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May 2024

Category: May 2024

Butler v. Adorno

United States District Court, M.D. Georgia, Macon Division.

Anthony BUTLER, Plaintiff,

v.

Jose Alberto Cruz ADORNO, CTS National Corporation, and ACE American Insurance Company, Defendants.

No. 5:21-CV-182 (CAR)

|

Signed March 27, 2024

Attorneys and Law Firms

Timothy Joseph Boyd, Christy Crowe Childers, David Hamilton McCain, Macon, GA, for Plaintiff.

Matthew Peter Stone, Dustin S. Sharpes, Shawn N. Kalfus, Atlanta, GA, Timothy Roth, Cleveland, OH, for Defendants.

ORDER ON DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF’S MOTION TO AMEND COMPLAINT

C. ASHLEY ROYAL, SENIOR JUDGE

*1 This case stems from the collision of two tractor-trailers. Defendant Jose Alberto Cruz Adorno, driving a tractor-trailer under dispatch for Defendant CTS National Corporation, rear-ended Plaintiff Anthony Butler, driving a tractor-trailer for UPS Ground Freight, Inc.1 Defendant ACE American Insurance Company insured Defendant CTS. Before the Court are Defendants’ Motions for Summary Judgment. Having read and considered the Motion, the record in this case, the applicable law, and the parties’ arguments, the Court HEREBY GRANTS in part and DENIES in part Defendants’ Motions for Summary Judgment [Docs. 50, 52] and DENIES as moot Plaintiff’s Motion to Amend Complaint [Doc. 57].

BACKGROUND

On May 5, 2019, around 11:14pm, Defendant Jose Alberto Cruz Adorno2 rear-ended Plaintiff Anthony Butler.3 At the time of the collision, Defendant Adorno was driving a tractor and hauling an empty tanker-trailer under dispatch for Defendant CTS National Corporation,4 and Plaintiff was driving a fully loaded tractor-trailer under dispatch for UPS Ground Freight, Inc.5 Defendant ACE American Insurance Company is the insurer for Defendant CTS National.6

After stopping at a Pilot Travel Center for a few hours, Plaintiff left and entered the on-ramp for Interstate 75 North.7 It was dark, and the roads were dry.8 As Plaintiff merged onto I-75 at exit 146 he noticed his tractor-trailer was not picking up speed.9 The exact speed Plaintiff was driving is in dispute. Defense expert James Hrycay opined Plaintiff never exceeded 21.7 miles per hour.10 Plaintiff denies he drove 21.7 miles per hour but admits he was going less than 40 miles per hour.11 Plaintiff testified that by the time he noticed a problem with the truck’s speed, Adorno had collided into the rear of his vehicle.12 Thus, Plaintiff contends he had no time to activate his four-way flashers.13 Adorno testified he was driving 65 miles per hour in the right lane of I-75 when he saw Plaintiff’s vehicle in his lane of travel and attempted to avoid it, but could not.14 The collision happened near mile marker 147, approximately half a mile to one mile from where Plaintiff entered the interstate.15 Both men were transported to the hospital after the collision.

I. Adorno’s Employment with CTS

*2 Defendant Adorno had two periods of employment with Defendant CTS. Adorno first worked for CTS from August 2018 until December 2018.16 Adorno owned the tractor he drove while employed at CTS, so he could not work when it was inoperable for maintenance reasons.17 Thus, when his motor blew in December 2018, he did not return until it had been repaired.18 Adorno then returned to CTS at the end of April of 2019 and worked for approximately six days until the accident occurred.19 After the accident, Adorno’s tractor was totaled, and he did not return to work for CTS.20

CTS employs a third-party company that performs background checks and verifies past employment for prospective hires.21 CTS also obtains and reviews a motor vehicle report going back seven years.22 Before hiring Adorno in August 2018, Adorno’s records revealed two incidents: one ticket in 2015 for speeding in a non-commercial vehicle and one citation in 2017 for hauling a trailer with an inoperative slack adjuster.23 CTS reviewed these violations and found they did not disqualify Adorno from the position.24 Adorno had also been involved in one previous accident in 2008 while employed by CPC Logistics, where he rear-ended a vehicle that passed him then stopped in front of him to turn left.25 But the 2008 accident was not on the motor vehicle record CTS reviewed, and they did not know about it until after this subject accident.26

CTS requires its drivers to have two years of driving experience, and it provides training which includes a written test on the Federal Motor Carrier Safety Regulations, training using the Smith System, and a road test.27 When Adorno came back to work for CTS in April 2019, CTS re-ran his background check but did not require him to redo his initial training because it was less than one year from when he initially received it.28

II. State Court Litigation

In July 2020, Adorno filed a lawsuit against Plaintiff, Plaintiff’s employer UPS, and UPS’s insurer in the State Court of Gwinnett County, Georgia for his injuries arising from the accident.29 Plaintiff’s attorney answered and moved to dismiss for improper venue or, in the alternative, to transfer to the State Court of Houston County.30 On September 9, 2020, Gwinnett County State Court entered a consent order finding venue was improper and granting the motion to transfer to Houston County.31 The Gwinnett Order further required Adorno to “pay all accrued court costs within 20 days of mailing or delivery of the cost bill,” lest the action be automatically dismissed without prejudice pursuant to Uniform State Court Rule 19.1(F) and Uniform Transfer Rule 10.32 On September 22, 2020, Adorno dismissed his claims with prejudice in the Gwinnett County case.33 There is no evidence in the record that Adorno ever paid the court costs required to transfer, or that the transfer to Houston County was ever effectuated. Thus, when Adorno voluntarily dismissed the case before the payment deadline, the case ended.

