Erickson v. Goodell Oil Co.

• Decision Date: 12 November 1970
• Docket Number: No. 6,6
• Citation: 384 Mich. 207,180 N.W.2d 798
• Parties: John ERICKSON and Shirley Erickson, Plaintiffs-Appellees, v. GOODELL OIL COMPANY, Inc., a Michigan Corporation, Defendant-Appellant.
• Court: Michigan Supreme Court

Page 798

180 N.W.2d 798

384 Mich. 207

John ERICKSON and Shirley Erickson, Plaintiffs-Appellees, v. GOODELL OIL COMPANY, Inc., a Michigan Corporation,

Defendant-Appellant.

No. 6.

Supreme Court of Michigan.

Nov. 12, 1970.

Wisti, Jaaskelainen & Bourland, Hancock, for plaintiffs-appellees

Messner, LaBine & Vairo, Houghton, for defendant-appellant, by, David R. Mechlin, Houghton.

Before the Entire Bench, except T. G. KAVANAGH and KELLY, JJ.

BRENNAN, Chief Justice.

THE CASE

Plaintiff was hired during the year 1963 by Robett Goodell of the Goodell Oil Company to work with his son, Stuart Goodell, at a retail gasoline station known as Bridge Service. Defendant Goodell Oil Company owned the building including fixtures and equipment and also the realty of the Bridge Station through an undisclosed arrangement with Stuart Goodell, who was operating the station under an assumed, but unfiled, name. In January, 1964, defendant resumed operation of the gas station to the exclusion of Stuart Goodell, but continued using the name Bridge Service Station. Plaintiff was injured on the premises on or about October 20, 1964, at which time both Goodell Oil Company and plaintiff were subject to the Michigan workmen's compensation act. Defendant voluntarily paid compensation under the act until plaintiff returned to work approximately seven months later.

Plaintiff brought this suit alleging negligence by defendant as a third-party tort-feasor in maintaining the premises. The complaint specifically alleged that plaintiff was the employee of Bridge Service at the time of his injury. Defendant filed a motion for accelerated judgment ¹ contending that defendant's 'absorption' of the Bridge Service Station resulted in plaintiff becoming defendant's employee, and that the negligence action would thus be barred since an employee's exclusive remedy for injuries suffered during the course of his employment would be limited to workmen's compensation benefits. ² Plaintiff filed a timely jury demand.

At the hearing on the motion for accelerated judgment, plaintiff contended that he had no knowledge of the 'absorption' and thus could not be considered an employee of defendant in the absence of some showing of assent to the new relationship, either expressly or by implication. Based upon the evidence adduced at the hearing, the trial judge granted defendant's motion for accelerated judgment, finding as a matter of law, that an implied contract of hire existed. Confining the issue solely to the question of whether there was any evidence presented at the hearing on the motion for accelerated judgment which would establish that plaintiff knew that defendant had become his true employer, the Court of Appeals remanded for a trial on the merits, finding that, as a matter of law, no implied contract of hire existed between the parties to the lawsuit. ³

DISCUSSION

The parameters of decision may be readily stated. Before benefits or rights under the workmen's compensation act can be claimed, an employer-employee relationship, established by a contract of employment must be shown to exist. Boshaw v. J. J. Newberry Co. (1932), 259 Mich. 333, 243 N.W. 46; City of Grand Rapids v. Crocker The question of whether an employer-employee relationship existed between plaintiff and defendant at the time of the injury was a disputed issue of fact at the hearing. Both lower courts recognized the pivotal question to be the existence of an implied contract of hire between the parties. ⁴ A contract implied in fact arises under circumstances which, according to the ordinary course of dealing and common understanding, of men, show a mutual intention to contract. In re Estate of Munro (1941), 296 Mich. 80, 295 N.W. 567. A contract is implied in fact where the intention as to it is not manifested by direct or explicit words between the parties, but is to be gathered by implication or proper deduction from the conduct of the parties, language used or things done by them, or other pertinent circumstances attending the transaction. Miller v. Stevens (1923), 224 Mich. 626, 195 N.W. 481. The existence of an implied contract, of necessity turning on inferences drawn from given circumstances, usually involves a question of fact, unless no essential facts are in dispute. See 100 C.J.S. Workmen's Compensation § 611. The question of an employee-employer relationship presents an issue of fact. In Chaffee v. Stenger, Supra, p. 60, 104 N.W.2d 805, 806, Mr. Justice Souris, speaking for a unanimous Court, stated:

(1922), 219 Mich. 178, 189 N.W. 221; Vaivida v. City of Grand Rapids (1933), 264 Mich. 204, 249 N.W. 826. The act is predicated on the existence of such a relationship. Chaffee v. Stenger (1960), 361 Mich. 57, 104 N.W.2d 805. Acceptance of voluntary payments of benefits made by a putative employer after application for an award of compensation does not foreclose a subsequent legal action for common-law negligence if it is later discovered that no employer-employee relationship in fact existed at the time of plaintiff's injury. Holcomb v. Bullock (1958), 353 Mich. 514, 91 N.W.2d 869. Nor can the mere acceptance of such benefits constitute proof of the existence of the requisite relationship. Chaffee v. Stenger, Supra.

'Indeed, the relationship between the parties was a disputed issue of fact at the hearing on the motion to dismiss, made so by the declaration's express averment that plaintiff was not defendant's employee and by the answer's denial thereof and averment that workmen's compensation benefits had been accepted by plaintiff * * *.'

In Chaffee, as in the instant case, the trial court decided the issue of the employment relationship on defendant's motion before trial. This procedure, as contrasted with that employed in Holcomb v. Bullock, Supra, was deemed improper:

'The important point is that in Holcomb's case, there was a judicial determination, at the trial, of the relationship between the parties. There has been no such determination in the case at bar. It cannot be said yet, of course, that a bilateral or a unilateral mistake has been made, nor can it be said until plaintiff's status is determined. But, plaintiff is entitled to such a determination, and he was deprived thereof by the trial court's dismissal on motion.' (Emphasis added.) Chaffee, supra, p. 60, 104 N.W.2d...