United States District Court,

E.D. Michigan, Southern Division.

SERVICE FIRST LOGISTICS, INC., Plaintiff,

v.

1. RODRIGUEZ TRUCKING, INC., Defendant.

Case No. 16-14337

|

Signed 04/14/2017

ORDER GRANTING DEFENDANT’S AMENDED MOTION TO SET ASIDE DEFAULT AND DEFAULT JUDGMENT, MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION [Dkt. No. 12], VACATING THE ENTRY OF DEFAULT [Dkt. No. 6] AND THE DEFAULT JUDGMENT [Dkt. No. 10] and DISMISSING PLAINTIFF’S CAUSE OF ACTION WITHOUT PREJUDICE

Denise Page Hood, Chief Judge

1. INTRODUCTION

*1 On January 18, 2017, the Court entered Default Judgment against Defendant. On February 2, 2017, Defendant filed its Amended Motion to Set Aside Default and Default Judgment, Motion to Dismiss for Lack of Subject Matter Jurisdiction and Lack of Personal Jurisdiction (“Amended Motion”). Dkt. No. 12. The motion has been fully briefed. The Court, having concluded that the decision process would not be significantly aided by oral argument, ordered that the motions be resolved on the motion and briefs submitted by the parties. E.D. Mich. L.R. 7.1(f)(2). Dkt. No. 13. For the reasons that follow, the Court sets aside the entry of default and default judgment against Defendant and dismisses Plaintiff’s cause of action, without prejudice, for lack of subject matter jurisdiction.

 

1. BACKGROUND

This case stems from a shipment of produce (lettuce products) that Plaintiff contracted with Defendant to have Defendant deliver. Plaintiff alleges that Defendant failed to properly refrigerate the load at 35 degrees Farenheit, which caused the products to spoil and the consignee to reject the entire load. The spoiled products caused Plaintiff to incur a loss of $21,863.32, which amount Defendant refused to reimburse Plaintiff.

 

Plaintiff filed this action on December 13, 2016, asserting that this Court had subject matter jurisdiction pursuant to 49 U.S.C. § 14706 (the “Carmack Amendment”). A certificate of service and summons was executed on December 19, 2016, and Defendant’s answer was due on January 9, 2017. When Defendant did not file an answer, Plaintiff moved for and was granted a Clerk’s Entry of Default on January 10, 2017. Dkt. Nos. 5 and 6. Plaintiff served Defendant with the Clerk’s Entry of Default on January 12, 2017, Dkt. No. 7, and Plaintiff moved for entry of judgment by default with affidavit of sum certain on January 17, 2017, Dkt. No. 8, the same day that counsel for Defendant filed an appearance in this case. Dkt. No. 9. On January 18, 2017, the Clerk of the Court entered Judgment by Default. Dkt. No. 10. On February 2, 2017, Defendant filed a Motion to Set Aside Default and Default Judgment, Motion to Dismiss for Lack of Subject Matter Jurisdiction and Lack of Personal Jurisdiction, Dkt. No. 11, and the Amended Motion. The Court now addresses the Amended Motion.

 

III. ANALYSIS

1. Legal Standard

Pursuant to Federal Rules of Civil Procedure 55(c) and 60(b), an entry of default and a default judgment may be set aside only upon the showing of: (1) mistake, inadvertence, or excusable neglect; (2) newly discovered evidence; (3) fraud, misrepresentation or other misconduct of the adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; or (6) any other reason justifying relief from judgment. See also Burrell v. Henderson, 434 F.3d 826 (6th Cir. 2006); United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839 (6th Cir. 1983). As set forth in United Coin, the Court also must determine that good cause exists for setting aside default judgment by assessing whether: (a) the plaintiff will be prejudiced; (c) the defendant has a meritorious defense; and (c) culpable conduct of the defendant led to the default. Id. at 845; Shepard Claims Serv., Inc. v. William Darrah & Assocs., 796 F.2d 190, 194 (6th Cir. 1986). The foregoing standards are applied more stringently under Rule 60(b) than Rule 55(c). Shepard, 796 F.2d at 194.

 

*2 As the entry of default is a harsh sanction, “[a]ny doubt should be resolved in favor of the petition to set aside the judgment so that cases may be decided on their merits. United Coin, 705 F.2d at 846; Shepard, 796 F.2d 193 (there is a strong preference for deciding cases on the merit rather than by default).

 

1. Analysis

Defendant argues that there is good cause to set aside the entry of default judgment. Defendant maintains that the default judgment is void because the Carmack Amendment is not applicable in this case. If the Carmack Amendment does not apply, the Court would lack subject matter jurisdiction and would have to dismiss Plaintiff’s cause of action. As the Sixth Circuit stated in Antoine v. Atlas Turner, Inc., 66 F.3d 105, 108 (6th Cir. 1995) (emphasis added):

If the underlying judgment is void, it is a per se abuse of discretion for a district court to deny a movant’s motion to vacate the judgment under Rule 60(b)(4). United States v. Indoor Cultivation Equipment, 55 F.3d 1311, 1317 (7th Cir. 1995). A judgment is void under 60(b)(4) “if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law.” In re Edwards, 962 F.2d 641, 544 (7th Cir. 1992) (citation omitted).

Defendant contends that this meritorious defense precludes any prejudice to Plaintiff, particularly as there was no culpable conduct by Defendant. The Court agrees.

