2018 WL 3677920

United States District Court, D. Minnesota.
Ricardo Gaytan SOTO and Marisol Gaytan Soto, Plaintiffs,
v.
Anthony SHEALEY and Swift Transportation Co. of Arizona, LLC, Defendants.
Civil No. 17-124 (JRT/KMM)
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Signed 08/02/2018
Attorneys and Law Firms
Brian E. Wojtalewicz, WOJTALEWICZ LAW FIRM, LTD, Post Office Box 123, Appleton, MN 56208, for plaintiffs.
Matthew D. Sloneker, LIND JENSEN SULLIVAN & PETERSON, PA, 901 Marquette Avenue South, Suite 1300, Minneapolis, MN 55402, for defendants.

MEMORANDUM OPINION AND ORDER ON DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT
JOHN R. TUNHEIM, Chief Judge
*1 This diversity case is a personal-injury action brought by Ricardo and Marisol Gaytan Soto against Anthony Shealey and Swift Transportation Company of Arizona, LLC (“STC”). Shealey was driving a semi truck that overturned on Interstate 90 when he tried to avoid hitting six deer. Mr. Soto was driving a sedan that collided with the overturned trailer. The Sotos assert a negligence claim against Shealey (Count I) and a vicariousliability claim against STC for Shealey’s negligence (Count III). The Sotos also assert a direct negligence claim against STC (Count II) under multiple tort theories, including negligent hiring, retention, selection, supervision, and entrustment. STC moves for summary judgment on Count II, arguing that no reasonable jury could find STC negligent under any of those theories of tort liability. Because the Sotos neither allege nor present evidence that Shealey committed an intentional tort, the Court will grant Defendants’ motion with respect to the Sotos’ claims for negligent hiring and retention. But the Court will deny STC’s motion with respect to the Sotos’ claims for negligent selection, supervision, and entrustment because genuine disputes of material fact remain with respect to those claims.

BACKGROUND

I. FACTUAL BACKGROUND
Shealey was an STC employee in late 2007 and early 2008, driving an 18-wheeler semi truck. (Aff. of Michael T. Burke (“Burke Aff.”) ¶ 2, Ex. 1 (“Shealey Dep.”) at 14:20-15:23, May 1, 2018, Docket No. 106.) During that time, STC documented multiple violations by Shealey related to his speed and hours driven. (Burke Aff. ¶ 3, Ex. 2 (“Malchesky Dep.”) at 22:5-25:5.)

In early 2016, Shealey wanted to rejoin the truck-driving workforce, and so he completed truck-driving school and renewed his commercial driver’s license. (See Shealey Dep. at 16:3-17:11.) He rejoined STC in July 2016, and completed his training in August 2016. (Id. at 19:5-14.) During his training in August 2016, his truck’s on-board computer system logged a “Critical Event Report,” indicating that the truck’s “stability control yaw system [was] triggered,” which could have been caused by going around a turn too quickly or hard braking. (Malchesky Dep. at 27:19-30:22.)

During his training, Shealey was driving for STC as an employee. (Shealey Dep. at 21:11-22.) After that, Shealey purchased his own truck and became an owner-operator for STC. (Id. at 21:11-17; 63:14-20.) Shealey financed the truck through a company called Idealease, a subsidiary of STC. (Id. at 23:10-25.) Shealey’s monthly payments on the loan were deducted from his STC paycheck. (Id.) Shealey’s agreement with STC is titled “Contractor Agreement.” (Burke Aff. ¶ 6, Ex. 5 at 1.) Shealey was not permitted to haul for anyone other than STC. (Id. ¶ 5.A.) While Shealey operated under STC’s authority, STC had “exclusive possession, control and use” of the truck and trailer. (Id.) If Shealey failed to make on-time deliveries, STC could “temporarily take possession of the Equipment and complete the transportation.” (Id. ¶ 5.C.) STC also had the sole authority to bar Shealey from employing anyone that STC “deem[ed] unqualified” to operate the equipment. (Id. ¶ 7.D.) Shealey was required to comply with STC’s speed restrictions (which are different than posted speed limits on roadways). (Id. ¶ 5.A; see Shealey Dep. at 61:6-15.) STC also required Shealey to maintain an on-board electronic monitoring system (sometimes called a “Qualcomm Communication system”). (See Burke Aff. ¶ 6, Ex. 5 ¶ 5.D.)

*2 Shealey’s truck had a governor that limited its speed to 68 mph. (Shealey Dep. at 61:1-62:25.) STC’s company trucks – i.e., not owner-operator trucks – are governed at 62 or 64 mph. (Id.) STC’s “Driver Handbook” states that speeds of 67 to 70 mph are “excessive” and speeds above 70 mph are “flagrant.” (Decl. of Brian Wojtalewicz, ¶ 5, Ex. E (“Long Rep.”) at 7, Apr. 13, 2018, Docket No. 93.) STC’s Driver’s Handbook also warns of the danger of migrating deer. (Id. at 5.) It notes that there is a spike in deer-related crashes in May and June and in October and November each year. (Id.) It also twice warns drivers in all-capital letters: “NEVER SWERVE!” (Id.) It is unclear whether STC requires its drivers to read the handbook. (Burke Aff. ¶ 8, Ex. 7 (“Peyton Dep.”) at 23:1-24:13.) STC neither tests their drivers on the handbook nor has a process for ensuring that their drivers read or maintain familiarity with the handbook. (Id. at 19:1-20:3.)

