Robertson v. Phone Directories Company, Inc. et al
Filing
39
ORDER granting 8 Motion for Summary Judgment. All claims against Defendant ZipLocal, LP are DISMISSED. Signed by Judge Donald W. Molloy on 9/26/2012. (dle)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
FAY ROBERTSON,
)
)
Plaintiff,
)
)
vs.
)
)
ZIPLOCAL, LP; PHOENIX
)
DISTRIBUTION; MIKE BOWDEN )
and DOES 3-5,
)
)
Defendants.
)
______________________________ )
CV 11-154-M-DWM
ORDER
Plaintiff Fay Robertson brings this action against Defendants Phone
Directories Company, Inc. (“ZipLocal”), Phoenix Distribution (“Phoenix”), and
Mike Bowden seeking damages for injuries sustained when she tripped and fell
over a phone directory left in her driveway. Pending before the Court is
ZipLocal’s motion for summary judgment. For the reasons stated below, the
motion is granted.
FACTUAL BACKGROUND
On the evening of September 1, 2007, Robertson arrived home from a
wedding and was asked to wait in the car as her daughter and son-in-law attempted
to trigger the driveway lights. Instead of waiting, Robertson began to walk around
the vehicle. When she was between the front of the car and the rear of another
vehicle parked in the driveway, she tripped and fell over a telephone directory.
The directory was published by ZipLocal and had been delivered the day before by
a person working for Phoenix, the company that ZipLocal hired to distribute its
phone books in Montana. Robertson suffered a hip fracture in the fall and has
experienced complications since.
ZipLocal hires third-party individuals and companies to distribute its
directories. It uses approximately 10 to 15 distributors nationally, and distribution
jobs are awarded on a single-year basis. Kimball Broderick, the Distribution
Manager at ZipLocal in 2007, attested that she would evaluate bids from
approximately one to three companies and choose a distributor based on the
bidder’s price, knowledge of the delivery area, and past performance. A vendor
was deemed to be in good standing if it had previously followed through on past
jobs and completed them in a timely manner, elicited no or minimal complaints,
invoiced ZipLocal correctly and on time, and showed up to meet the delivery truck
on time. However, these standards were not in written form in 2007. Nor did
ZipLocal have standards or regulations in place regarding whether a distributor
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could hire subcontractors to perform the delivery. ZipLocal has since adopted
written standards.
There is no contract in the record between ZipLocal and Phoenix from
2007. But the parties agree that ZipLocal hired Phoenix to distribute its
directories in several areas including Montana, Oregon, and Utah. When ZipLocal
hired Phoenix as the distributor for the Missoula, Montana area, it issued an order
form that stated the number of directories to be delivered and the areas where they
should be delivered.
Ziplocal did not provide training, dictate the hours worked, or specify how
the work was to take place. Phoenix was paid based on the number of directories
it delivered, and it submitted frequent progress reports to ZipLocal by email. The
reports indicated how many books had been received and delivered, what
percentage of each job had been completed, and the name of the manager
responsible for each job. If ZipLocal received a complaint about a delivery, it
forwarded the complaint to Phoenix. Phoenix typically replied that it would
investigate the complaint, and, in some cases, it reported back on how it
responded.
Robertson argues that ZipLocal is subject to liability for her injuries because
Phoenix was its agent or because ZipLocal negligently hired, trained, or
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supervised Phoenix. ZipLocal counters that it is entitled to judgment as a matter
of law on both theories because no material facts are in dispute, Phoenix was an
independent contractor, there is no evidence of “control,” and the record does not
support a theory of negligent hiring, training, or supervision.
ANALYSIS
A party is entitled to summary judgment if it can demonstrate “that there is
no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(c). Summary judgment is warranted where
the documentary evidence produced by the parties permits only one conclusion.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). On a motion for
summary judgment, this Court must determine whether a fair-minded jury could
return a verdict for the non-moving party. Id. at 252. Only disputes over facts that
might affect the outcome of the suit under the governing law will properly
preclude entry of summary judgment; factual disputes which are irrelevant or
unnecessary to the outcome are not considered. Id. at 248.
A.
Phoenix was not an agent, but an independent contractor.
The record does not support Robertson’s argument that Phoenix acted as
ZipLocal’s agent. “An individual is an agent of another when that other has the
right to control the details, methods, or means of accomplishing the individual’s
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work.” Butler v. Domin, 15 P.3d 1189, 1194 (Mont. 2000) (citations omitted).
