Gloria Kazeleski v. Dixie Motors, Inc.
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IN THE SUPREME COURT OF TENNESSEE
SPECIAL WORKERS’ COMPENSATION APPEALS PANEL
AT NASHVILLE
September 21, 2009 Session
GLORIA KAZELESKI v. DIXIE MOTORS, INC.
Direct Appeal from the Chancery Court for Davidson County
No. 06-1456-I
Claudia C. Bonnyman, Chancellor
No. M2009-00276-WC-R3-WC - Mailed - January 7, 2010
Filed - February 10, 2010
This workers’ compensation appeal has been referred to the Special Workers’ Compensation
Appeals Panel of the Supreme Court in accordance with Tennessee Code Annotated §
50-6-225(e)(3) for a hearing and a report of findings of fact and conclusions of law. The
plaintiff, Gloria Kazeleski, was involved in an automobile accident, and sought workers’
compensation benefits from defendant Dixie Motors, Inc. Dixie Motors contended that she
was not its employee, but an independent contractor. The trial court ruled that she was an
employee, and awarded benefits, including 100% permanent disability of the left arm. The
defendant has appealed, arguing that the trial court erred by finding that plaintiff was its
employee. We conclude that she was an independent contractor, and reverse the judgment.
Tenn. Code Ann. § 50-6-225(e) (2008) Appeal as of Right; Judgment of the Chancery
Court Reversed
J ON K ERRY B LACKWOOD, S R. J., delivered the opinion of the court, in which W ILLIAM C.
K OCH, J R., J., and D ONALD P. H ARRIS, S R. J., joined.
Michael Gigandet, Nashville, Tennessee, for the appellant, Dixie Motors, Inc.
Jeffrey S. Strickland, Brentwood, Tennessee, for the appellee, Gloria Kazeleski.
MEMORANDUM OPINION
Factual and Procedural Background
The plaintiff, Gloria Kazeleski, was injured in an automobile accident on July 29,
2004. At the time of the accident, she was driving a vehicle either to or from the premises
of the defendant, Dixie Motors, Inc. She sustained a severe fracture of her arm, and
extensive damage to her median nerve. Three surgical procedures were required to treat the
injury. These were successful in repairing the fracture. However, she was left without
sensation in the median nerve distribution in her hand.
Dixie Motors is involved in both the retail and wholesale automobile business. The
retail side of the business, which is not at issue in this case, is conducted by full-time sales
personnel, working on commission, selling vehicles which have been purchased at wholesale
by Dixie Motors.
Ms. Kazeleski was involved in the wholesale side of the business, which is structured
in a substantially different manner. Mike Caldwell, the general manager of Dixie Motors,
testified concerning the structure of its wholesale business. Automobiles are purchased at
wholesale by brokers, who are independent contractors. Dixie Motors provides financing for
the purchase of the automobiles, and also for repairs and detailing. The vehicles are stored
on its premises. Brokers are provided with a desk, a telephone, and accounting or
bookkeeping services. When a vehicle is sold by a broker to a retail automobile dealer, Dixie
Motors receives 30% of the broker’s net profit from the sale. Automobiles purchased by
brokers are transported to and from the premises by one of two methods. If several vehicles
have been purchased at once, they are moved by a transport truck. Individual vehicles are
transported by drivers, such as Ms. Kazeleski. Mr. Caldwell’s description of the operation
was corroborated by the testimony of Reese Payne, who had been a broker there for fifteen
years. Mr. Payne was one of the brokers who occasionally engaged Ms. Kazeleski’s
services.
Drivers are initially “hired” by individual brokers. However, before a driver could
actually move a vehicle, the driver had to provide a copy of her drivers’ license to Dixie
Motors. Dixie Motors would then forward that information to its insurer, which would
review the driver’s record. The drivers were covered by insurance purchased by Dixie
Motors. Drivers received their work assignments from individual brokers. Many, including
Ms. Kazeleski, worked for several brokers. The drivers negotiated their hourly wage with
each broker separately. Thus, Ms. Kazeleski was paid as little as $7.00 per hour or as much
as $10.00 per hour for delivering automobiles, depending on her agreement with the
individual broker. She testified that, to receive driving assignments, “I would call them or
they would call me or at the end of the day they would say to be here at nine o’clock, we
have a delivery.” When Ms. Kazeleski completed a driving assignment, she would advise
the individual broker how many hours it had taken. The broker would submit an expense
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voucher to Dixie Motors’ office manager. At the end of the week, a check was issued to Ms.
