United States District Court for the Northern District of Illinois, Eastern Division

June 15, 2022, Decided; June 15, 2022, Filed

No. 20 C 02477

Reporter

2022 U.S. Dist. LEXIS 106700 *

JAMES P. LYNCH and LINDA LYNCH, Plaintiffs, v. ZACKARY L. COLLINS, et al., Defendants.

Core Terms

leased, summary judgment, discovery, motion to dismiss, converted, parties, truck

Counsel:  [*1] For James P. Lynch, Linda Lynch, Plaintiffs: Dominic C. LoVerde, James Ian Power, Power Rogers, LLP, Chicago, IL.

For Zackary L Collins, Old South Freight Service, Inc., Sparky Transport, LLC, Defendants: Jon P. Malartsik, LEAD ATTORNEY, Kopka Pinkus Dolin, P.C., Chicago, IL.

For TTML Enterprises, LLC, Defendant: John P. Lynch, Jr., LEAD ATTORNEY, Cremer Law LLC, Chicago, IL; Matthew Heiting, Cremer Law, LLC, Chicago, IL.

For Fair Dealing Transport, LLC, Defendant: John P. Lynch, Jr., LEAD ATTORNEY, Cremer Law LLC, Chicago, IL; Jon P. Malartsik, LEAD ATTORNEY, Kopka Pinkus Dolin, P.C., Chicago, IL. Matthew Heiting, Cremer Law, LLC, Chicago, IL.

Judges: Honorable Thomas M. Durkin, United States District Judge.

Opinion by: Thomas M. Durkin

Opinion

MEMORANDUM OPINION AND ORDER

This is a trucking collision case in which plaintiffs James and Linda Lynch sued the driver of the truck that collided with Mr. Lynch’s car, along with several companies connected to the truck. Before the court is a motion to dismiss filed by one of those companies, 19th Capital Group. For the reasons set forth below, the Court converts 19th Capital’s motion to one for summary judgment, and grants it.

Background

On October 31, 2018, defendant Zackary [*2]  Collins was driving a tractor-trailer when he allegedly fell asleep and drove through a stop sign. His truck collided with the car driven by James Lynch, who suffered various injuries. Plaintiffs sued Collins and several corporations that allegedly employed him, owned or operated the tractor-trailer in question, or were otherwise vicariously liable. In counts 13 through 18 of their second amended complaint, Plaintiffs assert claims for negligence, loss of consortium, negligent hiring, and negligent supervision against 19th Capital, either individually or as Collins’s employer.

19th Capital moved to dismiss all the claims against it, arguing that it was solely the lessor of the subject trailer and maintained no control or authority over the vehicle at the time of the accident. 19th Capital’s motion was accompanied by an affidavit from Cindy Clipper, a litigation administrator for 19th Capital Group, LLC, which states in essence that 19th Capital leased the trailer to TTML (another defendant) on July 30, 2018, before the date of the accident. Clipper’s affidavit also states that Zackary Collins was not and has never been an employee or agent of 19th Capital.

After 19th Capital filed its [*3]  motion, the parties appeared at a status conference on December 22, 2021. At that conference, the Court noted that consideration of the affidavit accompanying the motion would likely necessitate conversion of the motion into one for summary judgment. Plaintiffs requested leave to conduct limited discovery on the matters at issue in the motion. The Court granted this request and directed Plaintiffs to file their response to the motion once the discovery was complete. Plaintiffs served interrogatories on 19th Capital and deposed Ms. Clipper as part of this discovery.

Discussion

When a court considers materials outside the pleadings on a Rule 12(b)(6) motion to dismiss, the motion is converted into one for summary judgment. Texas Hill Country Landscaping, Inc. v. Caterpillar, Inc., 522 F. Supp. 3d 402, 412 (N.D. Ill. 2021). In such cases, all parties “must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed. R. Civ. P. 12(d). Here, Plaintiffs had nearly six months to engage in discovery on any matters they felt were pertinent to the motion before filing their response. As such, the Court exercises its discretion to convert 19th Capital’s motion into one for summary judgment, and will consider materials outside the pleadings presented by the parties.

