United States District Court, N.D. Ohio, Western Division.

Akisha MCCARTER, Plaintiff,

v.

ZIYAR EXPRESS, INC., et al., Defendants.

Case No. 3:21 CV 2390

Filed January 10, 2023

Attorneys and Law Firms

Joshua M. Leizerman, Rena M. Leizerman, Michael J. Leizerman, Law Firm for Truck Safety, Toledo, OH, for Plaintiff.

Shannon J. George, Ritter, Robinson, McCready & James, Toledo, OH, for Defendants, Ziyar Express, Inc., Hakim Niazi.

David R. Hudson, Reminger Co., Toledo, OH, for Defendants, P.A.M. Transport, Inc., P.A.M. Transportation Services, Inc.

Christopher E. Cotter, Lidia B. Ebersole, Roetzel & Andress, Akron, OH, for Defendant, Universal Logistics Holdings, Inc.

Robert D. Boroff, Cleveland, OH, for Defendants, Centra, Inc., Matthew Moroun.

MEMORANDUM OPINION AND ORDER

James R. Knepp II, UNITED STATES DISTRICT JUDGE

Introduction

*1 Plaintiff Akisha McCarter brings negligence, vicarious liability, and survival claims individually and on behalf of her deceased husband’s estate against Defendants Ziyar Express, Inc. (“Ziyar”), Hakim Niazi, P.A.M. Transport, Inc. and P.A.M. Transportation Services, Inc. (“the P.A.M. Defendants”), Universal Logistics Holdings, Inc. (“Universal”), CenTra, Inc. (“CenTra”), and Matthew Moroun in this commercial truck crash case. (Doc. 26). Currently pending before the Court are Motions to Dismiss by the P.A.M. Defendants (Doc. 39), Defendants CenTra and Moroun (Doc. 41), and Defendant Universal (Doc. 42). All are fully briefed and ripe for decision. Jurisdiction is proper under 28 U.S.C. § 1332. For the reasons below, the Court grants all three Motions to Dismiss.

Background

This case stems from an auto accident between a commercial truck and a passenger vehicle in Toledo, Ohio, on October 15, 2021. (Doc. 26, at 5). Decedent Michael McCarter (Plaintiff’s husband) was driving a passenger vehicle on Interstate 75 South merging onto Interstate 475 West; Defendant Niazi was driving a commercial truck without a trailer on Interstate 75 North merging onto Interstate 475 West. Id. Niazi’s truck crossed the grass median at the junction between I-75 and I-475, crashed into the decedent’s vehicle at highway speed, and landed on top of the decedent’s vehicle as both vehicles left the highway to the right and rolled onto the grass shoulder. Id. Video footage of the crash was captured by Department of Transportation highway cameras. Id.

Emergency personnel removed the decedent from the vehicle after about 90 minutes. Id. at 15. He died after being transported from the crash scene. Plaintiff alleges Niazi was watching a movie on his cell phone while he was driving at the time of the crash. Id. at 5.

Plaintiff brings¹ claims against several defendants in connection with the crash, including:

(1) Niazi, the driver (id. at 5); (2) Ziyar, which Plaintiff identifies as Niazi’s employer and the owner of the commercial truck (id. at 6-7); and (3) the P.A.M. Defendants, which Plaintiff identifies as the transportation broker and a “closely related” entity involved with the crash as the freight broker² for the commercial truck. Id. at 3.

Plaintiff also brings claims against Defendants Universal, CenTra, and Moroun. Plaintiff does not allege a connection between Universal and the crash or any parties to it in the Amended Complaint. In a later filing, Plaintiff states Universal could have had several “potential roles”, such as motor carrier, shipper of the load, hirer of the P.A.M. Defendants, or freight broker. (Doc. 47, at 2-3). Plaintiff further alleges CenTra provides administrative, legal, and human resources support to Universal. (Doc. 26, at 13). Finally, Plaintiff alleges Maroun is the “controlling officer and shareholder” of the P.A.M. Defendants, Universal, and CenTra. Id. at 14.

Standard of Review

*2 On a motion to dismiss under Federal Civil Rule 12(b)(6), the Court tests the complaint’s legal sufficiency. The Court construes the complaint in the light most favorable to Plaintiffs, accepts all factual allegations as true, and determines whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations,” it requires more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Id. at 555. The complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

Discussion

Plaintiff brings negligence claims against all Defendants; vicarious liability claims against Ziyar, Universal, the P.A.M. Defendants, and Maroun; and survival claims against all Defendants except CenTra. (Doc. 26). The P.A.M. Defendants, Universal, and CenTra/Maroun each filed a Motion to Dismiss. (Docs. 39, 41, 42). The Court will consider each motion in turn. Defendants P.A.M. Transport, Inc. and P.A.M. Transportation Services, Inc.

