Jones v. Century Oil U.S.A., Inc., 91-5287

• Decision Date: 21 February 1992
• Docket Number: No. 91-5287,91-5287
• Citation: 957 F.2d 84
• Parties: Donald JONES, Lot 8-Maple Estates Pocono Lake, PA 18348, Lisa Anne Jones, Lot 8-Maple Estates Pocono Lake, PA 18348, v. CENTURY OIL U.S.A., INC., 111 Clifton Avenue, Clifton, NJ 07013. CENTURY OIL U.S.A., INC., Third Party Plaintiff, v. Gary A. FLEMING, d/b/a House Scene, Inc., Third Party Defendant, Donald Jones and Lisa Anne Jones, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 84

957 F.2d 84

Donald JONES, Lot 8-Maple Estates Pocono Lake, PA 18348, Lisa Anne Jones, Lot 8-Maple Estates Pocono Lake, PA 18348, v. CENTURY OIL U.S.A., INC., 111 Clifton Avenue, Clifton, NJ 07013.

CENTURY OIL U.S.A., INC., Third Party Plaintiff, v. Gary A. FLEMING, d/b/a House Scene, Inc., Third Party Defendant, Donald Jones and Lisa Anne Jones, Appellants.

No. 91-5287.

United States Court of Appeals Third Circuit.

Argued Oct. 28, 1991.

Decided Feb. 21, 1992.

Brian L. Lincicome, (argued), Cozen & O'Connor, Philadelphia, Pa., for appellants.

Paul E. Smith, (argued), Fine, Wyatt & Carey, Scranton, Pa., for appellee.

Before GREENBERG, ALITO and HIGGINBOTHAM, Circuit Judges.

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

Appellants Donald and Lisa Jones, citizens of the Commonwealth of Pennsylvania and residents of Pocono Lake, brought this action against Century Oil U.S.A., Inc., ("Century") a New Jersey corporation, in the district court for the Middle District of Pennsylvania pursuant to federal diversity jurisdiction. Jones, the owner and operator of D & L Locksmithing, suffered injuries on the premises of a service station located in Brodheadsville, Pennsylvania in December 1989 shortly after Century leased the property to Gary Fleming. Following an altercation with Fleming in which he was hurt, Jones filed a suit claiming that Century was liable for his injuries on the grounds that Fleming was Century's agent or employee or, in the alternative, that Century was negligent for failing to supervise its contractor Fleming sufficiently to protect Jones from harm.

A jury trial began on March 18, 1991. On March 19, 1991 at the close of plaintiff's evidence on liability, Century moved orally pursuant to Fed.R.Civ.P. 50(a) for a directed verdict that the trial judge granted from the bench. The ruling was subsequently affirmed in a written order on April 2, 1991. The written order merely stated that "the court concluded that plaintiffs failed in establishing a master-servant relationship or agency relationship to warrant recovery against the defendant Century Oil, U.S.A., Inc." Jones v. Century Oil, U.S.A., Inc., C.A. No. 90-0902, (M.D.Pa. April 2, 1991).

Appellants asked this Court to vacate the district court order and to remand the case for a new trial.

We exercise plenary review of the grant of a directed verdict, and we apply the same standard as would the district court in passing on the motion originally. Gay v. Petsock, 917 F.2d 768, 771 (3d Cir.1990). A verdict may be directed for a defendant only when there is insufficient evidence from which a jury could reasonably find for the opponent, the court viewing the evidence in the light most favorable to the opponent and giving him the advantage of every fair and reasonable inference. Laskaris v. Thornburgh, 733 F.2d 260, 264 (3d Cir.), cert. denied, 469 U.S. 886, 105 S.Ct. 260, 83 L.Ed.2d 196 (1984). If there is conflicting evidence that could reasonably lead to inconsistent inferences, a verdict may not be directed. Id. Viewing all the evidence introduced in the light most favorable to Jones, we cannot conclude that a jury could not have drawn inferences from the facts presented sufficient to support a verdict in appellants' favor. We will vacate the judgment of the district court and remand the case for trial.

I. BACKGROUND

We review the facts of this case in the light most favorable to Jones.

On November 20, 1989, Century Oil executed an agreement with Gary Fleming to take over the operation of its Brodheadsville Texaco gas station. Century's regional manager, Jay Marshall, obtained the name of Donald Jones' locksmith company from the phone book and called Jones a few days prior to November 20. Marshall advised him that Century was changing dealers at its station and wanted to put in new locks. Jones agreed to do the work with the understanding that he would be paid on the day the work was performed.

On November 20, 1989, Jones went to the station, but only Gary Fleming, the new dealer, was at the premises. Contrary to the understanding Jones had reached in his telephone conversation, Marshall, who had agreed to pay him that day for his work, was not there. Jones did, however, speak to Marshall by phone that day, and Marshall asked him to leave the bill with Fleming, promising that he would be paid the following week. Jones installed the new locks.

