Court Opinion

ID: 3108929
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:32:42.92448+00
Date Added: 2024-06-11T11:52:11.298688
License: Public Domain

Opinion issued February 25, 2014

                                   In The

                            Court of Appeals
                                   For The

                        First District of Texas
                          ————————————
                            NO. 01-12-00227-CV
                          ———————————
             LANI K. WHITE & CHARLES WHITE, Appellants
                                     V.
DR & PA DELIVERANCE, LTD., F/K/A DELIVERANCE-PAR SERVICES,
                       LTD., Appellee

                  On Appeal from the 344th District Court
                         Chambers County, Texas
                     Trial Court Case No. CV25059-A

                        MEMORANDUM OPINION

     Lani K. White and Charles White appeal a summary judgment in favor of

DR & PA Deliverance, Ltd., f/k/a Deliverance-Par Services, Ltd. (Deliverance).

We affirm.
                                    Background

      In 2005, the Whites bought a home in Baytown, Texas. Movers Specialty

Services Inc. (MSS) was hired to move the Whites’ appliances. MSS contracted

with Deliverance to disconnect and reconnect the Whites’ appliances, including

their electric dryer. Deliverance assigned the job to Patrick Rusk, with whom

Deliverance had entered into an independent contractor agreement.               Rusk

connected the electric dryer in the utility room of the Whites’ new home. Almost

four years later, a gas leak from an uncapped gas line in the Whites’ utility room

caused an explosion that injured Lani White.

      The Whites sued MSS, Deliverance, Rusk, and others.              They alleged

Deliverance was negligent for failing to inspect, detect and correct the uncapped

gas line, for failing to install proper caps for the shutoff valve, and for failing to

warn the Whites about the dangers of an uncapped gas line.

      Deliverance moved for summary judgment contending it was not vicariously

liable for Rusk’s alleged negligence because Rusk was an independent contractor,

not an employee of Deliverance. In their summary-judgment response, the Whites

argued that, notwithstanding the independent contractor agreement, there was a

fact issue about whether Rusk was an independent contractor because (1) the

independent contractor agreement had been modified by a second agreement

between Deliverance and MSS and (2) other evidence extrinsic to the independent

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contractor agreement raised a fact issue regarding whether Deliverance controlled

the details of Rusk’s work.

      After a hearing, the trial court granted Deliverance’s motion for summary

judgment and severed the Whites’ claims against Deliverance.           The Whites

appealed.

                                    Discussion

      The Whites challenge the summary judgment on two grounds. They argue

that an agreement between MSS and Deliverance specifying the procedures by

which Deliverance was to perform MSS jobs modified Rusk’s independent

contractor agreement with Deliverance. They also contend that, notwithstanding

the terms of the independent contractor agreement between Deliverance and Rusk,

the summary-judgment evidence raised a fact issue about whether, at the time Rusk

installed the Whites’ dryer, Deliverance exercised actual control over the operative

details of Rusk’s work.

A.    Standard of Review and Summary Judgment Standard

      We review a trial court’s grant of summary judgment de novo. Valence

Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) (citing Provident Life

& Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)). When reviewing

a summary judgment, we must (1) take as true all evidence favorable to the

nonmovant, and (2) indulge every reasonable inference and resolve any doubts in

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the nonmovant’s favor. Id. In a traditional summary judgment motion, the movant

has the burden to show that no genuine issue of material fact exists and that the

trial court should grant judgment as a matter of law. TEX. R. CIV. P. 166(a), (c);

KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748

(Tex. 1999).

B.    Applicable Law

      Under the doctrine of respondeat superior, an employer may be vicariously

liable for the negligence of its agent or employee who acts within the scope of his

employment even though the employer did not personally commit a wrong. St.

Joseph Hosp. v. Wolff, 94 S.W.3d 513, 542 (Tex. 2002); Baptist Mem’l Hosp. Sys.

v. Sampson, 969 S.W.2d 945, 947 (Tex. 1998). But an independent contractor has

sole control over the means and methods of his work and, therefore, the individual

or entity that hires the independent contractor is generally not vicariously liable for

the negligence of that person. Wolff, 94 S.W.3d at 542.

