Sliter v. Cobb

Holbrook, J.

. This is an appeal by plaintiffs from the grant of a motion for summary judgment in favor of defendant-appellee, The Benton Harbor Neys Palladium.

In June, 1968, defendant Marion Cobb began delivering “The Benton Harbor News Palladium”, a newspaper published by appellee. Defendant Cobb was designated as a “Motor Route Carrier” in the written lease agreement entered into by Cobb and appellee newspaper. On July 11, 1968, defendant Cobb invited two of his friends, defendant Ronald Lee Sims to drive and William Efauch to accompany him while he delivered that day’s newspapers. This day had been chosen by Cobb to bill his customers for the month of August, 1968. It was necessary for Cobb to fill out and then insert a billing card in each newspaper. Because he filled out the cards while delivering the newspapers, it was necessary for some*475one else to drive Ms motor veMcle. His wife usually accompanied Mm on billing days; however, on this particular day his wife had gone shopping and had not returned in time to drive for him.

After delivering the newspapers to all his regular customers, Cobb proceeded to deliver some “sample” newspapers in an attempt to gain new customers. Approximately 3/4 of a mile beyond where the last house to which the last sample was delivered and which was outside of the route area of Mr. Cobb, defendant Sims failed to stop at a stop sign and a collision occurred between Cobb’s automobile and the automobile in which the plaintiffs were riding.

On March 27, 1969, the plaintiffs filed a complaint in the Circuit Court for the County of Berrien alleging that they had sustained serious personal injuries as the result of the negligent operation of the motor vehicle owned by Cobb and operated by defendant Sims. Plaintiffs also alleged that defendant Cobb was an “employee” of appellee newspaper and was acting within the scope of his employment at the time of the accident; and therefore, appellee newspaper, as employer of Cobb, was also liable to plaintiffs for their damages.

On May 18, 1970, appellee newspaper filed a motion for summary judgment asserting that defendant Cobb was not an employee, but rather was an independent contractor doing work for the Benton Harbor News Palladium; and therefore, the appellee newspaper could not be held liable to plaintiffs for any negligence of defendant Marion Cobb. On May 27, 1970, appellee newspaper filed an amended motion for summary judgment.

On July 13, 1970, the motion was heard by the Hon. Chester J. Byrns, Berrien County circuit *476judge. The trial court in deciding the motion considered: (a) the pleadings; (b) the written interrogatories propounded by the plaintiffs to the said defendants and answered by Charles H. Bowie, circulation manager of the Palladium Publishing Company; (c) the two depositions of defendant Marion Cobb; (d) the Motor Route Lease agreement between defendant Marion Cobb and appellee Palladium Publishing Company; (e) the affidavit of Charles H. Bowie in support of appellee Benton Harbor News Palladium’s motion for summary judgment ; and (f) the parties’ briefs and oral arguments.

The learned trial judge decided that Cobb was as a matter of law an independent contractor and granted appellee Bentor Harbor News Palladium’s motion for summary judgment as provided by GfCR 1963,117.

Plaintiffs raise two issues on appeal which we consider in order.

I.

Did the evidence presented in connection with appellee newspaper’s motion for summary judgment, when viewed most favorably to plaintiffs, create a question of fact as to whether appellee newspaper maintained sufficient control over its news carrier Marion Cobb, to warrant a jury finding that Marion Cobb was, under the traditional test of employment, an employee of The Benton Harbor News Palladium?

The basis for relationship between the parties herein is the “Motor Route Lease” which is as follows:

“For and in consideration of the following covenants on the part of Marion Cobb, hereinafter re*477ferred to as the Lessee, The Palladium Publishing Company, a Michigan Corporation publishing The News-Palladium, at Benton Harbor, Michigan, hereinafter referred to as the Lessor, leases to Lessee a list of News-Palladium subscribers and the right to solicit additional subscribers living in an area described as follows:
“Covert, South Haven #9402.
“1. Lessee covenants and agrees as follows:
“(a) That he will purchase his newspapers from Lessor for $5.83 per hundred and sell and deliver said newspapers daily, except Sunday, to the subscribers on the above route at the established retail rate per subscriber, to wit: .55 per week; 2.40 per month; 7.20 quarterly; 14.40 semi-annually; 28.80 per year, and pay promptly each week to Lessor the sum of 5.83 per hundred on a settlement day to be determined by Lessor; and further, that he will make full and faithful accounting for advance collections from suctomers [sic] by Lessee.
“(b) That he will maintain an accurate and up-to-date subscription list of all customers, together with a road map of said customers; that he will disclose said list to no person except the Lessor which reserves the right of inspection of said list at all times; and upon termination of this lease, he will yield up said list as the exclusive property of Lessor to Lessor only.
“(c) That he will do (his, her) utmost to promote and expand the subscription list on the route described above; and that he will deliver no other publications on said route except as may be authorized in writing by the Lessor.
“(d) That he shall receive weekly from Lessor the sum of .07 per mile travelled in servicing said route as a mileage allowance, the Lessor reserving the right at all times to verify the mileage allowances claimed by Lessee; any unpaid mileage allowances may be held by Lessor in mitigation of any damage 6n its part as more fully set forth in Paragraph 3.
*478“(e) He shall, at his own expense, furnish to Lessor a fidelity bond in the penal sum of $1,000.00 with such sureties as Lessor may direct; in lieu, thereof, and at the discretion of Lessor, he shall deposit with Lessor the sum of 100.00 payable as follows: 92.00 down and 5.00 per week for — weeks, or until the total deposit has been paid; and that said bond or deposit shall be for (his, her) full and faithful performance of this lease. It is further agreed that lessor reserves the right to increase both the principal sum of this bond and the weekly accrual amount paid by lessee to correspond with the number of customers servised [sic] on said route as may be determined by periodic audit.
“2. Lessor may cancel this agreement at any time and without notice for good faith reason or reasons, including nut [sic] not limited to his physical or mental incapacity, failure to perform this agreement in all of its provisions, or intoxication. He may cancel this agreement by first giving Lessor 30-days notice of intention so to do.
“3. Any unpaid mileage allowance and/or the cash deposit described in subparagraph 1 (e) shall be available to Lessor, in whole or in part, in mitigation of any damage sustained by it through his breach of this agreement.
“In testimony whereof, the parties set their hands this 1st day of July, 1968.
“Lessee [signed] Marion W. L. Cobb
“Lessor Palladium Publishing Company,
“Benton Harbor, Michigan
“By [signed] C. R. Bowie
“Circulation Manager
“Motor Route Deposit
“To: The Palladium Publishing Company
“Per your direction of even date, I hereby deposit 92.00 with you and agree to deposit further the sum of 5.00 per week until the sum specified in subparagraph 1 (e) is reached. Dated 1 July 1968
“Lessee [signed] Marion W. L. Cobb”

*479It was necessary for the trial court in considering and determining the motion for summary judgment to decide whether as a matter of law, defendant Cobb, a newspaper routeman, was an independent contractor or were there sufficient facts present to submit to the jury the question of whether Cobb was an employee of the newspaper publishing company? Although the burden was upon the plaintiffs to prove Cobb was an employee of appellee Benton Harbor News Palladium and that he was, at the time of the accident, acting in the course of his employment, all disputed facts were required to be resolved in plaintiffs’ favor. Durant v. Stahlin (1965), 375 Mich 628.

The generally-accepted definitions of an independent contractor are stated in 41 Am Jur 2d, Independent Contractors, § 1, pp 737, 738, 739 as follows:

“There are many definitions of the term ‘independent contractor.’ One of the most frequently stated is to the effect that an independent contractor is one who, in exercising an independent employment, contracts to do certain work according to his own methods, without being subject to the control of his employer, except as to the product or result of his work. An independent contractor has also been defined as one who carries on an independent employment in pursuance of a contract by which he has entire control of the work and the manner of its performance; as one who contracts to do a specific piece of work, furnishing his own assistants and executing the work in accordance with either entirely his own ideas or a plan previously given to him by the person for whom the work is done, without being subject to the orders of the latter with respect to the details of the work; * * * . Accordingly, very broadly speaking, where an employer may prescribe what shall be done, but not how it shall be done or *480who shall do it, the person employed is an independent contractor. The fact that the work is to be done under the direction, and to the satisfaction of, a person representing the employer does not render the person contracting to do the work a servant.
“While the aforementioned definitions, with only slight variations, may be found in judicial opinions in most jurisdictions, it does not appear that a concise definition of the term ‘independent contractor’ can be laid down which will be sufficiently specific, and yet comprehensive enough, to apply to all situations that may arise.”

It is stated in 41 Am Jur 2d, Independent Contractors, § 6, pp 746, 747, as follows:

“As indicated above, the most important test in determining whether a person employed to do certain work is an independent contractor or a mere servant or employee is the control over the work which is reserved by the employer. Whether one is an independent contractor depends upon the extent to which he is in fact independent in performing his work. Broadly stated, if the contractor is under the control of the employer, he is a servant; if he is not under such control, he is an independent contractor.”

