KYCO Services v. Department of Workforce Services

2018 UT App 174
THE UTAH COURT OF APPEALS
K YCO S ERVICES LLC,
Petitioner,
v.
DEPARTMENT OF WORKFORCE S ERVICES,
Respondent.
Opinion
No. 20170273-CA
Filed September 7, 2018
Original Proceeding in this Court
Kendra Shirey, Chrystal Mancuso-Smith, and Robert
E. Aycock, Attorneys for Petitioner
Nathan R. White, Attorney for Respondent
JUDGE R YAN M. HARRIS authored this Opinion, in which
JUDGES DAVID N. M ORTENSEN and JILL M. POHLMAN concurred.
HARRIS, Judge:
¶1 	As a general rule, employers must make unemployment
insurance 	contributions 	for 	workers 	they 	employ. 	The
Department of Workforce Services Board of Appeals (Board)
determined that, for certain workers during certain pay periods,
Kyco Services, LLC (Kyco) had failed to do so. Kyco seeks
review of that determination in this court, and asserts that the
workers in question were not its employees but, instead, were
employed 	by 	a 	second 	company 	that 	it 	claims 	sometimes
supplied Kyco with extra laborers for certain jobs. Because the
evidence was sufficient to support the Board’s determination
that Kyco employed the workers, we decline to disturb it.

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BACKGROUND
¶2 	Kyco is a limited liability company that provides drywall
services on construction projects. For larger jobs, Kyco would
occasionally need additional workers, and on some of these
occasions would utilize contract laborers provided by a separate
company. As relevant here, in 2010 Kyco contracted with ITY,
LLC (ITY1), apparently for the purpose of obtaining contract
laborers as needed. At the time, ITY1 had a valid subcontractor’s
license, but that license expired in 2011 and was not renewed,
prompting Kyco to eventually stop working with ITY1.
¶3 	In December 2011, the owner of ITY1 created a new
company called ITY of Texas, LLC (ITY2), and at some point
thereafter, 	apparently 	in 	2012, 	Kyco 	entered 	into 	a 	written
“subcontract agreement” with this new entity. That agreement
stated 	that 	ITY2 	would 	provide 	workers 	to 	Kyco, 	provide
supervision for those workers, maintain worker’s compensation
insurance, pay payroll taxes, and hold a valid subcontractor’s
license. ITY2 never obtained such a license, however, and the
working relationship that actually developed between Kyco and
ITY2 deviated substantially from the terms of their agreement.
¶4 	In 2015, a representative of the Department of Workforce
Services (Department) audited Kyco and determined that ITY2
had not actually provided and supervised laborers for Kyco, but
instead had merely served as a “bookkeeping company” that
arranged 	for 	payment 	of 	workers 	that 	Kyco 	hired 	and
supervised. Under the Utah Administrative Code, an employer
must 	report 	an 	employee 	on 	its 	payroll 	tax 	reports 	if 	the
employer: (1) has the right to hire and fire the employee, (2) has
the responsibility to control and direct the employee, and (3) is
the employer for whom the employee performs a service. Utah
Admin. Code R994-202-104(1). “Payrolling” is “the practice of [a
company] paying wages to the employees of another employer
or 	reporting 	those 	wages 	on 	its 	payroll 	tax 	reports.” 	Id.

