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Cases

Jurek v. Hobbs

Court of Appeals of Kentucky.

Jeanne JUREK and Commonwealth of Kentucky/Department of Personnel, Appellants

v.

Eugene HUBBS and Emerson Electric Company, Appellees.

July 2, 2004.

OPINION

MINTON, Judge.

*1 Jeanne Jurek and the Commonwealth of Kentucky/Department of Personnel (Department of Personnel) appeal [FN1] from a judgment of the Hart Circuit Court in favor of Eugene Hubbs and Emerson Electric Company (Emerson Electric). The civil action arose from a motor vehicle accident in which the tractor-trailer driven by Hubbs struck the car in which Jurek was riding, injuring her severely. As grounds for appeal, Jurek and the Department of Personnel assert that the circuit court committed the following errors: (1) not granting Jurek’s motion for a directed verdict regarding Hubbs’s alleged violation of a provision of the Federal Motor Carrier Safety Regulations (FMCSR); (2) not permitting Jurek’s counsel to question Hubbs about a speeding ticket that he received approximately one month after the accident; (3) admitting into evidence testimony about other motor vehicle accidents that occurred at the same place shortly after the accident at issue; and (4) admitting into evidence Hubbs’s statement that he had driven 900,000 miles without an accident. For the reasons stated below, the Court reverses and remands this case to the circuit court for a new trial.

FN1. Originally Jurek and the Department of Personnel filed separate appeals, with each appellant designating the other as an appellee. Jurek’s appeal was numbered 2003-CA-000897-MR, and the appeal of the Department of Personnel was numbered 2003-CA-000936-MR. On July 11, 2003, pursuant to Jurek’s motion and the agreement between Jurek and the Department of Personnel to proceed as a single appellant as provided in Kentucky Rules of Civil Procedure (CR) 73.01(3), the Court ordered the two appeals to be consolidated. The Court further ordered that the parties be realigned such that Jurek and the Department of Personnel each be named an appellant in the appeal originally filed by the other.

The accident in question occurred on March 11, 1998, between mile markers 67 and 68 on I-65 North in Hart County. Hubbs was driving a loaded tractor-trailer for his employer, Emerson Electric, on his dedicated route from Oxford, Mississippi, to Findlay, Ohio. Debbie Bishop was driving a white Chevrolet Lumina owned by the Commonwealth of Kentucky. Riding with her were three passengers, Rhondia Burdine, Gary Grubbs, and Jeanne Jurek. All four were state employees returning to Frankfort after a training session in Bowling Green. On that day, both Hubbs and Bishop had driven through several areas where snow was falling but not sticking to the road; neither had encountered ice. Hubbs said that the snow never significantly impaired visibility, but other witnesses, including Bishop, disagreed. There were miles in between these isolated snow showers in which there was no snow or other precipitation, visibility was normal, and the pavement was clear and dry. They encountered snow again around mile markers 67 and 68. Hubbs testified that this snow did not significantly reduce visibility, but Bishop and others testified otherwise.

The collision between Bishop and Hubbs was part of a multiple vehicle accident that occurred in part because of ice. Bishop and Hubbs were in the right lane with Bishop somewhat ahead of Hubbs. The van immediately in front of Bishop began fishtailing then slid off the road onto the right shoulder. The car in front of her, which had been obscured by the van, was either stopped in the right lane or moving so slowly that it appeared to be stopped. Rather than hit the van off on the right shoulder, or be hit by a faster-moving vehicle which she saw approaching in the left lane, [FN2] Bishop remained in the right lane and tried to slow down as much as possible. She struck the car ahead in a low-speed collision. [FN3] She and her passengers were shaken but uninjured. However, Bishop’s Lumina then went sideways into the left lane at a 90-degree angle to oncoming traffic, directly into the path of Hubbs. His tractor-trailer struck the Lumina near the left rear door area where Jurek was seated. She suffered serious and permanent injuries. Other details concerning the accident will be developed below as necessary.

FN2. Bishop could not recall what type of vehicle was approaching on her left. She only remembered that it was moving faster than her vehicle.

FN3. As evidence of the minimal impact of this initial collision, the air bag(s) did not deploy.

*2 Jurek filed a complaint against Hubbs and Emerson Electric [FN4] on March 1, 2003, alleging a variety of claims. On May 2, 2000, the Department of Personnel, which had paid workers’ compensation benefits to Jurek, was permitted to intervene. The Department of Personnel’s complaint adopted by reference Jurek’s allegations against Hubbs and Emerson Electric and raised no new allegations against them. [FN5] A jury trial was conducted in Hart Circuit Court on February 24-26, 2003. At the conclusion of Jurek’s proof, the circuit court directed a verdict in favor of Emerson Electric on the allegation of negligent entrustment and on the allegations of negligent screening, hiring, training, and supervision. The trial court further directed a verdict in favor of Hubbs on the allegation of gross negligence, leaving the allegation of negligence on the part of Hubbs as the only issue to be decided by the jury. The only remaining allegation against Emerson Electric concerned vicarious liability. The circuit court denied Jurek’s motion for a directed verdict on the allegation that Hubbs had violated the FMCSR. Instead, the circuit court presented that issue to the jury by including among Hubbs’s specific duties the duty to comply with applicable provisions of FMCSR. The jury returned a unanimous verdict in favor of Hubbs, thereby dismissing all remaining allegations pleaded by Jurek against Hubbs and Emerson Electric. Jurek filed a motion for new trial, which was subsequently denied. Jurek and the Department of Personnel then filed timely separate appeals which were later consolidated as noted above.

FN4. Jurek also named other defendants. Because these defendants were dismissed prior to trial and are not involved in this appeal, we need not address them.

FN5. Jurek and the Department of Personnel had identical interests at trial against Hubbs and Emerson and again on appeal. Therefore, this Court shall refer to the plaintiffs at trial and now appellants collectively as “Jurek.” Likewise, because Hubbs and Emerson Electric have identical interests on appeal and shared representation, we shall refer to them collectively as “Hubbs.”

