     The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.


                                                                  SUMMARY
                                                          September 20, 2018

                                2018COA145

No. 17CA2147 Dos Almas LLC v. ICAO — Taxation —
Unemployment; Labor and Industry — Colorado Employment
Security Act — Premiums and Coverage — Transfer of
Experience and Assignment of Rates

     In this unemployment tax case, a division of the court of

appeals interprets and applies certain statutory provisions for

determining whether an employer that acquires “substantially all of

the assets” of another employer becomes a “successor” employer to

the predecessor for unemployment tax rate liability purposes. If the

statutory criteria in section 8-76-104(1)(a), C.R.S. 2017, are

satisfied, the acquiring employer “succeeds” to the predecessor’s

unemployment experience rating record and account for the purpose

of determining the unemployment tax rate for the successor.

     Affirming the Panel’s decision, the division holds that Dos

Almas’s asset acquisition satisfied these statutory criteria. First, the
division holds that the finding that Dos Almas acquired 90% of the

physical and intangible assets of the predecessor supports the

conclusion that it acquired “substantially all” of the predecessor’s

“assets.” The division further holds that employee retention is

irrelevant to the successor issues under the applicable “substantially

all of the assets” provisions of section 8-76-104(1)(a), although such

retention is relevant under other statutory criteria, not at issue in

this case, which provide alternative ways of becoming a successor

employer.

     Finally, the division rejects Dos Almas’s due process challenges

as unpreserved and inadequately developed.
COLORADO COURT OF APPEALS                                       2018COA145


Court of Appeals No. 17CA2147
Industrial Claim Appeals Office of the State of Colorado
DD No. 16040-2017


Dos Almas LLC,

Petitioner,

v.

Industrial Claim Appeals Office of the State of Colorado and Division of
Unemployment Insurance Employer Audits,

Respondents.


                              ORDER AFFIRMED

                                 Division IV
                       Opinion by CHIEF JUDGE LOEB
                      Hawthorne and Berger, JJ., concur

                        Announced September 20, 2018


John F. K. Sabal, Authorized Representative, Palisade, Colorado, of Petitioner

Cynthia H. Coffman, Attorney General, Evan P. Brennan, Assistant Attorney
General, Denver, Colorado, for Respondent Industrial Claim Appeals Office

No Appearance for Respondent Division of Unemployment Insurance Employer
Audits
¶1    Petitioner, Dos Almas LLC, seeks review of a final order of

 the Industrial Claim Appeals Office (Panel). Reversing a hearing

 officer’s decision, the Panel ruled that, for unemployment

 compensation tax rate liability purposes, Dos Almas is a

 “successor” employer to WooPig LLC under the statutory criteria

 in section 8-76-104(1)(a), C.R.S. 2017. We affirm the Panel’s

 order.

                            I. Background

¶2    The relevant facts are not in dispute. Dos Almas began

 operating a restaurant in Palisade after it acquired nearly all of

 the assets of WooPig, which previously operated a different

 restaurant at the same location. After this acquisition, Dos

 Almas submitted a form to the Department of Labor and

 Employment (Department), along with a copy of the asset

 purchase agreement, applying for an unemployment

 compensation insurance account and a determination of

 employer liability.

¶3    Based on these documents, a deputy issued the requested

 liability determination in August 2016. In this decision, the

 deputy ruled that Dos Almas was a successor employer to

                                   1
 WooPig for unemployment compensation tax rate liability

 purposes because it met the requirements of section

 8-76-104(1)(a) due to this acquisition.

¶4   In May 2017, Dos Almas appealed the deputy’s decision,

 more than eight months after the applicable twenty-day time

 limit. See § 8-74-106(1)(a), C.R.S. 2017. Nevertheless, in July

 2017, a hearing officer ruled that good cause was shown under

 the applicable regulatory criteria for permitting this untimely

 appeal. See Dep’t of Labor & Emp’t Reg. 12.1.8, 7 Code Colo.

 Regs. 1101-2; see also § 8-74-106(1)(b).

¶5   Consequently, an evidentiary hearing was held on this

 appeal before another hearing officer. At this hearing, the asset

 purchase agreement and the application by Dos Almas were

 admitted into evidence, and testimony was provided by the

 deputy and by one of the owners of Dos Almas.