III. Current Litigation

*3 Plaintiff filed suit in the Superior Court of Peach County against Defendants alleging negligence claims against Adorno; vicarious liability claims and direct liability claims for negligent hiring, retention, training, supervision, and failure to ensure proper maintenance against CTS; and a direct-action claim against ACE American. Defendants properly removed to this Court and now seek summary judgment on all claims.

LEGAL STANDARD

Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”34 A genuine issue of material fact only exists when “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.”35 Thus, summary judgment must be granted if there is insufficient evidence for a reasonable jury to return a verdict for the nonmoving party or, in other words, if reasonable minds could not differ as to the verdict.36 When ruling on a motion for summary judgment, the court must view the facts in the light most favorable to the party opposing the motion.37

The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact” and that entitle it to a judgment as a matter of law.38 If the moving party discharges this burden, the burden then shifts to the nonmoving party to go beyond the pleadings and present specific evidence showing that there is a genuine issue of material fact.39 This evidence must consist of more than mere conclusory allegations or legal conclusions.40

DISCUSSION

The Court first addresses Defendants’ argument that Plaintiff’s negligence claims against Defendant Adorno and his vicarious liability claims against Defendant CTS are barred by the compulsory counterclaim rule. Second, the Court examines Plaintiff’s direct liability claims against Defendant CTS for negligent hiring, retention, training, and supervision, and failing to ensure proper maintenance. Third, the Court evaluates Plaintiff’s claim against Defendant ACE American under Georgia’s direct-action statute. Finally, the Court addresses whether Plaintiff was negligent per se.

I. Plaintiff’s Claims Against Adorno and His Vicarious Liability Claims Against CTS Are Not Barred by the Compulsory Counterclaim Rule

Defendants argue they are entitled to summary judgment on Plaintiff’s negligence claims against Adorno and Plaintiff’s vicarious liability claims against CTS because they are compulsory counterclaims he failed to assert in his previous state court lawsuit. The Court disagrees.

“[A] party may not raise issues arising out of the same transaction which should have been pled as a compulsory counterclaim in another separate suit. If the first suit is completed, then res judicata serves to bar proceeding with the second action.”41 Georgia’s statute on compulsory counterclaims states:

*4 A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if … the claim is not within the jurisdiction of the court.42

“When [a court is] asked to give res judicata effect to a state court judgment, [the court] must apply the res judicata principles of the law of the state whose decision is set up as a bar to further litigation.”43 Because Defendants contend a Georgia case bars Plaintiff’s claims against Defendant Adorno and the vicarious liability claims against Defendant CTS, Georgia res judicata principles apply. Georgia’s res judicata statute states:

A judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside.44

The three requirements for res judicata to apply are: (1) identical causes of action, (2) identical parties or their privies, and (3) previous adjudication on the merits by a court of competent jurisdiction.45

Plaintiff’s counterclaims were not compulsory because venue was improper in Gwinnett County. Under Georgia law, when venue as to defendants is improper, “the court is without personal jurisdiction to enter a binding judgment on the merits against the nonresident defendants.”46 “[A] counterclaim is not compulsory when there is no jurisdiction.”47 The judge in the Gwinnett County case granted Plaintiff Butler’s motion to transfer venue and ruled “venue for this case cannot lie in Gwinnett County ….”48 Because the state court lacked jurisdiction over Plaintiff Butler, he was not required to assert his counterclaims. Thus, the Gwinnet County case is not a previous adjudication on the merits by a court of competent jurisdiction, and res judicata does not bar Plaintiff’s claims against Adorno or CTS.49

II. Plaintiff’s Direct Liability Claims Against CTS Fail to Raise Genuine Issues of Material Fact

A. Negligent Hiring and Retention

*5 Under Georgia law, “[t]he employer is bound to exercise ordinary care in the selection of employees and not to retain them after knowledge of incompetency.”50 Thus, “an employer may be liable for hiring or retaining an employee the employer knows or in the course of ordinary care should have known was not suited for the particular employment.”51 “[L]iability for negligent hiring or retention requires evidence that the employer knew or should have known of the employee’s propensity to engage in the type of conduct that caused the plaintiff’s injury.”52 Accordingly, Georgia courts have “granted summary judgment to employers when there is no evidence that the employer knew of violations on the employee’s driving record or ignored its own reasonable policy of investigating such records, and denied summary judgment when there is evidence that the employer knew of such violations on the employee’s record.”53 “Whether or not an employer’s investigative efforts were sufficient to fulfill its duty of ordinary care is dependent upon the unique facts of each case.”54

Plaintiff’s negligent hiring and retention claims fail to raise a genuine issue of material fact. There is no evidence that CTS knew Adorno had been in another rear-end collision at the time he was hired.55 The 2008 accident was not included on the seven-year motor vehicle report, nor did the third-party company that performed background checks and verified past employment discover it.56 There is no evidence CTS failed to follow the minimum requirements set by the Federal Motor Carrier Safety Regulations (“FMCSRs”), and in fact, there is evidence CTS went beyond them by obtaining Adorno’s motor vehicle record for the preceding seven years rather than the three years required by the FMCSRs.57 The FMCSRs only require an employment application to request information on employers and accidents for the previous three years, which CTS did.58 Thus, even though CTS investigated farther back than was required, it did not uncover the 2008 accident because it occurred ten years before he was initially hired by CTS.

