JESSICA ESTRADA, Plaintiff, vs. VASILY BUKATY and ROTEX TRANSPORTATION, INC.

JESSICA ESTRADA, Plaintiff, vs. VASILY BUKATY and ROTEX TRANSPORTATION, INC., Defendants.

Civil No. 14-CV-242-KHR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF WYOMING

2015 U.S. Dist. LEXIS 191485

October 20, 2015, Decided

October 20, 2015, Filed

COUNSEL: [*1] For Jessica Estrada, Plaintiff: Dustin T Lujan, LEAD ATTORNEY, HALL & EVANS LLC, Laramie, WY; Richard J Gage, LEAD ATTORNEY, Cheyenne, WY.

For Cheyenne, WY, Rotex Transportation Inc, Defendants: Keith J Dodson, Scott E Ortiz, LEAD ATTORNEY, Erica Rachel Day, WILLIAMS PORTER DAY & NEVILLE PC, Casper, WY.

For Global Hawk Insurance Co, Defendant: Lance E Shurtleff, LEAD ATTORNEY, HALL AND EVANS LLC, Denver, CO; Paul T Yarbrough, Timothy M Murphy, LEAD ATTORNEY, PRO HAC VICE, HALL & EVANS LLC, Denver, CO.

JUDGES: Kelly H. Rankin, United States Magistrate Judge.

OPINION BY: Kelly H. Rankin

OPINION

ORDER GRANTING PLAINTIFF’S MOTION TO AMEND COMPLAINT TO ADD PARTY [DOC. 42]

This matter is before the Court on Plaintiff’s Motion to Amend Complaint to Add Party [Doc. 42]. The Court, having carefully considered the Motion, Response, Reply, and being fully advised in the premises, FINDS:

BACKGROUND

This case arises out of a car crash that occurred on December 6, 2010. Plaintiff and her husband were travelling East on Interstate 80. They stopped to assist a semi-truck driver who had been in an accident. Plaintiff called emergency responders and waited in her vehicle for them to arrive. Defendant Bukaty was allegedly driving a semi-truck [*2] owned by Defendant Rotex Transportation, Inc. (Rotex) and insured by Global Hawk Insurance Company (Global Hawk). Plaintiff alleges Defendant Bukaty failed to change lanes even though the left lane was closed due to the original accident. Defendant Bukaty’s semi-truck struck the rear of the fire truck that had responded to the original accident. Plaintiff asserts the crash between Defendant Bukaty and the fire truck caused the fire truck to crash into her vehicle, sending it into the previously overturned semi-truck. Plaintiff further asserts she suffered severe and permanent injuries as a result of the crash. Subsequently, Plaintiff brought claims of negligence, respondeat superior, negligent hiring, training, and supervision, and punitive damages.

During discovery depositions, Plaintiff’s counsel questioned Diana Zhidovlenko, the

President and Safety Manager of Defendant Rotex. Plaintiff alleges Ms. Zhidovlenko’s testimony establishes that Defendant Rotex relied on its insurer, Global Hawk, to conduct the background check on Defendant Bukaty’s driving record. An excerpt from Ms.

Zhidovlenko’s testimony provides:

So you–it sounds like to me that you trusted [Global Hawk’s] call on

[*3] Vasily Bukaty?

I did.
Okay. And that would be normal for any driver that comes to you that you would expect the insurance carrier to [do] their job and pull the DMV records and let you know?
Correct.

Zhidovlenko Dep. 67:1-8, Sept. 23, 2015, ECF No. 42. Accordingly, Plaintiff seeks to add

Global Hawk as a defendant to this case and has filed the Motion to Amend Complaint to Add Party [Doc. 42] presently before the Court.

PLAINTIFF’S MOTION TO AMEND COMPLAINT TO ADD PARTY [DOC. 42]

In her Motion, Plaintiff asserts Global Hawk should be added as a defendant to this case pursuant to Rule 15(c) of the Federal Rules of Civil Procedure and the Restatement (Second) of Torts § 324A. Specifically, Plaintiff posits that because Defendant Rotex relied on Global Hawk to conduct the background check of Defendant Bukaty as evidenced by the testimony of Ms. Zhidovlenko, Global Hawk undertook and owed a duty to properly screen Defendant Bukaty’s driving record. Plaintiff believes this duty was breached because of Defendant Bukaty’s poor driving record and suspended California Driver’s License. Plaintiff also suggests any claims brought against Global Hawk can be related back to the Complaint filed against Defendants and thus do not violate the statute of limitations.

