Menu

Volume 14, edition 4 cases

Lewis v. Chica Trucking, Inc.

Appellate Court of Illinois,

First District, Sixth Division.

John LEWIS, Plaintiff–Appellant,

v.

CHICA TRUCKING, INC., an Illinois Corporation, Defendant–Appellee.

(SRF P.C. Trucking Corporation, Acorn Garage, Inc., and Midway Auto Truck Service, Inc., Defendants).

 

No. 1–10–0540.

March 31, 2011.

 

Appeal from the Circuit Court of Cook County. No. 06 L 13436, Thomas P. Quinn, Judge Presiding.

 

OPINION

Justice ROBERT E. GORDON delivered the judgment of the court, with opinion:

Plaintiff John Lewis brought suit for negligence against defendants Chica Trucking, Inc., SRF P.C. Trucking Corp., Acorn Garage, Inc., and Midway Auto Truck Service, Inc., after plaintiff sustained injury in an accident on December 29, 2004, when the brakes failed on the truck he was driving. Defendant Chica Trucking (Chica) filed a motion for summary judgment, claiming that it did not owe plaintiff a duty to inspect or repair his truck. The trial court granted summary judgment in Chica’s favor, finding that Chica did not owe plaintiff a duty as a matter of law. Plaintiff appeals, arguing that Chica owed him a duty to inspect and repair the truck based on its voluntarily undertaking to inspect and repair the truck. We affirm the grant of summary judgment.

 

BACKGROUND

The facts of this case come primarily from the deposition testimony of the parties. SRF P.C. Trucking Corporation (SRF) was an Illinois corporation organized in June or July 2004 for the purpose of purchasing and running a truck to transport goods. Fred Rabinowitz, the president of SRF and a partner at the law firm of Schaffner Rabinowitz & Feinartz, P.C., formed the company with David Feinartz, a law partner at the firm, and Jeff Hollingshead. Rabinowitz and Feinartz knew Hollingshead as client of the law firm, and it was Hollingshead’s idea to start the company. Rabinowitz had no experience with trucks, but testified at his deposition that Hollingshead “was more into that” and knew drivers and how to run the trucking business. Rabinowitz testified that “the idea was to run the truck, lease it out, and hopefully make some side money.”

 

Hollingshead was friends with John Spina, who was married to Patricia Cortez, the owner, president, and treasurer of Chica. Chica, like SRF, was a trucking broker that contracted to haul debris from construction sites. Rabinowitz testified, “[a]s far as the trucking company is concerned, we didn’t have any real contact with [Spina] other than he knew the trucking business. I don’t know if Jeff [Hollingshead] spoke with him about where do you find drivers, where do you dispatch and stuff like that.” Spina testified that he did not have any conversations with Hollingshead about providing assistance for SRF in purchasing a truck other than advising Hollingshead to look in magazines.

 

On July 12, 2004, after SRF purchased a used Mack truck, SRF sent it to Acorn Garage (Acorn) for a “complete inspection and overhaul.” Spina had taken trucks to Acorn in the past, but did not suggest to Hollingshead that he take SRF’s truck there; Spina testified that Hollingshead “knew Acorn himself” from “being in the neighborhood.” Rabinowitz did not deal with Acorn directly, but found out from Hollingshead that the repair work, mostly involving the truck’s brakes, was costing more money than they had anticipated. Rabinowitz gave Hollingshead “an okay to go ahead and do what they had to do.”

 

SRF owned only one truck and plaintiff was its only driver. At the time of the December 29, 2004, accident, plaintiff had been employed by SRF for approximately five months. At his deposition, plaintiff testified that his duties were to take SRF’s truck to jobsites and “haul[ ] spoils and pick[ ] up gravel.” The truck was kept in the “yard,” which was a lot located in Chicago that was large enough to hold 10 to 15 trucks. The trucks in the yard were owned by various companies and individuals, including SRF and Chica. The yard was fenced and had a gate that had to be unlocked with a key. Plaintiff testified that “[t]he lady” from Chica provided him with a key to the gate.

 

Hollingshead hired plaintiff to drive the truck; Rabinowitz had no involvement in interviewing or hiring him, and did not meet plaintiff until after he had been hired. Rabinowitz testified that when plaintiff had problems with the paperwork after he was hired, he was assisted by Spina. Rabinowitz also believed that Cortez assisted plaintiff in filling out paperwork and Cortez confirmed that she did. Plaintiff testified that Spina was present when he began working for SRF and provided plaintiff with instructions.

 

Rabinowitz testified that the procedure for truck hauling assignments was that plaintiff would call Luise Trucking (Luise), a company that contracted to remove debris, and receive his assignment. The people at Luise were people whom Hollingshead knew, and Rabinowitz recalled going to Luise’s office with Hollingshead near the time SRF purchased the truck. Spina also worked for Luise at one time, and Chica contracted its business to Luise, which would call Chica to direct it to jobsites. Rabinowitz testified that plaintiff was to contact Luise directly for assignments. Plaintiff testified that he received a daily telephone call from Chica, informing him what hours he was to work the next day and where he would be working. Plaintiff did not receive any assignments from anyone other than Spina or Cortez. Based on plaintiff’s telephone records, attached to his response to the motion for summary judgment, plaintiff’s telephone and Cortez’s telephone made contact approximately 127 times between July 16, 2004, and December 29, 2004, and plaintiff’s telephone and Spina’s telephone communicated approximately 111 times during that same period.

 

When asked to whom he was referring when he said “Chica,” plaintiff responded, “Johnny’s wife or Johnny.” Plaintiff did not know Johnny’s last name but later referred to him as “Johnny Chica” and could not recall Johnny’s wife’s name, saying he thought it was “Kathy or something.” The record indicates that “Johnny” is John Spina and “Johnny’s wife” is Patricia Cortez.

 

Plaintiff also testified that he was told to “[f]ollow Johnny,” meaning that he was to drive his truck to the same locations as the Chica trucks, and that he and the drivers for Chica’s two trucks would normally meet at the yard and “ran together.”

 

Plaintiff would fill out two sets of paperwork for each job: one for Luise and one for SRF. Rabinowitz testified that Hollingshead usually picked up plaintiff’s time sheets but that sometimes plaintiff dropped them off himself. However, plaintiff testified that when he went on assignments, someone at the work site would provide him with a voucher, which plaintiff left in the truck at the end of the day for Spina to pick up.

 

Rabinowitz testified that if plaintiff had any problems with the truck, he was to call Hollingshead. Plaintiff testified that the only regular contact he had with Hollingshead was to pick up his weekly paycheck and that he called Spina or Cortez in case of emergencies, such as when “something was wrong with the truck or [plaintiff] needed some information.” Plaintiff estimated that over the five months he worked at SRF, he telephoned Spina or Cortez approximately 10 to 15 times concerning the truck. Rabinowitz generally did not become aware of repairs made to the truck until he was billed for the repairs.

 

Plaintiff testified that he had heard air leaking from the brakes of the truck several times prior to the accident. He also had problems with the brakes at least twice before December 2004, in approximately September and October 2004. When the first incident occurred in September 2004, he reported it to Spina, who directed him to take the truck to the repair shop. Plaintiff brought the truck to Midway Auto Truck Service (Midway) to be repaired. He told a man that he identified as the owner of Midway that the truck was leaking air and that “something is wrong.” He also said that “I want to make sure that nothing happens to me in this truck.” In response, the owner told plaintiff that he would “check it out.” The owner later told plaintiff that Midway “made a few adjustments with the lines and a couple of pins or something in it, you know, to stop the air leakage and stuff.” Plaintiff later testified that he observed someone under the truck, inspecting the brake lines and observed the person putting in new brake lines. Plaintiff testified that the repair took approximately one hour, and it was paid for by charging it to the account that Chica kept with Midway; plaintiff testified that Spina directed him to charge the repair to Chica’s account.

 

The second incident also involved plaintiff hearing air leaking from the brakes, as well as the clutch being “too low” and problems with the truck cab’s heater; there was also a problem with the door opening when plaintiff drove over bumps in the road. He brought it to Midway again, where the owner said it would take the entire day to inspect the truck. Plaintiff spoke to Hollingshead on the telephone and he told plaintiff not to leave the truck with Midway, so plaintiff drove the truck back to the yard. Midway worked on the truck slightly during that visit and made some adjustments to the clutch and fixed the heater; plaintiff did not think that any work was done on the brakes. Plaintiff knew that the clutch adjustment had been made because the owner of Midway told him so and plaintiff could tell that an adjustment had been made when he drove the truck. Again, plaintiff testified that the work was charged to Chica’s account. Plaintiff further testified that he also informed Hollingshead of the problems with the air leaking, but that it was Spina who told him to take the truck to Midway.

 

Conversation With Cortez

Approximately two days before the accident, plaintiff testified, he took the truck to Acorn, located directly across the street from the yard, and told someone there that “something was wrong with the brakes.” While he had been driving the truck, plaintiff noticed “[s]lippage” with the brakes, which he described as “[s]ometimes they stopped, sometimes they didn’t.” Plaintiff described an incident in which he was trying to slow the truck, but the brakes “went to the floor” and he was only able to stop the truck by using the clutch; plaintiff observed that the brakes were slowing the truck down and were not immediately responding. Plaintiff testified that when the slippage occurred, “that’s when I knew something was wrong with [the brakes].”

 

Plaintiff did not report the problem to SRF, because he had been instructed by Hollingshead to report everything to Spina; however, plaintiff later testified that he brought the problem to Hollingshead’s attention. Plaintiff called Spina, who told him to take the truck to Acorn, and he did. Plaintiff testified that he spoke directly with someone at Acorn concerning the problems with the brakes, and he testified that the person at Acorn told him to “put it in the yard” because there was no room for the truck in the garage. Plaintiff then received a call back from Cortez, who also told him to “put it in the yard” and said “they’ll look at it.” Someone from Acorn told plaintiff that Acorn would examine the truck later; plaintiff testified that the Acorn employee “told me they was going to look at it.” Plaintiff later testified that Cortez “said they’ll look at it. She said they said they going to look at the brakes.”