Kazeleski reflecting the total of the vouchers submitted. Taxes were not deducted, and she
was provided with a 1099, rather than a W-2, for IRS purposes.
Ms. Kazeleski testified that she had the option of declining any individual assignment.
However, she was reluctant to do so, because the broker offering the assignment might not
request her services again. As a result, she accepted the assignments offered to her “nine
times out of ten.” On cross examination, she testified that one of the reasons she chose to
work in this manner was that it allowed her time to spend with her family.
Ms. Kazeleski testified that she did not receive any assignments from Mr. Caldwell,
the general manager, but that she once “did a favor for” him. She also testified that she
worked in the office on one occasion. Mr. Caldwell and Wendy Stoker, the office manager,
disputed that this occurred. Also, for an unspecified period of time, Ms. Kazeleski had a key
to the gate of Dixie Motors’s lot. She had been given this for the purpose of opening the gate
to permit delivery of automobiles after normal business hours.
The trial was bifurcated. A hearing was held on March 27, 2008 for the purpose of
determining whether or not Ms. Kazeleski was an employee of Dixie Motors for workers’
compensation purposes. The trial court ruled that she was an employee. A second hearing
was held on December 18, 2008 to determine the amount of benefits due to her. The trial
court awarded 100% permanent disability of the left arm, fifty-five weeks of temporary total
disability, and ordered the payment of medical expenses. Dixie Motors has appealed,
contending that the trial court erred by finding that Ms. Kazeleski was its employee for
purposes of the workers’ compensation law.
Standard of Review
Our standard of review of factual issues in a workers’ compensation case is de novo
upon the record of the trial court, accompanied by a presumption of correctness of the trial
court’s factual findings, unless the preponderance of the evidence is otherwise. Tenn. Code
Ann. § 50-6-225(e)(2) (2008); see also Rhodes v. Capital City Ins. Co., 154 S.W.3d 43, 46
(Tenn. 2004); Perrin v. Gaylord Entm’t Co., 120 S.W.3d 823, 825 (Tenn. 2003). When the
trial court has seen the witnesses and heard the testimony, especially where issues of
credibility and the weight of testimony are involved, the court on appeal must extend
considerable deference to the trial court’s factual findings. Houser v. Bi-Lo, Inc., 36 S.W.3d
68, 71 (Tenn. 2001). In reviewing documentary evidence such as depositions, however, we
extend no deference to the trial court’s findings. Orrick v. Bestway Trucking, Inc., 184
S.W.3d 211, 216 (Tenn. 2006). Conclusions of law are subject to de novo review without
any presumption of correctness. Rhodes, 154 S.W.3d at 46; Perrin, 120 S.W.3d at 826.
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Analysis
Dixie Motors does not contest the amount of the award in this appeal. The sole issue
presented is whether Ms. Kazeleski was an employee of Dixie Motors for purposes of the
workers’ compensation statute.
Dixie Motors contends that Ms. Kazeleski was an independent contractor, rather than
an employee. In support of its position, it points out that she did not submit an employment
application and was not interviewed by any employee of Dixie Motors before she began
driving for the brokers; that the individual brokers determined which drivers to use, when to
use them and how much to pay them. Dixie Motors also notes that Ms. Kazeleski was free
to accept or reject any given assignment; that it did not maintain personnel files on any
drivers; that taxes were not deducted from the checks issued to drivers; that Ms. Kazeleski’s
income tax returns stated that she was self-employed; and that the Tennessee Department of
Labor determined that the drivers were not employees of Dixie Motors for purposes of the
unemployment compensation law.
Ms. Kazeleski argues that the trial court correctly found her to be an employee. She
points out that she was paid by checks from Dixie Motors for all of her driving; that she and
other drivers were required to provide copies of their drivers’ licenses to Dixie Motors before
they were permitted to driver for any broker; that she was covered under its liability
insurance policy while driving the vehicles; that she was provided with a key to the premises;
and that she had no other employment after she began driving vehicles for its brokers.
Tenn. Code Ann. § 50-6-102(10)(D)(Supp. 2003) provides:
[I]n order to determine whether an individual is an “employee,” a
“subcontractor,” or an “independent contractor,” the following factors
shall be considered:
(A) The right to control the conduct of the work;
(B) The right of termination;
(C) The method of payment;
(D) The freedom to select and hire helpers;
(E) The furnishings of tools and equipment;
(F) Self scheduling of working hours; and
(G) The freedom to offer services to other entities[.]
Tenn. Code Ann. § 50-6-102(10)(D) (Supp. 2003). “[N]o single factor is determinative.”
