Ceradsky v. Mid-America Dairymen, Inc.

• Decision Date: 30 April 1979
• Docket Number: No. KCD,MID-AMERICA,KCD
• Citation: 583 S.W.2d 193
• Parties: Elizabeth CERADSKY, Beverly Lea Ceradsky, Ollie Christina Ceradsky and Garland Dewayne Ceradsky, Claimants-Dependents, Appellants, v.DAIRYMEN, INC. d/b/a Bethany Cheese Company, Alleged Employer and Home Indemnity Company, Insurer, Respondents. 29901.
• Court: Missouri Court of Appeals

Page 193

583 S.W.2d 193

Elizabeth CERADSKY, Beverly Lea Ceradsky, Ollie Christina Ceradsky and Garland Dewayne Ceradsky Claimants-Dependents, Appellants, v. MID-AMERICA DAIRYMEN, INC. d/b/a Bethany Cheese Company Alleged Employer and Home Indemnity Company Insurer, Respondents.

No. KCD 29901.

Missouri Court of Appeals, Western District .

April 30, 1979.

As Modified on Court's Own Motion for Denial of Rehearing

and/or Transfer to Supreme Court June 11, 1979.

John H. Norton and Wm. Harrison Norton, Norton & Pollard, Inc., North Kansas City, for appellants.

Marvin L. Sharp, Stockard, Andereck, Hauck, Sharp & Evans, Trenton, for respondents.

Before SHANGLER, P. J., SWOFFORD, C. J., and WASSERSTROM, J.

SHANGLER, Presiding Judge.

The dependents of Ceradsky, a workman killed as he operated a truck owned by one Percell used to haul milk to Mid-America Dairymen for manufacture into cheese, appeal from a judgment to affirm denial of workmen's compensation by the Industrial Commission. The final award of the Commission rested on the determination that Percell, otherwise regularly employed by Mid-America Dairymen as a field man, operated the milk route as an independent contractor, and therefore Ceradsky was not an employee of Mid-America Dairymen within the Workmen's Compensation Law.

The claim was heard by the referee on deposition testimony. The facts from the evidence are not in dispute and frame but one issue: was the workman Ceradsky an employee of Mid-America Dairymen (then Bethany Cheese Company) at the time of his death within the coverage of the Workmen's Compensation Law? The referee determined that Ceradsky was in fact an employee and awarded benefits to the claimants-dependents. The Industrial Commission found anew from the same evidence that Ceradsky was neither an employee in fact nor a statutory employee of Mid-America Dairymen and entered a final award to deny compensation. In other and more essential terms, the decision of the Industrial Commission determined that Percell, in his role as milk drayer, was not an employee of Mid-America Dairymen and so did not impart such a status to Ceradsky on principles of agency. (See, Gingell v. Walters Contracting Corporation, 303 S.W.2d 683 (Mo.App.1957)).

The appeal from the judgment of the circuit court to affirm the final award of the administrative body poses to this court the question of law: whether the determination by the Industrial Commission that Ceradsky was not an employee of Mid-America Dairymen rests on sufficient competent evidence. Maltz v. Jackoway-Katz Cap Co., 336 Mo. 1000, 82 S.W.2d 909, 918(7-9) (1935). And where, as in the case at bench, no dispute concerns the facts which bear on the status of employee, or not, the conclusions on the evidence adopted by the administrative body do not bind a court of review. Corp v. Joplin Cement Company, 337 S.W.2d 252, 258(7) (Mo. banc 1960).

The evidence shows conclusively that Percell was employed by Mid-America Dairymen (then the Bethany Cheese Company) as a field man and office help five days a week on a fixed schedule and for a fixed salary from which taxes and benefits money were withheld. In that role he was an Employee of the Cheese Company (and later of Dairymen) within the intendment of § 287.020, RSMo 1969, and of the coverage of the Workmen's Compensation Law. The fieldman entailed duty as a solicitor of farmer business and troubleshooter to them on quality control and other incidents of milk production. The field man also advised the farmers on equipment and sold them supplies, particularly filter disks to cleanse the production sold to the company. The employment as field man, however, was augmented by a separate oral undertaking between Percell and Bethany Cheese to pick up milk from farmers within numerous counties in northwest Missouri and southern Iowa for delivery to the factory for process into cheese. This dual capacity of service continued for about eleven years and even after Mid-America Dairymen bought out Bethany Cheese.

