Intermodal Services, Inc. v. Smith, 850208

• Decision Date: 15 January 1988
• Docket Number: No. 850208,850208
• Citation: 364 S.E.2d 221,234 Va. 596
• Parties: INTERMODAL SERVICES, INC., et al. v. Gary Daniel SMITH. Record
• Court: Virginia Supreme Court

Page 221

364 S.E.2d 221

234 Va. 596

INTERMODAL SERVICES, INC., et al. v. Gary Daniel SMITH.

Record No. 850208.

Supreme Court of Virginia.

Jan. 15, 1988.

Fred C. Alexander, Jr. (Boothe, Prichard & Dudley, Alexandria, on briefs), for appellants.

Leonard S. Sattler (Bray and Sattler, Arlington, on brief), for appellee.

Present: All the Justices.

COMPTON, Justice.

In this tort action seeking damages for personal injuries, the defendants filed a plea to the jurisdiction asserting that the plaintiff's exclusive remedy was under the Virginia Workers' Compensation Act (the Act). The dispositive question on appeal is whether the trial court correctly ruled that the Act did not apply because the plaintiff was an independent contractor, not an "employee."

In 1981, appellee Gary Daniel Smith, the plaintiff below, was injured in Alexandria on the premises of appellant Intermodal Services, Inc. (the Services Company), a defendant below. The injuries resulted from a collision between a motor vehicle owned and operated by the plaintiff and a motor vehicle owned by the Services Company and operated by appellant Steve Clark, its agent and the other defendant below.

In 1983, the plaintiff filed this damage suit, alleging defendants' negligence caused his injuries. In 1984, the defendants filed a motion to dismiss, asserting that the trial court lacked subject matter jurisdiction and that the claim was within the exclusive jurisdiction of the Industrial Commission of Virginia under the Act. Following an ore tenus hearing, the court denied the motion. The court, in a letter opinion, ruled that "the plaintiff was not an 'employee,' but rather an independent contractor, not subject to the provisions of [the Act]." Accordingly, the court held, the plaintiff could maintain his common-law negligence action against the defendants.

In a 1984 jury trial, the plaintiff recovered a verdict and judgment against the defendants in the amount of $100,000. We awarded the defendants this appeal to consider the correctness of the trial court's ruling on the jurisdictional plea.

Under familiar principles of appellate review, we will view the facts, many of which are conflicting, in the light most favorable to the plaintiff who prevailed below. The plaintiff was a self-employed truck driver who owned several pieces of heavy equipment including a tractor-trailer unit. He operated from his home in the Northern Virginia area as a sole proprietor under the name, "Smith's Fleet Service."

At the time of the accident in question, the plaintiff had leased the tractor portion of his tractor-trailer unit to Intermodal Transportation Services, Inc. (the Transportation Company), an Ohio-based corporation with an office in Alexandria. ^* The Transportation Company was in the long-haul trucking business. Under the contract with the Transportation Company, the plaintiff moved freight between Alexandria and points in the Northeast, as well as in the local Alexandria area, using his tractor to pull trailers not owned by him. The plaintiff's assignments for the Transportation Company were made by that Company's Alexandria dispatcher who worked from a location within a city block of the property of the Services Company.

The Services Company was a Georgia corporation that had a contract with the Southern Railway Company to operate a rail- highway exchange facility in Alexandria. The Services Company was engaged in the loading and unloading of trailers on and off railroad cars from a "piggyback yard" adjacent to railroad tracks. The Railway Company supplied the ramp for the process and the Services Company provided "the people and the equipment to run the ramp." The Services Company had the responsibility to shift the trailers around the yard and to assure they were properly parked or "spotted."

At times, the piggyback yard became filled with trailers. The Railway Company had leased a vacant parcel of land to receive the overflow. This satellite yard was one-tenth of a mile along a public highway from the piggyback yard. The Services Company used its own yard tractor for work within the piggyback yard but, because that unit was not insured for use on a public highway, obtained properly licensed and insured tractors to pull trailers from the piggyback yard, along the public highway, to the satellite yard.

