Sacramento Car Accident Lawyer Blog

(Please note: the names and locations of all parties have been changed to protect the confidentiality of the proceedings.)

Mr. Sunderland sued both Mr. Mazloom and his employer, Lockheed. The appellate court
held Mr. Sunderland was in the course and scope of his employment, noting the following:

1. Mr. Mazloom drove his own vehicle.
2. Lockheed did not pay Mr. Mazloom a mileage allowance while he worked in Lancaster.
3. Mr. Mazloom had already cleared out his office. Thus, his work for Lockheed was finished.
4. Mr. Mazloom made the trip to the fast food restaurant to get food. Thus, it was not a trip that had a mix of personal and business purposes.
5. The trip to In-N-Out Burger had no benefit to Lockheed.
6. Finally, the Court noted that Lockheed had “no control over Mazloom’s choice of
transportation generally, or over his movements at the time he collided with plaintiff’s
vehicle.”

The facts in the present case of Gibbs v.ABC, are critically different and thus require a different
result from the one reached in Sunderland.

1. Unlike Sunderland, Ms. Smythe’s vehicle was provided and paid for by her employer, ABC.
2. Unlike Sunderland, ABC paid for Ms. Smythe’s travel expenses.
3. Unlike Sunderland, Ms. Smythe was in the middle of a multi-day business trip for the benefit of ABC. Mr. Mazloom had already “cleared out his office,” whereas Ms. Smythe was expected by her boss to continue working for ABC in California the day following her collision with plaintiff John Gibbs.

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(Please note: the names and locations of all parties have been changed to protect the confidentiality of the proceedings.)

Further, personal acts that are “necessary to the comfort, convenience, health, and welfare of the employee while at work” are minor deviations and do not take the employee out of the course and scope of employment. O’Connor v. McDonald’s Restaurants (1990) 220 Cal. App. 3d 25, 30.
For example, in Lazar v. Thermal Equipment (1983) 148 Cal. App. 3d 458, 466-467, the court held that an employee’s decision to stop at a grocery store on the way home from work, even though the store was in the opposite direction than his normal route home, did not remove him from the course and scope of his employment. The court further held the detour was foreseeable because the employee was using a company vehicle to complete his work.
The Lazar court went on to say:

It is the established rule in this jurisdiction that where the servant is combining his own business with that of his master, or attending to both at substantially the same time, no nice inquiry will be made as to which business the servant was actually engaged in when the third person was injured…” (Lazar, supra, at pp. 467-468.)

IV. DEFENDANT'S RELIANCE ON SUNDERLAND v. LOCKHEED IS MISPLACED

In its argument that Nancy Smythe was not in the scope of her employment with
ABC at the time of the collision, defendant relies exclusively on the decision of Sunderland v.
Lockheed (2005) 130 CA4th 1. Defendant’s reliance on Sunderland, supra, is misplaced, and
is easily distinguished from the case at bar.

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(Please note: the names and locations of all parties have been changed to protect the confidentiality of the proceedings.)

First it should be noted that the application, evaluation and weighing of these factors cannot possibly be conducted without the court making factual determinations and weighing evidence, a process incompatible with summary adjudication.

In O’Connor v. McDonald’s Restaurant, supra, 220 Cal.App.3d 25 plaintiff was injured in a motor vehicle accident caused by a McDonald’s employee. The employee had voluntarily returned to the restaurant one evening from 8:00 p.m. until 1:00 or 2:00 a.m. in order to do extra cleaning and preparation for a “spring blitz” competition. The employee voluntarily contributed his extra time with a goal of receiving a promotion. He then traveled from McDonald’s to a co-workers house where he socialized until about 6:30 a.m. The accident occurred when he was traveling from the co-worker’s house to his own house. The trial court granted summary judgment in favor of McDonald’s, finding that he was on a special errand for McDonald’s when he voluntarily reported for cleanup duties, but that the stop at the co-worker’s house was a “complete departure” from the special errand and McDonald’s responsibility for his driving therefore terminated before the accident occurred. The court of appeal disagreed, and after applying the factors set forth in Felix v. Asai, concluded that there was a triable issue of material facts as to whether the trip to the co-worker’s house constituted a complete departure from the special errand. O’Connor v. McDonald’s Restaurants of California, Inc. Supra, 220 Cal.App.3d at 33-34.

