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Bits & Pieces

CAB Bits & Pieces December 2023

Hello and Happy Holidays!

How in the world is it December already! Many clients have shared they are just as busy as we are. Productive busy is good though and hopefully your year is ending on a positive note. CAB rounds out 2023 with more collaboration with our sister companies, especially Price Digests. If you haven’t heard about the Truck Blue Book™, TruckBody IQ™ and VIN verification service, check them out at www.pricedigests.com.

There are no new December webinars. We take this time off as we know how calendar-year closeouts, holiday schedules, and aforementioned year-end projects fill our December days. Should you have some time available, you can always check out our archived webinars in the library.

CAB website interface

Over the year we have shared our enhancements and new offerings. Join us in January’s webinar to get a recap and hear these discussed in more detail.

Central Analysis Bureau truly values every one of you and our partnerships. We are appreciative that through collaboration with our clients our tools and resources allow us to support your goals and CAB’s mission to help our partners “Make Better Decisions”.

Stay warm! Enjoy relaxation time as the year winds down.

May your 2024 be safe, healthy, and prosperous.

Chad Krueger & Pam Jones

CAB Live Training Sessions

Tuesday, January 9th | 12p EST – CAB Program New Offerings and Enhancements

Join us for a recap of various updates we’ve made to the system over the last year like Express Reports, Salesforce integrations, and API capabilities. Plus, hear the advancements we’ve made on the MC Advantage platform.

Tuesday, January 16th | 12p EST – New Heat Map

We recently released a new heat map on the CAB Report’s Radius of Operations. More details are included in the below in the Tips & Tricks section. This webinar will cover even more details of this new mapping feature 

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

Explore all of our previously recorded live webinar sessions in our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks

Introducing our new heat map feature. You never know what the developers will surprise you with. Most recently, our mapping options were updated to bring in a heat map for inspection details that go back three years for the latest inspection we have in the system.

heat map interface

First off, you can see the radiant scale above the map with 1 to 109 inspections in this example. Then at-a-glance, you can see the various colors corresponding to the inspection volume by state.

Further, there are two drop-downs.

One defaults to inspections, can be changed to meet your needs for additional data point breakdowns. The second dropdown for the calendar icon allows you to see all inspections for the full history of this vehicle in this fleet’s operation or select by year.

Plus, there’s now more emphasis on your own selected Hot Zone states. While on this Radius of Operations map, the border of your Hot Zone states is continuously moving in varying colors to standout. See our friends of California, Georgia, and New York. You can also still break this map and the hot zones by county. Remember, this “Radius of Operations” is of the inspections. It doesn’t reflect everywhere the fleet may operate. You still have the option to set the radius to your liking. Now, you can quickly increase or decrease the radius circle with the red dot on the edge of your radius.

This version allows the more options in the data disseminations plus it offers easier visibility to the differences in states. The hot zone identification allows the user to have those right out in front of you. This enhanced version still allows view by county. The heat map better identifies the main office, radiuses, hot spots, and heavy inspection states along with the option to break up the data into more than just inspections but drilling down to violation categories (driver, vehicle, hazmat).

The original version is still accessible with the Legacy toggle until you get more familiar with the new version.

Express Report

The heat map also transitioned to the Express Report to include the individual state’s details.

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THIS MONTH WE REPORT

2023 CCJ Top 250: What goes up… Every year, Commercial Carrier Journal ranks the largest for-hire carriers in North America — the CCJ Top 250 takes into consideration the entire scope of a fleet’s freight-related business operation. See who has moved up and who has moved down the list. Read more…

Diesel Price Drops 7.2¢ a Gallon to Reach $4.294. The average diesel price fell in all 10 regions in EIA’s weekly survey. That’s 41.3 cents less than it cost at this time in 2022. Read more…

Record Fleet of Ships Coming to Load Oil in US Keeps Growing. The record number of supertankers sailing toward the shores of the U.S. is getting ever larger. The growing volume comes after U.S. crude exports surged this year to a record. Overseas shipments have averaged 4.1 million barrels a day. Read more…

FMCSA tightens screws on brokers who ‘do not intend to pay’ carriers. The FMSCA has finalized a rule that will change the financial responsibility requirements for brokers and freight forwarders. Read more

Administration Convenes New Supply Chain Council. The government aims to monitor supply chains through the sharing of data. The Commerce Department has developed new tools to assess risks to the supply chain. Shipping companies are beginning to use new data resources from the Transportation Department on freight logistics. Read more…

Dash Cams in Fleet Vehicles are Key to Avoiding Nuclear Verdicts, Risk Managers Say. Risk improvement is possible, even in the accident and injury-prone commercial construction world, so said Louise Vallee, Crum & Forster’s vice president for risk engineering, at the International Risk Management Institute’s Annual Construction Risk Conference. Read more…

Federal agency recommends steps to limit the speeds of new cars. The National Transportation Safety Board recently said its investigation into a multi-vehicle collision in North Las Vegas, Nevada, last year that resulted in nine fatalities has led the board to recommend a requirement for intelligent speed assistance technology in all new cars. Read more…

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

AUTO

Eagle Express Lines, Inc. v. U.S., 2023 WL 7630294, No.: 22-cv-03747 (N.D. Ill. Nov. 14, 2023). In this matter arising from a fatal accident, the Illinois District Court granted in part and denied in part the Federal Government’s Motion to Dismiss. The Plaintiff, Eagle, was a licensed for hire motor carrier. An individual applied to be a driver with Eagle in 2016, and, unbeknownst to Eagle, the applicant had previously had heart bypass surgery in 2010. However, the applicant provided a medical certificate from a licensed physician which did not disclose that he had any prior cardiovascular issues. Eagle hired the applicant as a driver, and, two years later, the individual underwent a subsequent medical examination and again failed to disclose the prior cardiovascular issues. The medical examiner who signed off on the driver’s medical certificate renewal did not adequately examine the driver, as a thorough examination would have revealed the driver’s medical history and the scar on his chest from his bypass surgery. A regulatory review conducted by the FMCSA found that from 2014-16, the examiner “submitted approximately 4 times Medical Examiner Certificates than the next highest FMCSA certified Medical Examiner in the State of Florida” and from 2016-2017 to have conducted “10 times more medical examinations than the national average.” An undercover officer visited the examiner’s office and discovered that an examination by the examiner consisted of nothing more “than placing a stethoscope on the undercover officer’s chest and asking him to breathe in and out.” Despite only performing this measure, the examiner certified that the exam was performed in accordance with FMCSA Regulations and that the information on the certificate was accurate. Following this discovery, the examiner was indicted for falsifying medical certificates, but the Government did not announce the indictment until over a year after the undercover investigation. Meanwhile, the Eagle driver suffered a fatal heart attack while driving one of Eagle’s tractor-trailers and crashed into multiple vehicles, resulting in the deaths of five children and another tractor-trailer driver. Following the accident, Eagle sued the Government under the Federal Tort Claims Act, arguing that the Government was negligent in failing to warn it and other motor carriers of unqualified drivers who had received medical certificates from the examiner as well as for indemnification and contribution for any judgment issued against it resulting from the accident. The Government moved to dismiss all counts, arguing that the circumstances did not give rise to liability under the Tort Claims Act. The Court first found that Florida law applied, as that was where the examiner’s office was located and where the Government’s investigation took place. The Court next denied the Government’s motion to dismiss as to Eagle’s negligence claims, finding that, while there is generally no duty to prevent misconduct by third parties, such a duty does arise when the Government undertakes some action which could create a duty to protect third parties. The Court found that Eagle had properly alleged that the Government had undertaken the review of medical examiners to ensure compliance with federal regulations, all of which were designed to protect the public from harm. The Government argued that the unpredictable nature of the investigation made any resulting harm unforeseeable, but the Court rejected this argument. As such, the Court allowed Eagle’s negligence claims to proceed. The Court did dismiss Eagle’s indemnification claim, finding that Eagle had failed to allege a requisite “special relationship” between it and the Government or a breach of duty under contract or implied by the parties’ conduct. However, the Court also allowed Eagle’s contribution claim to proceed since it found that Eagle had properly alleged a failure to warn claim.