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Payrolling is not permitted under Utah law. Id. R994-202-104(2).
The auditor determined that certain laborers who had been paid
by ITY2 during various pay periods in 2014 and 2015 were
actually employed by Kyco, and that Kyco should have been
making 	unemployment 	insurance 	contributions 	for 	these
laborers. Accordingly, the auditor recommended that Kyco be
ordered to pay those contributions, plus interest and penalties.
Kyco requested that a “hearings officer” review the auditor’s
determination.
¶5 	After 	review, 	the 	hearings 	officer 	acknowledged 	that
“[Kyco] signed a subcontractor agreement with [ITY2]” stating
that ITY2 would “provide individuals to install drywall . . . at
[Kyco’s] worksites,” but noted that the auditor had “found a
different working relationship between [Kyco] and [ITY2] than
. . . implied in the agreement.” The officer stated that the auditor
had based that conclusion on discussions with the owner of ITY2
(Owner), who had “revealed” that ITY2 “was acting as a payroll
service” and that Kyco, not ITY2, employed the workers paid by
ITY2. The hearings officer affirmed the auditor’s determination,
and Kyco sought further administrative review.
¶6 	Thereafter, Kyco received a notice from the Department
that its appeal had been set for a telephonic hearing before an
administrative law judge (ALJ). This notice warned Kyco that
one of the issues to be heard during the hearing would be the
issue of “payrolling,” and that the hearing would be Kyco’s
opportunity to “present ALL testimony and evidence on the
issues.” The notice stated that “[t]he appeal decision will be
based solely on the evidence and testimony presented at the
hearing,” and that if a further appeal of the ALJ’s decision was
filed, Kyco would “generally not be allowed to present new or
additional testimony and evidence.” The notice also advised
Kyco that, while hearsay testimony would be admissible at the
telephonic hearing, direct witness testimony would be more
helpful than hearsay testimony in proving factual assertions.

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¶7 	The hearing took place in April 2016. At the hearing, Kyco
presented testimony from its owner, Kyle Morris, who testified
about several topics, such as the details of Kyco’s working
relationship with ITY1 prior to the formation of ITY2. However,
Kyle Morris stated that he did not deal directly with ITY2, and
that he had very few recent contacts with Owner and did not
know how ITY2’s business was structured. Kyco did not present
testimony from any other witnesses.
¶8 	In response, the Department presented testimony from
Owner, who testified that, while the contract signed by the
parties stated that ITY2 would provide supervised workers to
Kyco 	for 	construction 	projects, 	their 	actual 	agreement 	and
subsequent working relationship was significantly different in
practice. Indeed, Owner stated that, around the time that the
parties entered into the signed agreement, Kyco’s Rob Morris—
Kyle 	Morris’s 	brother—informed 	Owner 	that 	ITY2 	would
instead handle payrolling for Kyco. Owner testified that, for the
entirety of their professional relationship, the only work ITY2
performed for Kyco was issuing checks to employees that Kyco
hired and supervised based on lists of employee names and
payment amounts that Kyco provided. Owner further testified
that ITY2 was never involved in any labor on Kyco’s behalf, and
that he had never worked with drywall and would not know
how to perform such work.
¶9 	In response, Kyco solicited additional testimony from
Kyle Morris, who reiterated that he had very few conversations
with Owner, and confirmed that it was Rob Morris—rather than
himself—who 	“made 	the 	arrangements” 	regarding 	Kyco’s
relationship with ITY2. While Kyle Morris acknowledged that he
did not have direct knowledge of Rob Morris’s interactions with
Owner or of the actual working relationship that developed
between Kyco and ITY2, he indicated that he felt strongly that, if
asked, Rob Morris would deny that Kyco and ITY2 were in a
payrolling relationship. Kyle Morris further stated that Rob

