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Bits & Pieces

CAB BITS & PIECES September 2022

Why do we celebrate Labor Day? According to the U. S. Department of Labor, “Observed the first Monday in September, Labor Day is an annual celebration of the social and economic achievements of American workers. The holiday is rooted in the late nineteenth century, when labor activists pushed for a federal holiday to recognize the many contributions workers have made to America’s strength, prosperity, and well-being.”

Both the United States and Canada will be celebrating Labor Day on Monday, September 5th. We hope everyone enjoys this break as we head into the last part of the year.

For CAB, September starts an active stretch as we will be attending InsurTech Connect the week of September 18th in Las Vegas, and a couple weeks later we’ll be at the Motor Carrier Insurance Education Foundation (MCIEF) annual Seminar in Orlando. We look forward to seeing many of you at these shows and conferences. We always love meeting up with our users. Please feel free to reach out if you would like to connect at these events.

CAB is excited to be a Gold Sponsor of this year’s MCIEF Annual Conference. If you have never attended an MCIEF event, I would encourage you to look into it. Information can be found at the link here. We hope to see you there!

Have a great September!

CAB Live Training Sessions

Please Note! We have transitioned our web meeting resource to Zoom. We previously used Go to Webinar. Due to this switch, we encourage you to sign onto the webinar a little earlier than normal to ensure there are no connectivity issues.

Tuesday, September 13th, 12p EST: Chad Krueger will present on CAB’s very new CAB Express report. The Express report was released for trial in April and May of this year. Since then, a number of organizations have taken advantage of the report. This session will provide details on the CAB Express report, company specific trial periods, and discuss other potential unique customized reports for individual organizations. Do not miss out on this opportunity to learn about this powerful CAB feature. Click here to register.

Tuesday, September 20th, 12p EST: Mike Sevret will present on Introduction to CAB: Flow and Navigation. This is a great session for new users or folks looking for a refresher. Mike will provide an overview of the basic flow and navigation of the overall CAB environment. Do not miss out on this opportunity to learn the ins and outs of CAB. Click here to register.

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: How to find the Chameleon Carrier® Report

A Chameleon Carrier® is a very important part of understanding a motor carrier and its associated risk. As it relates to Central Analysis Bureau resources, a Chameleon Carrier® is a company that is related to another entity that used the carrier’s vehicles and shares a phone (landline, cell, or fax), address (physical or PO Box), email, or representative.

Occasionally, when reviewing a motor carrier and its associated entities, a CAB user might be subject to a bit of information overload. That is where the Chameleon Carrier® Report can provide clarity. Once you have done your search in Carrier Central and an orange and green Chameleon Carrier® icon appears. You can click on that icon and you will be taken to another page where the associated motor carriers will appear.

screenshot of the Chameleon Carrier® Report interface

From there, click on the Chameleon Carrier® Report link (green highlight above) and the concise report below will appear, providing a clear view as to the relationship with the additional entities. As we can see below, the carrier we identified had 4 additional related entities. The green checkmarks detail the data points are specifically related.

screenshot of Chameleon Carrier® Report

If you’re looking for additional information on Chameleon Carriers® and Interrelated Entities, feel free to click the webinar link here that covers the concept of a chameleon carrier, interrelated entities and the features CAB provides to identify and understand the relationships that may exist between motor carriers.

THIS MONTH WE REPORT:

Marketplace

More cameras in more places.

The cost of trucking in 2021 increased to its highest level in the 15-year history of the American Transportation Research Institute’s annual Operational Costs of Trucking research. Learn more on Overdrive

More truck models, more electric trucks, and higher MSRP. Price Digests’ lead analyst Jessica Carr examines the changing truck market. Read more 

Health & Safety

The NHTSA boss resigns for a California board position and there’s a new medical manual on the horizon for truckers, after the old one was withdrawn in 2015. Learn more in this news roundup

Trucking companies have again asked federal regulators to allow hair testing for drugs to determine if a person is fit to drive — and this time the government has agreed to consider their case. Read more

Slow down out there! Speeding might get a little tougher for those driving heavy duty trucks. Regulators are reviving a proposal to add speed limiters on most heavy duty trucks. Read more

Diversity

Women in Trucking: the numbers are up for leadership, support and driving roles. The Women in Trucking Association says 33.8% of C-suite executives in transportation companies are women, an increase of 1.5%Read more

Legal

Developing a culture of safety, utilizing data, are ways to reduce the risk of a nuclear verdictRead more

Should brokers be held liable for the safety outcomes of the motor carriers they utilize?  That question is playing out, with owner-operators watching closely. Read more

September 2022 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Coakley v. Cole, 2022 U.S. Dist. LEXIS 130224, C.A. No. 3:22-cv-00251 (N.D. Miss. July 22, 2022).  Finding the allegations of a tort complaint “do not plausibly suggest anything more than simple negligence” the court dismissed the punitive damages claim.  The court likewise dismissed the negligent hiring/retention/investigation/training/ entrustment/supervision claims because the employer admitted vicarious liability for the negligence of its employee driver. 

Est. of Grillo v. Thompson, 2022 U.S. Dist. LEXIS 137048, C.A. No. GLR-21-3132 (D. Md. Aug. 1, 2022).  The Maryland federal court granted a motor carrier summary judgment on all counts, finding the decedent was contributorily negligent in causing the accident.  The undisputed evidence established the tractor trailer was traveling between 59.5 and 66.5 mph (in excess of the 50-mph speed limit) approximately 1,000 feet from (but almost two minutes before) the Accident; the tractor-trailer entered the intersection while the light was yellow; and the decedent’s vehicle entered the intersection while his light was red.  The court rejected what it considered speculative conjecture that the decedent had a sudden medical event, which the Estate argued would prevent assignment of contributory negligence to the decedent.  The court likewise rejected that any alleged gross negligence by the operator of the tractor-trailer would preclude the normal application of the contributory negligence rule.  Last, the court rejected the Estate’s reliance upon the last clear chance doctrine, finding the Estate failed to show “something new or sequential” that afforded the driver of the tractor-trailer a fresh opportunity (which he failed to avail himself of) to prevent the accident. 

Joyce v. Rich, 2022 U.S. Dist. LEXIS 141562, C.A. No. 20-11638 (E.D. Mich. Aug. 9, 2022).  In a personal injury case arising from a winter pile-up during a “snowy winter day,” the court held the sudden emergency doctrine applied and granted summary judgment to the driver of tractor-trailer who was unable to stop, resulting in him striking the rear of the tractor-trailer traveling directly in front of him (who also ran off the road to avoid striking the car stopped in front of him).  There was no evidence of speeding, distraction, or impairment by either driver.  The court likewise granted summary judgment on the related/derivative claims. 

