Limestone Products Distribution v. Mcnamara

• Decision Date: 14 February 2002
• Docket Number: No. 01-0142.,01-0142.
• Citation: 71 S.W.3d 308
• Parties: LIMESTONE PRODUCTS DISTRIBUTION, INC., Petitioner, v. Hershel Helen McNAMARA, individually and as next friend of A. M., a minor, and as independent executrix of The Estate of Paul Tom McNamara, and K. M., Respondents.
• Court: Texas Supreme Court

71 S.W.3d 308

LIMESTONE PRODUCTS DISTRIBUTION, INC., Petitioner, v. Hershel Helen McNAMARA, individually and as next friend of A. M., a minor, and as independent executrix of The Estate of Paul Tom McNamara, and K. M., Respondents.

No. 01-0142.

Supreme Court of Texas.

February 14, 2002.

Rehearing Overruled April 25, 2002.

Jerry P. Campbell, Waco, Keith C. Cameron, Austin, Naman Howell Smith & Lee, for Petitioner.

John Phillip Palmer, Waco, for Petitioner.

J. Robert Sheehy, Law Office of J. Robert Sheehy, Sr., Waco, for Respondent.

PER CURIAM.

Coy Mathis's car collided with Tom McNamara's motorcycle, causing McNamara fatal injuries. Here, the issue is whether, when the accident occurred, Mathis worked as Limestone Products Distribution, Inc.'s independent contractor, or, if Mathis was Limestone's employee, whether he was acting in the course and scope of his employment. McNamara's survivors sued Mathis and Limestone alleging that Mathis's negligence caused McNamara's death. Limestone moved for summary judgment, asserting that it is not liable for Mathis's negligence because he was an independent contractor when the accident occurred. Alternatively, Limestone argued that, if Mathis was an employee at the time the accident occurred, he was not acting in the course and scope of his employment. Without specifying the grounds, the trial court granted Limestone's motion.

On rehearing, a divided court of appeals reversed the summary judgment and remanded the case to the trial court. 39 S.W.3d 619. It determined that a fact issue existed on: (1) whether Mathis was an independent contractor or Limestone's employee; and (2) if Mathis was a Limestone employee, whether Mathis was on a special mission and thus acting in the course and scope of his employment when the accident occurred. 39 S.W.3d at 625.

The court of appeals correctly stated the law that applies in this case. However, the court of appeals improperly applied that law to the summary-judgment evidence and incorrectly resolved the independent contractor issue. Thus, we reverse the court of appeals' judgment and render judgment that McNamara's survivors take nothing from Limestone.

Limestone delivers limestone and other materials to various customers. Mathis began working for Limestone as an employee, driving a Limestone delivery truck. Because he was an employee, Limestone prescribed the specific route Mathis had to drive whenever he made a delivery. Limestone paid for gasoline, repairs, and insurance on the truck that Limestone owned and Mathis drove to make deliveries. Limestone paid Mathis twenty-five percent of the income received from each load Mathis hauled. Limestone reported Mathis's income on a W-2 form and withheld social security and federal income tax payments from his paycheck. Additionally, Limestone covered Mathis on its workers' compensation insurance.

About three years before the accident occurred, Mathis bought a truck from Limestone and drove it as his own. After Mathis bought his truck, he was free to drive any route he wished when making a delivery as long as he timely delivered the load. Though he sometimes purchased gasoline from Limestone, Mathis—not Limestone—paid for his truck's gasoline, repairs, and insurance. Limestone compensated Mathis with eighty percent of the income from each load he delivered, rather than the twenty-five percent Limestone paid Mathis when he drove Limestone's truck as an employee. Limestone reported Mathis's income on a 1099 form rather than a W-2 form. Further, Mathis paid his own social security and federal income taxes and no longer received workers' compensation coverage from Limestone.

Some aspects of Mathis's work with Limestone were the same both before and after he bought his own truck. For instance, Mathis did not work regular hours. Instead, he called Limestone's office each morning to see if Limestone had any work for him that day. Mathis received no pay if there were no loads to haul. And he received no pay for vacation, sick leave, or holidays. Limestone instructed him where to pick up the load, where to deliver it, and what time it had to arrive. Moreover, for Limestone to bill its customers and for Mathis to receive his pay, Mathis submitted load tickets to Limestone for each job. He would either leave the tickets in the mailbox at the office, leave them in a mailbox at Limestone's entrance on Farm to Market Road 185, or hand deliver them to someone in the office. Mathis could submit the tickets daily or let them accumulate.

When the accident occurred, Mathis was driving his own car, not the truck he purchased from Limestone. Although Mathis did not have any loads to haul that day, he was driving to Limestone's property. When Mathis attempted to turn left off FM 185 onto Limestone's property, his car collided with Tom McNamara who was driving a motorcycle in the oncoming-traffic lane. McNamara's injuries were fatal. Immediately after the accident, Mathis stated that he was on his way to Limestone's office to deliver load tickets. But in his deposition, Mathis acknowledged that he actually had no load tickets to submit, and he was driving to Limestone's office to "kill time" and "see what was going on." However, Mathis stated that another Limestone driver who had load tickets to drop off at the office was in the car with Mathis.

Tom McNamara's widow ("McNamara"), individually and as independent executrix of McNamara's estate, sued Limestone and Mathis and alleged that Mathis's negligence proximately caused McNamara's death. McNamara alleged that Mathis was Limestone's employee engaged in the course and scope of his employment when the accident occurred. Limestone moved for summary judgment on the ground that Mathis was an independent contractor. Alternatively, Limestone asserted that if Mathis was an employee, he was not engaged in the course and scope of his employment when the accident occurred. The trial court granted Limestone's motion without specifying the grounds and severed McNamara's claims against Limestone from the claims against Mathis. McNamara appealed, claiming that summary judgment was not proper on either ground Limestone raised in its motion.

After reviewing the summary-judgment evidence, the court of appeals determined that Limestone did not conclusively prove that Mathis was an independent contractor. 39 S.W.3d at 623. The court of appeals observed that, though there are "ample characteristics of an independent contractor relationship, there is some evidence that Limestone still controls enough of the aspects of the manner in which Mathis operates in delivering the materials for Limestone so as to raise a fact question on the issue." 39 S.W.3d at 623. The court of appeals then reviewed Limestone's alternative summary-judgment argument that, if Mathis was an employee, he was not acting in the course and scope of his employment when the accident occurred. The court of appeals determined that delivering load tickets was a normal part of Mathis's employment, and therefore, travel to and from his place of employment was not a "special mission." 39 S.W.3d at 624. Because of this, the court of appeals held that even if Mathis was Limestone's employee, Mathis was not acting in the course and scope of his employment. Accordingly, the court of appeals affirmed the trial court's summary judgment on that ground. 39 S.W.3d at 624.

On rehearing, the court of appeals changed its view on the course and scope of employment issue. The court of appeals believed it misapplied the summary-judgment appellate review standard by failing to "accept as true all evidence favorable to the non-movant" and failing to "resolve all doubts and indulge every reasonable inference in favor of the non-movant." 39 S.W.3d at 624. The court of appeals then held that the summary-judgment evidence created a fact issue about whether Mathis's delivering load tickets was a special mission and thus Mathis was acting in the course and scope of his employment. Accordingly, the court of appeals reversed the summary judgment and remanded the cause to the trial court. 39 S.W.3d at 625.

Limestone's petition for review raises two issues: (1) whether the court of appeals properly applied the law to the facts when it determined a fact question existed about Mathis's status as an employee or an independent contractor; and (2) whether, if...