IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-82
Filed: 20 November 2018
Buncombe County, No. 15 CVS 1665
KEVIN MCKENZIE, ADMINSTRATOR OF THE ESTATE OF YVONNE LEWIS,
Plaintiff,
v.
RICHARD CHARLTON, INDIVIDUALLY, RICHARD CHARLTON, DBA NY
HOMES II, APAC-ATLANTIC, INC., D/B/A HARRISON CONSTRUCTION and
REACH FOR INDEPENDENCE, INC., Defendants.
Appeal by Plaintiff from order entered 13 July 2017 by Judge Casey M. Viser
in Buncombe County Superior Court. Heard in the Court of Appeals 5 September
2018.
White & Stradley, PLLC, by J. David Stradley and Lakota R. Denton, P.A., for
the Plaintiff-Appellant.
Davis and Hamrick, L.L.P., by Ann C. Rowe, for Defendant-Appellee Reach for
Independence, Inc.
Ball Barden & Cury P.A., by Ervin L. Ball, Jr., for Defendant-Appellee Richard
Charlton, individually, and dba NY Homes II.
DILLON, Judge.
This matter stems from a traffic accident in which Yvonne Lewis was struck
and killed by an automobile being driven by Defendant Richard Charlton as Ms.
Lewis was walking across a public street.
MCKENZIE V. CHARLTON
Opinion of the Court
Plaintiff Kevin McKenzie, in his capacity as the administrator for Ms. Lewis’
estate, filed this action against Mr. Charlton and against Defendant Reach for
Independence, Inc. (“Defendant RFI”), whom Plaintiff alleges Mr. Charlton was
working for at the time of the accident.
This present appeal is brought by Plaintiff from an interlocutory order in which
the trial court granted partial summary judgment to Defendant RFI, concluding that
Mr. Charlton was acting as an independent contractor and not as an employee of
Defendant RFI at the time of the accident. After careful review of the record, we
conclude that there was a genuine issue of material fact as to whether Defendant RFI
is liable for Ms. Lewis’ death under the doctrine of respondeat superior. We, therefore,
reverse the order of the trial court and remand for further proceedings.
I. Background
Defendant RFI is a government-regulated provider of Medicaid-funded
services to disabled individuals. Defendant RFI contracts with paraprofessional
caregivers to provide these services. In late 2014, Defendant RFI entered into a
contract with Mr. Charlton to serve as a paraprofessional caregiver for disabled
patients.
In January 2015, Mr. Charlton’s contractual obligations with Defendant RFI
involved spending approximately forty (40) hours per week, providing one-on-one
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Opinion of the Court
supervision of a certain disabled individual, hereinafter referred to as Mr. Smith1. At
the time of the accident, Mr. Charlton was not providing caregiving services to or for
anyone else either on behalf of Defendant RFI or otherwise.
On 8 January 2015, while Mr. Smith was a passenger in Mr. Charlton’s car,
Mr. Charlton struck Ms. Lewis as she was crossing a public street. Ms. Lewis later
died as a result of the accident.
Plaintiff filed a wrongful death action against both Defendant RFI and Mr.
Charlton, alleging negligence in the death of Ms. Lewis. Defendant RFI moved for
summary judgment. After a hearing on the matter, the trial court granted the motion
with respect to Plaintiff’s wrongful death claim,2 holding that Mr. Charlton was an
independent contractor of Defendant RFI and, therefore, Defendant RFI was not
liable under respondeat superior.
Plaintiff appeals.
II. Appellate Jurisdiction
Plaintiff is appealing from an interlocutory order which does not contain a Rule
54(b) certification. Therefore, Plaintiff’s appeal is premature unless the order affects
a substantial right. See Travco Hotels v. Piedmont Natural Gas Co., 332 N.C. 288,
1 A pseudonym is used to protect the identity of the client and to comply with any regulations
that may apply to services provided by Defendant RFI.
2 Plaintiff also brought claims against Defendant RFI for negligent hiring of and negligent
entrustment to Mr. Charlton, but those claims were not included in the partial summary judgment
and are not before this Court.