Finley v. Mora, 2023 U.S. App. LEXIS 30407, 2023 WL 7550447, C.A. No. 22-1886 (6th Cir. Nov. 14, 2023).  In this appeal of a ruling granting Defendant’s Motion for Summary Judgment, the Sixth Circuit Court of Appeals found that the district court did not abuse its discretion in excluding expert opinion from Plaintiff’s physician on injuries sustained from a truck accident. The trial court held that the expert’s review of Plaintiff’s medical records was an insufficient basis from which to draw conclusions of causation, and without such opinion, Plaintiff failed to create a triable issue of causation. On appeal, the Sixth Circuit explained that “the ability to diagnose medical conditions is not remotely the same… as the ability to deduce… in a scientifically reliable manner, the causes of those medical conditions,” and found that summary judgment was properly granted in favor of the Defendant.

Jones v. Silver Creek Transp., LLC, 2023 U.S. Dist. LEXIS 198505, 2023 WL 7301076, C.A. No. 2:23-cv-01461 (W.D. Pa. Nov. 6, 2023). In this action arising from an accident between a motorhome and a tractor-trailer, the Pennsylvania District Court granted Defendant’s Motion to Dismiss Plaintiff’s claim for punitive damages. Plaintiff based its punitive damages claim on the argument that Defendant’s conduct was outrageous “in that it willfully ignored the known safety hazards” that caused harm and damages.  The court explained that punitive damages may be awarded for conduct that is outrageous “as to demonstrate intentional, willful, wanton or reckless conduct,” and that mere allegations that a defendant failed to comply with traffic laws are not sufficient to justify punitive damages. Without requiring “something more” for punitive damages, the court asserted that almost any liable driver who violated a traffic law or regulation would face punitive claims. Thus, the court granted Defendant’s Motion to Dismiss and dismissed the claim for punitive damages. 

Younger v. J&CT, LLC, 2023 U.S. Dist. LEXIS 200667, 2023 WL 7386673, C.A. No. 3:22-cv-00143 (E.D. Ark. Nov. 8, 2023).  In this negligence action, the Arkansas District Court granted Defendants’ Motion for Summary Judgment on Plaintiff’s request for punitive damages and all direct negligence claims, except for the claim that Defendants failed to adopt the policies or procedures necessary to ensure its vehicles and equipment were properly inspected, maintained, and operated.  Plaintiff was working on a bridge in a highway construction zone when the driver of a tractor-trailer failed to slow down for traffic and was unable to stop due to allegedly defective brakes. To avoid being struck, Plaintiff jumped over the bridge’s guardrail and fell. In the two months preceding the accident, the tractor-trailer received multiple citations from driver and vehicle inspections, including one for a leak in the truck’s brake connection, but did not receive an out-of-service violation. The post-accident inspection, however, did result in an out-of-service violation for defective brakes. The court weighed the following facts in favor of granting the Motion for Summary Judgment for punitive damages: (1) the brake violations cited in the post-accident examination were not the same as the brake connection air leak cited prior to the accident; (2) the air leak citation was not an out-of-service violation; and (3) the record failed to show that the brake connection air leak caused or contributed to the accident. Thus, Plaintiff failed to show that the defendants acted with the “wanton or willful conduct” required for punitive damages under state law. Additionally, because Defendant Motor Carrier admitted vicarious liability for the actions of its driver, Plaintiff was limited to proceeding on its vicarious liability claim.

Paz v. Reggie’s Pallets Co., 2023 IL App (1st) 221093-U, 2023 Ill. App. Unpub. LEXIS 1802, C.A. No. 1-22-1093 (Ill. App. Ct. Nov. 9, 2023). This case arose from a fatal collision, in which a vehicle collided into a tractor-trailer parked near a road construction project. On behalf of the decedents’ estate, Plaintiff brought negligence claims based, in part, on the defective underride protection system on the involved tractor-trailer. Defendants filed a Motion to Dismiss and a Motion for Summary Judgment, arguing that they had no duty to design or maintain a vehicle with which it is safe to collide. The trial court granted the motions, finding that Defendants owed no common law duty to design or maintain a vehicle with which it is safe to collide. The Illinois Court of Appeals agreed, affirming the lower court’s decision.

BROKER

Montgomery v. Caribe Transport II, LLC, 2023 WL 7280899, No. 19-CV-1300 (S.D. Ill. Nov. 3, 2023). In this broker liability action, the Illinois District Court granted the freight broker’s Motion for Summary Judgment, finding that it was not vicariously liable for the actions of the motor carrier. The freight broker and Caribe, the motor carrier, entered into a Carrier Agreement in which the parties agreed that Caribe was an independent contractor, and that Caribe shall exercise “exclusive control, supervision, and direction over (i) the manner in which transportation services are provided; (ii) the persons engaged in providing transportation services; and (iii) the equipment selected and used to provide transportation services.”  The freight broker paid a factoring company which took a percentage and then paid Caribe. If Caribe wanted to deliver a load, it would ask for pickup and drop off times from the freight broker along with rate confirmations. The freight broker did not provide truck driver training or review any logbooks or driver records. It also did not obtain insurance for Caribe or pay any fuel expenses, tolls, or any maintenance or repair costs for Caribe’s vehicles. Caribe’s drivers did not wear any freight broker clothing or uniforms, and Caribe never held itself out as having the ability to enter into a contract on the freight broker’s behalf. In this instance, the freight broker brokered a load to Caribe, and Caribe’s driver was subsequently involved in an accident. The tort plaintiff subsequently filed a lawsuit against Caribe and the freight broker, and the freight broker moved for summary judgment as to the vicarious liability claim against it, arguing that Caribe was only an independent contractor. The plaintiff argued that the freight broker maintained control over certain aspects of the transportation process, including maintaining regular communications and tracking the location of the shipment, providing requirements for how to store the load, providing troubleshooting features to Caribe and its drivers, and by including certain items on various bills of lading. The court rejected the plaintiff’s argument, finding that these activities “do not demonstrate a retained right to control the manner of delivery that is tantamount to a principal-agent relationship.” The Court found that the freight broker and Caribe had an “arm’s length relationship” which did not rise to the level of the freight broker exerting control over Caribe. Therefore, the Court dismissed the vicarious liability claim against the freight broker. 