On October 31, 2016, Shealey got a speeding ticket in Missouri. (Shealey Dep. at 25:4-18.) Shealey claims he was going 68 mph in a 60-mph zone. (Id.) STC records indicate that he was going 84 mph in a 60-mph zone. (Malchesky Dep. at 20:14-21:1.) It is unknown whether STC took any action in response to Shealey’s speeding ticket. (Id. at 21:2-12.) In the trucking industry, there is an expression called “out-running your headlights,” referring to a situation in which a driver is traveling at a speed such that the minimum stopping distance for the vehicle exceeds the distance the driver can see. (See Peyton Dep. at 14:18-15:14.) STC trains its drivers about such situations. (Id.)

II. THE ACCIDENT
Around 10:00 p.m. on November 15, 2016, Shealey was driving westbound in the right-hand lane of I-90 near Luverne, Minnesota, going 68 mph on cruise control in a 70-mph zone. (Shealey Dep. at 27:18-21; Burke Aff. ¶ 4, Ex. 3 (“Crash Report”).) It was a clear, calm night, and there was little traffic. (Shealey Dep. at 26:16-22; see also Crash Report.) At that time, Shealey would have needed about 300 yards to stop his truck; Shealey admitted he could not see that far and that “[e]ven in daylight it’s really hard” to see that far. (Shealey Dep. at 74:20-76:1.)

Shortly after 10:00 p.m., Shealey saw six deer in I-90’s westbound lanes, two in the middle of the road and four near the shoulder. (Id. at 27:9-28:5). When he saw the deer he tapped his brakes which released the cruise control, decelerated, and flashed his lights. (Id. at 27:9-28:5; 32:15-33:1; Malchesky Dep. at 61:24-63:24.) Flashing the truck’s headlights caused the deer to freeze and stare in his direction. (Shealey Dep. at 32:15-33:1.)

Shealey thought he could avoid a collision by moving to the left and missing the deer. (Id. at 29:22-30:8.) He moved over to the left-hand lane and then onto the left shoulder. (Id. at 27:9-28:11.) He made it around the deer without striking them, but there was a drop-off where the pavement ended, dropping down to the grassy median. (Id.) The truck’s left tires slipped off the road and into the median, but the right tires remained on the pavement. (Id. at 28:6-29:7.) Shealey felt his trailer pulling sideways into the median. (Id. at 28:12-24; 30:14-23.) He then steered hard to get his truck and trailer back up onto the pavement, which caused the whole rig to tip onto its left side and slide onto the freeway. (Id. at 29:98-18, 34:22-35:1.) The cab of the truck came to a rest in the north ditch, and the overturned trailer blocked both westbound lanes of traffic. (Id. at 39:3-9; see also Crash Report.) Shortly thereafter, a vehicle driven by Mr. Soto collided with the underside of the trailer. (Crash Report.)

III. PROCEDURAL HISTORY
The Sotos brought this action in January 2017. (Compl., Jan. 12, 2017, Docket No. 1.) The Sotos assert a direct negligence claim against Shealey, alleging that he was negligent by swerving to avoid the deer and trying to turn back up onto the road (Count I); a direct negligence claim against STC, alleging that STC was negligent in its hiring, selection, retention, and supervision of Shealey (Count II); and a vicarious-liability claim against STC for Shealey’s alleged negligence (Count III). (Am. Compl. ¶¶ 26-48, Nov. 1, 2017, Docket No. 35.) STC moves for summary judgment on Count II only, arguing that no reasonable jury could find STC negligent. (Defs.’ Mot. for Partial Summ. J., May 1, 2018, Docket No. 103.)

DISCUSSION

I. STANDARD OF REVIEW
*3 Summary judgment is appropriate where there are no genuine issues of material fact and the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the lawsuit, and a dispute is genuine if the evidence could lead a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court considering a motion for summary judgment must view the facts in the light most favorable to the non-moving party and give that party the benefit of all reasonable inferences that can be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

II. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Count II of the Sotos’ Complaint embraces multiple tort theories of recovery: negligent hiring, negligent supervision, negligent selection, and negligent entrustment.1 The Court will address each theory in turn after first addressing the relationship between Shealey and STC.

