Hartford Insurance Group v. Mile High Drilling Co.

292 N.W.2d 232, 96 Mich. App. 455, 1980 Mich. App. LEXIS 2573
CourtMichigan Court of Appeals
DecidedApril 1, 1980
DocketDocket 78-3586
StatusPublished
Cited by13 cases

This text of 292 N.W.2d 232 (Hartford Insurance Group v. Mile High Drilling Co.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hartford Insurance Group v. Mile High Drilling Co., 292 N.W.2d 232, 96 Mich. App. 455, 1980 Mich. App. LEXIS 2573 (Mich. Ct. App. 1980).

Opinion

Mackenzie, P.J.

On September 11, 1975, plaintiff Hartford Insurance Group filed a complaint in Wayne County ^Circuit Court for damages against defendants Mile High Drilling Company and Greenfield and Associates. Defendants subsequently filed cross-claims against. each other. Plaintiff now appeals the lower court judgment that defendant Greenfield was without liability and that defendant Mile High was liable for damages only in the amount of $15,500.

Mile High leased a crane from plaintiff’s subrogor, Contractors Machinery Company, for use at the Port Huron Tunnel project. On December 19, 1973, Mile High agreed to let Greenfield, another contractor at the tunnel site, use the crane for Greenfield’s own purposes. The crane was used by Greenfield until December 20, 1973. On December 28, 1973, Mile High’s supervisor asked Greenfield’s supervisor if he would loan his crane operator to him. Other than to instruct the crane operator, Mr. Edwards, to do as the Mile High supervisor requested, Greenfield did not supervise him. While Mr. Edwards was loading some buggies owned by Mile High onto a trailer, the crane tipped over and sustained damage.

The owner of the machine, Contractors Machinery, repaired the crane itself and sought reimbursement from plaintiff, its insurer. An appraiser of construction equipment examined the damaged crane several weeks after the accident, and testified that the total cost of repair was $31,830.41 including profit, and $26,494.49 without profit. The *458 appraiser, however, testified that he did not possess expertise on the cause of damages and, consequently, had no opinion on how the crane was damaged.

Plaintiff first contends that the trial court erred in finding that the crane operator, Mr. Edwards, Was a borrowed servant of Mile High, thus relieving Greenfield from respondeat superior liability. We disagree.

The trial court found that Greenfield’s supervisor, Mr. Loy, made the crane operator’s services available to Mile High. In doing so, he did not retain control and supervisory duties over the crane operator for the service he was to perform for Mile High. Thus, the crane operator was a borrowed employee under Janik v Ford Motor Co, 180 Mich 557, 562; 147 NW 510 (1914). In that case, the Michigan Supreme Court held that the determination of which master is liable under the doctrine of respondeat superior in a borrowed servant situation depends upon which master had complete control over the servant at the time of the accident. Since Greenfield lacked control, it was not liable under the respondeat superior doctrine for the negligence of Mr. Edwards in performing the service.

In Nichol v Billot, 406 Mich 284; 279 NW2d 761 (1979), the Michigan Supreme Court was confronted with a situation involving the issue of whether the control test or the economic reality test is the proper test to employ. The economic reality test examines the following four factors: (1) control of a worker’s duties, (2) the payment of wages, (3) the right to hire and fire and the right to discipline, and (4) the performance of the duties as an integral part of the employer’s business towards the accomplishment of a common goal. *459 Askew v Macomber, 398 Mich 212, 217-218; 247 NW2d 288 (1976).

In Nichol, the plaintiffs decedent had been killed while working on an excavation project for a trailer park when a trench collapsed. The plaintiffs decedent was hired by the trailer park’s owner, and, consequently, the plaintiff received workmen’s compensation benefits from the owner. The owner had hired the defendant, an excavation contractor, to dig the trench. The defendant was also sued for negligence by the plaintiff, who contended that the defendant was an independent contractor and thus subject to suit. The defendant, however, contended it was an employee of the trailer park’s owner and thus immune from liability under the provision of the Worker’s Disability Compensation Act that bars suits by employees against co-employees, MCL 418.827(1); MSA 17.237(827X1).

The Court rejected use of the control test for determining whether the defendant was an employee of the trailer park owner or an independent contractor. The Court stated that the control test has been typically applied to cases involving the vicarious liability of a master for the acts of his servant vis-á-vis a third party. Stating that it was a misuse of the test to use it for purposes other than that for which it was originally intended, the Court limited it to cases involving the issue of liability under the doctrine of respondeat superior.

Upon rejecting the control test, the Court decided to apply the economic reality test. Noting that an independent contractor is a third party subject to suit under § 827(1) of the Worker’s Disability Compensation Act, the Court stated that the economic reality test was the appropriate test to determine which persons are not given immunity under the provision as well as those who are.

*460 Taking into consideration the Supreme Court’s discussion of the control test and the economic reality test in Nichol, we conclude that employment of the control test was appropriate in this case, which involves a question of respondeat superior liability. 1 Unlike Nichol, the workmen’s compensation statute is not involved here. Although the actual payment of workmen’s compensation benefits was not at issue in Nichol, the Supreme Court found it significant that important objectives of the workmen’s compensation statute were involved. The Court noted:

"Although workmen’s compensation benefits are not at issue here, the policies behind the act are involved through the invocation of § 827(1). We think that as the economic reality test is the appropriate test to determine which persons are intended to be included within the act, it is also the appropriate test to determine which persons should not be subject to the act’s bar against common-law remedies. Because the act is concerned with the correction of economic evils through remedies unknown to the common law, the control test, a creature of common law, is not responsive to the provisions of the statute. We deem it appropriate to apply the principle which accomplishes the purpose of the social legislation involved here, which is to afford maximum benefit to injured parties. As it is defendant who relies on the worker’s compensation act to support his defense, he should not be heard to complain that a rule utilized to construe the act’s provisions is to be employed.” Nichol v Billot, supra, at 298-299.

Having decided that employment of the control test was appropriate, we must next determine whether the trial court erred in concluding that *461 Greenfield was not in control of the crane operator and thus not liable under the respondeat superior doctrine.

The findings of fact by a trial judge after a bench trial will not be set aside unless clearly erroneous. GCR 1963, 517.1.

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Bluebook (online)
292 N.W.2d 232, 96 Mich. App. 455, 1980 Mich. App. LEXIS 2573, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hartford-insurance-group-v-mile-high-drilling-co-michctapp-1980.