No. 12653 INTHE 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, INAND 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

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# -Mr. JusticeWesley 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. Hewas paid on a per trip basis and was not eligible for the fringe benefits provided to other Yellowstone Pine employees. Hiswork was supervised by relator Ben Fergusonwho exercised this supervision as one of his duties as assistant to the president of Yellowstone Pine. In this capacity, Fergusonhad the power to hire and fire drivers and to purchase repairs and supplies for the trucks. 

### In addition to supervision of the trucking operation, Fergusonhad 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, Fergusonwas 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 Pinewas informed by union representatives that the trucking operation would either have to be moved from the Yellowstone Pine mill or the truck driverswould 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 operationwas separate from the Yellowstone Pinemill operation, the truckswere moved to a shop rented by Yellowstone Pine at a point away from its mill. Certain accounting changeswere also made. Essentially these changes involved the establishing of

a break-even haulage feewith the understanding thiswas to be adjusted up or down as required. This feewas credited to Ben Ferguson. Yellowstone Pine then deducted various itemswhich were paid directly by it for the trucking operation. These items included the cost of the trucks,workmen's compensationpremiums, and other expenses incurred for the trucking operation. Thebalance

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 checkswere drawn by Ferguson to pay the drivers' wages,witholding and social security taxes, and miscellaneous expense of the trucking operation. The haulage feewas adjusted to maintain this account at the break-even point. After this arrangementwas established and went into effect on November 1, 1971, Ferguson continued all of his other dutieswith 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,Hoffmanwas injured in the course of his employment as a driver. Following his injury,he filed a claim forworkmen's compensation benefits under the Workmen's CompensationAct and received benefits, including a substantialcompromise settlement. In the claim forbenefits and the settlement Yellowstone Pine isnamed as

### off man's employer, Following settlement of the workmen's compensation claim,Hoffmanbrought this action, alleging that relator Fergusonwas his employer. Both Yellowstone Pine and Fergusonmoved for summary judgment. Themotion was granted as to Yellowstone Pine and denied as to Ferguson. We concede that there are factualdisputes as towhether or not Hoffmanwas aware of the various changesmade by Yellowstone Pine and regarding the question ofnegligencebut,because of the viewwe take of relator's first issue,weneed not consider those matters here. The determinative issue is whether or not

### offm man's action is barred by the Workmen's CompensationAct. We hold that it is. Essentially

### offm man's position is that his employmentwas 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 immunityunder the workmen's Compensation Act from a common law action fornegligence. We do not consider the validity of this theory, since it is clear from the undisputed facts that therewas no transfer of employment, The test to determine whether or not an employer-employee relationship exists within the meaning of sections 92-410and 92- 411,R.C.M. 1947, is the so called control test. Under that test

an individual is in the service of anotherwhen that other has the right to control the details of the individual's work. Nelson v. Stukey, 89Mont, 277, 300 P. 287;Grief v. IndustrialAcc. Fund, 108Mont. 519, 93 P,2d 961. While this test has mst oftenbeen used to determinewhether or not an individualwas an independent contractor or an employee, it may also be used to determinewho 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 anotherwhen 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 undertakenby 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 supervisedby Ferguson acting as an employee of Yellowstone Pine. This supervision was done as directed by the president ofYellowstone Pine and had Ferguson deviated from those directions,he would have been replaced. Ultimate control of all the details of thework performed by Hoffmanwas in Yellowstone Pine. The fact that this controlwas exercised through Yellowstone Pine's employee, Ferguson, does not make him

### offm man's employer, even when considered togetherwith the change in the name on

### offm man's paycheck. That Fergusonwas an employee of Yellowstone Pine is undisputed. Since Hoffmanwas 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 thatwhere theAct applies, a coemployee is immune from suit. Madison 

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

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