Max Trucking, LLC v. Liberty Mutual Insurance Corp.

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 15a0233p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________

MAX TRUCKING, LLC, a Michigan limited liability ┐
company, │
Plaintiff-Appellant, │
│ No. 14-2115
│
v. >
│
│
LIBERTY MUTUAL INSURANCE CORPORATION, a │
Wisconsin corporation, │
Defendant-Appellee. │
┘
Appeal from the United States District Court
for the Western District of Michigan at Grand Rapids.
No. 1:12-cv-00060—Robert J. Jonker, District Judge.
Argued: June 11, 2015
Decided and Filed: September 21, 2015

Before: KEITH and CLAY, Circuit Judges; MARBLEY, District Judge.*

_________________

COUNSEL

ARGUED: Christopher M. Gibbons, GIBBONS & BOER, PLC, Grand Rapids, Michigan, for
Appellant. Graham K. Crabtree, FRASER, TREBILCOCK, DAVIS & DUNLAP, P.C., Lansing,
Michigan, for Appellee. ON BRIEF: Christopher M. Gibbons, GIBBONS & BOER, PLC,
Grand Rapids, Michigan, for Appellant. Graham K. Crabtree, Michael P. Donnelly, FRASER,
TREBILCOCK, DAVIS & DUNLAP, P.C., Lansing, Michigan, for Appellee.

*
The Honorable Algenon L. Marbley, United States District Judge for the Southern District of Ohio, sitting
by designation.

1
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 2

_________________

OPINION
_________________

MARBLEY, District Judge. Plaintiff-Appellant and Counter-Defendant, Max Trucking,
LLC (“Max Trucking”), appeals the district court’s findings of fact and conclusions of law
following a bench trial, pursuant to Fed. R. Civ. P. 52. Plaintiff-Appellant filed this law suit
seeking a declaratory judgment stating that it did not owe workers compensation premiums to
Defendant-Appellee and Counter-Plaintiff Liberty Mutual Insurance Corporation (“Liberty
Mutual”) because the truck drivers at issue were employees and not independent contractors
under the Michigan Worker’s Disability Compensation Act, Mich. Comp. Laws §§ 418.1-
418.400 (the “WDCA”). The district court ruled in favor of Defendant, and adopted Defendant’s
calculation of the outstanding premium owed, totaling $101,592.

We hold the district court properly determined the drivers are employees pursuant to the
applicable test under Mich. Comp. Laws 418.161(1)(n), as recently amended by 2011 P.A. 266,
and rendered an appropriate award of damages for unpaid premiums. Accordingly, the district
court’s judgment in this case is hereby AFFIRMED.

I. BACKGROUND

Max Trucking transports dry goods and freight by truck throughout the United States.
Max Trucking maintains a staff of six dispatchers at its headquarters in Kentwood, Michigan.
The dispatchers find jobs on various websites and then contact one of the 76 truck drivers living
throughout the United States who haul freight for Max Trucking, and offer the load to that driver.
About twenty of these drivers are based in Michigan.

The WDCA requires employers in Michigan to maintain worker’s
compensation insurance coverage for their employees. If an employer is unable to obtain
worker’s compensation insurance through the voluntary market, the employer may
purchase worker’s compensation insurance through Michigan’s involuntary market. The
Michigan Worker’s Compensation Placement Facility (“the Facility”) administers the
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 3

involuntary market in Michigan, pursuant to Chapter 23 of the Insurance Code of 1956, Mich.
Comp. Laws § 500.2301, et seq.

In 2006, Max Trucking applied for worker’s compensation insurance in the involuntary
market through the Facility. Liberty Mutual received the request from the Facility and issued a
policy to Max Trucking. Liberty Mutual renewed the policy annually for several years. Effective
December 5, 2010, Liberty Mutual issued a renewal policy with coverage dates from December
5, 2010 through December 5, 2011 (the “WC 010 Policy”). When the WC 010 Policy expired on
December 5, 2011, it was renewed for an additional year (the “WC 021″ Policy”).

In March 2011, Liberty Mutual audited Max Trucking and determined that 16–18
Michigan-based drivers who leased trucks from Max Trucking through a lease-to-buy program
(hereafter referred to as the “drivers”) were employees, not independent contractors, for the
purposes of Michigan’s worker’s compensation laws. Based on this determination, Liberty
Mutual increased Max Trucking’s policy premium. Max Trucking disputes the propriety of the
premium increase and has not paid Liberty Mutual the additional amounts associated with the
premium increase. Late in 2011, Liberty Mutual cancelled the WC 021 Policy. Early in 2012,
Max Trucking filed this lawsuit seeking a declaratory judgment that states the drivers operating
under the lease-to-buy program are not employees of Max Trucking but are independent
contractors for purposes of the WDCA. Max Trucking also sought a declaratory judgment
stating that Liberty Mutual is not entitled to increased premiums associated with the drivers and
that Max Trucking is not obligated to carry worker’s compensation insurance for the drivers
under the WDCA. Liberty Mutual filed a counterclaim on March 15, 2012, seeking unpaid
premiums totaling $101,592, which it claims Max Trucking owes it under the WC 010 and WC
021 policies.

The district court conducted a bench trial on February 4, 2014. As the district court
properly noted, the “dispute hinges on whether under Michigan’s workers compensation
insurance laws the truck drivers at issue are properly categorized as employees or independent
contractors.” Max Trucking, LLC v. Liberty Mut. Ins. Corp., No. 1:12-CV-60, 2014 WL
3756129, at *1 (W.D. Mich. July 31, 2014).
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 4

Max Trucking first presented the testimony of its general manager, Dalibor Kovacevic.
Kovacevic testified that Max Trucking has three different types of drivers: those who own their
trucks outright; those who are leasing or purchasing their truck from a third-party; and, those
who use the lease-to-buy program offered by Max Trucking. Kovacevic explained that when
Mario Banozic first purchased the company in 2006, he employed a driver to operate a truck
owned by the company, and he purchased worker’s compensation insurance for that driver. In
April 2006, the driver was in a bad accident, and Banozic incurred a high worker’s compensation
cost. At that point, Banozic decided only to use owner-operators, and not to hire employee-
operators. In 2008, however, many of Banozic’s drivers lost their trucks due to the economic
downturn, and Banozic’s fleet diminished considerably. As a result, in 2010 Max Trucking
developed a financing scheme whereby Max Trucking purchased trucks, and offered them to
drivers on a lease-to-buy basis.

