Appellant Arkansas Transit stice. carrier in the business of transporting mobile homes in interstate commerce. In February 1987, Appellant applied for workers’ compensation insurance coverage through the Arkansas Assigned Risk Pool. Appellee Aetna Life and Casualty was assigned to рrovide coverage to Appellant. Appellee issued a policy for the years February 7, 1991, to February 7, 1992, and March 13, 1992, to February 7, 1993. A subsequent audit of Appellant’s payroll records revealed that additional premiums were owed for those years. Appellant refused to pаy the additional amounts, and Appellee filed suit in the Pulaski County Circuit Court. The issue was whether certain truck drivers retained by Appellant were employees or independent contractors. The trial court found that they were employees and ordered Appellant to pay insurance premiums in the amount of $108,223.21, plus costs and attorney’s fees. This case was certified to us from the Arkansas Court of Appeals, as presenting an issue of substantial public interest. Hence, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(b)(4). We affirm.
For its sole point for reversal, Appellant argues that the trial cоurt erred in ruling that the truck drivers were not independent contractors. Our standard of review on appeals from bench trials is whether the trial judge’s findings were clearly erroneous or clearly against the preponderance of the evidence. See Ark. R. Civ. P 52(a); Neal v. Hollingsworth,
This court has long held that an independent contractor is one who contracts to do a job according to his own method and without being subject to the control of thе other party, except as to the result of the work. See, e.g., Johnson Timber Corp. v. Sturdivant,
The governing distinction is that if control of the work reserved by the employer is control not only of the result, but also of the means and manner of the performance, then the relation of master and sеrvant necessarily follows. But if control of the means be lacking, and the employer does not undertake to direct the manner in which the employee shall work in the discharge of his duties, then the relation of independent contractor exists.
Massey v. Poteau Trucking Co.,
The following factors are to be considered in determining whether one is an employee or independent contraсtor:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not thе work is a part of the regular business of the employer;
(i) whether or not the parties believe they are creating the relation of master and servant; and
(j) whether the principal is or is not in business.
Dickens v. Farm Bureau Mut. Ins. Co.,
The factors pertaining to the nature of the worker’s occupation and whether it is a part of the regular business of the employer comprise the “relative nature of the work” test, recognized in Sandy v. Salter,
In the present case, the evidence demonstrated that during the years in question, Appellant employed truck drivers on its payroll to transport mobile homes from the seller’s location to the buyer’s land. The employee drivers were subjeсt to workers’ compensation coverage, and premiums were paid for them. Appellant also retained a number of truck drivers by contract to transport mobile homes using their own trucks. Appellant asserted that these contract drivers were independent contractors for whom workers’ compensation coverage was not required.
The trial court concluded that the drivers were employees based, in large part, on the degree of control that Appellant retained over them. Specifically, the trial court found that under the contraсts, the drivers agreed to use their trucks exclusively in the business and service of Appellant, and that they could not use their trucks for a “trip lease” without Appellant’s express consent. A “trip lease” is when the driver has the opportunity to haul or deliver for someone else on his trip back to his place of origin. Meanwhile, Appellant had the right to sublease the drivers’ trucks. The trial court also found that: (1) the drivers had to paint their trucks in accordance with Appellant’s specifications and were required to affix Appellant’s insignia or other marks of identification on the trucks; (2) the trucks could only be driven by persons certified by Appellant as acceptable; (3) the drivers were authorized, as agents, to collect the monies due to Appellant for the shipping charges; (4) compensation was contingent upon the drivers providing bills of lading, log books, all tickets, permits, and copies of flagging tickets; (5) the drivers were required to pay all fuel use taxes, but Appellant would receive all credits and refunds on such taxes; and (6) the drivers were responsible for up to $350.00 for damage to the cargo.
