Strait v. Hale Constr. Co.

• Decision Date: 28 July 1972
• Citation: 26 Cal.App.3d 941,103 Cal.Rptr. 487
• Court: California Court of Appeals Court of Appeals
• Parties: Oliver STRAIT, Plaintiff and Respondent, v. HALE CONSTRUCTION COMPANY et al., Defendants and Appellants. TOPHAM & SONS, a California corp., Plaintiff and Respondent, v. William E. YOUNG, Jr., et al., Defendants and Appellants. Civ. 11576.

Page 487

103 Cal.Rptr. 487

26 Cal.App.3d 941

Oliver STRAIT, Plaintiff and Respondent, v. HALE CONSTRUCTION COMPANY et al., Defendants and Appellants.

TOPHAM & SONS, a California corp., Plaintiff and Respondent, v. William E. YOUNG, Jr., et al., Defendants and Appellants.

Civ. 11576.

Court of Appeal, Fourth District, Division 2, California.

July 28, 1972.

[26 Cal.App.3d 942] Wilson, Borror & Dunn and William H. Wilson, San Bernardino, for defendants and appellants, William E. Young, Jr. and Miguel Hurtado.

Thompson & Colegate, Bruce Morgan, Riverside, and Frederick J. Lower, Jr., Los Angeles, for defendant and appellant, Hale Construction Co.

Thomas T. Anderson, Indio, for plaintiff and respondent, Oliver Strait.

Jack Boggust, Brawley, for plaintiff and respondent, Topham & Sons.

OPINION

KERRIGAN, Associate Justice.

Two lawsuits were filed against three defendants as a result of a collision between a tractor (earthmover) and a truck on September 6, 1966, at the intersection of Route 115 and Allbright Street in the County of Imperial. The truck driver (Oliver Strait) was seriously injured in the collision and sued to recover damages for his injuries. The truck owner (Topham & Sons, a corporation) sued for the property damage to its truck. The earthmover was owned by a farmer (William E. Young, Jr.) and was being operated by his employee (Miguel Hurtado). Young had let the tractor and the operator (Hurtado) to a road construction firm (Hale Construction Company, a co-partnership). At the time of the accident, the road builder (Hale) was converting Allbright Street from a dirt road to a paved street.

The two actions against the farmer, the tractor operator and road builder (Young, Hurtado and Hale) were consolidated for trial. The jury awarded the truck driver $225,700 and the truck owner $8,603 against all defendants. This appeal ensued.

Negligence, contributory negligence, proximate cause and damages are Not issues on appeal. The crucial problem involves the vicarious liability, if any, of the general employer (Young) and the special employer (Hale) for the negligence of the borrowed servant (Hurtado). The general employer claims that the court erred in instructing the jury as a matter of law that he was liable for the loaned servant's negligence. The special employmer claims that the trial court erred in denying its motions for nonsuit, directed verdict and judgment notwithstanding the verdict and in leaving the issue of vicarious liability to the jury. ¹

We hold that where a general employer loans out a tractor and an operator to a special employer to assist in the construction of a public road, and where personal injury and property damage ensue to third parties as a result of the negligence of the loaned servant in the operation of the tractor, both the general employer and the special employer are liable for the tort of the borrowed servant.

In reaching the foregoing conclusion, it is necessary to review the factual background of these lawsuits as well as the law governing the liability of a general and special employer for the negligence of a loaned servant.

Hale Construction Company is a firm specializing in road and airport work. It entered into a contract with the county of Imperial and the federal government to do the work on Allbright Street. The job consisted of preparing Allbright Street for eventual hardtop surfacing. This required excavating dirt from some areas and building-up other areas which, in turn, required the use of earthmoving machines commonly callege rigs. The work on Allbright Street was to be accomplished east and west of its intersection with Route 115.

After the road firm undertook the Allbright Street job, it found it was falling behind in its work schedule. Hale was under a completion deadline with a penalty of $100 per day. Initially, Hale had the use of 3 John Deere 50--10 tractors (earthmovers or rigs). One was owned by Hale and operated by its own employee. The other two were rented, with the operators being provided by the equipment owners. Someone told Hale that Young owned a 50--10 tractor. To accelerate construction, Hale contacted Young about letting the rig with an operator.

