Wash. Court of Appeals published opinion — 323820.opn.pdf

Citation: Wash. Court of Appeals published opinion — 323820.opn.pdf
Jurisdiction: Washington (state)
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Original Source: https://www.courts.wa.gov/opinions/pdf/323820.opn.pdf ↗

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AR at 241,247. The association agreements provided for the manner of termination.

The association agreements specified each dentist's responsibilities. While each

dentist remained responsible for determining how much to charge for their respective

services, charges were billed under Dr. Armand's name and payments were deposited

into his account. In addition, Dr. Armand had to provide necessary facilities and

equipment and pay the rent and all expenses. Both Drs. Loretta and Louise received 35

percent of the fees they produced. This amount later increased to 40 percent.

In 2012, after it was discovered Dr. Armand was not paying unemployment

insurance taxes, the Employment Security Department (the Department) audited the

dental practice to determine whether the dental practice had to pay back taxes,

penalties, and interest. Thus, the principal focus of the audit was to ascertain whether

Drs. Loretta and Louise were employees of Dr. Armand's dental practice. The audit

covered the years 2010,2011, and the first quarter of 2012.

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No. 32382-0-111
DeFelice v. Emp't Sec. Dep't

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1 The auditor, Angela Hughes, reviewed various tax returns, quarterly and annual
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I reports, check registers, and general ledger accounts. Ms. Hughes requested any

agreements between the dentists; the. dental practice's bookkeeper complied. Ms.
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Hughes never asked if the association agreements were still valid and enforceable. Ms.

Hughes' review revealed (1) the dental practice was registered as a sole proprietorship

with both the Department and the Washington Department of Revenue, (2) Dr. Armand

listed the dental practice on his tax returns as a sole proprietorship, and (3) payments