Galloway v. Memphis Drum Serv., 822 S.W.2d 584, 586 (Tenn. 1991). However, “this
Court has repeatedly emphasized the importance of the right to control, the relevant inquiry
being whether the right existed, not whether it was exercised.” Id.
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We note that the evidence in this record overwhelmingly supports the conclusion that
the brokers, such as Mr. Payne, were independent contractors. This issue was not disputed
in the trial court. The status of the brokers is significant in determining Ms. Kazeleski’s
status, because her relationship with Dixie Motors was conducted primarily through them.
Drivers were recruited and hired by the individual brokers. Dixie Motors’ only involvement
in that process was to ask its insurer to determine that a proposed driver was insurable. After
being approved, drivers were paid by Dixie Motors. A individual driver’s rate of pay was
determined by separate agreements, negotiated individually with each broker. Thus, Ms.
Kazelski received as much as $10.00 per hour or as little as $7.00 per hour, depending on
which broker she was working for. The amount paid to a driver for a given job was charged
to the responsible broker by Dixie Motors. A single paycheck issued to a driver by Dixie
Motors could include work performed for several brokers at several different hourly rates.
The selection of a particular driver to transport a vehicle was made by the broker who
purchased or sold the vehicle. There is no evidence that Dixie Motors directly participated
in the assignment of work to individual drivers.
Asked about her work schedule, Ms. Kazeleski said “I would call them or they would
call me or at the end of the day they would say to be here at 9:00 o’clock, we have a
delivery.” This answer suggests, or permits the inference, that she did not work a regular
schedule. She stated that she could either accept or decline an assignment from an individual
broker, depending on whether she had other tasks. However, she accepted “nine times out
of ten.” She agreed that one of the benefits of working as a driver was that the flexible
schedule allowed her to spend time with her family.
The only employees of Dixie Motors with whom Ms. Kazeleski had direct contact
were Mr. Caldwell and Ms. Stoker.1 She testified that Mr. Caldwell did not assign any work
to her, but that she “did a favor” for him on one occasion. She also testified that she
performed filing in the office on one occasion, though Ms. Stoker disputed this. She had a
key to the vehicle lot for a period of time. This was given to her by Mr. Caldwell, so that she
could open the gate to deliver vehicles outside of regular business hours. He also gave her
documents confirming that she was insured while driving vehicles being purchased or sold
through Dixie Motors. She gave a copy of her driver’s license to Ms. Stoker when she first
began to drive for the brokers. She drank coffee in the office while waiting for driving
assignments. These activities constituted all, or virtually all, of Ms. Kazeleski’s direct
interaction with Dixie Motors. The remainder of her dealings with Dixie Motors were
through the individual wholesale brokers.
In summary, Ms. Kazeleski’s hiring, work assignments, schedule and rate of pay were
1
Ms. Kazeleski testified that she considered the wholesale brokers to be employees of Dixie Motors.
For the reasons stated herein, we conclude that they were not.
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all determined by the individual brokers, who were independent contractors. She was paid
by checks issued from Dixie Motors’ account, and was insured by Dixie Motors when
driving its vehicles. The evidence does not support the conclusion that Dixie Motors had the
right to control any aspect of her day-to-day work as a driver. We therefore conclude that
the evidence preponderates against the trial court’s finding that Ms. Kazeleski was an
employee of Dixie Motors for purposes of the workers’ compensation law.
Conclusion
The judgment of the trial court is reversed. The complaint is dismissed. Costs are
taxed to Gloria Kazeleski, for which execution may issue if necessary.
______________________________________
JON KERRY BLACKWOOD, SENIOR JUDGE
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IN THE SUPREME COURT OF TENNESSEE
SPECIAL WORKERS' COMPENSATION APPEALS PANEL
AT NASHVILLE
GLORIA KAZELESKI v. DIXIE MOTORS, INC.
Chancery Court for Davidson County
No. 06-1456-I
No. M2009-00276-WC-R3-WC - Filed - February 10, 2010
JUDGMENT
This case is before the Court upon the entire record, including the order of referral to
the Special Workers' Compensation Appeals Panel, and the Panel's Memorandum Opinion
setting forth its findings of fact and conclusions of law, which are incorporated herein by
reference.
Whereupon, it appears to the Court that the Memorandum Opinion of the Panel should
be accepted and approved; and
It is, therefore, ordered that the Panel's findings of fact and conclusions of law are
adopted and affirmed, and the decision of the Panel is made the judgment of the Court.
Costs will be paid by Gloria Kazeleski, for which execution may issue if necessary.
PER CURIAM
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