACKGROUND
Terraqua is a small business established in 1995 that provides fisheries research
and consulting. Michael Ward is its sole owner and principal officer. After working for
Terraqua as an intern in college, and then through an employment service firm, Jeremy
Moberg began working for Terraqua under a direct contract in 2001. He continued
entering into annual contracts with it to serve as a fish ecologist nearly every year until
2011. Terraqua declined to enter into further contracts with Mr. Moberg after the 2010
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contract expired on June 30, 2011.
In September 2011, Mr. Moberg sued Terraqua, asserting four claims for relief.
One claim, alleging violations of several of Washington's labor laws, was viable only if
Mr. Moberg had been an employee of Terraqua. Yet all ofTerraqua's contracts with Mr.
Moberg characterized him as an independent contractor.
Following the conduct of discovery, Terraqua moved for summary judgment
dismissing all of Mr. Moberg's claims. In support, it filed a 49-page declaration of Mr.
Ward and much shorter declarations from Holiday Sloan (Mr. Ward's ex-wife and a
former co-owner and officer of Terraqua); Mr. Moberg's ex-wife; and three individuals
(Joseph Ezell, Loren Doner, and Rueben Miller) who, like Mr. Moberg, had worked for
Terraqua under contracts characterizing them as independent contractors. Terraqua's
declarations included many attacks on Mr. Moberg as a person and an employee, and
addressed the fact that when he was not working for Terraqua, he had other business
ventures, including growing marijuana at a time when it was not legal. The declarations
of Messrs. Ezell, Doner, and Miller expressed satisfaction with being characterized by
Terraqua as independent contractors. Terraqua also presented evidence that Mr. Moberg
had spoken favorably in the past of his independent contractor relationship with the
company.
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Ms. Sloan, who "essentially ran the business" for Mr. Ward between 2007 and
2010, when he took a sabbatical, testified in her declaration as to why Terraqua "used the
independent contractor business model":
T erraqua used the independent contractor business model because it
is common in our industry, especially among small businesses, and because
it is an easy way to involve multiple people on the same project with
minimal coordination effort required and it kept the administrative burden
on the individual subcontractors' businesses rather than Terraqua.
Clerk's Papers (CP) at 962, 961.
Mr. Ward's declaration acknowledged that Terraqua's classification and use of
independent contractors was examined but not challenged in a 2009 audit by the Internal
Revenue Service (IRS). He also acknowledged that after terminating its relationship with
Mr. Moberg, Terraqua "transition[ ed] to a more employee-dominant business model over
the 2011 to 2013 time period." CP at 483. Mr. Ward attributed the company's revised
"employment" of workers to growth in Terraqua's business and resulting changes in its
administrative needs and demands, rather than to any belief that workers had previously
been misclassified. Messrs. Miller and Doner both acknowledged in their declarations
that they ceased to be treated as independent contractors by Terraqua in spring 2012,
becoming seasonal employees thereafter. Both claimed the change in status went hand-
in-hand with changes in their working relationship with T erraqua.
Most important for present purposes is the evidence Mr. Moberg presented in
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opposition to the motion for summary judgment and whether a jury could reasonably find
it supports his contention that he was, in fact, an employee. Mr. Moberg testified that
Terraqua's post-2012 "employees" did the same work they did when they were
subcontractors and that the company's transition to "employing" the workers is evidence
they had been misclassified earlier. But for the most part, his response keyed off this
court's 2010 decision in Anfinson v. FedEx Ground Package System, Inc., which held as
a matter of first impression that "employ" and "employee" under the Washington
Minimum Wage Act (MWA), chapter 49.46 RCW, have the broad "economic reality"
meaning applied under the federal Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C.
§§ 201-219. Anfinson, 159 Wn. App. 35,244 P.3d 32 (2010), aff'd, 174 Wn.2d 851,281
P.3d 289 (2012). That meaning has been characterized as "comprehensive enough to
require its application to many persons and working relationships, which prior to [the
FLSA], were not deemed to fall within an employer-employee category." Walling v.
Portland Terminal Co., 330 U.S. 148, 150-51, 67 S. Ct. 639, 91 L. Ed. 809 (1947).
