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When is a Person an Employee of Another?
Lawyer Blogs |
2011/07/19 09:20
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On July 19, 2011, the Indiana Court of Appeals issued a decision which I found surprising in McCann v. City of Anderson, ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 48A02-1009-PL-1060. At issue was whether a trial court had properly granted summary judgment on the question of whether a warrant officer was an employee of the Anderson City Court. Despite the procedural posture of the case and factors that weighed in favor of finding an employer-employee relationship, the Court affirmed a decision granting summary judgment to the defendants.
In this case, McCann was a police officer, who eventually became warrant officer for the Anderson City Court in 1998. He held that post until 2005, when the judge asked that McCann be reassigned. As a result of this dismissal, McCann filed suit based on the Indiana Wage Statute, arguing that he had been an employee of the Court and was entitled to funds that had been allocated to the position of warrant officer by that court. The parties filed cross-motions for summary judgment and the trial court granted the defendants' motion.
On appeal, the Court quoted GKN Co. v. Magness, 744 N.E.2d 397, 402 (Ind. 2001), for the seven factors that a court should consider when determining whether an employer-employee relationship exists. The Court then analyzed each of these factors and determined that three weighed in favor of the existence an employer-employee relationship and four against, with the most important factor weighing against.
Thus, over all, four of the seven factors, including the most important, Control over the Means Used, indicate McCann was not an employee of the City Court. Because the City Court was not McCann's employer, he cannot be due any unpaid wages from the City Court. Therefore, he cannot assert a claim against the City Court under the Indiana Wage Statute.
The aspect of this decision that is most surprising is that the Court reached this conclusion despite the procedural posture of the case. It could have easily held that, viewing the facts in the light most favorable to McCann, the seven factors weighed both for and against a finding of an employer-employee relationship between McCann and the City Court created a genuine issue of material fact. This indicates that the factor the Court identified as being most important, whether the purported employer exercised control over the means used by the purported employee to perform work, is very important indeed.
Lesson:
1.It will be exceedingly difficult to prove the existence of an employer-employee relationship if the purported employer did not exercise control over the means that the purported employee used to perform his work.
Brad A. Catlin
Price Waicukauski amp; Riley, LLC
http://www.indianalawupdate.com/entry/When-is-a-Person-an-Employee-of-Another |
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Court Shows It Is Serious About Appellate Procedure
Lawyer Blogs |
2011/06/10 23:53
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On June 8, 2011, the Indiana Court of Appeals demonstrated it is serious about enforcing the Rules of Appellate Procedure in Garrard v. Teibel, Cause No. 45A04-1003-PL-229, a memorandum decision, uncitable as authority under App. R. 65(D). In this case, a pro se appellant failed to include any statement of the case after 2007 (although summary judgment proceedings occurred in 2009) and failed to include any of the designated evidence from the summary judgment proceedings in his appendix. The Court found that the pro se appellant had waived all arguments on appeal and affirmed the trial court's order.
Lessons:
1.Although the Court cuts people a lot of slack in the form and content of their brief, its generosity has bounds.
Brad A. Catlin
Price Waicukauski amp; Riley, LLC |
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No Second Chances for Faulty IRA Trusts
Lawyer Blogs |
2010/09/07 07:17
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font size=2Postmortem wealth transfers to IRA beneficiaries continues to present estate planning challenges.span style=mso-spacerun: yesnbsp; /spanAlthough perhaps not the final word on the matter, the IRS now prevents postmortem trust reformation designed to allow trustees to treat them as designated beneficiary trusts.span style=mso-spacerun: yesnbsp; /spanThe relevant ruling is PLR 201021038.
/fontfont size=2 face=arial,helvetica,sans-serifThe broadness of the limited power of appointment was perhaps the most critical flaw in the subject trust.span style=mso-spacerun: yesnbsp; /spanIt was too broad to be able to determine the correct measuring life.span style=mso-spacerun: yesnbsp; /spanThere were other flaws as well, most notably the trust’s naming of charities as potential beneficiaries.
/fontfont size=2font face=arial,helvetica,sans-serifThe tax consequences of this ruling are devastating to any similarly-flawed trust:span style=mso-spacerun: yesnbsp; /spanBeneficiaries cannot stretch out required withdrawals over the lifespan of the oldest beneficiary but would presumably have to withdraw all money from the plan within just a few years.
/fontfont face=arial,helvetica,sans-serifUnless a tax court modifies this ruling – and until it does – the bar is very high indeed for those who draft trusts for the purpose of receiving postmortem IRA distributions.span style=mso-spacerun: yesnbsp; /spanIn short, get it right the first time!span style=mso-spacerun: yesnbsp; /spanI would read and reread /font/fonta href=http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000401----000-.html target=_blankfont size=2 face=arial,helvetica,sans-serifsection 401(a)(9)/font/afont size=2 face=arial,helvetica,sans-serif to ensure the trust conforms to the section’s standards precisely.span style=mso-spacerun: yesnbsp; /spanGoing forward, you may also wish to give grantors an opportunity to review the terms of their trusts to ensure they conform with the changing law on this subject.span style=mso-spacerun: yesnbsp; /spanA brief look every three-to-five years is appropriate, although factors like ill health /font |
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