Fields v. Shaw

954 N.W.2d 451

ESTATE OF Patrick FIELDS, BY its Administrator, Michelle FIELDS, Michelle Fields, Individually, K.F. by Her Next Friend, Michelle Fields, A.F. by Her Next Friend, Michelle Fields, Jerry Fields, Individually and Mary Jane Fields, Individually, Plaintiffs-Appellees,

v.Troy SHAW; Michael Shaw and Sherry Shaw, Individually, and d/b/a Shaw Trucking and/or Shaw Farms; Landus Cooperative d/b/a Farmers Cooperative Company; and Grinnell Mutual Reinsurance Company, Defendants-Appellants.

No. 19-0985

Court of Appeals of Iowa.

Filed October 7, 2020

Brenda K. Wallrichs of Lederer Weston Craig PLC, Cedar Rapids, and Kent A. Gummert of Lederer Weston Craig PLC, Des Moines, for appellants.

Brian P. Galligan of Galligan Law, P.C., Des Moines, Janice M. Thomas of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, Greg C. Schaffer of Schaffer Law Firm, San Francisco, California, and Robert T. Simon, Travis E. Davis, and Evan A. Garcia of The Simon Law Group, Hermosa Beach, California, for appellees.

Heard by Vaitheswaran, P.J., and Tabor and Schumacher, JJ.

TABOR, Judge.

Troy Shaw was hauling grain for the Landus Cooperative (Landus) when he crashed into a farm tractor driven by Patrick Fields, causing Fields's death. Fields's estate and family members¹ sued Troy; Troy's employer, Michael Shaw and Shaw Trucking; and Landus. The estate asserts two claims against Landus: (1) vicarious liability for Troy's negligence and (2) direct liability for negligently hiring Troy.² In this pretrial appeal, Landus challenges the district court's denial of its motion for summary judgment on the negligent-hiring claim. Landus contends it had no duty to evaluate the qualifications of an employee of its independent contractor.

Finding merit in that contention, we reverse the summary judgment ruling. The district court extended Landus's liability beyond what is supported by current Iowa authority. The record reveals no genuine issue of material fact to support the position that Landus "hired" Troy as an independent contractor. And the estate did not plead a claim that Landus was liable for failing to use reasonable care in selecting Michael as an independent contractor. Thus, we reverse and remand for entry of summary judgment for Landus on the negligent-hiring claim and for dismissal of the punitive-damages claim.

I. Facts and Prior Proceedings

Landus is a farming cooperative that transports various agricultural goods and products across Iowa.³ In 2016, Landus engaged Michael—the owner of Shaw Trucking—as a grain hauler. Michael agreed to work for Landus under an "Independent Contractor Agreement" stating:

1. This agreement does not constitute a hiring by either party. It is the parties intention that Independent Contractor shall have an Independent Contractor status and not be an employee for any purposes .... Independent Contractor shall retain sole and absolute discretion in the manner and means of carrying out their activities and responsibilities under this Agreement. This Agreement shall not be considered or construed to be a partnership or joint venture, and the Company shall not be liable for any obligations incurred by Independent Contractor unless specifically authorized in writing. Independent Contractor shall not act as an agent of the Company, ostensibly or otherwise, nor bind the Company in any manner, unless specifically authorized to do so in writing.

2. Independent Contractor shall be responsible to the management and directors of Company, but Independent Contractor will not be required to follow or establish a regular or daily work schedule, Independent Contractor shall supply all necessary equipment, materials, and supplies. Independent Contractor will not rely on the equipment or offices of Company for completion of tasks and duties set forth pursuant to this Agreement.

The agreement also indemnified Landus "against any and all liabilities ... which may be imposed upon or incurred by or asserted against [Landus] as a result of any negligence or misconduct on Independent Contractor's part, or from any breach or default of" the agreement "which is caused or occasioned by the acts of Independent Contractor or agents for Independent Contractor." Michael agreed to "assume[ ] all risk in the use and operation of the Independent Contractor's vehicle(s) and related vehicle equipment" as well as to "be responsible for providing proper safety devices and equipment to safeguard users or operators of the vehicle and related equipment."⁴

For several months, Shaw Trucking hauled grain for Landus without incident. Michael employed his son, Troy, to do most of the driving—Troy drove ninety percent of the Landus hauls.⁵ Troy testified that he did not talk to anyone working at Landus before he started making deliveries. Although Troy knew of the agreement between his father and Landus, Troy said he did not read the contract.