DENIAL OF DIRECTED VERDICT ON FMSCR CLAIM

Jurek asserts that the circuit court erred in denying her motion for directed verdict concerning the allegation that Hubbs violated the FMSCR. These regulations govern the operation of commercial motor vehicles in the United States. To the extent that they establish a standard of care higher than the law, ordinances, or regulations of a particular state jurisdiction, a commercial driver must comply with the FMSCR. [FN6] Jurek asserts that Hubbs violated the following provision:

FN6. 49 Code of Federal Regulations (C.F.R.) § 392.2.

Extreme caution in the operation of a commercial motor vehicle shall be exercised when hazardous conditions, such as those caused by snow, ice, sleet, fog, mist, rain, dust, or smoke, adversely affect visibility or traction. Speed shall be reduced when such conditions exist. If conditions become sufficiently dangerous, the operation of the commercial vehicle shall be discontinued and shall not be resumed until the commercial motor vehicle can be safely operated. [FN7]

FN7. 49 C.F.R. § 392.14.

To consider Jurek’s allegation, it is necessary to provide further details concerning the accident. When there was no precipitation and the road was dry and clear, Hubbs drove 64 miles per hour (mph); when he encountered snow, he would slow to 50 mph, even though the snow was not yet sticking to the roadway. He did not try to contact anyone by CB or other means to learn the condition of the interstate and the weather to his north. In fact, he had his CB turned off. Just before the accident, he saw snow falling for the first time since Horse Cave and slowed from 64 mph to 50 mph. Skidding vehicles and brake lights about one-quarter mile ahead of Hubbs alerted him to icy conditions. Hubbs began stab braking to bring his truck to a stop. [FN8] He moved to the left lane because he did not think he would be able to stop in time to avoid hitting the vehicles stopped in the right lane, and he could not get off on the right shoulder without hitting other vehicles. Hubbs continued stab breaking and succeeded in slowing his vehicle to approximately 30 mph. He first testified that it took him about a minute to slow to 30 mph but later said that it was probably closer to 20 seconds. He managed to keep his vehicle in the left lane, despite the tendency of his trailer to want to slide right whenever he applied the brakes . [FN9] Hubbs was almost past the area where he had originally noted the stopped vehicle in the right lane and the van that slid off on the right shoulder when the white Lumina driven by Bishop slid sideways directly in front of his tractor-trailer. It was so close that he could only see the car’s white roof, and he had three seconds or less to react. He tried to turn into the median, but, before he could do so, he struck the Lumina, knocking it into the median. To keep from hitting the car again, Hubbs continued on briefly in the left lane before pulling off in the median.

FN8. Stab breaking is a technique in which a tractor-trailer driver alternately steps on the brakes and then eases up on the brakes. It is designed to slow or stop a tractor-trailer without locking up the brakes on the trailer, which could result in jack-knifing the vehicle.

FN9. The trailer’s tendency to slide to the right was due to both the ice and to the banking of the road.

*3 Jurek does not dispute that Hubbs reduced his speed from 64 mph to 50 mph when he encountered snow immediately before the accident. However, she asserts that pursuant to 49 C.F.R. § 392.14, once he recognized the changeable weather and knew that he could encounter snow again, Jurek should have driven at a reduced speed even when the immediate weather was fine and the road was clear. She asserts that this obligation to drive at a reduced speed continued until he received confirmation from a third party via CB or other means that the road and weather ahead were clear. Jurek asserts that the fact that Hubbs was unable to bring his tractor-trailer to a complete stop before the accident is proof that he was traveling too fast at 64 mph given the changeable weather. Therefore, she asserts that she was entitled to a directed verdict on the allegation that Hubbs violated 49 C.F.R. § 392.14.

The standard for a directed verdict was set forth in Lewis v. Bledsoe Surface Mining Company, as follows:

Upon review of the evidence supporting a judgment entered upon a jury verdict, the role of an appellate court is limited to determining whether the trial court erred in failing to grant the motion for directed verdict. All evidence which favors the prevailing party must be taken as true and the reviewing court is not at liberty to determine credibility or the weight which should be given to the evidence, these functions being reserved to the trier of fact. The prevailing party is entitled to all reasonable inferences which may be drawn from the evidence. Upon completion of such an evidentiary review, the appellate court must decide whether the verdict rendered is ” ‘palpably or flagrantly’ against the evidence so as ‘to indicate that it was reached as a result of passion or prejudice.’ ” [FN10] If the reviewing court concludes that such is the case, it is at liberty to reverse the judgment on the grounds that the trial court erred in failing to sustain the motion for directed verdict. Otherwise, the judgment must be affirmed. [FN11]

FN10. NCAA v. Hornung, Ky., 754 S.W.2d 855, 860 (1988) (citation as in original).

FN11. Ky., 798 S.W.2d 459, 461-62 (1990) (some citations omitted).

When the evidence, including any reasonable inferences from it, is taken in the light most favorable to Hubbs as the prevailing party, it is clear that there was sufficient evidence to support the jury’s verdict in Hubbs’s favor on the issue of the alleged violation of the FMCSR. 49 C.F.R. § 392.14 requires a driver to reduce his speed when hazardous driving conditions, such as snow or ice, exist. Notwithstanding Jurek’s interpretation, it does not state an affirmative duty to drive at a reduced speed indefinitely when the snow or ice disperses until receiving confirmation from a third party that the weather ahead is similarly clear. There was sufficient evidence for the jury to agree with Hubbs, who stated, “just cause [sic] it snowed for a mile don’t [sic] mean you’ve got to stay slow for 500” miles. Therefore, we affirm the circuit court’s denial of Jurek’s motion for a directed verdict.

