No. 12653 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1974 

STATE OF MONTANA, ex re1 . BEN 

FERGUSON and FERGUSON TRUCKING, 

Relators, 

THE DISTRICT COURT OF THE EIGHTEENTH 

JUDICIAL DISTRICT OF THE STATE OF 

MONTANA, IN AND FOR THE COUNTY OF 

GALLATIN AND THE HONORABLE W. W. LESSLEY, 

JUDGE THEREOF, 

Respondents. 

ORIGINAL PROCEEDING: 

Counsel of Record : 

For Relators : 

Anderson and Dasinger, Bozeman, Montana 

Douglas Dasinger argued, Bozeman, Montana 

Norman Robb argued, Missoula, Montana 

For Respondents : 

&own and Gilbert, Bozeman, Montana 

Gene I. Brown argued, Bozeman, Montana 

Submitted : January 18, 1974 

Decided : 5 . -- - 

Filed : 0- - 
Mr. Justice Wesley Castles delivered the Opinion of the Court, 

This is an original proceeding seeking a writ of supervisory 

control over the district court of Gallatin County, the Hon. W.W. 

Lessley presiding. The petition alleges that Judge Lessley acted 

contrary to the laws of Montana in denying relators' motion for 

summary judgment . Relators are Ben Ferguson and Ferguson Trucking. Their 

petition alleges that an action commenced in respondent district 

court by George Hoffman against Yellowstone Pine and relators 

seeks damages for injuries claimed to have been caused by the 

negligence of Yellowstone Pine Company and/or relators. This 

action is one of the type referred to in Larson's Workman's 

Compensation Law, V. I, 5 26-10 as an "upside-down" workmen's 

compensation case, where the employee is attempting, after receiving the benefits, to avoid the restrictions of the Workmen's 

Compensation Act and pursue a common law action against his 

employer. 

From the depositions and other documents on file in that 

action, these facts appear: George Hoffman was employed by 

Yellowstone Pine as a truck driver. He was paid on a per trip 

basis and was not eligible for the fringe benefits provided to 

other Yellowstone Pine employees. His work was supervised by 

relator Ben Ferguson who exercised this supervision as one of his 

duties as assistant to the president of Yellowstone Pine. In this 

capacity, Ferguson had the power to hire and fire drivers and to 

purchase repairs and supplies for the trucks. In addition to 

supervision of the trucking operation, Ferguson had various other 

duties which required him to be on call 24 hours a day. For these 

services he was paid a monthly salary. In all of these duties, 

Ferguson was subject to the direction and control of the president 

of Yellowstone Pine. Failure to follow the president's directions 

would have resulted in Ferguson's discharge and replacement. 
Shortly after Hoffman was employed, Yellowstone Pine was 

informed by union representatives that the trucking operation 

would either have to be moved from the Yellowstone Pine mill or 

the truck drivers would have to be included in the union bargaining unit. Because of cost factors Yellowstone Pine wished 

to avoid inclusion of the truck drivers in the union bargaining 

unit. In an effort to create the appearance that the trucking 

operation was separate from the Yellowstone Pine mill operation, 

the trucks were moved to a shop rented by Yellowstone Pine at a 

point away from its mill. Certain accounting changes were also 

made. 

Essentially these changes involved the establishing of 

a break-even haulage fee with the understanding this was to be 

adjusted up or down as required. This fee was credited to Ben 

Ferguson. Yellowstone Pine then deducted various items which were 

paid directly by it for the trucking operation. These items 

included the cost of the trucks, workmen's compensation premiums, and 

other expenses incurred for the trucking operation. The balance 

was then given to Ferguson for deposit in an account which he 

had opened in his own name at the direction of the president of 

Yellowstone Pine. From this account checks were drawn by Ferguson 

to pay the drivers' wages, witholding and social security taxes, 

and miscellaneous expense of the trucking operation. The haulage 

fee was adjusted to maintain this account at the break-even point. 

After this arrangement was established and went into 

effect on November 1, 1971, Ferguson continued all of his other 

duties with Yellowstone Pine and supervised the trucking operation 

under the direction of the president of Yellowstone Pine. Had 

he failed to do so he would have been replaced. His compensation 

remained the same; he did not profit from the trucking operation. 

On December 6, 1971, Hoffman was injured in the course of 

his employment as a driver. Following his injury, he filed a 

claim for workmen's compensation benefits under the Workmen's 

Compensation Act and received benefits, including a substantial 
compromise settlement. In the claim for benefits and the settlement Yellowstone Pine is named as off man's employer, Following 

settlement of the workmen's compensation claim, Hoffman brought 

this action, alleging that relator Ferguson was his employer. 

Both Yellowstone Pine and Ferguson moved for summary judgment. 

The motion was granted as to Yellowstone Pine and denied as to 

Ferguson. 

We concede that there are factual disputes as to whether 

or not Hoffman was aware of the various changes made by Yellowstone Pine and regarding the question of negligence but, because 

of the view we take of relator's first issue, we need not consider 

those matters here. 

The determinative issue is whether or not offm man's action 

is barred by the Workmen's Compensation Act. We hold that it is. 

Essentially offm man's position is that his employment was 

transferred from a first employer, Yellowstone Pine, to a second 

employer, Ferguson, without his knowledge or consent and that a 

second employer cannot in such a situation claim immunity under the 

workmen's Compensation Act from a common law action for negligence. 

We do not consider the validity of this theory, since it is clear 

from the undisputed facts that there was no transfer of employment, 

The test to determine whether or not an employer-employee 

relationship exists within the meaning of sections 92-410 and 92- 

411, R.C.M. 1947, is the so called control test. Under that test 

an individual is in the service of another when that other has the 

right to control the details of the individual's work. Nelson v. 

Stukey, 89 Mont, 277, 300 P. 287; Grief v. Industrial Acc. Fund, 

108 Mont. 519, 93 P,2d 961. While this test has mst often been 

used to determine whether or not an individual was an independent 

contractor or an employee, it may also be used to determine who the 

employer is, in a given situation. Biggart v. Texas Eastern Transmission Corp,, (Miss. 1970), 235 S.2d 443. Under this test an 

employee will have been transferred from one employer to another 
when the right to control the details of his work has passed 

from one to another. 

Applying the test to the facts of the instant case, it is 

clear that the accounting changes undertaken by Yellowstone Pine 

did not result in a transfer of the right to control the details 

of off man's work. off man's work continued to be supervised by 

Ferguson acting as an employee of Yellowstone Pine. This supervision was done as directed by the president of Yellowstone Pine 

and had Ferguson deviated from those directions, he would have been 

replaced. Ultimate control of all the details of the work performed by Hoffman was in Yellowstone Pine. The fact that this 

control was exercised through Yellowstone Pine's employee, 

Ferguson, does not make him offm man's employer, even when considered together with the change in the name on offm man's paycheck. 

That Ferguson was an employee of Yellowstone Pine is undisputed. Since Hoffman was in fact also an employee of Yellowstone 

Pine, they were coemployees. Based on the view that the Montana 

Workmen's Compensation Act is founded on the principles of enterprise liability and enterprise immunity, it has become well settled 

that where the Act applies, a coemployee is immune from suit. 

Madison v. Pierce, 156 Mont. 209, 478 P.2d 860; Baird v. Remoir,Sr., 

156 Mont. 348, 480 P.2d 186. 

The order of the district court denying summary judgment 

as to relator is vacated. The District court is directed to grant 

summary judgment to relator Ben Ferguson. 

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Justice 

We Concur: 8 

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