Hello all and welcome to the unofficial start of the school year. Hopefully your kids have those first day of smiles all ready as we embark on another year. And for the rest of us, back to a traditional work life balance as summer ends and we move into fall. This also means conference season is back on. Join us at an upcoming event to chat in person.  

Chad Krueger and Pam Jones

CAB Events

• CVSA, Commercial Vehicle Safety Alliance Conference 
  September 8-12, Big Sky, MT

• WI Motor Carriers Association Annual Convention 
  September 12-13, Elkhart Lake, WI

CAB Webinars

Tuesday, September 10^th | 12p EST

Chameleon Carriers and Interrelated Entities | J Slaughter and special guest Shuie Yankelewitz 

Learn more about 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.

Tuesday, September 17^th | 12p EST

Motor Carrier Identification Details & Credentials | Pam Jones

Join Pam to hear solutions for common questions CAB receives around the motor carrier’s details from the MCS-150, data posting timing, and latest on Login.gov and CAB access to FMCSA Portal.

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

Register Now

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

VITAL & VITAL+

CAB’s VITAL, Vehicle Inspection Tracker and Locator tool allows the user to search the inspection, crash, and violation history by the vehicle identification number (VIN). Our tool allows this data to be exported into a spreadsheet.

The enhanced version, VITAL+, allows for deeper use of the program and is an add-on feature.  

Example use cases include:  

CMVs’, commercial motor vehicles, roadside activity can be viewed in VITAL+. While no BASIC scores exist for this activity, insurance companies and motor carriers can see the exposure of a CMV.  This option is especially useful when reviewing an intrastate CMV.

Further, a partial VIN and multiple VINs can be uploaded into VITAL+. The system will also give you “close” VIN data to choose if it makes sense to include within your search. A few of these and other features are exhibited below.  

THIS MONTH WE REPORT

New Study Analyzes Impacts of Nuclear Verdicts A recent study by the U.S. Chamber of Commerce Institute for Legal Reform examined nuclear verdicts—verdicts exceeding $10 million—and their growing impact on the trucking industry from 2013 to 2022. These unpredictable, high-dollar verdicts are particularly harmful to small and medium-sized businesses. Read more… 

Senate Committee Approves DOT Funding Bill with Truck Parking, Predatory Towing Provisions The U.S. Senate’s Committee on Appropriations approved a 2025 funding bill for the Department of Transportation, including truck parking expansion, predatory towing regulations, and cargo theft strategies. Key provisions mirror those in the House bill, though the Senate version lacks a ban on speed limiters and stricter hours of service rules. Read more… 

Stronger Freight Demand May be Around the Corner, Broker Survey Says A recent survey by Bloomberg and Truckstop reveals optimism among freight brokers, with 49% expecting volume increases by the end of 2024. While 76% predict stable or rising spot rates, concerns remain over gross margins, with 44% of brokers reporting lower margins in the first half of 2024. Read more… 

Pride Group Closing Could Affect Freight Rates, Driver Market The liquidation of Pride Group, one of Canada’s largest trucking and leasing companies, is set to impact freight rates and the driver market. With over 20,000 trucks in North America, Pride Group’s shutdown could put upward pressure on rates, particularly since the company aggressively lowered prices. The closure may also displace thousands of employees, including drivers. Read more… 

Owner of Trucking Company in Crash That Killed 7 Motorcyclists Pleads Guilty Dunyadar Gasanov, co-owner of Westfield Transport, pleaded guilty to falsifying driver logbooks after a 2019 crash that killed seven motorcyclists. Gasanov admitted to instructing employees to falsify records and exceed driving hours, and he also lied to federal inspectors about his knowledge of the driver involved in the crash. Read more… 

Hard Reinsurance Prices Likely to Last Longer Than in Previous Market Cycles: Report A recent AM Best report highlights that hard reinsurance pricing conditions are expected to persist for several years due to ongoing claims activity from medium-sized disaster losses and secondary perils. Despite strong technical results, reinsurers face challenges from an unpredictable risk environment. Read more… 

OODIA’s AB 5 Appeal Focuses on Discrimination Against Interstate Truckers The Owner-Operator Independent Drivers Association (OOIDA) filed an appeal challenging California’s AB 5 law, which restricts the leased owner-operator model. While the California Trucking Association dropped its appeal, OOIDA argues that the law unfairly burdens interstate commerce and violates the dormant Commerce Clause. Read more… 

Appeal of Werner Nuclear Verdict Will Be Heard by Texas Supreme Court The Texas Supreme Court will hear Werner Enterprises’ appeal of a $100 million nuclear verdict related to a 2014 fatal crash. The case centers on a 2018 jury decision that found Werner liable for 70% of the damages, citing failure to train the driver for winter conditions. Read more…

September 2024 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinak Law Group LLP.

AUTO

Rivera v. Convoy, Inc., 2024 WL 3791183, 2024 U.S. Dist. LEXIS 144068, C.A. No. 3:23-cv-01353 (D. Conn. Aug. 13, 2024).  This case involves application of the Graves Amendment in the context of a motion to dismiss.  The underlying accident giving rise to the lawsuit involved a disabled vehicle that was struck by a tractor trailer driven by Defendant Estrada resulting in the death of one of the occupants of the disabled vehicle. Estrada was the owner of Prowheeler, a one-truck/one-driver trucking company. On the morning of the collision, Estrada was operating Prowheeler’s truck while pulling a trailer leased from Premier. Plaintiff subsequently brought suit against Estrada, Prowheeler, and Premier, among others. Plaintiff’s allegations against Premier center around a theory of negligent entrustment. Premier moved to dismiss that claim as being barred by the Graves Amendment. The court explained that the Graves Amendment preempts state law vicarious liability claims against owners of motor vehicles under certain circumstances. To avoid the bar under the Graves Amendment, it must be shown that the owner/lessor of the motor vehicle acted criminally or negligently in some respect and such criminality or negligence was a proximate cause of the alleged damages.  In this instance, the court found that to prevail, Plaintiff would have to show that Premier negligently entrusted the Trailer to Prowheeler under Connecticut law.  The court agreed with Premier that it entrusted the Trailer to Prowheeler, as opposed to Estrada directly.  Additionally, the court rejected Plaintiff’s argument that Premier should have known, in light of Prowheeler’s one-truck/one-driver status, that Estrada would be using the Trailer, specifically finding there was no allegation that Premier knew or should have known of Prowheeler’s one-truck/one-driver operation at the time it leased the Trailer to Prowheeler. The court went on to find that the pleading failed to allege Premier knew or should have known the entrustee would likely use the Trailer in a manner that involves unreasonable risk of physical harm.  The court found there were no allegations that Premier knew or should have known of Estrada’s past driving violations by virtue of its leasing the Trailer to Prowheeler.  As such, the court granted Premier’s motion to dismiss with leave for Plaintiff to file an Amended Complaint. 

