Averett v. Grange

909 P.2d 246, 280 Utah Adv. Rep. 20, 1995 Utah LEXIS 86, 1995 WL 762901

• Court: Utah Supreme Court
• Decided: December 27, 1995
• Docket: 940069
• Status: Published

Opinions

RUSSON, Justice:

Plaintiff Judy Averett appeals from the trial court’s entry of summary judgment dismissing her wrongful death action against Timothy L. Grange on the ground that the action was barred by the exclusive remedy provision of the Utah Workers’ Compensation Act. We affirm.

FACTS

This case arose out of a work place accident on July 5, 1988, which resulted in the death of Glen A. Averett. While employed by Geneva Rock Products, Inc. (Geneva Rock), Averett was fatally injured when Grange accidentally backed a ten-wheel dump truck over him at a Geneva Rock job site.

Prior to the accident, Geneva Rock had contracted with Provo City to resurface a certain stretch of road. Because Geneva Rock did not own enough dump trucks to do all the work it had contracted to do, it entered into contracts with other persons and entities which owned trucks. Under these agreements, Geneva Rock agreed to lease both trucks and drivers. Both leased drivers and Geneva Rock’s regular drivers were paid by the hour every two weeks; leased drivers were not paid by the job. Once a leased driver was sent to a particular job site, he was under the supervision of the Geneva Rock foreman at that site and the foreman would direct the activities of the leased driver throughout the day.

The contract under which Geneva Rock leased Grange and his truck to work at the project site specifically stated:

The equipment leased hereby shall be used by Lessee [Geneva Rock] as Lessee sees fit and Lessee shall have the sole possession, custody, and control of said equipment at all times in the manner as though it were the absolute owner thereof, and shall have sole exclusive right to supervise and direct the drivers or operators of said equipment....

However, the contract required Grange to provide his own liability and property damage insurance as well as workers’ compensation coverage.

In addition to driving his truck, Grange performed other duties at the job site when asked. Also, Grange’s truck had a sign attached to its side which read “Geneva Rock” and included Geneva Rock’s Public Service Commission (PSC) number. Grange was involved in the same Geneva Rock activity as all of the other truck drivers, both regular and leased, at the time of the accident.

At the time and place of the accident, Averett was serving as foreman of the Provo road resurfacing job site. As foreman for Geneva Rock, Averett was responsible for directing the activities of all regular and leased employees at the site, including Grange. Both the company-owned and the leased Geneva Rock trucks were being used for the same work at the direction of Averett. Averett also had control of both regular and leased employees as to what, when, how, and where the work was to be done.

On July 5, 1988, while working at the Provo job site, Grange accidentally backed his ten-wheel dump truck over Averett, resulting in Averett’s death.

Averett’s wife filed a complaint against Grange, Grange’s brother Roger, and Mack Truck, Inc., for the wrongful death of Aver-ett.¹ After discovery had been completed, Grange moved for summary judgment on the ground that both he and the decedent were co-employees of Geneva Rock and, thus, he was immune from civil suit under the exclusive remedy provision of section 35-1-60 of the Utah Code. That section provides in pertinent part:

(1) The right to recover compensation pursuant to the provisions of this title for injuries sustained by an employee, whether resulting in death or not, shall be the exclusive remedy against the employer and shall be the exclusive remedy against any officer, agent, or employee of the employer and the liabilities of the employer imposed by this act shall be in place of any and all other civil liability whatsoever, at common law or otherwise, to the employee or to his spouse, widow, children, parents, dependents, next of kin, heirs, personal representatives, guardian, or any other person whomsoever, on account of any accident or injury or death, in any way contracted, sustained, aggravated, or incurred by the employee in the course of or because of or arising out of his employment, and no action at law may be maintained against an employer or against any officer, agent, or employee of the employer based upon any accident, injury, or death of an employ-ee_

(Emphasis added.)

The trial court ruled that as a matter of law, Averett and Grange were co-employees of Geneva Rock and that plaintiff’s action against Grange was therefore barred by the exclusive remedy provision of section 35-1-60.

