C & H Taxi Co. v. Richardson

• Citation: 461 S.E.2d 442,194 W.Va. 696
• Decision Date: 19 June 1995
• Docket Number: No. 22251,22251
• Court: Supreme Court of West Virginia
• Parties: C & H TAXI COMPANY, a West Virginia Corporation, Petitioner Below, Appellant, v. Andrew RICHARDSON, Commissioner, West Virginia Workers' Compensation Fund, Respondent Below, Appellee, West Virginia Public Service Commission, Intervenor.

Page 442

461 S.E.2d 442

194 W.Va. 696

C & H TAXI COMPANY, a West Virginia Corporation, Petitioner Below, Appellant, v. Andrew RICHARDSON, Commissioner, West Virginia Workers'

Compensation Fund, Respondent Below, Appellee,

West Virginia Public Service Commission, Intervenor.

No. 22251.

Supreme Court of Appeals of

West Virginia.

Submitted Jan. 10, 1995.

Decided June 19, 1995.

Syllabus by the Court

1. "Upon judicial review of a contested case under the West Virginia Administrative Procedure Act, Chapter 29A, Article 5, Section 4(g), the circuit court may affirm the order or decision of the agency or remand the case for further proceedings. The circuit court shall reverse, vacate or modify the order or decision of the agency if the substantial rights of the petitioner or petitioners have been prejudiced because the administrative findings, inferences, conclusions, decisions or order are: '(1) In violation of constitutional or statutory provisions; or (2) In excess of the statutory authority or jurisdiction of the agency; or (3) Made upon unlawful procedures; or (4) Affected by other error of law; or (5) Clearly wrong in view of the reliable, probative and substantial evidence on the whole record, or (6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.' " Syl. pt. 2, Shepherdstown V.F.D. v. W. Va. Human Rights Commission, 172 W.Va. 627, 309 S.E.2d 342 (1983).

2. "To ascertain whether a workman is an employee or an independent contractor each case must be resolved on its own facts and ordinarily no one feature of the relationship is controlling, but all must be considered together." Syl. pt. 1, Myers v. Workmen's Compensation Commissioner, 150 W.Va. 563, 148 S.E.2d 664 (1966).

3. "In determining whether a workman is an employee or an independent contractor, the controlling factor is whether the hiring party retains the right to control and supervise the work to be done." Syl. pt. 2, Myers v. Workmen's Compensation Commissioner, 150 W.Va. 563, 148 S.E.2d 664 (1966).

4. "In determining whether one is an employee or an independent contractor within the meaning of the workmen's compensation act, the act must be given a liberal construction in favor of the workman and any doubt is to be resolved in favor of his status as an employee, rather than an independent contractor." Syl. pt. 4, Myers v. Workmen's Compensation Commissioner, 150 W.Va. 563, 148 S.E.2d 664 (1966).

Michael T. Clifford, Clifford, Mann & Swisher, L.C., Charleston, for appellant.

Darrell V. McGraw, Jr., Attorney General, C. Terry Owen, Deputy Attorney General, Gina K. Karpinski, Assistant Attorney General, Charleston, for appellee.

Thornton Cooper, Charleston, for intervenor.

Guy R. Bucci, Janet E. James, Bucci, Chambers & Willis, L.C., Charleston, for Virginia N. Sibe, amicus curiae.

James D. Kauffelt, Kauffelt & Kauffelt, Charleston, for West Virginia Taxicab Ass'n, amicus curiae.

PER CURIAM:

This case is before this Court upon an appeal by C & H Taxi Company (hereinafter "C & H") from the final order of the Circuit Court of Kanawha County, entered on January 26, 1994. Pursuant to that order, the circuit court affirmed the May 22, 1991, decision and order of the Commissioner of the West Virginia Workers' Compensation Fund that the relationship between C & H and its taxicab drivers is that of employer-employee for workers' compensation purposes and that, accordingly, C & H is required to pay workers' compensation premiums for the benefit of those drivers. For the reasons stated below, the final order of the Circuit Court of Kanawha County is affirmed, in part, and reversed, in part, and this case is remanded.

It should be noted that, in addition to the material submitted by C & H and the Commissioner, this Court permitted the West Virginia Public Service Commission to intervene in this case. In addition, briefs amicus curiae have been received from Virginia N. Sibe, Administratrix of the Estate of John L. Sibe, deceased, and from the West Virginia Taxicab Association.

I

Pursuant to chapters 24 and 24A of the West Virginia Code, the operation of taxicabs in this State is regulated by the West Virginia Public Service Commission. W.Va. Code, 24-2-1 [1991]; W.Va.Code, 24A-1-1 [1987]; W.Va. Code, 24A-1-2 [1991]. For a number of years, C & H, pursuant to a certificate of convenience and necessity issued by the Public Service Commission, has operated a taxicab company in the Kanawha County, West Virginia, area involving some seventy-five to eighty drivers.