 

The next day, plaintiff received a phone call from Cortez. Plaintiff testified that he “got a phone call from Chica saying that they couldn’t find anything wrong with the truck. That’s my last time I had anything to do with Acorn over there, when she told me that Acorn couldn’t find anything wrong with the brakes.” When asked whether the Acorn employee looked at the truck, plaintiff responded, “[n]o, not that I know of.”

 

In her deposition, Cortez testified that she did not arrange for any service or maintenance for any truck other than the two Chica trucks in 2004, and she did not have any knowledge of any service or maintenance performed on plaintiff’s truck. There was a phone log introduced during Cortez’s deposition showing that her cell phone had made a call to plaintiff’s phone on December 26, 2004. However, neither of the phone numbers belonging to Cortez had communication with plaintiff either the day before or the day of the accident.

 

Additionally, Acorn answered several requests to admit propounded by Chica:

 

“1. Admit that at no time prior to December 29, 2004, did any agent, representative, employee or officer of Chica Trucking, Inc. ever request or order that any work be performed on a truck owned by SRF P.C. known as SRF Truck No. 177 * * *.

 

RESPONSE: Defendant admits that at no time prior to December 29, 2004 did any employee or representative of Chica Trucking request or order Acorn Garage to perform work on SRF P.C. Truck No. 177. As to balance of request, Defendant cannot admit or deny whether Chica Trucking requested or ordered work from any other entity.

 

2. Admit that at no time prior to December 29, 2004, did any agent, representative, employee or officer of Chica Trucking, Inc. ever pay for any work that was performed on a truck owned by SRF P.C. known as SRF Truck No. 177 * * *.

 

RESPONSE: Defendant admits that at no time prior to December 29, 2004, that any employee or representative of Chica Trucking paid Acorn Garage in connection with SRF P.C. Truck No. 177. As to the remainder of request, Defendant cannot admit or deny whether Chica paid any other entity for work on SRF P.C. Truck No. 177.

 

3. Admit that at no time prior to December 29, 2004, did any agent, representative, employee or officer of Chica Trucking, Inc. ever recommend that any work be performed on a truck owned by SRF P.C. known as SRF Truck No. 177 * * *.

 

RESPONSE: Defendant admits that Chica Trucking did not recommend to Acorn Garage that any work be performed on a SRF P.C. Truck No. 177. As to remainder of request, Defendant cannot admit or deny whether Chica Trucking recommended work be performed on subject truck to any other entity.

 

4. Admit that at no time prior to December 29, 2004, did any agent, representative, employee or officer of Chica Trucking, Inc. ever deliver such a truck for work owned by SRF P.C. known as SRF Truck No. 177 * * *.

 

RESPONSE: Defendant admits that no Chica employee or representative delivered SRF P.C. Truck No. 177 for work to Acorn Garage; Defendant cannot admit or deny whether such a request was made by Chica Trucking, Inc. to other entities.

 

5. Admit that at no time prior to December 29, 2004, did any agent, representative, employee or officer of Chica Trucking, Inc. ever authorize work to be done on a truck owned by SRF P.C. known as SRF Truck No. 177 * * *.

 

RESPONSE: Defendant admits that no Chica employee or representative authorized work to be done by Acorn Garage on a SRF P .C. Truck No. 177; Defendant cannot admit or deny whether such an authorization was made by Chica Trucking, Inc. upon another entity.”

 

Plaintiff testified that he never told any of his “bosses” that he was refusing to drive the truck but simply informed them of the problems. He also never told his “bosses” that he wanted the problems to be fixed or that he would report the problems to any sort of agency. Plaintiff further testified that he felt unsafe driving his truck for approximately a week prior to the accident, “[k]nowing maybe I can’t stop.” He felt that the repair shops Hollingshead had referred the truck to “were taking their time about fixing it.”

 

December 29, 2004, Accident

On December 29, 2004, plaintiff testified that he received a phone call at approximately 8:30 or 9 a.m. from Cortez, telling him to report to a dump site at the intersection of Indiana Avenue and Roosevelt Road in Chicago. Plaintiff testified that he did not want to go to the site because “something told me not to go,” but went to the site because he had only worked one day that week. When he arrived at the yard to pick up the truck, plaintiff “checked the truck out,” as was his custom.

 

When he checked the truck, plaintiff walked around the truck, checking for flat tires and nonworking lights. Plaintiff acknowledged that federal regulations required him to perform the safety check before he left, and he testified that he was required “[t]o check to make sure that the windshield wipers, lights, the truck has no flat tires, the brakes and lights are working.” Plaintiff described the condition of the truck as “[f]ine.” If plaintiff ever discovered anything wrong with the truck during the safety check, he informed Spina, and Spina would tell him to take the truck to the shop.

 

After performing the inspection, plaintiff drove the truck to the work site. On the way to the work site, plaintiff did not notice any problems operating the truck. After loading his truck, plaintiff drove southbound on Interstate 55 to the dump to unload the spoils. On the way to the dump, plaintiff did not notice any problems operating the truck on Interstate 55, and the brakes were operational as plaintiff was slowing to exit. Plaintiff exited Interstate 55 at Route 53 in Bolingbrook; the exit ramp had a downward slope. Plaintiff decelerated from 55 miles per hour to approximately 25 to 30 miles per hour on the ramp by “downshifting” in addition to “using the clutch and the brake.” Plaintiff described the ramp as curving to the right, with a stoplight at the end of the ramp; the stoplight turned red as plaintiff was exiting. The ramp began as two lanes, then branched into three lanes, with two turn lanes to the right and one turn lane to the left. There was no median where the lanes split, but the lanes were separated by “lines.” Plaintiff intended to turn right at the stoplight, onto Route 53, and was in the rightmost lane. There were two automobiles stopped in front of him in the same lane and two automobiles stopped in the other right turn lane. Plaintiff described the traffic on Route 53 as light.

 

Plaintiff testified that the configuration of the exit ramp onto Route 53 changed between the time of the accident and the time of his deposition in April 2008.

 

Plaintiff was unable to stop the truck, and he found no automobiles in the left turn lane, so he changed lanes. Plaintiff estimated that he was approximately four car lengths from the stoplight when he first realized his brakes were not working and was approximately two car lengths from the stoplight when he changed lanes. Plaintiff steered the truck to the left and was depressing both the brake and clutch; the truck did not slow down because plaintiff had a full load in the back of his truck. Plaintiff collided with another truck that was stopped on Route 53. Plaintiff testified that he “aimed” for the other truck because he believed that “the truck is the only thing that’s going to stop” him.

 

Plaintiff was ejected from the truck in part because the seat belt was not working properly. The truck contained a lap belt that would not remain taut; the belt would latch into place, but would remain loose on the driver’s lap. Plaintiff could not remember when the seat belt had stopped working but testified that “[i]t worked at first and then all of a sudden it stopped working.” Plaintiff estimated that the seat belt stopped working approximately a week before the accident. Plaintiff reported the problem to Spina, but could not remember Spina’s response. He brought the truck to Midway, but Midway did not repair the seat belt, and plaintiff continued to operate the truck with the nonfunctioning seat belt.

 

Additionally, at the time of the accident, the truck’s driver’s side door was not functioning properly. The door swung open when the truck made turns and was held closed by a bungee cord. The door had been held shut in this way for approximately two to three weeks prior to the accident. Plaintiff opined that the problem with the door was the result of a problem on the hinges of the lock. Plaintiff complained to Spina about the door, and Spina informed plaintiff that Midway would order a door latch. Plaintiff testified that he also made Hollingshead aware of the problems with the seat belt and the door.

 

As a result of the accident, plaintiff was hospitalized for 14 days and required several surgeries. Plaintiff’s injuries included permanent scarring on his left arm and hand, skin grafts on his arm and legs taken from his upper thighs, the loss of the “first digit” of his thumb, and fractured vertebrae in the lower portion of his spine.

 

Plaintiff did not know how many vertebrae were fractured.

 

Complaint

Plaintiff brought suit against Chica, SRF, Acorn, and Midway, claiming that they were negligent in a number of ways relating to the maintenance of the truck. Specifically, plaintiff alleged that each defendant

 

SRF was later dismissed from the suit because it was plaintiff’s employer and the proper remedy would have been a workers’ compensation claim. Additionally, plaintiff reached a settlement with Acorn, which was also dismissed from the suit.

 

“was negligent in one or more of the following ways:

 

a. Failed to fix the truck’s seatbelt;

 

b. Knowingly dispatched and instructed the Plaintiff, JOHN LEWIS, to drive the truck without a properly functioning seatbelt;

 

c. Failed to repair the driver’s side door which was held closed by a bungee cord;

 

d. Knowingly dispatched and instructed the Plaintiff, JOHN LEWIS, to drive the truck with the driver’s side door closed with a bungee cord;

 

e. Failed to repair the truck’s brakes;

 

f. Knowingly instructed the Plaintiff, JOHN LEWIS, to drive the truck with improperly working brakes;

 

g. Knowingly dispatched the Plaintiff, JOHN LEWIS, to drive to a job site with a truck that was not equipped with properly working brakes, seatbelt or a driver’s side door.”

 

Plaintiff’s complaint also included an allegation that SRF and Chica had contracted for Chica to perform the maintenance on the truck, an allegation that was seemingly abandoned prior to the motion for summary judgment

 

During discovery, the parties testified to the relationship between Chica and SRF. Plaintiff acknowledged that he did not work for Chica. He further testified that he believed that Spina worked for Chica. When asked how he knew that Spina worked for Chica, plaintiff explained that it was because “[h]e drove his own truck some time” and because “he told me it was his business, his trucks .” Plaintiff used Spina’s credit card to purchase fuel for his truck until Hollingshead provided plaintiff with a card to use.

