Toughill v. Melcher

• Decision Date: 04 September 1970
• Docket Number: No. 41469,41469
• Parties: Mildred M. TOUGHILL, widow of George J. Toughill, deceased, Relator, v. Albert MELCHER (Subcontractor), Respondents, Brechet & Richter Co., and Liberty Mutual Insurance Co., Respondent.
• Court: Minnesota Supreme Court

Page 633

179 N.W.2d 633

288 Minn. 266

Mildred M. TOUGHILL, widow of George J. Toughill, deceased Relator, v. Albert MELCHER (Subcontractor), Respondents Brechet & Richter Co., and Liberty Mutual Insurance Co. Respondent.

No. 41469.

Supreme Court of Minnesota.

Sept. 4, 1970.

Syllabus by the Court

1. The elements to be considered in workmen's compensation cases where the question arises as to whether one is an independent contractor or an employee are well understood but present difficulty in application to the facts in a particular case. In resolving the issue, the commission is obligated to look behind the form of the working arrangement, search for the true essence of the relationship, and avoid a 2. The holdings of this court in Guhlke v. Roberts Truck Lines, 268 Minn. 141, 128 N.W.2d 324, and Tretter v. Dart Transit Co., 271 Minn. 131, 135 N.W.2d 484, which denied workmen's compensation benefits to operators and owners of motor carrier equipment engaged in transportation services for a large shipper or interstate commerce carrier, do not necessarily control in a fact situation where an injured workman was operating or working on a small truck employed in local deliveries on a day-after-day basis for a mercantile establishment which had the right to terminate the employment at any time, and where, among other circumstances, the workman was at all times at the disposal of such establishment, expected to perform tasks delegated to him, and at times compensated at an hourly rate of pay.

narrow construction of workmen's compensation laws which would exclude a workman from its benefits.

Irwin Ketroser, Minneapolis, for relator.

Kenneth A. Mitchell, Minneapolis, for Melcher.

Robb, Van Eps & Gilmore, Minneapolis, for Brechet & Richter Co.

Heard before NELSON, MURPHY, OTIS, SHERAN, and THEODORE B. KNUDSON, JJ. Consideration and decision based on briefs by entire court en banc.

OPINION

MURPHY, Justice.

Certiorari to review a decision of the Workmen's Compensation Commission denying relator compensation for the death of her husband, George J. Toughill, against the mercantile firm of Brechet & Richter. The commission held that Toughill was an employee of Albert Melcher, an uninsured independent contractor at the time of decedent's death, and awarded compenation against Melcher.

It appears that for some years prior to the death of Toughill on November 23, 1960, Melcher had been engaged in business under the name of Rapid Transfer Company. In that business, he operated a truck which he either drove himself or with the assistance of decedent. Melcher paid decedent on a weekly basis, and his salary ranged from $100 to $125 a week. The business consisted of making deliveries of flour for Brechet & Richter, a bakery supplier. Melcher was paid for his services on the basis of a schedule of charges according to the number of sacks of flour delivered on any given day. Occasionally he and decedent delivered other goods and performed other labor for Brechet & Richter, for which they were compensated on an hourly basis.

On an ordinary day, Melcher and Toughill would pick up freight at the Minneapolis Terminal Warehouse pursuant to delivery slips provided by Brechet & Richter. This freight would be delivered to various designated bakeries. At each delivery the recipient would sign an invoice and a statement. Brechet & Richter would make a deduction from Melcher's compensation if any bags were broken on their rounds. In May 1960, Melcher took a construction job and sold the truck to decedent Toughill. Accordingly, until mid-October 1960, Toughill made most of the deliveries by himself. The same arrangement continued with the exception that Toughill billed Brechet & Richter for charges. In October 1960, John T. Richter, president of Brechet & Richter, contacted Melcher, told him he was going to have to let Toughill go, and inquired whether Melcher would care to resume the business. Apparently an accommodation was reached between Melcher and Toughill. The truck was resold to Melcher, and Toughill became an assistant again, drawing a salary. On November 23, 1960, while loading the truck at the Minneapolis Terminal Warehouse, Toughill suffered a fatal heart attack. After about 4 years, the widow instituted this action for recovery of compensation benefits.