Stephens v. Swift Transp. Co. of Ariz., LLC, No. 1:22-CV-01403-JPB, 2024 WL 3626635, 2024 U.S. Dist. LEXIS 136041 (N.D. Ga. Aug. 1, 2024).  In this hit-and-run accident personal injury case, Plaintiff filed a lawsuit against several defendants including Defendant Swift Transportation Company of Arizona, LLC (“Swift”). Regarding the accident, Plaintiff was a passenger in a vehicle struck by a tractor trailer. The tractor trailer kept going but Plaintiff noted the trailer’s license plate number, which was a Swift trailer. The day before, a Swift driver delivered a load to an Amazon facility pulling the same Swift trailer. The Swift driver unhooked from the Swift trailer at the Amazon facility and left with a different empty trailer. It was undisputed that no Swift tractors or drivers were involved in the subject accident or knew, authorized, or approved for anyone else to pull the Swift trailer from the Amazon facility the day of the subject accident. Swift filed a motion for summary judgment which the court granted, with the Court holding that Plaintiff failed to show Swift had any involvement in the subject accident beyond its trailer being pulled at the time. 

Sweigart v. Voyager Trucking Corp., No. 23-2397, 2024 WL 3565306, 2024 U.S. App. LEXIS 18609 (3rd Cir. July 29, 2024).  This opinion arises out trial resulting from a motor vehicle accident involving a tractor trailer and a motorcycle. Plaintiff suffered serious injuries when his motorcycle crashed into a tractor trailer. A jury awarded him $25 million in damages. Defendants (the driver and truck company) challenged five discretionary rulings of the District Court (“trial court”).  The Third Circuit Court of Appeals (“COA”) ultimately affirmed the jury verdict, ruling the trial court did not abuse its discretion. 

Regarding the accident, the driver was driving a fully loaded tractor trailer on an on ramp while on his phone early in the morning.  At the end of the ramp the driver saw Plaintiff’s motorcycle headlights approximately three football fields away.  The driver thought he had enough time to turn left before the motorcycle reached him.  Plaintiff did not realize the truck was turning left in front of him until it was too late to avoid a collision, and he applied his brakes and lost control of the motorcycle, colliding with the truck.  Plaintiff suffered a severe pelvic fracture as a result.  Defendants moved to bifurcate the liability and damages portion of the trail based on their concern of the jury’s reaction to Plaintiff’s horrific injuries.  During the trial, a juror fainted as a result of hearing testimony regarding Plaintiff’s injury and Plaintiff’s physician witness rendered aid.  Defendants moved for a mistrial which was denied.  The jury ultimately returned a verdict in Plaintiff’s favor for $25 million. 

Defendant appealed the denial of the motion to bifurcate, contending that the severity of Plaintiff’s injuries made it impossible for a jury to impartially separate issues of damages and liability.  The COA disagreed, noting bifurcation was the exception and not the rule.  It opined that Defendants did not offer a persuasive reason to bifurcate given the case involved serious injuries like many personal injury cases.  To rule otherwise would require courts to grant bifurcation every time a case involved serious personal injuries.  Finally, the COA noted the trial court had instructed the jury that the issue of liability and damages were separate and sympathy could not play a part in determining whether Plaintiff met his burden of proof regarding liability and damages.  Finally, Defendants did not cite a case where a trial court was found to have abused its discretion in denying a bifurcation motion.

Defendants also appealed the denial of their motion for a mistrial.  The COA affirmed the denial of the motion for mistrial, holding that the trial court questioned the jury regarding whether they could remain impartial after the incident.  In the COA’s view, the trial court did not abuse its discretion because it determined that each juror was sincere in affirming they could remain impartial after the incident. 

BROKER

Bailey v. Progressive Cnty. Mut.. Ins. Co., 2024 WL 3845966, 2024 U.S. Dist. LEXIS 146269, C.A. No. 22-5161 (E.D. La. Aug. 16, 2024).  This case arises from a motor vehicle collision wherein Plaintiff Bailey’s motor vehicle was struck by a tractor trailer, which she alleged “improperly turned and struck the side” of her vehicle. In addition to the driver of the tractor trailer, she also brought suit against Mascar Group, LLC and Hector Cordies Toreres, the alleged owners of the vehicle, US Foods, for whom the driver was making a delivery, and DCL, who served as the broker between US Foods and Mascar.  DCL moved to dismiss for failure to state a claim on the basis that the claim against it was barred by FAAAA. The parties agreed that FAAAA bars state law negligence claims against brokers like DCL, but Plaintiff contended that her state law claims survive preemption under the “Safety Regulatory Exception” set forth in 49 U.S.C. § 14501(c)(2)(A).  The court, citing Ye v. GlobalTranz Enterprises, Inc., 74 F. 4th 453 (7th Cir. 2023) and Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023), found that “there is no direct link between motor vehicle safety and DCL’s alleged negligent hiring by failing to properly screen Mascar and/or Mr. Perez in its capacity as a transportation broker” and therefore “the Safety Regulatory Exception does not exempt the claim in this case from the FAAAA Preemption Provision.” Additionally, the court found “the relationship between DCL’s alleged negligence and any motor vehicle is simply too attenuated to fall within the Safety Regulatory Exception.”  Finding Plaintiff’s state law negligent hiring claims were not exempted from preemption by the “Safety Regulatory Exception,” the Court granted defendant DCL’s motion to dismiss for failure to state a claim.

Schriner v. Gerard, 2024 WL 3824800, 2024 U.S. Dist. LEXIS 145154, C.A. No. 23-206-D (W.D. Okla. Aug. 14, 2024).  This case arises from a motor vehicle collision in which Plaintiff’s vehicle was struck while parked on the shoulder of the road after Defendant’s tractor trailer left the roadway. Plaintiff filed action against several defendants, including RXO, against which Plaintiff asserted two claims; vicarious liability and negligence in selecting the motor carrier for the shipment.  RXO moved to dismiss the claims against it. Reviewing the allegations of the Complaint, the Court found that RXO was a broker, not a motor carrier. Therefore, Plaintiff’s state negligence claims were preempted by FAAAA. The Court then turned to the Safety Regulatory Exception, and, as many others have done before, examined the issue in light of Ye v. GlobalTranz Enterprises, Inc., 74 F. 4th 453 (7th Cir. 2023) and Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023. The Court found that “the connection here-between a broker hiring standard and motor vehicles is – too attenuated to be saved” by the Safety Regulatory Exception. As such, Plaintiff’s claims were expressly preempted by FAAAA and not subject to the safety exception. Additionally, the Court found even if the claims weren’t preempted, Plaintiff failed to plead sufficient factual allegations to state a claim against RXO. Therefore, the Court granted RXO’s Motion to Dismiss with prejudice.

