Title: Belger Cartage Serv., Inc. v. Holland Constr. Co.
Citation: 224 Kan. 320, 582 P.2d 1111
Docket Number: 48,687
State: Kansas
Issuer: Kansas Supreme Court
Date: July 15, 1978

224 Kan. 320 (1978)
582 P.2d 1111
BELGER CARTAGE SERVICE, INC., Appellant,
v.
HOLLAND CONSTRUCTION COMPANY, Appellee.
No. 48,687

Supreme Court of Kansas.
Opinion filed July 15, 1978.
*321 D. Gary Hunter, of Williamson, Cubbison, Hardy, Hunter &amp; Whitaker, of Kansas City, argued the cause and was on the brief for the appellant.
Keith Martin, of Payne &amp; Jones, Chartered, of Olathe, argued the cause and was on the brief for the appellee.
The opinion of the court was delivered by
McFARLAND, J.:
This is an action by the plaintiff, Belger Cartage Service, Inc., for damage to its crane as a result of an accident which occurred on April 4, 1972. Defendant, Holland Construction Company, counterclaimed for damage to its conveyor and for loss of earnings therefrom. Following a bench trial, the trial court granted judgment to the defendant on its counterclaim in the amount of $7,127.99 and on plaintiff's petition. Plaintiff appeals therefrom.
The trial court made the following findings of fact and conclusions of law:
"FINDINGS OF FACT
"CONCLUSIONS OF LAW
*323 "See: 195 Kan. 51."
"JUDGMENT
Accompanying the above findings and conclusions was the following letter from the trial court:
The plaintiff-appellant raises numerous points and subpoints of claimed error. All but one of the issues raised are in the area of the legal relationship of the parties, as determined by the trial court.
The defendant (hereinafter referred to as Holland) needed a *324 crane to move some heavy equipment. To accomplish the moving of the equipment, Holland contacted the plaintiff (hereinafter referred to as Belger). Belger sent the crane, boom, and two employees to the job site. A work order was signed (whether it was signed before or after the accident is disputed). In small print on the reverse of the work order are the following provisions:
The two individuals sent by Belger with the crane and boom operated the equipment at all times relevant. Employees of Holland were on the ground operating tag lines. Tag lines are ropes that are attached to the load being lifted to steady and guide the same. When the conveyor was being lifted, the cable on the boom broke. The conveyor fell, damaging it as well as the crane and boom. The only evidence as to the precise cause of the accident was that the conveyor was lifted at an improper angle in relation to the boom. This resulted in the cable rubbing the side of the *325 pulley, fraying out, and breaking. The evidence indicated the crane and boom were of adequate size and in good working order. The individual operating the crane testified he was aware that too great an angle could result in the cable breaking, knew they were close to the "critical angle" in the lift, but did not think that point had been reached until the cable broke.
Belger contends that its employees became Holland's employees by virtue of the circumstances and paragraphs seven and eight of the work order. Therefore, Belger contends Holland was responsible for the negligence of these individuals. Harlow and Platz, the employees in question, were skilled crane operators and were paid by Belger. Holland paid an hourly rate for the use of Belger's equipment which included any compensation paid the employees. Belger assigned the men to the job. Holland's employees told them what work was to be done. The testimony was clear that Harlow and Platz determined how the work was to be done. The actual operation of the crane was in the control of Harlow and Platz. Only Belger could remove them from the job.
In the law of the master-servant relationship, a number of general criteria have been developed to determine whose servant a borrowed servant is. In 57 C.J.S., Master and Servant, § 566a (1948), the following is stated:
In the matter of control, it says:
This last statement was quoted in part (but from 39 C.J. 1275) *326 in Redfield v. Chelsea Coal Co., 136 Kan. 588, 590, 16 P.2d 475 (1932). In the Redfield case, a coal mining company made a contract with a truck owner to haul coal from the mine; the truck owner hired the truck drivers and paid them; the foreman of the mine told them when to report to work; the foreman of the mine showed the drivers where to load; and the mine employees would load the trucks. When a truck was involved in an accident with a third party, this court held that the evidence did not prove that the truck driver was an agent of the coal company. We noted that the collision resulted from the manner in which the truck was being operated, something over which the mining company had no control.
In cases involving independent contractors, this court has said that an employer's right to direct and control the method and manner of doing work is the most significant aspect of determining an employer-employee relationship (Chasteen v. Childers, 218 Kan. 519, Syl. 5, 546 P.2d 935 [1976]; McCarty v. Great Bend Board of Education, 195 Kan. 310, 403 P.2d 956 [1965]).
In Beitz v. Hereford, 169 Kan. 556, 220 P.2d 135 (1950), a repairman working on a door of a shop was being helped by employees of the shop; an issue involved was whether they became the repairman's employees while helping him. This court summarized the test:
There have been a number of cases from other jurisdictions involving the leasing of a crane and its operator(s), as in this case. A representative sampling of those which held the operator remained the employee of the lender and not the borrower is summarized as follows:
Harrington v. H.F. Davis Tractor Co. Inc., 342 Mass. 675, 175 N.E.2d 241 (1961). Even though the borrower gave the operator direction on what to do, the operator did not become subject to direction and control in the actual management of the crane. The court also stated there is a presumption that an employee remains the servant of the general employer.
