January 11, 2010 – Monica Eloise Korba, individually and as Personal Representative of the Estate of Brandy Rose Korba, deceased, and as Next Friend for Bryce Aaron Korba, a minor; Ruby Gerandt, individually and as Personal Representative of the Estate of Alicia Gerandt, deceased; Richard Hooke; and Steven Rouse v. Atlantic Circulation, Inc., a Delaware Corporation; Jaime R. Miller; Michelle R. Sanchez; Does 1-20 inclusive; Doe Managers 1-5 inclusive; and Doe Corporations 1-5 inclusive, No. 28,774

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: January 11, 2010
NO. 28,774.

MONICA ELOISE KORBA, individually and as Personal
Representative of the Estate of BRANDY ROSE KORBA,
deceased, and as Next Friend for BRYCE AARON KORBA, a
minor; RUBY GERANDT,, individually and as Personal
Representative of the Estate of ALICIA GERANDT,
deceased; RICHARD HOOKE; and STEVEN ROUSE,

Plaintiffs-A ppellants,
V.

ATLANTIC CIRCULATION, INC., a Delaware
Corporation; JAIME R. MILLER; MICHELLE R.
SANCHEZ; DOES 1-20 indusive- DOE MANAGERS
1-5 inclusive; and DOE CORPORATIONS 1-5 inclusive,

Defendants-A ppellees.

APPEAL FROM THE DISTRICT COURT OF SAN JUAN COUNTY
John A. Dean, Jr., District Judge

The Branch Law Firm
Tumer W. Branch

Albuquerque, NM

for Appellants

Gerding & O’ Loughlin, P.C.
Michael T. O’ Loughlin
Farmington, NM

for Appellees

OPINION
VIGIL, Judge.
{1} 	This is a personal injury case in which Atlantic Circulation, Inc., a magazine
subscription processing company, obtained summary judgment on the basis that
magazine sales managers and salespersons were not its employees. Plaintiffs appeal,
and we affirm.
BACKGROUND
{2} 	Sales managers and salespersons who process sales subscriptions through
Atlantic Circulation were riding in a 1992 Chevrolet Suburban overloaded with fifteen
people when a rear tire blew out, resulting in a single-vehicle accident. The vehicle
was driven by Jamie Miller and owned by Michelle Sanchez. Two persons, Brandy
Korba and Alicia Gerandt were killed, and two others, Richard Hooke and Steven
Rouse, were injured. Korba and her estate, Gerandt and her estate, Hooke, and Rouse
are Plaintiffs and allege a variety of claims based upon the accident. The liability of
Atlantic Circulation hinges on whether it was the employer of Miller, Sanchez, Korba,
Gerandt, Hooke, or Rouse at the time of the accident.
{3} 	Atlantic Circulation moved for summary judgment on the basis that it was not
the employer of Miller, Sanchez, Korba, Gerandt, Hooke, or Rouse. The district court
granted summary judgment and dismissed the complaint with prejudice. Plaintiffs

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appeal.
STANDARD OF REVIEW
{4} 	Summary judgment is proper “if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Rule 1-056(C) NMRA. Whether this standard is
satisfied presents a question of law, which we review de novo. Self v. United Parcel
Serv., Inc., 1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. 	As the movant,
Atlantic Circulation was required to make a prima facie showing that it was entitled
to summary judgment. See Savinsky v. Bromley Group, Ltd., 106 N.M. 175, 176, 740
P.2d 1159, 1161 (Ct. App. 1987) (noting that the defendant satisfied its burden to
obtain summary judgment by establishing it did not have the ability to control the
work of the alleged employee). 	Once Atlantic Circulation satisfied its burden, the
burden shifted to Plaintiffs to establish the existence of a genuine issue of material
fact. 	Ciup v. Chevron U.S.A., Inc., 1996-NMSC-062, ¶ 7, 122 N.M. 537, 928 P.2d
263 (“[T]he opponent must come forward and establish with admissible evidence that
a genuine issue of fact exists.”).
DISCUSSION
A. 	Distinguishing an Employee From an Independent Contractor