Plaintiff argues that CTS would have discovered the prior accident if it had called Adorno’s prior employer, CPC Logistics, but this is speculative. Adorno was last employed by CPC in 2012, six years before he applied to CTS, and there is no guarantee that calling CPC would have produced this information. Moreover, without knowing more information about the 2008 accident, it is unclear whether it would have prohibited Adorno from being hired.59 In fact, Plaintiff’s trucking standards expert Adam Grill had no criticisms of CTS’s hiring of Adorno.60

Plaintiff criticizes CTS for not investigating Adorno’s prior employment or accident history when he was re-hired, but even if CTS ran the background checks on Adorno anew there is no evidence the outcome would have changed. The 2008 accident was still too remote to be discovered by CTS’s hiring procedures. Thus, there is no evidence that CTS knew or should have known about the 2008 accident prior to hiring him or after retaining him.61 Nor is there any evidence that CTS’s hiring procedures “were faulty or not reasonable under the circumstances.”62 Thus, the Court GRANTS Defendants’ Motion for Summary Judgment as to the negligent hiring and retention claims.

B. Negligent Training and Supervision

*6 “To establish a negligent training claim, a plaintiff must demonstrate that inadequate training caused a reasonably foreseeable injury.”63 To defeat summary judgment on negligent supervision, a plaintiff must show “there is sufficient evidence to establish the employer reasonably knew or should have known of an employee’s tendencies to engage in certain behavior relevant to the injuries allegedly incurred by the plaintiff.”64

Because Plaintiff fails to raise genuine issues of material fact on his negligent training and supervision claims, the Court need not decide whether he failed to assert them in his Complaint.65 Before beginning his employment, CTS required Adorno to take a written test on the FMCSRs; complete training including on-road Smith System defensive driving training in which his performance was “exceptional;” and take a road test in which his performance was “outstanding.”66 Plaintiff’s expert Adam Grill identifies areas where CTS inadequately trained Adorno, including night driving and speed and space management. But as explained in the Court’s Order on the parties’ Daubert motions, Adam Grill’s testimony that CTS inadequately trained Adorno is excluded because of his lack of reliable data and methodology. Further, there are no federal regulations or other authority that mandate such training, however helpful it may be. With Grill’s testimony excluded, Plaintiff is left without any evidence supporting his negligent training claim. Nor is there sufficient evidence, as discussed above, to demonstrate CTS knew or should have known about Adorno’s 2008 accident to support Plaintiff’s negligent supervision claim. Thus, the Court GRANTS Defendants’ Motion for Summary Judgment as to the negligent training and supervision claims.

C. Failing to Ensure Proper Maintenance

Nothing in the record suggests Defendant CTS was negligent in failing to ensure the vehicle was properly maintained and inspected.67 There is no evidence the tractor-trailer driven by Adorno was defective in any way, nor any evidence that improper maintenance of the tractor-trailer caused Plaintiff’s injuries. Thus, the Court GRANTS Defendants’ Motion for Summary Judgment as to the negligent maintenance and inspection claim.

III. Plaintiff’s Direct-Action Claim Against ACE American Does Not Fail as a Matter of Law

Georgia’s direct-action statute allows a plaintiff to join both the motor carrier and insurance carrier in the same action.68 To maintain a cause of action against an insurer, the plaintiff must have an “actionable injury.”69 “And ‘actionable injury’ means an injury to a person who could sue the motor carrier and obtain a judgment for his injuries.”70

*7 Defendant ACE American is not entitled to summary judgment on Plaintiff’s direct-action claim because actionable claims against the insured party remain. Thus, the Court DENIES Defendants’ Motion for Summary Judgment as to Plaintiff’s direct-action claim.

IV. Genuine Issues of Material Fact Remain as to Plaintiff’s Negligence Per Se

Defendants argue Plaintiff was negligent per se because he violated two provisions of the Georgia Uniform Rules of the Road: O.C.G.A. § 40-6-184(a) and O.C.G.A. § 40-8-7(a). O.C.G.A § 40-6-184(a) states: “No person shall drive a motor vehicle at such a slow speed as to impede the normal and reasonable movement of traffic, except when reduced speed is necessary for safe operation.” O.C.G.A. § 40-8-7(a) states: “No person shall drive or move on any highway any motor vehicle … unless … the vehicle is in such safe mechanical condition as not to endanger the driver or other occupant or any person upon the highway.”

“A violation of the Uniform Rules of the Road prima facie establishes negligence per se in the absence of a valid defense. The burden then shifts to the defendant to show that the violation was unintentional and in the exercise of ordinary care.”71 It is clear from the record that Plaintiff was driving below the minimum speed limit, and Plaintiff’s vehicle was not in proper working order based on its inability to pick up speed. Defendants argue this is sufficient to establish Plaintiff was negligent per se.72

But a genuine dispute exists as to whether Plaintiff has a valid defense for operating his vehicle on the interstate at those low speeds. Both Plaintiff’s and Defendants’ trucking experts offer opinions about whether Plaintiff should have continued driving slowly until the nearest exit or pulled over and parked on the side of the highway. Thus, a reasonable jury could find Plaintiff had a valid defense and was justified in continuing. In Robinson v. Metropolitan Atlanta Rapid Transit Authority,73 the Georgia Court of Appeals affirmed the trial court’s refusal to give a negligence per se instruction for a violation of O.C.G.A. § 40-8-7(a) when the vehicle had been serviced recently, and the “driver had no reason to suspect that anything was wrong with the vehicle before it broke down.”74 Here, there is a genuine issue of material fact as to whether Plaintiff should have known something was wrong with the vehicle before merging onto the highway based on the conflicting testimony of Plaintiff and Defendants’ expert James Hrycay. Thus, the Court DENIES Defendants’ partial summary judgment as to Plaintiff’s negligence per se.

