Diane Perez and Ricky Perez v. Greater Houston Transportation Company D/B/A and or A/K/A Yellow Cab Company and/or Yellow Cab, and Delwende Nikiema ( 2019 )

Opinion issued August 15, 2019
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-17-00689-CV
———————————
DIANE PEREZ AND RICKY PEREZ, Appellants
V.
GREATER HOUSTON TRANSPORTATION COMPANY D/B/A AND/OR
A/K/A YELLOW CAB COMPANY AND/OR YELLOW CAB, AND
DELWENDE NIKIEMA, Appellees
On Appeal from the 234th District Court
Harris County, Texas
Trial Court Case No. 2016-32437
MEMORANDUM OPINION
Appellants Diane and Ricky Perez sued appellee Greater Houston
Transportation Company d/b/a and/or a/k/a Yellow Cab Company and/or Yellow
Cab (GHTC) for personal injuries Diane suffered in a collision with a cab driver,
asserting a cause of action for negligence under respondeat superior and joint-
enterprise theories. The trial court granted no-evidence summary judgment in favor
of GHTC and ordered that the Perezes take nothing by their claims against GHTC.
In their sole issue on appeal, the Perezes assert that the trial court erred in granting
summary judgment in favor of GHTC on their claim for negligence under a
respondeat superior theory. Because we conclude that the Perezes presented
evidence raising a fact question on the challenged elements of their claim, we
reverse and remand.
Background
Delwende Nikiema was driving a taxicab to pick up a passenger when he
collided with Diane Perez’s vehicle. The Perezes allege that Nikiema caused the
crash after he ran a stop sign while speeding and that Diane sustained injuries as a
result of the accident. GHTC owned the taxicab, and it held the taxicab’s permit
issued by the City of Houston. Nikiema leased the taxicab from GHTC through an
“Independent Contractor License and Vehicle Lease Purchase Option Agreement.”
The Perezes filed a personal injury suit against Nikiema and GHTC. 1 In their
suit against GHTC, the Perezes alleged that the company was negligent due to
inadequate training and policies for its drivers. They also alleged that GHTC was
1
The Perezes nonsuited their claim against Nikiema following the trial court’s
granting of GHTC’s no-evidence motion for summary judgment. Nikiema is not a
party to this appeal.
2
liable for Nikiema’s negligence under theories of respondeat superior and joint
enterprise, among others.
GHTC filed a no-evidence and a traditional motion for summary judgment.
In relevant part, it contended that the Perezes had no evidence to support their
claim that GHTC was vicariously liable for Diane’s injury under a theory of
respondeat superior or joint-enterprise liability. GHTC asserted that Nikiema was
not an employee of GHTC and that he was not acting within the course and scope
of his “alleged” employment with GHTC at the time of the accident. GHTC’s
summary-judgment evidence included, among other documents, the independent
contractor and vehicle lease agreement between Nikiema and GHTC and the
affidavit of Ed Kargbo, the Director of Marketing and Driver Services for GHTC.2
The agreement between GHTC and Nikiema stated that it was an
“Independent Contractor License and Vehicle Purchase Option Agreement.” It
granted Nikiema a license to operate GHTC’s taxicab, obligating Nikiema to pay a
set weekly fee to lease the taxicab and the specialized taxicab equipment installed
in it. The agreement also established an independent-contractor relationship
between GHTC and Nikiema. The agreement stated that GHTC “does not have the
right to control the details of how [Nikiema] will acquire and transport Passengers
2
Also included were Nikiema’s City of Houston taxi license issued August 6, 2013,
and records indicating that GHTC pulled Nikiema’s driving records on August 1,
2013, December 16, 2013, and March 24, 2014.
3
under this Agreement, and that [GHTC] gives no instructions as to how, when,
where, or even if the Licensee utilizes the Goods and Services or operates the
Taxicab.” Nikiema received his revenue from passengers. GHTC provided
Nikiema with specified amounts of indemnification liability coverage, and it
recommended he obtain additional insurance coverage. Under the terms of the
agreement, GHTC was not obligated to provide driver training, but the agreement
did provide, “Before [GHTC] is willing to execute this Agreement, [Nikiema] is
encouraged to complete the Business Orientation Program provided by [GHTC.]”