 

It is undisputed that the sole basis for subject matter jurisdiction in this Court is Plaintiff’s claim for damage to perishable food goods, a claim allegedly rooted in the Carmack Amendment. The Carmack Amendment states:

(a) GENERAL LIABILITY.

(1) MOTOR CARRIERS AND FREIGHT FORWARDERS. A carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 or chapter 105 are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading and, except in the case of a freight forwarder, applies to property reconsigned or diverted under a tariff under section 13702.

The Carmack Amendment applies only to transportation subject to motor carrier or freight forwarder jurisdiction of the Secretary of Transportation or the Surface Transportation Board. 49 U.S.C. § 13506 addresses “Miscellaneous motor carrier transportation exemptions.” Section 13506 states, in relevant part (emphasis added):

(a) IN GENERAL.—Neither the Secretary nor the Board has jurisdiction under this part over—

* * *

(6) transportation by motor vehicle of—

(A) ordinary livestock;

(B) agricultural or horticultural commodities (other than manufactured products thereof);

*3 (C) commodities listed as exempt in the Commodity List incorporated in ruling numbered 107, March 19, 1958, Bureau of Motor Carriers, Interstate Commerce Commission, other than frozen fruits, frozen berries, frozen vegetables, cocoa beans, coffee beans, tea, bananas, or hemp, or wool imported from a foreign country, wool tops and noils, or wool waste (carded, spun, woven, or knitted);

* * *

Administrative Ruling 107, now Composite Commodity List Administrative Ruling 119, includes as exempt commodities:

(1) Bagged commodities: Placing exempt commodities in bags does not effect the exempt status (page 1);

(2) Horticultural commodities. Plants, vegetables, flowers, Exempt—Law (page 17);

(3) Packaged commodities: Packaging exempt commodities does not affect their exempt status—Law, (page 21);

(4) Vegetables; Bagged—Exempt—Law (page 26);

(5) Vegetables—Cut up—fresh, in cellophane bags—Exempt—law (page 27);

(6) Vegetables—Washed, fresh, in cellophane bags—Exempt—Law (page 28).

Defendant argues that courts have ruled that produce like the commodity at issue here is exempt, with such rulings being affirmed by the U.S. Supreme Court. See, e.g., Frozen Food Express v. United States, 148 F.Supp. 399, 402-03 (S.D. Tex. 1956) (“the following commodities … [are] exempt: …. fresh cutup vegetables in cellophane bags; fresh vegetables washed, cleaned and packaged in cellophane bags or boxes; ….”), afffirmed 355 U.S. 6 (1957).

 

Plaintiff argues that exemptions to the Carmack Amendment are to be strictly construed. Interstate Commerce Commission v. Weldon, 90 F.Supp. 873, 875 (W.D. Tenn. 1950)(citing Piedmont & Northern R. Co. v. Interstate Commerce Commission, 286 U.S. 299 (1932)). Plaintiff contends that Administrative Ruling 119 does not include the specific types of salad products on the bill of lading in this case. Plaintiff suggests that the products at issue are processed salad products, not raw agricultural commodities in their natural state. Plaintiff states that various people and machines performed a number of different manufacturing processing steps, removing the products from the class of “unmanufactured agricultural commodities.” Plaintiff indicates that the items have been “remov[ed] from the ground, procured … from the ground, removed the stems and such things (similar to removing a peanut from its shell), washed the products pursuant to the shipper’s processing requirements, and packaged the same according to applicable product classifications in recycled plastic containers.” Dkt. No. 14, PgID 237-38.

 

Plaintiff further argues that the “spring mix” product is not a raw plant, but is a combination of several types of lettuce, all of which have been processed and mixed together in particular portions pursuant to manufacturing standards, then packaged for sale to the general public at a retail store. For those reasons, Plaintiff maintains that the raw agricultural commodity has been changed into a commercial item that is no longer exempt from the Carmack Amendment. Citing Weldon, 90 F.Supp. at 876. Plaintiff also asserts that Defendant did not cite any authority recognizing that the products at issue in this case are specifically exempt under the Carmack Amendment.

 

The Court is not persuaded by Plaintiff’s arguments. As Defendant notes, Frozen Food Express was decided six years after Weldon and a year after the Supreme Court’s decision in East Texas Motor Freight Lines, Inc. v. Frozen Food Express, 351 U.S. 49 (1956). First, in East Texas, the Supreme Court addressed the language of the Interstate Commerce Act, specifically Section 203(b)(6) (49 U.S.C. § 303(b)(6)), insofar as when a commodity has been “manufactured”—rather than simply processed. The Supreme Court recognized that:

*4 Manufacture implies a change, but every change is not manufacture, and yet every change in an article is the result of treatment, labor, and manipulation. But something more is necessary, as set forth and illustrated in Hartranft v. Wiegmann, 121 U.S. 609, 7 S.Ct. 1240, 30 L.Ed. 1012. There must be a transformation; a new and different article must emerge, “having a distinctive name, character, or use.”

East Texas, 351 U.S. at 53 (quoting Anheuser-Busch Brewing Ass’n v. United States, 207 U.S. 556, 562 (1908)).

