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Cruz v. Lopez

Supreme Court of Nebraska

November 9, 2018

Edgar Cruz, as father and next friend of Hazel N. Cruz, a minor child, appellant,
Carlos J. Lopez et al., appellees.

         1. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, giving that party the benefit of all reasonable inferences deducible from the evidence.

         2. Statutes: Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.

         3. Negligence: Proof. In order to recover in a negligence action, a plaintiff must show a legal duty owed by the defendant to the plaintiff, a breach of such duty, causation, and damages.

         4. Negligence. The question whether a legal duty exists for actionable negligence is a question of law dependent on the facts in a particular situation.

         5. Summary Judgment. The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; only disputes over facts that under the governing law might affect the outcome of the suit will properly preclude the entry of summary judgment.

         6. Employer and Employee: Negligence: Liability. Under the doctrine of respondeat superior, an employer is held vicariously liable to third persons for the employee's negligence in the course of the employer's business.

         7. Negligence: Liability: Contractors and Subcontractors. One who employs an independent contractor is generally not liable for physical [301 Neb. 532] harm caused to another by the acts or omissions of the contractor or its servants.

         8. Employer and Employee: Independent Contractor: Master and Servant. Ordinarily, a party's status as an employee or an independent contractor is a question of fact. However, where the facts are not in dispute and where the inference is clear that there is, or is not, a master and servant relationship, the matter is a question of law.

         9. Negligence: Liability: Contractors and Subcontractors. An employer of an independent contractor can be liable for physical harm caused to another if (1) the employer retains control over the contractor's work, (2) the employer is in possession and control of premises where the injury occurred, (3) a statute or rule imposes a specific duty on the employer, or (4) the contractor's work involves special risks or dangers.

         10. Negligence: Liability: Contractors and Subcontractors: Words and Phrases. A nondelegable duty means that an employer of an independent contractor, by assigning work consequent to a duty, is not relieved from liability arising from the delegated duties negligently performed.

         11. Contractors and Subcontractors: Employer and Employee: Liability. To fall within the control exception to the general rule of nonliability, the general contractor's involvement in overseeing the work must be substantial. Furthermore, that control must directly relate to the work that caused the injury.

         12. ___: ___: ___. To impose liability on a property owner or general contractor for injury to an independent contractor's employee based upon the owner's retained control over the work, the owner or general contractor must have (1) supervised the work that caused the injury, (2) actual or constructive knowledge of the danger that ultimately caused the injury, and (3) the opportunity to prevent the injury.

         13. Contractors and Subcontractors: Independent Contractor. In examining the right of control in an employment relationship with that of an independent contractor, it is important to distinguish control over the means and methods of the assignment from control over the end product of the work to be performed. Control over the work sufficient to impose liability on a general contractor or owner must manifest in an ability to dictate the way the work is performed, and not merely include powers such as a general right to start and stop work, inspect progress, or make suggestions that need not be followed.

         14. Contracts: Contractors and Subcontractors. In examining whether an owner or a general contractor exercises control over the work, both the language of any applicable contract and the actual practice of the parties should be examined.

         [301 Neb. 533] 15. Contracts: Liability. As a rule, in a contract, general language requiring compliance with government regulations does not establish vicarious liability.

         16. Negligence: Words and Phrases. A special risk is one that is different from the common risks to which persons in general are commonly subjected by the ordinary forms of negligence which are usual in the community.

         17. Negligence: Independent Contractor: Contractors and Subcontractors: Motor Vehicles: Presumptions. The risks attendant to the operation of a vehicle are precisely the risks that the employer of an independent contractor is justified in presuming that the contractor will act to avoid.

         18. Employer and Employee: Contractors and Subcontractors: Motor Carriers. Under the plain language of "employee" and "employer," a registered motor carrier that is also an employer of the drivers of its commercial motor vehicles cannot at the same time be the statutory employee of another motor carrier acting as a general contractor for a particular job.

          Appeal from the District Court for Lancaster County: Robert R. Otte, Judge. Affirmed.

          Kent A. Schroeder, of Ross, Schroeder & George, L.L.C., for appellant.

          Robert S. Keith and Alexis M. Wright, of Engles, Ketcham, Olson & Keith, P.C., for appellee Werner Construction, Inc.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

          FREUDENBERG, J.

         I. NATURE OF CASE

         The employee of a registered motor carrier caused an accident while returning the motor carrier's truck after delivering the last load of the day under a contract between the motor carrier and a general contractor, also a registered motor carrier, to haul away construction debris. The injured party's representative sued the driver, the motor carrier who employed the driver, and the general contractor. The court granted summary [301 Neb. 534] judgment for the general contractor. At issue is whether, viewing the evidence in a light most favorable to the plaintiff, our statutory scheme regulating intrastate motor carriers imputes an employer-employee relationship between the general contractor and the subcontracting motor carrier's employee for purposes of vicarious liability under respondeat superior. Also at issue is whether the general contractor could be held liable under one of the recognized common-law exceptions to a general contractor's nonliability for the acts or omissions of an independent contractor.


