In a 2-1 published decision, Duckworth v Cherokee Ins Co, the Michigan Court of Appeals held that the eight factors announced in McKissic v Bodine, 42 Mich App 203; 201 NW2d 333 (1972), a worker’s compensation case, should be considered in determining whether a worker is an employee or an independent contractor under the no-fault act.
Pursuant to MCL 500.3114(3), an employee who sustains accidental bodily injury while operating or occupying an employer-owned or registered vehicle may recover PIP benefits from the insurer of the furnished vehicle. In order for the statute to apply, the injured party must either be an employee or, if an independent contractor, must be self-employed. Celina Mut Ins Co v Lake States Ins Co, 452 Mich 84; 549 NW2d 834 (1996).
In Adanalic v Harco Nat Ins Co, 309 Mich App 173; 870 NW2d 731 (2015), the Court of Appeals recited a list of four non-exhaustive factors of the economic reality test. These four factors “include (a) control of the worker’s duties, (b) payment of wages, (c) right to hire, fire, and discipline, and (d) the performance of the duties as an integral part of the employer’s business towards the accomplishment of a common goal.” The Duckworth Court noted that these factors are non-exhaustive and can be considered in conjunction with other factors depending on the circumstances of the case.
James Duckworth had been injured in a motor vehicle accident when he lost control of the truck he was driving, which was owned by Speed Express, LLC. Speed Express had contracted with Mr. Duckworth to transport goods on its behalf. A priority dispute ensued between Mr. Duckworth’s personal auto insurer, Progressive, and the insurer of the truck, Cherokee Insurance Company. The Court of Appeals addressed whether Mr. Duckworth was an employee or an independent contractor, and expanded the test to include consideration of both the four Adanalic factors as well as the eight McKissic factors. The Court opined that courts should consider all of the following: (1) what liability, if any, does the employer incur in the event of the termination of the relationship at will; (2) is the work being performed an integral part of the employer’s business which contributes to the accomplishment of a common objective; (3) is the position or job of such a nature that the employee primarily depends upon the emolument for payment of his living expenses; (4) does the employee furnish his own equipment and materials; (5) does the individual seeking employment hold himself out to the public as one ready and able to perform tasks of a given nature; (6) is the work or the undertaking in question customarily performed by an individual as an independent contractor; (7) which party had control including over payment of wages, maintenance of discipline and the right to engage or discharge employee; and (8) what weight should be given to those factors which will most favorably effectuate the objectives of the statute.
The Court of Appeals concluded that Mr. Duckworth was an employee of Speed Express under the combined economic reality test and that therefore, Cherokee Insurance Company was first in priority to pay Mr. Duckworth’s benefits.
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