A. Employee vs. Independent Contractor
Before evaluating the specific causes of action embraced by Count II of the Sotos’ Amended Complaint, there is a threshold issue that the Court must address: whether Shealey was an employee or an independent contractor. To determine whether a person is an employee or an independent contractor, courts evaluate the following factors: “(1) [t]he right to control the means and manner of performance; (2) the mode of payment; (3) the furnishing of material or tools; (4) the control of the premises where the work is done; and (5) the right of the employer to discharge.” Boily v. Comm’r of Econ. Sec., 544 N.W.2d 295, 296 (Minn. 1996). “[U]nless the evidence is conclusive, the determination of whether a person is an independent contractor is a jury question.” Wild v. Rarig, 234 N.W.2d 775, 789 (Minn. 1975).

Here, there is more than sufficient evidence from which a reasonable jury could find that Shealey was an employee. For example, STC prohibited Shealey from hauling for other companies; STC maintained exclusive possession, control and use of the equipment; STC could take possession of the truck and trailer to complete a delivery if he was late; STC had the authority to bar Shealey from employing anyone that STC deemed unqualified to operate the equipment; Shealey was required to comply with STC’s speed restrictions; and STC required Shealey to maintain an on-board electronic monitoring system. Viewing the facts in the light most favorable to the Sotos, a reasonable jury could find that Shealey was an employee. See Doe v. Swift Transp. Co., No. 10-899, 2017 WL 67521, at *14-15 (D. Ariz. Jan. 6, 2017). Accordingly, the Court will evaluate the causes of action embraced in Count II assuming that the jury could find that Shealey was either an employee or an independent contractor.

B. Negligent Hiring & Retention
Minnesota law recognizes the direct-liability claims of negligent hiring and negligent retention. Ponticas v. K.M.S. Invs., 331 N.W. 2d 907, 910-11 (Minn. 1983). Claims for negligent hiring and negligent retention each impose direct liability on an employer for an employee’s intentional torts. Burt v. Winona Health, No. 16-1085, 2018 WL 1094289, at *2 (D. Minn. Feb. 28, 2018); see also Cook v. Greyhound Lines, Inc., 847 F. Supp. 725, 732 (D. Minn. 1994) (requiring an intentional tort as an element of a claim for negligent hiring/retention); M.L. v. Magnuson, 531 N.W. 2d 849, 857 (Minn. Ct. App. 1995) (same).

*4 Here, the Sotos do not present any evidence – or even allege – that Shealey committed an intentional tort. Thus, the Sotos cannot maintain claims against STC for negligent hiring or negligent retention. Accordingly, the Court will grant STC’s motion for summary judgment in this respect and dismiss the Sotos’ claims against STC for negligent hiring and negligent retention.

C. Negligent Selection
The Minnesota Supreme Court has not expressly adopted the tort of negligent selection. Larson v. Wasemiller, 738 N.W. 2d 300, 306 (Minn. 2007) (adopting the closely related tort of negligent credentialing). Thus, the Court must decide – pursuant to Erie – whether the Minnesota Supreme Court would recognize the tort of negligent selection of an independent contractor. The Court will conclude that it would. Moreover, there is sufficient evidence from which a jury could find STC liable for negligent selection. Accordingly, the Court will deny STC’s motion for summary judgment with respect to the Sotos’ claim for negligent selection.

1. The Tort of Negligent Selection in Minnesota
Federal courts sitting in diversity must apply state substantive law and defer to the highest court of the state whose substantive law the federal court is applying. Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938). If, however, the highest state court has not addressed a question of state law, a federal court should “apply what they find to be the state law after giving ‘proper regard’ to relevant rulings of other courts of the [s]tate.” Comm’r v. Estate of Bosch, 387 U.S. 456, 465 (1967). Additionally, federal courts must “ascertain from all the available data what the state law is.” West v. Am. Tel. & Tel. Co., 311 U.S. 223, 236-37 (1940). Such “available data” includes the highest state court’s recent decisions on similar issues, lower-court decisions, and other jurisdictions’ precedents. Id.

“In determining whether Minnesota recognizes a particular cause of action,” the Minnesota Supreme Court “look[s] to the common law and any statutes that might expand or restrict the common law.” Larson, 738 N.W. 2d at 303. More precisely, “[i]n deciding whether to recognize a common law tort, [the Minnesota Supreme Court] looks to (1) whether the tort is inherent in, or the natural extension of, a well-established common law right, (2) whether the tort has been recognized in other common law states, (3) whether recognition of a cause of action will create tension with other applicable laws, and (4) whether such tension is out-weighed by the importance of the additional protections that recognition of the claim would provide to injured persons.” Id. at 304. The Minnesota Supreme Court also “relie[s] on the Restatement of Torts to guide [its] development of tort law in areas that [it has] not previously had an opportunity to address.” Id. at 306.