¶6   After this hearing, the hearing officer found, consistent with

 the owner’s testimony, that Dos Almas had purchased

 approximately 90% of WooPig’s physical and intangible assets.

 The hearing officer also made detailed factual findings

 concerning specific physical and intangible assets that Dos

                                   2
 Almas had acquired, consistent with the asset purchase

 agreement. The hearing officer further found that Dos Almas did

 not retain WooPig’s employees, and that, although it hired one of

 those employees, that employee was not transferred to Dos

 Almas as part of the asset sale.

¶7    Based on these factual findings, the hearing officer ruled

 that Dos Almas was not a successor to WooPig under the

 statutory criteria. Although the hearing officer acknowledged

 that Dos Almas acquired “substantially all” of the physical and

 intangible assets of WooPig, the hearing officer ruled that Dos

 Almas did not acquire substantially all of the “total” assets of

 WooPig because it did not retain the employees as part of the

 asset sale.

¶8    The Division of Unemployment Insurance (Division) appealed

 the hearing officer’s decision to the Panel.

¶9    On review, the Panel reversed the hearing officer’s decision.

 The Panel upheld the hearing officer’s factual findings, but it

 reached a different conclusion based on those factual findings.

 In particular, based on the finding that Dos Almas had acquired

 90% of WooPig’s physical and intangible assets, the Panel ruled

                                    3
  that Dos Almas had acquired “substantially all” of WooPig’s

  “assets” and thereby met the statutory criteria in section

  8-76-104(1)(a) to be WooPig’s successor for unemployment

  compensation tax rate liability purposes. The Panel further ruled

  that the findings concerning WooPig’s employees were irrelevant

  under the applicable criteria in section 8-76-104(1)(a) because

  employees are not “assets” under those statutory provisions.

¶ 10   This appeal by Dos Almas followed.

                             II. Discussion

¶ 11   Dos Almas contends that the Panel erred in ruling that it is

  a successor to WooPig for unemployment compensation tax rate

  liability purposes under the circumstances here. We disagree.

                         A. Good Cause Issues

¶ 12   We first reject the argument raised in the Panel’s answer

  brief that Dos Almas’s untimely appeal from the deputy’s

  decision requires dismissal of this appeal for lack of subject

  matter jurisdiction. This argument is based on the faulty

  premise that the initial hearing officer could not permit that

  untimely appeal for good cause shown.



                                    4
¶ 13   As noted in the July 2017 hearing officer’s decision, Dos

  Almas’s appeal from the deputy’s decision was filed in May 2017,

  262 days late. Also, as the Panel’s answer brief points out, under

  current law, the Department’s regulations provide that an

  untimely appeal from a deputy’s decision shall be dismissed and

  the deputy’s decision shall become final if the untimely appeal is

  received more than 180 days beyond the expiration of the timely

  filing period. See Dep’t of Labor & Emp’t Reg. 12.1.3.2, 7 Code

  Colo. Regs. 1101-2 (effective Dec. 30, 2017). However, the

  Panel’s reliance on these provisions is misplaced because they

  were not in effect at the relevant times.

¶ 14   To the contrary, the regulatory provisions concerning an

  absolute 180-day time limit for a late appeal from a deputy’s

  decision were first adopted on August 14, 2017, and were

  effective on September 5, 2017. Dep’t of Labor & Emp’t Reg.

  12.1.3.2, 7 Code Colo. Regs. 1101-2 (expired Dec. 12, 2017).

  There was no outside time limit for a late appeal from a deputy’s

  decision under the regulations in effect when Dos Almas filed its

  untimely appeal in May 2017 or when the first hearing officer

  made her good cause determination in July 2017. Moreover, the

                                    5
  Division did not challenge this good cause determination in the

  administrative proceedings that followed before the second

  hearing officer and the Panel.

¶ 15   Under these circumstances, the propriety of the first hearing

  officer’s good cause determination is not properly before us, and

  there is no jurisdictional defect requiring the dismissal of this

  appeal.

       B. Successor Issues Under Applicable Statutory Criteria

¶ 16   Next, we reject Dos Almas’s argument that it is not a

  successor employer to WooPig for unemployment tax rate liability

  purposes under the applicable statutory criteria in section

  8-76-104(1)(a).