Kyco v. Department of Workforce Services
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Morris “would have asked me first” before agreeing to enter into
a payrolling relationship with ITY2, and that he had no reason to
believe Rob had entered into such a relationship.
¶10 	The ALJ credited Owner’s testimony over Kyle Morris’s
testimony. In a formal written decision, the ALJ found that
Owner 	was 	“the 	only 	individual 	who 	provided 	firsthand
testimony about the arrangements made” between Kyco and
ITY2. Accordingly, despite the written agreement’s language
classifying ITY2 as a subcontractor, the ALJ found that the
workers ITY2 paid were hired by Kyco, controlled and directed
by Kyco, and performed services for Kyco. The ALJ further
noted that, “[e]ven if . . . [Owner] signed an agreement to be a
construction subcontractor, he could not legally do so” because
he did not have a license. Accordingly, the ALJ concluded that,
regardless of the terms of the written agreement, Kyco employed
the workers paid by ITY2 and was therefore liable for the
unemployment insurance contributions associated with their
employment.
¶11 	Kyco appealed the ALJ’s determination to the Board. As
part of that appeal, Kyco sought for the first time to introduce a
declaration from Rob Morris calling Owner’s testimony into
question. However, the Board declined to consider this evidence
because it had not been presented during the hearing before the
ALJ and because, per Utah law, “[a]bsent a showing of unusual
or extraordinary circumstances, the Board will not consider new
evidence on appeal if the evidence was reasonably available and
accessible at the time of the hearing before the ALJ.” See Utah
Admin. Code R994-508-305(2).
¶12 	Kyco also attempted to persuade the Board to afford
greater weight to Kyle Morris’s testimony, arguing that he was a
“corporate representative” offering testimony on behalf of Kyco,
as opposed to offering testimony simply on his own behalf. The
Board 	determined 	that, 	while 	there 	are 	rules 	to 	designate

Kyco v. Department of Workforce Services
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corporate representatives for depositions in civil cases, there are
no 	such 	rules 	applicable 	to 	administrative 	hearings.
Accordingly, the Board determined that Kyle Morris’s testimony
regarding 	subjects 	of 	which 	he 	did 	not 	have 	firsthand
knowledge 	(such 	as 	Rob 	Morris’s 	activities, 	or 	the 	actual
working arrangement between Kyco and ITY2) was hearsay. The
Board therefore declined to afford more weight to Kyle Morris’s
testimony than the ALJ had. Further, the Board noted that, “even
if 	the 	entirety 	of 	[Kyle] 	Morris’s 	testimony 	were 	to 	be
considered, the ultimate outcome would not change” because
Kyle 	Morris 	did 	not 	fully 	contradict 	Owner’s 	testimony
regarding the day-to-day relationship between Kyco and ITY2.
¶13 	Accordingly, the Board affirmed the ALJ’s determination.
ISSUES AND STANDARDS OF REVIEW
¶14 	Kyco now seeks review of the Board’s decision in this
court, and asks us to consider four issues. First, Kyco contends
that 	much 	of 	Owner’s 	testimony 	was 	barred 	by 	the 	parol
evidence rule, and that the Board erred by considering that
testimony. 	Whether 	the 	parol 	evidence 	rule 	bars 	particular
evidence is a question of law, and we review for correctness the
Board’s decision to entertain the challenged evidence. See Bennet
v. Huish, 2007 UT App 19, ¶ 8, 155 P.3d 917.
¶15 	Second, Kyco asserts that the Board erred by determining
that Kyle Morris was not a designated corporate representative
of Kyco, and therefore concluding that his testimony that was
not based on firsthand information was hearsay. Under the Utah
Administrative Procedures Act, we may grant relief where “a
person seeking judicial review has been substantially prejudiced
[because] . . . the agency has erroneously interpreted or applied
the law.” Utah Code Ann. § 63G-4-403(4)(d) (LexisNexis 2016).
Further, 	whether 	evidence 	proffered 	at 	an 	administrative
hearing constitutes hearsay is a question of law that we review

