Howard v. Dallas Morning News, Inc.

• Decision Date: 01 April 1996
• Docket Number: No. 95-938,95-938
• Parties: Patricia Ann HOWARD and Richard Scott Howard, Appellants, v. The DALLAS MORNING NEWS, INC., Appellees.
• Court: Arkansas Supreme Court

Page 178

918 S.W.2d 178

324 Ark. 91

Patricia Ann HOWARD and Richard Scott Howard, Appellants, v. The DALLAS MORNING NEWS, INC., Appellees.

No. 95-938.

Supreme Court of Arkansas.

April 1, 1996.

Appeal from the Pulaski County Circuit Court, Morris W. Thompson, Judge. No. 93-1027.

Rose Law Firm, Little Rock, for Appellants.

Ronquillo & Dewolf, Dallas, Gregory T. Jones, Ainsley H. Lang, Little Rock, for Appellees.

ROAF, Justice.

Patricia and Robert Howard sued Dallas Morning News, Inc. (DMN), a newspaper publisher, for injuries Patricia suffered in April, 1991, when she was struck by a truck while she was walking in a pedestrian crosswalk at the Little Rock Municipal Airport. The driver of the truck was making delivery of the Dallas Morning News to the airport at the time of the accident. The Howards also sued Robert Mitchell, the driver, and Delivery Systems, Inc. (DSI), the regional distributor for the Dallas Morning News. The Howards appeal from an order granting summary judgment in favor of DMN, contending that 1) the trial court incorrectly applied the law of agency in finding that they were required to show that Mitchell and DMN intended to and did enter into a contractual relationship, and that, 2) even if they were so required, there was ample evidence from which an agency and contractual relationship might reasonably be inferred. We agree that the trial court erred in granting the summary judgment and reverse.

1. Facts

In July of 1989, DMN contracted with DSI to serve as distributor of the Dallas Morning News in the Little Rock and Hot Springs area. The contract was titled "Independent Distributor Agreement" and specified, in addition to such matters as prices and quantities of papers to be sold to distributor, terms of payment, area of distribution and place of delivery, that the distributor would "make efficient and prompt delivery of the newspaper to purchasers in a manner satisfactory to them," which was defined as reaching the reader by or before 6:30 a.m. each day, "prevent the insertion in copies of the newspaper of any advertising and other printed material," and "obtain new purchasers of the newspaper" through reasonable solicitation and promotional methods. The agreement further provided, in a clause captioned "Independent Contractor Relationship":

It is agreed that the means of accomplishing the foregoing objectives are wholly within the selection and control of Distributor, that all facilities and personnel used in the work shall be under the sole control and direction of Distributor or his sub-contractors, that the Publisher shall have no right or voice with respect to the means employed by Distributor in accomplishing the foregoing objectives, the selection, control or direction of the persons engaged by Distributor in performing the work or the mode, manner or method used by Distributor in the performance of this Agreement, and that the legal relationship created by this Agreement and by the actions and conduct of the parties in the performance of this Agreement is that of independent contractor. Distributor shall have no authority, and is hereby forbidden to employ or contract with any person on behalf of Publisher, and any and all contracts or arrangements made by Distributor in respect of the work contemplated by this Agreement shall be in the name of Distributor and for his account.

The distributor was also required to keep and make available to DMN, accurate and complete records with respect to all purchasers of the newspaper, all employees and subcontractors of distributor, and all other information needed by DMN to comply with rules of the Audit Bureau of Circulations. Although the agreement was for one year and automatically renewed from year to year, it could be terminated by either party with or without cause, upon 10 days written notice.

In December of 1989, DSI contracted with David Mitchell to serve as a "carrier" for DSI, by the execution of two separate documents, an "Independent Contractor/Carrier Agreement" and a "Delivery Systems Carrier Lease." The Agreement provided that Mitchell, as carrier, would procure from DSI and promptly deliver newspapers along a specified route, and further recited:

The means and facilities used for such purposes shall be selected and operated solely by the Carrier under his/her sole supervision, control and direction, and at his/her own cost and expense to the best interest of the Company and the faithful performance of this agreement. It is expressly agreed that the Carrier is not an employee of the Company and he/she at all times occupies the position of an independent contractor in his/her relationship with the Company. The Company is looking to the Carrier solely for the desired result of prompt receipt and delivery of newspapers.

