Opinion
Civil Action No. 1:02CV-64-R.
February 24, 2005
MEMORANDUM OPINION
This matter is before the Court on motion for summary judgment (Dkt. # 61) of Defendant Airborne Freight Corporation, d/b/a Airborne Express ("Airborne"). Plaintiff James Bauer, II ("Bauer") responded (Dkt. # 70), Airborne replied (Dkt. #76), and this matter is now ripe for adjudication. For the reasons that follow, the Court DENIES Airborne's motion.
BACKGROUND
Plaintiff Bauer filed this action for recovery after a June 7, 2000 motor vehicle accident involving his vehicle and a delivery van driven by Christopher Lawson ("Lawson"), an employee of W G Transport, Inc. ("W G Transport"), which delivered packages for Airborne. Plaintiff sues not only Lawson and W G Transport but also Airborne under a respondiat superior theory of liability. Airborne asks this court to grant summary judgment on Lawson's claims against it because, it argues, W G Transport (and therefore Lawson) were independent contractors under the contract by which they provided local ground delivery services to Airborne. If they were independent contractors, rather than employees, Airborne may not be liable for the damage caused by Lawson's alleged negligence.
STANDARD
Summary judgment is available under Fed.R.Civ.P. 56(c) if the moving party can establish that the "pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).[N]ot every issue of fact or conflicting inference presents a genuine issue of material fact." Street v. Bradford Co., 886 F.2d 1472, 1477 (6th Cir. 1989). The test is "whether the party bearing the burden of proof has presented a jury question as to each element in the case." Hartsel v. Keys, 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a mere scintilla of the evidence. To support his position, he must present evidence on which the trier of fact could find for the plaintiff. See id. (citing Anderson v. Liberty Lobby, 477 U.S. 242, 251-52 (1986)). Mere speculation will not suffice to defeat a motion for summary judgment: "[t]he mere existence of a colorable factual dispute will not defeat a properly supported motion for summary judgment. A genuine dispute between the parties on an issue of material fact must exist to render summary judgment inappropriate." Monette v. Electronic Data Systems Corp., 90 F. 3d 1173, 1177 (6th Cir. 1996).
The parties have agreed that, as between W G Transport and Airborne and the issue of their respective liability, if any, to Bauer for damages, Kentucky law governs. Under Kentucky tort law, an employer is liable for his employees' negligence committed within the scope of employment. Horne v. Hall, 246 S.W.2d 441, 442 (Ky. 1951). If the tortfeasor is an independent contractor, however, the employer is not liable. Miles Farm Supply v. Ellis, 878 S.W.2d 803, 804 (Ky.App. 1994). Under Kentucky law, the issue of whether a person is an employee or an independent contractor is a question of law for the court. Clark v. Young, 695 S.W.2d 285, 289 n. 4 (Ky.App. 1985).
On the issue of whether a person is an employee or an independent contractor, Kentucky has adopted the Restatement (Second) of Agency's ten-factor test. The factors are as follows:
The Kentucky Supreme Court adopted this factor test when asked to determine whether certain newspaper delivery persons were employees or independent contractors for purposes of assessing the delivery persons' unemployment insurance benefits claims, not for purposes of analyzing the employer's respondiat superior tort liability. However, given the similarities between the two areas, we believe that Kentucky courts would apply the same test for both.
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is part of the regular business of the employer;
(i) whether the parties believe they are creating the relation of master and servant; and
(j) whether the principal is or is not in business.
Kentucky Unemployment Insurance Commission v. Landmark Community Newspapers of Kentucky, Inc., 91 S.W. 3d 575 (Ky. 2002). As we noted in our previous order on Defendant's Motion for Summary Judgment (Dkt. #35), the terms of the contract are not dispositive of this inquiry. Also, the Kentucky Supreme Court has said that, contrary to earlier holdings, no one of these factors may outweigh the others. Id. at 580 (". . . not one of the aforementioned factors is determinative, and every case . . . needs to be resolved on its own facts.").