Madera v. KTC Express, Inc., 2022 U.S. Dist. LEXIS 131859, C.A. No. 3:19-cv-01516 (N.D. Ohio July 25, 2022).  In this case, the tort plaintiff argued he was entitled to summary judgment on his negligence per se claim based upon various alleged violations of state and federal law and regulations.  The court held that the alleged violations of the FMCSRs did not give rise to a private right of action and therefore could not support negligence per se.  The tort plaintiff’s reliance upon a state statute fared no better because it was a statute of general duty, rather than a “specific duty statute”, and as such it could not form the basis of a negligence per se claim.  The only statute sufficient to give rise to summary judgment in favor of the plaintiff on the negligence per se claim was the one providing that drivers stay in their own lanes and only change lanes when safe to do so.  Concluding there was no disputed material fact that the Accident was caused by the driver crossing the lane, the court held the tort plaintiff entitled to summary judgment on his negligence per se claim.  The court held fact issues precluded summary judgment on the remaining claims for negligence, strict liability, negligent hiring/training/supervision, punitive damages, and veil piercing. 

Rattlesnake Ridge Ventures, LLC v. Ortiz, 2022 Tex. App. 5453, C.A. No. 4-22-00004-CV (Tex. Ct. App. Aug. 3, 2022).  The Texas Court of Appeals held that a Texas-domiciled tort plaintiff failed to establish personal jurisdiction under Texas’ long-arm statute.  The Accident happened in Minnesota.  The driver of the alleged at-fault tractor-trailer was not a resident of Texas.  The motor carrier was a Wyoming limited liability company.  Thus, the only connection to Texas was the citizenship of the tort plaintiff.  Under these facts, personal jurisdiction was lacking in Texas. 

BROKER

Echo Glob. Logistics, Inc. v. Dep’t of Revenue, 2022 Wash. App. LEXIS 1551, C.A. No. 83548-3-I (Wash. Ct. App. Aug. 1, 2022).  The Washington Court of Appeals affirmed the Board of Tax Appeals’ finding that a freight broker did not operate motor vehicles and therefore it was not a motor transportation business subject to a public utility tax under state law.  The court found the broker’s work or labor was the coordination and management of the movement of goods, not “the impact on a motor propelled vehicle” that would otherwise qualify it for public utility tax treatment.    

Reynolds v. Singh, 2022 U.S. Dist. LEXIS 139552, C.A. No. 2:22-cv-00601 (E.D. Cal. Aug. 5, 2022).  This case arises from a fatal auto accident in Oklahoma wherein the driver of a CMV rear-ended another vehicle during a winter storm.  The CMV driver and motor carrier removed the state-court tort action, invoking federal question jurisdiction under the Federal Aviation Administration Authorization Act (“FAAAA”).  Citing the safety-regulatory carve-out for FAAAA preemption, the court found there was no basis for complete preemption sufficient to give rise to federal question jurisdiction.  The court likewise held that the alleged violation of a FMCSR as an element of a state law cause of action was insufficient to give rise to federal question jurisdiction under established precedent.  As for possible diversity jurisdiction, the forum defendant rule precluded that basis of federal jurisdiction.  Finding there was no legitimate basis for removal, the court granted recovery of fees/costs to the parties seeking remand.

Russ v. XPO Logistics, LLC, 2022 U.S. Dist. LEXIS 145938, C.A. No. 19-2719 (D. Minn. Aug. 16, 2022).  In this wide-ranging opinion, the court was faced with numerous summary judgment motions by various individuals and entities involved in some capacity in the shipment of a load that was involved in a fatal accident.  XPO served as the freight broker in connection with the shipment.  It brokered the load to Ecklund Logistics (“Ecklund”).  Ecklund, in turn, leased equipment from KLE.  KLE and Ecklund operated out of the same location and shared common ownership.  Ecklund hired a driver, who had previously worked for multiple other carriers.  However, Ecklund’s inquiry with the prior employers was limited to determining whether the driver complied with drug and alcohol testing regulations.  Ultimately, while on his first trip for Ecklund, the driver was involved in a fatal accident while transporting a load of freight brokered to Ecklund by XPO.  XPO’s onboarding process involved checking Ecklund’s SAFER rating—which was “Satisfactory”—the highest available.  The rating was six years old at the time of the Accident, during which time Ecklund had never been re-rated.  XPO also utilized Carrier411 to monitor carriers.  XPO also verified Ecklund had the required insurance coverages.  Finding no red flags during onboarding, Eckluch was added to XPO’s database of carriers.  Despite Ecklund having a satisfactory rating, the evidence showed it had a history of insurance claims in the five years preceding onboarding, including 104 property damage claims, 44 collision claims, and 20 bodily injury claims.  XPO did not investigate or consider the insurance claims prior to adding Ecklund to its database.  The Broker-Carrier agreement between XPO and Ecklund specified Ecklund must immediately notify XPO if its rating was downgraded to conditional or unsatisfactory and develop and provide to XPO a corrective action plan for any safety or safety rating issues.  The Agreement further required Ecklund’s drivers be fully trained, screened by a criminal background check, complete substance abuse testing procedures, and conduct themselves in a courteous and professional manner.  Under these facts, the court denied XPO summary judgment on the claim it negligently selected Ecklund as a carrier.  The court found a reasonable juror could conclude that additional precautions/investigation were necessary.  Specifically, the court noted that Ecklund’s safety rating was over six years old at the time of the Accident and XPO never attempted to investigate Ecklund’s financial status “despite evidence that such information is directly tied to a carrier’s safety.”  Further the court noted there was some evidence suggesting Ecklund had inadequate safety management controls as evidenced by its high number of incidents and insurance claims.  XPO was granted summary judgment on the claims alleging it was a motor carrier and that it was vicariously liable for the negligence of the driver under various agency, joint enterprise, and aiding and abetting theories.  XPO’s claim for indemnification from Ecklund was deemed premature given that a great number of the claims alleged XPO’s direct negligence, for which it could not be entitled to indemnification.  The court also granted summary judgment to XPO and all defendants on the claim alleging violations of the FMCSRs, finding the regulations did not create any private right of action.  KLE was granted summary judgment for the claims alleging joint venture and alter ego with Ecklund.  KLE was likewise granted summary judgment under the Graves Amendment for the claims alleging vicarious liability for the negligence of the driver but was denied summary judgment on the claim it negligently entrusted its equipment to Ecklund, which would not be covered under the Graves Amendment.  Ecklund was denied summary judgment on the claim alleging it negligently hired the driver, but the court granted Ecklund summary judgment on the negligent retention and supervision claims. 