Plaintiff brings against the P.A.M. Defendants identical negligence claims for “failing to exercise reasonable care in arranging transportation of the Load and hiring or selecting, training, supervising and/or retaining Defendants Ziyar Express or Niazi to operate the tractor-trailer and transport the Load.” (Doc. 26 at 9, 11). Plaintiff also brings near-identical vicarious liability claims against the P.A.M. Defendants for “the negligent and reckless actions and omissions of Defendants Niazi and Ziyar Express…committed within the course and scope of their employment or agency” with the P.A.M. Defendants. Id. at 8, 9. The vicarious liability claim against Defendant P.A.M. Transportation Services, Inc., differs from that against Defendant P.A.M. Transport, Inc., only in that it also seeks to hold the former liable for the “negligent and reckless actions and omissions” of the latter as well as those of Niazi and Ziyar. Id. at 9.

The P.A.M. Defendants argue they are shielded from Plaintiffs’ claims by the preemption provision of the Federal Aviation Authorization Administration Act (“FAAAA”) as shipping brokers. (Doc. 39, at 1). Plaintiff contends the claims are not preempted by the FAAAA, or in the alternative, the claims fall within the “safety exception” of the preemption provision. (Doc. 46, at 10). Consistent with its recent holding in Lee v. Werner Enterprises, Inc., this Court holds Plaintiff’s claims against the P.A.M. Defendants are preempted by the FAAAA. See 2022 WL 16695207, at *5 (N.D. Ohio).

The FAAAA provides that:

Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

49 U.S.C. § 14501(c)(1). The subsequent “safety exception” exempts from preemption “the safety regulatory authority of a State with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A).

In 1992, the Supreme Court made several holdings regarding an identical preemption provision in the Airline Deregulation Act of 1978 (“ADA”):

(1) that state enforcement actions having a connection with, or reference to, carrier rates, routes, or services are pre-empted;

*3 (2) that such pre-emption may occur even if a state law’s effect on rates, routes, or services is only indirect;

(3) that, in respect to pre-emption, it makes no difference whether a state law is consistent or inconsistent with federal regulation; and

(4) that pre-emption occurs at least where state laws have a significant impact related to Congress’ deregulatory and pre-emption-related objectives.

Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384-87 (1992) (cleaned up). The Supreme Court subsequently held the same principles applied to the FAAAA preemption section.

In Morales, this Court interpreted the pre-emption provision in the Airline Deregulation Act of 1978. And we follow Morales in interpreting similar language in the 1994 Act before us here. We have said that “when judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates, as a general matter, the intent to incorporate its judicial interpretations as well.”

Rowe v. New Hampshire Motor Transp. Ass’n, 552 U.S. 364, 370 (2008). There is not yet any binding law on this Court regarding whether personal injury tort claims against freight brokers are preempted under the FAAAA in keeping with Rowe and Morales. But this Court finds persuasive the Supreme Court’s holding that the identical ADA preemption section applies to state common law claims, which have “the force and effect of law.” Northwest, Inc. v. Ginsberg, 572 U.S. 273, 281-82 (2014).

This Court also adopts and incorporates its prior reasoning in Lee:

Another Judge of this Court previously held – in a truck crash case – that negligence claims brought against a shipper and broker “fall[ ] squarely within the preemption of the FAAAA.” Creagan v. Wal-Mart Trans., LLC, 354 F. Supp. 3d 808, 813 (N.D. Ohio 2018)….Additionally, if the safety exception preserved all claims related to motor vehicles, as urged by Plaintiffs and Miller, “all preempted claims would then be ‘saved’ by the exception.” Creagan, 354 F. Supp. 3d at 814. This would make the entirety of the preemption provision redundant. Rather, this Court finds “it cannot ignore the straightforward preemption analysis as laid out by the Supreme Court, and finds instructive the analysis in Rowe.” Volkova v. C.H. Robinson Co., 2018 WL 741441, at *4 (N.D. Ill.). To the eye of this Court, the FAAAA’s preemption provision protects precisely parties such as the shipper and broker, who did not have direct involvement in the accident that injured Plaintiffs.

2022 WL 16695207, at *5. This Court accordingly finds the claims against the P.A.M. Defendants, the freight brokers in this case, are preempted by the FAAAA and must be dismissed. Defendant Universal Logistics Holdings, Inc.

Plaintiff brings against Universal (1) a vicarious liability claim for “the negligent and reckless actions and omissions of Defendants P.A.M. Transport, Inc., Niazi[,] and Ziyar Express” and “for the collision as a motor carrier and statutory employer of the Load” (Doc. 26, at 11-12), and (2) a negligence claim for “failing to exercise reasonable care in arranging transportation of the Load and hiring or selecting, training, supervising and/or retaining [Defendants P.A.M., Ziyar, and Niazi] to operate the tractor-trailer and transport the Load.” Id. at 12.

*4 Plaintiff does not allege a definite connection between Universal and the crash. Universal points this out in its Motion to Dismiss. (Doc. 42-1, at 1). In response, Plaintiff claims Universal could have had “several potential roles…for this Load”, including carrier, broker, or shipper, and that “discovery is needed to clarify these roles.” (Doc. 47, at 2-3).

At the outset, in order to survive a Motion to Dismiss, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Plaintiff seeks to hold Universal accountable for its alleged negligence and for the negligence of three other Defendants. The basic elements of a negligence claim are duty, breach, causation, and damages. See, e.g., Abrams v. Worthington, 169 Ohio App. 3d 94, 99 (Ohio App. 2006). “In Ohio, the existence of a duty depends upon the foreseeability of injury to the plaintiff.” Id. “The test for foreseeability is whether a reasonably prudent person would have anticipated that an injury was likely to result from the performance or nonperformance of an act.” Id. (quoting Menifee v. Ohio Welding Prods., Inc., 15 Ohio St. 3d 75, 77 (1984)).