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{5} 	New Mexico courts have utilized the right to control test to determine whether
an employer-employee or independent contractor relationship exists. Celaya v. Hall,
2004-NMSC-005, ¶ 11, 135 N.M. 115, 85 P.3d 239. The test focuses on “whether the
principal exercised sufficient control over the agent to hold the principal liable for the
acts of the agent.” Id. ¶ 12. Recognizing that the right to control test is more complex
and “demands a more nuanced approach, than simply determining the degree of
control over the details or methods of the work[,]” our Supreme Court has adopted the
method used by the Restatement (Second) of Agency § 220(a)-(j) (1958) to
distinguish an employee from an independent contractor. Celaya, 2004-NMSC-005,
¶ 14.
{6} 	The Restatement approach continues to consider the degree of control exercised
by the principal over the details of the agents’s work, but this factor is not exclusive.
Id. ¶ 15. The analysis also requires an assessment of other factors which include: “1)
the type of occupation and whether it is usually performed without supervision; 2) the
skill 	required 	for 	the 	occupation; 	3) 	whether 	the 	employer 	supplies 	the
instrumentalities or tools for the person doing the work; 4) the length of time the
person is employed; 5) the method of payment, whether by time or job; 6) whether the
work is part of the regular business of the employer; 7) whether the parties intended
to create an employment relationship; and 8) whether the principal is engaged in

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business.” 	Id. 	A complete analysis may require the court to evaluate “the
circumstances unique to the particular case.” Id. In the court’s consideration of the
Restatement factors,
“[N]o particular factor should receive greater weight than any other,
except when the facts so indicate, nor should the existence or absence of
a particular factor be decisive. Rather, the totality of the circumstances
should be considered in determining whether the employer has the right
to exercise essential control over the work or workers of a particular
contractor.”
Id. (alteration in original) (quoting Harger v. Structural Servs., Inc., 121 N.M. 657,
667, 916 P.2d 1324, 1334 (1996)).
B. 	The Undisputed Material Facts
{7} 	The material facts establishing the relationships of sales managers and
salespersons with Atlantic Circulation are undisputed. 	Atlantic Circulation is a
processing center for direct sales of magazine subscriptions. Atlantic Circulation’s
practice is to enter into independent contractor agreements with sales managers
throughout 	the 	country. 	Sales 	managers 	in 	turn 	each 	hire 	their 	own 	sales
crews—salespersons who sell magazine subscriptions to consumers. 	It is also the
practice for sales managers to enter into a separate independent contractor agreement
with salespersons, called an “Agreement for Subscription Solicitation Services.”
{8} 	Atlantic Circulation has independent contractor agreements with sales managers
Korba and Sanchez. 	There is no agreement in the record for Miller, who was the

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driver. 	He is a defendant, but was never served. 	However, Hooke, who was a
salesperson and a passenger in the van, testified that Miller was also a sales manager,
and his testimony is not disputed. Each sales manager operates his or her crew as a
separate company, with a different name. Korba’s sales company was called Korba
Sales, and Sanchez’s sales company was called either Power Sales, Inc., or Strictly
Business, Inc. The independent contractor agreement between Atlantic Circulation
and the sales managers expressly states, “[Atlantic Circulation] desires to engage
Contractor as an independent contractor to perform certain solicitation for magazine
and book subscriptions and Contractor desires to perform the solicitation as an
independent contractor under the terms and conditions set forth herein.” 	The
agreement further provides, “The parties intend this Agreement to create an
independent contractor relationship and not an employer-employee relationship.
Nothing 	in 	this 	agreement 	shall 	be 	interpreted 	or 	construed 	to 	create 	an
employer-employee relationship.”
{9} 	Plaintiffs rely upon Chevron Oil Co. v. Sutton to argue that the independent
contractor agreements are not dispositive of the issue of whether there is an employee-
employer relationship. 	85 N.M. 679, 681, 515 P.2d 1283, 1285 (1973) (“[T]he
manner in which the parties designate a relationship is not controlling.”). While we
agree that the agreements on their own do not establish that the sales managers were

