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Int’l Cargo Loss Prevention, Inc. v. Mediterranean Shipping Co

United States District Court, S.D. New York.

INTERNATIONAL CARGO LOSS PREVENTION, INC., Plaintiff,

v.

MEDITERRANEAN SHIPPING CO. (USA) INC. and Mediterranean Shipping Co. S.A., Defendants.

23-CV-1312 (JGLC)

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Signed January 3, 2024

Attorneys and Law Firms

James Edward Mercante, Michael Evan Stern, Rubin, Fiorella, Friedman & Mercante LLP, New York, NY, Douglas Karl Scheller, Jr., Nicoletti, Hornig & Sweeney, New York, NY, for Plaintiff.

Mark A. Beckman, Gordon & Rees, LLP, New York, NY, for Defendants.

OPINION AND ORDER

JESSICA G. L. CLARKE, United States District Judge:

*1 Plaintiff International Cargo Loss Prevention, Inc. (“Plaintiff”) brings this action under the Carriage of Goods by Sea Act (“COGSA”) against Mediterranean Shipping Company (USA) Inc. (“MSC USA”) and Mediterranean Shipping Company S.A. (“MSC S.A.”) (collectively, “Defendants”), alleging that Defendants breached their contractual obligations. See ECF No. 19 (“FAC”). Defendants move to dismiss the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons herein, Defendants’ motion to dismiss is GRANTED in part and DENIED in part.

BACKGROUND

Plaintiff is the insurer of a shipment of frozen shrimp that Defendants, common carriers, were contracted to transport from Ennore, India to Chicago, Illinois. FAC ¶¶ 2, 5, 9–10. The terms of the carriage agreement are memorialized in Sea Waybill No. MEDUMQ297290 (the “Sea Waybill”). Id. ¶ 10. The Sea Waybill is signed by the shrimp supplier and MSC USA as agent for MSC S.A. ECF No. 25 (“Beckman Decl.”), Ex. 1 at 3.

According to Plaintiff, Defendants delivered the shipment to Chicago, Illinois on or about September 15, 2021 in damaged condition. FAC ¶ 11. In response, Plaintiff sought to bring suit against Defendants for damages. ECF No. 26 (“Pl.’s Mem.”) at 5. As COGSA’s statute of limitation extends only one year from the date of an alleged breach, Plaintiff asked Defendants for an extension of time to file their complaint. Id. at 5, 7–8. Defendants twice extended the filing deadline for the Complaint, providing a date and time by which Plaintiff needed to file suit. Id. at 4, 8. Though the parties agree on the date of the deadline, they disagree on whether Defendants’ time portion of the deadline was according to the Central European time zone or Central Standard time zone. Id. at 10; ECF No. 24 (“Defs.’ Mem.”) at 6.

Plaintiff filed the initial Complaint against MSC S.A. and MSC USA on February 15, 2023, at 5:32 p.m. Eastern Standard Time (“EST”). See ECF No. 1 (“Compl.”). On February 16, 2023, the Clerk of Court notified Plaintiff that the Complaint was deficient because the attorney signature was incomplete and the civil cover lacked sufficient information. See ECF No. 2. The Clerk of Court requested that Plaintiff re-file the Complaint, and Plaintiff did so later that same day. See ECF Nos. 2–4.

On May 12, 2023, Defendants filed a motion to dismiss. See ECF No. 12. In their supporting papers, Defendants argued that Plaintiff’s claims were time-barred by COGSA’s statute of limitations and that Plaintiff failed to state a claim against MSC USA because it failed to allege that MSC USA was a party to the Sea Waybill. ECF No. 13 at 3, 5. Plaintiff requested leave to file an amended complaint, which the Court granted on May 23, 2023. See ECF No. 16. The Amended Complaint, filed on June 2, 2023, adds that both MSC USA and MSC S.A. issued the Sea Waybill. FAC ¶ 10.

