Johnson Timber Corp. v. Sturdivant, 87-163

• Decision Date: 06 June 1988
• Docket Number: No. 87-163,87-163
• Citation: 752 S.W.2d 241,295 Ark. 622
• Parties: JOHNSON TIMBER CORPORATION, et al., Appellants, v. Norma Jean STURDIVANT, Administratrix, et al., Appellees.
• Court: Arkansas Supreme Court

Page 241

752 S.W.2d 241

295 Ark. 622

JOHNSON TIMBER CORPORATION, et al., Appellants, v. Norma Jean STURDIVANT, Administratrix, et al., Appellees.

No. 87-163.

Supreme Court of Arkansas.

June 6, 1988.

Richard E. Griffin, Crossett, for appellants.

Ted Boswell, Bryant, Robert Compton, El Dorado, James M. Pratt, Jr., Camden, John M. Shackleford, El Dorado, for appellees.

PURTLE, Justice.

Decision set aside on rehearing, see 758 S.W.2d 415.

A Union County Circuit Court jury awarded more than $5,000,000 to the various appellees for three wrongful deaths and a personal injury, all arising out of a motor vehicle collision. The appellants' common arguments for reversal are that the trial court erred in refusing to grant a directed verdict or a judgment notwithstanding the verdict, or a new trial, and that the court erred in refusing to give or in giving certain jury instructions. Numerous other arguments are presented by the several appellants and will be considered later herein. Finding no prejudicial error, we affirm the action of the trial court in entering judgments in accordance with the jury verdicts.

A truck loaded with pulpwood and driven by Joe Thrower was traveling east on U.S. Highway # 82 in Union County shortly before daylight on March 1, 1985, when the vehicle developed an electrical fire and Thrower stopped it in the eastbound traffic lane of the highway. The stalled truck had neither lights nor reflectors to warn other drivers as they approached. Thrower did manage to flag down a westbound log truck, driven by Lemmie Smith, who was employed by J & N Logging Company, Inc. Smith stopped his truck in the westbound traffic lane alongside Thrower's stalled vehicle. Smith told Thrower that he could not help him but would report the situation and send help when he reached the nearby city of Strong.

At the time of the occurrence Thrower was hauling a load of pulpwood for Charles G. Johnson d/b/a Johnson Timber Company to the Georgia-Pacific plant in Crossett. The pulpwood had been cut from land that did not belong to Georgia-Pacific. Thrower owned the truck he was driving. Smith was hauling a load of logs in a truck owned by J & N Logging to a Georgia-Pacific sawmill. These logs had been harvested from Georgia-Pacific land. It is undisputed that Smith was an employee of J & N and was in the course of his employment at the time of the accident.

As Smith drove away from Thrower's truck toward Strong, he met an eastbound automobile driven by Frank Sturdivant, Jr., in which Donald Vestal, Lloyd Meshell and James Meshell were passengers. The automobile crashed into the rear of the Thrower truck resulting in the injury of James Meshell and the death of the other three occupants.

Georgia-Pacific (GP) contracted with Johnson to cut and haul pulpwood from land owned by GP as well as from land owned by others. (The pulpwood being hauled by Thrower was cut from land owned by one Tatum.) Johnson, in turn, had an oral agreement with Thrower to do the actual cutting and hauling. All of the pulpwood being cut and hauled by Thrower during this period was delivered to Georgia-Pacific and was credited to the GP-Johnson contract. J & N contracted to cut and haul timber solely for Georgia-Pacific from Georgia-Pacific land during the period of time in question. The terms of the contracts and the relationship among these parties will be treated in detail later in this opinion.

Separate suits on behalf of the injured party and the various survivors were filed and were consolidated for trial. The issues of comparative fault, agency and damages were submitted to the jury on interrogatories. The jury answered the interrogatories that the agency relationship existed between Thrower and Johnson, between Johnson and GP, and between J & N and GP, and that Thrower was 85% at fault and Smith 15%. The jury also found Sturdivant was not at fault.

The critical issues in this appeal concern the question of agency between and among the various defendants. The contracts were written by Georgia-Pacific and by their terms obviously intended to create the status of independent contractors, thereby limiting GP's exposure to liability in occurrences such as this. It is therefore necessary to examine in detail the contracts which were in effect at the time.

