By Megan E. Ray
The Missouri Court of Appeals, Southern District, recently handed down an opinion which has implications for all Missouri companies using independent contractors.
The Court held on March 13, 2018 in the Bare v. Carroll Electric Cooperative Corporation opinion, that the Cooperative was liable for trespass by the contractor because the nature of the relationship between Carroll Electric Cooperative and its right-of-way contractor created an agency type relationship and not independent contractor type relationship.
Landowner brought a common law trespass action against Cooperative and its contractor. Landowner alleged the Defendants caused brush and trees to be removed in and just beyond Cooperative’s right-of-way and placed brush piles outside of the right-of-way. Landowner alleged Cooperative directed contractor to clear beyond the easement.
Carroll Electric Cooperative held an easement over landowner’s real property. The easement granted the Cooperative the right to clear the right-of-way and also permitted the removal of danger trees outside of the right-of-way.
Carroll Electric Cooperative contracted with an independent contractor for right-of-way clearing work. The contract provided several ways for the Cooperative to control the actions of the contractor in regard to clearing the right-of-way despite the contract claiming to create an independent contractor type relationship. The Cooperative was permitted to cause the removal of any employee of the contractor from the project if the Cooperative deemed such removal to be in its best interest. The Cooperative could require the contractor to add employees to the project. The Cooperative was permitted to dictate the number and type of tools and equipment used by the contractor. The Cooperative’s engineer was the authority tasked with “designating all danger trees which shall be removed or topped at option of Cooperative.” The contractor was unable to halt work without written permission of Cooperative. The Cooperative had control over the contractor’s documentation of the project.
In addition to the terms of the contract outlined above, the Cooperative exercised actual control over the contractor. The Cooperative’s supervisor not only inspected the work of the contractor but he “had the ability to correct” it and make sure that the contractor was “following what Carroll Electric would want.” The Cooperative’s supervisor could have stopped employees of the contractor from “putting logs off of the right-of-way” according to testimony at trial. The contractor’s president regarded his employees as being “under the control of” the Cooperative’s supervisor. The Cooperative oversaw the “daily progress” on the project with the contractor’s supervisor. The Cooperative’s supervisor and the contractor’s supervisor spoke about the project “every day or every other day.” The Cooperative’s supervisor could direct that a particular tree not be chopped down.
Following a jury trial, the Lawrence County Circuit Court entered a judgment in favor of the landowner, awarding actual damages of $6,560, punitive damages of $75,000, and attorneys’ fees of $59,455.55.
On appeal, the Court held that evidence was sufficient to support a finding that the Cooperative controlled its contractor so as to be liable for its actions, thus eliminating the protections afforded the Cooperative by an independent contractor relationship. Bare v. Carroll Electric Cooperative Corporation, 2018 WL 1281114 (Mo. Ct. App. S.D. 2018). https://www.courts.mo.gov/file.jsp?id=123715
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