Hello All, 

It’s been an exciting year for us here with the transition to Fusable, the TruckerCloud partnership, and the new product release of our blended CAB-Price Digests enhanced vehicle values tool.

We’ve also launched a new podcast Decoding Risk, hosted by our Marketing Content Manager, Edward Pronley. Check out our first episode where Edward discusses the trend of insurance broker consolidation with Fusable’s Director of Risk Intelligence Jasmine “J” Slaughter.

While our podcast dives into key industry topics, we’re also keeping a close eye on other important industry changes, like the proposed updates to the Safety Measurement System (SMS), to ensure we’re ready to support our customers’ evolving needs.

Fusable has been closely monitoring the proposed changes to the SMS as the FMCSA continues to evolve the program. Given the program’s history of updates, the latest release in the Federal Register has been highly anticipated. We are committed to staying ahead of these changes and are excited to collaborate with our partners to ensure we can continue delivering the integral solutions and data that our customers rely on, while expanding our capabilities to meet future needs.

As we await further details on the final timeline for the rollout, we are proactively preparing our systems to support both the new and current SMS scores. This approach will ensure minimal disruption and provide our partners with ample time to evaluate the new methodology, allowing them to determine the best way to incorporate the changes into their analysis and workflow.

CAB Webinars

Tuesday, December 17^th | 12p EST

Telematics Integration | Pt. 1 – Chad Krueger and Tim Brogan

Fusable’s new telematics integration explained and what it means for you. 45 minutes 

To register for the webinars, click the button below to sign into your CAB account. Then click live training at the top of the page to access the webinar registration.

Register Now

Explore all of our previously recorded live webinar sessions in our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks

New Product Announcement

Our “One Fusable” transition has allowed us to uncover new analytics by fusing our data together to benefit our clientele. Our first integration incorporates CAB’s and Price Digests’ powerful data within the online CAB report. The combined data in this new product is a key component in the Workbench we’re building to reduce insurance premium leakage.

Here is a quick rundown of the Benefits:

• Audit / Compare the Values (Prices) of VIN’s (Trucks, Trailers, and incidental PPV auto units) on your commercial vehicle schedules against our median Cost New and Retail values
• Identify invalid VINs with errors on fleet schedules and verify year, manufacturer/make, model with values on a fleet and individual VIN data level
• Add high-level fleet insights into your submissions or submission reviews with our stewarded analytics via graphs, charts, and heat maps – gain negotiable intel on each fleet/VIN
• Reduce human errors and enhance the speed at which you identify invalid/erroneous VIN’s / unit data and opportunities to price with better VIN values

All endpoints are also available via API, customized to your systems and needs to seamlessly integrate it into your workflow.

Contact your representative for more details or to set up a demo.

THIS MONTH WE REPORT

FMCSA to Move Ahead with Revamped CSA Scores FMCSA is moving forward with updates to its Safety Measurement System (SMS), including reorganized compliance categories, simplified severity weights, and refined intervention thresholds. The changes aim to enhance carrier prioritization and enforcement. Feedback from a public comment period led to adjustments, such as consolidating violations and renaming “safety categories” to “compliance categories.” Read more…

3 Key Qualities Trucking Operations Should Look for in Their Motor Truck Cargo Insurance Partner Trucking operations require an insurance partner with flexibility, strong customer service, and long-term commitment. Challenges such as supply chain disruptions, driver shortages, and evolving risks make it crucial to have a tailored policy. Insurers should offer adaptable coverage and support to ensure businesses can navigate operational hurdles while minimizing risk. Read more…

Population Shift Will Soon Drive Trucking Tidal Wave, Expert Says At the TCA annual convention, demographer Ken Gronbach highlighted demographic shifts poised to drive trucking’s recovery, citing 170 million Americans under 40 and growing Latino labor force participation. He urged carriers to adapt to changing consumer expectations and workforce diversity. Read more…

Unannounced Hazmat Inspection Blitz Puts 576 Trucks Out-of-Service A summer blitz by the CVSA inspected nearly 4,000 trucks, finding 14.6% with hazardous materials violations, resulting in 576 vehicles placed out of service. Shipping paper violations and loading/securement issues were the most common. Inspections and violations were down significantly compared to 2023. Separately, a Texas operation found 43% of inspected trucks out of service. Read more…

178,000 CDLs Scheduled for Downgrades for Drug, Alcohol Violations Starting November 18, CDL holders in “prohibited” status in FMCSA’s Drug & Alcohol Clearinghouse will face automatic license downgrades until completing the return-to-duty (RTD) process. This marks Phase 2 of FMCSA’s Clearinghouse initiative, tightening enforcement by requiring state agencies to revoke commercial driving privileges for violations. Read more…

How Much Does Detention Time Cost the Trucking Industry? Detention time costs the trucking industry $11.5 billion in lost revenue and $3.6 billion in direct expenses annually, with over 135 million hours of productivity wasted in 2023, according to ATRI. While detention incidents have declined slightly since 2014, 39% of all stops still experience delays. Read more…

FMCSA’s First-Ever General-Freight-Broker Enforcement Blitz Under Way The Federal Motor Carrier Safety Administration (FMCSA) has launched “Operation Protect Your Load,” its first enforcement initiative targeting unlawful brokering in general freight. Active in 17 states, the operation focuses on brokers with repeated lapses in insurance, bonding, or authority and those involved in fraud schemes like double brokering and nonpayment. Read more…

December 2024 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinak Law Group LLP.

