Owner Operator Ind. Drivers v. New Prime

• Decision Date: 29 March 2004
• Docket Number: No. 25742.,25742.
• Citation: 133 S.W.3d 162
• Parties: OWNER OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., and Jeffrey Warta, Individually, and on behalf of all similarly situated, Plaintiffs-Appellants, v. NEW PRIME, INC., d/b/a Prime, Inc., Robert Lowe, Lawana Lowe, and Vera Lowe, Defendants-Respondents.
• Court: Missouri Court of Appeals

133 S.W.3d 162

OWNER OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., and Jeffrey Warta, Individually, and on behalf of all similarly situated, Plaintiffs-Appellants, v.NEW PRIME, INC., d/b/a Prime, Inc., Robert Lowe, Lawana Lowe, and Vera Lowe, Defendants-Respondents.

No. 25742.

Missouri Court of Appeals, Southern District, Division One.

March 29, 2004.

Petition for Rehearing and Transfer Denied April 20, 2004.

Application for Transfer Denied May 25, 2004.

Richard E. Davis, Whiteaker & Wilson, P.C., Springfield, Thomas A. Sheehan, Shook, Hardy & Bacon, L.L.P., Kansas City, for Appellant.

R. Lawrence Ward, James C. Sullivan, Richard M. Paul, III, Shughart, Thomson & Kilroy, P.C., Kansas City, John C. Holstein, Shughart, Thomson & Kilroy, P.C., Springfield, for Respondent.

JAMES K. PREWITT, Judge.

The plaintiffs in this case("Appellants") filed a class action petition against the defendants seeking the return of insurance premiums paid for the procurement of workers' compensation insurance.According to Appellants, New Prime, Inc.("Prime"), as the alleged employer of Appellants, was responsible for paying workers' compensation premiums and therefore, by requiring Appellants to maintain their own workers' compensation insurance or deducting the cost of premiums from Appellants' pay, Prime was unjustly enriched or committed fraudulent misrepresentation or negligent misrepresentation.Appellants also alleged that DefendantsRobert Lowe, Vera Lowe, and Lawana Lowe, all officers and/or directors of Prime, had "disregarded the corporate form and formalities sufficient to pierce the corporate veil."The trial court granted Prime's motion to dismiss, finding that Appellants had no private right of action to enforce § 287.290, RSMo 2000, the section of the Missouri Workers' Compensation LawAppellants alleged Prime had violated, and that Appellants failed to state a claim because Appellants were owner-operators, who are specifically exempted from the definition of employees under § 287.020, RSMo 2000.Appellants raise four points of error, which will be discussed below.¹

Standard of Review

A motion to dismiss for failure to state a cause of action is solely a test of the adequacy of a plaintiff's petition.Bosch v. St. Louis Healthcare Network,41 S.W.3d 462, 464(Mo.banc 2001).Where the trial court has granted a motion to dismiss after determining that there is no private right of action or that the petition fails to state a claim, we review the trial court's ruling by giving the pleading its broadest intendment and treating all facts alleged as true.Cedar County Mem'l Hosp. v. Nevada City Hosp.,987 S.W.2d 422, 424(Mo.App.1999).In addition to assuming all of the averments in the petition are true, all reasonable inferences therefrom are liberally granted to the plaintiff.Reynolds v. Diamond Foods & Poultry, Inc.,79 S.W.3d 907, 909(Mo.banc 2002).

No attempt is made to weigh any facts alleged as to whether they are credible or persuasive.Id.Rather, the petition is reviewed in almost an academic manner to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in the case.Id.The petition is construed favorably to the plaintiff in order to determine whether the averments contained therein "invoke substantive principles of law which entitle the plaintiff to relief."Cedar County Mem'l Hosp.,987 S.W.2d at 424(internal citation omitted).

Within the motion to dismiss, Prime asserted that Appellants' petition failed to state a claim upon which relief could be granted because there was no private right of action for noncompliance with a provision of the Missouri Workers' Compensation Law and because Appellants were not considered employees under that law.Further, Prime argued that dismissal was appropriate because the Division of Workers' Compensation has exclusive jurisdiction over the matter.

A trial court should grant a motion to dismiss when it appears, by the preponderance of the evidence, that it lacks subject matter jurisdiction.Felts v. Ford Motor Co.,916 S.W.2d 798, 801(Mo. App.1995).The trial court's order granting Prime's motion to dismiss did not explicitly address the issue of subject matter jurisdiction or exclusive jurisdiction of the workers' compensation law in this situation.However, under our standard of review, we will affirm the trial court's ruling if the motion could have been sustained on any of the meritorious grounds raised in the motion.Cedar County Mem'l Hosp.,987 S.W.2d at 424.Thus, this Court will address the question of jurisdiction in its review.SeeBosch,41 S.W.3d at 464.