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independent contractors, the agreements are persuasive under our totality of the
circumstances analysis. See Restatement (Second) of Agency § 220(2)(i) (listing one
factor as “whether or not the parties believe they are creating the relation of master
and servant”); see also In re Comp. of Henn, 654 P.2d 1129, 1131 (Or. Ct. App. 1982)
(“While the fact that either or both of the parties considered their relationship to be
that of independent contractor is not controlling, a plain statement that the parties
intend the relationship of independent contractor and not employe[e] is not always to
be disregarded.” (citation omitted)). 	The contractual agreements between Atlantic
Circulation and the sales managers, as well as the salespersons, are highly indicative
of the parties’ state of mind concerning the nature of their relationship.
{10} 	According 	to 	Atlantic 	Circulation, 	sales 	managers 	are 	paid 	through 	a
credit/debit system which keeps a running track of commissions due and money owed
by the sales managers. 	Ongoing expenses may be paid through the use of a card
similar to a credit or debit card, but those expenses are deducted from the sales
manager’s running account with Atlantic Circulation. Atlantic Circulation produced
Korba’s credit and expense sheet which contains a record of the credits and debits to
her account while as a sales manager. To the extent that Plaintiffs rely upon Hooke’s
testimony to establish a material fact concerning the method of compensation, Hooke
himself testified that he had no personal knowledge of the “com card” and that the

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managers never told him anything. 	See Rule 1-056(E) (“Supporting and opposing
affidavits shall be made on personal knowledge, shall set forth such facts as would be
admissible in evidence, and shall show affirmatively that the affiant is competent to
testify to the matters stated therein.”).
{11} 	Plaintiffs also argue summary judgment is inappropriate because they claim
there is a dispute over whether Atlantic Circulation paid for the maintenance and
repairs to the vehicle, as well as other expenses sales managers incurred. Assuming
Atlantic Circulation paid for the repairs to the vehicle and for other expenses, this does
not establish that Atlantic Circulation exercised a right of control over the details of
the sales managers’ tasks. Plaintiffs have failed to present any evidence that Atlantic
Circulation determined where the sales teams traveled, when vehicles repairs were to
be made, what expenses were to be incurred, or any other indication that Atlantic
Circulation had exercised a right to control the details of the sales teams work.
{12} 	Sales managers are free to hire and fire as many or as few salespersons as they
wish. Sales managers also determine where and when to solicit subscriptions. Atlantic
Circulation does not determine work hours or work areas for the sales crews. There
are no production quotas required of the sales managers, nor are they required to sell
magazine subscriptions only for Atlantic Circulation. Atlantic Circulation does not
withhold state and local taxes from the sales managers.

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{13} 	Gerandt, Hooke, and Rouse were salespersons. 	While there is a written
agreement between Reagan and Hooke in the record, Hooke disputes its authenticity,
and Atlantic Circulation conceded that the agreement was not signed by him for
purposes of the summary judgment motion. However, there is no dispute that Hooke
was a salesperson. 	In the “Subscription Solicitation Services” agreements, sales
managers are identified as the “Sales Company,” and these agreements also expressly
state that the salesperson is an independent contractor and not an employee of the
“Sales Company.” 	The Sales manager agrees to provide the salesperson with
information 	concerning 	the 	necessary 	procedures 	for 	magazine 	subscription
processing, the forms to be used and to make the forms, price lists, and other printed
material available to the salespersons.
{14} 	When soliciting magazine subscriptions, salespersons display a laminated
identification card to potential customers with the name of the salesperson, the name
of Atlantic Circulation, the words, “magazine sales subscription,” and information
about the salespersons’ participation in a contest to sell magazines. Plaintiffs rely on
Singer v. Star, 510 So. 2d 637 (Fla. Dist. Ct. App. 1987), to argue this is a material
fact requiring reversal. However, Singer is not applicable. First, summary judgment
was improperly granted in that case because discovery was outstanding. Id. at 639.
Secondly, the plaintiffs in that case were relying on a theory of apparent authority to

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hold a newspaper company liable for the acts of one of its salespersons, and Plaintiffs
successfully contended certain evidence, which included identification badges issued
to minors by the newspaper company who were selling its newspapers, precluded
summary judgment on this theory of liability. Id. at 640-41. Apparent authority as
a theory of liability is not an issue in this case.
{15} 	If a customer pays for a magazine subscription by check, the customer makes
the check payable to Atlantic Circulation. Salespersons give customers a receipt in
the name of Atlantic Circulation, and customer service calls are directed to Atlantic
Circulation. 	Customers are also given Atlantic Circulation’s web site address by
salespersons so they can verify the salesperson’s connection with Atlantic Circulation,
and how many subscriptions that salesperson sold. If a salesperson is away from his
or her home state while selling magazine subscriptions and wants to go home, Atlantic
Circulation arranges for a bus ticket, but the sales managers pay for the ticket. In the
context of this case, these facts are insufficient to create a genuine issue of material
fact on the question of whether Atlantic Circulation had an employee-employer
relationship with the sales crews. These procedures are not “control” in the sense that
Atlantic Circulation directed the operation of the sales crews. 	Instead, they are
incidental requirements necessary to the relationship between a magazine subscription
processing company and independently operating magazine subscription solicitors.

