NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, et al., Plaintiffs, v. ALL AMERICAN FREIGHT, INC., HARTLEY FREIGHT LINES, LLC, and HARTLEY TRANSPORTATION, LLC, Defendants.

 

Case No. 14-CIV-62262-BLOOM/VALLE

 

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA

 

2016 U.S. Dist. LEXIS 120828

 

 

September 6, 2016, Decided

September 6, 2016, Filed

 

 

PRIOR HISTORY: Nat’l Union Fire Ins. Co. v. All Am. Freight, Inc., 2016 U.S. Dist. LEXIS 19014 (S.D. Fla., Feb. 16, 2016)

 

COUNSEL:  [*1] For National Union Fire Insurance Company of Pittsburgh, PA, other Coex Coffee International, Coex Coffee International, Plaintiffs: John Marcus Siracusa, LEAD ATTORNEY, Joseph William Janssen, III, Janssen & Siracusa, P.A., West Palm Beach, FL; Nathan T. Williams, LEAD ATTORNEY, PRO HAC VICE, Kennedy Lillis Schmidt & English, New York, NY.

 

All American Freight, Inc., Defendant, Pro se, Hollywood, Fl.

 

JUDGES: ALICIA O. VALLE, UNITED STATES MAGISTRATE JUDGE.

 

OPINION BY: ALICIA O. VALLE

 

OPINION

 

REPORT AND RECOMMENDATION TO DISTRICT JUDGE

THIS MATTER is before the Court upon Defendant Hartley Freight Lines, LLC’s Motion for Entitlement and Award of Reasonable Attorney’s Fees and Costs (ECF No. 89) (the “Motion”). United States District Judge Beth Bloom referred the Motion to the undersigned for disposition. See (ECF No. 91). The undersigned has reviewed the Motion, Plaintiffs’ Response (ECF No. 116), and Defendants’ Reply (ECF No. 133). Accordingly, being fully advised in the matter, the undersigned recommends that the Motion be DENIED for the reasons set forth below.

 

1. PROCEDURAL BACKGROUND

This case has been discussed extensively in prior Court rulings, which are incorporated by reference. See, e.g., (ECF No. 42) (Order [*2]  on Defendants’ Motion to Dismiss); (ECF No. 82) (Omnibus Order on Motions for Summary Judgment); and (ECF No. 130) (Order on Motion for Sanctions and Motion for Relief from Order on Summary Judgment). Facts relevant to the instant Motion are set forth below.

The case stems from the 2011 theft of 320 bags of green coffee (the “Cargo”) from a warehouse in Miami, Florida. Plaintiff National Union Fire Insurance Company of Pittsburgh, PA (“National Union”), who insured the Cargo against transit-related loss and damage, commenced this action as subrogee for Coex Coffee International (“Coex”). (ECF No. 1).

On March 25, 2015, Plaintiffs filed an Amended Complaint (ECF No. 34), alleging separate claims for breach of carriage contract under the Carmack Amendment, 49 U.S.C. § 14706, against Defendants All American Freight, Inc. (“AAF”), Hartley Transportation, LLC (“Hartley Transportation”), and Hartley Freight Lines, LLC (“Hartley Freight”). Id. Plaintiffs alleged an alternative state law negligence cause of action against Hartley Transportation. Id. at ¶¶ 58-72. Jurisdiction was alleged under 28 U.S.C. § 1331 (federal question) and, alternatively, under 28 U.S.C. § 1332 (diversity of citizenship). Id. at ¶¶ 17, 19.

On May 12, 2015, pursuant to Florida statue [*3]  § 768.79, Hartley Freight served an Offer of Judgment on Plaintiffs in the amount of $500 for “settlement of all claims made by the Plaintiffs against the Defendant Hartley Freight . . . including claims for attorney’s fees, interest, and punitive damages.” (ECF No. 89-1 at 1) (the “Offer of Judgment”). Plaintiffs did not accept the Offer of Judgment. (ECF No. 89 at 2).

On December 16, 2015, Defendants Hartley Freight and Hartley Transportation filed Motions for Summary Judgment. See (ECF Nos. 55, 57). On February 17, 2016, the Court granted Hartley Freight’s Motion for Summary Judgment. See (ECF No. 82). In granting summary judgment, the Court stated that Hartley Freight and Hartley Transportation–although sharing a root name–were distinct legal entities, and Plaintiffs had not provided a legal basis to support their argument that the corporate forms should be disregarded and/or comingled. Id. at 21-22. The Court further concluded that “there is absolutely no evidence that Hartley Freight was a party to the transaction resulting in the theft.” Id. at 23.

The instant Motion followed. In the Motion, Defendant Hartley Freight seeks to recover reasonable attorney’s fees and costs pursuant to Florida statute § 768.79 on the [*4]  grounds that Plaintiffs rejected the Offer of Judgment and the Court ultimately entered summary judgment in its favor. See (ECF No. 89 at 2).

