We’re ready for summer! 

Welcome to June. I’m sure everyone will be busy with graduations, weddings and vacations as summer starts. This is a wonderful time of year. Enjoy the season and stay safe and healthy!   

The conference season continues. The Motor Carrier Insurance Education Foundation Western Conference was a success, and we were very happy to see everyone! The opening gala event sponsored by CAB was fantastic and the educational sessions were top notch, as always.

We look forward to seeing everyone at the Annual Conference in Orlando October 4-5. If you’re not a member, it’s worth your time to learn more about it.   

We recently returned from the IRMI Transportation Risk Management Conference in Dallas. It was our first time at this event, and it was great chatting with old friends and meeting new ones. 

We hope everyone has a great month! 

Chad Krueger

CAB Live Training Sessions

Tuesday, June 13^th, 12p EST

Connor Harper’s CAB Webinar debut will focus on CAB’s SALEs lead generation resource. Grow Your Business with SALEs – Targeted Leads within your specific area of focus or interest with over 100+ filters. Search by insurance renewals, fleet size, commodities, and many other options.

Tuesday, June 20^th, 12p EST

Chad Krueger will present on CAB’s newest suite of tools. Get a first-hand look at CAB’s MC (Motor Carrier) Advantage Enterprise Suite of Tools that includes three modules: Safety, Sales and Brokerage. Learn what all the buzz is about so you can help bring this new resource to your clients.

To register for the webinars, click here to sign into your CAB account. Then click live training at the top of the page to access the webinar registration.

You can explore all of our previously recorded live webinar sessions by visiting our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks: Webinars are always available with CAB!

We are happy to announce that the Business CAB team is growing!

In May we welcomed Pam Jones to the team as our new Director of Strategic Accounts. Her expertise in the transportation insurance, regulatory, and consultancy field is vast. Some may be familiar with Pam as she has been active in numerous transportation conferences and associations over the years. We’re excited to have her as a resource for both our organization and yours. 

Pam will be actively involved with clients, conducting trainings, enhancing our product offerings, and helping create even more value for our fantastic users. Please join us in welcoming her and feel free to reach out and say hello. 

To learn more about Pam, click here for her LinkedIn profile.

THIS MONTH WE REPORT

More NOLA scammers headed to the slammer. Eight more individuals have been sentenced for their roles in a widespread staged-accident fraud scheme that’s netted 28 total indictments from New Orleans prosecutors so far. Targeting tractor-trailers changing lanes in zones where police, not troopers have jurisdiction, the scammers deliberately caused collisions by striking the truck in its blind spot using a “slammer vehicle.” Find out who of this villainous scum are headed to the slammer now. 

Not even your furniture is safe apparently. Lots of fraud is being perpetrated out there in transportation land and drivers aren’t the only ones being hit. Mid-April the FMSCA announced the launch of a special operation aimed at household-goods-moving scams. Called Operation Protect Your Move, Overdrive reports the agency is deploying dozens of investigators across the country to address a significant uptick in complaints of movers holding people’s furniture hostage.  

One toke over the line? Designated a top priority in 2022, researchers at the American Transportation Research Institute (ATRI) have launched a survey, “Impacts of Marijuana Legalization on Trucking Operations,” to better understand the effect legalization is having on the trucking operations. Here’s the news. 

Feds wants to ID risky business … better. FMCSA is now proposing to change some of the 16 existing crash types and add four new types to expand the program to help better identify risky driving behaviors. The proposed changes are expected to double the size of the current CPDP and provide more data on the impacts of a carrier’s not preventable crashes on its overall safety. Find out what they’re proposing here. 

Smile, you’re on in-cab camera! The American Transportation Research Institute (ATRI) released a new report investigating the trucking industry’s attitudes regarding driver-facing and road-facing cameras (DFCs/RFCs). Researchers conducted the study in an effort to better understand driver issues and perceptions related to the application of the technology. Get the driver’s point of view here. 

Robotic drivers, automated inspectors, and synthetic safety. At the FMCSA’s annual Analysis, Research and Technology (ART) Forum, Associate Administrator Tom Keane explained “while [autonomous] vehicles continue to mature, we know that human drivers will be core to motor vehicle operations for many, many years to come.” Look into FMCSA’s crystal ball for glimpse of automated level 8 inspections and the future of autonomous trucking. 

Over the long-haul Michigan is safer. According to the Michigan Department of Transportation, road fatalities caused by large trucks in Michigan have fallen by 2.9% between 2018 and 2022, with serious injuries lowered by 10.6%. Find out which states lead, and which states lag in this NHTSA truck crash fatality study. 

