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16-P-1152                                            Appeals Court

 SUSAN GALLAGHER     vs.   CEREBRAL PALSY OF MASSACHUSETTS, INC., &
                                others.1


                             No. 16-P-1152.

         Norfolk.      April 6, 2017. - September 13, 2017.

               Present:    Green, Blake, & Lemire, JJ.


MassHealth. Massachusetts Wage Act. Labor, Overtime
     compensation, Failure to pay wages. Independent Contractor
     Act. Regulation. Practice, Civil, Motion to dismiss,
     Summary judgment.



     Civil action commenced in the Superior Court Department on
December 10, 2015.

    A motion to dismiss was heard by Rosalind Henson Miller, J.


    Paul L. Nevins for the plaintiff.
    Jeffrey S. Beeler for the defendants.


    LEMIRE, J.      Susan Gallagher, a personal care attendant

(PCA) who provided in-home services for an elderly man




    1
        Donald Uvanitte and David Sprague.
                                                                   2


(consumer2), brought an action in Superior Court against Cerebral

Palsy of Massachusetts, Inc.; its president, Donald Uvanitte;

and its treasurer, David Sprague (collectively, CPM), alleging

that CPM was her employer and that it failed to pay her for her

overtime hours, including failing to do so at an overtime rate.

A judge granted CPM's motion to dismiss on the ground that,

pursuant to the MassHealth regulations (regulations) governing

Gallagher's work arrangement, she was employed by the consumer,

not CPM.   Gallagher appeals from the judgment, and we affirm.

     Standard of review.   Although there were exhibits attached

to both CPM's motion to dismiss and Gallagher's opposition, the

judge ostensibly declined to treat the motion as one for summary

judgment, and she excluded the additional material from

consideration.   See Mass.R.Civ.P. 12(b), 365 Mass. 754 (1974).

But in a footnote explicitly listing the excluded exhibits, the

judge did not identify as having been excluded one of CPM's

submissions:   excerpts from a contract it executed with the

Executive Office of Health and Human Services.   That document

establishes the applicability of certain of the regulations,

including CPM's role within that regulatory framework as a

     2
       The applicable regulations of MassHealth, the State-
provided health insurance program, as they existed in 2006, used
two terms: "member" and "consumer." 130 Code Mass. Regs.
§§ 422.00 (2002). Although the latter is no longer in use
following revisions effective as of 2017, our discussion will
use both terms.
                                                                    3


"fiscal intermediary," i.e., an entity that serves in a

facilitative role with regard to payroll and related matters.

130 Code Mass. Regs. § 422.402 (2006).   These facts were not

reflected in the complaint, but the judge cited them as

dispositive.   By relying on facts outside of the complaint, the

judge essentially rendered a decision in the nature of summary

judgment.   Doucette v. Massachusetts Parole Bd., 86 Mass. App.

Ct. 531, 533-534 (2014).

    We will review the decision as such, including taking into

consideration the other excluded material.   We may do so without

risk of procedural unfairness for two reasons.   First, both

parties in their briefs to this court addressed the implications

of the facts reflected in the materials, compare Marram v.

Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4 (2004), and

Gallagher's brief, in particular, argued that a summary judgment

standard should have been applied.   Second, as we will explain

further, we agree with the judge's conclusion that CPM was

entitled to judgment as a matter of law; this result could not

be overcome with further evidence.   "Accordingly, we review the

judge's dismissal of this action as though [she] had granted a

motion for summary judgment."   Cousineau v. Laramee, 388 Mass.

859, 860 n.2 (1983).

    We review a grant of summary judgment de novo.    Federal

Natl. Mort. Assn. v. Hendricks, 463 Mass. 635, 637 (2012).     In
                                                                   4


doing so, we consider the pleadings and other record evidence,

viewing them in the light most favorable to Gallagher and

drawing all reasonable inferences in her favor, to determine

whether, on the undisputed facts, CPM is entitled to judgment as

a matter of law.   Ibid.

