From Casetext: Smarter Legal Research

Nichol v. Billot

Michigan Court of Appeals
Dec 8, 1977
263 N.W.2d 345 (Mich. Ct. App. 1977)


In Nichol v Billot, 80 Mich. App. 263; 263 N.W.2d 345 (1977), lv gtd, 402 Mich. 922 (1978), the panel held that in a tort suit the "control" test was still the appropriate test.

Summary of this case from Berger v. City of Berkley


Docket No. 29607.

Decided December 8, 1977. Limited leave to appeal granted, 402 Mich ___.

Appeal from Sanilac, Allen E. Keyes, J. Submitted June 21, 1977, at Detroit. (Docket No. 29607.) Decided December 8, 1977. Limited leave to appeal granted, 402 Mich ___.

Complaint by Bertha Nichol, administratrix of the estate of Milo Nichol, deceased, against Wayne Billot seeking damages for wrongful death resulting from a sewer excavation cave-in. Judgment for defendant. Plaintiff appeals. Affirmed.

Marston, Sachs, Nunn, Kates, Kadushin O'Hare, P.C. (by David K. Barnes), for plaintiff. Drillock, Atkins, Schrope Marcus, for defendant.

Before: BEASLEY, P.J., and V.J. BRENNAN and J.R. McDONALD, JJ.

Circuit judge, sitting on the Court of Appeals by assignment.

On August 9, 1971, during construction of additional sites at a Sandusky trailer park, plaintiff's decedent, a courageous, 70-year-old retiree, was crushed to death when the wall of a trench, in which he was attaching a sewer pipe to an existing septic tank, collapsed.

Plaintiff seeks damages for wrongful death from defendant, the excavator who dug the trench which was more than nine feet deep, on the theory that defendant was an independent contractor and that he negligently failed to slope and shore the walls of the trench as required under accepted safety standards. Plaintiff's decedent, who resided in the trailer park, was employed on a part-time basis by the owner of the trailer park.

Plaintiff successfully claimed workmen's compensation benefits for wrongful death from his employer who owned the trailer park and who had compensated plaintiff's decedent for work done by him by applying his wages against rent for space in the trailer park.

Defendant denied liability claiming that, as a co-employee of the trailer park owner, he was immune from liability to plaintiff by virtue of the provisions of the workmen's compensation statute, and that, even if not immune, he was not negligent and that plaintiff's decedent was guilty of contributory negligence.

Now known as Worker's Disability Compensation Act; see, MCLA 418.161(1) and 418.827(1); MSA 17.237(161)(1) and 17.237(827)(1).

On November 10, 1972, shortly after suit was commenced, defendant moved for summary judgment, again claiming that he, defendant, was an employee of and under the control of the owner of the trailer park who acted through an "on-site" supervising manager, that he was hired to do some excavating on an hourly rate, that he was not and could not be liable for damages arising from the death of plaintiff's decedent because the provisions of the workmen's compensation law precluded it, and that plaintiff should look to his employer for workmen's compensation benefits.

The on-site supervising manager was the previous owner of the trailer park.

Plaintiff answered defendant's motion by claiming there were issues of fact which could not be decided by the trial judge, but which would have to go to the jury. Plaintiff filed a memorandum brief, in which the conclusion is:

"Inasmuch as there is a conflict in the evidence, as indicated by the affidavit and depositions and inasmuch as the conflict presents a question of fact for the jury, the issue of whether or not the arrangement between the Billot Excavating Company and Thomas Boyle was that of employer-employee, or of an independent contractor, cannot be determined by the Court on the Motion for Summary Judgment, and the Motion for Summary Judgment must, therefore, be denied." (Emphasis added.) Plaintiff's brief, dated January 2, 1974.

Eventually, on January 15, 1974, the then trial judge held with plaintiff and denied defendant's motion for summary judgment, holding the issue of whether defendant was an independent contractor or an employee of the trailer park owner was one of fact, depending upon the degree of control that the manager of the trailer park exercised over defendant and, therefore, was for a jury and not a judge.

Subsequently, after completion of discovery and pre-trial conference, defendant filed another motion for summary judgment, which was also denied.

In a three-day trial in March, 1976, a jury received all the issues, including the independent contractor-co-employee one, and found no cause of action in favor of defendant.

On appeal, plaintiff raises various issues, the first of which is that it was error to deny plaintiff's motion to strike defendant's affirmative defense that plaintiff's claim was barred under the workmen's compensation act because plaintiff's decedent and defendant were co-employees of the trailer park owner.

