Nazworth v. Swire Florida, Inc. , 11 Fla. L. Weekly 791 ( 1986 )

486 So. 2d 637 (1986)

Florence Mildred NAZWORTH, Individually, and As Personal Representative of the Estate of Henry Roy Nazworth, Deceased, and As Surviving Spouse, Appellant,
v.
SWIRE FLORIDA, INC., a Corporation, United States Fire Insurance Company, a Corporation, and the North River Insurance Company, a Corporation, Appellees.

No. BI-73.

District Court of Appeal of Florida, First District.

April 4, 1986.

Rutledge R. Liles, and J. Bruce Bickner, of Howell, Liles, Braddock & Milton, Jacksonville, for appellant.

Robert L. Cowles and James R. Barfield of Cowles, Hayden, Facciolo, McMorrow & Barfield, P.A., Jacksonville, and Daniel C. Shaughnessy and Howard C. Coker of Coker, Myers & Schickel, Jacksonville, for appellees.

NIMMONS, Judge.

This appeal arises from consolidated personal injury and wrongful death actions in which a final summary judgment was granted in favor of Swire Florida, Inc. ("Swire") and three insurers, finding that Swire was not responsible for the alleged negligence of an employee of Consultants Realty ("Consultants"), the court ruling that Consultants was an independent contractor as a matter of law. We reverse.

Appellant's husband was killed in an automobile collision between him and Goff, an off-duty police officer employed as a security guard at the Gateway Shopping Center by Consultants which managed the shopping center for Swire, the owner. Goff had received a call that a shoplifter had fled the Montgomery Ward store. He began searching for the suspect in his personal vehicle when he struck the decedent's vehicle about a mile from the shopping center, killing the decedent and seriously injuring his wife, the appellant. She subsequently filed these consolidated actions.

The appellant challenges on appeal the trial court's ruling that Consultants' relationship to Swire was, as a matter of law, that of an independent contractor.

A summary judgment is only appropriate where there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. If the evidence is susceptible of several inferences, one of which will support the non-moving party's theory of the case, the issue should be determined by the trier of fact. Burkett v. Parker, 410 So. 2d 947 (Fla. 1st DCA 1982).

The record shows that Swire purchased Gateway Shopping Center in the 1970's. At the time of the purchase, Gateway was being managed by Consultants. The written management contract was entered into in 1973 between Consultants and a prior owner of Gateway. The agreement was continued in force after Swire's purchase of Gateway. The operative provisions of the agreement are reproduced in the appendix to this opinion. David Young, an employee of Consultants, was the individual who performed the day-to-day management of Gateway and who carried out Consultants' obligations under the management agreement. In his deposition, Young described Consultants as a realty and management company. It is unclear from the record as to whether Consultants managed any other properties than Gateway.

Young had standing authority from Consultants "to hire X number of security guards" at Gateway. It was Young who hired and supervised Officer Goff.

The general rule, with certain exceptions, is that an owner, employer, or contractee will not be held liable for the torts of an independent contractor or of the latter's employees committed in the performance of the contracted work. 41 Am Jur 2nd Independent Contractors, Section 24; see Webb v. Priest, 413 So. 2d 43, fn. 2 at 47 (Fla. 3d DCA 1982); Brien v. 18925 Collins Avenue Corp., 233 So. 2d 847 (Fla. 3d DCA 1970); 2 Fla.Jur 2nd Agency and Employment, Section 109.

In the instant appeal, the parties agree that the determinative issue is whether, as to Swire, Consultants was an independent contractor.

In arguing against independent contractor status, Appellant relies, in part, upon the fact that the management agreement refers to Consultants as "Agent." But such reference is of no moment. As pointed out in RESTATEMENT (SECOND) AGENCY 2nd Section 14N:

Section 14 N. Agent and Independent Contractor.

One who contracts to act on behalf of another and subject to the other's control except with respect to his physical conduct is an agent and also an independent contractor.

Comment:

a. Independent contractor as agent. As stated in Section 2, "independent contractor" is a term which is antithetical to the word "servant", although not to the word "agent". In fact, most of the persons known as agents, that is, brokers, factors, attorneys, collection agencies, and selling agencies are independent contractors as the term is used in the Restatement of this Subject, since they are contractors but, although employed to perform services, are not subject to the control or right to control of the principal with respect to their physical conduct in the performance of the services. However, they fall within the category of agent.

See also Id., Section 250. In any event, the agreement's use of a certain descriptive label for one of the contracting parties is not determinative of the actual legal relationship between the parties. See Cantor v. Cochran, 184 So. 2d 173, 174 (Fla. 1966); LaGrande v. B & L Services, Inc., 432 So. 2d 1364 (Fla. 1st DCA 1983).

The standard for determining whether an agent is an independent contractor is the degree of control exercised by the employer or owner over the agent. DeBolt v. Department of Health and Rehabilitative Services, 427 So. 2d 221 (Fla. 1st DCA 1983); Restatement, supra, Section 250. More particularly, it is the right of control, and not actual control, which determines the relationship between the parties. Adams v. Department of Labor and Employment Security, 458 So. 2d 1161 (Fla. 1st DCA 1984); LaGrande v. B & L Services, Inc., supra.