On June 23, 2023, Defendants moved to dismiss the Amended Complaint pursuant to Rule 12(b)(6), based on similar grounds as those in their initial motion to dismiss. See Defs’ Mem. at 1–2. Defendants argue that the suit is time-barred by COGSA’s statute of limitations because Plaintiff filed the Complaint after Defendants’ filing extension expired, and that Plaintiff fails to state a claim against MSC USA because MSC USA, as an agent of MSC S.A., cannot be held liable for breaches of the Sea Waybill. Id. at 3, 8. Accompanying their motion to dismiss, Defendants attached five exhibits, none of which were attached to Plaintiff’s Complaint or Amended Complaint. See Beckman Decl.

LEGAL STANDARD

I. Motion to Dismiss

*2 Defendants’ motion to dismiss is brought pursuant to Rule 12(b)(6). In reviewing a motion to dismiss under Rule 12(b)(6), the Court must “constru[e] the complaint liberally, accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff’s favor.” Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008) (internal quotation marks omitted). A claim will survive a Rule 12(b)(6) motion only if the plaintiff alleges facts sufficient “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “Determining whether a complaint states a plausible claim for relief will … be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

II. Submission of Additional Documents

Typically, “[i]n deciding a motion under Rule 12(b)(6), the Court may consider only the facts stated on the face of the complaint, and in documents appended to the complaint or documents incorporated by reference in the complaint.” AIM Int’l Trading, L.L.C. v. Valcucine S.p.A., 02-CV-1363 (PKL), 2003 WL 21203503, at *3 (S.D.N.Y. May 22, 2003) (citing Schnall v. Marine Midland Bank, 225 F.3d 263, 266 (2d Cir. 2000)). Where a party on a motion to dismiss introduces documents outside the pleadings and not integral to the complaint, the Court must “either exclude the additional material and decide the motion on the complaint alone or convert the motion to one for summary judgment ….” Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000) (quoting Fonte v. Board of Managers of Continental Towers Condominium, 848 F.2d 24, 25 (2d Cir. 1988) (internal quotation marks omitted)).

However, the Court “may nevertheless consider” a document outside of the complaint “where the complaint ‘relies heavily upon its terms and effect,’ which renders the document ‘integral’ to the complaint.” Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (quoting Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)). “[W]hen a plaintiff chooses not to attach to the complaint or incorporate by reference a prospectus upon which it solely relies and which is integral to the complaint, the defendant may produce” the same in its motion to dismiss. Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991); see also Broder v. Cablevision Sys. Corp., 418 F.3d 187, 196 (2d Cir. 2005) (“Where a plaintiff has relied on the terms and effect of a document in drafting the complaint, and that document is thus integral to the complaint, we may consider its contents even if it is not formally incorporated by reference.”) (cleaned up).

Here, Defendants submitted documents in connection with their moving papers that were not attached to the Complaint, including: (1) the Sea Waybill; (2) the email exchanges documenting the extensions Defendants granted Plaintiff to file their complaint (“Extension Emails”); (3) a copy of the ECF receipt of the filing of Plaintiff’s Complaint on February 15, 2023; and (4) screenshots of the results of a Google search for “CET time” (“Google Screenshots”). Beckman Decl. Exs. 1–5.

The Court may properly consider the Sea Waybill in the context of this Rule 12(b)(6) motion because its breach forms the basis of Plaintiff’s suit. “Courts frequently consider contracts like this one in a motion to dismiss” without “transform[ing] [the] motion into one for summary judgment.” KiSKA Const. Corp.US v. G & G Steel, Inc., No. 04-CV-9252 (CSH), 2005 WL 1225944, at *3 (S.D.N.Y. May 20, 2005); see also Chambers, 282 F.3d at 153–54 (finding that the district court on a 12(b)(6) motion properly considered, without converting the motion into one for summary judgment, contracts not included in plaintiff’s pleadings that were “integral to the Amended Complaint”); Cortec Indus., Inc., 949 F.2d at 48 (holding that the district court was entitled to consider a written agreement defendant attached to a motion to dismiss without converting the motion to one for summary judgment); AIM Int’l Trading, L.L.C., 2003 WL 21203503, at *3–4 (declining to convert motion to dismiss into summary judgment motion but opting to consider agreements underlying plaintiff’s breach of contract claim). Accordingly, the Court will consider the Sea Waybill.

