Tretter v. Dart Transit Co.

• Decision Date: 07 May 1965
• Docket Number: No. 39358,39358
• Parties: Ruth TRETTER, widow of Raymond Tretter, deceased employe, Relator, v. DART TRANSIT CO. et al., Respondents.
• Court: Minnesota Supreme Court

Page 484

135 N.W.2d 484

271 Minn. 131

Ruth TRETTER, widow of Raymond Tretter, deceased employe, Relator, v. DART TRANSIT CO. et al., Respondents.

No. 39358.

Supreme Court of Minnesota.

May 7, 1965.

Syllabus by the Court

1. Usually the factors applied in testing whether one is an employee or an independent contractor are (1) the right to control the means and manner of performance; (2) the mode of payment; (3) the furnishing of material or tools; (4) the control of the premises where the work is done; and (5) the right of the employer to discharge.

2. A tractor owner who was fatally injured while pulling a trailer owned by a certified common carrier was engaged in work as an independent contractor and not as an employee of the common carrier under circumstances where he owned and leased the tractor to the common carrier, where he paid for its maintenance, operation, and insurance, was compensated on the basis of a percentage of the tariff rather than on a wage scale, where the tractor was under his control at all times and he was free to accept or reject work offered by the carrier, and where social security, income tax, and other records and payments were not consistent with the employer-employee relationship.

3. The fact that an unincorporated operator-owner of a leased tractor finds himself without protection of workmen's compensation is a result of the independent activity in which he is engaged. He is not legally prevented from contracting with a certified common carrier on the basis of an equipment lease; and where it cannot be said that the lease is merely an arrangement to conceal an employer-employee relationship, courts are bound by the Industrial Commission's finding that such relationship did not exist.

Bertie & Bettenburg, St. Paul, for relator.

Firestone, Fink, Krawetz, Miley & O'Neill, and Kenneth J. Maas, Jr., St. Paul, for respondents.

MURPHY, Justice.

This case is before us on certiorari upon relation of Ruth Tretter, widow of Raymond Tretter, to review a decision of the Industrial Commission. It is another in a series of cases reviewed by this court involving the issue of whether the decedent, the owner and operator of a tractor leased to a certified motor carrier, was at the time of his fatal injury an independent contractor or an employee entitled to workmen's compensation.

It appears from the record that the decedent, Raymond Tretter, owned and operated a tractor which was pulling a trailer owned by Dart Transit Company. License for the tractor was issued to and paid for by decedent. He purchased and paid for the fuel and oil used by the tractor. The tractor was leased to Dart, a certified common carrier, which holds a certificate of public necessity and convenience for the transportation of property in interstate commerce. Pertinent parts of the lease recite:

'1. Time and date of the beginning of this agreement shall be July 10, 1961 and shall end July 10, 1962.

'2. It is understood that the leased equipment under this agreement is in the exclusive possession, control, and use of the authorized carrier, LESSEE, and that the said LESSEE assumes full responsibility in respect to the operation of the equipment to the public, the shippers, and the I.C.C.

'3. In consideration of the leasing of the equipment used (and of the services of the driver of said equipment), the LESSEE agrees to pay to the LESSOR as per settlement sheets attached.

'4. This equipment shall be used to transport property for: Shipper: As authorized from as authorized to as authorized including pickup at point of origin and delivery at destination.

'6. The LESSOR agrees to deliver to the LESSEE the above equipment in good running order and condition and to fully maintain, service, and keep the equipment in good repair, and to pay all other expenses incident to the operation of said equipment. If LESSOR fails to maintain said equipment to the satisfaction of LESSEE, said LESSEE may cancel this lease forthwith.

'7. The LESSOR shall furnish the driver, and shall pay the driver for his services, and shall withhold any withholding or social security tax required by the State or Federal government.

'9. The LESSOR agrees that LESSEE shall not be liable for any loss or damage to or destruction of said leased equipment while it is being operated by or is in the care of and control of driver(s) furnished therewith. The LESSOR agrees to indemnify and save LESSEE harmless against (1) any claims resulting from the injury or death of any driver(s) furnished therewith, (2) any loss or damage resulting from the negligence, incompetence or dishonesty of such driver(s), and (3) of any loss, damage or happening giving rise to claims on the part of shippers.

'10. The LESSEE is to carry and pay for public liability, property damage, and cargo insurance incident to the operation of said equipment herein while such leased equipment is being operated exclusively in the interests of the LESSEE and not otherwise, but it is specifically and mutually agreed by and between LESSOR and LESSEE that such insurance so agreed to be carried by LESSEE shall be insurance for the benefit of the LESSEE and the public, and LESSOR only while in the service of the LESSEE except as hereinbefore provided.'

On December 21, 1961, while this contract was in force and while the leased equipment was being used in pulling a Dart trailer, an accident occurred as a result of which the decedent was fatally injured. In the interval between July 10, 1961, and December 17, 1961, the decedent had made about 90 one-way trips between St. Paul and Chicago for Dart.

1. The most recent statement of this court relating to the test for determining whether one is an employee or an independent contractor is to be found in Guhlke v. Roberts Truck Lines, 268 Minn. 141, 143, 128 N.W.2d 324, 326, where we said:

'In this court Mrs. Guhlke contends that the evidence supports the finding of the Industrial Commission to the effect that Doughboy was an employer of Vernon H. Guhlke. It is conceded that the factors applied in testing the relationship are: (1) The right to control the means and manner of performance; (2) the mode of payment; (3) the furnishing of material or tools; (4) the control of the premises where the work is done; and (5) the right of the employer to discharge. In determining whether the status is one of employee or independent contractor, the most important factor considered in light of the nature of the work involved is the right of the employer to control the means and manner of performance.'

2. In neasuring the facts in this case by the foregoing rule, it may be said that numerous factors which appear in the record identify the decedent as an independent contractor rather than an employee. He owned his own equipment which represented a substantial financial outlay; he leased it to the carrier. In the operation of it, he paid for its maintenance including oil and gasoline, carried his own collision insurance, and was compensated on the basis of a percentage of the tariff rather than on a wage scale. Social security tax was not withheld by the transportation company, nor did it withhold income tax. He filed his own tax returns as one engaged in an independent business. He was free to...