         On June 7, 2012, Hazel N. Cruz, a minor child, was injured in an automobile accident caused by Lyle J. Carman. Carman was an employee of Lopez Trucking and, at the time of the accident, was driving a dump truck owned by Carlos J. Lopez, doing business as Lopez Trucking. Testing conducted following the accident revealed that Carman was operating his vehicle under the influence of the controlled substances amphetamine and methamphetamine.

         Edgar Cruz, as father and next friend of Hazel, sued Carman for negligence, seeking recovery of medical expenses. Cruz joined Lopez, as the sole owner of Lopez Trucking, on the theory of imputed liability as Carman's employer, alleging that "[a]t all times relevant hereto, Carman was driving the . . . dump truck on June 7, 2012, in the course of his employment and with the permission of Lopez."

         Cruz also joined Werner Construction, Inc. (Werner), the general contractor for a project that Lopez Trucking had been contracted to do hauling work for. On the day of the accident, Carman had been hauling debris away from the construction site pursuant to Lopez Trucking's oral agreement with Werner, but he had delivered his last load for the day and was returning the truck to where Lopez directed him to park it for the night. Cruz sued Werner on the theories that Werner was in complete and exclusive control over the vehicle Carman was driving or [301 Neb. 535] that Carman was Werner's '"statutory employee'" pursuant to Neb. Rev. Stat. § 75-363 (Cum. Supp. 2012). Cruz alleged that Werner was negligent in failing to follow safety rules to determine Carman's qualifications and whether he was drug free, in compliance with Werner's drug-free workforce policy and federal regulations, as well as in failing to ensure that Lopez Trucking had Carman submit to a preemployment drug test. Cruz did not allege that the accident occurred on premises over which Werner had control.

         Werner denied liability for the accident and moved for summary judgment. The evidence presented at the summary judgment hearing was largely undisputed. When the accident occurred, Carman was driving a dump truck categorized as a commercial motor vehicle owned by Lopez, doing business as Lopez Trucking. Lopez Trucking possessed and was operating under a U.S. Department of Transportation (DOT) motor carrier identification number. The Federal Motor Carrier Safety Administration found Lopez Trucking to be in violation of 49 C.F.R. § 382.305 (2011) of the Federal Motor Carrier Safety Regulations, which requires employers to implement a random controlled substances and alcohol testing program for their employees. Lopez Trucking was fined for the violation.

         As alleged in Cruz' complaint and admitted by Werner, Carman was an employee of Lopez Trucking. He was paid an hourly wage by Lopez Trucking, which withheld taxes and provided Carman with workers' compensation insurance.

         Lopez Trucking had been hired by Werner to haul debris from a construction site located on Interstate 80, for what was referred to as the "1-80 Air Park West Junction US-77 Project" (Air Park project). Lopez, Carman, and another driver who worked for Lopez Trucking drove Lopez Trucking dump trucks for the hauling job at the Air Park project.

         Werner is also a registered commercial motor carrier with a DOT number. The Federal Motor Carrier Safety Administration did not conduct an investigation of Werner in relation to the accident.

         [301 Neb. 536] 1. Unsigned Lease Agreement

         Cruz entered into evidence a lease agreement which listed Werner as lessor and Lopez as lessee, but the agreement was dated approximately 1 year before Lopez Trucking worked on the Air Park project. Further, it was signed only by Werner's president, not by Lopez. Lopez testified that he had never seen the agreement.

         The agreement stated that Werner was leasing a dump truck for hauling on its construction projects. It specified the hourly rate, that Lopez would not be allowed to purchase fuel at the asphalt plant, that he would be required to fully fill out one "Lease Driver Report" per day, that Lopez must have at least $1 million in liability insurance, that Lopez would use and possess the equipment in compliance with all applicable laws, that Lopez would permit the equipment to be operated only by persons experienced in the use and operation thereof, and that he would not permit any insignia, lettering, safety warnings, or instructions on the equipment to be removed or defaced. An indemnification provision in the agreement provided that Lopez would assume the entire responsibility and liability for damages or injury to all persons and property connected with the use or care of the leased equipment.

         2. Testimony of Lopez

         Lopez testified that he had an oral agreement with Werner for work at the Air Park project and that it was not a lease agreement. He admitted, however, that the unsigned lease agreement accurately reflected their oral agreement with respect to the hourly rate and the requirement that Lopez Trucking obtain a liability policy of not less than $1 million. Lopez explained that this hourly rate compensated him for the maintenance and fuel for his dump trucks, which were entirely the responsibility of Lopez Trucking.

         Lopez elaborated that the job at the Air Park project involved hauling millings from the construction site to a plant in Milford, Nebraska. Lopez testified that at the end of each [301 Neb. 537] day, Werner's foreman for the Air Park project would let him know how many trucks to deliver to the jobsite the next day. Werner's supervisor at the milling machine would also tell Lopez each day when Lopez' trucks were no longer needed. No one directed Lopez as to the specific route he must take in driving between the construction site and the Milford plant.