Piquion v. Amerifreight Sys. LLC, 2023 U.S. Dist. LEXIS 209009, 2023 WL 8113379, C.A. No. 22-C-5690 (N.D. Ill. Nov. 21, 2023). In this Truth-in-Leasing Act (TILA) action, Plaintiffs, truck owner-operators, each contracted with Defendants, motor carriers Amerifreight Systems and AF Systems, to haul shipments under Amerifreight’s motor-carrier license in exchange for a percentage of Amerifreight’s gross revenue from the shipments hauled and exclusive use of their semi-trucks. Plaintiffs allege that Amerifreight underreported the gross revenue of its shipments and paid based on underreported amounts, in violation of TILA and a number of state statutes. Defendants moved to dismiss.  In response to Defendants’ arguments, the court held the following: (1) the section 376.12 leasing requirements of TILA apply regardless of whether the owner-lessor is a driver; (2) Plaintiff adequately alleged that one of the owner-operators was an “owner” under TILA because it had the right to exclusive use of its truck during its dealings with Amerifreight; and (3) Plaintiffs allegations permit a plausible inference that Amerifreight paid less than promised. The court also held that despite Amerifreight’s contention, the Equipment Lease’s 30-day dispute window does not prevent Plaintiffs from pleading damages. The court distinguished Seventh Circuit cases Mervyn v. Atlas Van Lines, Inc. and Stampley v. Altom Transport, Inc., in which the Court of Appeals held that contractual 30-day dispute windows warranted summary judgment for defendant-carriers on plaintiff-owner-operators’ claims for breach of contract and violations of TILA. The court noted that in Mervyn, the 30-day clause created an “irrebuttable presumption” by stating that “Financial entries made by [carrier] on payment documents shall be conclusively presumed correct if not disputed by [owner-operator] within 30 days after distribution.” 882 F.3d 680, 684 (7th Cir. 2018) (emphasis added). Likewise, the language of the clause in Stampley left no room for rebuttal. 958 F.3d 580, 587 (7th Cir. 2020). However, in this case, the court found that the 30-day clause created an “affirmative presumption,” which was rebuttable and did not waive Plaintiffs’ rights. Additionally, unlike the owner-operators in Mervyn and Stampley, Plaintiffs allege that they did not receive the necessary information from Amerifreight in time to dispute any underpayment. Thus, the district court declined the Defendants’ expansive reading of Mervyn and Stampley and denied its Motion to Dismiss the TILA claim. 

Lee v. Golf Transp., Inc., 2023 WL 7329523, No. 3:21-CV-01948 (M.D. Pa. Nov. 7, 2023). In this broker liability action, the Pennsylvania District Court granted summary judgment to the freight broker on the ground that the Plaintiff’s state law claims against it for vicarious liability, negligent hiring/supervision/retention/selection/entrustment and for joint venture were all preempted by the FAAAA. The freight broker contracted with co-defendant Golf, a motor carrier. At the request of the consignee, the freight broker arranged for the transportation of a load and brokered it to Golf. The rate confirmation for the load provided that the load was not to be double brokered. The load was picked up and signed by “Victor Bordo GOLF,” but Golf did not know who this individual was and did not know what motor carrier picked up the load. Golf’s corporate representative did testify that he would have another carrier pick up loads and sign the bills of lading for Golf and that this was done without the freight broker’s knowledge. The Golf representative testified that he thought double brokering was common in the industry and that he was not sure whether the broker was aware that Golf was double brokering certain loads. As to this subject load, Golf permitted it to be delivered by O’Connor Trucking. The O’Connor independent contractor driver was involved in an accident while transporting the subject load, resulting in the deaths of two individuals, the Plaintiffs’ decedents. The truck involved in the accident was owned by O’Connor, Golf was listed as the motor carrier on the bill of lading, and the owner of the trailer was listed as JP Logistics. The Plaintiffs brought claims against each of these entities, and the freight brokre eventually moved for summary judgment arguing for FAAAA preemption. The Court looked to the split of authority among the federal circuits but reasoned under a Third Circuit decision that state laws having a “direct” and “significant” effect on the “price, route, or service” of interstate transportation fell squarely within the preemptive effect of FAAAA. The Court agreed with Coyote that the Plaintiffs’ common law tort claims related to its services as a broker. The Court then looked to the recent Seventh Circuit and Eleventh Circuit decisions in Ye v. GlobalTranz Enters., Inc., 74 F.4th 453 (7th Cir. 2023) and Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023) to support its holding that the Plaintiffs’ state law claims fall within FAAAA preemption. The Court found the claims were preempted “because they focus on the output of services provided by Coyote as a broker, namely the process of arranging for transportation of the Subject Load by a motor carrier.” The Court also found that the FAAAA’s Safety Exception did not apply because the state law claims were not exercised with respect to brokers because the state law claims required a direct link between a state’s law and motor vehicle safety, which was not applicable to the freight broker. As such, the Court granted the freight broker’s motion for summary judgment as to the Plaintiff’s state law claims.

Poston v. Velox Transp., LLC, 2023 WL 8003510, No. CV 23-28-M-DWM (D. Mont. Nov. 17, 2023). In this action arising from a multi-vehicle collision, the Montana District Court denied Uber Freight LLC’s Motion to Dismiss a Third-Party Complaint. The Plaintiffs’ son was involved in a collision with a Velox Transport Solutions tractor-trailer, which was delivering cargo for which CES Hospitality and Almo Distributing Pennsylvania, Inc. had contracted to dropship. The plaintiffs sued Velox, Velox’s driver, CES, and Almo, basing their theories of liability against CES and Almo on a negligent selection cause of action for the selection of Velox. Almo denied liability and filed a third-party complaint against Uber Freight, a broker, for negligence, contribution, and indemnity, arguing that Uber Freight failed to properly investigate Velox’s hiring and training practices and its safety record. Uber Freight moved to dismiss based on FAAAA preemption. The Court disagreed, finding that Almo’s claims fell within the FAAAA’s safety exception. While the Court acknowledged that the state claims would affect Uber Freight’s relationships with its motor carriers, it found that the claims were directly related to the safety and welfare of the general public, and, thus, were carved out of FAAAA preemption under the safety exception. The Court further found that Almo had sufficiently alleged negligence on Uber Freight’s selection of Velox as a carrier and denied Uber Freight’s motion for failure to state a claim.

