Conagra Foods, Inc. v. Draper

• Decision Date: 14 February 2008
• Docket Number: No. 07-332.,07-332.
• Citation: 372 Ark. 361,276 S.W.3d 244
• Parties: CONAGRA FOODS, INC., Appellant, v. Homer Otis DRAPER and Colleen Draper, Appellees.
• Court: Arkansas Supreme Court

276 S.W.3d 244

372 Ark. 361

CONAGRA FOODS, INC., Appellant, v. Homer Otis DRAPER and Colleen Draper, Appellees.

No. 07-332.

Supreme Court of Arkansas.

February 14, 2008.

Cross, Gunter, Witherspoon & Galchus, P.C., by: David B. Vandergriff and Brian A. Vandiver, Fort Smith, for appellant.

Blair & Stroud, by: H. David Blair and Jerrie Grady, Batesville, for appellees.

JIM GUNTER, Justice.

This appeal arises out of an automobile accident occurring on January 28, 2003, involving an automobile driven by Appellee Homer Otis Draper and a truck and trailer hauling Appellant ConAgra's poultry to its processing plant in Batesville. The truck and trailer were owned by Patterson-Salter Trucking, Inc. ("PST") and driven by Charlie Von Garrett. On appeal, ConAgra asks that we reverse the Sharp County Circuit Court's denial of its motion for directed verdict. In the alternative, ConAgra asks that we reverse and remand this case for a new trial because the use of AMI Civ. 209 (2008) incorrectly placed the burden on ConAgra to prove that PST was an independent contractor. We affirm the circuit court's rulings.

Homer and Colleen Draper ("the Drapers") filed suit against both PST and ConAgra in the Sharp County Circuit Court for damages arising out of personal injuries that he sustained in the accident. On June 18, 2004, ConAgra filed a motion for summary judgment arguing that it was entitled to judgment as a matter of law because PST was not its agent or employee. The circuit court granted ConAgra's motion. On September 7, 2005, the Arkansas Court of Appeals reversed and remanded the case to the circuit court, holding that genuine issues of material fact as to the nature of the relationship between ConAgra and PST precluded summary judgment on independent-contractor grounds. See Draper v. ConAgra Foods, Inc., 92 Ark.App. 220, 212 S.W.3d 61 (2005).

Upon remand, ConAgra moved for directed verdict at the close of the Drapers' evidence and renewed the motion at the end of all of the evidence, arguing that the Drapers had failed to provide sufficient evidence to prove the issue of the extent of control ConAgra had over PST, whether PST was a distinct occupation or business, and whether poultry hauling was a part of ConAgra's regular business in 2003. The circuit court denied the motion for directed verdict.

A jury returned a verdict in favor of the Drapers, finding that PST was not an independent contractor at the time of the accident, that ConAgra was guilty of negligence that was a proximate cause of damages sustained by the Drapers, and that Homer Draper was also guilty of negligence, which was the proximate cause of damages sustained by him and Colleen Draper. On November 9, 2006, ConAgra filed a motion for new trial, arguing that the circuit court erred by giving the jury AMI Civ. 209 over ConAgra's objection because the burden of proof was improperly placed on ConAgra to show that an independent-contractor relationship existed. On December 9, 2006, ConAgra's motion for new trial was deemed denied. ConAgra filed a timely notice of appeal on January 8, 2007. This case was certified to us by the Arkansas Court of Appeals on December 31, 2007.

I. Sufficiency of the Evidence

For its first point on appeal, ConAgra argues that the circuit court erred in ruling that PST's independent-contractor status was a jury question. It further contends that the circuit court erred in denying its motions for directed verdict at the close of the Drapers' case and at the close of all the evidence, because there was no substantial evidence that PST was ConAgra's employee. Rather, ConAgra asserts that reasonable minds could not have differed as to PST's status as an independent contractor.

The Drapers respond, arguing that ConAgra is asking us to engage in a preponderance-of-the-evidence analysis when the only question presented here is whether there was substantial evidence to support a finding in favor of the Drapers. The Drapers assert that there is sufficient evidence to support the jury's finding that PST was not, at the time of the accident, acting as an independent contractor of ConAgra.