The commission found that on the date of his fatal injury decedent was not an employee of Brechet & Richter but was an employee of Albert Melcher and awarded compensation benefits to be paid by the latter. The commission was of the view that Toughill was hired and paid by Melcher and had no dealings with Brechet & Richter with reference to his employment. Subsequent to this decision and before seeking certiorari, relator filed an application for leave to take additional testimony. The application was supported by an affidavit of Melcher, who was a witness at the hearing. It appears that, because of the long delay in bringing these proceedings, there was some difficulty on both sides in producing evidence which would satisfactorily develop the true relationship of the parties. The commission denied the application, however, holding that the additional proffered testimony would not 'effect a change in the determination.'

Relator contends that the commission should have determined that Toughill was an employee of Brechet & Richter within the meaning of the Workmen's Compensation Act. As authority for holding that decedent Toughill was not an employee of Brechet & Richter, the commission in its memorandum stated:

'* * * This matter is covered by the rule of Guhlke v. Roberts Truck Lines * * * 268 Minn. 141, 128 N.W.(2d) 324 * * *. See also Tretter vs. Dart, 271 Minn. 131, 135 N.W.(2d) 484 * * *.'

In Guhlke v. Roberts Truck Lines, 268 Minn. 141, 128 N.W.2d 324, and Tretter v. Dart Transit Co., 271 Minn. 131, 135 N.W.2d 484, we restated the elements to be considered in determining whether one is an independent contractor or an employee. These elements include the right to control the means and manner of performance; the mode of payment; the furnishing of material or tools; the control of the premises where the work is done; and the right of the employer to discharge. In Guhlke, we held that a tractor-trailer driver, employed by a partnership engaged in interstate hauling for a large shipper, was at the time of his work-related injury an employee of the partnership and not of the shipper who had leased the partnership facilities. In Tretter, we held that an independent truckowner, engaged in contract hauling for an interstate common carrier under an arrangement where the truckowner could accept or reject loads for transportation as he desired, was not at the time of his work-related injury an employee of the company to whom he leased the equipment. We noted that if a driver and owner of a tractor wishes to make a substantial investment in such equipment, lease it to a shipper or common carrier, and operate it on the basis of an independent enterprise, he is apparently motivated by an opportunity for profit and is not an employee in the sense that that term is understood by our decisions. However, we noted (271 Minn. 138, 135 N.W.2d 488):

'* * * We can only say that each case must be determined on its own facts, and where as here it cannot be said that the lease is merely an arrangement to conceal the true nature of the relationship between the parties, we must affirm.'

We do not feel that either Guhlke or Tretter necessarily provides a solution for the issues in this case. We are inclined to the view that the commission could not safely place the decedent workman in the same category with entrepeneurs who engaged in activities in the nature of a private business venture, owned expensive motor vehicle equipment leased to a shipper or interstate commerce carrier, and provided services in connection with such equipment. Decedent here worked on a small, flat-top, 8-year-old Ford truck making deliveries day in and day out for the same company for a period of more than 2 years.

An examination of the historical development of our law as it bears upon this relationship indicates a well-established policy of this court to guard against a narrow construction of workmen's compensation laws which would exclude a workman from its benefits. In the early cases of Herron v. Coolsaet Bros., 158 Minn. 522, 198 N.W. 134; and Rouse v. Town of Bird Island, 169 Minn. 367, 211 N.W. 327, the court considered claims of workmen injured while using independently-owned horses and wagons. We early recognized that the tests for determining whether an injured person was an employee or an independent contractor were well understood, but as we said in Lynch v. Hutchinson Produce Co., 169 Minn. 329, 331, 211 N.W. 313:

'* * * The difficulty comes in their application to the facts in a particular case. Rarely do two cases present substantially the same state of facts.'

A review of subsequent authorities which reflect the development of the law applied to cases dealing with injuries to workmen who use their own motor vehicles in the performance of work for others indicates that our court has always looked behind the form of the working arrangement to find the true essence of the relationship.

In Barker v. Bemidji Wood Products Co., 184 Minn. 366, 238 N.W. 692, the workman owned a truck which he used to transport logs to the defendant's plant. He received an agreed price per cord for hauling. Although he did this work with some regularity, it was not constant. The defendant's employees helped the workman to load his truck, and he was instructed with reference to deliveries. This court there said (184 Minn. 370, 238 N.W. 693):

'Looking at it broadly, the plaintiff was doing services of a manual kind for the defendant. He was, as we think of it generally, a laborer and not a contractor. He was doing just the work that an employe of the defendant driving one of its own trucks would do. He was...