Plaintiff's motion was made after all the proofs were in and both sides had rested. The motion rested upon the following assumptions:

1) that there were no issues of fact,

2) that the question was one of law for the judge to decide, and

3) that the "economic reality" test rather than the "control" test, was the correct measure to be applied in deciding the motion.

Defendant denied each assumption.

At this point, with respect to the first two assumptions, both sides had switched from their earlier positions taken in connection with defendant's first motion for summary judgment.

Thus, on appeal, plaintiff takes an inconsistent position to that which he urged upon the trial court prior to trial. It can be argued that plaintiff has waived his alleged right to have the trial judge decide whether defendant was an employee of the trailer park owner by urging the trial judge to submit this question to the jury in his above quoted memorandum brief in response to defendant's motion for summary judgment. It can also be argued that by waiting until all the proofs were introduced before switching positions and moving the trial judge to rule as a matter of law that defendant was such an employee and, thus, to strike that affirmative defense, that plaintiff waived his right by delaying too long.

However, apart from this matter of possible waiver, were there issues of fact to be decided preliminary to disposition of the question of whether defendant was an employee of the trailer park owner? Some indication that there were such issues is the fact that plaintiff and defendant adopt diametrically different versions of the alleged facts. For example, plaintiff claims that defendant was an independent contractor who had a duty to comply with the statutory safety standards, while defendant claims that the trailer park manager exercised complete control over both plaintiff's decedent and defendant, including where the trench would be located, how defendant would dig, i.e., size of bucket, and the depth, size and width of the trench. Often such questions are mixed questions of law and fact. Here the record supports a finding that there were issues of fact. Therefore, we decline to find error in the trial judge's conclusion that there were issues of fact involved in deciding whether defendant was an employee of the trailer park owner and that the mixed questions of law and fact could be submitted to the jury under proper instructions.

We point out that while a person may ordinarily hold himself out as an independent contractor, he may be an employee under all the circumstances of a particular job.

Bonin v Gralewicz, 378 Mich. 521; 146 N.W.2d 647 (1966), Ray v Transamerica Insurance Co, 46 Mich. App. 647; 208 N.W.2d 610 (1973).

The next issue has to do with whether to apply the "control" test or the "economic reality" test in instructing the jury as to the correct measure for deciding whether defendant was an employee of the trailer park owner or an independent contractor. In Michigan tort cases, the traditional test for deciding whether an employer-employee relationship or an employer-independent contractor relationship existed in a particular situation is the extent of the employer's right to control whether exercised or not.

Dennis v Sinclair Lumber Fuel Co, 242 Mich. 89; 218 N.W. 781 (1928), Gall v Detroit Journal Co, 191 Mich. 405; 158 N.W. 36 (1916).

Since 1959 in Michigan workmen's compensation cases, the test of whether an employer-employee relationship exists is that of economic reality. This test includes some eight factors or guides, one of which is control.

Tata v Muskovitz, 354 Mich. 695, 699; 94 N.W.2d 71 (1959):
"It is time now to complete the cycle of departure from and return to all of the measures by which, under the clear weight of authority in this country, the relationship of employer and employee is rightfully identified for compensatory purposes. I move, then, with sight aimed at definite settlement of the steadily recurring question the parties — in the light of the quoted and adopted finding of facts — have stated and counterstated, that we now establish Mr. Justice SMITH'S dissenting opinion in Powell v Employment Security Commission, 345 Mich. 455, 462 [ 75 N.W.2d 874 (1956)], as proper guide to relevant interpretation of the workmen's compensation law." (Emphasis in original.)

McKissic v Bodine, 42 Mich. App. 203; 201 N.W.2d 333 (1972), Powell v Employment Security Commission, supra, dissenting opinion cited in Tata, supra.

By way of affirmative defense, defendant claims to be an employee of the trailer park owner under control of the on-the-job manager. Defendant claims that since this is a tort case, the control test applies. He concludes he is immune from claim by plaintiff under the co-employee exclusion of the workmen's compensation statute.

Sliter v Cobb, 388 Mich. 202; 200 N.W.2d 67 (1972), reversing 36 Mich. App. 471; 194 N.W.2d 75 (1971).

Plaintiff says the trial court erred in looking to the control test. It is plaintiff's position that since defendant seeks to avail himself of the protection of the workmen's compensation statute, the economic reality test must and does apply.

We do not believe that the control test has been overruled and replaced in tort cases. This is a tort case. The mere fact that defendant seeks to avail himself of the co-employee immunity from suit provision of the workmen's compensation statute does not mean that the economic reality test, whose purpose is to extend workmen's compensation benefits to greater numbers, must be applied. Consequently, we decline to find error in the refusal to apply the economic reality test.

