
    549 F. 2d 190
    TRISTATE DEVELOPERS, INC. v. THE UNITED STATES
    [No. 439-72.
    Decided January 26, 1977]
    
      
      Joseph J. Lyman, attorney of record, for plaintiff.
    
      Fenton P. WilMnson, with whom was Assistant Attorney General Scott P. Orampton, for defendant. Theodore D. Peyser md Roberts. Watkins, of counsel.
    
      Before CoweN, Chief Judge, Davis, and Kashiwa, Judges.
   Per Curiam r

This case comes before the court on defendant’s exceptions to the recommended decision of Trial Judge Lloyd Fletcher, filed October 21, 1975, pursuant to Buie 134(h), having been submitted and considered on the briefs and oral argument of counsel.

Like the earlier “applicator” cases, this case is controlled by the whole of its particular facts. The trial judge properly points out the significant differences from William C. McCombs Co. v. United States, 193 Ct. Cl. 644, 436 F. 2d 979 (1971). The present case is more like Rayhill v. United States, 176 Ct. Cl. 1120, 364 F. 2d 347 (1966) and Powers v. United States, 191 Ct. Cl. 762, 424 F. 2d 593 (1970), and falls within the area marked out by those decisions; the differences from those cases which defendant cites are not significant in the light of the totality of the circumstances.

Since the court agrees with the trial judge’s recommended decision, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Therefore, it is concluded the plaintiff is entitled to recover and judgment is entered for plaintiff with the amount of recovery to be determined pursuant to Buie 131 (c) in accordance with this opinion. Defendant’s counterclaim is dismissed.

OPINION OP TRIAL JUDGE

Fletcher, Trial Judge:

The issue in this case must bring to the court a resigned feeling of deja vu. Once again, it is necessary to wrestle with the familiar common law distinction between an employee and an independent contractor, as the courts have done so many times before. Not that the legal principle is esoteric; far from it. In Illinois Tri-Seal Products, Inc. v. United States, 173 Ct. Cl. 499, 353 F. 2d 216 (1965), the court has succinctly put the distinction, as follows, at 173 Ct. Cl. 510, 353 F. 2d 223:

* * * It is, of course, fundamental that under the common-law test, the relationship of employer and employee exists where the principal has the right to direct the manner and method in which the work shall be done, as well as the result to be accomplished, while an independent contractor relationship exists where the individual who performs work for another does so according to his own manner and method, free from direction or right of direction hi matters relating to the performance of the work save as to the result.

For all employment tax purposes, the Internal Revenue Code and the Treasury Regulations promulgated thereunder have specifically adopted this common law test for ascertaining the existence of the employer-employee relationship, Enochs v. Williams Packing Co., 370 U.S. 1, 3 (1962), and the regulations rightly conclude that:

(3) Whether the relationship of employer and employee exists under the usual common law rules will in doubtful cases be determined upon an examination of the particular facts of each case. Treas. Eeg. § 31.3121 (d)-l.

Since the problem for the court, therefore, is basically factual, it is necessary to proceed with an elaboration of the facts adduced at the trial, bearing in mind that the sole issue for decision is whether certain home siding and roofing “applicators” performing such work under contracts with plaintiff were its employees or were independent contractors. If these several applicators were independent subcontractors for plaintiff (sometimes “Tristate”), then plaintiff is entitled to recover herein. On the other hand, if these persons were Tristate’s employees, defendant is entitled to prevail on its counterclaim under the provisions of Sections 3101 et seq., 3301 et seq., and 3401 et seq. of the Internal Revenue Code of 1954. Upon the facts now to be described, I have concluded that the applicators who performed jobs for Tristate were not its employees but were independent contractors during the periods involved. Accordingly, judgment should be entered for plaintiff and the counterclaim dismissed.

The court is no stranger to the concept of “applicator” (sometimes also referred to as “installer” or “mechanic”) as that term is used in the home improvement business and has dealt with it on no less than seven prior occasions. Ralls, Inc. v. United States, 200 Ct. Cl. 240, 470 F. 2d 579 (1972); William C. McCombs Co. v. United States, 193 Ct. Cl. 644, 436 F. 2d 979 (1971); Powers v. United States, 191 Ct. Cl. 762, 424 F. 2d 593 (1970); Rayhill v. United States, 176 Ct. Cl. 1120, 364 F. 2d 347 (1966); Illinois Tri-Seal Prods. Inc. v. United States, 173 Ct. Cl. 499, 353 F. 2d 216 (1965); Edwards v. United States, 144 Ct. Cl. 158, 168 F. Supp. 955 (1958); and Ben Construction Corp. v. United States, 160 Ct. Cl. 604, 312 F. 2d 781 (1963). Nor has judicial consideration of applicators’ employment status been confined to the Court of Claims. See, for example, Alsco Storm Windows, Inc. v. United States, 311 F. 2d 341 (9th Cir., 1962); Ben v. United States, 139 F. Supp. 883, aff'd. 241 F. 2d 127 (2d Cir., 1957); Hoosier Home Improvement Co. v. United States, 350 F. 2d 640 (7th Cir., 1965); Consolidated Housecraft, Inc. v. United States, 170 F. Supp. 842 (E.D., N.Y., 1959); Jagolinzer v. United States, 150 F. Supp. 489 (D.R.I., 1957); Security Roofing and Const. Co. v. United States, 163 F. Supp. 794 (D. Mass., 1958); Fleeman v. United States, 175 F. Supp. 336 (N. D. Ohio, 1959); Zipley v. United States, 156 F. Supp. 141 (E.D., Pa., 1957); and Drake v. United States, 75-1 USTC ¶9475 (N. D. Tex., 1975). Despite generally similar fact patterns, there has not been unanimity of result in these many cases. They have 'been referred to, however, because in McCombs, supra, the court has observed that:

* * * We do not subscribe to the idea that these cases do not bear on one another because they involve purely factual issues. Of necessity, the selection or rejection of underlying facts for use in arriving at ultimate conclusions of fact, must involve criteria which have prece-dential value and in effect are conclusions of law. 193 Ct. Cl. at 652-53, 436 F. 2d at 983.