Under the agreement, Nikiema also granted GHTC the right to sell advertising on
and in the taxicab and the right to collect all revenue from such advertisements,
and in exchange he received a weekly lease rebate.
Kargbo’s affidavit likewise stated that: Nikiema was an independent
contractor; GHTC did not have the right to control the details of Nikiema’s work
or the right to control Nikiema in any manner; GHTC provided a computerized
dispatch system, but Nikiema was not required to use it, and if he did use it, he was
not required to accept the fare. Kargbo averred that the City of Houston passed
ordinances that controlled Nikiema’s performance of his duties as a taxicab
operator, and GHTC did not control his work beyond what it was required to do
under City ordinances.
4
The Perezes responded to GHTC’s motion for summary judgment and
asserted that the agreement relied upon by GHTC was “a mere sham or subterfuge
designed to conceal the true legal status of the parties” and that extrinsic evidence
provided “more than a scintilla of evidence” that GHTC had an actual right to
control Nikiema. In support of its argument, they offered the depositions of
Nikiema and Kargbo.
During his deposition, Nikiema testified that he entered into the independent
contractor agreement with GHTC, but he was not provided with a copy of the
contract to review before signing the agreement, and he was not given time to
review its terms. GHTC instructed him where to sign or initial the contract and
where not to. He considered GHTC to be his employer.
Nikiema testified that, as part of his agreement with GHTC, he paid a set
weekly fee to lease the taxicab, and he had an option to purchase the vehicle at the
end of the agreement. The taxicab was outfitted with specialized equipment,
including a credit-card swiper, stool light, taxi meter, GPS system, and dispatch
system. The equipment belonged to GHTC, and GHTC was responsible for the
maintenance of the equipment, as well as maintenance and repairs on the vehicle.
Nikiema testified that he was responsible for gas, tolls, any traffic tickets, and the
cost of oil and transmission changes.
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Nikiema further testified that, before contacting GHTC, he did not have a
taxi license, nor did he have any experience driving a taxicab or operating any
specialized equipment for taxicabs. He attended a course with GHTC over several
days in which he received training on how to operate the specialized taxicab
equipment. GHTC instructed him on how to deal with passengers, identified safety
precautions to follow while driving, and provided him with study materials to
prepare for the taxi license exam. Kargbo also testified during his deposition that
Nikiema completed GHTC’s business orientation program and a defensive driving
course at GHTC.
In his deposition, Nikiema indicated that, although he was not required to
use GHTC’s dispatch system, he obtained all, or 99%, of his fares through the
company’s dispatch system, and he had no customers of his own. GHTC
monitored the location of its vehicles, and it would send information about
potential fares to drivers based on the driver’s proximity to the passenger pick-up
location. Nikiema acknowledged that he was free to accept or reject any potential
fares generated through the GHTC dispatch system, but he understood that he was
expected to accept fares and that it was his “duty” to do so. He stated that GHTC
had penalized him on numerous occasions for rejecting fares. If he rejected a fare
for an “important customer,” or if there were no other available vehicles in the
area, GHTC dispatch would call his mobile phone and order him to accept the fare.
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When he rejected fares under those circumstances, the vehicle’s computer system
would be shut down and the stool light would deactivate. Nikiema testified that he
determined his own shifts, but if the taximeter was off for two or three hours
during the shift, GHTC would give him “downtime.”
Nikiema testified in his deposition that he generally was entitled to keep all
cash payments and all credit card payments, minus a processing fee, that he
received from passengers. He was required to provide receipts to customers, and
the receipts were branded with GHTC company information. When he accepted a
METROLift account fare, however, he did not receive any payment from the
passenger. Instead he would complete the trip and provide the ride information to
GHTC, which would then pay him directly.
At the time the accident with Diane Perez occurred, Nikiema was on his way
to pick up a METROLift account passenger who he had accepted through the
GHTC dispatch system. He testified that he contacted GHTC dispatch immediately
after the accident “seeking advice,” as he had been trained by GHTC to do. GHTC
contacted the police. Nikiema’s testimony also established that he was prohibited
from working for anyone but GHTC; GHTC had instructed Nikiema to take the
shortest route to pick up and to drop off passengers; and this route was provided to
him by the GPS device installed in the taxicab.