Plaintiffs respond that § 768.79 is inapplicable because the basis for jurisdiction in this case is a federal question under 28 U.S.C. § 1331 based on the Carmack Amendment. (ECF No. 116 at 3).1 In reply, Defendants argue that the Court has diversity or supplemental jurisdiction under 28 U.S.C. §§ 1332 or 1367 over the state law negligence and alter-ego claims such that § 768.79 applies. (ECF No. 133 at 4-5).

 

1   Plaintiffs also argue that the Offer of Judgment was facially deficient. See (ECF No. 116 at 3-5). Because the Motion can be decided on the applicability of § 768.79 to the instant facts, the Court need not address whether the Offer of Judgment was deficient.

 

1. LEGAL STANDARDS

Under the “American Rule,” litigants are generally not entitled to an award of attorneys’ fees for prevailing in litigation unless provided by statute or contract. See, e.g., In re Martinez, 416 F.3d 1286, 1288 (11th Cir. 2005); Buckhannon Bd. & Care Home, Inc. v. W Virginia Dep’t of Health & Human Res., 532 U.S. 598, 602, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001). Relevant to the issue of fees is the interplay between the federal Carmack Amendment (49 U.S.C. § 14706) and Florida’s Offer of Judgment statute (§ 768.79).

The Carmack Amendment generally governs interstate cargo claims, controls and limits the liability of common carriers for in-transit cargo, and preempts common or state law remedies [*5]  that increase a common carrier’s liability beyond the actual loss or injury to the property. See, e.g., A.I.G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir. 2003) (citing 49 U.S.C. § 14706(a)(1)) (“The Carmack Amendment to the Interstate Commerce Act makes common carriers liable for actual loss of or damage to shipments in interstate commerce.”); Smith v. United Parcel Serv., 296 F.3d 1244, 1246 (11th Cir. 2002) (“The Carmack Amendment creates a uniform rule for carrier liability when goods are shipped in interstate commerce.”); see also Casamassa v. Walton P. Davis Co. Inc., No. 2:07-CV-317-FTM-34DNF, 2008 U.S. Dist. LEXIS 24941, 2008 WL 879412, at *3 (M.D. Fla. Mar. 28, 2008) (“The Carmack Amendment provides that a shipper may recover the ‘actual loss or injury to the property’ caused by a carrier.”) (quoting 49 U.S.C. § 14706(a)(1)). The Amendment “provides the exclusive cause of action for interstate shipping contract claims.” White v. Mayflower Transit, LLC, 543 F.3d 581, 584 (9th Cir. 2008). As a result, state law claims arising from failures in the transportation and delivery of commercial goods are preempted. Smith, 296 F.3d at 1246 (internal citations omitted); see also Hansen v Wheaton Van Lines, Inc., 486 F. Supp. 2d 1339, 1343-44 (S.D. Fla. 2006) (“The law is well established that the remedies available under the Carmack Amendment preempt all state, common and statutory law regarding the liability of an interstate common carrier for claims arising out of shipments within the purview of said statute.”).

Under Florida statute § 768.79(1), in “a civil action for damages,” a defendant who files an offer of judgment that is not accepted by a plaintiff within 30 days “shall be entitled to recover reasonable costs and [*6]  attorney’s fees incurred by her or him . . . if the judgment is one of no liability.” Courts generally agree that § 768.79 must be strictly construed because it is “in derogation of the common law rule that parties are responsible for their own attorney’s fees.” Campbell v. Goldman, 959 So. 2d 223, 226 (Fla. 2007); Winter Park Imports, Inc. v. JM Family Enters., 66 So. 3d 336, 340 (Fla. Dist. Ct. App. 2011); Palm Beach Polo Holdings, Inc. v. Equestrian Club Estates Prop. Owners Ass’n, Inc., 22 So. 3d 140, 144 (Fla. Dist. Ct. App. 2009).

 

III. DISCUSSION

Although Plaintiffs alleged diversity of citizenship as an alternative basis for jurisdiction in the Amended Complaint, the primary basis for jurisdiction in this case is the Carmack Amendment and federal question jurisdiction. Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides that “district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treatises of the United States.” (ECF No. 34 at ¶¶ 17, 19). The parties agree that the relevant federal statute, the Carmack Amendment, does not allow for the recovery of attorney’s fees for shipments involving commercial goods. See (ECF Nos. 116 at 2; 133 at 4); Fine Foliage of Florida, Inc. v. Bowman Transp., Inc., 698 F. Supp. 1566, 1576 (M.D. Fla. 1988), aff’d, 901 F.2d 1034 (11th Cir. 1990) (noting that the Carmack Amendment has no provision for the recovery of attorney’s fees in litigation regarding the shipment of commercial goods). The parties, however, dispute whether the claims against Defendant Hartley Freight were brought solely under the Carmack Amendment (which would preclude recovery of attorney’s [*7]  fees), or as an alternative state law negligence claim (which may provide recovery of attorney’s fees under the Offer of Judgment statute).