Here, the Court concludes that Minnesota Supreme Court would recognize the tort of negligent selection. First, negligent selection is inherent in, or the natural extension of, a well-established common law right. Negligent selection is the independent-contractor analogue to the tort of negligent hiring in an employee-employer relationship, the latter of which exists under Minnesota law. See id. at 305-06 (recognizing the tort of negligent credentialing because it is a natural extension of a hospital’s duty to protect its patients from harm by third persons). Second, the overwhelming majority of states recognize the tort of negligent selection. See Basic Energy Servs., L.P. v. Petroleum Res. Mgmt., Corp., 343 P.3d 783, 790 (Wyo. 2015) (collecting cases) (“[T]he theory of negligent hiring in the context of independent contractors has gained broad acceptance.”); see also Larson, 738 N.W.2d at 306 (noting “the general acceptance … of the tort of negligent selection of an independent contractor”). Third, recognition of the tort of negligent selection will not create tension with other applicable laws. In particular, recognizing the tort of negligent selection would not create tension with the baseline absence of liability for those who hire independent contractors . See Fed. Ins. Co. ex rel. Lecy Const. v. Westurn Cedar Supply, Inc., No. 06-0614, 2008 WL 686556, at *2 (D. Minn. Mar. 13, 2008) (“[T]here are so many exceptions to this general rule that seventy years ago the Minnesota Supreme Court was already warning that ‘it would be proper to say that the rule is now primarily important as a preamble to the catalog of its exceptions.’ ” (quoting Pac. Fire Ins. v. Kenny Boiler & Mfg., 277 N.W. 226, 228 (Minn. 1937) ) ).2 Finally, § 411 of the Restatement recognizes the well-established tort of negligent selection of an independent contractor. Restatement (Second) of Torts § 411.

*5 Therefore, the Court concludes that the Minnesota Supreme Court would recognize the tort of negligent selection of an independent contractor and incorporate § 411 of the Restatement into its common law.

2. The Sotos’ Claim for Negligent Selection
Having concluded that a claim for negligent selection is a viable cause of action under Minnesota law, the Court must next decide whether there remains a genuine dispute of material fact as to whether STC is liable to the Sotos for negligent selection of Shealey.
An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the employer owes to third persons.
Restatement (Second) of Torts § 411.

Here, there is sufficient evidence from which a jury could find STC liable for negligent selection. For example, STC knew in 2016 that Shealey had previous speed and hours violations during his previous employment with STC. There are facts that suggest that speed might have been a factor in the accident because of the distance required to stop relative to the distance that Shealey could see. Moreover, it is unclear whether STC requires its drivers to be familiar with the Driver’s Handbook; STC has no process in place for ensuring that drivers read and maintain familiarity with the handbook; and that handbook recognizes the dangers associated with migrating deer and addresses how drivers should react to deer. Furthermore, Shealey had a Critical Event Report during his training with STC before he purportedly became an independent contractor. Viewing the facts in the light most favorable to the Sotos, a reasonable jury could find that STC failed to exercise reasonable care when it selected Shealey. Accordingly, the Court will deny STC’s motion for summary judgment on the Sotos’ claim for negligent selection.

D. Negligent Supervision
“[N]egligent supervision derives from the respondeat superior doctrine.” Cook, 847 F. Supp. at 732. Negligent supervision occurs when an employer fails to “exercise ordinary care to prevent [the] foreseeable misconduct of” its employee. Raleigh v. Indep. Sch. Dist. No. 625, 275 N.W.2d 572, 576 (Minn. 1978). “[A]n employer of an independent contractor may be found negligent when it retains detailed control over a project and then fails to exercise reasonably careful supervision over that project.” Anderson v. State, Dep’t of Nat. Res., 693 N.W.2d 181, 189 (Minn. 2005).

Here, there is sufficient evidence from which a jury could find STC liable for negligent supervision. For example, Shealey had a prior Critical Event Report and speed violations, and STC might not require its drivers to be sufficiently familiar with the Driver’s Handbook. Moreover, there is sufficient evidence that STC retained detailed control over Shealey. STC prohibited Shealey from hauling for other companies; STC maintained exclusive control of the equipment and could take possession of it if he was late; STC could bar Shealey from employing anyone that STC deemed unqualified; Shealey was required to comply with STC’s speed restrictions; and STC required Shealey to maintain an on-board electronic monitoring system. Viewing the facts in the light most favorable to the Sotos, a reasonable jury could find that STC failed to exercise ordinary care to prevent Shealey’s foreseeable conduct and that STC retained detailed control over Shealey’s performance. Accordingly, the Court will deny STC’s motion for summary judgment on the Sotos’ claim for negligent supervision.

E. Negligent Entrustment
*6 Claims for negligent entrustment impose direct liability on “[o]ne who supplies … a chattel for the use of another whom the supplier knows or has reason to know to be likely because of [the other’s] youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm.” Axelson v. Williamson, 324 N.W.2d 241, 243-44 (Minn. 1982) (quoting Restatement (Second) of Torts § 390). In the automobile-accident context, “negligent entrustment has been defined as a separate wrongful act when the negligence of the driver is reasonably foreseeable and the entrustor fails in the duty to take steps to prevent operation of the vehicle by the driver.” Lim v. Interstate Sys. Steel Div., Inc., 435 N.W.2d 830, 832 (Minn. Ct. App. 1989); accord Breeding v. Massey, 378 F.2d 171, 177-78 (8th Cir. 1967) (applying Arkansas law).