Safety challenged new carriers most post-pandemic. Preliminary data compiled by the FMCSA reveals a steady rise in crashes involving large trucks among companies that entered the industry since 2018. Explore the not-so-pretty outcome of newcomers and other data driven insights from FMCSA’s recent research forum. 

More vigilance, less risk, safer roads. Although National Work Zone Safety Awareness Week (April 17-21) has passed, the sentiments of the occasion haven’t. OverDrive editor Clifford Peterson explains it’s time to double down on the fight against safety complacency. 

Florida man saves his own neck. Physics tells us that objects in motion tend to stay in motion. Just ask this Florida trucker about the two, 2.5-ton utility poles that pierced his cab after a “phantom” motorist cut him off. You be the judge but knowing when to duck and is not sound safety policy or a replacement for a header board. 

June 2023 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Werner Enters., Inc. v. Blake, 2023 WL 3513843, C.A. No. 14-18-00967 (Tex. Ct. App. May 18, 2023). In this appeal, the en banc panel of the Court of Appeals of Texas affirmed the jury verdict against a motor carrier and its driver for $116 million in a case resulting in the death of a seven-year-old and TBI/quadriplegia to a twelve-year-old, as well as other injuries to the occupants of the passenger vehicle that collided with the Werner tractor-trailer during an ice storm in December 2014  In the Accident, the passenger vehicle lost control on ice and crossed the roadway in front of the tractor-trailer. Specifically, the appellate court found the evidence presented at trial was sufficient to establish the verdict. It found the driver owed a duty to the plaintiffs and breached that duty by driving “more than a crawl” during the ice storm. The court further found that the defendants failed to preserve certain objections to jury instructions presented at trial. The court affirmed the trial court’s refusal to provide a sudden emergency instruction where the court provided, as an alternative, an unavoidable accident instruction. The court rejected appellant’s arguments that the plaintiffs could not pursue direct liability claims of negligence against the motor carrier because it had admitted it was vicariously liable for the negligence of the driver, with the court noting that the “respondent superior admission rule” has not been recognized in that District at the time of the jury verdict, and moreover, even assuming it did apply, the motor carrier’s gross negligence would be enough to avoid application of the rule. The court then found there was sufficient evidence to support the jury’s findings against the motor carrier on the direct liability claims, finding that the motor carrier placed an inexperienced and unskilled driver in a situation that was reasonably likely to result in foreseeable harm to members of the motoring public. Specific evidence cited by the appellate court included the following:  (1) Werner actively denied [the driver] access to devices which would have conveyed relevant information concerning the weather and road conditions into which he was driving during a Winter Storm Warning while traveling at approximately 50 miles per hour on a [just-in-time “JIT”] delivery; (2) [the driver] received the second lowest score possible on his driving exam; (3) [the driver] was nonetheless entrusted with a JIT run through a Winter Storm Warning without access to relevant information or a supervisor who was awake; (4) Werner’s director of safety was unfamiliar with Werner’s practice of pairing student drivers with trainers on JIT deliveries; (5) it is “really important for the driver to monitor the outside air temperature … because we know once it drops below 32, that’s the condition that creates freezing water and therefore, freezing rain and black ice”; and (6) despite this importance, [the driver] was actively and knowingly prevented from monitoring the outside air temperature. The court went on to hold that the evidence was sufficient to establish the motor carrier failed its duty to properly train the driver. The appellate court further affirmed various evidentiary rulings made by the trial court, over the objection of defendants. Notably, there were two dissenting opinions to the majority en banc decision. 

Jones v. Trisura Specialty Ins. Co., 2023 WL 3400493, C.A. No. 21-00697 (M.D. La. May 11, 2023). In this personal injury action arising from an accident with a tractor-trailer, the court granted a motor carrier summary judgment on direct negligence causes of action against it where the motor carrier’s only connection to the loss was that the motor carrier was the title holder to the involved tractor at the time of the loss. The evidence established the motor carrier sold the truck to a different motor carrier approximately ten months before the accident, but a new title was not issued until after the accident. The court explained that direct liability negligence claims presume some level of control over the agent/driver, but here, there was no evidence of any control over the driver following the sale of the tractor by the motor carrier. As such, there was no basis for direct negligence claims and the court granted the motor carrier summary judgment. 