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Opinion of the Court
291-92, 420 S.E.2d 426, 428 (1992). Following the reasoning of our Supreme Court
in Bernick v. Jurden, we conclude that the order, indeed, does affect a substantial
right: “[W]e hold that because of the possibility of inconsistent verdicts in separate
trials, the order allowing summary judgment for fewer than all the defendants in the
case before us affects a substantial right.” Bernick v. Jurden, 306 N.C. 435, 439, 293
S.E.2d 405, 409 (1982).
III. Analysis
Plaintiff challenges the trial court’s decision granting summary judgment in
favor of Defendant RFI, in which the trial court held that Defendant RFI was not
vicariously liable under respondeat superior. We review the trial court’s summary
judgment decision de novo, to determine whether, in the light most favorable to the
non-moving party, the full record shows a genuine issue as to any material fact.
Forbis v. Neal, 361 N.C. 519, 523-24, 649 S.E.2d 382, 385 (2007). Specifically, we
consider (1) whether the agency relationship between Mr. Charlton and Defendant
RFI was sufficiently akin to an employer-employee relationship such that respondeat
superior would apply and (2) if so, whether Mr. Charlton was acting within the scope
of that relationship at the time of the accident.
A. Nature of Agency Relationship
Under the doctrine of respondeat superior, a principal may be held vicariously
liable for the torts of his agent. Our Supreme Court has held as a general rule that
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Opinion of the Court
respondeat superior applies if the agent’s relationship with his principal is akin to an
employee rather than that of an independent contractor. See Cooper v. Asheville
Citizen-Times Pub. Co., 258 N.C. 578, 586-87, 129 S.E.2d 107, 113-14 (1963). Our
task, here, is not to determine whether Defendant RFI should be treated as Mr.
Charlton’s employer for payroll tax purposes or in determining the applicability of
the Workers Compensation Act. Rather, our task is to determine whether Defendant
RFI should be treated as Mr. Charlton’s employer for purposes of holding Defendant
RFI vicariously liable for the torts committed by Mr. Charlton.
Our Supreme Court instructs that whether an agent is akin to an employee or
is akin to an independent contractor “depends on the degree of control retained by the
principal over the details of the work as it is being performed [by the agent].” Vaughn
v. N.C. Dep’t of Human Res., 296 N.C. 683, 686, 252 S.E.2d 792, 795 (1979) (emphasis
added); see also Gammons v. N.C. Dep’t of Human Res., 344 N.C. 51, 56-7, 472 S.E.2d
722, 725-26 (1996). One acts as an independent contractor where he is not
accountable to his employer as to the manner in which he performs his work, but is
only accountable “as to the result of his work.” Cooper, 258 N.C. at 588, 129 S.E.2d
at 114 (emphasis added).
Our Supreme Court instructs that the “vital test” in classifying whether a
worker acts as an employee does not depend on whether his principal actually
controls his work but whether his principal “has retained the right of control or
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Opinion of the Court
superintendence over the contractor or employee as to details” of the performance of
his work. Hayes v. Bd. of Trs. Of Elon Coll., 224 N.C. 11, 15, 29 S.E.2d 137, 140 (1944)
(emphasis added). “[I]t is immaterial whether [the principal] actually exercises [his
right of control],” so long as he has retained the right to do so. Cooper, 258 N.C. at
587, 129 S.E. at 113; see also Gammons, 344 N.C. at 57, 472 S.E.2d at 726 (“The
controlling principal is that vicarious liability arises from the right of supervision and
control.” (emphasis added)).
And our Supreme Court instructs that an independent contractor may still be
deemed an employee, for purposes of respondent superior, as to some of the work
performed by him, if that principal exercises a sufficient degree of control as to that
portion of the work.3
In conclusion, our Supreme Court’s jurisprudence suggests that we are to
determine the extent that Defendant RFI had the right to control Mr. Charlton’s work
with respect to Mr. Charlton’s care of Mr. Smith.
