Opinion issued August 15, 2019




                                     In The

                             Court of Appeals
                                    For The

                         First District of Texas
                            ————————————
                             NO. 01-17-00689-CV
                           ———————————
              DIANE PEREZ AND RICKY PEREZ, Appellants
                                       V.
 GREATER HOUSTON TRANSPORTATION COMPANY D/B/A AND/OR
   A/K/A YELLOW CAB COMPANY AND/OR YELLOW CAB, AND
              DELWENDE NIKIEMA, Appellees


                   On Appeal from the 234th District Court
                            Harris County, Texas
                      Trial Court Case No. 2016-32437


                         MEMORANDUM OPINION

      Appellants Diane and Ricky Perez sued appellee Greater Houston

Transportation Company d/b/a and/or a/k/a Yellow Cab Company and/or Yellow

Cab (GHTC) for personal injuries Diane suffered in a collision with a cab driver,
asserting a cause of action for negligence under respondeat superior and joint-

enterprise theories. The trial court granted no-evidence summary judgment in favor

of GHTC and ordered that the Perezes take nothing by their claims against GHTC.

In their sole issue on appeal, the Perezes assert that the trial court erred in granting

summary judgment in favor of GHTC on their claim for negligence under a

respondeat superior theory. Because we conclude that the Perezes presented

evidence raising a fact question on the challenged elements of their claim, we

reverse and remand.

                                     Background

      Delwende Nikiema was driving a taxicab to pick up a passenger when he

collided with Diane Perez’s vehicle. The Perezes allege that Nikiema caused the

crash after he ran a stop sign while speeding and that Diane sustained injuries as a

result of the accident. GHTC owned the taxicab, and it held the taxicab’s permit

issued by the City of Houston. Nikiema leased the taxicab from GHTC through an

“Independent Contractor License and Vehicle Lease Purchase Option Agreement.”

      The Perezes filed a personal injury suit against Nikiema and GHTC. 1 In their

suit against GHTC, the Perezes alleged that the company was negligent due to

inadequate training and policies for its drivers. They also alleged that GHTC was


1
      The Perezes nonsuited their claim against Nikiema following the trial court’s
      granting of GHTC’s no-evidence motion for summary judgment. Nikiema is not a
      party to this appeal.
                                           2
liable for Nikiema’s negligence under theories of respondeat superior and joint

enterprise, among others.

      GHTC filed a no-evidence and a traditional motion for summary judgment.

In relevant part, it contended that the Perezes had no evidence to support their

claim that GHTC was vicariously liable for Diane’s injury under a theory of

respondeat superior or joint-enterprise liability. GHTC asserted that Nikiema was

not an employee of GHTC and that he was not acting within the course and scope

of his “alleged” employment with GHTC at the time of the accident. GHTC’s

summary-judgment evidence included, among other documents, the independent

contractor and vehicle lease agreement between Nikiema and GHTC and the

affidavit of Ed Kargbo, the Director of Marketing and Driver Services for GHTC.2

      The agreement between GHTC and Nikiema stated that it was an

“Independent Contractor License and Vehicle Purchase Option Agreement.” It

granted Nikiema a license to operate GHTC’s taxicab, obligating Nikiema to pay a

set weekly fee to lease the taxicab and the specialized taxicab equipment installed

in it. The agreement also established an independent-contractor relationship

between GHTC and Nikiema. The agreement stated that GHTC “does not have the

right to control the details of how [Nikiema] will acquire and transport Passengers


2
      Also included were Nikiema’s City of Houston taxi license issued August 6, 2013,
      and records indicating that GHTC pulled Nikiema’s driving records on August 1,
      2013, December 16, 2013, and March 24, 2014.
                                          3
under this Agreement, and that [GHTC] gives no instructions as to how, when,

where, or even if the Licensee utilizes the Goods and Services or operates the

Taxicab.” Nikiema received his revenue from passengers. GHTC provided

Nikiema with specified amounts of indemnification liability coverage, and it

recommended he obtain additional insurance coverage. Under the terms of the

agreement, GHTC was not obligated to provide driver training, but the agreement

did provide, “Before [GHTC] is willing to execute this Agreement, [Nikiema] is

encouraged to complete the Business Orientation Program provided by [GHTC.]”