The management agreement contains specific limitations on various duties and functions of Consultants including the following: Swire had the right to indicate to Consultants its preferred sources of supplies and could require bids; Consultants could pay bills incurred by Swire or Consultants only at the direction of Swire; Consultants could not incur more than $150 expense for collections without the approval of Swire; Consultants could not spend more than $1500 for an individual repair or maintenance problem without approval from Swire; Swire required Consultants to insure the premises in such amount and for such risks as Swire determined.

Although the agreement does not specifically address the subject of security at Gateway, Consultants employed security guards with the knowledge and approval of Swire. In fact, although such guards were paid with Consultants' checks, Consultants regularly was reimbursed therefor by Swire. From this record, the trier of fact could conclude that Swire would be entitled to oversee and monitor the provision for security at Gateway, including the employment of security guards by Consultants.

We also note that, within two months after the accident, Swire terminated the management agreement with Consultants and proceeded to manage Gateway "in house" with its own employees. Young terminated his employment with Consultants and commenced working for Swire, managing the shopping center on site in much the same manner as he had previously.

The record, as developed at this time, is such that the trier of fact could fairly conclude that Swire maintained a degree of control over Consultants in the management of Gateway such that Consultants was not an independent contractor of Swire.

In DeBolt v. Department of Health & Rehabilitative Services, supra, this Court stated:

The terms of the contract appeared to have imposed a number of conditions and limitations upon the [worker] which, at the very least, create a factual dispute as to their status, thus precluding summary judgment.

427 So.2d at 226-227. In DeBolt, the right of control could be inferred in part from contract provisions which required the operators of an "attention home" for juvenile delinquents to report any illnesses of the children in their care, to refrain from entering into agreements to care for other children without contacting the putative employer, and to refrain from incurring any expenses for the children other than those set out in the agreement without first contacting the employer. Despite the reference in the agreement to the "attention home parents" as independent contractors, this court held that summary judgment on the issue of the legal status of such parties was precluded. See also Adams v. Department of Labor & Employment Security, supra.

We find the authorities relied upon by Swire to be distinguishable. For example, in Ortega v. General Motors Corporation, 392 So. 2d 40 (Fla. 4th DCA 1981), our sister court ruled that, despite a number of controls over an automobile dealership, the dealership was, as a matter of law, an independent contractor. The court there emphasized that the dealership owned its premises and inventory, and was ultimately responsible for the success or failure of the enterprise. In the present case, Consultants, through Young, was working on the premises of Swire. It was Swire who stood to lose if the shopping center failed. Also, in Miami Herald Publishing Company v. Kendall, 88 So. 2d 276 (Fla. 1956), a newspaper carrier was held to be an independent contractor as a matter of law despite evidence that the supervisor "rode herd" over the carriers. In that case, the agreement between the carrier and the Miami Herald specifically reserved to the carrier the right to control the means of delivery. The company only had a right to expect the papers to be delivered timely and neatly.

In the present case, based upon the record before us, we cannot say as a matter of law that an independent contractor relationship existed. Accordingly, the summary judgment is REVERSED and this case is REMANDED for further proceedings consistent with this opinion.

SHIVERS and JOANOS, JJ., concur.

