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Steel & Machinery Transportation, Inc. v. Illinois Workers' Compensation Comm'n

Court of Appeals of Illinois, First District, Workers Compensation Commission Division

May 1, 2015


Appeal from the Circuit Court of Cook County. No. 13-L-50386. Honorable Patrick J. Sherlock, Judge, Presiding.

FOR APPELLANT(s): Paul A. Krauter, Roddy, Leahy, Guill & Zima, Ltd., Chicago, IL.

FOR APPELLEE(s): Osvaldo Rodriguez, Law Offices of Osvaldo Rodriguez, P.C., Elmwood Park, IL.

JUSTICE HUDSON delivered the judgment of the court, with opinion. Justices Hoffman, Harris, and Stewart concurred in the judgment and opinion. Presiding Justice Holdridge, dissenting.


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[¶2] Respondent, Steel & Machinery Transportation, Inc., appeals from the

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judgment of the circuit court of Cook County confirming a decision of the Illinois Workers' Compensation Commission (Commission) awarding benefits to claimant, Radomir Cvetkovski, pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 et seq. (West 2004)). On appeal, respondent argues that the Commission erred in finding that an employer-employee relationship existed between it and claimant. We affirm.


[¶4] Claimant is an over-the-road truck driver who owns a tractor-trailer. Respondent is in the business of transporting machinery and metal products from sellers to purchasers. On Friday, June 10, 2005, respondent dispatched claimant to transport a shipment from Indiana to Wisconsin. After claimant picked up the load in Indiana, he drove his vehicle to a truck stop and went home for the weekend. Claimant resumed the delivery in the early morning hours of Monday, June 13, 2005. While driving in Illinois, claimant was involved in a motor-vehicle accident. As a result of the accident, claimant lost a portion of his left extremity below the knee. On October 3, 2005, claimant filed an application for adjustment of claim, seeking benefits for his injury. An arbitration hearing on claimant's application for adjustment of claim was held over two dates late in 2011. The following evidence relevant to this appeal was presented at that hearing.

[¶5] At the time of the accident, claimant was operating under an agreement with respondent entitled " INDEPENDENT CONTRACTOR AGREEMENT" (Agreement). The Agreement classified claimant as an independent contractor. Paragraph 1 of the Agreement provided that, for the duration of the Agreement, claimant would provide respondent " transportation related services and the Equipment set forth in SUPPLEMENT A." Supplement A was an equipment schedule listing claimant's tractor and trailer. Paragraph 6(a) of the Agreement provided that the equipment described in Supplement A " shall be for [respondent's] exclusive possession, control and use for the duration of this Agreement." Paragraph 6(a) further provided, " [t]his subparagraph is set forth solely to conform with Federal Motor Carrier Safety Adm. regulations and shall not be used for any other purposes, including any attempt to classify [claimant] as an employee of [respondent]." Paragraph 8 of the Agreement provided that respondent, " having exclusive possession, control and use of the equipment covered under this lease, under it's [ sic ] sole discretion, may interchange this equipment to other authorized carriers."

[¶6] The Agreement required respondent to maintain insurance to cover the equipment when it was being operated in respondent's service and claimant to acquire " bobtail" insurance to cover the equipment when it was not operated in respondent's service. In addition, the Agreement required claimant to notify respondent of any accident " involving operations under [the] Agreement." The Agreement provided that claimant would be compensated a specified percentage " of the transportation revenue after surcharges, if any." Under the Agreement, claimant was responsible for the cost of the equipment, including, but not limited to, necessary licenses, permits, oil, fuel, tires, highway use taxes, weight taxes, fuel taxes, and toll charges. In addition, claimant was required to keep the equipment " in clean appearance" at his sole cost and expense. Furthermore, the Agreement required claimant to maintain the equipment in a safe condition and in compliance with all applicable laws and regulations. The Agreement provided respondent with the right to place and maintain on the equipment its name and lettering, advertisement,

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slogans or designs. The Agreement could be terminated for any reason after 30 days from its effective date by giving one day's written notice to the other party either personally, by mail, or by facsimile machine. In addition, the Agreement could be terminated at any time, by either party, in the event of a breach of the Agreement by the other party.

[¶7] At the arbitration hearing, claimant, a native of Macedonia, testified through an interpreter. Claimant related that he began working for respondent in March 2005. Prior to driving for respondent, claimant completed an application, underwent a medical examination, and submitted to a drug test. Claimant testified that he paid for the medical examination, but he was not sure who paid for the drug test. During his first week of work for respondent, claimant met with Josephine Ramos, plaintiff's safety representative. Claimant testified that at this meeting, he and Ramos discussed " everything concerning *** the truck, everything about safety and avoiding accidents." Claimant related that he drove exclusively for respondent between his date of hire and the date of the accident.

[¶8] Claimant acknowledged that while driving for respondent, he was responsible for maintaining and repairing his truck and trailer in a certain manner. For instance, claimant had to take the tractor-trailer for inspections, keep inspection and maintenance records in accordance with federal regulations, and post respondent's name on the side of the tractor-trailer. Claimant further testified that while respondent provided liability insurance to cover the equipment while he was transporting loads for respondent, he was required to provide his own insurance for the equipment when he was not delivering for respondent. Claimant also acknowledged that he was responsible for truck repairs, plates, and licenses. Claimant initially testified that he was also responsible for purchasing fuel and paying tolls while he was working for respondent. However, claimant later indicated that respondent reimbursed him for the fuel charges. Claimant also testified that respondent did not require him to wear a uniform. He stated that he was paid by respondent on a weekly basis by company checks.

