United States District Court,
D. Maryland.
John SCHRAMM, et al.
v.
Brian Ashley FOSTER, et al.
Mitchell THOMPSON, et al.
v.
Brian Ashley FOSTER, et al.
Aug. 23, 2004.
OPINION
MOTZ, J.
Plaintiffs John and Marla Schramm, individually and as guardians of Tyler Schramm, and Plaintiffs Mitchell, Biff, and Dorothy Thompson have brought this action against Defendants Brian Ashley Foster, Groff Brothers Trucking, LLC (“Groff Brothers”), and C.H. Robinson Worldwide, Inc. (“Robinson”) for personal injuries suffered by Tyler Schramm and Mitchell Thompson in a motor vehicle accident involving a tractor-trailer driven by Foster. Plaintiffs assert state common law claims for negligence, negligent entrustment, and negligent hiring and supervision, and federal claims under the Motor Carrier Act (“MCA”) and Federal Motor Carrier Safety Regulations (“FMCSR”). Now pending before the Court are Robinson’s motion for summary judgment and plaintiffs’ cross motion for partial summary judgment as to the liability of Robinson.
I will deny plaintiffs’ motion as to all claims, and I will grant Robinson’s motion, except as to plaintiffs’ claim for negligent hiring. [FN1]
FN1. Robinson’s motion to strike the reports of plaintiffs’ experts is granted. The experts express opinions on legal issues that are for the court to determine.
I. Facts
A.
This case arises out of a catastrophic accident between a passenger vehicle and a tractor-trailer in Allegany County, Maryland. Foster was transporting a load of soy milk from the warehouse of Jasper Products, LLC (“Jasper”) in Joplin, Missouri, to White Rose Food Corporation in Cateret, New Jersey. Foster was an employee of Groff Brothers at the time.
On May 2, 2002, Jasper requested that Robinson arrange for transportation of the soy milk. Robinson made contact with Ronald Groff of Groff Brothers, with whom Robinson had a contract carrier agreement, and Groff Brothers accepted the shipment request. Groff then assigned the job to Foster who was one of his drivers.
On May 5, 2002, en route to New Jersey, Foster was traveling eastbound on I-68 in a tractor-trailer when he decided to exit onto Maryland Route 36. Upon reaching the stop sign at the end of the off-ramp, Foster failed to stop or yield the right of way to on-coming traffic and proceeded into the intersection, blocking all southbound lanes on Route 36. Tyler J. Schramm, a minor, was driving southbound in a pick-up truck with Mitchell A. Thompson on Route 36 at the time. Schramm’s pick-up truck collided with the tractor-trailer and traveled underneath it until it came to a stop on the other side. The roof of the pick-up truck was severed as it proceeded underneath the tractor-trailer. Foster had been driving in excess of the maximum driving hours allowed by law for operators of property-carrying vehicles.
Schramm suffered neurological damage from which he is not expected to recover. He remains in a semi-vegetative state and suffers from various complications, including seizures, caused by injuries to his brain. As a result of these injuries, Schramm requires assistance with all basic life functions. In addition, Thompson sustained severe and permanent injuries to his head and body.
B.
Robinson describes its business in the following manner:
C.H. Robinson Worldwide, Inc., together with its subsidiaries and affiliates, is a third party logistics “3PL” company that specializes in brokering the shipment of goods via truck, rail, ocean and air. C.H. Robinson does not own transportation equipment (trucks, trains, ships or aircraft), but instead matches shippers together with carriers that do own and operate such equipment so that commercial goods can be moved efficiently from origin to destination. C.H. Robinson and its affiliates operate over 150 branch offices in the United States and abroad. They brokered approximately 2.8 million shipments in 2002 and 3.2 million shipments in 2003. As part of its motor carrier property brokerage operation, C.H. Robinson has brokerage contracts with more than 20,000 licensed motor carriers, whereby the carriers agree to haul loads for shippers through C.H. Robinson. At the same time, C.H. Robinson markets itself to businesses and manufacturers with transportation needs. With a simple phone call or fax to C.H. Robinson, shippers with transportation needs have ready access to available carriers to haul their loads, and carriers with available trucks can find shippers with goods requiring transportation.