Under the agreement, Nikiema also granted GHTC the right to sell advertising on

and in the taxicab and the right to collect all revenue from such advertisements,

and in exchange he received a weekly lease rebate.

      Kargbo’s affidavit likewise stated that: Nikiema was an independent

contractor; GHTC did not have the right to control the details of Nikiema’s work

or the right to control Nikiema in any manner; GHTC provided a computerized

dispatch system, but Nikiema was not required to use it, and if he did use it, he was

not required to accept the fare. Kargbo averred that the City of Houston passed

ordinances that controlled Nikiema’s performance of his duties as a taxicab

operator, and GHTC did not control his work beyond what it was required to do

under City ordinances.




                                         4
      The Perezes responded to GHTC’s motion for summary judgment and

asserted that the agreement relied upon by GHTC was “a mere sham or subterfuge

designed to conceal the true legal status of the parties” and that extrinsic evidence

provided “more than a scintilla of evidence” that GHTC had an actual right to

control Nikiema. In support of its argument, they offered the depositions of

Nikiema and Kargbo.

      During his deposition, Nikiema testified that he entered into the independent

contractor agreement with GHTC, but he was not provided with a copy of the

contract to review before signing the agreement, and he was not given time to

review its terms. GHTC instructed him where to sign or initial the contract and

where not to. He considered GHTC to be his employer.

      Nikiema testified that, as part of his agreement with GHTC, he paid a set

weekly fee to lease the taxicab, and he had an option to purchase the vehicle at the

end of the agreement. The taxicab was outfitted with specialized equipment,

including a credit-card swiper, stool light, taxi meter, GPS system, and dispatch

system. The equipment belonged to GHTC, and GHTC was responsible for the

maintenance of the equipment, as well as maintenance and repairs on the vehicle.

Nikiema testified that he was responsible for gas, tolls, any traffic tickets, and the

cost of oil and transmission changes.




                                          5
      Nikiema further testified that, before contacting GHTC, he did not have a

taxi license, nor did he have any experience driving a taxicab or operating any

specialized equipment for taxicabs. He attended a course with GHTC over several

days in which he received training on how to operate the specialized taxicab

equipment. GHTC instructed him on how to deal with passengers, identified safety

precautions to follow while driving, and provided him with study materials to

prepare for the taxi license exam. Kargbo also testified during his deposition that

Nikiema completed GHTC’s business orientation program and a defensive driving

course at GHTC.

      In his deposition, Nikiema indicated that, although he was not required to

use GHTC’s dispatch system, he obtained all, or 99%, of his fares through the

company’s dispatch system, and he had no customers of his own. GHTC

monitored the location of its vehicles, and it would send information about

potential fares to drivers based on the driver’s proximity to the passenger pick-up

location. Nikiema acknowledged that he was free to accept or reject any potential

fares generated through the GHTC dispatch system, but he understood that he was

expected to accept fares and that it was his “duty” to do so. He stated that GHTC

had penalized him on numerous occasions for rejecting fares. If he rejected a fare

for an “important customer,” or if there were no other available vehicles in the

area, GHTC dispatch would call his mobile phone and order him to accept the fare.


                                        6
When he rejected fares under those circumstances, the vehicle’s computer system

would be shut down and the stool light would deactivate. Nikiema testified that he

determined his own shifts, but if the taximeter was off for two or three hours

during the shift, GHTC would give him “downtime.”

      Nikiema testified in his deposition that he generally was entitled to keep all

cash payments and all credit card payments, minus a processing fee, that he

received from passengers. He was required to provide receipts to customers, and

the receipts were branded with GHTC company information. When he accepted a

METROLift account fare, however, he did not receive any payment from the

passenger. Instead he would complete the trip and provide the ride information to

GHTC, which would then pay him directly.

      At the time the accident with Diane Perez occurred, Nikiema was on his way

to pick up a METROLift account passenger who he had accepted through the

GHTC dispatch system. He testified that he contacted GHTC dispatch immediately

after the accident “seeking advice,” as he had been trained by GHTC to do. GHTC

contacted the police. Nikiema’s testimony also established that he was prohibited

from working for anyone but GHTC; GHTC had instructed Nikiema to take the

shortest route to pick up and to drop off passengers; and this route was provided to

him by the GPS device installed in the taxicab.