Plaintiff does not state how Universal is connected to the accident, or how or why Universal was responsible for “arranging transportation” or “hiring[,] selection, training, supervising[, or] retaining” the other parties connected to the accident. Plaintiff cannot establish a duty, a breach of that duty, or any causal connection between Universal and the damages suffered without alleging facts plausibly connecting Universal to the incident. Plaintiff fails to meet basic pleading standards in its claims against Universal.

Even if Plaintiff had met these pleading standards, the claims against Universal are not substantively proper. First, to the extent Plaintiff sues Universal as a “carrier, broker or shipper”, all three of which Plaintiff lists as “examples of the potential roles of Defendant Universal”, these claims are preempted by the FAAAA for the same reasons stated above regarding the P.A.M. Defendants.

Next, to the extent Plaintiff seeks to hold Universal vicariously liable for the actions of any parties to the accident within Universal’s control, this Court notes an employer or principal can only be held liable for the conduct of its employee or agent if that employee or agent is directly liable himself. See Hayslip v. Genuine Parts Co., 420 F. Supp. 3d 666, 676 (S.D. Ohio 2019). While Plaintiff does not state Universal’s role with particularity, it is possible to discern from the Amended Complaint that Plaintiff sees Universal as “upstream” of the P.A.M. Defendants. See Doc. 51, at 2. Plaintiff alleges Niazi was employed by Ziyar, and that Ziyar was in turn hired by the P.A.M. Defendants. (Doc. 26, at 3, 12). Universal is then held out as, whatever its role, liable for the actions of the P.A.M. Defendants and the parties below them. Id. at 11. The claims against Universal are therefore derivative of the claims against the P.A.M. Defendants; Universal’s liability depends on P.A.M.’s liability. In vicarious liability cases, “[i]f the liability of the primarily liable party was extinguished, the liability of the secondarily liable party [is] likewise extinguished.” Comer v. Risko, 106 Ohio St. 3d 185, 190 (2005). Because the claims against the P.A.M. Defendants are preempted and those parties are not liable, Universal cannot be held liable via a derivative theory of liability.

*5 Finally, to the extent Plaintiff asserts a negligent hiring claim against Universal, her claim also fails. To make a negligent hiring claim, a party must show “(1) the existence of an employment relationship; (2) the employee’s incompetence; (3) the employer’s actual or constructive knowledge of such incompetence; (4) the employee’s act or omission causing the plaintiff’s injuries; and (5) the employer’s negligence in hiring or retaining the employee as the proximate cause of plaintiff’s injuries.” Viglianco v. Athenian Assisted Living, Ltd., 2015 WL 5782979, at *6 (N.D. Ohio). While Plaintiff broadly alleges an employment relationship between Universal and the P.A.M. Defendants, she does not, for example, assert any facts suggesting knowledge by Universal of P.A.M.’s incompetence or any proximate cause between the hiring and the crash.

To find proximate cause, “it must appear that the injury was the natural and probable consequence of the negligence or wrongful act, and that it ought to have been foreseen in the light of the attending circumstances.” Milwaukee & St. P.R. Co. v. Kellogg, 94 U.S. 469, 475 (1876). The sparse facts set forth by Plaintiff render Universal’s connection to the crash so vague and removed as to make it impossible to discern a prima facie allegation of proximate causation from the Amended Complaint.

Plaintiff asserts no other theories of liability for Universal. The claims against this Defendant must be dismissed.

Defendants Maroun and CenTra

Plaintiff brings against Maroun a vicarious liability claim for the negligence of the P.A.M. Defendants, a claim for “aiding and abetting” the P.A.M. Defendants’ “violation of federal statutes and regulations”, and a claim for “liability for [the] joint venture” of the P.A.M. Defendants, Universal, and CenTra. (Doc. 26, at 13-14). Plaintiff brings against CenTra a negligence claim for providing “administrative support services to Universal…including legal, human resource, and other services.” Id. at 13.

The Sixth Circuit at one point predicted Ohio would consider “civil aiding and abetting” a legally viable tort theory based on a then-unapproved section of the Restatement (Second) of Torts. Aetna Cas. & Sur. Co. v. Leahey Const. Co., 219 F.3d 519, 532-33 (6th Cir. 2000). Several years later, however, the Ohio Supreme Court held that Ohio does not recognize a cause of action for civil aiding and abetting under that section, undermining the Sixth Circuit’s decision. Blake v. Wells Fargo Bank, NA, 916 F. Supp. 2d 839, 842-43 (S.D. Ohio 2013) (citing DeVries Dairy, LLC v. White Eagle Coop. Ass’n, Inc., 132 Ohio St. 3d 516, 517 (2012)). Plaintiff’s claim against Maroun for aiding and abetting is therefore dismissed.