(Def.’s Mem. Supp. Summ. J. at 3.)
Plaintiffs assert, and Robinson does not dispute, that third party logistics companies such as Robinson have emerged in the wake of the deregulation of the trucking industry. Prior to deregulation, independent owner operators typically associated themselves with larger carriers who entered into contracts with shippers, either directly or through brokers. Because of the size of their internal networks, the large carriers could provide integrated services to the shippers. Shippers were able to rely upon the large carriers’ quality control monitoring of the independent owner operators (incentivized by the carriers’ potential liability) and their established processes for handling freight claims. [FN2] The carriers also provided excess liability insurance coverage, over and above the required regulatory minimum (presently $750,000) the independent owner operators were required to carry.
FN2. Plaintiffs also contend that the drivers of unionized carriers would also ensure that safety regulations, such as the maximum driving hour rule violated by Foster, were enforced.
Robinson proclaims that it provides such “one point of contact” service to shippers. It maintains what apparently can fairly be described as a “stable” of small carriers who can pick up loads from one of Robinson’s shipping clients at a moment’s notice. In the event that the cargo is damaged during transit, “we [Robinson] are the ones to write them [the shipper] the check for the damage if we decide that it is a viable claim. They don’t go to the trucking company directly. That’s one of the points of being a one point of contact.” (Birdwell Dep. at 38-39.) Robinson also addresses the issue of personal injury liability in its promotional materials: [FN3]
FN3. This particular advertisement was not produced until October, 2002, several months after the accident involved here. However, Robinson has not suggested that it is inconsistent with marketing approaches its sales representative took prior to the accident.
Just as CHRW [Robinson] takes responsibility for freight claims, we also step forward when liability issues arise. We insulate the shipper in three important ways:
1. We work only with carriers who carry full insurance coverage. When CHRW begins to do business with a carrier, we verify their insurance coverage and keep a copy in our files of documents that prove the carrier has Federal Operating Authority and a current insurance certificate, with a minimum of $25,000 and $750,000 auto liability coverage. In addition, we check in with carriers regularly to make sure their coverage is current and renewed at necessary levels.
2. If an accident occurs, the carrier indemnifies both the shipper and CHRW from liability.
3. In the rare event that the damage goes beyond the carrier’s insurance limits, CHRW maintains a liability insurance policy that pays the rest.
(Transport Folio Article, Pls.’ Mem. Supp. Summ. J. Ex. 27; see also Commercial Umbrella policy Ex. 28.) (Emphasis added).
C.
Groff Brothers entered into a contract carrier agreement with Robinson on January 26, 2001. Prior to that date, Ronald Groff (one of the Groff brothers), doing business as “RG Transportation,” had been a carrier in Robinson’s stable of carriers. He had entered into a master transportation contract with Robinson on March 18, 1998, and a contract carrier agreement on November 21, 2000. RG Transportation was originally granted motor common carrier authority by the Federal Motor Carrier Safety Administration (“FMSCA”) on January 29, 1998. This authority was voluntarily revoked as of March 13, 2002, and was reinstated on August 20, 2002.
Robinson’s contract carrier agreement with Groff Brothers (like its agreements with other carriers) required Groff Brothers to have a “Satisfactory” U.S. Department of Transportation rating. However, Groff Brothers did not have such a rating at the time it entered into the agreement with Robinson because it was a new company. Robinson was aware of this fact by virtue of a response Groff Brothers submitted to a Carrier Information Survey sent out by Robinson.