Young is a farmer living near Calipatria in Imperial County. He uses the earthmover in connection with his extensive farming operations. He has never leased out the rig or operator prior to being contacted by the road builder. Inasmuch as the machine was not then being utilized in farming operations, he agreed to rent the rig and supply Hurtado as the operator for $18.00 an hour. Young was to pay Hurtado $5.00 an hour to operate the rig from the $18.00 hourly rental. ²

Hurtado and the earthmover went on the construction job, worked for two weeks, and were temporarily terminated. A day or two before the accident, Hale again called Young and requested that Hurtado return with the rig to the job site.

In addition to a construction superintendent, the Allbright Street job was under the direct supervision of Raymond Hale, a general partner and officer of Hale Construction Company. Hale had a grade checker located at the police where the dirt was to be removed by the various tractor operators, as well as a dump boy at the site where the dirt was to be deposited by them. The grade checker would tell the rig operators where to cut and how deep to cut and the dump boy instructed them where and how to deposit the removed dirt. In removing and dumping the earth, it was necessary for the rigs to cross Route 115--a through highway--where it intersects with Allbright. Entrances to the highway on both sides of Allbright were posted with stop signs. In hauling dirt from a removal point west of the intersection to the dumpsite at a point east of the intersection, Hurtado collided with the truck being driven by Strait and owned by Topham & Sons which was proceeding north on Route 115.

Turning to the legal aspects of the two lawsuits, cases involving the application of the Loaned servant rule have not always been uniform in the results obtained. This observation is not new or novel. In 1928, an illustrious jurist came to the same conclusion when he wrote: 'The law that defines or seeks to define the distinction between general and special employers is beset with distinctions so delicate that chaos is the consequence. No lawyer can say with assurance in any given situation when one employment ends and the other begins. The wrong choice of defendants is often made, with instances, all too many, in which justice has miscarried.' (Cardozo, A Ministry of Justice, (1921) 35 Harv.L.Rev. 113, 121.) The passage of time has not eliminated the confusion. Courts has refused to attempt to differentiate and harmonize the case law on the grounds that to do so would merely add to the confusion; for the most part, the decisions have been characterized as irreconcilable. (See New York Central Railroad Co. v. Northern Indiana Public Service Co., 140 Ind.App. 79, 221 N.E.2d 442.)

The difficulty in determining the issue as to whether the general employer or the special employer, or both, should be liable for the tort of the loaned servant arose out of the test governing its application. In determining the vicarious liability issue, the courts have uniformly applied the Test of control, i.e., which employer had actual control or the right of control--the power to direct the borrowed servant in the details of the work at the time the tort occurred? In adopting the control theory and in weighing the elements of control, courts were inexorably driven to the expedience of making and accepting disparate refinements, ethereal in substance and revolting in reason, in order to reach any semblance of reconciliation of the results flowing from the borrowed servant cases. (See Smith, Scope of the Business: The Borrowed Servant Problem, (1940) 38 Mich.L.Rev. 1222, 1253.)

As in other jurisdictions, California courts applied the control test with varying results. In 1922, it was held that when a master (general employer) hires out under a rental agreement the services of his employee (loaned servant) for the operation of an instrumentality owned by the master, together with the use of the instrumentality, without relinquishing to the hirer (special employer) the power to discharge such servant, the legal presumption is that, although the hirer directs the servant where to go and what to do in the performance of the work, the servant who is the operator of the instrumentality employed in the doing of the work, remains, in the absence of an agreement to the contrary, the servant of the General employer insofar as concerns the manner and method of operating the instrumentality, and the general employer is solely liable for the servant's negligence in the operation of such instrumentality. (Billig v. Southern Paicific Co., 189 Cal. 477, 485--486, 209 P. 241.) In accord are other authorities holding that if the special employer does not have power to discharge the servant even though he directs the servant where to go and what to do in performance of the work, the servant, as operator of the instrumentality employed in the doing of the work, remains the employee of the General employer, with the latter being Responsible under the doctrine of Respondeat superior for the servant's negligence. (McComas v. Al. G. Barnes Shows Co., 215 Cal. 685, 12 P.2d 630; Mart v. Riley, 239 Cal.App.2d 649, 49 Cal.Rptr. 6; Doty v. Lacey, 114 Cal.App.2d 73, 249 P.2d 550; Lowell v. Harris, 24 Cal.App.2d 70, 74 P.2d 551.)

Conversely, the proposition has been propounded that an employee may be the general servant of one person and may be hired to another for a special service, and when he is subject wholly to the direction and control of the Special employer, the Latter, not the general employer, is Liable for the borrowed servant's negligence; but to escape liability for the negligence of a servant whose services have been rented or hired to...