CARGO

Lotte Global Logistics Co., Ltd. v. One Way Only Trans, Inc., 2024 WL 3886092, 2024 U.S. Dist. LEXIS 147767, C.A. No. 2:23-cv-03558-ODW (C.D. Cal. Aug. 19, 2024).  This case involves liability under the Carmack Amendment for goods stolen during shipment and involving various different entities along the logistics chain. Samsung contracted with Lotte Global Logistics Co., Ltd. (“Lotte”), Korean corporation that provides a “domestic and international trade logistics services”, to arrange transportation of seventeen cargo containers loaded with lithium ion batteries from Busan, Korea via ocean carrier to the Port of Los Angeles, California, where it would then continue on to Nextera Energy Constructors in Kingsman, Arizona via motor carrier. On November 3, 2022, Lotte Global Logistics, North America (“LGLNA”), Lotte’s wholly owned subsidiary in the United States and a licensed FMCSA property broker, entered into an agreement with One Way Only Trans., Inc. (“OWOT”), a FMCSA “registered motor carrier”, to transport the shipment from the Port of Los Angeles to its final destination in Kingman, Arizona. Under the agreement, OWOT, was required to comply with all state, federal, and local hazmat licensing requirements. OWOT had only one tractor and no hazmat permit. Additionally, OWOT did not possess an FMCSA property broker license.  STPW, Inc., a separate FMCSA-licensed motor carrier did have hazmat authority and additional equipment capacity.  The president of OWOT was also a driver for STPW.  LGLNA sent a delivery order and dangerous goods declaration from Samsung to OWOT.  The president of OWOT thereafter requested from the president of STPW if STPW could transport the shipment, which STPW agreed to do.  OWOT forwarded the delivery orders to STPW, which noted the hazmat requirements and special instructions.  Upon arrival of the containers at the Port of Los Angeles, OWOT “arranged” for four of the containers to be picked up from the terminal.  The next day, the remaining containers were picked up by STPW drivers.  After delivery to a cargo storage yard, a driver in a tractor bearing STPW placards presented a forged PD on STPW letterhead to the cargo storage yard’s personnel and left with one of the containers.  Later that day, the container was found, having been emptied of its cargo. The remaining sixteen containers were delivered to the consignee in Arizona without incident.  Upon presentation of a claim for the missing cargo, Lotte paid the full amount in exchange for an assignment of Samsung’s rights.  Thereafter, Lotte filed suit against OWOT, STPW, and the container storage yard alleging: (1) a Carmack Amendment claim; (2) violation of 49 U.S.C. §§ 13902, 14707, and 14916; (3) negligence; and (4) breach of bailment.  Lotte moved for summary judgment against OWOT and STPW on the Carmack Amendment claim. 

In ruling on the MSJ, the Court found that OWOT held itself out as a motor carrier, not as a broker, when contracting with LGLNA.  Specifically the court noted: (1) OWOT held motor carrier authority, but not broker authority; (2) OWOT signed a Motor Carrier Agreement identifying OWOT as the motor carrier; (3) OWOT never disclosed itself to LGLNA as “arranging” for the shipment; (4) there was no evidence supporting OWOT ever notified LGLNA that STPW would be transporting the shipment or that LGLNA approved such arrangement; (5) OWOT accepted LGLNA’s delivery order and Hazmat declaration and agreed to transport the shipment; (6) all communications for pickup and delivery of the shipment, including notification of the stolen cargo, were between LGLNA and OWOT; and (7) OWOT sent invoices and proofs of delivery to LGLNA for each container. Further, OWOT lacked brokerage authority. Therefore, it found OWOT was liable under Carmack as a motor carrier. Turning to STPW, the Court found that STPW was definitionally a motor carrier based on its actions related to the transportation of this shipment.  The court rejected STPW’s attempts to claim the president of OWOT, using a STPW truck, was acting outside the scope of his contractor status with STPW.  The court specifically noted that no motor carrier without hazmat authority (which STPW held whereas OWOT did not) could have moved the shipments. As such, the court granted summary judgment in favor of Lotte and against OWOT and STPW on the Carmack claim. 

Godonou v. Allied Transp. Grp. LLC, No. 24-CV-80239, 2024 U.S. Dist. LEXIS 142980, at *1 (S.D. Fla. Aug. 12, 2024).  In this cargo claim, the District Court granted in part Defendant Allied Transportation Group’s (“Allied”) motion to dismiss Plaintiff’s claim that it was strictly liable under the Carmack Amendment.  According to the operative complaint, Plaintiff entered into an agreement with Allied whereby Allied agreed to transport Plaintiff’s belongings.  Plaintiff alleges he and Allied were the only parties to the agreement.  Plaintiff alleges Allied picked up the property.  The complaint further claims that Allied contends Defendant SSA was supposed to deliver the property.  It appears undisputed neither Defendant ever made delivery.  Plaintiff denies ever signing any document/agreement with SSA and SSA was not mentioned in the agreement he signed with Allied.  Allied produced a Bill of Lading between Allied and SSA, but Plaintiff contends he was never provided with such document by either Defendant before filing suit and that his purported signature on the bill of lading was fraudulent.  Plaintiff claims Allied invoiced him and he paid 50% of the invoice following Allied picking up the shipment, but never re-invoiced him for the remaining balance, refused to deliver his goods, and indicated his goods were to be auctioned. 

In the motion to dismiss, Allied argued it was an improper party in the case as it was not a carrier and thus not strictly liable under the Carmack Amendment.  Plaintiff countered that Defendant Allied was a proper party because some courts had adopted a more expansive view of a broker and a broker could be exposed to “carrier-like” strict liability.  The Court first explained that the determination of whether an entity is a carrier or a broker is “case-specific” though the Eleventh Circuit has held that the key distinction between brokers and carriers is “whether the disputed party has accepted legal responsibility to transport the shipment,” but entities who operate as both brokers and carriers can insulate themselves from strict liability by making clear in writing that the company is “merely acting as a go-between to connect the shipper with a suitable third-party carrier.” 

The Court noted that Plaintiff did not allege in the operative pleading any facts that demonstrated that Allied was a carrier.  Rather, Plaintiff’s Complaint merely made the conclusory statement that both Defendants “are carriers by law” but without any supporting facts. Insofar as Plaintiff attached the agreement with Allied to the Amended Complaint, the court considered its in connection with the motion to dismiss.  The Court noted that the Agreement itself explicitly stated, twice, that Allied was not a carrier, but instead was merely acting to connect the shipper (i.e., Plaintiff) with a motor carrier.  Insofar as the court found Allied made it clear in writing that it was not acting in the capacity of a carrier, it could not be held liable under Carmack, thus entitling Allied to dismissal of this claim. 

Q1, LLC v. Assembly, No. 6:22-cv-1212-RBD-LHP, 2024 U.S. Dist. LEXIS 132346, at *1 (M.D. Fla. July 26, 2024).  In this Carmack Amendment case, Plaintiff contacted a logistics broker, Defendant DSV, to arrange a shipment of cell phones from Florida to Indiana.  Defendant broker then contracted with Defendant trucking company, to transport the phones.  The broker and trucking company’s business relationship was governed by a Broker-Carrier Agreement, which contained a clause whereby the trucking company would defend, indemnify, and hold DSV harmless from any claims, damages, etc. arising out of its performance under the Agreement and neither party was liable to the other to the extent caused by the negligence or intentional wrongful act of the other party or shipper. The cell phones went missing in transit and Plaintiff sued Defendant trucking company under the Carmack Amendment and Defendant broker for breach of contract.  Defendant broker then filed a crossclaim against Defendant trucking company for contractual indemnity under the Broker-Carrier Agreement.  Regarding the crossclaim, the trucking company argued that the Carmack Amendment preempted the broker’s crossclaim for fees under the Broker-Carrier Agreement because the fees did not arise from separate and distinct conduct from the cargo loss at issue.  The broker argued that the fees are recoverable because they do arise from separate and distinct conduct as they do not bear on liability for the lost phones.  The Court agreed with the broker.  To decide whether the fees arose from separate and distinct conduct from the cargo loss, it considered whether the claim turned on a party’s liability for lost cargo based on the prevailing law in the 11^th Circuit Court of Appeals.  The conduct was considered separate and distinct because it included contractual obligations independent from a specific shipment like those in the ongoing business relationship between the broker and trucking company.  Accordingly, the Court held that the indemnity clause in the Broker-Carrier Agreement was not impacted by either Defendants’ liability for Plaintiff’s shipment, and the crossclaim under the Agreement was not preempted by the Carmack Amendment. 