Sliter v Cobb, supra; the Supreme Court did not overrule that part of the Court of Appeals decision which declined to replace the control test with the economic reality test in tort cases.

Plaintiff also challenges the jury instructions. Taken as a whole, the trial court's instruction to the jury was not reversibly erroneous. There was sufficient evidence to justify instructing the jury regarding the possible contributory negligence of plaintiff's decedent.

Funk v General Motors Corp, 392 Mich. 91, 113; 220 N.W.2d 641 (1974).

Plaintiff's other claims of error are without merit.

Affirmed, with costs.

J.R. McDONALD, J., concurred.

I disagree with the majority in this matter. The Worker's Disability Compensation Act [hereafter WDCA] bars a common law action by an employee against a co-employee for a job-related injury which occurs during the course of employment. MCLA 418.131, 418.301, 418.827; MSA 17.237(131), 17.237(301), 17.237(827). In those situations, the injured party's sole avenue of recovery is the exclusive remedy provided by the WDCA. Herndon v UAW Local No 3, 56 Mich. App. 435, 436-437; 224 N.W.2d 334 (1974).

When defendant raised the WDCA as a defense to plaintiff's suit, he was raising a statutory, jurisdictional defense which should have been resolved before the case proceeded to trial. As can be seen from the briefs and the trial transcript, a primary dispute in this case is whether or not defendant and plaintiff's decedent were co-employees. If they were co-employees and the accident responsible for decedent's death occurred during their common employment, then plaintiff's exclusive remedy lay under the WDCA and the circuit court had no subject matter jurisdiction over the matter. However, if the principals were not co-employees, plaintiff could pursue a common law negligence suit against defendant in the circuit court.

The circuit court can decide whether its jurisdiction extends to this case. To do so, the court must determine whether defendant was plaintiff's co-employee under the WDCA. I would distinguish one recent decision of the Michigan Supreme Court. Szydlowski v General Motors Corp, 397 Mich. 356; 245 N.W.2d 26 (1976). In Szydlowski, where plaintiff filed a claim for workman's compensation with the bureau which was dismissed twice for no progress and then filed a wrongful death action in circuit court trying to recover compensation under a mandatory statutory medical service provision of the WDCA, the Court denied the circuit court the jurisdiction to hear the case.
I would distinguish that case as dealing with a claim involving the grant of workman's compensation benefits under circumstances which would have completely usurped the primary function of the Workman's Compensation Bureau had the Court allowed the circuit court concurrent jurisdiction. Plaintiff based her entire suit on the mandatory WDCA warranty insuring "reasonable medical, surgical and hospital services". Given the way she framed her action, the trial court could not have given judgment without directly passing upon a recovery provision of the act. Certainly, such action would serve to replace the exclusive function the act reserved to the Workman's Compensation Bureau.
In the case before us now, plaintiff does not seek to substitute the trial court for the bureau. The action alone seeks determination of the trial court's rightful jurisdiction — that is, whether plaintiff's action violates the statutory jurisdiction of the WDCA. This question the court must answer. The court must have jurisdiction to decide the matter of its own jurisdiction. Its resolution of jurisdictional facts is appropriate to the singular purpose of resolving the jurisdictional problem.
Further, Szydlowski involved the question whether injuries arose out of and during the course of employment and whether those injuries were compensable under a provision of the act. No determination of employee or employer status and its implications arose for the court to consider there.
In short, we find the particular question addressed by the trial court properly raised and resolved there. The court must and the act intends to allow circuit court determination of legal questions involving legitimate matters of jurisdiction touching its own court. If the suit conflicts with the ability of the Workman's Compensation Bureau to award compensation, then the circuit court must deny the parties' attempt to litigate there. However, the circumstances presented by this case and others involving statutory defenses under the act must be resolved by the trial court as to the jurisdictional implications under the act.

Once the court separately determined that the WDCA did not preclude a cause of action in tort, having so properly placed the suit before the court, plaintiff could then bring its motion for summary judgment on the negligence claim. GCR 1963, 117.2. He might then allege no material issue of fact under 117.2(3), at which point the court might have conceivably denied the motion on the basis of factual disputes.