Kyco v. Department of Workforce Services
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for correctness. Prosper, Inc. v. Department of Workforce Services,
2007 UT App 281, ¶ 8, 168 P.3d 344.
¶16 	Third, 	Kyco 	contends 	that 	the 	Board 	erred 	when 	it
refused to consider Rob Morris’s declaration. We review an
agency’s decision to exclude evidence for abuse of discretion.
Utah Code Ann. § 63G-4-403(4)(h).
¶17 	Fourth, Kyco contends that the Board erred when it found
that Kyco employed the workers paid by ITY2. On review, we
decline to disturb an agency’s findings of fact “if they are
supported by substantial evidence when viewed in light of the
whole record before the court.” Gibson v. Department of Workforce
Services, 	2017 	UT 	App 	107, 	¶ 	2, 	400 	P.3d 	1152 	(quotation
simplified). “Substantial evidence is that quantum and quality of
relevant evidence that is adequate to convince a reasonable mind
to support a conclusion and is more than a mere scintilla but [is]
something less than the weight of the evidence.” Needle, Inc. v.
Department of Workforce Services, 2016 UT App 85, ¶ 6, 372 P.3d
696 (quotation simplified). Further, due to the fact-intensive
nature of employment status inquiries, we defer to the Board’s
conclusions regarding employment status “if they are supported
by the record evidence.” Evolocity, Inc. v. Department of Workforce
Services, 2015 UT App 61, ¶ 6, 347 P.3d 406.1
1. Kyco also contends that the Board erred in failing to address
whether the workers paid by ITY2 were independent contractors
as opposed to Kyco’s employees. This argument is unavailing,
because 	the 	Board 	determined, 	during 	its 	review 	of 	the
“payrolling” 	regulation, 	that 	Kyco 	was 	responsible 	for
controlling and directing the workers in question. See Utah
Admin. Code R994-202-104(1)(b). Under a separate regulation, a
worker is an employee, and not an independent contractor, if the
putative employer exercises “control and direction” over the
(continued…)

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ANALYSIS
A
¶18 	Kyco first contends that much of Owner’s testimony was
barred by the parol evidence rule, and that the Board erred by
considering that testimony. We find this argument unpersuasive,
because the parol evidence rule does not apply to bar Owner’s
testimony 	regarding 	the 	contracting 	parties’ 	actual 	post-
agreement relationship.
¶19 	The parol evidence rule “operates, in the absence of fraud
or 	other 	invalidating 	causes, 	to 	exclude 	evidence 	of
contemporaneous conversations, representations, or statements
offered for the purpose of varying or adding to the terms of an
integrated contract.” See Tangren Family Trust v. Tangren, 2008
UT 20, ¶ 11, 182 P.3d 326 (quotation simplified). “Thus, if a
contract is integrated, parol evidence is admissible only to clarify
ambiguous terms,” and is “not admissible to vary or contradict
the clear and unambiguous terms of the contract.” Id. (quotation
simplified); see also Boud v. SDNCO, Inc., 2002 UT 83, ¶ 20, 54
P.3d 1131 (stating that the parol evidence rule “precludes a
search for additional or contradictory terms outside the four
corners 	of 	[the 	agreement] 	absent 	some 	proof 	of 	fraud 	or
mistake”).
(…continued)
worker. See id. R994-204-303(2). Thus, the Board’s determination
that Kyco exercised control and direction over the workers is
also dispositive of Kyco’s independent contractor argument.
Indeed, the Board expressly stated in its opinion that “the
individuals paid through [ITY2] are employees [of Kyco] and not
independent contractors.” Thus, the Board did not fail to address
the issue and, for the reasons discussed elsewhere herein, its
decision on the issue was sound.