                                         7
      The trial court granted GHTC’s no-evidence motion for summary judgment,

but it did not rule on GHTC’s traditional motion for summary judgment.

                                     Analysis

      On appeal, the Perezes argue in their sole issue that the trial court erred in

granting GHTC’s no-evidence motion for summary judgment because they

presented evidence raising a fact question on GHTC’s liability for negligence

based on their respondeat superior claim. They assert that they presented

“substantial evidence” that GHTC had the right of control of Nikiema’s work and

that the accident occurred in the course and scope of his employment with GHTC,

making the company vicariously liable for his negligence.

A.    Standard of Review

      After an adequate time for discovery has passed, a party may move for

summary judgment on the ground that there is no evidence of one or more essential

elements of a claim or defense on which the nonmovant would have the burden of

proof at trial. TEX. R. CIV. P. 166a(i). The motion must state the elements as to

which there is no evidence. TEX. R. CIV. P. 166a(i). The reviewing court must grant

the motion unless the nonmovant produces summary-judgment evidence raising a

genuine issue of material fact. Id.; see Mack Trucks, Inc. v. Tamez, 206 S.W.3d

572, 582 (Tex. 2006). If the nonmovant produces evidence “that would enable




                                         8
reasonable and fair-minded jurors to differ in their conclusions,” a genuine issue of

material fact exists. See Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008).

      A no-evidence motion for summary judgment is essentially a directed

verdict granted before trial. Mack Trucks, 206 S.W.3d at 581–82. We apply the

same legal sufficiency standard in reviewing a no-evidence summary judgment as

we apply in reviewing a directed verdict. See id. at 582. Accordingly, we review

the evidence in the light most favorable to the nonmovant, indulging every

reasonable inference and resolving any doubts in the nonmovant’s favor. Valence

Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Evidence that favors

the movant’s position will not be considered unless it is uncontroverted. Great Am.

Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.

1965).

B.    No-Evidence Summary Judgment on Respondeat Superior

      Under the doctrine of respondeat superior, an employer may be vicariously

liable for the negligence of its employee who was acting within the scope of his

employment, even though the employer has not personally committed a wrong. St.

Joseph Hosp. v. Wolff, 94 S.W.3d 513, 541–42 (Tex. 2002); Wilson v. Davis, 305

S.W.3d 57, 66–67 (Tex. App.—Houston [1st Dist.] 2009, no pet.). An entity that

hires an independent contractor, however, is generally not vicariously liable for the




                                          9
negligence of the independent contractor. Baptist Mem’l Hosp. Sys. v. Sampson,

969 S.W.2d 945, 947 (Tex. 1998).

      1.     Right of Control

      Whether Nikiema is an employee or an independent contractor of GHTC

turns on the question of GHTC’s right to control Nikiema’s work. Whether one is

an independent contractor or an employee is measured by the amount of control the

employer exerts, or has the right to exert, over the details of the work performed.

Newspapers, Inc. v. Love, 380 S.W.2d 582, 591 (Tex. 1964).

      When, as here, a contract establishes an independent-contractor relationship

and does not grant control over the details of the work to the principal, evidence

outside the contract must be produced to show that despite the contract terms, the

true operating agreement vested the right of control in the principal. Id. at 592;

Farrell v. Greater Houston Transp. Co., 908 S.W.2d 1, 3 (Tex. App.—Houston

[1st Dist.] 1995, writ denied). Absent extrinsic evidence indicating that the contract

was a subterfuge or sham, that the hiring party exercised control in a manner

inconsistent with the contract provisions, or that the contract has been modified by

a subsequent express or implied agreement, the contract is determinative on the

nature of the parties’ relationship. Love, 380 S.W.2d at 592; Weidner v. Sanchez,

14 S.W.3d 353, 373 (Tex. App.—Houston [14th Dist.] 2000, no pet.). Evidence of

“[s]poradic action directing the details of the work” or an “occasional assertion of


                                         10
control” is not sufficient to override the contract. Farrell, 908 S.W.2d at 3. The

assumption of an exercise of control must be “so persistent and the acquiescence

therein so pronounced as to raise an inference that at the time of the act or

omission giving rise to liability, the parties by implied consent and acquiescence

had agreed that the principal might have the right to control the details of the

work.” Love, 380 S.W.2d at 592.

