The Fifth Circuit Court of Appeals recently ruled on an indemnity issue. Mid-Continent Cas. Co. v. Davis, No. 11-10142 (5th Cir. June 8, 2012), available at http://www.ca5.uscourts.gov/opinions/pub/11/11-10142-CV0.wpd.pdf.
A construction worker died, and his family filed a wrongful death action against the construction company he worked for. The district court concluded that the construction company’s insurer had a duty to indemnify the construction company per the applicable insurance agreement because the worker was an independent contractor and not an employee.
In Texas, the legal test for determining independent contractor status is the right to control. On appeal, the Court examined five factors to assess whether the construction worker was an employee or an independent contractor. The Court held that the construction worker was an independent contractor because he provided his own tools, did not have social security or federal income taxes withheld, was issued a 1099, was not provided workers’ compensation coverage, and had discretion over the details of how his work was to be completed. Because of this conclusion, the Court affirmed the district court’s determination that the insurer had a duty to indemnify the construction company in the underlying wrongful death lawsuit.
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