Under Ohio law, parties to a joint venture are each “liable for the negligent and tortious acts of the other members, pursuant to the venture, that result in injury to third persons.” Hulett v. Am.’s Finest Serv. Co., 2005 WL 2233261, at *12 (N.D. Ohio). To establish the existence of a joint venture, Plaintiff must show (1) a joint contract, (2) intent among parties to form a joint venture, (3) a “community of interest and control, including contributions to the joint venture”, (4) “the mutual right” among members “to direct and control the purpose of the joint venture”, and (5) an agreement among parties to the venture to share its losses and profits. Anchor v. O’Toole, 94 F.3d 1014, 1024 (6th Cir. 1996). At the pleading stage, Plaintiff must allege “sufficient factual matter, accepted as true, to allow this court to draw the reasonable inference” of a joint venture’s existence. Lester v. Wow Car Co., 2013 WL 6058676, at *3 (S.D. Ohio).

Plaintiff’s Amended Complaint alleges that Defendant Moroun is “the controlling officer and shareholder” of the P.A.M. Defendants, Universal, and CenTra, and that he “entered into contractual relationships that manifested a joint intent between and with those entities to conduct business together with joint property interests, joint control over the ventures and to jointly earn financial rewards including shared profits and losses, from those business venture[s] together to transport the Load.” (Doc. 26, at 15). Plaintiff does not explain Moroun’s role at the P.A.M. businesses, Universal, or CenTra beyond “controlling officer and shareholder” and does not explain the purpose of the joint venture other than “to transport the Load;” Plaintiff does not allege in sufficient detail how the P.A.M. Defendants or Universal were involved with the trip that ended in the crash, and she alleges only that CenTra provided support services to Universal.

*6 These bare recitations of the elements of a claim do not provide sufficient factual matter to draw a reasonable inference or create a plausible claim. For comparison, in a case where evidence was provided of several companies’ agreements to drill wells in a particular county, the court still dismissed the claim because no facts were alleged defining the scope of the agreements or identifying whether a particular drilling activity was carried out pursuant to the joint venture. J&R Passmore, LLC v. Rice Drilling D, LLC, 2019 WL 6051112, at *3 (S.D. Ohio). In this case, where Plaintiff has not alleged in plausible detail the existence of agreements between the Defendants, much less the scope or purpose of the agreements or each company’s role, she has not pleaded sufficient facts to establish Maroun “has any stake” in the business transactions leading to the trip that ended in the crash. Id.

The remaining claims against Maroun appear to be either vicarious liability or negligent hiring claims. These theories of liability fail for the same reason they fail against Universal. Maroun’s activities as alleged by Plaintiff are “upstream” of those by Universal, the P.A.M. Defendants, Ziyar, and Niazi. Because the parties “below” Maroun cannot be held liable, Maroun would have no liability but for the liability of the underlying parties, and Plaintiff has not alleged any proximate cause between the accident and Maroun’s actions, all remaining claims against Maroun must be dismissed.

The claim against Defendant CenTra also appears to be a vicarious liability or negligent hiring claim. As is the case for the claims of this nature against Universal, Plaintiff has not sufficiently alleged liability of any “downstream” parties (extinguishing the vicarious liability claims) nor alleged facts supporting most if not all of the elements of a negligent hiring claim, such as the existence of CenTra as an employer rather than an employee or contractor, CenTra’s knowledge of incompetence, or proximate cause between CenTra’s provision of legal and human resources services and the auto accident. All claims against CenTra must therefore be dismissed.

Conclusion

For the foregoing reasons, good cause appearing, it is

ORDERED that Defendants P.A.M. Transport, Inc. and P.A.M. Transportation Services, Inc.’s Motion to Dismiss (Doc. 39), be, and the same hereby is, GRANTED; and it is

FURTHER ORDERED that Defendants Matthew Maroun and CenTra, Inc.’s Motion to Dismiss (Doc. 41), be, and the same hereby is, GRANTED; and it is

FURTHER ORDERED that Defendant Universal Logistics Holdings, Inc.’s Motion to Dismiss (Doc. 42), be, and the same hereby is, GRANTED.

All Citations

Footnotes

1 Plaintiff was qualified and appointed administrator of the decedent’s estate by the Lucas County Probate Division of the State of Ohio on November 8, 2021. (Doc. 26, at 2).  

2 A freight broker is an intermediary hired to arrange for transportation of a load by hiring a motor carrier for a shipper. See Doc. 39, at 2.  

End of Document

United States District Court, S.D. Illinois.

JESSICA MILLAM, ADMINISTRATOR OF THE ESTATE OF WAYNE WHALEN Plaintiff,

v.

NORTHERN FREIGHT, LLC, AHMED SANKUS, SAFARA EXPRESS, LIMITED LIABILITY COMPANY, and FEDEX CUSTOM CRITICAL, INC., Defendants.

Case No. 20-cv-00797-JPG

01/26/2023

J. PHIL GILBERT, DISTRICT JUDGE

MEMORANDUM AND ORDER

I. Introduction

*1 This matter comes before the Court on Defendant FedEx Custom Critical, Inc. (“FedEx” or “Defendant”) motion for summary judgement against Plaintiff Jessica Millam, (“Plaintiff”) Administrator of the Estate of Wayne Whalen (“Whalen”) (Doc. 104). Plaintiff opposes the motion (Doc. 107). FedEx, citing exceptional circumstances, filed a reply (Doc. 110). FedEx seeks judgment as a matter of law on Count IV¹ of the operative complaint.