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¶20 	In this case, Kyco asserts that the agreement it entered
with ITY2 was complete and unambiguous, and further argues
that 	at 	least 	part 	of 	Owner’s 	testimony—that 	“the 	‘real’
agreement between the parties was for payroll services”—was
offered for the purpose of varying or adding to the terms of the
agreement. Accordingly, Kyco argues that the Board should
have applied the parol evidence rule to bar Owner’s testimony.
¶21 	We disagree. While the parol evidence rule prohibits the
admission of evidence offered to vary or add to the terms of an
agreement, the rule applies only where the meaning of that
agreement is at issue. See State v. Laine, 618 P.2d 33, 34–35 (Utah
1980) (stating that “the parol evidence rule cannot properly be
invoked to prevent the State from showing the facts relating to”
whether the defendant committed a crime, because the State was
“not a party to” the contract in question and was therefore
“neither bound by [its] terms” nor “prohibited from” discussing
it during the trial); Garrett v. Ellison, 72 P.2d 449, 451–52 (Utah
1937) (stating that parol evidence is inadmissible “in an action
founded upon such 	writing, between the parties or privies
thereto,” and that the parol evidence rule “applies only in
controversies between the parties” to the contract (quotation
simplified)). In this administrative proceeding (as opposed to a
potential lawsuit by Kyco against ITY2 for breach of contract),
the terms of the parties’ 2012 agreement are of only tangential
relevance. Indeed, as a general matter, administrative agencies
are concerned with whether parties violated the law during
particular intervals of time. In this case, while Owner testified
briefly about the terms of the written agreement between Kyco
and ITY2, the terms of that agreement were merely background
information underlying the real issue: whether the workers
being paid by ITY2 were in fact employees of Kyco during the
specific 2014 and 2015 pay periods for which Kyco was audited,
such that Kyco should be liable for any taxes or payments
associated with those workers’ wages. While the terms of an
agreement 	between 	two 	parties 	may 	certainly 	bear 	some

Kyco v. Department of Workforce Services
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relevance to what is actually happening in practice, the focus of
the inquiry is not on the meaning of the language of any existing
agreement but rather on the actual relationship itself.
¶22 	Moreover, the parol evidence rule does not prohibit a
court from considering events that occurred after the formation
of a contract, including any subsequent arrangements that may
have been made by the parties. Mardesich v. Sun Hill Homes LC,
2017 UT App 33, ¶ 15 n.3, 392 P.3d 950 (“[T]he parol evidence
rule 	only 	purports 	to 	foreclose 	events 	which 	precede 	or
accompany a written or oral [agreement], not those which come
later.” (quotation simplified)). “Because a subsequent mutual
agreement is not a contemporaneous or prior conversation,
representation, or statement, it 	is not parol evidence” with
respect to an earlier contract. Id. (quotation simplified).
¶23 	Here, Owner testified that his company paid employees
who were hired and supervised by Kyco. This testimony was not
offered to vary or add to the terms of the agreement between
Kyco and ITY2, but rather to establish that the workers in
question were, in fact, Kyco’s employees during the relevant pay
periods. Similarly, the Board’s conclusion that Kyco and ITY2
were engaged in a payrolling relationship was not based on a
determination that the terms of the parties’ 2012 agreement
included payrolling arrangements, but rather on the conclusion
that payrolling occurred in 2014 and 2015 regardless of what the
agreement said. Accordingly, Owner’s testimony to that effect
was not barred by the parol evidence rule, and the Board did not
err in considering it.
B
¶24 	Kyco next contends that the Board erred when it declined
to deem Kyle Morris to be Kyco’s “corporate representative,”
and therefore determined that his testimony on subjects of which

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he did not have firsthand knowledge was hearsay.2 In making
this contention, Kyco asserts that Kyle Morris “testified at the
hearing as the representative for Kyco” and that, because “[a]
corporation is a fictitious entity” that “can only testify through
its designated representative,” Kyle Morris’s testimony as to the
working relationship between Kyco and ITY2 should not have
been considered hearsay despite his lack of personal knowledge.
¶25 	In its briefing on appeal, Kyco cites to no Utah statute or
case law in support of its position. However, at oral argument
and in the record below, Kyco analogized to rule 30(b)(6) of the
Utah Rule of Civil Procedure, which provides that in civil cases,
for purposes of pretrial depositions, “[a] party may name . . . a
corporation” as a witness and that, if a party does so, the
corporation may “designate one or more officers, directors,
managing agents, or other persons to testify on its behalf.” If a
corporate representative is designated in this manner, the party
calling 	the 	corporation 	as 	a 	witness 	must 	“describe 	with
2. Hearsay evidence is “clearly admissible in administrative
hearings,” see Deseret Book Co. v. Department of Workforce Services,
2018 UT App 50, ¶ 8 n.1, 430 P.3d 109 (quotation simplified), and
neither party contends here that the Board should have excluded
Kyle Morris’s hearsay testimony entirely. However, all factual
findings made in administrative hearings “must be supported by
a residuum of legal evidence competent in a court of law.” Id.
(quotation simplified). Because of its determination that some of
Kyle Morris’s testimony was hearsay, the Board appears to have
afforded less weight to that testimony than it did to Owner’s
firsthand testimony. On appeal, Kyco does not challenge the
principle that hearsay testimony should generally be afforded
less weight than firsthand testimony, and does not challenge the
Board’s specific decision—made following its determination that
Kyle 	Morris’s 	testimony 	constituted 	hearsay—to 	afford 	less
weight to that testimony because it was hearsay.

