Johnke, et al. v. Espinal-Quiroz, et al. v. Espinal Trucking, et al., 2016 WL 454333 (N.D. Ill. 2016)
Eagle Transport Group was the owner and lessor of a trailer driver Espinal-Quiroz was hauling when he was involved and a horrific accident that resulted in several fatalities. Eagle, also a motor carrier, was Mr. Espinal-Quiroz’s former employer, and it maintained an employment file for him. The estates sued multiple defendants in the U.S. District Court for the Northern District of Illinois, asserting a variety of causes of action. The driver apparently was blind in one eye, a condition the plaintiffs claim rendered him unqualified to drive, and one Eagle was aware of based on its employment records.
Eagle moved to dismiss the plaintiffs’ claims against it based on the Graves Amendment, 49 USC §30106; the absence of an employer-employee relationship for purposes of master-servant liability; and inadequate grounds to establish the driver was Eagle’s agent at the time of his accident.
The Graves Act preemptively blocks claims against equipment lessors for accident liability when they’re in the business of leasing, weren’t negligent in that leasing, and just owned equipment involved in a mishap. Thus, plaintiffs’ claims against Eagle based solely on its ownership of equipment were dismissed. But if Eagle were negligent in allowing a driver access to equipment when it knew he had a physical condition rendering him unqualified, a separate basis of potential liability not subject to the Graves Act would arise. The court denied plaintiffs’ claims based on those allegations given remaining questions of fact.
Certain plaintiffs alleged Eagle was Mr. Espinal-Quiroz’s statutory employer for purposes of vicarious master-servant liability. These assertions were based on misinterpretations of law designed for owner-operator relationships. Concluding Eagle was only an equipment owner and lessor, the court nixed claims based on an alleged statutory employer relationship. Similarly, as nothing in the complaint’s alleged facts suggests Mr. Espinal-Quiroz was acting as Eagle’s “agent” by leasing its trailer, the agency claims were tossed as well. Remaining at issue is the responsibility an equipment lessor has not to lease equipment to a driver it knows is unqualified.
National Specialty Ins. Co. v. Martin-Vegue, 2016 WL 737780 (8th Cir. 2016)
Motor carriers ABS Transport and ABS Freight Transportation (“ABS Freight”) were owned by a formerly married couple and operated in coordination with each other by sharing operations and through lease agreements. Apparently, freight broker ICCI brokered and documented a California-to-Florida load to ABS Freight, which then handed off the shipment to ABS Transport, whose driver, Andrii Plys hauled. ABS Freight had leased to ABS Transport the rig and trailer Plys was operating. He was involved in accident in Florida which, tragically, caused the death of Howard Martin-Vegue, whose estate made claims against both entities.
National Specialty Insurance Company (“National”) insured ABS Freight and brought a declaratory judgment action to foreclose the estate’s claim for coverage. It asserted that Plys wasn’t insured under its policy, and the MCS-90 endorsement ABS Freight filed was inapplicable. Affirming the U.S. District Court for the Southern District of Florida, the Eighth Circuit Court of Appeals agreed, and ruled National’s policy didn’t apply.
The policy excluded coverage for drivers using equipment leased from ABS Freight, so coverage could obtain only by ABS Transport being the carrier of record. Just because a broker documents a booking with a trucker doesn’t make that trucker a carrier of record. Indeed, ICCI confirmed it frequently allows double brokerage arrangements whereby loads it places with one carrier are hauled by another, in which case ICCI pays the actual trucker. More importantly, ABS Transport issued the shipment’s bill of lading, and was properly in possession of all equipment at the time of the accident. That ABS Freight leased, and didn’t own, the equipment is irrelevant.
For these reasons as well, National’s MCS-90 endorsement for ABS Freight is inapplicable, as it would guarantee coverage only for ABS Freight.
Mendoza, et al. v. Hicks, et al., 2016 WL 815505 (E.D. La. 2016)
Driver Hicks was employed by owner operator BAC Trucking, which was under lease to C&R Transport. Hicks’s truck broke down, forcing BAC to borrow a truck from Wyatt Trucking so that Hicks could make his runs for C&R. He was involved in an accident with another truck driver, who sued him in the U.S. District Court for the Eastern District of Louisiana.
