OUT OF SERVICE REPORTS.    J.J. Keller has released its statistical report on what states led the way in 2008  in placing drivers and trucks out of service.  Nebraska takes the crown on pulling truckers out of service, with 36.71 percent being placed out of service.  The list follows with Connecticut at 36.06 percent; Utah with 35.18 percent; Colorado with 34.82 percent; Missouri with 31.32 percent; Arizona with 31.23 percent; Idaho with 29.47 percent; Delaware with 29.04 percent; Louisiana with 28.95 percent and Wyoming with 28.87 percent.

Oregon leads the way on placing drivers out of service, with a rate of 15.92 percent, followed by Connecticut at 13.74 percent; Arizona at 13.58 percent; Wyoming at 12.02 percent; Utah at 10.95 percent; Minnesota at 10.86 percent; Idaho at 10.76 percent; Georgia at 10.04 percent; Maine at 9.81 percent and Arkansas at 9.56 percent.

As you now from our premium subscription service, the national vehicle out-of-service rate for 2008 was 22.25, while the national driver out-of-service rate was 6.38.

CSA 2010.  The FMCSA has announced 2 public webinars on the new CSA 2010 program. The webinars will be held on December 3 and December 10.  The specifics on this free webinar can be viewed here.

CURRENT CASES (Miscellaneous Cases | Cargo Cases | Auto Cases)

MISCELLANEOUS

Truckers need to be aware that having agents for service of process leaves them vulnerable if the agent is unreliable. In the Court of Appeals of North Carolina the Court refused to vacate a default judgment when there were clear evidence that the process agent was repeatedly provided with notices of the suit and the default.  There was no dispute that the trucker did not receive notice until after it was all over  (Rose v. Forester, 2009 WL 3818848)

Primary and excess insurers often have disputes over settlement of cases.  In a procedural decision in the Eastern District of California the court held that a primary insurer was not entitled to discovery on the excess insurers claim file and practices. The case involved claims by the excess insurer that the primary insurer had not defended or settled in good faith. The excess insurer sought a ruling that the primary insurer was responsible for the amount in excess of the primary policy limit. The court held that as the case involved only the reasonableness of the primary insurer’s actions there was no need for discovery on whether the excess insurer would have done anything differently.  (Lexington Insurance Co. v. Sentry Select Insurance Co., 2009 WL 3625388)

This is one of those cases which overlap into cargo and auto, although on its face it is a cargo loss. The plaintiff commenced an action against a broker for a cargo loss. The court dismissed the action as the plaintiff had failed to properly allege any fact that the broker failed to exercise a reasonable standard of care in hiring the carrier. The court also held  Whitney Morgan, presented as a motor carrier safety expert, could not opine on the standards for selecting carrier when his expertise was only in the familiarity of safety ratings and out of service percentages and how those items effected a carrier’s standing.  (Suzlon Wind Energy v. Fitzley, 2009 WL 3784390)

It is not often that we see decisions on physical damage so I was not sure where to put it. I decided to put it in this category so that, hopefully, everyone would see if.  The Court of Appeals in Tennessee held that there was a theft of a vehicle when the lessee who had an option to purchase the equipment refused to return the vehicle after failing to make payments.  While it was a civil matter between those parties, it was still a theft not otherwise excluded under the policy.  (Grapevine Trucking, LLC v. Carolina Casualty Ins. Co., 2009 WL 3486639)

CARGO

Can a trucker recover under the cargo policy even when it has not paid a cargo claim?  Apparently he does in the Court of Appeals in Georgia. The court also ruled that the requirement that an unattended vehicle be guarded was ambiguous and required the insurer to pay the trucker even though no cargo claim had been paid. (Those Certain Underwriters at Lloyds v. DTI Logistics, 2009 WL 3530376)

What would the monthly bits and pieces be without one or two preemption cases?  The Southern District of Texas held that a claim which arose from storage of carpets was not subject to preemption when the goods were lost while in storage.  (Black v. XPress Global Systems, Inc., 2009 WL 3834419) The Northern District of Indiana refused to dismiss a cause of action for negligence under the preemption doctrine concluding that the allegations were sufficiently close to be considered a claim under Carmack.  (Pennsylvania Lumbermens Mutual Insurance Co. v. Cripe Mobile Home Transport, 2009 WL 3756554) In the Eastern District of Missouri the court held otherwise, dismissing a breach of contract action which did not specifically address Carmack. Go figure.  (Wise v. Wheaton Van Lines, Inc. 2009 WL 3681175)

