Howard v. The Dallas Morning News, Inc.
Annotate this Case
Patricia Ann HOWARD and Richard Scott Howard
v. THE DALLAS MORNING NEWS, INC.
95-938 ___ S.W.2d ___
Supreme Court of Arkansas
Opinion delivered April 1, 1996
1. Judgment -- multiple parties -- factual underpinnings
supporting Ark. R. Civ. P. 54(b) certification must be set out
in trial court's order and abstracted. -- Under Ark. R. Civ.
P. 54(b), the trial court must factually set forth reasons in
the final judgment, order, or the record, which can then be
abstracted, explaining why a hardship or injustice would
result if an appeal involving fewer than all of the claims or
parties is not permitted; the factual underpinnings supporting
a 54(b) certification must be set out in the trial court's
order, and the factual findings must be abstracted.
2. Judgment -- multiple parties -- abstracted order reflected
that trial court stated facts sufficient to justify entry of
final, appealable order. -- The supreme court determined that
the trial court, in its Ark. R. Civ. P. 54(b) order, did not
merely track the language of the rule; the abstracted order
reflected that the trial court had stated facts sufficient to
justify the entry of a final, appealable order.
3. Judgment -- summary judgment -- burden of proof on movant --
respondent must meet proof with proof -- burden not improperly
shifted. -- The burden of proving there is not a genuine issue
of material fact is upon the summary judgment movant, and all
proof submitted must be viewed in a light most favorable to
the party resisting the motion; however, once the movant makes
a prima facie showing of entitlement to summary judgment, the
respondent must meet proof with proof showing a genuine issue
of material fact; thus, if the trial court determined that
appellee newspaper publisher had made a prima facie showing
that it was entitled to summary judgment as a matter of law,
it was proper to require appellants to come forward with proof
by showing a genuine issue of material fact, and this would
not be an improper shifting of the burden of proof to them.
4. Principal & agent -- creation and nature of relationship --
trial court misstated law by declaring that appellants must
provide proof that parties intended relationship to exist. --
An agency relationship requires an agreement for the agent to
act for the principal, or master; the agreement may be oral,
written, or implied from the conduct of the parties; the
supreme court found that the trial court misstated the law by
declaring that appellants must provide proof that the parties
intended the relationship to result, where the agreement was
implied.
5. Principal & agent -- relationship does not depend upon intent
of parties -- must be agreement but not necessarily contract.
-- The relationship of agency does not depend on the intent of
the parties to create it, nor the belief that they have done
so; to constitute the relationship there must be an agreement,
but not necessarily a contract, between the parties; if the
agreement results in the factual relationship between them to
which are attached the legal consequences of agency, an agency
exists although the parties did not call it agency and did not
intend the legal consequences of the relationship to follow.
6. Master & servant -- relationship created through submission by
one giving service to direction and control of one receiving
it. -- The relationship of master and servant can be created
although there is no mutual agreement to give and receive
assistance; it is only necessary that there be submission by
the one giving service to the direction and control of the one
receiving it as to the manner of performance.
7. Master & servant -- independent contractor defined. -- An
independent contractor is one who, exercising an independent
employment, contracts to do work according to his own methods
and without being subject to the control of the employer,
except as to the results of the work; the right to control and
not the actual control determines whether one is a servant or
an independent contractor.
8. Master & servant -- independent contractor -- right of control
is principal factor in determining nature of relationship. --
In making the determination whether a master-and-servant
relationship or an independent contract exists, the right of
control is the principal factor to be considered; the intent
of the parties is not included among these factors.
9. Appeal & error -- ruling affirmed if correct, even if reason
given is wrong. -- A trial court's ruling will be affirmed if
correct, even if the reason given for the decision is wrong.
10. Master & servant -- creation of relationship -- question of
responsibility not dependent upon existence of actual
contractual relationship. -- The relation of master and
servant between two persons may be shown by proving that the
one performs services for the other; it would be difficult, in
most of these cases, to prove the relation of master and
servant except by the fact that the one is known to perform
service for the other, or from their course of dealings; the
relationship may be created by express contract, but this is
not essential; it may be created as well by conduct that shows
that the parties recognize that one is the employer, or
master, and that the other is the employee or servant;
moreover, when one is sought to be held responsible for the
tortious act of another under the principle respondeat
superior, the question of responsibility will not depend
entirely upon the existence of some actual contractual
relationship of master and servant; it is sometimes allowable
to prove the relation of master and servant by the fact that
one performs service for another.