Mr. Moberg's opposition materials addressed the six factor test adopted in
Anfinson, which is used by a majority of the federal circuits to determine as a matter of
economic reality, whether a worker is dependent on the business to which he renders
service or is, instead, in business on his own. The six nonexclusive factors are:
( 1) the permanence of the working relationship between the parties;
(2) the degree of skill the work entails;
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(3) the extent of the worker's investment in equipment or materials;
(4) the worker's opportunity for profit or loss;
(5) the degree of the alleged employer's control over the worker;
(6) whether the service rendered by the worker is an integral part of the
alleged employer's business.
159 Wn. App. at 52.
On the matter of the permanence of his working relationship with Terraqua, Mr.
Moberg testified that he worked for Terraqua "for twelve straight years; from 1998
through June of 2011." CP at 422. He testified and provided documentary evidence that
Mr. Ward directed him to identify himself in communications with Terraqua's main
client, the Bonneville Power Administration (BPA), as Terraqua personnel. He testified
that anytime he authored a publication, Mr. Ward insisted he identify himself as working
for Terraqua.
He testified that in several of the years he worked for Terraqua, he did so without
a written contract. Mr. Ward's own declaration acknowledged having no signed contract
with Mr. Moberg for the periods 7/2007-6/2008, 7/2009-6/2010, and 7/2010-6/2011, but
stated there had been verbal agreements with Mr. Moberg to extend prior contracts into
those periods, including agreement to negotiated increases in Mr. Moberg's hourly rate of
pay.
Mr. Moberg testified he never freelanced as a fish ecologist during the period he
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worked for Terraqua, performing that work only for Terraqua. He testified that although
his contracts stated he had the right to work for others, Mr. Ward made it clear that if Mr.
Moberg sought fish ecology consulting work elsewhere, his contract would be
terminated, which was Terraqua's prerogative with 14 days' notice.
On the matter of the degree of skill the work entails, Mr. Moberg testified that
during the field season (spring through fall), he would gather data and manage other
employees in the field, while in the off-season, he worked on publications, quantifying
and assuring the quality of data, scheduling, budgeting, and other tasks.
On the matter of the extent of the worker's investment in equipment or materials,
Mr. Moberg testified that Mr. Ward and Terraqua supplied him with all the tools needed
to do field work, describing the types of gear provided. He testified he would "routinely
purchase this gear for Terraqua on the Terraqua company credit card." CP at 424.
Although Mr. Moberg acknowledged owning a computer and using it to do work for
Terraqua, he testified that office work was not a significant part of his work for Terraqua,
the company paid him to use his computer, and Terraqua supplied him with all of the
office supplies he needed for his work. He testified Terraqua paid for all of his training.
On the matter of the worker's opportunity for profit or loss, Mr. Moberg testified
he was always paid hourly, so there was "no way for me to profit more or experience loss
based on efficiency/inefficiency in the work I did .... If I worked more hours I would
get paid more money ... like any employee." CP at 425.
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On the matter of the degree of the alleged employer's control over the worker, Mr.
Moberg testified he took direction mostly from Mike Ward, but also from Holiday Sloan,
as to how to complete his work. He testified:
I was not free to choose how to allocate my hours. Mike Ward directed me
on how to allocate my hours. Often times Mike Ward directed me to
change my hours from one billing category to another. Also, I was required
to schedule all the field workers and Mike Ward would approve or reject
my schedules.
CP at 424. He testified that Mr. Ward "tightly controlled" his hours and often would tell
him to stop working for various reasons. CP at 425. He testified that Mr. Ward required
that he approve Mr. Moberg's schedule and hours worked. He supported these
contentions with electronic mail communications between himself and Mr. Ward.
On the matter of whether the service he rendered was an integral part of the
alleged employer's business, Mr. Moberg testified that during the years he worked for
Terraqua, he was part of a small core group of personnel. The type of services he
claimed to have provided, as earlier described (data gathering, field work managing, data
analysis and publication, scheduling and budgeting) were described as part and parcel of
what Terraqua clients purchased from the company. In Mr. Ward's own declaration, he
had described Terraqua as helping client agencies "meet their electrical production and
fish and wild life obligations ... by doing thorough and precise science that is also cost-
efficient for our clients." CP at 481.