Kovacevic testified that 16–18 Michigan drivers acquired their trucks through this lease-
to-buy program, and he explained the parameters of the program. Under the lease-to-buy
program, Max Trucking purchased trucks, and then leased the trucks to drivers with the
understanding that at the end of the lease term, the drivers could purchase the tractor-trailers for
a single dollar. The drivers paid Max Trucking—in addition to all the expenses incurred on an
individual load—a $4,000 down payment, and then a monthly payment for lease of the truck. A
written contract governed each of these lease-to-buy arrangements. Max Trucking, therefore,
officially held the title to the trucks, and the loan from the bank for each truck was issued to Max
Trucking. Under the program, Max Trucking does not refund the down payment or any lease
payments if a driver ceases to make lease payments and transport freight using the leased truck.
As the district court explained, “the arrangement is essentially a financing vehicle in which a
driver acquires a truck on the strength of Max Trucking’s credit, and then bears the cost of
acquisition through monthly lease payments to Max Trucking.” 2014 WL 3756129, at *2.
Further “these drivers are effectively economically dependent on Max Trucking for their ability
to operate as truckers,” because they would not have otherwise had the credit to purchase the
trucks. Id.
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 5

In one instance, a driver sold his leased truck, and Max Trucking received the payment
because the registration was in its name; but, Max Trucking then paid the trucker for his equity
in the truck. On a separate occasion, a trucker went to work for another trucking company, while
still making lease payments to Max Trucking. Further, three of Max Trucking’s dispatchers
purchased trucks from Max Trucking under the lease-to-buy program and hired drivers to drive
the leased trucks for them.

Max Trucking has a written contract with all of its drivers:

The contracts for the drivers at issue in this case are part of the trial record. The
contracts detail terms on which Max Trucking hires drivers to transport
commodities on behalf of Max Trucking. The contracts suggest that the
individuals contracting with Max Trucking may opt to hire other drivers to
perform the services the contracts describe, but in actual practice, the individuals
who enter these contracts with Max Trucking are the drivers themselves. The
contracts provide that the drivers will use motor vehicles the drivers own or are
leasing from Max Trucking to load, transport, and unload commodities that Max
Trucking makes available to the drivers for this purpose. The contracts describe
the terms of payment from Max Trucking to drivers for transporting commodities,
outline costs the drivers will bear, and specify regulatory requirements with which
the parties agree to comply. The contracts recite that the drivers are independent
contractors and not employees of Max Trucking. The contracts also recite that the
drivers are responsible for obtaining their own workers compensation coverage,
and that Max Trucking will not cover them. There is no evidence, however, that
any driver actually obtained his or her own coverage, and the Court finds as a
matter of fact that no driver obtained coverage for himself or herself.

Id. at *1.

When the dispatchers identify loads they believe Max Trucking drivers are available to
transport and deliver, they contact drivers and offer the opportunity to take on these loads. The
drivers may accept or decline the opportunity. On accepted loads, Max Trucking and the driver
divide the amount paid for each individual job, with Max Trucking taking 10%–12% and the
driver taking the remaining 88%–90%. In addition, all drivers on a haul have daily contact with
dispatchers to report their status and location; this information is required by the brokers and is
necessary to arrange shipments.

Kovacevic testified that the trucks used in its operations are registered with the U.S.
Department of Transportation (“DOT”) under Max Trucking. By virtue of this registration, all of
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 6

its drivers operate on the roadways under Max Trucking’s DOT number, which is displayed on
each truck along with Max Trucking’s decals. Drivers must fill out a daily logbook, which Max
Trucking uses to monitor the drivers’ compliance with DOT regulations. While it would be
possible for one of Max Trucking’s drivers to use his truck to transport freight for another
company, he would have to obtain a new logo and DOT number to display on his truck, and no
longer would be able to drive for Max Trucking. In the past, only one driver under the lease-to-
buy program has gone to work for another company while continuing to make payments on his
lease, but he had to obtain new logos, DOT number and decals, and, thus, no longer could
transport for Max Trucking.

Kovacevic ensures drivers’ documents are up to date, their required daily logbooks are
properly filled out and timely submitted, and that they are compliant with the law and applicable
DOT regulations. Max Trucking does not provide training, but it provides an orientation for new
drivers to review applicable laws and regulations.

Drivers must pay all expenses associated with transport out of their share of the proceeds.
Max Trucking advances expenses for fuel by giving each driver a fuel card, and also advances
costs of repair, liability insurance, and rental of the truck-trailers used to transport accepted
loads; the driver, however, is always ultimately responsible for those expenses. Kovacevic
testified that he acknowledged that these goods and services for which costs were advanced were
necessary for the drivers to be able to do their jobs. He also acknowledged that Max Trucking
receives its 10%–12% share of the fee paid regardless of the expenses the driver incurs. If
expenses exceed the percentage the driver is paid for the job, the driver bears the loss. Max
Trucking does not have a repair facility or a storage facility for the trucks used in its operations.

Liberty Mutual presented testimony from Russell Griffith, a Senior Forensic Consultant
who had worked for Liberty Mutual as an insurance auditor for more than 35 years. He testified
that in the past, he had performed audits of policies secured through the Michigan Facility,
including a significant number of audits of similar trucking companies. Based on his audit of
Max Trucking, he determined that the drivers leasing their vehicles from Max Trucking were
employees, subject to coverage under the WDCA. He explained the Facility places “a lot of
weight” on who owns the vehicle, and thus, his conclusion was strongly influenced by the fact
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 7

that the vehicles were registered to Max Trucking, and that Max Trucking technically could take
the vehicles away and terminate the lease-to-buy agreement at any time.

Griffith calculated that the additional premium due for the drivers in question was
$101,592. He arrived at this number pursuant to a sub-part of Rule Nine in the Facility’s
manual, which governs the determination of premiums for uninsured subcontractors with
employees:

Where contractors are for vehicles with drivers, the payroll shall be 1/3 of the
total contract price. When the contract price does not include the cost of fuel,
maintenance or other services provided, the value of such goods and services shall
be added to the contract price before determining the 1/3 amount.