It is the relationship of Percell as milk drayman for Bethany Cheese and successor Mid-America Dairymen, and not his duty as field man, which determines the status of Ceradsky on the claim for compensation. If Percell in the capacity of milk hauler was an employee of the cheese company, on principles of agency Ceradsky was within the coverage of the Workmen's Compensation Law; but if Percell was an independent jobber, Ceradsky does not stand to claim the benefits of an employee.

To operate the milk route Percell purchased a truck and hired a succession of drivers. Percell paid for the insurance and all maintenance on the vehicle. Ceradsky was hired at a regular salary to service the territory, outlined by the company as Route N in the agreement with Percell. Percell paid the wages, withheld the taxes, furnished Ceradsky the W-2 forms and paid contributions for unemployment compensation. Ceradsky received no payments from the company.

The cheese company paid the farmers per hundredweight for the milk and paid Percell a commensurate fee. The company checks were delivered to the farmers by Ceradsky and the other drivers.

Ceradsky ran the route six days a week from about midnight to eight in the morning. It was his procedure to leave empty milk cans (furnished by the company) with the farmer, pick up the full cans, unload them at the milk plant, and then to return home with the Percell truck to run the route anew the next morning. On occasions when the farmers left with the milk cans an order for supplies (generally, filter disks), Ceradsky remitted the purchase requests to the company and delivered the goods on the next round. There was intimation that in case of farmer discontent on the route, plant manager Hunt (and major shareholder of Bethany Cheese) felt free to reprimand Ceradsky, but the farmers dealt with Percell on milk matters and it is clear that Percell managed Ceradsky.

The truck owned by Percell and used by Ceradsky had an insulated bed for the transportation of the milk. That component bore the Bethany Cheese identification decal. The company had furnished Percell an insulated bed for the truck when the one in use was condemned by health inspectors. On the occasion when the Percell truck was disabled from damage, the company furnished a substitute, but Percell paid the cost of operation.

Ceradsky was killed one morning during the operation of the Percell milk truck along Route N. It is acknowledged that the death was out of and in the course of that duty. Only the question of status remains: whether Percell as milk hauler and hence Ceradsky was in the service of Dairymen within § 287.020.1 and so entitled to benefits of the Workmen's Compensation Law.

The final award of the Industrial Commission to deny compensation to the dependents rests on the determination that Percell was an independent contractor. That adjudgment rests on the rationale, simply, that as to Percell in the occupation of milk drayman, the cheese company exercised no control nor enjoyed right of control. The evidence allows acceptance without cavil only to the ultimate conclusion of direct control. That absent an observable right of control there can be no employment status for workmen's compensation, however, mistakes the law.

The definition of employment status, as the preeminent authority on Workmen's Compensation Law observes, almost of necessity takes the form of a distinction between an employee from an independent contractor.

The reason is simple. If one wants to get something done without doing it oneself, there are really only two ways open: to hire an employee to do it, or to contract out the work to an independent entrepreneur. The employee-independent contractor distinction is not an artificial dichotomy invented by legal minds interested in fine distinctions for their own sake. It is a fundamental fact of business life which could not be abolished by the most grandiose legislation. Larson, The Law of Workmen's Compensation. (1978) § 43.20.

Our courts, as virtually all others, have adapted the definition of Servant worked out for vicarious tort liability purposes by Restatement of the Law of Agency Second (§ 220) to derive a definition of Employee for workmen's compensation or other statutory purposes. Cline v. Carthage Crushed Limestone Company, 504 S.W.2d 102, 105(1, 2) (Mo.1973); Lawrence v. William Gebhardt, Jr., & Son, 311 S.W.2d 97, 102(1) (Mo.App.1958); Pratt v. Reed & Brown Hauling Company, 361 S.W.2d 57, 62 (Mo.App.1962):

Section 220. Definition of Servant

(1) A servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control.

(2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered;

(a) the extent of control which, by the agreement, the master may exercise over the details of the work;

(b) whether or not the one employed is engaged in a distinct occupation or business;

(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

(d) the skill required in the particular occupation;

(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

(f) the length of time for which the person is employed;

(g) the method of payment, whether by the time or by the job;

(h) whether or not the work is a part of the regular business of the employer;

(i) whether or not the parties believe they are creating the relation of master and servant; and

(j) whether the principal is or is not in business.

Where the evidence shows that a person to whom a service is rendered has a right to control the performance of the person who renders the...