Specifically, Defendant Hartley Freight argues that where a court has both federal question and supplemental jurisdiction, § 768.79 applies to the state law claims. (ECF No. 133 at 5); see, e.g., Design Pallets v. Gray Robinson, P.A., 583 F. Supp. 2d 1282, 1287 (M.D. Fla. 2008). According to Defendant Hartley Freight, the Amended Complaint included allegations of “negligence and alter-ego liability” that were “incorporated” into the claims against it. (ECF No. 133 at 5-6). Defendant Hartley Freight therefore concludes that the claims against it included state law claims that were not barred by the Carmack Amendment’s prohibition on fees for shipments involving commercial goods. Id. at 6. An analysis of the Amended Complaint, however, does not support Defendant’s argument.

First, the claims against Defendant Hartley Freight set forth in paragraphs 49 to 52 of the Amended Complaint were expressly premised on the Carmack Amendment. (ECF No. 34 at 6-7). Although it is true that paragraph 49 incorporated by reference prior allegations in the Amended Complaint, such form pleading did not create a separate state negligence claim against Defendant Hartley Freight that would allow recovery [*8]  of attorney’s fees under § 768.79. Moreover, even paragraph 16 of the Amended Complaint, which identifies the Defendants Hartley Freight and Harley Transportation as “[acting] in concert and in a similar capacity . . . as an interstate motor carrier of goods” is expressly “subject to the Carmack Amendment.” (ECF No. 34 at ¶ 16) (emphasis added). None of these paragraphs reference state law claims.

Second, paragraphs 58 to 72 of the Amendment Complaint, which allege the alternative state law negligence claim, do not mention Defendant Hartley Freight. (ECF No. 34 at 8-10). Although paragraph 58 once again incorporates prior paragraphs, the only corporate entity named in the alternative negligence claim is Defendant Hartley Transportation. See, e.g., ¶ 59 (“Hartley Transport owed [Plaintiff] a duty . . . .”); ¶ 60 (“Hartley Transport solicited, selected . . . .”); ¶ 62 (“As between [Plaintiff] and Hartley Transport . . . .”); ¶ 63 (“[Plaintiff] relied on Hartley Transport to inquire . . . .”); ¶¶ 64-65, 68 (“Hartley Transport hired AAF . . . .”); ¶ 67 (“the facts specified in Paragraphs 64 and 65 required Hartley Transport to expressly instruct AAF . . . .”); ¶ 69 (“Hartley Transport breached its duties . . . [*9]  .”); ¶¶ 70-71 (“By reason of Hartley Transport’s negligent acts . . . .”); ¶ 72 (“Hartley Transport caused [Plaintiffs] to sustain damages . . . .”). Thus, Defendant Hartley Freight’s argument that it too was the subject of the alternative state negligence claim is contrary to the plain language of the Amended Complaint.

Accordingly, the undersigned finds that the claims against Defendant Hartley Freight were based on the federal Carmack Amendment and it prevailed solely under the federal statute.2 Consequently, § 768.79 is inapplicable to the facts of this case. Vanderwall v. United Airlines, Inc., No. 14-60256-CIV, 2014 U.S. Dist. LEXIS 137709, 2014 WL 4755219, at *1 (S.D. Fla. Sept. 23, 2014) (“[A] federal judge whose

 

2   Indeed, Hartley Freight’s successful motion on summary judgment challenged the Carmack Amendment, without discussion of an alternative state law negligence claim. See (ECF No. 57). Likewise, the Court’s ruling on summary judgment was based on there being “absolutely no evidence that Hartley Freight was a party to the transaction resulting in the theft,” without reference to any state law claim. (ECF No. 82 at 23).

jurisdiction is founded solely on a federal question would not apply § 768.79 to the resolution of federal claims inasmuch as § 768.79 is preempted by federal law.”); Design Pallets, 583 F. Supp. 2d at 1285 (noting that where a federal court [*10]  has subject matter jurisdiction over a federal question only, § 768.79 does not apply); Cf. Morris v. Arizona Beverage Co., No. 03-60907-CIV, 2005 U.S. Dist. LEXIS 45292, 2005 WL 5544961, at *2 (S.D. Fla. Feb. 9, 2005) (concluding that § 768.79 applies where a court has supplemental jurisdiction over state law claims).

 

1. RECOMMENDATION

For the foregoing reasons, the undersigned respectfully recommends that the Motion (ECF No. 89) be DENIED. The undersigned also recommends that judgment be entered in favor of Defendant Hartley Freight consistent with the District Court’s prior ruling on summary judgment. See (ECF Nos. 82 at 25; 89 at 2 n.1).