Thus, $101,592 is equal to the construed wages or worker’s compensation premium basis
of one-third of the total compensation reported on the 1099 forms for the drivers, adjusted by
application of the worker’s compensation rate for trucking in Michigan.

Mr. Westerhoff, Max Trucking’s Certified Public Accountant, testified that the drivers
operating under the lease-to-buy program were owners of the leased trucks, even though Max
Trucking held title, because: (1) a lease with a purchase for a nominal fee at the end is a loan;
(2) Max Trucking did not carry the leased trucks as assets on its financial statements, although
the statements did list the lease receivables as assets; and (3) the drivers were able to claim
depreciation for the leased trucks in their tax returns. Westerhoff testified that Griffith’s
standard for calculating the premium did not represent a fair assessment of the amount that the
driver would make at the end of the day. He opined that 10.2% of Form 1099 compensation
would be a more appropriate standard. He testified he had never worked for an insurance
company offering worker’s compensation insurance and had no training regarding workers
compensation policies.

The district court concluded that the Michigan drivers at issue were employees, not
independent contractors, for worker’s compensation purposes. Id. at *3. Under the definition of
employee set forth in Mich. Comp. Laws 418.161(1)(l) and (n), as amended by 2011 P.A. 266,
the district court applied the three-part test and determined it was undisputed that the drivers
worked for hire for Max Trucking, and that: (1) none of the drivers at issue maintained a separate
trucking business; (2) held himself out to the public as a trucking business; or (3) qualified as an
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 8

employer under the WCDC. Id. The district court also found that Max Trucking owed Liberty
Mutual $101,592 in outstanding premiums. Id. at *5.

II. DISCUSSION

The primary issue before this Court is whether the Michigan drivers working for Max
Trucking who participated in the lease-to-buy program were “employees,” and not “independent
contractors” as defined by the applicable test codified at Mich. Comp. Laws § 418.161(1)(n).
This determination requires an interpretation of 161(1)(n), as amended by 2011 P.A. 266, which
defines “employee.” There is no settled case law interpreting the proper application of the
amendatory language of 161(1)(n). Appellant contends that the district court improperly relied
on the unchanged three-part test in the first sentence of 161(1)(n) as the standard for determining
employment status, when it should have relied only on the 20-factor Revenue Test set forth in
the amendatory language of 161(1)(n) (“20-factor test” or “Revenue Test”).

We hold that the district relied upon the proper test under the WDCA to determine the
employment status of the drivers at issue. Pursuant to that test, the district court properly held
that the drivers are employees, and not independent contractors. Finally, the district court did not
err in adopting Defendant’s calculation of the outstanding premium balance.

A. Test for determining employment-status under 161(1)(n)

1. Standard

“‘A matter requiring statutory interpretation is a question of law requiring de novo
review, and the starting point for interpretation is the language of the statute itself.’” United
States v. Brown, 639 F.3d 735, 737 (6th Cir. 2011) (quoting United States v. Batti, 631 F.3d 371,
375 (6th Cir. 2011)).

2. Analysis

Appellant’s challenge to the district court’s conclusion that the truckers are employees,
and not independent contractors, requires an interpretation of 161(1)(n) which, in relevant part,
reads as follows, with the amended portion in bold:
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 9

As used in this act, “employee” means:
***
(n) Every person performing service in the course of the trade, business,
profession, or occupation of an employer at the time of the injury, if the person in
relation to this service does not maintain a separate business, does not hold
himself or herself out to and render service to the public, and is not an employer
subject to this act. On and after January 1, 2013, services are employment if
the services are performed by an individual whom the Michigan
administrative hearing system determines to be in an employer-employee
relationship using the 20-factor test announced by the internal revenue
service of the United States department of treasury in revenue ruling 87-41, 1
C.B. 296. An individual for whom an employer is required to
withhold federal income tax is prima facie considered to perform service in
employment under this act. If a business entity requests the Michigan
administrative hearing system to determine whether 1 or more individuals
performing service for the entity in this state are in covered employment, the
Michigan administrative hearing system shall issue a determination of
coverage of service performed by those individuals and any other individuals
performing similar services under similar circumstances.

Mich. Comp. Laws § 418.161(1)(n) (emphasis added).

In its analysis, the district court first explained the legal standard for defining “employee”
under the WDCA. It began by noting that under subsections (1) and (n) of Mich. Comp. Laws
§ 418.161(1) “employee” is defined as:

(l) [e]very person in the service of another, under any contract of hire, express or
implied[;] and
(n) Every person performing service in the course of the trade, business,
profession, or occupation of an employer at the time of the injury, if the person in
relation to this service does not maintain a separate business, does not hold him or
herself out to and render service to the public, and is not an employer subject to
this act.

Max Trucking, 2014 WL 3756129, at *3. The district court explained that a special panel of the
Michigan Court of Appeals had recently ruled that all three statutory criteria in subsection (n)
must be met in order for the individual to “avoid the ‘employee’ classification.” Id. (citing Auto-
Owners Ins. Co. v. All Star Lawn Specialists Plus Inc., 845 N.W.2d 744 (Mich. Appl. Ct. 2013)
(overruling Amerisure Ins. Co. v. Time Auto Transp. Inc., 493 N.W.2d 482 (Mich. App. Ct.
1992)). Then the district court noted that subsection (n) of the statute states further that:
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 10

[o]n and after January 1, 2013, services are employment if the services are
performed by an individual whom the Michigan administrative hearing system
determines to be in an employer-employee relationship using the 20–factor test
announced by the internal revenue service of the United States department of
treasury in revenue ruling 87–41.

Id. The district court concluded that the meaning of subsection (n) is that “if the Michigan
administrative hearing system treats an individual as an employee for Internal Revenue Service
purposes, he or she is automatically treated as an employee for WDCA purposes.” Id.

Then, the district court applied the three-part test in the first sentence of 161(1)(n) and
concluded that the drivers under the lease-to-buy program were employees because: “none of the
drivers at issue maintains a separate trucking business; holds himself out to the public as a
trucking business; or qualifies as an employer under the WDCA.” Id.

