Once again I am sitting hear at the base of the Green Mountains writing my July bits and pieces. I will make this short so that I can head out for a hike. We are settling in to our new space in Lakewood. If you are passing by stop in and eat some of the candy that is everywhere you look thanks to Shuie. Our reception area now has an information highway traveled by small trucks. Thanks to those of you who have sent us your logo embossed trucks to join the information highway. All are welcome to be displayed! Send them over – we would love to add you to our information highway and show that you have the CABadvantage. We will post pictures as we get the road filled.
This month we report:
ANNE FERRO RESIGNS – The administrator of the FMCSA, Anne Ferro, announced her resignation. She will be become CEO and President of the American Association of Motor Vehicle Administrators. She has headed the FMCSA since 2009 and was the longest-serving administrator
ELECTRONIC LOGS – The FMCSA has agreed that it will begin accepting electronic logs as evidence of compliance with HOS regulations. Previously, drivers who prepared their logs on a computer and transmitted digitally signed copies of the log to their motor carrier were not in compliance with the regulations. The regulations stated that the logs must be in the drivers’ “own handwriting.” Drivers will be permitted to maintain electronic logs on their computers, tablets or smartphones and consider the driver in compliance with the regulations if an electronic signature is used. Drivers will be required to have the prior seven days of electronically signed logs available to be viewed on the device’s screen during an inspection. Law enforcement can request printed copies of the logs, and the driver must be given an opportunity to print the current and prior seven days. If an electronic signature is not used, the driver will be required to print the electronic logs and manually sign them daily. Drivers will also be required to retain the prior seven days of manually signed logs.
NTSB RECOMMENDATIONS – The National Transportation Safety Board has issued a list of recommendations following its investigation into the collapse of the Interstate 5 bridge over the Skagit River in Washington state. The NTSB has recommended that states certify pilot car operators, ban unauthorized use of cell phones for pilot car operators, and require CDL holders to obtain endorsements on their licenses before they can haul oversized loads.
NATIONAL FREIGHT ADVISORY COMMITTEE REPORT – The NFAC has reported that new funding for multimodal projections will assist in removing barriers and allow for more efficient movement of freight. The panel has recommended that Congress establish a multimodal fund, one that “supports and prioritizes” the first and last mile connectors among the major transportation modes. There are also recommendations to partner states and freight system stakeholders with high schools, colleges and vocational schools to support training and apprenticeship programs in transportation.
BORDER CROSSINGS – Trucks are on the move between Canada, USA and Mexico. The BTS reports that the number of commercial truck crossings into the United States from Canada and Mexico was 10.8 million in 2013, 1.1 percent more than in 2012. This is continued growth since 2010. The truck-crossing numbers are included in the 2013 Border Crossing/Entry Data which can be viewed here.
DRIVER TURNOVER – The ATA reports that the turnover rate at large truckload carriers rose just one percentage point to 92 percent (annualized rate) in the first quarter of 2014, but held above 90 percent for the ninth consecutive quarter. Turnover in the less-than-truckload sector fell 1 point to just 10 percent in the first quarter, which was the lowest mark since the second quarter 2013. The ATA reports that there are more than 30,000 unfilled trucking jobs.
U.S FREIGHT TRANSPORTATION FORECAST – The American Trucking Associations’ U.S. Freight Transportation Forecast to 2025 reports that freight tonnage will grow 23.5 percent by 2025, with revenue to increase 72%. This is an industry which will continue to remain a viable target for insurers. The report also predicts that truck’s share of freight will continue to grow in the next 10 years, though by just a few percentage points — from 69.1 to 71.4. Truckload volume will grow by about 3.5 percent a year through 2019 and then 1.2 percent annually in the next five years, but truckload carriers will use intermodal rail for longer hauls.