*3 The Court, however, declines to consider the remaining documents in deciding the current motion. Defendants attached these documents in support of their argument that Plaintiff’s Complaint is time-barred because it was filed after Defendants’ extension period expired. The parties, however, dispute the meaning of terms used in the extension emails and whether terms used were ambiguous in light of the circumstances in this case. These questions are not suited for resolution on a motion to dismiss. JGB (Cayman) Newton, Ltd. v. Sellas Life Scis. Grp. Inc., No. 18-CV-3095(DLC), 2018 WL 5266877, at *8 (S.D.N.Y. Oct. 23, 2018). (“If an ambiguity exists, then a court may consider extrinsic evidence to determine its meaning …. Because such evidence involves factual disputes, however, it is generally inappropriate for resolution on a motion to dismiss or for judgment on the pleadings.”) Because of this dispute, the Court declines to consider the remaining exhibits with respect to this motion.

DISCUSSION

Defendants assert three arguments in support of their motion to dismiss. The first is that Plaintiff’s claims are barred by COGSA’s statute of limitations because Plaintiff had to re-file its Complaint a day after the statutory period expired as Plaintiff’s initial Complaint was procedurally deficient. Next, Defendants argue that even if Plaintiff’s Complaint was filed on the day the statutory period expired, it is nonetheless still time-barred since it was filed hours after Defendants’ alleged deadline expired. In support of this argument, Defendants attached the Extension Emails and Google Screenshots. Finally, Defendant argues that Plaintiff failed to state a claim against MSC USA.

Because Defendants’ second argument relies entirely on extraneous exhibits that the Court will not consider, the Court will not address the argument at this time. For the reasons explained below, the Court finds that despite its procedural deficiencies, Plaintiff filed its Complaint on the date of the deadline, but that Plaintiff has failed to state a claim against MSC USA.

I. The Court Cannot Conclude That Plaintiff’s Claim Is Time-Barred

Defendants contend that Plaintiff’s claims are time-barred by COGSA’s statute of limitations because its “operative Complaint” was not filed until February 16, 2023. Defs.’ Mem. at 4. Plaintiff filed their Complaint on February 15, 2023, the parties’ agreed upon deadline. On February 16, 2023, the Clerk of Court notified Plaintiff that the Complaint was deficient because “the pleading was not signed by the attorney” and “the civil cover sheet [wa]s not correct.” See ECF No. 2. That same day, Plaintiff re-filed the Complaint with a signature and corrected civil cover sheet. See ECF Nos. 3–4. According to Defendants, because Plaintiff’s initial filing did not “comply with the rules,” the operative filing date is February 16, 2023, which is outside the statute of limitations. Defs.’ Mem. at 4–5.

Defendant’s argument is without merit. “A complaint is deemed filed when the Clerk of Court receives it.” Abusikin v. City of New York, No. 18-CV-4582 (AT), 2021 WL 930349, at *3 (S.D.N.Y. Mar. 11, 2021) (quoting Kalican v. Dzurenda, 583 F. App’x 21, 23 (2d Cir. 2014)). Plaintiff’s filing error does not void the February 15, 2023 filing date for statute of limitations purposes. A complaint filed without a proper signature “does not invalidate the timely filing of the Complaint.” Rodriguez v. City of New York, No. 10-CV-1849 (PKC), 2011 WL 4344057, at *3, (S.D.N.Y. Sept. 7, 2011). “[C]ourts regularly deem timely complaints filed before the statute of limitations expires but rejected by the Clerk of Court due to a lack of proper signature, and then promptly refiled correctly.” Abusikin, 2021 WL 930349, at *3. Here, Plaintiff promptly remedied its deficient Complaint on the same day it was notified of its mistakes. See ECF No. 3.