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Mr. Moberg's opposition materials demonstrated that during the period he worked
for Terraqua, the company had only two employees: its management employees, Mike
Ward and Holiday Sloan. He argued that the two employees could not and did not
perform the company's core "science" work for clients.
Mr. Moberg also submitted deposition testimony of Ms. Sloan and Mr. Ward in
opposition to summary judgment. The testimony, and an exhibit, identified what Ms.
Sloan told an IRS auditor in 2009 about the terms of its independent contractors' work
for the company. According to Mr. Moberg's opposition materials, much of what Ms.
Sloan told the IRS was false. He testified to eight examples of falsehoods.
The deposition testimony established that by the time of Mr. Ward's deposition,
Terraqua had gone from treating only Mr. Ward and Ms. Sloan as employees to treating
10 of its workers as employees. Finally, Mr. Ward identified the type of invoice Mr.
Moberg was required to submit to get paid for his work for Terraqua, including the
mileage and other expenses that he was allowed to have reimbursed by the company.
Reply declarations of Mr. Ward and Ms. Sloan submitted by Terraqua emphasized
the less than full-time nature of Mr. Moberg's work for Terraqua, and the fact that Mr.
Moberg's billings represented only six percent of Terraqua's gross receipts in his latter
years working for the company. Terraqua's counsel argued that Mr. Moberg should not
be heard to disclaim seven contracts he signed reciting his independent contractor status,
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nor should the court ignore the fact that Mr. Moberg filed his income tax returns as self-
employed, relying on that status to claim deductions that might not otherwise have been
available to him.
Turning to Mr. Moberg's claims that he had been promised by Mr. Ward to be
made a "partner" in Terraqua, the defendants offered a transcript of Mr. Moberg's
deposition, in which he testified as follows about the alleged promise:
[There were] conversations about, you know, "If we build this field
component, you know, it's a lucrative thing. It's how businesses make
money. And, you know, we could-we'll get to a point where we'll make
you a partner."
That was kind of an ongoing theme over the years.
CP at 844.
It was general. It was an assurance that, as I was growing his company,
that I would receive the benefits of that through some sort of partnership
ownership. It wasn't really spelled out, it was more of an assurance. It was
verbal promises, and I always had the expectation that they would be
fulfilled.
CP at 845.
Well, I don't know what [the partnership ownership] would look like. I had
no concept. All I knew was that I had been putting a lot of work into the
growth and success of Terraqua and that I would at some point benefit
through that through ownership, through solid salaries, and a commitment
that I knew that I would continue to work there and continue to grow the
company.
CP at 846.
It was just throughout the--it was throughout the years, on more of a-you
know, it was obviously never a formal commitment.
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CP at 851.
I don't think people use the word "promise" when they promise something,
but I was assured that my extra effort, which was really a lot of work and
determination to be successful for Terraqua, that I was encouraged with the
proposition-you could call it a promise-that I would at some point have
a documented partnership/ownership/employment relationship.
CP at 870.
Terraqua's motion for summary judgment was granted. The trial court concluded
in part that Mr. Moberg's independent contractor status while working for Terraqua was
not genuinely disputed.
Mr. Moberg appeals the dismissal of the wage related claims he asserts as an
employee (claims under the MWA, chapter 49.46 RCW; "Wage Payment Act" (WPA),
chapter 49.48 RCW; and "Wage Rebate Act" (WRA), chapter 49.52 RCW, arguing that
whether he was Terraqua's employee for those purposes is genuinely disputed. He also
contends he demonstrated that genuinely disputed facts require trial of his promissory
estoppel and unjust enrichment claims.
ANALYSIS
An order granting summary judgment is reviewed de novo, "considering the
evidence and all reasonable inferences from the evidence in the light most favorable to
the nonmoving party." Keck v. Collins, 184 Wn.2d 358,370,357 P.3d 1080 (2015).