CARGO

Creative Lifting Servs. v. Steam Logistics, LLC, 2022 U.S. Dist. LEXIS 136158, C.A. No. 1:20-cv-337 (E.D. Tenn. Aug. 1, 2022).  The plaintiff contracted with the defendant to ship a crane from Italy to Houston, but when the shipment arrived at the Port of Houston it was rejected because the wood utilized to support the crane during shipment was allegedly infested with insects.  The entire shipment had to be shipped back to Italy to be fumigated before being re-shipped to Houston.  The plaintiff sued the defendant under various theories based upon the professed expertise in shipping arrangements contained on defendant’s website.  The court denied the defendant’s motion to dismiss the Tennessee Consumer Protection Act claim, finding the operative pleading contained sufficient allegations to make out a viable claim.   The court found, with respect to the negligent misrepresentation claim, the “essential element” of how or why defendant failed to use reasonable care in communicating the alleged misrepresentations on its website, was lacking.  However, the court granted the plaintiff the opportunity to amend the pleading to correct the deficiency.  With respect to the breach of contract claim, which the court had previously permitted the plaintiff to amend, the court found it still lacked the necessary allegations to support this cause of action.  As such, this claim was dismissed.  Last, with respect to the negligence claim, which the plaintiff had also previously been allowed to amend, the court found the plaintiff still pled all obligations/duties arose pursuant to contract (bill of lading), and therefore the court was required to dismiss the negligence action because any violation of the contractual duties sounds solely in contract, not tort.    

D&J Distrib. & Mft. Co. v. Bella+Canvas Retail, LLC, 2022 U.S. Dist. LEXIS 143919, C.A. No. 3:22-cv-599 (N.D. Ohio Aug. 11, 2022).  The plaintiff alleged the motor carrier inexplicably delivered goods that were intended for plaintiff’s customer to another location (“recipient”).  The plaintiff alleged the recipient kept the goods and would not return them.  In turn, the plaintiff filed suit against the recipient and the motor carrier.  The claims against the motor carrier included: (1) breach of contract/ unjust enrichment; (2) specific performance/constructive trust; (3) theft /conversion; and (4) negligence.  The carrier successfully moved to dismiss all claims under Carmack preemption. 

Stewart v. Fed. Express Corp., 2022 U.S. Dist. LEXIS 138114, C.A. No. 21-2478 (D.D.C. Aug. 3, 2022).  The court dismissed, without prejudice, a pro se plaintiff’s complaint alleging losses related to stolen packages delivered to her residence by the motor carrier.  Noting the deferential standard applied to pro se pleadings, the court held the complaint, as pled, was not sufficiently definite to establish standing of the claimant to sue under Carmack.  However, in so holding, the court rejected the motor carrier’s argument that only shippers are entitled to recovery under the Carmack Amendment, and thus the court allowed the pro se plaintiff to file a second amended complaint.

COVERAGE

Koch v. Progressive Direct Ins. Co., 2022 Pa. Super. LEXIS 327, C.A. No. 1302 MDA 2021 (Pa. Super. Ct. Aug. 4, 2022).  The Pennsylvania Superior Court (intermediate appellate court) overturned a trial court’s decision in favor of an insured holding he was entitled to UIM benefits.  At policy inception, eleven years before the Accident, the insured executed a UIM rejection form.  However, nine months prior to the Accident, the insured had telephonic conversation with a representative of Progressive during which the insured requested to purchase additional coverage for the involved motorcycle.  During the conversation, the Progressive representative discussed the availability of uninsured motorist coverage, but not underinsured motorist coverage.  Following the call, the insured purchased $300,000 in UM coverage (but no UIM coverage).  The insured argued if the representative had discussed the availability of UIM coverage during the call, he would have purchased that as well.  The court held that the 2004 UIM rejection form remained valid and met the state’s statutory requirements for rejection of UIM benefits.  Additionally, the court stressed that Progressive routinely mailed the insured declarations pages showing he had rejected UIM coverage, including after the phone call in which he added additional UM coverage.  The applicable statutes provided once an insured executes a UM/UIM rejection form, the rejection is presumed to be in effect throughout the life of the policy unless affirmatively changed by the insured.  They also provided that an insured having completed a UM/UIM rejection form cannot claim liability of any based upon inadequate information.  Based upon this, the appellate court held Progressive was not required to inform the insured about the availability of UIM coverage or obtain a new UIM rejection form in response to the call seeking additional coverage.  As such, the appellate court held the insured was not entitled to UIM benefits in connection with the Accident. 

Nat’l Cas. Co. v. Eagle Eye Truck Lines, LLC, 2022 U.S. Dist. LEXIS 133124, C.A. No. 22-cv-147 (N.D. Ok. July 27, 2022).  A federal court entered a stay in the federal insurance coverage declaratory judgment action, citing disputes over choice of law, which it determined needed to first be decided in the underlying state court tort action. 

Pierson v. White Pine Ins. Co., 2022-Ohio-2702, C.A. No. 21CA3 (Ohio Ct. App. July 28, 2022).  In this insurance coverage declaratory judgment action, the court was tasked with addressing the scope of a towing-transporting-autos exclusion.  The exclusion excluded from coverage bodily injury or property damage “arising out the ownership, operation, maintenance or use of any ‘auto’ that is not identified in ITEM SEVEN in the Auto Dealer Declarations used to move, tow, haul or carry ‘autos.’”  The policy separately defined “auto” as “a land motor vehicle, ‘trailer’ or semitrailer.”  ITEM SEVEN was a schedule of covered autos and only listed one vehicle—a 1999 International Rollback.  The Accident involved a 1999 Freightliner hauling load of inoperable cars being transported on a trailer.  First, the court held the policy provisions were not ambiguous.  It stressed that the mere fact that provisions cross-referenced other provisions was not alone sufficient to render it ambiguous.  The court next held the 1999 Freightliner was not listed in Item Seven.  Further, it found the trailer itself constituted an “auto” under the policy definition, which specifically included trailers. As such, the court concluded a vehicle not identified in Item Seven was being used to move, tow, haul or carry an auto (i.e. the trailer).  The court held that under these circumstances, the exclusion applied.  It further rejected the policy provided illusory coverage, noting that had the 1999 Freightliner simply been listed in ITEM SEVEN, there would have been coverage.  As such, it reversed the trial court’s decision that the insurer had the duty to defend and indemnify in connection with the Accident.

Progressive Cas. Ins. Co. v. Jason Boire, 2022 U.S. Dist. LEXIS 141120, C.A. No. 8:21-cv-0666 (N.D.N.Y. Aug. 9, 2022).  The New York federal court dismissed a declaratory judgment insurance coverage action, subject to the right to file an amended complaint, where it found the operative pleading failed to allege a case or controversy.  In particular, the court found the declaratory judgment complaint failed to allege that the underlying tort action sought recovery from the plaintiff insurer or any party was claiming coverage under the at-issue policy.  As such, the court concluded there was merely a “hypothetical dispute” and the case or controversy requirement was not satisfied. 