Berkshire Hathaway Homestate Insurance Company insured C&R, and Canal Insurance Company insured Wyatt. At issue in cross motions for summary judgment was which insurer gets to pick up the accident tab.
The court first addressed a choice of law issue. Finding that all parties were located, and most activity transpired, in the Yellowhammer State, the court ruled that Alabama law governed insurance coverage issues. Louisiana was merely the accident’s location. This was significant because a Louisiana statute extends insurance coverage to temporary substitute vehicles as a matter of law. Alabama has no such statute, and the Pelican State’s interest in ensuring coverage exists for its public isn’t enough to control an insurance policy issued in another state.
Berkshire prevailed in the cross motions because its policy only extends to vehicles “owned” by the insured. Canal argued that because BAC and its vehicles were under lease to C&R, and FMCSA regs define a vehicle “owner” as the entity which has exclusive use of it, C&R kind of was an owner. But Alabama law won’t borrow from statutes aimed at different concerns to define a term that has a plain English meaning. “Own” means, well, “own” for insurance coverage purposes.
Mendoza, et al. v. Hicks, et al., 2016 WL 915297 (E.D. La. 2016)
So who’s on the hook under master-servant vicarious liability principles for driver Hicks’s accident? Plaintiff Mendoza wanted all three companies whose fingerprints were on Hicks and the truck to stay in the courtroom, and all three brought cross-motions for summary judgment on the issue.
Addressing first motor carrier C&R’s standing as Hicks’s employer, the Eastern District of Louisiana’s opinion goes through a nice little review and summary of the concept that drivers employed by owner operators under lease to a motor carrier are deemed the motor carrier’s “statutory employees” for purposes of accident liability. That’s notwithstanding any disclaimers within leases. The Interstate Commerce Commission, promulgating regs that remain in force today as the Federal Motor Carrier Safety Regulations, 49 CFR §§350-399, made it clear years ago that an “authorized carrier” bear “complete responsibility” for a truck’s operations whether or not a permitted driver is an actual carrier employee. C&R interpreted §376.12(c)(4) , which proclaims the regs don’t define whether an owner operator is an independent contractor or employee, to mean that the regs shouldn’t be construed to mean that a driver is employee, and that state law should govern. The court disagreed, ruling that the regs are designed to impose statutory employee status regardless of how state law would define the driver. Thus, Hicks is C&R’s employee for master-servant vicarious liability purposes.
BAC and Wyatt aren’t so clear. They exercised control over Hicks regarding such things as dispatch, fuel costs and hotel rooms; required that he undergo drug testing and pre-employment screening; and other activity typical of an employment relationship. But the regs don’t govern the relationship of a non-motor carrier and its driver, leaving questions of fact as to Hicks’s status that aren’t appropriate for summary judgment. The court denied the motions regarding BAC’s and Wyatt’s employer status pending trial.
Soares v. Bekins Van Lines, Co., et al., 2016 WL 797046 (D. NJ 2016)
Just a little heads up here about how courts give benefits of doubts to pro se parties by bending the rules a little bit in their favor. Fola Soares claimed motor carrier Bekins Van Lines lost some of her household goods when transporting them interstate to New Jersey. She sued Bekins pro se in the U.S. District Court for the District of New Jersey, stating in her complaint that “[t]his action constitutes Breach of Contract, Negligent, Misrepresentation and Malicious contrary to United States Department of Transportation (USDOT) regulations on interstate commerce, Title 29 (49 U.S.C.) [sic].” Bekins promptly moved to dismiss the complaint based on Carmack preemption of state and common law claims.
The court noted that “Soares is proceeding pro se and the Court must construe the Complaint liberally in favor of her.” Finding that her complaint’s allegations sufficiently set forth a Carmack claim, the court ruled that the fact she “cites to Title 49, the title in which the Carmack Amendment is contained” is enough to dodge an FRCP 12(b)(6) motion to dismiss. References to state law claims were dismissed, but Ms. Soares gets to proceed with a Carmack claim despite the fact she probably has no idea what it is.
Before proceeding, please note: If you are not a current client of Lane Powell PC, please do not include any information in this email that you or someone else considers to be confidential or secret in nature. Prior to the establishment of a lawyer-client relationship, unsolicited emails from non-clients containing confidential or secret information cannot be protected from disclosure.