Ocean Accident & Guarantee Corporation, Ltd. v. Kennison

• Decision Date: 30 October 1933
• Docket Number: Civil 3415
• Citation: 42 Ariz. 349,26 P.2d 113
• Parties: OCEAN ACCIDENT & GUARANTEE CORPORATION, LIMITED, Insurance Carrier, Petitioner, v. CHARLES D. KENNISON, Compensation Applicant, THE INDUSTRIAL COMMISSION OF ARIZONA, Respondents
• Court: Arizona Supreme Court

26 P.2d 113

42 Ariz. 349

OCEAN ACCIDENT & GUARANTEE CORPORATION, LIMITED, Insurance Carrier, Petitioner, v. CHARLES D. KENNISON, Compensation Applicant, THE INDUSTRIAL COMMISSION OF ARIZONA, Respondents

Civil No. 3415

Supreme Court of Arizona

October 30, 1933

APPEAL by Certiorari from an award of The Industrial Commission of Arizona. Award set aside.

Mr. C H. Young (Mr. Paul J. Feehan,of Counsel), for Petitioner.

Mr. Don C. Babitt and Mr. D. L. Cunningham, for Respondent Commission.

OPINION

ROSS, C. J.

Charles D. Kennison was awarded compensation for accidental injuries sustained while working for the General Motors Acceptance Corporation, hereinafter referred to as the corporation. The Industrial Commission found he was an employee and that his injury arose out of and in the course of his employment. The Ocean Accident & Guarantee Corporation, Limited, insurance carrier, moved for a rehearing on the ground that the evidence conclusively showed that Kennison was an independent contractor and not an employee of the corporation at the time of his injury. Upon the rehearing the award was affirmed. The record is before us upon a writ of certiorari issued at the instance of the insurance carrier.

The evidence bearing upon the character of Kennison's employment consists of the testimony of Kennison and G. A Brelin, Phoenix manager of the corporation, at the original hearing and at the rehearing; and, while in detail there are some discrepancies, in the main and in its legal effect their testimony at both hearings is the same. Brelin was not antagonistic to Kennison's claim for compensation, but rather friendly, we think, because he announced at the first hearing that the corporation was not appearing to defend against the claim, but "just here to take a record of what transpired."

The insurance carrier was represented at the first hearing by its local agent, Jack Barr.

Kennison appeared for himself.

The referee stated before any testimony was taken and repeated it several times during the taking of testimony, that the issue was whether Kennison was an independent contractor or an employee at the time of his injury.

The character of the corporation's business was such that the frequent occasions arose when it was necessary for it to repossess from purchasers, or their assigns, automobiles that had been sold on conditional contracts. Trips for this purpose into many parts of the country, near and far and extending over a period of some two years, had been made for the corporation by Kennison. He was not included in the corporation's liability insurance and was not carried on its regular pay-roll as an employee, but made and entered into a separate contract or engagement for each trip he took for the corporation.

He says that when the corporation informed him where a repossessed automobile was he would figure up the expenses of the trip both ways and add thereto $4 per day for the estimated time required to make the trip, and submit the statement to the corporation, which would give to him a check for the amount; that he would then go and get the car and on his return render a statement of the expenses of his trip to the corporation, and, if the expenses and his per diem of $4 were less than the amount advanced, he would return to the corporation the balance, but if the expenses and the per diem were more than the sum advanced, the corporation would pay him such additional sum as necessary to make his per diem $4. This kind of arrangement, we understand, was the one under which most of his trips were made for the corporation.

The trip in which he was hurt was one to Kansas City and return. Concerning the arrangement to make this trip he testified as follows:

"Q. Now on this particular trip what was the arrangement? A. That was for a flat rate -- $75.00 for the trip.

"Q. $75.00 for the trip and out of that you were presumed to make payment of all costs? A. Yes.

"Q. Including your own wage? A. Yes, sir. . . .

"Q. In cases where you made a flat price for the expenses and remuneration involved, would you make out one of these things -- one of these receipts? A. Yes, they had to have one made out for their records, or for the expenditure of that money and there has been one or two cases where I made a trip of that kind and came out on the wrong end of it that when I filed my voucher like that, a correction was made in the office so I wouldn't lose anything on the trip.

"Q. If you ran into bad luck they would make it up to you? A. Yes sir. I want to state that there is not any -- I am not a contractor -- I wasn't working as an independent contractor in returning these cars . . .

"Q. In this particular trip you got an advance of an additional $75.00, is that correct? . . . A. Yes sir. I had to wire in for money from Lincolnville."

In response to the question by the referee, "Then you do consider that you were an independent contractor on this trip?" he answered:

"I do on this one, yes. That was my intention when I started out, but the company I think realized the position I was in and I think they made it possible for me to make the trip at the actual cost rather than at the contract price. They didn't hold me to the contract price."

After the accident Kennison wired the corporation stating his trouble and asked for $75 more, which was sent him. He testified that, instead of submitting to the corporation a voucher for the contract price of $75, after the accident he itemized his expenses and the corporation waived or "considered . . . the flat rate was off," and he put in the actual expenses of his trip. He used the last $75 to pay repairs of the car, to pay doctor's bills and his other expenses in connection with the accident. Asked if all of this $75 was consumed, he said:

"No, there was some left over which I believe I still owe to the company. I have never returned that. I have never been in a financial condition since that time to return that money to them. What I proposed to do, if I had been financially in a position to do it, would have been to have kept my agreement of $75.00 and any cost over the $75.00 I would have assumed it myself which I have not been able to do. I want to be perfectly frank with you."

Brelin, describing the arrangements made with Kennison to return repossessed cars, used this language:

"We would send him out on a particular job. We would advance enough money to take care of it -- we considered to be his expenses, making allowance for meals, rooms, etc., depending on the number of days we figured it would take him to make the job and get back to Phoenix. This particular instance here I believe we advanced $75.00 to Mr. Kennison on the 12th of October. If he had not had this wreck why of course it would not have been necessary to require the additional $75.00, but in view of the wreck we had to advance more money. We figured Mr. Kennison should average around 10 or 12 days to make the job -- get the car and bring it back."

He testified the amount advanced for a trip was calculated on the basis of the actual costs of the trip and $4 per day remuneration to Kennison. This witness was asked and he answered as follows:

"Q. And no accounting on such advance in this case or any other case would have ordinarily been figured? A. That is correct.

"Q. In this particular case you say you had to make an additional $75.00 advance? A. Yes.

"Q. What basis was that advance made on? A. Well, it was necessary primarily due to the fact that the car was damaged in this wreck, Mr. Kennison had to have additional funds on hand to get it fixed so he could come on to Phoenix."

He stated that Kennison exercised on his own discretion as to the route on return trip as also going, or as to whether he would travel at night or not; that he was expected to travel at a reasonable rate of speed and not to carry any guests; that out of advances made he was to defray the ordinary expenses of the trip, but the corporation put up additional funds for major difficulties such as the repair of the auto in this case after the accident, for ruined tires, tubes etc.

Kennison, when asked to what extent the corporation directed him in the manner of doing his work, answered:

"Well only go...