    Background.    In June, 2006, Gallagher began working as a

PCA, providing in-home care to the consumer, who received these

services in connection with his MassHealth benefits.    Her work

was facilitated, in part, by CPM.   Pursuant to the regulations

governing PCA benefits for MassHealth members, CPM acted as a

fiscal intermediary.   CPM's duties included forwarding notice of

preapprovals, which were issued by MassHealth, for the number of

hours of Gallagher's weekly work for which wages would be

covered by MassHealth, issuing her paychecks, and making

payments into the unemployment insurance system.

    In September, 2006, shortly after beginning her work,

Gallagher signed a form given to her by CPM, acknowledging that

the consumer was her employer.   At approximately the same time,

she signed two other forms given to her by CPM -- a W-4 form and

an I-9 form.   Since that time, CPM has issued her annual W-2

forms.   Although these tax form interactions are commonly

conducted with an employer, here, the W-4 and I-9 forms

identified the consumer as the employer, and the single W-2 in

the record states that it was issued by CPM "FBO [the
                                                                      5


consumer]," i.e., for the benefit of the consumer.

Additionally, CPM's role with respect to these tax forms was

consistent with its duties under the regulations as a fiscal

intermediary.   See note 9, infra.

     During the years she worked as a PCA, Gallagher sometimes

worked more than forty hours per week, but she was not paid for

any hours worked beyond forty per week.     On December 10, 2015,

Gallagher filed a verified complaint against CPM, including two

of its officers, alleging violations of the Massachusetts Wage

Act, see G. L. c. 149, § 148, and the Massachusetts overtime

statute, see G. L. c. 151, § 1A.     CPM responded with a motion to

dismiss, which Gallagher opposed.     As stated, both parties

attached exhibits to their memoranda.     On June 27, 2016, after a

hearing, the judge granted CPM's motion on the ground that

Gallagher was employed by the consumer, not CPM.     Gallagher

appeals.

     Discussion.   1.   Legal standard.   The essential question

posed by this case is whether CPM may be considered Gallagher's

employer for the purposes of the Wage Act, the overtime statute,

or both.   Although the Wage Act contains two provisions that

specifically expand the scope of the term "employer" in certain

contexts,3 neither the Wage Act nor the overtime statute includes


     3
       In particular, certain agents of a corporation "shall be
deemed to be the employers of the employees of the corporation,"
                                                                     6


a self-contained definition of "employer."   See G. L. c. 149,

§ 148; G. L. c. 151, § 1A.

    Gallagher relies on Chase v. Independent Practice Assn., 31

Mass. App. Ct. 661, 665 (1991), and similar cases articulating

various factors used at common law to distinguish employees from

independent contractors.   These factors are "oriented toward

determining whether an individual's conduct was subject to the

principal's control or right of control."    Peters v. Haymarket

Leasing, Inc., 64 Mass. App. Ct. 767, 774 (2005).    That inquiry,

in turn, forms one of the "essential tests" used to determine

the existence of an employment relationship at common law.

Griswold v. Director of the Div. of Employment Security, 315

Mass. 371, 372 (1944).

    While the common-law approach has continuing vitality in

certain contexts, see, e.g., Peters, 64 Mass. App. Ct. at 773-

774 (tort liability under respondeat superior), where the Wage

Act and the overtime statute are concerned, the common-law

approach has been superseded by G. L. c. 149, § 148B, which

defines the over-all employer-employee relationship for all

cases arising under G. L. c. 149 and G. L. c. 151.




and certain public officers are deemed to be employers of public
employees. G. L. c. 149, § 148, as appearing in St. 1956,
c. 259.
                                                                     7


    Chapter 149, § 148B, creates a two-step inquiry.        First,

"[t]he threshold question is whether the [plaintiff] provided

services to the [defendant]."   Sebago v. Boston Cab Dispatch,

Inc., 471 Mass. 321, 329 (2015).   If this threshold is met, the

individual is presumed to be an employee.     Id. at 327.    Under

the second step, the putative employer may rebut that

presumption by proving, pursuant to a three-part test, that the

person worked as an independent contractor.     Ibid.

    We apply § 148B here by asking whether Gallagher provided

services to CPM.   Sebago, supra at 329.   Ordinarily, this

inquiry presents a question of fact.     See id. at 331; National

Assn. of Govt. Employees v. Labor Relations Commn., 59 Mass.