Kyco v. Department of Workforce Services
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reasonable particularity the matters on which” the witness is
expected to testify, and the corporation must “state, for each
person designated, the matters on which the person will testify.”
Id. If these guidelines are followed, the corporate representative
is entitled to testify “as to matters known or reasonably available
to the organization,” and is not limited to testifying solely about
those matters of which the corporate representative has personal
knowledge. Id. Kyco argues that it intended to designate Kyle
Morris as a form of corporate representative akin to those
designated in civil depositions pursuant to rule 30(b)(6), and that
therefore his testimony that his brother would not have engaged
in a payrolling-type relationship with ITY2 was not hearsay.
¶26 	We disagree for several reasons. First, even assuming,
without deciding, that rule 30(b)(6) could potentially apply in
the context of this administrative proceeding,3 that rule applies
by its terms only to discovery depositions, and not to trials or
3. The Board determined that “the Rules of Civil Procedure do
not generally apply” in administrative hearings before an ALJ.
While 	Utah 	Code 	section 	63G-4-205(1) 	(LexisNexis 	2016)
provides that parties to an administrative proceeding “may
conduct 	discovery 	according 	to 	the 	Utah 	Rules 	of 	Civil
Procedure” if “the agency does not enact [other] rules,” the
Department of Workforce Services has enacted rules for appeals
from “initial Department determination[s] on unemployment
benefits or unemployment tax liability (contributions).” Utah
Admin. Code R994-508-101(1). Those rules specifically provide
that, in this context, formal discovery governed by the Utah
Rules of Civil Procedure is “rarely necessary and tend[s] to
increase costs while delaying decisions.” Id. R994-508-108(2)–(3).
Accordingly, 	formal 	discovery 	is 	only 	allowed 	in 	these
proceedings “if so directed by the ALJ” and if certain elements
are found to be present. Id. The ALJ gave no such direction and
made no such findings in this case.

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evidentiary hearings. See, e.g., Union Pump Co. v. Centrifugal Tech.
Inc., 404 F. App’x 899, 908 (5th Cir. 2010) (stating that, while rule
30(b)(6) “allows corporate representatives to testify to matters
within the corporation’s knowledge during deposition,” that
rule does not apply to trials, and holding that “a corporate
representative may not testify [at trial] to matters outside his
own 	personal 	knowledge 	to 	the 	extent 	that 	information 	is
hearsay not falling within one of the authorized exceptions”
(quotation simplified)); In re Otero County Hosp. Ass’n, No. 11-11-
13686 JL, 2014 WL 184984, *10 (Bankr. D.N.M. Jan. 15, 2014)
(stating that rule 30(b)(6) “applies to deposition testimony, not
trial testimony”). Indeed, rule 30 appears in the section of the
Utah 	Rules 	of 	Civil 	Procedure 	governing 	“depositions 	and
discovery,” and is itself titled “Depositions upon oral questions.”
See Utah R. Civ. P. 30. Subsection (b) of that rule concerns itself
with the form of “[n]otice[s] of deposition.” Id. R. 30(b). Kyco
cites no authority for the proposition that rule 30(b)(6) has any
application outside the context of pretrial depositions in civil
cases. 	And 	the 	hearing 	before 	the 	ALJ 	was 	no 	pretrial
deposition—it was a contested, adversarial hearing presided
over by a neutral arbiter.
¶27 	Second, 	again 	assuming, 	without 	deciding, 	that 	rule
30(b)(6) could potentially apply here, Kyco made no effort to
comply with its requirements. Rule 30(b)(6) states that, if a party
calls a corporation as a witness, the corporation shall designate a
corporate 	representative 	to 	speak 	on 	its 	behalf, 	and 	shall
“describe with reasonable particularity the matters on which”
the corporate designee is expected to testify. The corporation
must also “state, for each person designated, the matters on
which the person will testify.” In this case, neither side called
Kyco as a corporate witness. Further, Kyco did not, prior to Kyle
Morris’s testimony, “describe with reasonable particularity the
matters on which” he was expected to testify or set forth the
matters on which he would testify. Accordingly, even if rule
30(b)(6) were applicable, Kyco failed to comply with its terms.