In applying the factors set forth by the court in Felix v. Asai, the inescapable conclusion is that there is a clear nexus between Smythe’s arrival at the site of the accident and her work for ABC.

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Where the employee “is combining his own business with that of his master, or attending to both at substantially the same time, no nice inquiry will be made as to which business the servant was actually engaged in when a third person was injured.” Miller v. Stouffer (1992) 9 Cal.App.4th 70, 78. “If the main purpose of his activity is still the employer’s business, it does not cease to be within the scope of the employment by reason of incidental personal acts, slight delays, or deflections from the most direct route. State Farm Mut. Auto. Ins. Co. V. Haight (1988) 205 Cal,App.3d 223, 243. Under such circumstances, the employer will face respondent superior liability “unless it clearly appears that the servant could not have been directly or indirectly serving his master.” Miller v. Stouffer, supra, 9 Cal.App.4th at 78 citing Loper v. Morrison (1944) 23 Cal.2d 600, 606.

Even if not motivated by a desire to serve the employer, conduct is nevertheless within the course and scope of employment if there is a sufficient causal nexus between the conduct at issue and the employment. Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 298. A sufficient causal nexus exists where the conduct at issue is “generated by or an outgrowth of work place responsibilities, conditions or events.” Id. at 302.

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(Please note: the names and locations of all parties have been changed to protect the confidentiality of the proceedings.)

6. ABC had the Right to Terminate Smythe at Will
One of the most critical factors has been determined to be the right of the employer to end the service of the employee whenever he sees fit. Press Pub Co. supra, 190 Cal. at 120. Here, there is no doubt that Chan had the authority to terminate Smythe at will. (See Fact No. 14)
Each and every factor outlined in the Restatement 2d of Agency dictates a conclusion that the true relationship between Smythe and ABC from April 2006 through and including the date of the accident at issue here, was one of employer/employee and not one of independent contractor. Because of the financial status of the company, a unique agreement was arrived at between Smythe and Chan, and Smythe was not placed on payroll. Nonetheless, the fact that she was engaged full-time, that she was charged with a wide variety of tasks and duties for the benefit of the company rather than hired for a specific project, the fact that Chan could and did dictate what she was to do and how she was to do it, and the fact that ABC provided her with all instrumentalities necessary for doing the work and, perhaps most importantly, that ABC held her out as president and COO all constitute traits of an employer-employee relationship and not one of independent contractor.
3. SMYTHE WAS IN THE COURSE AND SCOPE OF HER EMPLOYMENT AT THE TIME OF THE ACCIDENT

An employer is vicariously liable for the tortious conduct of its employees committed while the employee is in the course and scope of his or her employment. Rodgers v. Kemper Construction Company (1975) 50 Cal.App.3d 608, 617. The policy is based on an economic rational, with the goal being to place the cost of losses caused by the torts of employees that occur within the conduct of the employer’s enterprise upon the business itself, as a required cost of doing business. Hinman v. Westinghouse Electric Co. (1970) 2 Cal.3d 956, 959-960.

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(Please note: the names and locations of all parties have been changed to protect the confidentiality of the proceedings.)