      Courts measure the right to control by considering factors such as: (1) the

independent nature of the worker’s business; (2) the worker’s obligation to furnish

necessary tools, supplies, and materials to perform the job; (3) the worker’s right to

control the progress of the work except as to final results; (4) the time for which

the worker is employed; and (5) the method of payment, whether by unit of time or

by the job. Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312

(Tex. 2002); INA of Tex. v. Torres, 808 S.W.2d 291, 293 (Tex. App.—Houston

[1st Dist.] 1991, no writ). It is not required that all five factors be present to make a

finding on the right to control. Thompson v. Travelers Indem. Co. of R.I., 789

S.W.2d 277, 278 (Tex. 1990); see McClure v. Greater San Antonio Transp. Co.,

SA-08-CA-112-FB, 2009 WL 10670178, at *9 (W.D. Tex. Mar. 24, 2009). That a

“person is normally an independent contractor does not preclude a finding of

agency as to the particular transaction at issue.” Weidner, 14 S.W.3d at 373–74.




                                           11
      The Perezes argue that the trial court erred in granting summary judgment in

favor of GHTC on the theory of respondeat superior because they presented

“overwhelming” summary judgment evidence that, despite the terms of the

agreement between GHTC and Nikiema, GHTC nevertheless exercised a level of

control over Nikiema that indicated he was an employee rather than an

independent contractor. They argued that this extrinsic evidence was sufficient to

create a fact issue on their respondeat superior claim.

      Examining the summary-judgment evidence on GHTC’s right to control

Nikiema’s work, and hence his status as an independent contractor or employee,

we agree with the Perezes that they produced evidence raising a genuine issue of

material fact on their respondeat superior claim.

      The first measure of the right to control, the independent nature of the

worker’s business, relates to who has the right to control the details and methods of

the work. White v. DR & PA Deliverance, Ltd., No. 01-12-00227-CV, 2014 WL

767218, at *5 (Tex. App.—Houston [1st Dist.] Feb. 25, 2014, no pet.) (citing

Limestone, 71 S.W.3d at 312, and Wolff, 94 S.W.3d at 542). Uncontroverted

summary-judgment evidence established that Nikiema generally controlled the

days and hours he worked. However, in contradiction to the terms of the agreement

and GHTC’s assertions that Nikiema was not required to accept any fare if he

chose to use their dispatch system, Nikiema testified that his dispatch system was


                                          12
shut off when he refused certain rides, and he was given “downtime” when his

taximeter was inactive for two or three hours during his shift. The Perezes also

point to Nikiema’s deposition testimony indicating that he did not have his own

customers and that he relied entirely or almost entirely on GHTC’s dispatch system

for fares.

        As to the second factor, the worker’s obligation to furnish necessary tools,

supplies, and materials to perform the job, the summary-judgment evidence

established that GHTC owned the taxicab, including all of the specialized

equipment installed in it, and Nikiema paid GHTC to lease these items. See, e.g.,

Tirres v. El Paso Sand Products, Inc., 808 S.W.2d 672, 674, 676 (Tex. App.—El

Paso 1991, writ denied) (worker’s agreement to use equipment furnished by

principal was not evidence of right to control); see also White, 2014 WL 767218,

at *6 (although employer provided worker some materials, worker was obligated to

pay for the materials, which supported conclusion he was independent contractor).

Although the contract indicated that training was not included as part of the

agreement, Nikiema testified GHTC trained him on how to operate the specialized

taxicab equipment. It also instructed him on certain procedures and safety

precautions and provided him with study materials to prepare for the taxi license

exam.




                                         13
      Regarding the right to control the progress of Nikiema’s work except as to

final results, the Perezes contend that the evidence shows that GHTC, not Nikiema,

controlled the progress of his work. They point to evidence that GHTC had control

over the advertising and promotion of the cab operation, but the summary-

judgment evidence established that Nikiema sold advertising rights of the cab to

GHTC. Nikiema also testified in his deposition that GHTC had instructed him to

take the shortest route to pick up and to drop off passengers and this route was

provided to him by the GPS device that GHTC owned and had installed in the

taxicab.