On the day of the accident, the plaintiff had reported to the Transportation Company's dispatcher in the morning and announced that he was ready to be assigned a trip to haul freight with his tractor. A train had just been unloaded at the piggyback yard and the plaintiff wished to be sent on a trip to Boston. Because there would be a delay due to "paperwork" before the dispatcher could release the plaintiff for the out-of-state trip, the dispatcher asked the plaintiff if he would be willing in the meantime to drive to the piggyback yard to move trailers to the satellite yard "rather than sit around the office" until he could leave for Boston. The plaintiff agreed and, upon inquiry, the dispatcher indicated that the plaintiff would be paid at the "flat" rate of $10 to $12 per trailer moved. Previously, as was the custom, the terminal manager for the Services Company had advised the dispatcher for the Transportation Company of the need for "road drivers" to move trailers along the public highway from the piggyback yard to the satellite yard.

After the plaintiff had transferred approximately a dozen trailers from one yard to the other, he was involved in the accident in question. At the time of the injury, the plaintiff was pulling a trailer on the piggyback yard en route to the satellite yard when his tractor collided with the yard tractor. The plaintiff received workers' compensation benefits for the accident under coverage through the Transportation Company.

On appeal, the defendants contend the trial court erred in denying the jurisdictional plea. In a three-pronged argument, they contend that the plaintiff was an "employee," as defined in § 65.1-4 of the Act, of the Services Company; or that the plaintiff was a "statutory employee," within the provisions of § 65.1-29 or § 65.1-30 of the Act, of the Services Company; or that, even if the plaintiff was not in an employee relationship with the defendant, the defendants were not "other parties" under the Act against whom the plaintiff could maintain a tort action. We reject these contentions; the defendants have misinterpreted the settled law applicable to the facts of this case.

The Act protects "employees," as defined in the Act. Nowhere does an independent contractor who himself is injured in an industrial accident come within the terms of the Act. Baker v. Nussman, 152 Va. 293, 302, 147 S.E. 246, 249 (1929). In other words, independent contractors or subcontractors may not be "employees" within the meaning of the Act. Stover v. Ratliff, 221 Va. 509, 511, 272 S.E.2d 40, 42 (1980). "This result obtains because the Act applies to the contractual relationship of master and servant." Id. The Act "does not undertake to change, as between themselves, the rights of owners and independent contractors"; it "leaves that relationship as it was at common law and we must look to [the common law] in determining who is master and who is servant." Crowder v. Haymaker, 164 Va. 77, 79, 178 S.E. 803, 804 (1935).

"What constitutes an employee is a question of law; but, whether the facts bring a person within the law's designation, is usually a question of fact." Baker, 152 Va. at 298, 147 S.E. at 247. The worker's status "must be determined from the facts of the particular case in the light of well settled principles." Brown v. Fox, 189 Va. 509, 516, 54 S.E.2d 109, 113 (1949). Thus, the initial inquiry here is whether the trial court correctly applied the law and the facts to reach the conclusion that the plaintiff was an independent contractor, not an employee. If the plaintiff was an "employee," he was covered by the Act and his rights under the Act are exclusive. If, however, he was an independent contractor, the Act is inapplicable and maintenance of this action against defendants was proper.

Under Code § 65.1-4, as pertinent here, "every person ... in the service of another under any contract of hire or apprenticeship, written or implied," is an "employee" for purposes of the Act. Generally, "a person is an employee if he works for wages or a salary and the person who hires him reserves the power to fire him and the power to exercise control over the work to be performed." Richmond Newspapers v. Gill, 224 Va. 92, 98, 294 S.E.2d 840, 843 (1982) (route carrier of newspapers held to be an independent contractor not covered by the Act). The right of control is the determining factor in ascertaining the parties' status in an analysis of an employment relationship. Virginia Employment Comm'n v. A.I.M. Corp., 225 Va. 338, 347, 302 S.E.2d 534, 539 (1983). And the right of control includes not only the power to specify the result to be attained, but the power to control "the means and methods by which the result is to be accomplished." Gill, 224 Va. at 98, 294 S.E.2d at 843. An employer-employee relationship exists if the party for whom the work is to be done has the power to direct the means and methods by which the other does the work. "[I]f the latter is free to adopt such means and methods as he chooses to accomplish the result, he is not an employee but an independent contractor." A.I.M. Corp., 225 Va. at 347, 302 S.E.2d at 540; Craig v. Doyle, 179 Va. 526, 531, 19 S.E.2d 675, 677 (1942). The extent of the reserved right of control may be determined by examining the performance of the parties in the activity under scrutiny.

As we shall demonstrate, there is abundant evidence in the record to support the trial court's ruling that the plaintiff was not an employee and that the corporate defendant reserved only the power to control the result to be attained in this job assignment, and not the means and...