5. The Parties were Operating as Employer/Employee

One of the factors to be evaluated is how the parties saw the nature of the relationship between them. Smythe had no doubt that she was an employee of ABC. The employment of 2006 was substantially the same as the previous employment between 2000 and 2002. (See Fact No. 5) In her opinion, Chan was her immediate superior who could dictate her activities, and if Smythe disobeyed Chan it would constitute insubordination and subject her to termination. (See Fact Nos. 6, 13, 14, 15, 16) She was working full-time (See Fact No. 25, 29) and during both periods of employment had a company credit card, company office, cell phone, laptop, email account and voicemail. (See Fact No. 27) She had transitioned into a long term, full-time position as President and COO, and she was held out as such by Chan. (See Fact No. 20, 21, 25) Certainly in Smythe’s mind she was a long term employee of ABC. (See Fact No. 24, 25)

Although Chan does not describe Smythe as an employee, she admits that Smythe was introduced as President (See Fact No. 20, 21), directed the work of others (See Fact No. 19) and had a role in hiring, firing, and expending corporate funds. (See Fact No. 31)

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While it certainly may be true that outside consultants are sometimes hired on a project basis to fill a particular role that the company cannot fill in-house or to provide short-term outside consulting services, such is not the case with the employment of Smythe. As discussed below, she was working full-time for ABC and had no other clients. (See Fact No. 29) She was dedicating her full time efforts to advancing the objectives of the company. She was being held out to customers, potential customers and employees as the president of the company and was filling that role. She was involved in organizational efforts, setting and directing the objectives of the company, assisting with marketing and representing the company at conferences. This is not the traditional role of a consultant, and, in fact, it would be highly unorthodox for a company president to be an outside consultant. Rather than reflecting a true intent to retain Smythe as an independent contractor, the situation she was in with Smythe at the time of the accident was arrived at solely due to economic concerns and a desire to find a structure that would be economically best for both parties. (See Fact No. 26) Where all indicia are to the contrary, the court should, and must, ignore the “Independent Contractor” label assigned by the parties. Toyota, supra, 220 Cal.App.3d at 877.
3. ABC Supplies All Instrumentalities
At the time of the accident giving rise to this action, ABC was being supplied with all instrumentalities necessary to carry on her work for the benefit of ABC, including an office, an email account, a cell phone, voicemail, a computer and a company credit card. (See Fact No. 27) In addition, when she attended the conference in northern California, her expenses were paid by ABC, which provided him with a rental car, corporate housing and a local office in which to work. (See Fact No. 28)
Again, contrary to what would be expected with an independent consultant, ABC provided Smythe everything it would provide any other traditional employee to carry on the work of the company.

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(Please note: the names and locations of all parties have been changed to protect the confidentiality of the proceedings.)

2. Type of Business and SMYTHE’s Role in the Business
The Restatement (2d) sets forth several factors with overlapping analyses under the present facts, including (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (h) whether or not the work is part of the regular business of the employer; and (j) whether the principal is or is not in business. Therefore, these will be addressed together.

ABC is a business which provides manufacturing and software solutions for a variety of industries. It employs programmers to develop software. (See Fact No. 17) The organizational structure had a Board of Directors at the top, followed by Victoria Chan, the CEO, followed by Smythe, who was the “acting” president. (See Fact No. 18) Smythe and four others reported to Chan. (See Fact No. 19) Smythe also had authority over four other employees in the company. (See Fact No. 19)

Smythe was given the title of president and was authorized to introduce herself to others as president. (See Fact No.20) Victoria Chan introduced Smythe to customers, potential customers and employees as the president of the company. (See Fact No. 21) Business cards that were in the process of being ordered at the time of the accident, but were never printed, identified Smyhte as the President and Chief Operating Officer. (See Fact No. 22)