FMCSA RULINGS ON INSURANCE REQUIREMENTS ON THE WAY – The FMCSA moved up the date in which it projects to publish a proposed insurance increase rule to September 19, from last month’s November projection. Also, the Safety Fitness Determination proposed rules have been pushed ahead to February, 2015. The rule has been in the works since 2007 and would create a carrier scoring system the agency would use to target carriers deemed unsafe.
TRUCKING BANKRUPTCIES – Avondale Partners reports that capacity was reduced by 9,435 trucks during the second quarter, reflecting a loss of 375 companies with an average of 25 trucks. Failures declined from 10,650 trucks in the first quarter. According to Avondale some carriers are negatively impacted by the need for implementation of electronic logging devices, hours-of-service rule changes and older trucks that require more maintenance.
CASES
AUTO
The Trial Court’s dismissal of a driver’s suit against a shipper for injuries caused by the alleged improper loading of a shipment was reversed by the Court of Appeals In Mississippi. The Court held that the driver did not misrepresent his injuries in the discovery process despite a video tape which indicated the driver providing work assistance to a friend. The Court concluded that the defendant’s discovery did not go far enough to show any evidence of misrepresentation. (Kinzue v Belk Department Stores, 2014 WL 3417612)
The issue of pursuing a trucking company for a separate tort of negligence when vicarious liability was admitted was considered by the court in the Middle District of Pa. The Court dismissed the extra causes of action against the trucking company as they had admitted liability for the driver’s actions. The Court also dismissed punitive damage claims against the defendants as there was no evidence of outrageous behavior. (Calhoun v. Van Loon, 2014 WL 3428876)
Over in the Northern District of Mississippi, the Court agreed that there was no direct claim against the trucking company when it admitted vicarious liability for the driver’s actions. The Court further held that there was a question of fact as to whether the truck driver was obligated to permit the plaintiff to merge when lanes were ending or suffer the claim when an accident arose. (Lamika Coleman v Van Alstyne, 2014 U.S. Dist. Lexis 96538)
The Supreme Court in Michigan overturned an Appellate Court ruling that the business use exclusion applied anytime a vehicle was going to carry property, holding that the exclusion was applicable only while the property was actually being transported. The Court held there was a question of fact, however, as to whether the vehicle was being operated under lease at the time, which would also preclude coverage. (Hunt v. Drielick, 2013 WL 2895005)
Expert Michael Napier was permitted to testify in the Middle District of Alabama as to the nature of driving a tractor trailer and industry practices for safe driving along with his opinion on the standards for retention of drivers with violations. He was not, however, permitted to testify on his interpretation of federal regulations. The Court also held that the Synthesis of Safety Practices, a survey commissioned by the FMCSA was not the industry standard and could not be used to support an opinion on the driver risk. (Lohr v. Zehner, 2014 WL 2832192)
A trucker’s effort to avoid a bad jurisdiction known as a judicial hellhole by tying the personal injury action to an interpleader filed by its insurer in another county failed. The Superior Court of Pennsylvania concluded that coordinating the two actions was not necessary or appropriate, leaving the defendant to face trial in Philadelphia County. (Zurich American Ins. v. Budzowski, 2014 WL 2931346)
Summary judgment was not an appropriate remedy for a plaintiff who was injured while taking an oil sample from a truck. The fact that the driver moved the vehicle and that the plaintiff fell was not enough to establish as a matter of law that the plaintiff did not contribute to the loss. (Piscitello v. Fortress Trucking, 2014 WL 2782194)
An accident reconstructionist was permitted to testify that it was not reasonable for a witness to know whether a truck had a turning signal on immediately before an accident based upon the distance of the witness to the scene. The California Court affirmed the defense verdict for the trucking company. (Seamans v. Xiong, 2013 WL 3615991)