ADMISSIBILITY OF POST-ACCIDENT SPEEDING TICKET

*4 Jurek also asserts that the circuit court erred in barring inquiry into a speeding ticket which Hubbs received approximately one month after the accident for driving 73 mph in the same tractor-trailer. Jurek sought to use this evidence to impeach Hubbs regarding a statement made during his discovery deposition that he knew that he was going 64 mph prior to the accident because that was as fast as his truck would go due to its governor. In response to Hubbs’s motion in limine to prevent this line of inquiry, the circuit court ruled that evidence of the speeding ticket would not be relevant or admissible unless Hubbs testified at trial about the governor. At trial, when called as a witness by Jurek, Hubbs testified that he knew his speed was 64 mph before the accident by his speedometer. When asked if the speedometer was the only way that he knew his speed, Hubbs responded that that was the only way he could be sure. When Hubbs later testified on his own behalf, he again stated that he knew he was going 64 mph by his speedometer. When asked if he had stated in his deposition that “that’s all my truck will run,” referring to 64 mph, Hubbs agreed that the statement sounded accurate. In a bench conference, Jurek then moved to introduce the speeding ticket but was overruled. Jurek properly preserved the issue through avowal testimony. On avowal, Hubbs agreed that he said in his deposition that his truck would not go faster than 64 mph. He also admitted that he received a speeding ticket for going 73 mph in a 55 mph zone, approximately one month after the accident while driving the same truck. Hubbs stated that he disputed the ticket, however. He conceded that he was going faster than the 55 mph speed limit but disputed that he was driving 73 mph.

The circuit court based its decision on lack of relevance. Relevant evidence is defined as “evidence having any tendency to make the existence of any fact that is of consequence to the determination of that action more probable or less probable than it would be without the evidence.” [FN12] Relevance is a determination resting largely within the discretion of the trial court. [FN13] This Court will not disturb a lower court’s discretionary ruling on appeal, absent an abuse of discretion. [FN14] Given Hubbs’s uncontroverted testimony that he had already slowed from 64 mph to 50 mph and again to 30 mph when Bishop’s Lumina slid directly in front of his truck, the issue of exactly how he knew his earlier speed of 64 mph seems collateral. This is especially true since Jurek’s counsel seemed to have adopted Hubbs’s assessment that he was going 64 mph as fact at trial. Jurek’s counsel told the jury in opening statements that the evidence would show that Hubbs was traveling 64 mph prior to the accident. And again, in his closing arguments, he stated that shortly before the accident Hubbs was driving “64 mph, as fast as [his] truck could go.” [FN15] Under these circumstances, we cannot say that it was an abuse of discretion for the circuit court to have excluded any questions concerning the post-accident speeding ticket. Even if it were an error, we note that it would be harmless error under the standard noted below. Therefore, we affirm the circuit court’s ruling on this issue.

FN12. Kentucky Rules of Evidence (KRE) 401.

FN13. Glens Falls Ins. Co. v. Ogden, Ky., 310 S.W.2d 547, 549 (1958).

FN14. See Tumey v. Richardson, Ky., 437 S.W.2d 201, 205 (1969).

FN15. Punctuation added.

ADMISSIBILITY OF ACCIDENT-FREE DRIVING HISTORY

*5 Jurek also asserts that the circuit court erred by permitting Hubbs to testify about his unblemished truck-driving record. Hubbs testified on direct that he had driven approximately 900,000 miles for Emerson Electric and had never had an accident. Hubbs’s counsel referred to this testimony twice during closing. He called 900,000 accident-free miles “pretty good evidence” that Hubbs knew his job and knew what he was doing. Then later, just a minute or so before going over instructions on how to fill out the verdict forms, he declared that “Mr. Hubbs is a responsible driver, an accident-free driver for 900,000 miles. That’s pretty close to a million….” [FN16] He went on to urge that this record was one reason why it would be wrong to hold Hubbs liable for Jurek’s injuries.

FN16. Punctuation added.

KRE 404(a) sets forth a general prohibition against the use of character evidence to show propensity, stating in relevant part: “Evidence of a person’s character or a trait of character is not admissible for the purpose of proving action in conformity therewith on a particular occasion….” KRE 404(a) is subject to several exceptions; however, none applies to the present civil litigation.

There is no explicit mention of character evidence for civil cases in KRE 404, although the text of the provision plainly requires exclusion of such evidence. The provision begins with a general rule against the use of character evidence for substantive purposes, adopts two exceptions for criminal cases, and says nothing about exceptions for civil cases. [FN17]

FN17. Robert G. Lawson, The Kentucky Evidence Handbook § 2.15[5] (4th ed.2003).

Regarding the admissibility of character evidence in civil litigation for the purpose of showing action in conformity therewith on a particular occasion, the drafters of KRE 404 unequivocally stated, Rule 404 “eliminates the possibility of using such evidence in civil litigation, except to reflect on the credibility of the witnesses.” [FN18]

FN18. Evidence Rules Study Committee, Kentucky Rules of Evidence-Final Draft 24 (Nov.1989).

Hubbs’s testimony about his accident-free driving record is evidence of his carefulness. Evidence of a character for carefulness or carelessness for the purpose of showing actions in conformity with that character is inadmissible. [FN19] The only purpose for which this evidence was offered was to prove that Hubbs acted in conformity with his character for carefulness on March 11, 1998, as shown when his attorney cited it as pretty good evidence of Hubbs’s competence at his job and a reason why it would be wrong to hold him liable for the accident. As character evidence intended to show action in conformity on a particular occasion, the testimony about Hubbs’s driving record should not have been admitted at trial, pursuant to KRE 404.

FN19. See also Lawson, § 2.15[5], noting that despite the fact that there are no Kentucky cases predating the adoption of KRE regarding the admissibility of carefulness or carelessness, “such evidence was covered by the general rule of exclusion and was widely if not universally regarded as inadmissible.”

Having concluded that the circuit court committed error, we must determine whether this error was harmless. The standard for harmless error is as follows:

C.R. [sic] 61.01 provides that the court at every stage of the proceeding must disregard any error which does not affect the substantial rights of the parties. While this rule is primarily for the guidance of trial courts, this court, since the adoption of the new rules and before, … has accepted it as a rule for guidance and will not reverse or modify a judgment except for error which prejudices the substantial rights of the complaining party. [FN20]

FN20. Davidson v. Moore, Ky., 340 S.W.2d 227, 229 (1960).

*6 In determining whether reversal is warranted, this Court must judge each case on its unique facts. [FN21] An isolated instance of improper argument, for example, is seldom deemed prejudicial. [FN22] But, “when it is repeated and reiterated in colorful variety by an accomplished orator its deadly effect cannot be ignored.” [FN23] Such is the case here.

FN21. Stanley v. Ellegood, Ky., 382 S.W.2d 572, 575 (1964).

FN22. Id. See also Murphy v. Cordle, 303 Ky. 229, 197 S.W.2d 242, 244 (1946).