Four factors help determine whether the right of control is sufficient to give rise to
an agency relationship: “(1) direct evidence of right or exercise of control; (2)
method of payment; (3) furnishing of equipment; and (4) right to fire.” Id.
(citation omitted). In an agency relationship, the principal is liable for the
negligent acts of an agent that is acting within the scope of its agency. Mont.
Code Ann. § 28-10-602(1).
In contrast, “[e]mployers are generally not liable for the torts of their
independent contractors.” Beckman v. Butte-Silver Bow Co., 1 P.3d 348, 350
(Mont. 2000). An independent contractor “renders service in the course of an
occupation, and represents the will of his employer only as to the result of his
work, and not as to the means whereby it is accomplished, and is usually not paid
by the job.” Stand. Chem. Mfg. Co. v. Empl. Sec. Div. of Mont. State Dept. of Lab.
and Indus., 605 P.2d 610, 613 (Mont. 1980) (internal quotation marks and citation
omitted); see also In re Coupon Clearing Serv., Inc., 113 F.3d 1091, 1099 (9th
Cir. 1997) (“If control may be exercised only as to the result of the work and not
the means by which it is accomplished . . . an independent contractor relationship
exists.”) (construing California law); Ochoa v. J.B. Martin & Sons Farms, Inc. (“A
principal instructs an independent contractor on “what to do, but not how to do
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it.”) (construing Arizona law).
There are no facts suggesting that ZipLocal controlled or sought to control
the “details, methods, or means” of the directory distribution. ZipLocal prescribed
the results of the work (how many directories should be delivered and where they
should be delivered), but it did not specify the means by which Phoenix was to
accomplish these goals. It tracked information pertinent to the results of the work
such as the number of directories delivered, the locations where they were
delivered, and the percentage of each job that had been completed. But it did not
track, and Phoenix was not required to report on, how Phoenix achieved those
results.
ZipLocal also forwarded or sent summaries of customer complaints to
Phoenix rather than responding to the complaints itself, and it did not dictate how
Phoenix should respond. Docs. 37-17, 37-18, 37-19. Phoenix typically replied
that it would take care of the complaint or occasionally explained how it had
addressed or investigated the complaint. Id. When ZipLocal made
recommendations, Phoenix was not required to follow them. For example, after
receiving a number of complaints within the span of a few days about deliveries in
a specific area in Salem, Oregon, ZipLocal emailed Phoenix: “We need to stop all
night deliveries. This is getting out of hand.” Doc. 37-17 at 16. Apparently
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without consequence, Phoenix responded instead that it had fired the “people
responsible for these problems.” Id. In two other instances, ZipLocal instructed
Phoenix not to deliver books to people or locations without permission. Doc. 3718 at 2–3. However, this instruction relates to the results of the work—how many
books should be delivered and to whom—rather than the means by which the work
should be conducted. The record does not show that ZipLocal controlled the
means by which Phoenix performed its deliveries. Rather, Phoenix was
responsible for determining how the work was to be performed and for remedying
any problems.
Other factors also indicate that ZipLocal did not have sufficient control over
Phoenix’s operations to render it liable as a principal. Phoenix hired and fired its
own delivery personnel without input from Ziplocal, and there is no evidence that
ZipLocal had the right to fire, or instruct Phoenix to fire, those individuals. Nor
did ZipLocal control the hours that Phoenix employees worked or provide
equipment or other materials besides the phone directories and bags themselves.
Lastly, Phoenix was paid according to the number of directories it delivered, not
by the hours it worked, and it had distribution contracts with other companies. All
these factors, even when considered in the light most favorable to the plaintiff,
indicate that Phoenix was an independent contractor, not an agent.
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The fact that there is no contract specifying that Phoenix was an
independent contractor does not negate the rest of the evidence. In Kober v.
Stewart, 417 P.2d 476, 479 (Mont. 1966), the Montana Supreme Court noted that
the contract between a hospital and radiologist did not specify that the radiologist
was an independent contractor. However, the Court also noted several other
factors—including that the hospital owned the equipment and space the radiologist
used, charged the radiologist’s patients for services, and shared the income
generated by the radiology department—that contributed to its decision that there
was a genuine issue of material fact whether an employer-employee relationship
existed. Id. The lack of specification or, in this instance, the lack of a contract,
does not automatically create a dispute over whether an agency relationship
existed.