Following a factual pattern generally similar to all these cases, the record here shows that Tristate is a home improvement contractor, a substantial part of whose business is the installation of new siding or roofing to the homes of its customers. During the periods at issue, this business was conducted under the supervision of Tristate’s general manager, Ben Abramson, who utilized the services of commissioned salesmen to obtain contracts from customers and applicators to do the labor (and sometimes furnish the materials) necessary to the performance of those contracts. He acquired the services of these applicators in several ways. Their names were sometimes obtained by plaintiff from wholesale materials supply houses where applicators customarily made known their availability to the trade generally. From previous experience with them plaintiff also kept a list of names of several qualified applicators whom it would call when needed. Others came to plaintiff’s office by word of mouth from other applicators who had worked for plaintiff. Also, plaintiff inserted advertisements in the classified sections of newspapers for applicators, stating: “Wanted experienced siding applicators. Steady work. Good pay.” Also, a few applicators advertised in the “yellow pages” of the telephone directory.

As customer contracts were obtained, the specifications therein were transferred to a work order which authorized not only the work to be done and the materials to be used but also the price to be paid any applicator who accepted the work order. Occasionally, starting and completion dates might also be stated, but generally the timing of work performance was left to the applicator subject to overall concern for customer satisfaction.

There was no competitive bidding, and any applicator deemed by plaintiff to be sufficiently experienced was free to accept any particular work order. Some amount of bargaining as to price for the work took place, particularly where the job was unusual or fairly complex. Tristate’s general position was that it should have to pay no more than prevailing area rates and it maintained a price list reflecting them which list price generally prevailed. However, in negotiating prices, Abramson took a more flexible attitude when applicators were in short supply or when, because of prior experience, he wanted the services of a particular applicator who had done good work for plaintiff in the past. The end result of this procedure was that some applicators received one price and others received a different price for the same type of work.

The applicators were free to accept work orders of a similar kind offered by plaintiff’s competitors and they would do so except in the case of a few applicators who preferred to work exclusively for Tristate. All applicators, in addition to experience requirements, had to furnish all necessary tools and equipment for the performance of the job, and each had his own truck or other form of transportation which was maintained without reimbursement or other payment by Tristate. Some occasionally furnished the necessary materials but most of the time the materials were supplied and delivered to the job by Tristate. Some of the applicators were independent licensed contractors. They employed and paid their own helpers. Final payment by Tristate to an applicator for a particular job was made only upon completion of the job and the furnishing by the applicator of a completion certificate signed by the home owner. Tristate, however, would make various advance payments to applicators generally on Friday for work accomplished during the week.

Tristate did not actively supervise the applicators but depended upon their experience to satisfy the customer and comply with the specifications of the work order. While Tristáte had no foremen or supervisors, as those terms are generally understood, it did on several occasions employ as many as two persons known as “expediters” who would visit jobs in progress from time to time, the frequency of their visits depending upon the nature and number of any customer complaints and the company’s prior experience with a particular applicator. As the name suggests, their job essentially was to see to it that satisfactory progress was being made by the applicators in completing their respective jobs. They also conveyed customer complaints to the applicators, and on their own initiative would sometimes criticize work which they considered to have been poorly done. They also collected money from customers.

Plaintiff owned signs which, advertised its 'business with the slogan “A New Home at an Old Address by Tri-'State Developers”. These signs were placed at some but not all jobsites. Plaintiff asked the applicators to post these signs, and sometimes they did. At other times, the salesmen would post the signs on the customer’s property. For a period of about six weeks, one applicator and his helper wore uniforms with plaintiff’s name on them. This Shortlived effort at advertising was suggested by the applicator but was aborted due to cleaning and other difficulties. The 'applicators’ trucks carried no sign or other insignia identifying them in any way with Tristate Developers, Inc.

Mechanics sometimes worked for plaintiff in the capacity of ordinary manual laborers. On rainy days and during slack periods some would work at an hourly rate of pay in plaintiff’s warehouse unloading materials from delivery trucks or delivering materials to jobsites. One mechanic would sometimes repair the work of another mechanic when a service call was necessary, and a charge would be made for such service call by the mechanic making the repair. Plaintiff tried to charge this cost back to the original mechanic if possible.

A few mechanics represented themselves to the customer as either an employee of plaintiff or as the “foreman” of the job. One mechanic, who was obviously hostile to plaintiff, testified that he was told by plaintiff not to tell customers that he was a subcontractor. He expressed the opinion that he was plaintiff’s employee but freely admitted that he frequently left a job at mid-day and spent the afternoon drinking in a bar because he didn’t think such absence from the job “was any of the company’s concern”. By way of contrast to these few instances, the record in this case demonstrates that the reliable and experienced applicators who performed jobs for plaintiff felt that they were in business for themselves.

