Caramagno v. Tuchel

• Decision Date: 13 January 1989
• Docket Number: Docket No. 101255
• Citation: Caramagno v. Tuchel, 433 N.W.2d 389, 173 Mich.App. 167 (Mich. App. 1989)
• Parties: , 57 USLW 2446 Thomas CARAMAGNO, as Next Friend of Michael Caramagno, a Minor, Plaintiff-Appellant v. Daniel Christopher TUCHEL, Carl's Motor Sales, Charlotte Belinda Bryant, Lee Realty and the City of Detroit, jointly and severally, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 389

433 N.W.2d 389

173 Mich.App. 167, 57 USLW 2446

Thomas CARAMAGNO, as Next Friend of Michael Caramagno, a Minor, Plaintiff-Appellant v.Daniel Christopher TUCHEL, Carl's Motor Sales, Charlotte Belinda Bryant, Lee Realty and the City of Detroit, jointly and severally Defendants-Appellees.

Docket No. 101255.

Court of Appeals of Michigan.

Submitted Aug. 10, 1988.

Decided Nov. 21, 1988.

Released for Publication Jan. 13, 1989.

James F. Finn, Detroit, for plaintiff-appellant.

Siemion, Huckabay, Bodary, Padilla & Morganti, P.C., Detroit by Raymond W. Morganti, for Lee Realty.

Before SULLIVAN, P.J., and HOOD and BRUFF, ^* JJ.

HOOD, Judge.

Plaintiff appeals as of right from an order of the Wayne Circuit Court granting summary disposition to defendantLee Realty Company pursuant to MCR 2.116(C)(10).The trial court held that a real estate salesperson is, as a matter of law, an independent contractor and that an employing real estate broker therefore can not be held liable for the salesperson's negligence.We reverse.

The underlying facts in this case are not in dispute.Michael Caramagno was a passenger in the back seat of a vehicle being driven by defendant Tuchel when it was struck by a vehicle owned and operated by defendantCharlotte Bryant.Michael was seriously injured.Bryant was a licensed real estate salesperson who, at the time of the accident, was on official business for defendantLee Realty, traveling from the realty office in Roseville, Michigan to a residence which was to be listed for sale through Lee Realty.Plaintiff filed a complaint against Tuchel, Carl Motor Sales, which was the owner of the Tuchel vehicle, Bryant, Lee Realty, and the City of Detroit.A consent judgment in the amount of $20,000 was subsequently entered against Tuchel and Carl Motor Sales.Lee Realty then filed a motion for summary disposition under MCR 2.116(C)(10), arguing that Bryant was an independent contractor and that Lee Realty therefore could not be vicariously liable.The trial court agreed, opining, "I do see the real estate salesperson as an independent contractor."

A motion for summary disposition pursuant to MCR 2.116(C)(10) asserts that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.Samhoun v. Greenfield Construction Co., Inc., 163 Mich.App. 34, 39-40, 413 N.W.2d 723(1987).

In this case, there is no dispute as to the fact that defendant Bryant is a real estate salesperson who was working for defendantLee Realty.Thus the only question, in this matter of first impression, is whether defendant Bryant was a servant or an independent contractor of defendantLee Realty.If she was an independent contractor, her employer, Lee Realty, is not liable for her torts because, as a general rule, an employer of an independent contractor is not liable for the negligence of the contractor or the contractor's employees.Bosak v. Hutchinson, 422 Mich. 712, 724, 375 N.W.2d 333(1985), reh. den., 424 Mich. 1201(1985).

Our Supreme Court has defined an independent contractor as follows:

" 'An independent contractor is one who, carrying on an independent business, contracts to do a piece of work according to his own methods, and without being subject to the control of his employer as to the means by which the result is to be accomplished, but only as to the result of the work.Generally, the circumstances which go to show one to be an independent contractor, while separately they may not be conclusive, are the independent nature of his business, the existence of a contract for the performance of a specified piece of work, the agreement to pay a fixed price for the work, the employment of assistants by the employee who are under his control, the furnishing by him of the necessary materials, and his right to control the work while it is in progress except as to results.' "Marchand v Russell, 257 Mich 96, 100-101; 241 NW 209(1932), citingZoltowski v Ternes Coal & Lumber Co, 214 Mich 231, 233; 183 NW 11(1921), and 26 Cyc p 1546.