The 8th Circuit concluded that FedEx was not vicariously liable for the actions of independent contractors hired to transport trailers between distribution facilities. The Court also concluded that FedEx was acting as a shipper and that it could delegate the responsibility of the transport. Finally the Court also concluded that FedEx would not be liable for negligent entrustment of the vehicle to the driver under these circumstances. (Harris v. FedEx National LTL, 2014 WL 3638896)
The 10th Circuit Court of Appeals held that a plaintiff’s appeal of a small judgment for personal injuries would not stand when all of plaintiff’s alleged errors were claims against his own counsel for failure to introduce evidence. The small verdict against the trucker was upheld. (Brown v. Webster, 2014 WL 2726173)
The 11th Circuit Court of Appeals rejected a shipper’s efforts to obtain indemnity from a trucking company for the settlement of a wrongful death action against the shipper by the estate of the motor carrier’s driver. The Court held that the shipper was not entitled to recover from the carrier the costs of defending and settling the wrongful-death claim because the indemnity provision did not expressly indicate the parties’ intent to indemnify the negligence of the shipper or its employees. (Snyder’s-Lance Inc. v. Cowen Truck Line, Inc., 2014 WL 3562737)
The 10th Circuit also upheld a defense verdict in favor of a truck driver, agreeing that negligence was not established. The Court also held that there could be no claim against the trucking company employer for negligent training or supervision where the driver was not negligent. The Court rejected all of the plaintiff’s evidentiary objections. (Dahlberg v. MCT Transportation, 2014 WL 3057869)
The Court of Appeals in Kentucky dealt with a three truck accident caused when other vehicles transporting cement created a dust cloud obscuring the view of the trucks. The Court held the middle carrier, who hit the first truck which was trying to get to the side of the road could not rely on the sudden emergency doctrine as an absolute defense to liability, rejecting a request for a directed verdict. The Court also held that the cement truck drivers would not be liable for creating the dust bowl. (Werner Enterprises v. Northland Ins. Co., 2014 WL 3377087)
CARGO
A household goods carrier engaged to transport a printing press was given the benefit of its contractual limitation of liability. The District Court in New Jersey held that the carrier fully complied with the requirements for a limitation of liability under Carmack, despite the protestations of the shipper that it was not given an opportunity to declare a higher valuation or notice of the limitation. The Court placed the burden on the shipper to ask about limitations. The Court also held that the carrier’s agent had no direct liability for the loss under the regulations. (United Van Lines v. Lohr Printing, 2014 US, Dist. LEXIS 97557)
Can a motor carrier have a tariff which exonerates itself from liability for theft? Perhaps. The Northern District of Illinois held that there was a question of fact as to whether the shipper agreed to the exoneration which was contained in the carrier’s tariff. The fact that the bill of lading, prepared by the shipper indicated familiarity with the carrier’s tariff was not enough to conclusively establish actual notice of that particular limitation. (H. Kramer & Co v. CDN Logistics, 2014 U.S. Dist. LEXIS 94254)
Still the question of preemption shows up. The Western District of Texas held that a plaintiff’s state law claims of alleged damage and non-delivery of goods in interstate transport were preempted. What a surprise. (May v. United Van Lines, 2014 WL 2881610)
The Western District of Michigan remanded a case back to state court which had been removed under Carmack. The defendant sought removal based upon facts which it contended supported the conclusion that the transport, which was intra-state was actually part of an overall interstate transport. The Court rejected the defendant’s argument concluding that the final intrastate leg of the transport was a separate contract of carriage. (Open Systems Technologies DE, Inc. v. Transguard Ins. Co. of America, 2014 WL 3625737)
Although this is a warehouse legal liability case, I thought I would pass it along as it impacts most of the inland marine coverages. The Southern District of Texas considered the obligations of an insurer to defend a warehouseman when the complaint did not specifically allege when the goods went missing. The goods had allegedly been in storage prior to the inception of the policy. The Court held that was enough to establish the potential that it could have occurred, triggering the duty to defend. (Tower Ins Co. v. Al American Rigging Co., Inc., 2014 US Dist. LEXIS 9300)
Take some time and have some fun. See you next month.