App. Ct. 471, 474 (2003).   This is not the ordinary case,

however, because here there exists a regulatory framework that

describes the relationship between the various parties --

Gallagher, CPM, and the consumer -- in extensive detail.       See

130 Code Mass. Regs. §§ 422.00 (2002).

    The fact that these regulations applied to Gallagher's work

arrangement is confirmed by CPM's contract to act as a fiscal

intermediary, as well as by several other exhibits, including

many submitted by Gallagher herself.   Importantly, for summary

judgment purposes, there is nothing in the record to suggest

that the regulations did not apply, nor that Gallagher's

relationship with CPM differed in any respect from the
                                                                     8


relationship, as contemplated by the regulations, between PCAs

and fiscal intermediaries.     Equally important, looking to

Gallagher's pleadings, there also are no allegations suggesting

that her relationship with CPM differed in any way from that

described by the regulations, much less that it differed by

virtue of her providing services to CPM.     It is for this reason

that we stated in our discussion of the standard of review that

the result we reach could not be overcome with further evidence.

     We thus look to the regulations to understand Gallagher's

relationship with CPM and to determine whether she provided

services to CPM.4

     2.   The regulations.5   By the nature of their work, PCAs

perform tasks for consumers.    These tasks include, for example,

mobility assistance, bathing, dressing, meal preparation,

laundering, grocery shopping, and general housekeeping.    See 130

Code Mass. Regs. §§ 422.402 (2002, 2006) (defining "Activities

of Daily Living" and "Instrumental Activities of Daily Living"

as being undertaken by, or with assistance from, PCAs); 130 Code

     4
       CPM points out that, at all relevant times, the
regulations included a provision stating that "[t]he consumer is
the employer of the PCA." 130 Code Mass. Regs. § 422.402 (2006)
(defining "consumer"). We do not rely directly on that
provision which, in any event, was removed recently, i.e., in a
version effective May 5, 2017, the term "consumer" was removed.
See 130 Code Mass. Regs. § 422.402 (2017).
     5
       Hereinafter, we refer to the 2006 version of the Code of
Massachusetts Regulations unless otherwise noted.
                                                                    9


Mass. Regs. § 422.410(A)-(B) (specifying particular activities).

As a matter of law, consumers have the right to hire and to fire

their PCAs, to set their work schedules, to train them, and to

supervise them.     130 Code Mass. Regs. §§ 422.411(A)(1)(f),

422.420(A)(6).6,7

     Gallagher's relationship with CPM was of a markedly

different nature.    Fiscal intermediaries such as CPM enter into

contracts with MassHealth "to perform employer-required tasks

and related administrative tasks."    130 Code Mass. Regs.

§ 422.402.8   The definition of "employer-required tasks," in

turn, reflects the entities' role as strictly focused on

particular finance-related matters.     Ibid.   This includes

preparing PCA payrolls, generating and issuing paychecks,

managing certain tax-related matters (e.g., PCA income tax

withholdings and filing certain tax documents for members

     6
       These particular rights are also guaranteed to consumers
by G. L. c. 118E, § 73(a), a statutory provision found among a
group of several that govern an entity known as the "PCA quality
home care workforce council." G. L. c. 118E, § 70, inserted by
St. 2012, c. 224, § 131.
     7
       Until recently, some of these regulations were articulated
as a precondition for MassHealth coverage. Under the 2017
version, however, the regulations are articulated as an
eligibility requirement for PCAs wishing to work within the
program. 130 Code Mass. Regs. § 422.404(A)(4)(d)(5) (2017).
     8
       Following the revisions effective in 2017, the regulations
more particularly specify that the fiscal intermediary operates
under a contract with the Executive Office of Health and Human
Services. 130 Code Mass. Regs. § 422.402 (2017).
                                                                    10