 

In concluding that a chicken that had been killed and dressed, including removal of its feathers and entrails so that it was ready for market, the Supreme Court stated that “this processing which merely makes the chicken marketable [does not] turn[ ] it into a ‘manufactured’ commodity.” East Texas, 351 U.S. at 54 (footnote omitted). The Supreme Court further explained that:

At some point processing and manufacturing will merge. But where the commodity retains a substantial identity through the processing stage we cannot say that it has been ‘manufactured’ within the meaning of [§] 203(b).

Id. (emphasis added).

 

Second, in Frozen Food Express, the court explained why frozen fruits and vegetables were exempt and determined that a wide range of commodities were exempt, including “fresh cut up vegetables in cellophane bags; fresh vegetables washed, cleaned and packaged in cellophane bags or boxes:”

Prior to this action by the Court, frozen fruits and vegetables had become a particular bone of contention in the prolonged struggle over the extent and scope of the agricultural exemption. There is a heavy volume of motor carrier traffic in this commodity. The processing to which the fresh product is subjected, after leaving the farmers’ hands and before appearing in the familiar frozen-food carton on the grocers’ shelves, is extensive and complicated. In holding frozen fruits and vegetables to be exempt, the Home Transfer case has gone far toward settling the entire controversy in favor of the liberal interpretation of the exemption urged by the farming interests, the Department of Agriculture, and those motor carriers (as the Plaintiff) who seek to avoid ICC control in the carriage of these commodities.

With this background, the following commodities, of agricultural origin, having undergone some processing but retaining their original identity, we hold exempt: …. fresh vegetables washed, cleaned and packaged in cellophane bags or boxes; fruits or vegetables (quick frozen);…

Frozen Food Express, 148 F.Supp. at 402-03 (noting Home Transfer & Storage Co. v. United States, 141 F.Supp. 599 (W.D. Wash. 1956), affirmed Interstate Commerce Commission v. Home Transfer & Storage Co., 352 U.S. 884 (1956)).

 

For the reasons expressed in East Texas and Frozen Foods Express, the Court finds that the various types of mixed greens at issue in this case fall within the definition of exempt commodities in Frozen Food Express and Administrative Ruling 119. It is undisputed that the product at issue was lettuce, some of which was combined as a “spring mix,” had been washed, cut and packaged in plastic clam (cellophane) shells. Although the lettuce had been “processed,” the Court cannot find any basis for determining that it had: (1) been transformed, (2) lost its original identity, or (3) become a new and different article with a distinctive name, character, or use, such that the Court could conclude that the lettuce or spring mix had been “manufactured.”

 

*5 The bill of lading documents supplied by Plaintiff undermine its arguments and reinforce the Court’s conclusion that the commodities at issue are not subject to the Carmack Amendment. The bill of lading documents specifically identify the products subject to transport as “exempt commodities.” See Dkt. No. 14, Ex. E at PgID 284, 286 (each document governing the transaction at issue is literally captioned “MOTOR CARRIER STRAIGHT BILL OF LADING FOR EXEMPT COMMODITIES”).

 

Because the products at issue are exempt commodities, neither the Secretary of Transportation nor the Service Transportation Board had jurisdiction over them under Chapter 135, Subchapter 1, and the Carmack Amendment does not apply to the products at issue. And, as the Carmack Amendment does not apply, there is no subject matter jurisdiction in this Court. It is well-established that the lack of subject matter jurisdiction is a non-waivable, fatal defect, see, e.g., Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365 (1978) (jurisdiction otherwise lacking cannot be conferred by consent, collusion, laches, waiver, or estoppel), and dismissal under Rule 12(b)(1) is required.

 

The Court holds that the absence of subject matter jurisdiction in this Court establishes that Plaintiff will not suffer prejudice when default judgment is set aside, for two reasons: (1) Plaintiff cannot prevail in this Court as the Court does not have subject matter jurisdiction to hear Plaintiff’s case; and (2) dismissal of this action will be without prejudice, see, e.g., Brereton v. Bountiful City Corp., 434 F.3d 1213, 1218 (10th Cir. 2006), which means that Plaintiff can re-file its cause of action in an appropriate jurisdiction.

 

Finally, the Court is persuaded that the entry of judgment by default is not the result of culpable conduct by Defendant. First, the time line for responding to Plaintiff’s Complaint was significantly compromised by the date it was served on Defendant and Plaintiff’s expediency in defaulting Defendant. Defendant, a corporation, was served on December 19, 2016, with an answer due on January 9, 2017. The Court notes that there were two federal holidays between those dates (Christmas and New Year’s).

 

The Clerk’s entry of default was entered on the first day possible (January 10, 2017), and the notice of that default was served on Defendant on January 12, 2017. Counsel for Defendant filed a notice of appearance on January 17, 2017, only the second business day after Defendant received notice of the default. The Court finds that an appearance of counsel within two business days of being notified of the entry of default demonstrates that Defendant was serious about defending this action.

 

The Court also notes that it only took Plaintiff those same two business days to obtain the default judgment, essentially precluding Defendant from addressing the Clerk’s entry of default. Defendant filed its Amended Motion only two weeks after getting notice of the default judgment, approximately six weeks after getting notice of the lawsuit and only three weeks after learning of the entry of default. Again, the Court finds that Defendant’s action demonstrates that it was serious about defending this action.

