No. 12653
I N THE SUPREME C U T O T E STATE O M N A A
OR F H F OTN
1974
STATE O M N A A ex re1 BEN
F OTN, .
FERGUSON and FERGUSON TRUCKING,
Relators,
THE DISTRICT COURT O THE EIGHTEENTH
F
JUDICIAL DISTRICT O THE STATE O
F F
MONTANA, I N AND FOR THE COUNTY OF
GALLATIN AND THE HONORABLE W. W. LESSLEY,
JUDGE THEREOF,
Respondents.
ORIGINAL PROCEEDING:
Counsel o f Record :
For R e l a t o r s :
Anderson and Dasinger, Bozeman, Montana
Douglas Dasinger argued, Bozeman, Montana
Norman Robb argued, Missoula, Montana
For Respondents :
&own and G i l b e r t , Bozeman, Montana
Gene I . Brown argued, Bozeman, Montana
Submitted : January 18, 1974
Decided : - . --
5
Filed : -
0 -
Mr. Justice Wesley Castles delivered the Opinion of the Court,
This is an original proceeding seeking a writ of supervisory
control over the district court of Gallatin County, the Hon. W.W.
Lessley presiding. The petition alleges that Judge Lessley acted
contrary to the laws of Montana in denying relators' motion for
summary judgment .
Relators are Ben Ferguson and Ferguson Trucking. Their
petition alleges that an action commenced in respondent district
court by George Hoffman against Yellowstone Pine and relators
seeks damages for injuries claimed to have been caused by the
negligence of Yellowstone Pine Company and/or relators. This
action is one of the type referred to in Larson's Workman's
Compensation Law, V. I, 5 26-10 as an "upside-down" workmen's
compensation case, where the employee is attempting, after re-
ceiving the benefits, to avoid the restrictions of the Workmen's
Compensation Act and pursue a common law action against his
employer.
From the depositions and other documents on file in that
action, these facts appear: George Hoffman was employed by
Yellowstone Pine as a truck driver. He was paid on a per trip
basis and was not eligible for the fringe benefits provided to
other Yellowstone Pine employees. His work was supervised by
relator Ben Ferguson who exercised this supervision as one of his
duties as assistant to the president of Yellowstone Pine. In this
capacity, Ferguson had the power to hire and fire drivers and to
purchase repairs and supplies for the trucks. In addition to
supervision of the trucking operation, Ferguson had various other
duties which required him to be on call 24 hours a day. For these
services he was paid a monthly salary. In all of these duties,
Ferguson was subject to the direction and control of the president
of Yellowstone Pine. Failure to follow the president's directions
would have resulted in Ferguson's discharge and replacement.
Shortly after Hoffman was employed, Yellowstone Pine was
informed by union representatives that the trucking operation
would either have to be moved from the Yellowstone Pine mill or
the truck drivers would have to be included in the union bar-
gaining unit. Because of cost factors Yellowstone Pine wished
to avoid inclusion of the truck drivers in the union bargaining
unit. In an effort to create the appearance that the trucking
operation was separate from the Yellowstone Pine mill operation,
the trucks were moved to a shop rented by Yellowstone Pine at a
point away from its mill. Certain accounting changes were also
made.
Essentially these changes involved the establishing of
a break-even haulage fee with the understanding this was to be
adjusted up or down as required. This fee was credited to Ben
Ferguson. Yellowstone Pine then deducted various items which were
paid directly by it for the trucking operation. These items
included the cost of the trucks, workmen's compensation premiums, and
other expenses incurred for the trucking operation. The balance
was then given to Ferguson for deposit in an account which he
had opened in his own name at the direction of the president of
Yellowstone Pine. From this account checks were drawn by Ferguson
to pay the drivers' wages, witholding and social security taxes,
and miscellaneous expense of the trucking operation. The haulage
fee was adjusted to maintain this account at the break-even point.
After this arrangement was established and went into
effect on November 1, 1971, Ferguson continued all of his other
duties with Yellowstone Pine and supervised the trucking operation
under the direction of the president of Yellowstone Pine. Had
he failed to do so he would have been replaced. His compensation
remained the same; he did not profit from the trucking operation.
On December 6, 1971, Hoffman was injured in the course of
his employment as a driver. Following his injury, he filed a
claim for workmen's compensation benefits under the Workmen's
Compensation Act and received benefits, including a substantial
compromise settlement. In the claim for benefits and the settle-
ment Yellowstone Pine is named as off man's employer, Following
settlement of the workmen's compensation claim, Hoffman brought
this action, alleging that relator Ferguson was his employer.
Both Yellowstone Pine and Ferguson moved for summary judgment.
The motion was granted as to Yellowstone Pine and denied as to
Ferguson.
We concede that there are factual disputes as to whether
or not Hoffman was aware of the various changes made by Yellow-
stone Pine and regarding the question of negligence but, because
of the view we take of relator's first issue, we need not consider
those matters here.
The determinative issue is whether or not offm man's action
is barred by the Workmen's Compensation Act. We hold that it is.
Essentially offm man's position is that his employment was
transferred from a first employer, Yellowstone Pine, to a second
employer, Ferguson, without his knowledge or consent and that a
second employer cannot in such a situation claim immunity under the
workmen's Compensation Act from a common law action for negligence.
We do not consider the validity of this theory, since it is clear
from the undisputed facts that there was no transfer of employment,
The test to determine whether or not an employer-employee
relationship exists within the meaning of sections 92-410 and 92-
411, R.C.M. 1947, is the so called control test. Under that test
an individual is in the service of another when that other has the
right to control the details of the individual's work. Nelson v.
Stukey, 89 Mont, 277, 300 P. 287; Grief v. Industrial Acc. Fund,
108 Mont. 519, 93 P,2d 961. While this test has m s t often been
used to determine whether or not an individual was an independent
contractor or an employee, it may also be used to determine who the
employer is, in a given situation. Biggart v. Texas Eastern Trans-
mission Corp,, (Miss. 1970), 235 S.2d 443. Under this test an
employee will have been transferred from one employer to another
when the right to control the details of his work has passed
from one to another.
Applying the test to the facts of the instant case, it is
clear that the accounting changes undertaken by Yellowstone Pine
did not result in a transfer of the right to control the details
of off man's work. off man's work continued to be supervised by
Ferguson acting as an employee of Yellowstone Pine. This super-
vision was done as directed by the president of Yellowstone Pine
and had Ferguson deviated from those directions, he would have been
replaced. Ultimate control of all the details of the work per-
formed by Hoffman was in Yellowstone Pine. The fact that this
control was exercised through Yellowstone Pine's employee,
Ferguson, does not make him offm man's employer, even when con-
sidered together with the change in the name on offm man's paycheck.
That Ferguson was an employee of Yellowstone Pine is un-
disputed. Since Hoffman was in fact also an employee of Yellowstone
Pine, they were coemployees. Based on the view that the Montana
Workmen's Compensation Act is founded on the principles of enter-
prise liability and enterprise immunity, it has become well settled
that where the Act applies, a coemployee is immune from suit.
Madison v. Pierce, 156 Mont. 209, 478 P.2d 860; Baird v. Remoir,Sr.,
156 Mont. 348, 480 P.2d 186.
The order of the district court denying summary judgment
as to relator is vacated. The District court is directed to grant
summary judgment to relator Ben Ferguson.
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. ./ L . & .L
Justice
We Concur:/8
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