Here, there is sufficient evidence from which a jury could find STC liable for negligent entrustment. Assuming that Shealey was negligent on the night of the accident (a proposition on which STC does not move), the question then becomes whether Shealey’s negligence was foreseeable. STC knew or had reason to know of Shealey’s prior speed violations; STC knows about the danger of “outrunning” headlights; STC knows about the dangers of deer migration, including the times of year that pose an increased risk of deer-related crashes; and STC knew about Shealey’s Critical Event Report. Viewing the facts in the light most favorable to the Sotos, a reasonable jury could find that Shealey’s negligence, if proven, was reasonably foreseeable and that STC failed in its duty to take steps to prevent Shealey from operating his truck. Accordingly, the Court will deny STC’s motion for summary judgment on the Sotos’ claim for negligent entrustment.

This case will be placed on the Court’s next available trial calendar.

ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS HEREBY ORDERED that Defendants’ Motion for Partial Summary Judgment [Docket No. 103] is GRANTED in part and DENIED in part as follows:

1. Defendants’ motion is GRANTED with respect to Plaintiffs’ claims for negligent hiring, negligent retention, and negligent training embraced in Count II of the Plaintiffs’ Amended Complaint [Docket No. 35].

2. Defendants’ motion is DENIED with respect to Plaintiffs’ claims for negligent selection, negligent supervision, and negligent entrustment embraced in Count II of the Plaintiffs’ Amended Complaint [Docket No. 35].

All Citations
Slip Copy, 2018 WL 3677920

Footnotes

1
Minnesota law does not recognize a cause of action for the tort of negligent training. Lopez v. Minn. Vikings Football Stadium, LLC, No. 17-1179, 2018 WL 626529, at *2 (D. Minn. Jan. 30, 2018) (citing Johnson v. Peterson, N.W.2d 275, 277 (Minn. Ct. App. 2007). Therefore, to the extent that the Sotos assert a claim against STC for negligent training, the Court will grant STC’s motion with respect to this claim.

2
To the extent that recognition of the tort of negligent selection will create some tension with other applicable laws, that tension is outweighed by the importance of the additional protections that recognition of the tort of negligent selection would provide to injured persons.

2018 WL 3853875

UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING.
Superior Court of Delaware.
PROGRESSIVE CASUALTY INSURANCE COMPANY, Plaintiff,
v.
BOWMAN TRAILER LEASING, LLC; GREAT AMERICAN INSURANCE COMPANY; US TRAILER HOLDINGS, LLC, d/b/a CO QUEST CAPITAL GROUP, LLC; STAPLES, INC.; ACE AMERICAN INSURANCE COMPANY; CLINTON PEAVY; NAZIR PEAVY; a minor, by his guardian ad litem MYLESA WALTON; MYLESA WALTON; TEENA PEAVY; MICHAEL PEAVY; ESTATE OF CLINTON PEAVY; JAMES DONNELL LIGHTY; W.B. MASON CO., INC.; A DUIE PYLE, INC.; TRISTATE TRUCKING, LLC; AND CHARLES BOLTON, JR., Defendants.
C.A. NO.: N17C-12-333 AML
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Submitted: June 7, 2018
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Decided: August 13, 2018
Upon Defendant Nazir Peavy’s Motion to Dismiss or Stay: Stayed
Attorneys and Law Firms
Thomas P. Leff, Esquire, of CASARINO, CHRISTMAN & SHALK, Wilmington, Delaware, and Robert D. Moseley, Jr., Esquire, of SMITH MOORE LEATHERWOOD, LLP, Greenville, South Carolina, Attorneys for Plaintiff.
Jason D. Warren, Esquire of McCANN & WALL, LLC, Wilmington, Delaware, and Justin L. Klein, Esquire, of HOBBIE, CORRIGAN & BERTUCIO, P.C., Eatontown, New Jersey, Attorneys for Defendant Nazir Peavy.

MEMORANDUM OPINION
LeGrow, J.
*1 Defendant Nazir Peavy (“Peavy”) filed this motion to dismiss or stay Progressive Casualty Insurance Company’s (“Progressive”) declaratory judgment action. Progressive’s claim seeks a declaration that it is not obligated to defend or indemnify Tristate Trucking (“Tristate”) or Charles Bolton, two alleged tortfeasors in an underlying personal injury action pending in New Jersey. Peavy moved to dismiss or stay this action on forum non conveniens grounds, arguing New Jersey was the more appropriate forum for Progressive’s claim under the Cryo-Maid factors. This case requires this Court to determine whether a first-filed personal injury action is a prior pending action for forum non conveniens purposes when an insurance coverage dispute later is filed and resolution of at least some of the claims in both actions will turn on the same disputed set of facts. In view of the overlapping factual issues between the two actions, the risk of inconsistent judgments, and the fact Delaware law is not implicated in this case, I conclude the New Jersey action is a prior pending action, and the Cryo-Maid factors weigh in favor of granting Peavy’s motion. My reasoning follows.

