Factual Scenario 1
Jeremy Jip is not considered Lulu’s employee. Based on the criteria used by the courts to decide whether a worker is categorized as an employee or independent contractor, Jeremy wouldn’t be considered Lulu’s employee. He would be considered an independent contractor because Lulu has no control over the details of Jeremy’s work performance. She does not exercise considerable control of his work, his occupation is distinctly different from that of Lulu’s, his work is usually done without supervision, Lulu does not supply his tools for his occupation, and the job that he’s hired for requires a high degree of skill. Also, his term of employment is only until the house is sold and his one-time fee is paid at the completion of the sale. According to the text, an independent contractor is “a person who contracts with another to do something for him or her but who is not controlled by the other nor subject to the others right to control with respect to his or her physical conduct in the performance of the undertaking. He or she may not be an agent” (Clarkson, Miller, Cross, 2012, p. 625).
Lulu is not liable for Mary and Ollie’s injuries because, even though Jeremy Jip is an agent representing LuLu Lowlife, his day to day activities are still those of an independent contractor, not an employee. According to the text “To determine whether the relationship of the parties is that of employer and servant or that of employer and independent contractor, the primary test is whether the employer retains the right to control the time, manner and method of executing the work” (Clarkson, Miller, Cross, 2012, p. 626). Again, Jeremy’s occupational activities are unsupervised, which is an important factor for determining his employee status. Lulu did not supply Jeremy’s tool, his car, nor did she have any indication that Mary would be a passenger in Jeremy’s personal vehicle.
To understand what fiduciary duties were breached by Jip, first we have to know what fiduciary duties are. According to (Merriam-Webster's Dictionary of Law 1996) “a duty obligating a fiduciary (as an agent or trustee) to act with loyalty and honesty and in a manner consistent with the best interests of the beneficiary of the fiduciary relationship (as a principal or trust beneficiary)” (http://dictionary.findlaw.com/definition/duty.html#sthash.i9k9ZsV9.dpuf).
To relate to this particular scenario, Jeremy Jip would be the fiduciary and his fiduciary duty would be acting in the best interest of Lulu Lowlife, which establishes his fiduciary relationship to Lulu [the principal]. The first fiduciary duty that was breached by Jeremy was, driving Mary Moron and crashing into Ollie Onfoote. The transportation of the perspective purchaser and the wreckless driving of the independent contractor were not in the best interest of the principal [Lulu]. Another fiduciary duty breached by Jeremy was acceptance of a secret commission in the amount of $5,000 as a bonus from Ms. Moron, because fiduciaries may not profit from their relationship with their principals unless they have the principals consent.
Even though Lulu Lowlife became aware of the $5,000 bonus that Jeremy Jip accepted from Mary Moron, she knowingly completed the conveyance contract for the asking price of the farmhouse in the amount of $31,500. When Lulu hired Jeremy Jip it is implied that their agreement gave Jeremy exclusive agency which was Lulu’s consent to not interfere with Jeremy’s duties to sell the farm house. I would say that the conveyance contract was enforceable because it would violate the exclusive agency and expose Lulu to liability for Jeremy’s lost profits. It is also possible that Jeremy Jip could have withheld further performance in closing the sale and demanded that Lulu give an accounting if Lulu did not agree on Jeremy accepting the $5,000. Lulu probably completed the conveyance contract, knowing about the $5,000 bonus because she recognized her duty to indemnify Jeremy Jip for any liabilities incurred during the transaction and considered the bonus as Jeremy’s commission.