Travelers Prop. Cas. Co. of Am. v. H.E. Sutton Forwarding Co., 2022 U.S. Dist. LEXIS 140768, C.A. No. 2:21-cv-719 (M.D. Fla. Aug. 8, 2022).  In this insurance coverage declaratory judgment action, the excess insurer sought declaratory judgment it had no duty to defend or indemnify an entity in connection with claims arising from an accident, occurring on an airfield, in which the plaintiff collided with the wing of an aircraft that the putative insured had rented in connection with its aircraft charter business.  The excess policy excluded from coverage “[d]amages arising out of the ownership, maintenance, use or entrustment to others of any aircraft owned or operated by or rented or loaned to any insured.”  In response to the putative insured’s demand for coverage, the excess insurer reserved its rights but advised the insured there was no coverage on account of the aircraft exclusions.  The insurer then filed the declaratory judgment coverage action before moving for summary judgment that it had no duty to defend or indemnify the putative insured.  First, the court dispatched with the putative insured’s claim the action was not ripe, noting that the insured had requested coverage that had been denied.  Under Florida law, the court held the demand for coverage was sufficient to constitute a justiciable controversy.  As for the policy exclusions, the court noted the broad language used in the exclusion, explaining ‘arising out of’ is broader in meaning than the term “’caused by’ and means ‘originating from,’ ‘having its origin in,’ ‘growing out of,’ ‘flowing from,’ ‘incident to’ or ‘having a connection with.'”  Insofar as the underlying tort complaint alleged damages allegedly originating out of the use/rental of an aircraft by the putative insured, the court found the aircraft exclusion applied to bar coverage.  However, the court held the insurer had not met its burden to establish, for purposes of summary judgment, that the policy did not provide illusory coverage.  The putative insured argued application of the aircraft exclusion would nullify all coverage since all of its business involved the use of an aircraft.  Accordingly, this issue was left to be decided and the insurer’s motion for summary judgment was denied. 

Williamsburg Nat’l Ins. Co. v. New York Marine & Gen. Ins. Co., 2022 U.S. Dist. LEXIS 144658, C.A. No. 21-04377 (C.D. Ca. Aug. 12, 2022).  In this dispute between insurers over defense and indemnification obligations for various individuals and entities in connection with a motor vehicle accident, the court granted in part and denied in part the parties’ respective summary judgment motions.  Williamsburg issued a motor carrier liability policy with $1,000,000 limits and that included a MCS 90 endorsement to DLR Express (“Williamsburg Policy”).  New York Marine issued a motor carrier liability policy with $1,000,000 limits to Intermodal Contractor’s Association of North America, which also included a MCS 90 endorsement (“New York Marine Policy”).  Arthur Trimble was later added as a certificate holder to the New York Marine Policy.  DLR leased a tractor with attached trailer to Trimble under an equipment lease agreement and sub-haul agreement.  The Agreement provided Trimble would indemnify and release DLR against any liability arising out of Trimble’s use of the equipment.  Pursuant to the Agreement, Trimble also added DLR as an additional insured to the New York Marine Policy.  While using the leased tractor, Trimble was involved in an accident with Foster.  Foster filed a complaint against Trimble in California State Court (“Foster Litigation”).  DLR was later added as a defendant to the Foster Litigation.  New York Marine provided a defense to Trimble in the Foster Litigation.  All claims against Trimble in the Foster Litigation were resolved for $155,000.  It appears DLR never requested a defense and neither New York Marine nor Williamsburg provided a defense to DLR in the Foster Litigation.  A default judgment for over $6,000,000 was entered against DLR in the Foster Litigation.  After unsuccessfully moving to set aside the default judgment, DLR tendered its defense to Williamsburg, who agreed to defend DLR in the Foster Litigation pursuant to a full reservation of rights.  A month later, DLR tendered its defense and made a request for indemnification as an additional insured to New York Marine.  The Foster plaintiffs then agreed to settle all claims against DLR for $1,000,000.  DLR and Williamsburg demanded New York Marine tender the remaining $845K in available limits under the New York Marine Policy to settle the claim, but New York Marine refused.  Ultimately, Williamsburg paid the entire $1,000,000 demanded to settle the claim against DLR and then instituted suit against New York Marine seeking recoupment of those amounts.  The court held under these facts New York Marine had sufficient notice of a potential contribution claim from Williamsburg based upon the involvement of DLR in the Foster Litigation.  Even assuming DLR had not provided notice to New York Marine or demanded a defense, the court explained “an insured’s lack of tender or compliance with a policy provision is not fatal to a coinsurer’s right of equitable contribution; rather adequate notice of the potential for contribution and the opportunity for the investigation and participation in the defense of the underlying litigation will suffice.”  It therefore found New York Marine had sufficient notice of a possible contribution claim to preclude dismissal of the contribution claim.  While the court determined it need not reach the impact of the MCS 90 endorsement in light of its other ruling, it went on to explain that the MCS 90 endorsement only applies to injuries to the public and does not apply to disputes as between co-insurers.  With respect to the remaining claims of negligence and tort of another by Williamsburg against New York Marine, the court held New York Marine was entitled to dismissal of those claims because those were premised upon a viable claim by DLR for which Williamsburg was subrogated and since DLR did not provide adequate notice to New York Marine of its request for defense/indemnification in connection with the Foster Litigation, DLR had no assignable cause of action. 

WORKERS COMPENSATION

No cases of note to report this month.

CAB BITS & PIECES JULY 2022

The final stretch of summer.

August is normally seen as the last stretch of summer. We hope everyone gets at least one final opportunity to enjoy time with friends and family before school starts, fall sets in, and we get back to our non-summer schedules. 

As a quick follow-up reminder, as of last month, our Bits & Pieces is being delivered a few days later than normal. In order to ensure our newsletter does not get lost over weekends or holidays, we’re adjusting our delivery points. Do not worry, we will still be providing the great content and resources you’ve come to expect over the years.

Have a great August!

CAB Live Training Sessions

After taking the month of July off, we’re ready to get back into the swing of things. Our team has two great sessions that will take place during the August. Keep in mind, all our great training content is still available via our webinar page by clicking here.

Below is a peek at our live training sessions that will take place in August.

Tuesday, August 9th @ 12p EST: Mike Sevret will present on one of CAB’s most valuable tools, CAB List. Learn how to best use CAB List to monitor your book of business. Set up triggered alerts, analyze the health of your motor carriers, and more! Attendees will learn how to monitor CAB-BASIC Scores, ISS-CAB Values, crashes, violations, safety rating, filings and others. Do not miss out on this opportunity to learn about this powerful CAB feature. Click here to register.

Tuesday, August 16th @ 12p EST: Learn how to grow your business with SALEs Targeted Leads. The CAB team will teach you how to target companies within your specific appetite with over 100+ filters. Search by insurance renewals, fleet size, commodities, and many other options. This is a great session for newer and experienced users. Click here to register.

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: What’s in a number?