      The Perezes also presented some evidence regarding the time that Nikiema

was employed by GHTC. Perez testified that he considered GHTC his employer.

Nikiema further testified that, before working for GHTC, he did not have a taxi

license, nor did he have any experience driving a taxicab or operating any

specialized equipment for taxicabs. He attended a training course with GHTC on

how to operate the specialized taxicab equipment, and GHTC instructed him on

how to deal with passengers, identified safety precautions to follow while driving,

and provided him with study materials to prepare for the taxi license exam. Kargbo

also testified during his deposition that Nikiema completed GHTC’s business

orientation program and a defensive driving course at GHTC. The evidence also

established that Nikema first entered into an agreement with GHTC approximately


                                        14
eleven months before the accident and that, at the time of the accident, the parties

had entered into an agreement that would expire at the end of one year but could be

cancelled at any time.

      Finally, regarding the method of payment, it is undisputed that Nikiema was

paid by the job, and for typical fares he was paid directly by his customers.

However, Nikiema testified that he did not receive payment from customers for

METRO Lift account fares, such as the one he had taken at the time of the accident

in this case. According to his deposition testimony, he received compensation for

these fares from GHTC directly. See Weidner, 14 S.W.3d at 374–75 (holding that

fact that “[a] person is normally an independent contractor does not preclude a

finding of agency as to the particular transaction at issue”).

      Viewing the evidence in the light most favorable to the Perezes, as we must,

we conclude that they raised a material fact issue on their respondeat superior

claim. Although GHTC presented evidence of the agreement between itself and

Nikiema that expressly stated that Nikiema was an independent contractor, the

Perezes presented evidence outside the contract from which a factfinder could

determine that the true operating agreement vested the right of control in GHTC.

See Love, 380 S.W.2d at 592, Farrell, 908 S.W.2d at 3. The evidence produced by

the Perezes—namely, Nikiema’s deposition testimony—constitutes some evidence

that GHTC exercised control over Nikiema in a manner inconsistent with the


                                          15
agreement’s provisions or that the agreement had been modified by a subsequent

implied agreement. See Love, 380 S.W.2d at 592, Weidner, 14 S.W.3d at 373.

      GHTC asserts that its contract provided that Nikiema was an independent

contractor and that the summary-judgment evidence presented by the Perezes

failed to establish that GHTC took any actions beyond those required for

compliance with ordinances of the City of Houston. GHTC argues that the facts of

this case are akin to those presented to this court in Farrell, 908 S.W.2d 1. In

Farrell, this court affirmed a summary judgment in favor of a cab company and

held, as a matter of law, that a cab driver was an independent contractor.

      Like Nikiema, the cab driver in Farrell had entered into an independent-

contractor agreement with the cab company, Yellow Cab. Id. at 3. The summary-

judgment evidence in that case established that: Yellow Cab provided a

computerized dispatch system, but the driver was not required to use it, or to

accept any fares if he did; the driver paid a fee to operate to Yellow Cab to be

licensed under its cab operating permit and to use its radio and dispatch system;

and the driver’s total compensation came from payments by customers. Id. The

summary-judgment evidence in Farrell also established that: Yellow Cab did not

monitor how, where, or when the driver worked, and it did not know where or if he

was operating his taxicab; the driver determined the route he took when delivering

a customer; although the title to the cab listed Yellow Cab, the driver was listed as


                                         16
the vehicle’s “beneficial owner” and stated that the driver could have title assigned

to him if the cab left the Yellow Cab fleet; the driver was responsible for all

maintenance expenses on the cab; and the driver was covered under Yellow Cab’s

self-insurance certificate. Id. at 3–4.

      Farrell, therefore, is distinguishable in several key ways. Here, GHTC

presented evidence that it provided a dispatch system, but Nikiema was not

required to use it. Nikiema presented contradictory testimony, asserting that he got

all, or nearly all, of his fares through the dispatch system and that, despite the

terms of the agreement, he was pressured by GHTC to take fares under certain

circumstances. Nikiema also testified that, contrary to the terms of the agreement,

GHTC required him to take the shortest routes when picking up and dropping off

fares and that the route was set by the GPS device owned by GHTC and installed

in the taxicab. He also testified that GHTC was aware of when his meter was

running and would give him “downtime” when his taximeter was off for two or

three hours during his shift. There is a further key difference between this case and

Farrell in relation to the nature of Nikiema’s business and GHTC’s right to control

his work. In Farrell, uncontradicted evidence showed that the driver controlled

how, when, where, and if he worked. 908 S.W.2d at 4. Here, by contrast,

Nikiema’s testimony is some evidence that GHTC penalized him for rejecting fares




                                          17
or for periods of inactivity during a shift. Although GHTC denies this activity, we

conclude that this evidence raises a material question of fact on the right to control.

