Negligence--vicarious liability_newspaper carrier--independent contractor_summary
judgment
Summary judgment should not have been granted for defendant-newspapers on the issue
of vicarious liability in an action arising from a newspaper carrier's automobile accident. It
cannot be concluded, as a matter of law, that the carrier was an independent contractor: he was
not exercising an independent business or occupation, there were no skill or education
requirements, the variations in the time and manner of delivery which the carrier could choose
were considerably limited, and the carrier's contract could be terminated if he breached any of its
provisions, while few duties were placed on the newspaper.
Armstrong & Armstrong, P.A., by L. Lamar Armstrong, Jr., for
plaintiff-appellants.
Yates, McLamb & Weyher, L.L.P., by Erin D. McNeil, for
defendant-appellees The News & Observer Publishing Company,
The McClatchy Company, & McClatchy Newspapers, Inc. d/b/a The
Smithfield Herald.
THORNBURG, Judge.
Plaintiffs appeal the trial court's grant of summary judgment
for defendant-newspaper publishers and the denial of their motion
for summary judgment on the issue of vicarious liability.
Plaintiffs' personal injury claims arise out of an automobile
accident involving plaintiffs and defendant Jack Roberts. Roberts
worked as a newspaper carrier for the Smithfield Herald and was
delivering newspapers when the accident occurred. Plaintiffssought recovery from Roberts for negligence and from the Smithfield
Herald, its affiliate, and its parent company (collectively “the
Herald”) on the basis of respondeat superior. The Herald denied
liability for plaintiffs' accident based on its contention that
Roberts was an independent contractor rather than an employee.
Plaintiffs and the Herald filed cross motions for summary judgment
on the issue of vicarious liability. After holding that Roberts
was an independent contractor as a matter of law, the trial court
ruled that the Herald had no vicarious liability in this case. The
trial court granted summary judgment in favor of the Herald and
denied plaintiffs' motion for summary judgment.
In support of summary judgment, the parties relied on the
employment contract and transcripts from the depositions of Jack
Roberts and the publisher of the Smithfield Herald. The record
shows that when the accident occurred in 1999, Roberts had been
delivering newspapers for the Herald for about ten years. In the
employment contract, the Herald assigned Roberts a delivery route
and permitted him to purchase newspapers from the Herald at a
wholesale rate. However, the Herald reserved the right to
renegotiate this wholesale rate upon thirty days notice to the
carrier.
Roberts received as payment for his work the difference
between the wholesale rate at which he bought the newspapers and
the retail rate at which they were sold to customers. The Herald
agreed to bill customers who prepaid by mail, but any amount a
customer failed to pay would be deducted from Roberts's paycheck. The contract provided that Roberts could bill the other customers
in any manner he chose.
The Herald authorized Roberts to use his own judgment and
discretion as to whether and in what manner to do business with
customers. The contract only required that he “exert his best
efforts to increase the number of customers for The Smithfield
Herald . . . and to keep those customers satisfied.” Roberts could
determine the means and manner in which he delivered newspapers to
customers “without control or supervision” from the Herald. But
the contract also provided that Roberts was responsible for “the
prompt and satisfactory delivery” of the newspaper to customers on
his route and required Roberts to deliver the papers “in a dry and
readable condition . . . with delivery completed by 5:00 p.m.”
Pursuant to the contract, Roberts used his own vehicle to
complete his route and purchased his own liability insurance. He
was designated as an “independent contractor” and had authority to
hire assistants to help him, but those assistants were considered
his employees and he was responsible for compensating them. The
contract specifically assigned sole liability to Roberts for any
third party claims arising out of tortious acts committed by him or
his assistants.
The Herald did not withhold taxes from his paycheck or provide
him with employee benefits. Either party could terminate this
agreement for any reason with thirty days notice or could terminate
it instantly for a breach of contract by the other party. Under the doctrine of respondeat superior, an employer can be
held vicariously liable for a worker's negligence when an employer-
employee relationship exists. Gordon v. Garner, 127 N.C. App. 649,
658, 493 S.E.2d 58, 63 (1997), disc. review denied, 347 N.C. 670,
500 S.E.2d 86 (1998). Generally, an employer is not liable for the
negligent acts of an independent contractor. Id.
Whether a party is an independent contractor is a mixed
question of law and fact. Yelverton v. Lamm, 94 N.C. App. 536,
538, 380 S.E.2d 621, 623 (1989). Determining the terms of the
agreement between the parties is a question of fact. Id. Once the
factual disputes are resolved, deciding whether that agreement
establishes an independent contractor relationship is a matter of
law. Id. “[W]here the facts are undisputed or the evidence is
susceptible of only a single inference and a single conclusion, the
court must determine whether a party is an employee or an
independent contractor as a matter of law.” 41 Am. Jur. 2d
Independent Contractors § 79 (2000); see also Little v. Poole, 11
N.C. App. 597, 600, 182 S.E.2d 206, 208 (1971).
Pursuant to N.C.R. Civ. P. 56(c), summary judgment is
appropriate when “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 any party is entitled to a judgment as a
matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2003). The
party moving for summary judgment bears the burden of showing that
no material issue of fact exists and the trial court must construeall inferences of fact in the light most favorable to the non-
moving party. Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d
379, 381 (1975).
