Search v. Union Pacific Railroad

649 P.2d 48, 1982 Utah LEXIS 997
CourtUtah Supreme Court
DecidedJune 16, 1982
DocketNo. 17532
StatusPublished
Cited by1 cases

This text of 649 P.2d 48 (Search v. Union Pacific Railroad) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Search v. Union Pacific Railroad, 649 P.2d 48, 1982 Utah LEXIS 997 (Utah 1982).

Opinion

HOWE, Justice:

Plaintiff, a carman at Union Pacific Fruit Express Company (UPFE) appeals from the dismissal of his personal injury action against defendant Union Pacific Railroad [49]*49Company (Railroad) and seeks reversal of the judgment and remand for a new trial.

UPFE, a wholly owned subsidiary of the Railroad, is in the business of offering protective service railroad cars (refrigerator cars or “reefers”) for use by various railroads and other refrigerator car companies in the United States and Canada. It also services the refrigerator cars at locations along the railroad lines. Most of the cars are owned by the Railroad and leased to UPFE. About 75% of UPFE’s total revenue comes from business with railroads and refrigerator car companies other than the Railroad. Following an accident in which he was injured, plaintiff made claim for workmen’s compensation as a UPFE employee and received benefits over an extended length of time. In a non-jury trial, the lower court determined on a factual basis that the plaintiff who worked for UPFE was not “employed by” the Railroad pursuant to the Federal Employers’ Liability Act, 45 U.S.C.A. § 51, et seq.

The F.E.L.A. specifically allows recovery for an injury only if the plaintiff can prove that he was injured while employed by a railroad operating in interstate commerce. In Edwards v. Pacific Fruit Express Co., 390 U.S. 538, 88 S.Ct. 1239, 20 L.Ed.2d 112 (1968) the United States Supreme Court specifically ruled that refrigerator car companies like UPFE, the subsidiary herein, are not “going railroads” within the meaning of F.E.L.A. and as intended by Congress. The courts have also refrained from extending F.E.L.A. coverage to employees of various other kinds of operations closely related to railroading activities. Barnes v. The Chesapeake & Ohio R. Co., et al., Ky., 593 S.W.2d 510 (1978); Williams v. Chicago & Eastern Illinois R. Co., 13 Ill.App.3d 596, 300 N.E.2d 766 (1973); Hetman v. Fruit Growers Express Co., 346 F.2d 947 (3d Cir., 1965); Wells Fargo & Co. v. Taylor, 254 U.S. 175, 41 S.Ct. 93, 65 L.Ed. 205 (1919); Robinson v. B. & O. R. Co., 237 U.S. 84, 35 S.Ct. 491, 59 L.Ed. 849 (1915).

However, the plaintiff relies upon Kelley v. Southern Pacific Co., 419 U.S. 318, 95 S.Ct. 472, 42 L.Ed.2d 498 (1974) which outlines three ways that a non-railroad employee can establish an employment relationship with a railroad in order to qualify under F.E.L.A. At the time of the accident, the non-railroad employee must be (1) the “borrowed servant” of the railroad, (2) acting for “two masters simultaneously”, or (3) the “subservant” of the railroad. Plaintiff contends that as an employee of UPFE he was a “subservant” of the Railroad.

The “subservant” status is determined by whether a master-servant relationship exists between the railroad and its subsidiary. In other words, does the railroad “control or have a right to control” the non-railroad employee by “controlling or enjoying a right to control” his employer? Cooperation between parent and subsidiary companies does not necessarily imply control or a right to control. However, operational supervision at a direct or day-to-day level is an indicator of control. Kelley, supra; Fawcett v. Missouri Pacific R. Co., 242 F.Supp. 675 (W.D.La.1963); Gaulden v. Southern Pacific Co., 78 F.Supp. 651 (N.D.Cal.1948). Prior to the decision in Kelley but applicable to the issue of control, this Court enumerated five considerations in Moleton v. Union Pacific R. Co. and Pacific Fruit Express Co., 118 Utah 107, 219 P.2d 1080 (1950) which were used as a test to determine who exercised control over the injured employee in his work: (1) Who selected and hired the employee? (2) Who paid his wages? (3) Who had the power and authority to discharge him? (4) Who controlled his daily work activities? (5) Whose work was he actüally doing when the accident happened?

In the case before us, the Railroad is the answer to none of these questions. At the time of the accident the plaintiff was employed, supervised, and paid by UPFE. He was doing work for and on the premises of the refrigerator car company using its equipment. UPFE had the power to hire, promote and fire him. The Railroad enjoyed no direct supervisory power over him. The trial court determined that, based upon the evidence presented, sufficient control by the Railroad over UPFE did not exist to [50]*50establish a master-servant relationship and qualify the plaintiff as a “subservant” under F.E.L.A.

Further evidence as contained in the findings which support that determination is that although UPFE is a wholly owned subsidiary of the Railroad, it is a separately incorporated legal entity. In spite of limited interlocking between the Boards of Directors and the two top officers of the two companies being the same, both maintain completely separate supervisory staffs. UPFE maintains its own separate employee rosters, separate equipment, separate business facilities, and other properties.

Additionally, UPFE in its daily operation enters into a number of protective service contracts with the Railroad and other railroads. The trial court found that all business transactions between the Railroad and UPFE were “at arms length and in the same businesslike manner as are transactions between ... [UPFE] and other companies with which it deals.” There was no evidence that the terms of the contracts permitted supervision or control by the Railroad over UPFE in any way beyond parent-subsidiary cooperation.

As we have frequently stated, in a non-jury trial it is the trial judge’s prerogative to find facts — including judging the credibility of witnesses, weighing the reliability of other evidence, and drawing fairly derived and reasonable inferences therefrom. On appeal this Court reviews the evidence in a light most favorable to the trial court findings. Where there is competent evidence to support the findings this Court must sustain them. Nance v. City of Provo, 29 Utah 2d 340, 509 P.2d 365 (1973); Parker v. Telegift Intern, Inc., 29 Utah 2d 87, 505 P.2d 301 (1973); DeVas v. Noble, 13 Utah 2d 133, 369 P.2d 290 (1962); Charlton v. Hackett, 11 Utah 2d 389, 360 P.2d 176 (1961).

The plaintiff argues that the evidence suggests such intertwining between the two companies that UPFE is in reality nothing more than a “department” of the Railroad. For example, a railroad magazine characterizes employees of UPFE as “part of the Union Pacific family.” The railroad’s law department furnishes legal services to the subsidiary.

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Bluebook (online)
649 P.2d 48, 1982 Utah LEXIS 997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/search-v-union-pacific-railroad-utah-1982.