Within fourteen days after being served with a copy of this Report and Recommendation, any party may serve and file written objections to any of the above findings and recommendations as provided by the Local Rules for this district. 28 U.S.C. § 636(b)(1); S.D. Fla. Mag. R. 4(b). The parties are hereby notified that a failure to timely object waives the right to challenge on appeal the district court’s order based on unobjected-to factual and legal conclusions contained in this Report and Recommendation. 11th Cir. R. 3-1 (2016); see Thomas v. Arn, 474 U.S. 140, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985).

DONE AND ORDERED in Chambers in Fort Lauderdale, Florida, on September 6, 2016.

/s/ Alicia O. Valle

ALICIA O. VALLE

UNITED STATES MAGISTRATE JUDGE

JONATHAN BOTEY, Plaintiff v. ROBERT GREEN, CONWELL CORPORATION, and FFE TRANSPORTATION SERVICES INC., Defendants

 

Civil No. 3:12-CV-1520

 

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

 

2016 U.S. Dist. LEXIS 121591

 

 

September 7, 2016, Decided

September 7, 2016, Filed

 

 

PRIOR HISTORY: Botey v. Green, 2016 U.S. Dist. LEXIS 45278 (M.D. Pa., Apr. 4, 2016)

 

COUNSEL:  [*1] For Jonathan A. Botey, Plaintiff, Counterclaim Defendant: Daniel W. Munley, LEAD ATTORNEY, Munley, Munley & Cartwright, P.C., Scranton, PA; Patrick J. Sweeney, Sweeney & Sheehan, P.C., Philadelphia, PA.

 

For Robert D. Green, Conwell Corporation, FFE Transportation Services, Inc., Defendants, Counterclaim Plaintiffs: David Ronald Chludzinski, Gary N. Stewart, LEAD ATTORNEYS, Rawle & Henderson LLP, Pittsburgh, PA; Jeffrey Ryan, LEAD ATTORNEY, Chamblee, Ryan, Kershaw & Anderson, P.C., Dallas, TX; William H. Chamblee, LEAD ATTORNEY, Chamblee & Ryan, P.C., Dallas, TX.

 

For Mediator, Mediator: Joseph G. Price, LEAD ATTORNEY, Dougherty Leventhal & Price, LLP, Moosic, PA.

 

JUDGES: Martin C. Carlson, United States Magistrate Judge. Judge Mariani.

 

OPINION BY: Martin C. Carlson

 

OPINION

 

REPORT AND RECOMMENDATION

 

1. Introduction

In this automobile accident case the defendants have moved for partial summary judgment in their favor on all of the plaintiff’s claims for punitive damages. The defendants make this request against a factual backdrop marked by starkly competing narratives, each of which draws some support from the evidentiary record. Moreover, the defendants seeks summary judgment in this case while acknowledging that a number [*2]  of significant facts regarding the actions of the two individual parties-the plaintiff, Jonathan Botey, and the defendant, Robert Green-are both unknown and unknowable, since both of these parties are no longer able to recall the events surrounding this accident due to cognitive impairments.

Recognizing that “[t]he court shall grant summary judgment [only] if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law,” Fed. R. Civ. P. 56(a), we find that these factual disputes and uncertainties do not permit the plaintiff’s punitive damage claims to be resolved as a matter of law, and recommend that this motion for partial summary judgment be denied.

 

1. Statement of Facts and of the Case

At approximately 6:30 p.m. on the evening of May 10, 2011, Robert Green, a trucker operating a fully-loaded tractor trailer owned by Conwell Corporation and registered to FFE Transportation Services, Inc., pulled out of the Fuel-On Truck Stop on State Route 924 in Hazleton, Pennsylvania. As Green’s tractor trailer emerged from the truck stop, Green made a left-hand turn onto the southbound lane of Route 924. In making this turn, Green’s tractor trailer traversed [*3]  and entirely blocked the northbound lane of Route 924. As Green pulled out into traffic Jonathan Botey was driving his Oldsmobile Bravada northbound on Route 924 approaching the Fuel-On truck stop. Botey’s SUV struck Green’s tractor trailer traveling at approximately 40 miles. The impact of the collision wedged Botey’s vehicle under the tractor trailer, totaling the SUV and causing multiple severe injuries to Botey.

While this much is undisputed, the circumstances surrounding this accident are the subject of two competing narratives by the parties. These two narrative threads cannot be reconciled, and each competing narrative draws some support from the evidence. For their part, the defendants insist that Green safely emerged from the truck stop, and made the left hand turn onto Route 924. The defendants, therefore, attribute the accident to Botey’s inattention, alleging that Botey drove headlong into the tractor trailer without slowing because he was distracted and inattentive. Some evidence supports this view. The investigating traffic officer found that Botey was at fault in this incident, and one eyewitness, Derek Strauss, described a collision in which Botey’s SUV struck the tractor [*4]  trailer without apparently attempting to brake prior to impact.1 In addition, diagnostic records from the automated systems on Botey’s SUV indicated that Botey removed his foot from the accelerator seconds prior to impact, but do not clearly disclose that Botey applied the brakes prior to this collision.