*327 Skomia v. Highway Pavers, Inc., 39 Wis.2d 293, 159 N.W.2d 76 (1968). The court relied on a presumption that the operator remained with the general employer as long as he was on its business. Other factors relevant were that the operator was a specialist, and that he could be substituted by the general employer. The court also noted a rule that a person was not a loaned employee unless the employee consented to change. Because of a lack of evidence to overcome the presumption of continued employment, there was no need to consider the question of "control," but the court did note that merely pointing out work to be done was not control. However, if the operator would need detailed direction, then that might indicate control.
Lewis v. Barnhill, 267 N.C. 457, 148 S.E.2d 536 (1966). The court relied on a presumption of continued employment by the original master unless the borrower in fact assumed control of the manner of performance. The test was control of the work as well as the manner of performing it. Factors noted were the experience and skill on the part of the operator and lack thereof by the borrower; operator using his own judgment; lender having the right to substitute another employee; employees being paid by the lender; and the borrower giving requests but not commands.
An example of one case wherein the borrower became the master is distinguished from the case before us in that the lender was not in the regular business of leasing cranes and did not stand to profit (Western Foundry Inc. v. Matelich, 150 Mont. 228, 433 P.2d 789 [1967]).
There was substantial competent evidence to support the trial court's findings that Belger, under the totality of the circumstances, was the employer of Harlow and Platz; that their negligence was the cause of the accident; and that Holland was not negligent.
We turn now to the related issue of whether the exculpatory clauses in paragraphs seven and eight of the work order altered the legal relationship of the parties.
In Kansas City Structural Steel Co., v. L.G. Barcus &amp; Sons, Inc., 217 Kan. 88, 535 P.2d 419 (1975), we said:
However, it should be noted that Kansas City Structural Steel involved a delay of delivery issue and a limitation of liability for damages arising therefrom. Further, it arose under the provisions of the Uniform Commercial Code. Active negligence was not involved.
Hunter v. American Rentals, 189 Kan. 615, 371 P.2d 131 (1962), involved a rental of a trailer and hitch by a rental company to an individual. The trailer hitch broke. The rental agreement absolved the rental company of any responsibility in the event of accident. This court found that such a contract limiting liability for consequences of one's own negligence was "void as against public policy." Public policy was determined by a statute requiring certain standards for trailer hitches and connectors.
Hunter was distinguished in Talley v. Skelly Oil Co., 199 Kan. 767, 433 P.2d 425 (1967), in which this court said:
This court noted that Hunter was a well-defined exception to the general rule. There was no contention in Talley that the lease in question contravened any statute and no "public policy" question was involved. Talley involved injury to a third party during lessee's use of the premises. Lessee had complete, actual control over the premises. This factual situation is materially different from the facts at hand wherein lessor retains control of the leased equipment which requires special skill and training to operate, and the operation thereof is potentially dangerous.
As to "public policy," this court defined it in In re Estate of Shirk, 186 Kan. 311, 350 P.2d 1 (1960):
The rule seems to be that, unless against public policy, a contract exempting liability will be enforced, however, it will be enforced very strictly. In Cason v. Geis Irrigation Co., 211 Kan. 406, 507 P.2d 295 (1973), we said:
In Kansas City Power &amp; L. Co. v. United Tel. Co. of Kan., Inc., 458 F.2d 177 (10th Cir.1972), a Kansas case, the court found that the specific indemnification clause was not broad enough to require indemnification for losses occasioned by the company's own negligence. The court said:
The law of "unconscionable" provisions was discussed extensively in Wille v. Southwestern Bell Tel. Co., 219 Kan. 755, 549 P.2d 903 (1976), wherein this court found that in an action by an advertiser against a telephone company for damages by reason of an omission of advertising contracted for the yellow pages, the contract which limited the company's liability for errors and omissions was not unconscionable and contrary to public policy. We noted that disparity of bargaining power, alone, does not render a contract unconscionable.
A summary of the law in this area is provided in 17 Am.Jur.2d, Contracts, § 188:
The trial court concluded the exculpatory clause herein was against public policy and that the terms of the clause had been varied by the performance of the parties. Whether any term of a written contract has been modified or waived by a subsequent agreement is a question of fact for the trial court (Coonrod &amp; Walz Constr. Co., Inc. v. Motel Enterprises, Inc., et al., 217 Kan. 63, Syl. 2, 535 P.2d 971 [1975]).
