Mckee Foods Corp. v. Lawrence

• Decision Date: 03 June 2011
• Docket Number: MC-041,A11A0957
• Citation: McKee Foods Corp. v. Lawrence, A11A0957, MC-041 (Ga. App. Jun 03, 2011)
• Parties: MCKEE FOODS CORP. v. LAWRENCE ET AL.
• Court: Georgia Court of Appeals

MCKEE FOODS CORP. v. LAWRENCE ET AL.

MC-041

A11A0957

Court of Appeals of Georgia

June 3, 2011

FOURTH DIVISION

PHIPPS, P. J., ANDREWS and MCFADDEN, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk's office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008)

McFadden, Judge.

Jerry Lawrence and his wife sued Terry Lee Carswell, Carswell's snack distribution company, and McKee Foods Corporation for damages sustained when Carswell's delivery truck collided with a vehicle driven by Lawrence. With respect to McKee, the Lawrences alleged vicarious liability for Carswell's negligence. McKee moved for summary judgment, arguing that neither Carswell nor his company was a McKee agent or employee, undermining the vicarious liability claim. The trial court denied the motion, and we granted McKee's application for interlocutory appeal. Because the evidence shows that McKee did not control the time, manner, and method of the work performed by Carswell and his company, we reverse.

Summary judgment is appropriate when no genuine issues of material fact remain and the moving party is entitled to judgment as a matter of law. See Schlotzsky's v. Hyde, 245 Ga. App. 888 (538 SE2d 561) (2000). We review a trial court's summary judgment ruling de novo, construing the evidence and all reasonable inferences in favor of the non-moving party. Id.

So viewed, the record shows that McKee produces Little Debbie and Sunbelt snack items that it sells to distributors, who then sell the products to retail outlets. In April 2001, McKee entered into a distributorship agreement with Carswell's company, Terry's Distributor Snacks, Inc. ("TDS"). Among other things, the agreement defined the products that TDS could distribute, set forth payment procedures, and established the distribution territory. It also required TDS to provide facilities for the distribution business, comply with sanitation guidelines for handling and storing the products, obtain insurance, and maintain a certain corporate structure. Finally, the agreement addressed the parties' relationship, stating:

The parties intend to create an independent contractor relationship between them and agree that Distributor shall be an independent contractor for all purposes. Nothing herein shall be construed: (i) to be inconsistent with that relationship (ii) as constituting Distributor as the partner, agent, or employee of McKee or (iii) as authorizing Distributor, or any agent or employee of Distributor, to create or assume any obligation or liability in the name of McKee. McKee is interested only in the results obtained under this Agreement and hereby specifically relinquishes any right to control the manner and means by which Distributor achieves those results. Distributor shall exercise its independent business discretion in determining the manner and means of achieving those results and in directing the activities of any agents or employees of Distributor. Distributor shall hold itself out as an independent contractor and shall not be treated as an agent or employee of McKee for federal tax purposes or for any other purpose. Distributor shall comply with all laws applicable to Distributor's business, shall obtain all appropriate licenses for that business, and shall pay all business or self-employment taxes applicable to Distributor and that business.

TDS began operating under the agreement, and in August 2007, a delivery truck driven by Carswell struck Jerry Lawrence's vehicle. The Lawrences sued Carswell, TDS, and McKee, alleging that Carswell was negligent, that he was engaged in selling McKee products at the time of the collision, and that McKee was vicariously liable for all damages caused by Carswell's negligence. McKee moved for summary judgment on the vicarious liability claim. Finding that question of fact remain as to whether the distributorship agreement created an employer-employee relationship, the trial court denied the motion. This appeal followed.

Although an employer may be held vicariously liable for the torts of an employee, such liability does not extend to torts committed by an independent contractor. See OCGA §§ 51-2-2, 51-2-4, 51-2-5 (4). Control is the key question in determining the type of employment relationship created by a contract for services. An employer-employee relationship arises when "the contract gives, or the employer assumes, the right to control the time, manner, and method of executing the work." (Punctuation omitted.) McLaine v. McLeod, 291 Ga. App. 335, 339 (1) (661 SE2d 695) (2008). If, however, such control is lacking and a contract merely gives the employer the right "to require certain definite results in conformity to the contract," an independent contractor relationship exists. Id. An agreement that clearly designates a party as an independent contractor presumably creates such a relationship unless the evidence shows otherwise. See id.

The agreement in this case designates TDS as an independent contractor. The Lawrences argue, however, that other parts of the contract demonstrate McKee's...