FN23. Stanley, 382 S.W.2d at 575.

The improperly admitted evidence went toward Hubbs’s carefulness, a central issue in the negligence claim. Nevertheless, Hubbs’s testimony about his driving record alone might have been considered harmless error. However, Hubbs’s attorney twice stressed this improperly admitted evidence in closing argument, even calling it a reason why the jury should not hold Hubbs liable. Notably, this was almost the last thing counsel said during his closing argument before turning to the minutiae of how to fill out the verdict forms. The timing of this statement increased its possible prejudicial effect. Given these facts, we cannot describe the admission of Hubbs’s testimony about his accident-free driving record and his counsel’s subsequent references to it as harmless error. Therefore, we reverse the circuit court’s ruling on this matter.

ADMISSIBILITY OF OTHER MOTOR VEHICLE ACCIDENTS

Jurek also asserts that the circuit court erred in admitting testimony concerning other motor vehicle accidents that occurred at approximately the same time and place. Jurek filed a motion in limine to exclude this evidence. The circuit court ruled that evidence of other accidents at approximately the same time and location was admissible to show the icy condition of the road. [FN24] Hubbs’s counsel first set the stage for this testimony, stating in his opening statement that there were a dozen or more vehicles involved in accidents at approximately the same time and place as the accident at issue. Every fact witness [FN25] was asked about other accidents which occurred in the minutes after the accident at issue on the same stretch of northbound I-65. Jurek’s counsel promptly objected to the first few references to other accidents but was overruled on each occasion. Each of these witnesses recalled seeing at least one or more vehicles involved in an accident, including vehicles which slid or veered off the road without colliding with another vehicle. Two witnesses recalled that one of the accidents even involved an ambulance. Captain Hardin of the Kentucky State Police, who handled the accident involving Hubbs and Jurek, initially stated that he could not really speak about the other accidents since other agencies handled them, indirectly acknowledging these accidents’ existence. Hardin did estimate, however, that there were probably more than ten vehicles involved in one type of accident or another at this scene. In closing arguments, Hubbs’s counsel repeated Hardin’s estimate of the number of other accidents on the same stretch of interstate around the same time of the collision involving Jurek and Hubbs.

FN24. The circuit court did, however, restrict such evidence to accidents which occurred in the northbound lanes of I-65.

FN25. The witnesses asked about other accidents were Bishop, Burdine, Grubbs, Hubbs, and Captain Hardin, infra. Jurek has little memory of the relevant time period due to her injuries.

*7 Both Jurek and Hubbs agree that the controlling case regarding the propriety of introducing other accidents which occurred proximately in time and place to an accident at issue is Harris v. Thompson. [FN26] The circuit court also based its ruling permitting the introduction of the other accidents into evidence on Harris. We agree that Harris is the controlling case. However, under the law as established in that case, we hold that the testimony concerning other accidents was inadmissible. The Harris case concerned an automobile which slid out of control on an isolated patch of ice on an otherwise dry road, striking two pedestrians. [FN27] The driver of the vehicle introduced evidence of three other automobile accidents that occurred in the same location within two hours of the accident at issue. [FN28] The appellants objected on the grounds that the other accidents were not shown to have occurred under similar conditions, such as speed, as the accident at issue. [FN29] Kentucky’s highest court described the general rule on the admissibility of such evidence as follows:

FN26. Ky., 497 S.W.2d 422 (1973).

FN27. Id. at 424.

FN28. Id. at 428-29.

FN29. Id. at 429.

Evidence of the occurrence or nonoccurrence of other accidents or injuries under substantially similar circumstances is admissible when relevant to certain limited issues, such as the existence or causative role of a dangerous condition, or a party’s notice of such a condition. [FN30]

FN30. Id.

Based on the facts of the Harris case, Kentucky’s highest court ruled that the evidence of other accidents was inadmissible “because there was no real issue as to whether the patch of ice on an otherwise dry highway constituted a dangerous condition or whether that condition was a causative factor in the accident.” [FN31] The Harris court also stated that there was no contention that the accidents were relevant to the issue of notice. The court concluded that the only purpose of the evidence must have been to show whether the driver of the vehicle that struck the pedestrians was negligent by comparison to other drivers under similar circumstances. [FN32] The court explained the error in admitting evidence for this purpose:

FN31. Id.

FN32. Id.

[I]n a negligence case the comparison to be made is between the party alleged to have been negligent and that imaginary ideal, the ordinarily prudent person acting under similar circumstances. Without any way to prove or to judge whether another person who did or did not have an accident at the same place and under the same circumstances was himself an ordinarily prudent person, or was above or below average in that respect, we are forced to the conclusion that such evidence cannot be competent on the narrow issue of negligence. [FN33]

FN33. Id.

Notwithstanding this holding, the Harris court ultimately determined that the evidence of other accidents was admissible as a curative measure because the trial court had admitted testimony, over objection, of other witnesses who drove across the same stretch of road close to the time of the accident at issue. [FN34] Each of these witnesses testified that he or she had seen the ice soon enough to slow down and had crossed it without incident. [FN35] The court deemed that the admission of testimony to the effect that several people safely traversed this section of road opened the door to rebuttal evidence concerning testimony by those drivers who were not so fortunate. [FN36]

FN34. Id. at 429-30.

FN35. Id.

FN36. Id. at 430.

*8 In the instant case, there was no evidence presented to show whether the other accidents which occurred at generally the same time and place as the collision involving Hubbs and Jurek occurred under similar conditions, such as speed, nor whether the other drivers were conducting themselves as reasonably prudent persons. No one testified with any specificity about these accidents, and no one involved in them testified or was even identified. Nevertheless, the circuit court admitted evidence of the other accidents in order to show the icy conditions of the road. As in the Harris case, there was no real issue that there was an isolated section of ice on an otherwise dry road, that this ice posed a hazardous condition, [FN37] and that it was a factor in the accidents. [FN38] Hubbs attempts to distinguish this case by pointing out that during the trial, Jurek raised the issue of numerous other possible factors in the accident, such as excessive speed, tiredness, or hunger on his part. Just because Jurek attempted to show that Hubbs was negligent, does not mean that the presence and role of the ice was in dispute. No one disputed the presence of the ice or the danger it posed to drivers. There is no claim that the other accidents were relevant to the issue of notice. Also, unlike in the Harris case, there was no need to introduce the evidence of other accidents as rebuttal. No one testified about safely traversing the icy interstate between mile markers 67 and 68. The only purpose for this evidence was to show that Hubbs was not negligent by comparison to other people who also had accidents on the same stretch of interstate. However, the standard for comparison in a negligence case is to an ordinarily prudent person in similar circumstances. [FN39] This evidence, which only serves to compare Hubbs’s negligence to that of strangers of unknown prudence in unknown circumstances, is not competent on the narrow issue of negligence.