The FMSCA provides information regarding carriers on several websites and internet pages. This information includes “SafeStat,” which reports on and rates carriers’ safety performance. [FN4] “Safety Evaluation Area” values used on this site range from 0 (best) to 100 (worst). According to SafeStat, only SAE ratings of 75 or higher are deemed to be deficient. In September, 2001, Groff Brothers had an SEA rating of 74.00 in the driver safety evaluation area. By March 23, 2002, this rating had decreased to 70.63.
FN4. As Robinson points out, a caution page appears before the SafeStat information is accessed. This caution reads as follows:
“WARNING
Because of State data variations, FMCSA cautions those who seek to use the SafeStat data analysis system in ways not intended by FMCSA. Please be aware that use of SafeStat for purposes other than identifying and prioritizing carriers for FMCSA and state safety improvement and enforcement programs may produce unintended results and not be suitable for certain uses.”
II. Negligence/Respondeat Superior
A.
Plaintiffs argue that Robinson is liable for Foster’s negligence under a respondeat superior theory because Foster acted as an agent of Robinson in the transportation of the Jasper load. Under the doctrine of respondeat superior, an employer is vicariously liable for the tortious conduct of his employee or agent when that employee or agent is acting within the scope of the master-servant relationship. Schweizer v. Keating, 150 F.Supp.2d 830, 839 (D.Md.2001); Hunt v. Mercy Med. Ctr., 121 Md.App. 516, 545, 710 A.2d 362 (1998); Kersten v. Van Grack, Axelson & Williamowsky, P.C., 92 Md.App. 466, 469, 608 A.2d 1270 (1992).
An agency relationship “results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.” Restatement (Second) of Agency, § 1(1) (1958). An agency relationship may be established by written agreement or inference. Patten v. Board of Liquor, 107 Md.App. 224, 238, 667 A.2d 940 (1995). In this case, there was no written agreement in which Robinson and Foster or Groff Brothers manifestly consented to have Foster act as Robinson’s agent. Rather, plaintiffs contend that an agency relationship may be inferred from the circumstances.
To establish a principal-agent relationship by inference, plaintiffs must show that 1) the agent was subject to the principal’s right of control; 2) the agent had a duty to primarily act for the benefit of the principal; and 3) the agent held the power to alter the legal relations of the principal. Schear v. Motel Management Corp., 61 Md.App. 670, 687, 487 A.2d 1240 (1985), quoting Restatement (Second) of Agency, § 12–14 (1958).
Plaintiffs argue that Robinson asserted its control over Foster under the terms of the contract carrier agreement it executed with Groff Brothers. The contract states that Robinson controls the transportation of freight on behalf of its customers. It further instructs the carrier to obtain instructions concerning the handling of the load, to inspect the goods before loading to ensure that they are in good condition, and to notify Robinson if they are not. According to plaintiffs, pursuant to these provisions, Robinson exercised control when it dispatched Foster, directed him to pick up and deliver the load at specific times, and gave him directions from the Jasper warehouse to the warehouse in New Jersey. Robinson also gave Foster specific instructions regarding the load, including requiring Foster to use load locks on the trailer. Finally, according to plaintiffs, Robinson monitored Foster’s performance by requiring him to call when he had successfully picked up the load and then periodically throughout the trip.
However, both the written agreement and the conduct of the parties belie plaintiffs’ arguments. The contract expressly provides that the “relationship of Carrier to Robinson hereunder is solely that of an independent contractor.” Pl.’s Ex. 13, Contract Carrier Agreement, ¶ 6. The contract further states that the carrier shall employ all drivers transporting goods under the contract and that “such persons are not employees or agents of Robinson or its Customers.” Id. Under the terms of the agreement, Groff Brothers was to pay Foster’s salary and all expenses incurred in transporting the load and was to provide all necessary equipment and fuel required for the shipment. Id. at ¶ 4, 487 A.2d 1240. According to the contract, “the Parties agree that Carrier shall be the party solely responsible for operating the equipment necessary to transport commodities under this Contract.” Id. at ¶ 9, 487 A.2d 1240. Clearly, Groff Brothers and Robinson understood that Groff Brothers was to maintain control of the means and method of transportation, including the performance of the driver.
