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Donaldson v. Country Mutual Insurance Co.

Supreme Court of Alabama

June 14, 2019

Daniel Kyle Donaldson
Country Mutual Insurance Company

          Appeal from Madison Circuit Court (CV-15-902120)

          SELLERS, Justice.

         Daniel Kyle Donaldson appeals from a summary judgment in favor of Country Mutual Insurance Company ("Country Mutual"). We affirm.

         Facts and Procedural History

          The underlying action stems from a November 2015 accident in which Donaldson, while working in a construction zone on the west side of Bailey Cove Road in Madison County, was struck by a GMC Yukon sport-utility vehicle, owned and driven by Gregory Ryan Johnston. As a result of the collision, Donaldson suffered severe injuries to one of his legs that ultimately required the amputation of the leg.

         Donaldson sued Johnston and Country Mutual, asserting claims of negligence and wantonness against Johnston and asserting that Country Mutual was vicariously liable for Johnston's conduct under theories of agency and respondeat superior. At the time of the underlying accident, Johnston was working as an insurance agent under an "agent's agreement" with Country Mutual and a number of other companies that are collectively referred to in that agreement as "Country Insurance and Financial Services."[1] Pursuant to that agreement, Johnston solicited applications for the insurance products of Country Mutual and the other named companies, bound coverage and delivered insurance policies as approved by those companies, transmitted premiums received from policyholders to those companies, and provided customer service to policyholders. The agent's agreement expressly identified Johnston as an independent contractor and stated that "nothing in this Agreement shall be construed to create the relationship of employer and employee" between the parties.

         Country Mutual filed a motion for a summary judgment, arguing that Johnston was not its agent or employee but, instead, was an independent contractor. Country Mutual further argued that, even assuming Johnston was its employee, his actions in relation to the accident were outside the line and scope of his alleged employment. In opposition, Donaldson argued that a genuine issue of material fact existed as to whether Johnston was an employee of Country Mutual and whether he was acting within the line and scope of that employment at the time the accident occurred. The Madison Circuit Court ("the trial court") granted Country Mutual's motion for a summary judgment. The case proceeded to trial on the remaining claims against Johnston; the jury found in favor of Donaldson on both the negligence and wantonness claims and awarded him $5,560,000 in compensatory damages. After the trial court entered a judgment on the jury's verdict, Donaldson filed this appeal challenging the summary judgment in favor of Country Mutual.

         Standard of Review

"This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949, 952–53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce 'substantial evidence' as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797–98 (Ala. 1989); Ala. Code 1975, § 12–21–12. '[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v.Founders Life Assur. Co. of Fla., 547 So. 2d 870, 871 (Ala. 1989)."

Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004).


         Donaldson's claims against Country Mutual are based on the theory of respondeat superior. "To recover against a defendant on the theory of respondeat superior, it is necessary for the plaintiff to establish the status of master and servant and to establish that the act was done within the scope of the servant's employment." Jenkins v. Gadsden Times Publ'g Corp., 521 So. 2d 957, 958 (Ala. 1988)(citing Solmica of the Gulf Coast, Inc. v. Braggs, 285 Ala. 396, 232 So. 2d 638');">232 So. 2d 638 (1970)).

         To determine if a person is the servant or employee of another, rather than an independent contractor, we look at "whether the entity for whom the work is being performed has reserved the right of control over the means by which the work is done." Shaw v. C.B. & E., Inc., 630 So. 2d 401');">630 So. 2d 401, 403 (Ala. 1993)(citing Bay Shore Props., Inc. v. Drew Corp., 565 So. 2d 32 (Ala. 1990)(emphasis added)). Thus, for an employer-employee relationship to exist, the purported employer must retain the right to direct the manner in which the individual's work is to be performed, as well as the result the employer desires the individual to accomplish. See Birmingham Post Co. v. Sturgeon, 227 Ala. 162, 166, 149 So. 74, 77 (Ala. 1933). It is the reserved right of control, and not the actual exercise of such control, that governs the relationship. Shaw, 630 So. 2d at 403.

         How the parties characterize their relationship is not necessarily determinative of whether an individual is an independent contractor or an employee. Owen v. Tennessee Valley Printing Co., 168 So. 3d 1221, 1233 (Ala. Civ. App. 2014). "Because working relationships take a wide variety of forms, each case must depend on its own facts, and all features of the relationship are considered together." Sessions Co. v. ...

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