CONCLUSION

For the reasons set forth above, the Court HEREBY GRANTS IN PART and DENIES IN PART the Defendants’ Motions for Summary Judgment [Docs. 50, 52]. Specifically, the Court DENIES summary judgment for Defendants on Plaintiff’s claims against Adorno and vicarious liability claims against CTS; Plaintiff’s direct-action claim against ACE American; and Plaintiff’s negligence per se; and GRANTS summary judgment for Defendants on Plaintiff’s direct liability claims against CTS; and DENIES as moot Plaintiff’s Motion to Amend Complaint [Doc. 57].

*8 SO ORDERED, this 27th day of March, 2024.

All Citations

Footnotes  

  1. In his deposition Defendant Adorno is identified using his first surname, “Cruz;” however, because the relevant motions identify him as “Adorno,” that is how the Court will identify him.
  2. In his deposition Defendant Adorno is identified using his first surname, “Cruz;” however, because the relevant motions identify him as “Adorno,” that is how the Court will identify him.
  3. Defendants’ Memorandum of Law in Support of Their Motion for Summary Judgment [Doc. 52-1 at 4]; Plaintiff’s Response and Brief in Opposition [Doc. 56 at 1].  
  4. Defendants’ Statement of Undisputed Material Facts [Doc. 52-8 ¶¶ 1, 3].  
  5. Plaintiff’s Complaint [Doc. 1 ¶ 5]; Doc. 52-8 ¶ 4.  
  6. Plaintiff’s Deposition Transcript [Doc. 51-2 at 2].  
  7. Id. at 66, 76.  
  8. Adorno’s Deposition Transcript [Doc. 46-7 at 108]; Doc. 51-2 at 77.  
  9. Doc. 51-2 at 83, 84.  
  10. James Hrycay’s Expert Report [Doc. 46-1 at 35].  
  11. Plaintiff’s Response to Defendants’ Statement of Undisputed Material Facts [Doc. 60 ¶ 9]; Doc. 51-2 at 87.  
  12. Doc. 51-2 168–69.  
  13. Id.
  14. Deposition of Defendant Jose Alberto Cruz Adorno [Doc. 73 at 118].  
  15. Doc. 51-2 at 82.  
  16. Doc. 73 at 84; Defendant CTS’s 30(b)(6) Deposition [Doc. 46-9 at 104].  
  17. Doc. 46-9 at 104–05; Doc. 73 at 89.  
  18. Doc. 46-9 at 104–05; Doc. 73 at 89.  
  19. Doc. 46-9 at 104, 117.  
  20. Id. at 55, 117.  
  21. Doc. 46-9 at 15, 102, 149–150.  
  22. Id. at 102.  
  23. Declaration of David Phillips [Doc. 52-2 ¶ 6]; Doc. 46-9 at 102; Doc. 73 at 141–42.  
  24. Doc. 46-9 at 102; Doc. 52-2 ¶¶ 6, 7.  
  25. Doc. 73 at 44–45.
  26. Doc. 46-9 at 102.
  27. Id. at 14–15.  
  28. Id. at 118.  
  29. Ex. 3 to Motion for Summary Judgment, Prior Complaint [Doc. 52-5 at 1].  
  30. Ex. 4 to Motion for Summary Judgment, Prior Answer [Doc. 52-6 at 1]; Ex. A to Response to Motion for Summary Judgment, Motion to Transfer [Doc. 60-1 at 1].  
  31. Ex. B to Response to Motion for Summary Judgment, Consent Order [Doc. 60-2 at 1].
  32. Id. at 2.  
  33. Ex. 5 to Motion for Summary Judgment, Dismissal [Doc. 52-7 at 1].  
  34. Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).  
  35. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).  
  36. See id. at 249–52.  
  37. Welch v. Celotex Corp., 951 F.2d 1235, 1237 (11th Cir. 1992).  
  38. Celotex Corp., 477 U.S. at 323 (internal quotation marks omitted).  
  39. See Fed. R. Civ. P. 56(e); see also Celotex Corp., 477 U.S. at 324–26.  
  40. See Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir. 1991).  
  41. Allstate Ins. Co. v. Welch, 259 Ga. App. 71, 73 (2003) (quoting First Fed. Sav. & Loan Ass’n of Detroit v. I.T.S.R.E., Ltd., 159 Ga. App. 861, 863 (1981)).  
  42. O.C.G.A. § 9-11-13(a)(3).  
  43. Kizzire v. Baptist Health Sys., Inc., 441 F.3d 1306, 1308 (11th Cir. 2006)  
  44. O.C.G.A. § 9-12-40.  
  45. Coen v. CDC Software Corp., 304 Ga. 105, 109 (2018).  
  46. Exum v. Melton, 244 Ga. App. 775, 776 (2000).  
  47. EarthLink, Inc. v. Eaves, 293 Ga. App. 75, 78 (2008) (citing Lester v. Goodyear Tire & Rubber Co., 156 Ga. App. 171, 171 (1980)).  
  48. Consent Order [Doc. 60-2 at 2].  
  49. Moreover, even if Plaintiff’s claims against Adorno were barred by res judicata, they would not be barred against CTS for their liability under the doctrine of respondeat superior. Although a voluntary dismissal with prejudice acts as an adjudication on the merits, “the effect of a voluntary dismissal does not extend to any party not named therein.” Hedquist v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 272 Ga. 209, 212 (2000). Thus, CTS would not be entitled to dismissal of Plaintiff’s claims because CTS was not a party to the earlier lawsuit.  O.C.G.A. § 34-7-20.  
  50. Munroe v. Universal Health Servs., Inc., 277 Ga. 861, 862 (2004).  
  51. Middlebrooks v. Hillcrest Foods, Inc., 256 F.3d 1241, 1247 (11th Cir. 2001) (citing Alpharetta First United Methodist Church v. Stewart, 221 Ga. App. 748, 753 (1996)).  
  52. W. Indus., Inc. v. Poole, 280 Ga. App. 378, 382 (2006).  
  53. Munroe, 277 Ga. at 864 n.4.  
  54. Plaintiff’s Response and Brief in Opposition to Defendants’ Motion for Summary Judgment [Doc. 56 at 16–17]; Doc. 52-2 ¶¶ 5, 6; Doc. 46-9 at 102.  
  55. Doc. 46-9 at 15, 102, 149–150.  
  56. 49 C.F.R. § 391.23(a)(1).  
  57. 49 C.F.R. § 391.21(b)(7), (10); Doc. 52-2 ¶ 6.  
  58. Doc. 46-9 at 54.  
  59. Deposition of Adam Grill [Doc. 51-9 at 29].  
  60. See Patterson v. Southeastern Newspapers, Inc., 243 Ga. App. 241, 245 (2000) (granting summary judgment when there was no evidence employer knew or should have known of employee’s bad driving record and there was no evidence employer’s hiring procedures were faulty); Cherry v. Kelly Servs., Inc., 171 Ga. App. 235, 235 (1984) (denying summary judgment to employer when employer knew of one traffic violation on employee’s record but did not investigate further).  
  61. Patterson, 243 Ga. App. at 245.
  62. ABM Aviation v. Prince, 366 Ga. App. 592, 598 (2023) (quoting Advanced Disposal Servs. Atlanta, LLC v. Marczak, 359 Ga. App. 316, 319 (2021)).
  63. Leo v. Waffle House, Inc., 298 Ga. App. 838, 841 (2009) (quoting Alexander v. A. Atlanta Autosave, Inc., 272 Ga. App. 73, 77 (2005)).  
  64. Defendants argue Plaintiff failed to assert a negligent training or supervision claim in his Complaint. Plaintiff counters that he is not required to plead every legal theory of recovery under the notice pleading standard of Federal Rule of Civil Procedure 8 and moves to amend his Complaint [Doc. 57].  
  65. Doc. 52-2 ¶ 8; Doc. 46-9 at 15, 121, 139  
  66. Doc. 46-9 at 121–22.  
  67. O.C.G.A. § 40-1-112(c).  
  68. Coleman v. B-H Transfer Co., 290 Ga. App. 503, 508 (2008).  
  69. Id.
  70. In/Ex Sys., Inc. v. Masud, 352 Ga. App. 722, 724 (2019) (quoting Harden v. Burdette, 204 Ga. App. 733, 735 (1992)).  
  71. Plaintiff argues, among other things, that state law is impliedly pre-empted by FMCSR § 396.7(b). Because the Court is denying partial summary judgment on negligence per se, it does not address this argument on the merits. The Court can address any issues with Plaintiff offering evidence on this at trial through a motion in limine.  
  72. 197 Ga. App. 628, 629 (1990).  
  73. Robinson v. Metro. Atlanta Rapid Transit Auth., 197 Ga. App. 628, 629 (1990).  

