L. M. T. Steel Products, Inc. v. Peirson

• Decision Date: 06 February 1981
• Docket Number: No. 648,648
• Citation: 425 A.2d 242,47 Md.App. 633
• Parties: L. M. T. STEEL PRODUCTS, INC. v. Doris K. PEIRSON et al.
• Court: Court of Special Appeals of Maryland

Page 633

47 Md.App. 633

425 A.2d 242

L. M. T. STEEL PRODUCTS, INC. v. Doris K. PEIRSON et al.

No. 648.

Court of Special Appeals of Maryland.

Feb. 6, 1981.

E. Gwinn Miller, Rockville, with whom was Robert W. Fox, Baltimore, on brief, for appellant.

Phillips L. Goldsborough, III, Baltimore, with whom were Smith, Somerville & Case, Baltimore, for appellees, Ham and Jones.

Argued before GILBERT, C. J., WILNER and ORTH, CHARLES E., Jr. (ret'd specially assigned), JJ.

WILNER, Judge.

On September 18, 1975, Roy Webster was involved in an automobile accident from which Doris Peirson suffered substantial injuries. Mrs. Peirson and her husband sued Webster and others in the Circuit Court for Harford County and recovered a rather large verdict. One of the defendants sued was appellant, who was alleged by the plaintiffs and believed by the jury to be Webster's employer at the time of the accident. Its liability was strictly a vicarious one, emanating from the doctrine of respondeat superior.

Appellant's contention is a three-fold one which derives in large measure from the fact that Webster was driving his own vehicle at the time of the accident. It argues that: (1) Webster was an independent contractor and not appellant's employee, this being evident from the overall relationship between the parties; (2) even if Webster was an employee, he was not acting within the course of his employment at the time of the accident; and (3) even if Webster was then acting in the course of his employment, appellant is not liable because it never expressly consented to Webster's use of his personal vehicle in performing his duties for appellant. These arguments are made in the context of appellant's complaint that the court erred in denying its motions for directed verdict and for judgment N.O.V., and in denying as well certain requested instructions to the jury (Nos. 27-30) regarding its vicarious liability. We find no error and shall affirm.

(1) Overall Relationship Employee or Independent Contractor?

The rules which define the distinction between the relationship of employer-employee and that of independent contractors which tell us, in other words, when a person is an employee/servant and not an independent contractor are fairly well settled. As pointed out in B. P. Oil Corp. v. Mabe, 279 Md. 632, 370 A.2d 554 (1977), there were originally four elements to be considered in determining the existence of the master-servant relationship, these being "(1) the selection and engagement of the servant, (2) the payment of wages, (3) the power of dismissal, and (4) the power of control of the servant's conduct." Sun Cab Co. v. Powell, 196 Md. 572, 577-78, 77 A.2d 783 (1951), quoted in Mabe, 279 Md. at 638, 370 A.2d 554. In Keitz v. National Paving and Contracting Co., 214 Md. 479, 491, 134 A.2d 296 (1957), the Court added a fifth element to be considered "whether the work is a part of the regular business of the employer."

As the Court was careful to point out in Keitz, however, and in nearly every case involving this issue decided since Keitz (see, for example, Mabe, 279 Md. at 638, 370 A.2d 554), these are but indicia of the employment relationship factors or criteria to look at. Only one of the five has any special conclusive significance; that is element four, the power or right to control, with some immediacy and directness, the alleged servant's work. If that right of control is present, the relationship is necessarily one of employment, because it negates the independence or autonomy presumed to exist with an independent contractor. As stated in Keitz, 214 Md. at 491, 134 A.2d 296 and repeated in Mabe, 279 Md. at 638, 370 A.2d 554:

"The decisive test in determining whether the relation of master and servant exists is whether the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done.... (I)t is not the manner in which the alleged master actually exercised his authority to control and direct the action of the servant which controls, but it is his right to do so that is important." (Emphasis in original.)