¶ 17   Section 8-76-104(1)(a) provides, in pertinent part, that an

  employing unit “that becomes an employer because it acquires all

  of the organization, trade, or business or substantially all of the

  assets of one or more employers” subject to the Colorado

  Employment Security Act (CESA) “shall succeed to the entire

  experience rating record of the predecessor employer,” and the

  predecessor employer’s account “shall pass to the successor for



                                    6
  the purpose of determining” the successor’s unemployment

  compensation tax rate.

¶ 18   At issue in this appeal is whether Dos Almas acquired

  “substantially all of the assets” of WooPig as required under

  these provisions so as to become a successor employer to WooPig

  for purposes of determining Dos Almas’s unemployment

  compensation tax rate. Like the Panel, we conclude that Dos

  Almas’s asset acquisition satisfied these statutory requirements.

¶ 19   The second hearing officer found from the evidence

  presented that Dos Almas had purchased approximately 90% of

  WooPig’s physical and intangible assets, including extensive

  equipment for the operation of the restaurant business and all

  marketing and internet-related intangibles. Because these

  factual findings are supported by substantial evidence in the

  record, we must accept them on appeal. See § 8-74-107(4),

  C.R.S. 2017; Yotes, Inc. v. Indus. Claim Appeals Office, 2013 COA

  124, ¶ 10.

¶ 20   Notwithstanding Dos Almas’s arguments concerning the

  assets it did not acquire, the hearing officer’s findings concerning

  Dos Almas’s acquisition of 90% of WooPig’s physical and

                                    7
  intangible assets support the conclusion that Dos Almas

  acquired “substantially all” of WooPig’s assets, as required under

  the applicable statutory criteria. We also note that the changes

  Dos Almas made in operating and marketing the restaurant

  business after this transaction do not alter the fact that Dos

  Almas first acquired “substantially all” of WooPig’s assets, which

  is all that was necessary to satisfy the applicable statutory

  criteria. Consequently, we agree with the Panel that the hearing

  officer’s established factual findings support the conclusion that

  Dos Almas is a successor employer to WooPig for unemployment

  compensation tax rate liability purposes under the applicable

  statutory criteria in section 8-76-104(1)(a). See § 8-74-107(6).

¶ 21   Contrary to Dos Almas’s further argument, we also agree

  with the Panel that the lack of employee retention in the asset

  purchase transaction is irrelevant to the successor issues in this

  case.

¶ 22   In this regard, we note that employee retention is a factor

  under other statutory provisions in CESA that govern alternative

  ways in which an entity can become a successor employer for

  unemployment compensation tax rate liability purposes. In

                                    8
  particular, an entity can also become a successor employer

  under separate criteria in section 8-76-104(1)(a) by acquiring “all

  of the organization, trade, or business” of a predecessor

  employer, and section 8-76-104(11)(c) defines “trade” or

  “business” as including “an employer’s work force.” Employee

  retention can also provide an alternative way in which an entity

  can become a successor employer under the provisions of section

  8-76-104(9).

¶ 23   Nevertheless, Dos Almas was not determined to be a

  successor employer under those statutory provisions, but instead

  under the statutory criteria in section 8-76-104(1)(a) concerning

  acquisition of “substantially all of the assets” of a predecessor

  employer. Under these statutory provisions, employee retention,

  or lack of employee retention, is irrelevant to the successor

  issues because a predecessor’s employees are simply not “assets”

  under the plain meaning of that statutory term. See

  § 8-74-107(6).

¶ 24   Dos Almas also contends that the statutory requirements in

  section 8-76-104(1)(a) were not satisfied because it asserts that it



                                    9
  did not become an employer simply “because” of its acquisition of

  WooPig’s assets. This argument is also unpersuasive.

¶ 25   As noted by Dos Almas, the statutory language in section

  8-76-104(1)(a) refers to an entity becoming an employer

  “because” it acquires either “all of the organization, trade, or

  business” of a predecessor or “substantially all of the assets” of a

  predecessor. Contrary to Dos Almas’s argument, however, this

  condition was also satisfied in this case.

¶ 26   Here, the record shows that, in its initial application to the

  Department, Dos Almas checked a box on the form indicating

  that it was completing this application “as a result of a business

  acquisition.” The owner completing this application certified,

  under penalty of perjury, that this information was true,

  accurate, and complete to the best of his knowledge. Moreover,

  Dos Almas admits in its opening brief that its acquisition of

  WooPig’s assets was “part of” its process of becoming an

  employer.

