Chevron Oil Co. v. Sutton

Decision Date09 November 1973
Docket NumberNo. 9772,9772
Citation1973 NMSC 111,85 N.M. 679,515 P.2d 1283
PartiesCHEVRON OIL COMPANY, Petitioner, v. Charles M. SUTTON, Individually and as Administrator and Personal Representative of the Estate of Mona Ray Sutton, Deceased, Respondent.
CourtNew Mexico Supreme Court
OPINION

McMANUS, Chief Justice.

This suit began in the District Court of Bernalillo County. Sutton, respondent, sought damages for death by wrongful act pursuant to § 22--20--1 et seq., N.M.S.A.1953, against petitioner, Chevron Oil Company (Chevron), Lee Sharp (lessee for Chevron) and Herbert R. Buss (Sharp's employee). Sutton's wife had died from injuries sustained in a car accident when a wheel of a car repaired by Buss came off the vehicle. The district court granted Chevron's motion for a summary judgment. On appeal to the Court of Appeals, the summary judgment was reversed. Sutton v. Chevron Oil Co., 85 N.M. 604, 514 P.2d 1301 (Ct.App., June 6, 1973). The matter is now before this court on certiorari to the Court of Appeals.

One of the grounds upon which the Court of Appeals based its decision was that of strict liability. We discussed this doctrine at length in Stang v. Hertz Corporation, 83 N.M. 730, 497 P.2d 732 (1972). Nothing we said in our decision in that case can properly be enlarged or extended to embrace the factual situation here.

The main issue before this court is whether Chevron asserted enough control over its lessee to constitute a master-servant relationship. If such relationship is present, then Chevron could be found liable under the doctrine of respondeat superior. The district court granted Chevron a summary judgment on this issue and the Court of Appeals reversed on grounds that there were sufficient indicia of control to warrant the submission of the issue to a jury.

In the present case, there are two important contract provisions which must be considered. The first provided that Sharp was '* * * engaged in an independent business, and nothing herein contained shall be construed as granting to (Chevron) any right to control (Sharp's) business or operations, or the manner in which the same shall be conducted.' This agreement, on its face, tends to show that there was no master-servant relationship present, but that Sharp was merely an independent contractor. However, the majority rule is that the manner in which the parties designate a relationship is not controlling, and if an act done by one person on behalf of another is in its essential nature one of agency, the one is the agent of the other, notwithstanding he is not so called. See Board of Trade v. Hammond Elevator Co., 198 U.S. 424, 25 S.Ct. 740, 49 L.Ed. 1111 (1904); Pritchard v. Smith (8th Cir. 1961), 289 F.2d 153, 88 A.L.R.2d 1146; Green v. Jones-Murphy Properties Inc., 232 Ark. 320, 335 S.W.2d 822 (1960); Van Pelt v. Paull,6 Mich.App. 618, 150 N.W.2d 185 (1967); Nat. Mut. Bldg. & L. Assn. v. Brahan, 80 Miss. 407, 31 So. 840 (1902); McCarty v. King County Medical Service Corp., 26 Wash.2d 660, 175 P.2d 653 (1946).

Furthermore, it has long been the rule that a third person who deals with an agent is not bound by any secret or private instructions given to an agent by the principal. See Sterling v. B. & E. Constructors, Inc., 74 N.M. 708, 397 P.2d 729 (1964); South Second Livestock Autction, Inc. v. Roberts,69 N.M. 155, 364 P.2d 859 (1961); Douglass v. Mutual Ben. Health & Accident Ass'n, 42 N.M. 190, 76 P.2d 453 (1937); Echols v. N. C. Ribble Co., 85 N.M. 240, 511 P.2d 566 (Ct.App.1973).

When such agreements do not control, 'whether a station operator is an employee of an oil company or an independent contractor depends on the facts of each case the principal consideration being the control, or right to control, of the operation of the station.' (Emphasis added.) Shaver v. Bell, 74 N.M. 700, 704, 397 P.2d 723, 727 (1964). In Shaver, supra, the court granted summary judgment for the defendant when the defendant did not send its personnel to check the premises or deal directly with the operator of the station, but did allow the station operator to display the defendant's trade mark and signs, and use its credit card facilities. However, the court noted that 'slight changes in facts may result in different conclusions as to the presence of an issue for determination by the jury.' In addition, the court stated that when oil company personnel check the station for clanliness and worthless check frequency, and suggest gas prices and ways to increase the business of the station, then these additional facts are enough to submit the case to a jury. This analysis is in line with Goodman v. Brock, 83 N.M. 789, 792, 498 P.2d 676, 679 (1972), which interpreted rule 56(c), New Mexico Rules of Civil Procedure, to mean,

'* * * that the party opposing the motion (for summary judgment) is to be given the benefit of all reasonable doubts in determining whether a genuine issue exists. If there are such reasonable doubts, summary judgment should be denied. A substantial dispute as to a material fact forecloses summary judgment.'

In the present case, there is a substantial dispute as to a material fact, and this should foreclose summary judgment. The fact in dispute is whether or not Chevron exercised such control over Sharp as to bring the doctrine of respondeat superior into play. Independent stations of the appellant were required to: (1) diligently promote the sale of Chevron's brand products; (2) remain open for certain hours and days and 'meet the operating hours of competitors'; (3) keep the premises, restrooms and equipment in a 'clean and orderly condition'; (4) present a 'good appearance'; and (5) promote Chevron's image to the motoring public. In addition, Sharp also (6) sold Chevron products and dispensed gasoline and oil provided by the Chevron organization; (7) received the benefit of Chevron advertising; (8) wore uniforms containing the Chevron emblem; (9) used calling cards which billed the station as 'Lee Sharp Chevron and Four Wheel Drive Equipment' (apparently with Chevron's consent); and (10) the customers of the Sharp station were permitted to charge purchases of both products and repairs on Chevron credit cards. No one of these factors is controlling, but all are useful in determining whether or not control was present. By using all of these factors, there is a sufficient factual question as to whether or not there was an actual master-servant relationship.

Even if there were not a material issue as to whether or not Chevron asserted enough control as to create an actual master-servant relationship, there still exists a material issue as to whether or not Chevron had clothed the lessee with apparent...

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