FN37. Debbie Bishop testified that when she exited the Lumina after the accident, the ice was so slick that she had to hold onto the car to keep from falling. Similarly, Captain Hardin testified that the road was so slick and icy that he actually fell when exiting his vehicle. Notably, Jurek’s counsel concedes that Bishop’s and Hardin’s testimony on this matter was properly admitted into evidence.

FN38. See Id. at 429.

FN39. Id.

The question then arises whether this error is harmless under the previously-cited standard. The existence of other accidents was a theme carried throughout the trial by Hubbs’s counsel from opening to closing. Every fact witness who was competent to testify about the issue testified to seeing at least one or more other vehicles collide or leave the roadway, with Captain Hardin estimating that more than ten vehicles were involved in accidents at that scene. This is not a case in which there was only one brief mention of the improper testimony; it was a pervasive theme throughout the trial. Under these circumstances, we cannot say that this error was harmless. Therefore, we must reverse the trial court’s finding with respect to the admission of evidence of other accidents at approximately the same time and place.

CONCLUSION

We reverse with respect to the circuit court’s evidentiary rulings permitting Hubbs to introduce testimony that he had driven 900,00 miles as a truck driver without an accident and to introduce evidence of other accidents which occurred shortly before or after the accident at issue in the same section of I-65 North. We remand this case to the Hart Circuit Court for another trial consistent with this opinion.

ALL CONCUR.

Alpina Insurance Co. v. Trans American Trucking Service

United States District Court,

S.D. New York.

ALPINA INSURANCE COMPANY, LTD. Zurich, Aon Jauch & Hubener Gmbh, Transpac

Container System Ltd. d/b/a Blue Anchor Line and Kuehne & Nagel (AG & Co.),

Plaintiffs,

v.

TRANS AMERICAN TRUCKING SERVICE, INC., Trans American Brokerage Service, Inc.

and United Express Service, Inc. d/b/a Ues Transport, Defendants.

July 28, 2004.

MEMORANDUM and ORDER

PAULEY, J.

Plaintiffs Alpina Insurance Company, Ltd. Zurich (“Alpina”), AON Jauch & Hubener GmbH (“AON”), Transpac Container System Ltd. d/b/a Blue Anchor Line (“Blue Anchor”) and Kuhne & Nagel (AG & Co.) (“K & N”) (collectively, “plaintiffs”) bring this breach of contract and negligence action to recover $385,000 in damages from defendants Trans American Trucking Service, Inc., Trans American Brokerage Service, Inc. (collectively, “Trans American”) and United Express Service, Inc. d/b/a/ UES Transport (“UES”) (collectively, “defendants”). Alpina is an insurer of Blue Anchor and K & N, and AON is Alpina’s agent in connection with its insurance for Blue Anchor and K & N. (Amended Complaint, dated Sept. 30, 2003 (“Am.Compl.”) ¶ ¶ 4-5.) Plaintiffs seek to recover funds Alpina paid in settlement in Germany to non-party Gerling-Konzern Allgemeine Versicherungs-AG (“Gerling”), the insurer of non-party MAN Roland/DE (the “German Shipper”), for printing equipment damaged in New Jersey en route from Germany to Nebraska. (Am.Compl.¶ ¶ 10, 20-22.) Presently before this Court are: (1) Trans American’s “motion to dismiss” the complaint pursuant to Fed.R.Civ.P. Rules 12(b) and 56; (2) UES’s motion to dismiss pursuant to Fed.R.Civ.P. Rule 12(b)(6), and (3) UES’s motion for partial summary judgment pursuant to Fed.R.Civ.P. Rule 56, limiting its liability to $500 per package. For the reasons stated below, defendants’ motions to dismiss are granted, and UES’s motion for partial summary judgment is denied as moot.

BACKGROUND

This action concerns printing equipment damaged in an accident during transport from Bremerhaven, Germany to Omaha, Nebraska. In February 2001, the German Shipper hired Blue Anchor to transport a printing press by ship from Bremerhaven to New York, and then by truck to Omaha. (Am.Compl.¶ 10.) Through its agent K & N, Blue Anchor issued a bill of lading (“Bill of Lading”) to the German Shipper to transport the equipment. (Am.Compl.¶ ¶ 10-11.) On February 13, 2001, the printing equipment was loaded aboard the MV Atlantic Carrier in Germany, and on February 27, 2001, the equipment arrived at the port of discharge in New York City. (Am.Compl.¶ ¶ 12-13.) In March 2001, K & N contracted with Trans American to transport the printing equipment from New York to Nebraska, and Trans American subcontracted the transport to UES, a common carrier. (Am.Compl.¶ ¶ 14-15.) On March 5, 2001, the printing equipment was severely damaged after UES’s truck jackknifed into the median on I-80 West in New Jersey. (Am.Compl.¶ ¶ 18-19.)

After settling the loss the German Shipper’s insurer, Gerling asserted a claim for damage against K & N under the Bill of Lading. (Plaintiffs’ Supplemental Memorandum, dated January 27, 2004 (“Pl.Supp.Mem.”), Ex. A: Declaration of Roland Doerre, dated January 20, 2004 (“Doerre Decl.”) at ¶ 3.) [FN1] On the advice of its German counsel, Alpina paid Gerling 335,000 Euros (approximately $385,000) to settle the claim. (Am. Compl. ¶ ¶ 1, 21; Doerre Decl. at ¶ 9.) Plaintiffs argue that as a result of that payment, they are subrogated to the rights of the German Shipper in connection with the printing equipment.