II. Background

This case arises from a motor vehicle accident on July 21, 2020. Whalen was driving on Interstate 70 in Cumberland County, Illinois where he was involved in an accident with Ahmed Sankus (“Sankus”), who was driving a 2014 Freightliner Straight Truck owned by Northern Freight, LLC (“Northern Freight”). In a third amended complaint, Plaintiff filed a four-count complaint asserting a claim for negligence against FedEx. Plaintiff alleges that Sankus was driving the truck as an agent of FedEx during the instant accident. Additionally, Plaintiff further alleges that it was the duty of Sankus, acting as an agent of FedEx to exercise ordinary and reasonable care to operate the motor vehicle.

Additionally, Plaintiff alleges that Sankus, acting as an agent of FedEx, breached his duty by failing to reduce his speed to avoid a collision, drove while distracted, violated Federal Motor Carrier Safety Regulation (“FMCSR”) 392.14 by failing to use extreme caution and failing to reduce speed in hazardous conditions, by failing to discontinue operation due to hazardous conditions. Additionally, Plaintiff alleges Sankus, as an agent of FedEx, failed to reduce speed when the weather warranted in violation of 625 ILCS 5/11-601 and drove while fatigued. Plaintiff alleges that Sankus’s negligent acts was a direct and proximate cause of Plaintiff’s injuries.

Based on the pleadings in this case, Northern Freight has admitted Sankus was driving a truck owned by Northern Freight and Sankus was an employee of Northern Freight. FedEx is a transportation provider for shipments. The agreements at issue are the Transportation Service Agreement (“TSA”), and Master Transportation Agreement (“MTA”). The TSA gave FedEx the right to act as carrier or broker at its discretion.

Regarding the subject July 2020 load, Team Industrial Services hired FedEx to transport from its facility in Ohio to its facility in Illinois. FedEx was listed as the carrier on the shipper’s bill of lading regarding this load, but FedEx argues that it was listed as the carrier because the shipper initially booked the load with FedEx and FedEx ended up brokering the subject load to Safara. (Doc. 104 at 3). Then, Safara “double brokered” the subject load to Northern Freight. FedEx argues that “double brokering” the load was against the terms of the MTA between FedEx and Safara. Plaintiff argues that nothing in the MTA prohibited Safara from leasing with independent contractors or owner operators to hail loads that had been brokered to it. (Doc. 107 at 3).

*2 FedEx dispatches loads through a Rate Confirmation Sheet (“RCS”). Pursuant to the RCS Safara was the carrier for the load, and his driver “Ahmed” was to drive the load. The RCS apparently imposes several terms requiring a driver to communicate with FedEx. Plaintiff argues that Sankus was “picking up the load for FedEx,” the load belonged to FedEx, Safara was the motor carrier for this load, and Northern Freight was an independent contractor. Therefore, Plaintiff argues, Sankus was an agent of FedEx.

III. Analysis

Summary judgment must be granted “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); see Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Spath v. Hayes Wheels Int’l–Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000). The reviewing court must construe the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Thus, the Court construes evidence and draws all reasonable inferences in favor of Plaintiffs.

On summary judgment a court may not make credibility determinations or weigh the evidence, because these are tasks for a factfinder. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Betaco, Inc. v. Cessna Aircraft Co., 32 F.3d 1126, 1138 (7th Cir.1994). In evaluating a motion for summary judgment, “[t]he court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial.” Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994).

The Court here will interpret state law “to determine how the state’s highest court would rule.” Anicich v. Home Depot U.S.A., Inc., 852 F.3d 643, 649 (7th Cir. 2017). Here, Illinois law would apply. When there is no dispute over which state’s law applies, the court will apply the substantive law of the state in which the federal court sits. Med. Protective Co. of Fort Wayne v. Am. Int’l Specialty Lines Ins. Co., 911 F.3d 438, 445 (7th Cir. 2018). Here, the parties agree that Illinois law applies, and their choice is consistent with Illinois’s presumption in personal-injury cases to apply the law of the state in which the injury occurred. Townsend v. Sears, Roebuck & Co., 227 Ill.2d 147, 316 Ill.Dec. 505, 879 N.E.2d 893, 903 (2007).

a. Duty under Agency Theory

First, FedEx argues that the evidence is undisputed that Sankus was operating his vehicle as Northern Freight employee and agent, and not as the agent of FedEx. Therefore, FedEx argues that FedEx had no duty to Plaintiff. (Doc. 104 at 5-6). Plaintiff argues the opposite and states there is substantial support that FedEx had control over Sankus.