11. Principal & agent -- agency becomes question of law where
facts are undisputed -- appellants provided proof of genuine
issue of material fact. -- Although agency is a question of
fact ordinarily determined by the trier of fact, where the
facts are undisputed, and only one inference can reasonably be
drawn from them, it becomes a question of law; in the present
case, appellants presented evidence of control by appellee
newspaper publisher not only as to the results to be achieved
but also as to certain details of the work; the supreme court
could not say that only one inference could reasonably be
drawn from the proof submitted by appellants as evidence of
the extent of control appellee exercised over its
distributor's carrier.
Appeal from Pulaski Circuit Court; Morris W. Thompson, Judge;
reversed and remanded.
Rose Law Firm, by: James H. Druff, for appellants.
Ronquillo & DeWolf, L.L.P., and Wright, Lindsey & Jennings,
by: Gregory T. Jones and Ainsley H. Lang, for appellees.
Andree Layton Roaf, Justice. April 1, 1996. *ADVREP8*
PATRICIA ANN HOWARD AND RICHARD
SCOTT HOWARD,
APPELLANTS,
V.
THE DALLAS MORNING NEWS, INC.,
APPELLEES,
95-938
APPEAL FROM THE PULASKI COUNTY
CIRCUIT COURT,
NO. 93-1027,
HON. MORRIS W. THOMPSON, JUDGE,
REVERSED AND REMANDED.
Andree Layton Roaf
Patricia and Robert Howard sued Dallas Morning News, Inc.
(DMN), a newspaper publisher, for injuries Patricia suffered in
April, 1991, when she was struck by a truck while she was walking
in a pedestrian crosswalk at the Little Rock Municipal Airport.
The driver of the truck was making delivery of the Dallas Morning
News to the airport at the time of the accident. The Howards also
sued Robert Mitchell, the driver, and Delivery Systems, Inc. (DSI),
the regional distributor for the Dallas Morning News. The Howards
appeal from an order granting summary judgment in favor of DMN,
contending that 1) the trial court incorrectly applied the law of
agency in finding that they were required to show that Mitchell and
DMN intended to and did enter into a contractual relationship, and
that, 2) even if they were so required, there was ample evidence
from which an agency and contractual relationship might reasonably
be inferred. We agree that the trial court erred in granting the
summary judgment and reverse.
1. Facts
In July of 1989, DMN contracted with DSI to serve as
distributor of the Dallas Morning News in the Little Rock and Hot
Springs area. The contract was titled "Independent Distributor
Agreement" and specified, in addition to such matters as prices and
quantities of papers to be sold to distributor, terms of payment,
area of distribution, and place of delivery, that the distributor
would "make efficient and prompt delivery of the newspaper to
purchasers in a manner satisfactory to them," which was defined as
reaching the reader by or before 6:30 a.m. each day, "prevent the
insertion in copies of the newspaper of any advertising and other
printed material," and "obtain new purchasers of the newspaper"
through reasonable solicitation and promotional methods. The
agreement further provided, in a clause captioned "Independent
Contractor Relationship":
It is agreed that the means of accomplishing the
foregoing objectives are wholly within the selection and
control of Distributor, that all facilities and personnel
used in the work shall be under the sole control and
direction of Distributor or his sub-contractors, that the
Publisher shall have no right or voice with respect to
the means employed by Distributor in accomplishing the
foregoing objectives, the selection, control or direction
of the persons engaged by Distributor in performing the
work or the mode, manner or method used by Distributor in
the performance of this Agreement, and that the legal
relationship created by this Agreement and by the actions
and conduct of the parties in the performance of this
Agreement is that of independent contractor. Distributor
shall have no authority, and is hereby forbidden to
employ or contract with any person on behalf of
Publisher, and any and all contracts or arrangements made
by Distributor in respect of the work contemplated by
this Agreement shall be in the name of Distributor and
for his account.
The distributor was also required to keep and make available
to DMN, accurate and complete records with respect to all
purchasers of the newspaper, all employees and subcontractors of
distributor, and all other information needed by DMN to comply with
rules of the Audit Bureau of Circulations. Although the agreement
was for one year and automatically renewed from year to year, it
could be terminated by either party with or without cause, upon 10
days written notice.
