Edelbrock v. TT of Naples, Inc. and Gulf Coast Auto Services, LLC, 2016 WL 4157426 (M.D. Fla. 2016)
Here’s one that should give pause to dealerships which handle the transport of cars for their customers. Mr. Edelbrock bought an Aston Martin at the Naples Florida dealership, called TT of Naples, that he wanted transported to his home in Michigan. A TT of Naples employee ordered up transportation with motor carrier Gulf Coast Auto Services for delivery to a dealership in Troy. The carrier named TT of Naples as the shipper in its bill of lading.
The trucker was involved in an accident en route, damaging Mr. Edelbrock’s car to the tune of some 27 grand in repairs plus another 30 grand in diminished value. The car owner sued both TT of Naples and Gulf Coast in the U.S. District Court for the Middle District of Florida, alleging Carmack and state law liability against both.
TT of Naples sought to dismiss the Carmack claim on summary judgment. It argued it wasn’t set up or licensed as any kind of transportation service provider, but if it might have been one here, a freight broker was most likely. As brokers aren’t liable under Carmack, the dealership reasoned, Carmack wasn’t a viable theory against it.
But TT of Naples had accepted a bill of lading by which Gulf Coast named it as its shipper of record. That sounds like what a freight forwarder would do. At a minimum, the court found questions of fact as to what the parties intended. Consequently, summary judgment was denied, and TT of Naples might very well find itself liable as a forwarder which operated without authority.
Golub Corporation v. Sandell Transport, 2016 WL 4703734 (N.D. NY 2016)
Grocery store operator Golub ordered a load of nuts from supplier Wonderful Pistachios & Almonds. Golub’s intermediary hired motor carrier Sandell Transport to run the load from California to New York, but Sandell turned around and posted it on a load board. Imposter thieves who claimed they were with “GM Express” accepted the haul on the board. Of course, the load disappeared.
Golub sued Sandell in the U.S. District Court for the Northern District of New York, and Sandell filed a third-party action against Wonderful, alleging the supplier’s negligence, breach of contract and fraud caused the loss. Wonderful actually loaded the nuts into the imposters’ truck, and apparently when checking the driver’s license for identification purposes, didn’t catch on to the fact that his address was stated as “Northdridge, California.” There’s no such municipality in the Golden State (presumably, the misspelled town was intended to be “Northridge,” which is just a neighborhood in L.A., and wouldn’t be listed on a real driver’s license).
Wonderful moved to dismiss. While an argument could be made that the shipper had a duty not to load cargo into a truck whose driver hadn’t been confirmed, the court refused to recognize as potential negligence a company’s lack of familiarity with every California township’s name. a shipper’s duty when another entity arranges transportation goes only so far. The contract claim failed as well because, well, there was no identified contract between Sandell and Wonderful, at least not one that would impose duties on Wonderful to verify to a certainty a truck driver’s identity. Even under a third-party beneficiary theory, Sandell could not assert a claim on behalf of Golub against Wonderful based on the Golub-Wonderful sales agreement. Lastly, the court didn’t even consider the fraud claim because it was improperly pleaded.
The court did give Sandell an opportunity to amend its complaint to state a viable cause of action, but from facts in the record, it’s hard to see where one might lie.
Schneider v. Fifth Wheel, LLC, et al., 2016 WL 4424944 (N. D. Ohio 2016)
The opinion isn’t entirely clear on this one, but it appears the U.S. District Court for the Northern District of Ohio may have misinterpreted Carmack to conclude that a consignee plaintiff isn’t bound by an apparent shipper’s agreement to bill of lading terms which included limitation of liability.
Shipper Schneider bought an antique car from a dealer in Spokane, Washington, and through its broker, engaged motor carrier Fifth Wheel to transport the car to Ohio on the lower level of a dual-deck open trailer. Oil from the car overhead leaked onto Schneider’s rod causing some twelve grand in damages.
Schneider sued Fifth Wheel, which promptly sought to deflect Carmack liability based on the inherent vice defense. The carrier’s argument was that when you agree to ship a car with others in this type trailer, oil leakage is unavoidable. Thus, the theory went, cars shipped with others are inherently susceptible to oil leak damage. The court rejected that argument, correctly observing that Schneider’s car itself must have some sort of propensity to suffer oil damage for the inherent vice defense to apply, and the circumstances of its shipment with other cargo can’t “create” that propensity.