      GHTC correctly notes that at least some of its supervision and direction of

Nikiema’s work was required for it to comply with City ordinances. See HOU.

ORD. §§ 46-11(c) (requiring permittees of vehicles equipped with GPS to “collect,

maintain, and provide to the director . . . all real-time tracking information . . .

including . . . GPS location data, and whether or not the licensee is engaged with a

passenger”); 46-18 (permittee required to submit written lease contract, certificate

of title, and self-insurance); 46-114 (requiring driver to take the shortest route).

The evidence nevertheless raises a fact question regarding whether GHTC’s

control over Nikiema’s work rendered him an employee rather than an independent

contractor. In addition to the evidence of things GHTC did to comply with City

ordinances, there is at least some evidence that GHTC provided training and study

materials to Nikiema and penalized him for rejecting fares or remaining idle during

his shifts. Nikiema relied almost exclusively on GHTC’s dispatch system at the

time of the accident and, when he struck Diane’s vehicle, he was on his way to

pick up a METRO Lift fare for which he would be compensated directly by

GHTC. See McClure, 2009 WL 10670178, at *15.

      Viewing the evidence in the light most favorable to the Perezes, and

construing all reasonable inferences and resolving any doubts in their favor, we


                                          18
conclude that they produced evidence that would enable reasonable and fair-

minded factfinders to conclude that GHTC exercised a right to control Nikiema’s

work such that he was an employee of GHTC at the time of the accident, and not

an independent contractor. Thus, the trial court erred in granting GHTC’s no-

evidence motion for summary judgment on this element of their respondeat

superior claim.

      2.    Course and scope of employment

      Under the doctrine of respondeat superior, the plaintiff must establish not

only that the negligent party was an employee but also that the employee was

acting within the scope of his employment. See Wolff, 94 S.W.3d at 541–42. To

establish that a party was acting within the scope of his employment, a plaintiff

must show only that the act was: (1) within the general authority given to the

employee; (2) in furtherance of the employer’s business; and (3) for the

accomplishment of the object for which the employee was employed. Leadon v.

Kimbrough Bros. Lumber Co., 484 S.W.2d 567, 569 (Tex. 1972); Drooker v.

Saeilo Motors, 756 S.W.2d 394, 397 (Tex. App.—Houston [1st Dist.] 1988, writ

denied).

      It is uncontroverted that at the time of the accident, Nikiema was driving a

taxicab owned by and permitted to GHTC. It is also uncontroverted that he was on

his way to pick up a passenger for a METRO Lift account fare that he had received


                                       19
and accepted through the GHTC dispatch system. Nikiema was following the route

provided by GHTC’s GPS device that it had installed in the taxicab, and, if he had

completed the trip, GHTC would have been responsible for compensating him for

the fare. Accordingly, the Perezes’ summary-judgment evidence raises a genuine

issue of material fact as to whether Nikiema was operating the taxicab within the

course and scope of his alleged employment with GHTC at the time of the

accident.

      We conclude that the Perezes produced summary-judgment evidence raising

a genuine issue of material fact as to whether GHTC actually exercised control

over Nikiema’s work at the time of the accident, such that he was acting as an

employee and not an independent contractor, and whether Nikiema was acting

within the scope of that alleged employment at the time of the accident.

Accordingly, the trial court erred in granting GHTC’s no-evidence motion for

summary judgment on the Perezes’ repondeat superior claim.

      We sustain the Perezes’ sole issue on appeal.




                                        20
                                  Conclusion

      We reverse the judgment of the trial court and remand the case to the trial

court for further proceedings.




                                            Richard Hightower
                                            Justice

Panel consists of Justices Keyes, Goodman, and Hightower.




                                       21