CARGO

England Logistics, Inc. v. GV Champlines, 2023 U.S. Dist. LEXIS 201209, 2023 WL 7387258, C.A. No. 2:22-cv-00742 (D. Utah Nov. 8, 2023).  In this action alleging claims for breach of contract and violation of the Carmack Amendment, the Utah District Court granted Defendant’s Motion to Dismiss the contract claim, finding that it was preempted by the Carmack Amendment. Here, Plaintiff, a freight broker, and Defendant, a motor carrier, entered into a written agreement for Plaintiff to arrange for Defendant to transport loads of freight for Plaintiff’s customers. Plaintiff alleged that Defendant delivered damaged cargo. Defendant moved to dismiss, arguing that (1) the parties waived any rights and remedies under the Carmack Agreement in the general waiver of their agreement and (2) the eighteen-month limitation in the parties’ agreement should govern because contractual parties may stipulate to stricter limitations than those allowed by statutes, such as statutes of limitations. In contrast, Plaintiff argued that despite the waiver of rights contained in the agreement, it did not waive the Carmack Amendment, but instead expressly referred to and incorporated it in regard to claims for loss or damage to goods, and thus the Carmack Amendment’s two-year statute of limitation applies. The Utah District Court found that because the provision applying the Carmack Amendment to liability for cargo damage is more specific than the provision expressly waiving rights under the Carmack Amendment, the Carmack Amendment and its two-year statute of limitations applied.

Chillz Vending, LLC v. Greenwood Motor Lines, Inc., 2023 WL 7135152, No. 4:23-cv-00065 (D. Utah Oct. 30, 2023). In this cargo claim, the Plaintiff, Chillz Vending, purchased two ice and water vending machines from Everest Ice & Water Systems, Inc. Unishippers, Everest’s shipping and storage partner, agreed to manage the transportation of the products. Unishippers then contracted with Greenwood, d/b/a R+L Carriers, to transport the machines. Upon delivery, Chillz noticed that the machines were damaged. It subsequently filed a Carmack claim against Unishippers, along with alternative claims for state law breach of contract, promissory estoppel, and negligence. Unishippers sought dismissal, arguing it was not a carrier under the Carmack Amendment and that the state law claims were preempted by the Carmack Amendment. The Court found there was conflicting evidence as to whether Unishippers was acting as a carrier or a broker. Unishippers was licensed as a broker, and the bill of lading listed R+L as the carrier. However, Unishippers indicated that it was “serving as a freight and shipment consolidator,” and Everest represented that Unishippers was its “partner shipping and storage company.” The Plaintiffs also provided a declaration indicating their belief that Unishippers was acting as a carrier. Thus, the Court declined to find that Unishippers was acting only as a broker and denied its motion to dismiss the Carmack claim, indicating that discovery first needed to take place. The Court did find that, if Unishippers was deemed to be a carrier, the state law claims would be preempted but that, if Unishippers acted only as a broker, the state law claims would not be preempted. As to Unishippers arguments that it was not responsible for any alleged damage, the court found that dismissal was also premature.

King Ocean Servs. v. CI Mistic SAS Fruits & Vegetables, LLC, 2023 U.S. Dist. LEXIS 211051, 2023 WL 8234567, C.A. No. 23-22227 (S.D. Fla. Nov. 28, 2023). In this case, Defendants raised a counterclaim asserting four causes of action: (1) damage to cargo under the Carriage of Goods by Sea Act (“COGSA”); (2) damage to cargo under the Harter Act; (3) breach of warranties and nondelegable cargo worthiness duties; and (4) negligence. King Ocean sought dismissal of the counterclaim. When evaluating the Motion to Dismiss, the Florida District Court explained that COGSA, when it applies, supersedes other laws. Because the parties agreed that COGSA applied to each claim, the court dismissed counts two through four, allowing only the COGSA claim to proceed forward in litigation.

Coverage

Great West Cas. Co. v. Kirsch Transp. Servs., Inc., 1:18-cv-00012-SHL-SBJ (S.D. Iowa Nov. 7, 2023). In this coverage matter arising from an underlying broker liability action, an Iowa District Court ruled that a freight broker’s secondary insurer did not have to provide coverage for the underlying tort suit. Kirsch, the freight broker, had brokered a load to Natex, a motor carrier. Natex was subsequently involved in an accident, and an underlying personal injury action was filed against Natex, Kirsch, and other parties.  The underlying personal injury suit alleged claims against Kirsch for vicarious liability premised upon the motor carrier driver’s negligence as well as direct negligence claims. As part of its Broker-Carrier Agreement with Natex, Kirsch required Natex to list it as an additional insured on Natex’s policy with its insurer, Artisan Truckers and Casualty Insurance Company (“Artisan”). However, Kirsch also had a separate policy with Great West for “contingent” coverage, that included Commercial Auto liability coverage and a “Brokerage Concerns—Broadened Contingent Coverage” endorsement.. Kirsch tendered its defense in the suit to both Artisan and Great West. Artisan accepted the tender for the vicarious liability claims asserted against Kirsch, but Great West denied Kirsch’s tender.  The parties further agreed that there would not be any coverage in favor of Kirsch under the Artisan Policy for the direct liability claims against it. Great West initially filed a declaratory judgment and obtained a ruling that it did not have to provide Kirsch and another co-defendant, Walmart, coverage under a Great West commercial general liability policy. Artisan also filed an interpleader action arguing that the Natex vehicle involved in the accident was not an insured automobile at the time of the accident and that the only available coverage was that under the MCS-90 Endorsement, which only extended to Natex and no other individual or entity. Ultimately, however, Artisan paid its policy limits of $1,000,000 (not just the $750,000 under the MCS 90 endorsement) in connection with the underlying litigation and/or the Interpleader Action.  In the underlying action, the vicarious liability claims against Kirsch were dismissed, resulting in Artisan withdrawing its defense of Kirsch because it had only accepted the tender with respect to the vicarious liability claims.  Thereafter, Kirsch agreed to pay the tort plaintiffs $350,000 and agree to a judgment being entered against Kirsch in connection with the underlying tort action in an amount to be determined by a neutral mediator.  Ultimately, the mediator awarded over $10,000,000 judgment against Kirsch.  Kirsch assigned its rights under the Great West policy to the tort plaintiffs in exchange for the tort plaintiffs foregoing any attempts to collect the $10,000,000+ judgment from Kirsch directly.  Kirsch thereafter moved, unopposed, for summary judgment in the Interpleader Action that the Artisan Policy did not afford coverage for the direct negligence claims against Kirsch in the underlying personal injury action, which the Interpleader court granted.  In the separate Great West declaratory judgment action, the court read the Great West policy o provide insurance coverage for Kirsch when it brokers the hauling of freight by motor carriers such as Natex, but only where there is a deficiency in coverage in favor of Kirsch under the motor carrier’s insurance policies.  The court then held the “contingent” nature of the Great West policy means it only kicked in when the underlying motor carrier’s coverage in favor of Kirsch was “not collectible.” The tort plaintiffs argued the term “is not collectible” meant that Kirsch was simply not a named insured under the motor carrier’s policy. Conversely, Great West argued the term meant the motor carrier’s insurance was not collectible at all in connection with the underlying accident and that, because the Artisan policy was eventually “collectible” inasmuch as Artisan paid its policy limits, the Brokerage Endorsement under its policy did not apply. The Court agreed with Great West, finding that the Artisan policy was “collectible” since Artisan paid its fully policy limits and finding that the phrase “is not collectible” was meant to address a situation in which the primary insurance coverage failed for some other reason. Thus, the Court held that the secondary coverage for Kirsch under the Great West policy was never triggered, and it granted summary judgment in favor of Great West.