 

However, Rabinowitz testified that “[t]here was no relationship” between SRF and Chica. Rabinowitz testified that, to the best of his knowledge, Chica never extended money on behalf of SRF and SRF never wrote any checks to Chica. Rabinowitz acknowledged that there was a receipt from Carson Tire Service that was addressed to “Pat Cortez of Chica,” but he had “no idea” why it was addressed to her; Rabinowitz testified that the document was signed by plaintiff and that SRF paid the bill, which was approximately $30.

 

Spina testified that Chica was owned and operated by Cortez, but that he had never been an employee or independent contractor for Chica. At the time of the accident, Spina was not employed, although he “might have drove [sic ] for [his] wife a couple times. Not that often.” Spina testified that when he drove for his wife, he did so gratuitously. Spina did not direct Chica drivers to drive the Chica trucks. Spina knew plaintiff “from parking in the yard” and would “kid around” with plaintiff when he saw him in the yard. Spina testified that he may have run into plaintiff on work sites occasionally.

 

Spina testified that he did not recall ever instructing plaintiff to take his truck to Midway, nor did he recall having any conversations with plaintiff about taking his truck to Midway. Spina testified that on occasion, plaintiff could not reach Hollingshead and Spina called Hollingshead to inform him that plaintiff wanted to be paid or had problems with his truck; Spina further testified that if he ever told plaintiff to take his truck to be fixed, it was in the context of relaying a message from Hollingshead. Spina said that he “didn’t directly tell Mr. Lewis where to take that truck because it wasn’t mine for number one.” Spina testified that the only time he heard about problems with the brakes was after plaintiff’s accident.

 

Cortez testified that Spina never had any position of employment or contract work with Chica. He drove Chica’s trucks occasionally but did not get paid; Cortez testified that Spina drove her trucks “[i]f [she] didn’t have someone to drive and had a job to do.” She estimated that Spina drove one of her trucks fewer than five times in 2004.

 

Cortez testified that plaintiff was not one of Chica’s contracted drivers. She further testified that Chica did not have any in-house maintenance and would take the trucks to Acorn and Midway to be serviced. However, she did not instruct any other truck drivers about where to take any trucks that needed maintenance. Cortez testified that plaintiff never contacted her about any problems he was having with his truck, nor did she ever direct him to take his truck to Acorn or Midway.

 

In its answer to Chica’s request to admit, Midway admitted that no “agent, representative, employee or officer of CHICA TRUCKING, INC.,” “ever request[ed] or order[ed] that any work be performed on a truck owned by SRF P.C.,” “ever pa [id] for any work that was performed on a truck owned by SRF P.C.,” “ever recommend[ed] that any work be performed on a truck owned by SRF P.C.,” “ever deliver[ed] such a truck owned by SRF P.C.,” or “ever authorize[d] work to be done on a truck owned by SRF P.C.”

 

Summary Judgment

On June 12, 2007, Chica filed a motion to dismiss pursuant to section 2–615 of the Code of Civil Procedure (Code) (735 ILCS 5/2–615 (West 2004)), which was denied. Chica then filed a motion for summary judgment on October 6, 2009, arguing that Chica had no duty to maintain the truck. In response, plaintiff argued that Chica had voluntarily undertaken a duty to inspect and repair the truck.

 

After a hearing on the motion, the trial court granted summary judgement in Chica’s favor on January 22, 2010. In its order, the court found that plaintiff had failed to submit evidence from which a reasonable person could conclude that Chica owed him a duty with respect to the truck. The court, relying on Chisolm v. Stephens, 47 Ill.App.3d 999 (1977), noted that plaintiff’s testimony that he reported problems to Chica and Chica told him where to bring the truck for repairs was “inconsequential,” because even if Chica had gratuitously assumed a duty to protect plaintiff, it was under no obligation to continue that protection indefinitely.

 

The court further found that “there is no evidence that Chica: (1) did anything to aggravate or make the condition of the truck more dangerous; (2) misrepresented that it had fixed any condition; (3) misrepresented what the condition of the truck was on the day of the accident; or (4) prevented plaintiff from obtaining information as to the condition of the truck.”

 

Finally, the court held that even if Chica had a duty, it would still be entitled to summary judgment because plaintiff testified that Cortez told him that Acorn had examined the brakes and could not find anything wrong. “In other words, plaintiff knew that the brakes were faulty and knew that nothing had been done to fix them. He was not told that the brakes were fixed.” The court concluded that “plaintiff’s own testimony shows that he was not under any misapprehension that the brakes had been fixed.” Plaintiff timely appealed.

 

ANALYSIS

Plaintiff argues that the trial court erred in granting summary judgment in favor of Chica. A trial court is permitted to grant summary judgment only “if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2–1005(c) (West 2008). The trial court must view these documents and exhibits in the light most favorable to the nonmoving party. Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill.2d 307, 315 (2004). We review a trial court’s decision to grant a motion for summary judgment de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 102 (1992).

 

“Summary judgment is a drastic measure and should only be granted if the movant’s right to judgment is clear and free from doubt.” Outboard Marine Corp., 154 Ill.2d at 102. However, “[m]ere speculation, conjecture, or guess is insufficient to withstand summary judgment.” Sorce v. Naperville Jeep Eagle, Inc ., 309 Ill.App.3d 313, 328 (1999). A defendant moving for summary judgment bears the initial burden of proof. Nedzvekas v. Fung, 374 Ill.App.3d 618, 624 (2007). The defendant may meet his burden of proof either by affirmatively showing that some element of the case must be resolved in his favor or by establishing “ ‘that there is an absence of evidence to support the nonmoving party’s case.’ “ Nedzvekas, 374 Ill.App.3d at 624 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).

 

“ ‘The purpose of summary judgment is not to try an issue of fact but * * * to determine whether a triable issue of fact exists.’ “ Schrager v. North Community Bank, 328 Ill.App.3d 696, 708 (2002) (quoting Luu v. Kim, 323 Ill.App.3d 946, 952 (2001)). “ ‘To withstand a summary judgment motion, the nonmoving party need not prove his case at this preliminary stage but must present some factual basis that would support his claim.’ “ Schrager, 328 Ill.App.3d at 708 (quoting Luu, 323 Ill.App.3d at 952). We may affirm on any basis appearing in the record, whether or not the trial court relied on that basis or its reasoning was correct. Ray Dancer, Inc. v. DMC Corp., 230 Ill.App.3d 40, 50 (1992).

 

To state a cause of action for negligence, a plaintiff must allege facts in his complaint that establish the existence of a duty of care owed by the defendant to the plaintiff, a breach of that duty, and an injury proximately caused by the breach. Marshall v. Burger King Corp., 222 Ill.2d 422, 430 (2006) (citing Bajwa v. Metropolitan Life Insurance Co., 208 Ill.2d 414, 421 (2004)). Whether Chica owed plaintiff a duty of care is a question of law for the court to decide. Vaughn v. City of West Frankfort, 166 Ill.2d 155, 158 (1995); Marshall v. City of Centralia, 143 Ill.2d 1, 6 (1991).

 

In the case at bar, plaintiff claims that Chica owed him a duty to inspect and repair the brakes on his truck under the voluntary undertaking theory of liability. Under that theory, “one who gratuitously or for consideration renders services to another is subject to liability for bodily harm caused to the other by one’s failure to exercise due care or ‘ “such competence and skill as [one] possesses.” ‘ “ Frye v. Medicare–Glaser Corp., 153 Ill.2d 26, 32 (1992) (quoting Cross v. Wells Fargo Alarm Services, 82 Ill.2d 313, 317 (1980), quoting Nelson v. Union Wire Rope Corp ., 31 Ill.2d 69, 74 (1964)); Wakulich v. Mraz, 203 Ill.2d 223, 241 (2003). This theory of liability for negligence is expressed in section 323 of the Restatement (Second) of Torts, which has been adopted by Illinois courts. See, e.g., Vancura v. Katris, 238 Ill.2d 352, 381–82 (2010); Wakulich, 203 Ill.2d at 243; Frye, 153 Ill.2d at 32. Section 323 provides:

 

“One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if

 

(a) his failure to exercise such care increases the risk of such harm, or

 

(b) the harm is suffered because of the other’s reliance upon the undertaking.” Restatement (Second) of Torts § 323 (1965).

 

The duty of care is limited to the extent of the voluntary undertaking.   Rhodes v. Illinois Central Gulf R.R., 172 Ill.2d 213, 239 (1996); Frye, 153 Ill.2d at 32. Thus, the theory is construed narrowly. Fichtel v. Board of Directors of the River Shore of Naperville Condominium Ass’n, 389 Ill.App.3d 951, 961 (2009). Accordingly, to determine whether Chica breached a duty it owed to plaintiff, we must determine the extent of any voluntary undertaking.

 

Plaintiff alleges that Chica:

 

“a. Failed to fix the truck’s seatbelt;

 

b. Knowingly dispatched and instructed the Plaintiff, JOHN LEWIS, to drive the truck without a properly functioning seatbelt;

 

c. Failed to repair the driver’s side door which was held closed by a bungee cord;

 

d. Knowingly dispatched and instructed the Plaintiff, JOHN LEWIS, to drive the truck with the driver’s side door closed with a bungee cord[.]”

 

There was no evidence concerning allegations (a) through (d) and plaintiff admitted at oral argument that allegations (a) through (d) are not at issue.

 

Plaintiff claims that Chica voluntarily undertook a duty to “inspect and repair the defective brakes on the Plaintiff’s truck when Patricia Cortez, the Defendant’s president, told the Plaintiff that a garage would look at the truck.” The conversation in the record that plaintiff cites to in support of the duty comes from plaintiff’s deposition, where he testified that “[s]he said they’ll look at it. She said they [Acorn] said they going to look at the brakes.” Plaintiff later testified that he “got a phone call from Chica saying that they couldn’t find anything wrong with the truck. That’s my last time I had anything to do with Acorn over there, when she told me that Acorn couldn’t find anything wrong with the brakes.” Since this case arises on Chica’s motion for summary judgment, we consider the record in the light most favorable to plaintiff and, therefore, assume that plaintiff’s recollection of the conversations with Cortez is true.

