Court: District Court of Appeal of Florida; July 25, 2003; Florida; State Appellate Court
Patricia Font, as the personal representative of Howard Font's estate, appeals a final summary judgment in a wrongful death lawsuit against Stanley Steemer International, Inc., Gellner Enterprises, and its employee, O'Connor. The court ruled that Stanley Steemer was not liable under an agency theory for Gellner Enterprises or O'Connor's alleged negligence. Font contends that whether Gellner and O'Connor were actual agents of Stanley Steemer is a factual question unsuitable for summary judgment. The incident in question involved Howard Font's vehicle colliding with a van owned by Gellner, which was operated by O'Connor, who lacked a valid driver's license. Font's claims included negligence against O'Connor and vicarious liability against Stanley Steemer based on actual or apparent agency.
Stanley Steemer argued it was not liable because Gellner was an independent contractor under their franchise agreement and maintained no control over Gellner's operations. The court found no actual or apparent agency existed, but Font's appeal focuses solely on actual agency. The essential elements of an actual agency are acknowledgment by the principal, acceptance by the agent, and control by the principal. Courts typically determine agency relationships as factual issues for a jury unless evidence permits only one conclusion. The burden of proof lies with the party asserting the agency relationship, while the opposing party must demonstrate the absence of material fact disputes. The appellate court agreed with Font's position and reversed the lower court's ruling.
The franchise agreement stipulates that Gellner is an independent contractor and not an employee or agent of Stanley Steemer. However, the determination of their relationship is based on the control exerted by one party over the other, rather than the labels used in the agreement. The "control test" assesses whether the employer's right to control extends to the manner of task execution. If an employer dictates how tasks are performed, the worker is considered an employee, not an independent contractor. The complexities of applying this test in a franchise context are acknowledged.
Gellner Enterprises owned the van involved in an accident and managed its operations independently, with no ownership interest from Stanley Steemer, which also did not hire or supervise Gellner's employees. Nevertheless, the franchisor retains necessary control over branding and operational methods, which can influence the classification of the relationship. The franchise agreement grants Gellner exclusive rights to use Stanley Steemer's trademarks, patents, and cleaning systems within a designated area, requiring Gellner to seek consent for servicing outside that area. Gellner was obligated to start operations within three months, pay an initial licensing fee, and a monthly royalty of six percent of gross sales. Stanley Steemer provided operational bulletins and training, mandating the use of its patented equipment and adherence to specific cleaning procedures. Gellner had to purchase a Stanley Steemer cleaning machine and a van before commencing business operations.
The franchise agreement mandated that Gellner Enterprises transport cleaning machines and supplies exclusively in a specified van-type truck that adhered to Stanley Steemer's guidelines regarding size, color, and appearance. Gellner was required to submit a written description of intended trucks for approval from Stanley Steemer within ten days, and any vehicle signage had to conform to Stanley Steemer's standards. All advertising needed prior approval from Stanley Steemer, and Gellner had to contribute to national advertising costs. Additionally, Gellner's employees were obligated to wear uniforms that met Stanley Steemer's specifications for various attributes.
Insurance requirements included public liability, products liability, and workers' compensation, with Gellner required to insure both itself and Stanley Steemer, except for workers' compensation. The excerpt references Mobil Oil Corporation v. Bransford, where the Florida Supreme Court established that mere use of franchisor logos does not indicate control over the franchisee's business decisions. Bransford's case against Mobil was deemed legally insufficient despite allegations of an apparent agency relationship due to Mobil's branding and property ownership.
In Ortega v. General Motors Corp., the court ruled in favor of General Motors, affirming that its franchisee, South Bay Equipment Company, was an independent contractor despite contractual requirements related to operational aspects. The court noted that General Motors did not control day-to-day operations or employee management at South Bay, reinforcing the notion that operational control alone does not establish agency.
South Bay had sole authority over employee matters, including wages and benefits. However, the fourth district court in Parker v. Domino's Pizza, Inc. raised a factual question regarding the agency relationship stemming from the franchise agreement and operating manual of Domino's. The case involved a personal injury claim against Domino's, its franchisee, and the franchisee's delivery driver. Although the franchise agreement labeled the franchisee as an independent contractor, it imposed significant operational controls such as sales quotas, site approval, mandated managerial hours, and required adherence to Domino’s operational guidelines and reporting.
The court noted that despite the independence stated in franchise agreements, actual control and the totality of circumstances could suggest otherwise, as highlighted in Villazon. Hence, there is no clear standard for determining when a franchisee may be considered an agent of the franchisor. In this context, the appellate court could not conclusively determine that Gellner Enterprises was not an agent of Stanley Steemer, leading to the reversal of the summary judgment and remand for further proceedings. It was also noted that summary judgment is appropriate only when there is no genuine issue of material fact. The court referenced several other cases that have yielded varying conclusions on similar franchise agreement provisions.