In December of 1989, DSI contracted with David Mitchell to
serve as a "carrier" for DSI, by the execution of two separate
documents, an "Independent Contractor/Carrier Agreement" and a
"Delivery Systems Carrier Lease." The Agreement provided that
Mitchell, as carrier, would procure from DSI and promptly deliver
newspapers along a specified route, and further recited:
The means and facilities used for such purposes
shall be selected and operated solely by the Carrier
under his/her sole supervision, control and direction,
and at his/her own cost and expense to the best interest
of the Company and the faithful performance of this
agreement. It is expressly agreed that the Carrier is
not an employee of the Company and he/she at all times
occupies the position of an independent contractor in
his/her relationship with the Company. The Company is
looking to the Carrier solely for the desired result of
prompt receipt and delivery of newspapers.
The Agreement also required Mitchell to provide a substitute
carrier when he was unable to deliver the newspapers, prohibited
him from making alterations or insertions to the newspapers, and
allowed him to engage in other business pursuits if they did not
interfere with his contractual obligations to DSI. The Agreement
was for 30 days, automatically renewed from month to month, and
could be terminated by Mitchell upon 20 days written notice or at
will by DSI without notice.
The Lease Agreement required Mitchell to lease from DSI
vending machines and a list of subscribers for his delivery route,
and contained clauses similar to the Independent Contractor/Carrier
Agreement regarding Mitchell's status as an independent contractor.
The lease agreement further required Mitchell to provide
information weekly to DSI regarding each retailer and vending
machine on his route and to fill out forms provided by DMN and
necessary for DMN to comply with regulations of the Audit Bureau of
Circulations.
At the time of the accident, Mitchell was also delivering the
Wall Street Journal, National Sports Daily, Barron's, and the New
York Times pursuant to his agreement with DSI, and he was engaged
in a separate lawn-maintenance business. Sometime after the
accident, DMN learned that Mitchell had destroyed or discarded 130
copies of the paper when he could not complete his route. DMN
indicated to DSI that Mitchell should be terminated. DSI's
response was to terminate its contract with DMN.
After the trial court denied DSI's motion for summary
judgment, DMN also moved for summary judgment, asserting that no
contract existed between Mitchell and DMN, nor was Mitchell in an
employment relationship with DMN. In support of its motion for
summary judgment, DMN submitted the agreements between Mitchell and
DSI and the agreement between DSI and DMN, affidavits of several
employees of DMN and the depositions of Joe Fox, President of DSI,
and a number of DMN employees. The Howards submitted portions of
the deposition of Mitchell, several of the same depositions of DMN
employees submitted by DMN, and the depositions of two employees of
DMN's predecessor.
After granting DMN summary judgment, the trial court also
granted the Howards' motion for entry of final judgment pursuant to
Ark. R. Civ. P. 54(b), so that they could appeal the dismissal of
DMN prior to trial. DMN takes issue with the finality of this
order and asks that this appeal be dismissed.
2. Finality of Order
We first address DMN's contention that the appeal should be
dismissed because there is not sufficient grounds for certification
under Ark. R. Civ. P. 54(b).
In Franklin v. OSCA, Inc., 308 Ark. 409, 825 S.W.2d 812 (1992),
we said that under Rule 54(b) the trial court "must factually set
forth reasons in the final judgment, order, or the record, which
can then be abstracted, explaining why a hardship or injustice
would result if an appeal is not permitted." Id. at 412, 825 S.W.2d at 814. However, we have clarified this holding to require
that the factual underpinnings supporting a 54(b) certification
must be set out in the trial court's order, see Davis v. Wausau
Ins. Cos., 315 Ark. 330, 332, 867 S.W.2d 444, 446 (1993), and that
the factual findings must be abstracted. See Reeves v. Hinkle, 321
Ark. 28, 899 S.W.2d 841 (1995).
In this case, the trial court's findings of facts contained in
the 54(b) order are abstracted as follows:
(1) Significant discovery remains to be done. Based on
past events, if DMN's dismissal is reversed on appeal, it
will doubtless want to re-depose experts whose
depositions were taken without its participation. (2)
Any subsequent trial against DMN would be protracted and
largely duplicative of the first trial. DMN would be
entitled to relitigate virtually all issues raised in the
first trial. A protracted retrial of the same issues is
highly inefficient and raises an unseemly possibility of
divergent verdicts arising from identical facts. The
court finds this situation indistinguishable from that in
Franklin v. OSCA, Inc., 308 Ark. 409, 412, 825 S.W.2d 812
(1992), in which the Supreme Court held an immediate
appeal was warranted to avoid a duplicative trial. (3)
To deny the motion would not insure there would be only
one appeal, since the parties would likely appeal from
both trials. To certify this appeal would avoid the
prospect of multiple appeals from possibly divergent
verdicts.
