Appellants' two points on appeal are interrelated and will be discussed jointly. In essence, Appellants argue that the trial court erred in granting summary judgment in favor of Respondent because, contrary to the court's finding, the contractual clauses were exculpatory in nature but do not comply with the requirements of Alack with regard to such
clauses. We give no deference to the trial court's grant of summary judgment, as the propriety of summary judgment is strictly an issue of law. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We use the same principles employed by the trial court in determining whether to grant summary judgment. Id. Furthermore, we view the record in the light most favorable to the non-movant. Id. All facts set forth by affidavit or otherwise in support of summary judgment are taken as true unless contradicted by the non-movant's response. Id. A defending party is entitled to summary judgment if he can show: (1) facts that negate any one of the claimant's elements facts, (2) that the non-movant, after an adequate period of discovery, has not been able to produce, and will not be able to produce, evidence sufficient to allow the trier of fact to find the existence of any one of the claimant's elements, or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support the movant's properly- pleaded affirmative defense. Regardless of which of these three means is employed by the "defending party," each establishes a right to judgment as a matter of law. Where the facts underlying this right to judgment are beyond dispute, summary judgment is proper. Id. at 381. Once movant has met this burden, the non-moving party may only avoid summary judgment being entered against him/her if that party can "show--by affidavit, depositions, answers to interrogatories, or admissions on file--that one or more of the material facts shown by the movant to be above any genuine dispute is, in fact, genuinely disputed." Id. In its motion, Respondent relied on the following contentions: (1) it was not vicariously liable for the alleged negligence of Stafford because he was under the control of Caballero and was, therefore, his "borrowed servant"; and (2) the indemnity and hold harmless clauses in the contracts should be enforced because they are not "pure exculpatory clauses . . . because the language does not shift fault of [Respondent] itself; rather it merely defines which of the contracting parties is responsible for the performance of [Stafford]." In responding to the motion, Appellants contended there were genuine issues of fact regarding whether Stafford was a "borrowed servant" of Caballero, and that the indemnity and hold harmless clauses of the contracts constituted exculpatory clauses that were impermissibly vague and ambiguous and therefore not effective, under this scenario. I. BORROWED SERVANT DEFENSE In the present case, Appellants allege that Respondent is vicariously liable for any injuries resulting from
Stafford's negligence. Under the doctrine of respondeat superior, Respondent is vicariously liable for Stafford's negligence only if, at the time of the accident, Stafford was Respondent's employee and was engaged in an activity within the course and scope of his employment. Burrell ex rel. Schatz v. O'Reilly Automotive, Inc., 175 S.W.3d 642, 647 (Mo.App. S.D. 2005). However, "[t]he borrowed servant doctrine can block a general employer's vicarious liability for its employee's negligence." Wren v. Vaca, 922 S.W.2d 408, 410 (Mo.App. W.D. 1996). Therefore, if Stafford was the "borrowed servant" of Caballero at the time of the accident, vicarious liability cannot be imposed on Respondent. "The core of the 'borrowed servant' defense is that the general employer [Respondent in this case] has surrendered to the borrower [Caballero in this case] all control over the employee, so that the employee has become, with respect to the work for which he was loaned, exclusively the employee of the special employer or borrower." Huff v. Belford Trucking Co., 809 S.W.2d 71, 73 (Mo.App. W.D. 1991). The essential elements necessary to establish a "borrowed servant" relationship are as follows: (a) consent on the part of the employee to work for the special employer; (b) actual entry by the employee upon the work of and for the special master pursuant to an express or implied contract so to do; and (c) power of the special employer to control the details of the work to be performed and to determine how the work shall be done and whether it shall stop or continue. Ballard v. Leonard Bros. Transport Co., Inc., 506 S.W.2d 346, 