 

However, despite our acceptance of plaintiff’s version of events as true, we cannot find any duty by Chica to “inspect and repair the defective brakes on the Plaintiff’s truck.” The conversations show that at most, Chica, through the actions of Cortez, undertook a duty to ensure that Acorn examined the brakes. There is no indication that Chica would perform any inspection itself, nor that Chica would repair plaintiff’s brakes. Moreover, plaintiff would have been aware that Chica was not performing any inspection or repair services itself, since every time plaintiff complained to Chica about problems with the truck, he testified that he was referred to a repair shop. In fact, during the incident at issue, plaintiff testified that he initially took the truck to Acorn, described the problem with the brakes to someone who worked at Acorn, and the person from Acorn told him to take the truck back to the yard and that Acorn would “look at it.” However, the issue here does not concern any voluntary undertaking by Acorn. Thus, the only way that Chica could be liable for a voluntary undertaking would be if it had voluntarily undertaken to ensure that plaintiff’s brakes were inspected. Therefore, subsection (e) of plaintiff’s complaint, which states that Chica “[f]ailed to repair the truck’s brakes” was properly dismissed by the trial court on summary judgment because plaintiff has offered no evidence that Chica had a duty to repair the brakes.

 

Assuming arguendo that Chica had undertaken a duty to ensure that plaintiff’s brakes were inspected, we would then have to consider whether there are facts that support plaintiff’s claim that Chica breached its duty to ensure that Acorn examined the plaintiff’s brakes. See Rhodes, 172 Ill.2d at 239–40 (finding that the voluntary undertaking of the defendant railroad was not a duty to ensure that aid was provided to the injured plaintiff, but at most, reporting the plaintiff’s presence to the police); Frye, 153 Ill.2d at 33–34 (finding that the defendant pharmacist had a duty to ensure that the warning labels placed on a prescription bottle were accurate, not a duty to warn of all possible side effects).

 

The voluntary undertaking doctrine applies to both misfeasance—performing the undertaking negligently—and to nonfeasance—failure to perform the undertaking. Bourgonje v. Machev, 362 Ill.App.3d 984, 996 (2005); see also Restatement (Second) of Torts § 323 (1965). In the case at bar, since plaintiff claims that Chica failed to perform its duty, we consider whether there is evidence supporting liability through nonfeasance and find that there is not.

 

Plaintiff points to the accident that occurred and his testimony that the brakes failed, as well as Cortez’s testimony that she did not have any knowledge of any service or maintenance performed on plaintiff’s truck, to support his contention that Chica breached its duty. However, these facts are insufficient to show that a duty was breached. Simply from plaintiff’s deposition testimony, it is apparent that the truck was inspected and repaired on several occasions, yet continued to have problems. Thus, the fact that the brakes failed does not mean that the truck was not inspected by Acorn on this occasion. Acorn’s answer to Chica’s request to admit only states that Chica did not request Acorn to inspect the truck. Nothing in the answer tells us whether Acorn inspected the truck in the lot by itself since plaintiff testified that Acorn told him it was going to inspect it. Similarly, the fact that Cortez was not familiar with any “service or maintenance” performed on the truck does not establish that she breached her duty. If Acorn had inspected the truck and had found nothing wrong, then there would have been no “service or maintenance” needed.

 

Moreover, there is no evidence showing what information, if any, Acorn conveyed to Cortez. Cortez was not a mechanic, nor was she the person performing the inspection on the truck. Her role in the truck’s inspection was limited to relaying the information provided by Acorn to plaintiff. If Acorn was at fault, either by performing the inspection negligently or by not performing the inspection at all, then any information provided to plaintiff could have been incorrect even though Cortez had properly performed her duty by relaying the information to plaintiff. It is plaintiff’s claim that since Cortez denies that plaintiff ever contacted her about any problems he was having with his truck, his testimony standing alone is enough to defeat a motion for summary judgment.

 

We agree with plaintiff that, contrary to the trial court’s reasoning, the case at bar is distinguishable from Chisolm, which the trial court used to support its decision to grant summary judgment to Chica. In that case, a plaintiff tenant fell and was injured when the defendant landlord failed to clear the sidewalk in front of the plaintiff’s residence, which was covered with a layer of ice. Chisolm, 47 Ill.App.3d at 1002. The plaintiff claimed that the defendant’s consistent removal of snow and ice over the past 15 years, and her reliance on that removal, gave rise to a legal duty for defendant to clean the sidewalk each morning. Chisolm, 47 Ill.App.3d at 1005. The court disagreed, noting that “even a person who has gratuitously assumed to protect others against injury is under no obligation to continue that protection indefinitely.” Chisolm, 47 Ill.App.3d at 1006 (citing Hubbard v. Aetna Insurance Co., 37 Ill.App.3d 666, 671 (1976)). Additionally, the court found that the reliance of the plaintiff on the defendant’s performance in the past, without more, was insufficient to give rise to a duty to clean the sidewalks on the morning of the accident. Chisolm, 47 Ill.App.3d at 1007. Thus, the court held that there was no duty to clear the sidewalk. Chisolm, 47 Ill.App.3d at 1009.

 

Here, plaintiff argues that the voluntary undertaking was not based on Chica’s performance in the past, but instead was based on Cortez’s affirmative statement that Acorn was “going to look at the brakes.” Accordingly, Chisolm is inapposite.

 

However, we also find plaintiff’s claimed support in Bourgonje unpersuasive. In Bourgonje, the plaintiff tenant was attacked in front of her apartment building and claimed that the defendant landlord had breached her duty to protect against such attacks by providing security lighting.   Bourgonje, 362 Ill.App.3d at 986–87. The court found that there were sufficient facts to survive summary judgment because the plaintiff had claimed that the defendant specifically agreed to light the mansion in order to protect her from attacks late at night. Bourgonje, 362 Ill.App.3d at 1003. The court’s conclusion was supported by the fact that the defendant had listed “exterior lights” as a security measure in her answers to plaintiff’s interrogatories. Bourgonje, 362 Ill.App.3d at 1003. The court further found that the plaintiff had reasonably relied on the promise, entering into the lease in part because of it “and therefore forsook the opportunity to undertake her own safety precautions,” as well as being precluded from undertaking substitute performance herself. Bourgonje, 362 Ill.App.3d at 1005–06, 1007.

 

Here, even if we were to find a duty, we cannot find such reasonable reliance. In cases of nonfeasance, a plaintiff’s reliance on the defendant’s promise is “an independent, essential element” for liability in a case of a voluntary undertaking. Bourgonje, 362 Ill.App.3d at 997; Chisolm v. Stephens, 47 Ill.App.3d 999, 1007 (1977) (“the element of reliance lies at the very heart of the cause of action, and is a basic and necessary prerequisite to liability”). A plaintiff’s reliance is reasonable where “there is a deceptive appearance that performance had been made, or where a representation of performance has been communicated to plaintiff by defendant, or where plaintiff is otherwise prevented from obtaining knowledge or substitute performance of the undertaking. But, to justify reliance, plaintiff must be unaware of the actual circumstances and not equally capable of determining such facts.” Chisolm, 47 Ill.App.3d at 1007.

 

In the case at bar, we cannot find that plaintiff reasonably relied on Chica’s alleged promise to ensure that Acorn inspected the truck. Plaintiff testified that he “got a phone call from Chica saying that they couldn’t find anything wrong with the truck. That’s my last time I had anything to do with Acorn over there, when she told me that Acorn couldn’t find anything wrong with the brakes.” There is no evidence that plaintiff had any further conversation with Cortez or any other party, and his next action was performing his usual inspection of the truck and driving it on the day of the accident.

 

From plaintiff’s conversation with Cortez, it is clear that plaintiff knew that no repairs had been made on the truck: if Acorn could not find anything wrong, there was nothing that would have been repaired. However, plaintiff had just been in a situation where his brakes failed, and testified that when that occurred, he “knew something was wrong with them.” Nowhere in his testimony does plaintiff ever use the word “reliance.” He never testified that he relied on Cortez’s statement that the truck was inspected. Plaintiff asks us to find reliance from the fact that he drove the truck after he heard Cortez tell him that Acorn inspected the truck and found nothing wrong plus the fact plaintiff found nothing wrong with the brakes initially.

 

Here, plaintiff was capable of determining whether Acorn had in fact inspected the truck. He testified that he brought the truck to Acorn several times and in fact had brought the truck to Acorn and had spoken to someone at Acorn about the brake problems during the incident at issue. There was nothing preventing plaintiff from contacting Acorn about any inspection or repairs. Plaintiff had a cell phone and a call to Acorn would have been reasonable. Accordingly, we cannot find any reliance by plaintiff, and if there was reliance it was not reasonable.

 

Finally, even if we found that Chica owed plaintiff a duty to ensure that the truck was inspected and breached that duty, Chica would not be liable because Chica’s breach was not the proximate cause of plaintiff’s injury. “ ‘Proximate cause requires the plaintiff to show that the defendant’s negligence was (1) the actual cause or the cause in fact of his injury, i.e., but for the defendant’s conduct, the accident would not have occurred; and (2) the legal cause of his injury, i.e., the defendant’s conduct was so closely tied to the plaintiff’s injury that he should be held legally responsible for it.’ “ Bourgonje, 362 Ill.App.3d at 1007 (quoting McCraw v. Cegielski, 287 Ill.App.3d 871, 873 (1996)). While the issue of proximate cause is generally a factual issue, “ ‘it is well settled that it may be determined as a matter of law by the court where the facts as alleged show that the plaintiff would never be entitled to recover.’ “ Bourgonje, 362 Ill.App.3d at 995 (quoting Abrams v. City of Chicago, 211 Ill.2d 251, 257–58 (2004)).