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C. 	Analysis of the Material Facts
{16} 	We apply the Restatement approach as described in Celaya to determine
whether Atlantic Circulation established a prima facie showing that it was entitled to
summary judgment and whether Plaintiffs then produced admissible evidence that a
genuine issue of material fact exists on whether Atlantic Circulation was the employer
of Miller, Sanchez, Korba, Gerandt, Hooke, or Rouse at the time of the accident. We
consider the degree of control exercised by Atlantic Circulation over the details of the
work performed by the managers and salespersons, and also assess what the summary
judgment record shows as to the other factors set forth in Section 220(a)-(j) of the
Restatement (Second) of Agency. Celaya, 2004-NMSC-005, ¶ 15.
{17} 	As to the sales managers, Korba, Sanchez, and Miller, there is no issue of
material fact for a jury to decide. 	The sales managers enter into independent
contractor agreements with Atlantic Circulation, and each operates his or her crew as
a separate company to sell magazine subscriptions to consumers. Sales managers are
free to hire and fire their salespersons, and they determine where and when to solicit
subscriptions. 	The sales managers have no production quotas, and they are not
required to sell only for Atlantic Circulation. 	Sales managers are paid through a
credit/debit system which keeps a running track of commissions due and money owed
by the sales managers, and Atlantic Circulation does not withhold state and local taxes

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from sales managers.
{18} 	We find Bond v. Harrel, 108 N.W.2d 552 (Wis. 1961) persuasive. In this case,
the question presented was whether the manager of a magazine salesperson’s crew
was an employee or independent contractor of a magazine subscription processing
company when his automobile was involved in a motor vehicle accident, which
resulted in the death of the plaintiff’s decedent. Id. at 553. The magazine subscription
processing company contended it was entitled to summary judgment on grounds that
the sales manager was an independent contractor and not its employee. Id. The court
used a right to control test and concluded the sales manager was an independent
contractor. Id. at 555. As in the case before us, the magazine subscription processing
company operated through solicitation crews and salespersons. Id. at 554. The sales
crews 	were 	free 	to 	travel 	where 	they 	wished 	to 	make 	their 	house-to-house
solicitations. 	Id. 	Crew managers were designated as independent contractors who
hire and make their own contract for compensation with salespersons. 	Id. 	Crew
managers had no quota, they were paid on a commission basis, and they paid their
salespersons out of their commissions. Id. The company furnished the receipt forms,
report forms to be used, envelopes, and sales materials which were to be used by the
sales manager and his crew. Id. The sales manager was also furnished with a field
manager 	credential 	which 	authorized 	him 	and 	the 	members 	of 	his 	crew 	as

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representatives of the company. Id. The company had no sales meeting or training
program. Id. The company did not provide cars or means of transportation, it did not
pay any expenses, and it did not withhold taxes. Id.
{19} 	We also conclude that as to the salespersons, Gerandt, Hooke, and Rouse, there
is no issue of material fact for a jury to decide. Salespersons are hired and fired by
their sales managers independent of Atlantic Circulation. 	Their employment
agreement is with the sales company operated by their respective sales managers, and
not Atlantic Circulation. Atlantic Circulation does not determine work hours or areas
for sales crews—these are decisions which are made exclusively by the sales
managers. In addition, the sales managers tell the sales crews what the procedures are
for processing magazine subscriptions, and they provide their sales crews with the
forms, price lists, and other necessary printed material.
{20} 	Our Supreme Court has previously addressed whether a salesperson is an
employee or independent contractor within the context of our unemployment
compensation statute. Solar Age Mfg., Inc. v. Employment Sec. Dep’t, 103 N.M. 780,
714 	P.2d 	584 	(1986). 	See 	NMSA 	1978, 	§ 	51-1-42(F)(5) 	(2007) 	(defining
“employment” to qualify for unemployment benefits). In deciding the issue, the court
used the right to control test without considering the additional Section 220(a)-(j)
Restatement factors. Solar Age Mfg., Inc., 103 N.M. at 781-82, 714 P.2d at 585-86.