350 (Mo. 1974) (citations omitted). "To escape liability the general employer must surrender full control of the employee in the performance of the particular work, it not being sufficient if the servant is partially under the control of a third party." Koirtyohann v. Washington Plumbing & Heating Co., 471 S.W.2d 217, 219-20 (Mo. 1971). "If the general employer retains some control over the employee as he goes about the work for which he has been lent and borrowed, the 'borrowed servant' defense . . . is not available to the general employer." Huff, 809 S.W.2d at 73. The mere fact that an employee obeys the orders of the temporary employer does not necessarily make that employee a "borrowed servant" of the temporary employer. Brickner v. Normandy Osteopathic Hosp., Inc., 746 S.W.2d 108, 114 (Mo.App. E.D. 1988). By the same token, "in the leasing of equipment and operators to another, the mere fact that the general employer continues to pay the operator's wages, the gas, oil and other expense, and is responsible for maintenance, does not prevent the operator from becoming a [borrowed servant] of the lessee." Ballard, 506 S.W.2d at 351. Respondent argues that "[t]he [PSA], pursuant to its own provisions and read in conjunction with the [ICOA], clearly and unambiguously provides that a driver supplied to Caballero at his request – such as [Stafford] – was the
borrowed servant of Caballero." The ICOA provides that "[Respondent] shall have exclusive possession, control and use of the Equipment and complete responsibility for the operation of the Equipment." Pursuant to the ICOA, Caballero further agreed to make the equipment available to Respondent in order to transport freight for Respondent's customers. Respondent, therefore, has exclusive control over the leased equipment, and dictates where and how freight is to be delivered. The PSA provides that Caballero is responsible for the supervision and conduct of Stafford, but also provides that Stafford shall be deemed an employee of Respondent only. Respondent is responsible for dispatching Stafford, and instructs Caballero about the manner in which he is to supervise Stafford: [Caballero] shall require the Drivers to keep and maintain proper daily logs, daily vehicle inspections, on- the-road inspections by law enforcement officers, trip reports and all other records and data necessary to comply with all applicable regulations of the [D.O.T] and such other state and federal agencies having authority over the operation of [Caballero's] equipment. In sum, Respondent instructs Caballero how he is to supervise Stafford while Stafford is driving equipment under the complete control of Respondent. The deposition testimony of Hopkins and Lacy provides that Respondent controlled where and when the load was to be picked up and delivered, and determined the requirements for each haul. We fail to understand how Respondent can have complete control over the equipment operated by Stafford, and dictate the manner in which Caballero is to supervise Stafford, but at the same time have relinquished total control over Stafford to Caballero. In arguing that Stafford is the "borrowed servant" of Caballero, Respondent relies heavily on the western district case, Wren. However, that case is distinguishable. In Wren, American Driver Leasing, Inc. ("ADL") leased truck-driver Robert Vaca ("Vaca") to Mo-Kan Express ("Mo-Kan"). 922 S.W.2d at 409. Vaca fell asleep while driving a tractor-trailer unit for Mo-Kan resulting in an accident. Id. Jack Wren ("Wren"), an employee of Mo-Kan, who was in the tractor's sleeping compartment, was injured as a result of the accident. Id. Wren sued both Vaca and ADL. Id. ADL claimed it was not liable for Vaca's negligence because Vaca was the "borrowed servant" of Mo-Kan. Id. at 410. The following facts were undisputed in that case: Vaca received his pay from ADL which had leased Vaca to Mo-Kan. . . . Mo-Kan controlled Vaca's day-to- day duties. Through Wren, it told Vaca when to report for work and where to go and how to perform his duties. ADL paid for Vaca's health insurance, but Mo-Kan reimbursed it for this expense. ADL reserved the right to fire Vaca. It also exercised some control over its drivers by requiring them to obey its company policies and rules. It had a right to withhold payment from drivers who did not obey its policies