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The employer’s control is the most important factor, and the others are to be considered “secondary elements.” Toyota, supra, 220 Cal.App.3d at 875; Isenberg v. California Emp. Stab. Com., (1947) 30 Cal.2d 34, 39. “Moreover, it is not the control actually exercised, but that which may be exercised which is determinative.” Toyota, supra, 220 Cal.App.3d at 875.
In applying the factors to the evidence of Ms. Smythe’s employment status, the inescapable conclusion is that she was operating as an employee rather than an independent contractor at the time of the accident that injured plaintiff John Gibbs.
1. Employer Right of Control
Smythe had worked at ABC previously as an employee between January 2000 and July 2002. (See Fact No. 1) She returned to work ABC at in April 2007, and was terminated in July 2007. (See Fact No. 2) During the initial period of employment between 2000 and 2002, she reported directly to CEO Victoria Chan until the end of that period, when David Grillo took over. (See Fact No. 3) Victoria Chan controlled and directed her work for that two-and-half-year period. (See Fact No. 4) Upon her return to the company in April 2007, her relationship was similar; Victoria Chan told her what to do, and Chan could terminate her at will. (See Fact No. 5, 14)
With regard to the conference that Smythe was attending in northern California at the time of the accident, she had been instructed by Chan to attend the ITC conference in Marin. (See Fact No. 6) It would have been an issue if Smythe had declined to attend the conference. (See Fact No. 7) She was told what her objectives were while at the conference. (See Fact No. 8) She was told to travel to the conference, stay at the company house, attend the conference, and take a team to represent ABC. (See Fact No. 9) She did what she was told. (See Fact No. 10) By her second stint with ABC, she had a lot of experience, but Chan was still in charge of her work. (See Fact No. 11)

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7. President Smythe’s job was not finished on July 17. Smythe intended to do some work for ABC on the morning of July 18, including checking e-mail and voicemail, doing follow-up, and preparing for her day using an ABC-issued phone and laptop issued for these purposes. Any such work would have been billed accordingly. [Smythe deposition, at 119:7-16; 119:21-121:2.]
B. Nancy Smythe Was an Employee of ABC
The seminal and well-reasoned case of Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, discusses at length the factors to be evaluated in determining employment status.
The most significant factor in determining whether the status of a person performing services for another is an employee or an independent contractor is the right to control the manner and means of accomplishing the result, that is, the details of the work. ‘If the employer has the authority to exercise complete control, whether or not that right is exercised with respect to all details, an employer-employee relationship exists.’

Id. at 873-874, quoting Empire Star Mines Co. v. Cal. Emp. Com. (1946) 28 Cal.2d 33, 43.

In addition to the determination regarding the right to control the manner and means of the work, the Toyota court also recognized factors set forth in the Restatement (2nd) of Agency, section 220, as additional matters of fact that must be considered:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;

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“Q. You had the right to direct Nancy Smythe in her work at ABC. True? A. Yes.”
2. An additional criteria creating an employer-employee relationship is the right to fire at will. Smythe did what she was told by her immediate superior, Chan, because Smythe believed she could be fired otherwise. [Smythe deposition, at 28:3-29:7; 31:2-14. Chan deposition, at 46:14-47:4, set forth below.]
“Q. You had the right to fire Ms. Smythe, if you chose to?
A. Yes.
Q. If he – if you found someone else who you thought could do a better job, you could have fired her and hired another person?
A. Correct.
Q. If she didn’t meet expectations, you could fire her?
A. Correct.
Q. If you decided to take the company in a different direction, you could fire her?
A. Correct.
Q. You could fire her whenever you felt like she wasn’t helpful?
A. Correct.”

3. In keeping with her status as an employee as of July 2006, according to CEO Chan, Smythe was “Acting President” of ABC. [Chan depo, at 25:19-26:13.] Smythe had the responsibilities of the President of ABC. [Smythe depo, at 108:11-20.] Chan introduced Smythe as President and Chief Operation Officer. [Chan depo, at 100:25-101:7.]