Next, the district court addressed Max Trucking’s assertion that under the 20-factor
IRS test, to which the amendatory language in 161(n)(1) refers, the drivers are independent
contractors, and thus they were independent contractors for the purposes of worker’s
compensation. The district court disagreed, holding:

Even assuming the 20-part IRS test applies, it does not change the result in this
case. First, the reference to the 20-part test simply creates an additional basis on
which an individual may qualify as an employee for worker’s compensation
purposes. In other words, after the effective date of January 1, 2013, all
individuals who are W-2 employees for IRS purposes are automatically workers
compensation employees too. But that does not mean that anyone receiving a
1099 for tax purposes is not an employee for workers compensation purposes.
The statute does not say that, and there are good reasons that the State may define
“employee” for workers compensation purposes more broadly than the IRS does
for W-2 purposes. Second, even under the 20-factor test, the factors weigh in
favor of finding employee and not independent contractor status. The point of the
three-part test, as well as the 20-part test, is to expose the economic reality of the
working relationship and treat it accordingly. Here, the economic reality reflects
that the drivers are employees of Max Trucking, for reasons already summarized.

Id. at *4.

Appellant argues that the district court’s above holding shows that the court
inappropriately applied both tests—the Revenue Test and the three-part test—to the drivers.
Appellant contends that this was an error because, according to the amendatory language of
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 11

161(1)(n), after January 1, 2013, the district court was permitted to apply only the Revenue Test
to determine the employment status of the drivers.

This Court is called upon to interpret this amended statute in the first instance. The Sixth
Circuit has noted that, “[u]nder Michigan law, statutory interpretation requires an examination of
the plain language of the statute.” Performance Contracting Inc. v. DynaSteel Corp., 750 F.3d
608, 611 (6th Cir. 2014) (citing In re Certified Question, 468 Mich. 109, 659 N.W.2d 597
(2003), which held, “[a] fundamental principle of statutory construction is that a clear and
unambiguous statute leaves no room for judicial construction or interpretation”). Although the
district court did not engage in an explicit statutory interpretation of 161(1)(n), a plain reading of
161(1)(n) shows that the district court was correct to apply the three-part test to this case, and not
to rely on the 20-factor test.

First, the language of the statute shows that the amendatory language providing that “[o]n
and after January 1, 2013, services are employment if the services are performed by an
individual whom the Michigan administrative hearing system determines to be in an employer-
employee relationship using the 20-factor test,” did not replace the test provided in the first
sentence of subsection (n). Instead, the first sentence of subsection (n), which contains the three-
part-test, was re-enacted and published without change or limitation by the amendatory
legislative act. Thus, it is still good law.

As the Appellee notes, Article 4, Section 25, of the Michigan Constitution requires that
when a legislative act is altered or amended, the sections that are altered or amended must be “re-
enacted and published at length.” Const. 1963, art. 4, § 25. Further, under Mich. Comp. Laws
8.3u:

The provisions of any law or statute which is re-enacted, amended or revised, so
far as they are the same as those of prior laws, shall be construed as a continuation
of such laws and not as new enactments. If any provision of a law is repealed and
in substance re-enacted, a reference in any other law to the repealed provision
shall be deemed a reference to the re-enacted provision.

Mich. Comp. Laws § 8.3u. Although 161(n)(1) was amended in 2011, the first sentence
of 161(n)(1) contains the same definition of employee in the current version as it contained prior
to the 2011 amendment:
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 12

Every person performing service in the course of the trade, business, profession,
or occupation of an employer at the time of the injury, if the person in relation to
this service does not maintain a separate business, does not hold himself or herself
out to and render service to the public, and is not an employer subject to this act.

Accordingly, under Article 4, § 25 of the Michigan Constitution, and Mich. Comp. Laws 8.3u,
this Court construes the first sentence as a continuation of the law.

Second, the amendatory language to 161(n)(1) did not add any new language that limits
its application or effectiveness. As Appellee notes, the legislature could have amended the first
sentence to read that it only would apply until January 1, 2013, with the amendatory language to
be applied exclusively thereafter, but it did not do so.

Third, the face of the amendatory language limits use of the Revenue Test to
determinations of employment status made in administrative proceedings before the Michigan
Administrative Hearing System (“MAHS”). Since the determination of the employment status
of the drivers in this case did not come to this Court by way of the MAHS, but rather by way of
an insurance premium dispute, the language of the statute does not call upon us to apply the
Revenue Test, and certainly does not call upon it to apply the Revenue Test exclusively. This
truth is only bolstered by the amendment’s legislative history. See Mich. Senate Fiscal Agency’s
Bill Analysis, H.B. 5002, 12/19/2011 (discussing the use of the three-part test in defining
“employee” and the 20-factor test for MASH determinations of “employment” after January 1,
2013), and Mich. Dept. of Labor & Econ. Growth Bill Analysis, H.B. 5002, 12/14/2011 (stating
that the purpose of the amendatory language at issue is to “[a]llow the Michigan Administrative
Hearings System (MAHS) to determine whether an employee/employer relationship exists using
the IRS 20-factor test, and provides an amnesty period of one year to promote compliance”).

Thus, we find that the Revenue Test did not supplant the three-part test.

Appellant argues further that the district court’s application of the three-part test, in
addition to the Revenue Test, leads to the illogical result that the truckers may be “independent
contractors” under the Revenue Test, and for tax purposes, but employees for worker’s
compensation insurance purposes. This is because the twenty-factor test is more detailed and
exacting, and one can conceive of a situation in which a person is found to be an employee under
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 13

the broader three-part test, but an independent contractor under the 20-factor test. In its brief,
Appellant applies all twenty factors to the facts of this case, and argues that such an application
demonstrates that the drivers at issue are independent contractors.

First, contrary to Appellant’s assertion, nothing in the district court’s opinion indicates its
holding depended upon an application of the three-part test in addition to an application of the
Revenue Test. Instead, the district court held that the drivers were employees under the three-
part test, and then considered the 20-factor test simply on an argumentative basis, stating: “Even
assuming the 20-part IRS test applies, it does not change the result in this case.” 2014 WL
3756129, at *4. Couched in argument, therefore, the district court found that 161(1)(n)’s
“reference to the 20-part test simply creates an additional basis on which an individual may
qualify as an employee for worker’s compensation purposes.” Id. This statement indicates
nothing more than the district court’s opinion that the Revenue Test is an independent basis for
finding employee status.