 

Chica’s claimed duty was limited to ensuring that Acorn inspected plaintiff’s truck, not to inspecting the truck itself. However, plaintiff had brought the truck to Acorn himself and had made Acorn aware of the brake problems, and Acorn had promised to inspect the truck later. Thus, a failure of Chica to contact Acorn would have had no impact on whether Acorn actually inspected and repaired the truck. Moreover, while he argues that it was Chica’s responsibility, plaintiff claims that the failure to make the repair was the proximate cause of his injury: plaintiff claims that “Defendant is subject to liability to Plaintiff * * * for the injuries he sustained from Defendant’s failure to exercise reasonable care to perform [an] inspection and repair of the brakes on his truck. There is no doubt that this failure was a proximate cause of the Plaintiff’s injuries.” Since the brakes’ failure was the proximate cause of the injury, and Chica did not have a duty to repair the brakes, Chica cannot be liable for plaintiff’s injury.

 

In addition, plaintiff claims Chica:

 

“f. Knowingly instructed the Plaintiff, JOHN LEWIS, to drive the truck with improperly working brakes;

 

g. Knowingly dispatched the Plaintiff, JOHN LEWIS, to drive to a job site with a truck that was not equipped with properly working brakes, seatbelt or a driver’s side door.”

 

However, there is no evidence that Chica knew the brakes were working improperly, and even if Chica did know about plaintiff’s brake complaints, the brakes’ failure was the proximate cause of the injury, not the conduct of Chica. There is no evidence that Cortez dispatched plaintiff to a jobsite. It was plaintiff’s idea to drive the truck with the known brake problems. He testified that he drove the truck on the day of the accident because he had not worked for a week.

 

CONCLUSION

For the reasons set forth above, Chica was not liable for plaintiff’s injury and the trial court’s grant of summary judgment in Chica’s favor was appropriate.

 

Affirmed.

 

Presiding Justice GARCIA and Justice McBRIDE concurred in the judgment and opinion.

Jones Exp., Inc. v. Watson

United States District Court,

M.D. Tennessee,

Nashville Division.

JONES EXPRESS, INC., Plaintiff,

v.

Ernest WATSON, Defendant.

 

Civil Action No. 3:10–cv–140.

March 31, 2011.

 

MEMORANDUM OPINION

THOMAS A. WISEMAN, JR., Senior District Judge.

Plaintiff Jones Express, Inc. (“Jones Express”) filed this diversity action against defendant Ernest Watson, an individual, alleging that Watson breached the terms of a contract between them and, alternatively, that he breached a common-law duty of indemnity. Now before the Court is Jones Express’s motion for partial summary judgment, in which Jones Express seeks judgment in its favor on the issue of liability on the basis of both contractual and common-law indemnity. For the reasons set forth herein, the motion will be denied.

 

I. FACTUAL BACKGROUND

On January 30, 2007, defendant Ernest Watson, as Lessor, entered into a Long Term Equipment Lease (“2007 Lease”) with plaintiff Jones Express as Lessee. Watson admits he signed the 2007 Lease, but claims that the equipment identified in the Lease, a Volvo truck tractor, serial number 4V4NC9RH61 N306252, is not owned by Watson himself but is instead titled to Nestledown Farms, Inc., an administratively dissolved Tennessee corporation of which Watson was the principal shareholder and owner, as well as the registered agent. Jones Express had previously entered into a long-term equipment lease with Nestledown Farms, Inc. in July 2003 and had, pursuant to that lease, paid Nestledown Farms in accordance with the lease terms. Watson claims that he signed the 2007 Lease in his individual capacity as a result of inadvertence and mistake and that he intended to sign in his capacity as agent for Nestledown Farms. However, the evidence also indicates that Nestledown Farms was administratively dissolved in August 2006, several months prior to Watson’s execution of the 2007 Lease at issue in this case. In addition, Jones Express made the payments under the 2007 Lease to Ernest Watson individually. Watson claims he is attempting to administratively reinstate the corporate charter of Nestledown Farms, but the fact remains that the company is, and was at the time of execution of the 2007 Lease, technically not in existence.

 

Pursuant to the Lease terms, Watson agreed to be bound by the provisions of the Interstate Commerce Commission rules and regulations applicable to the operation of vehicles as contemplated by the Lease, and that he also agreed to “indemnify and save [Jones Express] harmless from any and all cost, expenses or loss caused [Jones Express] by [Watson], his agents, servants, employees, or leased drivers.” (Lease (Doc. No. 1–1) § 9.) Jones Express alleges that, pursuant to the Lease, it furnished the vehicle described in the Lease to Watson, who in April 2008, dispatched a driver and the vehicle to Georgia.  On April 15, 2008, the driver, in the course and scope of the performance of his duties as Watson’s employee, was involved in an accident (the “Accident”) that resulted in one fatality. It appears to be undisputed that the actions of the driver caused Jones Express to be “involved” in litigation that arose concerning the Accident. (Def.’s Resp. to Pl.’s Statement of Undisp. Facts (Doc. No. 33) ¶¶ 4, 5.) Jones Express further alleges that in connection with the “resolution of the litigation” Jones Express paid damages and incurred substantial expenses, including attorneys’ fees and litigation costs. (Pl.’s Statement of Undisp. Facts (Doc. No. 21) ¶¶ 6, 7.) The settlement agreement, if in fact there was one, is not in the record, however. In addition, there are no allegations in the complaint or in the evidentiary record that the driver, Watson’s employee, negligently caused the accident. Watson avers, in fact, that he had not been able to obtain discovery regarding the litigation or its settlement, or the expenses Jones Express might have incurred in association therewith.

 

Watson denies this allegation insofar as he claims Nestledown Farms dispatched the driver. As discussed below, because the corporation was administratively dissolved prior at the time the 2007 Lease was executed and Watson signed the Lease in his individual capacity, the Court finds that Watson’s denial of this fact does not give rise to a material issue of disputed fact.

 

Watson denies these allegations but only on the basis of his claim that the driver was hired to drive for Nestledown Farms, Inc. rather than for Watson individually.

 

In any event, Jones Express states two causes of action against Watson in its Complaint: one for breach of contract, specifically for breach of the indemnity clause in the 2007 Lease; and a second for breach of the common-law duty of indemnity. Jones Express has now moved for partial summary judgment on the issues of (1) whether Watson has a contractual obligation to indemnify it for all amounts paid in the settlement of the litigation arising out of the Accident along with all fees, expenses, costs and attorneys’ fees associated with the litigation, and (2) whether Watson has a common-law duty to indemnify and reimburse Jones Express for all fees, expense, costs, and attorneys’ fees associated with the litigation arising out of the Accident.

 

Watson denies liability under either theory. In support of his position, Watson argues first that the Lease provision in which Jones Express represents that it maintained public liability insurance and was insured for the type of loss giving rise to this litigation is in conflict with the indemnity clause, and that these two Lease provisions “present an ambiguity which cannot be resolved on summary judgment.” (Def.’s Resp. Opp. Summ. J. (Doc. No. 32) at 1.) He contends another ambiguity arises as a result of the Lease provision which seems to limit Watson’s personal liability to “the first five hundred ($500.00) dollars relating to any type of liability claim caused by the fault or negligence of the OWNER and/or driver or helper.” (Lease § 4.) Second, Watson asserts that the indemnification provision in the Lease violates federal regulations governing the lease of motor vehicles by the owners thereof to motor carriers with federal motor carrier authority, pursuant to which the indemnification provision is unenforceable. (Id. (citing 49 C.F.R. § 376.101 et seq.).) Third, Watson asserts that he is not the owner of the vehicle involved in the Accident, as a result of which the Lease violates 49 C.F.R. § 376.12(a), which requires that a lease of this type be signed by both an authorized motor carrier and the “owner” of the leased equipment, as owner is defined in 49 C.F.R. § 376.2(d) Alternatively, Watson requests that he be permitted to discover the terms of the settlement underlying the litigation, as well as “prior equipment leases between Jones Express and Nestledown Farms, Inc.” and “the circumstances leading up to the execution of the Lease.” (Doc. No. 32, at 2.)

 

II. LEGAL ANALYSIS

 

A. Standard of Review

 

Summary judgment is appropriate if the evidence, when viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue of material fact such that the moving party is entitled to judgment as a matter of law. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “The judge is not to weigh the evidence and determine the truth of the matter, but rather determine whether there is a genuine issue for trial.” Totes Isotoner Corp. v. Int’l Chem. Workers Union Council, 532 F.3d 405, 411–12 (6th Cir.2008) (quoting Sterling China Co. v. Glass, Molders, Pottery, Plastics and Allied Workers Local No. 24, 357 F.3d 546, 551 (6th Cir.2004)).

 

B. Watson May Be Held Personally Liable Despite Purported Unilateral “Mistake.”

As an initial matter, the Court notes that the Lease itself provides that it is to be construed in accordance with Pennsylvania law. (Lease § 13.) Under Pennsylvania law, it is well settled that a lease agreement is a contract and is therefore controlled by principles of contract law. Amoco Oil Co. v. Snyder, 505 Pa. 214, 478 A.2d 795, 798 (Pa.1984). When a reviewing court is asked to interpret or review the meaning of a contract, the intent of the parties is paramount, and the court’s objective is simply to ascertain the parties’ intent as it is manifestly expressed in the agreement itself.   Cusamano v. Anthony M. DiLucia, Inc., 281 Pa.Super. 8, 421 A.2d 1120, 1122 (Pa.Super.Ct.1980); Daniels v. Bethlehem Mines Corp., 391 Pa. 195, 137 A.2d 304, 308 (Pa.1958). The intent of the parties to a written contract is regarded as embodied in the writing itself. Marcinak v. Se. Greene Sch. Dist., 375 Pa.Super. 486, 544 A.2d 1025, 1027 (Pa.Super.Ct.1988). When the words of a contract are unequivocal, they speak for themselves, and a meaning other than that expressed cannot be given to them. Id.

