Case Name: HILLDRUP TRANSFER & STORAGE OF NEW SMYRNA BEACH, INC., Appellant, v. STATE of Florida, DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY, DIVISION OF EMPLOYMENT, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1984-03-22
Citations: 447 So. 2d 414
Docket Number: No. 82-1592
Parties: HILLDRUP TRANSFER & STORAGE OF NEW SMYRNA BEACH, INC., Appellant, v. STATE of Florida, DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY, DIVISION OF EMPLOYMENT, Appellee.
Judges: DAUKSCH, J„ concurs.
Reporter: Southern Reporter, Second Series
Volume: 447
Pages: 414–424

Head Matter:
HILLDRUP TRANSFER & STORAGE OF NEW SMYRNA BEACH, INC., Appellant, v. STATE of Florida, DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY, DIVISION OF EMPLOYMENT, Appellee.
No. 82-1592.
District Court of Appeal of Florida, Fifth District.
March 22, 1984.
Charles M. Rand and Thomas C. Gar-wood, Jr., of Akerman, Senterfitt & Eidson, Orlando, for appellant.
Geri M. Atkinson-Hazelton, Tallahassee, for amicus curiae Associated Industries of Florida, Inc.
Alex D. Littlefield, Jr., Tallahassee, for appellee.

Opinion:
FRANK D. UPCHURCH, Jr., Judge.
Hilldrup Transfer & Storage of New Smyrna Beach, Inc., appeals from a determination by the State of Florida's Division of Employment Security that two kinds of truck drivers performing work in Hilldr-up's interstate moving business aré.In its employment within the meaning of section 443.036(17), Florida Statutes (1981), and therefore, Hilldrup is subject to the state unemployment tax. If the truck drivers are independent contractors, Hilldrup would not be subject to the tax.
The facts involved here are essentially undisputed. The decision therefore depends upon the legal relationship that the undisputed facts engender. Cantor v. Cochran, 184 So.2d 173 (Fla.1966), citing Toney Builders, Inc. v. Huddleston, 149 So.2d 38 (Fla.1963). The question presented on appeal is whether the Division correctly concluded that a master-servant, as opposed to an independent contractor, relationship existed here. We reverse.
Hilldrup is in the moving and storage business. It owns and uses van type trailers to move principally household furnishings. It utilizes its own tractors and drivers (their status is not in question) to move some loads. Other loads, however, are moved via company vans by operators who either own their own tractors or lease them from Hilldrup. Under a written agreement, these contract operators are paid a percentage (fifty-three percent) of the established rate for the particular haul. The operators are not contractually obligated to pack, load, or unload, but are compensated should they elect to do so. The agreement specifically provides that the operators are to be independent contractors and that the company cannot control or endeavor to control the manner, or prescribe the method of doing that portion of the business of the company which has been contracted for, and that the contractor is responsible for results only. The contract can be terminated by either party upon written notice, provided that the operator completes any delivery which had been commenced prior to termination.
The operators are responsible for payment of all expenses connected with the operation and ownership of their tractors, including fuel, insurance, repairs, maintenance, parking, licenses, applicable taxes, and road and bridge tolls. The operators can hire any help they require and are responsible for all wages, employment taxes, arid worker's compensation for these helpers. The operators have complete control over the selection, supervision and discharge of these helpers.
Under this arrangement, Hilldrup is able to simplify its operation. Its capital requirement is substantially reduced since acquisition costs of tractors and expenses attendant to their operation are reduced. Control over operation and care of the tractors is transferred to the operators, who have the most to gain by prudent and careful operation. The cost of movement of a load becomes accurately predictable.
On the other hand, the operators receive economic benefits from the arrangement, which is illustrated by the fact that they work an average of four years for Hilldr-up. They can increase their profits by prudent operation and maintenance of their tractors. They can work their own hours, select the routes they wish to travel and choose what assignments to accept. They are able to acquire and utilize profitably through care, judgment and their own industry an expensive piece of equipment which may substantially increase their income-producing potential.
The special deputy, citing Cantor, relied upon the factors enunciated in the Restatement (Second) of Agency, § 220 (1958) in finding that these contract-operators are employees. That section of the Restatement provides:
(2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
;u) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of the employer;
(i) whether or not the parties believe they are creating the relationship of master and servant; and
(j) whether the principal is or is not in business.
The deputy appears to have placed the greatest emphasis on control. He found control on the part of Hilldrup because the operators are obligated to keep the dispatcher informed of their progress and contents of their vehicles, file reports with Hilldrup as requested, wear company uniforms and paint their tractors with Hilldr-up's colors and name.
The Division and the deputy have misconstrued the type of control which is specified in the Restatement which states:
(a) The extent of control which, by the agreement, the master may exercise over the details of the work, (emphasis added)
By the agreement here, Hilldrup has no right of control. The contract specifies that:
[I]t is understood and agreed that Company has not the right to, and will not control or endeavor to control the manner, or prescribe the method of doing that portion of the business of the Company which is contracted for herein by Contractor. Contractor will be held responsible for results only... .