*4 Defendants rely on Davis v. Lenox Hill Hospital to support their argument that the filing date should be February 16, 2023 rather than February 15, 2023. No. 03-CV-3746 (DLC), 2004 WL 1926086, at *8 (S.D.N.Y. 2004). The situation in Davis is distinguishable. There, the plaintiff failed to immediately remedy her filing error and instead allowed nearly a month to elapse before correcting the error. Id. Further, the misfiled document was returned to the plaintiff twice more for failing to comply with the local rules and the plaintiff twice more allowed weeks to pass before attempting to remedy the mistake. Id. All told, it took the plaintiff in Davis over four months to correct her filing error. Id. Here, Plaintiff correctly re-filed its pleadings on the same day that it was notified of the deficiencies. See ECF No. 3.

Accordingly, Plaintiff’s Complaint was commenced on January 15, 2023 and is not time-barred.

II. Plaintiff Fails to State a Claim Against MSC USA

Defendants argue that Plaintiff failed to state a claim against MSC USA. Defs.’ Mem. at 8. Plaintiff’s Amended Complaint alleges that both MSC S.A. and MSC USA issued and breached the Sea Waybill. FAC ¶¶ 10, 12. According to Defendants, however, “MSC USA, as agent for MSC SA, had no involvement with the instant issues, is the wrong party, and thus cannot be held liable here.” Defs.’ Mem. at 8. Pointing to the Sea Waybill, Defendants highlight that “it was issued only by MSC SA.” Defs.’ Mem. at 8.

Plaintiff does not dispute that MSC USA is the agent of MSC. S.A., but asserts that it “sufficiently pled [ ] that both MSC USA and MSC SA are the liable parties” since it “list[ed] MSC USA as a defendant and party to the action” and alleged that it breached the Sea Waybill. Pl.’s Mem at 14. As “[f]urther proof that MSC USA was a party to the Sea Waybill,” Plaintiff states that MSC USA “was charged with administering the loss under contract” and “had the power to bind both MSC SA and MSC USA in accordance with the damage to the shipment.” Id. On this last point, though the Complaint alleges that MSC USA and MSC S.A. issued and breached the Sea Waybill, the Complaint does not allege that MSC USA “was charged with administering the loss under contract” or that “it had the power to bind MSC S.A.” Accordingly, the Court will not consider those allegations as facts for the purpose of this motion.

“[C]ommon law rules of agency” apply to interpretation of maritime contracts. CMA-CGM (Canada), Inc. v. World Shippers Consultants, Ltd., 921 F. Supp. 2d 1, 6 (E.D.N.Y. 2013). Thus, “if an agent executes a contract on behalf of its principal, and if the agent has properly disclosed its principal, then the agent is not itself a party to the contract and is not liable for claims arising out of it.” Mediterranean Shipping Co. (USA) Inc. v. Am. Cargo Shipping Lines, Inc., No. 13–CV–6357 (ER), 2014 WL 4449796, at *4 (S.D.N.Y. 2014). The agent, however, may be held liable for a breach of the contract if the agent “clearly manifests an intent to be so bound, ‘instead of, or in addition to, its principal.’ ” CMA-CGM, 921 F. Supp. 2d at 6 (quoting Ariel Mar. Grp., Inc. v. Zust Bachmeier of Switzerland, Inc., 762 F. Supp. 55, 60 (S.D.N.Y. 1991)).