FN1. At oral argument on January 8, 2004, this Court required supplemental briefing from all parties on questions of German law and the applicable statute of limitations. (Transcript of Oral Argument, dated January 8, 2004 (“Tr.”) at 11-12, 15-16.)

The Bill of Lading contains a nine-month statute of limitations clause, which states: “The Carrier shall be discharged of all liability under this Document unless suit is brought within nine months after the delivery of the Goods, or the date when the Goods should have been delivered unless International Conventions or statutory regulations compulsorily applicable in the individual case are stipulating a longer term of prescription.” (Bill of Lading ¶ 3.)

Additionally, the Bill of Lading contains a “U.S. Clause” which states that the Carriage of Goods by Sea Act (“COGSA”), 46 App. U.S.C.A. § 1300, et seq., is applicable where the goods are shipped to a United States port, and continues to be applicable while the goods are in the carrier’s custody. (Bill of Lading ¶ 28 .1.) The U.S. Clause expressly adopts Section 1304(5) of COGSA limiting the Carrier’s and/or the vessel’s liability to $500 unless the nature and value of goods are declared. (Bill of Lading ¶ 28.1 .) The Bill of Lading also states that if any part of the Bill of Lading is deemed unenforceable under COGSA, it “shall not affect the validity or enforceability” of any other term of the Bill. (Bill of Lading ¶ 28.1.)

Finally, the Bill of Lading contains a “Himalaya Clause,” that allows a secondary carrier to claim the benefits of the primary carrier’s contractual limitations of liability and extends the terms of the Bill of Lading to inland transport after transport by sea. (Bill of Lading ¶ 17(c).)

Plaintiffs Blue Anchor and K & N filed their original complaint on January 31, 2003. On September 30, 2003, plaintiffs filed an amended complaint, adding plaintiffs Alpina and AON and joining defendant Trans American Brokerage Service, Inc. (Am.Compl.¶ ¶ 4-5, 8.)

DISCUSSION

Trans American moves to dismiss the complaint pursuant to Fed.R.Civ.P. Rule 12(b) for: (i) lack of subject matter jurisdiction; (ii) improper venue; and (iii) failure to state a claim upon which relief can be granted. Trans American also moves “to dismiss” pursuant to Fed.R.Civ.P. Rule 56 for: (i) failure to file within the statute of limitations; (ii) failure to satisfy a condition precedent to suit; and (iii) failure to file a timely action. (See Declaration of James M. Haddad, dated October 31, 2003 (“Haddad Decl.”) ¶ ¶ 3-4.)

Defendant UES separately moves to dismiss the complaint for: (i) failure to file within the applicable COGSA statute of limitations; and (ii) as against plaintiffs Blue Anchor and K & N for lack of standing. Alternately, UES moves for partial summary judgment limiting liability to $500 per package. (UES Memorandum, dated October 31, 2003 (“UES Mem.”) at 3.)

I. Summary Judgment

Both defendants move to dismiss plaintiffs’ complaint on the ground that it is barred by the applicable statute of limitations. Defendants asserted their statute of limitations arguments during an initial exchange of memoranda and supplemented them with additional briefing required by this Court. (Tr. at 15- 16.)

“When matters outside the pleadings are presented on a motion to dismiss under Rule 12(b)(6), a court may convert the motion to one for summary judgment so long as it affords all parties the opportunity to present supporting material.” Wesley v. NMU Pension & Welfare Plan, No. 01 Civ. 2628(WHP), 2002 WL 10486, at *3 (S.D.N.Y. Jan. 3, 2002) (citing Morelli v. Cedel, 141 F.3d 39, 46 (2d Cir.1998)). The court may base its decision to convert the motions sua sponte on “whether [plaintiff] should reasonably have recognized the possibility that the motion might be converted into one for summary judgment or [was] taken by surprise and deprived of a reasonable opportunity to meet facts outside the pleadings.” Kraft Foods N. Am., Inc. v. Rockland County Dept. of Weights & Measures, No. 01 Civ. 6980(WHP), 2003 WL 554796 (S.D.N.Y. Feb. 26, 2003) (citing In re G. & A. Books, Inc., 770 F.2d 288, 295 (2d Cir.1985)); see also Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 592 (2d Cir.1993) (holding that there was no error in sua sponte conversion, and plaintiffs were not unfairly surprised, where defendant’s motion papers sought dismissal on certain grounds, summary judgment was granted on those grounds, and plaintiffs had supplemented the record with exhibits).

Defendants’ motions to dismiss were accompanied by summary judgment motions that expressly addressed the applicability of COGSA and the applicable statute of limitations period. At oral argument, plaintiffs acknowledged that the motions to dismiss would likely be converted to summary judgment, and subsequently provided this Court with a supplemental memorandum, a Rule 56.1 Statement, and a declaration with exhibits. (Tr. at 11-12, 15-16; Pl. Supp. Mem, Exs. A, B.) Since plaintiffs had sufficient notice and opportunity to respond to the allegations through supplemental briefing, their own 56.1 statement and other submissions, all of defendants’ motions will be treated as ones for summary judgment.

Rule 56(c) provides that summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. See, e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Grady v. Affiliated Cent., Inc., 130 F.3d 553, 559 (2d Cir.1997). In evaluating the record to determine whether there is a genuine issue as to any material fact, “[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.” Liberty Lobby, 477 U.S. at 255.

II. Statute of Limitations

The parties differ in their positions concerning the applicable law in this case. Trans American argues that New York State law applies and that the Bill of Lading’s nine-month statute of limitations bars suit under New York law. (Trans American Memorandum, dated October 31, 2003 (“Trans Am. Mem.”) at 2-3.) Plaintiffs also contend that New York State law applies, but interpret New York State law to implicate a three-year statute of limitations pursuant to N.Y.C.P.L.R. § 214(4) and the Carmack Amendment, 49 U.S.C. § 14709(e)(1), which would not bar suit. (Plaintiffs’ Opposition, dated November 17, 2003 (“Pl.Mem.”) at 5-6.) UES argues that COGSA applies instead of New York law, and that COGSA’s one-year statute of limitations bars plaintiffs’ suit. (UES Mem. at 3-7.)