7
The trial court granted GHTC’s no-evidence motion for summary judgment,
but it did not rule on GHTC’s traditional motion for summary judgment.
Analysis
On appeal, the Perezes argue in their sole issue that the trial court erred in
granting GHTC’s no-evidence motion for summary judgment because they
presented evidence raising a fact question on GHTC’s liability for negligence
based on their respondeat superior claim. They assert that they presented
“substantial evidence” that GHTC had the right of control of Nikiema’s work and
that the accident occurred in the course and scope of his employment with GHTC,
making the company vicariously liable for his negligence.
A. Standard of Review
After an adequate time for discovery has passed, a party may move for
summary judgment on the ground that there is no evidence of one or more essential
elements of a claim or defense on which the nonmovant would have the burden of
proof at trial. TEX. R. CIV. P. 166a(i). The motion must state the elements as to
which there is no evidence. TEX. R. CIV. P. 166a(i). The reviewing court must grant
the motion unless the nonmovant produces summary-judgment evidence raising a
genuine issue of material fact. Id.; see Mack Trucks, Inc. v. Tamez, 206 S.W.3d
572, 582 (Tex. 2006). If the nonmovant produces evidence “that would enable
8
reasonable and fair-minded jurors to differ in their conclusions,” a genuine issue of
material fact exists. See Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008).
A no-evidence motion for summary judgment is essentially a directed
verdict granted before trial. Mack Trucks, 206 S.W.3d at 581–82. We apply the
same legal sufficiency standard in reviewing a no-evidence summary judgment as
we apply in reviewing a directed verdict. See id. at 582. Accordingly, we review
the evidence in the light most favorable to the nonmovant, indulging every
reasonable inference and resolving any doubts in the nonmovant’s favor. Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Evidence that favors
the movant’s position will not be considered unless it is uncontroverted. Great Am.
Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.
1965).
B. No-Evidence Summary Judgment on Respondeat Superior
Under the doctrine of respondeat superior, an employer may be vicariously
liable for the negligence of its employee who was acting within the scope of his
employment, even though the employer has not personally committed a wrong. St.
Joseph Hosp. v. Wolff, 94 S.W.3d 513, 541–42 (Tex. 2002); Wilson v. Davis, 305
S.W.3d 57, 66–67 (Tex. App.—Houston [1st Dist.] 2009, no pet.). An entity that
hires an independent contractor, however, is generally not vicariously liable for the
9
negligence of the independent contractor. Baptist Mem’l Hosp. Sys. v. Sampson,
969 S.W.2d 945, 947 (Tex. 1998).
1. Right of Control
Whether Nikiema is an employee or an independent contractor of GHTC
turns on the question of GHTC’s right to control Nikiema’s work. Whether one is
an independent contractor or an employee is measured by the amount of control the
employer exerts, or has the right to exert, over the details of the work performed.
Newspapers, Inc. v. Love, 380 S.W.2d 582, 591 (Tex. 1964).
When, as here, a contract establishes an independent-contractor relationship
and does not grant control over the details of the work to the principal, evidence
outside the contract must be produced to show that despite the contract terms, the
true operating agreement vested the right of control in the principal. Id. at 592;
Farrell v. Greater Houston Transp. Co., 908 S.W.2d 1, 3 (Tex. App.—Houston
[1st Dist.] 1995, writ denied). Absent extrinsic evidence indicating that the contract
was a subterfuge or sham, that the hiring party exercised control in a manner
inconsistent with the contract provisions, or that the contract has been modified by
a subsequent express or implied agreement, the contract is determinative on the
nature of the parties’ relationship. Love, 380 S.W.2d at 592; Weidner v. Sanchez,
14 S.W.3d 353, 373 (Tex. App.—Houston [14th Dist.] 2000, no pet.). Evidence of
“[s]poradic action directing the details of the work” or an “occasional assertion of
10
control” is not sufficient to override the contract. Farrell, 908 S.W.2d at 3. The
assumption of an exercise of control must be “so persistent and the acquiescence
therein so pronounced as to raise an inference that at the time of the act or
omission giving rise to liability, the parties by implied consent and acquiescence
had agreed that the principal might have the right to control the details of the
work.” Love, 380 S.W.2d at 592.