Moreover, there is no evidence that Robinson controlled Foster’s actual performance through its coordination of the shipment. Groff Brothers remained at all times an independent contractor. An independent contractor is “one who contracts to perform a certain work for another according to his own means and methods, free from control of his employer in all details connected with the performance of the work except as to its product or result.” Kersten, 92 Md.App. at 469, 608 A.2d at 1272 (quoting Gale v. Greater Washington Softball Umpires Ass’n, 19 Md.App. 481, 487, 311 A.2d 817 (1973)). The rule of respondeat superior does not impose liability on an employer for the wrongdoing of an independent contractor. See Brady v. Ralph Parsons Co., 308 Md. 486, 512, 520 A.2d 717 (1987); Rowley v. Mayor and City Council of Baltimore, 305 Md. 456, 461, 505 A.2d 494 (1986).
The mere fact that Robinson had Foster call Robinson directly to receive the dispatch information, rather than receive it from Groff Brothers does not demonstrate that Foster was under Robinson’s control in the performance of his work. Furthermore, although Robinson provided Foster with directions to and from the Jasper warehouse, it explicitly stated that the directions provided were simply for informational purposes. [FN5] The driving directions and special loading instructions provided by Robinson did not circumscribe Foster’s performance to the extent that the details of his performance were precisely determined by Robinson’s authority over the transaction. See Tartaglione v. Shaw’s Exp., Inc., 790 F.Supp. 438, 441 (S.D.N.Y.1992) (concluding that the fact that broker controlled the location where cargo was picked up and delivered did not establish an agency relationship because such control involved only the result of the work and not the manner in which it was undertaken).
FN5. The Carrier Load Confirmation sent by Robinson to Groff Brothers stated: “Directions supplied by C.H. Robinson or its Customers either orally and/or in written form are for informational purposes only. It is the Carrier’s sole responsibility to confirm that it may lawfully operate a loaded vehicle of any weight, commodity, or dimension over any highway, bridge or route.” Def.’s Ex. 11, Carrier Load Confirmation, at 2.
“Complete control over the result to be accomplished is not enough to make an independent contractor an employee … ‘[A]n employer has a right to exercise such control over an independent contractor as is necessary to secure the performance of the contract according to its terms, in order to accomplish the results contemplated by the parties in making the contract, without thereby creating such contractor an employee.” ‘ Taylor v. Local No. 7, Intern. Union of Journeymen Horseshoers of U.S. and Canada (AFL-CIO), 353 F.2d 593, 596 (4th Cir.1965) (citation omitted). Thus, the fact that Robinson provided driving directions and required Foster to inspect the load upon pick-up, use load locks, and arrange for the shipment to be unloaded did not destroy Foster’s status as an independent contractor; rather, such instructions simply served to secure performance of Robinson’s agreement with Jasper according to its terms.
Professional Communications, Inc. v. Contract Freighters, Inc., 171 F.Supp.2d 546 (D.Md.2001), is on point. There, the court considered whether an agency relationship existed between a broker and a carrier hired to transport a shipment of cell phones. As evidence of the agency relationship, the plaintiffs presented a “Driver Trip Sheet” which included a heading with attention to the broker and contained instructions for the driver to report any delays to the broker. Id. at 551. The court found that these instructions were consistent with the broker’s role and did not indicate a principal-agent relationship. Id. The court concluded that “[a] mere contract to ship goods does not establish an agency relationship.” Id.