19th Capital contends [*4]  it is immune from liability in this case under 49 U.S.C. § 30106, commonly known as the “Graves Amendment.” The Graves Amendment states:

(a) An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if–

(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and

(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).

No party disputes that 19th Capital is engaged in the business of renting or leasing motor vehicles, so that element of the Graves Amendment is satisfied. However, as other courts have held, the Graves Amendment does not block a direct negligence claim against a vehicle lessor. Johnke v. Espinal-Quiroz, 2016 U.S. Dist. LEXIS 14057, 2016 WL 454333, at *5 (N.D. Ill. Feb. 5, 2016). This would include Plaintiffs’ negligent hiring and negligent supervision claims, which are direct liability claims and are not subject to the Graves [*5]  Amendment. See Fuller v. Briggs, 2021 WL 1237100, at *5 (N.D. Tex. Apr. 2, 2021); Montize v. Pittman Props. Ltd. P’ship No. 1, 719 F. Supp. 2d 1052, 1057 (W.D. Ark. 2010).

Plaintiffs argue their vicarious liability claims for negligence and loss of consortium are also outside the Graves Amendment because they do not seek to impose liability on 19th Capital solely, in the terms of the Amendment, “by reason of being the owner of the vehicle.” Instead, they premise liability on an employer-employee relationship. The court in Johnke endorsed this view of the interplay between vicarious liability claims and the Graves Amendment, and this Court agrees. A claim premised on an employment or agency relationship between a driver and vehicle owner does not seek to impose liability on the latter merely because it is the owner of the vehicle. Johnke, 2016 U.S. Dist. LEXIS 14057, 2016 WL 454333, at *8. Therefore, the Graves Amendment does not apply to these claims either.

The common thread in all of Plaintiffs’ claims against 19th Capital is the existence of an employer-employee relationship. Because it has converted the motion into one for summary judgment, the Court must determine whether the evidence, taken in the light most favorable to Plaintiffs, would permit a reasonable factfinder to conclude that 19th Capital was Collins’s employer at the time of the crash.

The Court finds no evidence in the record to [*6]  support this conclusion. Plaintiffs have cited to no evidence gathered in discovery that supports their claims, instead referencing their “allegations” of an employment relationship between 19th Capital and Collins while citing to the motion to dismiss standard in which a court accepts as true any facts alleged in the complaint. See R. 79, at 2-3.

As noted, Plaintiffs had months to conduct discovery on this issue, and knew the basis for 19th Capital’s motion well before even the December 2021 status conference. They cannot now turn back to the plaintiff-friendly pleading standard because no helpful evidence seems to have emerged. Because Plaintiffs had notice and a fair opportunity to present additional material they deemed pertinent, the summary judgment standard applies here. Dovenmuehle v. Gilldorn Mortg. Midwest Corp., 871 F.2d 697, 699 n.1 (7th Cir. 1989). Under that standard, the Court is not required to credit a plaintiff’s bare accusations, and the plaintiff must come forward with “specific facts showing that there is a genuine issue for trial.” Johnson v. Advocate Health and Hosps. Corp., 892 F.3d 887, 894, 896 (7th Cir. 2018).

The evidence in the record shows that prior to the date of the accident, 19th Capital leased the subject trailer to TTML Enterprises, a commercial entity and a defendant in this case, which in turn leased it to Old [*7]  South Freight Service, another defendant. Further, on the day of the accident, Collins was operating the truck under the motor carrier authority of Old South. Clipper’s affidavit states unequivocally that Collins was not and has never been an employee of 19th Capital, and Plaintiffs did not challenge that statement during her deposition—indeed, Collins was barely even mentioned.

As such, nothing in the record disputes 19th Capital’s assertions that it was not Collins’s employer and that its only connection to the crash and other parties in this case is as lessor of the trailer. Plaintiffs cite to the definitions of “employer” and “employee” in the Federal Motor Carrier Safety Regulations to argue that 19th Capital is liable as a “statutory employer.” 49 C.F.R. § 390.5. But that regulation only provides definitions, not bases for liability. Johnke, 2016 U.S. Dist. LEXIS 14057, 2016 WL 454333, at *7. It cannot be the case that 19th Capital is liable as an employer simply because it meets this definition. This would result in a nonsensical situation where any employer could be sued for any crash in the country involving a person who qualifies as an employee. So there must still be some evidence of an actual employer-employee relationship between the parties involved, [*8]  and such evidence is completely absent here.