© 2024 Thomson Reuters. No claim to original U.S. Government Works.

End of Document

Morales v. OK Trans, Inc.

United States District Court, S.D. Texas, Corpus Christi Division.

ADRIANNA MORALES, et al., Plaintiffs,

v.

OK TRANS, INC., et al., Defendants.

CIVIL ACTION NO. 2:19-CV-00094

|

Filed 03/29/2024

MEMORANDUM OPINION GRANTING PENSKE LOGISTICS’ MOTION FOR SUMMARY JUDGMENT

DAVID S. MORALES UNITED STATES DISTRICT JUDGE

*1 Before the Court is Defendant Penske Logistics LLC’s (“Penske”) motion for summary judgment. (D.E. 180). Plaintiffs are opposed to the motion. See (D.E. 196, p. 1). For the reasons below, the Court GRANTS the motion. (D.E. 180).

I. Background

The facts of this case are straightforward and were recounted in the Court’s order denying Penske’s earlier motion for summary judgment. See (D.E. 123, p. 1–3). On or about December 26, 2018, in Bee County, Texas, Satnam Singh Lehal was driving a tractor-trailer owned and operated by OK Transport, Inc. (“OK Trans.”). See (D.E. 223, p. 10). At some point, the tractor-trailer jackknifed, crossed into the oncoming lane, and collided with a pick-up truck driven by Lyndon Dean Meyer, who died on impact. See id. at 10–11.

Penske previously moved for summary judgment, arguing that it acted as a broker and not a motor carrier for purposes of the shipment at issue in this case. See (D.E. 98, p. 5–6, 9–10). The Court denied that motion, finding disputed fact issues as to whether Penske acted as a motor carrier or broker. See (D.E. 123, p. 7–10).

In the instant motion, Penske assumes—for purposes of this motion only—that it acted as a motor carrier and not as a broker. See (D.E. 180, p. 1–2, n.1, 6). According to Penske, even if it acted as a motor carrier, it was not Lehal’s statutory employer because it had no arrangement with Lehal or OK Trans. See id. at 6–10.