COVERAGE

Mid-Century Ins. Co. v. Werley, 2024 WL 4049221, C.A. No. 23-1822 (3rd Cir. Sep. 5, 2024).  The Third Circuit reversed the trial court’s grant of summary judgment to an insured, accepting the insurer’s argument that a household vehicle exclusion prevented inter-policy stacking of underinsured motorist (UIM) benefits under Pennsylvania law. 

Levi Werley was seriously injured while riding an uninsured motorized dirt bike. When the insurance of the driver that struck him did not compensate him fully for his injuries, Levi’s parents, sought to recover underinsured motorist (“UIM”) benefits under their own automobile insurance policies.  The Werleys’ insurer paid $250,000 under one policy, but denied the claim under a separate policy. Specifically, the Werleys contended that the policy’s “household vehicle exclusion, which bars payments for bodily injury sustained while occupying an uninsured vehicle” is invalid and unenforceable under state law. 

The Third Circuit began its analysis by explaining the two variations of stacking as follows: (1) “intra-policy stacking aggregates the coverage limits on multiple vehicles under a single policy, even though not all the vehicles are involved in the accident or occurrence” and (2) “inter-policy stacking aggregates coverage limits for vehicles insured under separate policies.”  The default rule under the state Motor Vehicle Financial Responsibility Law (“MVFRL”) is that UIM coverages are “stacked” but an insured can waive stacked UIM coverage in exchange for a reduced premium.  The court went on to analyze a prior Pennsylvania Supreme Court ruling from 2006, holding the statutorily prescribed waiver form under the MVFRL is phrased only in terms of waiving intra-policy stacking rather than inter-policy stacking. Nevertheless, the prior court acknowledged that the stacking waiver language was enforceable as a knowing waiver of inter-policy stacking in the circumstance where a policy covers only one vehicle. 

The Werleys had two automobile policies in their household, both underwritten by Defendant insurer. The first (the “Multi-Vehicle Policy”), listed Levi’s parents as named insureds and insured four vehicles. The Multi Vehicle Policy provided UIM coverage equal to the bodily injury limits of $250,000 per person and $500,000 per accident, with intra-policy stacking validly rejected. However, the Werleys could not waive inter-policy stacking because the Multi-Vehicle Policy insured multiple vehicles. The Multi-Vehicle Policy contained a household vehicle exclusion of UIM coverage for “bodily injury sustained by you or any family member while occupying or when struck by any motor vehicle owned by you or any family member which is not insured for this coverage under any similar form.” While the Multi-Vehicle Policy did not define the term “motor vehicle,” Pennsylvania’s Vehicle Code defines a “motor vehicle” as “[a] vehicle which is self-propelled except an electric personal assistive mobility device or a vehicle which is propelled solely by human power.” Thus, Levi’s injuries would not normally be covered due to this exclusion.  The second automobile policy insured only one vehicle, a Jeep (the “Jeep Policy”) and had somewhat different language for the household vehicle exclusion.  The insurer determined the Jeep Policy’s household vehicle exclusion did not apply, and paid the $250,000 UIM limits available under the Jeep Policy. However, it denied the UIM claim made under the Multi-Vehicle Policy, contending the household vehicle exclusion applied.

On appeal, the Third Circuit disagreed with the trial court, who had accepted the Werleys’ argument that the uninsured status of the dirt bike is irrelevant because the Werley family seeks to collect UIM benefits for Levi, who was undisputedly an insured under the Multi-Vehicle Policy. Essentially, the trial court found “the ability to stack follows the son and not the dirt bike.”  However, the Third Circuit held this was inconsistent with prior Pennsylvania authorities holding UIM coverage is not “universally portable and not susceptible to exclusions from coverage” and “[i]f the MVFRL does not require that UIM coverage follow the insured in all circumstances, then the MVFRL cannot be read to prohibit exclusions from UIM coverage.”  As such, the Third Circuit found “absent a statutory prohibition . . . exclusions limiting the scope of UIM coverage, like the Multi-Vehicle Policy’s household vehicle exclusion, are generally enforceable . . . unless the exclusion functions as an impermissible de facto waiver of inter-policy stacking.” 

On that issue, the court found the Werleys never paid premiums for the dirt bike, let alone UIM coverage on it.  Since the dirt bike was never insured, application of the household vehicle exclusion would not deprive the Werleys of something for which they had bargained.  Citing another Pennsylvania Supreme Court case finding that policies that “explicitly exclude … UIM coverage for damages sustained while operating an unlisted household vehicle … do not conflict with Section 1738 of the MVFRL.” Thus, when the host vehicle is uninsured, UIM coverage that may have existed under a second-priority policy can properly be excluded.

Concluding that the household vehicle exclusion under the Multi-Vehicle Policy was unambiguous and did not otherwise conflict with Pennsylvania statutory requirements under the MVFRL, the Third Circuit reversed the trial court’s grant of summary judgment in favor of the Werleys and remanded the case to the trial court to enter summary judgment in favor of the insurer. 

WORKERS COMPENSATION

No cases of note to report this month.  

Hello Everyone! 

Summer sure seems to be moving along quickly! Sooner than expected, the kiddos will be headed back to school. Readers driving to work on a regular basis will need to remember to plan accordingly for the school buses slowing your commute down in the weeks ahead. It’s always a reminder of, “Oh darn, I’m on the bus route.” National School Bus Safety Week isn’t until the end of October but it’s a good refresher to think about as the new school year kicks off.

Have a safe and enjoyable rest of your summer!

Chad Krueger and Pam Jones

CAB Webinars

Tuesday, August 13^th | 12p EST

Diving into Analysis Central & New Segment Leader Intro | Mike Sevret and J Slaughter

Join us as we introduce our new Insurance Brokerage portfolio Senior Director, J Slaughter. Our main topic will focus on our Analysis Central section of the CAB platform. We’ll dive into our various reports and historical data.

Tuesday, August 20^th | 12p EST

MC Advantage Safety Module | Pam Jones and Jay Weinberg

Motor carriers requested an enhanced, motor carrier specific tool with similar CAB data our insurance clients find so valuable. In typical CAB fashion, we responded. Learn more about our motor carrier focused platform and recent enhancements that fleets will benefit from.

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

Register Now

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

CAB’s platform has a feature, Chameleon Carrier^® detector, that identities interrelationships of motor carriers. Understanding this is imperative to ensuring the fleet is being evaluated accurately. FMCSA pays attention to interrelations between fleets. Sometimes we see this type of activity make headlines as FMCSA identifies a fleet as reincarnated. It’s not every day to hear about these but it does come up. Plus, it is not always nefarious.

Listen to Chad Krueger’s webinars when he talks about the Chameleon Carrier^® feature and you will hear about a family operation that swap trucks across their multiple fleets. There is a webinar archive from 6/13/2022 on this topic.

Utilizing roadside activity and motor carrier data, CAB’s Chameleon Carrier^® Detector allows the user to see relationships across fleets. If multiple fleets both have the same VIN and share another company detail data point (address, phone, etc.), CAB flags this as a Chameleon Carrier^®.

Pay attention to these notices for enhanced motor carrier reviews.