Occasionally, we get asked about the DOT number. How many are there? How many are active? How many are issued during a day, week, or month? What is the most recent DOT number issued? Would the FMCSA ever run out of DOT numbers? When does DOT information need to be updated? Hopefully, I will be able to answer a number of these questions below.

Active DOT Numbers? Currently, as I write this piece, there are 2,112,645 active DOT numbers.

What is the last DOT number issued? This is difficult to say as there are roughly 600-700 DOT numbers issued every day.  However, I can tell you that we are in the 3,926,xxx range.

The FMCSA will likely never run out of DOT numbers. It is interesting to note that the pace of issuing DOT numbers continues to pick up. It took eight years to get from 1,000,000 to 2,000,000, seven years from 2,000,000 to 3,000,000, and we’re anticipating 4,000,000 to be sometime in November which would put it at five and a half years.  Below is a quick graph of the count of DOT numbers that have been issued each month since January of 2016.

graph showing count of DOT numbers issued by month.

DOT numbers are also used to identify when motor carriers are required to update their carrier census or MCS-150 information. Updates are required every two years. The last two numbers in the DOT number identify specifically when this is to be done. The last digit is the month, 0 (zero) being October. No one updates in November or December. The second to last digit, even or odd, identifies the year the update must be completed. Therefore, if a motor carrier’s DOT number is 2578346, the updated should be completed June of even years.

THIS MONTH WE REPORT:

“Gasoline has been poured on the fire that is our ongoing supply-chain crisis.” That’s the reaction of the California Trucking Association after the US Supreme Court denied its petition challenging California’s AB5 law, which makes it more difficult to classify workers as independent contractors. The Association says more than 70,000 owner-operators could be affected. Protests were held at California ports in LA and Oakland as truckers as the 2019 law went into effect. Learn more in these stories: 

Supreme Court denies California Trucking Association’s AB5 Case

Supreme Court Ruling may take 70,000  truckers off road 

California Truckers Struggle to Comply with New Employment Law – WSJ 

California trucking prepares for shake-up under independent contractor law AB5  

Call for repeal of AB5 in California  

Cameras 

More cameras in more places. CCJ takes a closer look at cameras, and how fleets and drivers are using them for more than just foiling thieves after their cargo. Learn more 

Younger Drivers 

CAB’s Chief Operating Officer Shuie Yankelewitz says new laws allowing 18-year-olds to drive commercially may not have that much impact on the industry if the fleets that do the hiring can’t get past insurance requirements. CCJ – Commercial Carrier Journal – talks to Yankelewitz and looks at what it takes to get younger drivers insured. Learn more

New Safe Driver Apprenticeship Pilot Program: FMCSA encourages companies to prepare for the SDAP Program by reviewing requirements. Learn more 

Safety 

The hot summers can be extra dangerous for truck drivers, as tire safety risks can rise with the temperature. Irregular tire wear (especially in the center of the tire tread), bulges, blisters, peeling and/or discoloration could be signs that a tire is overheating, according to Mark Finger, Senior Vice President of Maintenance and Operations at Transervice. Get tips on recognizing the signs of heat damage and taking preventive action to reduce the damage to tires due to overheating. Learn more

Brake Safety Week is August 21-27. In this important article, CCJ looks at one of the most common violations: brake hose chafing. “Anytime hoses are permitted to move there is potential for lines to rub,” said Transervice Vice President of Maintenance Matt Copot. Learn more  

Inspections are on the rise, and so are moving violations. Todd Dills from Overdrive reports that the initial COVID downturn in both inspections and violations is reversing itself this summer. Learn more 

Drug test results for truck drivers: nearly 130,000 truck drivers were in the Drug and Alcohol Clearinghouse as of June 1. Jason Cannon and Matt Cole from CCJ take a look at what this means for the transportation industry. Watch 10-44 with Jason and Matt

Brokers 

Should dispatch services be considered brokers? The FMSCA asked for comment and the Owner-Operator Independent Drivers Association says, “it depends.” Matt Cole from Overdrive reveals details of this comment and others that have been received so far in the debate on broker reform. Learn more 

Chameleon Carriers 

two lines of the cabs of semi trucks

Did you miss our special update on chameleon carriers? Get the scoop here.

July 2022 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Garza v. Pullen, 2022 Tex. App. LEXIS 4958 (Tex. Ct. App. July 20, 2022).  The Court of Appeals of Texas affirmed in part and reversed in part the trial court’s grant of summary judgment to a motor carrier.  The case involved an accident with a tractor-trailer parked on the side of the highway.  The appellate court held there was a fact issue regarding the proximate cause of the accident, such that the motor carrier/tractor trailer driver were not entitled to summary judgment on the simple negligence cause of action.  However, the tractor-trailer operator’s failure to put out warning devices was held to be insufficient to satisfy the gross negligence standard, and accordingly the motor carrier and tractor-trailer driver were entitled to summary judgment on the gross negligence cause of action.   

Roberts v. Bentarius Fonta Stewart, 2022 U.S. Dist. LEXIS 126797, C.A. No. 22-0187 (S.D. Ala. July 18, 2022).  The federal court denied a tort plaintiff’s motion to remand the tort action to state court.  While the pleadings did not contain a specific amount pled as damages, the federal court held it could read the nature of the allegations of the complaint, including that the tort plaintiff’s vehicle was totaled, the plaintiff’s vehicle was allegedly dragged underneath the trailer, and the tort plaintiff sustained “significant personal injuries”, in combination with “judicial experience and common sense” to rule that the amount in controversy exceeded the $75,000 jurisdictional threshold. 

Gregory v. Lindamood Heavy Hauling, 2022 U.S. Dist. LEXIS 125575, C.A. No. 22-327 (W.D. Ok. July 15, 2022).  The Oklahoma court applied prior precedent in dismissing negligent hiring, training, supervision, retention, and monitoring causes of action where the motor carrier had previously stipulated that the driver was acting within the course and scope of his employment at the time of the Accident.  With respect to the negligent entrustment cause of action, the court explained that cause of action could be maintained even where the employer stipulates to course and scope of employment.  However, the court held the plaintiff failed to plead facts necessary to give rise to a viable negligent entrustment cause of action.  The same was true with respect to the allegation the motor carrier “ratified” the driver’s negligent actions, with the court specifically noting the employer stipulated the driver was acting within the course and scope of employment whereas ratification presumes an “after-the-fact” approval of something not otherwise authorized. 

Odisho v. Yacouba, 2022 U.S. Dist. LEXIS 121786, C.A. No. 21-11021 (E.D. Mich. July 11, 2022).  The court held there was no evidence that FMCSR violations found on the tractor (a crack on the passenger side of the windshield; three axles out-of-adjustment; and “CMV manufactured after 10/19/94 has an automatic airbrake adjustment system fails to compensate for wear”) and two violations with respect to the trailer (left and right brake lamp and left turn signal inoperable), almost two weeks after the accident, played any causal role in the fatal backing accident.  As such, the lessor of the equipment was entitled to summary judgment in the personal injury action. 

