Argonaut Insurance Exchange v. Industrial Accident Commission

WARNE, J. pro tem.* Truck Insurance Exchange, the insurer for the Riley Trucking Company, and Argonaut Insurance Exchange, the insurer for the S. E. Thompson Lumber Company, by separate petitions, seek review of an award of the Industrial Accident Commission by which the insurance companies were ordered to pay compensation to the surviving wife of the deceased employee, Clayton Easterling, and to his surviving children, for his death.

On December 2, 1955, the S. E. Thompson Lumber Company entered into an agreement with the Riley Trucking Company to lease certain equipment, a Lorain power shovel and some trucks, owned by Riley Trucking Company. The equipment was to be used for “rocking” certain logging roads at the site of a lumber operation of the S. E. Thompson Lumber Company. The latter company agreed to pay rent for the use of the equipment. Riley Trucking Company agreed to maintain the equipment. The agreement provided that the S. E. Thompson Lumber Company would carry the drivers and operators of the equipment on their payroll and pay all wages.

Pursuant to the agreement the equipment was furnished and work began. On the night of December 5, 1955, Clayton Easterling was driving one of the trucks from the camp site to the nearest town and was killed when the truck he was operating ran off the road and plunged into a ravine.

A claim for compensation was filed. The first decision of the Industrial Accident Commission was that the S. E. Thompson Lumber Company was the sole employer. The Riley Trucking Company and its insurer, Truck Insurance Exchange, were dismissed. Argonaut Insurance Company asked [706]for, and was granted, reconsideration. The decision, after reconsideration, was that Riley Trucking Company was the sole employer, and S. E. Thompson Lumber Company and its insurer, Argonaut Insurance Exchange, were dismissed. Truck Insurance Exchange then asked for reconsideration, which was granted, and the third decision of the Industrial Accident Commission was that a general and special employment existed and both employers and their insurers were held liable for compensation. Both insurers seek an annulment of the order.

Truck Insurance Exchange claims that the finding that the Riley Trucking Company was the general employer is unsupported by the evidence. It contends that the evidence discloses that the S. E. Thompson Lumber Company was the sole employer. The evidence shows that Clayton Easterling, the deceased, had worked for Riley Trucking Company prior to the time of the Riley Trucking Company’s agreement with the S. E. Thompson Lumber Company. Charles W. Riley, owner of the Riley Trucking Company, testified that he told Easterling that he had rented the trucks and if Easterling cared to go over and drive there was a job open. Apparently, the Riley Trucking Company produced all the drivers who operated the trucks for the S. E. Thompson Lumber Company. One John Evans, who did the maintenance on the equipment which was a responsibility of Riley Trucking Company, was paid for that work by the Riley Trucking Company, and the work he did in driving was paid for by S. E. Thompson Lumber Company. Two drivers testified that Evans was the foreman in charge. Mr. Stewart E. Thompson, who operated the S. E. Thompson Lumber Company, testified that he had no authority to hire or fire the drivers sent up by the Riley Trucking Company. This is substantial evidence from which the Industrial Accident Commission could infer that the Riley Trucking Company still maintained some control over the drivers who operated the equipment leased to the S. E. Thompson Lumber Company. Where both the general and special employer exert some measure of control, both are liable. (National Automobile Ins. Co. v. Industrial Acc. Com., 23 Cal.2d 215 [143 P.2d 481].)