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Summary judgment is appropriate where there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter oflaw. CR 56(c).
I. CLAIMS UNDER STA TEWAGE AND HOUR LAWS 1
The record does not reveal a quantification of overtime wages Mr. Moberg claims
not to have been paid, but he did assert a claim for unpaid overtime in opposing summary
judgment. Overtime is required by RCW 49.46.130 to be paid to employees working
longer than 40 hours in a workweek. As previously observed, the test of employee status
for purposes of chapter 49 .46 RCW is whether the worker is an employee "as a matter of
economic reality" in the sense that "the individual is dependent on the business to which
1
Terraqua makes a preliminary argument that Mr. Moberg's opening brief violates
several rules of appellate procedure and we should treat him as having waived all his
claims.
Terraqua is correct that Mr. Moberg's opening brief fails to set forth relevant facts.
Nonetheless, his briefing is clear that he is appealing the trial court's grant of summary
judgment dismissing his state wage and hour, promissory estoppel, and unjust enrichment
claims because, he argues, he demonstrated disputed facts that require trial. Given the de
novo nature of review of a summary judgment, that points us directly to the parties'
affidavits and other evidentiary submissions. "In a case where the nature of the appeal is
clear and the relevant issues are argued in the body of the brief and citations are supplied
so that the court is not greatly inconvenienced and the respondent is not prejudiced, there
is no compelling reason for the appellate court not to exercise its discretion to consider
the merits of the case or issue." State v. Olson, 126 Wn.2d 315,323, 893 P.2d 629
(1995).
Terraqua also argues that Mr. Moberg did not allege violations of the MWA or the
WPA in his complaint, but the complaint includes a claim for unpaid overtime, see CP
1064 at paragraph 26, and in addition to generally alleging a failure to pay wages in
violation of state law, see id., cites RCW 49.52.050 and .070 (the WRA), and RCW
49.48.030 (the WP A} as a basis for relief. See id. The wage claims were also addressed
in the parties' summary judgment briefing. See, e.g., CP at 157, 227-28, 231.
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he renders service"-the test applied to claims arising under the FLSA. Anfinson, 159
Wn. App. at 51.
Over the years, Mr. Moberg signed seven contracts that identified him as a
"subcontractor" of Terraqua and stated he would "function as an independent
Subcontractor, with rights to control the means of performing the services listed herein
and to perform services for other clients." CP at 582-611. But federal cases applying the
FLSA do not attach importance to the employer's label for its employees, and because
the MWA is based on the FLSA, federal authority under the FLSA provides helpful
guidance. Drinkwitz v. Alliant Techsystems, Inc., 140 Wn.2d 291, 298, 996 P.2d 582
(2000). "[A]n employer's self-serving label of workers as independent contractors is not
controlling." Brock v. Superior Care, Inc., 840 F.2d 1054, 1059 (2nd Cir. 1988).
One reason for attaching no importance to the employer's label is that different
tests control whether one is an independent contractor or employee for different purposes,
so even if the parties agree on the label, it is not clear what they mean by it. "The
distinction between independent contractors and employees arose at common law to limit
the principal's vicarious liability for the misconduct of a person rendering service to the
principal." Anfinson, 159 Wn. App. at 51. "In this context, the principal's supervisory
power was crucial because '[t]he extent to which the employer had a right to control [the
details of the service] activities was ... highly relevant to the question [of] whether the
employer ought to be legally liable' for the worker's actions." Id. (alteration in original).
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The purpose of distinguishing employees from independent contractors is
substantially different when a statute provides remedial protections to workers. Id. at 50-
51. The result is a substantially different definition of employee. Under the MWA, an
employee includes any individual "permit[ted] to work" subject to statutory exceptions,
none of which apply here. RCW 49.46.010(2); Anfinson, 174 Wn.2d at 867. "This is a
broad definition." Id.
Another reason for attaching no importance to an employer's label is that an
employee is not permitted to waive employee status, so the fact that a worker signs
contracts stating he or she was an independent contractor is not dispositive. Rochicheaux
v. Radcliff Material, Inc., 697 F.2d 662, 667 (5th Cir. 1983) (citing Donovan v. Am.