Similarly, Appellant’s argument is without merit that the district court erred in finding
summarily that “even under the 20-factor test, the factors weigh in favor of finding employee and
not independent contractor status.” Id. First, as the district court reasoned, the purpose of the
20-factor test, like the three-part test, is to “expose the economic reality of the working
relationship,” which the Court had already found was one of employer-employee under the three-
part test. Id. Second, as stated supra, the district court neither was bound to apply the 20-factor
test, nor did it expressly apply the 20-factor test in anything but an argumentative fashion. Thus,
we need not review whether the district court erred in its summary application of the 20-factor
test.

The Appellant does raise a valid concern regarding which test under 161(1)(n) MAHS
will use in future administrative proceedings to determine employment status. Appellant argues
that it is conceivable that conflicts may arise between determinations of employment status
MAHS may reach under the reenacted and broader three-part test, and determinations under the
narrower, 20-factor test.

This issue, however, is not properly before this Court. As stated supra, the amendatory
language limits use of the Revenue Test to determinations of employment status made in
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 14

administrative proceedings before MAHS, and this case did not come to this Court by way of the
MAHS.

Nevertheless, this Court agrees with the district court’s rationale that while under the
amendatory language, an individual for whom an employer is required to withhold federal
income tax under the 20-factor test is considered automatically to perform service in
employment, the reverse is not true under the 161(1)(n). In other words, while under the
amendatory language issuance of a W-2 is prima facie evidence of employee status, issuance of a
1099 is not prima facie evidence of independent contractor status under 161(1)(n). Thus, under
the language of 161(1)(n), a finding of independent contractor status under the Revenue Test
does not necessarily bar a finding that those services are employee services under the surviving
three-part test in the first sentence of 161(1)(n). The amendatory language nowhere states that
the 20-factor test is the only test to be used to determine employment status. Instead, it states
merely that services will be considered employment if an employer-employee relationship is
found under the 20-factor test.

Thus, the district court applied the proper standard for determining employment status
under 161(1)(n). It did not err by relying on the three-part test in the first sentence 161(1)(n) for
the definition of “employee”, and not relying on the Revenue Test in the amendatory language of
161(1)(n).

B. Whether the district court properly determined the
drivers at issue are employees under the WDCA

1. Standard of Review

Whether a particular situation is an employment relationship is a question of law. Solis v.
Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 521-22 (6th Cir. 2011) (quoting Fegley v.
Higgins, 19 F.3d 1126, 1132 (6th Cir. 1994)). We review the district court’s factual findings
made after a bench trial for clear error, “but review de novo the district court’s application of the
legal standard to them.” Id. at 522. The parties do not dispute the district court’s factual
findings, but only its application of the law to the facts.
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 15

2. Analysis

The Michigan Supreme Court has explained that whether a person is an employee or an
independent contractor for the purposes of the WDCA is determined by applying a two-step test.
Elde, 2013 WL 2420970, at *4 (citing Reed v. Yackell, 473 Mich. 520, 530; 703 NW2d 1 (2005)
(Taylor, C.J., Young and Markman, JJ., concurring)). First, the Court must determine whether
the person satisfies 161(1)(l). Id. Second, the Court must determine whether the person satisfies
161(1)(n). Id. As the district court in this case noted, there is no argument that the truck drivers
do not satisfy 161(1)(l), as they were under contracts for hire.

The proper interpretation of the three-part test laid out in the first sentence of 161(1)(n)
has changed since the district court applied the test. Since 1992, Michigan Courts have
interpreted the three-part test to mean that all three criteria of 161(1)(n) must be satisfied in order
to obtain employee status under the WDCA. See Amerisure Ins. Co. v. Time Auto Transp. Inc.,
493 N.W.2d 482 (Mich. Ct. App. 1992). Recently, in Auto-Owners Ins. v. All Star Lawn
Specialists Plus, Inc., a special panel overturned Amerisure and held that “all three of the criteria
in Mich. Comp. Laws 418.161(1)(n) must be met before an individual is divested of employee
status.” 845 N.W.2d 744 (Mich. Ct. App. 2013). The district court in this case relied on the
special panel’s interpretation of the three-part test when determining the drivers’ employment
status.

Then, after the district court’s decision, the Michigan Supreme Court overruled the
special panel and concluded that Amerisure was properly decided, holding:

Each criterion of MCL 418.161(1)(n) must be satisfied for an individual to be
considered an employee; conversely, failure to satisfy any one of the three criteria
will exclude an individual from employee status.

Auto-Owners Ins. Co. v. All Star Lawn Specialists Plus, Inc., 857 N.W.2d 520, 523 (Mich. 2014).
Thus, in order to be deemed an employee under 116(1)(n), a person must show that he or she:
(1) does not maintain a separate business; (2) does not hold himself or herself out to render
services to the public; and (3) is not an employer subject to the WDCA.

The Michigan Supreme Court’s overruling of the special panel in Auto-Owners does not
affect the district court’s ruling in this case because the district court found that every criterion
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 16

was met: “[T]he Court finds that none of the drivers at issue maintains a separate trucking
business; holds himself out to the public as a trucking business; or qualifies as an employer under
the WDCA.” 2014 WL 3756129, at *3. We agree with the district court.

First, the district court found, and the parties do not dispute, that none of Michigan
drivers at issue has any employees. Second, the district court properly found that none of the
drivers maintains a separate trucking business, and, similarly, that none of the drivers holds
himself out to the public as a trucking business. While the district court did not distinguish
clearly which facts supported which criterion, the district court’s findings can be disaggregated
to meet each criterion.

The district court’s finding that none of the truckers holds himself out to the public as a
trucking business is supported by the finding that while it may be true, theoretically, that the
drivers are free to drive for other companies if they desire, it is not what happens in fact. Instead,
“the evidence reflects that only one driver has actually done so, and that driver ceased working
for Max Trucking at that point. All of the other drivers drive for Max Trucking alone, and the
drivers receive all of their dispatches from Max Trucking.” Id. at *4. Indeed, the record shows
that the drivers can operate only for Max Trucking on the roadways, using Max Trucking’s DOT
number exclusively.