II. Legal Standard

Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it “might affect the outcome of the suit under the governing law[.]” Id. In determining whether a judgment as a matter of law is appropriate, the court must decide “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251–52. The “court must view the evidence ‘in the light most favorable to the [nonmovant].’ ” Tolan v. Cotton, 572 U.S. 650, 657 (2014) (per curiam) (quoting Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). A court is not required to search the record for evidence supporting a party’s opposition to summary judgment. Stults v. Conoco, Inc., 76 F.3d 651, 657 (5th Cir. 1996); Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994).

The movant bears the “initial responsibility” to present evidence proving that no genuine dispute of material fact exists, but the movant does not have to present supporting evidence “negating the opponent’s claim.” See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (emphasis omitted). If the movant “fails to meet this initial burden, the motion must be denied, regardless of the nonmovant’s response.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (per curiam). If the movant meets this burden, then the burden shifts to the nonmovant to “go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial.” Id. (citing Celotex, 477 U.S. at 324). The nonmoving party “must identify specific evidence in the summary judgment record” and demonstrate how that evidence supports their claim. Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007) (internal quotations and citations omitted). The nonmoving party’s burden cannot be satisfied by “conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (internal quotations and citation omitted). If the nonmovant fails to meet this burden, then the movant is entitled to summary judgment. Little, 37 F.3d at 1076.

III. Discussion

A. The Statutory-Employer Doctrine

*2 As discussed in the Court’s previous order granting Plaintiffs’ partial motion for summary judgment, there are two theories of statutory employment. See (D.E. 258, p. 3). Only the “responsibility and control” theory is relevant here. See (D.E. 196, p. 7–8 (containing no argument that Penske is Lehal’s employer as contemplated by 49 C.F.R. § 390.5)); D.E. 213, p. 2). Under the responsibility and control theory, an entity is a statutory employer if four conditions are met:

(1) the entity is a motor carrier and not a broker;

(2) it does not own the vehicle involved in the incident;

(3) it is using the vehicle in interstate commerce; and

(4) it does not employ the driver.

See (D.E. 123, p. 4) (order denying Penske’s previous motion for summary judgment); Sentry Select Ins. Co. v. Drought Transp., LLC, No. 15-CV-890, 2017 WL 5382168, at *2 (W.D. Tex. May 3, 2017) (Lamberth, J.); Sharpless v. Sim, 209 S.W.3d 825, 829 (Tex. App.—Dallas 2006, pet. denied)); McKeown v. Rahim, 446 F. Supp. 3d 69, 78–79 (W.D. Va. 2020) (Dillon, J.).

Only the third condition—whether Penske used the vehicle at issue in interstate commerce—is relevant to the instant motion.1 See (D.E. 180; D.E. 196, p. 2). After viewing all the evidence in the light most favorable to Plaintiffs, the Court finds that Penske is entitled to summary judgment because a motor carrier cannot use a vehicle in interstate commerce unless it has an arrangement with the owner or driver of the vehicle.

As an initial matter, the parties disagree as to the proper wording of the condition at issue—Penske argues that the Court must determine whether “the carrier operates the vehicle under an arrangement with the owner to provide transportation subject to federal regulations[.]” See (D.E. 180, p. 7) (quoting Hernandez v. Union Pac. R.R. Co., No. EP-17-CV-7, 2018 WL 4169328, at *3 (W.D. Tex. June 13, 2018) (Montalvo, J.)). Conversely, Plaintiffs focus on whether Penske “used” the vehicle owned by OK Trans. See (D.E. 196, p. 7). In reply, Penske suggests that relying on Sentry Select Ins. Co., 2017 WL 5382168, at *2, for the “use” standard is misguided. See (D.E. 213, p. 3 n.1). In Sentry, the court cited Sharpless, 209 S.W.3d at 829, for the proposition that the correct condition is that “the company is using the truck in interstate commerce[.]” 2017 WL 5382168, at *2 (emphasis added). But Sharpless provides a slightly different standard: “the carrier operates the vehicle under an ‘arrangement’ with the owner to provide transportation subject to federal regulations[.]” 209 S.W.3d at 829 (citation omitted).

At bottom, the parties’ disagreement turns on whether a motor carrier is statutorily liable for a driver’s negligence only when that carrier has a direct arrangement with the owner of the vehicle. See (D.E. 196, p. 7; D.E. 213, p. 4–5). This Court has yet to address this question—in its D.E. 258 order, the Court held that Liberty Lane “used” OK Trans’s vehicle to fulfill its obligation to transport the shipment on behalf of Penske. (D.E. 258, p. 8). There, it was undisputed that Liberty Lane had an arrangement with OK Trans, the owner of the vehicle, to transport the shipment. See id. (finding that “Liberty Lane had an agreement with OK Trans that Lehal would drive OK Trans’s vehicle on behalf of Liberty Lane to fulfill Liberty Lane’s agreement with Penske”). Conversely, in the instant motion, Penske argues that it had no arrangement with OK Trans. See (D.E. 180, p. 6; D.E. 213, p. 5).

*3 As such, the Court must determine: (1) whether an arrangement between a motor carrier and the owner or driver of a vehicle is required before the motor carrier may be considered the driver’s statutory employer—thus subjecting the motor carrier to vicarious liability—and (2) if so, whether a direct arrangement existed between Penske and OK Trans or Lehal.