DEFENDANTS’ RESPONSE [*4] [DOC. 47]

In their Response [Doc. 47], Defendants argue Plaintiff’s Motion is futile and would cause Defendants undue prejudice. Defendants suggest Plaintiff’s Motion is futile because Global Hawk did not assume a duty toward the Plaintiff. Defendants assert Plaintiff’s Motion is unduly prejudicial because evidence of Defendants’ liability insurance, which would generally be inadmissible under Rule 411 of the Federal Rules of Evidence, will be presented if Global Hawk is named as a defendant. Finally, Defendants contend the statute of limitations bars any claims against Global Hawk.

PLAINTIFF’S REPLY [DOC. 50]

Plaintiff’s Reply argues amendment would not be futile because Defendant Rotex relied on Global Hawk to check Defendant Bukaty’s driving record. Thus, according to Plaintiff, a jury could determine Global Hawk breached a duty to properly check Defendant Bukaty’s driving record and report to Defendant Rotex. Finally, Plaintiff asserts it would be unjust to exclude Global Hawk from this litigation because Defendants could simply place fault with the insurance company’s failure to investigate Defendant Bukaty’s driving background.

RULING OF THE COURT

The issue before the Court is whether Plaintiff should be allowed to amend [*5] her Complaint to add Global Hawk as a defendant. The Federal Rules of Civil Procedure note “a party may amend its pleading only with the opposing party’s written consent or the court’s leave [and] [t]he Court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). The Supreme Court has emphasized “this mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962). The grant or denial of leave to amend is within the sound discretion of the court. Id.; T.V. Commc’n, Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1028 (10th Cir. 1992); Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S. Ct. 795, 28 L. Ed. 2d 77 (1971)). However, leave to amend should be denied where courts find “undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).

Defendants oppose Plaintiff’s Motion to Amend for three reasons. First, Defendants suggest amendment is futile because Global Hawk did not undertake to provide Defendant Rotex with a driving record check of Defendant Bukaty. Second, Defendants allege they will suffer undue prejudice if Global Hawk is added as a defendant. Third, Defendants argue the statute of limitations bars any of Plaintiff’s prospective claims against Global Hawk.

FUTILITY

Defendants first argue the addition of Global Hawk is futile because Global Hawk only acted [*6] toward the insurability of Defendant Bukaty and did not undertake to render any additional services toward Defendant Rotex under Wyoming law as applied through the Erie Doctrine. Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S. Ct. 817, 82 L. Ed. 1188 (1938) (holding federal courts exercising diversity jurisdiction apply substantive state law and procedural federal law). An amendment is futile “if it would be unable to “withstand a motion to dismiss or otherwise fails to state a claim.” Lyle v. Commodity Credit Corp., 898 F. Supp. 808, 810 (D. Kan. 1995). Thus, to avoid futility, Plaintiffs must demonstrate claims against Global Hawk will survive summary judgment.

Wyoming law has adopted the Restatement (Second) of Torts, which contains the following provision:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if

(a) his failure to exercise reasonable care increases the risk of such harm, or

(b) he has undertaken to perform a duty owed by the other to the third person, or

Rice v. Collins Comm., Inc., 2010 WY 109, 236 P.3d 1009 (Wyo. 2010); Restatement (Second) of Torts § 324A (1965). [*7] Accordingly, the Court must first determine whether the defendant, or potential defendant in this case, has undertaken to render a service. Paulson v. Andicoechea, 926 P.2d 955, 959 (Wyo. 1998); Deines v. Vermeer Mfg. Co., 752 F. Supp. 989, 994 (D. Kan. 1990). If the Court finds the defendant “undertook” to provide a service, the defendant is potentially liable under § 324A. Tooley v. Hill Truck Line, Inc., No. 88-1238-C, 1992 U.S. Dist. LEXIS 15421, 1992 WL 266605, at *18-19 (D. Kan. Sept. 30, 1992) (citing Anderson v. Scheffler, 248 Kan. 736, 811 P.2d 1125 (Kan. 1991)). A defendant undertakes a service when the defendant “agreed to or was obligated to perform services for another that were accepted.” Gooch v. Bethel A.M.E. Church, 246 Kan. 663, 792 P.2d 993, 998 (Kan. 1990). Courts have found insurance providers to have undertaken to render services where: (1) the insurance provider represents to the insured that it offers safety inspection services for the insured’s benefit and the insured relies on those representations or (2) the insurance provider conducts background checks for the insured’s employees and marketed those background checks as additional services to the insured. See Deines, 752 F. Supp. at 993-95 (holding insurer was potentially liable under § 324A because the insurer offered to conduct safety inspections ultimately relied on by the insured); Johnson v. Aetna Cas. & Sur. Co., 348 F. Supp. 627, 628 (M.D. Fla. 1972) (holding insurance provider potentially liable for an unlawful death after insurance provider contracted with insured to maintain safety engineering devises and conduct safety inspections of insured’s premises); Tooley, 1992 U.S. Dist. LEXIS 15421, 1992 WL 266605 at *20 (holding insurer of a trucking [*8] company was potentially liable for negligent driver evaluations marketed as a “side benefit” to the insured and relied on by the trucking company).