In support of the finding that none of the drivers at issue maintains a separate trucking
business, the district court found that the drivers were financially dependent on Max Trucking
for all practical purposes:

The trucks at issue are all registered in Max Trucking’s name. Max Trucking
provides liability and physical damage insurance coverage and advances fuel and
repair payments to the drivers, eventually charging costs back to the drivers. The
drivers have the means necessary to perform the services for Max Trucking only
because Max Trucking provides these things up front, even if the costs are
ultimately charged back to the drivers.

Id. at *3. The district court also distinguished the lease-to-buy drivers’ complete dependence on
Max Trucking from the owner-operator drivers’ comparatively lower dependence on Max
Trucking:
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 17

Most importantly, Mr. Kovacevic, [Max Trucking’s] General Manager, testified
that the drivers at issue get their trucks only on the strength of Max Trucking’s
credit. Max Trucking’s expert witness, Mr. Westerhof, testified similarly that the
drivers lack a credit or asset base sufficient to obtain their trucks independently.
They need the balance sheet of Max Trucking to acquire a truck.

Id.

As the district court explained in its findings of fact, the drivers operating under the lease-
to-buy program “are effectively economically dependent on Max Trucking for their ability to
operate as truckers.” Id. at *2. This complete dependence indicates that the lease-to-buy drivers
cannot be considered to maintain separate businesses.

Elde v. Castles Bros. Inc. supports upholding the district court’s determination that the
drivers at issue are employees for the purposes of the WDCA. 2013 WL 2420970, at *1 (Mich.
Ct. App. June 4, 2013) appeal denied sub nom. Elde v. Castles Bros., Inc., 838 N.W.2d 879
(Mich. 2013). In Elde, the defendant insisted that the plaintiff was an independent contractor
because he was self-employed through his sole proprietorship (Bob Elde, Builder), obtained
commercial insurance, and claimed his income by filing 1099 income-tax forms. Id. at *4.
Although the defendant did not require the plaintiff to work a set number of hours, or guarantee
plaintiff a minimum number of hours, plaintiff usually worked a forty-hour workweek for the
defendant. Id. at *1. Thus, for 18 years, the plaintiff had received almost all of his personal
income from the defendant. Id. The evidence showed that the plaintiff filed 1099s only because
that was defendant’s demand. Id. at *4. The Elde Court found, therefore, that while evidence
such as filing a 1099 was relevant, it did not negate competent evidence that the plaintiff did not
maintain a separate business offering the same services to others that he offered on behalf of the
defendant. Id.

Further, the Elde Court found that the plaintiff did not hold himself out to render
construction services to the public: the plaintiff had no business cards; he did not advertise; and,
outside of performing an occasional miscellaneous job for friends or family, he only performed
work that the defendant offered to him. Id. at *5.

Like the Court in Elde, this Court finds that while the contract recites that the drivers are
independent contractors, and the drivers are required to file 1099s, such evidence does not negate
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 18

competent evidence that the drivers do not maintain separate businesses offering trucking
services to businesses other than Max Trucking. See also, e.g., State Auto Prop. & Cas. Ins. v.
A–3, Inc., No. 276535, 2008 WL 4367464, at *3 (Mich. Ct. App. Sept. 25, 2008) (even where a
contract states that a person is an independent contractor and not an employee, the language of
161(1)(n) “does not confine the examination of employee status strictly to the parties’
contractual language, if there is a contract.”). Further, like in Elde, although the drivers are not
required to accept a load or work a set number of hours, the reality is that they receive all of their
personal income from Max Trucking, and would not be able to provide trucking services to Max
Trucking but for access to the lease-to-buy program.

Moreover, as in Elde, the truckers at issue do not hold themselves out to render services
to the public: they do not and cannot provide services to anyone other than Max Trucking, and
they do not advertise their services. Cf. Moore v. Nolff’s Const., No. 313440, 2015 WL 493318,
at *5 (Mich. Ct. App. Feb. 6, 2015) (finding that if the worker provides the same services to
someone else that it does to the alleged employer, the worker cannot show that he does not
maintain a separate business).

Appellant does not challenge the district court’s application of the three-part test in the
first sentence of 161(1)(n). Instead, the Appellant argues more broadly that the district court
erred when it concluded that the economic reality of the relationship between Max Trucking and
the drivers in question is that of employer and employee. Appellant goes through each of the 20-
factors in the Revenue Test, and contends that an application of that test proves that the
economic reality is one of employer and independent contractor. Specifically, Appellant attacks
the district court’s reliance on Peno Trucking, Inc. v. C.I.R., 296 F. App’x 449 (6th Cir. 2008), a
tax court case that found the truckers at issue were employees, not independent contractors,
based on the economic reality of the employment relationship. Appellant argues that Peno is
distinguishable because in that case the drivers did not assume costs, bear risk of loss, or own
trucks. Appellant urges the Court to rely, instead, on Nichols v. All Points Transp. Corp. of
Michigan, which found that the truckers at issue were independent contractors under the
“economic realities” test employed under the Family Medical Leave Act (“FMLA”). 364 F.
Supp. 2d 621, 630 (E.D. Mich. 2005). Appellant contends that the drivers in Nichols had an
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 19

employment relationship with their trucking company that is similar to the employment
relationship the disputed drivers have with Max Trucking.

This Court need not address Appellant’s arguments related to Peno and Nichols. Peno
considered the standard for determining employment status for federal tax purposes, and Nichols
considered the standard for determining employment status for FMLA purposes. As explained in
Cent. States, Se. & Sw. Areas Pension Fund v. Int’l Comfort Prod. LLC, when a court is tasked
with determining whether a worker is an employee or independent contractor for the purposes of
a particular statute, the Court cannot rely on cases that determined employment status under
statutes different than the one at issue. No. 3:07-CV-00383, 2011 WL 3608553, at *9 (M.D.
Tenn. Aug. 16, 2011) (holding that reliance on cases addressing employer-employee
relationships under various areas of federal law, including ERISA, federal tax law, and Title VII
law, was improper where the question before the court was whether an employer-employee
relationship existed under the Multiemployer Pension Plan Amendments Act, 29 U.S.C. § 1381
et seq.). Similarly, in Nichols, the Court explained that “[t]he FLSA’s definition of employee is
broader than the common law definitions used by other statutory schemes, such as Title VII or
the ADEA.” 364 F. Supp. 2d at 630. As such, in its analysis, the Nichols Court did not rely on
cases applying the Title VII or ADEA test for determining employment status. Accordingly, it is
improper to rely on the rationale in either Peno or Nichols in this case for determining if the
drivers are employees or independent contractors under the WDCA, as those cases did not apply
the standard under the WDCA.