3 See, e.g., State v. Wilson, 362 N.C. 162, 165, 655 S.E.2d 359, 361 (2008) (recognizing that “an
independent contractor can, in certain respects, be an [employee] depending upon the degree of control
exercised by the principal”); Holcomb v. Colonial Assoc., L.L.C., 358 N.C. 501, 509-10, 597 S.E.2d 710,
716 (2004) (recognizing that a landlord who hired an independent contractor to manage its residential
property may still be vicariously liable for dogs allowed by the contractor where the landlord had
authority to actively control the presence of pets); Gammons, 344 N.C. at 63, 472 S.E.2d at 729 (holding
that “regarding the provision of child protective services, there exists a sufficient agency relationship
between [the State] and [the County] such that the doctrine of respondeat superior is implicated, [and
therefore the State] may be liable [for negligent acts of the County] while acting within the scope of
their obligation [to provide child protective services]”).
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Opinion of the Court
Whether vicarious liability applies in a given agency relationship is “a mixed
question of fact and law.” Beach v. McLean, 219 N.C. 521, 525, 14 S.E.2d 515, 518
(1941). But where the facts are essentially established, then the issue is purely a
question of law. Id. As we have held:
Where the facts are undisputed or the evidence is
susceptible of only a single inference and a single
conclusion, it is a question of law for the court whether one
is an employee or an independent contractor, but it is only
where a single inference can reasonably be drawn from the
evidence that the question of whether one is an employee
or an independent contractor becomes one of law for the
court.
Little v. Poole, 11 N.C. App. 597, 600, 182 S.E.2d 206, 208 (1971).
We have reviewed the contract between Mr. Charlton and Defendant RFI (the
“Contract”) and the other evidence in the record. For the reasons stated below, we
conclude that Mr. Charlton was an “employee” of Defendant RFI in his care of Mr.
Smith for purposes of respondeat superior.4 In reviewing the evidence that was before
the trial court at summary judgment, we are guided by the cases cited above and by
the eight factors considered by our Supreme Court in Hayes v. Board of Trustees of
4 We note that the Contract does state that Mr. Charlton was not an employee of Defendant
RFI for purposes of benefits, payroll taxes, or workers compensation. But the names assigned by the
parties are not conclusive as to whether Defendant RFI had the right to control the manner in which
Mr. Charlton performed his caregiver duties, thereby exposing Defendant RFI to vicarious liability for
the negligent acts of Mr. Charlton in the performance of his caregiving duties on Defendant RFI’s
behalf.
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Opinion of the Court
Elon College in determining whether one acts as an employee or as an independent
contractor; namely, whether:
[t]he person employed
(a) is engaged in an independent business, calling, or
occupation;
(b) is to have the independent use of his special skill,
knowledge, or training in the execution of the work;
(c) is doing a specified piece of work at a fixed price or for a
lump sum or upon a quantitative basis;
(d) is not subject to discharge because he adopts one
method of doing the work rather than another;
(e) is not in the regular employ of the other contracting
party;
(f) is free to use such assistants as he may think proper;
(g) has full control over such assistants; and
(h) selects his own time.
Hayes, 224 N.C. at 16, 29 S.E.2d at 140.
We are further guided by our Court’s opinion in Rhoney v. Fele, in which we
analyzed whether a registered nurse was an employee of a nurse staffing agency at
the time the nurse was involved in a fatal car accident. Rhoney v. Fele, 134 N.C. App.
614, 518 S.E.2d 536 (1999). In Rhoney, the staffing agency recruited nurses to work
at medical facilities short-term. Rhoney, 134 N.C. App. at 615, 518 S.E.2d at 538. If
a facility needed a nurse for a particular shift, it would call the agency who would
provide a nurse from the agency’s pool. Id. On one occasion, the agency contacted
the defendant nurse who agreed to work a shift at a particular hospital. Id. While
driving to the hospital, the nurse was involved in an automobile accident which killed
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Opinion of the Court
an individual. Id. The deceased’s estate brought suit against both the nurse and the
agency. Id.
