Stephens v. Celeryvale Transport, Inc.

• Decision Date: 11 December 1979
• Docket Number: No. 42463,42463
• Citation: 286 N.W.2d 420,205 Neb. 12
• Parties: Robert D. STEPHENS, Appellee and Cross-Appellant, v. CELERYVALE TRANSPORT, INC., Appellant and Cross-Appellee.
• Court: Nebraska Supreme Court

Page 420

286 N.W.2d 420

205 Neb. 12

Robert D. STEPHENS, Appellee and Cross-Appellant, v. CELERYVALE TRANSPORT, INC., Appellant and Cross-Appellee.

No. 42463.

Supreme Court of Nebraska.

Dec. 11, 1979.

Syllabus by the Court

1. Employer and Employee: Contracts. The relationship of employer and employee, as well as that of employer and independent contractor, arises from the contract between the parties.

2. Employer and Employee: Contracts: Contractors. There is generally no single test by which the determination may be made of whether or not a workman is an employee as distinguished from an independent contractor. However, the ultimate question is what was the contract between the parties.

3. Employer and Employee: Contracts: Proof. The burden of proof is on the claimant employee to prove the nature of the contractual relationship.

4. Employer and Employee: Contracts. If there exists a written contract, it must be considered and may be of prime importance. However, a writing which merely denominates the relationship may not be used to conceal the true arrangement.

5. Employer and Employee: Contracts: Contractors: Statutes. Where a written contract between the claimant and alleged employer exists, which not only denominates the relationship as that of independent contractor but also describes that kind of relationship, and nothing in the manner of performance by the parties is inconsistent with the relationship described, then the independent contractor is, as a matter of law, bound by the contract and is not to be deemed an employee within the meaning of the workmen's compensation statutes.

Baylor, Evnen, Baylor, Curtiss & Grimit, Lincoln, for appellant and cross-appellee.

William A. Wieland, of Healey, Brown, Wieland & Kluender, Lincoln, for appellee and cross-appellant.

Heard before BOSLAUGH, McCOWN, CLINTON, and BRODKEY, JJ., and ENDACOTT, District Judge.

CLINTON, Justice.

This is an appeal by the defendant, Celeryvale Transport, Inc., from the Nebraska Workmen's Compensation Court on rehearing, from an order by a divided court awarding the plaintiff, Robert D. Stephens, compensation for injuries received while allegedly in the employment of Celeryvale. The issue which is determinative of the outcome of this appeal is whether the finding of the Workmen's Compensation Court that Stephens was an employee of Celeryvale, rather than an independent contractor, is clearly wrong. We determine, as a matter of law, that Stephens was an independent contractor and reverse the judgment of the Workmen's Compensation Court and direct dismissal.

The standard of review governing factual determinations of the Workmen's Compensation Court is governed by the relevant portion of section 48-185, R.R.S.1943, which provides: "The findings of fact made by the Nebraska Workmen's Compensation Court after rehearing shall have the same force and effect as a jury verdict in a civil case." That statute also limits the grounds for reversal to four, which include: "(3) there is not sufficient competent evidence in the record to warrant the making of the order, judgment, or award . . . ." In applying this statute we have held the findings of fact made by the Workmen's Compensation Court on rehearing will not be set aside on appeal unless clearly wrong. Hyatt v. Kay Windsor, Inc., 198 Neb. 580, 254 N.W.2d 92. However, final determination of issues of law are for this court. Where the inference is clear that there is, or is not, a master and servant relationship, the determination is for the court and not for the trier of fact. Peetz v. Masek Auto Supply Co., 161 Neb. 588, 74 N.W.2d 474; Mansfield v. Andrew Murphy & Son, 139 Neb. 793, 298 N.W. 749; Vontress v. Ready Mixed Concrete Co., 170 Neb. 789, 104 N.W.2d 331.

The evidence shows that at the times pertinent to this litigation Celeryvale was an interstate motor freight carrier holding an I.C.C. certificate and appropriate certificates from various state commissions. It also shows that Stephens was the owner of a certain 1968 Kenworth tractor. For a number of years Stephens has made his living by operating his own truck, which he leased to others who held the appropriate operating certificates.

