Welcome to the new “CABAdvantage Bits & Pieces”. We have worked hard at CAB to be the “go to” place for all motor carrier information. Utilizing the wealth of data provided by CAB gives you the advantage that you need to operate successfully. We want you to have the CABAdvantage! We created a new logo to go with the “new and improved” CAB. We would love to know what you think. There is a $50 gift certificate for the first person to e-mail us and correctly explain what this logo signifies! E-mail Mark Schweber with your entry.
Our new website is www.cabadvantage.com (we recommend that you save it to your favorites) and our email suffix has been changed from @cabfinancial.com to @cabadvantage.com. But don’t worry – using our old website and email addresses will still get you where you need to be until you update your records.
A great time was had by all at the IMUA annual meeting in Chicago. Although it was a bit brisk weather wise, it was great to connect with everyone again and to let Tiana Cain finally meet all of the people that I have talked about. Thank you to everyone who stopped by our table to meet her. I, as you would expect, never sat at the table – there are just too many people to talk to and not enough time. A special acknowledgement goes out to Frank Oleskiewicz who received the first Lifetime Achievement Award from the IMUA. Frank has been an asset to the industry and it has been my great pleasure to work with him on the transportation committee these many years. The award could not have gone to a better candidate.
This month I will be speaking at the IMUA Great Lakes Advisory Meeting in Ohio together with Mike Guthrie of GenRe, so plan a frolicking and fun-filled afternoon discussing carriers, brokers, and warehouseman and their insurance needs. You can register for the program, in Ohio, at the IMUA website at www.imua.org.
As a much loved godson leaves to serve in Afghanistan this Memorial Day it reminds me once again to be thankful to all of those who serve and protect our country. So to all of our service members, both now and in the past, we salute you and wish you well this Memorial Day holiday.
And now to the news:
HOURS OF SERVICE – The FMCSA has advised that it has added 4 new research studies to the materials that it will look at to determine if the hours need to be changed. The 4 studies include:
Hours of Service and Driver Fatigue-Driver Characteristics Research
Potential Causes Of Driver Fatigue: A Study On Transit Bus Operators In Florida.
The latest word from the FMCSA is that we will not see any proposed rulemaking until October, 2011.
PRE-EMPLOYMENT SCREENING PROGRAM – The first year of this program went well and appears to be accomplishing exactly what it was supposed to do. Commercial carriers and truck drivers conducted 380,000 pre-employment driver safety record searches. PSP provides access to up to five years of driver crash data and three years of inspection data, which includes serious safety violations in the areas of unsafe driving, hours-of-service, controlled substances and alcohol, and valid medical qualifications. It also gives users access to co-driver safety records, post-crash violations and the dates that drivers’ records are updated.
CARGO THEFT – The National Insurance Crime Bureau (NICB) has issued its 2010 National Cargo Theft report, identifying 747 cargo thefts across the nation in 2010 with an estimated loss value of $171,000,000. It is reported that most thefts are from freight moving primarily by truck or rail. The states with the most cargo theft incidents were: California (247), Texas (91), Florida (66), Illinois (56), Tennessee (40) and Georgia (39). Electronics were most often the theft target (139 thefts) followed by food (108) and clothing (73). The month of February saw the most thefts with 113 followed by August (78) and June (76). The full report is available here.
DRIVER DETENTION TIME – The ATA has come out against the proposed regulations which would govern the time for detention of vehicles during loading and unloading. The legislation, if passed, would authorize the DOT to establish national standards for detention time and set penalties for shippers that violate them.
HOUSEHOLD GOODS CARRIERS COMPLIANCE SWEEP – The Federal Motor Carrier Safety Administration recently performed a nine-city compliance sweep for household goods moving companies, resulting in fines of $25,000 each for three such movers. 67 moving companies were reviewed as part of the “Household Goods Strike Force” initiative. The compliance reviews looked for regulatory violations such as “failing to relinquish possession of a household goods shipment (hostage load), collecting fees more than the original binding estimate, and failing to provide consumers with an arbitration process.” The Federal Motor Carrier Safety Administration plans to publish a final rule titled “Consumer Complaint Information” by early 2012. The rulemaking would require each household goods motor carrier to submit a quarterly report with specific identified information for complaints it receives from shippers and consumers.