and rules. ADL paid workers' compensation benefits for Vaca. Id. at 409-10. In determining that Vaca was the "borrowed servant" of Mo-Kan, the court explained, "ADL established that Mo-Kan controlled the details of Vaca's work. It told him when to drive, where to drive, how to drive, and how to load and unload his cargo. This was sufficient to relieve ADL of liability for Vaca's negligent operation of the tractor-trailer rig." Id. at 410. The court further noted that "ADL's requiring Vaca to obey its general policies and rules had no relevance to the particular work demanded by Mo-Kan. . . . Vaca did not drive unless Mo-Kan told him to drive. ADL had no right to assert control over when Vaca drove, where he drove, or how he drove." Id at 410-11. Respondent argues "[a]s in Wren, the issue before this Court is not whether [Respondent] was [Stafford's] employer – [Respondent] acknowledges that it was. Rather, the issue is who controlled the details of [Stafford's] work in connection with the operation of Caballero's truck[.]" Respondent alleges that the parties "resolved this controlling issue on December 10, 2002[,] when they contractually agreed that Caballero 'shall be responsible for the supervision and conduct of the Drivers.'" We disagree. In Wren, the "borrowed servant" was leased to another trucking company; therefore the leasing employer had absolutely no control over when Vaca was to report for work, where he was to go and how he was to perform his duties. 922 S.W.2d at 410-11. In the present case, Stafford was not leased to another trucking company but to Respondent's own independent contractor. This is an important distinction, because while Caballero agreed to supervise Stafford, Stafford was at all times performing work at the direction of Respondent. As such, Respondent told Stafford, whether through Caballero or directly, when to report for work, where to haul freight, and how to perform his duties. The trial court found that "[t]he language included in the agreements is somewhat convoluted on the issue of which party has control of driver Stafford." We agree with the trial court's apparent conclusion that there remain material facts in dispute regarding the existence of the "borrowed servant" relationship. Certainly, the record does not permit us to conclude that Respondent was entitled to a judgment as a matter of law on that theory. The PSA specifically provides that Stafford "shall at all times be deemed to be and shall be employed by [Respondent] only." Since summary judgment would not have been appropriate on the issue of "borrowed servant," Respondent would be entitled to summary judgment only if the indemnity and hold harmless provisions contained in the ICOA and PSA, purporting to release Respondent from liability for the actions of Stafford, are valid and enforceable. The issue, therefore, is whether the contract language is effective to relieve Respondent of vicarious liability as a matter of law.
II. ENFORCEABILITY OF INDEMNITY AND HOLD HARMLESS PROVISIONS The relevant contractual provisions in the ICOA and PSA are labeled "Hold Harmless and Indemnification," but the parties are in disagreement regarding whether they are indemnity clauses, exculpatory clauses, or both. In its amended motion to dismiss, Respondent asserts that the contractual provisions "are not pure exculpatory clauses . . . because the language does not shift fault of [Respondent] itself; rather, it merely defines which of the contracting parties is responsible for the performance of the 'leased' driver." Similarly, the trial court found that the agreements do not "exculpate [Respondent] from their own negligence, but rather . . . make clear as between [Respondent and Caballero], which party will be responsible for a third party's negligence." An "exculpatory clause" is "[a] contractual provision relieving a party from liability resulting from a negligent or wrongful act." Black's Law Dictionary 608 (8th ed. 2004). An "indemnity clause" is "[a] contractual provision in which one party agrees to answer for any specified or unspecified liability or harm that the other party might incur. – Also termed hold-harmless clause; save-harmless clause." Id. at 784. The Supreme Court of Missouri in Alack, 923 S.W.2d at 334, cites the Supreme Court of Texas case Dresser Industries, Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508-09 (Tex. 1993), in its analysis of the requirements necessary to release a party to a contract from its own negligence. In Dresser, the Supreme Court of Texas explains: [A] release surrenders legal rights or obligations between the parties to an agreement. It operates to extinguish the claim or cause of action as effectively as would a prior judgment between the parties and is an absolute bar to any right of action on the released matter. For these reasons, a release is expressly designated as an affirmative defense. . . . An indemnity agreement is a promise to safeguard or hold the indemnitee harmless against either existing and/or future loss liability. The agreement creates a potential cause of action in the indemnitee against the indemnitor. 