Here, MSC USA’s signature on the Sea Waybill plainly states that it is signing “as Agent on behalf of the Carrier MSC Mediterranean Shipping Company S.A.” Beckman Decl. Ex. 1 at 3. And Plaintiff has acknowledged that MSC USA is the agent of MSC S.A. See Pl.’s Mem. at 14. In this case, MSC USA can be found liable only if it manifested an intent to be bound to the contract. See CMA-CGM, 921 F. Supp. 2d at 6. Plaintiff does not allege any facts to support that MSC USA manifested an intent to be bound to the Sea Waybill. Instead, the only allegation specific to MSC USA is that it, along with MSC S.A., issued the Sea Waybill. Plaintiff also included a conclusory statement that MSC S.A. and MSC USA “breached, failed and violated the contract of carriage and their duties and obligations as common carriers …” FAC ¶ 12. These allegations are insufficient to state a claim against MSC USA. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted) (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”).

*5 Finally, Plaintiff has requested leave to amend the Amended Complaint if the Court finds that Plaintiff has failed to sufficiently state a claim against MSC USA. Pl.’s Mem. at 14–15. Plaintiff, however, has already been afforded the opportunity to remedy the Complaint’s insufficient allegations against MSC USA. It amended the complaint after Defendants raised this very issue in a motion to dismiss Plaintiff’s initial Complaint. ECF Nos. 13; 19. Plaintiff failed to plead any facts to address Defendants’ argument in this regard or indicate in any way that it has facts to support such an allegation. As such, Plaintiff’s request to file a second amended complaint is denied.

CONCLUSION

For the foregoing reasons, Defendants’ motion to dismiss is GRANTED in part and DENIED in part. Defendant MSC USA is dismissed from the case.

All Citations

Slip Copy, 2024 WL 37072

End of Document

© 2024 Thomson Reuters. No claim to original U.S. Government Works.  

Ayala v. Fundamental Labor Strategies, Inc.

See Pa. Commonwealth Court Internal Operating Procedures, Sec. 414 before citing.

Commonwealth Court of Pennsylvania.

Wilfredo Ayala, Petitioner

v.

Fundamental Labor Strategies, Inc. (Workers’ Compensation Appeal Board), Respondent

No. 1037 C.D. 2022

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Submitted: April 28, 2023

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FILED: January 2, 2024

BEFORE: HONORABLE ANNE E. COVEY, Judge HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE STACY WALLACE, Judge

OPINION NOT REPORTED

STACY WALLACE, Judge

*1 Wilfredo Ayala (Claimant) petitions for review of the order of the Workers’ Compensation Appeal Board (Board) dated August 31, 2022, which affirmed the decision and order of a workers’ compensation judge (WCJ), circulated February 16, 2022 (WCJ’s Decision). On appeal, Claimant argues it was error for the Board to affirm the WCJ’s finding he was an independent contractor at the time of his injury and, therefore, not entitled to workers’ compensation (WC) benefits. After review, we affirm the Board’s order.

BACKGROUND

Claimant, a commercial truck driver, began working as a delivery driver for Fundamental Labor Strategies, Inc. (FLS) in March 2019. Certified Record (C.R.), Item No. 13. On February 17, 2021, Claimant filed a claim petition alleging on February 6, 2020, he sustained a lumbar disc injury while unloading a window during the course and scope of his employment with FLS. Id. Claimant then filed a petition for penalties alleging FLS violated the Pennsylvania Workers’ Compensation Act1 by failing to timely file Bureau of Workers’ Compensation documents accepting or rejecting liability for his work injury. Id. Claimant filed an additional claim petition alleging that also on February 6, 2020, he sustained adjustment disorder with anxious and depressed mood and chronic pain syndrome from his work injury. Id. After each of Claimant’s filings, FLS filed an answer denying an employment relationship with Claimant.

In support of his two claim petitions, Claimant testified FLS was not a motor carrier, and explained FLS sent him to different driving assignments with various clients. Id. After finishing his previous assignment, FLS emailed Claimant his assignments for the next day, which included the required arrival time, the address, and the items he was to deliver. Id. Claimant first testified he was permitted to accept or reject assignments, but later testified he did not feel he could decline an assignment. Id. When carrying out an assignment, Claimant received routing instructions from the motor carrier, and he drove trucks owned by the clients. Id.

