Bits & Pieces

Volume 21, Edition 4


Dear Subscribers,

I generally start the Bits and Pieces with some simple phrase about the preceding month. This month, unfortunately, I take the time to sadly report on the sudden passing of the longest standing employee at CAB, Mark Schweber. Mark joined CAB 35 years ago and rose to be our Director of Financial Analysis. Mark was an important part of our financial analysis group, taking the time to teach our analysts on the unique nature of evaluating the financial stability of trucking operations. Mark joined us as a young man out of college, spending his entire career here, something one rarely sees today. Losing Mark was sudden and his loss is felt strongly by all of us. Mark was a character and truly enjoyed explaining to trucking companies why they got the rating they did. He loved telling truckers that “barely fair” was pretty darn good in his view. Mark deserves the highest rating – Satisfactory by our standards. He is survived by his best friend and wife, Andrea and his beautiful daughter Rebecca and all his friends here at CAB. He will be missed.

The IMUA meeting in Scottsdale is coming up soon. We are looking forward to seeing many of you there. This is always a great event and we remind you of the Bring a Buddy program – thing about bringing the people new to inland marine insurance. They will learn so much from us old folks! I will also be at the Board of Marine Underwriters in San Francisco talking about inland marine insurance so hopefully will catch up with some of you there.

This month was fairly quiet, but we found a few nuggets of information. We report:

CAB IN THE NEWS! Not to toot our own horn, but we were very excited to read this article this month in Freightwaves profiling our part in the transportation industry. Take a look.

FMCSA DOCTOR REGISTRY, The FMCSA’s National Registry of Certified Medical Examiners website is still in a state of flux since the hack back in December and they have advised that they are continuing to try to fix the problem. Medical examiners, which were certified before the hack, have been able to continue conducting DOT physicals and issuing medical certificates (Form MCSA-5876) to qualified drivers. Unfortunately the back log of results is jamming the system.

ELD POINT VIOLATIONS. The FMSCA has assigned severity weights to each of about a dozen electronic logging device-related violations that are being recorded on a driver’s or motor carrier’s safety profile score. A complete list of the new violations can be viewed here. The violations range from 1 to 5 points.

OPERATION SAFE DRIVER WEEK CVSA has announced that its next targeted enforcement in mid-July will focus on risky driving behaviors, including speeding, distracted driving, texting, seatbelt usage, following too closely, improper lane change, and failure to obey traffic control devices.

Current Cases

Speaking of certified doctors, one plaintiff in the Middle District of Alabama has turned his attention to pursuing a claim against the doctor. Plaintiff has commenced an action against the doctor who certified the truck driver who injured plaintiff in a truck accident. Plaintiff claimed the doctor was not authorized to certify drivers and should have known of the driver’s medical issues. The issue addressed by the court was whether the doctor, who certified the driver in Georgia, was subject to jurisdiction in Alabama when the accident occurred there (he was not). The court transferred the case to Georgia. Hardman v Southeast Permanent Medical Group, 2018 WL 1457297

The First District in Florida held that a Florida statute which imposes strict liability for the release of certain pollutants did not give rise to a private right of action. The plaintiff was injured when he came into contact with battery acid which spilled from a shipment of batteries which were on the road after an accident. He sought recovery from the motor carrier who spilled the cargo. While the court held that it did not permit a right of action, it certified the question to the Supreme Court so we will follow the decision for further reporting. Simon’s Trucking v. Lieupo, 2018 WL 1833415.

When discovery reveals facts which would support a claim for punitive damages against a motor carrier a plaintiff was permitted to amend the complaint. The Western District of Pennsylvania would not however allow a claim for loss of parental consortium by the plaintiff’s children, concluding that Pennsylvania law did not permit such a claim. Pegley v. Roles, 2018 WL 1863024

One motor carrier is being forced to litigate a truck accident in both state and federal court. The Northern District of Alabama held that it would allow one plaintiff to continue its action in the federal court even while a passenger had a similar suit pending against the motor carrier in state court. Jacks v. Cedric Dejanero Chance, 2018 WL 1856195