Appellant argues that the trial court erred in rеlying on these contract provisions as bearing on the issue of the right to control. It claims that its contracts provided no more control than that mandated by the Interstate Commerce Commission’s (ICC) regulations. Appellant particularly relies on 49 C.F.R. § 1057.12(c)(1) (1992),
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which provides in part that equipment lеases “shall provide that the authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease.” Appellant asserts that the ICC has never viewed this exclusive-use requirement as having any bearing on the relationship of thе parties. See section 1057.12(c)(4). Appellant relies on this court’s holding in Julian Martin, Inc. v. Indiana Refrig. Lines, Inc.,
There, a truck driver was injured while driving a truck owned by White County Ready Mix, leased to Julian Martin, and then subleased for one trip to Indiana Refrigeration Lines. The dispute was between the lessee and the sub-lessee as to which one was the driver’s employer and thus respоnsible for compensation of his injuries. The lessee argued that the sub-lessee was responsible, in part, because the sub-lessee controlled the driver’s activities under the ICC’s regulations. This court disagreed: “Control of the leased equipment does not operate as such complete control of the driver, as to make the driver the employee of the lessee as a matter oJlaw[.]” Id. at 678,
Here, in addition to the facts set out above, the evidence showed that the contract drivers performed the same work as the employee drivers, with the only difference being that the employee drivers were given specific times and dates for pick up and delivery, and they did not have the option of declining particular moves. The contracts were initially for a term of thirty days, but were autоmatically renewed and continued thereafter unless terminated. Either party could terminate the contract by giving at least ten days’ written notice. The trial court found significant the length of time that these drivers worked for Appellant, with the majority having done so for at least two years. The trial court also found significant the factor that the drivers were not engaged in a distinct occupation or business, as the greater weight of the evidence showed that these drivers did not engage in work other than hauling mobile homes for Appellant. The trial court also found that the work performеd by the contract drivers was such an integral part of Appellant’s business, that it could not operate without the contract drivers. The trial court relied on the fact that Appellant is in the business of transporting mobile homes, and that the truck drivers are in the identical business. Thus, the trial court found that thе truck drivers’ work bears a significant relationship to Appellant’s business under the “relative nature of the work” test.
Furthermore, contrary to Appellant’s argument, the contracts here exceeded the amount of control specified in the ICC’s regulations. For example, the exclusive-usе provision found in section 1057.12(c)(1) does not specifically prohibit use of the trucks by the lessor-owners for trip leases. Indeed, the reason offered by Appellant in support of this provision was not that it was mandated by the regulations, but that Appellant likes to know where the drivers are in case they are needed for another move. Similarly, there does not appear to be any regulation requiring the lessor-owners to act as trustees or agents of the carrier for the purpose of collecting monies due for shipping charges. Thus, viewing the foregoing facts in a light mоst favorable to Appellee, we cannot say that the trial court was clearly erroneous in finding that the contract drivers were employees.
We find additional support for our holding in the trial court’s determination that Appellant should be estopped from' denying payment of thе additional premiums regardless of the drivers’ status. The evidence revealed that workers’ compensation claims were made by five of the contract drivers during the period in question, and those claims were paid by Appellee. In one of those five cases, the trial court found thаt the claim was signed by Appellant’s vice-president, Winston Chandler, and that Chandler never raised the issue of the driver’s employment status until approximately two years after the claim was made and compensation had been paid. On another claim, the trial court found that Chandler had infоrmed Appellee’s claims adjuster that the company had withheld funds from the claimant’s pay to pay for workers’ compensation insurance. Furthermore, the trial court found that all of the drivers were treated in the same way, as it related to the assignment of jobs, the rate of pay, and the method and manner in which they performed each job. Accordingly, the trial court found that Appellant intended and elected to have the contract drivers, as a group, covered by its policy. Again, we cannot say that the trial court’s ruling was clearly erroneous, and we affirm thе judgment.
We do not reduce the judgment, as Appellant requests, by the premium amounts for those drivers working in Alabama, Georgia, Tennessee, and Virginia. It is not apparent that Appellant made this argument below. To the contrary, the abstract reflects that Appellant informed the trial court that it was not controverting the calculations of the premiums and that the only issue was the coverage itself. Accordingly, the issue is not preserved for appeal. See Rainey v. Hartness,
Lastly, because we affirm the trial court’s determination that the drivers were employees, it is not necessary to review the alternative finding that the drivers were subcontractors. We do find it necessary, however, to point out that even if the drivers were subcontractors, Appellant, as the prime contractor, would not be respоnsible for payment of workers’ compensation premiums for the subcontractors themselves, but only for those employees of the subcontractors, if any, for whom no compensation coverage was provided. See Ark. Code Ann. § ll-9-402(a) (Repl. 1996); Hollingsworth & Rockwood Ins. Co. v. Evans,
Affirmed.
Notes
This regulation is now codified as 49 C.F.R. § 376.12(c)(1) (1999).