Regarding his employment relationship with FLS, Claimant understood FLS treated him as an independent contractor, and he had worked as an independent contractor for other companies. Id. Claimant testified FLS provided him a hat with FLS’s logo, but he was not required to wear it. Id. Claimant never drove a truck owned by FLS or displaying FLS’s logo. Id. FLS paid Claimant by check and Claimant understood FLS made no tax deductions, and he was responsible for paying his own taxes. Id. Claimant admitted he signed an independent contractor occupational accident insurance enrollment form in March 2019, but claimed he did not understand FLS would take deductions from his pay for the insurance. Id.

In response, Curtis Ball (Ball), the president of FLS, testified FLS is a transportation broker with two brokerage services. Id. FLS offers a dedicated driver service, which private motor carriers use to haul their own goods, rather than hauling another’s goods for a fee. Id. Ball testified FLS considers dedicated service drivers employees of FLS and closely manages them. Id. FLS dictates the assignments and hours of dedicated service drivers, and these drivers are required to report to work to perform their assignments. Id. The dedicated service drivers receive life insurance, disability insurance, and health benefits, and are subject to FLS’s internal rules and regulations. Id. They also receive W2 tax forms. Id.

*2 Ball explained the other service offered by FLS is the flex driver brokerage service. Id. This service matches motor carriers having a short term need for a driver with drivers who want to work. Id. These assignments can range from a day to a week or a month. Id. Ball indicated flex drivers determine how much they want to work. Id. The flex drivers transport themselves to the clients’ locations and drive the clients’ vehicles. Id. The client provides any trip sheet or routing information. Id. The motor carrier or shipper sets the start time for the job and the number of stops to be made during the assignment. Id. Flex drivers are paid a flat fee and receive a 1099 tax form. Id. Flex drivers are free to accept or reject assignments. Id. In order to provide flex drivers with as much information as possible to make decisions about accepting assignments, FLS obtains as much information about the assignment from the client as possible including the work days available, the start times, the equipment that will be operated, the number of deliveries to be made, whether the equipment is temperature controlled, the type of transmission in the vehicle, and any other relevant information. Id. There are no repercussions if a flex driver rejects an assignment. Id. Additionally, flex drivers are permitted to drive for other companies. Id.

Regarding Claimant’s work with FLS, Ball testified Claimant was a flex driver and received driving assignments from FLS in 2019 and 2020. Id. Claimant executed a W2 in July 2018 on which he indicated he was a sole proprietor or LLC. Id. Additionally, Ball testified Claimant executed an application for independent contractor occupational accident insurance. Id. In his testimony, Ball explained flex drivers provide FLS with proof they are insured so FLS knows the driver is covered in the event of a loss, but FLS does not provide coverage or require specific accident insurance coverage for flex drivers. C.R., Item No. 26. Ball testified that as a flex driver, Claimant was permitted to accept or reject assignments, and he had documentation Claimant rejected 11 assignment offers. C.R., Item No. 13. There were no repercussions for Claimant rejecting the assignments. Id.

Based on the testimony presented, the WCJ found Claimant did not establish an employment relationship with FLS and dismissed Claimant’s claim petitions and petition for penalties. Id. The WCJ noted that to the extent “Claimant and [Ball’s testimony] differs, [Ball’s] testimony is accepted as credible, particularly where he testified that there were at least 11 instances of refused assignments, but ongoing assignments offered to Claimant.” Id. The WCJ found Ball’s testimony regarding the flex driver program crucial in establishing Claimant was an independent contractor rather than FLS’s employee. Id.