 

Second, Defendant has represented that it is, in essence, a closely-held business whose president was distracted by the health condition of, and assisted with the care for, a terminally ill family member during December 2016 and the majority of January 2017 (the family member died on January 16, 2017), the period between when Defendant was served until the day before default judgment was entered. Defendant’s president also states that neither she nor Defendant had been sued before, and she was unfamiliar with what to do. The Court is satisfied that Defendant’s failure to timely respond to the Complaint was not the result of culpable conduct by Defendant.

 

*6 For the reasons set forth above, the Court holds that Defendant has established that good cause exists for setting aside the Clerk’s entry of default and the judgment of default. The Court grants Defendant’s motion to set aside the entry of default and the default judgment and Orders that the Clerk of the Court vacate both the entry of default and the default judgment. Dkt. Nos. 6 and 10. The Court also finds that, because the products at issue were exempt commodities under the Carmack Amendment, the Carmack Amendment does not apply in this case. As sole alleged basis for the Court’s jurisdiction in this case is the Carmack Amendment, the absence of a viable claim under the Carmack Amendment deprives the Court of subject matter jurisdiction. The Court grants Defendant’s motion to dismiss Plaintiff’s cause of action, without prejudice.

 

1. CONCLUSION

Accordingly,

 

IT IS ORDERED that Defendant’s Amended Motion to Set Aside Default and Default Judgment, Motion to Dismiss for Lack of Subject Matter Jurisdiction and Lack of Personal Jurisdiction [Dkt. No. 12] is GRANTED.

 

IT IS FURTHER ORDERED that the Clerk of the Court shall VACATE the Clerk’s Entry of Default [Dkt. No. 6] and the Clerk’s Entry of Judgment by Default [Dkt. No. 10].

 

IT IS FURTHER ORDERED that Plaintiff’s cause of action is DISMISSED WITHOUT PREJUDICE.

United States District Court,

N.D. Ohio, Western Division.

Anthony Herndon, Plaintiff

v.

Carlos V. Torres, et al., Defendants

Case No. 3:15CV561

|

Filed: 04/21/2017

ORDER

James G. Carr Sr. U.S. District Judge

This personal-injury case arises out of a truck driver’s vicious attack on another truck driver at a rest stop.

 

One evening in June, 2014, Plaintiff Anthony Herndon was driving his semi-trailer truck through Perrysburg, Ohio. As Herndon, preparing to turn into a truck stop, pulled his rig into a left-turn lane, the defendant, Carlos Torres, suddenly merged his truck into the turn lane and cut-off Herndon.

 

After both men parked their trucks near each other, Herndon walked by Torres and urged him to be more careful. Cursing at Herndon, Torres retrieved a long metal bar known as a “cheater bar” and beat Herndon with it repeatedly, breaking Herndon’s leg and inflicting permanent injuries.

 

Herndon filed this suit against Torres and defendant Avrora Express, Inc., the trucking company for whom Torres worked at the time of the attack. He brings claims of negligence, wanton/reckless misconduct, assault, battery, and negligent and intentional infliction of emotional distress against Torres. Herndon also alleges that Avrora is vicariously liable for Torres’s attack on him, and that the company was negligent in hiring, retaining, training, and supervising Torres.

 

Jurisdiction is proper under 28 U.S.C. § 1332(a)(1). (Doc. 1 at ¶¶1–3).

 

Pending is Avrora’s motion for summary judgment. (Doc. 28). For the following reasons, I grant the motion.

 

Background

Avrora is a Massachusetts corporation in the business of transporting and delivering automobiles from the east coast of the United States to the west coast. It operates a fleet of eight trucks and engages as many as ten “independent contractors” to make the coast-to-coast trips. (Doc. 29 at 3).

 

Ilya Khotsin and Dmitriy Salagornik are the owners of Avrora.

 

Avrora evolved out a now-defunct transportation company called Vitaliy’s Auto Sales, Inc., that Salagornik had owned with his father. When Vitaliy’s closed, Salagornik sold or leased the company’s trucks to Avrora.

 

1. Avrora and Torres’s Relationship

In 2012, Torres applied to work for Vitaliy’s.

 

Torres held a Class A driver’s license that allowed him to operate tractor trailers. (Id.). Torres had also held several jobs that required him to undergo either a criminal background check, a drug test, or both. He testified that no prospective employer had ever denied him a job based on the results of a criminal background check or drug test.

 

When he applied to Vitaliy’s, Torres submitted to a drug test and represented that he did not have a felony conviction. Vitaliy’s then used a third-party human-resources company to inquire into Torres’ motor-vehicle record and enroll him in a random drug-screening program. This process “showed no disqualifying information and Salagornik engaged Torres to drive for Vitaliy’s.” (Doc. 29 at 4).

 

When Vitaliy’s closed, Avrora, at Salagornik’s urging, hired Torres. Rather than conducting a new employment screen and background check, Avrora simply utilized the materials that Vitaliy’s had generated while vetting Torres’s application.

 

1. Nature of Torres’s Work

Between late 2012 and June, 2014, Torres “intermittent[ly]” hauled loads for Avrora. (Doc. 24–4 at 46). As Khotsin described it, Torres was:

free to go on to the trip or not to go to the trip … There was no commitment. There was nothing like he 8:00 a.m. he has to show up and do some work, check in or check out, nothing like that.

We call him. We have a load, we have a truck. We say, you want to go to this trip on this particular date? He says, yes or no.

(Id.).