Essentially, the issue for this Court is whether the facts,
considered in the light most favorable to plaintiffs, support the
trial court's conclusion that Roberts was an independent
contractor. The Herald contends that the employment contract fully
reflects the conditions of Roberts's employment and establishes
that he was an independent contractor. Plaintiffs argue that the
surrounding circumstances and the parties' actions demonstrate the
actual relationship between the Herald and Roberts was that of
employer-employee. As we conclude that the evidence is susceptible
to more than one inference, we hold that summary judgment was not
appropriate for either party on the issue of whether Roberts was an
independent contractor. We reverse and remand.
Under North Carolina law, an independent contractor is defined
as one who exercises an independent employment and contracts to do
certain work according to his own judgment and method, without
being subject to his employer except as to the results of his work.
Youngblood v. North State Ford Truck Sales, 321 N.C. 380, 384, 364
S.E.2d 433, 437 (1988). Although the contract with the Herald
designates Roberts as an “independent contractor” and assigns to
him sole liability for any third party claims against him, these
types of contractual declarations are not determinative of the
relationship or the rights of the parties. Yelverton, 94 N.C. App.
at 540, 380 S.E.2d at 624. An employer cannot exonerate himselffrom his legally imposed liability to a third party for injury
resulting from the tortious acts of his employee simply by
contracting with the employee that he is to be free from the
employer's control. Id.
In Hayes v. Elon College, 224 N.C. 11, 29 S.E.2d 137 (1944),
our Supreme Court identified several factors to consider in
determining whether a person is an independent contractor. These
factors include whether the person:
(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.
Id. at 16, 29 S.E.2d at 140. However, none of these factors are
determinative, nor is the presence of all required to indicate an
independent contractor relationship. Id. The Hayes factors are
considered along with the other circumstances of the employment
relationship to determine whether the one employed possesses that
degree of independence necessary to require his classification as
an independent contractor rather than an employee. Id.
Applying the Hayes factors, our Supreme Court has found that
newspaper carriers typically do not exercise a sufficient degree of
control over their work to be considered independent contractors as
a matter of law. Cooper v. Publishing Co., 258 N.C. 578, 589, 129S.E.2d 107, 115 (1963). The Court stated that “[o]rdinarily, the
day by day sale and delivery of newspapers under a cancellable
agreement of indefinite duration may not be considered 'a specific
job under contract' within the meaning of that phrase when used in
defining an independent contractor.” Id. Considering several of
the factors raised in the Hayes and Cooper cases under the facts of
the present case, we cannot conclude that Roberts was an
independent contractor as a matter of law.
Roberts was not exercising “an independent business, calling,
or occupation” by delivering newspapers for the Herald. The prompt
delivery and circulation of newspapers is essential to the
newspaper's success and is part of the regular business of the
publisher. Id. at 587-88, 129 S.E.2d at 114. Newspaper carriers
“are just as much an integral part of the newspaper industry as are
the typesetters and pressmen or the editorial staff.” Id. at 588,
129 S.E.2d at 114 (citation omitted).
While independent contractors usually have a special skill or
knowledge, the duties performed by newspaper carriers are generally
“routine in nature, requiring diligence and responsibility rather
than discretion and skill.” Id. at 589, 129 S.E.2d at 115. The
parties agree that the Herald had no real skill or education
requirements for its carriers and that Roberts received little or
no training when he started working for the Herald.
Also, the potential variations in time and manner in which a
newspaper carrier could choose to deliver newspapers to customers
on his route are considerably limited. Id. Roberts had littlediscretion in how to complete his route since he was required to
deliver the papers “in a dry and readable condition promptly upon
receipt by him” and in a manner satisfactory to customers.
Although the contract states that he could choose whether and in
what manner to do business with any customer, if Roberts forgot or
chose not to deliver to a customer, the Herald could opt to deliver
the paper for him and penalize him with a fee of $3.00 per paper.
If Roberts breached any of the contract provisions, the Herald
has the option of terminating his contract. Our courts have
recognized that “the 'right to fire' is one of the most effective
methods of control.” Id. (quoting Lassiter v. Cline, 222 N.C. 271,
274, 22 S.E.2d 558, 560 (1942)). Under the terms of the contract,
Roberts was subject to discharge if he did not deliver the
newspapers in a “prompt and satisfactory” manner. Although Roberts
could hire assistants, his ability to hire employees has little
significance since the Herald retained the right to fire Roberts at
will for a broad range of reasons. It is worth noting that while
Roberts could terminate the contract for a breach by the Herald,
the contract contained very few provisions that placed any kind of
duty on the Herald.
However, while not dispositive, the contract in the case is
still evidence of the relationship between Roberts and the Herald.
In addition, defendants presented evidence that would permit a jury
to find that Roberts engaged in an independent business over which
the newspaper did not exercise the requisite degree of control
necessary to transform him into an employee. Thus, we hold thatthe entry of summary judgment should be reversed and the matter
remanded to the trial court for further proceedings consistent with
this opinion.
Reversed and remanded.
Judges HUDSON and GEER concur.
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