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¶28 	Third, we credit the Board’s determination that, “even if
the entirety of [Kyle] Morris’s testimony were to be considered
[as 	firsthand 	testimony 	rather 	than 	hearsay], 	the 	ultimate
outcome” of this case would not change because Kyle Morris did
not fully contradict Owner’s testimony regarding to the day-to-
day relationship between Kyco and ITY2. Kyle Morris testified
only that he did not believe Rob Morris would have entered into
the sort of agreement with ITY2 that Owner alleged, and that he
believed Rob Morris would have denied entering into that sort
of agreement. He did not contradict Owner’s testimony that,
regardless of whatever written agreement existed between Kyco
and 	ITY2, 	the 	day-to-day 	practice 	between 	Kyco 	and 	ITY2
amounted to a payrolling relationship. Accordingly, even had
Kyle Morris been a corporate representative similar to that
envisioned under rule 30(b)(6), his testimony would not have
been sufficient to contradict the bulk of Owner’s testimony, or
undermine the Board’s ultimate conclusion.
¶29 	Accordingly, the Board did not err when it determined
that Kyle Morris was not a corporate representative, and that his
testimony 	on 	subjects 	of 	which 	he 	did 	not 	have 	firsthand
knowledge was hearsay.
C
¶30 	Kyco next contends that the Board erred when it refused
to consider the declaration of Rob Morris. As noted, Rob Morris
did not testify at the hearing, and Kyco made no effort to
introduce his declaration before the ALJ. Kyco’s first attempt to
introduce that declaration into these proceedings was during its
appeal to the Board. We conclude that the Board did not abuse
its discretion by refusing to consider Rob Morris’s declaration.
¶31 	Under the Utah Administrative Code, an ALJ’s decision
“will be based solely on the testimony and evidence presented at
the 	[administrative] 	hearing.” 	Utah 	Admin. 	Code 	R994-508-
109(4). Further, “[a]bsent a showing of unusual or extraordinary

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circumstances, the Board will not consider new evidence on
appeal if the evidence was reasonably available and accessible at
the time of the hearing before the ALJ.” Id. R994-508-305(2).
Here, Kyco argues that the Board should have accepted Rob
Morris’s 	declaration 	because 	“unusual 	and 	extraordinary
circumstances exist[ed]” in that “[Kyco] had no way to predict or
anticipate” that, at the hearing, Owner would contradict the
terms of the written agreement between Kyco and ITY2.
¶32 	However, this assertion is belied by the particulars of the
hearings officer’s decision, which was issued almost two months
before the ALJ hearing and was the decision that Kyco appealed
to the ALJ. In this decision, the hearings officer affirmed the field
auditor’s determination that Kyco had engaged in payrolling,
and explicitly stated that this determination had been based on
“[c]onversations between the [a]uditor and [Owner]” 	which
“revealed [that ITY2] was acting as a payroll service” for Kyco.
The 	decision 	went 	on 	to 	describe 	an 	alleged 	business
relationship between ITY2 and Kyco that differed significantly
from the terms set forth in the written agreement. Moreover,
after appealing the officer’s decision, Kyco received a notice
prior to the hearing before the ALJ, which specifically informed
Kyco that the subject of “payrolling” would be at issue during
the hearing. Because Kyco received specific notice that Owner
had already testified that the agreement between Kyco and ITY2
was different in practice than it was on paper, it should have
been entirely foreseeable to Kyco that the Department might
present testimony from Owner reiterating that same point.
¶33 	Kyco therefore received adequate notice that it would
need to be ready to present all of the evidence (including witness
testimony) relevant to its position on the subject of payrolling
(and more broadly, the subject of whether Kyco employed the
workers paid by ITY2) at the administrative hearing before the
ALJ. Kyco has not asserted that Rob Morris was unavailable to
testify at the hearing, and has not adequately explained why it