In June 2017, Troy was making a daytime delivery in one of Michael's semi-trailer trucks. His route crossed a "relatively flat and straight" stretch in rural Greene County. On that two-lane paved road, Troy crashed into the back of a farm tractor. The impact pushed the tractor into a ditch and flipped it upside down. The tractor driver, Patrick Fields, suffered fatal injuries in the collision.

At the scene, the Iowa State Patrol conducted an investigation and collected evidence. During an inventory of the truck, the officer discovered a spoon and pop can; both had burn marks on the bottom. The state crime laboratory reported finding heroin residue on them.⁶ A few hours after the accident, the patrol took Troy's urine sample. When questioned, Troy denied using drugs or drinking alcohol before driving the truck. But he admitted taking hydrocodone, a painkiller, after the crash to relieve back pain. Troy's lab results returned positive for both morphine and norquetiapine, an anti-psychotic medication.

Patrick Fields's estate—along with his parents, wife, and children—brought a wrongful death suit against Troy, Michael, Michael's companies—Shaw Trucking and Shaw Farms—and Landus. The estate asserted five main claims⁷ : (1) Troy was negligent in operating the truck; (2) Michael was vicariously liable for Troy's negligence because Troy was acting as his agent at the time of the collision; (3) Michael was directly liable for negligently entrusting the truck and negligently hiring Troy; (4) Landus was vicariously liable for Troy's negligence because Troy acted as an agent or subagent for Landus; and (5) Landus was directly liable for negligently hiring Troy. In May 2018, Landus moved for summary judgment, contending it "retained no control over the day to day operations of Mike Shaw's business as an independent contractor, and therefore Landus did not owe a duty to plaintiffs." The district court interpreted Landus's argument as addressing only vicarious liability. The court found a genuine issue of material fact on whether Landus exercised substantial control over Michael's work to establish vicarious liability and, if so, whether Landus exercised its control with reasonable care. Thus, the court denied summary judgment.

After Landus moved for summary judgment, the estate filed an amended petition asserting a new punitive-damages claim against Landus for recklessness in employing Troy. Landus moved to dismiss the claim, asserting again that it owed no duty to Fields and could not be liable for the willful and wanton disregard of the rights or safety of others. In line with its summary judgment ruling, the court found Landus did bear a duty to Fields and rejected the motion to dismiss.

In March 2019, Landus filed a motion for summary judgment on the negligent-hiring claim. Landus argued that Michael, as an independent contractor, made the sole hiring and firing decisions for his business. Because Landus had no control over who Michael hired as employees, Landus argued it had no duty to look into Troy's qualifications.

Rejecting that argument, the district court found that Landus did have a duty to investigate Troy. The court acknowledged Troy was "an employee or subcontractor of Shaw Trucking" and not of Landus. But it reasoned that at least two Landus employees knew Troy had a history of drug use.⁸ That knowledge, the court found, imposed a duty on Landus to investigate Troy. Finding a genuine issue of material fact as to whether Landus breached that duty, and if so, whether its failure to screen Troy for drug use caused Patrick Fields's death, the court denied the motion. Landus unsuccessfully moved for reconsideration.

Landus then sought interlocutory review.⁹ The supreme court granted the request and transferred the appeal to this court. Landus challenges the denial of its motion seeking summary judgment on the negligent-hiring claim.

II. Scope and Standard of Review

We review a summary judgment ruling for correction of errors at law. MidWestOne Bank v. Heartland Co-op , 941 N.W.2d 876, 882 (Iowa 2020). Summary judgment is appropriate when there is no genuine issue of material fact, the only conflict is the legal consequences of undisputed facts, "and the moving party is entitled to judgment as a matter of law." Id. (citation omitted). "The moving party has the burden of showing the nonexistence of a material fact." Nelson v. Lindaman , 867 N.W.2d 1, 6 (Iowa 2015) (quoting Hlubek v. Pelecky , 701 N.W.2d 93, 95 (Iowa 2005) ). "An issue is ‘genuine’ if the evidence in the record ‘is such that a reasonable jury could return a verdict for the non-moving party.’ " Id. (quoting Wallace v. Des Moines Indep. Cmty. Sch. Dist. Bd. of Dirs. , 754 N.W.2d 854, 857 (Iowa 2008) ). "We view the evidence in the light most favorable to the nonmoving party, who is entitled to every legitimate inference that we may draw from the record." Id. at 6–7. "When the facts are undisputed, we reverse only if the district court misapplied the law." Iowa Dep't of Human Servs. ex rel. Palmer v. Unisys Corp. , 637 N.W.2d 142, 149 (Iowa 2001).

Summary...