This summary of Tristate’s relationship to its applicators, expanded at length in the findings below, discloses a general fact pattern common to all cases in which applicators have been held to have independent contractor status. See, for example, Rayhill v. United States, supra; Powers v. United States, supra; and Balls, Inc. v. United States, supra. It would seem, therefore, that a like result is demanded here.

Defendant, however, contends vigorously that the present case' is completely controlled by William C. McCombs v. United States, supra, in which the court held that, on its particular facts, the case had passed the outer limits established by RayMll and like oases to such an extent as to require a finding of employer-employee status. But this effort to equate the facts in McOombs with those in the present case fails wholly to discern the significant differences between the two cases.

Probably the most salient of the numerous differences is the court’s finding in McOombs that the home improvement contractor there had employed salaried supervisors who would visit the jobsites “to insure workmanlike performance and, if necessary, to instruct an applicator m certain techniques and procedures, such as overlapping aluminum channels, caulking of seams, spacing of nails, etc.” 193 Ct. Cl. 654, finding 6. [Emphasis supplied.] Concerning this finding the court said:

* * * Implicit in this finding is the desire of the plaintiff to control not only the result but also the manner of achieving it. The type of instruction 'given by the supervisors seems rather fundamental to the whole process, and shows that plaintiff, although preferring experienced applicators, when available, was also training people who had no previous experience in this line of work. 'Several witnesses indicated they had done no ap-plicating work before coming to McCombs. These witnesses also indicated they had to obtain their tools from McCombs with cost being deducted from their subsequent pay. One who must learn his trade and acquire his tools from the person employing his services can hardly be classified as an independent contractor. 193 Ct. 01. 650.

No comparable situation existed in the present case. In contrast, just as in Bayhill, Tristate offered work orders only to experienced applicators who were deemed capable of performing the work even though, as might be expected in any subcontractor relationship, some applicators were more skilled and competent than others. Unlike their own helper-employees, these men needed no instruction or supervision in the performance of their work orders, and in fact knew much more about the techniques involved than Abramson himself who never visited a job-site. To him the important consideration was the applicator’s experience and the absence of customer complaints. Even after 'he had hired expediters, it was understood that their basic functions were to remedy problems of uncollected bills and complaints over poor workmanship, to assess problems (such as undetected rot) which arose during a job, to arrange bank financing for customers, to verify the amount of materials needed, and generally to keep the jobs moving to an expeditious conclusion. Although they sometimes suggested to a mechanic that he should caulk more around windows or straighten a bent aluminum panel, their function was not to instruct an applicator in certain techniques and procedures, such as overlapping aluminum channels, caulking of seams, spacing of nails, etc., as was done by the McCombs Co. supervisors. The expediters did not teach Tristate’s mechanics their trade. Their work served to improve customer relations, to avert probable customer complaints about things which their prior experience as applicators gave them reason to anticipate, and in general to contribute to efficient functioning of the company through obviating time-consuming and expensive corrections. Thus, their function more closely resembles that of the contractor’s representatives in Powers than that of the supervisors in McOombs. See finding 19 in Powers v. United States, supra, at 191 Ct. Cl. 783. Further, Tristate’s applicators furnished their own tools.

Another fact which moved the McOombs’ applicators from the more typical subcontractor pattern into employee status was that the contractor there could fire an applicator for cause before completion of the job. This right existed and was exercised in Powers, too, but the court’s opinion observed that “plaintiff’s actions toward this applicator [who got drunk, suffered an injury, and failed to show up for work] were not those of an employer discharging an employee. Rather, they were a manifestation of the right of a general contractor to declare that his subcontract had been breached by the subcontractor.” Powers v. United States, supra, at 191 Ct. Cl. 771. As in Powers, Tristate had discharged one applicator during a job without permitting him, to finish, but this incident also occurred in the atmosphere of a contractor’s right to terminate his subcontractor for unsatisfactory performance of the contract. Usually Tristate permitted applicators to complete a job and, if dissatisfied with his work, simply did not offer him further work orders in the future.

Tristate’s situation is further dissimilar from the plaintiff’s in the McGombs case because of the absence of a mutual intent to establish or perpetuate 'an employee relationship. Tristate did wish to compile a list of experienced “regulars” on whom it could rely for dependable work, but even these “regulars” felt no obligation to make themselves constantly available to Tristate, and some freely accepted applicator jobs elsewhere.

Other crucial dissimilarities show the inapplicability of McGombs to the present case. In the area of representation to the public at large, for example, McGombs furnished three uniforms to its applicators “with McCombs Company advertising emblazoned thereon” and paid one-half the laundering cost. In addition, McCombs arranged to display advertising on the trucks of several applicators. 193 Ct. Cl. 651. No such efforts were made by Tristate to create a public impression that the applicators were its employees. To the contrary, it restricted this type of advertising to a simple display of its signs at the jobsite, which was characteristic of the prior cases.