Reliance on the “economic reality” test used in Peno and Nichols is inappropriate for
another reason. In 1985, the Michigan Legislature amended the definition of employee in the
WDCA by adding the current three-part test to the first sentence of 161(1)(n). See Hoste v.
Shanty Creek Mgmt., Inc., 592 N.W.2d 360, 364-65 (Mich. 1999). Prior to that, the WDCA
defined “employee” only as a person under a contract for hire, and the Michigan courts applied
an eight-part economic realities test to determine employment status.1 Id. at 571. In interpreting

1
The factors of the “economic reality” test under the WDCA, prior to the 1985 Amendment, were:
First, what liability, if any, does the employer incur in the event of the termination of the
relationship at will?; Second, is the work being performed an integral part of the employer’s
business which contributes to the accomplishment of a common objective?; Third, is the position
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 20

the 1985 amendment, the Michigan Supreme Court held that the three-part-test superseded the
common law “economic realities” test previously employed. Id. at 572. It further held that
while the three-part test incorporated some of the eight “economic-reality” factors, it had not
incorporated all of the factors; thus, the old case law regarding the “economic realities test” only
could be applied to those factors that had been preserved in the new three-part test. Id.
Accordingly, any application of an economic realities test is inappropriate in this case.

It should be noted that the district court’s reference to Peno and the economic reality test
presents no hurdle to upholding the district court’s ruling. As delineated, supra, the district court
performed a full application of the three-part test, and came to a well-reasoned conclusion that
the drivers are employees. Peno provided merely non-dispositive support to the district court’s
holding.

Appellant also argues that in concluding that the drivers were employees, the district
court failed to acknowledge that: (1) the operators may decline to work; (2) they can incur a
financial loss; (3) they made a significant financial investment in the vehicle purchase; and
(3) they receive all tax deductions and depreciation of the vehicles on their personal tax returns.
While these considerations may be more relevant under the 20-factor test, they are less
persuasive under the three-part test. As noted in Elde, while certain factors indicating
independent contractor status may be relevant, the Court is permitted to rely on competent
evidence to the contrary that shows the drivers in question do not maintain separate businesses,
and do not hold themselves out to render services to the public.

Finally, the Appellant objects to the district court’s finding that “Mr. Kovacevic,
Plaintiff's General Manager, testified that Max Trucking has attempted to structure its
relationship with the drivers as an independent contractor relationship precisely to avoid having

or job of such a nature that the employee primarily depends upon the emolument for payment of
his living expense?; Fourth, does the employee furnish his own equipment and materials?; Fifth,
does the individual seeking employment hold himself out to the public as one ready and able to
perform tasks of a given nature?; Sixth, is the work or the undertaking in question customarily
performed by an individual as an independent contractor?; Seventh, control, although abandoned
as an exclusive criterion upon which the relationship can be determined, is a factor to be
considered along with payment of wages, maintenance of discipline and the right to engage or
discharge employees.; Eighth, weight should be given to those factors which will most favorably
effectuate the objectives of the statute. [Id. at 208–209, 201 N.W.2d 333.].
Hoste, 592 N.W.2d at 363.
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 21

to provide workers compensation coverage to the drivers.” 2014 WL 3756129, at *4. Appellant
argues that it did not develop the lease-to-buy program in 2008 to avoid the worker’s
compensation system, but, instead, developed the program in response to the 2008 economic
downturn. Further, Appellant clarifies that Max Trucking moved over to the owner-operator
structure in 2006, in response to a bad worker’s compensation experience with an employee-
driver. This objection is unfounded. The district court referred broadly to Max Trucking’s
attempt to structure its business in order to avoid worker’s compensation liability. Both
eliminating any employee-truckers in 2006, and also instituting a buy-to-lease program in 2008,
contributed to a business model that avoids worker’s compensation responsibilities.

Accordingly, this Court AFFIRMS the district court’s finding that the drivers are
employees under the applicable test.

C. Damages-premium calculation

1. Standard of Review

“In a non-jury action a trial court’s determination of damages is reviewable only for
abuse of discretion, subject to being set aside as a finding of fact under the ‘clearly erroneous’
standard of Rule 52(a) of the Federal Rules of Civil Procedure.” Smith v. Manausa, 535 F.2d
353, 354 (6th Cir. 1976). Clear error will be found only when the reviewing court is left with the
definite and firm conviction that a mistake has been committed. Anderson v. City of Bessemer
City, 470 U.S. 564, 573 (1985).

2. Analysis

Appellant challenges the district court’s adoption of Liberty Mutual’s calculation of the
outstanding worker’s compensation insurance premium owed to it for the disputed drivers.

At trial, Griffith calculated that the premium due for the drivers was $101,592.
He arrived at this number pursuant to the following standard in the Michigan Worker’s
Compensation Placement Facility Basic Manual for Worker’s Compensation and Employers’
Liability Insurance (“Facility’s Manual”):
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 22

Rule Nine-Special Condition or Operations Affecting Coverage and Premium
F. Subcontractors
3. Premium for Uninsured Subcontractors with Employees
Exceptions
(3) Where contractors are for vehicles with drivers, the payroll shall be 1/3 of the
total contract price. When the contract price does not include the cost of fuel,
maintenance or other services provided, the value of such goods and services shall
be added to the contract price before determining the 1/3 amount.

Thus, according to Liberty Mutual, $101,592 is equal to the construed wages or “workers
compensation premium basis” of one-third of the total compensation reported on the 1099 forms
for the drivers, adjusted by application of the workers compensation rate for trucking in
Michigan.