Here, the Court finds amending the Complaint to add Global Hawk as a defendant is not futile. Based on the testimony of Ms. Zhidovlenko, there is enough evidence to support Plaintiff’s claim Global Hawk undertook to provide Defendant Rotex with a review and confirmation of Defendant Bukaty’s driving record. Ms. Zhidovlenko expressly stated she trusted Global Hawk’s “call on . . . Vasily Bukaty” and stated Global Hawk examined Defendant Bukaty’s driving record before reporting back to her. Zhidovlenko Dep. 66:11-15; 67:1-8. This fact is especially significant considering Defendant Rotex attempted to review Defendant Bukaty’s driving record but did not receive information from the State of California until five months after Defendant Bukaty was approved by Global Hawk. Zhidovlenko Dep. 32:8-21. Furthermore, Ms. Zhidovlenko revealed Global Hawk represented to her that it checks driving records and then reports back to the insured. Zhidovlenko Dep. 67:4-8. Evidence also suggests Global Hawk reported to Defendant Rotex regarding Defendant Bukaty’s [*9] driving record, which indicates action by Global Hawk beyond underwriting Defendant Bukaty’s insurability. Zhidovlenko Dep. 61:3-15; 66:11-25; Defs.’ Response Ex. B. Thus, Ms. Zhidovlenko’s statements support Plaintiff’s position suggesting Global Hawk undertook to perform a background check of Defendant Bukaty relied on by Defendant Rotex Transportation, Inc.

Because Ms. Zhidovlenko’s testimony suggests Global Hawk undertook to provide a background check relied on by Defendant Rotex, Global Hawk is potentially liable under § 324A of the Restatement (Second) of Torts, which imposes liability on one who undertakes to render services to another and then causes injury to a third party. Therefore, Plaintiff has not failed to state a claim against Global Hawk and could potentially survive summary judgment, provided the remaining elements of the proposed negligence claim are satisfied. On the record presently before the Court, an amendment adding Global Hawk as a defendant would not be futile.

UNDUE PREJUDICE

Defendants also claim amending the pleadings to add Global Hawk as a defendant is unduly prejudicial because doing so would bring evidence of Defendants’ liability insurance before the jury. In the Tenth Circuit, an amendment is [*10] unduly prejudicial if it “‘unfairly affects the defendants in terms of preparing their defense to the amendment.'” Minter v. Prime Equip. Co., 451 F.3d 1196, 1208 (10th Cir. 2006) (quoting Patton v. Guyer, 443 F.2d 79, 86 (10th Cir. 1971)). Defense preparation is unfairly effected when the proposed amendments “arise out of a subject matter different from what was set forth in the complaint and raise significant new factual issues.” Id. Furthermore, the Tenth Circuit has noted prejudice imposed by referencing liability insurance banned by Rule 411 of the Federal Rules of Evidence may be limited with an appropriate jury instruction. Rios v. Bigler, 67 F.3d 1543, 1550 (10th Cir. 1995).

In this case, Defendants will not be unduly prejudiced by the addition of Global Hawk as a defendant. The addition of Global Hawk arises out of the same subject matter set forth in Plaintiff’s Complaint as Plaintiff’s claims against Global Hawk relate to the car accident and Defendant Bukaty’s fitness as a driver. Furthermore, significant new factual issues will not be raised if Global Hawk is added as a defendant. Even with the addition of Global Hawk, factual issues in this case will still center on whether Defendant Bukaty and Defendant Rotex were negligent and whether that negligence caused Plaintiff’s injuries. New factual issues will be limited to Global Hawk’s involvement and potential negligence in [*11] advising Defendant Rotex regarding Defendant Bukaty. While the addition of Global Hawk will likely present evidence of Defendants’ liability insurance, the prejudice of that evidence can ultimately be limited through jury instructions and orders in limine. Accordingly, the current Defendants will not be unfairly affected in preparing a defense, and the addition of Global Hawk does not cause Defendants unfair prejudice.