The trial court has not merely tracked the language of Rule 54(b).
Here the abstracted order reflects that the trial court has stated
facts sufficient to justify the entry of a final, appealable order.
3. Misapplication of Law
The Howards first argue, in essence, that the trial court made
both procedural and substantive errors of law in the order granting
the summary judgment. The summary judgment order provided in
pertinent part:
The bulk of the Howards argument focuses on the
factors to be scrutinized in determining whether a
relationship is one of agent or independent contractor.
This, however, avoids the threshold issue of whether
there was a contract between the parties. Irrespective
of whether Mitchell was an agent or independent
contractor, both required there to be a contractual
relationship.
Agency encompasses several types of relationships
wherein the one referred to as the agent has agreed with
the one referred to as the principal or master to act for
the principal or master, subject to his control. The
agreement may be oral or written or implied from the
conduct of the parties and may be with or without
compensation. See Crouch v. Twin City Transit, 245 Ark.
778, 434 S.W.2d 816 (1968); AMI 701.
. . .
The Howards' argument assumes that Mitchell, in some
way, contracted with DMN to perform the work, yet it
provides no proof of this. Even if it could be argued
that the agreement is implied from the conduct of the
parties, this does not relieve the Howards from providing
some proof as to the intent of the parties to be so
bound. Clearly, Mitchell contracted with DSI, but that
is not to say that it did so with DMN. (Emphasis added).
The Howards take issue with the underlined portion of the order.
They contend that the trial court, by requiring them to prove as a
threshold to agency liability, a contractual relationship between
Mitchell and DMN, both incorrectly shifted the burden of proof from
DMN to them, and also incorrectly stated the law of agency. They
also contend that the trial court similarly erred by stating that
they must provide some proof of the intent of Mitchell and DMN to
be bound, for the agreement to be implied from the conduct of the
parties.
The Howards correctly state that the burden of proving there
is not a genuine issue of material fact is upon the summary
judgment movant, and all proof submitted must be viewed in a light
most favorable to the party resisting the motion. See Cash v.
Carter, 312 Ark. 41, 847 S.W.2d 18 (1993). However, once the
movant makes a prima facie showing of entitlement to summary
judgment, the respondent must meet proof with proof showing a
genuine issue of material fact. Cash, supra. Thus, if the trial
court determined that DMN made a prima facie showing that it was
entitled to summary judgment as a matter of law, it was proper to
require the Howards to come forward with proof by showing a genuine
issue of material fact, and this would not be an improper shifting
of the burden of proof to them.
Also, although the trial court seems to have used the terms
contract and agreement interchangeably in the order, and
characterized the existence of a contract between Mitchell and DMN
as the "threshold issue," the order correctly stated that an agency
relationship requires an agreement for the agent to act for the
principal, or master, and that the agreement may be oral, written,
or implied from the conduct of the parties. Crouch, supra.
However, we do agree that the trial court misstated the law by
further declaring that the Howards must also provide proof that the
parties intended the relationship to result, where the agreement is
implied.
We have adopted the Restatement definition of agency in a
number of cases. See Crouch, supra; Evans v. White, 284 Ark. 376,
682 S.W.2d 733 (1985). The Restatement (Second) of Agency, 1,
cmt. b (1957) provides that "the relationship of agency does not
depend on the intent of the parties to create it, nor the belief
that they have done so. To constitute the relationship there must
be an agreement, but not necessarily a contract, between the
parties; if the agreement results in the factual relationship
between them to which are attached the legal consequences of
agency, an agency exists although the parties did not call it
agency and did not intend the legal consequences of the
relationship to follow."
The Restatement further provides that the "relationship of
master and servant can be created although there is no mutual
agreement to give and receive assistance. It is only necessary
that there be submission by the one giving service to the direction
and control of the one receiving it as to the manner of
performance." Restatement (Second) of Agency 221, cmt. c (1957).
On the other hand, we have defined an independent contractor
as one who, exercising an independent employment, contracts to do
work according to his own methods and without being subject to the
control of the employer, except as to the results of the work, and
have held that the right to control and not the actual control
determines whether one is a servant or an independent contractor.