Alexander v. Davis, 2022-Ohio-2345, Appeal No. C-210461 (Ohio Ct. App. July 6, 2022).  An employee staffing company, which provided CDL drivers to a motor carrier customer who then drove the motor carrier’s equipment under the motor carrier’s operating authority, was not entitled to summary judgment in a personal injury suit alleging one of the temporary drivers negligently operated a CMV causing a fatal accident.  The court held there was a direct employment relationship between the driver and the customer motor carrier, but not to the exclusion of potential employment by the staffing company as well.  As such, the staffing company was not entitled to judgment in its favor as a matter of law with respect to the personal injury action.    

McMaster v. DTE Energy Co., 2022 Mich. LEXIS 1319, No. 162076 (Mich. July 1, 2022).  The Supreme Court of Michigan held that Michigan’s adoption of the Motor Carrier Safety Act did not abrogate the common law duty a shipper owes to use reasonable care while loading cargo where the shipper assumes the responsibility of loading.  The “shipper’s exception” holding the shipper liable to the carrier and/or injured third parties for injuries caused by latent and concealed defects that cannot be discerned by ordinary observation by the carrier remained good law even after enactment of the MCSA.  Thus, if the defect is latent, the shipper is liable to injured third parties, whereas if the defect is readily discernable to the carrier, the carrier but not the shipper can be held liable.  However, the court found the defect at issue in the case was not latent and was discernable by the carrier’s driver.  As such, the shipper was entitled to summary judgment in the personal injury action. 

Marr v. Croxton, 2022 U.S. Dist. LEXIS 115155, SA-21-CV-00961 (W.D. Tex. June 29, 2022).  The court held that failure to log on-duty hours as required by FMCSRs was not, standing alone, sufficient to create a genuine issue of material fact as to whether the driver was fatigued at the time of the Accident.  As such, this was not enough to support a gross negligence cause of action.  Similarly, the court held there was insufficient evidence to support a gross negligence claim against the motor carrier premised upon negligent hiring, retention, and entrustment or failure to follow FMCSRs.  Moreover, because the motor carrier admitted the driver was acting within the course and scope of his employment at the time of the Accident, the direct negligence claims against the employer had to be dismissed. 

Martin v. Thomas, 2022 La. LEXIS 1288, C.A. No. 2021-C-01490 (La. June 29, 2022).  The Supreme Court of Louisiana has now spoken on a frequently litigated issue (with differing rulings by jurisdiction).  The court ruled that a plaintiff may pursue both a negligence cause of action against an employer for which the employer is vicariously liable and a direct claim against the employer for its own negligence in hiring, supervision, training, and retention, as well as negligent entrustment claims, even if the employer stipulates the employee was in the course and scope of employment at the time of the injury. 

BROKER

No notable decisions to report this month. 

CARGO

Beaumont v. Vanguard Logistics Servs. (USA), Inc., 2022 U.S. Dist. LEXIS 127632, C.A. No. 2:22-cv-02715 (D.N.J. July 19, 2022).  Plaintiff contracted with VLS for the carriage of cargo containing a motorcycle, bicycle, and other personal items from Australia to the United States.  The bill of lading VLS issued reflected transport from Sydney, Australia to Ballston Spa, New York (an inland port 30 miles north of Albany, NY).  Plaintiff alleged that the crate was shipped from Sydney, Australia to the Port of Los Angeles, where it was then transported by rail to Carteret, New Jersey.  Plaintiff further alleges the cargo was damaged while in Carteret, New Jersey at VLS’s warehouse while awaiting to clear customs.  The plaintiff brought a state court action in New Jersey state court alleging violations of New Jersey’s Consumer Fraud Act, which VLS then removed to federal court on the basis of diversity and maritime jurisdiction.  VLS then sought transfer of the case to the Southern District of New York pursuant to a forum selection clause contained in the VLS bill of lading.  Plaintiff challenged the transfer, alleging there was no admiralty jurisdiction because the damage occurred on land, that the standard terms of the bill of lading were unenforceable as contracts of adhesion, and the forum selection clause and COGSA were inapplicable because the cargo was damaged during overland transport by means other than what was expressed in the bill of lading.  The court rejected each of Plaintiff’s arguments.  As for admiralty jurisdiction, the court found the contract of carriage “required performance substantially by sea.”  As for the contract of adhesion argument, the court noted that forum selection clauses are generally valid even when part of a contract of adhesion.  Similarly, Plaintiff was unable to show that being forced to litigate the action in the SDNY would be so gravely difficult so as to deprive him of his day in court.  Last, the court noted that the bill of lading provided for through transportation and that the carriage to its final destination inevitably had to include carriage by land. 

Patriot Logistics v. Travelers Prop. & Cas. Co. of Am., 2022 U.S. Dist. LEXIS 122600, C.A. No. 4:20-cv-03565 (S.D. Tex. July 12, 2022).  A motor carrier sued its cargo insurer after it denied a cargo claim stemming from goods stolen from a locked, secure “drop yard.”  The motor carrier tendered the cargo claim to Travelers, but Travelers denied the claim.  The shipper eventually sued the motor carrier and Travelers refused to provide a defense to the motor carrier.  The motor carrier then settled directly with the shipper but then sued Travelers for breach of contract, breach of good faith and fair dealing, and violations of the Texas Insurance Code. Travelers sought summary judgment as to all causes of action.  In assessing the duty to defend, the court limited its analysis to the allegations of the underlying complaint to determine whether it triggered coverage, as alleged, under the Travelers Policy.  As such, the court sustained Travelers’ objections to consideration of additional materials made part of the motor carrier’s complaint but not included with the shipper’s complaint against the motor carrier.  However, the court then rejected Travelers argument that the suit was time-barred because the statute of limitation ran from the date of its denial of the claim.  Instead, the court held the breach of the duty to defend, as well as the breach of good faith and fair dealing, accrued when the underlying lawsuit was filed and Travelers refused to provide a defense—in the court’s reasoning, “[p]rior to that, there was nothing for Travelers to either defend or indemnify.”  Thus, it denied Travelers summary judgment on these counts.  However, for the specific allegation of breach of Chapter 541 of the Texas Insurance Code, the court, applying prior rulings, held it accrued as of the date of the first denial such that this cause of action was time-barred.  Arnold v. Allied Van Lines, Inc., 2022 U.S. Dist. LEXIS 116529, C.A. No. SA-21-CV-438 (W.D. Tex. July 1, 2022).  The Texas trial court held the household goods carrier satisfied, as a matter of law, the four factor Hughes test with respect to its $150,000 limitation of liability except for specific items listed on the carrier’s “High Value Inventory List.”  The court held there were multiple reasonable interpretations of the High Value Inventory List—1.) that items listed there were not subject to the general $150,000 limitation of liability; or 2.) those items are still subject to the $150,000 limitation of liability.  As such, that aspect of the case presented a jury question, and the household goods carrier was not entitled to summary judgment.   The court further held that the household goods carrier, if found liable, could elect between repair or replacement value in its discretion, rejecting the claimant’s argument the carrier could only pay replacement value.  Last, the court held the claimants could recover attorney’s fees, provided they met all requirements of 49 U.S.C. § 14708(d). 