The Agreement also required Mitchell to provide a substitute carrier when he was unable to deliver the newspapers, prohibited him from making alterations or insertions to the newspapers and allowed him to engage in other business pursuits if they did not interfere with his contractual obligations to DSI. The Agreement was for 30 days, automatically renewed from month to month, and could be terminated by Mitchell upon 20 days written notice or at will by DSI without notice.

The Lease Agreement required Mitchell to lease from DSI vending machines and a list of subscribers for his delivery route, and contained clauses similar to the Independent Contractor/Carrier Agreement regarding Mitchell's status as an independent contractor. The lease agreement further required Mitchell to provide information weekly to DSI regarding each retailer and vending machine on his route and to fill out forms provided by DMN and necessary for DMN to comply with regulations of the Audit Bureau of Circulations.

At the time of the accident, Mitchell was also delivering the Wall Street Journal, National Sports Daily, Barron's, and the New York Times pursuant to his agreement with DSI, and he was engaged in a separate lawn-maintenance business. Sometime after the accident, DMN learned that Mitchell had destroyed or discarded 130 copies of the paper when he could not complete his route. DMN indicated to DSI that Mitchell should be terminated. DSI's response was to terminate its contract with DMN.

After the trial court denied DSI's motion for summary judgment, DMN also moved for summary judgment, asserting that no contract existed between Mitchell and DMN, nor was Mitchell in an employment relationship with DMN. In support of its motion for summary judgment, DMN submitted the agreements between Mitchell and DSI and the agreement between DSI and DMN, affidavits of several employees of DMN and the depositions of Joe Fox, President of DSI and a number of DMN employees. The Howards submitted portions of the deposition of Mitchell, several of the same depositions of DMN employees submitted by DMN and the depositions of two employees of DMN's predecessor.

After granting DMN summary judgment, the trial court also granted the Howards' motion for entry of final judgment pursuant to Ark.R.Civ.P. 54(b), so that they could appeal the dismissal of DMN prior to trial. DMN takes issue with the finality of this order and asks that this appeal be dismissed.

2. Finality of Order

We first address DMN's contention that the appeal should be dismissed because there is not sufficient grounds for certification under Ark.R.Civ.P. 54(b).

In Franklin v. Osca, Inc., 308 Ark. 409, 825 S.W.2d 812 (1992), we said that under Rule 54(b) the trial court "must factually set forth reasons in the final judgment, order, or the record, which can then be abstracted, explaining why a hardship or injustice would result if an appeal is not permitted." Id. at 412, 825 S.W.2d at 814. However, we have clarified this holding to require that the factual underpinnings supporting a 54(b) certification must be set out in the trial court's order, see Davis v. Wausau Ins. Cos., 315 Ark. 330, 332, 867 S.W.2d 444, 446 (1993), and that the factual findings must be abstracted. See Reeves v. Hinkle, 321 Ark. 28, 899 S.W.2d 841 (1995).

In this case, the trial court's findings of facts contained in the 54(b) order are abstracted as follows:

(1) Significant discovery remains to be done. Based on past events, if DMN's dismissal is reversed on appeal, it will doubtless want to re-depose experts whose depositions were taken without its participation. (2) Any subsequent trial against DMN would be protracted and largely duplicative of the first trial. DMN would be entitled to relitigate virtually all issues raised in the first trial. A protracted retrial of the same issues is highly inefficient and raises an unseemly possibility of divergent verdicts arising from identical facts. The court finds this situation indistinguishable from that in Franklin v. Osca, Inc., 308 Ark. 409, 412, 825 S.W.2d 812 (1992), in which the Supreme Court held an immediate appeal was warranted to avoid a duplicative trial. (3) To deny the motion would not insure there would be only one appeal, since the parties would likely appeal from both trials. To certify this appeal would avoid the prospect of multiple appeals from possibly divergent verdicts.

The trial court has not merely tracked the language of Rule 54(b). Here the abstracted order reflects that the trial court has stated facts sufficient to justify the entry of a final, appealable order.

3. Misapplication of Law

The Howards first argue, in essence, that the trial court made both procedural and substantive errors of law in the order granting the summary judgment. The summary judgment order provided in pertinent part:

The bulk of the Howards argument focuses on the factors to be scrutinized in determining whether a relationship is one of agent or independent contractor. This, however, avoids the threshold issue of whether there was a contract between the parties. Irrespective of whether Mitchell was an agent or independent contractor, both...