WORKERS COMPENSATION

No cases of note to report. 

CAB Bits & Pieces November 2023

Hello and Happy Fall,

With the cold weather, the upcoming year-end, and project warp-ups, we certainly are in Q4. Hopefully you get some time to enjoy the fall colors before the leaves are just for the raking!

CAB has been out and about at various events this season. It has been great seeing many of you at conferences.

Thank you so much for your continued support.

Talk to you soon,  

Chad Krueger and Pam Jones 

CAB Live Training Sessions

Tuesday, November 14th | 12p EST – VITAL/VITAL+

Tuesday, November 21st | 12p EST – MC Safety

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

Explore all of our previously recorded live webinar sessions in our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks: Motor Carrier Data Updates

In case you have not spent much time on VIN details, know that within the CAB Report, you can see inspection activity by unit beyond the individual fleet you are looking at. The Inspections / Accidents tab on the report shows inspection details down to the individual unit level.

Scrolling down to the Vehicles section allows you to dig into this data. Notice on the right by unit, our system shares if the VIN has been inspected before, after, or during the timeline of this fleet’s inspections with a different fleet.

screenshot of inspections/accidents tab in CAB database

Digging into the individual VIN then, looking at only the inspection data for a moment (shippers and violation summaries are also available), we can see the history of the unit (see #4) and various fleets it has been inspected under.

Focusing in on the time with the current fleet (see #5), we find two inspections that were completed under other authorities. Good information to check out to ensure we know what’s happening with this truck and driver.

Clicking on the yellow inspection details (on the left under each activity). Is it an owner operator legally operating for multiple operations or is it something else? 

screenshot of inspection report

THIS MONTH WE REPORT

Trucking’s Annual Congestion Costs Top $94.6 Billion. Traffic congestion on U.S. highways added $94.6 billion in costs to the trucking industry in 2021 according to the latest Cost of Congestion study published by the American Transportation Research Institute (ATRI). Read more…

Trucker out-of-service orders hit all-time high. New-entrant out-of-service (OOS) orders issued to carriers will surge to an all-time high in 2023, according to the latest government data, a trend that has mirrored the dramatic increase in new-carrier operating authorities issued since 2020. Read more…

More carriers likely to fail in muted fall freight season says ATA’s Chief Economist Bob Costello. American Trucking Associations Chief Economist shares his economic outlook at the 2023 Management Conference & Exhibition in Austin.The bankruptcies will be “other people’s pain for our gain.” Read more…

US House Panel Evaluates New Truck Excise Tax Repeal. “Not only will repealing this federal excise tax deliver upfront cost savings for truckers and small businesses, but it will also provide downstream supply chain and cost-saving benefits for consumers,” Rep. Chris Pappas (D-N.H.), a co-sponsor, said recently. Read more…

FMCSA extends comment period for carrier safety rating system revamp. Owner-operators and others in trucking are getting more time to comment on the FMCSA’s information-seeking advance notice of proposed rulemaking related to a potential revamp of its carrier rating system. Read more…

Convoy cancels all shipments, load board is empty, announcement upcoming. A change is brewing in the next day or two at Seattle-based digital brokerage Convoy, with reports Wednesday of all loads being canceled–the company is “taking several necessary steps to prepare Convoy’s business for a transition that we will have more details.” Read more…

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

AUTO

Flores v. Allen Henderschiedt Trucking, Inc., 2023 U.S. Dist. LEXIS 182600 (S.D. Tex. Oct. 11, 2023). In this personal injury action, the defendant motor carrier and its driver moved the court to exclude the following: evidence of a previous and unrelated speeding citation, evidence of claims for negligent entrustment and/or gross negligence, evidence related to the Federal Motor Carrier Safety Act (FMCSA). The motor carrier and driver also sought the prohibition of two medical billing affidavits. The court was unwilling to issue a blanket order precluding the introduction of evidence regarding the driver’s unrelated speeding citation and reference to the FMCSA. Next, the court allowed plaintiff to move forward with gross negligence and negligent entrustment claims, stating that at the appropriate time the court will decide whether to instruct the jury accordingly. Finally, the court declined to decide on the affidavits in question and instead reserved its decision after the parties fully advance their positions at trial.

