Opinion ID: 3009507
Heading Depth: 4
Heading Rank: 1

Heading: Servants or independent contractors

Text: In reaching its conclusion that Winback's sales representatives are independent contractors, the district court relied almost exclusively on Baldasarre. In that case, the plaintiff had sought to hold a purchaser of land liable for his attorney's alleged misrepresentations. In denying relief, the Supreme Court of New Jersey reasoned: Attorneys generally are not subject to their clients' actual control or direction. Indeed, most clients have an attorney because they are unfamiliar with the law and want an attorney to guide them through the intricacies of that field. As professionals, attorneys are deemed responsible for their own acts, and, as in this case, most clients have legal recourse against the attorney and his law firm for their actions. Baldasarre, 625 A.2d at 465. Therefore, the Court concluded that [a]n innocent client should not be held vicariously liable for the wrongful conduct of his or her attorney against the attorney's other clients if the client does not direct, advise, consent to or participate in the attorney's improper conduct. Id. at 465. The district court in this case analogized as follows: [T]he level of joint activity between [Winback] and Inga and the sales representatives is similarly minimal and peripheral to the nuts and bolts of the business of marketing and promoting. Furthermore, as detailed above, no proof was submitted to the Court to establish that [Winback] or Inga advised, consented to or participated in the alleged misrepresentations. Accordingly, plaintiff has failed to establish sufficient proof that the sales representatives are any more than independent contractors. 851 F. Supp. at 626. We hold that the district court correctly concluded that the sales representatives are independent contractors. The district court found that Winback employs no marketing employees on its own, and that the sales representatives play an integral role in the success of [Winback], financially and otherwise, in that all sales are conducted through these agencies and individuals. 851 F. Supp. at 626. Nonetheless, the district court correctly recognized that Winback exercises minimal control over the manner in which the representatives perform their work, and no control at all even over whether the representatives choose to market their company. Moreover, the representatives work for any number of companies at the same time, are paid purely based on the results they obtain, and operate their own businesses with their own expenses. The fact that Winback attempted to police the representatives to prevent misrepresentations does not change our result. [A]n employer does not transform an independent contractor into a servant merely because he wishes to supervise the project as it transpires. Brady v. Ralph Parsons Co., 520 A.2d 717, 731 (Md. 1987). Therefore, the district court properly found that the sales representatives were independent contractors. However, the court erred by stopping at that point. The district court failed to determine whether the sales representatives were agentindependent contractors or non-agent independent contractors.17 17 . The district court's failure to address this question is understandable in light of Baldasarre, for the case does not set forth explicitly the distinctions on which it relies. A close reading of the case reveals, however, that the Supreme Court of New Jersey did not intend to eviscerate the distinction between agent-independent contractors and non-agent independent contractors. For example, the Court quotes Prosser and Keeton on Torts for the proposition that an employer who hires an independent contractor: 'has no right of control over the manner in which the work is to be done, it is to be regarded as the contractor's own enterprise, and he, rather than the employer is the proper party to be charged with the responsibility for preventing the risk, and administering and distributing it.' Baldasarre, 625 A.2d at 465 (quoting Prosser and Keeton on Torts, § 71). But Prosser and Keeton rely in turn on the Second Restatement of Agency for their liability proposition, and the authors recognize that there are agent-independent contractors and non-agent independent contractors: Since an agent who is not a servant is not subject to any right of control by his employer over the details of his physical conduct, the responsibility ordinarily rests upon the agent alone, and the principal is not liable for the torts which he may commit. There are, however, a number of situations in which such liability may exist. These include cases in which a tort may be based upon the apparent authority of the agent to act for his principal, or in which a tort such as deceit occurs in the course of a consensual transaction between the agent and the injured person. Thus . . . a seller of land or goods may, in most states, be subject to an action of deceit for the fraud of his agent committed in the course of the sale. Prosser and Keeton on Torts, § 70 at 508 (citing, among other authorities, numerous sections of the Restatement (Second) of