It is further stated in 41 Am Jur 2d, Independent Contractors, § 8, pp 751, 752, 753, as follows:

“As a practical proposition, every contract for work to be done reserves to the employer a certain degree of control, at least to enable him to see that the contract is performed according to specifications. The employer may exercise a limited control over the work without rendering the contractor a mere servant or employee, as a relation of master and servant or employer and employee is not infer-able from a reservation of powers which do not deprive the contractor of his right to do the work according to his own initiative, so long as he does it *481in accordance with the contract. The control of the work reserved in the . employer which effects a master-servant relationship is control of the means and manner of performance of the work, as well as of the result; an independent contractor relationship exists where the person doing the work is subject to the will of the employer only as to the result, but not as to the means or manner of accomplishment. Thus, a person employed to perform certain work is not necessarily a mere servant because the contract provides that the work shall be subject to the approval or satisfaction of the employer. Such a provision is not an assumption by the employer of the right to control the person employed as to the details or method of doing the work, but is only a provision that the employer may see that the contract is carried out according to the plans. A requirement that the work be performed according to standards and specifications imposed by the owner is not sufficient to establish the degree of control necessary to make a presumably independent contractor the agent of the owner, but the retention of the right not only to insure conformity with specifications, but also the retention or exercise of the right to direct the manner in or means by which the work shall be performed, will destroy the independent status of the contractor.”

In the very similar case of Gall v. Detroit Journal Co. (1916), 191 Mich 405, it is stated on pp 408, 409, 410:

“The contract between the Detroit Journal Company and Rebtoy constituted a very plain and simple arrangement for an employment of an equally plain and simple character. Omitting the provisions relating to default or failure in performance, it amounted to just this: Rebtoy was to deliver the papers to such persons, at such places, and on such time as the company should from day to day desig*482nate. Such, delivery was the result to he obtained. And Rebtoy was to effect such delivery and obtain such result by any means and by any conveyance and in any way he saw fit. He could make the deliveries in person, or through others employed by him. It is shown by the evidence that those making deliveries for the company did occasionally employ others to do the work. He could use a horse, an automobile, or carry the papers on foot, provided he got them to the rig’ht persons, at the right places, and upon time. So far as the terms of the contract are concerned Rebtoy was certainly an independent contractor and not a servant. One whom the employer does not control, and has no right to control, as to the method, or means, by which he produces the result contracted for is an independent contractor. * * *
“Rebtoy did have a contract for a specific piece of work; that is, for the delivery of the papers. And it was none the less specific because the places to which the deliveries were to be made, and the persons to whom the papers were to be delivered, might change from day to day. The right, on the part of the company, to designate the persons and places was but a right to designate the result to be obtained, and did not give the company any control over the method for obtaining that result.”

This Court stated in the case of Kaniewski v. Warner (1968), 12 Mich App 355, 358, as follows:

“At the present time the tort liability test for an independent contractor relationship is the right to control. Gall v. Detroit Journal Co. (1916), 191 Mich 405; Holloway v. Nassar (1936), 276 Mich 212. The facts now before us show that Warner could not exercise any supervision over Robson’s method of operation. Warner did handle the financial aspects of Robson’s accounts, but this limited involvement in the business does not amount to a right to control.

*483See Sawtells v. Ekenberg Co. (1919), 206 Mich 246. The trial court was correct in holding that Robson was an independent contractor.

“Plaintiff’s second contention on appeal is that because Robson hauled nothing but Warner’s oil from December, 1963, until the date of the accident, Warner had ‘exclusive use’ of the truck and was therefore ‘renting’ it within the meaning of CLS 1961, §257.37 (Stat Ann 1960 Rev §9.1837). We will not foster such a strained statutory interpretation. Robson’s title and unfettered control of his truck clearly demonstrate that Robson was the sole owner of the vehicle.”

The trial court in rejecting the plaintiffs’ claimed aspects of the facts that would require the court to deny the motion for summary judgment stated in his ruling on the motion in part as follows:

“1. That Cobb could sell and deliver only in a certain mapped-out area and that when he gave up this particular territory he had to return the map to the Palladium. This, however, was the franchise Cobb sought and contracted to service and it is the one he secured. This is not determinative of his status as an employee or an independent contractor and goes not to control of the means or method but to the contract that was made between the parties and the franchise that was granted. Further, the agreement with Cobb did not prohibit him handling other newspapers as claimed by the plaintiffs in opposition to this motion for summary judgment, but provided only that he first get authority from the Palladium to do it. As Cobb and the circulation manager of the Palladium acknowledged in the deposition and the answers filed in this clause, Cobb could deliver other newspapers as long as he kept his Palladium business up. Actually Cobb himself in his deposition said he could carry other noon and afternoon papers' and actually was transporting the *484South Haven Tribune. I believe that is in the file here.
Off the record.
(Discussion off the record.)
“The Court: Now, strike 'actually’ and anything after that.
“He said at page 32 of his deposition that he could carry the South Haven Tribune but did not carry it because they paid less than the News Palladium but that another routeman for the Palladium did carry the South Haven Tribune.
“2. That he had to buy papers at a certain price and sell at a certain price. Actually realizing his compensation was the difference between the two prices for which he contracted, this is, if anything, most indicative of an independent contractor status. In Gall v. Detroit Journal Company, supra, the carrier held to be an independent contractor had no discretion or voice in what he charged his customers.
“3. That he had to keep an up-to-date subscription list which was to be confidential between him and the Palladium and that the Palladium would inspect it every six or eight weeks. The list was to be returned when he gave up his route. What plaintiffs miss is that defendant by his own contract only leased the subscription list and the right to solicit new subscriptions within his territory. The lists belonged to the Palladium at all times. This fact does not dispute an independent contractor status, but actually supports it.
“4. That Cobb was encouraged to get new subscribers and was only to carry the Palladium. The latter point has been covered in an earlier mention in this opinion. Earning money by getting new subscribers was why Mr. Cobb sought the route and the same cause was why the Palladium gave the route, and financial profit is the usual genesis for independent contractor. This is obvious and Cobb’s own statement in his deposition taken by the plaintiff that getting more customers benefited Cobb be*485cause more customers meant more money for Mm. In mentioning this matter of carrying only the Palladium, I’d like to note also here that an independent contractor can, without becoming an employee or losing his status as an independent contractor, agree to carry or to sell only one product.
“5. That occasionally three or four times during his employement a Palladium employee would ride with him on his route to help him if he had trouble, the words that Cobb used; that a rubber band supplied by the newspaper and paid for by Cobb had to be placed around the newspapers; that the papers had to be put in a plastic tube, which tubes Cobb was required to place for new customers and remove on cancelled subscriptions. Surely all of this taken as true for this motion goes only to the interest of the Palladium in the results of the defendant’s work. It is inspection or such supervision as may be necessary to secure the ultimate result of the Cobb-Palladium contract, recognizing that the purpose of the contract was to keep the Palladium subscriptions up and its customers satisfied and Cobb and the Palladium making their respective profits. The Cobb deposition does not suggest in this court’s opinion that the few times a Palladium employee rode with him that it was for control, but the court is left with the impression in reading the Cobb deposition at best it was to help him if he needed assistance. Cobb in his deposition said he had to buy the rubber bands and the Palladium did prefer the use of bands, but that he could also fold the papers as well. The tubes were the property of the Palladium and neither Cobb nor the customers paid for the tubes.
“6. That Cobb had to do his accounting and billing on a form submitted by the Palladium. Again this is not a control over the working of a person by another that would create in law an employment relationship, but rather it is the assistance by a party using an independent contractor to insure *486that the financial results for both are realized. It should be noted here that the bills were in the name of Cobb who himself received the payments from the customers. In this connection see Kaniewski v. Warner, supra.
“7. That Cobb while he was permitted to cancel a customer for nonpayment could not cancel for other reasons without the Palladium’s permission. Certainly a newspaper interested in the results, to-wit, its sales, has a right, without losing the independent contractor status of a routeman, to know why the routeman proposes to cancel a customer in an area which the newspaper itself built up.
“8. That two weeks before he quit, the Palladium required Cobb to train a replacement. How this would change Mr. Cobb from an independent contractor to an employee, I must admit, defies my reasoning.
“9. That Cobb couldn’t sell his route to whom he wished. That is not unusual realizing that the route was the property of the Palladium and was only leased to Cobb.
“10. That the newspaper could cancel the route at any time for good faith or reason, as more specifically read earlier into the opinion, while Cobb had to give the notice of cancellation. This does not create a control over the means or methods of work of Cobb, but goes to the termination of an independent contractor relationship. It should be noted in Gall v. Detroit Journal Company, supra, the newspaper there, where the routeman was held to be an independent contractor, wasn’t even required to use any reason or any basis before cancelling.
“11. That Cobb was to keep his vehicle in good mechanical condition. Actually in this file the only reference to that was Cobb in his deposition mentioned that this was stated in an advertisement seeking carriers, to which advertisement he responded. In the deposition of Cobb taken by the plaintiff, *487Cobb said that during his route he was never told by the Palladium that he had to have his vehicle in good mechanical condition. Even if there was such a showing or application of such a requirement, this would not, in this court’s opinion, change an independent contractor’s relationship into that of an employee.
“Taken individually or collectively, all of the claims of plaintiffs do not deny or challenge sufficient to raise any jury question that Cobb was an independent contractor, and this court so finds that he was at the time of this particular event as a matter of law.”