FACTUAL AND PROCEDURAL BACKGROUND
The following facts are drawn from the complaint and the parties’ briefs. On August 19, 2016, Charles Bolton was operating a Great Dane Trailer (“trailer”) attached to a 2010 Freightliner Tractor (“tractor”). While driving in New Castle County, Delaware, Bolton was involved in a motor vehicle accident with a vehicle occupied by Clinton Peavy, Nazir Peavy, and Teena Peavy. Nazir Peavy, a six-year-old passenger in the Peavy vehicle, suffered severe burns as a result of the accident. At the time of the accident, Bolton was operating the tractor on behalf of Tristate, a company insured by Progressive and principally owned and operated by James Donnell Lighty.

According to Progressive’s complaint, several additional parties had an insurance or ownership/leasing interest in the trailer or its freight. US Trailer owned the trailer, but had leased it to Bowman Trailer, which subleased the trailer to Staples. Great American Insurance Company (“Great American”) allegedly insured both US Trailer and Bowman Trailer, while ACE American Insurance Company (“ACE American”) insured Staples. At the time of the accident, the trailer was carrying freight allegedly owned by W.B. Mason, Inc. How the tractor became linked to the trailer and came to be carrying the freight remain disputed factual issues. Additionally, it is unclear whether A Duie Pyle, as the transportation broker for Tristate, properly vetted Tristate’s insurance coverage, as the Peavys allege it was required to do.

On October 22, 2016, Nazir Peavy, through his guardian ad litem Mylesa Walton, filed a negligence action in the New Jersey Superior Court of Monmouth County against multiple parties involved in the August 2016 accident. Peavy’s law suit was consolidated with two other negligence actions in the New Jersey Superior Court, Monmouth County, arising from the August 2016 accident (the “New Jersey action”).

*2 At the time of the accident, Progressive’s policy for Tristate did not list the tractor or trailer on its auto schedule. On December 27, 2017, Progressive brought this Delaware action seeking declaratory judgment that (1) Progressive has no duty to defend or indemnify Tristate or Bolton, and (2) Progressive’s insurance policy with Tristate does not apply to the New Jersey action. On April 20, 2018, Nazir Peavy moved to dismiss or stay the Delaware action on forum non conveniens grounds, arguing both the declaratory judgment action and the negligence action should be tried in New Jersey. In November 2017, an unrelated party filed a separate personal injury action against Bolton and several other defendants regarding the August accident.1 That, however, has no bearing on the outcome of Peavy’s motion.

THE PARTIES’ CONTENTIONS
In support of his motion, Peavy argues the factors applied in Delaware to forum non conveniens motions weigh in favor of dismissing, or at a minimum staying, the Delaware action. Peavy first argues litigating this action in Delaware would impose a substantial hardship for him associated with the additional costs of hiring Delaware counsel and traveling approximately one hundred miles to Delaware for court proceedings. Second, Peavy argues the Delaware action largely involves issues of contract and therefore neither New Jersey nor Delaware presents access of proof issues. Third, Peavy contends that, although the accident occurred in Delaware, no question of Delaware law is presented because there is no indication any of the insurance policies were issued in Delaware. Finally, Peavy maintains that the New Jersey action constitutes a prior pending action with factual issues that overlap substantially with the Delaware action, and consolidating the actions in New Jersey would avoid duplicative discovery and streamline the litigation.

Progressive, on the other hand, first argues the New Jersey action does not constitute a prior pending action, and Peavy therefore must demonstrate overwhelming hardship in order to dismiss the Delaware action on forum non conveniens grounds. Progressive asserts the New Jersey action does not constitute a prior pending action because it involves different claims, and therefore rulings by one court would not conflict with rulings by the other. Progressive also contends Delaware law may apply to the case because several of the parties are incorporated in Delaware.

Third, Progressive argues the issues of access of proof and compulsory process for witnesses do not weigh in Peavy’s favor because the declaratory judgment claim largely involves issues of law, not fact. Fourth, Progressive asserts practical considerations weigh in favor of adjudicating its claim in Delaware because the accident occurred in Delaware, and New Jersey may not have general jurisdiction over the parties essential to the declaratory judgment action. Finally, Progressive argues Peavy is not an indispensable party in this action and therefore lacks standing to move to dismiss or stay.