Airlines, Inc., 686 F.2d 267,269 n.3 (5th Cir. 1982)). Even the worker's subjective
opinion that he is a businessman rather than an employee does not change his status. Id.
(citing Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1315 (5th Cir. 1976)). Similarly, the
fact that an employee is issued a Form 1099 and reports his income and expenses as a
sole proprietor for tax purposes is also not controlling. See Olson v. Star Lift Inc., 709 F.
Supp. 2d 1351, 1356 (S.D. Fla. 2010).
Mr. Moberg also asserts claims under the WP A and WRA, which prohibit
employers from wrongfully withholding or diverting an employee's wages. RCW
49.48.010, 49.52.050. Those laws incorporate the "Industrial Welfare Act" definition of
employee. RCW 49.48.082(5)(b). Under the Industrial Welfare Act, chapter 49.12
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RCW, '" [e]mployee' means an employee who is employed in the business of the
employee's employer whether by way of manual labor or otherwise." RCW
49.12.005( 4).
Below, both parties assumed that "employee" as used in the WP A and WRA
should receive the same construction as the term's meaning under the MWA. Given the
remedial purpose of the statutes-both providing protections to workers-we assume
without deciding that this is correct. 2 But cf Ebling v. Gove 's Cove, Inc., 34 Wn. App.
495,498, 663 P.2d 132 (1983) (relying on a tort case, Hollingbery v. Dunn, 68 Wn.2d 75,
411 P .2d 431 (1966), for the common law right to control test in applying the WRA, but
with no indication that anyone suggested some other test might apply).
As earlier observed, courts consider the following nonexclusive factors to
determine whether an individual was an employee or an independent contractor:
2
We assume rather than decide the issue because it was not briefed by the parties.
See RAP 12.1. Nonetheless, we note that the remedial purpose of the WRA "is to protect
the wages of an employee against any diminution or deduction therefrom by rebating,
underpayment, or false showing of overpayment of any part of such wages. The act is
thus primarily a protective measure, rather than a strictly corrupt practices statute." State
v. Carter, 18 Wn.2d 590,621, 142 P.2d 403 (1943) (emphasis omitted). Our Supreme
Court has characterized the MWA, WP A, and WRA, as a "comprehensive scheme"
evidencing the legislature's strong policy in favor of payment of wages. Schilling v.
Radio Holdings, Inc., 136 Wn.2d 152,157,961 P.2d 371 (1998). It also appears that the
Washington Department of Labor and Industries applies the economic realities test to
determine worker status under the WRA. See SUCHI SHARMA, w ASH. STATE DEP'T OF
LABOR & INDUS., EMPLOYMENT STANDARDS PROGRAM OVERVIEW 9, (undated),
http://wastatecouncil.shrm.org/sites/wastatecouncil.shrm.org/files/
SHARMA%20Labor%20and%20Industries.pdf [https ://perma.cc/P7 65-JPQS].
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( 1) the permanence of the working relationship between the parties;
(2) the degree of skill the work entails;
(3) the extent of the worker's investment in equipment or materials;
(4) the worker's opportunity for profit or loss;
(5) the degree of the alleged employer's control over the worker;
( 6) whether the service rendered by the worker is an integral part of the
alleged employer's business.
Anfinson, 159 Wn. App. at 52. No one of these factors is dispositive; rather, the test is
based on a totality of the circumstances. Superior Care, 840 F.2d at 1059.
Viewing the evidence in the light most favorable to Mr. Moberg, genuine issues of
material fact exist as to most of the six factors. As to the matter of the permanence of the
working relationship between the parties, "Employees usually work for only one
employer and the relationship is continuous and of indefinite duration. Independent
contractors often have fixed employment periods and transfer from place to place as
particular work is offered to them." Harper v. San Luis Valley Reg'/ Med. Ctr., 848 F.