A. COGSA’s Statute of Limitations

COGSA’s one-year statute of limitations bars this action in its entirety. COGSA governs the relationship between the parties to a bill of lading “which is evidence of a contract for the carriage of goods by sea to or from ports of the United States.” 46 App. U.S.C.A. § 1300; see Watermill Export, Inc. v. MV Ponce, 506 F.Supp. 612, 613 (S.D.N.Y.1981) (stating that COGSA applies to “contracts of carriage relating to shipments between United States ports and foreign ports”). Parties also may contractually agree to have COGSA govern the inland portion of a multi-modal transport. See Allianz CP Gen. Ins. Co. v. Blue Anchor Line, No. 02 Civ. 2238(NRB), 2004 WL 1048228, at *6 (S.D.N.Y. May 7, 2004); see Toshiba Int’l Corp. v. M/V Sea-Land Exp., 841 F.Supp. 123, 125 (S.D.N.Y.1994) (“[T]he provisions of COGSA may contractually be extended past the time of discharge of the cargo from the ship…. It is also well-settled that the protections of COGSA and other provisions of the bill of lading may contractually be extended to third party agents of the carrier, such as inland carriers.”) (citations omitted).

To extend the applicability of COGSA, parties may include in their contract a “U.S. Clause,” expressly stating that COGSA shall govern the entire transportation. See Allianz, 2004 WL 1048228 at *7; Sompo Japan Ins. of Am. v. Union Pacific R.R. Co., No. 03 Civ. 1604(RCC), 2003 WL 22510361, at * 2-3 (S.D.N.Y. Nov. 5, 2003); see also Colgate Palmolive Co. v. S/S Dart Canada, 724 F.2d 313, 314 (2d Cir.1983) (stating that the provisions of COGSA may contractually be extended past the time of the discharge of the cargo from the ship). When COGSA limits liability, it preempts state law, even if the claims are phrased as common law causes of action. See Greenidge v. Mundo Shipping Corp., 41 F.Supp.2d 354, 358 (E.D.N.Y.1999) (COGSA “sets forth the minimum liabilities, rights and responsibilities of the carrier and the shipper.”); Junior Gallery, Ltd. v. Neptune Orient Lines, Ltd., No. 94 Civ. 4518(DC), 1998 WL 770558 (S.D.N.Y. Nov. 3, 1998) (“[T]he application of COGSA cannot be circumvented merely by construing claims arising out of the carriage of goods by sea as common law causes of action.”); Miller Export Corp. v. Hellenic Lines, Ltd., 534 F.Supp. 707, 710 (S.D.N.Y.1982) (“[T]he exclusive application of COGSA cannot be avoided by couching claims in terms of negligence or other common law causes of action.”).

The parties adopted COGSA through a U.S. Clause in the Bill of Lading which states:

If this Express Cargo Bill covers the Carriage of Goods to or from ports of United States of America this Express Cargo Bill shall be subject to United States Carriage of Goods by Sea Act (USA COGSA), which shall be incorporated herein, and the provisions of said Act shall govern before loading and after discharge and throughout the entire time the Goods are in the custody of the Carrier.

(Bill of Lading ¶ 28.1.) Under COGSA, “the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.” 46 App. U.S .C.A. § 1303(6).

The defendants are entitled to the benefit of defenses under COGSA by virtue of the Bill of Lading’s Himalaya Clause, which states: “each and every Participating Carriers [sic] … engaged or employed by the Carrier … shall be a beneficiary of this contract and shall be entitled to all exemptions from and limitations of liability which the Carrier has under this Express Cargo Bill and the applicable law.” (Bill of Lading ¶ 17(c).) The Bill defines “Participating Carrier” as “any other water carrier, including those performing transshipment or relay, feeder, or towage services, or any land or air carrier performing any stage of the carriage provided for herein.” (Bill of Lading ¶ 1.3.)

Under the definition in the Bill of Lading, UES qualifies as a Participating Carrier since it was the land carrier that performed a stage of the transportation provided for in the Bill of Lading. (Am. Compl. ¶ ¶ 14-16; Bill of Lading ¶ ¶ 1.3, 17(c).) Trans American, with whom K & N contracted to transport the equipment from New York to Nebraska, similarly qualifies as a Participating Carrier under the Bill. (Am. Compl. ¶ ¶ 14-16; Bill of Lading ¶ ¶ 1.3, 17(c).) As Participating Carriers, UES and Trans American are entitled to the benefit of the limitations of liability in paragraph 17(c) of the Bill of Lading.

The parties do not dispute that defendants qualify as Participating Carriers under the definition in the Bill of Lading. Instead, plaintiffs contend that since the limitations in the Bill of Lading were not available to them under German law, defendants are not entitled to those defenses as third-party beneficiaries to the Bill of Lading. (Pl. Mem. at 5; Tr. at 6 (“[E]ven though this bill of lading is enforceable and these limitations are enforceable under United States federal law, they weren’t enforceable under German law.”).)

Plaintiffs acknowledge that the Himalaya Clause “makes defendants third-party beneficiaries of the defenses stated in the Bill of Lading” (Pl. Mem. at 5), but argue that those defenses are limited by German law since the settlement was reached there. (Pl. Mem. at 5-6.) Plaintiffs’ argument is unpersuasive. They offer no admissible evidence concerning the state of German law on this subject, and cite to no case where a German court has limited the defenses available under a Bill of Lading or COGSA. Tellingly, Alpina did not oppose the Gerling claim, electing instead negotiated a settlement before the dispute went before a German court. (Doerre Decl. ¶ ¶ 8-10.)

In their initial submissions, plaintiffs offered no evidence of the settlement or citations to applicable German law. Even after oral argument, plaintiffs submitted only a bare affidavit from AON’s German counsel, an interested party, expressing his opinion on the relevant questions of German law. (Doerre Decl. ¶ ¶ 1, 7-10; Pl. Supp. Mem. at 2.) Plaintiffs failed to provide this Court with any German statutes, court decisions, or other independent, admissible legal analysis relating to the defenses available under German law. This Court will not prohibit defendants from asserting legitimate defenses under the Bill of Lading and COGSA on the supposition that German law may bar them.