“Agency is a fiduciary relationship in which the agent has the power to act on the principal’s behalf.” Sphere Drake Ins. Ltd. v. Am. Gen. Life Ins. Co., 376 F.3d 664, 672 (7th Cir. 2004). The test for agency is “whether the alleged principal has the right to control the manner and method in which work is carried out by the alleged agent and whether the alleged agent can affect the legal relationships of the principal.” Chemtool, Inc., v. Lubrication Techs., 148 F.3d 742, 745 (7th Cir. 1998). The parties must consent to a principal-agent relationship, which may be created by conduct or contract. Id. Another significant factor “is the nature of work performed in relation to the general business of the employer.” Sperl v. C.H. Robinson Worldwide, Inc., 408 Ill. App. 3d 1051, 1057-58, 946 N.E.2d 463, 471 (2011). “Other factors to consider are: (1) the right to discharge; (2) the method of payment; (3) the provision of necessary tools, materials, and equipment; (4) whether taxes are deducted from the payment; and (5) the level of skill required.” Id. at 1058, 946 N.E.2d at 471.

*3 FedEx argues that FedEx had no ownership interest in the vehicle driven by Sankus and Sankus was not acting as an agent of FedEx. FedEx’s argument can be distilled as the following: FedEx did not hire Northern Freight or Sankus. FedEx brokered the load to Safara to hail as a carrier. Safara, as a broker, without permission, double brokered the load to Northern Freight, who assigned the load to Northern Freight’s employee Sankus. Therefore, FedEx argues, FedEx had no authority or control over Sankus. Plaintiff argues that there is “substantial evidence” – depositions, contractual agreements, and application of trucking regulations and industry custom of those agreements – to support the allegation FedEx had control over Sankus. (Doc. 107 at 7).

i. Double Brokering

Some explanation regarding a “double broker” relationship is required here. Double brokering involves the practice of a broker receiving a shipment from a shipper and subsequently tendering the shipment to another broker for movement by a motor carrier. It is frequently done without the shipper’s knowledge or the motor carrier’s knowledge. No written or even oral contracts exist between the shipper and the second broker or between the motor carrier ultimately used and the initial broker. Jets Prolink Cargo, Inc. v. Brenny Transp., Inc., No. Civ. 02-1294 ADMRLE, 2003 WL 22047910, 1 n.1 (D. Minn. Aug. 29, 2003). “While there do not appear to be any reported administrative or court decisions that deal with this precise issue, double brokering is often considered illegal in light of the wording of federal regulations.” James C. Hardman, Third Party Contract Issues Concerning Motor Carriers, Brokers, and Shippers, 34 Transp. L.J. 307, 310 (2007) (citing 49 C.F.R. § 371.7 (2007). This Court offers no opinion or finding as to the legality or illegality of double brokering.

Here, the Court finds that Safara giving the load to Northern Freight, who dispatched the load to Sankus constituted double brokering. Plaintiff argues that Safara did not “double broker” the load. (Doc. 107 at 12). Plaintiff argues FedEx knew Safara (or permitted Safara) and other motor carriers would contract with owner-operators to hail loads. (Doc. 107 at 12, 15). Plaintiff provides no support for this claim and the Court will not consider unsubstantiated claims. Plaintiff then cites 49 C.F.R. § 371.2(a) that states Safara was not a broker but rather a motor carrier. Specifically, Plaintiff argues § 371.2(a) states a motor carrier are not brokers “when they arrange or offer to arrange the transportation of shipments which they are authorized to transport.” Id. It is clear based on the MTA that Safara was not permitted to broker the load to Northern Freight. Plaintiff does not provide support that Safara was authorized, through its relationship with FedEx, that it was authorized to transport the load through Northern Freight.

Next, Plaintiff argues that Safara “did not, and could not, broker any loads to anyone.” Plaintiff’s expert, in an affidavit, Walter Guntharp makes this claim. (Doc. 107, Ex. 7). FedEx responds and argues Plaintiff wrongfully contradicts sworn testimony with unsupported expert options (Doc. 110 at 3). The Court reviewed Plaintiff’s expert report, which bases his conclusion that “no double brokerage occurred” and Safara was “unable to double broker” because per the FMCSR, Safara had no brokerage authority. The expert confirmed this by “the owner of Safara who acknowledged that Safara did not have any brokerage authority.” (Doc. 107, Ex. 7 at 6). The expert does not provide a cite to Safara’s answer. Pursuant to FRCP 59(e), this fact is not properly supported. The Court is unclear as to Plaintiff’s expert foundation regarding his opinion. A judge must “look behind [the expert’s] ultimate conclusion …and analyze the adequacy of its foundation.” Mid-State Fertilizer Co. v. Exch. Nat. Bank of Chicago, 877 F.2d 1333, 1339 (7th Cir. 1989). Additionally, while Plaintiff continues to state Safara was not a broker and could not have acted as a broker because of FMCSR, there is a difference between what they were authorized to do, and what they in fact did. Here, Safara double brokered the load, against the terms of the MTA.

*4 Additionally, Plaintiff argues FedEx’s argument regarding double brokering ignores the lease agreement² between Safara and Northern Freight, which identifies Safara as a motor carrier and not as a broker (Doc. 107 at 12-13). Caselaw requires to review the actions of the parties, and not just look at “contractual labels or provisions” to determine agency relationship. without exclusive weight being given to contractual labels or provisions. Sperl, 408 Ill.App.3d at 1057, 349 Ill.Dec. 269, 946 N.E.2d 463; Pekin Ins. Co. v. Ledcor Constr., Inc., 2017 IL App (1st) 162623-U, ¶ 15 (“The alleged conduct, rather than the labeling of the claim in the complaint, is controlling.”). The Court finds this load was double brokered.

ii. Agency Theory

Even if the load was not double brokered, pursuant to the rules set forth under Illinois law for a finding of an agency relationship, the relationship between FedEx and Sankus does not amount to a principal-agent relationship.