STATUTE OF LIMITATIONS

Finally, Defendants assert Plaintiff’s potential claims against Global Hawk are barred by the statute of limitations. Under Wyoming law, tort claims for “[t]he recovery of personal property[,] for . . . injuring personal property[,] or [a]n injury to the rights of the plaintiff” must be brought within four years. Wyo. Stat. Ann. § 1-3-105(a)(iv) (West 2015). Since the accident giving rise to Plaintiff’s claims occurred on December 6, 2010, any claims Plaintiff seeks to assert against Global Hawk would seemingly be barred by the statute of limitations. However, pursuant to Rule 15 of the Federal Rules of Civil Procedure:

(1) An amendment to a pleading relates back to the date of the original pleading when:

(A) . . .

(B) the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out–or [*12] attempted to be set out–in the original pleading; or

(C) the amendment changes the party or naming of the party against whom a claim asserted if Rule 15(c)(1)(B) is satisfied and if, within the period provided by Rule 4(m) for serving the summons and complaint, the party to be brought in by amendment:

(i) received such notice of the action that it will not be prejudiced in defending on the merits; and

(ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity.

Fed. R. Civ. P. 15(c)(1)(B)-(C). Thus, Plaintiff’s proposed claims against Global Hawk are not barred by the statute of limitations if (1) the proposed claims arise out of the same conduct referenced in Plaintiff’s Complaint, (2) Global Hawk had notice of this case, and (3) Global Hawk knew or should have known the action should have been brought against it. Id.

Plaintiff’s claims against Global Hawk are not barred by the statute of limitations. As discussed above, Plaintiff’s proposed claims against Global Hawk arise out of the same conduct in Plaintiff’s Complaint. Additionally, as noted by Plaintiff, Global Hawk had notice of this case. Global Hawk was given written notice of the pending case in January, [*13] 2011 and hired counsel pertaining to this matter in March, 2011. Plaintiff also alleges counsel for Plaintiff and Global Hawk communicated in February, 2012. These facts sufficiently demonstrate Global Hawk had sufficient notice of this case.

While Global Hawk may not have known this case would be brought against it, Plaintiff’s argument suggesting Global Hawk should have known is persuasive. Contact from Plaintiff’s counsel could have suggested to Global Hawk litigation was a possibility. More significantly, Global Hawk was aware Global Hawk provided a background check of Defendant Bukaty relied on by Defendant Rotex. Because of this, Global Hawk should have been aware of potential liability under § 324A. Since Plaintiff’s claims against Global Hawk arise from the same subject matter provided in the Complaint, Global Hawk had notice of the pending litigation via contact from Plaintiff’s counsel, and Global Hawk should have known of potential liability under § 324A, Plaintiff’s claims against Global Hawk relate back to Plaintiff’s Complaint and are not barred by the statute of limitations.

CONCLUSION

The Court finds the addition of Global Hawk as a defendant will not be futile. Testimony elicited [*14] from Ms. Zhidovlenko by Plaintiff suggested Global Hawk undertook to report to Defendant Rotex with a background check of Defendant Bukaty that was ultimately relied on by Defendant Rotex. Furthermore, Defendants will not be prejudiced by the addition of Global Hawk as a defendant because Plaintiff’s claims against Global Hawk arise from the same subject matter alleged in the original complaint and any prejudice caused by evidence of Defendants’ liability insurance may be mitigated through the Court’s instructions. Finally, Plaintiff’s claims against Global Hawk relate back to Plaintiff’s Complaint and are not barred by the statute of limitations because the claims arise from the same subject matter alleged in the Complaint, Global Hawk had notice of potential litigation, and Global Hawk should have known about potential liability under § 324A after approving Defendant Bukaty to drive for Defendant Rotex.

THEREFORE, IT IS ORDERED Plaintiff’s Motion for Leave to Amend Complaint [Doc. 42] is GRANTED.

IT IS FURTHER ORDERED that Plaintiff shall file an Amended Complaint on or before October 23, 2015.

Dated this 20th day of October, 2015.

/s/ Kelly H. Rankin

Kelly H. Rankin

United States Magistrate [*15] Judge