In plaintiffs’ brief on appeal it is also asserted that a control as to methods and means of carrying out the agreement was exercised by the appellee newspaper over Cobb in that it required that Cobb deliver the newspaper by a specified time each day. On at least two occasions after complaints by customers were received, appellee newspaper brought to Cobb’s attention that the papers were delivered late. In Gall v. Detroit Journal Co., supra, there was a provision in the contract requiring delivery of the newspapers according to a schedule and a penalty was also exacted for failure to deliver on time. Such a provision was held., by the Court to be consistent with construing the contract as creating an independent contractor relationship.

Two depositions of Mr. Cobb were taken and considered by the court in determining the motion for summary judgment. We deem certain portions of these depositions suffiicently important to repeat them here:

“Q. Who paid the social security and withholding on the money that you made ?
“A. I did.
*488“Q. So that you were required to keep track of social security and withholding tax yourself?
“A. Yes.
“Q. They told you you have to do this yourself?
“A. No, they didn’t tell me, but I knew it.
“Q. How did you order the papers that you would need?
“A. Well, normally when I would pick up a new customer I would just call in and tell them to add one and drop one sample. I had 15 samples. They would add one paper and drop one sample.
“Q. The 15 samples were provided to you as a matter of course in promotional work?
“A. Yes.
“Q. This took place from the beginning and carried through all the time ?
“A. Yes.
“Q. Were you permitted to leave the newspaper other than at a News Palladium tube?
“A. If the tube was missing I could put it in the mailbox. Occasionally I would throw it in their yard.
# * #
“Q. Did you ever get new customers that had been obtained for you by the News Palladium through its own circulation office ? What I mean is, did you ever get notification that there would be an additional customer on your route?
“A. Yes.
“Q. That you had not gotten yourself?
“A. Yes.
“Q. Now, were you required to service that customer whether you wanted to or not, as long as the customer paid?
“A. No. It was strictly up to me. If I felt I had more than enough customers I could handle, I could refuse to leave papers at this customer.
*JZ. jr, W ¶
“Q. Well, I’ll ask you who provided the automobile?
*489“A. I did.
“Q. How about the gas?
“A. I did.
“Q. The oil and repairs?
“A. I did.
“Q. You did all those things?
“A. Yes.
“Q. You solicited customers?
“A. Yes.
“Q. Who picked the day that you collected?
“A. Me.
“Q. You selected the day that you’d —.
“A. Yes.
“Q. —collect from your customers?
“A. Yes.
“Q. I believe in the deposition that you testified that your wife sometimes rode the route with you, is that correct?
“A. Yes.
“Q. Where did you pick up those papers?
“A. Well, I originally started picking them up.at Holly’s Restaurant in South Haven, and then later on I had it changed to the Mobil Station in Covert. That was close to home.
“Q. In our answers to your interrogatories we said we believed you picked them up at Holly’s Motel.
“A. Yes, its a restaurant and motel, together, combined.
“Q. You subsequently had that changed?
“A. Yes.
“Q. You had it changed?
“A. Yes.”

We are constrained under the facts in this case to rule that the trial court properly determined that the plaintiffs failed to raise any issue as to a material fact pertaining to the liability of the appellee publishing company. Durant v. Stahlin, supra.

*490II.

Should the test for determining the tort liability of an employer to an injured third party be based upon the theory of economic reality heretofore adopted by the Michigan Supreme Court as the appropriate test for determining employment relationship in workmen’s compensation cases?

This issue was not presented to or ruled upon by the trial court.

The plaintiffs urge us to extend the economic reality test adopted by our Supreme Court in the workmen’s compensation case of Tata v. Muskovitz (1959), 354 Mich 695, to tort liability cases.

This we decline to do in view of the fact that we would have to depart from the established law in tort liability cases as delineated in our discussion of the first issue herein. Our Supreme Court no doubt has had an opportunity to extend the test of economic reality rule to tort cases during the interim years since the Tata case was decided in 1959. In the absence of such a declaration by our Supreme Court we will await their word on the matter.

Affirmed. Costs to defendants-appellees.

R. B. Burns, P. J., concurred.