 

When he accepted a job, Torres drove a truck that Avrora owned, though he used his own cell phone to communicate with Avrora and customers, chose his own clothes, and kept his own logbook. Even while occasionally hauling for Avrora, Torres remained free to take jobs at other companies.

 

If Torres accepted a job, Avrora had no ability to control the number of hours he worked. It was, instead, federal law that set the maximum number of hours Torres could drive in a given week. (Doc. 29 at 8). Khotsin also testified that, in 2013 – the one full year in which Torres hauled for Avrora – Torres worked only half the hours that a full-time trucker would have worked. (Doc. 26–4 at 46–47).

 

Oftentimes during his trips, Avrora would contact Torres and ask him to make an additional pick-up. However, Torres had discretion to accept or decline the additional work as he saw fit. And in hauling cars to the west coast, Torres had discretion to select his own routes: while Avrora might suggest routes for him to take, the final decision always rested with Torres.

 

For each period that Torres hauled for Avrora, the company paid him in bi-weekly installments. If Torres damaged the truck or its cargo, Avrora could deduct the damage from his pay. Avrora also covered the costs of fuel, tolls, and traffic citations (if any) that Torres incurred during coast-to-coast hauls.

 

It is undisputed that Avrora annually provided Torres with a 1099 supplemental income form, an IRS form that independent contractors, rather than employees, use.

 

During Torres’s tenure with Avrora, neither Khotsin nor the company “receive [d] any reports related to any threatening or violent behavior exhibited by Torres during his engagement with Avrora” or “outside of his engagement with Avrora.” (Doc. 27–6 at ¶¶8, 9).

 

1. The Attack

In June, 2014, Avrora engaged Torres to haul a shipment of vehicles from Massachusetts to California. (Doc. 29 at 5).

 

It was during this trip that Torres encountered Herndon and, as described above, beat him with the cheater bar. The attack left Herndon with a fractured femur and a great deal of chronic pain. Operations to repair the fracture resulted in one of Herndon’s legs being longer than the other.

 

Authorities arrested Torres, and he later pled guilty to attempted felonious assault and served a year in prison.

 

Standard of Review

Summary judgment is appropriate under Fed. R. Civ. P. 56 where the opposing party fails to show the existence of an essential element for which that party bears the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

 

The movant must initially show the absence of a genuine issue of material fact. Id. at 323. Once the movant meets that burden, the “burden shifts to the nonmoving party [to] set forth specific facts showing there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Rule 56 “requires the nonmoving party to go beyond the [unverified] pleadings” and submit admissible evidence supporting its position. Celotex, supra, 477 U.S. at 324.

 

I accept the non-movant’s evidence as true and construe all evidence in its favor. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 456 (1992).

 

Discussion

Avrora seeks summary judgment on three grounds.

 

Regarding Herndon’s vicarious-liability claim, Avrora contends that, as a matter of Ohio law, it cannot be liable for Torres’s intentional torts because Torres was an independent contractor, not an employee. In the alternative, Avrora argues that even if Torres were its employee, it is still not liable because Torres was not acting in the scope of his employment when he attacked Herndon.

 

As to Herndon’s negligence claims, Avrora maintains that the undisputed facts show that it was neither Torres’s employer nor negligent in hiring, training, retaining or supervising Torres.

 

1. Choice of Law

At the outset, the parties dispute whether Ohio or Massachusetts law applies.1

 

“In deciding conflict of law questions in diversity of citizenship cases, a federal court generally follows the choice of law rules of the state in which it sits.” In re Commercial Money Ctr., Inc., Equip. Litig., 603 F. Supp. 2d 1095, 1099 (N.D. Ohio).

 

“Under Ohio law, a presumption is created that the law of the place of the injury controls.” Friedman v. Intervet Inc., 2010 WL 2817257, *8 (N.D. Ohio). This presumption controls “unless another jurisdiction has a more significant relationship to the lawsuit.” Id.

 

In deciding that question, Ohio courts consider: “(1) the place of the injury; (2) the place where the conduct causing the injury occurred; (3) the domicile, residence, nationality, place of incorporation, and place of business of the parties; (4) the place where the relationship between the parties, if any, is located; and (5) any factors under Section 6 [of the Restatement of the Law 2d, Conflict of Laws] which the court may deem relevant to the litigation.” Morgan v. Biro Mfg. Co., 15 Ohio St. 3d 339, 342 (1989).

 

Section 6, in turn, allows a court to consider: “(a) the needs of the interstate and international systems; (b) the relevant policies of the forum; (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue; (d) the protection of justified expectations; (e) the basic policies underlying the particular field of law; (f) certainty, predictability and uniformity of result; and (g) ease in the determination and application of law to be applied.” 1 Restatement of the Law 2d, Conflict of Laws § 6(2)(a)–(g).

 

1. Place of Injury

It is undisputed that the place of the injury is Ohio. I therefore start with the presumption that Ohio law controls this dispute. Friedman, supra, 2010 WL 2817257, at *8; see also Walker v. Nationwide Mut. Ins. Co., 2015-Ohio-5371, ¶24 (Ohio App.).

 

2. Conduct Causing the Injury

Likewise, the conduct causing Herndon’s injuries – to wit, Torres’s beating Herndon with the cheater bar – occurred in Ohio.