[¶9] Claimant testified that he obtained his work assignments from a dispatcher named Spiro Krlevski (Spiro), who is also a native of Macedonia. According to claimant, Spiro would provide him with " the numbers for the pick-up." Claimant would then drive to the designated pick-up location. When claimant picked up a load for respondent, he would identify himself as the driver for " SMT," the acronym by which respondent is known. After taking possession of the goods, claimant would travel to the delivery location. Claimant testified that it was Spiro's responsibility to call him every two hours " to check on [his] location, find out where [he is] and what's going on." Once claimant completed a delivery he would call Spiro to obtain a new assignment. With respect to the frequency of the calls claimant would make to respondent, claimant testified, " [i]t may happen three or five times a day that I would need to call the company, for instance, when I needed to report if I am empty, if I delivered." Claimant further testified that Spiro gave him specific instructions to the address he was delivering to on the night of the accident.

[¶10] Claimant testified that it was not up to him to choose which loads he wanted to transport. Moreover, claimant testified that he would not " dare" medianeutralrsc=" true" refuse a load. When asked about the consequences for declining a load, claimant responded that " there might be consequence [ sic ] such as me losing my job or not getting any loads for like two days." Claimant also testified

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that he was not free to take loads for other companies and he could not use another driver to transport a load for respondent. Claimant testified that respondent would provide him with a general time frame for each pick-up and that each load had a delivery deadline. If claimant delivered a load late, there would be a consequence, such as a late charge. According to claimant, he was assessed a late charge with respect to the load he was delivering when the accident at issue occurred.

[¶11] During cross-examination, claimant initially denied entering into the Agreement with respondent. However, after being shown the Agreement, claimant identified his signature on the document. Although claimant testified through an interpreter, he acknowledged that he reads, writes, and understands English. Claimant was shown the bill of lading for the load he was carrying at the time of the accident. Claimant admitted that the bill of lading required him to deliver the load between 7:30 a.m. and 3:30 p.m., Monday through Friday.

[¶12] Respondent called three witnesses at the hearing--Ramos, Herbert Schaffer, and Spiro. Ramos testified that, as respondent's director of safety, she " pre-qualifies" drivers, sets up contractor lease agreements, monitors maintenance files, and performs safety and compliance duties on respondent's behalf. Ramos described respondent's " pre-qualification" process in detail. She explained that this process involves having a prospective driver complete an application, undergo a physical, and submit to a drug test. In addition, Ramos reviews the applicant's motor-vehicle record and employment history. Ramos testified that the applicant pays for the physical and the drug screen. If an applicant is approved, he participates in an orientation process. Ramos testified that once an applicant is qualified and executes an independent-contractor agreement, it is respondent's responsibility to " continuously monitor" the driver's status. For instance, Ramos explained that federal regulations limit the number of hours a driver can drive and respondent monitors the number of hours driven. Moreover, under federal law, respondent is required to ensure that leased equipment is operated in compliance with federal guidelines. Thus, if a driver's equipment is not in compliance with federal standards, respondent would cancel the driver's agreement.

[¶13] Ramos testified that respondent did not require claimant to wear a uniform, shave, or wear his hair in a particular manner. In addition, respondent had no input regarding how claimant introduced himself while picking up a load. Ramos testified that the equipment respondent leased from claimant would have had door signs with respondent's name and logo on it, as required by federal regulations. According to Ramos, claimant was required to inspect his truck and trailer before each trip pursuant to federal regulations. Respondent exercised no control over the type of fuel claimant purchased or where he parked. Moreover, respondent did not provide claimant with any tools or equipment. Ramos testified that each driver is responsible for obtaining his or her own bobtail insurance and workers' compensation coverage.

[¶14] Ramos testified that she knows Spiro, the dispatcher referenced by claimant. Ramos described Spiro as an " independent agent" for respondent. Ramos testified that, in addition to using independent agents to dispatch, respondent has its own dispatch system within the company itself. Ramos testified that under the Agreement, claimant had the option to dispatch through Spiro or respondent's system. Ramos explained that, under either system, the dispatch process is essentially identical. Initially, the driver calls in for a

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job. If the agent does not have a load the driver is interested in moving, he can contact a different agent or respondent's own dispatch. According to Ramos, a driver need only call dispatch when he would like to pick up a load. Claimant was not required to call in daily to report his status or work any particular shift, and he was not required to accept a particular shipment. Moreover, Ramos denied that respondent required claimant to take a specific route in delivering a load.

[¶15] Ramos testified that once a load is delivered and the driver presents proof of delivery and log sheets, he receives payment. Payment is made by check or via a " ComData" card, which Ramos likened to a debit card. According to Ramos, claimant elected to receive his payments on a ComData card. Ramos stated that respondent did not withhold income taxes or any other type of government deduction from claimant's settlements. Respondent provided claimant with a 1099 tax form at the end of the calendar year. Ramos acknowledged that a deduction to claimant's pay was made after the June 2005 accident. According to Ramos, however, the deduction had nothing to do with the accident, but constituted charges for the late delivery of a different load.

[¶16] Ramos testified that it is respondent's responsibility to observe and enforce all applicable federal and state regulations in transporting goods. Ramos testified that respondent monitored " paperwork" while claimant's equipment was under lease pursuant to federal regulations. Ramos testified that pursuant to a federal requirement, claimant's equipment must meet state and federal regulations before respondent can enter into a lease agreement. According to Ramos, under the Agreement, respondent did not impose any requirements above and beyond those of the federal ...

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