 

1   Strauss’ deposition testimony aptly illustrates the often equivocal nature of the proof in this case. While Strauss testified to some observations at the time of the accident which may favor the defense, he acknowledged limitations on his opportunity to view these events. Further, Strauss testified to the dangers which truckers present to on-coming traffic when they exit this truck stop turning left onto the southbound lanes of Route 924 without allowing for on-coming northbound traffic, testimony which supported the plaintiff’s claims.

Yet, much of this evidence also has an equivocal quality, and could also support a finding of negligence by Green. For example, the absence of any evidence indicating that Botey attempted to brake immediately prior to the collision may be proof of inattention on Botey’s part. But this evidence also supports a competing conclusion that Green emerged from [*5]  the truck stop suddenly without checking for on-coming northbound traffic, and then stopped blocking the entire northbound lane of Route 924. In fact, this is precisely the conclusion reached by a accident reconstructionist retained by the plaintiff, who has concluded based upon the evidence that Green was at fault for this accident because he traversed the northbound lane of Route 924 without first ensuring that the roadway was clear and then came to a stop in the face of on-coming traffic, causing this accident.

Further clouding this factual scenario is the simple truth that neither Botey nor Green can shed any meaningful light on the circumstances surrounding this collision. For his part, Botey is unable to recall these events because he suffered a severe traumatic brain injury in the accident, and has no independent recollection of the collision. Green, in turn, has been diagnosed as suffering from significant, and progressive dementia, and cannot testify in a substantive way to the events which transpired on May 10, 2011.

The uncertainty and confusion which cloak the circumstances surrounding this accident also reveal a broader factual dispute between the parties. This dispute relates [*6]  to the issue of whether Conway and FFE were negligent in the hiring, training, and entrusting this tractor trailer to Green. Here, once again, we are presented with competing factual narratives, each of which draws some support from a contested evidentiary record. For their part, Conway and FFE cite Green’s driving experience, lack of any serious prior adverse driving history, and successful completion of their own in-house driver training program as evidence which they submit entirely rebuts any claim of negligent hiring, training or entrustment. Indeed, the defendants emphasize the testimony of Green’s driver training instructor, Tommy Dodd, that he would have never certified that Green satisfactorily completed this training if he felt Green was not ready to drive as proof which rebuts any claim of negligent training or hiring.

The plaintiff, however, points to other evidence, evidence which casts doubt upon Green’s fitness to drive, and indicates that these questions concerning Green’s fitness were known by defendants in May of 2011. Thus, drawing upon the undisputed fact that Green currently suffers from dementia, the plaintiff has tendered medical opinion evidence which indicates [*7]  that this progressive dementia would have undermined Green’s mental acuity and impaired his fitness to drive in May of 2011. The plaintiff supports this claim by citing to GPS records maintained by the defendants, records which disclosed confused driving on Green’s part, with Green apparently becoming lost on trips around the time of this accident and traveling many miles off course during these trips.

The plaintiff also supports this claim that Green was a dangerously deficient driver, whose shortcomings were known to the defendants, by citing FFE’s own training records. Specifically, Botey relies upon weekly student evaluation forms for the training that Green underwent between December 31, 2010, and February 2011. (Doc. 108-11.) These training records, which reflect contemporaneous assessments of Green’s skills in the months immediately preceding this accident, present a disturbing picture. For example, on December 30, 2010, the driving instructor noted 40 deficiencies in Green’s performance; on January 7, 2011, 42 deficiencies were noted; on January 13, 2011, 32 deficiencies were observed; on January 21, 2011, 42 deficiencies were noted; and on January 28, 2011, 7 deficiencies-including [*8]  a citation for running a stop sign-were documented in these training records. (Doc. 108-11, 108-13.) The training records also explicitly document at least three failed evaluations during a one month period.

Beyond the volume of these operator deficiencies, which were documented in FFE’s training records, the nature of some of the deficiencies is troubling. For example, the training instructor documented an episode in which Green ran a stop sign and received a citation. The records also repeatedly documented deficiencies in terms of situational awareness by Green when making left turns onto highways. This was precisely the maneuver that was executed by Green on the day of the accident. Indeed, some 57 deficiencies appear to be noted in this regard on FFE’s training records, documenting numerous instances in which Green did not check for on-coming traffic when making left turns onto roadways.