Courts measure the right to control by considering factors such as: (1) the
independent nature of the worker’s business; (2) the worker’s obligation to furnish
necessary tools, supplies, and materials to perform the job; (3) the worker’s right to
control the progress of the work except as to final results; (4) the time for which
the worker is employed; and (5) the method of payment, whether by unit of time or
by the job. Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312
(Tex. 2002); INA of Tex. v. Torres, 808 S.W.2d 291, 293 (Tex. App.—Houston
[1st Dist.] 1991, no writ). It is not required that all five factors be present to make a
finding on the right to control. Thompson v. Travelers Indem. Co. of R.I., 789
S.W.2d 277, 278 (Tex. 1990); see McClure v. Greater San Antonio Transp. Co.,
SA-08-CA-112-FB, 2009 WL 10670178, at *9 (W.D. Tex. Mar. 24, 2009). That a
“person is normally an independent contractor does not preclude a finding of
agency as to the particular transaction at issue.” Weidner, 14 S.W.3d at 373–74.
11
The Perezes argue that the trial court erred in granting summary judgment in
favor of GHTC on the theory of respondeat superior because they presented
“overwhelming” summary judgment evidence that, despite the terms of the
agreement between GHTC and Nikiema, GHTC nevertheless exercised a level of
control over Nikiema that indicated he was an employee rather than an
independent contractor. They argued that this extrinsic evidence was sufficient to
create a fact issue on their respondeat superior claim.
Examining the summary-judgment evidence on GHTC’s right to control
Nikiema’s work, and hence his status as an independent contractor or employee,
we agree with the Perezes that they produced evidence raising a genuine issue of
material fact on their respondeat superior claim.
The first measure of the right to control, the independent nature of the
worker’s business, relates to who has the right to control the details and methods of
the work. White v. DR & PA Deliverance, Ltd., No. 01-12-00227-CV, 2014 WL
767218, at *5 (Tex. App.—Houston [1st Dist.] Feb. 25, 2014, no pet.) (citing
Limestone, 71 S.W.3d at 312, and Wolff, 94 S.W.3d at 542). Uncontroverted
summary-judgment evidence established that Nikiema generally controlled the
days and hours he worked. However, in contradiction to the terms of the agreement
and GHTC’s assertions that Nikiema was not required to accept any fare if he
chose to use their dispatch system, Nikiema testified that his dispatch system was
12
shut off when he refused certain rides, and he was given “downtime” when his
taximeter was inactive for two or three hours during his shift. The Perezes also
point to Nikiema’s deposition testimony indicating that he did not have his own
customers and that he relied entirely or almost entirely on GHTC’s dispatch system
for fares.
As to the second factor, the worker’s obligation to furnish necessary tools,
supplies, and materials to perform the job, the summary-judgment evidence
established that GHTC owned the taxicab, including all of the specialized
equipment installed in it, and Nikiema paid GHTC to lease these items. See, e.g.,
Tirres v. El Paso Sand Products, Inc., 808 S.W.2d 672, 674, 676 (Tex. App.—El
Paso 1991, writ denied) (worker’s agreement to use equipment furnished by
principal was not evidence of right to control); see also White, 2014 WL 767218,
at *6 (although employer provided worker some materials, worker was obligated to
pay for the materials, which supported conclusion he was independent contractor).
Although the contract indicated that training was not included as part of the
agreement, Nikiema testified GHTC trained him on how to operate the specialized
taxicab equipment. It also instructed him on certain procedures and safety
precautions and provided him with study materials to prepare for the taxi license
exam.
13
Regarding the right to control the progress of Nikiema’s work except as to
final results, the Perezes contend that the evidence shows that GHTC, not Nikiema,
controlled the progress of his work. They point to evidence that GHTC had control
over the advertising and promotion of the cab operation, but the summary-
judgment evidence established that Nikiema sold advertising rights of the cab to
GHTC. Nikiema also testified in his deposition that GHTC had instructed him to
take the shortest route to pick up and to drop off passengers and this route was
provided to him by the GPS device that GHTC owned and had installed in the
taxicab.