Prime argues that our review is for abuse of discretion.Prime is correct that a motion to dismiss for lack of subject matter jurisdiction is an appropriate means of raising the workers' compensation law as a defense to a common law tort action.James v. Poppa,85 S.W.3d 8, 9(Mo.banc 2002).Under Rule 55.27, the trial court shall dismiss the action whenever it appears, either by suggestion of a party to the action or otherwise, that the court lacks jurisdiction.Id.;Rule 55.27(g)(3).As indicated above, the trial court should grant the motion to dismiss if it appears by a preponderance of the evidence that it is without jurisdiction.Quinn v. Clayton Constr. Co., Inc.,111 S.W.3d 428, 431(Mo.App.2003).

Whether there is subject matter jurisdiction is a question of fact left to the sound discretion of the trial court.James,85 S.W.3d at 9.As such, when the trial court answers that question of fact,we will review for an abuse of discretion.Quinn,111 S.W.3d at 431-32(emphasis added).Here, the trial court did not address the issue of subject matter jurisdiction, dismissing Appellants' petition on other grounds; thus, our standard of review is as is outlined in the paragraphs previous to the one above.

Facts

Appellants are comprised of "all persons who entered into lease agreements with Prime and lease-purchase agreements with Success Leasing, Inc.[("Success")], and who have been charged and paid premiums for workers' compensation insurance."The Owner Operator Independent Drivers Association, Inc., also one of the plaintiffs and Appellants, "is a business association of persons and entities, commonly known as `owner-operators,' who own or lease and operate, motor carrier equipment."The Association "is a party to this lawsuit in a representative capacity in order to redress the injury to its members."Jeffrey Warta is the named plaintiff for the class.

Prime is incorporated under the laws of the State of Nebraska, authorized to do business in Missouri, with Springfield, Missouri serving as its principal place of business.Prime "is a motor carrier, primarily engaged in the enterprise of providing transportation services to the shipping public."Success is a corporation, also based in Springfield, Missouri, "that leases tractor units, with the option to purchase, to independent owner-operators."

Appellants assert in their brief that Success is wholly owned by Robert and Lawana Lowe; however, Appellants provide no reference to the legal file where such an allegation is made.There is information in the legal file that indicates that Prime and Success share employees, such as the Controller of Prime acting also in the capacity of Director of Leasing at Success.It is alleged in the petition that Robert and Vera Lowe are officers and directors of Prime, and that Lawana Lowe is a director of Prime.

From 1996 until April 7, 2000, Warta provided a motor vehicle, specifically a tractor unit, to Prime under a service contract between Warta and Prime.Within the service contract, which Prime called a service contract until April, 1997, after which time the term "Independent Contractor Operating Agreement" was used, the tractor was leased from Warta "to Prime for the purpose of hauling freight."The tractor itself was leased to Warta from Success under a lease-purchase agreement.Under the provisions of the lease-purchase agreement, although Warta had the option to purchase the tractor, he obtained no ownership interest in the vehicle during the term of the lease.

The service contract with Prime indicated that Warta was required to obtain and purchase workers' compensation insurance.Under the operating agreement, Warta had a choice of either making an election under the workers' compensation law to procure insurance for occupational injuries or providing and maintaining "suitable alternative insurance coverage... approved by Prime."The agreement also contained a provision under which Warta could procure required insurance coverage "through Prime or a Prime affiliate."Amounts were deducted weekly from Warta's pay from Prime to pay for the premiums.

On April 7, 2000, Warta sustained an injury, and he later applied for workers' compensation benefits before the Missouri Labor and Industrial Relations Commission.In his claim for compensation, Warta listed himself as the employer.As averred in the petition, Prime "intervened" in that proceeding as Warta's employer, directed his medical treatment, "and obtained other benefits pursuant to Missouri workers' compensation law."

In their petition, Appellants alleged that Prime "engaged in a pattern of practice in which its alter-ego, [Success], enters into lease-purchase agreements with putative class members, whereby such putative class members obtain equipment where no title passes to the individuals."The tractors leased under those lease-purchase agreements are then "leased to Prime to transport goods in interstate commerce[,]" under the provisions of a service contract in which putative class members are identified as independent contractors.Appellants further alleged that "Prime engaged in a scheme by which it deducted workers' compensation premiums from putative class members, in violation of [§ 287.290, RSMo 2000], and at the same time considered itself the employer...