Claimant appealed to the Board. Ultimately, the Board determined the WCJ did not err in finding Claimant was an independent contractor. C.R., Item No. 16. The Board rejected Claimant’s challenges to the WCJ’s weight and credibility determinations, which determinations are binding on appeal. Id. Noting the WCJ’s findings were supported by substantial, competent evidence, the Board affirmed the WCJ’s Decision. Id.

Claimant now petitions this Court for review of the Board’s order. On appeal, Claimant argues the Board erred in concluding he was an independent contractor at the time of his injury. Claimant’s Br. at 10. Specifically, Claimant contends he was not an independent contractor because FLS exercised control over his work. Id. at 18. In response, FLS contends the Board properly affirmed the WCJ’s Decision as substantial evidence supported the WCJ’s finding Claimant was an independent contractor. FLS’s Br. at 6.

DISCUSSION

Our review in WC appeals is limited to “determining whether the WCJ’s findings of fact were supported by substantial evidence, whether an error of law was committed, or whether constitutional rights were violated.” Pierson v. Workers’ Comp. Appeal Bd. (Consol Pa. Coal Co. LLC), 252 A.3d 1169, 1172 n.3 (Pa. Cmwlth.), appeal denied, 261 A.3d 378 (Pa. 2021). Relevant to this appeal, the question of whether an employee-employer relationship exists is a question of law subject to our plenary, de novo review. Am. Rd. Lines v. Workers’ Comp. Appeal Bd. (Royal), 39 A.3d 603, 610-11 n.6 (Pa. Cmwlth. 2012). However, where substantial evidence supports the WCJ’s findings, we defer to those findings as the WCJ is the ultimate fact finder in workers’ compensation cases and “has exclusive province over questions of credibility and evidentiary weight.” Anderson v. Workers’ Comp. Appeal Bd. (Penn Ctr. for Rehab.), 15 A.3d 944, 949 (Pa. Cmwlth. 2010). The WCJ is free to accept or reject the testimony of any witness, Edward v. Workers’ Compensation Appeal Board (Epicure Home Care, Inc.), 134 A.3d 1156, 1161 (Pa. Cmwlth. 2016), and this Court is bound by those credibility determinations. A&J Builders, Inc. v. Workers’ Comp. Appeal Bd. (Verdi), 78 A.3d 1233 (Pa. Cmwlth. 2013).

*3 For a claimant to receive WC benefits, the claimant must prove an employer-employee relationship exists because “[a]n independent contractor is not entitled to benefits.” Universal Am-Can v. Workers’ Comp. Appeal Bd. (Minteer), 762 A.2d 328, 330 (Pa. 2000). Whether an employer-employee relationship exists depends on the unique facts and circumstances of each case. 3D Trucking v. Workers’ Comp. Appeal Bd. (Fine and Anthony Holdings Int’l), 921 A.2d 1281 (Pa. Cmwlth. 2007). In considering whether a claimant is an independent contractor versus an employee, we consider many factors, including:

(1) control of manner the work is done; (2) responsibility for result only; (3) terms of agreement between the parties; (4) nature of the work/occupation; (5) skill required for performance; (6) whether one is engaged in a distinct occupation or business; (7) which party supplies the tools/equipment; (8) whether payment is by time or by the job; (9) whether work is part of the regular business of employer; and, (10) the right to terminate employment.

Am. Rd. Lines, 39 A.3d at 611 (internal citation omitted). While no factor is dispositive, control over the work and the manner it is performed are primary factors in determining employment status. Universal Am-Can, 762 A.2d at 333. Where an alleged employer has the right to select the employee, the right and power to discharge the employee, the power to direct the manner of performance, and the power to control the employee, there is sufficient control to establish an employer-employee relationship. 3D Trucking, 921 A.2d at 1288. Additionally, payment of wages and payroll deductions are a significant consideration, as is a tax filing noting self-employment. Id. See also Guthrie v. Workers’ Comp. Appeal Bd. (The Travelers’ Club, Inc.), 854 A.2d 653, 662-63 (Pa. Cmwlth. 2004).