The narratives that accompany these training records, and document Green’s driving deficiencies, are also telling. According to the training records, the instructor “had to constantly stay on [Green] to check mirrors and cancel turn signal.” (Doc. 108-11.) These records also cited Green for “not [*9]  doing traffic checks;” stated that “at times [it was] extremely difficult to instruct [Green to] follow[] simple directions;” and warned that Green “has way too many excuses” while the instructor noted that he was “trying desperately to get [Green] to understand good driving habits.” (Doc. 108-11.)

It is against this contested and hotly disputed factual backdrop that the defendants have now moved for summary judgment in their favor on Botey’s claims for punitive damages, and related corporate claims of negligent training, hiring and entrustment, allegations which under state law would support punitive damages claims against the corporate defendants. (Doc. 103.) This motion has been fully briefed by the parties, and is, therefore, ripe for resolution. For the reasons set forth below, it is recommended that the defendants’ motion for partial summary judgment be denied, since disputed issues of fact preclude judgment as a matter of law on the question of punitive damages, negligent training and negligent entrustment.

 

1. Discussion

 

1. Summary Judgment–Standard of Review

Rule 56(a) of the Federal Rules of Civil Procedure provides as follows:

 

A party may move for summary judgment, identifying each claim or defense — or the part of each claim [*10]  or defense — on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion.

 

 

Fed. R. Civ. P. 56(a). For purposes of Rule 56, a fact is material if proof of its existence of nonexistence might affect the outcome of the suit under the applicable substantive law. Haybarger v. Laurence Cnty. Adult Prob. & Parole, 667 F.3d 408, 412 (3d Cir. 2012) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). For an issue to be genuine, “all that is required is that sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing versions of the truth at trial.” Id. (quoting Anderson, 477 U.S. at 248-49).

Accordingly, in support of a motion for summary judgment, the moving party must show that if the evidence of record were reduced to admissible evidence in court, it would be insufficient to allow the non-moving party to carry its burden of proof. See Celotex v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Provided the moving party has satisfied this burden, “its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Scott v. Harris, 550 U.S. 372, 380, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007). Instead, if the moving party has carried its burden, the non-moving party [*11]  must then respond by identifying specific facts, supported by evidence, which show a genuine issue for trial, and may not rely upon the allegations or denials of its pleadings. See Marten v. Godwin, 499 F.3d 290, 295 (3d Cir. 2007); see also Fed. R. Civ. P. 56(c).

In adjudicating the motion, the court must view the evidence presented in the light most favorable to the opposing party, Anderson, 477 U.S. at 255, and draw all reasonable inferences in the light most favorable to the non-moving party, Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992). Where the non-moving party’s evidence contradicts the movant’s, then the non-movant’s must be taken as true. Id. Additionally, the court is not to decide whether the evidence unquestionably favors one side or the other, or to make credibility determinations, but instead must decide whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. Id. at 252; see also Big Apple BMW, 974 F.2d at 1363. In reaching this determination, the Third Circuit has instructed that:

 

To raise a genuine issue of material fact . . . the opponent need not match, item for item, each piece of evidence proffered by the movant. In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant’s version of events against [*12]  the opponent, even if the quantity of the movant’s evidence far outweighs that of its opponent. It thus remains the province of the factfinder to ascertain the believability and weight of the evidence.

 

 

Id. In contrast, “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 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) (internal quotation marks omitted); NAACP v. North Hudson Reg’l Fire & Rescue, 665 F.3d 464, 476 (3d Cir. 2011).

 

1. The Defendants’ Partial Summary Judgment Motion Should be Denied

As a federal court exercising diversity jurisdiction in this case, we are obliged to apply the substantive law of Pennsylvania to this dispute. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d. Cir. 2000). Under Pennsylvania law, in order to establish a cause of action for negligence, a plaintiff must prove the following elements: (1) a duty or obligation to the plaintiff recognized by law; (2) a breach of that duty to the plaintiff; (3) a causal connection between the conduct and plaintiff’s resulting injury; and (4) actual damages suffered by the plaintiff. Pittsburgh Nat’l Bank v. Perr, 431 Pa. Super. 580, 637 A.2d 334, 336 (Pa. Super. Ct. 1994).

The nature of tort claims, however, is often fact-specific, and questions of tort liability frequently turn on essentially factual assessments, making summary judgment inappropriate in many cases. So it is in this case, where we [*13]  find that disputed issues of fact preclude summary judgment on the issue of whether Botey may maintain a claim for punitive damages.

In reaching this conclusion, we note that Pennsylvania law sets an exceedingly high standard for the award of punitive damages. “Pennsylvania has adopted Section 908 of the Restatement (Second) of Torts, which provides that punitive damages may be ‘awarded to punish a defendant for outrageous conduct, which is defined as an act which, in addition to creating “actual damages, also imports insult or outrage, and is committed with a view to oppress or is done in contempt of plaintiffs’ rights.” … Both intent and reckless indifference will constitute a sufficient mental state.’ Klinger v. State Farm Mut. Auto. Ins. Co., 115 F.3d 230, 235 (3d Cir.1997)(quoting Delahanty v. First Pa. Bank, N.A., 318 Pa.Super. 90, 464 A.2d 1243, 1263 (1983))” W.V. Realty, Inc. v. N. Ins. Co., 334 F.3d 306, 318 (3d Cir. 2003).

