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Secci v. United Independent Taxi Drivers, Inc.

California Court of Appeals, Second District, Fifth Division

February 15, 2017

EMANUELE SECCI, Plaintiff and Appellant,
v.
UNITED INDEPENDENT TAXI DRIVERS, INC., et al., Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC487145 Ralph Dau, Judge. Reversed.

          MaryBeth LippSmith, Douglas Adam Linde, and Erica Allen Gonzales for Plaintiff and Appellant.

          Law Office of Cleidin Z. Atanous, Cleidin Z. Atanous and Michelle L. Villarreal for Defendants and Respondents.

          KRIEGLER, J.

         Plaintiff and appellant Emanuele Secci appeals from a judgment in favor of defendants and respondents United Independent Taxi Drivers, Inc. (United Independent) and United Taxi of the Southwest (United Southwest) (collectively, United). Secci obtained a jury verdict for damages suffered after a motorcycle crash with defendant Aram Tonakanian.[1] Tonakanian was driving a green and white taxi marked with United's insignia. The jury found Tonakanian to be United's agent, but not an employee. The court granted United's motion for judgment notwithstanding the verdict (JNOV) under Code of Civil Procedure section 629, finding the evidence insufficient to support the jury's finding that Tonakanian was United's agent. Secci now seeks reversal, arguing that there was substantial evidence of agency to support the verdict. United contends the trial court correctly granted its JNOV motion because the only evidence supporting an agency finding were requirements imposed by public regulation or third parties. We reverse the trial court's order and reinstate the jury's verdict, because California law does not preclude consideration of controls required by public regulations in finding an agency relationship.

         FACTUAL AND PROCEDURAL BACKGROUND

         Relevant facts

         We present the evidence in the light most favorable to Secci. (Bufano v. San Francisco (1965) 233 Cal.App.2d 61, 68 (Bufano).) Secci was driving his motorcycle through an intersection in the City of West Hollywood when Tonakanian's taxi, coming from the opposite direction, turned left directly in front of Secci. Tonakanian's taxi was painted with United's green and white color scheme and was licensed to pick up passengers in the City of West Hollywood.

         United describes itself as an association of taxicab owners. United had franchise agreements with the City of West Hollywood and other cities in Southern California to operate a taxi service. United Southwest was a wholly-owned subsidiary of United Independent at the time. The two companies were operated by the same people, and United dispatchers worked for both companies out of the same building. United's franchise agreement with the City of West Hollywood required it to maintain commercial auto liability insurance and provide a list of insured vehicles to the director of the city's department of transportation.

         Like other owner-drivers, Tonakanian owned his taxi and set his own hours. Tonakanian's contract with United stated he was an independent contractor. Drivers paid monthly dues and other fees to cover United's expenses. United provided marketing and advertising. Each United taxi had the company's phone number painted on it. If a customer called the number, a dispatcher would enter the location information into a computer, and the computer would send out a dispatch request. In order to receive dispatch requests, a driver would check into the zone where he or she was located. Drivers were free to accept or reject dispatch requests, and could pick up passengers on the street, so long as they were licensed to accept fares within that city.

         Drivers were required to use uniform credit card and dispatch equipment chosen by United. Credit card charges were initially paid to United, which would deduct credit card processing fees, monthly dues, and a small fee for accounting. Taxi rates were set by meter. Drivers were not free to charge flat or discounted rates. United required its drivers to accept vouchers and coupons that drivers could later submit to United for payment. If a driver transferred ownership of a United taxi, the buyer and seller had to notify United and pay a $500 transfer fee.

         United provided a training manual to each of its drivers. It required drivers to keep a copy of the manual in the taxi and to complete a training course before taking the city's licensing test. There was conflicting testimony about whether the City of West Hollywood required United to provide training to its drivers before a driver could be licensed in that city. The training manual made reference to department of transportation rules, but also described additional rules applicable to drivers. For example, department of transportation rules provide that drivers “shall provide prompt, efficient service and be courteous at all times to the general public, other City-permitted taxicab drivers, and to City investigators/officers” and that a driver cannot smoke while the taxicab is occupied without the consent of all passengers. The manual goes farther, stating, “Taxicab drivers are NOT ALLOWED TO SMOKE while servicing passenger(s)” and, “Do not discuss or argue with passengers about controversial subjects such as politics, religion, etc....” The training manual provided specific information about the drivers' appearance, including a dress code, as well as specifics about driving safely, conducting themselves while waiting in taxi lines, and interacting with passengers politely.

         United drivers were expected to abide by the company's rules and regulations, and drivers acknowledged their relationship with United could be terminated for violations of those rules. United had drivers working as “Road Supervisors.” According to the training manual, road supervisors were trained by United, and were available to help in an emergency and to enforce United's rules and regulations. A road supervisor had authority to resolve disputes between drivers, and to cite a driver for a “false first up, guzzling, dirty cabs, not conforming to the dress code, missing hubcaps, etc....” Drivers were required to complete and submit a report if they were involved in an accident, or risk a fine or suspension.

         Procedural history

         This appeal arises after Secci's claims survived two motions for summary judgment and two jury trials. Secci's original complaint named United Independent as a defendant, but not United Southwest. United Independent moved for summary judgment, but the trial court denied the motion because United Independent had not demonstrated the lack of an agency relationship. After the first trial ended with a jury verdict for Secci, the court granted United Independent's motion for a new trial on the ground that the court incorrectly denied United Independent's request to include BAJI No. 13.20, an instruction on the factors to be weighed in determining whether Tonakanian was acting as United's agent or as an independent contractor. Secci later named United Southwest as a Doe defendant and both defendants filed a second motion for summary judgment. Again, the court denied summary judgment because United's evidence did not establish the absence of an agency relationship between United and Tonakanian.

         In the second jury trial, the trial court instructed the jury on how to determine whether Tonakanian was United's employee or an independent contractor, using CACI No. 3704. The court also gave instructions on the question of agency, relying on both CACI No. 3705 and BAJI No. 13.20. Under CACI No. 3705, the jury could find agency if Secci proved that United gave Tonakanian authority to act on its behalf, and that the grant of authority “may be shown by words or may be implied by the parties' conduct” but could not be shown by Tonakanian's words alone. BAJI No. 13.20 gave additional details about factors the jury should consider in determining whether an agency relationship existed between United, as a principal, and Tonakanian, as an agent. The court instructed, “The most important but not the only factor, in determining whether one is an agent or independent contractor is whether the principal has the right to control the manner and means of accomplishing the result desired. Strong evidence in support of a principal agent relationship is the right to discharge at-will without cause. [¶] Other factor[s] which should be taken into consideration in determining whether a person is an agent or independent contractor are[:] [¶] (a) whether the one performing services is engaged in a distinct occupation or business[;] [¶] (b) whether, in the locality, the kind of occupation or business is one in which the work is usually done under the direction of a principal or by a specialist without supervision[;] [¶] (c) the skill required in the particular occupation or business[;] [¶] (d) whether the principal or the worker supplies the instrumentalities, tools and the place of work for the person doing the work, or helpers[;] [¶] (e) the ...


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