Kersten v. Van Grack, Axelson & Williamowsky, P.C.

HARRELL, Judge. This appeal from a summary judgment proceeding in the Circuit Court for Montgomery County raises the issue of whether a law firm may be held vicariously liable for the alleged bad acts of a private process server. The circuit court (Cave, J.) ruled that appellee, Van Grack, Axelson & Williamowsky, P.C., neither possessed nor exercised that degree of control over the private process server which would give rise to vicarious liability. We find no error and affirm.

Facts The events leading up to this appeal are undisputed and may be summarized briefly. Appellee was retained by Charlene Baden in connection with an action brought against her by Private Mortgage Investors Trade Association (PMITA). On behalf of Baden, appellee filed a third-party complaint against appellants, Carol and Peggy Kersten and Lucille and Jeffrey Schneyer. 1 Appellee engaged Richard Alan James to serve process on appellants. James submitted purported 2 affidavits of service to appellee and to the circuit court stating that he had personally served appellants on 30 and 31 May 1987.

The affidavits were false; James never personally served appellants. ⁴⁶⁸ Not having received notice of Baden’s complaint, appellants failed to respond to it. Upon the written request of appellee, therefore, the circuit court entered an order of default against Carol Kersten and the Schneyers pursuant to Md. Rule 2-613. The circuit court notified Carol Kersten and the Schneyers that an order of default had been entered against them and that they could move to vacate the order within 30 days after its entry. Thereafter, they successfully moved to vacate the order.

Judgment was ultimately entered in favor of appellants in the PMITA action. On 5 May 1988, appellants filed the instant action against appellee, James, and Baden. 3 In their complaint, appellants alleged that, as a result of discovering they were potentially subject to a substantial default judgment, they suffered severe emotional distress. Appellants also sought to recover financial losses sustained in defending against the entry of the default order. Their complaint contained two counts, one of which charged appellee with vicarious liability for James’ actions.

Appellee moved for summary judgment on 29 March 1991. After hearing arguments on 29 August 1991, the circuit court granted appellee’s motion for summary judgment. Although there were a number of issues raised before the circuit court at the summary judgment hearing, the sole issue on appeal is whether liability may be imputed to appellee for the alleged bad acts of James. Appellants contend that an employer-employee relationship existed between appellee and James, such that liability may be imputed to appellee under the doctrine of respondeat superior.

Alternatively, appellants contend that appellee may be held vicariously liable under one of the exceptions to the general rule that an employer of an independent contractor is not liable for the conduct of the contractor. We reject both contentions. ⁴⁶⁹ I. Under the doctrine of respondeat superior, an employer is vicariously liable for the tortious conduct of an employee when the employee is acting within the scope of the employer-employee relationship. Brady v. Ralph Parsons Co., 308 Md. 486, 511 , 520 A.2d 717 (1987). Converse to this doctrine is the general rule that an employer of an independent contractor is not vicariously liable for the conduct of the contractor.

Id. at 512 , 520 A.2d 717 ; Rowley v. Mayor of Baltimore, 305 Md. 456, 461 , 505 A.2d 494 (1986). An independent contractor is “one who contracts to perform a certain work for another according to his own means and methods, free from control of his employer in all details connected with the performance of the work except as to its product or result.” Gale v. Greater Washington Softball Umpires Ass’n, 19 Md.App. 481, 487 , 311 A.2d 817 (1973). Various reasons have been advanced for it [the rule that an employer is not liable for conduct of an independent contractor], but the one most commonly accepted is that, since the employer has no right of control over the manner in which the work is to be done, it is to be regarded as the contractor’s own enterprise, and he, rather than the employer, is the proper party to be charged with the responsibility for preventing the risk, and administering and distributing it. Rowley, 305 Md. at 462 , 505 A.2d 494 , quoting 5 Prosser and Keeton on the Law of Torts, § 71 at 509 (1984).

As one might expect based upon the above rationale, the distinction between an employee and an independent contractor hinges on the right of control and supervision. [T]he cases list a number of subsidiary factors that may be considered, but stress the right of control and supervision retained by the employer. To put it in terms of an employer-employee relationship, the decisive test in determining whether the relation of master and servant exists is whether the employer has the right to control and direct the servant in the performance of his work and ⁴⁷⁰ in the manner in which the work is to be done (emphasis in original) (citations omitted). Gale, 19 Md.App. at 487 , 311 A.2d 817 . Other factors considered by courts in determining the existence of an employer-employee relationship include (1) the selection and engagement of the servant, (2) the payment of wages, (3) the power of dismissal, and (4) whether the work is a part of the regular business of the employer.