Phipps v. Brunkhorst Trucking, Inc., 2023 WL 3305935, C.A. No. 21-cv-03464 (D. Colo. May 8, 2023). In a personal injury action against two motor carriers resulting from a train on tractor-trailer accident, one motor carrier obtained summary judgment in its favor while the other motor carrier had some claims against it dismissed. The tractor-trailer driver was employed by Brunkhorst, who also owned the involved tractor. Jensen contracted with Brunkhorst for driving services and leased the tractor pursuant to an Independent Contractor Lease Agreement. On the day of the accident, the driver left his home with a loaded trailer traveling from Colorado to Nebraska where he delivered the load, then continued with the unloaded trailer to Brunkhorst’s terminal elsewhere in Nebraska. At Brunkhorst’s terminal, Brunkhorst had the driver swap trucks to one with a loaded trailer, which the driver was operating at the time of the accident. The plan was for the driver to drive the new tractor with loaded trailer to his home in Colorado, remain off duty for his 36-hour reset, then deliver the load to Nebraska. The accident occurred while the driver was en route to his home. With respect to Brunkhorst, the court rejected its argument that the driver was not in furtherance of its motor carrier operations under the coming-and-going rule. The fact that he was driving a loaded truck from one location to another, albeit with an intervening detour to his home for the 36 hour reset, fell outside of the coming-and-going rule. As such, he was acting for the benefit of Brunkhorst at the time of the accident and the respondeat superior and agency claims were not dismissed. With respect to Jensen, it found the driver was not under the control of Jensen, being instead under the control of Brunkhorst; accordingly, the respondeat superior and agency claims against Jensen premised upon the actions of the driver failed as a matter of law. Similarly, insofar as the court found neither the driver nor the tractor were under the control of Jensen, the negligent entrustment cause of action against Jensen was dismissed as a matter of law. Last, because there was no evidence the driver was an employee of Jensen, but instead was employed by Brunkhorst, the negligent hiring, supervision, training, and retention causes of action against Jensen were dismissed. 

Pepper v. C.R. England, 528 F.3d 587, No. 840009 (Nev. May 4, 2023). The Supreme Court of Nevada reversed the lower court’s grant of a motion to transfer a personal injury action from Nevada to Texas on forum non conveniens grounds. The accident occurred in Texas. The plaintiff’s decedent was a Texas resident. The motor carrier was incorporated and headquartered in Utah. The driver of the tractor-trailer was a Nevada resident. The plaintiff initiated the wrongful death lawsuit in Nevada against the motor carrier and driver. First, the court ruled that the motion to transfer was deficient because it did not include the mandatory supporting affidavit. However, the court went on to clarify its forum non conveniens analysis under the applicable Placer Dome test, which holds a “foreign” plaintiff is not entitled to deference to the choice of forum. The court held “foreign” for purposes of the test meant both non-US citizens and citizens of another sister state (i.e., non-Nevada residents). Accordingly, a foreign plaintiff is not afforded deference for the choice of forum absent proof that Nevada is a convenient forum by showing bona fide connections to Nevada. The court, however, did not resolve whether the case presented a bona fide connection to Nevada.

Martinez v. ITF LLC, 2023 WL 3236030, Case Nos. 2022-01483, 2022-01494, 2022-05075 (N.Y. Sup. Ct. May 4, 2023). The sudden emergency doctrine was unavailable in a personal injury action arising out of an accident wherein the operator of a tractor-trailer struck the back of a car stopped in the roadway. The court found the evidence established the driver of the tractor-trailer was speeding and talking on his cell phone immediately before the accident, and further, had an unobstructed view of the roadway. As such, the driver of the tractor-trailer “himself created the emergency” and therefore the doctrine was not available as a defense. 

Dowd v. Kharieh Bros., Inc., 2023 WL 3328668, C.A. No. 2021-05388 (N.Y. App. Div. May 10, 2023). The owner of a box truck that was leased to a motor carrier when it was involved in a collision with the plaintiff was entitled to summary judgment in its favor in the personal injury action. Specifically, the court held the Graves Amendment precluded the claims against the owner because the evidence did not raise any triable issue that negligent maintenance of the vehicle played any causal role in the accident.    