      The right to control the details of the work is the supreme test for whether a

master-servant relationship exists and whether the rule of vicarious liability

applies. Id. (citing Golden Spread Council, Inc. No. 562 of Boy Scouts of Am. v.

Akins, 926 S.W.2d 287, 290 (Tex. 1996)).      A right of control requires more than

      a general right to order the work stopped or resumed, to inspect its
      progress or to receive reports, to make suggestions or
      recommendations which need not necessarily be followed, or to
      prescribe alterations and deviations. Such a general right is usually
                                          4
      reserved to employers, but it does not mean that the contractor is
      controlled as to his methods of work, or as to operative detail. There
      must be such a retention of a right to supervision that the contractor is
      not entirely free to do the work in his own way.

Koch Refining Co. v. Chapa, 11 S.W.3d 153, 155 (Tex. 1999) (quoting

Restatement (Second) of Torts § 414 cmt. c (1965)). Employers may direct when

and where an independent contractor does the work and may request information

about the work, but an employer is liable for the independent contractor’s torts

only if the employer controls the details and methods of the independent

contractor’s work to such an extent that the contractor cannot perform the work as

he so chooses. Koch, 11 S.W.3d at 155–56; Weidner v. Sanchez, 14 S.W.3d 353,

373 (Tex. App.—Houston [14th Dist.] 2000, no pet.).

      A contract expressly providing that a person is an independent contractor “is

determinative of the [parties’] relationship absent evidence that the contract is a

mere sham or subterfuge designed to conceal the true legal status of the parties or

that the contract has been modified by a subsequent agreement between the

parties.” Farlow v. Harris Methodist Fort Worth Hosp., 284 S.W.3d 903, 911

(Tex. App.—Fort Worth 2009, pet. denied) (citing Newspapers, Inc. v. Love, 380
S.W.2d 582, 588–90, 592 (Tex. 1964)); Weidner, 14 S.W.3d at 373.

      When a contract establishes an independent contractor relationship, evidence

outside the contract must be produced to show that despite the contract terms, the

true operating agreement vested the right of control in the principal. Id. at 374
                                         5
(citing Farrell v. Greater Houston Transp. Co., 908 S.W.2d 1, 3 (Tex. App.—

Houston [1st Dist.] 1995, writ denied)). Neither sporadic action directing the

details of the work nor an occasional assertion of control will destroy the original

contract forming the basis of the independent contractor relationship. Id. The

assumption of exercise of control must be so persistent and the acquiescence

therein so pronounced as to raise an inference that when the accident occurred, the

parties by implied consent had agreed that the principal might have the right to

control the details of the work. Id.

C.    Analysis

      The Independent Contractor Agreement created an independent contractor
      relationship

      Deliverance and Rusk entered into an “Independent Contractor Agreement,”

in which they agreed that “[Rusk] is an independent contractor, and not the

employee or agent of [Deliverance] for any purpose whatsoever.”          Other key

terms of the agreement provide:

          • Deliverance “shall have no right to, and shall not control the manner,
            or prescribe the method, of accomplishing the portion of
            [Deliverance’s] business which shall be performed by [Rusk]
            pursuant to this Agreement.”

          • Rusk has “the right to refuse acceptance of any or any part of
            particular assignments submitted to the Contractor for service” for
            any reason, provided he submits the reason in writing.

                                         6
         • For jobs tendered, Rusk “shall provide the necessary vehicles, labor
           and materials (except lumber, paper pads) to complete the
           assignment.”

         • Any labor hired by Rusk to complete jobs shall be hired at Rusk’s
           expense, and persons employed by Rusk to perform such labor “shall
           be under the sole direction and control of [Rusk].”

         • Rusk shall complete all documents in accordance with guidelines
           required by Deliverance.

         • Rusk shall furnish, at his expense, worker’s compensation insurance
           for himself and his employees.