However, Jones was not paid the following week. After several telephone conversations with Century's headquarters, and several promises that he would be paid, Jones threatened to remove his locks from the gas station. On December 6, 1989, he drove to the gas station to take the locks out. That day Marshall and Fleming were both there. After some discussion with Marshall and Fleming, Jones started to remove the locks he had installed in the doors. Fleming became verbally abusive and threatening, and ordered him off the premises. Jones refused to leave. While Jones was crouched around the door unscrewing the locks, Fleming walked up to him and, in full view of Marshall, he "slammed" Jones in the shoulder and back.

As a result of being hit in his back, Jones alleges that he suffered herniated discs in his spine, had to undergo surgery, and subsequently became unable to perform his customary occupation.

II. DISCUSSION

The issue in dispute is the nature of the relationship between Century and Fleming under the applicable law--whether Fleming was, as Century insists, an independent contractor or whether, as Jones asserts, Fleming was an employee or agent of Century. Pennsylvania law governs the determination of their relationship. Accordingly, the determining factor is not the way in which plaintiffs or defendant regards this relationship but "what it really was under the facts and applicable rules of law." Feller v. New Amsterdam Casualty Co., 363 Pa. 483, 489, 70 A.2d 299, 302 (1950).

In defining the distinction between an employee or servant and an independent contractor, the Supreme Court of Pennsylvania held in Feller that the "characteristic of the former relationship is that the master not only controls the result of the work but has the right to direct the way in which it shall be done, whereas the characteristic of the latter is that the person engaged in the work has the exclusive control over the manner of performing it, being responsible only for the result." Id. at 486, 70 A.2d at 300. "Broadly stated," the Court said, "if the contractor is under the control of the employer, he is a servant; if not under such control, he is an independent contractor...." Id. The difference between the two relationships turned not so much on "the fact of actual interference or exercise of control by the employer," the Court explained, "but the existence of the right or authority to interfere or control, which renders one a servant rather than an independent contractor." Id.; accord, Moon Area School District v. Garzony, 522 Pa. 178, 189-90, 560 A.2d 1361, 1367-68 (Pa.1989).

In Smalich v. Westfall, 440 Pa. 409, 415, 269 A.2d 476, 481 (1970), the Supreme Court of Pennsylvania, in distinguishing between the agent whose principal is vicariously liable for harm the agent caused and the agent whose conduct does not impose liability on the principal, pointed out that the agency relationship that renders the principal liable is that of master-servant. "Thus," the Court stated, "a master not only controls the results of the work but also may direct the manner in which such work shall be done, and a servant, in rendering the agreed services, remains entirely under the control and direction of the master." It is "[b]ecause a master has the right to exercise control over the physical activities of the servant within the time of service, [that] he is vicariously liable for the servant's negligent acts committed within the scope of his employment." Id.

Century claims that Fleming was an independent contractor to whom it leased the Brodheadsville Texaco station, as expressed in their signed agreements. Nonetheless, the Supreme Court of Pennsylvania has recognized that "[t]his is not determinative of the matter, for it is the actual practice between the parties that is crucial." George v. Nemeth, 426 Pa. 551, 554, 233 A.2d 231, 233 (1967). Trial testimony of Century's President, Mr. DeJonge, concerning Fleming's obligations to Century showed that in numerous respects Fleming's obligations were exactly the same as the gas station's previous operator, an individual Century acknowledged as its employee at what it called a "company run" (App. 34a) station. Trial Transcript at App. 38a-57a. Thus in these respects Century controlled not merely the result but also the manner in which Fleming performed his job under the Dealer's Agreement. According to DeJonge, the following obligations were identical to those of Century's previous employee:

.. Fleming had to sell only Texaco brand gasoline supplied by Century (App. 38a),

.. Fleming could not bargain about the price he paid for Century gasoline (App. 39a),

.. Fleming was to notify Century of any complaints from customers concerning the products he sold (App. 40a),

.. Century could enter the premises at any time to inspect, repair, adjust or replace the equipment (App. 41a),

.. Century, in the event of shortages, could allocate unilaterally the amount of gasoline it would sell to Fleming (App. 41a),

.. Century could terminate the agreement for numerous reasons, including failure to keep the premises safe and clean (App. 42a), failure to keep the station open 7 days a week during prescribed hours, (App. 43a), failure to maintain a minimum purchase of 60,000 gallons a month (App. 47a), and numerous other requirements,

.. and Century was exclusively responsible for repairs costing more than $250 and for painting the premises (App. 48a).

The details of the Lease Agreement between Century Oil as Landlord and Gary Fleming as Tenant were also...