Further, McGombs paid part of the premiums for those applicators who participated in the company’s group health and group life insurance programs and, in some instances, paid applicators lump sum bonuses as vacation pay. All these are clearly indicative of employer-employee Status, but Tristate did none of these things. It did carry public liability and property damage insurance to protect itself against claims for damages and injuries caused by the applicators, but this type of insurance coverage in no way negates a contractor-subcontractor relationship. See Rayhill, supra, 176 Ct. Cl. at 1127, 364 F. 2d at 352.

In contrast to the factual situation in McCombs, it is also important to observe that the Tristate applicators, once they received a work order, were free to perform the work with partners or helpers 'of their own choosing. Tristate had no control, and did not attempt to exercise control, over an applicator’s selection of such co-workers, and this clearly indicates lack of control over the methods and details of performing the work. Tristate issued its payment Checks only to the primary applicator and never to one of his helpers, although on rare occasions Tristate might issue checks to each applicator when working in partnership.

From a consideration of all these factors, one finally returns to the ultimate question of “right to control” which must always govern the outcome of these cases involving the distinction between an “employee” and an “independent contractor”. Many years ago, Judge Learned Hand described the question in his typically pungent way as follows:

* * * The test lies in the degree to which the principal may intervene to control the details of the agent’s performance; and that in the end is all that can be said, though the regulation redundantly elaborated it. In the case at bar the plaintiff did intervene to some degree; but so does a general building contractor intervene in the work of his subcontractors. He decides how the different parts of the work must be timed, and how they pba.11 be fitted together; if he finds it desirable to cut out this or that from the specifications, he does so. Some such supervision is inherent in any joint undertaking, and does not make the contributing contractors employees. Radio City Music Hall Corp. v. United States, 135 F. 2d 715, 717-18 (2d Cir., 1943).

Those graceful observations might well have been made with respect to the factual pattern of the present case.

Upon careful consideration of the entire record and its significant dissimilarities from the McCombs record, it is concluded that while plaintiff retained the right at all times to control the result of the work contracted for, and on which applicators were used, plaintiff did not exercise direction and control over the manner and method of the applicators’ work performance, nor did it retain the right to do so. Accordingly, under the authority of the seven applicator cases previously decided by the court and cited above, plaintiff is entitled to recover and defendant’s counterclaim must be dismissed. From the figures contained in finding 32 below, it seems apparent that the total amount of plaintiff’s recovery should be $2,898.60, plus interest thereon as provided by law. However, in the absence of an agreement by the parties to that effect, it seems appropriate to reserve a final determination of the exact amount of recovery for further proceedings under Buie 131 (c).

FINDINGS OP PACT

1. Plaintiff, Tristate Developers, Inc. (Tristate) is a Maryland corporation with its principal office in Hagerstown, Maryland, from which it conducted a home repair and remodeling business during the taxable years 1968 through 1971. Plaintiff’s business facilities consisted initially of two rooms of office space and some warehouse space in Hagers-town. During the years in issue, plaintiff remodeled the exteriors of existing residential homes of frame construction. It did not remodel commercial buildings or perform any interior work.

2. Essentially, plaintiff’s business consisted of the sale and application of structural materials to the 'homes of residential property owners, including roofing, 'aluminum and vinyl siding, rain carrier equipment such as 'gutters, downspouts, and the like, asphalt roofing shingles, storm windows and doors, aluminum soffit and facia covering, and precast stone facing. Plaintiff’s business also necessarily involved the performance of incidental carpentry work. All work was done under written contracts with customers.

3. Plaintiff’s aforesaid business was conducted under the supervision of Ben Abramson, who, as general manager, had overall responsibility for all of plaintiff’s operations during the periods involved herein. At the present time, he is plaintiff’s president and sole stockholder. His managerial duties were generally to supervise plaintiff’s activities and particularly to secure sales for the company through newspaper advertisements and telephone solicitations. His home office staff consisted of several telephone solicitors, who were salaried employees, and a bookkeeper-secretary, who was paid on an hourly basis.

4. Tristate also utilized the services of salesmen who were paid on a commission basis to solicit customers whose homes needed repair or renovation 'and “expediters” who were paid on a salary basis. The bookkeeper-secretary, the telephone solicitors, and the expediters have been conceded by plaintiff to be common law “employees”. Defendant, in turn, has conceded that the salesmen were not such “employees” of plaintiff. Defendant has also conceded that those persons who were engaged by plaintiff to apply precast stone facing materials to its customers’ homes were not plaintiff’s common law “employees”. These mutual concessions leave at issue the employment status only of those persons engaged by plaintiff as “applicators” to install on its customer’s homes such items as roofing, siding, windows, doors, shutters, gutters, downspouts, 'and the like. Hereafter, the latter persons are sometimes referred to as “mechanics,” or simply as “applicators”.

5. The applicators performed work for plaintiff pursuant to work orders offered them by plaintiff on an individual basis. These work orders were prepared by Abramson from the information contained in customer contracts obtained by plaintiff’s salesmen and approved by plaintiff. Those contracts were on printed forms supplied by plaintiff to its salesmen. They contained the date, name, and telephone number of the customer, a description of the materials to be applied, the nature of the labor to be performed, the total price for the job, credit and financing information where applicable, a provision for rejection by the plaintiff if credit were disapproved, and usually a specific provision that the contract or work could be assigned to a subcontractor.

