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Rutherford v. Modern Transportation Co.

Decided: March 20, 1974.


Larner, A.j.s.c.


[128 NJSuper Page 505] Plaintiff as administratrix, both general and ad prosequendum, brings this wrongful death action for damages resulting from the death of her husband Roosevelt Rutherford as a result of an accident which occurred on October 9, 1970. One of the defendants against whom negligence is alleged is Modern Transportation Co. This defendant has asserted as one of its defenses that decedent Roosevelt Rutherford was its employee, that the occurrence and

death arose out of and in the course of his employment, and that as a consequence the exclusive remedy for dependency benefits is limited to a petition in the Workmen's Compensation Division. Plaintiff disputed this contention, claiming that decedent was an independent contractor entitled to bring an action at law for damages arising out of the negligence of defendant.

With consent of the parties the court conducted a plenary hearing without a jury in advance of trial to determine the true status of decedent and whether plaintiff is barred by the provisions of the Workmen's Compensation Act. It is undisputed that decedent was killed as a result of an accident which arose out of and in the course of his work on the day of the occurrence. The narrow issue for determination, therefore, is whether he was an employee within the Workmen's Compensation Act and the cases interpreting the same.

Modern Transportation Co. is in the business of collecting and disposing of liquid wastes from sewage treatment plants and other sources. The sewage material is brought by trucks owned by Modern and others and unloaded into a holding tank at the Modern facility in Kearny from which it is ultimately pumped into barges and dumped at sea. On the day of the accident decedent had transported a load of this waste in a truck owned by Modern and was waiting to unload it into defendant's tanks when poisonous fumes or gases escaped from the tanks as a result of the dumping of some chemical waste by another trucker. Several persons were overcome and three of them died, including Rutherford.

For some time prior to May 1970 Rutherford had been operating a truck for Modern and was carried on its payroll as an employee. In May 1970 (the exact date unavailable in the proofs) a new arrangement was made between Rutherford and Modern whereby Modern removed him from the payroll as an employee and terminated all the requisite formal accompaniments of the usual employer-employee relationship,

such as withholding taxes, W-2 forms, social security, unemployment deductions, etc.

An agreement admitted into evidence reveals that in July 1970 Modern leased a 1970 Diamond Reo tractor to Rutherford, trading as John Anthony Trucking Co., without any stated consideration. In fact, the evidence supports the finding that no moneys were paid by Rutherford for the lease of this piece of equipment.

Under this agreement, and from the evidence relating to its implementation, the court finds that Rutherford was required to and did pay for the cost of fuel and other normal maintenance costs of the tractor. It is clear that the tractor was used solely for the transportation of sewage material in connection with Modern's business, and that Rutherford was directed each day by Modern's foreman when and where to go for this purpose.

The agreement guaranteed Rutherford sufficient hauling to return a minimum weekly income of $600. Invoices introduced as samples establish that Rutherford billed Modern on a weekly basis at an hourly rate of $10, and that the weekly billings far exceeded the $600 minimum.

Pursuant to the agreement Modern continued to maintain insurance on the truck. In addition, the agreement sought to eliminate any title interest in the vehicle in Rutherford by designating him as a "bailee for hire."

At the time of the change in relationship in May 1970 Rutherford opened a new bank account in the name of John Anthony Trucking, with an initial deposit of $20 furnished by his employer. The secretary of A & S Transportation Co. (an affiliate of Modern Transportation) handled all the secretarial and bookkeeping functions for Rutherford. She arranged for an employer identification number; she made out checks for John Anthony Trucking; she made bank deposits; she made out all necessary I.R.S. forms; she maintained all his books and records.

From the evidence the court finds that Rutherford spent his full time in the service required by Modern, and that all

the moneys deposited in the John Anthony Trucking bank account between May and October 1970 emanated solely from Modern's payments.

It also appears that Rutherford had purchased a Mack truck from Chemquid Disposals in November 1969 which was thereafter registered in his name, and that he made regular monthly payments on account with the checks paid from the John Anthony Trucking account. The evidence is vague as to the use of this truck. However, Mrs. Rutherford testified that her husband did some trucking for Chemquid, and invoices in evidence reveal billings from Rutherford to Chemquid between January and May 1970. It is also apparent that the Mack truck was utilized in connection with Modern's operations subsequent to May 1970, for the billings reflect ...

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