ANALYSIS
Until recently, Delaware courts applied different forum non conveniens tests depending on whether there was an action pending in another jurisdiction and, if so, whether the Delaware action was first-filed. Under the Delaware Supreme Court’s decision in General Foods Corp. v. Cryo-Maid, Inc.,2 when the Delaware action was first-filed, the court would consider: (i) the relative ease of access to proof; (ii) the availability of compulsory process for witnesses; (iii) the possibility of viewing the premises, if appropriate; (iv) all other practical problems that would make the trial of the case easy, expeditious and inexpensive; and (v) “whether or not the controversy is dependent upon the application of Delaware law which the courts of this State more properly should decide than those of another jurisdiction.”3 On the other hand, in McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co.,4 the Delaware Supreme Court held that when the first- filed action arose in another jurisdiction, Delaware courts could exercise their discretion “freely in favor of the stay when there is a prior action pending elsewhere, in a court capable of doing prompt and complete justice, involving the same parties and the same issues ….”5

*3 More recent decisions, however, combine the Cryo-Maid and McWane tests and apply different presumptions depending on a case’s procedural posture. Now, Delaware courts apply the Cryo-Maid factors to all forum non conveniens motions, irrespective of whether there is another pending action and which action was filed first. The issue of a prior pending action remains relevant, however, to the level of proof required for the movant to prevail.

If the dispute is a first-filed Delaware case, with no pending litigation in another jurisdiction, then the moving defendant “must establish overwhelming hardship for Delaware courts to grant dismissal.”6 If the Delaware action is a second-filed case with another first-filed case pending in another jurisdiction, however, “Delaware courts have greater discretion in determining whether a stay or dismissal is proper.”7 Here, I conclude the New Jersey Action is a prior pending action and the Cryo-Maid factors weigh in favor of this Court exercising its discretion to stay this matter.

A. The New Jersey action constitutes a prior pending action under McWane.
Although the existence of a prior pending action often is listed as the last Cryo-Maid factor, I have considered this factor first because it informs the standard by which this Court weighs the remaining factors. In my view, the New Jersey action constitutes a prior pending action in another jurisdiction.

Under McWane, an action is a “prior pending” action when 1) the two actions involve similar claims and similar parties, and 2) the first action is in a court capable of doing prompt and complete justice.8 Here, there is no dispute that the New Jersey action was filed more than a year before this action or that the New Jersey court is capable of doing prompt and complete justice. Progressive, however, resists Peavy’s contention that the claims in both cases are similar. Progressive argues its declaratory judgment action regarding its policy with Tristate involves different issues of fact and law than the New Jersey negligence action. Accordingly, Progressive argues McWane’s comity concerns of inconsistent rulings do not apply. I disagree and find the cases closely are related and arise out of the same common nucleus of operative facts.

As this Court recognized previously, “all claims arising from a common nucleus of operative facts should be brought in the same court at the same time whenever possible.”9 Here, both cases arose from the same accident and, importantly for purposes of this case, the determinative factual issues in both actions appear to overlap.

First, the parties in this action and the New Jersey action substantially are similar. Of the sixteen listed defendants in the Delaware action, only Progressive, Great American, and ACE American are not named in the New Jersey action. It appears the New Jersey court would have jurisdiction over all the parties in the Delaware action, as all the corporate defendants regularly conduct business in New Jersey and the individual defendants either live in New Jersey or are defending the negligence action there without contesting jurisdiction. In any event, the relatively remote possibility that the New Jersey Court may lack personal jurisdiction over a necessary defendant weighs in favor of staying, rather than dismissing, this action.

*4 Second, although it is not typically the case in insurance coverage disputes, in this particular case the coverage question appears likely to turn on many of the same facts that are at issue in the negligence case. That is, the main factual question—unresolved at this date—is not the question of fault for the accident, but rather how the trailer came to be attached to the tractor and whether and how A Duie Pyle verified that the tractor and Bolton were insured. Those issues appear relevant, if not potentially determinative, to both this coverage dispute and some of the liability claims in the negligence action. Discovery regarding these issues is underway in New Jersey, and a fact finder’s conclusions of these disputes likely will be necessary to resolve the coverage action and some of the negligence claims. For that reason, this case is different than many in which there is both an insurance coverage or indemnification question and an underlying liability action. Although it cannot be said that all such cases have similar facts or risk inconsistent judgments, the unique circumstances of this case compel that conclusion.

Finally, neither party argues the New Jersey Court is incapable of delivering prompt and complete justice to Progressive’s claim. Accordingly, the New Jersey action constitutes a prior pending action, and Peavy need not demonstrate overwhelming hardship to obtain a stay.

B. The remaining Cryo-Maid factors favor staying this action so the parties may pursue their coverage dispute in New Jersey.
All the remaining Cryo-Maid factors are either neutral or weigh in Peavy’s favor. First, Progressive’s coverage dispute does not involve substantive access to proof issues. It appears discovery documents and witnesses will be equally accessible in both jurisdictions. Second, both parties agree that neither court will need compulsory process to subpoena witnesses in this case. Third, no review of the crash site is necessary to determine Progressive’s coverage dispute.

Fourth, this case does not involve issues of Delaware law. Although the site of the accident was in Delaware, the insurance policy is governed by the laws of other states. Additionally, Peavy, Walton, and Michael Peavy are New Jersey residents. Progressive argues it is possible that Delaware law could apply because several of the named defendants are incorporated in or have their principal place of business in Delaware. This argument is unconvincing; Progressive’s insurance policy was issued in another state and Progressive failed to cite any Delaware law that would apply to the coverage dispute.