Plaintiffs also attack Clipper’s credibility, arguing she had no foundation to attest to the facts in her affidavit. While Clipper was unable to answer certain questions about 19th Capital during her deposition, this does not mean she lacked a basis to attest to the specific facts in her affidavit, which were based on her firsthand review of the Master Lease Agreement and communications with a representative of H19 Capital, the corporation that purchased 19th Capital’s assets in May 2020. It is hardly unusual that Clipper might have lacked broad knowledge of 19th Capital’s overall employment structure around the time of the accident but nonetheless been informed that a specific person was not employed by the company. Furthermore, other evidence in the record supports 19th Capital’s position, including the police report that identifies Old South as the vehicle owner and freight carrier for which Collins was driving, and discovery responses indicating that Collins was employed as an independent contractor by TTML, not 19th Capital.

Because there is no basis to find that Collins was an agent or employee of 19th Capital at any relevant time, each [*9]  of Plaintiffs’ claims premised on such a relationship fails as a matter of law. Furthermore, Plaintiffs have cited to no evidence that might sustain any other claim of direct negligence against 19th Capital not barred by the Grave Amendment.

Conclusion

For the foregoing reasons, the Court converts 19th Capital’s motion to dismiss [R. 52] into a motion for summary judgment and grants that motion in 19th Capital’s favor as to all claims against it.

ENTERED:

/s/ Thomas M. Durkin

Honorable Thomas M. Durkin

United States District Judge

Dated: June 15, 2022

End of Document

United States District Court for the Western District of Texas, San Antonio Division

May 4, 2022, Decided; May 4, 2022, Filed

SA-20-CV-01102-XR

Reporter

2022 U.S. Dist. LEXIS 97413 *

THERESA ACUNA, ASHLEY ACUNA, Plaintiffs, vs. COVENANT TRANSPORT, INC., CTG LEASING COMPANY, CHARLES JAMES LEACH, Defendants.

Core Terms

summary judgment, recommendations, pleadings, genuine, report and recommendation, district court, non-movant, summary judgment motion, judicial admission, undersigned, invoices, Leasing, parties, entity

Counsel:  [*1] For Theresa Acuna, Ashley Acuna, Plaintiffs: Melissa Robbins, LEAD ATTORNEY, Villareal & Begum Law Firm, San Antonio, TX.

For Covenant Transport, Inc., CTG Leasing Company, Charles James Leach, Defendants: Jose J. Trevino, Jr., LEAD ATTORNEY, Valdez & Trevino, San Antonio, TX; Mathews Jon Metyko, Valdez and Trevino PLLC, San Antonio, TX.

Judges: ELIZABETH S. (“BETSY”) CHESTNEY, UNITED STATES MAGISTRATE JUDGE. Honorable United States District Judge Xavier Rodriguez.

Opinion by: ELIZABETH S. (“BETSY”) CHESTNEY

Opinion

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

To the Honorable United States District Judge Xavier Rodriguez:

This Report and Recommendation concerns Defendants’ Motion for Summary Judgment on Improper Party [#165], which was referred to the undersigned for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). In making this recommendation, the undersigned has also considered Plaintiffs’ response to the motion [#177] and the arguments of counsel at the live hearing before the undersigned on April 26, 2022. For the reasons set forth below, it is recommended that Defendants’ motion be denied.

I. Background

This is a personal-injury action arising out of a motor vehicle accident between a vehicle operated by [*2]  Plaintiff Theresa Acuna, in which Plaintiff Ashley Acuna was a passenger, and a tractor-trailer operated by Defendant Charles Leach that was allegedly owned or leased by Defendants Covenant Transport, Inc. (“Covenant”), and CTG Leasing Company (“CTG”). Plaintiffs allege they sustained serious injuries from the accident due to the negligence of Defendants. Both Plaintiffs have undergone spinal surgeries, which they claim were necessary treatment for their injuries. The live pleading, Plaintiffs’ Second Amended Complaint [#27], asserts causes of action for negligence against Leach and negligence based on a theory of respondeat superior liability against Covenant and CTG. The District Court previously dismissed all claims against Covenant and CTG based on their direct negligence in entrusting, hiring, training, and supervising Leach, among other theories.

