Twism Ents., L.L.C. v. State Bd. Registration for Professional Engineers & Surveyors

Citation: 2021 Ohio 3665Docket: C-200411, C-210125

Court: Ohio Court of Appeals; October 13, 2021; Ohio; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The Ohio Court of Appeals reversed the trial court's judgment in favor of Twism Enterprises, LLC (Twism) regarding the denial of its application for a Certificate of Authorization (COA) to provide engineering services. The State Board of Registration for Professional Engineers and Surveyors (the Board) had denied Twism's application, asserting that it failed to designate a full-time manager responsible for its engineering activities, as required by R.C. 4733.16(D). 

Shawn Alexander, Twism's principal, had applied for the COA in December 2018, designating James L. Cooper, a licensed professional engineer, as the responsible engineer. Cooper was to act as an independent contractor and not a full-time employee. The Board expressed concerns about Twism performing engineering services without a COA and subsequently denied the application, stating that Cooper did not meet the employment criteria outlined in Ohio law. 

Twism appealed the denial, arguing that Cooper would serve as the full-time manager of their engineering activities. However, a hearing officer concluded that Cooper's status as a 1099 independent contractor did not satisfy the requirements for a responsible engineer as defined by Ohio regulations. The Board adopted the hearing officer's recommendation to uphold the denial of the COA. Twism also cross-appealed concerning the trial court's denial of its attorney’s fees.

Twism appealed a decision from the Board to the Hamilton County Court of Common Pleas, which resulted in a magistrate reversing the Board's ruling. The Board objected to this decision, but the trial court upheld the magistrate's ruling, clarifying that R.C. 4733.16(D) only requires firms to designate one or more full-time managers responsible for professional engineering or surveying activities, with those managers needing to be registered in Ohio. The trial court emphasized that its interpretation aligned with the stipulated fact that Cooper, a professional engineer and 1099 employee of Twism, was appropriately designated as the full-time manager. The court rejected the Board's assertion that a full-time manager must be a W-2 employee exclusively devoted to one company, labeling this as an unreasonable, unwritten requirement beyond the statute's scope. Consequently, the court reversed the Board's decision and mandated the issuance of a Certificate of Authorization (COA) to Twism.

Subsequently, Twism sought attorney's fees, arguing it was the prevailing party and that the Board's position lacked substantial justification, as noted by both the magistrate and the trial court. However, the court denied this motion, finding the Board justified in its actions as it aimed to protect public interest.

Regarding the Board's assignment of error, the trial court and parties acknowledged no factual disputes. The key issue for the appellate court is whether the trial court properly interpreted R.C. 4733.16(D) and Ohio Adm.Code 4733-39-02, specifically whether an independent contractor can serve as a full-time manager for obtaining a COA. The Board contended that the trial court failed to defer to its interpretation of the law, which it believed was reasonable. However, it is noted that the court's initial responsibility is to assess any ambiguities in the statute or rule.

A court does not owe deference to an administrative interpretation of an ordinance unless it is deemed ambiguous, as supported by precedents such as *Cleveland Clinic Found. v. Bd. of Zoning Appeals* and *Wells Fargo Bank, N.A. v. Isaacs*. Deference to an agency’s interpretation applies only when regulations are ambiguous, as established in *Lang v. Dir. Ohio Dept. of Job and Family Servs.* Courts and agencies must honor the clear intent of the legislature, with the principle that if Congress's intent is clear, no further interpretation is necessary. An unambiguous administrative rule does not warrant deference; thus, if both the statute and rule are clear, the court's review is a straightforward legal question conducted de novo. A statute is considered ambiguous if its language permits more than one reasonable interpretation, as noted in *Bernard v. Unemp. Comp. Rev. Comm.* Conversely, when statutory language is clear and unequivocal, no additional interpretation is required, and the statute should be applied as written. Courts must adhere to plain statutory language, applying it strictly without modifications, as illustrated in cases like *State ex rel. Newark Group, Inc. v. Admr. Bur. of Workers’ Comp.* 

Specifically, R.C. 4733.16 mandates that each limited liability company offering professional engineering or surveying services must designate responsible individuals registered in the state. Independent contractors differ from employees as they offer specialized services under specific contractual terms, do not typically work regularly for an employer, cover their own expenses, and have control over their work schedules and job performance.

The term "full-time manager" is ambiguous, with reasonable interpretations suggesting it could refer to either a directly employed individual or an independent contractor tasked with management duties for an entity seeking a Certificate of Authorization (COA). Under R.C. 4733.16(D) and Ohio Adm.Code 4733-39-02(B), a full-time manager must work over thirty hours per week or handle most of the engineering services. The Board interpreted that "working for" requires direct employment, while Twism argued that Cooper, an independent contractor who bills Twism for his services, meets the criteria. Both interpretations are deemed reasonable, leading to the conclusion that the term is ambiguous, necessitating deference to the Board’s interpretation.

The trial court erred by reversing the Board's denial of Twism's COA application. It was undisputed that Twism designated Cooper as its manager, that he was named in the operating agreement, and that he was registered as a professional engineer in Ohio. The Board, as the expert body, should have had its reasonable interpretation honored by the trial court. Consequently, the appellate court reversed the trial court’s decision and ruled in favor of the Board, deeming Twism's motion for attorney’s fees moot due to this reversal. The court concluded that the trial court improperly substituted its judgment for that of the Board regarding the independent contractor relationship.