The work orders prepared by Abramson and furnished to the applicators typically contained similar information such as the date, name, address, and telephone number of the customer, the salesman’s name, a general description of the work to be done, the kind and quantity of materials to be applied, and occasionally starting and completion dates, and extra work to be done, e.g., “paint gable ends — remove window casing — cover bannister to top — cut with coil over top of front porch to stay with contour of existing porch — furr out in rear, etc.” Where deemed necessary, directions to the job-site were given. Many contained no remarks at all, and, other than an occasional reminder that customer satisfaction was required as to both labor and materials, no directions were given regarding the method or manner of accomplishing the work. In general, the more complex the job, the more detailed the specifications in the work order.

6. Plaintiff acquired the services of these applicators in several ways. Their names were sometimes obtained by plaintiff from wholesale materials supply houses where applicators customarily made known their availability to the trade generally. From previous experience with them plaintiff also kept a list of names of several qualified applicators whom it would call when needed. Others came to plaintiff’s office by word of mouth from other applicators who had worked for plaintiff. Also, plaintiff inserted advertisements in the classified sections of newspapers for applicators, stating: “Wanted experienced siding applicators. Steady work. Good pay.” Also, a few applicators advertised in the “yellow pages” of the telephone directory, although it would be very rare for an applicator to maintain a business phone as such, distribute business cards, or place business advertisements in a newspaper.

7. As would be expected, in deciding whether to offer a work order to an applicator with whom plaintiff had no prior contact, consideration was given to his previous experience with others in siding and roofing installation. In general, plaintiff desired a new applicator to be experienced in the trade, although no rule of thumb was used as to number of years of required experience, and no effort was made to investigate his reputation with other home improvement contractors for whom he may have worked in the past. Experienced applicators were sometimes difficult to find, particularly during good-weather months, and when plaintiff’s backlog of work was relatively high, Abramson would tend to engage the services of applicators with less experience and expertise than he ordinarily would require.

8. In addition to satisfactory experience, an applicator was also required to possess his own equipment for accomplishing the work. This equipment included hand tools, ladders, ladder-jacks, walking planks, brakes (used to bend material), metal cutters, electric table saws, hand saws, and a truck or other vehicle for transporting material and equipment. With most applicators, this investment in tools and equipment, exclusive of a truck or other vehicle, amounted to about $3,000 on an average. Applicators paid their own maintenance expenses and insurance premiums on their trucks, without reimbursement from plaintiff, except that in the case of a particularly remote job -they would receive some reimbursement frequently in the form of an increased price for the job.

Plaintiff owned a brake for a short period of time, and a few applicators used it on occasion. Other than the brake, plaintiff owned no truck, tools, or any of the necessary equipment described above. Infrequently, an applicator might purchase a needed tool on plaintiff’s credit and thereafter keep the tool. He would pay plaintiff for the cost thereof, usually by a deduction from amounts due him by plaintiff. In the case of jobs which required some unusual piece of equipment, such as a very long ladder, the applicators were told that they could rent such item for which they would be reimbursed by plaintiff.

9. Upon being tendered a work order, an applicator had to decide whether he would take the job or not. There was no “competitive bidding” between interested applicators as that system is generally known in the construction industry, but some bargaining did take place. Abramson would inquire of the applicator as to his charge per 100 square feet of material applied, and the cost of any extra work to be performed. The applicator would state the amount of compensation he wanted which might be based upon his usual hourly charge or, more often, upon his charge for the items in a job {e.g., square footage of siding, number of gutters, downspouts, shutters, and the like). If a job appeared particularly difficult, such as 'a 8-story ¡house, or was fairly distant from Hagerstown, the mechanic usually would ask more.

Thereupon, Abramson would bargain with the mechanics over the amount of compensation. As a bargaining tool, he maintained a standard price list which he used as a guide in arriving at a price with the applicators. The prices on this list had been compiled from prevailing rates in the local trade and from typical prices previously paid to plaintiff’s applicators. In bargaining with an applicator, Abramson always endeavored to bring the applicator’s asking price down to the price on plaintiff’s standard price list. Usually he was successful, particularly in bargaining with a new applicator who had never done work for plaintiff before. He took a more flexible attitude, however, when applicators were in short supply or when, because of prior experience, he wanted the services of a particular applicator who had done good work for plaintiff in the past. The end result of this procedure was that some applicators received one price and others received a different price for the same type of work.

10. All jobs were tendered by plaintiff on a job-by-job basis, and each job was a separate undertaking. There was no agreement that plaintiff would give an applicator any predetermined number of jobs over a period of time. Abramson did attempt to keep the applicators (particularly the more skillful ones) busy with jobs and in this sense tried to assure them of steady work. However, plaintiff and the applicators felt no legal obligation to each other regarding employment beyond the particular job being performed. Neither does there appear to have been any sense of loyalty existing between plaintiff and the applicators.

11. An applicator was free either to accept or to reject a work order offered him by plaintiff. Most of the applicators, however, regularly accepted j obs offered them. Those applicators who at one time or another refused a job later received other opportunities to work if jobs were available, and hence did not feel that rejecting any particular job would prejudice them with plaintiff. Rejected work orders were tendered to other applicators. When comparatively difficult jobs were involved, plaintiff tended to offer them to its more competent applicators, and usually they accepted such work orders.

12. Upon receiving a work order but before beginning work, a mechanic would visit the jobsite, inspect the house, talk to the owner, and verify the salesman’s measurement figures as to materials and amount of work necessary. In the event of a discrepancy, it was necessary to confer with either the salesman or the expediter and arrive at the correct measurement.