Defendants have filed a motion for summary judgment, which seeks summary judgment on all claims against CTG on the basis that it is not a proper party to this suit. The motion is ripe for the Court’s review.

II. Summary Judgment

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure only “if the pleadings, depositions, answers to interrogatories, and admissions [*3]  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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); see also Fed. R. Civ. P. 56(c). A dispute is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

The party moving for summary judgment bears the initial burden of “informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp., 477 U.S. at 323. Once the movant carries its burden, the burden shifts to the nonmoving party to establish the existence of a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Wise v. E.I. Dupont de Nemours & Co., 58 F.3d 193, 195 (5th Cir. 1995). The non-movant must respond to the motion by setting forth particular facts indicating that there is a genuine issue for trial. Miss. River Basin Alliance v. Westphal, 230 F.3d 170, 174 (5th Cir. 2000). The parties may satisfy their respective burdens by tendering depositions, affidavits, and other competent evidence. Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992). The Court will view the summary judgment evidence in the light most favorable to the non-movant. Rosado v. Deters, 5 F.3d 119, 123 (5th Cir. 1993). “After the non-movant has been given the opportunity to raise a genuine factual issue, if no reasonable juror could find for the non-movant, summary [*4]  judgment will be granted.” Westphal, 230 F.3d at 174.

III. Analysis

Defendants’ motion for summary judgment argues that CTG is not a proper party to this suit because it was not an employer of Leach so cannot be vicariously liable for his negligence in the car accident underlying this action. In support of this argument, Defendants provide the Court with the following summary judgment evidence: a crash report following the accident referencing Covenant and not CTG as the owner/lessee of the truck at issue [#165-1]; employment records for Leach listing Covenant and not CTG as the company conducting pre-employment screening of Leach [#165-2]; and trip documents and invoices prepared by Covenant and not CTG [#165-3].

Plaintiffs respond that Defendants are judicially estopped from making the argument that CTG was not Leach’s employer because they have admitted in numerous pleadings, court filings, and discovery responses in this case that CTG is the same entity as Covenant and that Leach was an employee of both companies. In addition to providing the Court with the referenced pleadings and discovery responses [#177-1, #177-2, #177-3, #177-4, #177-9], Plaintiffs submitted the following additional summary judgment [*5]  evidence in opposition to Defendants’ motion: Tennessee Department of Revenue Official Vehicle Registration for the truck in the accident at issue listing CTG, not Covenant, as the lessee/registrant [#177-5] and various checkoff lists and repair invoices for the vehicle completed by or invoiced to CTG or reflecting both Covenant and CTG as the same entity, e.g., “Covenant Transport (CTG Leasing)” [#177-6, #177-7, #177-8].

On this record, Defendants have not established as a matter of law that CTG is not a proper party to this lawsuit. The parties agree that Texas law governs this diversity action. The doctrine of respondeat superior liability imposes liability on an employer for the tortious acts of its employees when the employee’s negligence, while acting with the course and scope of his employment, is the proximate cause of injury to another. Baptist Mem’l Hosp. Sys. v. Sampson, 969 S.W.2d 945, 947 (Tex. 1998). To defeat a claim of vicarious liability, Defendants must establish as a matter of law either that: (1) Leach was not an employee; (2) no negligent act occurred; or (3) Leach was not acting within the course and scope of his employment at the time of the collision. See Drooker v. Saeilo Motors, 756 S.W.2d 394, 396 (Tex. App.—Houston [1st Dist.] 1988, writ denied) (citing Leadon v. Kimbrough Bros. Lumber Co., 484 S.W.2d 567, 569 (Tex. 1972)).

Defendants’ assertion that Leach was not an employee of CTG [*6]  is a fact issue that is not resolved by Defendants’ proffer of discrete summary judgment evidence. Defendants’ evidence, such as the crash report, employment records, and trip documents and invoices reflecting Covenant and not CTG merely establish that Covenant is Leach’s employer. These documents do not establish that CTG is not also Leach’s employer. Plaintiffs’ summary judgment evidence—the Tennessee Department of Revenue Vehicle Registration and trip checklists and repair invoices referencing CTG and Covenant/CTG collectively—raise a genuine issue of material fact as to the status of CTG as Leach’s employer precluding summary judgment.

