The opinion of the court was delivered by: Justice Holdridge
NOTICE Decision filed 08/21/07. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.
Michael Gray, leased a taxi vehicle from Respondent West Cab Company, on a regular basis. On August 7, 1994, Gray was in the leased taxicab when he was shot and killed by an armed assailant. An Application for Adjustment of Claim was initially filed by the deceased's mother, Clennie Gray, on September 2, 1994, identifying the decedent as the claimant. Subsequently, the amended applications were filed naming certain dependent children of Gray as claimants. Each of these applications were filed solely against West Cab Company. A subsequent amended application added Northwest Cab Company and Northwest Package Delivery Service, Inc. as respondents.
Following multiple hearing dates, the arbitrator issued a decision on March 5, 2002, finding claimants had failed to prove the deceased, Michael Gray, was an employee of any of the three respondents, holding that Gray was an independent contractor who merely leased a taxicab from West Cab. While the hearing before the arbitrator included several other issues, the decision did not address any other issue due to the finding on the threshold issue of employer/employee relationship.
Claimants sought review before the Commission, which reversed the arbitrator's decision. On January 30, 2003, in a two to one decision, the Commission found that the deceased was an employee of all three corporations at the time of his death, and that it would retain jurisdiction over the remaining questions and not remand the case back to the arbitrator for a further decision. This final procedure of retaining the case was done without objection from either side.
On October 28, 2003, again by a two to one decision, the Commission found that Michael Gray's death arose out of and in the course of his employment, with all three respondents, and awarded benefits to the claimants. The respondent corporations then appealed to the Cook County circuit court, which confirmed the Commission's decision. Respondents then filed this appeal. We reverse, finding that Gray was not an employee of any of the respondents.
Sometime during the early morning hours of August 7, 1994, in Franklin Park, Illinois, Michael Gray was shot and killed while in a taxi cab leased to him by the West Cab Company.
James Bennett, Sr., testified he had been the manager of West Cab since approximately 1992. At the time of hearing, he concurrently managed West Cab, Northwest Cab and Northwest Package Service, just as he did in August 1994. All three businesses were owned by the same person, Jerilyn Ugaste. Bennett had been the president of Northwest Cab since 1963, and Jerilyn Ugaste had been the president of West Cab since approximately 1980. Bennett testified that West Cab would lease taxi vehicles it owned to lessees on a daily basis from it's Schiller Park location. While medallions were not required in Schiller Park, he said either the State or the municipality did require the taxicabs to be registered with the State. Pursuant to a lease agreement, Bennett testified that lessees would come to West Cab to lease a taxicab, West Cab would log the lessee in while noting the time and mileage, and when the cab was returned the driver would pay his or her lease fee. Bennett stated that in 1994, lessees would pay West Cab $1.85 per hour plus 22 cents a mile for the taxicab. He estimated that the average cost of taxicab rental was about $50 per day in 1994. The logs that were kept as to when specific lessees leased cabs were discarded once West Cab completed it's bookkeeping, thus Bennett testified there is no way to now tell when or how often Michael Gray leased a taxicab. Lessee drivers were allowed to keep a taxicab as long as they wanted to, but were required to pay a minimum charge of 8 hours no matter how long they retained the taxicab. Lessees weren't guaranteed to get the exact same taxicab each time they requested a car, but could request the same one if available. If a taxicab was not available when a lessee came in to lease one, the lessee would have to wait until a taxi was returned, as West Cab was under no obligation to have cabs available to lessees. There were no set or scheduled times for lessees to obtain taxicabs. Bennett testified that drivers never had to notify West Cab about any fares they would pick up in the taxicabs. While West Cab didn't require any specific documentation from lessees when they signed a lease agreement, Bennett noted that Schiller Park required drivers to be fingerprinted and processed.
Bennett testified that in 1994, on average, there were two daytime dispatchers, one and a half in the afternoon, and one at night. During the day, one dispatcher simultaneously worked for Northwest Cab and West Cab, while the other dispatched for Northwest Package Delivery. The night dispatcher would take calls for all three companies. Bennett admitted that there were West Cab and Northwest Cab taxicabs that had "Northwest Package Delivery" written on them, although he said this was due to an Illinois Commerce Commission rule based on the leasing of the cab to Northwest Package Delivery.
Bennett testified that he knew Gray and, "depending, sometimes he would drive three days, five days, six days" a week, but noted he had no records to confirm or prove this. Bennett acknowledged that the taxicab lease in evidence as Petitioner's Exhibit 5 was between Michael Gray and both West Cab and Northwest Cab, noting Gray "occasionally did drive a Northwest Cab if a West Cab wasn't available", and indicating both companies had the same owner but were separate corporations. In a second round of testimony, Bennett stated that lessee drivers could lease cabs from either West Cab or Northwest Cab. The leases would last "indefinitely . . . until (the lessee doesn't) want to lease anymore." He stated that Michael Gray wasn't an employee of Northwest Package Delivery, and noted that Northwest Package Delivery had twenty to twenty-two of it's own employees who were paid hourly wages in August 1994, and carried workers' compensation coverage on these employees. He further testified that West Cab did not carry workers' compensation insurance coverage on lessees.