Kelly v. FedEx Corp. Servs., 2022 U.S. Dist. LEXIS 1117221, C.A. No. 3:22-cv-50 (D.N.D. May 31, 2022).  The North Dakota federal court remanded a case stemming from alleged loss/damage to cargo under the Carmack Amendment, finding the $10,000 jurisdictional threshold had not been met.  The claimant initially filed a state court action alleging various state law causes of action and seeking damages “not less than $50,000.”  The claimant later filed a motion for default judgment in the state court action seeking $2,500 plus fees and costs.  The day after FedEx removed the case to federal court, the claimant filed an amended complaint in state court removing the bad faith claim and seeking damages “not to exceed $7,500.”  The claimant alleged in the complaint he purchased the at-issue cargo (rifle) from a firearms dealer for $2,545.  When he arranged shipment with FedEx, he declared a value of $2,500.  Against this record, the court held there was not sufficient evidence that the amount in controversy exceeded the $10,000 threshold for federal jurisdiction. 

COVERAGE

Lancer Ins. Co. v. Jet Exec. Limousine Serv., 2022 U.S. Dist. LEXIS 125649, C.A. No. 1:19-cv-3024 (N.D. Ga. July 14, 2022).  In an insurance coverage declaratory judgment action arising from a single-vehicle accident involving a bus, partial summary judgment was granted to insurers and partial summary judgment was granted to tort plaintiffs named as defendants in the DJ action.  The dispute involved multiple different liability and excess policies issued to different transportation companies allegedly involved in the at-issue trip.  The court held the auto exclusion under an at-issue Cooper-Global CGL policy excluded coverage for the loss.  The at-issue Cooper-Global commercial auto liability policy provided coverage for scheduled, hired, and non-owned autos in the amount of $1.5 million, which the insurer conceded during briefing did provide coverage for the loss.  With respect to the Cooper-Global excess policy, it contained a scheduled listing of 23 vehicles (as opposed to the 92 listed under the primary Cooper-Global policy).  The Cooper-Global excess policy also included verbiage indicating it was follow-form to the underlying insurance, unless there was otherwise a conflict between the two, in which case the terms of the excess policy controlled.  Since the Cooper-Global excess policy only included a schedule of covered autos, the involved bus was not listed on the excess policy schedule, and the excess policy did not include the numeric designation for hired and non-owned autos (as did the Cooper-Global primary policy), the court found a conflict between the primary and excess policy regarding the scope of coverage.  Accordingly, given the language of the Cooper-Global excess policy, its language prevailed and the court held the auto was not covered under that excess policy despite being covered under the underlying Cooper-Global primary policy.  With respect to whether the MCS 90-B endorsement on the Cooper-Global policy applied, the court adopted the “majority view” that the endorsement only applies when the vehicle is involved in interstate travel at the time of the accident.  Finding the at-issue trip was not a “practical continuity of movement” between transportation providers in interstate commerce, the MCS 90-B endorsement on the Cooper-Global primary policy was held to be inapplicable.  With respect to the Form F endorsement on the Cooper-Global primary policy, the court held the tender of $1.5 million under the Cooper-Global primary auto liability policy eliminated any obligation under the Form F endorsement because the tender exceeded the state mandated financial surety requirement of $500,000.  The same was not true with respect to the Form F endorsement on another policy issued to a separate transportation company—Hennessy—allegedly involved in making the arrangements for the trip.  Because the court found there was a fact dispute whether Cooper-Global and Hennessy were the same company or merged prior to the Accident, and it was not clear that Hennessy was an insured under the Cooper-Global policies, the court held the $1.5 million tender under the Cooper-Global primary policy did not alleviate exposure under the Hennessy policy’s Form F endorsement. 

Brink v. Direct Gen. Ins. Co., 38 F.4th 917 (11th Cir. 2022).  The Eleventh Circuit Court of Appeals reversed a jury verdict in favor of an insurer on bad faith claims, finding the trial court gave an improper jury instruction regarding Florida’s law on bad faith. After start-and-stop efforts to obtain a settlement in exchange for the state-minimum policy limits under the policy, the tort plaintiff’s attorney finally responded acknowledging he would settle for the policy limits provided certain conditions were met.  However, the insurer failed to respond to this correspondence or otherwise re-tender the policy limits in response.  Further, there was no evidence adduced to show the insurer notified its insureds of this settlement offer or the risk of an excess judgment.  The tort plaintiff subsequently obtained a $12 million judgment at trial and then pursued the insurer for bad faith via an assignment from the insureds.  The appellate court reversed the jury verdict in favor of the insurer, finding that the jury instructions the plaintiff requested were consistent with Florida law.  Specifically, the court held Florida recognizes a separate component of insurance bad faith requiring the insurer to advise its insured of possible excess judgments.  As such, the case was remanded for a new trial. 

Progressive Paloverde Ins. Co. v. BJ Trucking Earthmover, LLC, 2022 U.S. App. LEXIS 19649, No. 21-30379 (5th Cir. July 15, 2022).  In a case arising from a fatal tractor-trailer on train accident, the trial court made several summary judgment rulings that were appealed to the Fifth Circuit.  The driver of the tractor-trailer was the sole member of BJ Earthmover, LLC, who owned both the tractor and trailer.  Progressive insured the tractor the decedent was driving under a Non-Trucking Liability Policy.  Heck Industries was alleged to have been the decedent’s employer at the time of the Accident, though it maintained the decedent was an independent contractor.  Heck was listed as an additional insured under the Progressive NTL policy.  Heck submitted a demand for defense and indemnification to Progressive.  The Fifth Circuit affirmed the trial court’s ruling on summary judgment that Heck was not the employer of the decedent driver, finding there was no written contract between the two, the decedent was paid by the load, each could have terminated the relationship at will, the decedent had control over the manner and method by which he performed the transportation, the only instructions from Heck were the location of pickup and delivery, the decedent had the option to work on any given day or not, and the only “instructions” given the haulers were safety restrictions for the plants on which they were operating.  The Fifth Circuit likewise affirmed the trial court’s ruling that the Progressive NTL policy did not require it to defend or indemnify Heck, noting that the endorsement for non-trucking liability excluded from the definition of “insured” “anyone engaged in the business of transporting property by auto for hire that is liable for your conduct.”  The NTL policy likewise excluded coverage when an insured auto or attached trailer was being used, operated, or maintained to carry property or while such property is being loaded or unloaded from the insured auto or the insured auto is used in any business or for any business purpose.  It was undisputed at the time of the Accident, the decedent was hauling 27 tons of sand, such that the Fifth Circuit found he was “indisputably hauling property at the point of collision.”  As such, the NTL Policy did not provide coverage for the loss.  The Fifth Circuit rejected Heck’s challenges to the legality of the NTL exclusion, noting the provision had been upheld by at least one other state appellate court. 

