In Global Hawk Insurance Co. v. Le (No. A137976, filed 4/14/2014), a California appeals court declined to apply the statutory presumption of employee status under the Federal Motor Carrier Safety Administration Act (“FMCSA”) to exclude injuries suffered by a long haul trucker because the policy did not attach an MCS-90 motor carrier endorsement. Applying California common law instead, the court found triable issues of fact whether the driver was an independent contractor, potentially limiting application of employee and workers’ compensation exclusions.
V&H Transport was insured by Global Hawk under a commercial auto policy. Le was a long haul trucker who drove for V&H. He was paid a flat fee of $1,100 for a 10-day round trip from California to New York. A principal of V&H said that Le was not an employee, and that he received a 1099 at the end of the year. The Global Hawk policy did not attach an MCS-90 motor carrier endorsement, but did list the truck Le was riding in as a passenger when he was injured as an insured vehicle.
Global Hawk filed an action for declaratory relief arguing that coverage was barred for Le’s injuries by virtue of the policy’s exclusions for injuries to employees and claims subject workers’ compensation. Global Hawk argued that V&H was subject to the FMCSA, which defines “employee” to include an independent contractor driving a commercial motor vehicle. (49 C.F.R. §§ 390.5; 3110(2).) Global Hawk cited Perry v. Harco National Ins. Co. (9th Cir. 1997) 129 F.3d 1072, which held that the statutory definition of employee precluded coverage for a driver even if otherwise qualifying as an independent contractor, because the MCS-90 excludes injuries to employees. While acknowledging that its policy did not attach an MCS-90 endorsement, Global Hawk argued that coverage was nonetheless barred because injuries to employees and workers’ compensation claims were excluded in the main body of its policy.
The Global Hawk court disagreed, finding Perry distinguishable for three reasons: there was no MCS-90 endorsement on the policy; the truck was admittedly insured on V&H policy; and the driver might not be eligible for workers’ compensation. Thus, beside the lack of an MCS-90, the public policies supporting application of the FMCSA — protecting the public from uninsured vehicles and enhancing the welfare of commercial drivers — were absent.
The Global Hawk court said that Perry was limited to interpreting the MCS-90 and that application of the FMCSA would operate contrary to California law in this situation. Instead, the Global Hawk court cited S.G. Borello & Sons Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, for the general rule that the determination of employee or independent-contractor status is one of fact if dependent upon the resolution of disputed evidence or inferences. The Global Hawk court then applied the rule and reversed the summary judgment that had been entered for Global Hawk, stating:
“Global Hawk goes to great lengths to attempt to show that under the principles enunciated in Borello, Cristler, and other cases Le was an employee, an argument that runs for pages, proceeding factor by factor. We see no need to make such a detailed analysis, as we easily find triable issues of fact that Le was not an employee, including that he was to be paid a lump sum; he was to be paid without any withholding for taxes; and he was to be provided a 1099 at the year end, a tax form provided to independent contractors. Indeed, Golden Hawk itself describes the trip as a ‘one off’ job. Were that not enough, Le was told by Vu that he was ‘not an employee’ and was not eligible for workers’ compensation. Those facts do not indicate, much less demonstrate, employee. They indicate independent contractor. There is a triable issue whether the ’employee’ exclusion applies. Likewise, the exclusion for ‘workers’ compensation.'”
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