The cutting and hauling contracts which Johnson & J & N entered into with Georgia-Pacific were essentially the same. The contracts repeatedly stated that Johnson and J & N were independent contractors. The contracts incorporated by reference schedules which were considerably more specific and detailed than the contracts themselves. If a party followed all the specific details and requirements in the contracts there would be no need for any supervision. By complying with the details in the contracts, the "contractors" and their employees were under the direct control of GP as to the details of the performance of the contracts.

Some of the specifics of the contracts were: Georgia-Pacific determined trees to be cut by spotting them with paint; GP dictated the beginning and ending of cutting periods; Georgia-Pacific had the right to speed up, slow down or even stop the harvesting of timber on tracts of land covered by the contract, whether owned by Georgia-Pacific or not; each contract contained provisions requiring the contractors to provide worker's compensation and liability insurance; GP set the minimum limits of coverage and was listed on the policies as a "certificate holder"; the insuring agencies were required to report any changes in coverage or cancellations, etc., direct to Georgia-Pacific; worker's compensation insurance premiums were withheld by Georgia-Pacific from the proceeds due the contractors for the pulp and logs delivered.

The contracts required Johnson Timber Company and J & N to meet the requirements of the law, including the Fair Labor Standards Act (FLSA) and the Occupational Safety and Health Act (OSHA); provided that accidents be reported to GP's legal department; required that the contractors' records be available for inspection by GP at any time and provided that the records would be inspected at least monthly; gave Georgia-Pacific the right to refuse to unload trucks which were not in compliance with the loading specifications of Georgia-Pacific; required large loads to be separated to allow Georgia-Pacific to unload with their equipment; set detailed specifications for wood which would be delivered including the size, species and general appearance of the wood; and set the destination or delivery point. The specifications set out in the incorporated schedules for "pulpwood contractors," e.g., included:

Contractor agrees to cut from standing timber only marked trees and to fell said trees free of unmarked trees. (By marked trees are meant only such trees as are marked with paint in a conspicuous manner). All wood must be green and sound, with knots and branches trimmed flush with the body of tree.

All truck delivered wood must be cut in lengths not less than 4', or greater than 6'-6"' in length. Rail wood must be cut in lengths not less than 5', and not more than 5'-6"' in lengths.

No axe-cut or wood with splintered ends will be acceptable.

Georgia Pacific furnished trained foresters to assist the contractors; prepared the contracts and filled in the blanks before presenting them to the contractors for their signatures; and retained the right to terminate the contracts at any time.

The contracts repeatedly declared that Johnson and J & N were independent contractors and that Georgia Pacific would not exercise any physical control over the contractors or their employees or equipment and operations. The contracts also contained "hold harmless" provisions which, when coupled with the requirements and prohibitions, were intended to shield Georgia-Pacific from all angles. Between the contract and the attached specifications there was indeed very little ground not covered.

Due to the multiple briefs and points argued on appeal we consolidate the discussion of the arguments whenever possible.

The central issues which we must decide are whether J & N Logging Company was the agent, servant or employee of Georgia Pacific; whether Thrower was the agent of Johnson Timber; and, if Thrower was indeed an agent, whether Johnson Timber was the agent of Georgia Pacific. On appellate review of a trial court's denial of a motion for a directed verdict or a motion for a judgment notwithstanding the verdict, we must determine whether the verdict is supported by any substantial evidence. See, e.g., Grendell v. Kiehl, 291 Ark. 228, 723 S.W.2d 830 (1987); and Arkansas Power and Light v. Adcock, 281 Ark. 104, 661 S.W.2d 392 (1983). Substantial evidence is that which is of sufficient force and character that it will compel a conclusion one way or another. Kinco, Inc. v. Schueck Steel, Inc., 283 Ark. 72, 671 S.W.2d 178 (1984). Such proof, with all reasonable inferences, is examined in the light most favorable to the party against whom the motion is sought, and if there is any substantial evidence to support the verdict we affirm the trial court.

We have repeatedly held that the two essential elements of agency are authorization and right to control. The relation of agency is created as the result of conduct by two parties manifesting that one of them is willing for the other to act for him subject to his control, and that the other consents to so act. Evans v. White, 284 Ark. 376, 682 S.W.2d 733 (1985). Ordinarily the question of agency is one of fact to be decided by the trier of fact. Id. However, if only one reasonable inference can be drawn from the proof presented, then it becomes a question of law. Evans v. White, supra, citing Campbell v. Bastian, 236 Ark. 205, 365 S.W.2d 249 (1963).

When it is demonstrated that the person causing an injury was at the time rendering service for another and being paid for that service, "and the facts presented are as consistent...