Relying on many of the Supreme Court’s opinions cited above, our Court held
that the nurse was an independent contractor. Id. at 618-19, 518 S.E.2d at 540. In
the analysis, our Court cited a number of factors which supported a finding that the
nurse was an independent contractor: (1) as a registered nurse, he was engaged in
an independent profession; (2) he was free to provide nursing services to others
outside his arrangement with the agency; (3) he exercised his duties at the assigned
hospital, free from supervision from the agency; (4) his work was sporadic, rather
than regular; (5) he was free to reject job assignments offered by the agency; and (6)
the agency did not provide him with valuable equipment. Id.
Our Court also cited factors which supported a finding that the nurse was an
employee: (1) he was paid an hourly rate, rather than a lump sum for a particular
assignment; (2) he was not free to select his assistants; (3) he was not able to choose
unilaterally when he would perform his assigned tasks; (4) the agency was paid
directly by the hospital for his services, who in turn would pay him; (5) the agency
could terminate its relationship with him at any time; and (6) the agency provided a
work packet and directions to the site for each assignment. Id.
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Opinion of the Court
Our Court weighed the factors, “bearing in mind the admonition of Gordon and
Hayes that the key factor is ‘control,’ ” and concluded that the nurse was an
independent contractor:
These factors demonstrate that while [the agency]
exercised control over extraneous aspects of [the nurse’s]
work, such as dates and times when work was offered and
collection of his salary, [the agency] exercised no control
over [the nurse’s] nursing, the function for which hospitals
sought him. To the contrary, [the nurse] was a free agent
who could and did maintain similar arrangements with
other suppliers of medical personnel . . . . Once [he]
accepted work proposed by [the agency], [the nurse] was
not under any control by [the agency] while working . . . .
Thus, [the agency’s] role was similar to that of a broker or
middleman.
Id.
The facts in the present case are similar to the facts of Rhoney, but they are
not “on all fours.” Bearing in mind that the key factor is “control,” for the reasons
stated below, we conclude that Defendant RFI exerted much more control over Mr.
Charlton than the agency exerted over the nurse in Rhoney. Specifically, the evidence
shows that while Mr. Charlton was experienced in providing caregiving services to
disabled clients, Defendant RFI was more than just a broker or middleman who
placed caregivers with such clients.
According to the Contract, Defendant RFI had the right to monitor and
supervise Mr. Charlton in his work and to exercise some control over the manner in
which Mr. Charlton provided his caregiving services. The Contract suggests that Mr.
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Opinion of the Court
Charlton was required to provide caregiving services to whichever clients Defendant
RFI decided to place with him and that Defendant RFI had the right to control and
plan the type of caregiving services which Mr. Charlton provided to Mr. Smith:
[Mr. Charlton shall] provide all services to each placed
client described in the contact [sic] in accordance with the
approved habilitation plan for each client, as such plan
may change from time to time. [Mr. Charlton shall] notify
[the qualified professional supervising him] when the
schedule of services changes for any reason. [Mr. Charlton
shall] participate in the review and changing of the plan as
needed to meet the needs of the client. [Mr. Charlton shall]
not provide services for payment that [Defendant RFI] is
not approved to provide.
Further, Mr. Charlton was required to participate in consultations with Defendant
RFI regarding his care of clients. Mr. Charlton was not allowed to use restraints on
a client who was acting unruly; he could only use “restrictive interventions” as
approved by Defendant RFI, and he was required to notify Defendant RFI if he
determined in his judgment that it was necessary to use emergency rights
restrictions. Defendant RFI even controlled the manner in which Mr. Charlton drove
his vehicle when transporting clients, limiting his speed to five miles per hour below
the speed limit. We note, though, that there was evidence of an independent
contractor relationship; for example, Mr. Charlton was free to hire others to help him
carry out his caregiving duties.
According to their Contract, Defendant RFI controlled Mr. Charlton’s ability
to accept clients on his own; that is, Mr. Charlton was generally required to work
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Opinion of the Court
with only Defendant RFI clients. Specifically, the Contract provided that Mr.
Charlton shall “not accept clients from another agency while housing clients from
[Defendant RFI].” The evidence shows that Mr. Charlton did house clients of
Defendant RFI and did not work with clients outside of those assigned to him by
Defendant RFI.
