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Area Trans. Co. v. Industrial Com.





Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.


Area Transportation Company (Area) appeals from the judgment of the circuit court of Cook County confirming the decision of the Industrial Commission. The arbitrator found that John Fiedler was an employee of Area and awarded compensation for permanent total disability. On review the Industrial Commission affirmed the arbitrator's award and added further amounts of medical payments. The sole issue is whether Fiedler was an employee of Area under the Workers' Compensation Act at the time he was injured. An additional defendant, Mace Iron Works (Mace), was dismissed by the arbitrator, no argument or contention is made with regard to Mace in this appeal, and in oral argument Area has stipulated to the dismissal of Mace.

Fiedler sustained injuries in an automobile accident on July 29, 1978, while riding in his brother's car after being picked up at the site of a mechanical breakdown of his truck. For two years prior to the accident, Fiedler had worked for Mace, receiving an hourly wage for approximately 35 hours of work weekly as a welder of structural steel and for loading and delivering the product.

In 1977, Fiedler purchased a truck owned by Mace for the hauling of the fabricated steel under a note payable in installments. On January 14, 1977, Fiedler entered into an "Equipment Lease" under which he leased the truck, purchased from Mace, to Area.

The lease recited that Area desired to lease the equipment from the "Independent Contractor," that the vehicle would be under the direction, supervision, and control and operated pursuant to for-hire motor carrier authority of Area under its ICC License, for a period from January 14, 1977, to January 14, 1980.

The lease agreement provided, as material:

"2. [Fiedler] agrees to haul such property as [Area] may require for a series of trips, between various points and places, for a period of one (1) year beginning with date and time shown below and continued thereafter until terminated by the terms of this agreement. Either party may at its option terminate this lease by giving thirty (30) days notice in writing to the other.

3. Costs of Operation. [Fiedler] shall pay all costs of operation which may include, but shall not be limited to, the following: Maintenance, repairs, fuels, lubricants, tires, etc; wages or other remuneration of operators, drivers and helpers; public liability and property damage insurance on the equipment while not being operated in service of [Area] or otherwise; workmen's compensation, unemployment insurance, Social Security or other similar taxes, insurance or benefits on the operator, drivers and helpers and, in connection therewith, [Fiedler] shall make all payroll, tax or other deductions required by any applicable law or regulation; license registration fees, toll charges, decals, use permits, axle, weight, garoline [sic] or other types of taxes, fees or exactions required of or on the equipment or on the use or operation thereof, including all reports connected with such matters, damages to cargo caused by the fault or neglect of [Fiedler], and fines and penalties arising out of the use of said equipment. In the event [Area] is compelled to pay any of [Fiedler's] costs of operations such payment shall be considered an advance to [Fiedler] and is deducted from any monies due or becoming due to [Fiedler]."

It further provided for the transportation of:

"Commodities general within a fifty (50) mile radius of 1939 So. 48th Court, Cicero, Illinois and to transport such property to or from any point outside of such authorized area of operation for a shipper or shippers within such area. Also, between the Indiana-Illinois State Line, on the one hand and on the other, points and places in Indiana within the Chicago, Illinois Commercial Zone as defined by the Interstate Commerce Commission on I.M.C.C. 673."

After Fiedler purchased the truck from Mace he continued his work for Mace as a welder. Also, prior to the agreement with Area, Fiedler hauled only for Mace. After the agreement with Area, Fiedler hauled only for Area, which included deliveries from Mace once or twice a week. When Fiedler would make a delivery for Area to a housing project he was to pick up the unused steel he found on the ground near the foundation of the project for Mace and was paid a straight $15 per pickup by Mace, and Area Transportation received nothing from this.

Fiedler testified that he maintained the truck and kept it on Mace property. Area purchased the insurance for the truck and furnished Fiedler with the Interstate Commerce Commission (ICC) numbered decal. Area would pay Fiedler on a weekly basis and would create the freight bill and send it to Mace, which would pay Area every two or three weeks. There was also testimony that Fiedler, before he started trucking for Area, filled out an employment application form provided by Area and used for other employees. A physical examination was required for truck drivers. If Fiedler failed to pass a driving test he would not be allowed to drive for Area; likewise he would not be allowed to drive if there were any "unsavory information" on the employment application. Area's witness testified that this was so the insurance company would maintain the insurance. Area's officer also testified, in the nature of an offer of proof submitted by Fiedler's counsel, that he would terminate the relationship should Fiedler violate ICC regulations such as hauling outside the area or hauling unauthorized commodities.

In case of accident Fiedler was instructed to call in to Area. Area's name was on the truck on an adhesive. Area owns no trucks of its own. Area withheld a security deposit of $225-$250 from Fiedler's check to cover any damage to cargoes. Fiedler's truck was only used to deliver steel from or to Mace.

On the morning of the accident, after Fiedler loaded his truck with steel at Mace he punched out there and began his delivery of a load of structural steel. On the way, the drive shaft separated from the transmission. Fiedler called for a tow truck which came, but the tower would not take the truck back to Mace without being paid for the tow; Fiedler went to a gas station and called his brother to come out with money to pick up ...

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