receiving care),9 paying into the unemployment insurance system,

and purchasing workers' compensation insurance.     Ibid.    Although

the fiscal intermediaries are responsible for issuing payments

to PCAs, they act only as a conduit for funds that are provided

by MassHealth.     130 Code Mass. Regs. §§ 422.411(A),

422.419(B)(12).     Another regulation specifically provides that

fiscal intermediaries are not responsible for paying PCAs for

time worked in excess of what has been authorized by MassHealth,

and the regulation does so with language that suggests that

consumers would be responsible for payment of wages for that

time.     See 130 Code Mass. Regs. § 422.416(E)(4)(e).10    Only

MassHealth may approve the number of weekly hours for which it

will cover payment of wages, including overtime.11       See 130 Code

Mass. Regs. §§ 422.416, 422.417, 422.418(A).     Initial requests

for preapprovals, as well as requests to adjust preapprovals,

are made not by fiscal intermediaries, but by entities known as

     9
       As we stated previously, CPM's involvement with
Gallagher's W-2, W-4, and I-9 forms was consistent with its
obligations as a fiscal intermediary. See 130 Code Mass. Regs.
§ 422.419(B)(11) (2017); 130 Code Mass. Regs. § 422.419(B)(13).
     10
       The regulation states that fiscal intermediaries are not
responsible for "reimburs[ing]" members for excess hours. 130
Code Mass. Regs. § 422.416(E)(4)(e).
     11
       Among Gallagher's exhibits is a letter from CPM informing
her that an adjustment in weekly PCA hours had been approved.
The document is consistent with the regulations -- it is
directed to the consumer, not to Gallagher, and it states that
MassHealth, not CPM, issued the approval.
                                                                     11


personal care agencies, in coordination with consumers, who may

initiate such adjustment requests.    130 Code Mass. Regs.

§§ 422.416, 422.417, 422.418(A).     Rates of payment are set by

regulation.   130 Code Mass. Regs. § 422.448.

     Nothing in these regulations suggests that PCAs provide

services to fiscal intermediaries.     While it is true that the

very existence of PCAs does eventually inure to the benefit of

fiscal intermediaries -- MassHealth pays fiscal intermediaries

"administrative fee[s]" for their work, 130 Code Mass. Regs.

§ 422.448 -- there are two reasons why this does not alter our

conclusion.

     First, CPM's entitlement to administrative fees is the

result of a work arrangement that was designed by Congress, the

State Legislature, and regulatory agencies -- not CPM.12     As in


     12
       The program in which the parties participate is a
Medicaid funded program providing in-home services to elders who
qualify for services under the Federal Medicaid statute. See 42
U.S.C. § 1396 (2012). The program is governed by a "labyrinth"
of Federal and State statutes. Daley v. Secretary of the
Executive Office of Health & Human Servs., 477 Mass. 188, 189
(2017). "Although the Medicaid program is voluntary for States,
participating States must comply with certain requirements
imposed by the [Federal Medicaid statute] and regulations
promulgated by the [United States] Secretary [of Health and
Human Services] through [the Centers for Medicare and Medicaid
Services]." Id. at 190. Massachusetts has voluntarily adopted
a State Medicaid program known as MassHealth, see note 2, supra,
which was established pursuant to G. L. c. 118E, § 9, to comply
with the Federal Medicaid statute. The relationships between
the parties here are a product of the Federal-State partnership,
the Federal mandate, and the implementing statute and
regulations.
                                                                    12


Sebago, which also involved a highly regulated industry, "[t]his

is not a case of defendants concocting an artificial . . .

scheme to circumvent the wage laws."   471 Mass. at 330.   Nor is

this "a case of [an employer] creating a false dichotomy between

the administrative and operational aspects of [its] business."

Ibid.   The administrative fees do not reflect an effort by CPM

to make an "end run" around our wage and hour laws.   DePianti v.

Jan-Pro Franchising Intl., Inc., 465 Mass. 607, 624 (2013).

     Second, focusing our attention more directly on the

threshold test under § 148B, we conclude that the relationship

between Gallagher's work and CPM's receipt of administrative

fees is far too attenuated to permit the conclusion that she

provided services to CPM.   This aspect of the parties'

relationship is similar to that between taxicab drivers and the

taxicab garage in Sebago, supra at 331.   Gallagher did not

provide services to CPM, much as the drivers did not provide

services to the taxicab garage; rather, like the garage, which

catered to the taxicab industry "as a whole," CPM received

administrative fees by virtue of the facilitative services it

provided to this MassHealth program as a whole.   Ibid.