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We therefore consider this decision persuasive, while acknowledging it is not
controlling. 	In Solar Age, the salesperson was free to operate in any location, he
chose his own hours, he was not restricted on the manner of how the sale was
presented, he was allowed to advertise on his own, he was allowed to sell other
products from other wholesalers, including competitors, he was paid on a commission
basis, he had no quotas, sales were completed with Solar Age invoices, and checks
were made payable to Solar Age. Id. Because the salesperson “was free from control
or direction over the performance of his job as a salesperson,” the Supreme Court
concluded that the salesman was not an employee, but an independent contractor. Id.
at 783-84, 714 P.2d at 587-88.
{21} 	Significantly, in deciding Solar Age Mfg., Inc., our Supreme Court specifically
considered In re Compensation of Henn and found it to be persuasive. 	Solar Age
Mfg., Inc., 103 N.M. at 782, 714 P.2d at 586. In re Compensation of Henn concluded
that a traveling magazine salesperson, under circumstances very similar to the case
now before us, was an independent contractor and not an employee. 	654 P.2d at
1130-31. 	The 	salesperson 	sold 	magazine 	subscriptions 	as 	an 	“authorized
representative,” and had a “Representatives’ Agreement” with the company in which
she was designated as an independent contractor. 	Id. at 1129 (internal quotation
marks omitted). The company provided a training session for its salespersons and

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supplied invoices and other materials. Id. at 1130. The plaintiff used her own vehicle
when selling subscriptions, no particular working hours were specified, she was paid
on a commission basis, no income taxes were deducted from commissions, and the
salesperson was free to engage in other employment. Id. at 1129-30. Utilizing a right
to control test, these facts were sufficient for the court to conclude that the salesperson
was an independent contractor. Id. at 1130-31.
{22} 	In Indiana Insurance Co. v. American Community Services, Inc., the Indiana
Court of Appeals decided a nearly identical case. 	768 N.E.2d 929 (Ind. Ct. App.
2002). A processor of magazine subscriptions had independent contractor agreements
with sales managers, who in turn had independent contractor agreements with their
salespersons. Id. at 930. A van owned by a husband-wife crew manager was carrying
a sales crew when it was involved in a single-vehicle accident, and one the of the
salespersons was killed. Id. The court considered the factors set forth in Restatement
(Second) of Agency § 220(a)-(j), and concluded that the magazine salesperson was
an independent contractor and not an employee of the magazine subscription
company. Indiana Ins. Co., 768 N.E.2d at 937. It held, “[g]iven the weight of such
important factors as [the company]’s limited control and supervision, the intent of the
contracting parties, and the existence of multiple layers of independent contracts
between [the company], its crew managers, and salespeople, we find that . . . [the

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salesperson] was not an employee.” Id. at 939.
{23} 	We therefore conclude that based on the record before us, Plaintiffs have not
raised a genuine issue of material fact as to Atlantic Circulation’s right to exercise
essential control over the work of the sales managers or salespersons such that a jury
could find an employee-employer relationship. 	The undisputed facts show the
following. Sales managers enter into independent contractor agreements with Atlantic
Circulation, the terms of which expressly define the relationship. There is no evidence
that Atlantic Circulation controls the details of how sales managers operate daily.
Atlantic Circulation does not determine where sales crews operate, how long they
operate in one location, or how many hours they work. Atlantic Circulation provides
no supervision or direction and sales crews operate autonomously. The salespersons
are expressly hired by each sales manager to work for that sales manager, and the
details of the salesperson’s work is directed and controlled by the sales manager of
each crew, not Atlantic Circulation. Thus, Plaintiffs have not provided any material
facts that would allow a jury to find that Atlantic Circulation had an employee-
employer relationship with Miller, Sanchez, Korba, Gerandt, Hooke, or Rouse at the
time of the accident.
CONCLUSION
{24} 	We affirm the district court order granting Defendant Atlantic Circulation

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summary judgment and dismissing the complaint with prejudice.
{25} 	IT IS SO ORDERED.
________________________________
MICHAEL E. VIGIL, Judge
WE CONCUR:
_________________________________
CELIA FOY CASTILLO, Judge
_________________________________
LINDA M. VANZI, Judge