The Perezes also presented some evidence regarding the time that Nikiema
was employed by GHTC. Perez testified that he considered GHTC his employer.
Nikiema further testified that, before working for GHTC, he did not have a taxi
license, nor did he have any experience driving a taxicab or operating any
specialized equipment for taxicabs. He attended a training course with GHTC on
how to operate the specialized taxicab equipment, and GHTC instructed him on
how to deal with passengers, identified safety precautions to follow while driving,
and provided him with study materials to prepare for the taxi license exam. Kargbo
also testified during his deposition that Nikiema completed GHTC’s business
orientation program and a defensive driving course at GHTC. The evidence also
established that Nikema first entered into an agreement with GHTC approximately
14
eleven months before the accident and that, at the time of the accident, the parties
had entered into an agreement that would expire at the end of one year but could be
cancelled at any time.
Finally, regarding the method of payment, it is undisputed that Nikiema was
paid by the job, and for typical fares he was paid directly by his customers.
However, Nikiema testified that he did not receive payment from customers for
METRO Lift account fares, such as the one he had taken at the time of the accident
in this case. According to his deposition testimony, he received compensation for
these fares from GHTC directly. See Weidner, 14 S.W.3d at 374–75 (holding that
fact that “[a] person is normally an independent contractor does not preclude a
finding of agency as to the particular transaction at issue”).
Viewing the evidence in the light most favorable to the Perezes, as we must,
we conclude that they raised a material fact issue on their respondeat superior
claim. Although GHTC presented evidence of the agreement between itself and
Nikiema that expressly stated that Nikiema was an independent contractor, the
Perezes presented evidence outside the contract from which a factfinder could
determine that the true operating agreement vested the right of control in GHTC.
See Love, 380 S.W.2d at 592, Farrell, 908 S.W.2d at 3. The evidence produced by
the Perezes—namely, Nikiema’s deposition testimony—constitutes some evidence
that GHTC exercised control over Nikiema in a manner inconsistent with the
15
agreement’s provisions or that the agreement had been modified by a subsequent
implied agreement. See Love, 380 S.W.2d at 592, Weidner, 14 S.W.3d at 373.
GHTC asserts that its contract provided that Nikiema was an independent
contractor and that the summary-judgment evidence presented by the Perezes
failed to establish that GHTC took any actions beyond those required for
compliance with ordinances of the City of Houston. GHTC argues that the facts of
this case are akin to those presented to this court in Farrell, 908 S.W.2d 1. In
Farrell, this court affirmed a summary judgment in favor of a cab company and
held, as a matter of law, that a cab driver was an independent contractor.
Like Nikiema, the cab driver in Farrell had entered into an independent-
contractor agreement with the cab company, Yellow Cab. Id. at 3. The summary-
judgment evidence in that case established that: Yellow Cab provided a
computerized dispatch system, but the driver was not required to use it, or to
accept any fares if he did; the driver paid a fee to operate to Yellow Cab to be
licensed under its cab operating permit and to use its radio and dispatch system;
and the driver’s total compensation came from payments by customers. Id. The
summary-judgment evidence in Farrell also established that: Yellow Cab did not
monitor how, where, or when the driver worked, and it did not know where or if he
was operating his taxicab; the driver determined the route he took when delivering
a customer; although the title to the cab listed Yellow Cab, the driver was listed as
16
the vehicle’s “beneficial owner” and stated that the driver could have title assigned
to him if the cab left the Yellow Cab fleet; the driver was responsible for all
maintenance expenses on the cab; and the driver was covered under Yellow Cab’s
self-insurance certificate. Id. at 3–4.