Finally, any evidence that ZipLocal, since the accident, started providing
written instructions to its delivery contractors on where to place directories or
exercising more control over how contractors should respond to complaints is
irrelevant to this case. The evidence does not establish control prior to or during
Phoenix’s delivery of the directory to Robertson’s residence in 2007, and may
only indicate a subsequent remedial measure. Robertson’s theory of ostensible
agency also fails because there is no evidence that ZipLocal ever held out Phoenix
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as its agent.
B.
ZipLocal did not exercise control sufficient to render it liable for
Phoenix’s tortious acts.
The record does not support Robertson’s argument that ZipLocal
negligently exercised control over Phoenix’s work. A principal may be liable for
the torts of an independent contractor if it “knows or should know that the
independent contractor is performing work in an unreasonably dangerous manner,
and if the employer retains the authority to direct the manner in which work is to
be performed.” Beckman, 1 P.3d at 355 (citing Restatement (Second) of Torts §
414, cmt. b); see also Umbs v. Sherrodd, Inc., 805 P.2d 519, 521 (Mont. 1991). A
principal can retain such authority by taking control of its independent
contractor’s actions or by reserving that authority in a contract. For example, the
principal in Umbs v. Sherrodd, Inc. ordered its independent contractor to deliver a
load using a truck that the principal knew was unsafe. The principal thus “took
control” over the actions of its independent contractor, creating an issue of
material fact concerning liability. Id. In Beckman, the principal did not order its
independent contractor to engage in an unsafe activity and did not supervise the
excavating operations. 1 P.3d at 356. However, two documents provided that the
principal in Beckman “[might] provide supervision,” would “monitor[] all
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construction work,” and could set requirements for the “methods of construction.”
Id. There was thus an issue of material fact over whether the principal retained
sufficient control to establish liability for its independent contractor’s acts. Id.
Robertson has presented no evidence from before August 31, 2007, when
the directory at issue was delivered, that suggests that ZipLocal knew Phoenix was
delivering telephone directories in an “unreasonably dangerous manner.”
Beckman, 1 P.3d at 355. The complaints from customers that are in the record all
post-date Robertson’s accident. Moreover, the complaints do not indicate that
ZipLocal should have foreseen a physical injury from a trip and fall. The emails
include complaints about transmission fluid that leaked on a driveway, thrown
books that made a “mess,” books that got wet in the rain or a puddle, deliveries
that were larger than was required, unwanted deliveries, and missed deliveries.
The only complaint that could possibly be construed as indicating an
“unreasonably dangerous manner” of delivery concerned a book that was thrown
at a house and broke off pieces of the vinyl siding.
Even if ZipLocal knew or should have known that Phoenix was performing
its contract in an unreasonably dangerous manner, it did not “retain the authority
to direct the manner in which work [was] to be performed.” Id. at 355. Though
ZipLocal may have been able to make suggestions, it did not control the operative
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details of Phoenix’s work. See Restatement (Second) of Torts § 414, cmt. c
(noting that it is not enough that a principal “has merely a general right to order
the work stopped or resumed, to inspect its progress or to receive reports, to make
suggestions or recommendations which need not necessarily be followed, or to
prescribe alterations and deviations”); Dean v. City of Buffalo, 579 F. Supp. 2d
391, 400–01 (W.D. N.Y. 2008) (distinguishing between directions by the
employer as to the work to be performed by an independent contractor and control
over the ‘method and means’ of the performance of that work).
There is no evidence that ZipLocal supervised or controlled the manner in
which Phoenix delivered the phone book to Robertson, or that ZipLocal had ever
before asserted such a right, and there is no contract in which ZipLocal reserved
such authority. Accordingly, Ziplocal did not assume liability for Phoenix’s torts.
C.
ZipLocal cannot be held liable for allegedly negligently hiring,
training, and supervising Phoenix.
1.
Negligent hiring
“The basis of responsibility under the doctrine of negligent hiring is the
master’s own negligence in hiring or retaining in his employ an incompetent
servant whom the master knows or by the exercise of reasonable care should have
known was incompetent or unfit and thereby creating an unreasonable risk of harm
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to others.” Bruner v. Yellowstone Co., 900 P.2d 901, 906 (Mont. 1995) (Leaphart,
J., dissenting) (internal quotation marks and citation omitted). The Montana
Supreme Court has recognized the tort of negligent hiring applies to independent
contractors. Gurnsey v. Conklin Co., Inc., 751 P.2d 151, 157–58 (Mont. 1988)).
