Lumber Mutual Casualty Ins. Co. v. Stukes

• Decision Date: 18 November 1947
• Docket Number: No. 5645.,5645.
• Citation: 164 F.2d 571
• Parties: LUMBER MUTUAL CASUALTY INS. CO. OF NEW YORK v. STUKES et al.
• Court: U.S. Court of Appeals — Fourth Circuit

164 F.2d 571 (1947)

LUMBER MUTUAL CASUALTY INS. CO. OF NEW YORK v. STUKES et al.

No. 5645.

Circuit Court of Appeals, Fourth Circuit.

November 18, 1947.

Edward A. Harter, Jr., and N. A. Turner, both of Columbia, S. C., for appellant.

Shepard K. Nash, of Sumter, S. C. (C. M. Edmunds, of Sumter, S. C., and James

Hugh McFaddin, of Manning, S. C., on the brief), for appellees.

Before PARKER, SOPER and DOBIE, Circuit Judges.

PARKER, Circuit Judge.

This is an appeal in an action to obtain a declaratory judgment under a public liability insurance policy. The plaintiff in the court below was the Lumber Mutual Casualty Insurance Company, a New York corporation, and the defendants were one G. N. Marshall, a citizen of South Carolina, doing business under the name of the Carolina Roofing Company, and Melvin Blease Stukes, also a citizen of South Carolina, who, as administrator of the estate of Eugene David Stukes, had instituted an action for damages against Marshall and others in a South Carolina state court. In the state court action it was alleged that the death of Eugene David Stukes had been caused by negligence in the operation of a motor truck of Marshall in which he was riding and which was being operated at the time by one Timmons. The motor truck was covered by a policy of public liability insurance issued by the insurance company to Marshall. Verdict was directed for the defendants; and from judgment entered thereon denying relief to plaintiff, it has appealed to this court.

The insurance company contends that liability under the policy is excluded because Stukes was an employee of Marshall engaged in the employment at the time of his death, or, if not an employee of Marshall, was an employee of Timmons, who, if he was an independent contractor and was operating the motor truck with Marshall's consent, was an additional insured within the meaning of the policy. The administrator contends that Stukes was not an employee of Marshall but of Timmons, that Timmons was an independent contractor, that the exclusion clause of the policy does not apply in that situation, and that, at all events, at the time of his death Stukes' position was not that of an employee of insured engaged in the employment but of a fare paying passenger. The judge held with the administrator on all of these questions in directing the verdict in his behalf.

The truck in which Stukes was riding at the time of his death was unquestionably owned by Marshall and was being driven by Timmons. It was covered by a policy containing the usual omnibus coverage clause defining the word insured as used in the policy to include "any person while using the automobile * * * provided the actual use of the automobile is with the permission of the named insured". The policy contained an exclusion clause to the effect that its coverage did not apply to "bodily injury to or death of any employee of the insured while engaged in the employment". The omnibus coverage clause, defining the insured as above stated, provided that the insurance with respect to any person or organization other than the named insured should not apply "to any employee with respect to injury to or death of another employee of the same employer".

Marshall was in the roofing business, which consisted in securing contracts to put roofing and siding on buildings in the vicinity of Sumter, S. C. and then having these put on in accordance with the contracts. Timmons was engaged in putting on the roofing and siding under the contracts secured by Marshall with the help of laborers, whom he carried to and from their work in Marshall's truck. Stukes and other laborers had been working under Timmons on the day of the accident at a place near Hartsville until around five o'clock in the afternoon, when they quit work and were returning to their homes with Timmons, who was driving the truck. The fatal collision occurred while they were returning.

The evidence as to whether Timmons was an independent contractor or a mere foreman of Marshall in charge of the work is such that conflicting inferences can reasonably be drawn from it. It shows that Marshall secured the contracts, furnished the materials, paid the laborers, paid the social security and unemployment insurance on the wages of the laborers and furnished the truck in which the materials were transported to the jobs and in which the laborers were carried to and from work. Timmons, on the other hand, was paid by the job at the rate of $4.50 per square, and the wages paid the workmen under him came out of this amount; but Marshall kept the records of wages of the workmen, just as though they were working for him. He kept a similar record of amounts paid Timmons and paid social security and unemployment insurance on them in the same way as on the wages paid the others. Both Timmons and Marshall testified that Timmons had control of the details of the work with the right to hire and fire; but there is no evidence of his hiring or firing anyone and there is evidence that at least some, if not all, of those working under him had been working for Marshall before he became connected with the business.

On the contention that Stukes was not engaged in his employment at the time of his death, but occupied the position of a fare paying passenger, there is evidence that 3% was deducted from wages for transportation. Marshall admitted, however, and the other evidence shows, that this was in reality deducted to pay unemployment insurance, which the South Carolina statutes forbid an employer to deduct from an employee's wages. Code §§ 7035-87(a) and 7035-95.

Upon the facts as stated, we think that the learned District Judge was in error in directing a verdict for defendants. In the first place, we think it was a question for the jury whether Stukes was not an employee of Marshall and within the exclusion clause of the policy for that reason. An employer cannot escape the consequences of the employer-employee relationship by calling his foremen independent contractors, by giving...