B. The Carmack Amendment

Plaintiffs argue that COGSA’s statute of limitations period is inapplicable and that this Court should instead apply a three-year statue of limitations period for filing claims under New York law. Specifically, plaintiffs claim that the Carmack Amendment to the Interstate Commerce Act of 1887, 49 U.S.C. § 14706(e)(1), [FN2] invalidates any limitations period under COGSA. Plaintiffs’ contention is without merit.

FN2. The Carmack Amendment states in pertinent part: “A carrier may not provide by rule, contract, or otherwise, a period of less than 9 months for filing a claim against it under this section and a period of less than 2 years for bringing a civil action against it under this section. The period for bringing a civil action is computed from the date the carrier gives a person written notice that the carrier has disallowed any part of the claim specified in the notice .” 49 U.S.C. § 14706(e)(1).

The Carmack Amendment governs the liability of common carriers for goods lost or damaged during a shipment in interstate commerce.” Ford v. Allied Van Lines, Inc., 3:96 Civ. 2598(AHN), 1997 WL 317315, at *2 (D. Conn. June 3, 1997). While the Carmack Amendment generally applies to the domestic leg of an international journey “as long as the domestic leg is covered by a separate bill or bills of lading”, it is inapplicable where the bill of lading governing the shipment is a “through bill of lading.” Allianz, 2004 WL 1048228, at *4 (citing Swift Textiles v. Warkin Motor Lines, 799 F.2d 697, 701 (11th Cir.1986); Ins. Co. of N. Am. v. S/S Transworld Bridge, 92 Civ. 7375, 1994 WL 75249, at *7 n.6 (S.D.N.Y. Mar. 7, 1994)); accord Capital Converting Equip., Inc. v. LEP Transp., Inc., 965 F.2d 391, 394 (7th Cir.1992). A “through bill of lading is one which governs the entire course of transport and applies to the connecting carriers despite the fact that they are not parties to the contract.” M/V Sealand Express, 841 F.Supp. at 128; accord Capital Converting, 965 F.2d at 394 (“A bill of lading issued in a foreign country to govern a shipment throughout its transportation from abroad to its final destination in the United States is termed a ‘through bill of lading.’).

It is undisputed that the Bill of Lading, which governed the entire shipment, was a through bill of lading. (See, e.g., UES 56.1 Stmt. ¶ ¶ 1-2, 8, 10, 13 (describing Bill of Lading as contract covering transport of goods from Germany to Nebraska); Pl. 56.1 Stmt. ¶ 2-4 (same); Pl.’s Response to UES 56.1 Stmt ¶ 1-2, 8, 10, 13 (admitting same).) Indeed, the Bill of Lading expressly contemplates the inland transportation of the goods and designates both the point of origin, Bremerhaven, and the final destination, Omaha. (Bill of Lading at p. 1, ¶ 28.1.) The German Shipper entered into the Bill of Lading with Blue Anchor for all transportation from Germany to Nebraska. Thus, the Bill of Lading was a through bill of lading, which governed the entire transportation of goods and applied to all connecting carriers. (Bill of Lading ¶ 28.1.) See Alianz, 2004 WL 1048228, at *4 (holding Carmack Amendment inapplicable where through bill of lading contemplated inland transportation of goods and designated Ohio as final destination and Bangkok as point of origin). Accordingly, the Carmack Amendment is inapplicable here since it “does not apply where a through bill of lading covers the entire course of an international journey,” Allianz, 2004 WL 1048228, at *5 (citing New York Marine & Gen. Ins. Co. v. S/S Ming Prosperity, 920 F.Supp. 416, 425 (S.D.N.Y.1996)).

Additionally, it is well-established “that the Carmack Amendment may be departed from by contract and supplanted by … COGSA to the detriment of the merchant.” Sompo, 2003 WL 22510361, at *3 (citing M/V Sealand Express, 841 F.Supp. at 125 (“It is … well-settled that the protections of COGSA and other provisions of the bill of lading may contractually be extended to third party agents of the carrier, such as inland carriers.”)). [FN3] As noted, the parties clearly invoked COGSA’s terms in the Bill of Lading, and contemplated that they would apply to the whole shipment. (Bill of Lading ¶ 28.1.)

FN3. Notably, Blue Anchor and K & N appeared as defendants in a recently decided case, Allianz CP Gen. Ins. Co. v. Blue Anchor Line, 02 Civ. 2238(NRB), 2004 WL 1048228, at *4 (S.D.N.Y. May 7, 2004), and successfully argued that they were entitled to COGSA’s liability limitations because a similar Blue Anchor bill of lading with an identical U.S. Clause implicated COGSA, not the Carmack Amendment.

Thus, this Court finds that COGSA’s one-year statute of limitations is applicable since the Bill of Lading makes COGSA applicable to the inland portion of the shipment.

III. This Action is Time-Barred

COGSA’s one-year statute of limitations applies to this case. The parties agree that the statute of limitations began to run in early March 2001. In its supplemental memorandum, Trans American contends that the statute of limitations began to toll on March 8, 2001, the day the goods should have been delivered to Omaha, Nebraska. (Trans American Supplemental Memorandum, dated January 27, 2004 (“Trans Am. Supp. Mem.”) at 5.) Plaintiffs and UES agree that the statute of limitations commenced on March 5, 2001, the day of the accident. (Pl. Supp. Mem. at 4; UES Supplemental Memorandum, dated January 27, 2004 (“UES Supp. Mem.”) at 5.) This three-day gap is a distinction without a difference. Plaintiffs filed their original complaint on January 31, 2003, more than a year and ten months after the statute of limitations period commenced. [FN4] Thus, COGSA’s one-year statute of limitations bars plaintiffs’ suit.

FN4. Since both the original complaint, filed January 30, 2003, and the amended complaint, filed September 30, 2003, were lodged more than a year after the statute of limitations began to run, this Court finds it unnecessary to address any issues that might arise under Fed.R.Civ.P. Rule 15(c).

Because the application of the COGSA statute of limitations mandates dismissal of this action, this Court finds moot UES’s motion for partial summary judgment invoking a $500 per package liability limitation.

CONCLUSION

For the reasons set forth above, defendants’ motions are granted, and this action is dismissed with prejudice. UES’s motion for partial summary judgment is denied as moot since the application of COGSA’s one-year statute of limitations bars plaintiffs’ claims. The Clerk of the Court is directed to mark this case closed.

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