THIS MONTH WE REPORT

New Jersey’s $1.5 Million Truck Insurance Hike Goes into Effect July 1 Starting July 1, 2024, New Jersey requires heavy-duty trucks to carry a minimum of $1.5 million in liability insurance. This increase, signed into law by Governor Phil Murphy, applies to commercial vehicles weighing 26,001 pounds or more. Read more…

Hard Market Conditions Expected to Ease in 2025 as Claims Inflation Softens: Swiss Re Swiss Re forecasts that the global non-life insurance sector will see an easing of hard market conditions in 2025 due to moderating general and claims inflation. Profitability is on the rise, with improved underwriting results and higher investment returns. However, insurers must stay vigilant against new inflation shocks from geopolitical conflicts. Read more…

NTSB Raises Concerns Over Marijuana Rescheduling Proposal The National Transportation Safety Board (NTSB) warned that moving marijuana from Schedule I to Schedule III could jeopardize drug testing for truck drivers, pilots, and others in safety-sensitive roles. The NTSB emphasized the need to maintain marijuana testing within DOT and HHS protocols to avoid safety risks. Read more…

Transportation a Top 10 Target of Cyberattackers, Cases Nearly Triple Last Year A study by SOAX found the transportation industry experienced a 181% increase in data breaches in 2023, with 101 cases compared to 2022. This matches the total breaches from 2020-2022 combined. The surge highlights the urgent need for better cybersecurity measures, as cyberattacks in transportation can significantly impact daily life. Read more…

FMCSA Pleads with Congress for More Power to Punish Brokered-Freight Fraudsters The Federal Motor Carrier Safety Administration (FMCSA) reported to Congress that it lacks the authority to effectively combat brokered-freight fraud. The agency cited the 2019 Riojas decision, which limits its ability to assess civil penalties. FMCSA seeks enhanced legislative authority to address unlawful brokerage activities, emphasizing the need for timely enforcement. Read more…

Trailer Orders Plummet, but Truck Pre-Buy Taking Shape U.S. trailer orders fell 19% year-over-year in June, with 6,300 units ordered, though slightly higher than the previous month. The decline reflects weak fundamentals and high dealer inventories. FTR Intelligence reported a 17% drop from May and a 44% rise from June 2023. Read more…

Senators Look to Empower FMCSA, Other Agencies After Landmark Supreme Court Decision Following the Supreme Court’s decision to overturn the Chevron doctrine, Senators introduced the Stop Corporate Capture Act to maintain agency deference and reform the regulatory process. The bill, led by Sen. Elizabeth Warren, aims to enhance transparency, streamline rulemaking, and increase public participation. Read more…

August 2024 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinak Law Group LLP.

AUTO

Pun v. Jones, 2024 WL 3504553, C.A. No. 3:24-CV-1059-D (N.D. Tex. July 22, 2024).  In this personal injury and property damage lawsuit arising from a MVA involving a CMV, the driver of the CMV moved to dismiss various causes of action alleged against him.  First, the court held that the driver lacked standing to seek dismissal of the direct liability claims of negligent hiring, training, supervision, retention, and negligent entrustment alleged by plaintiff against the driver’s alleged employer, the motor carrier.  As such, the motion to dismiss was denied for the direct liability claims.  Turning to the negligence per se claim, for which the driver did have standing to challenge, the court agreed that plaintiff’s complaint failed to allege the necessary elements supporting such a claim and dismissed that claim as against the driver. 

Todd v. Capella Logistics, Inc., 2024 WL 3445006, C.A. No. 1:22-cv-108 (N.D. Ga. July 17, 2024).  In this personal injury action arising from a chain-reaction MVA, the defendant motor carrier was successful in obtaining summary judgment on claims for negligent hiring, entrustment, training, and supervision, and a claim for punitive damages.  However, the court denied summary judgment on plaintiff’s claim for attorneys’ fees under O.C.G.A. § 13-6-11.  This case arose from an automobile accident between the parties.  Defendant Bula was driving a tractor-trailer on behalf of Defendant Capella Logistics, a motor carrier, when he rear-ended a tractor driven by former Defendant Rodney Chappelle that then spun across the interstate, collided with the Plaintiffs’ vehicle, and ultimately caused injuries to the Plaintiffs.  Capella Logistics moved for summary judgment on the direct liability, punitive damages, and attorneys’ fees claim.  On the direct negligence claims, the court found that the Plaintiffs failed to present affirmative evidence showing a genuine issue of material fact on any of their negligent hiring, training, or supervision claims. Rather, the evidence suggests that Bula had no driving history indicating a propensity to drive negligently.  Instead, Bula’s record shows that prior to his employment with Capella, he had a 2016 citation for driving beyond an eight-hour time limit, a 2016 citation for lacking a current record of duty status, and a 2017 citation for faulty brake hose and tubing.  In the court’s view, “none of these citations suggest that Capella knew or should have known that Bula had a propensity to engage in negligent driving. Nor does [Capella’s owner/president’s] alleged lack of knowledge of the motor carrier safety regulations indicate that Bula was improperly trained, much less that such training or lack thereof could have caused the Plaintiffs’ injuries.”  The court pointed to law from a sister court holding that when a driver holds a CDL, like Bula did, “[t]he Federal Motor Carrier Safety Regulations generally do not require trucking companies to train their drivers.” Finally, the court found Plaintiffs presented no evidence supporting their negligent supervision claim, nor does Bula’s driving record substantiate any instances of negligent driving similar to that alleged in the Third Amended Complaint. Therefore, it granted summary judgment in favor of the motor carrier on the negligent hiring, training, supervision, and entrustment claims.  In light of the dismissal of the direct negligence claims against the motor carrier, the court found the Plaintiffs could not sustain their burden to show “willful or wanton misconduct” on the part of the motor carrier necessary to sustain a punitive damages award.  As such, it granted summary judgment in favor of the motor carrier and dismissed the punitive damages claim against it.  Last, with respect to the claim for attorneys’ fees under O.C.G.A. § 13-6-11, the court noted “questions concerning bad faith, stubborn litigiousness, and unnecessary trouble and expense under [the statute] are generally questions for the jury to decide.”  It therefore denied summary judgment to the motor carrier on the attorneys’ fees claim. 

NFI Interactive Logistics, LLC v. Bruski, 2024 WL 3169160, C.A. No. 23A-CT-1969 (Ind. Ct. App. June 26, 2024).  In this interlocutory appeal of a trial court’s denial of a motion to dismiss, the Indiana Court of Appeals affirmed the trial court’s ruling, finding that the plaintiff’s complaint alleged sufficient facts to survive a 12(b)(6) motion.  The lawsuit arose out of chain-reaction accident.  According to the complaint, around 2:50 a.m., an eastbound driver on I-94 lost control of a Mercury vehicle (“the Mercury”) and struck a concrete barrier wall, causing the Mercury to become disabled on a dark, unlit portion of I-94.  Terry, a driver under the motor carrier authority of NFI and that was operating a CMV on behalf of NFI, was also driving eastbound on I-94.  Terry struck the Mercury around 2:50 a.m. and came to a controlled stop on the right shoulder of I-94.  The complaint further alleged that, “from approximately 2:50 a.m. through approximately 3:00 a.m., [Terry] did not activate the hazard warning signal flashers on, nor place any hazard warning triangles … or flares behind, the [CMV] to alert approaching motorists of the hazards in the travel lane and [the] shoulder of [I-94].”  Around 3:00 a.m., Plaintiffs who were the driver and passenger in a separate tractor-trailer, struck the Mercury before striking the concrete barrier wall.  In their complaint, Plaintiffs alleged Terry and NFI were liable for “failure to warn.”  They alleged Defendants were subject to FMCSRs, incorporated by reference into Indiana’s Code, which were violated when Terry did not activate his flashers or place a warning device.  The appellate court rejected Defendants’ argument that Terry had no common law duty to warn since he did not create the original danger—the disabled Mercury.  The court found it was plausible from the complaint that Terry “increased the hazard” and therefore had a common law duty to warn.  Similarly, the court found an alleged violation of the FMCSRs, as incorporated into Indiana’s Code, could be sufficient to support a negligence per se claim.  Since the Plaintiffs were found to be within “the class of persons protected” by the FMCSRs and the regulations were designed to protect against the type of collision involved in this instance, the appellate court found the trial court properly denied Defendants’ motion to dismiss the negligence per se cause of action. 

