Tindall v. Denholm & McKay Co.

• Decision Date: 28 February 1964
• Citation: 347 Mass. 100,196 N.E.2d 631
• Parties: Beatrice TINDALL v. DENHOLM AND McKAY COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 631

196 N.E.2d 631

347 Mass. 100

Beatrice TINDALL v. DENHOLM AND McKAY COMPANY.

Supreme Judicial Court of Massachusetts, Worcester.

Argued Jan. 9, 1964.

Decided Feb. 28, 1964.

Stanley B. Milton, Worcester (Robert C. Milton, Worcester, with him), for defendant.

James C. Donnelly, Jr., Worcester, for plaintiff.

Before WILKINS, C. J., and CUTTER, KIRK, SPIEGEL and REARDON, JJ.

KIRK, Justice.

This action of tort was brought in the name of the plaintiff, an employee of Allied Millinery Company, Inc. (Allied), by Allied's insurer, under G.L. c. 152, § 15, ¹ to recover for injuries sustained by her on June 21, 1958, when she stepped from a 'passenger freight elevator' on the defendant's premises. The operator of the elevator, an employee of the defendant, was admittedly negligent. ² The plaintiff received compensation from Allied's insurer. The defendant also was insured under the act. The jury returned a verdict for the plaintiff. The defendant, having waived all other exceptions, now relies solely upon its exception to the denial of its motion for a directed verdict. The motion was based on the ground that the work done by the plaintiff's employer was part of and process in the business carried on by the defendant. G.L. c. 152, § 18.

We examine the evidence in the light most favorable to the plaintiff (Mazzaferro v. Dupuis, 321 Mass. 718, 719, 75 N.E.2d 503; Dubois v. Soule Mill, 323 Mass. 472, 476, 82 N.E.2d 886; Howes v. Kelman, 326 Mass. 696-697, 96 N.E.2d 394) to determine whether, as matter of law, the work done by the plaintiff's employer was 'part of or process in, the trade or business carried on by the [defendant] insured.' G.L. c. 152, § 18. ³ In deciding this question, the test is whether Allied's work was 'plainly' a part of the defendant's business. Roby v. Boston & Maine R., 337 Mass. 369, 375, 149 N.E.2d 661. McPadden v. W. J. Halloran Co., 338 Mass. 189, 192, 154 N.E.2d 582. Gauss v. H. N. Hartwell Co., Inc., 338 Mass. 353, 354-355, 155 N.E.2d 415. Amorosso v. Farina Bros. Co., Inc., 339 Mass. 595, 596, 161 N.E.2d 761.

The following facts, which are undisputed, are taken from the pre-trial order containing stipulations and admissions, an agreement as to certain facts, the lease between Allied and the defendant, and the testimony as summarized in the defendant's bill of exceptions. The defendant owns and operates in Worcester a department store with eighty-eight departments selling a large variety of merchandise, including, for example, women's and men's clothing, and household goods. Although some of the departments are run directly by the defendant, others are operated by independent contractors under a lease arrangement. Allied is one of the independent contractors. It runs the millinery department, and is the owner of the millinery and accessories which are sold at three locations on different floors in the defendant's building. Each location has its own price range and styling. The plaintiff, as the manager of the millinery department, supervised the three locations. She did the buying for the department within the broad limits set by the comptroller in Allied's New York office. She had been in Allied's employ at Worcester for five months before the accident and, in all, had had fifteen years' experience in the millinery business. Allied operated many millinery departments in stores throughout the United States and Canada.

The relationship between Allied and the defendant began in 1930. The terms of this relationship are set out in a lease executed in 1942. Since then the parties have been governed by its provisions. That instrument provided, in essential part, that the defendant leased to Allied certain space for the purpose of selling millinery, which Allied was to keep in full stock; that the defendant was neither to sell nor to permit to be sold similar goods in any other part of the store; that all Allied's employees were to be hired by the defendant's superintendent with the concurrence of Allied's manager, and all such employees were to be governed by the rules and regulations of the defendant; that Allied was to pay to the defendant each month, as rent, eighteen per cent of net sales; that the defendant was to furnish heat, light, and power as well as certain incidental services such as delivery, porter, and window trimming; that all merchandise in the millinery department and all proceeds from sales were to be Allied's exclusive property; and that the defendant would guarantee credit sales, pay Allied's employees and all incidental department expenses out of the proceeds of the millinery department, make final decisions concerning customer complaints, and, at the close of each month, pay over to Allied the net proceeds from the millinery department. One provision required Allied to carry various kinds of insurance, including workmen's compensation insurance.

There was, apart from the lease, oral testimony which disclosed the following additional undisputed facts. Prior to 1930, the defendant itself ran the millinery department, but thereafter Allied operated it under a lease arrangement. Under that arrangement, all of the sales slips from the millinery department were turned over to the defendant's auditor, and all the proceeds from that department were given to the defendant and deposited by the defendant to its own account. Allied, with respect to its employees in the millinery department, made employers' payments for social security and contributions to Blue Cross-Blue Shield. It also paid employment security taxes and distributed W-2 forms (withholding tax statements). The plaintiff decided what prices would be placed on millinery and millinery accessories. Like other department heads in the store, she cordinated the advertising of millinery with the defendant's advertising department. All public advertising used the defendant's name alone. Bags, boxes, and tags for millinery, when they bore a name, as they usually did, bore only the defendant's name. In fact, Allied's name appeared nowhere in the store or in its advertising.

In determining whether the work of the independent contractor, Allied, is part of the business of the insured person, the defendant, we apply the rule stated by Ronan, J., in Cannon v. Crowley, 318 Mass. 373, 375, 61 N.E.2d 662, 664: 'The character and nature of the business must be determined, and if the work done by an independent contractor is really a branch or department of that business * * * it constitutes a part of the business itself' (emphasis supplied). See Cozzo v. Atlantic Ref. Co., 299 Mass. 260, 266, 12 N.E.2d 744. Compare Meehan v. Gordon, 307 Mass. 59, 62, 29 N.E.2d 759; Caton v. Winslow Bros. & Smith Co., 309 Mass. 150, 154-155, 34 N.E.2d 638; Alberts v. Brockelman Bros., Inc., 312 Mass. 486, 489, 45 N.E.2d 392. As the plaintiff has admitted, it is customary for a department store to have within it a millinery department. It is beyond dispute that the work done by Allied in the millinery department was a 'branch or department' of the defendant's business, for the defendant was in the business of selling a large variety of wearing apparel. It is only natural that it should carry hats to complement its full line of other types of clothing, such as dresses, shoes, hosiery, and lingerie. The work Allied performed in the store, therefore, was plainly part of the business of the defendant.

This result is not affected by the fact that Allied was leasing space in the defendant's store to sell Allied's hats. For that 'lease' was 'primarily an agreement establishing a commercial relationship of some intricacy and importance to both parties' (emphasis supplied). Marcelle, Inc. v. Sol. & S. Marcus Co., 274 Mass. 469, 471, 175 N.E. 83, 84, 74 A.L.R. 1012. The evidence establishes that no ordinary lessor-lessee relationship was created by the lease, but rather that Allied's operations in the store were made an integral part of the business of the defendant. Amorosso v. Farina Bros. Co., Inc., 339 Mass. 595, 596, 161 N.E.2d 761.

The facts that the plaintiff and all other...