BROKER

Guidry Liaison Group, Inc. v. Reckart Logistics, Inc., 2023 WL 3568672, C.A. No. 5:22-cv-00533 (C.D. Cal. May 18, 2023). A freight broker prevailed on its motion to dismiss an action alleging (1) breach of contract; (2) breach of implied contract; (3) accounts stated; and (4) promissory estoppel on the basis the California court lacked personal jurisdiction over it. The defendant freight broker was incorporated under the laws of the State of West Virginia with its principal place of business in West Virginia. It had one part-employee domiciled in California, though it lacked any business office or locations in California. As a broker, it transacted business with customers throughout all 50 states, exclusively through phone calls, emails, and letters. It earned, on average, less than 5% of its total revenue from shipping customers located in California. While the court found the defendant broker had purposefully availed itself of California by doing business in California, it found the claims in dispute did not arise out of the broker’s activities in the State of California because the three at-issue shipment contracts did not originate from or terminate in California. Accordingly, the court granted the defendant broker’s motion to dismiss for lack of personal jurisdiction. 

Ruff v. Reliant Transportation, Inc., 2023 WL 3645719, C.A. No. 8:23-cv-92 (D. Neb. May 25, 2023). On a motion to remand to state court a personal injury/negligent hiring action against a freight broker, the court agreed that the broker’s FAAAA preemption defense did not create federal question subject matter jurisdiction. Given that the parties were not diverse, the court remanded the matter to state court for further proceedings. In so holding, however, the court suggested that FAAAA preemption would not apply under the circumstances by operation of the safety exception.

Lyles v. Wren, 2023 WL 33118695, C.A. No. 2:23-cv-00051 (E.D. Ark. May 9, 2023). On a motion to remand to state court, the federal court held that the freight broker’s FAAAA preemption defense did not create federal subject matter jurisdiction. Accordingly, it remanded the personal injury action to state court for further proceedings. 

Lopez v. Metrogistics, LLC, 2023 WL 3165973, C.A. No. B322681 (Ca. Ct. App. May 1, 2023). The California intermediate appellate court reversed the trial court’s grant of summary judgment to a freight broker in a personal injury action arising from a brokered shipment. Specifically, the court found fact issues remained as to whether the broker acted as a motor carrier having a nondelegable duty of care with respect to the shipment. The court found the broker held itself out as a “nationwide carrier” and has disseminated advertisements depicting the broker’s contact information affixed to the side of tractor trailers. Its website references “transportation services.” The broker contracted with Autonation, Inc. to provide “transportation services” to Autonation’s western region. In the contract, the broker agreed to “provide service to the AUTONATION western region,” “meet accepted delivery standards set forth by AUTONATION,” provide for “delivery” within designated time frames and under designated rates, and provide insurance for general liability and Autonation’s cargo “[i]n addition to the Cargo coverage held by each contracted carrier.” The broker was to be “paid directly” for these services. The contract does not specify whether the broker is a “carrier” or a “broker.” The broker also had in place a “Broker-Carrier” agreement with the motor carrier transporting the load at the time of the accident, which provided the motor carrier was an independent contractor to the broker with respect to the services provided thereunder. The broker issued the bill of lading for the shipment. After citing the various federal definitions of broker and carrier, the court lamented the line between the two is “often blurry” though the key distinction is whether the entity accepted legal responsibility to transport the shipment. The court noted that nowhere in the Autonation agreement did the broker refer to itself as “broker” and further it agreed to provide “delivery” services. On the whole, the court found there was sufficient evidence to raise a triable issue of fact on whether the broker held itself out as a motor carrier.  It therefore reversed the grant of summary judgment in favor of the broker. 

CARGO

Bunis v. Masha Mobile Moving and Storage, LLC, 2023 WL 3689984, C.A. No. 23-1237 (E.D. Pa. May 26, 2023). In this dispute arising from the alleged damage to personal items packaged, stored, and moved from Pennsylvania to Illinois, the insurer for the household goods motor carrier was granted its motion to dismiss because: (1) there was no evidence of a contractual relationship between the plaintiff and the insurer; and (2) federal law does not allow a direct action against the cargo insurer. The court held the Carmack claim against the cargo insurer must be dismissed because the insurer was not a carrier subject to Carmack liability. Next, it dismissed the contract claim against the insurer, noting that while Carmack would not preempt such claims to the extent they were viable because, again, the insurer is not a carrier for purposes of Carmack preemption, but nevertheless there was no evidence of a viable contractual or privity relationship between the insurer and the plaintiff. 

COVERAGE

Hughes v. ACE American Insurance Company, 2023 WL 3670997, C.A. No. A23A0609 (Ga. Ct. App. May 26, 2023).  In this appeal, the Georgia Court of Appeals ruled that the direct action provision under the Georgia Motor Carrier Act, O.C.G.A. § 40-1-112, which permits a tort claimant to sue the insurer of a “motor carrier” directly in a personal injury tort action, did not apply to a company that provided transportation for group home residents to and from doctors appointments as well as other activities. The company did not charge the residents specifically for the transportation, but instead, provided it as part of the overall bundle of services it offered to its residents. Further, the company did not offer transportation services to the general public. Under these facts, the court determined the company did not provide “public conveyance” and as such was not subject to the direct-action statute. 