Plaintiff appeals, arguing that Grange was an independent contractor who had merely leased a truck and a driver to Averett’s employer, Geneva Rock. Thus, she asserts, Grange is specifically included in the group of persons subject to suits arising from work-related actions under section 35-1-62 of the Utah Code. That section provides, in pertinent part, “[T]he injured employee or his heirs or personal representative may also maintain an action for damages against subcontractors, general contractors, independent contractors, property owners or their lessees or assigns, not occupying an employee-employer relationship with the injured or deceased employee at the time of his injury or death.” Grange responds that since the two men were working on the same project at the same site under the same supervision and were both subject to the right of control of Geneva Rock, they must be considered co-employees. Therefore, Grange argues, the trial court was correct in granting his motion for summary judgment on the ground that the action was barred by the exclusive remedy provision of section 35-1-60.

STANDARD OF REVIEW

Summary judgment is proper only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c); Higgins v. Salt Lake County, 855 P.2d 231, 235 (Utah 1993). Because we resolve only legal issues on appeal from a summary judgment, we do not defer to the trial court’s conclusions of law but review them for correctness. Ferree v. State, 784 P.2d 149, 151 (Utah 1989); accord Higgins, 855 P.2d at 235. On appeal, “[w]e determine only whether the trial court erred in applying the governing law and whether the trial court correctly held that there were no disputed issues of material fact.” Ferree, 784 P.2d at 151 (citing Bushnell Real Estate, Inc. v. Nielson, 672 P.2d 746, 749 (Utah 1983); Bowen v. Riverton City, 656 P.2d 434, 436 (Utah 1982)).

ANALYSIS

The Workers’ Compensation Act defines “independent contractor” for purposes of the act as

any person engaged in the performance of any work for another who, while so engaged, is independent of the employer in all that pertains to the execution of the work, is not subject to the rule or control of the employer, is engaged only in the performance of a definite job or piece of work, and is subordinate to the employer only in effecting a result in accordance with the employer’s design.

Utah Code Ann. § 35-l-42(2)(b) (emphasis added).

In workers’ compensation cases, this court has consistently held that whether an employer-employee relationship exists depends upon the employer’s right to control the employee. In Pinter Construction Co. v. Fris-by, 678 P.2d 305 (Utah 1984), Frisby was a subcontractor of Pinter Construction Company, which was under contract to construct a metal building. This court held that Frisby was an employee of Pinter because Pinter had the right to control Frisby. Therefore, this court held that Frisby, as an employee of Pinter, was entitled to workers’ compensation. Id. at 308-10. In commenting on section 35-1-42(2), this court stated, “Thus, if an employer hires a contractor, that contractor, his employees, and all subcontractors under him are ‘employees’ if (1) the employer controls or supervises the contractor’s work, and (2) such work is a part or process in the employer’s trade or business.” Id. at 307. The court further held, “It is not the actual exercise of control that determines whether an employer-employee relationship exists; it is the right to control that is determinative.” Id. at 309 (citing Hinds v. Herm Hughes & Sons, Inc., 577 P.2d 561 (Utah 1978); Barnbrough v. Bethers, 552 P.2d 1286 (Utah 1976); Smith v. Alfred Brown Co., 27 Utah 2d 155, 493 P.2d 994 (1972)).

In addition, in English v. Kienke, 848 P.2d 153 (Utah 1993), this court explained the difference between employees and independent contractors for purposes of the Workers’ Compensation Act as follows:

“Speaking in generality: an employee is one who is hired and paid a salary, a wage, or at a fixed rate, to perform the employer’s work as directed by the employer and who is subject to a comparatively high degree of control in performing those duties. In contrast, an independent contractor is one who is engaged to do some particular project or piece of work, usually for a set total sum, who may do the job in his [or her] own way, subject to only minimal restriction or controls and is responsible only for its satisfactory completion.

The main facts to be considered as bearing on the relationship here are: (1) whatever covenants or agreements exist concerning the right of direction and control over the employee, whether express or implied; (2) the right to hire and fire; (3) the method of payment, i.e., whether in wages or fees, as compared to payment for a complete job or project; and (4) the furnishing of the equipment.”

Id. at 157 (quoting Harry L. Young & Sons v. Ashton, 538 P.2d 316, 318 (Utah 1975)). Even the case cited by the dissent as being similar to the present case, Luker Sand & Gravel Co. v. Industrial Commission, 82 Utah 188, 23 P.2d 225 (1933), clearly and unequivocally states, “When the employer retains supervision and control of the work to be performed, the workmen under him are employees.” Id. at 195, 23 P.2d at 228. Accordingly, this court held that because the employer did not have the right to control the manner or method in which the driver did his work, the driver was not an employee but an independent contractor.