853 S.W.2d at 508 (citations omitted). An exculpatory clause or release operates in a procedurally different manner than an indemnity or hold harmless provision. If a motorist, not party to the contracts, was injured in this accident due to the negligence of either Stafford or Caballero, and the motorist recovered damages from Respondent, then pursuant to the contracts, Respondent could bring
an indemnity action against Caballero. On the other hand, while labeled "Hold Harmless and Indemnification," the relative provisions in this case are being used by Respondent as an affirmative defense, which, if enforceable, would release Respondent from liability for Stafford's negligence. As previously set out, the trial court characterized the relative agreements as follows: "We have two entrepreneurs involved in a freight hauling venture enter into agreements, not to exculpate [Respondent] from their own negligence, but rather to make clear as between them, which party will be responsible for a third party's negligence." With that characterization in mind the trial court related that "[t]he contract between the parties on the 'hold harmless' issue is precise, clear and unambiguous, and need not include the 'magic' language suggested in Alack." We disagree with the trial court's analysis. As set out above, in the absence of a "borrowed servant" relationship, Respondent is responsible for the negligent acts of its employees under the doctrine of respondeat superior. "[R]espondeat superior imposes vicarious liability on employers for the negligent acts or omissions of employees or agents as long as the acts or omissions are committed within the scope of the employment or agency." Lindquist v. Scott Radiological Group, Inc., 168 S.W.3d 635, 655-56 (Mo.App. E.D. 2005) (emphasis supplied). The parties do not dispute that Stafford is the employee of Respondent, and the PSA specifically provides that Stafford "shall at all times be deemed to be and shall be employed by [Respondent] only." Through the doctrine of respondeat superior, Stafford's negligence would be imputed to Respondent. Since the contractual clauses here are being sought to relieve Respondent from liability for its employee's negligence, they are exculpatory in nature. See O'Connell v. Walt Disney World Co., 413 So.2d 444, 446 (Fla. Dist. Ct. App. 1982) (explaining that an indemnification clause which attempts to shift the responsibility for the payment of damages back to the injured party produces the same result as an exculpatory provision). "Although exculpatory clauses in contracts releasing an individual from his or her own future negligence are disfavored, they are not prohibited as against public policy." Twin Chimneys Homeowners Ass'n v. J.E. Jones Const. Co., 168 S.W.3d 488, 497 (Mo.App. E.D. 2005). Exculpatory clauses are strictly construed against the party seeking their enforcement. Gates v. Sells Rest Home, Inc., 57 S.W.3d 391, 397 (Mo.App. S.D. 2001). "[T]he rule is clear 'that a contract provision exempting one from liability for his negligence will never be implied but must be clearly and explicitly stated.'" Id. (quoting Poslosky v. Firestone Tire & Rubber Co., 349 S.W.2d 847, 850 (Mo.1961)). "Whether the contract or purported exculpatory clause is clear and explicit or ambiguous and nonexculpatory is a matter of law[.]" Id. In Alack, 923 S.W.2d at 337-38, the Supreme Court of Missouri set out a bright- line test for courts to apply when assessing whether an exculpatory clause releases a party from its own negligence. "[E]xculpatory language must effectively notify a party that he or she is releasing the other party from claims arising from the other party's own