 

Herndon suggests that the relevant “conduct” was Avrora’s decision to hire or engage Torres. (Doc. 32 at 16) (“Mr. Herndon’s injury was merely the ultimate manifestation and/or result of Defendant Avrora’s negligent conduct.”). But Herndon cites no case law to support that understanding, and the cases Avrora cites refute it. Laux v. Huillerat, 680 F. Supp. 1131, 1136 (S.D. Ohio 1987); Grieser v. Montgomery, 2012 WL 1906379, *2 (N.D. Ohio).

 

Accordingly, Ohio – as “the state in which both the conduct and the injury occur[red]” – has “the dominant interest in regulating that conduct, determining whether it was tortious in character, and determining whether the interest is entitled to legal protection.” Kurent v. Farmers Ins. of Columbus, 62 Ohio St. 3d 242, 246 (1991). “[S]ubject only to rare exceptions, the local law of the state where the conduct and injury occurred will be applied[.]” 1 Restatement of the Law 2d, Conflict of Laws § 145.

 

3. Domiciles, State of Incorporation, and Prior Relationships

At the time of the attack, Herndon was an Alabama citizen, Torres was a Massachusetts citizen, and Avrora was a Massachusetts citizen. (Doc. 1 at ¶¶1–3).

 

In this kind of case, where the parties do not have their domiciles in the state where the injury and the conduct causing the injury occurred, “[t]he third factor points in no single direction.” Grieser, supra, 2012 WL 1906379, at *2. And where, as here, the parties do not have any prior relationship or past dealings with one another, “it will be rare that § 145’ s domicile factor, alone, will overcome the presumption that the law of the place of injury controls.” Grubb v. Day to Day Logistics, Inc., 2015 WL 4068742, *9 (S.D. Ohio).

 

4. Locus of the Parties’ Relationship

It is undisputed that Ohio is the only place where the paths of all three parties crossed.

 

5. Section 6 Factors

Herndon does not argue that any of the Section 6 factors supports applying Massachusetts rather than Ohio law, nor do I find any of them particularly relevant.

 

* * *

 

Because the injury and the conduct that caused it occurred in Ohio, and because Ohio is the only state where all parties’ paths crossed, I conclude that Ohio law controls this dispute.2

 

1. Respondeat Superior Claim
2. Independent Contractor

Under Ohio law, a hiring party is not vicariously liable for the torts of an independent contractor. Laderer v. St. Rita’s Med. Ctr., 122 Ohio App. 3d 587, 594 (1997).

 

“The chief test in determining whether one is an employee or an independent contractor is the right to control the manner or means of performing the work.” Ponyicky v. City of Brunswick, 2014-Ohio-3540, ¶11 (Ohio App.).

 

“The determination of who has the right to control must be made by examining the individual facts of each case. The factors to be considered include, but are certainly not limited to, such indicia as who controls the details and quality of the work; who controls the hours worked; who selects the materials, tools and personnel used; who selects the routes traveled; the length of employment; the type of business; the method of payment; and any pertinent agreements or contracts.” Id.

 

“If such right is in the employer, the relationship is that of employer and employee; but if the manner or means of performing the work is left to one responsible to the employer for the result alone, an independent contractor relationship is created.” Id.

 

Given the undisputed evidence, a jury could only find that Torres was an independent contractor.

 

First, it is undisputed that Torres alone controlled which jobs he took and the hours he worked. As Salagornik testified, whenever Avrora sought out Torres to make a particular haul, Torres had discretion to accept or reject the offer. This discretion spilled over into mid-trip decision-making: if Avrora contacted Torres during a trip and asked him to pick-up another load, Torres could refuse to do so.

 

When Torres was hauling, moreover, Avrora did not set his hours; rather, federal regulations fixed that number. And if Torres needed additional time to complete a haul, he was free to tell Avrora. In addition, Torres’s hours in 2013 were roughly half that a full-time trucker would likely work.

 

Second, Torres selected the routes he took. Bookwalter v. Prescott, 168 Ohio App. 3d 262, 269 (2006) (fact that trucker “was not required to take any particular route” while hauling cargo was evidence of his independent-contractor status).

 

Third, Torres worked on a haul-by-haul basis, and Avrora correspondingly paid him by the job. Harmon v. Schnurmacher, 84 Ohio App. 3d 207, 213 (1992) (recognizing that an independent contractor “is generally hired to complete a single job only and does not have a continuing, full-time relationship with a single client”); Freeman v. Ideal Merch., Inc., 2008-Ohio-1721, ¶18 (Ohio App.) (fact that “the men were paid by the job and not the time” supported the trial court’s finding of an independent-contractor relationship).

 

Fourth, the parties’ use of a 1099 form “suggests that the parties were not acting in an employer/employee relationship but rather in that of an independent contractor relationship.” Northeast Ohio Coll. of Massotherapy v. Burek, 144 Ohio App. 3d 196, 203–04 (2001).

 

In contrast, Herndon emphasizes that Avrora owned the truck Torres used to haul cargo, and that it identified where Torres was to make pick-ups and deliveries. (Doc. 32 at 17–18). Herndon also notes that Avrora expected Torres to be the “face of the company,” and that it sought to control his behavior by prohibiting him from drinking alcohol while on a trip.

 

But these facts do nothing to show that Avrora controlled the manner and the means of Torres’s work.

 

Although Avrora owned a piece of equipment that Torres needed to accomplish the work, once Torres accepted a job and set out on a haul, he, rather than Avrora, had essentially unfettered control over how he used that equipment (what routes he took, what hours he worked, whether he accepted or declined additional cargo pick-ups along the way) to accomplish the haul.