By analogy, a Uniform Commercial Code sales provision (K.S.A. 84-2-316[2]) provides in part:
Kansas has found this conspicuousness to be absent in such cases as Atlas Industries, Inc. v. National Cash Register Co., 216 Kan. 213, 531 P.2d 41 (1975) (disclaimer of warranty in equipment order used much smaller type than rest of contract); and Christopher &amp; Son v. Kansas Paint &amp; Color Co., 215 Kan. 185, 523 P.2d 709, modified on other grounds, 215 Kan. 510, 525 P.2d 626 (1974) (disclaimer in invoice was in smaller type and of same color as rest of writing). See generally Annot., Implied Warranty Disclaimer as "Conspicuous," 73 A.L.R.3d 248 (1976). Also, K.S.A. 1977 Supp. 84-1-201(10) provides:
The exculpatory clause was in small print on the reverse side of the form. Everything on the reverse side was printed. All signatures and "personalized" data were on the front of the order. *331 There was no evidence that the clauses were discussed or that Holland had actual knowledge thereof. The evidence was disputed as to whether or not the work order was signed before or after the accident.
In determining the enforceability of exculpatory clauses purportedly transferring employees to another and relieving the transferring employer from all responsibility for harm they might cause, such clauses are to be strictly construed against the transferring employer.
In determining the enforceability of any such exculpatory clauses, the trial court may consider the totality of the circumstances surrounding the execution and performance of the contract including, but not limited to, whether the employer to whom the employees were purportedly transferred had knowledge of the clauses by having them pointed out to him or the clauses themselves being conspicuous in the contract; the nature of the work to be performed including the degree of skill required and the degree of risk of harm involved; and the actual performance of the parties.
There was substantial competent evidence to support all of the trial court's findings of fact contained in its memorandum opinion and as expanded upon in its accompanying letter of May 25, 1976.
The remaining issue is whether or not Holland's counterclaim was barred by the statute of limitations. The trial court found Holland could recover on the theories of both negligence and implied warranty. The action herein was commenced on April 4, 1974. It was predicated on an accident occurring April 4, 1972. Holland filed its counterclaim on May 30, 1974.
K.S.A. 60-213(d) provides:
By this statute a claim that may be barred by a statute of limitations may still be used as a matter of pure defense but not as an affirmative action (Lightcap v. Mobil Oil Corporation, 221 Kan. *332 448, Syl. 8, 9, 562 P.2d 1 [1977]; Waechter v. Amoco Production Co., 217 Kan. 489, 517-519, 537 P.2d 228 [1975]; Rochester American Ins. Co. v. Cassell Truck Lines, 195 Kan. 51, 402 P.2d 782 [1965]).
Rochester was the case that the trial court relied upon. In that case we stated in part:
"....
Had Belger recovered, the negligence claim of Holland could have been used as a setoff. However, Belger did not recover against Holland. Therefore, any recovery on the negligence theory of the counterclaim was barred by the statute of limitations which was two years, pursuant to K.S.A. 60-513. The trial court's conclusion of law No. 7 as follows:
was clearly erroneous.
We turn now to the issue of breach of implied warranty. The cause of action for breach of implied warranty has a three-year statute of limitations pursuant to K.S.A. 60-512, as follows:
The trial court found that Belger had breached its implied warranty "that the equipment was, in fact, fit for the use for which it was intended." The counterclaim theory of implied warranty was as follows:
It was broader based than implied warranty of fitness for intended purpose. There was no evidence that the crane was not "fit" for the intended purpose and the trial court found no defects in the equipment itself.
The counterclaim raises the theory of an implied warranty by Belger to complete the job in a workmanlike manner. In Gilley v. Farmer, 207 Kan. 536, Syl. 3, 485 P.2d 1284 (1971), this court said:
Implied warranty of fitness has been used by this court in a different factual situation in Global Tank Trailer Sales v. Textilana-Nease, Inc., 209 Kan. 314, 496 P.2d 1292 (1972). Textilana-Nease was using Global's tank trailer to haul detergent. The tank collapsed. In reversing the lower court and finding for Textilana-Nease, this court said:
In Franklin v. Northwest Drilling Co., Inc., 215 Kan. 304, 524 P.2d 1194 (1974), a well driller was selling the equipment and drilling the well. This court found no implied warranty as to the quantity or quality of the water, only that his work will be in a workmanlike manner, with such skill as may be expected from *334 one who ordinarily does such work. As to the selling of the equipment, this court said the implied warranty provides that the equipment will be fit for the purpose when the seller knows of the particular purpose for which the equipment will be used. Franklin was, however, a Uniform Commercial Code case applying K.S.A. 84-2-315.
A person supplying equipment and workmen to operate the equipment, absent an express warranty, impliedly warrants: (1) the equipment is fit for the intended use; and (2) that the workmen are skilled in the use of said equipment, will do the job in a workmanlike manner, and will exercise reasonable care in performing the work.
The trial court does not specifically conclude that the implied warranty of performance in a workmanlike manner, using reasonable care, was breached, but the findings support this conclusion. The trial court did find that Belger was responsible for Holland's losses due to breach of implied warranty. The trial court apparently considered the employees as a part of the equipment package or unit in reaching this conclusion.
The judgment of a trial court is to be upheld if it is correct, even though the trial court may have relied upon a wrong ground or assigned an erroneous reason for its decision (Crow v. City of Wichita, 222 Kan. 322, Syl. 1, 566 P.2d 1 [1977]). We have no difficulty in concluding that the correct result was reached herein.
The judgment is affirmed.