In Marchand, the Court stated that the right to control ¹, even if not exercised, was decisive in determining that the defendant was a servant rather than an independent contractor.Marchand, supra at 102, 241 N.W. 209.The Court also noted that the determination of whether the defendant was a servant or independent contractor was dependent on the facts.Marchand, supra at 103, 241 N.W. 209.In Holloway v. Nassar, 276 Mich. 212, 267 N.W. 619(1936), the Court stated that no issue of fact was raised, but the Court reversed the jury's decision that the individual defendant was a servant of the employer.The reason for reversal was that the plaintiff had "failed to sustain the burden of evidence that Nassar was a servant of defendant company at the time of the collision."Holloway, supra at 217, 267 N.W. 619.

In both Marchand and Holloway, the individual defendants were traveling salesmen involved in auto collisions, and the issues were whether they were independent contractors so as to release their employers of vicarious liability.In each case, the Court determined the relationship as a matter of law.In Sliter v. Cobb, 388 Mich. 202, 200 N.W.2d 67(1972), also a case involving alleged vicarious liability of a master, the Court held that summary disposition was improper because the plaintiffs had raised an issue of fact as to whether the defendant was an employee (servant) of his employer or an independent contractor; the Court remanded for a new trial.

In this case, on the other hand, the evidentiary fasts are undisputed.We conclude that, because of the statute which regulates, inter alia, real estate brokers and salespersons, those evidentiary facts are also susceptible of only one inference, that defendant Bryant, as a real estate salesperson, is a servant of defendantLee Realty and not an independent contractor.

The governing statute is the Occupational Code, M.C.L. Sec. 339.101 et seq.;M.S.A. Sec. 18.425(101) et seq.The statute states that all real estate salespersons must be licensed, that only one license is issued for any given period, and that salespersons' licenses must be held by a broker.

The statute distinguishes a real estate broker, defined as "an individual ... who ... sells ...," from a real estate salesperson, defined as "a person who ... is employed either directly or indirectly by a licensed real estate broker to sell...."M.C.L. Sec. 339.2501(a), (b);M.S.A. Sec. 18.425(2501)(a), (b).Whereas a real estate salesperson must have forty hours of instruction, a real estate broker is required to have an additional ninety hours.M.C.L. Sec. 339.2504;M.S.A. Sec. 18.425(2504).A real estate salesperson applies for a license through a broker, and the broker holds that license as follows:

"(4) An applicant for a salesperson's license shall set forth the period of time during which the applicant has been engaged in the business, stating the name of the applicant's last employer and the name and the place of business of the individual, partnership, association, or corporation then employing the applicant or in whose employ the applicant is to enter.The application shall be accompanied by a written statement by the real estate broker in whose employ the applicant is to enter stating that in the real estate broker's opinion the applicant is of good moral character, and recommending that the license be granted to the applicant."M.C.L. Sec. 339.2505(4);M.S.A. Sec. 18.425(2505)(4).

"Sec. 2506.The department shall issue to each person who meets the requirements of this article and who pays the appropriate license fee prescribed in section 37 of ActNo. 152 of the Public Acts of 1979, a license in a form and size as prescribed by the department.This license shall show the name and address of the licensee and in case of a real estate salesperson's license, shall show the name of the real estate broker by whom the real estate salesperson is employed.A license shall contain data prescribed by the department.The license of a real estate salesperson shall be delivered or mailed to the real estate broker by whom the real estate salesperson is employed and shall be kept in the custody and control of the broker.A real estate broker shall conspicuously display the real estate broker's license and the license of each real estate salesperson employed by the real estate broker in the real estate broker's place of business.Written notice shall be given to the department by a licensee of a change of either a principal or branch business location.The department shall issue a new license for the unexpired period upon payment of the fee prescribed in section 37 of ActNo. 152 of the Public Acts of 1979.The department shall prepare and deliver to a licensed person a pocket card not larger than 2 1/4 inches in width and 3 3/4 inches in length, which card, among other things, shall contain the name and address of the person, and in case of a real estate salesperson the name and address of the employer, and shall certify that the person whose name appears on the card is a licensed real estate salesperson or real estate broker.The date to be printed on the pocket card, except as set forth in this section, shall be prescribed by the department."M.C.L. Sec. 339.2506;M.S.A. Sec. 18.425(2506).(Emphasis added.)

The real estate salesperson's license is returned to the Department of Licensing and Regulation upon the termination of employment as provided in M.C.L. Sec. 339.2507;M.S.A. Sec. 18.425(2507):

"Sec. 2507.When a real estate salesperson is discharged or terminates employment with a real estate broker by giving the employer a written notice of the termination, the real estate broker shall deliver or mail by registered mail to the department, within 5 days, the real estate salesperson's license.If a written notice of termination of employment is not served upon the real estate broker by the real estate...