Pfadt v. Wheels Assured Delivery Sys., Inc.

200 N.E.3d 961

Jennifer PFADT, Appellant-Plaintiff,

v.WHEELS ASSURED DELIVERY SYSTEMS, INC., and Jason Shartzer, Special Administrator for the Estate of Jonathan R. Zeigler, Appellees-Defendants,Amanda Mitchell, as Personal Representative of the Estate of Gregory Mitchell, Deceased, Appellant-Plaintiff,

v.Jason Shartzer, as Personal Representative of the Estate of Jonathan Zeigler, and Wheels Assured Delivery Systems, Inc. Appellees-Defendants.

Court of Appeals Case No. 21A-CT-1449

Court of Appeals of Indiana.

Filed December 19, 2022

Attorneys for Appellants: James F. Ludlow, Indianapolis, Indiana, Bryan H. Babb, Bose McKinney & Evans LLP, Indianapolis, Indiana, James M. Dubach, Hankey Law Office, Indianapolis, Indiana

Attorney for Appellees: Jacob M. O'Brien, Starr Austen & Miller, LLP, Logansport, Indiana

May, Judge.

[1] Jennifer Pfadt, individually, and Amanda Mitchell, as personal representative of the estate of Gregory Mitchell, (collectively, "Plaintiffs") appeal following the trial court's order granting summary judgment in favor of Wheels Assured Delivery Systems, Inc. ("Wheels Assured"). Plaintiffs allege the trial court erred as a matter of law in concluding:

1. a delivery driver involved in an automobile accident was an independent contractor and not an employee of Wheels Assured, which precluded recovery under a theory of respondeat superior; and

2. Wheels Assured was entitled to summary judgment on Pfadt's apparent agency claim.

We reverse and remand.

Facts and Procedural History

[2] Shortly after 4:00 a.m. on June 1, 2017, Jonathan R. Zeigler was driving southbound on State Road 1 in Allen County, Indiana, when his vehicle crossed the center line and struck Gregory Mitchell's car head-on. Zeigler and Mitchell both died as a result of the collision, and Zeigler's front-seat passenger, Pfadt, sustained significant injuries. At the time of the accident, Zeigler was traveling the "Auburn Route" and delivering packages for Wheels Assured, a commercial logistics and delivery service. (App. Vol. II at 80.)

[3] On June 27, 2018, Pfadt filed suit against Wheels Assured.¹ Pfadt alleged Wheels Assured was responsible for Zeigler's negligence because he was acting within the course and scope of his employment for Wheels Assured at the time of the accident. Pfadt also alleged Wheels Assured was negligent in hiring and retaining Zeigler. On May 31, 2019, Amanda Mitchell, as personal representative of the estate of Gregory Mitchell, filed suit against Zeigler's estate and Wheels Assured. Mitchell also alleged Zeigler was acting in the course and scope of his employment for Wheels Assured at the time of the accident. In each answer, Wheels Assured denied Zeigler was an employee of Wheels Assured at the time of the accident. The trial court consolidated the two suits on July 15, 2019.

[4] On September 20, 2019, Wheels Assured filed a motion for summary judgment. Wheels Assured asserted it was entitled to summary judgment on the basis that it was not liable for Zeigler's alleged negligence because he was an independent contractor at the time of the accident and Indiana law generally does not impose vicarious liability against the principal for the negligent actions of an independent contractor. In support of its motion, Wheels Assured designated a copy of the contract between Wheels Assured and Zeigler. The contract was labeled "INDEPENDENT CONTRACTOR AGREEMENT " ("ICA") and went into effect on February 20, 2017. (App. Vol. II at 115) (formatting in original). The ICA, referring to Zeigler as "CONTRACTOR" and Wheels Assured as "COMPANY", stated in relevant part:

1. PROVISION OF SERVICES AND EQUIPMENT. In performing the expedited delivery and courier services contemplated herein, CONTRACTOR shall furnish the Equipment set forth in Appendix A (the "Equipment"). CONTRACTOR represents and warrants that CONTRACTOR has a substantial financial interest in the Equipment, and has title to or is authorized to contract the Equipment and services to COMPANY. CONTRACTOR further warrants that the Equipment will be used primarily for business purposes.

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3. COMPENSATION ( 49 CFR 376.12(d) ). It is expressly understood and agreed that CONTRACTOR's compensation shall be set forth in Appendix B and such compensation shall constitute the total compensation for everything furnished, provided, or done by CONTRACTOR in connection with this Agreement, including driver's services. COMPANY agrees to make reasonable efforts to make deliveries available from time to time for transportation by CONTRACTOR; provided, however, that there is no guarantee by COMPANY to CONTRACTOR of a minimum number of deliveries, or that CONTRACTOR is guaranteed a profit under this Agreement.