In the case before us, the following numbered facts are sufficient to conclude that as a matter of law, an employer-employee relationship existed between Grange and Geneva Rock, thereby making Grange and Averett co-employees. (1) The Grange truck lease provided:

The equipment leased hereby shall be used by Lessee [Geneva Rock] as Lessee sees fit and Lessee shall have the sole possession, custody, and control of said equipment at all times in the manner as though it were the absolute owner thereof, and shall have sole exclusive right to supervise and direct the drivers or operators of said equipment ... [;]

(2) both Grange and his truck were subject to the direction of Geneva Rock as to what, when, how, and where the work was to be performed; (3) the truck driven by Grange had a sign attached to its side which read “Geneva Rock” and included Geneva Rock’s PSC number; (4) Grange also performed other duties at the job site when asked; (5) at the time and place of the accident, both the company-owned and the leased Geneva Rock trucks were being used for the same work at the direction of Geneva Rock foreman Averett; (6) as foreman for Geneva Rock, Averett was responsible for directing the activities of all regular and “leased” employees at the site; (7) leased drivers, like regular Geneva Rock drivers, were paid by the hour every two weeks — leased drivers were not paid by the job; (8) at the time of the accident, Grange was involved in the same Geneva Rock activity as all the other truck drivers. It is clear from these facts that Grange was not an independent contractor but an employee of Geneva Rock and therefore a co-employee of Averett.

Moreover, the fact that Grange’s contract with Geneva Rock required him to provide his own insurance and workers’ compensation coverage does not alter our analysis. In workers’ compensation cases, the most important factor in determining whether an employer-employee relationship exists is not what relationship the parties intended to create, but what relationship was in fact created. Parties may intend to create an independent contractor relationship, but in doing so they may actually create an employer-employee relationship. Employers cannot escape their responsibility to the public or their employees simply by entering into agreements which identify employees as independent contractors and force them to procure their own insurance and workers’ compensation coverage, while insisting on the right to supervise and control when, where, and how they do their work. Otherwise, employers would enter into such agreements with every employee, thereby avoiding legal liability to third parties for employees’ actions as well as responsibility under the Workers’ Compensation Act.

The dissent, however, deviates from the well-established right-of-control test and argues that professionals such as lawyers, therapists, and accountants would be considered employees of their clients if the inquiry were limited to the right of control. Such argument has no merit. For example, while clients of attorneys have certain rights as to the end product and the time of its accomplishment, which is true in all independent contractor relationships, such clients do not have the right to control when and where the attorney practices law, the manner in which legal work is performed, the type of work the attorney can or cannot do, or the freedom the attorney has to serve other clients. In contrast, where an attorney is actually employed by a private company which retains the right to supervise and direct when and where the attorney will work, the kind of work the attorney will do, and the manner in which such work will be done, an employer-employee relationship has been established.

Furthermore, our decision comports with other well-established principles of workers’ compensation law. If Grange had been injured in this accident and had made a claim with Geneva Rock for workers’ compensation benefits for such injuries, this court, consistent with prior decisions, clearly would have held that he was an employee and was entitled to such benefits. Accordingly, a claim by a Geneva Rock employee against Grange must be guided by the same principles. As this court has previously stated:

The general rule, which has been approved by this court a number of times is that the act should be liberally construed to effectuate its purpose of providing protection to employees. It would be quite inconsistent with our ideas of even-handed justice to apply a liberal interpretation of the Act in order to assure coverage to employees, but if it appears that there is other coverage, to then reverse the policy and apply a restrictive view to exclude coverage in order to allow an employee to sue an employer. We think the ends of justice will best be served and the beneficial purposes of the Act will be best accomplished for employees and employers alike, if the statute is applied in an uniform manner, whoever’s rights may be at stake.

Smith v. Alfred Brown Co., 27 Utah 2d at 158,493 P.2d at 995 (footnotes omitted).

CONCLUSION

In the ease before us, the facts are relatively simple and involve the relationship between two construction workers involved in the same project. The facts clearly show that Geneva Rock had the right to control where, when, and how Grange did the work. The trial judge was correct in holding that the facts establish an employer-employee relationship between Grange and Geneva Rock as a matter of law. Thus, Grange and Aver-ett were co-employees of Geneva Rock, and workers’ compensation was plaintiffs only remedy. Accordingly, we affirm.

1 . Roger Grange and Mack Truck, Inc., were subsequently dismissed by stipulation of the parties.