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2. Even if an agreement appears unambiguous, the Court must consider extrinsic evidence disclosing a latent ambiguity. [Wolf v. Superior Court (2004) 114 CA4th 1343, 1351]
3. No weighing of evidence. Matters going to the weight or credibility of evidence must be disregarded. One witness opposing the motion is sufficient to controvert a dozen supporting the motion. [Mann. V. Cracchiolo (1985) 38 C3d 18, 39; Binder v. Aetna (1999) 75 CA4th 832, 840]
4. Uncontroverted declarations must be accepted as true. [CCP $437c(e)]
5. The Court must consider not only plaintiff’s direct evidence but also all inferences that can be reasonably drawn from plaintiff’s evidence. A reasonable inference is sufficient to create a triable issue of fact and defeat a motion for summary judgment. [Hulett v. Farmers (1992) 10 CA4th 1051, 1059]
6. No weighing of reasonable inferences. [Aguilar v. Atlantic Richfield (2001) 25 C4th 826, 856]
7. Plaintiff’s declarations and evidence opposing the motion must be liberally construed, but defendant’s declarations and evidence are to be strictly construed. This reflects the cautious judicial attitude about granting summary judgment and depriving the plaintiff with the right of trial. [D’Amico v. Board of Medical Examiners (1974) 11 C3d 1, 21; Binder v. Aetna (1999) 75 CA4th 832, 839; Powell v. Kleinman (2007) 151 CA4th 112, 125 – 126]
Applying the above rules to the case at bar, defendant’s motion should be denied.

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II. LEGAL STANDARD
A party who seeks a court’s action in its favor bears the burden of persuasion thereon. (Evid. Code § 500). Thus, “from commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that it is entitled to judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850 (emphasis added).) Therefore, defendants moving for summary judgment bear the burden of persuasion that one or more elements of the cause of action in question “cannot be established,” or that “there is a complete defense” thereto. (Aguilar, supra, at 850.)
If there is even one triable issue of material fact the motion must fail. (Aguilar v. Atlantic Richfield (2001) 25 Cal.4th 826, 854-855) Additionally, the moving party’s evidence must be strictly construed “in order to avoid unjustly depriving the plaintiff of a trial.” (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1601.) [See The Rutter Group, Civil Procedure Before Trial, Chapt. 10-E, §§ 223 et seq.]
As the moving party, ABC has two opportunities to submit pleadings to the Court. Plaintiff John Gibbs has only one such opportunity. Why? This is because ABC has the burden of persuasion and, in addition, the following rules apply:

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Plaintiff, JOHN GIBBS, submits this Opposition to Defendant ABC MANUFACTURING, INC’S (hereinafter, “ABC”), Motion for Summary Judgment.

I. FACTS
NANCY SMYTHE, who had previously been employed by ABC, returned to the company in April 2006. There was never any formal agreement. During the years Ms. Smythe was not working for ABC, the Chief Executive Officer (“CEO”) of ABC, Victoria Chan , had from time to time asked Ms. Smythe to return. In April of 2006, Ms. Smythe sent CEO Chan an email offering to consult for a short period.
While initially anticipating this would be a short term, part-time assignment, the job quickly morphed into full-time employment during which Ms. Smythe was an employee, engaged in all aspects of running, improving, and directing the company. CEO Chan told not only Ms. Smythe but also ABC customers, potential customers, and employees that Ms. Smythe was ABC’s President and Chief Operating Officer. Smythe was working full time, was paid hourly, and never took on any other consulting clients. As an employee and President, Ms. Smythe’s work was controlled and directed by CEO Chan. Ms. Smythe served at Chan’s pleasure. Ms. Chan had the right to fire employee Smythe without notice.
Each year in July, ABC attended a conference of international technology leaders in Marin County (“ITC Conference”) with the hopes of finding new customers and expanding its manufacturing and business base. In 2006, CEO Chan planned to attend and was a scheduled speaker at the conference. She directed ABC President Smythe to attend; she complied. CEO Chan, President Price, and a number of other lesser ABC employees made the trip from ABC’s headquarters in Austin, Texas to Marin County, California where the ITC conference was held. It was a multi-day rip to promote ABC.

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