 

Likewise, in making Torres and its other drivers the face of the company, Avrora was simply identifying an objective for Torres to accomplish, and it was up to Torres to figure out how to interact properly with customers. Ponyicky, supra, 2014-Ohio-3540, at ¶11 (“if the manner or means of performing the work is left to one responsible to the employer for the result alone, an independent contractor relationship is created”).

 

And while the fact that Avrora forbade Torres to drink alcohol while on a haul does suggest that Avrora exercised some control over the manner in which Torres performed the work, such evidence is not a sufficient basis for a jury to find that Torres was an employee of Avrora.

 

Because the undisputed facts would permit a jury to find only that Torres was an independent contractor, Avrora is not liable for Torres’s attack on Herndon. Accordingly, Avrora is entitled to summary judgment Herndon’s vicarious-liability claim.

 

2. Scope of Employment

Even assuming, arguendo, that Torres was Avrora’s employee, Avrora still would not be liable under a respondeat-superior theory of liability.

 

Under Ohio law, “[a]n employer can be held liable for an employee’s intentional, malicious acts only where those acts are performed in the scope of the employee’s employment.” Leach v. Heyman, 233 F. Supp. 2d 906, 912 (N.D. Ohio 2002). “As a general rule, however, an intentional and wilful attack committed by an agent or employee, to vent his own spleen or malevolence against the injured person, is a clear departure from his employment and his principal or employer is not responsible therefore.” Id.

 

Here, no reasonable jury could find that Torres was acting within the scope of his employment at the time of the attack. On the contrary, and as a matter of law, Torres “clear[ly] depart[ed]” from any employment relationship he might have had with Avrora when he began beating Herndon. Id. For this reason as well, Avrora is entitled to summary judgment on the vicarious-liability claim.

 

1. Negligence Claims

To prevail on his claims for negligent hiring, retention, training, and supervision, Herndon must establish: 1) the existence of an employment relationship; 2) the employee’s incompetence; 3) the employer’s actual or constructive knowledge of that incompetence; 4) the employee’s act or omission that caused the plaintiff’s injuries; and 5) the employer’s negligence in hiring, retaining, training, or supervising the employee proximately caused the plaintiff’s injuries. Sygula v. Regency Hosp. of Cleveland East, 64 N.E.3d 458, 471 (Ohio App. 2016).3

 

Because an employment relationship is an element of Herndon’s negligence claims, my determination, supra, that a reasonable jury could find only that Torres was an independent contractor is enough to grant summary judgment to Avrora on the negligence claims.

 

But even assuming that Avrora were Torres’s employer, Herndon has not shown a genuine factual dispute on at least two elements of his negligence claims.

 

1. Knowledge

It is undisputed that Avrora did not have actual knowledge of Torres’s alleged violent or criminal propensities.

 

Khotsin so testified (Doc. 27 at ¶¶8–10), and Torres, when he applied for a position with Avrora’s predecessor-in-interest, represented that he had no felony convictions and had never lost a job due to a failed background check. Torres did not display any violent or criminal propensity during the roughly two years he hauled for Avrora (Doc. 27 at ¶¶6–10), and both Khotsin and Salagornik testified that Torres was a reliable driver.

 

Furthermore, there is no evidence to support a jury finding that Avrora had constructive knowledge of Torres’s alleged criminal or violent propensities.

 

Constructive knowledge is “[k]nowledge that one using reasonable care or diligence should have, and therefore that is attributed by law to a given person.” Hartings v. Xu, 2014-Ohio-1794, ¶74 (Ohio App.).

 

Herndon argues at length that, had Avrora simply conducted a criminal background check on Torres, it would have discovered that: 1) Torres allegedly had four prior convictions, including one for domestic violence; and 2) police in Holyoke, Massachusetts had arrested Torres twice in 1988 and once in 2000. (Doc. 32 at 10–11, 22–24).

 

This argument fails for two reasons.

 

First, neither federal regulations nor Ohio law required Avrora to run a criminal background check on Torres. See 49 C.F.R. § 391.23 (specifying the “investigations and inquiries with respect to each driver it employs” that motor carries must undertake, none of which concerns drivers’ criminal backgrounds); Rozzi v. Star Personnel Servs., Inc., 2007-Ohio-2555, ¶11 (Ohio App.) (collecting cases supporting the proposition that “Ohio law holds that no such duty [to run a criminal background check on prospective employees] exists”); see also Connes v. Molalla Transport Sys., Inc., 831 P.2d 1316, 1323 (Colo. 1992) (employer had no duty to investigate driver’s non-vehicular criminal background “in order to protect a member of the public … from a sexual assault committed by [the driver] in the course of making a long-haul trip over the interstate highway system”).

 

Accordingly, the law does not impute to Avrora knowledge of any information that the company would have discovered had it undertaken the background check.

 

Second, it is undisputed that the District Court in Holyoke, Massachusetts, and the Hampden County, Massachusetts, Superior Court have no record of Torres incurring a criminal conviction in or after 1988, when he turned eighteen. (Doc. 27–3) (signed and sealed certification from the Deputy Clerk of the Holyoke District Court); (Doc. 27–4) (signed and sealed certification from the Deputy Clerk of the Hampden County Superior Court).4

 

Herndon nevertheless maintains that Torres does, in fact, have multiple criminal convictions.