Also, unlike the nurse in Rhoney whose work with the agency “was sporadic
rather than regular,” Rhoney, 134 N.C. App. at 619, 518 S.E.2d at 540, the evidence
here shows that Mr. Charlton’s work with Mr. Smith was regular. He worked forty
(40) hours each week, a typical full work week, providing direct caregiving services
to Mr. Smith. It is true that Defendant RFI did not have absolute control over the
specific hours Mr. Charlton had to work each week. See Youngblood v. N. State Ford
Truck Sales, 321 N.C. 380, 385, 364 S.E.2d 433, 438 (1988) (recognizing that a
requirement that a worker perform his work during a set time is indicative of an
employer-employee relationship). But there was evidence that Mr. Charlton could
not unilaterally choose when to provide his forty (40) hours of service either, but that
he needed to do so to fit the needs of Mr. Smith, and that he generally worked with
Mr. Smith during regular day-time working hours.
According to their Contract, Mr. Charlton was paid hourly, rather than by the
job, a strong indication of an employer-employee relationship. See Id. at 384, 364
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Opinion of the Court
S.E.2d at 437-38 (stating that “payment by a unit of time, such as an hour, day, or
week, is strong evidence that [the worker] is an employee”).
Regarding the transportation services Mr. Charlton provided to Mr. Smith, we
note that Defendant RFI did not provide Mr. Charlton with a vehicle to transport
clients, a factor which suggests an independent contractor relationship. However,
there were other factors which suggest an employment relationship, including that
(1) Mr. Charlton was required to drive clients to certain events as requested by the
client and as otherwise required by the plan of services that Defendant RFI required
Mr. Charlton to provide; (2) Defendant RFI had the right to inspect Mr. Charlton’s
vehicle that he used to transport clients; and (3) Defendant RFI controlled the
manner in which Mr. Charlton operated his vehicle, for instance, requiring that he
not drive faster than five miles per hour below the speed limit.
Our Supreme Court has held that “[t]he right to fire is one of the most effective
means of control” and that “[a]n independent contractor is subject to discharge only
for cause and not because he adopts one method of work over another[,]” whereas
“[a]n employee, on the other hand, may be discharged without cause at any time.”
Youngblood, 321 N.C. at 385, 364 S.E.2d at 438. Here, Defendant RFI did not have
the absolute right to terminate the Contract without cause, but the Contract did
provide that Defendant RFI had the right to terminate the Contract “immediately
without notice” if it “reasonably determines that the life, health, safety or property of
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Opinion of the Court
the client is threatened or at risk.” Implicit in this provision is the right of Defendant
RFI to terminate the Contract if Mr. Charlton provided caregiving services in a
manner which violates the Contract but which otherwise complies with law.
Though not controlling, we are persuaded by guidance provided by the U.S.
Department of Labor, Wage and Hour Division. Specifically, on 13 July 2018, the
Department issued a bulletin to guide whether to treat “caregiver registries” as
employers of the caregiver.5 For instance, the Bulletin informs that where a registry
merely conducts more than just basic background checks, but rather conducts
additional subjective screening, an employer-employee relationship is indicated.
Here, the Contract suggests that Defendant RFI engages in subjective screening
beyond basic background checks in placing caregivers with clients based on their
respective “culture, age, gender, sexual orientation, spiritual beliefs, socioeconomic
status and language” expecting the caregiver to “hold[] the same values [of
inclusivity].”
The Bulletin provides that where the client controls the hiring/firing of the
caregiver, an independent contractor relationship is indicated. But where the
registry plays a more active role and can fire a caregiver for not meeting certain
5 Wage and Hour Division, Field Assistance Bulletin No. 2018-4: Determining whether nurse
or caregiver registries are employers of the caregiver, U.S. Dep’t of Labor (13 July 2018)
https://www.dol.gov/whd/FieldBulletins/fab2018_4.htm.
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Opinion of the Court
standards, an employer-employee relationship is indicated. Here, Defendant RFI
does have some control to terminate Mr. Charlton.
