Michigan Court of Appeals; Docket # 330014; Unpublished
Judges Borrello, Markey and M. J. Kelly; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous unpublished per curiam Opinion involving plaintiff’s accident while operating a semi-truck owned by Crooked Creek Farms, the Court of Appeals held that summary disposition was properly granted for Farm Bureau Insurance, plaintiff’s personal no-fault insurer, on Farm Bureau’s third-party claim against AMCO Insurance Company, the insurer of the semi-truck. In so ruling, the Court affirmed the trial court’s finding that AMCO was responsible for paying plaintiff’s no-fault benefits because, under the economic reality test, plaintiff was an employee of Crooked Creek Farms at the time of the semi-truck accident.
Plaintiff was injured in an accident while driving a semi-truck to transport manure to one of Crooked Creek Farms’ fields. After the accident, plaintiff sought no-fault PIP benefits from his personal no-fault insurer, Farm Bureau. Thereafter, Farm Bureau filed a third-party claim against AMCO, which insured the semi-truck, maintaining that AMCO was responsible for plaintiff’s no-fault benefits pursuant to MCL 500.3114(3) because plaintiff was an employee of, and occupying the semi-truck owned by, Crooked Creek Farms and AMCO was the insurer of the semi-truck. AMCO argued that Farm Bureau was liable for benefits because plaintiff was not an employee of Crooked Creek Farms but rather an independent contractor. Farm Bureau moved for summary disposition, asserting there was no genuine issue of material fact that plaintiff was an employee of Crooked Creek Farms. The trial court granted Farm Bureau’s motion.
The Court of Appeals affirmed summary disposition for Farm Bureau, finding that under the economic reality test, plaintiff was an employee of Crooked Creek Farms and, therefore, AMCO was liable for no-fault benefits.
In reaching this conclusion, the Court of Appeals cited Adanalic v Harco Nat Ins Co, 309 Mich App 173 (2015), and its application of the “economic reality” test to determine whether a plaintiff is an employee. According to the Court, four main factors must be considered under this test: 1) control of the worker’s duties; 2) payment of wages; 3) right to hire, fire and discipline; and 4) the performance of the duties as an integral part of the employer’s business toward the accomplishment of a common goal.
The Court further noted that other factors may also be considered, including whether: 1) the individual furnishes his own equipment and materials; 2) the individual holds himself out to the public for hire; and 3) the work in question is customarily performed by an independent contractor.
When applying the economic reality test, the Court of Appeals emphasized that weight should be given to the factors that “most favorably effectuate the objectives of” MCL 500.3114(3). The Court also pointed out that cases interpreting §3114(3) have given it a “broad reading” that is designed to allocate the cost of injuries resulting from use of business vehicles to the business.
In light of the economic reality test, the Court of Appeals found that plaintiff was an employee of Crooked Creek Farms and, as a result, AMCO was liable for no-fault benefits. The Court concluded:
“[T]here was substantial evidence … that established that plaintiff was an employee of Crooked Creek such that reasonable minds could not differ on the issue. … The deposition testimony established that the first, third, and fourth factors in the economic reality test and the first and second additional factors … all weighed in favor of a finding that plaintiff was an employee of Crooked Creek. Crooked Creek determined plaintiff’s delivery schedule, and on days plaintiff was not making deliveries, Carpenter gave plaintiff a list of tasks to complete at the farm. Plaintiff drove a semi-truck owned by Crooked Creek, and Crooked Creek paid for the truck’s fuel, maintenance, and highway tolls. Plaintiff was paid a weekly wage of $750 regardless of how many hours he worked. He also received two weeks of paid vacation after working at Crooked Creek for one year. There was testimony to support that Carpenter was able to fire plaintiff without consequence. Plaintiff did a variety of tasks for the farm, including transporting hogs and grain, equipment maintenance, manure spreading, planting, and harvesting, which were all integral to Crooked Creek’s farming business. Plaintiff generally used Crooked Creek’s equipment, and he did not hold himself out for public hire. Plaintiff worked exclusively for Crooked Creek between 40 and 50 hours a week. While evidence showed that plaintiff’s pay-structure was more akin to an independent contractor — i.e. plaintiff received a 1099 form and Crooked Creek did not withhold income or payroll taxes considering all of the other evidence, this alone did not leave open an issue on which reasonable minds could differ. … In short, applying the economic reality test indicates that there was no genuine issue of fact regarding whether plaintiff was an employee of Crooked Creek and the trial court did not err in granting summary disposition in favor of Farm Bureau.”