As the Pennsylvania Supreme Court has observed:

 

The standard governing the award of punitive damages in Pennsylvania is settled. “Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.” Feld v. Merriam, 506 Pa. 383, 485 A.2d 742, 747 (1984) (quoting Restatement (Second) of Torts § 908(2) (1979)); see also Chambers v. Montgomery, 411 Pa. 339, 192 A.2d 355, 358 (1963). As the name suggests, punitive damages are penal in nature and are proper only in cases where the defendant’s actions are so outrageous as to demonstrate willful, wanton or reckless conduct. See SHV Coal, Inc. v. Continental Grain Co., 526 Pa. 489, 587 A.2d 702, 704 (1991); Feld, 485 A.2d at 747-48; Chambers, 192 A.2d at 358. See [*14]  also Restatement (Second) of Torts § 908, comment b. The purpose of punitive damages is to punish a tortfeasor for outrageous conduct and to deter him or others like him from similar conduct. Kirkbride v. Lisbon Contractors, Inc., 521 Pa. 97, 555 A.2d 800, 803 (1989); Restatement (Second) of Torts § 908 (1) ( “Punitive damages are damages, other than compensatory or nominal damages, awarded against a person to punish him for his outrageous conduct and to deter him and others like him from similar conduct in the future.”). Additionally, this Court has stressed that, when assessing the propriety of the imposition of punitive damages, “[t]he state of mind of the actor is vital. The act, or the failure to act, must be intentional, reckless or malicious.” See Feld, 485 A.2d at 748; see also Martin v. Johns-Manville Corp., 508 Pa. 154, 494 A.2d 1088, 1097 n. 12 (1985) (plurality opinion).

 

 

Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 121 22, 870 A.2d 766, 770-71 (2005).

In Hutchinson the Pennsylvania Supreme Court also:

 

[S]et forth the standard the courts are to apply when called upon to determine whether the evidence supports a punitive damages award on such a basis. Noting that Comment b to Section 908(2) of the Restatement refers to Section 500 as defining the requisite state of mind for punitive damages based on reckless indifference, this Court turned to Section 500, which states:

• 500 Reckless Disregard of Safety Defined

The actor’s conduct is in reckless disregard of the safety of another if he does an act or intentionally fails to do an act which it is his duty to the other to do, knowing [*15]  or having reason to know of facts which would lead a reasonable man to realize, not only that his conduct creates an unreasonable risk of physical harm to another, but also that such risk is substantially greater than that which is necessary to make his conduct negligent.

Restatement (Second) of Torts § 500.

Id. At 771.

 

 

Noting that Section 500 set forth two very different types of state of mind as to reckless indifference, the Pennsylvania Supreme Court adopted the narrower reading of this state of mind requirement when addressing punitive damage claims, concluding that “in Pennsylvania, a punitive damages claim must be supported by evidence sufficient to establish that (1) a defendant had a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) he acted, or failed to act, as the case may be, in conscious disregard of that risk.” Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 124, 870 A.2d 766, 772 (2005).

There is a corollary to this principle which applies in this factual context where a trucking firm is sued for claims arising out of an accident caused by the alleged negligence of a driver. In simple negligence lawsuits arising out of such accidents, when an employer acknowledges a master-servant relationship with the alleged tortfeasor that gives rise to respondeat [*16]  superior liability, any separate cause of action for negligent entrustment is often considered prejudicial, duplicative and unnecessary. See, e.g., Allen v. Fletcher, No. 07-722, 2009 U.S. Dist. LEXIS 130250, 2009 WL 1542767 (M.D.Pa. June 2, 2009); Fortunato v. May, No. 04-1140, 2009 U.S. Dist. LEXIS 20587, 2009 WL 703393, *5 (W.D. Pa. Mar. 16, 2009); Vargo v. Coslet, No. 02-676, 2002 U.S. Dist. LEXIS 29005, slip op. at 3 (M.D. Pa. Dec. 20, 2002)(Kosik, J.); Holben v. Midwest Emery Freight System, Inc., 525 F. Supp. 1224, 1225 (W.D. Pa. 1981)(dicta). The only exception to this rule recognized by the courts involves actions, like the instant case, which seek both compensatory and punitive damages. When the plaintiff is alleging that the employer’s conduct was sufficiently outrageous to justify the award of punitive damages, courts agree that it is appropriate to allow the plaintiff to pursue both a negligent entrustment cause of action and respondeat superior liability. Burke v. Transam Trucking Inc., 605 F.Supp.2d. 647, 657-8 (M.D. Pa. 2009); Holben v. Midwest Emery Freight System, Inc., 525 F. Supp. 1224 1225 (W.D. Pa. 1981). Indeed, the state of the law on this precise issue has been cogently described by this Court in Allen v. Fletcher, No. 07-722, 2009 U.S. Dist. LEXIS 130250, 2009 WL 1542767 (M.D.Pa. June 2, 2009), where the Court explained that: “As a general rule, courts have dismissed claims for negligent supervision and negligent hiring when a supervisor defendant concedes an agency relationship with the codefendant … The courts have recognized an exception to this rule when a plaintiff has made punitive damages claims against the supervisor defendant.” Allen, 2009 U.S. Dist. LEXIS 130250, 2009 WL 1542767, *4 -5(citations omitted).

