Opinion
CIVIL ACTION NO. 02-0916, SECTION "N" (5).
January 9, 2003
ORDER AND REASONS
Before the Court is the motion for partial summary judgment filed by Defendant Certain Underwriters at Lloyd's, London ("Lloyd's") on June 3, 2003 (Rec. Doc. No. 66), and set for hearing on June 25, 2003. Trial by the Court is set to commence on July 21, 2003. For the reasons explained herein, Lloyd's motion is DENIED.
Background
On March 15, 2000, a yacht owned by Plaintiff's, Royal Insurance Company of America's, insured partially sank while at the dock of Lloyd's insured, Defendant Schubert Marine Sales and Service, Inc. ("Schubert"). Defendant Alphonse Roberts is the security guard that was on duty at Schubert the night before and early in the morning on the day that the vessel partially sank. Roberts heard an alarm sound on the vessel around 1:00 a.m. Unbeknownst to him, the alarm was the vessel's bilge alarm and indicated that the vessel was taking on water. Because roberts did not know what the alarm meant, he simply confirmed that there had been no attempted break-in to the vessel and then continued his regular rounds. He has stated that there was no water on the vessel and that it was not leaning to one side when he first checked it. When he checked the vessel at around 6:00 a.m., however, he saw that the vessel was leaning toward one side and taking on water. He then called the Coast Guard and Schubert's yard manager to report the problem. This litigation ultimately ensued.Plaintiff and Intervenors, W. Investments, Inc., W. Investments, L.L.C., and Craig Walker, initially did not name Roberts as a defendant. They added him, however, when they determined that Schubert would be arguing that Roberts was an independent contractor for whom it had no vicarious liability. On June 3, 2003, Lloyd's filed its motion for partial summary judgment, asserting that it owes no coverage to Roberts because he is an independent contractor rather than an employee. The motion is opposed by Plaintiff, Intervenors, and co-defendant Roberts.
Schubert previously obtained security services from a company called Bayou Security. At that time, Roberts worked for Bayou Security and was one of the security guards who would be assigned to work at Schubert. Sometime prior to the March 14-15, 2000 incident, Roberts decided to leave the employ of Bayou Security and to work full-time as Schubert's security guard. There is no dispute that Roberts uses a d/b/a name — Okay Security — in providing these services and that Roberts' checks from Schubert are made payable to Okay Security and to him. Further, Roberts finds other persons to do his shifts at Schubert's when he desires to take some time off. It also appears that Schubert pays Roberts for the services of the substitute guards and he in turn pays them. It is undisputed that Schubert pays no taxes on Roberts' behalf and that neither Roberts nor Okay Security had its own liability insurance.
Law and Analysis
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is properly granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See Fed.R.Civ.P. 56(c). "An issue is material if its resolution could affect the outcome of the action." Roberts v. Cardinal Services, Inc., 266 F.3d 368, 373 (5th Cir. 2001), cert. denied, 122 S.Ct. 1357 (2002). A factual dispute precludes a grant of summary judgment if the evidence would permit a reasonable trier of fact to find for the nonmoving party. Smith v. Amedisys, 298 F.3d 434, 440 (5th Cir. 2002).
On the issue presently before the Court, the Restatement (Second) of Agency § 220 provides, in pertinent part:
(1) A servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control.
(2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the job;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is part of the regular business of the employer;
(i) whether or not the parties believe they are creating the relation of master and servant; and
(j) whether the principal is or is not in business.
The parties disagree on the substantive law governing this motion and Roberts' related motion for summary judgment. Roberts and Schubert contend that Louisiana law governs the determination of Roberts' status as an employee or independent contractor. Plaintiff/Intervenors contend that general maritime law applies and consideration of the Restatement (Second) of Agency § 220 is appropriate. Although Lloyd's originally seemed to rely on Louisiana law, it stated in its June 23, 2003 reply memorandum, and at oral argument, that it agrees with Plaintiff/Intervenors that general maritime law (and the Restatement) apply. The Court does not resolve this issue because, assuming that the Restatement test does apply, it finds that Lloyd's has not demonstrated entitlement to summary judgment.
Although it does make passing reference to other factors, Lloyd's motion turns on its assertion that "[c]ontrol over the details of the job is the key factor . . ." and that "the term `independent contractor' connotes a freedom of action and choice with respect to the undertaking in question." Lloyd's asserts that Roberts possessed the requisite freedom of action, contending that Roberts never received instructions from Schubert about how to do his job and that Schubert did not control the details of how he did his job. Lloyd's further highlights that Schubert gave Roberts the authority to employ others on Roberts' days off and that Schubert's yard manager asked Roberts to fire a derelict stand-in, rather than firing the person himself. Lloyd's also contends that neither of the two exceptions (for purposes of vicarious liability) to the independent contractor doctrine recognized by Louisiana law — ultrahazardous activities and where the principal maintains "operational control" over the contractor's activities — is applicable here.