         Furthermore, Lopez explained that he was under no obligation to haul for Werner on any given day, or to haul a minimum number of loads, and Lopez was free to dictate his own schedule and that of his employees. Each day Lopez told Carman what to do, where to go, and when to do it. At no time was Carman, Lopez, or Lopez Trucking authorized by Werner to operate under Werner's DOT number.

         3. Testimony of Werner's Project Manager, Julie Budnick

         Julie Budnick, Werner's project manager, described that usually when Werner contracted with Lopez Trucking or similar contracts, it needed the trucks to supplement Werner's fleet only for short periods of time. There were no written agreements in such situations. Budnick testified that Werner would call and tell the trucking company that Werner "need[s] a couple of trucks" and that "then they are free to do whatever they want to do."

         She explained that "these trucks have no obligation to work for us." Such trucks do not "want to necessarily commit"; "they want to go anywhere they want to go for the highest pay they can get." Lopez had worked for Werner in this capacity on other jobs in the past.

         Budnick testified that on jobs like the Air Park project where they call in a few extra trucks, Werner does not need to tell the drivers what to do when they arrive. "They all just get in line, back up to the mill . . . get a load, drive it out, dump it, drive back, get a second load. Take a circle, drive, dump those millings, come back." She said, "They don't have to be told anything, but that, you know, when they get to the end, they're [301 Neb. 538] done, go home or - or leave, we don't need you anymore for today.''

         At one point, Budnick was handed a copy of the unsigned lease agreement and answered in the affirmative that it was the lease agreement that Werner had with Lopez. But she later explained that she did not believe the lease agreement applied to Lopez, because it was authored for situations where drivers are using Werner's equipment. Budnick indicated that the lease agreement was used only when other truckers were pulling Werner trailers. She said that the lease agreement presented to her "doesn't even apply because we're not ren- we're not controlling, we're not using his equipment at all, he's not using our equipment." Budnick testified that Lopez "controls his own equipment, he maintains it, he fuels it, insures it. He can just come and go as he pleases."

         Under the bid proposal for the Air Park project, Werner had agreed to comply with all applicable federal, state, and local laws governing safety, health, and sanitation; provide all safeguards, safety devices, and protective equipment; and take any other needed actions that Werner or the state highway administration's contracting officer may determine to be reasonably necessary in connection with the performance of work covered by the contract to protect property, the life and health of employees on the job, and the safety of the public. Budnick testified that Werner had a drug testing policy, but that such policy would not have been applicable to Carman, because he was not Werner's employee.

         4. Testimony of Carman

         Carman testified that at the beginning of each day, he received instructions from Lopez regarding the work to be performed. Beginning on May 29, 2012, and continuing until the day of the accident, Carman had been directed to haul debris from the Air Park project.

         Carmen would pick up Lopez Trucking's truck at a truck-stop, go to the construction site, and then travel between the [301 Neb. 539] construction site and the Milford plant until he was done for the day. Carman would then return the truck to the truckstop. Carman also fueled the truck at the truckstop under Lopez Trucking's account.

         Carmen testified that while working on the Air Park project, he continued to receive his instructions from Lopez. He could not recall any representatives from Werner telling him what to do.

         Carman kept track of the hours he worked for Lopez Trucking in a calendar that he kept in the truck. Additionally, during his final load at the end of each day, or sometimes the following morning, Carman would give a Werner employee his "unload sheet." The sheets are found in the record and are entitled "Werner Construction Lease Driver Report[s]."

         The forms appear to require the date, name of the trucking company, beginning time, ending time, truck number, trailer number, load time, unload time, starting location, ending location, material hauled, load or ticket number, delays encountered, Werner fuel added, Werner oil added, other Werner-owned purchases, the driver's signature, and the signature of the foreman or plant manager. However, Carman filled out only the date, "Carlos Lopez" as the trucking company, the truck number, the beginning and ending time, the starting and ending location, and the material hauled. These were signed by Carman and Werner's plant manager.

         The ending location listed in the driver reports was always the Milford plant. At the time of the accident, the truck Carman was driving had already made its last run to the Milford plant to unload the millings. Carlos was driving the empty truck back to the truckstop to park it for the evening.

         5. Order of Summary Judgment

         The court granted Werner's motion for summary judgment on the ground that it had not breached any duty in relation to the accident.

         [301 Neb. 540] The court found the evidence undisputed that Lopez Trucking had an independent contractor agreement with Werner to provide trucking services but did not lease its dump truck to Werner. The court considered the 10 factors distinguishing an employment relationship from that of an independent contractor[1] and concluded that "while a couple of the factors may auger in favor of [Cruz'] claim given the standard of review, the facts overwhelming[ly] establish support [for] the finding [of] an independent contractor status in this case."

         The court concluded, further, that under the Federal Motor Carrier Safety Regulations adopted by § 75-363, there was no material issue of fact that Lopez Trucking, rather than Werner, was operating as the motor carrier with respect to ...

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