Max Trucking, LLC v. Liberty Mutual Insurance Corp.
802 F.3d 793
| 6th Cir. | 2015Background
- Max Trucking leased-to-buy program drivers; district court held drivers are WDCA employees and awarded $101,592 in unpaid premiums to Liberty Mutual.
- WDCA requires workers’ compensation coverage; Michigan Facility administers involuntary market for uninsured employers.
- Liberty Mutual audited and concluded lease-to-buy drivers were employees, increasing premiums; WC 021 policy cancelled.
- Drivers’ trucks were registered in Max Trucking’s name; company provided most operating expenses and controls DOT compliance, dispatching, and payment structure.
- District court applied the three-part test under 418.161(1)(n) and considered the 20-factor test; court found no separate trucking businesses and no public holding out by drivers.
- Appellant Max Trucking appealed, challenging the tests used and the premium-damages calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 418.161(1)(n) uses the 3-part test or the 20-factor Revenue Test. | Max Trucking argues the Revenue Test governs post-2013. | Liberty Mutual contends the 20-factor test applies as the Revenue Test is limited to MAHS determinations. | Three-part test governs; Revenue Test does not supplant it. |
| Whether the drivers meet WDCA employee status under the 3-part test. | Drivers are independent contractors under lease-to-buy. | Drivers are economically dependent and do not maintain separate businesses. | Drivers are employees under the 3-part WDCA test. |
| Whether the district court properly calculated unpaid premiums. | Liberty Mutual’s premium method (one-third of 1099 wages) is inappropriate. | One-third rule is proper under the Facility’s Manual; Max Trucking bears risk of record-keeping laxity. | District court properly adopted Liberty Mutual’s premium calculation of $101,592. |
| Whether the district court properly relied on the Facility’s Manual in a WDCA premium dispute. | Manual applicability to this case is improper contract-wise. | Facility’s Manual governs classification and rating for premiums of this class of drivers. | Facility’s Manual applied; reliance supported by statute and authority. |
Key Cases Cited
- Auto-Owners Ins. Co. v. All Star Lawn Specialists Plus, Inc., 857 N.W.2d 520 (Mich. 2014) (reaffirmed three-part WDCA test and employment status requirements)
- Amerisure Ins. Co. v. Time Auto Transp. Inc., 493 N.W.2d 482 (Mich. Ct. App. 1992) (held all three criteria must be met for employee status under WDCA (prior rule))
- Hoste v. Shanty Creek Mgmt., Inc., 592 N.W.2d 360 (Mich. 1999) (historic eight-part economic reality test superseded by three-part WDCA test)
- Peno Trucking, Inc. v. C.I.R., 296 F. App’x 449 (6th Cir. 2008) (tax-context discussion informing economic reality but not controlling for WDCA)