 

In the present case, the Lease terms naming the parties who are bound by the Lease are clear: Ernest Watson as “Owner” and Lessor agreed to lease to Jones Express, Inc. the Volvo truck tractor that was involved in the Accident. Watson’s initials (“EW”) are written at the bottom of each page of the Lease. At the end of the lease is a line where the “Owner’s” name is to be “[n]eatly [p]rint[ed].” (Lease at page 3.) The printed name “Ernest Watson” appears on that line. Below that is the signature line for the person signing on behalf of the Owner. Below that line appear the words: “(Signature of Owner or Owner’s Agent—can be driver).” Ernest Watson signed his name on this line. The Lease does not anywhere mention Nestledown Farms, Inc. The Lease unequivocally reflects the parties’ intent that Ernest Watson enter into it in his personal and individual capacity and not as the agent of a business entity.

 

Watson nonetheless alleges that the Lease should have been between Nestledown Farms and Jones Express but for “inadvertence and a mistake” on his part. (Watson Decl. (Doc. No. 34) ¶ 6.) Notwithstanding, another well settled general rule of contracts under Pennsylvania law is that “if a mistake is not mutual, but unilateral, and is not due to the fault of the one not mistaken, there is no basis for relief.” Warren v. Greenfield, 407 Pa.Super. 600, 595 A.2d 1308, 1312 (Pa.Super.Ct.1991) (citing McFadden v. Am. Oil Co., 215 Pa.Super. 44, 257 A.2d 283 (Pa.Super.Ct.1969) (emphasis in original)). The purported mistake in this case is not alleged to be bilateral, and the fact that Jones Express’s payments under the 2007 Lease were made to Ernest Watson in his individual capacity eliminates any possible inference that Jones Express knew or intended to contract with Nestledown Farms rather than with Watson. Moreover, the fact that Nestledown Farms was administratively dissolved at the time the parties executed the 2007 Lease also belies Watson’s allegation that there was a mistake at all, particularly given that Watson is or was the registered agent for the corporation and the party responsible for dissolving the corporation.

 

Regardless, Pennsylvania law is also clear that if a contract is entered into in the name of a corporate agent, with the name of the corporation also being disclosed on the agreement, then there is a strong presumption that the intent of the contracting parties is that the principal should be the party to the contract, and not the agent. In re Rothman, 204 B.R. 143, 150 (Bkrtcy.E.D.Pa.1996) (citing Viso v. Werner, 47, 471 Pa. 42, 369 A.2d 1185, 1187 (Pa.1977); Bucks v. Buckwalter, 419 Pa. 544, 215 A.2d 625, 627 (Pa.1966)). Conversely, it seems logical to presume that when the name of the corporation is nowhere disclosed on the contract, the opposite presumption arises: that there was no intention on the part of the parties that the unnamed corporation, rather than the individual who signed the contract, should be obligated.

 

That presumption is strengthened by another principle of Pennsylvania law: that a corporation that is not in existence has no legal or equitable rights and cannot be charged with a legal obligation. See id. (concerning situation where corporation was not yet in existence and promoter nonetheless attempted to sign contract on behalf of the corporation). In this case, Watson was responsible for the administrative dissolution of his closely held corporation. Just a corporate promoter will be held personally liable on contracts made by him for the benefit of a corporation he intends to organize, even though he may assume to act on behalf of a projected corporation and not for himself, see, e.g., RKO–Stanley Warner Theatres, Inc. v. Graziano, 467 Pa. 220, 355 A.2d 830, 832 (Pa.1976), so should one who signs a contract purportedly on behalf of a corporation be held individually liable when he, as corporate agent, knows that the corporation is no longer in existence. See id. at 833 (“The imposition of personal liability upon a promoter where that promoter has contracted on behalf of a corporation is based upon the principle that one who assumes to act for a nonexistent principal is himself liable on the contract in the absence of an agreement to the contrary. [Further,] there is an inference that a person intends to make a present contract with an existing person. If, therefore, the other party knows that there is no principal capable of entering into such a contract, there is a rebuttable inference that, although the contract is nominally in the name of the nonexistent person, the parties intend that the person signing as agent should be a party, unless there is some indication to the contrary.” (Citations and internal quotation marks omitted.)). In other words, even if Watson had signed the 2007 Lease as agent for the dissolved corporation, he likely could still be held individually liable for its breach.

 

In sum, the contract does not purport to be in the name of Watson’s administratively dissolved corporation. Watson clearly and unambiguously signed it in his individual capacity, and there is no evidence of the type of mistake that would allow him to avoid individual liability. Even if he had signed as agent for Nestledown Farms, it appears that Watson would remain individually liable on the 2007 Lease based on his knowledge of the nonexistence of the corporation. The Court therefore rejects Watson’s contention that he cannot not be held individually liable on the Lease.

 

Watson’s claim that the Volvo tractor is actually titled to Nestledown Farms, Inc. and that, because he personally does not own the equipment at issue he did not have the power to lease it to Jones Express, is also unavailing. Although the applicable regulation does require that an equipment lease such as the one at issue be made between an authorized carrier (such as Jones Express) and the “owner” of the equipment, 49 C.F.R. § 376.12(a), title ownership is not dispositive. The regulations define the term “owner” as: “A person (1) to whom title to equipment has been issued, or (2) who, without title, has the right to exclusive use of equipment, or (3) who has lawful possession of equipment registered and licensed in any State in the name of that person.” 49 C.F.R. § 376.2(d) (emphasis added). There is no dispute that Watson had the right to exclusive use of the equipment at the time he executed the 2007 Lease. Further, although the Court makes no finding in this regard and does not find this factor to be dispositive, the Court notes that it is highly likely that the vehicle at issue is registered and licensed in Tennessee in Watson’s name. The fact that the Volvo tractor is titled to Watson’s administratively dissolved corporation is not dispositive of Watson’s individual liability.

 

C. Jones Express’s Insurance Coverage Does Not Affect Watson’s Indemnification Obligation.

Watson’s first substantive argument in support of his claim that he cannot be liable for indemnifying Jones Express is that the Lease itself required Jones Express to maintain liability insurance, as a result of which “Jones Express cannot now claim that it paid for the settlement and attorney’s fees incurred as a result of the [Accident].” (Def.’s Resp. Opp. Summ. J., Doc. No. 32, at 3.) In fact, according to Watson, Jones Express’s representation in the Lease was to the contrary. That is, because “Jones Express was insured … [i]t cannot now be heard to say that it can recover indemnification from Watson for its alleged losses.” (Id.)

 

This argument is completely disingenuous. Whether Jones Express had insurance coverage has no bearing on whether Watson has an enforceable contractual indemnification obligation. The only question potentially raised by this argument is whether Jones Express is insured by a third party who paid the entire loss, in which case the insurer as subrogee is the real party at interest who should have brought suit in its own name. At this point in the proceedings, however, there is no evidence in the record regarding whether Jones Express paid all or part of the loss itself or whether Jones Express is self-insured, in either of which case it would remain a real party in interest with the ability to sue in its own name. See In re Chi–Chi’s, Inc., 338 B.R. 618, 623 (D.Del.2006) (“[W]here there is partial subrogation, both the insured and the insurer are real parties in interest.”). Cf. United States v. Aetna Cas. & Sur. Co., 338 U.S. 366, 380–81, 70 S.Ct. 207, 94 L.Ed. 171 (1949) (if a subrogee has paid an entire loss suffered by an insured, it is the only real party in interest and the only party that may sue in its own name); Va. Elec. & Power Co. v. Westinghouse Elec. Corp., 485 F.2d 78, 83, 84 (4th Cir.1973) (where an insurer-subrogee has paid an entire loss suffered by the insured, it is the only real party in interest and must sue in its own name). Regardless, whether the insurer-subrogee should be named as a party in this case is not germane to the question of whether the defendant is liable; it concerns the naming of the appropriate plaintiff to which or to whom the defendant may be required to pay damages. See Reid v. Bootheel Transp. Co., 771 F.Supp. 237, 240 (N.D.Ill.1991) (in a factually similar indemnity case in the trucking-industry context, holding under Illinois law that that an indemnitee’s subrogee has the right to recover the amount the subrogee has paid on behalf of the indemnitee); Universal Underwriters Ins. Co. v. A. Richard Kacin, Inc., 916 A.2d 686, 693 (Pa.Super.Ct.2007) (noting that under Pennsylvania law “a subrogee stands in the shoes of the subrogor” and can recover damages when the subrogor has a legally cognizable cause of action against a third party).

 

D. The Indemnification Provision Does Not Violate Federal Law.

Watson argues next that the indemnification provision of the Lease violates 49 C.F.R. Pt. 376, the “Truth–in–Leasing” regulations that govern the motor-carrier industry and lease agreements like the one executed by the parties here. Before discussing Watson’s arguments, it may be helpful to outline the statutory and regulatory framework governing the relationship between truck “owner-operators” such as Watson and common carriers like Jones Express.

 

Owner-operators are small business men and women who own or control truck tractors used to transport property on the country’s highways. Owner-operators either transport commodities exempt from Department of Transportation (“DOT”) regulations or, as independent contractors, lease or provide their equipment and services to motor carriers who possess the legal operating authority under DOT regulations to enter into contracts with shippers to transport property. The relationship between independent truck owner-operators and regulated carriers is set forth must be set forth in a written agreement between the parties and is regulated by the DOT. See 49 U.S.C. § 14102 (authorizing the secretary to promulgate regulations governing the leasing of transport vehicles by motor carriers); 49 C.F.R. pt. 376.

