Anderson v. Farm Bureau Mut. Ins. Co. of Idaho, 16319

Decision Date02 February 1987
Docket NumberNo. 16319,16319
Citation732 P.2d 699,112 Idaho 461
PartiesSteve ANDERSON, Plaintiff-Appellant, v. FARM BUREAU MUTUAL INSURANCE COMPANY OF IDAHO, An Idaho Corporation and Its Affiliates and Subsidiaries; and Western Community Insurance Co., An Idaho Corporation; and Western Farm Bureau Life Insurance Co., a Colorado Corporation, Defendants-Respondents.
CourtIdaho Court of Appeals

Alan G. Lance, Meridian, for appellant.

Richard D. Petersen, Pocatello, and Richard C. Fields and Robert C. Grisham (argued), Boise, for respondents.

BURNETT, Judge.

This appeal comes to us from a certified partial summary judgment dismissing a claim for breach of contract and wrongful termination of employment. The claimant, Steve Anderson, sued for general damages and recovery of wrongfully withheld employment benefits after he was terminated as an insurance agent. We are asked to decide whether the district court erred in finding that Anderson was not an "employee" and, therefore, was not entitled to recover the purported benefits. We also must decide whether Anderson was terminated under circumstances violating his contract rights or public policy. For the reasons set forth below, we affirm the judgment.

The essential facts are undisputed. Steve Anderson entered into a dual series of contracts with several affiliated insurance companies. Pursuant to one series of contracts, Anderson agreed to act as special agent for Western Farm Bureau Life Insurance Co. (Western Farm Bureau) in the sale of life and health insurance. Under the second series of contracts, Anderson agreed to sell property and casualty insurance for Farm Bureau Mutual Insurance Company of Idaho (Farm Bureau Mutual) and Western Community Insurance Co. (Western Community). Anderson's contracts with these companies were updated periodically, but the portions relevant here were unchanged throughout his tenure as an agent with the affiliated companies. As compensation, Anderson received fixed commissions on the sale of each policy.

Anderson was a successful agent. In fact, by 1982 he had become Western Farm Bureau's most highly rated life insurance agent in Idaho. However, Anderson's sales activities also began to arouse controversy. Management of the affiliated Farm Bureau companies discovered that Anderson was placing insurance policies with competing insurers. Anderson was warned that placing insurance elsewhere, without the Farm Bureau companies' consent, violated the terms of his agency contracts. Nonetheless, Anderson continued placing policies elsewhere without seeking consent. Eventually, Anderson was told that if he did not discontinue these activities, his Farm Bureau contracts would be terminated. Anderson refused to comply. The contracts then were terminated. Anderson sued in district court for wrongful discharge and breach of contract. On cross-motions for summary judgment, the district court ruled in favor of the insurance companies.

Preliminarily, we restate the familiar standards governing motions for summary judgment. Such a motion should be granted only when "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." I.R.C.P. 56(c). When the motion is supported by depositions or affidavits, the adverse party "may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." I.R.C.P. 56(e).

In general, a party opposing summary judgment is entitled to favorable inferences from the underlying facts. However, when the evidentiary facts are not disputed and the judge rather than a jury will be the ultimate trier of fact, the judge may draw the inferences he or she deems most probable since the judge alone would be responsible for drawing such inferences from the same facts at trial. Riverside Development Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982). In the present case, neither party requested a trial by jury pursuant to I.R.C.P. 38(b). Moreover, where--as here--the opposing parties both have moved for summary judgment on the same evidentiary facts and on the same theories and issues, the parties effectively have stipulated that there is no genuine issue of material fact. Id. Therefore, the judge in this case was entitled to draw all reasonable inferences from the facts. Jones v. EG & G Idaho, Inc., 111 Idaho 591, 726 P.2d 703 (1986); Edwards v. Conchemco Incorporated, 111 Idaho 851, 727 P.2d 1279 (Ct.App.1986). Insofar as our review embraces factual matters, we will accept the judge's factual determinations where they are reasonably supported by the record.