Prodigies Child Care Mgmt. v. Cotton, 2023 WL 6611014, No. S22G0914 (Ga. Oct. 11, 2023). In this appeal of a ruling granting summary judgment in a personal injury action filed by an injured truck driver, the Georgia Supreme Court vacated the Court of Appeals’ application of the “special circumstances exception” to the general rule that employees do not act in furtherance of an employer’s business during a lunch break commute. The court remanded the matter for the lower court to apply the proper respondeat superior test. The injured truck driver filed a lawsuit against a childcare facility and its employee after the employee collided with the truck driver during the employee’s lunch break commute back to work. The evidence showed that, at the time of the collision, the employee was looking at her phone and attempting to contact the childcare facility to notify it that she would be late in her return from lunch. The truck driver alleged that the childcare employee was acting in furtherance of the childcare facility’s business at the time of the accident and that the facility was, therefore, liable under a theory of respondeat superior. The trial court granted the childcare facility’s motion for summary judgment, finding that the employee was not acting in furtherance of the facility’s business at the time of the accident. The truck driver appealed, and a divided panel of the Court of Appeals found that there was sufficient evidence to raise a question of fact under the “special circumstances exception” to the general rule that an employee does not act in furtherance of an employer’s business during a lunch break commute. This “special circumstances exception” had been applied by the Court of Appeals in prior decisions where an employee was on the phone for business-related calls at the time of an accident. Relying on the exception, the Court of Appeals reversed the trial court’s grant of summary judgment. The Supreme Court reversed, clarifying that “the so-called ‘special circumstances exception’ is merely an application of the doctrine of respondeat superior—not a separate doctrine or an ‘exception’ to respondeat superior” and disapproving the language relied upon in the prior Court of Appeals’ rulings. The court concluded that the question of whether respondeat superior attached instead depended upon whether the employee was acting in furtherance of her employer’s business and within the course and scope of her employment at the time of the tortious act, regardless of the timing of a commute during a lunch break or so-called “special circumstances” giving rise to an exception. While recognizing that the general rule that an employee’s travel to or from work is generally not within the scope of employment for respondeat superior, the court determined that it was still necessary to determine whether the employee did something else at the time of the accident that was allegedly within the scope of employment. Regardless, the court held “that there is no need—and it is not proper—to apply a separate test to determine whether the acts in question are so-called ‘special circumstances.’ The proper test is the traditional respondeat superior test: whether the employee was acting in furtherance of her employer’s business and within the scope of her employment at the time she committed the tortious act.”

Handley v. Werner Enters. Inc., 2023 WL 6628921, No. 23-10587 (11th Cir. Oct. 11, 2023). In this tort action, Handley sued Werner and ACE American Insurance Company following Handley’s collision with a Werner tractor trailer. A jury returned a verdict in Handley’s favor, and Werner moved for Judgment as a Matter of Law and for a New Trial. The district court denied these motions, and the Eleventh Circuit affirmed on appeal. In affirming the lower court’s denial of the Judgment as a Matter of Law, the panel conceded that there was conflicting evidence regarding the accident. However, it concluded that, viewing the evidence in the light most favorable to Handley, there was sufficient evidence to support the jury’s conclusion that Werner and its driver were negligent. The court also found that Werner had failed to meet its burden to assert an argument under the avoidable consequences affirmative defense because it never stated or proved the elements of the defense. Finally, in affirming the lower court’s denial of Werner’s motion for a new trial, the court found that Werner’s argument that ACE was inadvertently included on the verdict form caption did not necessitate a new trial and, furthermore, that the jury had been properly instructed to not consider insurance during its deliberations.

Brooks v. AK Creation, LLC, 2023 WL 6406367, No. 3:22-cv-103 (M.D. Ga. Oct. 2, 2023). In this negligence action following a collision, the court granted summary judgment in favor of a motor carrier, AK, as to the plaintiff’s claim for punitive damages. The plaintiff, Brooks, was involved in a collision with AK’s driver, after the driver ran a red light due to defective brakes on the tractor trailer. Brooks suffered injuries, and he and his wife asserted claims for negligence and loss of consortium, respectively, against the driver and AK. Prior to the wreck, the evidence showed that the driver complained of the tractor trailer’s brakes two or three times to an associate of AK. However, the vehicle was inspected and passed a report. The wreck with Brooks occurred three days later. Following the collision, the Georgia Department of Public Safety determined four of the brakes on the tractor trailer were inoperative. Thus, on this finding, the plaintiffs asserted a claim for punitive damages against AK. In granting AK’s motion for summary judgment as to the punitive damages claim, the court found that there was no evidence that AK personally learned of any defect with the brakes in the three days between the inspection and the accident or had any reason to doubt the veracity of the inspection report. Thus, the court found the record was void of any evidence to support an award of punitive damages and, accordingly, granted summary judgment as to that claim.

Villagran v. Freightbull, Inc., 2023 WL 6690700, No. 22-2159 (E.D. Pa. Oct. 12, 2023). Following a fatal trucking accident, the plaintiff, as administrator of the decedent’s estate, filed a lawsuit asserting claims for direct and vicarious liability against the trucking company and its driver. Following the close of discovery, the trucking company moved for summary judgment as to punitive damages and moved to dismiss the direct claims asserted against it. The accident involved the tractor trailer pulling out into a highway at night, stopping briefly, and engaging its left turn signal before crossing two lanes of travel. Before the truck could complete its turn, the plaintiff’s decedent crashed into the side of the trailer. The decedent’s widow alleged negligent entrustment, supervision, hiring, and retention, and specifically alleged that the motor carrier failed to properly train or supervise its driver as a basis for asserting a claim for punitive damages. In analyzing the punitive damages claim, the court found that, as to the driver, a video of the truck pulling into the roadway supported a possible argument that he misjudged the proximity of the decedent’s vehicle but that it showed nothing which warranted an award of punitive damages. As to the company, the court found that the allegations of the plaintiff pointing to the company’s safety officer’s lack of education, the lack of a CDL on the part of the officer, and the officer having only three years of trucking safety experience were not enough to demonstrate egregious conduct warranting an award of punitive damages. Moreover, the court found that the lack of training for the driver as to trip planning also did not amount to egregious conduct. Finally, the court found that the fact that the company did not investigate its own accidents also did not amount to conduct justifying punitive damages. As to the direct claims against the trucking company, the court declined to find that there was a blanket rule justifying dismissal of such claims given the lack of punitive damages. However, it instead analyzed the claims under a Rule 403 balancing test and found that dismissal of the direct liability claims was indeed warranted. The court held that “[t]he criticism leveled at [the company’s] in-house training program seems peripheral, and the charges that it failed to train drivers on pre-trip planning or conduct accident investigations are wholly unrelated to the accident in this case.” The court went on to find that “the previous record of its driver reflects at most two minor collisions resulting in property damage, with only seven citations in 17 years of professional driving.” “The probative value of this evidence is minimal, as compared to the prejudice that follows from allowing the jury to consider evidence that would otherwise be excluded as irrelevant and prejudicial.” Thus, the court dismissed the Plaintiff’s claims for negligent and reckless hiring, training, supervision, and entrustment against the company.

Perez v. U.S. Xpress, Inc., 2023 WL 6393899, No. 23-50146 (W.D. Tx. Oct. 2, 2023). In this parking lot truck bump up personal injury action, the Fifth Circuit affirmed the district court’s grant of summary judgment to the defendant motor carrier and its driver. The plaintiff, Perez, alleged that he was asleep in the top bunk of his truck at the time the defendant driver bumped into his parked truck in a parking lot. Perez then alleged that he woke up, got scared, and jumped from the bunk, injuring himself. Perez then filed suit, alleging various negligence theories against the defendant company and driver. The defendants moved for summary judgment, and the district court granted it, finding a lack of proximate cause between the collision and the plaintiff’s injuries. In affirming the grant of summary judgment, the Fifth Circuit panel noted that, under Texas law, “cause in fact is not established where the defendant’s negligence does no more than furnish a condition which makes the injuries possible.” The court concluded that, while the plaintiff had allegedly injured his back when he jumped from the top bunk, he did so after the impact from the defendant’s truck and that his decision to jump was a deliberate one that he made on his own. Thus, finding no genuine dispute of material fact as to causation, the court affirmed the grant of summary judgment.

