ARGONAUT INSURANCE EXCHANGE v. INDUSTRIAL ACCIDENT COMMISSION

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District Court of Appeal, Second District, Division 3, California.

ARGONAUT INSURANCE EXCHANGE, an inter-insurance exchange, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California, and Gien Maxwell Smith, Respondents.*

Civ. 21430.

Decided: February 28, 1956

Herlihy & Herlihy, Los Angeles, for petitioner. Everett A. Corten and Edward A. Sarkisian, San Francisco, for respondent Industrial Accident Commission.

Petitioner Argonaut Insurance Exchange was the insurer of Ivan Tors Productions, Inc., with respect to workmen's compensation liability and petitions the court for annulment of an award in favor of Glen Maxwell Smith based upon injuries he received while at work. The ground upon which annulment of the award is sought is that it had no support in the evidence for the reason that Smith was an independent contractor and not an employe of Tors at the time he sustained his injuries. This contention in our opinion must be sustained and the award annulled.

Tors Productions, hereinafter called Tors, was making a motion picture entitled ‘Riders to the Stars' and contemplated the production of another one called ‘Space Station U.S.A.’ Smith was a highly skilled technical adviser in the production of motion pictures and this had been his profession for more than 20 years. He was possessed fo scientific equipment which he was accustomed to rent to the producers of pictures in connection with services he rendered as a technical adviser. He conceived an idea for a story which he sold to the corporation Tors and was employed by the latter as technical adviser and associate producer for the production of the first picture entitled ‘Riders to the Stars' and in the contract of employment he agreed to furnish equipment for use in the production. On June 8, 1953, by letter addressed to and accepted by Smith, the terms and conditions under which Smith's services were to be rendered were set forth in extenso. This contract, which was in such detail as to render unlikely any situation in which either of the parties would have to trust the other, comprises 19 pages of closely printed matter and has been filed as a supplement to the petition for writ of review. We shall recite here only sufficient of its provisions to show the nature of the relationship which it created. Smith agreed to render his services ‘as technical adviser and story consultant in connection with the photoplays and to render all services usually and customarily rendered by persons engaged in such capacities in connection with the production of feature-length motion picture photoplays'; he agreed to furnish and make available ‘various and sundry technical and electronic equipment,’ was to commence work May 1, 1953 and continue thereafter until completion of the photoplays. He was to be paid for each picture $7,500 of which $5,000 was to be in cash from production funds and the balance of $2,500 only from gross receipts of the pictures; also 2 per cent of the net profits of the two pictures. The contract did not provide for any deductions for unemployment insurance, Social Security benefits or withholding tax and none was made. Smith warranted that all material prepared or composed by him would be original and protectible as such; he assigned to Tors any rights he might have in the pictures ‘whether such results and proceeds consist of literary, dramatic, musical, motion picture, mechanical, material or any other form or works, themes, ideas, creations, products or compositions'; and was to certify that whatever he might author during his employment should belong to Tors. The latter was not required to utilize the services of Smith or to produce or market either picture but nevertheless was required to pay him the stipulated cash compensation. Smith, on the other hand, was obligated to render his services and furnish his equipment as long as they were required in the production of the pictures. Smith was to receive screen credit as ‘associate producer in charge of scientific research, or words to such effect.’ Tors was given the right to assign the agreement or license all or any part of its rights thereunder and the agreement was to inure to the benefit of its successors and assigns. Paragraph 4 of the contract reads as follows: ‘During the term hereof you will render your services to us on a non-exclusive basis and as, when and wherever we may require. Your services shall be rendered in a diligent and conscientious manner and to the best of your ability and subject to such instructions, directions, requests, rules and regulations made or issued by us. Your services shall be rendered under the supervision, direction and control of and in collaboration with such person or persons as we may from time to time designate. Natwithstanding the foregoing provisions, it is understood that your services hereunder shall be rendered in the capacity of an independent contractor.’ (Emphasis added.) Attached to the agreement was an exhibit, bearing the signatures of the parties which set forth in minute detail the manner in which the pictures would be exhibited and the net profits computed.

The first picture had to do with rockets, one of which was called a ‘V–2 Type.’ Such a rocket, which had been constructed by Smith and delivered to the lot, had been damaged and was in need of repairs. Smith testified that Ivan Tors, president of the corporation, instructed him to take it home and repair it in the evening; he undertook to do this but while seated on the floor in his home he picked up a small acetylene gas tank which exploded when he endeavored to move it, thereby inflicting multiple permanent injuries.

There was evidence that the picture consisted of 397 separate scenes, all of which required discussion among Smith, Ivan Tors, Carlson, who was the director, Siodmak, the writer, Redmond, the head special effects man. Ivan Tors testified that he suggested what was to be done ‘because finances are involved, and I have to be careful that it should not be expensive. A certain shot can cost $15,000 or a thousand dollars; so this again has to be discussed with the Producer and all his employees. That is a special situation.’ He also testified that Smith as a scientific expert is ‘one of the top men in his field’; that there were only two or three qualified men in that field. He gave instructions to Smith as to what he wanted and ‘it would be up to him to do it.’ * * * ‘No one in the IASTE Union has a specialty like he has; but anything that an IASTE man can do, I let be done by a Union member, to comply with my contract with the IASTE.’ He also testified that while he signed the agreement with Smith he never read it. His attorney prepared it. He had ‘about three hundred contracts like that’ coming from his attorney and he testified ‘And I think it was his conclusion at that time, from my memo. that Mr. Smith is an independent contractor.’