ANALYSIS
We apply, then, the ten-factor test set forth in the Restatement.(A) Extent of control over details
This factor requires the court to examine the agreement between the parties (here, the Cartage Agreement and Airborne's "Cartage Contract Specifications") to determine what degree of control it grants to the employer over the details of the work. Before the Kentucky Supreme Court's decision in Landmark, supra, this factor was considered the most important; now, however, it is weighed alongside all the other factors. In this case, the Cartage Agreement and the documents related to it are quite detailed in some areas and set forth a number of specifications "designed to coordinate [Airborne's] business with the services [W G Transport] has contracted to provide . . ." (Airborne Express Cartage Contract Specifications, Exhibit E to Dkt. #71, p. 3). However, some details of how W G Transport was to meet those specifications are expressly and entirely left in the discretion of W G Transport. Specifically, the hiring and firing of employees, the specific routes they took and the hours they worked were all controlled by W G Transport. Nevertheless, given the amount of control provided to Airborne over the details of W G Transport's operation relative to the complexity of the operation generally, this factor weighs in favor of finding an employer-employee relationship.
(B) Worker in distinct occupation or business
Airborne argues that, because W G Transport provides only local ground transportation for packages (without using aircraft), it is engaged in a distinct occupation or business from Airborne, which uses air, ground and maritime modes of transportation to deliver packages for its customers. The evidence indicates that Airborne has employees in some areas of the country who provide the services which it contracted from W G Transport in this case. The evidence also shows that W G Transport was allowed to perform similar services for other companies in certain circumstances; that Airborne had no ownership interest in W G Transport; and that Airborne did not participate in the management of W G Transport. Nevertheless, W G Transport engages in a subset of the business in which Airborne engages; from this perspective, W G Transport is more like an employee than an independent contractor.
(C) Local custom
No evidence has been presented by either side in this case about local custom in Evansville, Indiana as to whether work such as this is typically done by independent contractors or employees.
(D) Skill required in the particular occupation
Because no significant, task-specific education or training are involved in becoming a driver for W G Transport, this factor weighs in favor of an employer-employee relationship.
(E) Supplier of instrumentalities, tools and place of work
The evidence indicates that Airborne supplied the packages to be delivered, computer and dispatch software, scanners, packaging receipts and bills of lading, radios, uniforms, logos, and offices. W G Transport, according to Paragraph 4 of the Cartage Agreement, was required to "furnish, operate and maintain in good working condition motor vehicle equipment . . . and bear all other costs necessary to perform the cartage services described in Paragraph 1 above." Accordingly, W G Transport owned the van driven by Lawson at the time of the accident. In spite of this, the majority of the instrumentalities and tools and the place of work were supplied by Airborne; this factor, then, weighs in favor of finding an employer-employee relationship.
(F) Length of employment
Paragraph 20 of the Cartage Agreement provides that the agreement "shall continue in effect until terminated" for cause or without cause with not less than sixty days' written notice by either party. The long-term nature of the agreement between W G Transport and Airborne weighs in favor of finding an employer-employee relationship.
(G) Method of payment
The evidence indicates that W G Transport was paid both "by the job" (a base rate per shipment) and "by the time" (a flat rate per week for dispatch and dock services). Because the agreement between the parties provides for both methods of payment, it does not weigh in favor of either characterization of the relationship.
(H) Regular business of employer
Airborne is engaged in the business of delivering packages door-to-door for its customers; W G transport provides local ground transportation to delivery services including, but not limited to, Airborne. W G Transport's work is a regular, in fact crucial, part of Airborne's business. This factor weighs in favor of finding an employer-employee relationship.
(I) Intent of the parties
The Cartage Agreement indicates that the parties believed themselves to be creating an independent contractor relationship. Their use of the term "contractor" to refer to W G Transport throughout the agreement, as well as the paragraphs specifically setting forth the parties' intent on the point. Paragraph 18 of the Cartage Agreement reads:
It is the express intent of both Airborne and Contractor to establish an independent contractor relationship. This agreement is not intended to create a joint venture, joint enterprise, partnership, or principal/agent relationship between Contractor and Airborne. Airborne expressly agrees that it is the sole responsibility of Contractor to control the manner and means of performance of all services which it has contracted to provide hereunder. It is further agreed and understood that neither Contractor nor any of Contractor's employees shall be considered under the provisions of this Agreement or otherwise as having any employee status with Airborne . . .
This factor, then, weighs in favor of finding an independent contractor relationship between W G Transport's employees and Airborne.
(J) Whether the employer is or is not in business
Airborne is in business, so this factor weighs in favor of finding an employee relationship.
CONCLUSION
For the reasons outlined above, this Court concludes that Defendant is not entitled to summary judgment as a matter of law.
An appropriate order shall issue.