Of even more importance, however, is Hilldrup's interest in the end result as opposed to the details of the operator's work. See Cosmo Personnel Agency of Fort Lauderdale, Inc. v. State, 407 So.2d 249 (Fla. 4th DCA 1981); Herbert Hayes Yacht and Ship Sales, Inc. v. Lovell, 406 So.2d 1259 (Fla. 4th DCA 1981). By permitting the operators to set their own work hours and routes, hire and supervise their own helpers and accept or reject work assignments, Hilldrup has indicated a lack of interest in the details of their work.
The facts relied upon by the deputy in finding control are actually of little relevance when compared to the above factors. For instance, the requirement that the operators wear uniforms and paint their tractors with Hilldrup's colors and name is merely designed to assure the carrier's customers that the operators are representatives of Hilldrup. Also, while the operators are requested to notify Hilldrup daily of their whereabouts and contents of their vehicles, this is intended not so much as a control over the operators, but as an aid in utilizing the trucks and trailers efficiently. Finally, the operators are required to submit reports to Hilldrup "as requested." The nature of these reports is not clear but, in any event, such requirement does not constitute control over the means and methods of accomplishing the results sought. See Florida Industrial Comm. v. State, 155 Fla. 772, 21 So.2d 599 (1945).
The special deputy also erroneously concluded that the operators are not in a separate business. It is clear that they are. Each operates an independent business of his own. Each must invest substantial sums in equipment and bear any risk of loss attributable to his operation. The success of an operator depends upon his own skill and business acumen, and not on that of Hilldrup. An operator does have an on-going relationship with Hilldrup but only in the sense that he may do more work for Hilldrup some time in the future. Hilldrup and the operators are separate business entities and each may make a profit or loss irrespective of the others profits or losses. See generally Merchants Home Delivery Service, Inc. v. N.L.R.B., 580 F.2d 966 (9th Cir.1978); SIDA of Hawaii Inc. v. N.L.R.B., 512 F.2d 354 (9th Cir.1975). As stated in United States v. Silk, 331 U.S. 704, 67 S.Ct. 1463, 1471, 91 L.Ed. 1757 (1947) which is another case involving owner-operator truck drivers:
It is the total situation, including the risk undertaken, the control exercised, the opportunity for profit from sound management, that marks these driver-owners as independent contractors.
Finally, we find another factor significant which neither the special deputy nor the Division considered. Section 443.131, Florida Statutes (1981), provides that an employer shall pay 2.7% of an employee's wages as contribution for unemployment compensation. The operators punch no time cards and work the times and hours they elect. What would their wage be? Would Hilldrup pay 2.7% of the "employee's" total compensation which includes payment for the use of the truck? Would the amount be figured after deducting fuel, garaging, insurance, maintenance, tolls and other expenses paid by the operator? A large truck represents a substantial investment. Could Hilldrup consider depreciation and interest on any purchase loans in determining wages? Could the Division require Hilldrup to calculate an estimated wage on the same basis as their non-contract drivers? If so, how could it determine hours when the operators are free to work their own hours and choose their travel routes?
The relationship between Hilldrup and its operators has a legitimate business purpose. Compare A Nu Transfer, Inc. v. Dept. of Labor & Employment Security, 427 So.2d 305 (Fla. 3d DCA 1983) with Justice v. Belford Trucking Company, Inc., 272 So.2d 131 (Fla.1972). It is not simply a subterfuge to avoid the payment of unemployment or other taxes. The Division ignored the intent and relationship established by the agreement. It should have found that the contract operators are independent contractors.
REVERSED.
DAUKSCH, J" concurs.
SHARP, J., dissents with opinion.
. Section 443.036(17), Florida Statutes (1981), defines "employment" as:
[A]ny service performed by an employee for the person employing him..
and an "employee" as:
[A]ny individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee. ,
None of the special inclusions or exclusions of the statute appear applicable in this case.
. While a closer question is presented as to the lease operators, we conclude no distinction is necessary. If the lease were with a third party instead of Hilldrup it would unquestionably be a legitimate arrangement. There was no showing that the arrangement was a subterfuge so we treat the lease-operators and owner-operators as the same.
. The company furnishes insurance on its vans and their contents.
. In light of this language, it is curious to note the following findings which the special deputy made. First he stated: "Thus, the record clearly reflects that the Petitioner did have sufficient right of control over the drivers to constitute an employer-employee relationship, ." He later stated: "In resolving such conflicts, the Special Deputy has accepted the written contracts . as the best evidence of the relationship of the parties."
. See also Merchant's Home Delivery Service, Inc. v. N.L.R.B., 580 F.2d 966 (9th Cir.1978) wherein the court found that owner-operator truck drivers were independent contractors and not employees for purposes of the National Labor Relations Act. The court pointed out there is a difference between directing the means and manner of performance of work and exercising an ex post facto right to reprimand when the end result is unsatisfactory.
. Indeed, A Nu Transfer is similar to this case and there the Third District found that truck owner-operators were not employees of a freight carrier but rather were independent contractors. The only major difference between the two cases is that in A Nu Transfer, the owner-operators could work for any competitor of the carrier while here the agreement provided they could not. However, Hilldrup's vice-president explained that this restriction existed because of Interstate Commerce Commission rules which required that permit numbers of the carrier appear on its vehicles. If shipments from other carriers were transported, this rule would have been violated. The vice-president testified, without contradiction, that since 1980, this contractual restriction had not been enforced and operators could obtain other loads so long as a ten percent rental charge was paid to Hilldrup for the use of its trailer.