These are very high and exacting burdens of proof that must be met to sustain punitive damage claims [*17]  against trucking companies based upon negligent training, hiring or entrustment allegations, and we do not opine regarding whether Botey can ultimately meet these exacting standards at trial. Instead, we are mindful that when considering a motion for summary judgment:

 

To raise a genuine issue of material fact . . . the opponent need not match, item for item, each piece of evidence proffered by the movant. In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant’s version of events against the opponent, even if the quantity of the movant’s evidence far outweighs that of its opponent. It thus remains the province of the factfinder to ascertain the believability and weight of the evidence.

 

 

also Big Apple BMW, 974 F.2d at 1363. Applying this standard, we conclude that in this case the evidence, viewed in a light most favorable to the plaintiff, may permit a finding that punitive damages are appropriate. That finding, in turn, would allow a jury to consider claims against the corporate defendants based upon negligent training, hiring or entrustment theories of liability.

In particular, we note that FFE’s own [*18]  training records, which document Green’s training with the defendants in the months immediately preceding the accident, may permit an inference that the defendants had “(1) . . . a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) . . . acted, or failed to act, as the case may be, in conscious disregard of that risk.” Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 124, 870 A.2d 766, 772 (2005).

These training records can be construed as showing persistent and profound problems with Green’s performance over an extended period of time, problems which were known to the defendants prior to May 2011. Thus, on December 30, 2010, the driving instructor noted 40 deficiencies in Green’s performance; on January 7, 2011, 42 deficiencies were noted; on January 13, 2011, 32 deficiencies were observed; on January 21, 2011, 42 deficiencies were noted; and on January 28, 2011, 7 deficiencies-including a citation for running a stop sign-were documented in these training records. (Doc. 108-11, 108-13.) The nature of these deficiencies is also troubling. These the training records: (1) documented an episode in which Green ran a stop sign and received a citation; and (2) also repeatedly identified deficiencies by Green in terms of situational [*19]  awareness when making left turns, precisely the maneuver that was executed by Green on the day of the accident. In fact, some 57 deficiencies relating to left hand turns were documented by Green’s instructors between December 31, 2010, and the end of January, 2011. The narratives that accompany these training records also would permit an inference that FFE had a subjective awareness of the dangers posed by Green’s erratic test driving performance. According to the training records, the driving instructor “had to constantly stay on [Green] to check mirrors and cancel turn signal;” cited Green for “not doing traffic checks;” stated that “at times [it was] extremely difficult to instruct [Green to] follow[] simple directions;” and warned that Green “has way too many excuses” while the instructor observed that he was “trying desperately to get [Green] to understand good driving habits.” (Doc. 108-11.)

Taken together, and viewed in a light most favorable to the plaintiff, this evidence may permit an inference that the defendants were aware of a significant risk to safety posed by Green’s driving, and failed to act in the face of this known risk. Recognizing that the evidence may permit such [*20]  an inference, which in turn would support a claim for punitive damages, our course of action in this case is clear. As this Court has previously observed when addressing a motion for summary judgment which sought to dismiss a punitive damages claim: “there is a possibility that plaintiff may be able to establish these claims at trial. If he does, punitive damages may be available, so it is pre-mature for the Court to release defendants from liability on this issue.” Roach v. Marrow, No. 3:08·CV·1136, 2012 U.S. Dist. LEXIS 43075, 2012 WL 1059741, at *9 (M.D. Pa. Mar. 28, 2012)(Mariani, J.)

 

III. Recommendation

Accordingly, for the foregoing reasons, IT IS RECOMMENDED that the defendant’s motion for partial summary judgement, (Doc. 103.), be DENIED.

The parties are further placed on notice that pursuant to Local Rule 72.3:

 

Any party may object to a magistrate judge’s proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the [*21]  proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.

 

 

Submitted this 7th day of September 2016.

/s/ Martin C. Carlson

Martin C. Carlson

United States Magistrate Judge