13. Once an applicator undertook to perform a job for the agreed price, he was expected to start work as soon as practicable, usually on the following day. Occasionally, a starting date was specified. Many times a mechanic did not appear on a job which he had agreed to perform. On these occasions, plaintiff would simply engage another mechanic.

It was not customary to specify a fixed date for completion of a job. However, Abramson kept in touch with job progress by calling the mechanic at the jobsite, and if the job was progressing slowly, or if he had received a complaint from a customer, Abramson would ask the mechanic to spend more time on the job and expedite its completion. In general, however, the applicators ran their own time schedule and worked such hours as they chose. They took time off during jobs and between jobs without consulting Abramson in any way. They also set the work schedule for their crews, or helpers, without interference from plaintiff.

Plaintiff did impose certain rules, posted on its warehouse door, concerning swearing 'and drinking on the job. Rules regarding penalties for stealing from the warehouse were also posted. One mechanic, who breached the rule on drinking, was threatened by Abramson with the possibility that he would receive no more work orders if his drinking continued. Mechanics were expected to clean up the jobsite at the conclusion of each work day.

14. Plaintiff usually furnished the major materials for a job during the period involved. Prior thereto, the applicators bought their own materials and did their work on the basis of supplying both labor and materials. However, plaintiff preferred to supply the materials itself, and this became the customary, although not exclusive, practice. Where the applicator furnished both labor and material, his charge for applying siding might range from $50 to $60 per square, whereas when plaintiff furnished the siding materials, the labor charge by the applicator might range from $18 to $35 per square. Whatever 'basis was used, the applicator’s charges were set forth on a “labor break-down” sheet composed either by the applicator himself or by Abramson from information furnished him by the applicator. In cases where plaintiff furnished the materials, they were shown as sold to the applicator who in turn would show the cost thereof in his bill to plaintiff. Hence, if he used less materials than those purchased, the excess unused materials belonged to the applicator.

15. Materials supplied by plaintiff might arrive at the jobsite in one of several ways 'but were expected to be on site by the time the applicator was ready to begin work. First, the wholesale supplier from whom plaintiff itself purchased the materials might deliver them. Second, a private trucker with whom plaintiff had contracted might deliver it. Third, plaintiff might hire a mechanic for the sole purpose of delivering materials to a job on which he was not working or might pay the mechanic who had the job an additional sum over the contract price for hauling materials to the job. Plaintiff did not own a truck in which material deliveries were customarily made.

16. Adequate performance of an applicator’s job requires skills and know-how comparable to those possessed by a carpenter. All the applicators involved in this case possessed such skills in varying degrees. They were sufficiently knowledgeable to perform the shorthand type specifications used in the typical work order without instructions or other help from plaintiff, and tins record shows that, except for a few unusual jobs where the applicator sought advice, the plaintiff furnished no directions regarding the method or manner of performance.

Hence, plaintiff employed no full-time job foreman, as that term is generally understood. At intervals, however, it did employ as many as two persons with prior experience in the trade who were known as “expediters”. Essentially, their job (as the name suggests) was to see to it that satisfactory progress was being made by the applicators in completing their respective jobs. They also conveyed customer complaints to the applicators, and on their own initiative would sometimes criticize work which they considered to have been poorly done. They also collected money from customers.

For these purposes, the expediters would visit jobs in progress from time to time. Where an able and experienced applicator was performing the job, such visits would be infrequent. They would be more frequent to jobs where the applicator was not well-known to plaintiff or where the customer complaints were numerous. It was also customary for the salesman who had originally sold the job to visit the site while work was in progress. The general manager, Abramson, never visited the jobsites. 'He considered that payment by a customer implied satisfaction with the applicator’s work. He could recall only one occasion when an applicator was discharged from a job for unsatisfactory work and immediately replaced by another mechanic. Usually, even an unsatisfactory mechanic was allowed to finish a job but was thereafter not offered any others.

17. When previously undetected rot or some other hidden defect was discovered during performance, the mechanic would telephone Abramson, advise him of the problem, and inquire as to what plaintiff wanted to do. Oftentimes the mechanic would state that he would have to make an extra charge on account of the defect, whereupon he and Abramson, or the expediter, would bargain over the amount of the additional cost.

Other circumstances which caused an applicator to call Abramson were shortages of materials and requests from the customer for additional work not listed on the work order. In each situation, the applicator sought Abramson’s prior authorization. Abramson does not recall that any mechanic ever called the plaintiff’s office to say that he was having trouble in performing the work and needed help.

18. Occasionally a mechanic contracted directly with a customer to do extra work not encompassed by the work order, 'and in such instances the customer would pay the mechanic directly without involving the plaintiff. Except for very minor jobs, Abramson did not approve of this practice. He told the mechanics that they should always contact plaintiff when additional work of any significance was requested and should never contract directly with a customer before consulting him.

With respect to potential new jobs, Abramson asked mechanics to refer any “leads” to him and not to pirate the jobs for themselves. Some mechanics would always refer a lead, but others sometimes followed them up for their own account. On one occasion, Abramson threatened to withhold future work orders from a mechanic for his failure to refer a lead. The méchame agreed to refer any future leads and even removed his name from his truck, but he did continue to accept work, when available, from plaintiff’s competitors.