Asbie v. Padilla, 2024 WL 3295600, C.A. No. 24-1637 (E.D. Pa. July 3, 2024).  In this negligence action arising from a multi-vehicle motor vehicle accident, the motor carrier and its driver successfully moved to dismiss plaintiff’s negligence claim against them.  The complaint alleged plaintiff was driving eastbound in the right lane of Interstate 80 when her car “was pushed into the shoulder lane by another vehicle.” Defendant Padilla, who was driving a tractor-trailer for YP Transport, had pulled over into the highway’s shoulder “directly adjacent to the lane” that Plaintiff was driving in after “she heard noises coming from her truck” and had stopped to “inspect for any issues.” Padilla had failed to activate her hazard lights or put out warning triangles or flares.  Plaintiff’s car struck Padilla’s tractor-trailer, and Plaintiff alleged she suffered “severe and permanent injuries.” Plaintiff sued Padilla and YP Transport for negligence and negligent entrustment.  With respect to the negligence per se claim, premised upon alleged violation of a state regulation prohibiting a vehicle from being stationary adjacent to a roadway, the court noted the regulation provided for an emergency/safety exception.  It pointed to the allegations of Plaintiff’s complaint alleging Padilla only pulled over after hearing noises coming from the tractor as necessarily implicating the emergency exception.  As such, it dismissed with prejudice the negligence per se cause of action.  With respect to the negligence claim, the court agreed with Defendants that the other driver’s action in forcing Plaintiff’s vehicle off the roadway, ultimately leading to the collision with the tractor-trailer, was a superseding cause of Plaintiff’s alleged injuries.  As such it dismissed the negligence cause of action with prejudice.  Insofar as the other negligence-based causes of action were dismissed, the negligent entrustment cause of action failed as a matter of law and Defendants were granted a dismissal with prejudice as to that cause of action as well. 

BROKER

Gauthier v. Hard to Stop, LLC, 2024 WL 3338944, C.A. No. 22-10774 (11^th Cir. July 9, 2024).  In this appeal from a trial court’s ruling that a tort plaintiff’s negligent selection claim against a freight broker was preempted by FAAAA, the Eleventh Circuit Court of Appeals affirmed the trial court’s ruling.  The court applied its reasoning from Aspen American Insurance Company v. Landstar Ranger, Inc., 65 F.4^th 1261 (11^th Cir. 2023), finding while common law claims such as negligent retention are “generally applicable,” the specific claims of plaintiff were not because “[m]embers of the public do not arrange for the motor transportation of property; brokers do.”  The court reasoned that “[b]y regulating that specific activity, [plaintiff’s] common law claim is aimed solely at the performance of brokers’ core transportation-related services[,]” and as such, is preempted by FAAAA.  Last, the court rejected the plaintiff’s attempt to distinguish the holding of Aspen from cases involving traffic accidents.  The court stressed “[a]ny claim that a broker negligently selected a driver to haul a load of property clearly falls within Section 14501(c)(1) because . . . that claim seeks to regulate the broker’s performance of its core transportation-related services.  And such claims do not arise from an exercise of the safety regulatory authority of a State with respect to motor vehicles, 49 U.S.C. § 14501(c)(2)(A), which requires that the relevant state law have a direct relationship to motor vehicles.”  As in Aspen, the court stressed that negligent-selection-of-broker claims “necessarily lack a direct relationship because the services a broker provides have no direct connection to motor vehicles.”  For each of these reasons, the court affirmed the trial court’s dismissal of the negligent selection claim against the broker. 

CARGO

Evergreen Shipping Agency (America) Corp. v. Federal Maritime Commission, 2024 WL 3308236, C.A. No. 23-1052 (D.C. Cir. July 5, 2024).  This matter presents an appeal from a ruling by the Federal Maritime Commission that an ocean carrier’s assessment of detention charges against a motor carrier for the late return of an ocean container and vehicle chassis were “unjust and unreasonable.”  The appellate court first set forth the basis of its review, noting that a federal agency’s action is arbitrary and capricious if the agency has: “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”  The appellate court agreed with the ocean carrier that the FMC decision failed to adequately address various arguments raised by the ocean carrier and it failed to explain why those arguments were not relevant to the “just and reasonable” analysis or were outweighed by countervailing considerations.  The appellate court further rejected the FMC’s reasoning that “a detention charge necessarily lacks any incentivizing effect because it is levied for a day on which a container cannot be returned to a marine terminal.”  In fact, the appellate court found the opposite, noting “on the contrary, being charged for detention during a port closing announced before the carrier picks up the equipment heightens the incentive to return equipment on time.”  The appellate court further criticized the FMC decision for being internally inconsistent on the importance of returning equipment on time as it impacts the overall supply chain.  Ultimately finding that the FMC decision lacked “a logical explanation” to support its finding, the appellate court vacated the FMC Order and remanded the matter to the FMC for further handling consistent with the written opinion. 

Triax, Inc. v. TForce Freight, Inc., 2024 WL 3487892, C.A. No. 1:22-cv-01693 (D. Md. July 19, 2024).  In this case involving an alleged lost shipment, the court enforced the motor carrier’s limitation of liability.  Triax retained FreightCenter, who brokered the shipment to TForce.  FreightCenter generated a bill of lading in connection with the shipment, which identified TForce as the carrier and Triax as the “ship to” location (the “Bill of Lading”). On the Bill of Lading, FreightCenter included a class designation of 77.5 and a shipment weight of 375 pounds.  TForce’s representative signed the Bill of Lading the day after it was issued by FreightCenter.  The Bill of Lading included a warning that “Liability Limitation for loss or damage in this shipment may be applicable,” cited to the Carmack Amendment, 49 U.S.C. § 14706(c)(1), and advised that the shipment was “RECEIVED, subject to individually determined rates…that have been agreed upon in writing between the carrier and shipper, if applicable, otherwise to the rates, classifications[,] and rules that have been established by the carrier and are available to the shipper, on request.” The signed Bill of Lading included a sticker stating: “LIMITATIONS OF LIABILITY APPLY, SUBJECT TO LIMITS OF LIABILITY OF THE CARRIER’S RULE TARIFF.” TForce maintained a “Rules Tariff” at the time of the shipment in this case (the “TForce Tariff”).  The TForce Tariff provides:

In an effort to provide its customers with quality service at competitive rates, certain commodities may be offered to be shipped at less than full value and TForce Freight encourages shippers to review this publication, as some Items may be subject to limitations of liability, released values or other options specific to a shipment or a commodity.