Supp. 911, 914 (D. Colo. 1994) (citations omitted). Terraqua emphasizes the one-year
fixed duration of its contracts with Mr. Moberg; Mr. Moberg emphasizes the fact that the
contracts were routinely renewed. In Usery, 527 F.2d at 1314, the court dealt with a
similar situation: the status of operators of laundry pick-up stations who had one-year
contracts that were routinely renewed. There, the court found the duration of the
relationship suggested dependence on the employer rather than satisfaction with a
contractual relationship, because none of the operators had a true business operation they
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could offer to other laundry facilities-all the operators could transfer was their own
labor. Id. This factor weighed in favor of employee status. Id.
Terraqua points to evidence that Mr. Moberg was happy working for Terraqua,
which it contends explains the length of their contractual relationship. It also points to
his contractual right to work for others, although Mr. Moberg's declaration raises a
question of fact whether he could have exercised that right without having his contract
with Terraqua terminated. Federal courts applying the permanency factor generally give
more weight to the actual length of the working relationship than to the contractual right
to terminate it. Hopkins v. Cornerstone Am., 545 F.3d 338, 345 (5th Cir. 2008).
As to the matter of the degree of skill the work entails, the "skill" at issue here is
not technical skill, because a variety of skilled workers who do not exercise significant
initiative in locating work opportunities have been held to be employees. Superior Care,
840 F .2d at 1060 (citing cases). It is, instead, whether the worker uses entrepreneurial
skill to secure contract employment. See id. Neither party briefed the factor in these
terms. It is undisputed, however, that Mr. Moberg never secured contract employment as
a fish ecologist for anyone else during the years he worked for Terraqua.
As to the matter of the worker's investment in equipment or material, "Large
personal investments are more representative of an independent contractor than an
employee. Such investments include 'large expenditures, such as risk capital, or capital
investments, and not negligible items or labor itself."' Perez v. Super Maid, LLC, 55 F.
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Supp. 3d 1065, 1077 (N.D. Ill. 2014) (quoting Dep 't of Labor v. Lauritzen, 835 F.2d
1529, 1537 (7th Cir. 1987). In weighing this factor, "courts must compare the worker's
investment in the equipment to perform his job with the company's total investment."
Keller v. Miri Microsystems LLC, 781 F.3d 799, 810 (6th Cir. 2015). We consider the
capital investment in light of the broader question-whether it signifies the worker's
economic independence-and may discount capital investment in items that the worker is
likely to have for personal use, such as a vehicle and a computer. Id.
Terraqua emphasizes the fact that it did not maintain work space for its
subcontractors, and that Mr. Moberg maintained his own. But Mr. Moberg's work and
storage space were in his home. Terraqua also points to capital investments that Mr.
Moberg made in business activities other than fish ecology work, such as farming. It
cites no authority, nor did we find any, that a worker's activities unrelated to the type of
service he is hired to perform for the employer is relevant in determining this or any other
factor.
Most significant is Mr. Moberg's testimony that apart from his computer and
vehicle, Terraqua provided him with the tools needed to do field work, including
specialized gear like GPS 3 units, fish electro-shockers, total stations and other surveying
equipment, data loggers, dry suits, wet suits, snorkel and masks and nets, among others.
3 Global Positioning System.
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It also reimbursed all his mileage. He testified that he would "routinely purchase this
gear for Terraqua on the Terraqua company credit card," with Mr. Ward's approval. CP
at 424. While Terraqua argues that it was client agencies like the BPA who actually paid
for the gear, BPA did so pursuant to its contract with Terraqua. As between Terraqua and
Mr. Moberg, it was Terraqua who held the BP A contract and thereby the ability to make
the gear available. As a result, Mr. Moberg was not required to make large capital
investments himself.
As to the matter of a worker's opportunity for profit or loss, the relevant inquiry is
whether Mr. Moberg had an opportunity for profit or loss that depended on his own
efficiency and managerial skill. See Hughes v. Family Life Care, Inc., 117 F. Supp. 3d
1365, 1371 (N.D. Fla. 2015). Managerial skill does not exhibit itself through working
additional hours, which is analogous to an employee's ability to work overtime.
Scant/and v. Jeffry Knight, Inc., 721 F.3d 1308, 1316-17 (11th Cir. 2013).