Initially, all taxicab drivers in West Virginia were required to be employees of their respective companies. However, largely as the result of a financial decline in the taxicab industry, the West Virginia Taxicab Association petitioned the Public Service Commission for another option by which to do business. That petition resulted in the adoption by the Public Service Commission, in 1981, of P.S.C. W.Va. M.C. Form No. 55 (hereinafter "lease form no. 55"). Thereafter, through the use of lease form no. 55, many taxicab companies in West Virginia converted their employee drivers to lessees. To convert to the lease-type arrangement with regard to taxicab drivers, the use of lease form no. 55 is mandatory.

In January 1986, C & H elected to adopt lease form no. 55 with regard to each of its taxicab drivers. Although several versions of the lease appear in the record, the lease in use during the period in question provided, inter alia, that C & H, the lessor, would provide to the taxicab driver, the lessee, a taxicab "in good working order," upon which would appear the lessor's insignia, and the lessor would, further, provide tires, servicing and maintenance for the vehicle and the required license tags, registration and automobile liability insurance. In addition, C & H, the lessor, agreed to provide radio dispatch service to the lessee. Under the lease, the taxicab driver, the lessee, was not required to accept the radio dispatch calls, although C & H, under Public Service Commission regulations, remained obligated to insure that the public would not be denied taxicab service. Furthermore, C & H, the lessor, agreed to lease the vehicle to the lessee at a fixed rate for various hourly periods.

Under lease form no. 55, the taxicab driver, the lessee, agreed to provide gasoline for the vehicle and, further, agreed not to sublease the vehicle. During each lease period, the vehicle was to remain "in the exclusive custody and absolute control of the Lessee." Other provisions of the lease stated:

In order to protect Lessor's good will and license, the Lessee shall keep himself/herself and said taxicab in a neat and clean condition and agrees to conduct himself/herself and operate said taxicab reasonably, prudently, courteously, and in a careful manner[.] ... Discretion in the operation of the said taxicab is vested in the Lessee, and the Lessor shall do no more than make available to Lessee telephone call service or radio service of prospective passengers.

....

Lessee agrees to be bound by all the rules and regulations applicable to motor vehicles transporting passengers and property in taxicab service as prescribed by the Public Service Commission of West Virginia. Violations of said rules shall be sufficient cause for Lessor not to enter into any future taxicab rental agreements with the Lessee.

....

Lessee agrees to be bound by and charge only those rates and charges approved by the Public Service Commission of West Virginia for the operation of the Leased vehicle. Failure to charge the approved rates and charges shall be sufficient cause for Lessor not to enter into any future taxicab rental agreements with the Lessee.

With regard to the latter provision, lease form no. 55 required the taxicab driver, the lessee, to submit to C & H, at the end of each lease period, a manifest which, as the Public Service Commission explained, sets forth every passenger trip consummated by the taxicab driver and the charges therefor.

In addition to the above, lease form no. 55 contains the following additional provision which has become the focus of this litigation:

By this agreement the Lessor and Lessee acknowledge and agree that there does not exist between them the relationship of employer-employee, principal agent or master-servant, either express or implied, but that the relationship between the parties hereto is strictly Lessor-Lessee, the Lessee being an independent contractor, free from interference or control on the part of the Lessor in the operation of said taxicab, and subject only to adherence to applicable rules and regulations of the Public Service Commission of West Virginia, [s]tatutes and ordinances of the State of West Virginia, and County or Municipality in which the Lessee operates the equipment Leased from Lessor. Lessee further acknowledges that as an independent contractor, free from authority and control of the Lessor, he is not covered by Workmen's Compensation insurance provided by the Lessor, and that he expressly waives any such coverage as a condition to his independent status: further, that no withholding will be made by Lessor for Federal, State or City income Taxes, or Social Security payments, or for any other taxes, and that the Lessee will be liable for payment of said taxes. If the Lessor is called upon to pay any charges assumed herein ... the Lessee will reimburse the Lessor upon demand. Lessor shall not be responsible for any injury to Lessee resulting from the use of or operation of said taxicab, and the Lessee will insure himself against such injury if he desires such insurance. ¹

(emphasis and footnote added).

C & H maintains that, under lease form no. 55, it derives income solely from the lease payments of the taxicab drivers and not from the fares the drivers charge the passengers.

II

By amended notice dated July 27, 1990, the Commissioner of the Workers' Compensation Fund notified all...