         • Rusk agrees to obtain at his expense automobile liability insurance
           and general liability insurance.

         • Rusk was to be paid 40% of the amount Deliverance invoiced the
           customer for each job Rusk performed.
      We agree with Deliverance that the independent contractor agreement

created an independent contractor relationship between Deliverance and Rusk. We

thus turn to the question of whether the Whites met their burden to adduce

summary-judgment evidence raising a fact issue about whether the agreement

should not be determinative of the parties’ relationship either because it was

modified by a subsequent agreement or because other extrinsic evidence raises a

fact issue about whether Deliverance exercised control over the details and

methods of Rusk’s work, despite the terms of the independent contractor

agreement.

                                      7
      The Whites’ summary judgment evidence failed to raise a fact issue
      regarding whether the independent contractor agreement is determinative
            a. The MSS agreement and MSS’s Suggested Operating Procedures

      The Whites argue that Rusk’s independent contractor agreement was

modified when Deliverance and MSS entered into their own contract, in which

Deliverance agreed to perform all work for MSS in accordance with MSS’s

Suggested Operating Procedures and manual. They contend that the step-by-step

procedures set forth in MSS’s service guidelines dictated the details and methods

of the work of those working for Deliverance, including Rusk, to the extent that

they wrested control over the methods and details of the work from Rusk. The

Whites’ summary-judgment evidence showed that Deliverance trained Rusk on

MSS’s guidelines and policed compliance with them by periodically circulating

memoranda reminding Rusk that he would be docked pay for failing to comply.

      We note, first, that the record contains only an unsigned version of an

agreement between MSS and Deliverance Movers Service (“DMS”), which is not a

party to this appeal.   The record contains no evidence of the nature of the

relationship between DMS and Deliverance, nor does it indicate that MSS and

DMS intended to be bound by the agreement despite the lack of signatures. The

Whites contend the agreement is binding on Deliverance because Deliverance

produced it in response to a request for production. We indulge doubts and

reasonable inferences in the Whites’ favor, but, here, the Whites urge us to stack

                                        8
one inference upon another: (1) the contract was binding on DMS despite the lack

of signatures or evidence demonstrating an intent to be bound in their absence and

(2) the contract also bound Deliverance, despite the fact that it is nowhere

mentioned in the agreement, because Deliverance is a successor to DMS. See

Marathon Corp. v. Pitzner, 106 S.W.3d 724, 728 (Tex. 2003) (an inference stacked

only on other inferences is not legally sufficient evidence); Zavala v. Burlington N.

Santa Fe Corp., 355 S.W.3d 359, 373 (Tex. App.—El Paso 2011, no pet.)

(“Stacking inferences is insufficient to create a fact issue precluding summary

judgment.”).

               b. Other extrinsic evidence

      The Whites contend that summary-judgment evidence other than the MSS

agreement and guidelines raised a fact issue regarding whether Rusk’s independent

contractor agreement was determinative of the parties’ relationship. Deliverance,

the movant, relied primarily on Rusk’s independent contractor agreement and the

affidavit of Paul Arena to prove that Rusk independently controlled the details and

methods of his work and that it was entitled to judgment as a matter of law. In

response, the Whites argued that Rusk’s affidavit raised a fact issue as to Rusk’s

independent contractor status.

      We examine the summary-judgment evidence against the five Limestone

factors: (1) the independent nature of the worker’s business; (2) the worker’s

                                             9
obligation to furnish necessary tools, supplies, and materials to perform the job;

(3) the worker’s right to control the progress of the work except about final results;

(4) the time for which the worker is employed; and (5) the method of payment,

whether the worker is paid by time or by the job. Limestone Prods. Distrib., Inc. v.

McNamara, 71 S.W.3d 308, 312 (Tex. 2002).