Additionally, the undersigned agrees with Plaintiffs that Defendants are judicially estopped from taking the position at this stage in the proceedings that CTG is not an employer of Leach. In the Notice of Removal filed by Defendants, Defendants refer to Covenant and CTG collectively as “Covenant” and expressly state that “CTG Leasing Company is the same entity as Covenant” multiple times throughout the filing, including in the jurisdictional allegations regarding Covenant’s and CTG’s citizenship. (Notice of Removal [#177-1], at 1, 2.) Subsequently, [*7]  in an early motion to dismiss, Defendants reiterate that “CTG Leasing Company is Covenant, they are the same entity.” (Mtn. to Dismiss [#177-2], at 1.) Moreover, Defendants have collectively admitted in their discovery responses that Leach was their employee at the time of the accident and that they entrusted the vehicle driven by Leach for their benefit and the scope and purpose of employment with both companies. (Resps. to Requests for Admission [#177-3], at 3.) These representations to the Court are binding, and Defendants are judicially estopped from contradicting these admissions.

“Judicial estoppel is an equitable doctrine that prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding.” Hopkins v. Cornerstone Am., 545 F.3d 338, 347 (5th Cir. 2008) (internal citation and quotation omitted). Moreover, “[a] judicial admission is a formal concession in the pleadings or stipulations by a party or counsel that is binding on the party making them. Although a judicial admission is not itself evidence, it has the effect of withdrawing it from contention.” Martinez v. Bally’s La., Inc., 244 F.3d 474, 476 (5th Cir. 2001) “[F]actual assertions in pleadings . . . are considered to be judicial admissions conclusively binding [*8]  on the party who made them.” White v. ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir. 1983). A party therefore may not rebut a judicial admission made in its pleadings with new evidence or testimony. See Davis v. A.G. Edwards & Sons, Inc., 823 F.2d 105, 107-08 (5th Cir. 1987).

This is precisely what Defendants are attempting to do here after years of litigation representing to the Court and Plaintiffs that Covenant and CTG are one and the same entity. Accordingly, the motion for summary judgment should be denied not only due to the failure of Defendants to carry their summary judgment burden on the fact question of employer status but also because Defendants’ own judicial admissions throughout the pleadings and discovery in this case preclude them from taking a contrary position on the eve of trial.

IV. Conclusion and Recommendation

Having considered Defendants’ motion, Plaintiffs’ response, the summary judgment evidence, and the arguments of counsel at the live hearing, the undersigned recommends that Defendants’ Motion for Summary Judgment on Improper Party [#165] be DENIED.

V. Instructions for Service and Notice of Right to Object/Appeal

The United States District Clerk shall serve a copy of this report and recommendation on all parties by either (1) electronic transmittal to all parties represented by attorneys registered [*9]  as a “filing user” with the clerk of court, or (2) by mailing a copy to those not registered by certified mail, return receipt requested. Written objections to this report and recommendation must be filed within fourteen (14) days after being served with a copy of same, unless this time period is modified by the district court. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). The party shall file the objections with the Clerk of Court and serve the objections on all other parties. A party filing objections must specifically identify those findings, conclusions or recommendations to which objections are being made and the basis for such objections; the district court need not consider frivolous, conclusive or general objections. A party’s failure to file written objections to the proposed findings, conclusions and recommendations contained in this report shall bar the party from a de novo determination by the district court. Thomas v. Arn, 474 U.S. 140, 149-52, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985); Acuña v. Brown & Root, Inc., 200 F.3d 335, 340 (5th Cir. 2000). Additionally, failure to file timely written objections to the proposed findings, conclusions and recommendations contained in this report and recommendation shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the un-objected-to proposed factual findings and legal [*10]  conclusions accepted by the district court. Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).

SIGNED this 4th day of May, 2022.

/s/ Elizabeth S. (“Betsy”) Chestney

ELIZABETH S. (“BETSY”) CHESTNEY

UNITED STATES MAGISTRATE JUDGE

End of Document