Farrell, therefore, is distinguishable in several key ways. Here, GHTC
presented evidence that it provided a dispatch system, but Nikiema was not
required to use it. Nikiema presented contradictory testimony, asserting that he got
all, or nearly all, of his fares through the dispatch system and that, despite the
terms of the agreement, he was pressured by GHTC to take fares under certain
circumstances. Nikiema also testified that, contrary to the terms of the agreement,
GHTC required him to take the shortest routes when picking up and dropping off
fares and that the route was set by the GPS device owned by GHTC and installed
in the taxicab. He also testified that GHTC was aware of when his meter was
running and would give him “downtime” when his taximeter was off for two or
three hours during his shift. There is a further key difference between this case and
Farrell in relation to the nature of Nikiema’s business and GHTC’s right to control
his work. In Farrell, uncontradicted evidence showed that the driver controlled
how, when, where, and if he worked. 908 S.W.2d at 4. Here, by contrast,
Nikiema’s testimony is some evidence that GHTC penalized him for rejecting fares
17
or for periods of inactivity during a shift. Although GHTC denies this activity, we
conclude that this evidence raises a material question of fact on the right to control.
GHTC correctly notes that at least some of its supervision and direction of
Nikiema’s work was required for it to comply with City ordinances. See HOU.
ORD. §§ 46-11(c) (requiring permittees of vehicles equipped with GPS to “collect,
maintain, and provide to the director . . . all real-time tracking information . . .
including . . . GPS location data, and whether or not the licensee is engaged with a
passenger”); 46-18 (permittee required to submit written lease contract, certificate
of title, and self-insurance); 46-114 (requiring driver to take the shortest route).
The evidence nevertheless raises a fact question regarding whether GHTC’s
control over Nikiema’s work rendered him an employee rather than an independent
contractor. In addition to the evidence of things GHTC did to comply with City
ordinances, there is at least some evidence that GHTC provided training and study
materials to Nikiema and penalized him for rejecting fares or remaining idle during
his shifts. Nikiema relied almost exclusively on GHTC’s dispatch system at the
time of the accident and, when he struck Diane’s vehicle, he was on his way to
pick up a METRO Lift fare for which he would be compensated directly by
GHTC. See McClure, 2009 WL 10670178, at *15.
Viewing the evidence in the light most favorable to the Perezes, and
construing all reasonable inferences and resolving any doubts in their favor, we
18
conclude that they produced evidence that would enable reasonable and fair-
minded factfinders to conclude that GHTC exercised a right to control Nikiema’s
work such that he was an employee of GHTC at the time of the accident, and not
an independent contractor. Thus, the trial court erred in granting GHTC’s no-
evidence motion for summary judgment on this element of their respondeat
superior claim.
2. Course and scope of employment
Under the doctrine of respondeat superior, the plaintiff must establish not
only that the negligent party was an employee but also that the employee was
acting within the scope of his employment. See Wolff, 94 S.W.3d at 541–42. To
establish that a party was acting within the scope of his employment, a plaintiff
must show only that the act was: (1) within the general authority given to the
employee; (2) in furtherance of the employer’s business; and (3) for the
accomplishment of the object for which the employee was employed. Leadon v.
Kimbrough Bros. Lumber Co., 484 S.W.2d 567, 569 (Tex. 1972); Drooker v.
Saeilo Motors, 756 S.W.2d 394, 397 (Tex. App.—Houston [1st Dist.] 1988, writ
denied).
It is uncontroverted that at the time of the accident, Nikiema was driving a
taxicab owned by and permitted to GHTC. It is also uncontroverted that he was on
his way to pick up a passenger for a METRO Lift account fare that he had received
19
and accepted through the GHTC dispatch system. Nikiema was following the route
provided by GHTC’s GPS device that it had installed in the taxicab, and, if he had
completed the trip, GHTC would have been responsible for compensating him for
the fare. Accordingly, the Perezes’ summary-judgment evidence raises a genuine
issue of material fact as to whether Nikiema was operating the taxicab within the
course and scope of his alleged employment with GHTC at the time of the
accident.
We conclude that the Perezes produced summary-judgment evidence raising
a genuine issue of material fact as to whether GHTC actually exercised control
over Nikiema’s work at the time of the accident, such that he was acting as an
employee and not an independent contractor, and whether Nikiema was acting
within the scope of that alleged employment at the time of the accident.
Accordingly, the trial court erred in granting GHTC’s no-evidence motion for
summary judgment on the Perezes’ repondeat superior claim.
We sustain the Perezes’ sole issue on appeal.
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Conclusion
We reverse the judgment of the trial court and remand the case to the trial
court for further proceedings.
Richard Hightower
Justice
Panel consists of Justices Keyes, Goodman, and Hightower.
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