A motor carrier’s efforts to remove a tort action to federal court failed in the Eastern District of Louisiana. The court held that the motor carrier could not prove that naming the driver of the other vehicle was done simply to defeat diversity. In addition the court held that the removal was untimely when the motor carrier claimed that it only moved to remove the case when it found evidence that the plaintiff’s law firm had a pattern of adding non-diverse parties to stave off removal. Harris v. U.S. Express 2018 WL 1737575

Serving a co-habitant of a person authorized to receive service for an artificial entity, a trucking company, was held to be insufficient service in the Northern District of Alabama. The court did not dismiss the suit, however, giving the plaintiff an opportunity to complete service. Haynes v. Johnson, 2018 U.S. Dist. LEXIS 56271

When the amount of damages is in issue, it is the defendant’s obligation to show that the plaintiff seeks more than $75,000 if it wants to stay in federal court. The Eastern District of Missouri held that plaintiff’s post complaint demand of $100,000, together with the failure of plaintiff to stipulate that damages were below $75,000 was sufficient to allow the trucker to continue the case in federal court. Hughes v. Transwood, Inc., 2018 U.S. Dist. 62074

The Southern District in Ohio denied the request of a tractor owner for reconsideration of the denial of its summary judgment motion under the Graves Amendment. The Court had held that the Graves Amendment was inapplicable when the argument being presented by the plaintiff alleged that the lessor was an alter ego of the motor carrier. The court held that there was a question of fact as to whether both defendants would be considered employers of the driver. Parker v. Miller, 2018 U.S. Dist LEXIS 62155

Sanctions were not warranted against a motor carrier who failed to maintain data from the Omnitrac system which it used to keep data on drivers. The Middle District of Georgia held that the plaintiff was not substantially impacted by the failure to keep the data when there were other sources of data which could supply similar information. Barrett v. FedEx Custom Critical, Inc. 2018 U.S. Dist. LEXIS 60139.

Leasing equipment to another motor carrier and providing a driver may not be enough to avoid being a motor carrier for hire. The Western District of Oklahoma held that an insurer was premature in its request for a declaration that the MCS-90 did not apply to the liability which the insured may have for an accident when the vehicle was operated by the co-defendant. The court also held that the fact that the actual motor carrier had insurance coverage in excess of the MCS-90 requirements did not preclude the MCS-90 from applying, concluding that the obligation is satisfied per accident, not per carrier. Militello v. ICAN Logistics, 2018 WL 61400.  In a related case the Court ruled that the actual motor carrier was entitled to indemnity from the vehicle owner under the terms of the lease. The Court agreed that the lease clearly made the lessor responsible to indemnify the motor carrier. Militello v. ICAN Logistics, 2018 U.S. Dist. LEXIS 61399

A motor carrier was required to produce the early scene investigation performed by a third party adjuster under the direction of counsel retained to address the accident. The District Court in Minnesota held the motor carrier failed to show that the investigation was subject to a work product privilege when it failed to produce evidence that the accident investigation was not a normal part of its business operations. Soto v. Swift Transp. Servs. 2018 U.S. Dist. LEXIS 63138

A truck driver whose vehicle was under lease to a motor carrier used his vehicle, for compensation, as part of a Mardi Gras parade. The Court of Appeals in Louisiana upheld the trial court’s decision to grant judgment to the motor carrier. The court agreed that the vehicle was not being operated in the business of the motor carrier and that the federal “exclusive responsibility” regulations were inapplicable to intrastate transport. Jackson v. Wise, 2018 La. App. LEXIS 716

Over in the Western District of Kentucky the Court granted summary judgment to a truck company on a punitive damages claim arising from a truck accident. The court held that under Kentucky law an employer cannot be held liable for punitive damages based upon vicarious liability and that retaining the driver after the accident did not give rise to a claim that the trucker ratified the actions of the driver. The court did leave open the claim of punitive damages against the driver and co-driver, concluding that there could be a basis for a punitive damages claim. White v. Transportation Services, Inc. 2018 WL 15708187

In the Northern District of Oklahoma a different result was reached by the court. The court denied the defendants motion for summary judgment on claims of negligent entrustment and punitive damages against the employer of the truck driver. The court held that there were sufficient facts raised to claim that the employer knew that the driver suffered from sleep apnea and permitted the driver to drive outside the hours of service all of which could all support a negligent entrustment and punitive damage claim. Byrd v. Ace American Insurance Co., 2018 WL 1569499