B. Whether an Arrangement is Necessary

Penske argues that it cannot be Lehal’s statutory employer because “there was no written or oral lease, or any other arrangement[,]” between Penske and Lehal or OK Trans. (D.E. 180, p. 6). According to Penske, it is five steps removed from Lehal—Penske contracted Penske Transportation Management LLC (“PTM”) to broker the shipment to Liberty Lane; Liberty Lane contracted Liberty Commercial, LLC, to sub-broker the shipment to OK Trans; and OK Trans employed Lehal to drive the shipment. See id. at 7. Penske argues that five steps removed is four steps too many; absent a “direct arrangement,” it cannot be vicariously liable for Lehal’s negligence. Id. at 7–8. Conversely, Plaintiffs argue that the Court may impose statutory-employer liability on Penske even absent a direct arrangement between Penske and OK Trans or Lehal. (D.E. 196, p. 2).

As discussed in the Court’s order granting Plaintiffs’ motion for partial summary judgment, Congress amended federal law in 1956 to require motor carriers to assume control of the vehicles they lease. (D.E. 258, p. 10–11); Price, 727 F.2d at 496. In relevant part, 49 U.S.C. § 14102 provides:

(a) General authority of Secretary—The Secretary may require a motor carrier providing transportation subject to jurisdiction under subchapter I of chapter 135 that uses motor vehicles not owned by it to transport property under an arrangement with another party to—

(1) make the arrangement in writing signed by the parties specifying its duration and the compensation to be paid by the motor carrier;

(2) carry a copy of the arrangement in each motor vehicle to which it applies during the period the arrangement is in effect;

(3) inspect the motor vehicles and obtain liability and cargo insurance on them; and

(4) have control of and be responsible for operating those motor vehicles in compliance with requirements prescribed by the Secretary on safety of operations and equipment, and with other applicable law as if the motor vehicles were owned by the motor carrier.

49 U.S.C. § 14102(a). The intent of the amendments was “to ensure that interstate motor carriers would be fully responsible for the” operation of leased vehicles “and the supervision of drivers, thus protecting the public” from motor carriers who might otherwise attempt to shirk financial responsibility for accidents. Crocker v. Morales-Santana, 854 N.W.2d 663, 668 (N.D. 2014) (citation omitted); see also Simmons, 478 F.2d at 866–67, 866 n.21. Consistent with the text and purpose of the statute, the Department of Transportation promulgated regulations—referenced throughout this Order as the “responsibility and control” regulations—requiring motor carriers who use equipment they do not own to enter into written leases with the entity that owns the equipment. See 49 C.F.R. §§ 376.11–.12. The regulations further require that the lease grant the motor carrier “exclusive possession, control, and use of the equipment for the duration of the lease” and that the lease “provide that the authorized carrier lessee shall assume complete operation for the operation of the equipment for the duration of the lease.” Id. § 376.12(c)(1).

*4 Courts applying § 14102 and the responsibility and control regulations regularly impose statutory-employer liability on motor carriers when the carrier has a direct arrangement with the owner or driver of the vehicle at issue. See Puga, 227 F. Supp. 3d at 763–64 (imposing statutory-liability on a motor carrier where there was evidence of an arrangement between the carrier and the driver); Taghavi v. Soto, No. 3:21-CV-2557-S-BN, 2023 WL 7862769, at *4 (W.D. Tex. Oct. 12, 2023) (Horan, Mag. J.) (articulating that statutory-employer liability requires that a carrier operate the vehicle under an arrangement with the owner), adopted, No. 3:21-CV-2557-S-BN, 2023 WL 7706721, at *1 (Nov. 14, 2023) (Scholer, J.); Del Real v. Transportes De Carga FEMA S.A. de C.V., No. 5:17-CV-00129, 2018 WL 11429351, at *3–4 (S.D. Tex. Nov. 2, 2018) (Saldaña, J.) (finding no statutory-employment liability where there was no evidence that carrier had an arrangement with driver); Hutchinson v. Shuman, No. 4:07-CV-37, 2008 WL 11342643, at *4 (N.D. Miss. June 24, 2008) (Aycock, J.) (imposing statutory-employer liability where the carrier had a contract with the owner of the vehicle); Zamalloa v. Hart, 31 F.3d 911, 918 (9th Cir. 1994) (“[Motor] carriers are liable as the statutory employers of the drivers from whom they lease trucks during the term of the lease, regardless of whether the lease is written or oral.”); Sharpless, 209 S.W.3d 825, 829–30 (Tex. App.—Dallas 2006, no pet.) (affirming trial court’s decision finding statutory-employer liability where there was an arrangement between the carrier and the driver).2