Respondent commission relies entirely upon paragraph 4 of the contract and upon evidence that Ivan Tors, president of the corporation, had and exercised authority to direct how the picture should be made. Respondent says that the evidence of the parties ‘as to their business relations, their situation at the time the written contract was executed and the subsequent acts of the parties in operating under the written contract, showed clearly that the employee did not have that freedom to do his work without close and constant supervision, direction and control of the employer.’

It cannot be questioned that Tors had general authority over every one who was working on the production; he knew the results which he desired to achieve and was diligent in imparting that knowledge to others through innumerable daily conferences over a period of months. Among them were Mr. Carlson, the director, and Mr. Redmond, the special effects man. But such general authority is not sufficient to create an employer-employe relationship if it gives instructions as to a desired result without the right to exercise complete and authoritative control of the means and methods to be employed in performance of the work. Labor Code, § 3353; Western Indemnity Co. v. Pillsbury, 172 Cal. 807, 159 P. 721; Winther v. Industrial Acc. Comm., 16 Cal.App.2d 131, 60 P.2d 342; Mountain Meadow Creameries v. Industrial Acc. Comm., 25 Cal.App.2d 123, 76 P.2d 724. Smith was employed to give technical advice and the benefit of his scientific skill as a fabricator of strange devices to the end that his work would contribute to a desired result. One does not enter into an employer-employe relationship by giving general directions to a plumber, Bennett v. Truebody, 66 Cal. 509, 6 P. 329; or a lather, Perguica v. Industrial Acc. Comm., 29 Cal.2d 857, 179 P.2d 812; or a picker of his olives, Winther v. Industrial Acc. Comm., supra, 16 Cal.App.2d 131, 60 P.2d 342; or a hauler of milk, Mountain Meadow Creameries v. Industrial Acc. Comm., supra, 25 Cal.App.2d 123, 76 P.2d 724; or water, Briggs v. California Emp. Comm., 28 Cal.2d 50, 168 P.2d 696; or hay, Flickenger v. Industrial Acc. Comm., 181 Cal. 425, 184 P. , 851, 19 A.L.R. 1150; or for the pumping of sand from a well, Pryor v. Industrial Acc. Comm., 186 Cal. 169, 198 P. 1045; or the grading of land, Western Indemnity Co. v. Pillsbury, supra, 172 Cal. 807, 159 P. 721; or the painting of a building. Los Flores S. Dist. v. Industrial Acc. Comm., 13 Cal.App.2d 180, 56 P.2d 581.

Smith's task was to manufacture rockets about 3 feet long which would resemble a V–2 rocket, thus permitting the use of film that had been made of a real V–2 rocket. He was to devise and construct the mechanism that would make the rocket function as desired. According to Tors, Smith was one of two or three men who were capable of constructing and installing such a rocket. He was an inventor and had been in the business of manufacturing intricate electronic and other technical instruments. Tors had no technical training or knowledge in that field nor had any one else in his organization. Smith constructed the rockets in a laboratory at his home and did much of his other work there. The record is devoid of evidence that Tors or any one else gave Smith any directions with respect to the construction of the rocket or the manner in which it would be made to function, or with respect to any feature of his work that involved special knowledge or skill. Upon the contrary, it was shown that no one in organization was competent to direct the technical features of his work.

How can it be said that in rendering his services such an exceptionally qualified technician as Smith was subservient to the directions and control of Ivan Tors or any one else who was without any training, knowledge or experience, and wholly incompetent to give advice? Where one possessed of surpassing scientific or artistic accomplishments is engaged to furnish his talent in the service of another, who is wholly devoid of knowledge or experience in the matter, it would seem incongruous to consider that his genius was to be subordinated to the ignorant direction and control of his employer. There was nothing in the relations of Smith and Tors when the former's services were engaged, nor anything in the contract or the manner of its performance which points to an employer-employe relationship.

No special test or fact or circumstance has been found to give a conclusive answer to the question whether one is an employe or an independent contractor and each case must turn upon its own peculiar facts and circumstances. Schaller v. Industrial Acc. Comm., 11 Cal.2d 46, 62, 77 P.2d 836.

It seems clear to us that Smith was far removed from the status of a mere employe. He was practicing a unique and highly technical profession; in addition to the mechanical apparatus he was to construct, it was contemplated that he would furnish ideas, picture material and advice, and give rather than receive directions; he contracted to render an entire service for an entire price; his services could not be dispensed with without payment of his full compensation; the contract specifically provided that he was employed as an independent contractor, which was his expressed intention and also the understanding of Tors' attorney, who prepared the contract according to Tors' directions, and the contract made no provision for deductions for unemployment insurance, Social Security or withholding tax and none was made. These were all important matters having a direct bearing on the nature of the relationship. Empire Star Mines Co. v. California Emp. Comm., 28 Cal.2d 33, 43, 168 P.2d 686. They all point unerringly to the status of Smith as that of an independent contractor, and there are numerous other provisions that have the same tendency.

The respondent says ‘It was a question of fact ‘to be determined by the commission from the evidence adduced, whether the essential employer-employee relationship exists, and the commission's finding on that issue will not be disturbed where it is supported by substantial evidence’ unless only ‘a single inference and one conclusion may be drawn’ in which case the question is one of law.' Citing Esquer v. Teresi, 105 Cal.App.2d 89, 94, 232 P.2d 895. This, of course, is an elementary rule in proceedings for review of workmen's compensation awards but it cannot be invoked to foreclose the independent judgment of a court when the character of the relationship of the parties is to be determined from a construction of their contract and undisputed evidence of their strict compliance with their respective undertakings. Not only the contract but the manner in which performance was rendered permit of the single conclusion that Smith was an independent contractor and we are obliged to hold that the finding of the commission to the contrary is without support in the evidence.

The award is annulled.

SHINN, Presiding Justice.

PARKER WOOD and VALLEÉ, JJ., concur.