BROKER

Heselton v. Espinoza, 2023 WL 7003467, No. 21-cv-1592 (S.D. Ill. Oct. 24, 2023). In this negligence action filed by plaintiffs Stacey and LaNette Heselton against driver Pedro Espinoza; his employer, Roline Express; and Flock Freight, the broker of the subject load transported by Espinoza, the court granted the plaintiffs’ motion to dismiss without prejudice. Plaintiffs filed their suit following an accident between Stacey Heselton and Espinoza in Effingham, Illinois. Plaintiffs asserted theories of negligence against Espinoza and for vicarious liability and negligent hiring against Roline and Flock. Following extensive discovery, the plaintiffs moved to dismiss without prejudice under Rule 41(a)(2), seeking to instead litigate the case in California where they had already filed a second lawsuit against the Defendants. The Defendants opposed the motion on the grounds that the parties had conducted extensive discovery and had expended a significant amount of resources litigating the case. Furthermore, the Defendants relied upon the pendency of Flock’s motion to dismiss based on FAAAA preemption in opposing the plaintiffs’ motion to dismiss while also asserting that the Plaintiffs were forum shopping. Flock argued that the Plaintiffs were attempting to avoid the pending motion to dismiss and the Seventh Circuit’s recent decision in Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023) (finding that plaintiffs’ claims were barred by FAAAA preemption) as opposed to the Ninth Circuit’s ruling in Miller v. C.H. Robinson, 976 F.3d 1016 (9th Cir. 2020) (allowing such claims against a broker under the FAAAA’s safety exception to preemption).  The Defendants argued this demonstrated an intent on the part of the plaintiffs to seek a more favorable outcome in California. The plaintiffs represented to the court that California was the more convenient and appropriate venue given that the Defendants were located in California and given the presence of witnesses to the case in California. In analyzing the arguments, the court found that the relevant factors weighed in favor of voluntary dismissal in favor of the plaintiffs because that the case was still in the discovery stage and trial was not set until March 2024. The court also found that the Defendants would not be subjected to “plain legal prejudice” by the dismissal of the action and that, even though the matter had been pending since December 2021, the record did not support a finding of excessive delay or a lack of diligence on the part of the plaintiffs. Finally, the court held that it was not clear that the plaintiffs were engaged in forum shopping but that they were instead pursuing their claims in two jurisdictions.

CARGO

Aeronet Worldwide, Inc. v. AB&M Interstate Servs., Inc., 2023 U.S. Dist. LEXIS 181617, No. 6:22-cv-01081 (N.D. N.Y. Oct. 10, 2023). In this cargo claim, the plaintiff, Aeronet, alleged that defendants AB&M Interstate Services, AB&M Logistics, and Mobi Express were all agents of each other. Aeronet alleged that it had arranged for the defendants to transport two pallets of automobile part assembly kits, which the defendants received but never delivered as required under an agreement between the parties. Aeronet alleged that, by agreeing to transport the cargo and by having received the cargo, the defendants were acting as motor carriers and were carriers within the meaning of the Carmack Amendment. Following Mobi’s failure to answer or otherwise plead, Aeronet moved for entry of a default judgment. While finding that Aeronet had met the procedural requirements for entry of a default judgment, the court held that Aeronet’s state law claims were preempted under the Carmack Amendment. In analyzing Aeronet’s Carmack claim, the court held that Aeronet’s allegations lacked requisite specificity as to the relationships between it and the defendants as well as that of Mobi to the other defendants. Ultimately, the court found that Aeronet failed to plausibly allege a relationship between Defendants and instead merely relied on conclusory allegations in its complaint. The court found that Aeronet must offer the defendant fair notice of what its claim was and the grounds upon which it rested so that Mobi could answer and prepare for trial. The court found that Aeronet failed to meet this requirement because it did not supply any documentary evidence or allege any particularized facts as to the relationship of the parties or their assent to the contract. Moreover, the court observed that the other AB&M defendants had denied Aeronet’s allegations and asserted crossclaims of their own against Mobi. Finding that Mobi could potentially share in these defenses, the court declined to enter a default judgment against Mobi but left open the possibility that Aeronet could refile its motion at a later time.

Shemes v. U.S. Moving Serv. LLC, 2023 U.S. Dist. LEXIS 176910, No. 2:23-cv-02084 (D. Kan. Oct. 2, 2023). In this case involving alleged damages to household goods during an interstate move, the court denied the defendants’ motion to transfer the matter to another forum, denied a motion to dismiss under Carmack preemption as to one defendant, but granted the motion as to the other defendant. The plaintiffs sued US Moving and USA Logistics under state contract, tort, and consumer protection causes of action. The plaintiffs contracted with US Moving to arrange for the transportation of their property, and US Moving subsequently arranged for USA Logistics to transport the property. Following several payments made to US Moving and USA Logistics and the alleged delay of the delivery, the plaintiffs allegedly discovered, upon the delivery of the property, that $330,000 worth of it had been damaged or lost. Following the plaintiffs’ suit, the defendants moved to transfer the matter to California, citing a forum-selection clause in the bill of lading issued by USA Logistics to the plaintiffs. The court rejected this argument, finding that the forum selection clause did not mention US Moving and that USA Logistics had failed to sever the claims asserted against it from those asserted against US Moving. Moreover, the court found that the forum selection clause failed to cite to a federal court in California to which the matter should have been litigated and that it, thus, failed to comply with the requirements of 28 U.S.C. § 1404(a). Regarding the Motion to Dismiss under Carmack preemption, the court found that the complaint did not operatively show that U.S. Moving was a carrier and that, given its role as only the apparent broker to the action, Carmack preemption could not be held to apply. However, the court found that USA Logistics was a carrier and that any claims asserted against it for the damage to the property were indeed within the scope of Carmack preemption. The court, thus, dismissed the state law claims against USA Logistics, despite the plaintiffs’ argument that the bill of lading issued by USA Logistics was secured fraudulently and under duress. However, the court did allow the plaintiffs leave to file an amended complaint to assert a Carmack claim against either or both of the defendants.

