Genie Trucking Line, Inc. v. American Home Assur. Co.

• Citation: 524 A.2d 966,362 Pa.Super. 456
• Parties: GENIE TRUCKING LINE, INC., Appellant, v. AMERICAN HOME ASSURANCE COMPANY, Appellee. 413 HARRISBURG 1986
• Decision Date: 24 April 1987
• Court: Superior Court of Pennsylvania

Page 966

524 A.2d 966

362 Pa.Super. 456

GENIE TRUCKING LINE, INC., Appellant, v. AMERICAN HOME ASSURANCE COMPANY, Appellee.

413 HARRISBURG 1986

Superior Court of Pennsylvania.

Argued Feb. 18, 1987.

Filed April 24, 1987.

James D. Flower, Jr., Carlisle, for appellant.

Kenneth F. DeMarco, Philadelphia, for appellee.

Before WIEAND, OLSZEWSKI and TAMILIA, JJ.

WIEAND, Judge:

The issue in this appeal is the correct computation of premiums owed by Genie Trucking Lines, Inc. (Genie) for workers' compensation coverage provided by a policy of insurance issued by American Home Assurance Company (American Home). Genie contended that it had overpaid the premiums by $7,506.09 and commenced an action to recover the same. American Home contended that the premiums had been underpaid by $17,764.00 and counterclaimed for that amount. After trial without jury, the court found that Genie was indebted to American Home in the amount of $17,764.00 and, following denial of Genie's post-trial motion, judgment was entered in favor of American Home for that amount. Genie appealed. We affirm.

G. Kenneth Bishop was president and one of three stockholders of Genie. Shortly after becoming president in 1981, Bishop requested the issuance of a policy of workers' compensation insurance from James E. Bankes, a member of the Rollins-Burdick-Hunter Agency. Bishop told Bankes that Genie regularly utilized the services of trucking contractors whose trucks were driven by drivers employed by the trucking contractors, and that he wanted a policy of insurance which did not provide coverage for the contractors or their drivers. Bankes, despite diligent efforts, was unable to find an insurance company willing to issue workers' compensation coverage without charging a premium because of the exposure created by potential claims on behalf of the trucking contractors and their drivers. Bankes ultimately obtained a policy from American Home, for which Genie was billed $8,776.00. ¹ This premium was determined by including trucking contractors and their drivers in the premium rate base. It was paid by Genie.

Thereafter, an audit was conducted to verify the number of persons covered, together with their remuneration, so that the precise amount of the premium could be determined. After the audit had been completed, Bishop became displeased because the contractors and their drivers had been included in the premium rate base. Bishop requested another audit and displayed to the auditor the lease agreements with trucking contractors. He was thus able to persuade the auditor that the trucking contractors were independent contractors and that their drivers were not employees of Genie. In reliance thereon, Genie contended that it had overpaid the correct premium ($1,269.91) by $7,506.09. American Home denied that a refund was owed. It notified Genie that the premium had initially been underestimated and that the correct premium was $26,540.00. Based on this computation, Genie allegedly owed a balance of $17,764.00.

The dispute at trial was whether the trucking contractors and their drivers were to be included in the premium rate base. According to the language of the policy, coverage was provided for "clerical employees and truckmen," and the premium was to be determined according to whether the truck drivers "may render the company liable under the policy for injury to or death of such person in accordance with the workmen's compensation law." ² The trial court found that potential liability did exist with respect to the drivers of the trucking contractors and that those drivers, therefore, were properly included in the premium rate base.

Genie argues that its contracts with trucking contractors contain terms which make the truckers independent contractors. Therefore, the argument continues, the drivers employed by the trucking contractors cannot be deemed employees of Genie and cannot present valid claims under the Workers' Compensation Law.

In Mature v. Angelo, 373 Pa. 593, 97 A.2d 59 (1953), the Supreme Court stated:

Where one is engaged in the business of renting out trucks, automobiles, cranes, or any other machine, and furnishes a driver or operator as part of the hiring, there is a factual presumption that the operator remains in the employ of his original master, and, unless that presumption is overcome by evidence that the borrowing employer in fact assumes control of the employe's manner of performing the work, the servant remains in the service of his original employer....

Facts which indicate that the servant remains the employe of his original master are, among others, that the latter has the right to select the employe to be loaned and to discharge him at any time and send another in his place, that the lent servant has the skill of a technician or specialist which the performance of the work requires, that the hiring is at a rate by the day or hour, and that the employment is for no definite period....

Id. at 596-597, 97 A.2d at 61. See: Patterson v. Workmen's Compensation Appeal Board, 86 Pa.Cmwlth. 608, 612, 485 A.2d 886, 889 (1985); Lego v. Workmen's Compensation Appeal Board, 66 Pa.Cmwlth. 593, 596, 445 A.2d 1324, 1325 (1982); Martin Trucking Co. v. Workmen's Compensation Appeal Board, 30 Pa.Cmwlth. 367, 371, 373 A.2d 1168, 1169 (1977).

The relevant criteria for distinguishing between an employer and independent contractor were enumerated by the Commonwealth Court in J. Miller Co. v. Mixter, 2 Pa.Cmwlth. 229, 277 A.2d 867 (1971), as follows:

The courts have not formulated a hard and fast definition for the determination of whether any given relationship is one of independent contractor or that of employer-employee. They have, however, set forth indicia of such relationship to be used as guides in making such a determination, some of which are: Control of manner work is to be done; responsibility for result only; terms of agreement between the parties; the nature of the work or occupation; skill required for performance; whether one employed is engaged in a distinct occupation or business; which party supplies the tools; whether payment is by the time or by the job; whether work is a part of regular business of the employer, and also the right of employer to terminate the employment at any time.... These indicia are not to be considered as circumstantial in nature and whether some or all of them exist in any given situation is not absolutely controlling as to the outcome; each case must be determined on its own facts.

Id. at 232, 277 A.2d at 869 (citations omitted).

Genie contends that the agreements with the trucking contractors provide expressly that the truckers shall have control over the operation of a leased vehicle and the person operating the same. However, the terms of the lease are but one factor to be considered, and each case must be decided on its own facts. If Genie were in fact to exercise control over the driver of a truck, according to the decided cases, the provisions of the agreement of lease for a truck would not bar a finding of the existence of an employer-employee relationship. Cf. Patterson v. Workmen's Compensation Appeal Board, supra 86 Pa.Cmwlth. at 614, 485 A.2d at 889 (despite provision in lease that owner/lessor relinquished all control over leased vehicle to carrier/lessee, court found that driver was employee of lessor and not lessee because, in fact, control had not been transferred). This Court cannot, as Genie would have us do, determine solely from the provisions of Genie's standard lease, that none of the trucking contractors or their...