Reed v. Industrial Commission

• Decision Date: 13 May 1975
• Docket Number: No. 1,CA-IC,1
• Citation: 23 Ariz.App. 591,534 P.2d 1090
• Parties: David R. REED, Deceased, Peggy Sue Reed, widow, Cynthia Rene Reed and Mildred Elaine Reed, Individually and by their guardian ad litem, Peggy Sue Reed, Petitioners, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, Movers Port Service of California, Respondent Employer, St. Paul Fire & Marine Insurance Company, Respondent Carrier, Rocky Ford Moving Vans or Movers Port Service, Inc. of Midland, Texas, Respondent Employer, Northwestern National Insurance c/o Crawford & Company, Respondent Carrier. 1063.
• Court: Arizona Court of Appeals

Page 1090

534 P.2d 1090

23 Ariz.App. 591

David R. REED, Deceased, Peggy Sue Reed, widow, Cynthia Rene Reed and Mildred Elaine Reed, Individually and by their guardian ad litem, Peggy Sue Reed, Petitioners, v. The INDUSTRIAL COMMISSION of Arizona, Respondent Movers Port Service of California, Respondent Employer St. Paul Fire & Marine Insurance Company, Respondent Carrier Rocky Ford Moving Vans or Movers Port Service, Inc. of Midland, Texas, Respondent Employer Northwestern National Insurance c/o Crawford & Company, Respondent Carrier.

No. 1 CA-IC 1063.

Court of Appeals of Arizona, Division 1, Department C.

May 13, 1975.

Rehearing Denied June 13, 1975.

Review Denied July 10, 1975.

Machmer, Schlosser & Meitz, P.C. by Ronald M. Meitz, Phoenix, for petitioners.

Greg L. Folger, Chief Counsel, The Industrial Commission of Arizona, Phoenix, for respondent.

Lewis & Roca by Merton E. Marks, Phoenix, for Movers Port Service of California and St. Paul Fire & Marine Ins. Co.

Jennings, Strouss & Salmon by Michael W. Mullane, Phoenix, for Rocky Ford Moving Vans and Northwestern National Ins.

OPINION

STEVENS, Judge.

This Court has been petitioned to review the award of The Industrial Commission of Arizona to determine whether the award finding that the deceased was an independent contractor and not an employee is reasonably supported by the evidence.

David R. Reed (Reed) was driving his truck through Arizona on 25 July 1971 when he was involved in an accident near Benson in which he was killed. His widow, Peggy Sue Reed filed her 'Widow's Claim for Compensation.' Movers Port Service of California (Movers of California) and Rocky Ford Moving Vans (Rocky Ford) were alleged to be Reed's employers. The respective insurance carriers denied the widow's compensation because both firms maintained that Reed was not an employee. After several depositions and a hearing in Midland, Texas, the hearing officer (on 29 August 1973) issued his Consolidated Decision Upon Hearing and Findings and Award Denying Death Benefits. The hearing officer found that the employer-employee relationship had not been established and that Reed was an independent contractor and not an employee of either of the firms alleged to be an employer. After a requested review, the hearing officer affirmed his original decision. The case is before the Court upon a writ of certiorari. Our review will consider the evidence in a light most favorable to sustaining the Commission's award. Spears v. Industrial Commission of Arizona, 20 Ariz.App. 406, 513 P.2d 695 (1973); Montano v. Industrial Commission of Arizona, 18 Ariz.App. 58, 500 P.2d 318 (1972).

Initially, we must note that Rocky Ford urges that the petitioners waived their right to appeal the hearing officer's decision as to Rocky Ford. Rocky Ford urges that the memorandum attached to petitioners' request for review argued only that Movers of California was Reed's employer and that this was the only question that the hearing officer reviewed. Thus, it is urged, the petitioners failed to exhaust their administrative remedies as to Rocky Ford before coming to this Court and that this Court is without jurisdiction to consider the matter. A.R.S. § 23--943 provides that requests for review of a hearing officer's award need only state that a party requests a review of the award. The request may be accompanied by a memorandum of points and authorities but this is not necessary and the hearing officer reviews the entire award. The award was required to be reviewed as it applied to both alleged employers and petitioners did exhaust their administrative remedies before the Commission. This Court has jurisdiction to review the entire award.

One of the alleged employers is Movers Port Service, Inc. of Midland, Texas. The hearing officer found that the only connection of this alleged employer with the case is that Howard Ford is the owner of both Rocky Ford and this alleged employer and that this name is similar to the name of Movers of California. ¹ Movers Port Service of Midland, Texas, is a separate corporation and is not engaged in interstate commerce. The claim against this alleged employer was summarily denied. In this finding we concur and none of the parties contend that Movers Port Service, Inc. of Midland, Texas, was an employer of Reed.

Reed was required to follow a complex series of rules and regulations in the operation of his rig while hauling goods for Movers of California. The petitioners contend that the quantity and quality of these regulations establishes that Reed was an employee of either Movers of California or Rocky Ford.

The statutory guidelines to determine whether individual is an employee or an independent contractor are provided by A.R.S. § 23--902, as follows:

'B. When an employer procures work to be done for him by a contractor over whose work he retains supervision or control, and such work is a part or process in the trade or business of the employer, then such contractors and the persons employed by him, and his subcontractor and persons employed by the sub-contractor, are, within the meaning of this section, employees of the original employer.

'C. A person engaged in work for another, and who while so engaged is independent of the employer in the execution of the work and not subject to the rule or control of the person for whom the work is done, but is engaged only in the performance of a definite job or piece of work, and is subordinate to the employer only in effecting a result in accordance with the employer's design, is an independent contractor, and an employer within the meaning of this section.'

Basically, it is the right to control the method of reaching the desired result which determines whether an individual is an employee or an independent contractor. Employers Mutual Liability Insurance Co. v. Industrial Commission of Arizona, 18 Ariz.App. 403, 502 P.2d 1080 (1972); Nochta v. Industrial Commission of Arizona, 7 Ariz.App. 166, 436 P.2d 944 (1968). To determine the right to control, one must look to the totality of the facts and circumstances of each case examining the sign posts or indicia of control.

Reed owned the tractor and trailer that he drove. In June of 1971, he contacted Movers of California in its Houston office. He and his wife spoke to James Cook, the manager of the Houston office. Cook and Reed agreed that Reed would haul freight for Movers of California. Movers of California, within the United States, transported military household goods that were involved in international commerce. Movers of California did not have the necessary Interstate Commerce Commission (ICC) license to haul these goods but through a lease agreement with Rocky Ford, who was the owner of the ICC license required of common carriers who transport goods in interstate commerce, Movers of California was able to engage in interstate hauling. Movers of California paid Rocky Ford a percentage of the revenue derived from the use of the license. What was the relationship between Reed and Rocky Ford? Rocky Ford, as the owner of the ICC license, required that all drivers who hauled under its license, conform to all the ICC regulations. For this reason, Reed had to take a written examination and a driver's test at Rocky Ford's place of business. An employee of Rocky Ford, a duly qualified examiner of the ICC, administered these tests. Reed passed and received his license, cab identification card and a sign that he had to post on his cab stating that the rig was leased to Rocky Ford together with Rocky Ford's ICC permit number. Reed was also limited to the number of hours that he could drive in a day and was required to submit the 'driver's logs' required by the ICC. Howard K. Ford, the owner of Rocky Ford and Movers Port Service of Midland, Texas, testified at the hearing. He stated that any driver who would violate the ICC regulations in a significant manner would not be allowed to drive under his ICC license. While Ford could not terminate any driver of Movers of California as such, he would tell Movers...