Holcomb v. Bullock

• Decision Date: 09 September 1958
• Docket Number: No. 19,19
• Citation: 353 Mich. 514,91 N.W.2d 869
• Parties: Clare HOLCOMB, Plaintiff and Appellee, v. Lester BULLOCK, Defendant and Appellant.
• Court: Michigan Supreme Court

Page 869

91 N.W.2d 869

353 Mich. 514

Clare HOLCOMB, Plaintiff and Appellee, v. Lester BULLOCK, Defendant and Appellant.

No. 19.

Supreme Court of Michigan.

Sept. 9, 1958.

Ransom & Fazenbaker, Flint, for appellant.

H. Donald Bruce, Lansing, for appellee.

Before he Entire Bench.

CARR, Justice.

Plaintiff was injured in a traffic accident occurring on Miller road, Genesee county, on May 17, 1951. He was at the time engaged in hauling gravel, with his own truck, for the defendant. A collision occurred between plaintiff's vehilce and a truck operated by defendant's employee, both drivers sustaining serious physical injuries.

Following the accident plaintiff received voluntary payments from defendant's workmen's compensation insurance carrier for the period from May 18 to July 31, 1951, in the total sum of $320. His hospital bill, amounting to $305.75, and a physician's bill for $110 were likewise paid. The present action for damages was started by summons on August 7, 1951, the declaration being filed November 16th following. Thereafter defendant filed a demand for a more specific declaration with reference to the nature of plaintiff's employment at the time of the accident, and by whom he was employed. To such demand plaintiff answered that at the time of sustaining the injuries for which he sought damages he was self-employed and rendering services for defendant as an independent contractor. Said answer was filed February 11, 1952. Defendant's answer to the declaration was filed March 24, 1953, at which time the cause was at issue. In his pleading defendant alleged affirmatively that on the 17th of May, 1951, plaintiff was an employee of the defendant, that as such he was subject to the provisions of the workmen's compensation act of the State, and that he had accepted compensation thereunder. No specific reply to these averments was made on behalf of the plaintiff.

On April 13, 1954, the case was dismissed for lack of progress. In July, 1955, plaintiff made application for benefits under the provisions of the workmen's compensation law of the State. ¹ Hearing was had before a referee of the commission in January following, plaintiff being denied compensation. The order was reviewed by the appeal board, which affirmed the finding of the referee. It is not disputed that such action was based on the conclusion that plaintiff was an independent contractor rather than an employee of defendant at the time of the accident. The denial of compensation by the appeal board was not appealed to this Court.

While the proceeding under the compensation act was pending plaintiff procured the instant case to be reinstated. The order therefor was signed by the circuit judge on December 29, 1955, and filed on January 12th thereafter. On February 29, 1956, plaintiff filed an amendment to his declaration, alleging that at the time of his injury on May 17, 1951, he was an independent contractor and not an employee of the defendant subject to the workmen's compensation act. It was further set forth in said amendment that the driver of defendant's truck was guilty of negligence in operating said vehicle on the left side of the center line of the two-lane highway. No answer to this amendment was filed by defendant.

The case was tried, beginning July 10, 1957, before the circuit judge without a jury. During the course of the proceeding counsel for defendant moved to dismiss the action, alleging in support thereof that plaintiff had elected to pursue his remedy under the workmen's compensation act, thereby barring any right that he might have had to sue in a court of law for his damages, and that by failing to reply to the claim set forth in defendant's answer that at the time of the accident he was an employee of defendant and as such subject to the provisions of the compensation act, he had admitted such affirmative defense. The motion was denied, and at the conclusion of the proofs judgment was entered for the plaintiff in the sum of $11,000, the court finding that negligence on the part of defendant's driver was the proximate cause of the accident, and that plaintiff was at the time an independent contractor rather than an employee of defendant.

Following the decision of the case by the circuit judge counsel for plaintiff, on August 27, 1957, submitted a motion to increase the judgment, averring in support thereof that the amount of damages found was inadequate to cover loss of earnings and other elements of damages. The motion was denied. Counsel for defendant filed claim of appeal from the judgment, and plaintiff claimed a cross-appeal from the denial of the motion to increase the judgment, specifying therein that such appeal was 'limited to increasing the judgment heretofore entered in plaintiff's behalf.'