Regardless of whether material questions of fact exist concerning the underlying negligence claim, the primary question which the trial court should have resolved before any other on a separate record was that of defendant's status under the WDCA. So constituted, the question was not a question of fact for the jury to decide; the question was one of law for the judge. See Chester v World Football League, 75 Mich. App. 455, 462; 255 N.W.2d 643 (1977) (V.J. BRENNAN, J., concurring in part, dissenting in part), Askew v Macomber, 63 Mich. App. 359, 362; 234 N.W.2d 523 (1975), Renfroe v Higgins Rack Coating Manufacturing Co, Inc, 17 Mich. App. 259, 261-262; 169 N.W.2d 326 (1969).

Being a jurisdictional question, defendant's claim under the WDCA can be brought at any time. See, Fox v Board of Regents of the University of Michigan, 375 Mich. 238, 242; 132 N.W.2d 146 (1965). However, as the gist of the claim asserts lack of subject matter jurisdiction, the most appropriate vehicle would be a motion for accelerated judgment under GCR 1963, 116.1(2). See St Paul Fire Marine Insurance Co v Littky, 60 Mich. App. 375, 377; 230 N.W.2d 440 (1975). We do not believe a motion for summary judgment is proper. See, Renfroe v Higgins Rack Coating Mfg Co, Inc, supra, at 262. See also, St Paul Fire Marine Insurance Co v Littky, supra, at 377. The determination of whether a cause of action should proceed to trial on the merits is distinct from the legal question concerning the court's ability to hear and decide the case. Any dispute of jurisdictional fact should be resolved by the trial court incident to its consideration of jurisdiction under GCR 1963, 116.1(2). A separate hearing to resolve these disputed jurisdictional facts may be necessary.

Since Tata v Muskovitz, 354 Mich. 695; 94 N.W.2d 71 (1959), the economic reality test has been consistently applied by Michigan courts in determining the employer-employee relationship in connection with worker's compensation and unemployment compensation questions. See Higgins v Monroe Evening News, 70 Mich. App. 407, 414-415; 245 N.W.2d 769 (1976), Moore v Gundelfinger, 56 Mich. App. 73, 80; 223 N.W.2d 643 (1974), White v Extra Labor Power of America, 54 Mich. App. 370, 374; 221 N.W.2d 214 (1974). On the other hand, in relation to tort claims wholely unrelated to the WDCA, the control test has been correctly used to determine employee status such as with questions of vicarious liability (respondeat superior). See Sliter v Cobb, 36 Mich. App. 471, 490; 194 N.W.2d 75 (1971), rev'd on other grounds, 388 Mich. 202; 200 N.W.2d 67 (1972), and Kaniewski v Warner, 12 Mich. App. 355; 163 N.W.2d 34 (1968).

In the present case, the court faced its summary judgment decision in the context of a tort claim but with defendant relying on the WDCA in an effort to escape plaintiff's suit. Consequently, the case did not then represent either a tort claim alone or a claim for statutory compensation, as against defendant's employer. See Higgins, supra. Under these circumstances, I would hold that the logical test to use in deciding whether or not defendant can use the WDCA as a shield against the plaintiff must be the WDCA test, not the control test. Chester v World Football League, supra, at 462. See Cronk v Chevrolet Local 659, 32 Mich. App. 394, 398; 189 N.W.2d 16 (1971), lev den, 385 Mich. 784 (1971). Hence, the judge should have used the economic reality test in deciding whether or not defendant was Boyle's employee, and therefore the decedent's co-employee.

In applying the economic reality test to the facts as presented, I conclude as a matter of law that the defendant was not an employee within the meaning of the WDCA. See McKissic v Bodine, 42 Mich. App. 203, 208-209; 201 N.W.2d 333 (1972). The reasoning and result I reach on this important question is in line with the purposes of the WDCA, which are (1) to bring about reimbursement of the employer or insurance carrier who has paid worker's compensation benefits to the injured employee and (2) to allow the injured employee to obtain recovery beyond the statutory worker's compensation benefits. See Hix v Besser Co, 19 Mich. App. 468, 472-473; 172 N.W.2d 821 (1969), aff'd in part, vacated in part on other grounds, 386 Mich. 499; 194 N.W.2d 333 (1972).

Sufficient factual evidence was presented by the record to allow a legally informed decision by the trial court as to whether defendant was an employee under the WDCA.