negligence. . . . General language will not suffice." Id. at 337. The Court determined that an exculpatory clause purporting to shield a health club facility from liability for "any damages," "any injuries," and "any and all claims" arising from a member's use of its facilities was ambiguous. Id. "As extensive as it is, the exculpatory clause at issue in this case is ambiguous because it did not specifically state that a member was releasing Vic Tanny for its own future negligence." Id. The Court noted that "one may never exonerate oneself from future liability for intentional torts or for gross negligence, or for activities involving the public interest," therefore "[a] contract that purports to relieve a party from any and all claims but does not actually do so is duplicitous, indistinct and uncertain." Id. The Court then related that: The better rule is one that establishes a bright-line test, easy for courts to apply, and certain to alert all involved that the future 'negligence' or 'fault' of a party is being released. The words 'negligence' or 'fault' or their equivalents must be used conspicuously so that a clear and unmistakable waiver and shifting of risk occurs. There must be no doubt that a reasonable person agreeing to an exculpatory clause actually understands what future claims he or she is waiving. Id. Similarly, "[a] contract of indemnity will not be construed so as to indemnify one against loss or damage resulting from his own negligent acts unless such intention is expressed in clear and unequivocal terms." Nusbaum v. City of Kansas City, 100 S.W.3d 101, 105 (Mo. banc 2003). We disagree with the trial court and believe Alack is applicable to the case at bar. Where a party, such as Respondent, wishes to release itself from vicarious liability for the negligent acts of its employees, it must follow the rule of Alack.(FN2) The language in the PSA provides that Caballero agrees not to hold Respondent or Stafford "responsible for any damage or injuries suffered by [Caballero] . . . as a result of any action by [Stafford] and hereby releases [Respondent] and [Stafford] from any such claims." Likewise, the language contained within the ICOA indicates that Caballero will indemnify and hold Respondent harmless from "liabilities," "expenses," "claims, damages, judgments, awards, settlements, investigations, cost and attorneys' fees." The relative provisions do not use the words "negligence" or "fault"' or their equivalents, therefore such provisions do not relieve Respondent from liability for Stafford's negligence. In holding that Respondent has not contractually released itself from liability for Stafford's negligence, we do not ignore the Supreme Court of the United State's holding in Transamerican Freight Lines, Inc. v. Brada Miller Freight Systems, Inc., 423 U.S. 28, 96 S.Ct. 229, 46 L.Ed.2d 169 (1975). In that case, the Court held that "the presence in an equipment lease of an indemnification clause directed to the lessor's negligence is not in conflict with the safety concerns
of the Commission or with the regulations it has promulgated." Id. at 41. The Court noted that "[a]lthough one party is required by law to have control and responsibility for conditions of the vehicle, and to bear the consequences of any negligence, the party responsible in law to the injured or damaged person may seek indemnity from the party responsible in fact." Id. at 40. In the present case, through the doctrine of respondeat superior, Respondent is the party responsible in fact, and is therefore seeking to release itself from its own negligence. As previously set out, in Missouri, if a party wishes to release itself from its own negligence, "[t]he words 'negligence' or 'fault' or their equivalents must be used conspicuously so that a clear and unmistakable waiver and shifting of risk occurs." Alack, 923 S.W.2d at 337. The trial court erred in granting partial summary judgment in favor of Respondent. The relevant contractual provisions do not include the words "negligence" or "fault" or their equivalents as required by Alack, and therefore, are not effective to release Respondent from liability for the alleged negligence of Stafford. Furthermore, Respondent has not demonstrated that it was entitled to judgment as a matter of law, because there are genuine issues of material fact regarding Respondent's "borrowed servant" defense. Accordingly, the summary judgment entered by the trial court must be, and is hereby, reversed and the case remanded for further proceedings. Footnotes: FN1.Stafford's motion to dismiss was denied, but the trial court entered an order in which it "expressly determine[d] that there [was] no just reason for delay." FN2.We do not ignore the principal that less precise language may be effective in agreements negotiated at arms length between equally sophisticated commercial entities. See Alack, 923 S.W.2d at 338 n. 4; see also Purcell Tire & Rubber Co., Inc. v. Executive Beechcraft, Inc., 59 S.W.3d 505, 510-11 (Mo. banc 2001). However, we can find nothing in the record supporting the proposition that Caballero is a sophisticated commercial entity. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.