The Northern District of California held that there were just too many questions of fact when there was a loss involving a Mexico-U.S. shipment. Although the carrier had a limitation of liability for shipments commencing in Mexico, the court held that it was unclear whether that there was a through bill of lading, whether the tariff could apply or whether the parties had waived the Carmack Amendment. (Diageo North America v. Con-Way Trucking, Inc., 2009 WL 3681665)

For those of you continuing to follow the Sompo cases in New York, the court issued another decision this month.  While the 3^rd Circuit Court of Appeals recently made contrary rulings, the Southern District of New York held that it would continue to hold that the Carmack Amendment applies to a train derailment which involved international transportation under a through bill of lading. (Nipponkoa v. Norfolk Southern Railway Corp., 2009 WL 3734068)

The 3^rd Circuit Court of Appeals addressed “contingent coverage” under an inland marine policy. Although this policy was for leased equipment, the analysis applies equally well to a contingent cargo policy and so we bring it to your attention. The court upheld as unambiguous an insurer’s requirement that the insured have a contract which made the lessee liable and obtain a certificate of insurance verifying that the lessee had insurance.  (Interstate Aerials, LLC v. Great American Insurance Co. of NY, 2009 WL 3792407)

AUTO

An insurer’s policy provision which  sublimited coverage for unreported drivers was upheld in Appellate Division in New Jersey. In that case the policy increased the deductible and limited coverage to the minimum financial responsibility under state law if the insurer had not previously approved the driver.  The court determined that there was no public policy which would limit use of such an exclusion.  (Ford v. National Independent Truckers Insurance Co., 2009 WL 3762423)

In an action heard in the Court of Appeals in California a tractor-trailer driver was held not to owe a duty not to stop on the side of the road for a bite to eat even where the sign indicated emergency stopping was only permitted.  The driver’s action in stopping on the side of the road was not the cause of a collision when the clear evidence showed that the driver left the lane of truck and crossed over onto the side of the freeway and struck the tractor. (Cabral v. Ralphs Grocery Co., 2009 WL 3747222)

The Southern District in Mississippi permitted an auto insurer to walk away from a defense when it tendered its policy limits to the court and the money was accepted and paid out to the claimants, even where the action continued against the insured.  Interesting decision as the policy permitted withdrawal from defense only after limits were exhausted by payment of judgment or settlement.  (Canal Indemnity Co v. Dauma, 2009 WL 3644914)

The Court of Appeals in Michigan let stand a defense verdict in favor of a trucker.  The plaintiff had sued the trucker when struck in the head by an unknown object while traveling behind the trucker. It was alleged that the driver had failed to inspect the vehicle to determine if he had picked up any loose slag while having his vehicle loaded.  The court held that there was reasonable evidence that the driver did an ordinary inspection and that it was not reasonably foreseeable that a piece of slag would hit the plaintiff, if that in fact was even what happened.  (Heikkila v. North Star Steel Co., 2009 WL 3693183)

The Supreme Court of Wyoming held that a defense’s counsel’s objection to a jury instruction must be clear as to the basis for the objection in order for there to be an appeal for improper instructions.  While counsel had objected on some grounds he had failed to object on the grounds that there was a statutory presumption which would have assisted his client.  The court also held that the trial court’s failure to instruct on those grounds was not error.  The plaintiff had failed to yield at a yield sign and was hit but a truck already traveling on the road.  The court upheld an $18 million dollar judgment.  (Werner Enterprises v. Brophy, 2009 WL 3571622)

The Supreme Court of Illinois upheld a reciprocal coverage provision in a motor carrier’s policy. The Court held that the vehicle owner’s policy would not provide coverage for the permissive user, also a trucker, when that trucker’s policy did not cover the vehicle owner. The defendant’s effort to support the conclusion that the vehicle was not being used exclusively in its business, when it was only borrowed for a limited time, was unavailing. The court also held that the statutory obligations for permissive users did not apply to truckers regulated under the Commercial Transportation Law.  (Zurich American Insurance co. v. Key Cartage, Inc., 2009)

Happy Holidays!!! See you next month.