CVSA JUNE ROADCHECK – The summer Roadcheck will start in early June. This year it is reported that Roadcheck will focus on checking driver logbooks. In addition Roadcheck 2011 put added emphasis on finding carriers of household goods who may be operating under the radar by using improperly marked rental vehicles and/or operating as a property carrier rather than a HHG carrier.
NAFTA – I used to think that perhaps the borders would be open by the time my children finished college. Well that has long since passed so I am putting retirement as the new goal – will they be open by the time I retire? Can I become a truck driver going back and forth to Mexico in my next career? The FMCSA has now been challenged that its cross-border operation exceeds its authority, which apparently only allowed for a limited scope project. Under the new project, after 18 months a Mexican carrier can receive full operating authority. Cross-border operations are a big business. The BTS reported this month that the number of truck crossings into the United States from Canada and Mexico was 10.2 million in 2010, 9.4 percent more than in 2009.
CELL PHONES AND HAZMAT TRANSPORT – The Pipeline and Hazardous Materials Safety Administration has issued proposed regulations which would restrict the use of handheld devices, including cell phones, when transporting hazardous materials The new rule is expected to affect about 1,490 small carriers and would cost a carrier only about $17 in lost production time.
CURRENT CASES:
OF INTEREST TO ALL:
The Northern District of California has allowed an action to proceed against 26 trucking companies which have been sued, in subrogation, for alleged conspiracy and fraudulent concealment when they were allegedly improperly dumping goods at a waste management site, without paying proper fees to the management company. The court held that the fact that the trucking companies knew that they were being uncharged, and directly when and where to deliver the goods evidences knowledge that there was wrongdoing happening at the site which should have been reported. (National Union Fire Ins. Co. v. Resources Development Services, 2011 WL 2993374)
Right up to the garden gate and the door is slammed shut. The District Court in Montana dismissed a declaratory judgment action weeks before the scheduled trial date. In the action involving a coverage determination over primary excess issues on non-trucking and trucking issues the court determined that the applicable state law was so unsettled that it would decline, at this late stage of the game, to rule on the case. (Great American Ins Co. v. Discovery Property & Casualty Insurance Co., 2011 WL 1557916)
The Northern District of Indiana held that all named insureds can be held liable for the deductibles of other named insureds. As each fell within the definition of insured, the remaining viable insured was stuck with the responsibility of other companies. (St. Paul Fire & Marine Ins. Co. v. Schilli Transportation Services, 2011 WL 1743480)
CARGO:
Preemption is still an issue. This month the District Court in CT dismissed a negligence action against a motor carrier arising from a claim for damage to household goods. The court held that while elements of a Carmack claim are part of a negligence claim it is not enough to allow the action to continue. (Cadwallader v. Allied Van Lines, 2011 WL 1637946)
The Western District in Wisconsin held that negligence and breach of contract actions could continue against a broker when there was a cargo theft. The court held that there were questions of fact as to whether a broker should have undertaken steps to determine what type of security would be provided by the motor carrier who was hauling a high value shipment. The court did hold that there was no breach of implied obligation of good faith and fair dealing or promissory estoppel against the broker. (Non Typical, Inc. v, Transglobal Logistics Group, 2011 WL 1792927)
Even when a loss occurs during domestic transit it is not always clear whether the Carmack Amendment will apply. In this case the Southern District in New York held that as the shipment was ultimately going by air to Hong Kong, federal common law would apply to the domestic transit. Neither preemption nor jurisdiction based on Carmack could be maintained. (Sotheby’s, Inc. v. Modern Art Services, 2011 WL 1642197)
Is property in a sealed container in the yard “property in the open”? Under a commercial policy which covered property of others in the open, the answer was no in the Western District of North Carolina. The court held that the insured was not entitled to coverage, especially since his prior policy, which did cover the cargo, was much more money- which evidenced his own understanding that containerized freight was not covered. (QBE Specialty Ins. Co. v. FSI, 2011 WL 1655591)