Keitz v. National Paving and Contracting Co., 214 Md. 479, 491 , 134 A.2d 296 , 136 A.2d, 229 (1957). These factors are relevant to the extent that the right of overall control is implicit in each. L.M. T. Steel Products, Inc. v. Pierson, 47 Md.App. 633, 636 , 425 A.2d 242 (1981). However, “these are but indicia of the employment relationship — factors or criteria to look at.” Id. at 635 , 425 A.2d 242 (emphasis in original).

The only test with “any special conclusive significance” is the power or right of control and supervision. Id. To have an employment relationship, the ‘employer’ must have some ability, should he care to exercise it, to tell the ‘employee’ what to do and how and when to do it. If there is not this minimal power of control — if the worker’s agreement is to perform the work ‘according to his own means and methods free from control of his employer in all details connected with the performance of the work except as to its product or result’ — the worker is deemed to be an independent contractor and not an employee/servant.

L.M.T. Steel Products, 47 Md.App. at 636 , 425 A.2d 242 , quoting Gale, 19 Md.App. at 481 , 311 A.2d 817 . To like effect, see Chevron, U.S.A., Inc. v. Lesch, 319 Md. 25, 32-33 , 570 A.2d 840 (1990); Whitehead v. Safway Steel Products, Inc., 304 Md. 67, 78 , 497 A.2d 803 (1985). Based upon the above principles, we shall now examine the circuit court’s decision in the instant case. Because we are judging the propriety of the grant of a motion for summary judgment, we must determine whether there is a genuine dispute as to any material fact and whether appellee is entitled to judgment as a matter of law.

Brady, 308 ⁴⁷¹ Md. at 496, 520 A.2d 717 . In determining whether any factual issues exist, we must resolve all inferences in favor of appellants. Id. A genuine dispute as to any material fact, or as to the inferences to be drawn from the facts, renders summary judgment improper.

Id.; Austin v. Thrifty Diversified, Inc., 76 Md.App. 150, 153 , 543 A.2d 889 (1988). The undisputed facts adduced by the parties regarding the terms and manner of James’ employment with appellee are as follows: In May 1987, James had been serving process papers for appellee for approximately eighteen months. James was the sole process server engaged by appellee for collections matters. He served process for matters other than collections as well.

James did not have a written contract with appellee. He was under no obligation to accept assignments from appellee. It was assumed, however, that he would be available to serve process for appellee. James received a flat, agreed upon fee for each assignment which he successfully completed.

He was generally paid out of appellee’s collections trust account. No ordinary payroll deductions were made on his checks. James maintained his own offices and made his services available to the general public. He also provided his own forms for affidavits of service and his own notary public to notarize the affidavits.

Once a week at irregular intervals, James met with someone from appellee’s office to report on assignments he had successfully completed and to receive new assignments. He generally met with Katrina March, a paralegal in appellee’s office who was in charge of appellee’s collections. Occasionally, he also met with the attorney in charge of the matter for which he was serving process. When James met with March, she would review a copy of his affidavits of service to verify that they had been completed and signed by him.

In addition, she would attempt to verify that James had served the proper person and that he had filed the affidavits in court, usually by asking James these questions directly. March would also give James the names ⁴⁷² of persons to be served and addresses or locations where they might be found. Based upon these facts, we find that the circuit court was correct in determining that the undisputed facts, and the reasonable inferences possible therefrom, did not demonstrate the degree of control required to establish an employer-employee relationship. James set his own hours of work and established his own work sequence.

There is nothing in the record to suggest that James was subject to any instructions from appellee regarding the order in which process was to be served. Although he reported to appellee once a week at irregular intervals, the reports were only for the purpose of verifying that James had successfully completed particular assignments and giving him information necessary to carry out new assignments. See Brady, 308 Md. at 486 , 520 A.2d 717 (rendition of reports does not establish an employer-employee relationship). The only instructions James received were whom to serve and where they might be found.

Thus, there is no basis in the record for the conclusion that appellee ever dictated, or had a right to dictate, when, where or how James served process. While appellee directed James as to the product or result of his work, James was free from appellee’s control as to the details and means by which that