Plaintiff heavily relies on Sperl to support a finding that an agency relationship existed between FedEx and Sankus. In Sperl, the appellate court concluded that there was a reasonable basis supporting a finding of an agency relationship and thus declined to overrule a finding of vicarious liability against the defendant CHR, a logistics company that provided transportation-related services. CHR is a licensed freight broker and not a motor carrier. CHR and Dragonfly signed a carrier agreement so Dragonfly could haul loads for CHR. In Sperl, the driver, an employee of Dragonfly, contacted CHR directly, and had to pick up the load at a specified time and make check-in calls with CHR. But there was much more: the driver had to “stay in constant communication” with the CHR’s dispatchers; she was required to follow special instructions concerning the load she was hauling; she “was required to continuously measure the temperature of the load during her trip” and had to call CHR immediately if it did not meet a certain temperature; and the defendant “enforced its special instructions with a system of fines.” Sperl, 408 Ill. App. 3d at 1058, 946 N.E.2d at 471-72. CHR’s requirements effectively required the driver to violate federal regulations regarding the hours a truck driver can drive in a day in order to deliver her load on time, as she would be fined for late delivery. Id. at 1058, 946 N.E.2d at 472. These requirements and the fine-based enforcement, the court concluded, “directed [the driver’s] conduct during the entire transportation process,” thus supporting the finding CHR had the right to control the manner in which the driver performed her job. Id.

Plaintiff argues that pursuant to Sperl, the requirements³ and special instructions in the RCS indicate FedEx had a right to control Sankus’ performance. Specifically, Plaintiff argues the RCS imposed several terms of the driver including a requirement to communicate with FedEx at certain events, dictated the type of trailer to be used, and required drivers to provide FedEx with their cell number to monitor the load at all times. The crux of FedEx’s argument is that Safara double brokered the load to Northern Freight, and therefore it had no authority to exercise control over Sankus. The Court agrees. While Plaintiff argues “it is undisputed that he [Sankus] was required to comply with its terms[,]” (Doc. 107 at 9), this claim is without evidentiary support. Here, because Sankus was not authorized to transport the load, FedEx could not have power or control over him to impose terms in the RCS. Additionally, while the rule requires the Court to evaluate the “right to control” the agent, the record indicates FedEx never communicated with Sankus, nor Sankus with FedEx. Whereas in Sperl, where the driver contacted CHR directly, was required to continuously measure the temperature of the load, and failure to do so resulted in fines, the Court does not find an analogous situation here. The Court cannot find an agency relationship exists where FedEx did not have any involvement with the load, nor knew the driver was not the driver on the RCS. Therefore, FedEx had no control or authority to control Sankus at the time of the accident. Kolchinsky v. W. Dairy Transp., LLC, 949 F.3d 1010, 1015 (7th Cir. 2020) (finding no agency relationship where “evidence shows that Western Dairy had no part in the transaction leading to Mr. Bentley’s fateful trip.”).

*5 Even if the Court grants Plaintiff’s argument that this load was leased and not double brokered, the facts of this case, and conduct do not rise to the level of an agency relationship as a matter of law. There was distance between FedEx and Sankus. FedEx brokered the load to Safara, who then gave the load to Northern Freight, the employer of Sankus. FedEx alleges it had no knowledge of Northern Freight taking over the hauling of the load. A finding that FedEx retained control over a driver from an entirely different company, with which it had no written agreement, does not support agency finding under Illinois law. The Court finds these facts similar to a case recently decided by the Seventh Circuit Court of Appeals where the court affirmed a finding that no agency relationship existed.

In Kolchinsky v. Western Dairy Transport, LLC, WD Logistics, LLC (“WD Logistics”) instructed Mr. Bentley, sole member of Bentley Trucking, LLC, (“Bentley”) to transport milk. 949 F.3d 1010, 1011 (7th Cir. 2020). Bentley provided freight transportation services to WD Logistics according to the terms of Carrier/Broker Agreement, where Bentley retained “full control” over its personnel and either party could terminate agreement on 30-day notice. Id. at 1012. Western Dairy “owns and leases trucks and trailers and hauls freight, while WD Logistics brokers the hauls.” Id. Bentley was the carrier for the load brokered by WD Logistics. Id. Bentley agreed to inform WD Logistics if Bentley could not meet the schedule, the broker reserved the right to withhold damages from Bentley’s pay, and the agreement required Bentley pay for its employees, provide and maintain its own tractor, fuel, insurance, licenses, and permits. Id. The trial court found no agency relationship between Bentley and WD Logistics. On appeal, Plaintiff argued that the requirement to contact at various times, daily status call, call upon delivery, and the fact WD Logistics could charge Bentley for damages if a delivery was late or damaged supported agency finding. The Seventh Circuit held these facts did not amount to the “degree of control that Illinois courts have required when finding an agency relationship exists.” Id. at 1014 (citing Sperl, 349 Ill.Dec. 269, 946 N.E. 2d at 471–72). Assuming arguendo, the load was not double brokered, the case at hand is not close to the facts Illinois courts have required when finding agency relationship exists. FedEx did not have contacts or communications with Northern or Safara, nor did it know the driver was a Northern Freight driver. Unlike Kolinchinsky, there was no agreement between FedEx and Northern Freight. There is no support that FedEx was able to control or retained the right to control the manner of delivery, especially where FedEx was not able to exercise that control over the driver. Without evidence FedEx was able to control any details of the delivery, there can be no agency relationship. “Even if a broker requires an exclusive relationship, has the power to fire, and sets rules governing the manner of loading the trucks, no agency relationship exists if the broker does not have the power to control the details of the manner of delivery.” Id. at 1014; Dowe v. Birmingham Steel Corp., 357 Ill.Dec. 391, 963 N.E.2d 344, 351 (2011) (finding no agency relationship where a trucking company chose the route, set hours, and provided and maintained equipment and insurance).