 

In 1995, the Interstate Commerce Commission (“ICC”) transferred the regulation of motor carrier functions to the DOT and to the Surface Transportation Board (“STB”). See 49 U.S.C. § 13501. The Federal Highway Administration (“FHWA”) is within the DOT and administers and enforces regulations concerning lease agreements between motor carriers and owner-operators.

 

It is true, as Watson argues, that under federal law, motor carriers are required to register with the Department of Transportation (“DOT”) in order to ship most types of cargo. 49 U.S.C. §§ 13901, 13902. Once registered, common carriers are legal obligated to comply with certain DOT regulations. 49 U.S.C. § 13902(a)(1); 49 C.F.R. § 367.1. “A primary goal of this regulatory scheme is to prevent large carriers from taking advantage of individual owner-operators due to their weak bargaining position.” Owner–Operator Indep. Drivers Ass’n v. Swift Transp. Co., 367 F.3d 1108, 1109 (9th Cir.2004). The Eighth Circuit elaborated:

 

A review of the development in the Truth in Leasing regulations indicates that they were intended to remedy disparities in bargaining positions between independent owner operators and motor carriers. The regulations were originally developed by the Interstate Commerce Commission (ICC), and the ICC’s notice of proposed rulemaking noted “the Commission’s deep concern for the problems faced by the owner-operator in making a decent living in his chosen profession.” In its notice of proposed final rules, the ICC said that some of its rulemaking objectives were “to eliminate or reduce opportunities for skimming and other illegal or inequitable practices; and to promote the stability and economic welfare of the independent trucker segment of the motor carrier industry.”

 

Owner–Operator Indep. Drivers Ass’n v. New Prime, Inc., 398 F.3d 1067, 1070 (8th Cir.2003) (citations omitted). Thus, for example, the statute authorizes the DOT to require that all leases between motor carriers and owner-operators be in writing and contain certain basic information, such as the duration of the lease and the compensation to be paid the owner-operator. 49 U.S.C. § 14102(a); see 49 C.F.R. § 376.11(a) (requiring that leases be in writing); id. § 376.12(b) (requiring that leases “specify the time and date … on which the lease begins and ends”); id. § 376.12(d) (requiring that the amount to be paid to the owner-operator be “clearly stated on the face of the lease”).

 

In this case, Watson entered into a Lease agreement with Jones Express pursuant to which Jones Express leased Watson’s tractor with a driver employed by Watson. One of the provisions of the 2007 Lease, referenced above, required Jones Express to maintain liability coverage, with itself as the named insured, for the protection of the public:

 

COMPANY will maintain public liability, property damage and cargo insurance, for the protection of the public naming COMPANY as the insured for the vehicles while operating from and to points specified by COMPANY….

 

(Lease § 8.) The Lease further specified that “[a]ll other insurance covering the vehicle or vehicles furnished during the time it or they are operating under this LEASE, if any,” including, for example, bobtail insurance, “shall be obtained at OWNER’S expense.” (Id.)

 

Operating the tractor without a trailer in tow is commonly known in trucking parlance as “bobtailing.” Bobtail insurance typically covers accidents that occur while the tractor is not hauling freight.

 

These Lease clauses are in compliance with the regulations requiring motor carriers to maintain insurance coverage “for the protection of the public”:

 

The lease shall clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public…. The lease shall further specify who is responsible for providing any other insurance coverage for the operation of the leased equipment, such as bobtail insurance.

 

49 C.F.R. § 376.12(j)(1). In addition, however, the regulations require that truck leases must “provide that the authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease. The lease shall further provide that the authorized carrier lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.” Id. § 376.12(c)(1). In compliance with this provision, the Lease states:

Responsibility. While transporting freight in the service of the COMPANY [Jones Express] under the company’s Interstate Commerce Commission Operating Authority, the COMPANY assumes responsibility for the equipment leased for the period of the LEASE to the extent required by and in accordance with the provisions of all applicable Interstate Commerce Commission rules and regulations.

 

(Lease § 1.)

 

Watson argues that the regulatory scheme anticipates that the owner-operator “traditionally does not have the insurance required by federal law, cannot obtain its federal authority, and is left to lease his equipment to an authorized carrier who has the required insurance.” Doc. No. 32, at 7–8.) He argues that “[t]o require an owner-operator like Ernest Watson to indemnify Jones Express here constitutes an unlawful and hidden insurance obligation that violates the letter and the spirit of the Truth–In–Leasing regulations,” and that “[t]o allow Jones Express to pass liability for this loss on to Watson defeats the very purpose of the federal regulations.” (Doc. No. 32, at 8.)

 

The courts that have considered this issue, including the Supreme Court, have generally rejected Watson’s contention. In Transamerican Freight Lines, Inc. v. Brada Miller Freight Systems, Inc., 423 U.S. 28, 40, 96 S.Ct. 229, 46 L.Ed.2d 169 (1975), a lessee motor carrier sought to recover against a lessor pursuant to a truck-leasing agreement which provided that the lessor would indemnify the lessee for loss caused by the negligence of the lessor. The Supreme Court expressly held that the indemnification provision at issue was enforceable, specifically because it did not violate the ICC regulation providing that any lease of trucking equipment shall place control and responsibility for the operation of the equipment in the lessee, nor did the indemnification agreement conflict with ICC safety regulations. In that case Transamerican Freight Lines as lessee entered into a lease agreement with Brada Miller Freight Systems as lessor. Brada Miller also provided a driver as its employee. The lease provided that Transamerica would maintain control and responsibility for the leased equipment “in respect to the public.” Id. at 31. It also provided that Brada Miller would indemnify and hold harmless Transamerican for any claims and injuries sustained or alleged to have been sustained by reason of the negligence or alleged negligence on the part of Brada Miller or its agents or employees. While this lease was in effect, the leased vehicle, driven by a Brada Miller employee, was in an accident in which a third party was injured. The third party sued both Transamerican and Brada Miller alleging driver negligence. The driver settled with Transamerican who then sought indemnification from Brada Miller pursuant to the lease. Brada Miller sought summary judgment on the grounds that the indemnification provision was contrary to public policy and therefore unenforceable, as it contravened the regulatory and contractual requirement that Transamerican maintain responsibility and control of the leased equipment at all times. The district court and the Seventh Circuit agreed with Brada Miller, the latter holding that the intent of the regulations “was to make sure that licensed carriers would be responsible in fact, as well as in law, for the maintenance of leased equipment and the supervision of borrowed drivers.” Id. at 34. The Supreme Court reversed, holding that the indemnification clause “did not affect [the] basic responsibility of the lessee to the public; it affected only the relationship between the lessee and the lessor.” Id. at 39. The Court noted that, while the lessor’s furnishing of the driver “allows an aspect of control, in a sense, to remain in the lessor,” this type of control was merely “ministerial control,” rather than “operating authority.” Id. The Court further observed that the regulations “do not expressly prohibit an indemnification agreement between the lessor and the lessee. In fact, they neither sanction nor forbid it.” Id. at 39–40. Consequently, the Court concluded that a lease clause requiring the lessee to “bear the burden of its own negligence does not, in and of itself, offend the regulations so long as the lessee does not absolve itself from the duties to the public and to the shippers imposed upon it by the Commission’s regulations.” Id. at 40.

 

Although the Court did not expressly consider whether an indemnification clause conflicts with the regulatory requirement that motor carrier-lessees in these types of leases carry insurance “for the protection of the public,” its holding strongly suggests that they do not, and other courts have reached that conclusion. In Reid v. Bootheel Transportation Co., 771 F.Supp. 237 (N.D.Ill.1991), for example, a motorist brought suit against the lessor and lessee of a tractor trailer for damages resulting from injuries incurred in a collision. At the time of the accident, the tractor trailer and its driver were driving solely in the interest of the lessee. The lessee settled with the motorist and brought suit against the lessor for indemnity. The court entered judgment for the lessee, holding that the indemnity provision in the lease agreement did not conflict with the requirement in the lease that the lessee carry liability insurance and that it maintain full common-carrier responsibility for the leased tractor trailer, and that the indemnity provision in the lease was therefore enforceable. Cf. Nowak v. Transport Indem. Co., 120 Wis.2d 635, 358 N.W.2d 294 (Wis.Ct.App.1984) (where ICC requirements for insurance have been met, and public is protected by the existence of adequate funding, parties and their insurers are free to allocate ultimate responsibility among themselves).

 

Watson here argues that both Reid and Transamerican are distinguishable on the facts from the case at bar because in those cases, both parties were certified carriers licensed by the Interstate Commerce Commission (instead of a certified carrier and an owner-operator), and they were operating under a short-term Trip Lease agreement. In addition, it was clear in Reid at least that both parties were covered by insurance for the insured’s legal liability for damages because of bodily injury or property damage. This Court is not persuaded by these distinctions. Rather, the Court finds that the holding in Transamerican and Reid apply with equal force to the facts at issue here. Thus, the question is not whether the applicable regulations permit the parties to allocate responsibility for driver negligence to the lessor; they clearly do. The question is whether the parties in this particular case effected such an allocation in their Lease agreement. Cf. Dietrich v. Albertsons Inc., 57 F.3d 1080 (Table), 1995 WL 355246, at(10th Cir. June 14, 1995) (“Federal regulations … are indifferent as to how the lessor and lessee may contractually apportion liability…. The question before us, therefore, is not whether Coast [lessor] could have contractually agreed to indemnify Mayflower [lessee]. Clearly, under federal law such a contractual arrangement is permitted. Rather, our inquiry is whether, under Indiana law, Coast in fact agreed to hold harmless and indemnify Mayflower for damages arising out of this accident.” (Footnote and citations omitted.)).