APPENDIX

The operative portions of the Management Agreement are reproduced as follows: RECITALS 1. Owner owns Gateway Shopping Center, hereinafter called "Premises" located in Jacksonville, Florida. 2. Owner desires Agent to undertake the management of Premises and to act as his representative for Premises in the normal operational functions and affairs thereof. IN CONSIDERATION of the mutual covenants and agreements contained herein and for other good and valuable considerations, the parties hereto agree as follows: 1. Owner hereby employs Agent to act as Owner's agent to manage and direct the operation of the Premises for a term commencing on September 1, 1973, and terminating on December 31, 1974, subject to the renewal provisions set forth below. 2. Agent accepts such employment and agrees to carry out and perform the terms and conditions of this Agreement on its part to be kept and performed. 3. Agent agrees to use its best efforts to perform the following services: (a) To rent all vacant space in the Premises; negotiate lease renewals and replace delinquent tenants as needed, all in accordance with leasing terms and conditions approved by the Owner. (b) Collect rent, invoice and collect all other payments due from tenants such as parking lot maintenance charges, tax increases, etc. (c) Maintain an adequate account of all transactions made on behalf of the Premises. (d) Coordinate the Merchants Association and represent Owner at all Merchants Association functions. (e) Let all contracts for maintenance, repairs and alterations and supervise same for Owner, providing, however, that except in emergencies all individual expenditures in excess of $1,500 shall require the prior approval of the Owner. General approval of annual expenses shall be required annually by approval of operating budget to be prepared by Agent and submitted to Owner. (f) The Owner shall indicate to Agent its preferred sources for all supplies for operating and servicing the Premises, and to require quotations or bids where Owner may consider these appropriate. (g) Undertake the collection of all delinquent rents. (h) Maintain complete liaison with each of the tenants. (i) Submit monthly reports in form prescribed by Owner reflecting the physical and financial condition of the Premises to Owner, not later than the twentieth day of the next succeeding month. (j) To deposit all rents collected in an agency bank account approved by Owner in the name of Owner and pay from the funds thus deposited, all bills incurred by Owner or Owner's Agent on account of management and maintenance, repairs and alterations of said Premises and any other items when so directed by Owner; and to remit on such monthly or other basis as directed by Owner any excess cash, according to the directions of Owner. (k) To exercise all Owner's contacts with the tenants including the dealing with any complaints. (l) Keep insurance placed on premises in such amounts and insuring against such risks with such insurance companies or agents as may be directed by the Owner. 4. Owner shall pay Agent the sum of $3,333.33 per month, which Agent may monthly pay from the collected rents, such payment to be made in advance. 5. Agent shall be reimbursed such funds, previously approved in annual budget, as it may expend from its own payroll for the salary of a maintenance man or men employed on a weekly basis to maintain the Premises, which reimbursement shall include in addition to the weekly salary 15% thereof to cover employer's share of F.I.C.A., Workmen's Compensation and other insurance, State unemployment insurance and such other charges attributable to the employee's salary. 6. Agent shall be paid real estate commissions by Owner as follows: (a) With respect to all leases for ten years or less negotiated with new tenants a commission of 5% of gross minimum rent for all stores less than 2,000 square feet and 2 1/2% of gross minimum rent for all stores of 2,000 square feet and over. If the lease is for five years or less, one-half of said commission shall be paid when said leases have been signed by the Owner and tenant and the remainder of the commission shall be paid when the term of the lease actually commences. If the lease is for over five years and not over ten years the commission with respect to the first five years shall be payable in the same fashion as a lease for five years or less. The commission with respect to rents for the period after five years shall be payable in two equal installments, the first installment being due on the first anniversary of the lease and the second installment being due on the second anniversary of the lease. (b) With respect to all leases for a period of over 10 years the amount of commission and method of payment shall be as agreed upon by Owner and Agent. (c) With respect to any new lease or amendment to a lease with a then existing tenant, the commissions shall be the same percentages as set out in sub-paragraphs (a) and (b), above, but shall be figured only on the increase in rent, if any, over the prior lease. In arriving at the amount of such increase, the gross minimum rent under the new lease shall be compared with the total of all forms of rent and other compensation paid by the Tenant to the Owner under the prior lease during the immediately last preceding lease year under the prior lease. (d) No commission shall be payable with respect to the exercise by any tenant of a renewal option. In the event that a tenant vacates the premises prior to the expiration of its lease, Agent will reimburse Owner for a prorata credit for the unearned portion of the commission, provided that the Agent re-leases the vacated premises. It shall be the duty of the Agent to renegotiate leases, where possible, with the existing tenants in the Premises. Agent shall have an exclusive listing for all rentals in the Premises and shall be entitled to a commission in those instances where space is rented by another real estate broker; it being the responsibility of the Agent to pay such other broker any commissions due him. 7. The supervision referred to in paragraph 3(e) does not extend to architectural, engineering or general contractor supervision, payment for which services shall be borne by Owner, and is not included in the compensation paid to Agent for its services hereunder. Similarly, any cost of collection, such as retaining of attorneys or incurring charges for independent collection services shall also be borne by Owner and is not included in the compensation referred to herein. No such costs in excess of $150.00 shall be incurred without the consent of Owner. 8. Owner agrees to reimburse Agent for any disbursements that it may make from its own funds on behalf of Owner, which disbursements are to be considered as advances and which will be promptly reimbursed by Owner upon submission of detailed description of items so advanced. 9. In the event of the dissolution, cessation of business (for any cause whatsoever), bankruptcy, insolvency, or assignments for the benefit of creditors of or by Agent, or in the event of the improper handling by agent of their accounts, or in the event of any breach by Agent of its obligations under this Agreement, then and in any such events, Owner may immediately terminate this Agreement, at its option, upon giving written notice of such cancellation to Agent. In the event of the sale of the Premises or of any other premises being managed by Agent for Owner, either Owner or Agent may terminate this agreement upon the giving of at least three months prior written notice of such termination. Owner may also terminate this agreement upon giving 30 days prior written notice in the event either Bruce Strumpf or Robert Thompson cease to be associated with Agent. 10. Agent shall furnish Owner with evidence that Agent has in force during the term of this agreement such insurance and bonds as will in Owner's opinion reasonably protect Owner against loss by reason of any negligence, misfeasance, or malfeasance by Agent or Agent's officers or employees. 11. This Agreement shall be automatically renewed for the period of ninety (90) days and for succeeding 90-day terms upon expiration of any renewal hereof for a period of ten years, unless either party hereto, sixty days before the termination hereof or any renewal hereof, shall, in writing, notify the other of its desire not to renew. 12. Agent has authority to execute on behalf of Owner all leases having an aggregate total value of $20,000.00 or less and having a term not in excess of five years.