Soderback v. Townsend
57 Or. App. 366, 644 P.2d 640, 1982 Ore. App. LEXIS 2881 (1982)
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Rule of Law:
An employer is not vicariously liable for the torts of a worker if the worker is an independent contractor, a status determined by whether the employer has the right to control the physical manner and means of performing the work, not merely the ultimate result.
Facts:
- American Quasar Petroleum Company (Quasar) retained Townsend, an independent oil and gas broker with 26 years of experience, to negotiate gas leases in Oregon.
- Quasar designated the general areas of interest and placed maximum limits on Townsend's negotiating authority regarding price and lease duration.
- Under the arrangement, Townsend was given a 'free hand' in the manner and means of obtaining leases; he set his own work schedule, had no quotas, and was paid a per diem of $175 plus expenses.
- Quasar did not have the right to control Townsend's physical movements, including when he would drive, how he would drive, or what routes he would travel.
- Townsend was prohibited from buying leases for his own account or for other clients while working for Quasar.
- While driving a rental car from St. Helens to Mist to check on leases for Quasar, Townsend was involved in an automobile accident.
- Quasar treated Townsend as an independent contractor for accounting purposes, withholding no taxes or Social Security deductions from his compensation.
Procedural Posture:
- Plaintiff initiated an action against defendant Townsend and a rental car agency for damages from an automobile accident.
- Plaintiff subsequently added American Quasar Petroleum Company (Quasar) as a defendant on a theory of vicarious liability.
- Plaintiff settled the claims against Townsend and the rental agency.
- In the trial court, Quasar filed a motion for summary judgment, arguing that Townsend was an independent contractor.
- The trial court granted summary judgment in favor of Quasar.
- Plaintiff appealed the trial court's grant of summary judgment to the Court of Appeals of Oregon.
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Issue:
Is an employer vicariously liable for the negligence of a worker when the employer has the right to control the result of the work but not the physical manner and means of its performance?
Opinions:
Majority - Van Hoomissen, J.
No. An employer is not vicariously liable for a worker's negligence where the employer lacks the right to control the physical details of how the work is performed. The decisive factor in distinguishing an employee from an independent contractor is the right to control not only the result but also the manner and means of accomplishing it. Here, the undisputed evidence showed that Quasar retained Townsend to achieve a result—the acquisition of gas leases—but did not have the right to control the physical details of his performance, such as his travel methods, routes, or work schedule. Townsend's own representations that he 'worked for' Quasar were insufficient to create a factual dispute on the central issue of control. Because there was no genuine issue of material fact regarding Quasar's lack of right to control, Townsend was an independent contractor as a matter of law, and Quasar was entitled to summary judgment.
Analysis:
This decision reinforces the traditional 'right to control' test as the determinative factor for establishing an employment relationship for purposes of vicarious liability. It clarifies that an employer's control over the final product or outcome of the work, without control over the physical conduct of the worker, is insufficient to create master-servant liability. The case serves as a clear example of how courts distinguish between setting broad objectives for a contractor and managing the day-to-day activities of an employee. For future cases, it underscores that where the facts concerning the work arrangement are undisputed, the determination of employee versus independent contractor status is a question of law for the court to decide on summary judgment.