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5. CONTRACTOR'S RESPONSIBILITIES

(a) Compliance with Pertinent Laws and Regulations.

i. CONTRACTOR shall provide competent drivers who meet all of the requirements of the U.S. Department of Transportation, including but not limited to familiarity and compliance with Federal, state, and local traffic laws and regulations.

ii. CONTRACTOR shall carry a copy of this Agreement in the Equipment at all times and file with COMPANY, on a timely basis, all log sheets, physical examination certificates, accident reports, and any other required data, documents, or reports.

iii. CONTRACTOR agrees that all shipping manifests or other papers identifying the deliveries made by CONTRACTOR during the period it is contracted shall be those of COMPANY, or as authorized by COMPANY.

iv. CONTRACTOR agrees not to receive any credit extension in COMPANY's name or in any way to use COMPANY's name to obtain credit, unless CONTRACTOR first receives COMPANY's written consent to do so.

v. CONTRACTOR agrees to operate the Equipment in a safe and prudent manner at all times in accordance with the laws of the various jurisdictions in which the Equipment will be operated and pursuant to the operating authorities of COMPANY and in accordance with all rules related to traffic safety, highway protection, and road requirements. Moreover, CONTRACTOR agrees that all drivers and/or workers employed by CONTRACTOR will comply with the terms of this Agreement, including the requirement of safe operations while operating the Equipment on behalf of CONTRACTOR. CONTRACTOR agrees that any driver utilized by CONTRACTOR will comply with COMPANY's policies and procedures and any subsequent revisions thereto, which will be provided by COMPANY.

(b) Operational Expenses ( 49 CFR 376.12(e) ).

i. CONTRACTOR shall, at its sole cost and expense, provide all the Equipment ready to operate and fully roadworthy, including the necessary permits and vehicle license plates, and shall furnish all necessary oil, fuel, tires, and other parts, supplies, and equipment necessary or required for the safe and efficient operation and maintenance of the Equipment, including repairs for the operation of such Equipment; and shall pay all other expenses incidental to such operation, including, but not limited to, highway use taxes, state property or indefinite situs taxes, fuel taxes, and registration fees, ferry and toll charges and detention and accessorial charges not collected by COMPANY because of CONTRACTOR's failure to provide the required documentation.

ii. Unless otherwise required by law, empty mileage expense shall be borne by CONTRACTOR.

iii. CONTRACTOR shall have the right to maintain and repair the Equipment at any place CONTRACTOR should choose. CONTRACTOR shall be responsible for maintaining, and shall maintain the Equipment in safe condition and in complete compliance with all laws and regulations of the states in which CONTRACTOR operates and the Department of Transportation. CONTRACTOR has the right to choose the route of travel of the Equipment and at what points CONTACTOR shall make stops subject however to any delivery schedules prescribed by COMPANY's customers.

iv. CONTRACTOR agrees to pay all fines imposed for violation of any law or regulation by the state in which CONTRACTOR operates and the Department of Transportation, where such violation results, at least partially, from the acts or omissions of CONTRACTOR.

v. CONTRACTOR shall, at his sole cost and expense, supply all drivers and substitute drivers necessary to provide the services contemplated herein and to meet any delivery schedules provided by COMPANY's customers.

(c) Damage Claims ( 49 CFR 376.12 (1) ). COMPANY reserves the right to investigate all claims, including but not limited to, delays, shortages, misdeliveries, and claims related to lost or damaged shipments, arising out of, or in connection with CONTRACTOR's services to determine if CONTRACTOR's actions or omissions resulted in or contributed to the cargo claim. If it is determined that CONTRACTOR's actions or omissions resulted in or contributed to the cargo claim, then COMPANY shall charge back CONTRACTOR for the insurance deductible portion of the cargo claim pursuant to paragraph 12 of this Agreement.

(d) Equipment/Property Damage ( 49 CFR 376.12(l) ). CONTRACTOR shall be liable for, and pay, all direct, indirect and consequential damage, including but not limited to reasonable attorney fees, arising out of, or in connection with, CONTRACTOR's use of COMPANY's equipment, or any other property belonging to COMPANY.

(e) Insurance ( 49 CFR 376.12(l) ). The responsibilities and obligation between COMPANY and CONTRACTOR involving insurance shall be as specified in paragraph 6(d) and in Appendix C. COMPANY shall have no insurance responsibilities or obligations pertaining to CONTRACTOR other than those expressly stated in this Agreement or mandated by law.

(f) Accident Reports. CONTRACTOR shall immediately report any accident to COMPANY involving operations under this Agreement, including CONTRACTOR's written report of such accident. In the event CONTRACTOR fails to notify COMPANY of the accident within one (1) hour from the time of the accident, CONTRACTOR shall be liable for any and all damages resulting from

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