      In addition to the independent contractor agreement, the terms of which are

outlined above, Deliverance offered the Arena affidavit, which established the

following undisputed facts:

      • Rusk had the right to refuse all or any part of a work assignment.
      • No employees or agents of Deliverance oversaw or were present while
        Rusk worked at the Whites’ home, and none inspected Rusk’s work.
      • Rusk was paid on a form 1099 and did not receive W-2 forms.
      • Rusk received no pay if there was no work, and Deliverance did not pay
        Rusk for vacation time, sick leave or holidays.
      • Rusk was responsible for hiring, supervising and paying any labor
        required to complete his work.
      • Rusk was responsible for all costs and expenses incurred by him or any
        of his employees while completing his work.
      • Rusk paid state and federal income tax, unemployment insurance, and
        Social Security benefits for himself and his employees.
      • Rusk maintained general liability insurance naming Deliverance as an
        insured.
      • Rusk was liable for any property damage he or his employees caused.1

1
      Arena also averred that “Rusk was an independent contractor hired by
      Deliverance,” but we accord that legal conclusion no evidentiary value. The same
      is true for Rusk’s statement in his affidavit that “Deliverance controlled all the
      specifics of my work.” See Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991)
      (legal conclusions and conclusory statements are not proper summary-judgment
      evidence).
                                          10
      The Whites adduced no summary-judgment evidence controverting these

facts. Rather, they offered Rusk’s affidavit, which makes the following key points:

      • Rusk was required to report to Deliverance’s office by 8:00 a.m. six days
        a week and worked up to 80 hours each week.
      • Each morning, Deliverance gave him a list of jobs that he was required to
        complete by the end of the day.
      • Rusk was required to call Deliverance dispatch at the completion of each
        individual job he completed throughout the day.
      • Deliverance provided Rusk with 6 weeks of training on packing, crating
        and installation policies and procedures. Rusk was required to follow
        these procedures and was docked in pay if he did not.
      • Deliverance required Rusk to wear uniforms bearing Deliverance’s logo,
        fill out a Deliverance checklist indicating that he had completed various
        aspects of the job and, when introducing himself to customers, was
        required to “announce that [he] worked for Deliverance.”
      • Rusk worked exclusively for Deliverance for nearly four years, during
        which time he considered himself a Deliverance employee.

The Whites also adduced evidence that Rusk entered into a non-competition

agreement with Deliverance.

      The first Limestone factor relates to the independent nature of the business

and, in particular, who has the right to control the details and methods of the work.

Limestone, 71 S.W.3d at 312; Wolff, 94 S.W.3d at 542. The summary-judgment

record demonstrates that Rusk could refuse any job, was solely responsible for

deciding whether to hire additional labor for any job, and performed the work

without physical oversight or inspection by Deliverance. Deliverance’s evidence

thus demonstrated that Rusk was “free to do the work in his own way.” See Koch,
11 S.W.3d at 155; Limestone, 71 S.W.3d at 312.
                                         11
      The Whites nevertheless argue that Rusk’s business was not independent

because Rusk (1) was required to follow detailed procedures, report to

Deliverance’s office by 8:00 a.m. each morning, work long hours, and call dispatch

at the completion of each job, and (2) believed himself to be an employee of

Deliverance and gave customers the impression that he was a Deliverance

employee. The evidence that Deliverance exercised the right to determine when

Rusk would begin work, to require reports, and to suggest methods for

accomplishing the work safely and cost-effectively, even taken together, falls short

of raising a fact issue because none of it suggests that Deliverance persistently

controlled the methods and operative details of the work. See Limestone, 71
S.W.3d at 312 (affirming summary judgment as to independent contractor status

where worker called Limestone daily to see if there was any work, was told where

to pick up and deliver loads, was given deadlines for completing each job, and was

required to use load tickets bearing Limestone logo for each job); Hoechst-

Celanese Corp. v. Compton, 899 S.W.2d 215, 221 (Tex. App.—Houston [14th

Dist.] 1994, writ denied) (noting that key inquiry is control, not a worker’s belief

as to his status or general supervision of time or place of work, or manner of

worker’s dress); Farlow, 284 S.W.3d at 916 (hospital bylaws contractually

requiring doctor to provide treatment in specified ways were results-oriented only

and did not raise a fact issue regarding independent contractor relationship); Koch,

                                        12
11 S.W.3d at 155 (right to order work stopped or resumed, receive progress

reports, make suggestions or recommendations, prescribe alterations does not mean

that contractor is controlled as to his methods of work or as to operative detail).