Lloyd's Memorandum in Support of Motion for Summary Judgment at 3.
The parties opposing Lloyd's motion maintain that Roberts had no contract with Schubert. They also argue that Roberts' work was not of a independent nature; rather, it was under the complete control and discretion of Schubert. These parties also emphasize that Roberts was not paid a price for a specific project. Instead, he was paid by the hour, was required to submit timesheets, and received a weekly paycheck. Finally, they argue that Roberts was hired, and still is employed at Schubert, for an indefinite period, not for a set time or duration.
Based on the disputed and undisputed evidence presented, the Court finds that a reasonable trier of fact could find that Roberts was an employee of Schubert. Regarding the question of Schubert's control over Roberts, it is undisputed that Schubert had placed "keys" at different locations around its shipyard and that Roberts was required to "turn" all of the keys each hour to ensure that he patrolled particular areas of the shipyard at regular intervals throughout his shift. Additionally, Roberts introduced a part of a document that appears to have been prepared by Bayou Security as Exhibit F to Roberts' memorandum in support of his motion for summary judgment. Exhibit F provides instructions to security guards on duty at Schubert regarding how often they are to patrol the dock area, where they are supposed to walk while during their patrols (the key turn locations are listed), how they should inspect the boats, and what to do if it appears a boat may be taking on water. It also explains in detail the procedures for dealing with visitors coming to Schubert's shipyard after regular business hours. Roberts' affidavit states that he was required to follow the instructions in Exhibit F during the time that he worked for Bayou Security and in March 2000 when he worked directly for Schubert.
See December 2, 2002 Transcript of Deposition of Frank Heuer at 48, 58-61; June 3, 2003 Transcript of Deposition of Edson Davis at 87-89.
Exhibit F to Roberts' Memorandum in Support of Motion for Summary Judgment.
See June 9, 2003 Affidavit of Alphonse Roberts, Jr., ¶¶ 9-10.
Consistent with Roberts' affidavit, Roberts and/or Plaintiff have submitted evidence that, prior to the accident, Schubert's yard manager had compiled written instructions prepared by Shubert and Bayou Security, and kept them in the security guard's shack at Schubert. In addition, Schubert's yard manager testified that, prior to the accident, Roberts was supposed to report if any alarms on boats sounded and call if there were any problems. Based on this evidence, a reasonable trier of fact could find that Schubert's had, and in fact exercised, control over the details of how Roberts did his job.
See Heuer Deposition at 36-37.
Id. at 36, 44. Roberts, however, disagrees that he was given any instructions particularly regarding boat alarms prior to the accident. See November 7, 2002 Deposition of Alphonse Roberts, Jr. at 9.
Other evidence also could support a determination of employee status. Roberts was paid an hourly rate once a week, rather than upon completion of a particular project. Although Schubert required outside contractors to provide proof of liability insurance, it is not disputed that Roberts did not have his own liability insurance. Nor is there evidence that Schubert ever asked him to provide proof of insurance in accordance with its policy for outside contractors. In addition, Roberts' services, like many employees, appears to be for an indefinite duration and terminable at will.
See November 2, 2002 Deposition of Laurence "Becky" Chantrey at 73-75.
Id.
It also is undisputed that Schubert did not have a security guard during the day. Although this likely was in part because of a reduced chance of criminal activity or trespassing during working hours, a reasonable trier of fact could conclude that the presence of other employees, who indirectly provided such services as part of their employment, may have been a contributing factor. Thus, providing security for the vessels kept at Schubert could be viewed, to some extent, to be part of Schubert's regular business. Finally, though Roberts may have been responsible for providing and paying his own substitute when he went on vacation, a reasonable person could conclude that Schubert retained final approval authority over the substitute. Indeed, when the Schubert's yard manager was not satisfied with one of the substitutes, he told Roberts that he would have to fire that person. Roberts did.
Id. at 76.
Id. at 76.
See Heuer Deposition at 52-53.
Id.
The Court agrees that it is somewhat unusual for an employee to operate under a "d/b/a name," to receive paychecks made payable to him and this business, to be responsible for finding and paying his own substitutes when he takes time off, and to pay all of his own income taxes. While this information may suggest that Schubert sought an arrangement that might offer it financial and tax benefits when it retained Roberts' services, it does not justify a grant of summary judgment in favor of Lloyd's on the issue of Roberts' status, in light of the other evidence presented.
Conclusion
For the foregoing reasons, IT IS ORDERED that the motion for summary judgment filed by Certain Underwriters at Lloyd's, London, subscribing to Policy No. ST-9910293, is DENIED.