19. The plaintiff sometimes asked mechanics to “spike” another job during their course of work on a job. (“Spike” is trade j argon for affixing a few materials to a customer’s house in furtherance of a contract in an effort to deter possible cancellation of the contract by the customer.) If the mechanic did not like the job to be “spiked,” he would decline plaintiff’s request. Usually, however, mechanics would “spike” when requested and most of the time would be offered the work order for completion of the job.

20. Mechanics frequently worked with the aid of “helpers,” who formed the mechanic’s crew. Plaintiff kept a list of helpers in the event a mechanic wanted to hire one. A mechanic could also “pick up” a helper around town, in which event it was doubtful that plaintiff would even know about the hiring. Friends would sometimes recommend a helper to a mechanic. Wages of helpers were paid by the mechanic for whom they worked, and plaintiff had nothing to do with such payments.

Plaintiff had no requirements as to the hiring or firing of helpers by its mechanics although at times plaintiff’s manager expressed dissatisfaction with, 'a particular helper’s appearance, language, or work habits. 'Since the helper was not employed by plaintiff, Abramson could not order the mechanic to fire the helper in such instances but would merely suggest that the mechanic “straighten him out” so that plaintiff’s customers would not be annoyed. The mechanic, of course, would appreciate that his failure to correct such a situation might well result in a cessation of work orders from plaintiff.

21. Mechanics that worked for plaintiff also performed similar work for plaintiff’s competitors. Abramson was aware of this and he did not approve of it. He told some mechanics not to take further work from competitors and threatened to give them no more work orders if they continued. For the most part, these mechanics complied with plaintiff’s wishes, but others continued to obtain work where-ever they could find it, and it was not uncommon for Abram-son to call an applicator only to find that he was working elsewhere and unavailable to plaintiff for several weeks. This situation, however, did not deter Abramson from offering a work order to such applicator at a later time.

22. Plaintiff owned signs which advertised its business with the slogan “A New Home 'at an Old Address by TriState Developers”. These signs were placed at some but not all jobsites. Plaintiff asked the applicators to post these signs, and sometimes they did. At other times, the salesmen would post the signs on the customer’s property.

23. Mechanics sometimes worked for plaintiff in the capacity of ordinary manual laborers. On ¡rainy days and during slack periods some would work at an hourly rate of pay in plaintiff’s warehouse unloading materials from delivery trucks or delivering materials to jobsites.

One mechanic would sometimes repair the work of another mechanic when a service call was necessary, and a charge would be made for such service call by the mechanic making the repair. Plaintiff tried to charge this cost back to the original mechanic if possible.

If a mechanic damaged a customer’s property in the course of his work, plaintiff would pay for the necessary repairs to correct the damage. Also, if materials at the jobsite were damaged or stolen, plaintiff would replace them without charge to the applicator or customer.

For a period of about six weeks, one applicator and his helper wore uniforms with plaintiff’s name on them. This short-lived effort at advertising was suggested by the applicator but was aborted due to cleaning and other difficulties.

24. A few mechanics represented themselves to the customer as either an employee of plaintiff or as the “foreman” of the job. One mechanic, who was obviously hostile to plaintiff, testified that he was told by plaintiff not to tell customers that he was a subcontractor. He expressed the opinion that he was plaintiff’s employee but freely admitted that he frequently left a job at midday and spent the afternoon drinking in a bar because he didn’t think such absence from the job “was any of the company’s concern.” By way of contrast to these few instances, the record in this case demonstrates that the reliable and experienced applicators who performed jobs for plaintiff felt that they were in business for themselves.

25. No mechanic ever asked plaintiff to withhold any type of federal or state taxes from his compensation, and plaintiff did not withhold any. From his experience with them, Abramson doubted if the mechanics would ever agree to the withholding of any tax. While the record is not entirely satisfactory on the matter, acceptable inference may be made that most of the applicators paid no self-employment taxes on their respective incomes, nor did they withhold employment taxes from the wages paid by them to their own employees, who are referred to above as “helpers”.

26. The final completion of a job was signified to plaintiff by the applicator’s presentation to it of a “completion certificate” signed by the customer. In this connection it was understood that a mechanic was required to rectify any work about which a customer complained before he would be paid in full, and there was no extra compensation for such corrective work. All mechanics understood the importance of obtaining the completion certificate and knew they could expect final payment for the job upon presenting the certificate to Abramson irrespective of whether or not plaintiff had received payment from its customer.

The actual computation of final payment involved a “labor breakdown sheet”, whether the mechanics worked for plaintiff on a labor-and-materials basis or a labor-only basis. These breakdown sheets were usually prepared by Abramson in plaintiff’s office although sometimes they were filled out and presented to Abramson by the applicator. In the latter case, disputes might arise over the rates charged by the applicator especially where the applicator felt entitled to increased compensation 'because of unexpected difficulties encountered on the job. Abramson usually won these arguments.

27. As stated, each job was paid for by plaintiff in full upon completion and presentation of a certificate signed by the owner. Sometimes partial payment, as an advance, would be made to an applicator upon his request before the job was actually completed. These advances, or progress payments, were generally made on Friday for work performed during the week. Advances drawn by applicators were against labor already performed and not against labor to be performed. The amounts of such advance payments were later credited against the total amount due the applicator upon completion of a job.