Our standard of review of the denial of a motion for directed verdict is whether the jury's verdict is supported by substantial evidence. Crawford County v. Jones, 365 Ark. 585, 232 S.W.3d 433 (2006); Stewart Title Guar. Co. v. American Abstract & Title Co., 363 Ark. 530, 215 S.W.3d 596 (2005); Ethyl Corp. v. Johnson, 345 Ark. 476, 49 S.W.3d 644 (2001). Similarly, in reviewing the denial of a motion for JNOV, we will reverse only if there is no substantial evidence to support the jury's verdict, and the moving party is entitled to judgment as a matter of law. Id. Substantial evidence is that which goes beyond suspicion or conjecture and is sufficient to compel a conclusion one way or the other. Id. It is not our place to try issues of fact; rather, we simply review the record for substantial evidence to support the jury's verdict. Id. In determining whether there is substantial evidence, we view the evidence and all reasonable inferences arising therefrom in the light most favorable to the party on whose behalf judgment was entered. Id. A motion for directed verdict should be denied when there is a conflict in the evidence, or when the evidence is such that fair-minded people might reach different conclusions. See McMickle v. Griffin, 369 Ark. 318, 254 S.W.3d 729 (2007) (citing Wal-Mart Stores, Inc. v. Kelton, 305 Ark. 173, 806 S.W.2d 373 (1991)).

The Restatement Second of Agency § 220(2) (1958) sets out factors that are to be weighed in drawing the line between independent contractor and employee:

(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;

. . . .

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

See also Blankenship v. Overholt, 301 Ark. 476, 786 S.W.2d 814 (1990) (citing Alpha Zeta Chapter of Pi Kappa Alpha Fraternity v. Sullivan, 293 Ark. 576, 740 S.W.2d 127 (1987)).

In the present case, ConAgra moved for directed verdict at trial, arguing that the Drapers failed to produce sufficient evidence on the three above factors: the extent of control ConAgra could exercise over the details of the work; whether poultry hauling was a part of ConAgra's regular business; and whether PST was engaged in business. Therefore, we will only address these three factors.

A. Control

On appeal, ConAgra asserts that it had no control over the details of the work of PST or its driver. First, ConAgra contends that the independent-contractor agreement clearly demonstrates that PST and its driver were independent contractors. Second, ConAgra argues that the actions of PST and ConAgra clearly demonstrate that drivers employed by PST were not ConAgra's employees because: (1) PST drivers were not controlled by ConAgra; (2) PST controlled its own employees; (3) PST's control was not diminished by its agreement to reduce bruising of or death to ConAgra's birds; (4) PST's control was not diminished by its agreement to haul and deliver ConAgra's birds at specific times and dates; and (5) ConAgra seldom had contact with PST's drivers.

In response, the Drapers argue that ConAgra's reliance on the terms of the written agreement are misplaced because the real test is not the written agreement, but rather the conduct of the parties. They contend that, because the relationship of ConAgra and PST should be defined by the conduct of the parties, the determination of whether PST is an independent contractor or an employee is highly factual in nature and therefore properly entrusted to a jury. They further argue that there is substantial evidence to conclude that ConAgra closely controlled the activities of the drivers furnished to it by PST.

We have long held that an independent contractor is one who contracts to do a job according to his own method and without being subject to the control of the other party, except as to the result of the work. See Ark. Transit Homes, Inc. v. Aetna Life & Cas., 341 Ark. 317, 16 S.W.3d 545 (2000); Johnson Timber Corp. v. Sturdivant, 295 Ark. 622, 752 S.W.2d 241 (1988); Moore v. Phillips, 197 Ark. 131, 120 S.W.2d 722 (1938); W.H. Moore Lumber Co. v. Starrett, 170 Ark. 92, 279 S.W. 4 (1926). The governing distinction is that if control of the work reserved by the employer is control not only of the result, but also of the means and manner of the performance, then the relation of master and servant necessarily follows. But if control of the means be lacking, and the employer does not undertake to direct the manner in which the employee shall work in the discharge of his duties, then the relation of independent contractor exists. See Ark. Transit Homes, supra (citing Massey v. Poteau Trucking Co., 221 Ark. 589, 254 S.W.2d 959 (1953)). The right to control is the principle factor in determining whether one is an employee or an independent contractor. Id. It is the right to control, not the actual control, that determines the relationship. Id. (citing Taylor v. Gill, 326 Ark. 1040, 934 S.W.2d 919 (1996)).

Although a written contract creates the relation of employer and independent contractor, such relation may be destroyed by conduct of the employer through the direction of means and methods of producing physical results, and it becomes a question of fact for the jury if there is any substantial evidence to show that such conduct became operative. Johnson Timber Corp. v. Sturdivant, 295 Ark. 622, 752 S.W.2d 241 (1988) (citing Ozan Lumber Co. v. McNeely, 214 Ark. 657, 217 S.W.2d 341 (1949)). The relationship may be created by express contract, but this is not essential; it may be created as well by conduct, which shows that the parties recognize that one is the employer, or master, and that the other is the employee or servant. Howard v. Dallas Morning News, Inc., 324...