According to Bennett, West Cab dispatchers would sometimes give package delivery orders from Northwest Package to drivers who leased it's cabs when Northwest Package Delivery's regular delivery drivers were unavailable. The dispatcher would get a package delivery order by phone, and then "put it on the air", i.e. on the radios of the cabs, for bid, and drivers for either West Cab or Northwest Cab could then bid on the delivery, in the same way they would bid on taxicab passenger dispatches. Once a bid was accepted, the lessee would pick up the package and deliver it. Bennett testified the driver would receive the full fee for the package delivery minus a 14% handling fee that went to Northwest Package Delivery "for the paperwork." Lessees paid no fees to West Cab for passenger fares. Usually the lessees would receive "charge vouchers" for package deliveries. It appears these vouchers essentially were received when the customer was paying Northwest Package Delivery on credit or by credit card, and the driver would receive a voucher verifying the package delivery fee. Lessees could then give these vouchers to West Cab as payment towards their taxicab lease costs. If the vouchers turned in totaled more than what the lessee owed West Cab, West Cab would return the overage to the lessee by way of a check. The package delivery customers would be billed by Northwest Package Delivery, and Northwest Package Delivery would then reimburse West Cab for the vouchers it received from it's lessees. Bennett testified that West Cab earned income out of this arrangement because lessees would run up mileage in the process of package delivery, but verified that Northwest Package Delivery kept the entire 14% handling fee. Bennett further testified that West Cab lessees would frequently earn enough money delivering packages to cover the costs of leasing a taxicab. He stated West Cab would keep individual sheets of paper listing package deliveries made by lessees and the names of the customers, but that these would be discarded after seven days. A "blue ticket" would also be kept with each order indicating the delivery fees. Drivers were not required to accept any package delivery orders. Bennett stated that oftentimes no lessees would respond to a package delivery bid offer over the radio. He did not know how much of Gray's income in driving the cab was based on package deliveries for Northwest Package Delivery, as, again, the records from 1994 no longer exist.
Bennett acknowledged that Gray leased a taxicab from West Cab on the date of the incident, August 7, 1994. Lessees were required to post a one-time deposit with West Cab as bond security, and Bennett confirmed that Michael Gray had paid a $50 deposit, noting all of West Cab's leases with drivers were the same as the one signed by Michael Gray in Petitioner's Exhibit 5.
Identical leases are still used by West Cab and Northwest Cab. Lessee drivers could do anything they wanted with the leased taxicab after picking it up, including personal and non-taxi use, as West Cab would get paid hourly and mileage fees regardless of lessee's use. Lessees were not limited to any specific geographical area, although, per Chicago city ordinance, they could not go into Chicago to pick up fares unless they were requested by someone within Chicago city limits to pick them up to bring them back to Schiller Park. Lessees could take Schiller Park passenger fares anywhere. Only the lessee was allowed to drive a leased taxicab, with Bennett again noting that Schiller Park required all taxi drivers to be licensed. The lessee was responsible for purchasing gas and could purchase it from anywhere he wanted. West Cab was responsible for maintaining the cabs in working condition, including services like the replacement of a flat tire or burned out head light. Bennett indicated that taxicabs were serviced by West Cab every 4,000 miles, and the Village of Schiller Park would inspect the taxicabs annually. He testified that pursuant to the lease, no compensation was paid by West Cab to a lessee, and lessees weren't required to report any of their earnings to West Cab. Bennett testified that West Cab maintained no right to control a lessee's operation of the vehicles, and West Cab exercised no such supervision over lessees, including the deceased.
Bennett agreed that West Cab provided dispatch services to lessees, stating West Cab would receive calls for taxi service and would put the request over the radio for bids from lessees. West Cab would continue to offer the request over the radio until a lessee would bid on it, and if no lessee ended up making a bid, West Cab would either call the customer back and indicate they couldn't offer a ride, or would otherwise give the order to a competitor. Bennett said there were no advertisements inside the cabs, and West Cab had no right to contact a lessee to have them bring in a cab for inspection.
West Cab provided public liability insurance on the taxicabs. Bennett testified that this was done due to requirements of the state. He again noted West Cab did not provide workers' compensation coverage for lessees because it was in the leasing business, not the taxicab business. He indicated a lessee's lease would end when the driver requested that the lease end and therefore requested their bond deposit back. West Cab could not terminate a lease without cause. While lessees would sometimes report any problems they may have had with a taxicab when they returned the vehicle, they were not required to do so nor to make any reports to West Cab. Bennett testified that the company name was written on the side of the cabs because Schiller Park required this, as well as a requirement that all taxicabs in their fleet must be painted the same color, a color that other cab companies then could not use.
Bennett testified that on the date of accident, Gray's bid on the dispatch to the 3000 block of Prairie in Franklin Park was for a passenger pick up, not a package. On cross examination, Bennett indicated he knew this because "I believe we brought evidence as far as the tickets to show it was a passenger."
On further cross exam, Bennett reiterated that the lease document constituted the entire agreement between West Cab and the lessee, but agreed that the requirement of a $50 bond deposit was not stated in the lease. When asked why West Cab and Northwest Cab shared the same facility, Bennett stated he did not know, noting Northwest Cab was older than West Cab, and he believed "when West Cab moved into our facilities that we started dispatching out of there to them." In questioning Bennett, claimants' attorney raised the point that it would be in West Cab's best interests if lessees used the leased vehicles as taxicabs because otherwise lessees would put minimal mileage on the taxicabs. Bennett agreed it was in West Cab's interests to have mileage put on the car given the mileage fees, but that it was irrelevant to West Cab how mileage was put on the car. Bennett reiterated that only the lessee had permission to drive the leased vehicle, as "we are only leasing to one person at a time", and that this included non-lessees who may have been licensed to drive a taxi by Schiller Park. Bennett agreed that West Cab and Northwest Cab would get the benefit of additional mileage when lessee driver's delivered packages for Northwest Package Delivery.
James Bennett Jr., Bennett's son, testified he was the assistant manager of all three respondent companies, and that Jerilyn Ugaste was his mother. James Bennett Sr. testified that Jerilyn Ugaste was his ex-wife. He verified that Northwest Package Delivery would reimburse West Cab when West ...