Conversely, this Court found no cases where a court imposed statutory-employer liability absent an arrangement between the motor carrier and the vehicle’s owner or driver. And while Plaintiffs argue that nothing in § 14102(a)’s text requires an arrangement between Penske and Lehal or OK Trans, (D.E. 196, p. 7–8), they fail to grapple with the responsibility and control regulations, see id. These regulations require a lease between a motor carrier who uses equipment it does not own and the owner of that equipment. See 49 C.F.R. § 376.12(a). The regulations also define a “lease” as an “arrangement in which the owner grants the use of equipment, with or without driver, for a specified period to an authorized carrier for use in the regulation transportation of property[.]” 49 C.F.R. § 376.2 (emphasis added); see also Shimko v. Jeff Wagner Trucking, LLC, No. 11-CV-831, 2013 WL 10075919, at *4 (W.D. Wis. June 28, 2013) (Conley, J.). In their attempt to expand statutory-employer liability to arrangements between motor carriers, Plaintiffs cite § 376.22, (D.E. 196, p. 9–11), which contemplates an arrangement where a motor carrier lessor holds equipment under a lease and then leases that same equipment to a second motor carrier. In this scenario, § 376.22 requires the motor carriers to enter into a “written agreement” providing “that control and responsibility for the operation of the equipment shall be that of the lessee from the time possession is taken by the lessee[.]” § 376.22(c)(2). But Plaintiffs cite no cases, and the Court found none, where a court has applied § 376.22 to impose statutory-employer liability on a carrier with no relationship to the owner or driver of the equipment. See (D.E. 196). This lack of case law makes sense, as the statutory and regulatory scheme at issue here is concerned with motor carriers trying to escape liability for negligent drivers by leasing equipment and then treating the drivers of the leased equipment as independent contractors. See Waldhart v. 7S Trucking, Inc., No. 4:15-CV-101, 2016 WL 11476943, at *4 (D. N.D. Dec. 9, 2016) (Erickson, J.). But a lease between two authorized carriers is outside this concern. Because the motor carrier who leased the equipment from the owner is subject to the statutory-employer doctrine, the public is protected from a motor carrier’s attempt to designate the driver as an independent contractor to avoid liability.3

*5 Granted, this Court agrees with Plaintiffs that failure to comply with the written lease requirement in § 14102 or the responsibility and control regulations does not shield a carrier from statutory-employer liability. See (D.E. 258); Jackson v. O’Shields, 101 F.3d 1083, 1089 (5th Cir. 1996). As Judge Ramos stated in Puga, “any requirement of a lease is a consequence of triggering the statute, not the means for triggering the statute. Therefore, no lease—written or oral—is required prior to imposing statutory liability[.]” 227 F. Supp. 3d at 764. As such, motor carriers cannot skirt statutory liability by failing to formalize their arrangements into leases. But here Penske argues that it had no arrangement with OK Trans or Lehal at all—not that it had an arrangement but did not formalize it via a written or oral lease. See (D.E. 180, p. 6). And § 14102(a) is concerned with whether the “necessary relationship” exists—not whether it is termed a lease. See Puga, 227 F. Supp. 3d at 764.4 The Court also agrees with Plaintiffs that “use” presupposes the existence of an arrangement. See (D.E. 196, p. 9) (arguing that, barring theft, any “use” necessitates an arrangement). The question is whom that arrangement must be between. And after considering the text of § 14102, the responsibility and control regulations, and the relevant case law, the Court finds that an arrangement must exist between the motor carrier and the owner or driver of the vehicle at issue to trigger statutory-employer liability. To hold otherwise would expand the scope of the statutory-employer doctrine beyond that which other courts have articulated. This Court declines to take that step.

C. Whether an Arrangement Existed Between Penske and OK Trans or Lehal

The parties agree that Penske’s arrangement was with Liberty Lane and not with OK Trans or Lehal. See (D.E. 180, p. 6–7) (containing Penske’s allegations that it did not have an arrangement with OK Trans or Lehal); (D.E. 196, p. 7–8) (Plaintiffs’ response, which argues that Penske is “Lehal’s statutory employer even though Penske’s arrangement was with Liberty”) (emphasis added)). In fact, Plaintiffs admit that “Penske did not directly communicate with [OK Trans] or Lehal[.]” (D.E. 196, p. 9). Thus, it is undisputed that Penske did not have an arrangement with OK Trans or Lehal.

The Court acknowledges Plaintiffs’ contention that there is evidence from which a jury could find that Liberty Lane advised Penske’s sister company, PTM, that OK Trans would transport the shipment. See id. at 4–5. However, even assuming PTM knew that OK Trans would transport the shipment, that knowledge is insufficient to create a factual dispute as to the existence of an arrangement as between Penske and OK Trans. Notably, Plaintiffs do not allege that Penske was aware that OK Trans was to transport the shipment—only that PTM was. See id. at 4–5. And even if Penske was aware that Liberty Commercial had sub-brokered the shipment to OK Trans, there is no evidence that Penske engaged OK Trans in any manner. As such, no arrangement existed, and Penske is entitled to judgment as a matter of law.

IV. Conclusion

For the reasons above, the Court GRANTS Defendant Penske’s motion for summary judgment. (D.E. 180).

SO ORDERED.

Corpus Christi, Texas

All Citations

Footnotes

  1. Penske concedes it acted as a motor carrier for purposes of this motion. See (D.E. 180, p. 6) (noting that “even if” Plaintiff’s allegation that Penske acted as a motor carrier is “accepted as true for purposes of this motion, Plaintiffs’ claims against [Penske] cannot succeed.”). Plaintiffs agree. See (D.E. 196, p. 6). As such, the first condition is not at issue. And Penske admits that it “did not own the vehicle involved in the subject accident, nor did it employ [Lehal].” (D.E. 180, p. 7). Thus, only the third condition is at issue here.  
  2. It does not appear that the issue of whether an arrangement between the owner or driver of a vehicle and the motor carrier leasing the vehicle is necessary to impose statutory liability was before any of the courts in these cases. Rather, each case involved facts where the motor carrier had an arrangement with the owner or driver of the vehicle at issue.  
  3. This in no way suggests a driver can have only one statutory employer. The Court previously rejected that argument, see (D.E. 287, p. 8–9), and does so again here. When multiple motor carriers have arrangements with the owner or driver of a vehicle, then multiple motor carriers may be subject to the statutory-employer doctrine. Id.
  4. The issue of what constitutes a “necessary relationship” to impose statutory liability was not squarely before the Puga court. See id.  

End of Document

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