¶ 27   Because Dos Almas has acknowledged the causal link

  between its acquisition of WooPig’s assets and becoming an

  employer, we conclude that it became an employer “because” of

                                    10
  its asset acquisition within the meaning of this statutory term in

  section 8-76-104(1)(a).

¶ 28   In essence, Dos Almas contends that the statutory term

  “because” should be read as “only because,” and that this

  condition was not satisfied because there were also other steps in

  the process of becoming an employer. We perceive no basis for

  this interpretation in the statutory language, and we will not read

  a limitation into the provisions of section 8-76-104(1)(a) that is

  not supported by the statutory language used. See Tesmer v.

  Colo. High Sch. Activities Ass’n, 140 P.3d 249, 253 (Colo. App.

  2006) (holding, in a different context, that the statutory phrase

  “because of” required only a showing of “but for” causation,

  without any requirement to show a “sole” cause); see also Indus.

  Claim Appeals Office v. Colo. Dep’t of Labor & Emp’t, 2013 CO 52,

  ¶¶ 8-15 (in interpreting other CESA provisions, court declined to

  read limitation into statute that did not contain limiting

  language).

¶ 29   In short, based on the established factual findings and the

  applicable provisions of section 8-76-104(1)(a), the Panel properly

  ruled that Dos Almas became a successor employer to WooPig for

                                    11
  unemployment compensation tax rate liability purposes due to

  its acquisition of “substantially all” of WooPig’s assets.

                         C. Due Process Issues

¶ 30   We also reject Dos Almas’s arguments that its due process

  rights were somehow violated by the determination that it is a

  successor employer for unemployment compensation tax rate

  liability purposes. As noted in the Panel’s answer brief, the

  nature and the contours of Dos Almas’s due process arguments

  are unclear, but these arguments are unpersuasive in any event.

¶ 31   First, to the extent that Dos Almas is raising as-applied due

  process challenges to the successor liability determination under

  the pertinent statutory criteria, such challenges have not been

  preserved for our review. Because Dos Almas did not raise such

  challenges in the administrative proceedings before the second

  hearing officer and the Panel, we decline to address them on

  appeal. See § 8-74-107(1); Goodwill Indus. of Colo. Springs v.

  Indus. Claim Appeals Office, 862 P.2d 1042, 1045 (Colo. App.

  1993); see also Magin v. Div. of Emp’t, 899 P.2d 369, 371 (Colo.

  App. 1995).



                                    12
¶ 32   Next, to the extent that Dos Almas is raising facial

  challenges to the constitutionality of the pertinent statutory

  criteria in section 8-76-104(1)(a), we also decline to address any

  such challenges because Dos Almas has not cited any supporting

  legal authority and has not adequately developed any such

  arguments. See People v. Hicks, 262 P.3d 916, 920 (Colo. App.

  2011) (declining to address due process argument asserted on

  appeal without reference to any supporting legal authority); see

  also Biel v. Alcott, 876 P.2d 60, 64 (Colo. App. 1993) (stating that

  an appealing party has the burden to provide supporting

  authority for arguments on appeal and that a failure to do so will

  result in affirmation).

¶ 33   Finally, it appears that Dos Almas essentially contends that

  application of the statutory criteria in section 8-76-104(1)(a) in

  determining the successor liability issues is “unfair” because it

  asserts that additional or different criteria should be considered.

  In this regard, we note that arguments concerning possible

  inequities arising from the application of the limited existing

  statutory criteria should be directed to the General Assembly

  rather than to this court. See Manpower, Inc. v. Indus. Comm’n,

                                    13
  677 P.2d 346, 347 (Colo. App. 1983) (changes to statutory

  criteria for unemployment compensation successor liability are

  for General Assembly, not the courts); see also Lewis v. Colo.

  Dep’t of Labor & Emp’t, 924 P.2d 1183, 1185-86 (Colo. App.

  1996) (changes to other CESA provisions to address possible

  inequities are for legislative branch, not the courts).

                             III. Conclusion

¶ 34   The Panel’s order is affirmed.

       JUDGE HAWTHORNE and JUDGE BERGER concur.




                                    14