Mr. Westerhoff, Max Trucking’s Certified Public Accountant, testified that Griffith’s
standard for calculating the premium did not represent a fair assessment of the amount that the
driver would make “at the end of the day.” He opined that 10.2% of Form 1099 compensation
would be a more appropriate standard. Westerhoff testified he had never worked for an
insurance company offering worker’s compensation insurance, and had no training regarding
worker’s compensation policies. Finally, he testified that while he estimated actual wages
averaged 10.2% of the 1099 form, he could not verify that number, nor testify as to a precise rate
of return for any of the drivers at issue.

Accordingly, the district court found, by a preponderance of the evidence, that Liberty
Mutual’s calculations were correct:

First, the only evidence from anyone who actually works in the workers
compensation insurance business weighs in favor of Liberty Mutual. The
testimony is unrebutted that the one-third rule of thumb applies in translating
gross revenues on the 1099s to wage base for workers compensation purposes.
Second, Max Trucking’s arguments to the contrary rest on the testimony of a CPA
who is not a workers compensation expert and who has not even reviewed the
coverage manual. Finally, the risk of uncertainty fairly falls on Max Trucking. It
is in the best position to treat the truckers as employees, and to document
“wages,” as well as other business expenses. But it has not done so either
contemporaneously, or even for purposes of this case. Accordingly, the Court
credits Liberty Mutual’s evidence on damages and finds that Liberty is entitled to
$101,592 in damages for unpaid premiums due.
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 23

Max Trucking, 2014 WL 3756129, at *5.

Appellant contends, first, that the district court’s holding was in error because
Mr. Griffith relied on a manual provision that applied only to uninsured subcontractors with
employees, which most of the drivers at issue are not. Second, Appellant argues that the policy
manual upon which Liberty Mutual and the district court relied is not in the contract, and nothing
in the contract would place Max Trucking on notice to treat the drivers as employees, document
wages, or anticipate paying worker’s compensation premiums based on sums advanced for fuel,
insurance, repairs, and fees.

Appellant’s objections are not well taken. Mr. Griffith’s determination was based on his
application of the Facility’s Manual to the facts at hand. As a participating member of the
Facility, Liberty Mutual was bound by Michigan law to apply the Facility’s classification and
rating systems contained in the Manual:

Sec. 2318. (1) The classification and rating systems of the facility shall be
determined by the designated advisory organization, subject to the requirements
of this chapter and the approval of the commissioner.
(2) Every participating member designated to act on behalf of the facility shall be
authorized to use the classification and rating systems of the facility on business
placed through the facility and shall not use other rates for worker’s compensation
insurance placed through the facility.

Mich. Comp. Laws § 500.2318. Thus, Appellant’s argument that such standards were not
contained in the contract, and thus it was not on notice of its responsibilities, is unavailing.

Further, Griffith testified that based on his 35 years of experience, and prior experience
auditing truck companies, he used the correct standard from the Manual to calculate the
premium. Even assuming the standard upon which Griffith relied is not perfectly applicable to
the circumstances of the drivers at issues—as all but three are not subcontractors, but work
directly for Max Trucking—his reliance on the standard was not in error under the WDCA.

As Rule (9)(F)(3)(3) articulates, the premium for hired drivers depends on a calculation
of payroll wages, including fuel and other services, with one-third of the 1099 Form serving as
an estimate for payroll wages. Under the WDCA, the average payroll wages must be calculated
for the purposes of worker’s compensation payments because the payroll wages are used to
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 24

determine the proper premium to charge employers. In cases like this one, however, where the
“hourly earnings of the employee cannot be ascertained,” the wage of the employee shall be
“taken to be the usual wage for similar services if the services are rendered by paid employees.”
Mich. Comp. Laws § 418.371.

Since the hourly earnings and/or yearly wages of the drivers at issue cannot be
ascertained due to Max Trucking’s failure to keep accurate records, § 418.371 can be applied to
determine the drivers’ wages, and, thus, the correct premium. As Appellant concedes, the
standard Griffith used to calculate the premium undoubtedly applies to the three drivers under
the lease-to-buy program who were subcontracting an employee to drive for them. Further, the
parties cannot contest that there is no appreciable difference between the services the
subcontractor drivers provide under the lease-to-buy program, and the services the drivers who
lease directly from Max Trucking provide. Thus, under § 418.317, Griffith was permitted to rely
on the one-third standard (which includes fuel and maintenance costs), which undoubtedly
applies to the subcontracted drivers, in order to determine the wages of the drivers working
directly for Max Trucking. Thus, the district court properly adopted the standard that Griffith
used to determine the premium.

In addition, findings of fact, such as the determination of damages, are reviewed on
appeal for clear error. Fed. R. Civ. P. 52(a). Clear error will be found only when the reviewing
court is left with the definite and firm conviction that a mistake has been committed. Anderson
v. City of Bessemer City, 470 U.S. 564, 573 (1985). Even greater deference is required when
the findings of fact rest upon credibility determinations. Id. at 575. Where there are two
permissible views of the evidence, the factfinder’s choice between them is not clearly
erroneous. Id. at 574.

In this case, the district court determined it would not credit Max Trucking’s CPA’s
calculations over Liberty Mutual’s auditor’s calculations. In support, the trial court found that
Liberty Mutual’s witness was the only one who worked in the worker’s compensation insurance
business and relied on the Facility’s Manual, and that Max Trucking’s CPA’s calculations were
not based on reliable evidence. See, e.g., United States v. Garavaglia, 178 F.3d 1297 (6th Cir.
1999) (table opinion) (finding restitution in the amount calculated by the Government was
No. 14-2115 Max Trucking v. Liberty Mutual Ins. Page 25

correct because the Government provided a credible report regarding the loss to insurance
companies, and the defendant did nothing more than attack the Government’s report); Summit
Petroleum Corp. of Indiana v. Ingersoll-Rand Fin. Corp., 909 F.2d 862, 868 (6th Cir. 1990)
(finding the district court did not err in calculating a damages because “[g]iving appropriate
regard ‘to the opportunity of the trial court’ to assess ‘the credibility of the witnesses[,]’ see Fed.
R. Civ. P. 52(a), we cannot say that the district court’s established value of $275,000 is clearly
erroneous”).

For the above-stated reasons, the Court AFFIRMS the district court’s findings concerning
the premium owed to Liberty Mutual.

III. CONCLUSION

Appellant has failed to show that the district court erred in any of its determinations on
appeal. For the above-stated reasons, the Court AFFIRMS the decision of the district court.