To some extent, of course, the right of overall control is implicit in all five elements, which is why they are all relevant. The power of dismissal, for example, certainly carries with it the power to control in some measure how the subordinate does his work. The distinction, it would seem, is in the degree to which the power of control, if it exists, is exercised. To have an employment relationship, the "employer" must have some ability, should he care to exercise it, to tell the "employee" what to do and how and when to do it. If there is not this minimal power of control if the worker's agreement is to perform the work "according to his own means and methods free from control of his employer in all details connected with the performance of the work except as to its product or result" the worker is deemed to be an independent contractor and not an employee/servant. Williams Construction Co. v. Bohlen, 189 Md. 576, 580, 56 A.2d 694 (1948); Gale v. Greater Washington Softball Umpires Assoc., 19 Md.App. 481, 311 A.2d 817 (1973).

A master-servant relationship does not require, however, the actual exercise of minutely or hourly or even daily direct on-site supervision by the employer. Indeed, the more authority an employee has, the less likely such routine supervision will be. The president or vice-president of a company is not likely to be supervised by the board of directors in his every action, but that does not render him less an employee; it does not make him an independent contractor. To one degree or another, this is necessarily true with respect to all persons employed in administrative or supervisory roles.

What the Court seemed to be saying in Keitz, and in previous and subsequent cases, is that if the exercise of direct and immediate supervision is present, there is little need to look beyond it. That will suffice to label the relationship one of employment. But direct and immediate supervision is not the exclusive test; it is not a sine qua non. If it does not exist, the court must still look to see whether the right or power of control is present, which then involves an examination of the other four factors, and perhaps others that might also be relevant to the particular circumstance. This is the legal framework within which we must consider appellant's contention.

The evidentiary framework governing our review is that restated for us recently in Impala Platinum Ltd. v. Impala Sales (U. S. A.), Inc., 283 Md. 296, 328, 389 A.2d 887 (1978). In judging the propriety of a motion for directed verdict (or for judgment N.O.V.), the trial court, and on review this Court, must consider the evidence in a light most favorable to the party against whom the motion is made in this case the appellees. All conflicts must be resolved and all reasonable inferences must be drawn in their favor.

We may start with a few basic facts that are not in dispute. Appellant is a New Jersey corporation that had been awarded a subcontract on a school construction project in Harford County. It was to supply and install the interior partitions in the North Harford school. Webster had been selected by appellant to superintend the installation.

The only evidence pertaining to the nature of Webster's relationship with appellant came from Webster, and it was not without some internal contradiction. Several times he identified himself as an employee of appellant. When asked, for example, by whom he was "employed," he answered, "L. M. T. Steel Products" appellant. He considered himself appellant's "foreman" on the job.

Webster said that he had worked for appellant, on and off, since 1964. He had no written contract. On some jobs he was paid by the hour, on others by the week, and on still others by the "foot" i. e., so much for each linear foot of partition erected. Appellant determined the method of compensation for each job. On this job, Webster was being paid by the foot. Webster stated that the method of compensation had no effect on his duties, the way in which he performed his work. ¹

Webster was not directly supervised on the job. He was given a set of blueprints and he (and the men he hired) installed the partitions supplied by appellant. He hired and supervised the other installers and set their wages, but they were appellant's employees and were paid with checks drawn on appellant's payroll account. Webster was authorized to sign the payroll checks on behalf of appellant and did so. A special account was established by appellant in a New Jersey bank for that purpose. Webster also drew a weekly check on that account for his own compensation, to an unincorporated company he had "registered" a company known as "VIP" but gave no explanation for that procedure. No ordinary payroll deductions were made on his checks. Webster never acquired a contractor's license in Maryland, either in his name or that of any company. ² He acknowledged that he could be "terminated" by appellant if it didn't like the way in which he did his work.

Some aspects of the relationship, as Webster described it, would be consistent with a finding that he was an independent contract; but most aspects support the conclusion that he was a supervisory employee for appellant the general foreman on the job. The evidence most favorable to appellees would clearly establish at least four of the five criteria or elements mentioned in Keitz ; only the exercise (but not necessarily the power) of direct supervisory control is lacking. But given the nature of Webster's duties overall jobsite responsibility that is, as we have said, by no means fatal. At the very least, it was a proper issue for the jury to resolve.

(2) Was Webster in the Course of his Employment at the Time of the Accident?

Webster testified that, at the time of the accident, he was on his way from the jobsite to a diner...