Mahan v. NTC of America & Fireman's Fund Indemnity Co.

1992 OK 8, 832 P.2d 805, 63 O.B.A.J. 286, 1992 Okla. LEXIS 3, 1992 WL 6919

• Court: Supreme Court of Oklahoma
• Decided: January 21, 1992
• Docket: 73254
• Status: Published

Opinions

SUMMERS, Justice:

The question is whether injured claimant was an “employee” protected by the Oklahoma Workers’ Compensation Act. Upon review of the record consistent with our duty to adjudicate a jurisdictional fact, we hold that he was not.

Mahan had a truck. He entered into a leasing agreement with NTC of America, Inc. Under the terms of the lease, Mahan agreed to carry goods for NTC from place to place in exchange for a percentage of the gross profit realized from the goods. Mahan was charged with the duty of maintenance of the truck, fueling of the truck, and providing a limited amount of insurance. The contract stated that NTC had exclusive control over the leased equipment. However, the truck remained in the possession of Mahan. The general procedure prior to hauling a load of goods was notification to Mahan as to where and when he should pick up and deliver the load. Mahan could then accept or refuse the job.

On September 26, 1985, Mahan suffered an injury to his eye while repairing the truck during a trip on which he was carrying goods for NTC. The injury required surgery and repeated physician’s consultations. The parties stipulated that Mahan timely notified NTC of the injury.

After a hearing the trial judge determined that Mahan was acting as an independent contractor when the injury occurred, and thus was not entitled to workers’ compensation benefits. Mahan appealed to the three-judge panel, claiming that the trial court applied the incorrect statute. The panel sent the matter back for reconsideration under what it considered to be the correct statute, and the trial judge again refused benefits.¹ Mahan then appealed and the Court of Appeals reversed, finding that Mahan was an employee at the time of his injury. NTC petitioned for cer-tiorari. We granted certiorari on Novem-her 6, 1990, and now reinstate the order of the Workers’ Compensation Court.

Initially, we note that in workers’ compensation cases we are not bound by the lower court’s determination of jurisdictional facts. Swyden Constr. Co. v. White, 383 P.2d 674, 676 (Okla.1963); McKeever Drilling Co. v. Egbert, 170 Okl. 259, 40 P.2d 32, 34-35 (1934). The question of whether or not a claimant is an employee has long been recognized as a jurisdictional fact, and therefore this Court will review the record to make an independent finding on that issue. Leonhardt Enterprises v. Houseman, 562 P.2d 515, 517 (Okla.1977); Smith Brothers Road Construction Co. v. Palmer, 389 P.2d 495 (Okl.1964).

The determination of whether an individual is an employee or an independent contractor turns on the particular facts of the case and on the contract between the parties. Cannan v. Drane, 477 P.2d 687, 691 (Okla.1970). Generally, an independent contractor is one who performs a service for another according to his or her own methods, free from control and direction in all matters connected with the performance of the task, except as to the result. Flick v. Crouch, 434 P.2d 256 (Okla.1967). An employee, on the other hand, is subject to the employer’s direction and control as to the details of the task. See Parkhill Truck Co. v. Brewer, 354 P.2d 774, 776 (Okla.1960).

We look first to the formal contract between the parties. As in Cannan, the leasing agreement stated that NTC wanted to “conduct a portion of its transportation business by use of equipment owned and operated by independent contractors....” (Emphasis Added) While the agreement expressly provided that the leased equipment was under the exclusive control of NTC, it also provided that Mahan was to direct and control the driver of the truck, was to provide fuel and maintenance for the truck, and was to pay all operating expenses. He was to be paid a percent of the gross revenue from the load he delivered. Finally, the agreement specifically stated that the “parties intend to create by the Agreement a ‘contractor-independent contractor’ relationship and not an ‘employer-employee’ relationship....”

As for the facts surrounding the relationship, NTC directed where and when the loads were to be delivered. Other than this, Mahan was permitted to make decisions regarding the details of the work. He was paid as an independent contractor; NTC did not withhold taxes from his payments. Mahan also testified that he was free to accept other jobs during the time the lease was in effect.

Although mode of payment is not determinative, it is a factor to be considered. Cannan, 477 P.2d at 691; Parkhill Truck Co., 354 P.2d at 776. The intent of the parties is also important. Cannan, 477 P.2d at 691. Here, all aspects of the relationship point towards Mahan’s status as being an independent contractor. The express contract language, the mode of payment, and the lack of control and supervision by NTC all indicate that the parties created a contractor-independent contractor relationship.

In Smith Brothers Road Constr. v. Palmer, supra, we faced a similar situation. There claimant was hired to haul loads of gravel from one pit to another. Claimant either owned his truck or it was owned by his son. Claimant paid for the fuel and maintenance of the truck. He was paid on a per load basis. He was free from supervision except as to the ultimate result. We held the claimant to be an independent contractor. We find Smith Brothers indistinguishable from the ease at bar. See also Miller v. Steelman Contracting Co., 282 P.2d 740 (Okla.1955).

We therefore vacate the opinion of the Court of Appeals and sustain the order of the Workers’ Compensation Court denying benefits.

OPALA, C.J., HODGES, Y.C.J., and LAVENDER, SIMMS, HARGRAVE and KAUGER, JJ., concur.

1 . At the time of Mahan’s injury 85 O.S.1981 § 3 did not specifically exclude an owner/operator of a truck which was leased to a carrier. On November 1, 1986, the statute was amended to specifically exclude from the definition of "employee” any "person, commonly referred to as an owner-operator, who owns or leases a truck-tractor or truck for hire, if the owner-operator actually operates the truck-tractor or truck and if the person contracting with the owner-operator is not the lessor of the truck-tractor or truck.”