      The evidence relating to the second factor—the obligation to furnish

necessary tools and materials—favors Deliverance. The undisputed evidence is

that Rusk was responsible for the expense of necessary labor, tools, and materials.

The record shows that Deliverance provided some materials to Rusk, apparently to

take advantage of volume discounts, but the Whites do not dispute that Rusk

nevertheless was obligated to pay for them.

      The third factor—the right to control the progress of the work—also

suggests Rusk was an independent contractor. Deliverance exercised the right to

tell Rusk when to start work and which jobs to do—Rusk was expected to be in the

office at 8:00 a.m. to pick up daily job assignments—but this is not inconsistent

with an independent contractor relationship. Koch, 11 S.W.3d at 155 (right of

control requires more than a general right to order work stopped or resumed). Nor

is the fact that Rusk was required to inform Deliverance that he had completed

work. Id. (right of control requires more than right to receive reports). And it is

undisputed that Rusk, after learning which jobs were assigned to him, was

responsible for contacting customers and scheduling a time in which to do the job.

                                          13
      Under the fourth factor, we examine the time for which the person is

employed. Rusk worked exclusively for Deliverance for nearly four years, and the

Whites rely heavily on this fact, and the existence of a non-competition agreement,

to argue for employee status. But courts have concluded persons were independent

contractors in cases involving far longer tenures. See Mid-Continent Cas. Co. v.

Davis, 683 F.3d 651, 658 (5th Cir. 2012) (finding workers were independent

contractors despite 17 and 18 year tenures where they got paid only if they

worked). Likewise, the existence of a non-compete is unrelated to the central issue

of control over methods and operative detail of the work.

      The evidence relevant to the fifth factor is undisputed. Rusk was paid by the

job and only upon completion of a job, receiving no pay if there was no work. In

sum, application of the Limestone factors requires affirmance.

      The Whites rely heavily on Weidner v. Sanchez, 14 S.W.3d 353 (Tex.

App.—Houston [14th Dist.] 2000, no pet.) to argue for a different result. There,

Weidner, a cab driver, and Liberty Cab had a Daily Pay Agreement that recited

that Weidner was an independent contractor. Weidner, 14 S.W.3d at 374. The

court of appeals held there was ample evidence that a subsequent agreement

between Liberty Cab and Metro modified the Daily Pay Agreement and that

Liberty exercised such control over Weidner that he was not an independent

contractor in the transaction at issue. Weidner is different for two reasons. First,

                                        14
here, we have concluded that the summary-judgment evidence did not raise a fact

issue as to whether the MSS agreement modified Rusk’s independent contractor

relationship. Second, and more important, in Weidner, the cab driver was paid by

the hour and the details of his work—driving—were dictated by Liberty Cab to the

degree that “precious little was left to Weidner’s discretion on the day of the

accident.” Id. at 375 (noting that “a salaried school bus driver probably has more

discretion than Weidner”).     Here, while Rusk was required to follow results-

oriented procedures, go to Deliverance’s office each morning, meet deadlines, and

periodically report on the progress of his work, there is no indication that he lacked

discretion as to the operative details of his work—installing the Whites’ dryer. See

Farlow, 284 S.W.3d at 916 (hospital bylaws contractually requiring doctor to

provide treatment in specified ways did not raise a fact issue as to independent

contractor status); Koch, 11 S.W.3d at 155 (right to order work stopped or

resumed, receive progress reports, make suggestions or recommendations,

prescribe alterations does not mean that contractor is controlled as to his methods

of work or as to operative detail).

                                         15
                                   Conclusion

      We affirm the trial court’s judgment.

                                              Rebeca Huddle
                                              Justice

Panel consists of Chief Justice Radack and Justices Bland and Huddle.

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