 

He bases this argument on the “expert declaration” of Jill Miller, an Ohio private investigator. According to Miller, she ran a standard pre-employment background check on Torres and concluded that “prior to 2014, Defendant Torres had been convicted of the crimes of drug possession (2008 and 2009), trespass (2008), domestic violence (2008), and had been subject to a protective order (2007).” (Doc. 23–1 at ¶10a).

 

But Miller does not point to any court records or certified copies of conviction to support that opinion. Nor does she explain how the “criminal records” she attached to her declaration establish that Torres has four criminal convictions.

 

In the absence of such a foundation and explanation, Miller’s “expert declaration” simply embodies her opinion as to the sum and substance of Torres’s criminal record, which is insufficient to show a genuine dispute of material fact re. Avrora’s constructive knowledge of Torres’s criminal or violent propensities.

 

In any event, I have examined the records on which Miller relied, and they do not support her opinion. For example, the background check that Miller ran turned up the “criminal record” associated with Torres’s assault on Herndon. Notably, that record specifies a “conviction date” of September 29, 2014. (Doc. 23–1 at 11). But the “criminal records” associated with Torres’s alleged convictions for drug possession, trespass, and domestic violence contain no reference to a “conviction date”; they simply indicate an “offense date.” (Doc. 23–1 at 9–12).

 

For that reason as well, Miller’s unexplained and unsubstantiated opinion does not show that Avrora had constructive knowledge of Torres’s alleged criminal or violent propensities.

 

2. Avrora’s Negligence
3. Foreseeability

Given that Avrora neither knew nor should have known about Torres’s alleged criminal or violent propensity, I also hold that Avrora did not have a duty to protect Herndon from Torres.

 

As I have previously explained:

[A] plaintiff must prove that the employee’s acts were “reasonably foreseeable” by the employer. An act is reasonably foreseeable only if the employer knew or should have known of the employee’s propensity to engage in similar criminal, tortious, or dangerous conduct. To thus be liable for an employee’s incompetence, the employer must be able to anticipate the employee’s misconduct and thereafter unreasonably take the risk to either hire him or continue his employment.

Johnson v. J.B. Hunt Transp., Inc., 2009 WL 4282941, *6 (N.D. Ohio).

 

At bottom, Herndon’s argument is that Avrora ought to have foreseen the attack because the company ought to have conducted a criminal background check. But that argument is contrary to Ohio law, which did not require Avrora to do so. I therefore conclude there is no factual basis for a jury to find that Torres’s attack was foreseeable to Avrora.

 

1. Causation

“When a third person’s criminal act intervenes between a defendant’s conduct and a plaintiff’s injuries, the defendant’s negligence is the proximate cause of the plaintiff’s injuries only where the defendant could have reasonably foreseen the intervening act.” Evans v. Thrasher, 2013-Ohio-4776, ¶22 (Ohio App.).

 

For the reasons already given, there is no evidence suggesting that Avrora should have foreseen Torres’s attack on Herndon. Accordingly, there is likewise no basis on which a jury could find that any negligence on Avrora’s part in hiring, retaining, supervising, or training Torres proximately caused Herndon’s injuries.

 

1. Punitive Damages

Finally, because Avrora is entitled to judgment as a matter of law on all of Herndon’s causes of action against it, Herndon’s request for punitive damages from Aurora also fails.

 

Conclusion

It is, therefore,

 

ORDERED THAT defendant Avrora Express’s motion for summary judgment (Doc. 28) be, and the same hereby is, granted.

 

So ordered.

 

All Citations

— F.Supp.3d —-, 2017 WL 1422847

 

 

Footnotes

1

Based on the parties’ briefs, it appears that the general contours of Ohio and Massachusetts law are more or less the same when it comes to identifying: 1) whether one is an independent contractor or an employee; and 2) the elements of a negligent hiring/retention/training/supervision claim. The law in the two states differs, however, when it comes to an employer’s liability for an employee’s intentional torts. Under Ohio law, an employer can almost never be liable for the intentional torts of its employee. But under Massachusetts law, the employer may be liable if “the employee’s assault was in response to the plaintiff’s conduct which was presently interfering with the employee’s ability to perform his duties successfully.” Miller v. Federated Dep’t Stores, Inc., 304 N.E.2d 573, 580 (Mass. 1973). Because Herndon argues Avrora is liable under that provision of Massachusetts law, it is appropriate to resolve the choice-of-law issue.

2

In so holding, I reject Herndon’s argument that Laux, supra, 680 F. Supp. 1131, warrants a different result. Most importantly, the court in Laux did not mention, let alone apply, the presumption that Ohio law controls when the injury and conduct causing the injury occurs in Ohio.

3

Herndon has brought four separate negligence claims – for hiring, retaining, training, and supervising Torres – but each claim has essentially the same elements, the only difference being the whether it was Avrora’s negligent hiring, negligent retention, negligent training, or negligent supervision that proximately caused Herndon’s injuries. I therefore discuss the claims together.

4

Herndon tries to discount these certifications by observing that, in 2012 – when Avrora engaged Torres – the age of majority in Massachusetts was seventeen. (Doc. 32 at 22 n.5). Because not even Herndon suggests that Torres had a criminal conviction in 1987, whether the certifications at issue went back an additional year is immaterial.