Davis v. Home Insurance Company

291 So. 2d 455, 1974 La. App. LEXIS 3798
CourtLouisiana Court of Appeal
DecidedJanuary 8, 1974
Docket12199
StatusPublished
Cited by5 cases

This text of 291 So. 2d 455 (Davis v. Home Insurance Company) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. Home Insurance Company, 291 So. 2d 455, 1974 La. App. LEXIS 3798 (La. Ct. App. 1974).

Opinion

291 So.2d 455 (1974)

Stanley R. DAVIS, Plaintiff-Appellant,
v.
The HOME INSURANCE COMPANY et al., Defendants-Appellees.

No. 12199.

Court of Appeal of Louisiana, Second Circuit.

January 8, 1974.
Rehearing Denied February 12, 1974.

*456 McKinley, Dimos & Brown by Donald R. Brown, Monroe, for plaintiff-appellant.

Lunn, Irion, Switzer, Johnson and Salley by Jack E. Carlisle, Jr., Shreveport, for defendants-appellees.

Before BOLIN, PRICE and HALL, JJ.

PRICE, Judge.

Stanley R. Davis, an insurance sales representative of Investors Preferred Life Insurance Company, brought this action against Investors and its insurer, The Home Insurance Company, seeking benefits under the workmen's compensation statute for a total and permanent disability alleged to have resulted from an accidental injury sustained by Davis while in the course of employment with Investors.

Investors and Home Insurance deny liability, contending Davis was an independent contractor rather than an employee of Investors and therefore not entitled to benefits under the statute. They further deny the occurrence of the accident alleged to have caused the injury to Davis, or that he was engaged in the performance of any duties connected with his agency relationship with Investors at the time the alleged accident happened.

Davis has appealed from the judgment of the trial court rejecting his demands.

Davis was an agent for Investors engaged in selling group accident policies to businesses and institutions in Louisiana and southern Arkansas. As his home was in El Dorado, Arkansas, he customarily drove his own automobile to points in Louisiana and Arkansas, and on occasions remained away from home overnight in the performance of his work.

Plaintiff contends that on April 10, 1970, while preparing to check out of a motel, following a three day stay in Shreveport to service policyholders of Investors in that city, he tripped as he stepped from the threshold of his room and injured his back.

In his reasons for rejecting plaintiff's demands for compensation benefits, the trial judge concluded Davis had not proven his relationship with Investors was that of "employer-employee" instead of "principal and independent contractor." Nor did the court find Davis had proven his accident happened while in the course or scope of his employment.

We find the trial court erred in its conclusion and are of the opinion plaintiff is entitled to compensation benefits for the reasons set forth hereinafter.

Relationship of Davis to Investors— Employee or Independent Contractor.

This court in the recent case of Sones v. Mutual of Omaha Insurance Company, 272 So.2d 739 (La.App. 2d Cir. 1972), had occasion to resolve the status of a commission insurance agent for the purpose of determining coverage under the workmen's compensation *457 statute. After an exhaustive review of the prior decisions on this issue in the Sones case, the commission insurance agent was held to be an employee. In resolving this issue in Sones, factors considered of primary importance in making the determination are as follows:

"Under the statutory definition, as explained in Shelton [Shelton v. Barber Brothers Company, 94 So.2d 489 (La. App.)] and Gresham [Gresham v. Speights, 133 So.2d 846 (La.App.)] Sones cannot be considered an independent contractor. He did not contract for a specified piece of work or result for a specified price or recompense. He was not one independent in business in that he had a continuing, exclusive relationship with the defendants. His employment was subject to termination at the will of either party without a corresponding liability on the part of either.

"While defendants use the term `independent agent', their argument, basically, is that Sones was an independent contractor as distinguished from an employee. Having found that Sones' employment does not come within the definition of independent contractor, the presumption is that he was an employee. R.S. 23:1044 provides:
`A person rendering service for another in any trades, businesses or occupations covered by this Chapter is presumed to be an employee under this Chapter. * * *'

* * * * * *

"Our decision that Sones was an employee within the provisions of the workmen's compensation statute is based on a consideration of the total relationship between him and the defendant companies. Admittedly, actual control or even the right to control his physical activities was minimal. On the other hand, economic control was substantial. We attach particular importance to the facts that his services were rendered to the companies on a continuing, exclusive basis and that the nature of his services— selling insurance—was an integral part of the companies' regular and basic business which necessarily must be accomplished through persons regularly doing this work. We do not choose to label this approach to the problem, but it probably comes close to the `relative nature-of-the-work test' described in Larsen's Workmen's Compensation Law, Sections 43, 50, et seq."

Davis had represented Investors or their predecessor company for a period of approximately eight years prior to his accident. Although he had a written contract with Investors obligating him to represent them exclusively, this provision was not followed and Davis did have licenses to sell policies of a non-competitive nature with other companies. The evidence shows his commissions earned with the other companies to have been so negligible that for all practicable purposes he worked exclusively for Investors. Average commissions paid to Davis by Investors ran approximately $5,000 annually, whereas his total sale of occasional hospitalization policies for other companies amounted to only $300 to $400 per year.

The stipulation in Davis' contract describing his status as an independent contractor is not conclusive. A similar argument was rejected by this court in Sones.

The true nature of the relationship for purposes of coverage under the workmen's compensation statute must be determined by an evaluation of all facts and circumstances and not entirely from a contractual characterization of the status.

We find most of the factors on which the court in Sones relied to hold the agent was an employee to be present in this case. Davis had authority to solicit applications for group policies and if accepted by Investors, he was paid a commission on initial premiums and a percentage on renewals for what is described in the written contract as a "persistency allowance" for *458 compensation for the servicing of the policies sold by him. The contract requires him to produce a minimum of $2,500 in new premiums each year to entitle him to renewal commissions. The agreement is subject to termination by either party after thirty days notice without liability.

The degree of control over the activities of Davis by Investors is a fact in dispute. Davis testified he and other agents were required to prepare a daily log of contacts made with prospects who were receptive enough to listen to a sales presentation and file it with the home office of Investors at the end of each week. Davis further testified he was expected to render liaison services between the company and the policyholders in his territory. Although this factor is disputed by Investors, the weight of the evidence favors Davis' testimony.

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Bluebook (online)
291 So. 2d 455, 1974 La. App. LEXIS 3798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-home-insurance-company-lactapp-1974.