The Bulletin provides that a registry which exercises “control over the
caregiver’s work schedules and assignments may indicate that the registry is an
employer[.]” Here, Defendant RFI did have the right to exercise control over
assignments and the number of hours Mr. Charlton was to work.
The Bulletin states that for the caregiver to be considered an independent
contractor, the registry may not “instruct caregivers how to provide caregiving
services, monitor or supervise caregivers in clients’ homes, or evaluate caregivers’
performance.” And further, “[c]ontrol over the caregiver services indicates that the
registry is an employer of the caregiver.” Here, though, as outlined above, Defendant
RFI had control over how Mr. Charlton provided care.
The Bulletin states that a registry, in an independent contractor relationship,
“does not determine a caregiver’s rate of pay.” The Bulletin recognizes that the
registry is not deemed to set pay where Medicaid or another government program
determines the hourly rate. The evidence, here, suggests that Mr. Charlton’s pay was
based largely on the rate allowed by the government, and therefore, is indicative of
an independent contractor relationship. However, the Bulletin also recognizes that
where the registry makes money for each hour worked by the caregiver, rather than
simply from an upfront fee for making the placement, the registry acts like an
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Opinion of the Court
employer, as is the case here. Also, the Bulletin states that where the registry pays
the caregiver directly, the registry acts as an employer, as is the case here.
The Bulletin provides that a registry acts as an employer when it tracks and
verifies the number of hours worked by the caregiver, which is again the case here.
The Bulletin provides that a registry that provides equipment and supplies to
a caregiver acts as an employee. However, here, this factor cuts against an employer-
employee relationship.
Finally, the Bulletin states that “[c]alling a caregiver an ‘independent
contractor’ or issuing him or her an IRS 1099 form,” as Defendant RFI does here,
“does not preclude the caregiver from being an employee [under the Fair Labor
Standards Act.]”
In conclusion, there are factors which suggest an employer-employee
relationship, for purposes of respondeat superior, and there are factors which suggest
an independent contractor relationship. However, as stated above, Defendant RFI
acted as more than just a passive middleman who placed Mr. Charlton with clients:
Defendant RFI retained the right to prescribe the type of services and to regulate the
manner in which they were provided; and Defendant RFI retained the right to
supervise and monitor Mr. Charlton as he provided these services. Therefore, we
conclude that Defendant RFI could be held vicariously liable for the torts of Mr.
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Opinion of the Court
Charlton that he might have committed while providing services to clients of
Defendant RFI under their Contract.6
B. Course of the Agency Relationship
Our conclusion that Mr. Charlton was, as a matter of law, an employee of
Defendant RFI for the purposes of respondeat superior does not fully answer whether
respondeat superior applies in this particular case. Rather, whether, as a matter of
law, Mr. Charlton was acting in the scope of his employment with Defendant RFI at
the time of the accident is not an issue that either party has raised in this appeal. The
trial court never reached this issue, having concluded that Mr. Charlton was an
independent contractor. And neither party briefed this issue in this appeal.
Therefore, we decline to consider the issue in this appeal.
IV. Conclusion
We conclude that Defendant RFI was not entitled to summary judgment on the
issue of its vicarious liability for Mr. Charlton’s alleged negligence. Defendant RFI,
per the terms of the Contract, had the authority to exercise sufficient control over Mr.
Charlton in his performance of caregiving services to deem Mr. Charlton an employee
for purposes of respondeat superior. We cannot say, however, that Mr. Charlton was
entitled to summary judgment on the issue of vicarious liability: Whether Mr.
6 Defendant RFI argues that it would be inappropriate for partial summary judgment to be
entered for Plaintiff on the agency issue, as Plaintiff never moved for summary judgment. However,
Rule 56 allows for summary judgment to be entered against the moving party where appropriate. N.C.
R. Civ. P. 56.
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Opinion of the Court
Charlton was acting within the scope of his contract with Defendant RFI at the time
of the accident is not an issue that is before us. We, therefore, vacate the trial court’s
grant of summary judgment and remand for further proceedings consistent with this
opinion.
VACATED AND REMANDED.
Judges ELMORE and DAVIS concur.
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