Artisan & Truckers Cas. Co. v. Dollar Tree Stores, Inc., 2023 WL 3601734, C.A. No. 20-C-290 (N.D. Ill. May 23, 2023). In this insurance coverage declaratory judgment action, the court ruled the liability insurer had no duty to defend or indemnify any individual or entity in connection with a motor vehicle accident. Ljupka Logistics, a federally licensed motor carrier, entered into a broker-carrier agreement with U.S. Xpress, a federally-licensed freight broker.  Dollar Tree contracted with U.S. Xpress for brokerage services for delivery of goods throughout Illinois. U.S. Xpress brokered the shipments to Ljupka. In violation of the agreement with U.S. Xpress, Ljupka “double-brokered” the load to another motor carrier, GLS Group. The owner of Ljupka was married to the owner of GLS.  GLS dispatched the load to Elliott McCoy, a driver for GLS Group. McCoy operated a tractor, which was titled in the name of the owner of GLS, but which was subject to an Owner-Operator Agreement granting Ljupka exclusive possession and use of the tractor. Nevertheless, it appears that, despite the Owner Operator Agreement, McCoy continued using the tractor for GLS Group deliveries. McCoy utilized a trailer “supplied by” U.S. Xpress, which subleased the trailer from another company. When a Dollar Tree employee opened the trailer door at one of the delivery locations, freight fell from the trailer onto him.  He brought a personal injury action against Dollar Tree, U.S. Xpress, Ljupka, and GLS Group.  Artisan & Truckers Casualty Company (“Artisan”) insured Ljupka under a commercial auto liability policy, which provided liability coverage for accidents involving an “insured auto”—defined as specifically described autos, additional autos, replacement autos, or temporary substitute autos. Artisan initiated the declaratory judgment action seeking a declaration of whether it had any duty to defend or indemnify any individual or entity in connection with the accident and resulting lawsuit. Neither the involved tractor nor the involved trailer was specifically described on the Artisan Policy at the time of the accident, though hours after the accident the owner of Ljupka attempted to add the tractor as a specially described auto. First, the court resolved that neither the tractor nor the trailer qualify as an “insured auto” under the Artisan Policy. Whether or not the trailer qualify as an “insured auto” was not contested.  With respect to the tractor, the court found that the attempt by the owner of Ljupka to add it after the accident was of no effect. The court stressed that the language of the declarations page itself made clear “changes shown above will not be effective prior to the time the changes were requested.” As such, any attempt to add the tractor after the accident could not have retroactive effect to render it covered for the accident. The mere fact that the requested effective date of the changes was the day of the accident did not sway the Court against retroactive application of the request to add the tractor. Accordingly, it could not qualify as a specifically described auto on the declarations page. Next, the court ruled out that the tractor qualified as an additional, replacement, or temporary substitute auto. With respect to the MCS 90 endorsement on the Artisan Policy, McCoy’s contemplated trips were wholly within the confines of the State of Illinois—intrastate—and therefore did not involve “interstate commerce” subject to the regulation of the Motor Carrier Act. The court cited the recent Seventh Circuit decision in Prime Insurance Company v. Wright, which “made clear that the relevant unit of analysis in ascertaining whether a carrier is operating in interstate or foreign commerce is the itinerary of the carrier’s route at the time of the accident, not, more narrowly, the specific portion of that itinerary on which the accident took place or, more broadly, the nature of the carrier’s business as a whole.” Under the Wright test, the fact that McCoy’s route would never take him out of Illinois rendered the MCS 90 endorsement inapplicable. Last, the court dispatched with the alternative argument that financial responsibility requirements upon intrastate carriers under Illinois law [presumably equivalent of Form E/F] applied to require Artisan to provide indemnification because the filing had not been made as of the date of the accident and it was incumbent upon the motor carrier to request of the insurer the Form E/F and the court found that “an insurer cannot be punished, through contract reformation, for the failure of its insured to comply with state law, particularly in light of the fact that Illinois law imposes both criminal penalties and civil sanctions for operating without a license from the ICC.”  As such, summary judgment was granted to Artisan on both the duty to defend and indemnify. 

WORKERS COMPENSATION

No cases of note to report this month.