Considered in this case, the economic realities do not indicate defendant was an employee under the WDCA. Defendant Billot testified that he and his father owned a small enterprise known as Billot Excavating Co. They owned a backhoe, an end loader, a bulldozer and three trucks. They supplied all equipment for jobs they handled. Defendant considered himself self-employed. He managed his social security and taxes himself. He was not carried on employment rolls for the jobs he took. He was paid a flat rate of $12 per hour for his work with the backhoe. This procedure was followed when defendant did the job for trailer park owner Boyle. Concurrent with work done for owner Boyle, defendant was working for several other persons. His living expenses did not depend primarily on emolument from owner Boyle. He was listed in the phone book as an excavating contractor. Defendant was not hired for purposes directly related to the operation of Boyle's trailer park.
In short, the only factor of the eight ordinarily enumerated which applied to defendant with some accuracy was the control factor. Owner Boyle did maintain some degree of control over defendant while he was actually engaged in the operation of positioning and digging the trench. Obvious evidence of this control appears from the fact that owner Boyle contracted a specific overall supervisor for the trailer park expansion project, O.J. Campbell, the former owner of the park, and that supervisor Campbell was specifically responsible for obtaining defendant's services. Campbell was present and directly involved with the operation of constructing the trench. Consequently, defendant may well have looked like an employee under the control test but not so under the economic reality test.
Potential prejudice appears when the fact is considered that the jury found no cause of action against defendant when instructed under the control test and then was allowed to determine the WDCA defense according to that standard. We might note incidentally, though nonessential for decision of the WDCA defense, that defendant may well be characterized as an independent contractor even were the control test used. However, the question is close enough under that test so the potential for prejudice cannot be eliminated with any degree of certainty.

Consequently, the trial judge should have found that defendant was not an employee within the meaning of the WDCA, thus providing a basis for subject matter jurisdiction of plaintiff's tort action in the circuit court.

Thereafter, were the trial court to later submit the question of defendant's possible negligence to the jury, in the totally unlikely situation that defendant's working status was at issue, the court could have at that time framed its instructions in terms of the control test. See Kendrick v Graddis, 75 Mich. App. 383, 386, n 1; 255 N.W.2d 14 (1977), Sliter v Cobb, supra, at 490. However, the court's failure to distinguish the proper standard under the WDCA claim constitutes error and requires reversal.

Because plaintiff is suing defendant, a fellow worker, rather than owner Boyle, the question of whether either party was an employee or independent contractor has no legal significance for purposes of tort liability in this case. Consequently, the court would likely never be in a position to instruct the jury on this matter under any test. Note that if plaintiff had sued owner Boyle, the question of employee or independent contractor entails considerations of different standards of care by which defendant's duty would be tested. See, Kendrick v Graddis, supra. See, regarding the standard of care for independent contractors as against employees, Holgate v Chrysler Corp, 279 Mich. 24, 30; 271 N.W. 539 (1937). See also 16 Callaghan's Michigan Civil Jurisprudence, Master and Servant, § 67, pp 457-458.

The jury may well have exonerated defendant after concluding that he was an employee of the trailer park and not an independent contractor. Such a conclusion was reached under legally incorrect guidelines.

The plaintiff also objects to the submission of contributory negligence and negligence questions to the jury. However, our courts strongly favor jury determination of contributory negligence questions, Funk v General Motors Corp, 392 Mich. 91, 113; 220 N.W.2d 641 (1974), Jaworski v Great Scott Supermarkets, 71 Mich. App. 235; 247 N.W.2d 363 (1976), and negligence questions, Miller v Miller, 373 Mich. 519, 524; 129 N.W.2d 885 (1964), Witucke v Presque Isle Bank, 68 Mich. App. 599, 612; 243 N.W.2d 907 (1976). Further, in the instant case, where bona fide disputes existed over who was negligent, supervisor Campbell, the decedent or the defendant, the questions were properly left to the jury.

I would reverse and remand to the trial court for a new trial.

Summaries of

Nichol v. Billot

Michigan Court of Appeals
Dec 8, 1977
263 N.W.2d 345 (Mich. Ct. App. 1977)

In Nichol v Billot, 80 Mich. App. 263; 263 N.W.2d 345 (1977), lv gtd, 402 Mich. 922 (1978), the panel held that in a tort suit the "control" test was still the appropriate test.

Summary of this case from Berger v. City of Berkley
Case details for

Nichol v. Billot

Case Details

Full title:NICHOL v BILLOT

Court:Michigan Court of Appeals

Date published: Dec 8, 1977


263 N.W.2d 345 (Mich. Ct. App. 1977)
263 N.W.2d 345

Citing Cases

Sewell v. Clearing Machine Corp.

When Nichol was in the Court of Appeals, Judge BRENNAN, dissenting, explained this principle. Nichol v…

Nichol v. Billot

After a three-day trial in March 1976, the jury returned a verdict of no cause of action. The Court of…