Wilson v. Davison, 197 Ark. 99, 122 S.W.2d 539 (1938).
In Blankenship v. Overholt, 301 Ark. 476, 786 S.W.2d 814
(1990), we listed ten factors to be considered in determining
whether a master/servant relationship or independent contract
existed, as found in 220 of the Restatement (Second) of Agency,
and stated that the right of control is the principal factor to be
considered in making the determination. The intent of the parties
is not included among these factors. See also Dickens v. Farm
Bureau Mut. Ins. Co., 315 Ark. 514, 868 S.W.2d 476 (1994).
Nevertheless, the trial court's misstatement of the law alone
is not a sufficient basis for reversal. We have repeatedly stated
that a trial court's ruling will be affirmed if correct, even if
the reason given for the decision is wrong. Higginbottom v. Waugh,
313 Ark. 558, 856 S.W.2d 7 (1993). It is unclear whether the trial
court considered the proof submitted by the Howards as evidence,
however, we cannot say that the trial court erred merely because he
misstated the law of agency in his order. We must further consider
the evidence submitted by the parties to make this determination.
4. Evidence of Agency
The Howards next argue that even if they were required to
establish the existence of a contractual relationship between
Mitchell and DMN, there is sufficient evidence from which to infer
that Mitchell was in fact both DMN's agent and its contractual
employee. We agree that the Howards have provided proof of a
genuine issue of material fact.
The Howards suggest there are numerous instances of control
exerted on Mitchell by DMN, as evidenced by DMN's contract with DSI
and from the deposition testimony provided with the response to
DMN's motion. This evidence and the Howards' characterization of
it may be summarized as follows: DMN admitted its strong interest
in how Mitchell performed because the newspaper could not function
without timely delivery. DMN planned Mitchell's business. The
contract between DSI and DMN contains provisions which can only be
described as controls over the scope and manner of delivery:
territorial routes were assigned, insertion of other materials was
prohibited, strict record keeping was required and substitution of
carrier was required if Mitchell could not perform. Through DSI,
DMN supplied Mitchell with virtually all the supplies, forms and
equipment he needed, with the exception of his vehicle. The
paperwork supplied by DMN was extensive and complicated. DMN's
district manager acknowledged that he rode with Mitchell on one
occasion on certain routes to service his racks. DMN roadmen would
visit from time to time and follow carriers to observe the manner
and method of distribution in order to verify performance of the
contract. DMN structured the system under which Mitchell was paid
what amounted to a salary. DMN effectively terminated Mitchell
when it became dissatisfied with his performance. DMN confirmed
its controlling role in delivery by delivering Mitchell's route
after causing his discharge.
DMN counters these contentions with the following assertions:
There was no evidence that DMN provided any form of compensation to
Mitchell, or paid any insurance or other employment benefits.
Mitchell was free to deliver the paper by whatever method he chose.
Mitchell chose where to locate and service racks. There was no
evidence that DMN had an interest in how Mitchell performed his job
or that DMN planned Mitchell's business. DMN's contract with DSI is
not evidence that DMN exercised control over Mitchell. Mitchell
never perceived himself as an employee of DMN. There is no
evidence that DMN provided any supplies directly to Mitchell and,
the carrier route list was not furnished by DMN to Mitchell. A DMN
employee would ride with DSI's carrier only on occasion, to either
monitor compliance by DSI with the terms of its contract, or to
analyze rack sale performance for DMN's own benefit or at the
request of the independent distributor. DMN did not terminate
Mitchell; DSI terminated the contract because DSI feared that DMN
might terminate it for poor performance, not because DMN learned
Mitchell was still delivering the paper. DMN assumed delivery of
the paper in Little Rock upon DSI's termination of the contract in
order to assure service to readers while DMN arranged for a new
contractor.
The Howards rely on Karcher Candy Co. v. Hester, 204 Ark. 574,
163 S.W.2d 168 (1942), to support their contentions that Mitchell
was DMN's agent. In Karcher, Hester's son was employed by
Karcher's driver to aid him in delivering beer with Karcher's
permission, and Karcher paid the driver one cent more per case to
enable the driver to pay the helper. We determined that this was
sufficient evidence to show that the relationship of master and
servant existed between Karcher and the driver's helper, stating:
The relation of master and servant between two
persons may be shown by proving that the one
performs services for the other. [citation
omitted] Indeed, it would be difficult, in
most of these cases, to prove the relation of
master and servant except by the fact that the
one is known to perform service for the other,
or from their course of dealings.
