Key Decisions

December 2012- Agent Or An Independent Contractor

(filed under: Key Decisions | December 19, 2012)

Agent Or An Independent Contractor Is A Question Of Fact

Monarrez v. Automobile Club of Southern California
(Cal. Ct. of App., 2d Dist.), filed November 20, 2012

Ruben Monarrez requested roadside assistance from the Auto Club for a flat tire. Auto Club dispatched a flat bed car carrier driven by Juan Felix.

Felix worked for Hirad, Inc., dba AM/PM Towing & Auto Repair.  He drove a truck insured under Hirad’s $1 million commercial policy, but considered himself to be an Auto Club technician.  Auto Club controls many details as to how tow operators help its members.

When Felix arrived, he found Monarrez standing near the front of his car on the right shoulder of the Long Beach freeway.  Felix decided to transport Monarrez’s car to the next exit and change the tire off the freeway.  He backed his truck up toward Monarrez’s vehicle, got out, and obtained Monarrez’s Auto Club card and identification.  Felix’s truck was encroaching onto the slow lane of the freeway.

Felix told Monarrez of his plan to move the car and said, “Can you go into my tow truck?”  Monarrez replied, “Okay.”  After their brief conversation, Felix dropped his clipboard in the truck and saw Monarrez near the guardrail, toward the back of the disabled car.  While Felix positioned the car on his truck, he did not keep an eye on Monarrez, but was aware that Monarrez did not pass him on the way to the front of the truck.  When he was done loading the car, Felix found Monarrez lying next to the tow truck in the slow lane of the freeway, in a fetal position, after being struck by a motorist.

Monarrez suffered serious brain and orthopedic injuries, and requires 24-hour skilled nursing care for life.

Monarrez, through his guardian at litem, sued the Auto Club.  He alleged that Felix was inadequately trained in safety procedures, and negligently allowed Monarrez to remain in a dangerous and vulnerable location on the freeway shoulder, contrary to industry custom and safe practice.  This negligence led to Monarrez’s injuries.

The Auto Club moved for summary judgment, arguing that it had no duty to Monarrez because Felix worked for an independent contractor.  The Auto Club insisted that it merely provides “orientation on proper personal grooming and greeting” and did not control the method of towing and servicing vehicles.  Monarrez responded that there were triable issues as to whether Hirad was the employee, agent, or ostensible agent of the Auto Club, which exerts “tremendous control over every detail” of its relationship with Hirad.

The trial court granted the motion because the contract between the Auto Club and Hirad “expressly defines their relationship as that of independent contractor.”

The Court of Appeal reversed.  It held that there were triable issues of material fact relative to the relationship between the Auto Club and Hirad.

The court held that the language in the contract between the Auto Club and Hirad, referring to Hirad as an independent contractor, did not create an open and shut case.  It noted that “The label placed by the parties on their relationship is not dispositive . . . .”

“An agent is one who represents another, called the principal, in dealings with third persons.”  (Cal. Civ. Code § 2295.)  An “actual” agency occurs when the agent “is really employed by the principal.”  (Cal. Civ. Code § 2299.)  An “ostensible” agency occurs “when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him.”  (Cal. Civ. Code § 2300.)  Agency may be implied from the facts and proved by circumstantial evidence.  Inferences may be drawn from the conduct of the parties.

The primary test for agency is control.  If one of the parties has the right to control and supervise the actions of another, there is an agency, not an independent contractor relationship, even if the right to control is not exercised and there is no actual supervision of the agent’s work.

In contrast to an agent, an independent contractor is “a person who is employed by another to perform work; who pursues an ‘independent employment or occupation’ in performing it; and who follows the employer’s ‘desires only as to the results of the work, and not as to the means whereby it is to be accomplished.’”  The person hiring an independent contractor has no right of control as to the mode of doing the work contracted for.

Under these standards, the evidence would allow a finder of fact to determine that Hirad was actually the Auto Club’s agent.