The TForce Tariff was made available to shippers upon request.  It included Item 166 that identified its maximum liability per pound according to class designation.  According to the TForce Tariff, the maximum liability for a class designation of 77.5 is $8.00 per pound.  It further provided that TForce, as the carrier, “will not be liable for any damages in excess of the limitations within Item 166,” and that TForce would not “be liable for any indirect, incidental, consequential, loss of profit, loss of income, special, exemplary, or punitive damages.”  Triax’s designated corporate representative testified it never requested a copy of the TForce Tariff, he knew based on the Bill of Lading the transportation was subject to the motor carrier tariff, and that Triax provided the weight to FreightCenter that was listed on the Bill of Lading. 

Following non-delivery of the cargo, Triax filed suit against TForce seeking (i) monetary damages in the amount of $1,007,254.32, presumably (although ambiguously) consisting of the cost of the cargo and the cost of purchase orders that it was set to process upon receiving the cargo; (ii) pre-judgment interest and costs; and (iii) “such other, further and different relief as may be just on the premises.”  TForce filed a motion seeking to limit available damages to a maximum of $3,000 in accordance with the Bill of Lading and TForce Tariff liability limitations referenced therein.

In addressing the issue, the court set forth the four-part test adopted by the Fourth Circuit to determine whether a motor carrier has properly limited its liability, which holds carriers must: (1) provide the shipper, upon request, a copy of its rate schedule; (2) give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper’s agreement as to his choice of carrier liability limit; and (4) issue a bill of lading prior to moving the shipment that reflects any such agreement.  The court further explained that the foregoing applied irrespective of whether the carrier or shipper prepared the bill of lading.  Further, “consistent with Supreme Court precedent, when an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.” 

Applying the four-part test, the court first found there was no material dispute that Triax had not requested a copy of the TForce Tariff prior to the shipment, despite knowledge that the shipment would be subject to the TForce Tariff.  As for the “reasonable opportunity” to choose between different levels of liability, the court explained “[a] reasonable opportunity to choose between different levels of coverage means that the shipper had both reasonable notice of the liability limitation and the opportunity to obtain information necessary to making a deliberate and well-informed choice.”  Insofar as Triax provided the weight and class code to FreightCenter to include on the Bill of Lading; FreightCenter, as agent of Triax, issued the Bill of Lading; Triax knew the Bill of Lading was subject to the TForce Tariff; and the TForce Tariff included multiple class designations with corresponding maximum liability limits, the court found the “reasonable opportunity” element was met.  As for the “shipper’s agreement” requirement, Triax agreed the Bill of Lading governed the terms of the shipment and that the Bill of Lading was subject to the TForce Tariff.  However, the court found, even barring the foregoing admissions by Triax, the face of the Bill of Lading clearly and unambiguously identified that the shipment was subject to limitations of liability.  As such, the agreement component was met.  Last, insofar as FreightCenter issued the Bill of Lading and a TForce representative signed the Bill of Lading the day of the shipment, there was no material dispute the fourth requirement was met.  As such, the court found the limitation of liability to $8.00 per pound was fully enforceable and capped TForce’s liability at $3,000 (based upon stated 375 pound shipment weight). 

McCarthy v. Krupp Moving and Storage II, LLC, 2024 WL 3413255, C.A. No. 1:24-cv-79 (S.D. Ohio July 15, 2024).  In this lawsuit arising from a household goods movement from Ohio to Massachusetts allegedly gone wrong, the court granted in part and denied in part the household goods carrier’s motion to dismiss.  According to the allegations of the Complaint, Plaintiff signed an Estimate on November 4, 2022 and then a Contract on November 15, 2022 with the HHG carrier for the HHG carrier to provide two trucks and five movers to pack and move Plaintiff’s family’s belongings from Ohio to Massachusetts.  The Contract included listed charges for payment amounting to $19,044.48. The HHG carrier allegedly promised Plaintiff it would provide two 26-foot trucks for the move.  The HHG carrier’s movers did not follow Plaintiff’s organizational system when it packed up his Ohio residence.  Further the HHG carrier provided one 26-foot truck, but the second truck was only 16-feet long, meaning the trucks did not have enough storage space to move all Plaintiff’s belongings.  The movers placed Plaintiff’s belongings in the truck without wrapping or protecting them, resulting in multiple items becoming damaged or stained. Last, the HHG carrier charged Plaintiff more than $2,000 in excess of the Contract price.  Plaintiff filed suit against the HHG carrier alleging ten causes of action: (1) violation of the Carmack Amendment; (2) Breach of Contract; (3) Unjust Enrichment—In the Alternative; (4) Conversion; (5) Fraud; (6) Negligent Misrepresentation–In the Alternative; (7) Violation of the Ohio Consumer Sales Practices Act (“OCSPA”); (8) Violation of the Ohio Deceptive Trade Practices Act (“ODTPA”); (9) Negligence; and (10) Intentional Infliction of Emotional Distress.  The HHG moved to dismiss all but the Carmack cause of action.  The court found all but the claim for negligence were preempted by the Carmack Amendment.  However, with respect to the negligence cause of action, the court found that the damage alleged was separate and distinct from the alleged loss or damage to the goods.  Specifically, Plaintiff alleged that in connection with the move, the HHG carrier’s movers backed a truck into a centuries old tree at his new residence in Massachusetts resulting in damages.  Insofar as the alleged damages were wholly unrelated to the goods shipped in interstate commerce, the court found the negligence claim escaped Carmack’s preemptive scope, but only with respect to the damages to the tree.  As such, all causes of action but the Carmack and negligence claims were dismissed with prejudice. 

Cell Deal, Inc. v. FedEx Freight, Inc., 2024 WL 3401198, C.A. No. 21-cv-00788 (E.D.N.Y. July 12, 2024).  The district court overrode a magistrate court’s recommendation against summary judgment in favor of a motor carrier on a limitation of liability.  In so holding, the court agreed the motor carrier had validly limited its liability with respect to the at-issue shipment.  The issue was whether a freight broker, operating as an agent for the plaintiff shipper, could bind the shipper to a limitation of liability.  Citing Kirby, the court explained “[w]hen an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.”  The court found there was no genuine issue of material fact that the intermediary freight broker agreed to the motor carrier’s limitation of liability.  The contract between the freight broker and motor carrier specifically included a “Liability Notice” referencing the specific Item of the motor carrier’s tariff limiting liability if the consignor or consignee does not declare a higher value.  Further, the Bill of Lading for the disputed shipment likewise did not declare the value of the shipment.  Based upon this, the court found there was no dispute of material fact that the intermediary had agreed to the carrier’s limitation of liability, which under Kirby, was binding upon the shipper.  As such, plaintiff’s damages were limited to $153.00. 