Terraqua argues that Mr. Moberg's contracts did not require full-time
employment-a matter of some dispute, since in discovery responses, Mr. Moberg
testified that he would not have had time to work for others. In any event, Terraqua
argues that because the work was not full-time, Mr. Moberg had the ability to develop
economic opportunities unrelated to the science he performed solely for Terraqua-
opportunities such as his farm and a marijuana growing operation. Here again, Terraqua
cites no authority that a less than full-time worker's ability to take on unrelated work is
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relevant to dependence on an employer for the work that is at issue. To the contrary,
federal cases hold that less than permanent full-time employment is indicative of
independent contractor status if the lack of permanence is because the worker is
successfully marketing his relevant skills to others-which is not the case here. It is not
indicative of independent contractor status if it is due to "operational characteristics
intrinsic to the industry," such as employers who use seasonal or part-time workers.
Superior Care, 840 F .2d at 1060-61.
As to the matter of the employer's control over the worker, what is significant is
whether the employee "exerts such a control over a meaningful part of the business that
she stands as a separate economic entity." Scantland, 721 F .3 d at 1313. Workers'
control over the hours when they work is not indicative of independent contractor status.
Dole v. Snell, 875 F.2d 802, 806 (10th Cir. 1989) (noting that flexibility in work
schedules is common to many businesses and is not significant in and of itself); accord
Doty v. Elias, 733 F.2d 720, 723 (10th Cir. 1984). In addition, if workers work from
home or offsite, an employer's lack of control is not particularly significant. Donovan v.
Dia/America Mktg., Inc., 757 F.2d 1376, 1384 (3d Cir. 1985)).
It does not matter that the control exercised by an employer might be dictated by
regulations or by a customer's demands. As the Eleventh Circuit explained in Scant/and,
"Business needs cannot immunize employers. . . . If the nature of a business requires a
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Moberg v. Terraqua, LLC
company to exert control over workers ... then that company must hire employees, not
independent contractors." 721 F .3d at 1316.
While Terraqua emphasizes the parties' contract language that Mr. Moberg will
function "with rights to control the means of performing the services listed herein," the
list of services required by the contract and other terms reflect aspects of Terraqua's
control. CP at 611 (emphasis added). For instance, Mr. Moberg's last, 2010-11 contract
included the following provisions:
• Terraqua identified the services and tasks to be performed, and that they must be
performed in a "workman like fashion,"
• Terraqua dictated the format in which Mr. Moberg would invoice for work, when
he could invoice, when he would be paid, and the documentary support he must
retain to support expenses, and
• Terraqua identified Mike Ward as the person who would provide
"[ s]ubcontractor' s direction."
CP at 611-12. Mr. Moberg's declaration in opposition to summary judgment provided a
number of examples of the "subcontractor's direction" that he received from Mr. Ward.
Finally, as to the matter of whether Mr. Moberg's work was integral to Terraqua's
business, it obviously was; Terraqua's core business-conducting science for clients-
was performed by its subcontractors. Terraqua admitted at summary judgment that Mr.
Moberg's work was integral to its business.
Considering all, reasonable jurors could find that the parties' contractual
characterization of Mr. Moberg as a subcontractor was not based on economic reality but
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Moberg v. Terraqua, LLC
that Terraqua "used the independent contractor business model," as Ms. Sloan put it, as a
matter of convenience and cost savings. Mr. Moberg's evidence was sufficient to raise a
genuine issue of material fact whether, under the totality of circumstances, he was
misclassified as an independent contractor and should have been treated for purposes of
the MWA, WP A, and WRA as an employee.
II. PROMISSORY ESTOPPEL
To prevail on a claim of promissory estoppel, a party must demonstrate five
elements:
"(1) [a] promise which (2) the promisor should reasonably expect to cause
the promisee to change his position and (3) which does cause the promisee
to change his position (4) justifiably relying upon the promise, in such a
manner that (5) injustice can be avoided only by enforcement of the
promise."