I

Anderson first contends that upon termination he was entitled to recover certain employment benefits. He bases this claim upon the theory that he was an "employee" and that his "employers," the insurance companies, were required to make Social Security, worker's compensation insurance and federal and state unemployment insurance contributions on his behalf. Anderson further claims that, as his employers, the insurance companies were obliged to withhold federal income taxes from his pay. The companies, on the other hand, steadfastly maintained that Anderson was an independent contractor; consequently, they did not owe him the duties that employers owe employees. The district court agreed with the companies. So do we.

A

Much time and effort was devoted to the employment issue during the discovery phase of this litigation. While there was no conflict in the evidence presented on the cross-motions for summary judgment, each side argued a view of the facts supporting its interpretation of the relationship created by the agency contracts. Because the facts are essentially undisputed, the proper characterization of that relationship is one of law for an appellate court to make. Zaremba v. Miller, 113 Cal.App.3d Supp. 1, 169 Cal.Rptr. 688 (Cal.App.Dep't Super.Ct.1980); Little v. Poole, 11 N.C.App. 597, 182 S.E.2d 206 (1971).

The integral test in Idaho for determining whether a person is an employee or an independent contractor is whether a contract gives, or the "employer" assumes, the right to control the time, manner and method of executing the work, as distinguished from the right merely to require certain results. Burdick v. Thornton, 109 Idaho 869, 712 P.2d 570 (1985); Burns v. Nyberg, 108 Idaho 151, 697 P.2d 1165 [112 Idaho 465] (1985); Ledesma v. Bergeson, 99 Idaho 555, 585 P.2d 965 (1978); Merrill v. Duffy Reed Construction Co., 82 Idaho 410, 353 P.2d 657 (1960). This analysis applies to insurance agents as well. Glynn v. M.F.A. Mut. Ins. Co., 363 Mo. 896, 254 S.W.2d 623 (1953). In a case involving an insurance agent, one appellate court has listed indicia which ordinarily earmark an independent contractor in contrast to an employee:

The person employed (a) is engaged in an independent business, calling, or occupation; (b) is to have the independent use of his special skill, knowledge, or training in the execution of work; (c) is doing a specified piece of work at a fixed price or for a lump sum or upon a quantitative basis; (d) is not subject to discharge because he adopts one method of doing the work rather than another; (e) is not in the regular employ of the other contracting party; (f) is free to use such assistants as he may think proper; (g) has full control over such assistants; and (h) selects his own time.

The presence of no particular one of these indicia is controlling. Nor is the presence of all required. They are considered along with all other circumstances to determine whether in fact there exists in the one employed that degree of independence necessary to require his classification as independent contractor rather than employee.

Little v. Poole, supra, 182 S.E.2d at 209. Accordingly, an insurance agent whose function is solely to bring about contractual relations between his principals and others on his own initiative, without being subject to the principal's direction as to how he shall accomplish this result, is ordinarily held to be an independent contractor. Id.

We apply the same reasoning in the present case. The following facts, gathered from uncontroverted statements in affidavits and depositions indicate that both parties viewed Anderson's role as that of an independent contractor. The insurance companies failed to exercise control over the time, method and manner of his performance.

1. Anderson was not required to work specific office hours. He decided his own office hours and vacation dates.

2. Anderson was free to use his own presentation and solicitation methods. He was free to decide on which prospective clients to call.

3. Anderson was not limited to any specific territory; he was free to solicit business anywhere he was licensed.

4. Anderson was not required to make any reports to the companies other than production reports.

5. Anderson hired and paid his own secretarial help.

6. Anderson purchased some of his own equipment for use in his business.

7. Anderson incurred business expenses without reimbursement.

8. Anderson's compensation was in the form of commissions. (A "base salary" arrangement with Farm Bureau Mutual and Western Community was simply in lieu of auto insurance renewal commissions and was subject to reduction for lower productivity.)

9. Anderson filed his own tax returns as a self-employed person. The insurance companies treated him as an independent contractor for tax purposes.

10. The contracts were terminable at will by either party.

If these were the only facts before us, we would have little difficulty in concluding that Anderson was an independent contractor. However, this conclusion also draws support from explicit provisions in the parties' contracts. The Farm Bureau Mutual/Western Community contract in effect at termination stated:

It is the mutual intent of the parties that Agent is not an employee of the...

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