Mendenhall v. FedEx Ground Package System, Inc., 2024 WL 3226580, C.A. No. 23-cv-11025 (N.D. Ill. June 28, 2024).  In this lawsuit arising out of an alleged non-delivery of freight, the court denied plaintiff’s motion to remand and granted carrier’s motion to dismiss.  Plaintiff alleged he purchased a laptop through an online seller, who contracted with FedEx for the delivery to Plaintiff’s residence.  Plaintiff claimed the laptop was never delivered and sought a refund from the online retailer.  When the online retailer contacted FedEx, Plaintiff alleged FedEx notified the online retailer that the laptop had, in fact, been delivered.  Plaintiff contended that FedEx alleged Plaintiff was “knowingly attempting to obtain by deception insurance reimbursement for the package.”  Plaintiff filed a complaint in Illinois state court that included claims for breach of contract and libel.  FedEx removed the case to federal court and then moved to dismiss the complaint in its entirety.  In response, Plaintiff moved to remand.  In first addressing the motion to remand, the court found the shipment was subject to the Carmack Amendment because it was transported in interstate commerce and Plaintiff was a “person entitled to recover under the receipt or bill of lading.”  As such, the court had appropriate subject matter jurisdiction and therefore denied the motion to remand.  Turning to the motion to dismiss, the court found the breach of contract claim was clearly preempted by the Carmack Amendment since it dealt directly with the alleged failure to deliver the laptop and dismissed that claim with prejudice.  As for the libel claim, the court found that it did escape preemption because it alleged “harm separate and distinct from the loss of goods.”  Nevertheless, without a “federal anchor claim,” the Court found it lacked supplemental jurisdiction to hear such a claim.  As such, it dismissed the libel claim without prejudice. 

SLT Imports, Inc. v. SAR Transport Systems Pvt. Ltd., 2024 WL 3289649, C.A. No. 23-cv-184484 (D. N.J. July 3, 2024).  In this admiralty action, the ocean carrier successfully moved for judgment on the pleadings and had the operative complaint against it dismissed with prejudice.  Plaintiff entered into an agreement whereby it would provide financing to non-party Krishna Food Corp. to allow Krishna to purchase food products from an Indian supplier to be shipped to Krishna in New Jersey.  Defendant SAR Transport Systems was the shipping carrier for the cargo.  Plaintiff alleged SAR Transport Systems “intentionally delivered” the cargo to Krishna without the required proof of payment by Krishna to SLT in the form of endorsed bills of lading.  Plaintiff brought an action against SAR Transport Systems alleging: (1) fraud in the execution of a maritime contract; or (2) alternatively, breach of maritime contract under COGSA and general maritime law.  The court found COGSA applied to the first count.  It further found Plaintiff did not state a claim for fraud in the execution under the “heightened pleading requirements,” and accordingly, the bills of lading, to which COGSA applied, were not void ab initio.  In the court’s view, at most, the complaint alleged a misdelivery of the goods, which would be subject to COGSA’s one year statute of limitation.  Since the suit was not brought within that timeframe, the cause of action was time-barred.  Further, the court found the entirety of Count II was subject to COGSA’s one year statute of limitation, and accordingly, was likewise time-barred. 

COVERAGE

Hudson Ins. Co. v. Townsell, 2024 WL 3186649, C.A. No. 23-CV-316-MTS (N.D. Okla. June 26, 2024).  In this insurance coverage declaratory judgment action arising from a MVA involving a CMV, the court granted in part and denied in part the insurer’s motion for summary judgment.  Waller, an employee of Arkk Trucking, agreed to drive a “boom truck” owned by Kirby-Smith Machinery, Inc. from Oklahoma to Utah on Kirby-Smith’s behalf.  While en route, in Wanship, Utah, Waller, while operating the boom truck, was involved in a single vehicle accident.  Townsell was a passenger in the boom truck at the time of the Accident and alleged personal injuries resulting therefrom.  Hudson insured Arkk Trucking under a commercial auto liability insurance policy that contained a MCS 90 endorsement.  Subsequent to the Accident, Townsell filed suit against Waller and Arkk Trucking in Utah state court.  Hudson thereafter filed the instant DJ action against Arkk and Townsell seeking a declaration as to its obligations under the auto liability policy and/or MCS 90 endorsement in response to the underlying tort suit.  The court quickly dispatched with potential defense and indemnity obligations under the Hudson Policy, finding the Accident did not involve a “covered auto” as defined under the Hudson Policy insofar as the boom truck was not specifically described on the declarations page to the Hudson Policy at the time of the Accident.  As for the MCS 90 endorsement, Hudson argued it had no obligation thereunder because: (1) the boom truck does not fall within the requirements of the Motor Carrier Act because it was not transporting property and Arkk was not a “for-hire” motor carrier; and (2) there is other insurance available within the required federal limits to cover the boom truck and any judgment against Arkk in the Underlying Suit.  However, the court refused to consider Hudson’s arguments with respect to the MCS 90, finding those were not yet “ripe” insofar as there was not yet a “final judgment” against Arkk Trucking—the motor carrier named in the MCS 90 endorsement. 

Misner v. Tecumseh, 2024 WL 3458084, C.A. No. 1:22-cv-01600 (D. Co. July 18, 2024).  This insurance coverage declaratory judgment action focuses upon whether the responsibility to procure an auto liability policy satisfying the requirements of the Motor Carrier Act of 1980 (the “Act”) lies with the insurer or the insured motor carrier.  A driver for Asa Griego Deliveries LLC (“Griego”) was making deliveries on behalf of Greigo when he was involved in an accident resulting in fatalities to two of the occupants of the other vehicle.  It is undisputed that the Griego delivery truck (the “Subject Vehicle”) was being used in interstate commerce and weighed more than 10,001 pounds. Thus, the Subject Vehicle falls under the purview of the Act.  At the time of the Accident, Alpha Property & Casualty Insurance Company (“Alpha”) insured the Subject Vehicle under a commercial vehicle policy with liability limits of $100,000 per person and $300,000 per accident. It is further undisputed that Griego did not seek to purchase a policy from Alpha for more than these amounts.  Representatives of the Estates of the decedents settled the underlying tort suit for $100,000 each and an assignment of the right to seek reformation of the Alpha insurance policy against Alpha. Thereafter, the Estates filed the instant declaratory judgment action, arguing the Act requires the Court to reform the Alpha insurance policy and increase the liability limits to $750,000. Alpha thereafter moved for summary judgment.

Alpha contended it was entitled to summary judgment because it had no reason to know the delivery truck was subject to the Act and even if it did, the Act does not provide the remedy the Estates seek.  The court agreed with the second contention, and accordingly, did not address the first.  While the Estates cited several cases for the proposition that insurance policies must conform to statutory mandatory minimums, and where they do not, Colorado law permits reformation, the court found the statutory schemes in Plaintiffs’ cited cases place the burden directly on the insurance companies to provide certain types or amounts of coverage.  In contrast, “[a] plain reading of the Act and its regulations indicates that they place the burden of compliance on the motor carrier not on the insurer.”  According to the court, [b]oth state and federal courts are in consensus, and this Court agrees that the Act does not create a duty of compliance for insurance companies.”  Additionally, the court found “it would be a perverse outcome to require an insurance company to bear the additional financial responsibility for an accident when it was the insured who was derelict in its duty to maintain proper coverage.”  The court stressed “Colorado law recognizes that absent a special relationship between the insured and the insurer’s agent, an insurance company has no affirmative “duty to advise, guide, or direct a client to obtain additional coverage.”  Acknowledging the tragic nature of the case, the court nevertheless granted summary judgment in favor of Alpha, holding the Alpha Policy was not subject to reformation to higher limits under the Act.

WORKERS COMPENSATION

No cases of note to report this month.