Did Santa treat you well? Hope he made you happy.  One client has inquired as to which of our clients might actually be insuring Santa?  You know – fat guy, drives outdated rig, poor maintenance, hauls mostly dry freight?  (Thanks for putting this thought in our head Ms. Jerrie Brannon!) I know that we all believe that Shuie can find out the most interesting of information about entities which haul other people’s property but even he has not figured that one out yet – Santa must not need a filing. Anyone going to come clean?   I wonder what his loss runs look like?

We are working away on the resumé so there is not much that we want to report at this end of the year – it will all be in resume which will be out shortly.  So for those of you who were actually stuck going to work this week, we give you these little bits of news:

HOURS OF SERVICE RULES – The Hours of Service of Drivers Final Rule has been published in the Federal Register. The effective date of the Final Rule is February 27, 2012, and the compliance date of selected provisions is July 1, 2013. A comparison between the old and new rules table provides:

SUMMARY OF 2011 HOS FINAL RULE PROVISIONS Changes Compared to Current Rule

More on the new rules can be viewed here.

HAZARDOUS MATERIALS. – The FMCSA has agreed to review a hazardous materials safety permit regulation that has caused a number of carriers to lose their hazardous materials authority. The hazmat safety permit is required for carriers transporting certain explosives, poison inhalation hazard materials, radioactive materials, and liquefied natural gas. Currently a carrier loses his safety permit if it meets certain out of service standards. Proposed rules are expected in the coming year.

CASES:

AUTO:

Leaving blanks in insurance policies can come back to haunt an insurer.  The Eastern District of Missouri held a policy ambiguous when the selection of limits was not completed on the uninsured motor forms. Rather than the $500,000 intended by the insurer for those limits the court held that the full policy limit of $2 million available for the driver who suffered injuries.  (Munroe v. Continental Western Insurance Co, 2011 WL 6026999)

A truck driver was entitled to recover from the shipper when he was injured while on the premises for the loading of slag. The Court of Appeals in Indiana held jury instructions appropriate for the jury to understand its obligation to consider the burden of a property owner to an invitee.  (Rippe v. Edward C. Levy Co., 2011 5904666)

The criminal conviction of a driver for a fatal truck accident was held to collaterally estop the driver from contesting liability in the personal injury action in the Northern District of Indiana.  The court also considered that fact, as well as the fact that he was driving the vehicle under the influence of alcohol and had worked with his employer to falsify log books to grant summary judgment giving the plaintiff punitive damages.  (Karpov v. Net Trucking, 2011 WL 6056618)

The Appellate Court in Illinois upheld a judgment in favor of a shipper who was sued for a fatal bus-train accident. The court held that the driver was not operating as the agent of the shipper and that the shipper had no duty to insure that the driver had an enough hours to complete the trip and was not overly fatigued.  (Dowe v. Birmingham Steel Corp., 2011 WL 63820265.)

The 6th Circuit Court of Appeals held a non-trucking policy inapplicable to a loss when the driver was returning home after leaving a load at a shipper for later pick up.  After analyzing the facts the court held that the “in the business of” exclusion precluded coverage.  (Illinois National Insurance Co. v. Ohio Security Co., 2011 WL 6415048)

Personal injury actions against transportation brokers was held not preempted under the Federal Aviation Administration Authorization Act in the Middle District in Tennessee.  The court held that while the claims are related to services they are based upon highway safety which is exempted from the Act. The court also held that while violations of the safety regulations do not give rise to a cause of action, the violations can be used to establish negligence.  (Owens v. Anthony, 2011 WL 6056409.

CARGO:

Entering into Master Service Agreements often create confusion when there are other limitations of liability which might apply.  The Central District in California held that a trucking company working for Fed Ex was not entitled to any potential limitation of liability in the shipper’s Fed Ex agreement when the trucking company had a master service agreement which held the trucker to full liability.  (Certain Lloyds Underwriters v. Baldwin Distribution Services, 2011 WL 6010217)

UPS Supply Chain was found strictly liable for misdelivery of goods from a warehouse in the Court of Appeals in Arizona. The court also held that the customer had no duty to try and repossess the goods after the misdelivery and that UPS had no applicable limitation of liability as there was no evidence that the claimant had agreed to the limitation.  (Inter K v. UPS Supply Chain, 2011 WL 5826046)

A broker is not permitted to avoid the impact of Carmack preemption when it is simply suing on behalf of the motor carrier in the Southern District in Ohio.  The Carmack Amendment applies when there is no contractual indemnity between the broker and the carrier.  (Exel v. Southern Refrigerated Transport, 2011 WL 6258387)

With more and more parties opting into contracts instead of ordinary bills of lading, the applicability of Carmack strict liability is repeatedly called into question. In the District Court in Kansas the court considered the impact of a standard bill of lading, which incorporated classifications  and a separate contractual agreement on a cargo loss. In this case the plaintiff sought only to recover under the Carmack Amendment, to avoid the impact of contractual terms. Once the court held that Carmact did not apply, plaintiff was left with no cause of action.  The court did not even allow amendment in light of the fact that it had already entered judgment in favor of the defendant.  (ACE, USA v. Union Pacific R. Co., 2011 WL 609)

MISCELLANEOUS:

As we all know, the ability of truckers to work within the ports is generally governed, in part, by the terms and conditions of the UIIA agreement. The Central District in California refused to enforce the arbitration provision of the agreement contending that the contract was one of adhesion and it was unconscionable to require a trucker to arbitrate its suit against a steamship lines for excessive charges.  (Unimax v. COSCO North America, 2011 WL 5909881)

While an offer of judgment can be a good thing and help a defendant to recover fees, be careful when making the offer that you can establish good faith.  The Court of Appeals rejected the defendant’s request for attorney’s fees after obtaining a defense verdict.  The Court held that the offer of judgment was not in good faith when done before witnesses were interviewed, the offer was nominal and a greater offer was made before trial. (Great West Casualty Co. v. Bloomfield, 2011 WL 6004571)

A claim against an insurance broker for failure to procure adequate insurance on a crane was dismissed as premature when the plaintiff had not yet proven that there was no coverage in the District Court in Florida. In addition the court held that when the insurance broker was simply a nominal party to the suit its agreement to remove was not required.  (Mobro Marine v. Essex Insurance Co., 2011 WL 6328255)

Happy New Year To All.  Be safe and enjoy the holiday.

Jean Gardner