Wash. Educ. Ass'n v. Dep't ofRet. Sys., 181 Wn.2d 212, 224-25, 332 P.3d 428 (2014)
(alteration in original) (quoting Havens v. C&D Plastics, Inc:, 124 Wn.2d 158, 171-72,
876 P.2d 435 (1994)). "Importantly, '[p]romissory estoppel requires the existence of a
promise' that is 'clear and definite.'" Wash. Educ. Ass 'n, 181 Wn.2d at 225 (alteration in
original) (quoting Havens, 124 Wn.2d at 172). "This court has adopted the Restatement's
definition of 'promise': 'A promise is a manifestation of intention to act or refrain from
acting in a specified way, so made as to justify a promisee in understanding that a
commitment has been made.'" Id. at 225 (quoting RESTATEMENT (SECOND) OF
CONTRACTS § 2( 1) (AM. LA w INST. 1981)). But "[a] statement of future intent is not
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No. 34390-1-111
Moberg v. Terraqua, LLC
sufficient to constitute a promise for the purpose of promissory estoppel. An intention to
do a thing is not a promise to do it." Elliott Bay Seafoods, Inc. v. Port ofSeattle, 124 Wn.
App. 5, 13, 98 P.3d 491 (2004).
Mr. Moberg asserts promissory estoppel as a basis for enforcing Mr. Ward's
alleged promise to make him a partner ofTerraqua. But Mr. Moberg's own deposition
testimony as to statements made by Mr. Ward, reproduced above, establishes only that
Mr. Ward made statements of future intent. Mr. Moberg himself admits that no formal
commitment was ever made, that the terms were not discussed, and the issue was one to
be worked out in the future. Such statements are too vague for a court to enforce.
Mr. Moberg's evidence does not raise a question of fact as to whether a clear and
definite promise was made-an essential element of promissory estoppel. On that basis
alone, summary judgment was proper.
III. UNJUST ENRICHMENT
A party may bring a claim for unjust enrichment to recover the value of a benefit
retained even absent any contractual relationship, if fairness and justice require it. Young
v. Young, 164 Wn.2d 477,484, 191 P.3d 1258 (2008). The party must prove three
elements: "(1) the defendant receives a benefit, (2) the received benefit is at the plaintiffs
expense, and (3) the circumstances make it unjust for the defendant to retain the benefit
without payment." Id. at 484-85.
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Moberg v. Terraqua, LLC
Mr. Moberg claims he conferred on Terraqua the benefit of his "dedication, long
hours and hard work." Br. of Appellant at 16. The result, he claims, was to expand ~eld
work and increase Terraqua's revenue, as evidenced by an increase in the value of
Terraqua's contracts with the government from $42,141 in 2003 to over $1,000,000 in
2011.
It is clear the contracts Terraqua entered into increased in value. But Mr. Moberg
provides no evidence that it was his efforts that resulted in the increase and no viable
argument why the increased business should be viewed as an injustice to him rather than
as Mr. Ward's reward for sound hiring and management decisions. "[T]o defeat a motion
for summary judgment, a party must present more than '[u]ltimate facts' or 'conclusory
statements."' SentinelC3, Inc. v. Hunt, 181 Wn.2d 127,140,331 P.3d 40 (2014) (second
alteration in original) (quoting Grimwood v. Univ. of Puget Sound, Inc., 110 Wn.2d 355,
359-60, 753 P.2d 517 (1988)).
Mr. Moberg's citation to Duckworth v. Langland, 95 Wn. App. 1, 3-4, 988 P.2d
967 ( 1998) is inapposite. Duckworth relates to the enforceability of an oral partnership
agreement. The issue here is whether Mr. Moberg conveyed a benefit to Terraqua that it
would be unjust for Terraqua to retain without reimbursing Mr. Moberg. Dismissal of the
unjust enrichment claim was proper.
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IV. COSTS
Under RAP 14.2, the party who substantially prevails on appeal is entitled to costs.
Because each party prevailed on significant issues, we decline to award costs.
We reverse summary judgment dismissal of the MWA, WPA, and WRA claims;
affirm dismissal of the promissory estoppel and unjust enrichment claims; and remand for
further proceedings consistent with this opinion.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
WE CONCUR:
j
Pennell, J.
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