 

E. The Lease Is Not Ambiguous.

The indemnification provision in the Lease appears just below the section concerning Jones Express’s obligation to maintain liability insurance for the protection of the public. It states in pertinent part: “Indemnification. In addition to any other indemnification agreements set forth herein, OWNER hereby agrees to indemnify and save COMPANY harmless from any and all cost, expense or loss caused COMPANY by OWNER, his agents, servants, employees, or leased drivers.” (Lease § 9.) In addition, the Lease also required Watson, as owner, to maintain liability insurance. More problematically, however, the same Lease section requiring Watson to maintain insurance coverage also appears to limit Watson’s liability to “the first five hundred ($500.00) dollars relating to any type of liability claim caused by the fault or negligence of the OWNER and/or driver or helper”:

 

Payment of Expenses…. Further, OWNER [defendant/lessor] shall pay all costs of operation in addition to the above including but not limited to repairs …; damages to the equipment; payment for injury or damages to the operator, driver and/or helper, insurance coverage for collision, fire, theft, or other occurrence or catastrophe; … the first five hundred ($500.00) dollars of damage to or loss of cargo or the first five hundred ($500.00) dollars relating to any type of liability claim caused by the fault or negligence of the OWNER and/or driver or helper.

 

(Lease § 4 (emphasis added).)  Watson asserts that, in the event the Court finds that the indemnity provisions do not violate public policy, his liability should be limited to $500.00 as set forth in § 4 of the Lease. This argument is presented in a “Supplemental Filing” in response to the plaintiff’s motion for summary judgment, filed on March 3, 2011. Jones Express’s reply brief, filed on March 16, 2011, does not address it.

 

Watson asserts in his response in opposition to summary judgment that “[u]nder standard insurance policies, owner-operators cannot obtain public liability insurance and are limited to bobtail insurance policies.” (Doc. No. 32, at 7.) The factual record does not support this assertion. Rather, Watson alleges in his declaration that his “company cannot afford the public liability insurance.” (Watson Decl. ¶ 7.) The 2007 Lease nonetheless required Watson to obtain liability insurance to cover the negligent operation of the leased vehicle by his drivers. It appears Watson did carry bobtail insurance, as required by the Lease, and that Jones Express actually obtained bobtail insurance on behalf of Watson for which Watson then reimbursed it. There is no indication in the factual record that the Accident occurred during a period when the truck was “bobtailing.”

 

It is a “firmly settled” point of Pennsylvania contract law that “the intent of the parties to a written contract is contained in the writing itself.”   Krizovensky v. Krizovensky, 425 Pa.Super. 204, 624 A.2d 638, 642 (Pa.Super.Ct.1993) (citing Steuart v. McChesney, 498 Pa. 45, 444 A.2d 659 (Pa.1982)). “ ‘Where the intention of the parties is clear, there is no need to resort to extrinsic aids or evidence,’ “ and, instead, the meaning of a clear and unequivocal written contract “ ‘must be determined by its contents alone.’ “ Steuart, 444 A.2d at 661 (quoting E. Crossroads Ctr., Inc. v. Mellon–Stuart Co., 416 Pa. 229, 205 A.2d 865, 866 (Pa.1965)). “[W]here language is clear and unambiguous, the focus of interpretation is upon the terms of the agreement as manifestly expressed, rather than as, perhaps, silently intended.” Id. “Clear contractual terms that are capable of one reasonable interpretation must be given effect without reference to matters outside the contract.” Krizovensky, 624 A.2d at 642.

 

Courts may, however, look outside the “four corners” of a contract if the contract’s terms are unclear: “Where the contract terms are ambiguous and susceptible of more than one reasonable interpretation, … the court is free to receive extrinsic evidence, i.e., parol evidence, to resolve the ambiguity.” Id. But because Pennsylvania presumes that the writing conveys the parties’ intent, a contract

 

will be found ambiguous if, and only if, it is reasonably or fairly susceptible of different constructions and is capable of being understood in more senses than one and is obscure in meaning through indefiniteness of expression or has a double meaning. A contract is not ambiguous if the court can determine its meaning without any guide other than a knowledge of the simple facts on which, from the nature of the language in general, its meaning depends; and a contract is not rendered ambiguous by the mere fact that the parties do not agree on the proper construction.

 

Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 614 (3d Cir.1995) (quoting Samuel Rappaport Family P’ship v. Meridian Bank, 441 Pa.Super. 194, 657 A.2d 17, 21–22 (Pa.Super.Ct.1993)) (internal quotation marks omitted). To determine whether ambiguity exists in a contract, the court may consider “the words of the contract, the alternative meaning suggested by counsel, and the nature of the objective evidence to be offered in support of that meaning.” Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1001, 1011 (3d Cir.1980).

 

The Court does not find the language of the contract here to be reasonably susceptible of different constructions or capable of being understood in more than one sense. The language of Section 4 unambiguously required Watson to cover the costs associated with damages to the tractor and injuries to the driver, and required him to carry insurance coverage for collision “or other occurrence or catastrophe.” (Lease § 4.) The same clause also required Watson to pay “the first five hundred ($500.00) dollars relating to any type of liability claim caused by the fault or negligence of the OWNER and/or driver or helper.” (Id.) This clause unambiguously obligated Watson to cover the first five hundred dollars of any claim for damages brought by a third party as a result of driver negligence.

 

The indemnification clause, which states that it is “in addition to any other indemnification agreements” in the Lease, required Watson to indemnify Jones Express from “any and all” costs or expenses” caused by Watson or his driver. (Lease § 9.) In reading the Lease agreement as an integrated whole, as it must, the Court finds that this provision, read in conjunction with § 4, requires Watson to reimburse Jones Express for any expenses Jones Express incurs otherwise in defending or settling a claim that arises because of the driver’s negligence in addition to the first $500 in liability to the injured third party, including attorney’s fees and litigation costs. In order for these clauses to be construed consistently and not in conflict with each other, § 9 cannot be interpreted to require Watson to cover the amount of the actual liability to the third party in excess of the first $500.

 

F. Jones Express Is Not Entitled to Summary Judgment on Breach–of–Contract Claim.

Jones Express’s motion for partial summary judgment seeks a judgment that Watson is actually liable under the Lease. The Court has held that the indemnification clause is enforceable regardless of whether Jones Express was insured for the damages in question; that the indemnity clause does not violate federal law; that the Lease is not ambiguous; and that Watson may be held personally liable for breach of the Lease.

 

Despite these preliminary conclusions, the Court cannot find as a matter of law that Watson is actually liable for breach of contract because the factual record is not sufficiently developed. Specifically, there is no evidence in the record regarding whether Watson’s driver was actually negligent or alleged to be negligent and that his negligence caused the Accident that was the subject of the underlying litigation; or whether some other basis for liability was raised in the underlying litigation; or whether Jones Express might have released any possible indemnity claims, including those at issue here, when it settled the underlying litigation. Under Pennsylvania law, if the underlying case is resolved by settlement, the party seeking indemnification by operation of contract must establish that the claims in the underlying case fall within the scope of the indemnity clause, and must also prove the reasonableness of the settlement and the validity of the underlying claim, as well as the reasonableness of the attorneys’ fees and costs that are sought.   McClure v. Deerland Corp., 401 Pa.Super. 226, 585 A.2d 19, 23 (Pa.Super.Ct.1991) (citing Martinique Shoes, Inc. v. N.Y. Progressive Wood Heel Co., 207 Pa.Super. 404, 217 A.2d 781 (Pa.Super.Ct.1966)). None of that evidence is in the Court’s record, and the defendant is entitled to obtain discovery on these issues if he has not already done so. The motion for summary judgment as to the contractual indemnity claim must therefore be denied.

 

G. Jones Express Is Not Entitled to Summary Judgment on Common–Law Claim.

As for the common-law indemnity claim, the Court likewise finds that the evidence in the record is insufficient to establish liability on the part of Watson. Under Pennsylvania law, common-law indemnity is an equitable remedy that “enures to a person who, without active fault on his own part, has been compelled, by reason of some legal obligation, to pay damages occasioned by the initial negligence of another, and for which he himself is only secondarily liable.” Waynesboro Country Club of Chester Cnty. v. Diedrich Niles Bolton Architects, Inc., No. 07–155, 2008 WL 687485 (E.D.Pa. March 11, 2008) (quoting Builders Supply Co. v. McCabe, 366 Pa. 322, 77 A.2d 368 (Pa.1951)). In the present case, as noted above, there is no evidence in the record at all regarding the substance or settlement of the underlying claim, and this Court cannot determine as a matter of law that common-law indemnity is warranted.

 

The parties have not addressed the issue of which state’s law should apply, and there is no evidence in the record to guide this Court’s resolution of that question. The Court presumes for the moment, without deciding, that Pennsylvania law applies simply because Pennsylvania law governs construction of the Lease.

 

More importantly, regardless of which state’s law applies, a plaintiff is generally not entitled to equitable relief when its relationship with the defendant is governed by the terms of a negotiated contract. See, e.g., McClure, 585 A.2d at 23 (“Under Pennsylvania law, a claim for recovery under an indemnification agreement is an action for breach of contract over which equity lacks jurisdiction.”); Allegheny Plastics, Inc. v. Stuyvesant Ins. Co., 414 Pa. 381, 200 A.2d 775, 776 (Pa.1964) (holding that where a party has an adequate remedy at law for breach of contract, the case is not a “proper one for equitable relief”); ARC LifeMed, Inc. v. AMC–Tenn., Inc., 183 S.W.3d 1, 26 (Tenn.Ct.App.2005) (“[W]here the remedies available to a litigant are circumscribed by the boundaries drawn at law, such as in a breach of contract case, principles of equity cannot create rights outside those boundaries.” (Citations omitted.)). Because the parties’ relationship is governed by the terms of a contract covering the issue of indemnity, Jones Express will be entitled to recover, if at all, on the basis of contractual indemnity, not common-law indemnity.

 

The plaintiff’s motion for summary judgment in its favor as to the defendant’s liability under a theory of common-law duty to indemnify will therefore also be denied.

 

III. CONCLUSION

For the reasons set forth herein, plaintiff Jones Express’s motion for partial summary judgment will be denied. An appropriate Order will enter.

© 2024 Fusable™