Opinion ID: 1709176
Heading Depth: 1
Heading Rank: 7

Heading: application of mcl 418.171

Text: The ultimate question in this case is whether Gulf Oil Company or Bole Oil Company was a statutory employer of the plaintiff under MCL 418.171; MSA 17.237(171). If [the principal, an employer covered under WDCA,] contracts with [a contractor, a non-covered employer, and an employee of the contractor makes a claim for injury] for the execution by or under the contractor    of any work undertaken by the principal, the principal shall be liable [for WDCA benefits]. (Emphasis added.) From the statute, we derive the following individual factors required to make the legal determination that Gulf-Bole may be statutory employers: 1. Gulf-Bole was an employer insured under the WDCA. 2. Lang was an employer uninsured under the WDCA. 3. Gulf-Bole contracted with Lang. 4. Plaintiff was employed under Lang. 5. Plaintiff was injured while employed under Lang in the execution of work. 6. The work was work undertaken by the principal Gulf-Bole. Although the consideration of these factors involves mixed questions of law and fact, which is a judicially appropriate function, it would be possible to remand the matter to the WCAB to act under correct legal principles herein outlined. However, since we have already once remanded the matter to the WCAB and since the matter is more than ten years old, judicial economy suggests that it would be better to render a decision to resolve this long-running litigation. We therefore proceed to consideration of these factors.

3. Gulf contracted with Lang. Records & Briefs of Supreme Court No 3, April, 1978, Appendix, pp 80a-85a (testimony of Bole, a Gulf distributor). There was a lease between Gulf and Lang. Records & Briefs of Supreme Court, No 3, April, 1978, Appendix, p 520a. 4. Plaintiff was employed by Lang. The WCAB made a special finding of this at this Court's request. 5. It is not disputed that plaintiff was injured during a test drive of a car he repaired while working under Lang. The question is whether the repair work was work undertaken by the principal. 6. The work was work undertaken by the principal Gulf. To determine whether the repair of customer cars by or under the contractor service station was work undertaken by the principal, we look first to whatever contract or contracts were entered into between Gulf and Lang. The actual lease between Gulf and Lang was not produced by Gulf at the hearing, but a copy of the standard lease form which was the basis of the Gulf-Lang lease was introduced. Records & Briefs of Supreme Court No 3, April, 1978, Appendix, p 520a. Under the lease, among other undertakings required of a lessee, Lang, in order to preserve the intrinsic value of the service station, was to furnish such services and accommodations to retail gasoline customers as are customarily provided by gasoline service stations, including but not limited to certain enumerated services such as hours of operation, condition of the premises, maintenance of restrooms, etc. The lease did not specifically include car repairs. In order to determine whether car repairs were customarily provided by gasoline service stations, we must look to extrinsic evidence. That the undertaking between Gulf and Lang contemplated Lang's providing repair service is clearly shown by the credit card agreement. Records & Briefs, Supreme Court No 3, April, 1978, Appendix, p 416a. This document begins: [w]hereas Gulf Oil Corporation    has made available a credit card program to encourage greater sales of products, merchandise, and services at stations displaying the Gulf brand. Thereafter the duties of both parties regarding the credit cards is described. What is of direct interest to our consideration is the testimony of Roger Eberly, a Gulf sales representative. Mr. Eberly first identified the credit card agreement as follows: Q. According to this agreement the purpose of the credit card program is to encourage greater sales of merchandise, products, and service displaying the Gulf brand, is that your understanding of the purpose? A. Yes. Q. It is not used exclusively to pay for Gulf products, it can be used to pay for oil changing, grease job, pay for mechanical work, can it not? A. Yes. Q. Can you use it to pay for tires, batteries, products that were not produced, manufactured, or sold by you? A. Yes. Q. The idea being to promote more use of the Gulf stations you would be selling more Gulf oil products, isn't that correct? A. Yes. (Emphasis added.) Records & Briefs of Supreme Court No 3, April, 1978, Appendix, p 114a. This testimony of the Gulf representative clearly and explicitly indicates that Gulf's undertaking with Lang included mechanical work to be performed by or under Lang. That it was contemplated that service stations customarily provide repair services is indicated by the fact that Gulf supplied them with manuals on how to do mechanical work profitably. This is shown by the following testimony of Lyle Armel, a Gulf sales representative: Q. However, you do, your stations, enough of your stations do mechanical work, etc., that you do supply them with data books showing how they can profitably run an operation? A. As to sale of our products, yes. Q. As long as a sale of your product is involved? A. Correct. Records & Briefs of Supreme Court No 3, April, 1978, Appendix, p 158a. Furthermore, Mr. Armel testified that Gulf service stations were permitted to have tow trucks, suggesting that Gulf service stations could provide repair services: Q. Are your stations permitted to have emergency service equipment, tow trucks, available? A. Yes. Q. Are those charges permitted to go onto a Gulf credit card? A. Up to a limit, yes. Records & Briefs of Supreme Court No 3, April, 1978, Appendix, pp 195a-196a. Additional evidence that service stations customarily provided repair services is found in the fact that Gulf mediated complaints between service stations and customers dissatisfied with mechanical repairs. Records & Briefs of Supreme Court No 3, April, 1978, Appendix, p 118a (testimony of Roger Eberly). The sum of this evidence is that Gulf had undertaken with Lang to furnish such services    as are customarily provided by gasoline service stations, that under Gulf's credit card program Lang's customers would charge repair services, that Gulf provided manuals on how to do mechanical work profitably, that Gulf service stations were permitted to provide tow truck service, and that Gulf mediated disputes between Gulf service stations and mechanical repair customers. Individually and especially in combination these pieces of evidence indicate that Gulf contemplated that customarily provided    service station services included mechanical repairs and that the undertaking between Gulf and Lang specifically included such mechanical repair services. A final observation is that Mr. Bole, who brought Gulf and Lang together and who was a Gulf distributor, and also Mr. Eberly, Gulf's representative (Records & Briefs of Supreme Court No 3, April, 1978, Appendix, p 127a) recognized that the plaintiff did mechanical work at Lang's service station. Because of the evidence discussed, we determine that car repair work was work undertaken by the principal. Therefore, because of this determination and the determinations with respect to the other factors, we hold that Gulf Oil Company was a statutory employer of the plaintiff under MCL 418.171; MSA 17.237(171) and is liable for compensation benefits. Application of the Burt, DeWitt, Woody part of its business test confirms our statutory interpretation. Applying the Burt test that [i]t was just as much a part of its business to keep its boilers in repair as it was to make woodenware, it was just as much a part of Gulf's business to facilitate the sales of gasoline through full service stations as it was to procure and refine the oil. Gulf's leasing of pumps, permitting use of its logotype, and providing for purchases by credit card makes that abundantly clear.
In deciding Bole's status under the statutory employer provision, we apply the same factors that were used in deciding Gulf's status. Our analysis indicates that:

3. Bole testified that his company had no contract with Lang. Records & Briefs of Supreme Court No 3, April, 1978, Appendix, p 97a. 4. Plaintiff was employed by Lang. The WCAB made a special finding of this at this Court's request. 5. It is uncontested that plaintiff was injured during a test drive of a car he repaired, while working under Lang. 6. The last factor is whether the repair work done by plaintiff was work undertaken by Bole. Plaintiff does not adduce any evidence that there was an undertaking by Bole that repair work be executed by or under Lang, nor do the WCAB finding or our own research of the record indicate that there is any such evidence. On the basis of our analysis of the above factors, we conclude that the plaintiff did not prove that Bole was his statutory employer.