Mujkic v. Lynx, Inc.
| Decision Date | 11 March 2015 |
| Docket Number | No. 14–0636.,14–0636. |
| Parties | Rifet MUJKIC, Plaintiff–Appellant, v. LYNX, INC. d/b/a Lynx Transportation, Inc., Defendant–Appellee. |
| Court | Iowa Court of Appeals |
Erin Patrick Lyons of Dutton, Braun, Staack & Hellman, Waterloo, for appellant.
Kate B. Mitchell of Beecher, Field, Walker, Morris, Hoffman & Johnson, P.C., Waterloo, for appellee.
Heard by VOGEL, P.J., and DOYLE and McDONALD, JJ.
Rifet Mujkic appeals the district court's ruling denying his Iowa Code chapter 91A (2011) and promissory estoppel claims against Lynx, Inc. We affirm in part, reverse in part, and remand with directions.
Selvedin Babic and Rifet Mujkic were friends and neighbors in their native country, Bosnia, and have known each other since childhood. Babic and Mujkic's friendship continued over the years after both moved to Waterloo.
Babic is the president and sole shareholder of Lynx, Inc., doing business as Lynx Transportation, Inc. In February 2012, Mujkic began working for Lynx. Mujkic and Babic signed Lynx's standard “contract agreement” setting forth the terms of Mujkic's employment. Mujkic worked as a “company driver,” driving a company truck for Lynx and earning $0.38 to $0.40 per mile. Lynx was responsible for all operating expenses of the truck, including fuel, tolls, repairs, insurance, and registration.
Within a few months, Mujkic expressed interest to Babic in buying a truck so he could work as an “owner/operator” and earn compensation “per load.” Lynx owner-operator drivers were responsible for expenses such as liability and cargo insurance, fuel, tolls, truck repairs, truck registration, and trailer rent. Also, Lynx charged its owner/operator drivers a ten-percent negotiation fee for scheduling loads with the broker.
Lynx maintained a “T–Check”1 account to cover fuel expenses for its drivers. Lynx provided both company and owner/operator drivers with a card to pay for fuel. Drivers were required to enter a PIN and/or sign when purchasing fuel with the card. Lynx did not deduct “T–Check Fuel” advances from its company drivers' paychecks. With pre-approval from Lynx, drivers could also receive cash advances for personal expenses by using the T–Check system. Lynx deducted these “T–Chek Advances” from its drivers' paychecks.
Lynx also deducted $100 from each paycheck (up to a total of $1000) of both company drivers and owner/operators, which was paid into an escrow account. The escrow account was used to cover insurance deductibles for accidents caused by Lynx drivers. At the end of the driver's employment, if the escrow money was not used, the driver received the money back. In other words, Lynx used these payments into escrow as a mandatory “savings account” for its drivers.
Mujkic and Babic reached an agreement for Mujkic to purchase from Lynx the truck he had been driving as a company driver, a 2006 International 9200i semi-truck. Due to Mujkic's poor credit history and lack of driving experience, Babic agreed to personally finance Mujkic's truck purchase and assist with Mujkic's other owner-operator expenses. They agreed Mujkic would pay $32,000 for the truck. Mujkic did not have the $3000 down payment, so Babic agreed to the first $1000 would be taken from Mujkic's escrow account and $1000 would be deducted from each of his next two paychecks. The $29,000 balance was to be paid in monthly installments of $1500. The agreement did not appear to provide for the payment of any interest. The cost of insurance and registration, paid by Lynx, was bundled in the purchase price, and Babic agreed to keep the registration and plates in Lynx's name. When Mujkic paid off the truck, title would transfer to his name, and he would assume responsibility for those expenses. Mujkic did not sign an additional contract agreement when his status changed from company driver to owner-operator.
Within a few months, Mujkic had the truck serviced to repair the air-conditioning. Lynx paid for the servicing via T–Check and the charge was subsequently deducted from Mujkic's paycheck. The air-conditioning needed servicing again shortly thereafter. Mujkic told Babic that Lynx needed to pay the bill or he would return the truck. Babic informed Mujkic that the owner/operator was the party ultimately responsible for repair expenses. Mujkic left the truck at the repair center and did not pay the bill. Mujkic quit working for Lynx in July 2012. Lynx subsequently sold the truck to Jasmin Bejtic for $16,000.
In October 2012, Mujkic filed this action against Lynx, alleging a violation of the Iowa Wage Payment Collection Law under Iowa Code chapter 91A for Lynx's deductions of his paychecks for T–Check advances and for escrow, and that he was entitled to equitable relief from Lynx under the doctrine of promissory estoppel for his payments toward the truck. Lynx filed an answer and raised two counterclaims for damages as a result of Mujkic's failure to: (1) reimburse Lynx for repairs made to the truck in the amount of $880.06, and (2) pay Lynx for the balance of the purchase price owed on the truck—after deducting the amount Mujkic paid and Lynx's mitigation of damages—in the amount of $8500. Mujkic filed two motions for partial summary judgment, which the district court overruled.
