Appeal from the Circuit Court of Sangamon County; the Hon.
Simon L. Friedman, Judge, presiding.
MR. JUSTICE KLUCZYNSKI DELIVERED THE OPINION OF THE COURT:
Claimant, Donald Ivester, filed an application for adjustment of claim before the Industrial Commission seeking an award for injuries he sustained when the truck he was driving collided with another vehicle near Springfield, Illinois, on Monday, February 1, 1971. The arbitrator entered an award on behalf of claimant for temporary total incapacity, permanent facial disfigurement and medical services. The arbitrator found that M.W.M. Trucking Co. (M.W.M.), as the borrowing employer, was principally liable for payment of the award. It was further determined that American Transit Lines (American), as the loaning employer, would be liable should M.W.M. fail to satisfy the award. However, the arbitrator declined to determine the relative rights between M.W.M. and American to reimbursement or indemnification of each for payment of the award. The Industrial Commission confirmed the award, but on certiorari to the circuit court of Sangamon County the award was reversed. The principal issues raised in the direct appeal concern the jurisdiction of the Industrial Commission to determine this cause, the question of whether claimant was an independent contractor at the time of the accident, the status of M.W.M. as a borrowing employer, the amount of the award, and the issue of whether M.W.M. or American is primarily liable should an award be sustained.
Claimant, an Illinois resident, entered into an agreement to lease his truck to American. Claimant's payment was determined by the amount of freight he handled. In return American supplied claimant with Interstate Commerce Commission approval to operate the vehicle. American also provided claimant with liability insurance, and it withheld taxes and social security contributions from his pay. The agreement recited that use of the equipment without American's express consent would place the activity outside the scope of the agreement and render the agreement inoperative. Claimant also agreed to pay American all monies he collected.
American's main terminal was located in Chicago. Claimant's normal itinerary consisted of hauling freight between Chicago and St. Louis, Missouri. American also maintained a terminal in Granite City, Illinois, which is in close proximity to St. Louis. Claimant resided near Granite City.
After discharging cargo at the Granite City terminal, a driver would normally inform Bud Arnold, American's dispatcher at this facility, that he was available to haul freight north to Chicago. A driver's name would be placed on a board, and he would be assigned on a "first-in, first-out" basis. The record establishes that most of American's freight business consisted of shipment of cargo southbound from Chicago. Unless a driver obtained cargo being shipped northward, he would "deadhead," i.e., return empty, to Chicago with a resulting loss in pay. To avoid this situation, American's drivers who were not assigned northbound cargo by 3 or 4 p.m. were given permission to obtain a "trip lease." A "trip lease" was common practice in the trucking industry whereby a lessor would lease the vehicle to another company for a single trip to a specified designation. The Granite City dispatcher had authority to permit this practice and he would then notify American that a driver was returning with cargo.
Claimant testified that he arrived at the Granite City terminal on January 29, 1971, discharged his cargo and inquired as to northbound freight. He said American did not have any cargo that would be assigned to him. Therefore about noontime he asked and received permission from the dispatcher to "trip lease" for M.W.M., as he had done on numerous occasions.
M.W.M. is a trucking firm incorporated in Missouri with its principal place of business in Arcadia, Missouri. Most of its cargoes are destined for the Chicago area. Claimant said he traveled to Arcadia on January 29, arriving in the evening. He signed a "trip lease" agreement with M.W.M. for transporting lumber from Missouri to Whiting, Indiana, which is located in the Chicago area. Evidence established that the prevailing industry custom permitted a driver to sign the "trip lease" on behalf of the employer lessor. The agreement named claimant and American as lessor of the vehicle. In consideration for 75% of the freight revenue, lessor agreed to transport said property, although the agreement did not contain any specific date or time for delivery. The remaining 25% was payable to M.W.M., who, as lessee, agreed to assume full operational control and responsibility for the equipment, including display of appropriate Interstate Commerce Commission signs. The lessor, however, was to pay the driver's salary, compensation coverage, all taxes, and necessary operating expenses, such as fuel and maintenance.
Claimant obtained a cargo of lumber from M.W.M. in Missouri. He drove to his home in Illinois for the weekend. He left for Whiting, Indiana, the following Monday, the day the accident occurred.
Fourteen checks were introduced into evidence that had been issued by M.W.M. for "trip leases" entered into with claimant commencing in 1968 until December, 1970. M.W.M. had sent these checks to claimant as he had specified. Twelve checks were made payable solely to American, and two checks were made payable to American and claimant. All bore the purported endorsement of American. The record establishes that claimant, without knowledge of American, had endorsed the checks in the latter's name and retained the proceeds therefrom. Claimant explained that he had never been told not to act in this manner. The testimony of the manager of M.W.M. indicated that it was an industry custom for a driver to endorse a check on behalf of his company.
Claimant said that American knew of the "trip leases" with M.W.M. because he would record this activity in his log records. Claimant asserted that he submitted log copies to American detailing his activities as required by the Interstate Commerce Commission.
Robert Wendorf, the operational director of American, had reviewed all logs submitted by claimant from mid-1969, and he testified that he was unable to discover any notation on these documents indicating claimant had entered into a "trip lease" with M.W.M. and such knowledge was not obtained until after claimant's accident. Prior log records had been destroyed. Wendorf testified that a driver was required to turn in a daily log even if he was not working. Wendorf also said American could derive a benefit by having trucks available in Chicago and it therefore permitted its dispatcher in Granite City to augment ("trip lease") its vehicles. The dispatcher would inform American of the "trip lease," and American would then notify the company by letter to send it a check in payment thereof. American, however, had not sent a letter to M.W.M. regarding payment. Therefore the industry custom would permit payment directly to a driver. But even though payment was directly made to claimant, Wendorf asserted that the logs should have revealed the "trip leases" for M.W.M. and it was not until after the accident that this witness knew of the existence of said company.
Wendorf also detailed American's policy to deduct 5% from the "trip lease" payment for administrative expenses it incurred for this activity. This policy was instituted in the latter part of 1970. While claimant had not paid this percentage to American for any "trip lease" with M.W.M. prior to his accident, the record substantiates that claimant had entered into only one "trip lease" with M.W.M. which would have required the 5% deduction.
On review before the Commission the owner of M.W.M., Marvin Walker, disclaimed that his company instructed claimant that the latter must adhere to a specific route, and claimant admitted that he chose the destination route. M.W.M. possessed the original of claimant's log records that were written on American's log books indicating the "trip ...