Finally, the fact that Robinson provided Foster with a number to call in case he experienced any problems during the transportation of the load, and Robinson’s desire to have Foster call periodically to check in do not indicate that Robinson exercised sufficient control over Foster’s movements as to make him an agent of Robinson. “Even some reservation of control to supervise the manner in which the work is done, or to inspect the work during its performance does not destroy the independent contractor relationship where the contractor is not deprived of his judgment in the execution of his duties.” Id.; Schweizer, 150 F.Supp.2d at 840; Brooks v. Euclid Systems Corp., 151 Md.App. 487, 510, 827 A.2d 887 (2003)). See also Schearer, 61 Md.App. at 688, 487 A.2d 1240 (franchisor’s right to conduct periodic inspections of franchisee’s hotel to assure adherence to quality control standards did not create agency relationship). [FN6]
FN6. Plaintiffs also claim that Foster exercised the authority to alter Robinson’s legal relations with Jasper when he signed the bill of lading which designated Robinson as “carrier.” Foster’s signature on the bill of lading is insufficient to establish an agency relationship, however, because Foster was not authorized, either expressly or implicitly, to alter Robinson’s legal relations in that manner. The authority of an agent must come from the principal, and the principal must either knowingly permit the agent to exercise the authority or hold out the agent as possessing it. Integrated Consulting Services, Inc. v. LDDS Communications, Inc., 996 F.Supp. 470, 474 (D.Md.1998) (citing Homa v. Friendly Mobile Manor, 93 Md.App. 337, 359-360, 612 A.2d 322 (1992)). Although Foster was authorized to sign the bill of lading on behalf of Groff Brothers upon receiving the load, Robinson never expressly authorized Foster or held him out as authorized to legally bind Robinson by signing a bill of lading which, erroneously and without Robinson’s knowledge, named Robinson as the carrier. See Chubb Group of Ins. Companies v. H.A. Transp. Systems, Inc., 243 F.Supp.2d 1064, 1070 (C.D.Cal.2002) (where transportation company did not prepare or assist in preparing bill of lading which listed company as “carrier”, bill of lading could not be relied upon as basis for imposing carrier liability on company).
B.
Even if Foster were deemed to have acted as an agent of Robinson, Robinson would only be liable for Foster’s negligence if Foster acted as Robinson’s servant in the context of a master-servant relationship. The distinction between an agent and a servant is important because a principal will not ordinarily be liable for the negligence of an agent who is not a servant. Green v. H & R Block, Inc., 355 Md. 488, 509, 735 A.2d 1039, 1051 (1999) (citing Globe Indem. Co. v. Victill Corp., 208 Md. 573, 581, 119 A.2d 423, 427 (1956)). As the Maryland Court of Appeals explained in Globe:
An agent is a person who represents another in contractual negotiations or transactions akin thereto. A servant is a person who is employed to perform personal services for another in his affairs, and who, in respect to his physical movements in the performance of the service is subject to the other’s control or right of control. Persons who render service but retain control over the manner of doing it are not servants … A principal employing an agent to accomplish a result, but not having the right to control the details of his movements, is not responsible for incidental negligence while such agent is conducting the authorized transaction.
208 Md. at 581-82, 119 A.2d at 427.
“One may be an agent of another, owing to his principal the fiduciary obligations of loyalty and general obedience, but at the same time not be sufficiently under the control of the principal to be considered a servant. The relationship of master and servant exists only when the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done.” Chevron, U.S.A., Inc. v. Lesch, 319 Md. 25, 570 A.2d 840 (1990). A principal is not liable for any physical injury caused by the negligent acts of his agent, who is not a servant, unless the act was done in a manner authorized or directed by the principal, or the result was one the principal authorized or intended. Green, 355 Md. at 509, 735 A.2d at 1051. If Foster was merely an agent rather than a servant of Robinson, Robinson could only be liable for Foster’s negligent acts if Robinson authorized or directed Foster to drive in a fatigued condition in excess of his hours.
Furthermore, it is not enough that Robinson retain general control over Foster’s participation in the transaction. To subject the principal to vicarious liability, “the key element of control, or right to control must exist in respect to the very thing from which the injury arose.” Cutlip v. Lucky Stores, Inc., 22 Md.App. 673, 678, 325 A.2d 432 (1974). Thus, unless Robinson had control over Foster’s driving time and the condition in which he drove, it will not be vicariously liable for Foster’s negligence.