* * * *
The relationship may be created by express
contract, but this is not essential; it may be
created as well by conduct which shows that
the parties recognize that one is the
employer, or master, and that the other is the
employee or servant. Moreover, when one is
sought to be held responsible for the tortious
act of another under the principle respondeat
superior, the question of responsibility will
not depend entirely upon the existence of some
actual contractual relationship of master and
servant. It is sometimes allowable to prove
the relation of master and servant by the fact
that one performs service for another.
Karcher, supra.
However, in Jumper v. L & M Transport. Inc., 296 Ark. 319, 756 S.W.2d 901 (1988), this court concluded that the driver of a
tractor-trailer rig was not an employee or agent of L & M, but was
an employee of Jimmy Sellers, who leased the rig to L & M because:
(1) Sellers owned the truck and leased the truck to L & M; (2)
Sellers employed the driver; (3) Sellers was responsible for
qualifying the driver; (4) L & M had no authority to hire or fire
the driver; (5) L & M did not pay the driver's wages or social
security; and (6) Sellers told the driver the routes he was to
drive.
Although we have not previously considered whether a newspaper
carrier is an agent of the publisher, a number of other
jurisdictions have addressed this issue. In Murrell v. Goertz, 596 P.2d 1223 (1979), the Oklahoma Court of Appeals held that a
newspaper publisher would not be liable for damages resulting from
an assault and battery by a carrier hired as an independent carrier
salesman by a friend who was himself an independent contractor of
the publisher. Although the publisher had ultimate control over
territorial boundaries of the paper route, required that deliveries
be completed by 6:00 a.m., set policy that all papers were to be
held by rubber bands, and provided that customers missed by the
carrier were to call the publisher, the independent contractor of
the publishing company testified that he had hired the person
charged with assault as an independent carrier salesman, and that
the carrier was responsible only to him for delivery of the
newspaper and was in no way under the supervision, dominion and
control of the publishing company. However, the publisher in
Murrell, unlike DMN, had no direct contact with the carrier and had
no knowledge of his employment.
Although agency is a question of fact ordinarily determined by
the trier of fact, where the facts are undisputed, and only one
inference can reasonably be drawn from them, it becomes a question
of law. Evans, supra. Here, the Howards presented evidence of
control by DMN not only as to the results to be achieved - timely
delivery of the newspapers, but also as to certain details of the
work. We cannot say that only one inference could reasonably be
drawn from the proof submitted by the Howards as evidence of the
extent of control DMN exercised over Mitchell.
Reversed and remanded.
Dudley, J., not participating; Glaze and Brown, JJ. dissent.
Associate Justice Robert L. Brown
April 1, 1996 *ADVREP8-A*
PATRICIA ANN HOWARD AND RICHARD
SCOTT HOWARD,
APPELLANTS,
V.
THE DALLAS MORNING NEWS, INC.,
APPELLEE,
95-938
APPEAL FROM THE PULASKI COUNTY
CIRCUIT COURT,
NO. 93-1027,
HON. MORRIS W. THOMPSON, JUDGE,
DISSENTING OPINION.
The central issue in this case is whether David Mitchell was
an employee or an independent contractor of the Dallas Morning
News. The threshold determination in such cases is whether Mitchell
had the authority to act for the publishing company. See, e.g.,
McMahan v. Berry, 319 Ark. 88, 890 S.W.2d 242 (1994); Pledger v.
Troll Book Clubs, Inc., 316 Ark. 195, 871 S.W.2d 389 (1994); Jumper
v. L & M Transp., Inc., 296 Ark. 319, 756 S.W.2d 901 (1988);
Johnson v. Timber Corp., 295 Ark. 622, 752 S.W.2d 241, set aside on
rehearing on other grounds, 295 Ark. 663-A, 758 S.W.2d 415 (1988);
Schuster's, Inc. v. Whitehead, 291 Ark. 180, 722 S.W.2d 862 (1987);
Evans v. White, 284 Ark. 376, 682 S.W.2d 733 (1985); Crouch v. Twin
City Transit, 245 Ark. 778, 434 S.W.2d 816 (1968). Our law in
Arkansas is absolutely clear on that point.