28. Plaintiff usually paid an applicator by check drawn to his order alone. Infrequently, plaintiff would write more than one check where more than one applicator was working a job, but the general practice was to issue and deliver only one check. The recipient applicator would then pay the helpers and split the balance with 'his partner-applicator, if he had one.

29. Plaintiff desired that mechanics carry their own workmen’s compensation and liability insurance, and at least three of them did so. Plaintiff paid the premiums for those applicators who did not carry such insurance themselves in order to protect itself. However, in an indemnity-type agreement executed by some applicators, they agreed to hold plaintiff harmless from liability under any claim made against plaintiff by the applicators’ employees.

Plaintiff provided no group hospitalization or any other type of employee benefit plan such as vacation or year-end bonus plans. It did not pay unemployment insurance to the State of Maryland on its several applicators.

30. Some applicators were licensed contractors operating under licenses issued by the State of Maryland. None of the applicators were members of a labor union.

31. The Internal Revenue Service made a determination that plaintiff’s salesmen and mechanics were common law employees and assessed the plaintiff for the employment taxes which it asserted should have been withheld, a portion thereof matched, and the total paid to defendant.

32. Plaintiff made payments to the defendant of Federal Insurance Contribution Act taxes (FICA) Federal Unemployment Taxes (FUTA), and Income Withholding Taxes in the following amounts for the periods indicated:

Plaintiff then filed timely claims for refund of these taxes, which claims the defendant disallowed.

33. Plaintiff timely filed this suit on December 6, 1972. Defendant filed a counterclaim on March 25,1974, which was based on the compensation paid to the salesmen, the stone mechanics, and the siding applicators. For purposes of trial, the defendant has dismissed the counterclaim with respect to the salesmen and stone applicators, leaving only the employment status of the siding applicators at issue.

ultimate findings of fact

34. The applicators were skilled and experienced craftsmen who possessed the ability, without supervision or direction, to perform the work required by the specifications contained in the work orders.

35. The applicators performed their work on their own time schedule, selected their own help, and chose their own partners in the course of performing the contract jobs.

36. All applicators owned and furnished at considerable expense their own tools, equipment, and transportation vehicles without reimbursement therefor by the plaintiff.

37. All applicators were paid on a per job basis at rates negotiated with the plaintiff. The (rates of payment differed among the applicators for the same work depending upon their prior record with plaintiff and plaintiff’s need for their services from time to time.

38. They were free to accept or reject jobs as they chose, and as opportunities presented themselves would perform jobs on their own account and for plaintiff’s competitors.

39. Other than being expected to follow work order requirements of a kind usually contained in siding application specifications so that the job would be accomplished in accordance therewith, the applicators received no instructions from the plaintiff as to the method or manner in which the work was to be done, plaintiff’s main interest being ultimate satisfaction of its customers.

40. In only one instance was an applicator’s work terminated during its progress. If plaintiff was dissatisfied with the work of a particular applicator, it would simply not offer him another work order.

41. Plaintiff had the right to control only the result to be accomplished by the applicators. It did not have the right to control the manner and method in which the work was to be performed.

CONCLUSION or LAW

Upon the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover, and judgment is entered to that effect, with the determination of the exact amount of recovery to be reserved for further proceedings under Rule 131(c) in accordance with this opinion. Defendant’s counterclaim is dismissed. 
      
       The detailed facts of the case are set forth In the findings of fact below. They will be summarized here only to the extent necessary to explain the basis for decision.
     
      
       Plaintiff has also utilized the services of other individuals whose status originally was, but no longer is, controverted. Its bookkeeper-secretary, telephone solicitors, and expediters have now been conceded by Tristate to be Its employees. In turn, the Government no longer contends for employee status of plaintiff's commission-salesmen and stone applicators.
     
      
       Although on a “nose-count” approach, most of the decisions arrive at a conclusion of independent contractor status for applicators.
     
      
       It was also understood that Interested applicators were tree to reject any proffered work order, and although such refusals were rare, they did not prejudice the rejecting applicator from, being offered subsequent work ordera
     
      
       Tristate owned no trucks or tools other than (for a short period) a brake for forming aluminum which a few applicators used occasionally.
     
      
       Any faulty work had to be corrected by the applicator to the customer’s satisfaction without further compensation.
     
      
      
         With one exception. At the suggestion of one of its applicators, he and his helper obtained uniforms at their own cost with Tristate’s name printed thereon. After several weeks, the practice was abandoned.
     
      
       At times, Abramson expressed dissatisfaction -with a particular helper’s appearance, language, or work habits which might be offensive to Tristate’s customers, but he did not consider that he had the power to fire such helper. He could withhold further work orders from the applicator Involved.
     
      
       On some occasions Abramson might simply outline a work order in a telephone conversation with an experienced applicator in lieu of furnishing him a written work order.
     
      
       As in the case of most outdoor construction activity, home improvement work tends to be seasonal in nature, the winter months being relatively slack.
     
      
       As stated by one applicator-witness, “Eventually X got my [price].” (Tr. 370).
     
      
       One applicator liked to work for plaintiff because its checks did not “bounce". Another showed hostility towards plaintiff, a subjective feeling which was probably attributable to a personality clash with one of plaintiff’s expediters.
     
      
       In this agreement the plaintiff Is referred to as the “Contractor” and the applicator is referred to as the “Subcontractor”. Except for this agreement, which was not In effect during the entire period Involved, there was no written agreement between plaintiff and the applicators defining their relationship.
     