The court held that there were questions of fact on the liability of a truck stop for a cargo loss, at least under Tennessee law. The Court held that the truck stop’s duty could extend to the cargo owners and there were questions of fact as to whether the truck stop should have taken actions to prevent theft. Interestingly, the plaintiff had sued the truck yard for two losses – one in Ohio and one in Tennessee. The truck stop was granted summary judgment on the Ohio case as the court held that under Ohio standards they could have no liability. (Royal and Sunalliance Ins v. TA Operating, LLC 2011 WL 1533043)
It is so often a question as to whether coverage is afforded under a property/liability policy or a fidelity policy when no one knows exactly what happened. This month two insurers squared off, with the property insurer winning the battle. The court actually considered the fact that the nature of the theft, which appeared to be an ongoing theft of copper, clearly showed signs that employees must have been involved. The court granted judgment in favor of the property insurer, who excluded employee theft, and held that the fidelity insurer provided coverage, even when no specific employee was identified. (Coleman Cable, Inc. v. Travelers Indemnity Co., 2011 WL 1838685)
Where, oh where is my car? The plaintiff hired someone to held him ship his car to Uganda. Apparently the shipping agent took off with the car, and arranged for it to be shipped to another country. The insurer denied coverage because the loss occurred outside the U.S. Is that correct? Or did it occur when he took it? The Eastern District of California held it was a question of fact. They also released the steamship line, who actually had the vehicle, as the plaintiff did not sue within the one year required by the bill of lading. (Diamond v. State Farm Mutual Automobile Ins. Co., 2011 WL 1807331)
A warehouseman will be liable for conversion when it refuses to release goods to a party who has evidence of title. The Appellate Division in New Jersey held that the business practices between the parties were sufficient to create notice of title. They court also held that when conflicting parties claim an interest the warehouseman can not release the goods to either and must follow UCC protocol to determine ownership. (One Step Up v. Sam Logistics, 2011 WL 1662860)
The Southern District in Texas confirmed that you can not get attorney’s fees for a Carmack claim. However, if there are other causes of action which are upheld, fees, if permissible, can be carved out. (Amlin Corporate Member v. Logistics Group International, 2011 WL 1740193)
AUTO:
The impact of the Texas Anti-Indemnity statute was considered when applied against the indemnity agreement of the UIIA agreement. Court of Appeals in Texas held that when the UIIA agreement had actually been entered into prior to the enactment of the statute, additional evidence was needed to determine if the modifications to the UIIA agreement, post statute, would make the statute applicable. (CMA-CGM v. Empire Truck Lines, Inc., 2011 WL 1631961)
The Court of Appeals in Texas reverse summary judgment which had been entered in favor of a construction company which had hired carriers to assist in the removal of construction debris. The court held that there were sufficient questions of fact as to whether the company had negligently hired the carriers or was otherwise in violation of the Texas Motor Carrier Safety Regulations. (Martinex v. Hays Construction, Inc., 2011 WL 1834818)
Texas was busy this month, apparently really wanting more cases to go through the trial process. The Western District in Texas held that there were questions of fact as to whether one carrier, which retained a second carrier, exercised sufficient control over the actions of that second carrier to fall within the definition of an insured under the second carrier’s insurance policy. (Stallion Heavy Haulers, LP v. Lincoln General Insurance Co., 2011 WL 1843259)
An owner operator’s attempt to avoid the indemnification provision in his leas with a motor carrier was at issue in the middle District in Tennessee. The court held that where the owner-operator signed individually he could not hide behind his purported attempt to mean his corporation, and that the fact that the corporation and not the individual was the vehicle owner did not help. The court also held that indemnification provisions in leases were not in violation of federal leasing regulations. Finally despite the fact that the contract had provisions which appeared to limit the indemnification to $500, subsequent paragraphs rendered the owner operator liable to indemnify the carrier for all injuries caused by the driver. (Jones Express v. Watson, 2011 WL 1842853)
We don’t see this very often. In the Eastern District of Pennsylvania a trucking company actually received a defense verdict for an alleged rear-end. The court found the plaintiff’s testimony inconsistent and held that there was insufficient evidence to show that the truck driver failed to exercise reasonable care. (Fields v. Satinsky, 2011 WL 1883114)
See you next month.