Schneider Nat’l Carriers, Inc. v. Kaba & Sons, LLC, 2023 WL 6929334, No. 4:23-cv-00792 (M.D. Pa. Oct. 19, 2023). In this action following the total loss of goods after a trailer caught fire, the court granted a default judgment for Schneider National Carriers (SNC) after Kaba, the motor carrier, failed to answer or otherwise plead. Schneider and Kaba were parties to an agreement where Kaba was to provide transportation services for SNC and its customers. SNC tendered a shipment of certain goods to Kaba. However, Kaba failed to inspect the trailer before transporting the load. Two of the tires on the trailer were “low and bald,” and an accident occurred, causing the trailer and its contents to catch fire. Following payment to its customer for the loss of the cargo, SNC filed this action against Kaba seeking indemnification under the parties’ contract for the value of the cargo, as well as a claim under the Carmack Amendment. Following Kaba’s failure to answer or otherwise appear, SNC moved for a default judgment. The court found that SNC’s contract claim was preempted under federal law but that it had properly alleged its Carmack claim. The court also found that SNC had properly pled breach of contract for the damage to its trailer given Kaba’s failure to inspect it prior to transport. Ultimately, the court awarded damages to SNC for the value of the cargo and the value of its trailer.

COVERAGE

Prime Ins. Co. v. Wright, 57 F.4th 597 (7th Cir. 2023) (cert. denied Oct. 2, 2023). The U.S. Supreme Court declined to review the Seventh Circuit’s decision in this insurance coverage dispute, which was previously reported in the January 2023 edition of CAB Case Summaries. Thus, the Seventh Circuit’s ruling that the MCS 90 endorsement required the insurer to satisfy a default judgment entered against the motor carrier will stand.

Stein v. Farmers Ins. Co. of Ariz., 2023 U.S. App. LEXIS 28053, Nos. 22-55356 & 22-55414 (9th Cir. Oct. 23, 2023). In this bad faith action, the Ninth Circuit affirmed a jury verdict finding that the insurer engaged in bad faith, breached its contract, and violated New Mexico’s Unfair Insurance Practices Act in handling the claimant’s personal injury claim. The court found that the evidence supported the premise that the insurer engaged in unfounded delay, having not investigated the claimant’s injuries for five months after the accident, having failed to conduct an independent medical examination regarding the claimant’s injuries, and having rendered a coverage position despite its failure to adequately investigate. Thus, the court found that the evidence supported the jury’s finding that the insurer’s two-year long investigation constituted unfounded delay and supported a finding of bad faith. The court also found that the jury was reasonable in concluding that the insurer’s actions amounted to a violation of the Unfair Insurance Practices Act in handling the claims. Thus, the Court declined to overrule the district court’s denial of the insurer’s Rule 60 motion to alter the judgment and also affirmed the lower court’s ruling regarding its post judgment interest calculation.

CSX Transp., Inc. v. General Mills, Inc., 82 F.4th 1315 (11th Cir. 2023). In this matter originally arising from an injured General Mills’ employees’ negligence action against CSX, the Eleventh Circuit affirmed and reversed in part the district court. The employee sued CSX alleging negligence after several railcars ran over and severed his leg on a sidetrack. Following its settlement with the worker, CSX sued General Mills for breach of contract or, alternatively, under a theory that General Mills was jointly liable and required to indemnify it for the damages paid to the worker pursuant to a “Sidetrack Agreement” between the parties. The Agreement specified that General Mills would have the option to conduct its own switching (i.e., moving) of railcars. The court granted General Mills’ motion to dismiss the breach of contract claim and its motion for summary judgment on the other claim. The 11th Circuit panel partly reversed and partly affirmed the district court rulings against CSX, finding that, while the Sidetrack Agreement did not require General Mills to indemnify CSX if General Mills was not at all at fault, CSX could bring evidence to show that General Mills was partially responsible for its employee’s injuries. In so holding as to the latter claim, the court found that Georgia’s “vouchment” statute was central to its analysis. While General Mills argued that the statute bound CSX, under the doctrine of res judicata, to previous judgments in the underlying injury suit, CSX argued that it only bound General Mills. The court found that it was undisputed that CSX vouched General Mills into the underlying suit, that previous state Supreme Court rulings on the vouchment statute had only considered whether the vouchee was bound by it, not the voucher, as it is typically the voucher that seeks to bind the other party, and that this was an unusual case in that the vouchee is seeking to bind the voucher. Ultimately, the court agreed with CSX that the lower court had erred in misinterpreting the statute. “In other words, by design, vouchment empowers the voucher, not the vouchee.” “General Mills’s concern that vouchment, if it only binds the vouchee, tends to work against vouchees is simply a feature of the doctrine.” However, the court affirmed the district court’s dismissal of CSX’s first count for breach of contract, in which CSX had argued that its agreement with General Mills required the food company to indemnify the railroad for any injury, even if General Mills had no fault. The court found that the agreement did not “expressly, plainly, clearly, and unequivocally” provide for such indemnification as would be required under Georgia law.

SYNY Logistics, Inc. v. Great Lakes Ins. SE, 2023 WL 6388233, No. 22-cv-764 (N.D. Ill. Sept. 30, 2023). In this declaratory judgment action arising from first-party physical damage coverage, the court granted the insurer’s motion for summary judgment, finding that a trucking company’s driver did not have the experience required under the insurer’s policy to warrant coverage. SYNY, a motor carrier, had a driver who was involved in an accident. SYNY filed a claim with its insurer, Great Lakes. Under the policy, Great Lakes did not have to “indemnify [SYNY] for loss or damage to any Automobile … unless the Automobile is operated by … a driver who at inception of this Policy or at the date of hire, whichever is the later, provides documented evidence of an MRV no older than three months showing that they: … a) a minimum of two (2) years continuous driving experience, within thirty-six (36) months of the policy inception date or date of hire, whichever is the later, driving equipment similar to or driving trucks transporting cargo similar to that insured under this Policy; OR b) a minimum of (1) years continuous driving experience, within twenty-four (24) months of the policy inception date or date of hire, whichever is the later, driving equipment similar to or driving trucks transporting cargo similar to that insured under this Policy providing there are no violations and no at fault accidents.” Under this language, and specifically the minimum 1-year requirement under b), Great Lakes denied coverage because SYNY’s driver did not have the requisite one year of experience. The court agreed, finding that the driver had only 354 days of experience prior to the accident. Despite the driver being only 9 days short of the requisite experience and despite SYNY’s argument that the driver had obtained his license within the 24-month window provided by the policy, the court found there was no genuine dispute of material fact that the driver needed to have one year of experience at the time of an incident for the indemnity obligation to be effective. Thus, the court granted summary judgment in favor of Great Lakes while also dismissing SYNY’s claims for breach of contract and under Ill. Comp. Stat. 5/155(1)(b).

WORKERS COMPENSATION

No cases of note to report. 

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