The Court finds as a matter of law that Sankus was not an agent of FedEx. None of the facts alleged by Plaintiff show the degree of control that Illinois courts have required when finding an agency relationship exists. See also Powell v. Dean Foods Co., 379 Ill.Dec. 837, 7 N.E.3d 675, 698 (2013) (upholding a finding of agency relationship where the trial evidence showed that the shipping company controlled the drivers’ actions, required drivers to wear uniforms, and provided trailers; and the evidence also showed that the driver pulled exclusively for the company for 60 years and used its letterhead); cf Trzaska v. Bigane, 325 Ill.App. 528, 60 N.E.2d 264, 265–67 (1945) (finding no agency relationship where the driver is free to refuse a load).

*6 Plaintiff states in its response that “FedEx clams that looking at the DOT number on the side of the truck determines whose authority the driver was operating under, although it provides no authority for this assertion.” (Doc. 107 at 13). The Court believes that Plaintiff is responding to a citation in FedEx’s motion which states that FedEx argues “it had no ownership interest in the subject truck.” (Doc. 104 at 3). The Court need not consider this argument because it has already found that Sankus was not an agent of FedEx based on the agency test laid out by Illinois courts. See also Petersen v. U.S. Reduction Co., 267 Ill.App.3d 775, 204 Ill.Dec. 415, 641 N.E.2d 845, 851 (1994) (finding no agency relationship despite providing a trailer).

Next the Court looks at the nature of work performed in relation to the general business of the employer. Here, the Court agrees that work performed is similar and directly related. However, without the “right to control the manner and method in which work is carried out,” which is the ultimate test regarding whether to find an agency relationship, the Court cannot sustain an agency relationship on the fact the work performed between FedEx and Sankus is similar or directly related. Other factors that the Court can consider are 1) the right to discharge; (2) the method of payment; (3) the provision of necessary tools, materials, and equipment; (4) whether taxes are deducted from the payment; and (5) the level of skill required. Here, there is no evidence that FedEx had any right to discharge Sankus since Sankus was subject to the lease agreement between Safara and Northern Freight. Regarding the method of payment, per the lease agreement Safara was the one to transmit payment to Sankus (or Northern Freight directly). The Court is unclear as to the other factors and neither FedEx nor Plaintiff detail any application of these factors to FedEx and Sankus. It is clear to this Court in applying the agency test, Sankus was not an agent of FedEx.

Simply put, there are not enough facts to show Sankus was an agent of FedEx. Illinois courts require much more than the facts at hand. Without more, the Court finds, as a matter of law, Sankus was not an agent of FedEx.

b. Proximate Cause

Because the Court has found that FedEx owed no duty to Plaintiff, the Court need not address whether or not FedEx’s negligence was a proximate cause of the accident.

IV. Conclusion

For these reasons the Court GRANTS FedEx Custom Critical’s Motion for Summary Judgment (Doc. 104). Count IV against FedEx Custom Critical is DISMISSED.

IT IS SO ORDERED.

Dated: January 26, 2023

/s/ J. Phil Gilbert

J. PHIL GILBERT

DISTRICT JUDGE

.

All Citations

Footnotes

1 After FedEx moved for summary judgment, the Court granted Plaintiff’s motion for leave to file an amended complaint to add a count for negligent hiring. Therefore, the operative complaint is at Doc. 113.

2 The lease agreement lays out the “carrier responsibilities” which indicates the following requirements: (1) carrier requires contractor to conduct himself diligently; (2) carrier shall prepare paychecks and pay contractor for services rendered; (3) carrier shall pay contractor when all necessary documents including logbooks, miles and fuel documents, maintenance records, DOT inspection reports, and traffic tickets.

3 Plaintiff argues the RCS required Sankus to communicate with FedEx with the following: 1) arrival at the shipper, 2) when loaded but prior to departing, 3) every 4 hours while on the road, 4) upon arrival and departure from any customs/broker or transfer stops, 5) upon arrival at delivery, 6) when departing the delivery with proof of delivery details, and 7) at any time during shipment when the driver experiences a delay.

End of Document