Ballentine Express Corp. v. EAN Holdings, LLC, 2022 U.S. Dist. LEXIS 126653, C.A. No. 2:21-cv-02242 (July 18, 2022).  A motor carrier rented a vehicle from Enterprise for use in its motor carrier operations.  As part of the rental agreement, the motor carrier purchased the $100,000/$300,000 liability coverage offered by Enterprise.  One of the motor carrier’s employees was involved in an accident while operating the rented vehicle.  The injured tort plaintiff filed a tort action in which he sued the motor carrier.  Shelter Insurance insured the motor carrier under a policy with $1,000,000 liability limits and which contained an MCS 90 endorsement.  Evidently, the rented vehicle was not listed on the Shelter Policy.  Shelter provided a defense to tort lawsuit to the motor carrier pursuant to a reservation of rights.  The motor carrier then sued Enterprise in a separate action in federal court.  Within the federal action, Enterprise filed a third-party complaint against Shelter.  In the third-party complaint, Enterprise sought declaratory judgment that any insurance coverage in relation to the Accident must come from the Shelter Policy and/or the MCS 90 endorsement on the Shelter Policy, not the Enterprise Policy, and that Shelter was required to indemnify Enterprise up to the limits of the Shelter Policy or MCS 90 endorsement.  Shelter then moved to dismiss Enterprise’s third-party complaint in the federal action.  Shelter argued the third-party complaint was improper because Shelter had no liability to Enterprise, claiming any liability of Shelter would be limited to the motor carrier only.  The court adopted Shelter’s arguments and dismissed Enterprise’s third-party complaint against it. 

Wagner v. Progressive Direct Ins. Co., 2022 Conn. Super. LEXIS 1740, No. HHD-CV21-6139450 (Conn. Super. Ct. July 11, 2022).  A tort plaintiff brought an uninsured motorist complaint arising from injuries he sustained when he was rear-ended by an uninsured vehicle.  The uninsured vehicle was being operated by a driver in furtherance of CAS Trucking, LLC’s business at the time of the Accident.  CAS Trucking had rented the vehicle from Enterprise.  Progressive, as the putative UM carrier, filed an apportionment complaint against the truck driver, CAS Trucking, and Enterprise.  Progressive claimed Enterprise, in leasing/renting the vehicle to CAS Trucking, was independently negligent (to get around Graves Amendment) for failing to verify CAS Trucking had liability insurance coverage and allowing its truck to be driven on Connecticut highways without insurance.  Enterprise claimed as a rental car company, it had no legal obligation to provide liability insurance or ensure the users of its vehicles maintained minimum state liability limits, with this same rule applying regardless of whether it rented/leased passenger or commercial motor vehicles.  The court rejected Progressive’s arguments, explaining ‘[w]hile Connecticut’s statutory requirements for minimum insurance for motor carriers are not superseded under the Graves Amendment, their existence in no way undercuts the Graves Amendment’s absolute exemption of commercial renters and lessors of motor vehicles from liability for damages caused solely by the negligence of those who rent or lease from them. The failure to enforce a contractual provision obligating the lessor to meet minimum insurance requirements does not constitute “negligence on the part of the owner” sufficient to avoid the pre-emptive effect of 49 U.S.C. § 30106(a).”  The court also questioned whether Progressive’s theory could satisfy the proximate cause element.  As such, the court struck the apportionment complaint. 

P.I. & I. Motor Express, Inc. v. RLI Ins. Co., 2022 U.S. App. LEXIS 18525, Nos. 21-3412/3442 (6th Cir. July 6, 2022).  The Sixth Circuit held a workers compensation exclusion in a CGL policy did not bar coverage for a claim against a statutory employer stemming from a work-related injury.  A truck driver was injured while working at a plant.  He leased a truck from Sam Russell Trucking (“SRT”) and ran it under Motor Express’s operating authority.  The Administrative Law Judge hearing the workers’ compensation claim held SRT was the direct employer, whereas Motor Express and the owner of the plant were statutory employers of the injured driver.  However, SRT and Motor Express did not have insurance to respond to the workers compensation award, so the Administrative Law Judge ordered the plant owner to pay the benefits subject to its right to seek indemnification from Motor Express and SRT.  Motor Express later reimbursed the plant owner for the benefits.  However, the injured driver subsequently sued Motor Express in tort under the exception to the state’s workers compensation exclusivity rule when an employer or statutory employer fails to obtain workers compensation benefits.  RLI had in place a CGL policy for Motor Express.  Motor Express tendered the defense of the tort lawsuit to RLI, which RLI defended under a reservation of rights.  The tort suit was settled, but RLI refused to indemnity Motor Express for the settlement.  Motor Express then sued RLI seeking indemnification for the settlement in the tort lawsuit (but not the repayment to the plant owner under the workers compensation action).  The court held the workers compensation exclusion inapplicable because the liability for which Motor Express sought reimbursement under the CGL Policy was not “under” Pennsylvania’s workers compensation law. 

Alesevic v. Gordon, 2022 Mich. App. LEXIS 3815, No. 358507 (Mich. Ct. App. June 30, 2022).  This case involves a dispute between a commercial auto liability insurer and NTL insurer over who is responsible for first-party PIP benefits stemming from an accident.  The PIP endorsement on the NTL policy was specific to the listed auto, which was not involved in the Accident.  As such, the court agreed with the NTL insurer that its PIP endorsement was inapplicable.  Moreover, even if the PIP endorsement applied to other vehicles, the court found an exclusion for bodily injury to “anyone entitled to recover under Michigan’s no-fault benefits as Named Insured under another policy” applied to remove the claim from coverage.  Since the claimant was the Named Insured under the commercial auto liability policy, which also provided benefits consistent with Michigan’s no-fault system, the court held the exclusion in the NTL Policy PIP endorsement would apply to exclude coverage.  As such, the commercial auto liability insurer was solely responsible for PIP benefits.    

WORKERS COMPENSATION

Lewis v. Wieber, 2022 La. App. LEXIS 1094, C.A. No. 2021-CA-476 (La. Ct. App. July 6, 2022).  A driver who filed for and sought workers compensation benefits against a motor carrier, ultimately settling the workers compensation claim on a full and final release, was precluded, on res judicata grounds, from maintaining a separate tort action against the motor carrier.

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