Because of the relationships among drivers, owner-operators and motor carriers and the thorough regulation of them, the trucking industry presents unique challenges in determining whether an employer-employee relationship exists. Am. Rd. Lines, 39 A.3d at 611. In these cases, in addition to the previously outlined factors, we also consider the degree of supervision and control over delivery routes and the timing of work or schedule. Id.

Here, the WCJ analyzed and weighed the testimony and each of the WCJ’s findings are supported by evidence in the record. See generally C.R., Item No. 13. Accordingly, we conclude substantial evidence supports the WCJ’s factual findings about Claimant’s employment relationship with FLS. Because the Board is bound by the same standard of review we are, it did not err in reaching the same conclusion.

Turning to the WCJ’s legal conclusion Claimant was an independent contractor, we note the WCJ rejected Claimant’s testimony to the extent it conflicted with Ball’s testimony. Ball testified Claimant had no guarantee of work and was free to refuse work or even work for another company. He also testified FLS paid Claimant by check and took no tax deductions, instead FLS provided Claimant a Form 1099 and he was responsible for paying his own taxes. As to the amount of control, FLS provided Claimant with assignments and information from the client about pick-up and drop-off locations. While requests about the manner of work may have come from the clients, FLS did not dictate to Claimant which assignments to accept, how to complete the assignments, what routes to travel, and what times to drive each day or for how long. FLS did not provide a uniform or the vehicles for Claimant to drive, nor did FLS train Claimant. While none of these facts are individually dispositive, taken as a whole, these findings reflect Claimant controlled the time and manner of his work, primarily by his ability to accept or reject assignments.

*4 In analyzing the WCJ’s legal conclusion Claimant was an independent contractor at the time of his injury, the Board explained:

Herein, the WCJ credited the testimony of Claimant and [Ball] that Claimant signed an independent contractor occupational accident insurance form so he would have his own insurance in the case of an accident since he was treated as an independent contractor with [FLS] similar to his prior independent contractor driving jobs. Additionally, the credible testimony of Claimant and [Ball] supports the Claimant did not drive [FLS’s] truck, since [FLS] did not own any trucks, trailers, or warehouses, and the hat provided by [FLS] with the company logo on it was a gift which was not required to be worn by Claimant during driving assignments as a uniform. Moreover, the credible testimony establishes that [FLS] had no control over Claimant’s daily routes, starting or ending times, etc., and that Claimant was entitled to, and in fact took advantage of, rejecting job assignments without repercussions. This credible evidence constitutes substantial evidence to support the WCJ’s finding that Claimant was an independent contractor rather than an employee for [FLS] based on the terms of the agreement that Claimant would be an independent contractor for [FLS], that [FLS] did not supply Claimant’s tools to perform his job, and [FLS] did not retain control [over] the manner of Claimant’s driving on assignments. Consequently, the WCJ properly determined Claimant failed to meet his burden establishing an employment relationship with [FLS].

C.R., Item No.16. We agree with the Board’s determination.

CONCLUSION

Because this Court may not reweigh the evidence or second-guess the WCJ’s credibility determinations, and because substantial evidence in the record supports the WCJ’s findings of fact and conclusions of law, we discern no error by the Board in affirming the WCJ’s Decision Claimant was an independent contractor. As an independent contractor, Claimant was not entitled to WC benefits. Accordingly, we affirm the Board’s Order.

Judge Fizzano Cannon did not participate in the decision of this case.

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Wilfredo Ayala, Petitioner

v.

Fundamental Labor Strategies, Inc. (Workers’ Compensation Appeal Board), Respondent

No. 1037 C.D. 2022

ORDER

AND NOW, this 2nd day of January 2024, the Order of the Workers’ Compensation Appeal Board dated August 31, 2022, is AFFIRMED.

STACY WALLACE, Judge

All Citations

Footnotes  

  1. Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.

End of Document

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