In 1968, this court adopted the Restatement of Agency standard
of what is required to create an agency relationship. See Crouch
v. Twin City Transit, supra. We acknowledged that an agency
relationship is created as a result of conduct by two parties
manifesting that one of them is willing to have the other act for
him subject to that party's control, and the other party consents
to act. Absent an agreement, there must be conduct evidencing this
relationship. The majority and I agree on this point, and caselaw
in this state bears it out. See, e.g., Schuster's, Inc. v.
Whitehead, supra; Evans v. White, supra; Karcher Candy Co. v.
Hester, 204 Ark. 574, 163 S.W.2d 168 (1942); see also AMI Civ. 3d
701 and 707.
Where the majority opinion falls short, in my judgment, is in
its failure to identify proof of conduct by Dallas Morning News and
David Mitchell to create such a relationship. What the majority
does instead is present circumstances that might prove some control
by the Dallas Morning News over Mitchell. Whether Dallas Morning
News was interested in results and effective delivery of its papers
rather than control over the details of the work is debatable. See
generally Blankenship v. Overholt, 301 Ark. 476,786 S.W.2d 814
(1990). But even assuming for purposes of summary judgment review
that these circumstances manifest some control, that analysis does
not satisfy whether the publisher's conduct evidenced that Mitchell
was acting for it and conduct by Mitchell that he consented to act
for the Dallas Morning News.
The contractual arrangements in this case certainly give no
indication that an agreement was struck between Dallas Morning News
and Mitchell. Dallas Morning News contracted with Delivery
Systems, Inc. to serve as its distributor in the Little Rock area.
The Independent Distributor Agreement between the parties stated
that Delivery Systems would have "sole control" over its personnel,
including their selection and their work performance. It further
stated that Delivery Systems was an independent contractor and
added:
Distributor [Delivery Systems] shall have no authority,
and is hereby forbidden, to employ or contract with any
person on behalf of Publisher [Dallas Morning News]....
Delivery Systems then contracted with David Mitchell as a carrier
and entered into an Independent Contractor/Carrier Agreement as
well as a Delivery Systems Carrier Lease. The Independent
Contractor/Carrier Agreement specified that Mitchell operated
solely under his own supervision as an independent contractor and
that Delivery Systems was only interested in the "desired result of
prompt receipt and delivery of newspapers."
Mitchell did destroy 130 newspapers, and when Dallas Morning
News found out about this, the publishing company was upset.
According to Joe Fox, president of Delivery Systems, the
"impression" was left with him that if Delivery Systems wanted to
keep the contract with Dallas Morning News, it would have to
terminate the contract with Mitchell. Rather than do this, Fox
ended the contract with Dallas Morning News. But in discussing
these circumstances in his deposition, Fox made it clear that the
Dallas Morning News knew that it did not have the authority to
terminate Mitchell. And Mitchell made it clear in his depositions
that he worked for Delivery Systems.
The majority appears to hinge its opinion on Comment C to
Restatement (Second) of Agency 221 (1958), which requires that
there be submission by the one giving service to the directions and
control of the one receiving it as to the manner of performance.
Comment C to 221 further states that if one manifests consent that
another shall be his servant and work is in fact done upon his
account, the one employed is the servant of the one employing,
although there is no intent to receive the service. Again, there
is no proof of conduct in this case on Mitchell's part to submit to
the directions and control of Dallas Morning News, and no conduct
by Dallas Morning News consenting to the fact that Mitchell was in
its employ.
The one case cited in the majority opinion which had
approximate facts stands for the point that no employment
relationship existed. See Murrell v. Goertz, 597 P.2d 1223 (1979).
In Goertz, there was a tier of two independent-contractor
relationships, as in the instant case. In short, the majority has
presented no precedent for eliminating the necessity for some
implied agreement based on conduct. But that is what the majority
opinion does by inferring an agency relationship solely based on
aspects of control exercised by Dallas Morning News. Again,
whether Mitchell's conduct proved in any form or fashion that he
submitted to this control is not even addressed. And the record
reveals there is no such proof.
On the Howards' second cause of action, the circuit judge
denied summary judgment to Delivery Systems, and their case against
that party will go to trial. In the case against Dallas Morning
News, however, I cannot see eliminating one essential factor for
determining agency and employment which has been the law in
Arkansas for decades and which the Restatement on Agency
contemplates.
For these reasons, I would affirm.
Glaze, J., joins.
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