The case proceeded to a two-day bench trial in November 2013. The court heard testimony from Mujkic, Babic, Senaid Babic (Selvedin Babic's brother and the manager of Lynx). The parties also introduced a number of evidentiary exhibits, including the parties' contract agreement, repair invoices, and Lynx paystubs.
In January 2014, the district court entered a ruling denying Mujkic's claims and awarding no damages to Mujkic. Specifically, the court determined Mujkic was an independent contractor during his tenure with Lynx, and therefore was not protected by chapter 91A. The court further found Mujkic had failed to prove the necessary elements of promissory estoppel. Finally, the court found Lynx's counterclaims moot, as they “were for the purposes of set-off exclusively.” Mujkic filed a motion to enlarge or amend, which the court denied. Mujkic appeals.
We review cases tried at law for correction of errors at law. Lindsay v. Cottingham & Butler Ins. Servs., Inc., 763 N.W.2d 568, 573 (Iowa 2009). We are bound by the district court's findings of fact if they are supported by substantial evidence. Sutton v. Iowa Trenchless, L.C., 808 N.W.2d 744, 749 (Iowa Ct.App.2011).
Mujkic claims he is entitled to an award of damages from Lynx under the Iowa Wage Payment Collection Law. At the outset, we must determine whether chapter 91A is applicable to Mujkic's claim.
The Iowa Wage Payment Collection Law, by its terms, applies only to an “employee,” defined as “a natural person who is employed in this state for wages by an employer.” See Iowa Code § 91A.2(3) (defining “employee”). Chapter 91A does not apply to independent contractors. Miller v. Component Homes, Inc., 356 N.W.2d 213, 216 (Iowa 1984) .
During his tenure with Lynx, Mujkic worked as a company driver and as an owner/operator. Mujkic claims he was an employee of Lynx in both these capacities.
A. April through July 2012. We first turn to the latter portion of Mujkic's tenure with Lynx—April to July 2012—when he was an owner/operator. Mujkic claims the district court erred in determining he was an independent contractor precluded from recovery during this time period.2 For the following reasons, we find Mujkic's claim unpersuasive.
“In cases presenting a choice between categorizing a person as an employee or an independent contractor, the primary focus is on the extent of control by the employer over the details of the alleged employee's work.” Iowa Mut. Ins. Co. v. McCarthy, 572 N.W.2d 537, 542 (Iowa 1997). Factors relevant to this consideration include:
(1) who had the right to control the physical conduct of the work; (2) whether the purported employee was on the employer's payroll; (3) the method of payment, whether by time or by job; (4) who provided the equipment to accomplish the work; (5) the individual's obligation to furnish necessary tools, supplies, and materials; (6) the existence of a contract for the performance of a certain kind of work at a fixed price; (7) the independent nature of the individual's business; (8) the individual's employment of assistants, with the right to supervise their activities; (9) the time for which the individual is employed; (10) whether the work is part of the regular business of the employer; (11) the intent of the parties; and (12) the right to control the progress of the work, except as to final results.
Fesler v. Whelen Eng'g Co., 794 F.Supp.2d 994, 1008–09 (S.D.Iowa 2011) aff'd, 688 F.3d 439 (8th Cir.2012) (citing Iowa Mut. Ins. Co., 572 N.W.2d at 54243).
The district court thoroughly and meticulously analyzed each of these factors in determining Mujkic's status as an independent contractor, and we need not regurgitate substantially the same analysis here. As an owner/operator, Mujkic earned compensation “per load.” From the broker's payment, Lynx deducted a ten-percent negotiation fee for scheduling loads with the broker, T–Check advances, cargo insurance, trailer rent, and escrow. Mujkic was paid the balance. Mujkic supplied his own truck. He controlled the day-to-day use of, and was responsible for every aspect of the vehicle. As an owner/operator, Mujkic was responsible for all expenses associated with being a registered driver and completing the jobs, such as liability insurance, fuel, tolls, truck repairs, and truck registration. Mujkic controlled the physical conduct of his work. He decided which loads he would take and which loads he would refuse. He decided what hours he would work. He decided the routes he took. He decided the manner in which he drove....
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...582, 585 (Iowa 2002). The provisions of that statute do not apply to independent contractors. Mujkic v. Lynx, Inc., 863 N.W.2d 37 (Table), 2015 WL 1055307, *2 (Iowa Ct. App. March 11, 2015). Whether Sterling was an employee under the contract or an independent contractor was presented to th......