However, the Court has not analyzed the tort except to adopt the limitation in
Restatement (Second) of Torts § 411 that provides that such liability is limited to
physical harm. Id. at 158.
The Restatement states that an employer is only liable for the incompetence
or carelessness of a contractor where a non-negligent employer would have
discovered his lack of skill or experience and where physical injury to a third party
resulted from those deficiencies. Restatement (Second) of Torts § 411, cmt. b. In
contrast, an employer is not liable for harm caused solely by a contractor’s
inattention or negligence. Id. Courts have also found that the amount of care that
should be exercised in selecting an independent contractor varies according to the
danger and difficulty of the work that is to be done. Id.; Restatement (Second) of
Torts § 411, cmt. c.
Robertson insists that ZipLocal “made no inquiry into whether Phoenix
Distribution was competent to facilitate” delivery of its telephone books. Doc. 36
at 15. However, the evidence in the record does not support this assertion. When
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hiring a vendor for a particular job, ZipLocal considered bidders’ prices as well as
their knowledge of the delivery area and past performance. Doc. 37-2 at 2–3.
Phoenix was considered a vendor in good standing, meaning it was deemed to
have completed jobs in a timely manner, invoiced ZipLocal correctly and on time,
obtained the required equipment prior to delivery, and completed its jobs with “no
or minimal complaints.” Depo. Suster, doc. 38-1 at 3–4. Given that Phoenix had
completed past jobs with “no or minimal” complaints, there is no evidence that
ZipLocal knew or should have known that Phoenix lacked skill or experience
when it hired Phoenix to deliver books to the Missoula, Montana area.
Additionally, the record contains no complaints from the time period preceding the
accident much less from the time period before ZipLocal hired Phoenix. Thus
Robertson has cited no evidence that indicates that ZipLocal should have known
that Phoenix might be careless or incompetent and or that hiring or retaining
Phoenix posed an unreasonable risk of harm to others.
2.
Negligent supervision and training
The Montana Supreme Court has not decided a negligent supervision case
involving an independent contractor. However, other courts have limited such
claims to situations where the employer has reserved the right, or has a duty, to
supervise the independent contractor’s work. E.g. Gus & Jacks Tire Shop v.
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Reznor, 8 Fed. Appx. 696, 700 (9th Cir. 2001) (unpublished) (construing Montana
law); Robinson v. Govt. of Malaysia, 269 F.3d 133, 145 (2d Cir. 2001) (applying
New York law); Jordan v. NUCOR Corp., 295 F.3d 828, 835 (8th Cir. 1999)
(applying Nebraska law); Dean, 579 F. Supp. 2d at 401 (finding no supervision
where an employer directed work that was to be done but did not control the
method and means of the work’s performance); Castro v. Serrata, 145 F. Supp. 2d
829, 831 (S.D. Tex. 2000) (“To be liable for negligent supervision, the employer’s
role must be more than a general right to order the work to start or stop, to inspect
progress, or receive reports.”). Other courts have held that a plaintiff can establish
a claim for negligent training or supervision if she establishes that the principal
“knew or should have known of the necessity and opportunity for exercising such
control.” E.g. Otani v. City & County of Haw., 126 F. Supp. 2d 1299, 1308 (D.
Haw. 1998) aff’d sub nom. Otani v. Hawai'i Co. Police Dept., 246 F.3d 675 (9th
Cir. 2000) (citation omitted) (applying Hawaii law). Under either standard,
ZipLocal prevails. As discussed above, there is no evidence that ZipLocal
reserved the right to supervise or control Phoenix’s work or that it exercised such
control or supervision. Nor is there evidence that Mike Bowden or Phoenix
Distribution needed supervision or training in their supervision or training of their
distributors or that the work was so dangerous or complex as to necessitate such
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supervision. Accordingly, Robertson’s claims for negligent training and
supervision also fail.
CONCLUSION
Based on the foregoing, ZipLocal is entitled to summary judgment on each
of Robertson’s claims.
IT IS HEREBY ORDERED that ZipLocal’s Motion for Summary Judgment
(doc. 8) is GRANTED. All claims against Defendant ZipLocal, LP are
DISMISSED.
Dated this 26th day of September 2012.
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