Sufficient facts were alleged by the plaintiff to support a possible claim for punitive damages against a truck driver in the Middle District of Pennsylvania. The court held that when the defendant allegedly made a right turn from the left lane when the plaintiff was in the right lane he was reasonably aware of the risk of making the turn and so permitted punitive damages to remain on the table. Gontarski v. Hoag, 2018 WL 1440982

A trucker was successful in recovering monies from its liability insurer for monies which it owed following resolution of a claim for superfund clean-up. Claims were made against the trucker for toxins released following truck clean-ups and washes. The 5th District of Illinois held that the insurer was estopped to assert the pollution exclusion in its policy and that it had breached the duty to defend, further allowing recovery of attorney’s fees and statutory damages to the motor carrier. Rogers Cartage Co. v. Travelers Indemnity Company, 2018 WL 160098.

When a truck driver fled the scene of an accident, leaving the injured party unattended, the Middle District of Pennsylvania held that the plaintiff could allege all of those facts under the complaint. The defendant’s argument that the allegations were scandalous and immaterial was unavailing. Lane v. McLean, 2018 WL 1545588

Be careful what you allege when suits are brought by different parties in different court. The District Court in Kansas denied a request to dismiss a suit brought by plaintiff for injuries suffered in a truck accident even though there was a second action pending in another jurisdiction. That action, which was brought by a motor carrier’s pd insurer, had resulted in cross and counter-claims asserting similar damages to that pending action. The court held that the “first to file” rule did not apply when one of the actions was in state court. Konopasek v. Ozark Kenworth, Inc., 2018 U.S. Dist. LEXIS 61285

When a manufacturer’s palletization, warehousing and cargo loading complied with the reasonable standards of the industry the manufacturer would not be liable for injuries suffered by the warehouse driver when a box of tiles fell on the plaintiff during unloading from the truck. The Southern District of New York held that under New York law the defendant was entitled to summary judgment. Bah v. Everlast Logistics, 2018 WL 1517191

The Court of Appeals in Louisiana affirmed a decision granting summary judgment to a trucker who was sued following a 3 vehicle accident. The Court held that there was no reasonable basis for finding the trucking company was negligent when it was the third vehicle to be struck. Boyance v. United Fire & Casualty, 2018 WL 1515702

Who is responsible when equipment is defectively put together by a third party and it results in an accident? The Court of Appeals in Indiana held that Paccar could be held liable for providing parts of a semi-tractor that lacked necessary safety features even though it was assembled by the trucking company who was operating the vehicle at the time of the loss. Brewer v. Paccar, 2018 WL 1474250

Judgment was afforded against a motor carrier in a Carmack suit brought by a truck broker. The truck broker had an assignment of the shipper’s claim and defendant offered no basis for a denial of liability. The Northern District of Illinois gave the broker all that it asked for. Coyote Logistics v. Concord Services, 2018 WL 1468997

Although not a cargo claim, the issue of date of loss under an inland marine policy was addressed by the Texas Appellate Court. The court held that the insured failed to show that a theft occurred before the policy was non-renewed when the insured had not seen the equipment for a period of time before the discovery, which was post nonrenewal. Plaintiff could not argue that there was a question of fact as to the date of loss by simply claiming it had not seen the equipment before the policy non-renewed and that it, therefore, could have been stolen while the policy was in effect. Schrader v. Tex. Farm Bureau Underwriters, 2018 Tex. App LEXIS 2445

Setting forth a specific amount is a requirement for complying with the cargo claim requirements, even under the substantial performance standard. The 9th Circuit held that the plaintiff had failed to comply with the claim filing requirements when it simply noted the value of the cargo and indicated that the cargo was still subject to inspection. NY Marine v. Estes Express, 2018 WL 1804229

Worker’s Compensation
The Court of Appeals In California granted judgment to a motor carrier and the driver on a claim for injuries by a co-driver. The Court held that the sole remedy for the plaintiff was worker’s compensation and that plaintiff could not support a claim that the motor carrier was not his employee simply because the vehicle was under lease to another carrier. Stoilkov v. Yin, 2018 Cal. App Unpub. LEXIS 2422

See you next month!

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