On May 12, 1977, Stephens entered into an "Equipment Lease and Transportation Agreement" with Celeryvale, in which the latter is described as "carrier" and Stephens as "contractor." By the terms of the agreement, Stephens leased to Celeryvale the above-mentioned tractor for a period of 1 year. The lease provided that the carrier pay contractor 42 cents a loaded mile. Although the agreement does not expressly so provide, it is clear from the evidence the tractor was to be used to pull trailers either owned by carrier or which it leased from others. The contractor agreed to bear "all costs of licenses, proration expenses, fuel and use taxes, gross receipts tax, Colo. G.T.M. tax, intangeable (sic) tax, tolls, and other fees or assessments incident to the ownership and operation of said tractor." Carrier was obligated to pay for the operating permits for the Kenworth and public liability insurance thereon, except bobtail, as well as for all licenses, proration expenses, and maintenance on carrier-owned trailers.

Again, although not expressly provided in the agreement, it is to be clearly inferred from the way in which the parties operated that the agreement contemplated that Stephens would either operate the tractor himself or furnish drivers. It provided: "All drivers, laborers and other helpers utilized by the Contractor shall be exclusively the employees of and compensated by the Contractor." It provided: "Carrier will bear the cost of Workmens Compensation Insurance for the Contractor," and, "It is expressly understood and agreed that all employees are subject to certain rules and regulations of said Carrier."

Sometime after the written agreement was entered into, Stephens was furnished with a copy of "current procedures and regulations affecting all owner-operators, and owner-operator drivers." The procedures and regulations referred to related to telephone reports and the weighing of vehicles. It contained a prohibition of the presence of alcoholic beverages in the vehicle, made drivers responsible for damage to equipment and cargo, and required them to pay fines for speeding or other moving violations. Also covered were paperwork, bills of lading, filing of logs, the making of cash advances by the contractor, physical examinations, shortages, and certain other responsibilities of drivers.

Both the contract and the regulations required the contractor to make a cash "bond" deposit of $1,000 to guarantee performance of the contract. This was to be paid in installments at a stated rate per trip. The agreement provided that the contractor could cancel the lease on 30 days notice. It further provided: "The parties intend to create by this contract the relationship of CARRIER and INDEPENDENT CONTRACTOR, and not an employer-employee relationship. Neither the CONTRACTOR nor its employees are to be considered the employees of the CARRIER at any time, under any circumstances, for any purpose."

The evidence shows the parties operated in the following manner. Celeryvale solicited shippers, advised Stephens where and when to pick up cargo, and the cargo's destination. The bills of lading received from the shipper specified destinations and usually delivery dates.

Celeryvale made advances to Stephens for each trip. The agreement and regulations both indicated payment would be made for each trip after completion of the necessary paperwork. In actual practice, only advances were made and no payment of any balance was made until after the accident in which Stephens was injured. That accident occurred on August 3, 1977, after the agreement had been in effect less than 3 months. During that time Stephens made 21 hauls for Celeryvale.

The evidence shows that neither income tax nor social security tax was withheld from the payments made to Stephens. Whether Celeryvale paid an employer's share of social security on compensation to Stephens is not shown, but it is inferable that it did not, since Stephens' profit or net compensation could be determined only after his business expenses were deducted. The record does not show whether Stephens paid social security as a self-employed person.

The evidence does not leave doubt that Stephens regarded himself as self-employed even though his testimony at the original hearing and at the rehearing was somewhat contradictory on the point. At the rehearing, the testimony on the point, including admissions as to testimony at the original hearing, was as follows: "Q. Mr. Stephens, have you always owned your own unit and worked for yourself, so to speak?

A. Yes.

Q. You've always considered yourself your own boss; right?

A. Not always. I used to work for other people.

Q. While you owned you own tractors?

A. I always leased them to somebody else.

Q. But always considered yourself your own boss?

A. When I was gypsying I did, but when you lease to somebody, you kind of go by their own agreement.

Q. I am going to call your attention again back to the first hearing. Mr. Stephens, the Court was asking you a little bit about the amount of money you were receiving.

'Q. And you say one of the reasons you didn't have a feel for other truck drivers is that you run your own rig, worked for yourself most of your life; is that correct?

'A. Yes.'

Do you remember that?

A. I guess.

Q. That answer was correct, wasn't it?

A. Yes. . . .

Q. . . . My next question:

'Q. So you've sort of been your own boss?

'A. Yes.'

That was correct, was it not?

A. Whenever it was leased. I was gypsying for a long time."

The evidence indicates Stephens generally selected his own route of travel, although he knew if a trailer owned or leased by Celeryvale required repairs or tires he might have to go to certain places to get these repairs or replacements. Stephens made...