Kyco v. Department of Workforce Services
20170273-CA 	16 	2018 UT App 174
would not have been on notice that Rob Morris’s testimony
might be relevant to the issues underlying the field auditor’s
conclusions. Accordingly, the Board did not abuse its discretion
when 	it 	determined 	that 	“unusual 	and 	extraordinary
circumstances” 	were 	not 	present, 	and 	therefore 	refused 	to
consider Rob Morris’s declaration.
D
¶34 	Finally, Kyco contends that the Board’s determination
that 	Kyco 	employed 	the 	workers 	in 	question 	was 	“clearly
erroneous.” However, Kyco does not identify any specific factual
findings that it asserts are unsupported by substantial evidence.
Similarly, Kyco does not identify any of the Board’s conclusions
that it asserts are unsupported by record evidence. Instead,
Kyco’s argument on this point is advanced on two fronts: (1)
Kyco’s 	reiteration 	of 	its 	arguments 	that 	Owner’s 	testimony
should have been excluded, Kyle Morris’s testimony should not
have 	been 	considered 	hearsay, 	and 	Rob Morris’s testimony
should have been admitted; and (2) Kyco’s assertions that the
Board could have made different factual findings and come to
different legal conclusions based on the evidence.
¶35 	As to the first argument, we have already determined that
the Board did not err in considering Owner’s testimony about
the mechanics of the day-to-day relationship between Kyco and
ITY2, 	determining 	that 	Kyle 	Morris’s 	testimony 	regarding
Kyco’s 	working 	relationship 	with 	ITY2 	was 	hearsay, 	and
excluding Rob Morris’s declaration. As to the second argument,
we note that our role as an appellate court is not to reweigh the
evidence presented before the Board and determine whether we
would have come to a different conclusion, or even whether a
different conclusion would have been plausible given the record
evidence. See Syed v. Department of Workforce Services, 2012 UT
App 266, ¶ 3, 286 P.3d 1291 (per curiam) (stating that “appellate
courts will not reassess an agency’s credibility determinations or

Kyco v. Department of Workforce Services
20170273-CA 	17 	2018 UT App 174
reweigh the evidence in a proceeding where conflicting evidence
is presented”). Rather, our role is to determine whether the
Board’s factual findings were based on substantial evidence. On
this 	record, 	we 	conclude 	that 	the 	Board’s 	findings 	were
supported by substantial evidence. Accordingly, we perceive no
reason to disturb the Board’s determination that Kyco employed
the workers in question during the relevant time period.
CONCLUSION
¶36 	Owner’s 	testimony 	about 	the 	day-to-day 	relationship
between Kyco and ITY2 was not barred by the parol evidence
rule, and the Board therefore did not err by considering it. The
Board did not err by determining that Kyle Morris’s testimony
on issues of which he had no personal knowledge was hearsay.
The Board did not abuse its discretion by refusing to consider
Rob Morris’s declaration. In light of these rulings, it follows that
there 	was 	substantial 	evidence 	to 	support 	the 	Board’s
determinations, and we therefore decline to disturb them.