Fifth Wheel pointed to the limitation of liability clause in the bill of lading the seller signed, which would limit its liability to comparative peanuts. The court rejected the clause’s applicability because Schneider, and not the seller, was the plaintiff; Schneider didn’t see the bill of lading until delivery; and the evidence didn’t establish that the seller was Schneider’s agent. If the bill of lading showed the seller as the shipper of record, the analysis should have ended there. A carrier has a right to assume that terms it agrees to with its shipper of record will control the transportation transaction, and shouldn’t have to worry about a consignee plaintiff having greater rights than the shipper. By the court’s reasoning, in order to limit liability, a motor carrier would have to get both the shipper’s and consignee’s signatures on a bill of lading at the time of tender, which in most cases is impossible.
Owner-Operator Independent Drivers Association v. U.S. Department of Transportation , et al., 2016 WL 4087235 (8th Cir. 2016)
The Federal Motor Carrier Safety Administration (FMCSA), as part of its complex program of evaluating and apprising the public about motor carrier safety, generates “Crash Indicator” measures for licensed carriers. The assessment is based on the number of accidents per a carrier’s vehicles revised to reflect accident severity and miles driver per vehicle. FMCSA crunches the data to place registered carriers into a safety-event group of comparable carriers. Safety-event groups are based on two factors, (1) whether the carrier is a straight truck (all axles on a single frame), or a combination-truck; and (2) how many accidents the carrier has sustained over a 24-month period.
FMCSA then ranks the sorted carriers into percentiles of accidents as compared to the other carriers in the safety-event group. A ranking of 65 or higher subjects the carrier to FMCSA intervention, ranging from warning letters to investigations to removal from service.
In March 2015, FMCSA issued a “regulatory guidance” excluding attenuator trucks from the analysis. Attenuators are highway-safety vehicles equipped with an impact-absorbing crash cushion designed to protect workers in construction zones. In other words, they’re meant specifically to be involved in crashes, rendering them, in FMCSA’s eyes, improper for inclusion in the Crash Indicator assessment.
OOIDA member Kuehl Trucking thought that wasn’t fair, and per established procedure, brought its gripe to the U.S. Court of Appeals for the Eighth Circuit. It claimed FMCSA’s Crash Indicator assessment sans attenuator truck consideration was essentially an agency reg promulgated without an adequate public notice, or alternatively, was arbitrary and capricious.
While the court’s opinion goes through a nice little summary of FMCSA’s Crash Indicator program, the Eight Circuit dismissed OOIDA’s claim for lack of standing on the part of Kuehl or the association as a whole. This is because a precept of an entitlement to court-ordered relief is standing to make a claim, and neither Kuehl nor OOIDA could show FMCSA’s guidance caused any harm. OOIDA argued that Kuehl, like other motor carriers, was more likely to get hit with a higher percentile ranking within its safety-event groups when attenuators weren’t added in, as there are fewer vehicles involved in crashes when that class is removed from the mix. The court didn’t buy that argument, as Kuehl was a combo carrier, and attenuators, being straight trucks, don’t affect its standing.
OOIDA scrambled and put in a declaration from several other of its carrier members, but the data the declaration contained was still insufficient to demonstrate they were harmed either. If a plaintiff, even an association representing a class of potentially affected entities, is unable to show harm, there is no standing to pursue a claim in court.
Forward Air Solutions v. C.R. Williams Transportation, et al., 2016 WL 4582186 (E.D. Tenn. 2016)
This case might be a handy cautionary tale to show insured players in the transportation industry when they are less than fully cooperative with their insurers. Most insurance policies contain clauses requiring insureds to give the insurer adequate notice of claim, and to cooperate in the insurer’s investigation and defense of claims for covered losses. Progressive Southeastern Insurance Company’s policies for motor truck cargo and vehicle insurance contain such clauses. When a truck owned by insured C.R. Williams Transportation, along with its cargo, disappeared from a lot in Tennessee, the motor carrier and its owner went radio silent in response to a lawsuit filed by Forward Air Solutions in the U.S. District Court for the Eastern District of Tennessee.
Apparently nervous about its potential exposure as the truck and cargo’s insurer, Progressive intervened in the lawsuit, and promptly brought a motion for summary judgment seeking determination that its insured’s violation of the cooperation clauses absolves the insurer of coverage liability. Progressive went through the host of cooperation provisions its insured violated, from failure to give the insurer timely notice, to failure to appear for an examination under oath, to failure to assist with mitigation of damages.
Applying North Carolina law (which is largely consistent with that of most states), the court ruled that alleged violation of policy cooperation clauses typically raises questions of fact not proper for summary judgment. But in response to Progressive’s motion, the court found no challenge to the insurer’s version of events. That wasn’t hard to do given that the trucker defaulted in the lawsuit.
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