On behalf of defendant it is argued that plaintiff should be held estopped to pursue his action at law for damages because of his acceptance of benefits under the workmen's compensation act and his subsequent attempt to obtain an award of compensation. The claim that there was an election of remedies on plaintiff's part, advanced on the trial of the cause, was not well-founded under the facts in the controversy. At the time of the accident plaintiff was not an employee of the defendant and hence was not entitled to invoke the benefit of the workmen's compensation act. It may be assumed that when the voluntary payments were made and accepted both parties were in error as to the legal relationship existing between them.

The finding of the court in the instant case that plaintiff was actually an independent contractor and rendering services to defendant as such on the 17th of May, 1951, is not questioned. The situation was, in consequence, that plaintiff had no right to pursue any remedy other than by way of an action at law for damages. The cases of Twork v. Munising Paper Co., 275 Mich. 174, 266 N.W. 311; Morris v. Ford Motor Company, 320 Mich. 372, 31 N.W.2d 89; and Demkiw v. Briggs Manufacturing Company, 347 Mich. 492, 79 N.W.2d 876, are distinguishable on the facts. In each of said cases the relation of employer and employee between the parties existed at the time plaintiff's injury was sustained. Relief was sought in each case on the basis of such relationship, and the duties, incidents and obligations pertaining thereto. Each holding was predicated on the provisions of the workmen's compensation law and the obvious purpose of the legislature in its enactment. In the case at bar the situation is fundamentally different. The requisite relationship not existing, plaintiff had no right to seek benefits under said act. He had no right of election as to his remedy. The fact that he may have been in error in his conclusion as to the legal relationship between himself and the defendant does not alter the situation.

For somewhat analogous reasons defendant's claim of estoppel must be rejected. Assuming that the averments of fact in defendant's answer to plaintiff's declaration are sufficient in substance to permit the argument to be advanced, the facts as disclosed by the record before us do not afford a proper basis for the application of the doctrine. The parties were equally informed with reference to the nature of the relationship existing between them at the time of the accident. There was no concealment on plaintiff's part of any material facts bearing on the question, nor does it appear that defendant was misled to his prejudice by improper conduct on plaintiff's part. No claim is made that there was any deliberate attempt to mislead defendant. The conclusion is fully warranted that defendant knew all material facts involved. Such being the case he is not entitled to assert a claim of estoppel. Cudahy Brothers Co. v. West Michigan Dock & Market Corp., 285 Mich. 18, 26, 280 N.W. 93; Richards v. Lowrie & Webb Lumber Co., 317 Mich. 42, 26 N.W.2d 590. See, also, Viaene v. Mikel, 349 Mich. 533, 542, 84 N.W.2d 765.

It is further contended on behalf of defendant that plaintiff's failure to file reply to the affirmative allegations in the answer to the declaration must be construed as a binding admission of the truth of the averments as to plaintiff's employment by defendant. Reliance is placed on Michigan Court Rule 23, § 2, which provides that:

'Every material allegation in the declaration or bill to which the defendant shall not make answer shall be taken as admitted by the defendant.'

Rule 24 imposes a like duty on plaintiff with reference to the denial of affirmative defenses alleged in the answer in any action. Cited also in support of the claim are Neada v. State Farm Life Insurance Company, 324 Mich. 233, 36 N.W.2d 904, and Zdero v. Briggs Manufacturing Company, 338 Mich. 549, 61 N.W.2d 615. The situations involved in these cases were materially different from that in the case at bar. As before noted, plaintiff, in reply to defendant's demand for a more specific declaration with reference to plaintiff's employment at the time of the accident, replied under date of February 11, 1952, to the effect that he was at said time self-employed and was working under a contract with defendant as an independent contractor. Defendant by his answer subsequently filed averred that plaintiff was an employee of defendant and that the parties were subject to the Michigan workmen's compensation act. The declaration was formally amended prior to trial, on February 29, 1956, affirmatively alleging the status of plaintiff at the time of his injury as that of an independent contractor, in effect denying the claim set forth in defendant's answer. We think it may be said that issue was fairly joined on the question whether plaintiff was, as he claimed, an independent contractor, or, as defendant claimed, an employee. Dramis v. Dunbar, 280 Mich. 300, 305, 273 N.W. 576. The trial court was not in error in determining the matter on the basis of the proofs.

This brings us to a consideration of the question raised by plaintiff's...