As these Cryo-Maid factors do not support either party’s position, the determinative factor in this case is the Court’s consideration of the “practical problems” that would make the case easy, expeditious, and inexpensive to try. Although there will be some hardship to Peavy in hiring Delaware counsel, which will increase costs and lower the net amount he may receive of any recovery ultimately awarded, those costs are not so substantial that they factor strongly in the analysis.10 Much more significant, however, is the substantial risk of inconsistent judgments if these cases continue to proceed in different forums. As previously explained, there are significant overlapping factual issues between the two cases relating to how the tractor and trailer became connected and how A Duie Pyle verified insurance. Consolidating the actions in one court eliminates that considerable risk.

Progressive, however, continues to resist that conclusion, pointing out that a separate personal injury complaint was filed in Delaware relating to this accident. That complaint was filed by a bystander who allegedly suffered injuries while rendering assistance immediately after the crash.11 Progressive argues this complaint’s filing in Delaware “further supports Progressive’s position that Delaware is the proper venue for the declaratory judgment action” and the personal injury actions arising from the accident.12 The existence of a later-filed action in this State, however, has no apparent relevance under the Cryo-Maid factors. More importantly, the existence of these two personal injury actions in Delaware does not alter the analysis regarding the risk of inconsistent judgments.

C. Peavy has standing to file his motion to dismiss or stay.
*5 As an alternative basis to deny Peavy’s motion, Progressive argued Peavy is not an indispensable party to this action and therefore lacks standing to move to dismiss. In support of its argument, Progressive cites Auto Mutual Indemnity v. Dupont13 and Monsanto Co. v. Aetna Casualty & Surety Co.14 Neither case, however, supports Progressive’s standing argument. In Dupont, the District Court dismissed the plaintiff’s claim because the joinder of dispensable defendants from Delaware did not establish diversity jurisdiction in Delaware when the indispensable parties included a New York plaintiff and a Virginia defendant.15 Similarly, in Monsanto, the Superior Court denied joinder of multiple plaintiffs because joinder of all potential plaintiffs in a mass tort action was not feasible.16 Neither Dupont nor Monsanto, therefore, stand for the rather remarkable argument that a party already named as a defendant lacks standing to move to dismiss under Rule 12(b).

It is an elementary tenet of law that parties to an action may present a defense against a claim for relief. Superior Court Civil Rule 8(b) provides, in relevant part, “[a] party shall state in short and plain terms the party’s defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies.”17 Because Progressive named Peavy as a defendant in its declaratory judgment action, Peavy is permitted to move to dismiss or stay.18

CONCLUSION
For the foregoing reasons, Progressive’s declaratory judgment action is STAYED.

IT IS SO ORDERED.

All Citations
Not Reported in Atl. Rptr., 2018 WL 3853875

Footnotes

1
See DeShields v. Bolton, et. al, C.A. No. N18C-001-CEB (Del. Super.).

2
198 A.2d 681 (Del. 1964).

3
Id. at 684. The Cryo-Maid Court applied these factors to an action first-filed in Delaware with a second-filed action pending in Illinois. Id. at 682.

4
263 A.2d 281, 283 (Del. 1970).

5
Id. at 283.

6
Aranda v. Philip Morris USA Inc., 2018 WL 1415215, *3 (Del. Mar. 22, 2018) (quoting Gramercy Emerging Markets Fund v. Allied Irish Banks, PLC, 173 A3d 1033, 1038 (Del. 2017)).

7
Id. In Gramercy, the Delaware Supreme Court addressed a different forum non conveniens variation: a Delaware action filed after a first-filed action was dismissed for forum non conveniens in another jurisdiction.

8
McWane, 263 A.2d at 283.

9
Transamerica Corp. v. Reliance Ins. Co. of Illinois, 1995 WL 1312656, *5 (Del. Super. Aug. 30, 1995) (citing Schnell v. Porta Systems Corp., 1994 WL 148276 (April 12, 1994)).

10
Peavy represented that his New Jersey attorneys represent him on a contingency basis, but they have been forced to retain Delaware counsel at an hourly rate to defend this case, and those costs will be subtracted from any recovery Peavy receives. If both actions proceed in New Jersey, however, Peavy’s contingency counsel will represent him for all purposes.

11
See D.I. 82, Ex. A.

12
D.I. 82.

13
21 F.Supp. 606 (D. Del. 1937).

14
565 A.2d 268 (Del. Super. 1989).

15
Dupont, 21 F.Supp. at 608.

16
Monsanto, 565 A.2d at 271-72 (holding that Monsanto adequately represented the interests of the plaintiffs against Aetna and therefore joinder was not necessary to preserve their interests).

17
Super. Ct. Civ. R. 8(b).

18
Moreover, the injured parties likely have the most at stake in this coverage action. A ruling that Progressive has no coverage obligations would eliminate the most obvious source of recovery available to the injured parties, since Bolton, Lighty, and Tristate are either judgment proof or have filed for bankruptcy.