In this week’s Alabama Law Weekly Update, we report on two cases from the Alabama Court of Civil Appeals. The first case discusses Alabama agency law and the second case discusses the appropriate venue for filing a lawsuit against a corporate defendant.

Owen v. Tennessee Valley Printing Company, Inc., No. 2130139 (Ala. Civ. App. 2014) (holding that newspaper deliverer was independent contractor and not agent of newspaper company).

Tennessee Valley Printing Company, Inc., d/b/a The Decatur Daily (“TVPC”) utilizes independent contractors to deliver newspapers for The Decatur Daily. Carolyn Johnson (“Johnson”) entered into a contract with TVPC to deliver newspapers. The contract specifically stated that Johnson was an independent contractor of TVPC. The contract gave Johnson the sole right to control the manner of performance under the contract, including the right to retain individuals of her own choosing to fulfill the requirements of the contract.

On August 31, 2011, Johnson employed Felton Leon Johnson (“Leon”) to deliver newspapers. Leon was delivering newspapers to a Kroger grocery store when he struck Patricia Owen with his vehicle causing her to suffer injuries that ultimately led to her death. Owen filed a lawsuit asserting claims against Leon, TVPC, and several other defendants. Owen argued that Johnson was an employee of TVPC and that Leon had been acting as a sub-agent of Johnson. Owen claimed that TVPC was liable for Leon’s actions. TVPC filed a motion for summary judgment, arguing that Johnson was an independent contractor for TVPC not an employee of TVPC. TVPC claimed that it was not liable for the actions of independent contractors. The trial court agreed with TVPC and dismissed all claims asserted against TVPC. Owen appealed.

In general, an Alabama corporation can be held liable for the actions of its agents but not the actions of an independent contractor. In determining whether an individual is an agent or an independent contractor, courts examine the relationship between the individual and the employer. An agency relationship exists where the employer retains the right to direct both the type of work to be performed and how the work shall be performed. In this case, the Court concluded that TVPC did not exercise sufficient control over Johnson for an agency relationship to exist. Because the Court determined that, as a matter of law, Johnson was not an agent of TVPC, TVPC’s summary judgment motion was affirmed and all claims against TVPC were dismissed.

Ex parte Diamond Scaffold Services Group, Inc. No. 2130771 (Ala. Civ. App. 2014) (holding that appropriate venue against company is not where agent of company does business but where company does business).

Diamond Scaffold provides services to erect, maintain, and dismantle industrial scaffolding. Daniel Reed (“Reed”) was employed by Diamond Scaffold in August 2011. At that time, Diamond Scaffold was performing work as a subcontractor for ThyssenKrupp Steel USA, LLC (“ThyssenKrupp”) at ThyssenKrupp’s construction site in Calvert, Alabama. Calvert, Alabama lies in both Mobile and Washington Counties. On August 14, 2011, Reed was working at the site when he fell and injured his back. Reed, a resident of Washington County, filed a complaint for workers’ compensation benefits in the Washington County Circuit Court. In his complaint, Reed named the corporation, Diamond Scaffold, as a defendant.

Under Alabama law, there are strict guidelines that govern the appropriate county in which to sue a corporate defendant. Diamond Scaffold sought to transfer Reed’s workers’ compensation action from Washington County to Mobile County. Diamond Scaffold argued that the complaint should have been filed in Mobile County because the evidence showed that the accident occurred in Mobile County, because Diamond Scaffold’s principle place of business is in Mobile County, and because Diamond Scaffold has never conducted business in Washington County. The trial court denied Diamond Scaffold’s request. Diamond Scaffold filed a petition for a writ of mandamus directing the Washington County Circuit Court to enter an order transferring the action to the Mobile Circuit Court.

The Alabama Court of Civil Appeals determined that the undisputed evidence showed that the accident in which Reed was injured occurred in Mobile County, that Reed was an employee of Diamond Scaffold and not of ThyssenKrupp, and that Diamond Scaffold’s principal office was in Mobile County. When Reed was injured, Diamond Scaffold was a subcontractor, or an agent, of ThyssenKrupp. The Court determined that there was no authority in Alabama law which would stand for the proposition that an action may be brought against an agent in a county where its principal does business. The Court granted Diamond Scaffold’s request to transfer Reed’s lawsuit to the Mobile County Circuit Court.