     We therefore conclude that, in the circumstances of this

case involving a PCA and fiscal intermediary working wholly

within the framework of the regulations, Gallagher did not
                                                                  13


provide services to CPM and cannot be deemed its employee for

the purpose of the Wage Act or the overtime statute.

     3.   Joint employment.   Gallagher posits that, even if

another person or entity was her employer,13 CPM was her joint

employer.14   "The Supreme Court defined the concept of a 'joint-

employer' as a company possessing 'sufficient control over the

work of the employees' of another company."    Commodore v.

Genesis Health Ventures, Inc., 63 Mass. App. Ct. 57, 61 (2005),

quoting from Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964).

"The basis of [a joint employer] finding is simply that one

employer while contracting in good faith with an otherwise

independent company, has retained for itself sufficient control

of the terms and conditions of employment of the employees who

are employed by the other employer."    Id. at 62, quoting from

Swallows v. Barnes & Noble Book Stores, Inc., 128 F.3d 990, 993

n.4 (6th Cir. 1997).   As with the existence of an employment


     13
       She specifically identifies the consumer as the employer,
consistent with the judge's conclusion. For present purposes,
however, we need not address whether that conclusion was
correct.
     14
       In her brief, Gallagher identified MassHealth as the
entity that may have been her joint employer. We do not address
the question whether MassHealth may be her joint employer, as
Gallagher brought claims against CPM, not MassHealth, who is not
a party to this litigation. As best we can discern, it appears
that Gallagher intended to press a theory that CPM was her joint
employer. We therefore construe her argument as such, rather
than simply reject it as irrelevant.
                                                                14


relationship, or the distinction between employees and

independent contractors, joint employment is ordinarily a

question of fact.     Id. at 61-62, citing Boire, supra.

     We need not address whether the statutory "provision of

services" test in § 148B supplants the common-law "right to

control" test for purposes of a joint employment theory of

liability under the Wage Act or the overtime statute.

Gallagher's theory fails under the statutory test, for the

reasons already set forth; and it fails under the common-law

approach because the regulations we described further reflect

that CPM, unlike the consumer, had no right to control

Gallagher's work.15

     Conclusion.    Although fiscal intermediaries play an

important role in MassHealth's regulatory framework, their

     15
       In the context of her right to control argument,
Gallagher noted that the consumer she cared for was "non-compos
mentis." It is not clear on this record whether the consumer
appointed a surrogate agent to make decisions on his behalf, as
contemplated by the regulations. See 130 Code Mass. Regs.
§§ 422.422(B)(1) (members appoint their surrogates); 422.402
(PCA is "hired by the member or surrogate"). See also 130 Code
Mass. Regs. §§ 422.411(A)(1)(f) (PCA must be "willing to receive
training and supervision . . . from the member or the member's
surrogate"); 422.416(B) (consumer or surrogate may request
adjustment to prior authorizations for weekly hours covered by
MassHealth); 422.422(A)(1)(b) (when beginning services, member
is assessed to determine need for surrogate). In any event,
even under the common-law approach, "[i]t is the right to
control, as opposed to actual control, that is determinative."
Peters, 64 Mass. App. Ct. at 774. This principle has particular
relevance here because this matter involves a highly regulated
set of relationships.
                                                                  15


"[m]ere participation in that system is insufficient" to render

them presumptive employers under G. L. c. 149, § 148B(a).

Sebago, 471 Mass. at 330.    Because Gallagher did not provide

services to CPM, it cannot be deemed her employer for the

purposes of the Wage Act, nor the overtime statute, and her

claims were correctly dismissed.16,17

                                     Judgment affirmed.




     16
       We do not reach the question whether a PCA would have a
claim sounding in contract against a fiscal intermediary if the
latter were to improperly withhold, from both the PCA and the
member, wages for work performed where the number of hours did
not exceed those approved for coverage under a MassHealth prior
authorization.
     17
          We deny CPM's request for appellate attorney's fees.
