Secci v. United Independent Taxi Drivers 2/15/17, 2DCA2/5
Motorcyclist was hit by a cab and sued the cab driver and the cab company (United) for personal injury. United operates under a franchise agreement with the city where the accident occurred. Various government regulations and rules apply to United and United enforces those rules on its drivers. Whether a person is an employee, independent contractor or agent turns largely on the amount of control exercised by the company. The jury found that the driver was not an employee of United but was its agent. Liability was imposed on United on that basis. The trial court granted United’s motion for JNOV, holding that control exercised over the driver by virtue of government regulations shouldn’t count against the cab company for purposes of deciding agency. Held: Reversed.
The jury instruction (CACI No. 3705) on agency provides: “Whether a person performing work for another is an agent or an independent contractor depends primarily upon whether the one for whom the work is done has the legal right to control the activities of the alleged agent. … It is not essential that the right of control be exercised or that there be actual supervision of the work of the agent. The existence of the right of control and supervision establishes the existence of an agency relationship.” This is a fact question for the jury. A trial court can reverse the jury’s verdict on a motion for JNOV under limited circumstances. “A motion for a judgment notwithstanding the verdict may properly be granted only when, disregarding conflicting evidence and indulging in every legitimate inference which may be drawn from plaintiff’s evidence, the result is a determination that there is no evidence sufficiently substantial to support the verdict.”
United argued that control exercised over drivers by virtue of government regulation shouldn’t count in the agency-control analysis, an argument that the trial court accepted. At least two federal cases support United’s position; but there are no California cases on point.
The appellate court rejected the holding of the federal cases. Unlike federal law, under California agency law, independent contractorship is not necessarily mutually exclusive with a finding of agency. Simply put, an agent may also be an independent contractor. The court therefore rejected federal authorities relied on by United, and found that government regulation could be measured in the agency-control analysis.
The court found support for it conclusion in the “regulated hirer” exception to non-liability in the independent contractor area. While companies are not generally for the conduct of their independent contractors, one exception (among a growing number) concerns the “regulated hirer.” See Millsap v. Federal Express Corp., supra, 227 Cal.App.3d 425, 433–435 (Millsap). In Millsap, the court of appeal discussed the regulated hirer exception to the general rule of non-liability, pointing out that the hirer of an independent contractor may be held liable when “an individual or corporation undertakes to carry on an activity involving possible danger to the public under a license or franchise granted by public authority subject to certain obligations or liabilities imposed by the public authority.” So, when regulations exist for public safety, a company subject to those regulation can’t necessarily escape responsibility and liability to the public by simply passing the buck to its independent contractors.
Finally, the court rejected United’s argument that the regulations in question in this case were not for public safety but for quality of life. The court seemed to suggest that salient point was that the regulations occurred under the government’s police power. This last point is an important one because its portents that the rule announced by this court could be applied rather liberally.