AUTO

Jessie Lee Shifflett v.. Stephane Routhier, et al., C.A. No. 5:23-cv-00046, 2024 WL 4894866 (W.D. Va., Nov. 26, 2024). This case involves a motor vehicle accident with a tractor-trailer. The Plaintiff brought a direct cause of action for negligence and negligence per se against the truck driver’s employer, arguing certain violations of the FMCSA regulations. The Court found that there was no federal private right of action for plaintiffs to support a negligence per se cause of action based upon regulation violations, and that even if there were, Plaintiff could not properly plead any causation between the motor carrier’s alleged violations and his injuries and thus the negligence cause of action also failed as a matter of law. Plaintiff also brought a claim for Negligent Retention, but the Court found that this claim was not supported by the allegations, as Plaintiff had failed to show that there were any prior violations that were so grave that discharging the driver was the only reasonable response, and that even if there were such allegations, he had failed to show causation between the failure to discharge the driver and his injury. On that basis, the Court granted Defendant’s motion to dismiss the claims against them.

McCleary v. Singh, C.A. Nos. CV-24-08056, 24-08092, 2024 WL 4728649 (D. Ariz., Nov. 8, 2024). In this case involving a motor vehicle accident with two semi-tractor trailers, the Court considered a motion to consolidate two separate tort actions which were filed related to the accident. The first action was brought by a driver and passenger (“First Plaintiffs”) of one of the tractors against the driver of the other tractor trailer, the owner of the other tractor trailer, and the trucking company for which the other tractor trailer was hauling cargo at the time. The second tort action was brought by the insurer for the trucking company for whom the First Plaintiffs were operating at the time of the accident against the owner of the other involved tractor. After the second action was brought, all parties to the second action moved to consolidate the cases, which was granted. Following the cases being consolidated, the plaintiff passenger in the first action filed a motion to reconsider the consolidation. She argued that consolidating the cases might delay her ability to obtain discovery as the other parties and that the two actions had some unique questions of law. The Court disagreed, citing rule 42 of the Federal Rules of Civil Procedure, and finding that even if there were some unique issues of law and fact, the cases called for determination of substantially the same questions. On this basis, the Court denied the motion to reconsider and consolidated the cases.  

Drake v. Old Dominion Freight Line, Inc., C.A. No. 1:22-cv-21-ACL, 2024 WL 4679068 (E.D. Mo., Nov. 5, 2024). This case involved a motor vehicle accident involving a tractor-trailer. The accident occurred after the Defendant’s driver turned left onto the highway and was soon thereafter hit in the rear by Plaintiff. Plaintiff alleged that the driver failed to yield. First, Defendant moved for summary judgment on Plaintiff’s claim for punitive damages. Plaintiff argued that it alleged that Defendant’s driver acted with complete indifference to or conscious disregard for the safety of others when he failed to yield to Plaintiff. The Court found that Plaintiff had not presented evidence supporting a finding that the driver acted with reckless disregard for the safety of others. “Assuming [Plaintiff]’s account of the accident is true, [Defendant] merely did not see [Plaintiff]’s vehicle.” The Court therefore dismissed the claim for punitive damages. Defendant also moved for summary judgment on the negligence claim on the basis that the Plaintiff actually caused the accident. The Court found that there was conflicting evidence on this issue such that it was an issue for the jury. Therefore, the Court granted summary judgment on the claim for punitive damages and denied it for the negligence claims.

Winter v. Cowart and DT Freight, C.A. No. 3:23-cv-352, 2024 WL 4556985 (N.D. Miss., Oct. 23, 2024). This case involved a fatal motor vehicle accident involving a tractor trailer and a minivan which rear-ended the trailer after the trailer merged back onto the highway after having temporarily parked it on the shoulder. The Defendants moved for summary judgment on a number of issues. First, the trucking company Defendant argued that claims against it (which included negligent supervision, entrustment, and hiring) were redundant as it admitted that it was vicariously liable for the acts of its driver, who was also a Defendant. The Court agreed, finding that these causes of action were redundant and possibly prejudicial. The Court dismissed these causes of action in light of the stipulation. Next, the Court considered claims that the Defendant breached safety provisions contained in the FMCSA. Defendant argued that Plaintiff had not shown any evidence that those regulations were breached. Plaintiff countered that it was not intending to introduce those regulations as part of a negligence per se claim. In light of that concession, the Court dismissed any negligence per se claim to the extent it was asserted. Finally, Defendants argued that there was no evidence of punitive damages. Plaintiff withdrew its claim for punitive damages prior to the hearing, which made this issue moot.

BROKER

3SIX5 Logistics, LLC v. Renko, C.A. No. 1:23-cv-0206, 2024 WL 4880388 (Ill. App. 1 Dist., Nov. 25, 2024). This case involved a contract dispute between a transportation logistics company (3SIX5) and Defendants, a group of individual transportation brokers who work as independent contractors. 3SIX5 and the Defendants signed independent contractor agreements which provided that Defendants would broker shipments through 3SIX5. This arrangement continued for a few months, but eventually, the Defendants felt that 3SIX5 was not growing fast enough and began brokering with other companies. 3SIX5 alleged multiple instances of breach of contract. First, 3SIX5 alleged that one of the defendants breached the contract by competing against 3SIX5 and recruiting clients for a new customer. The Court found that nothing in the agreement held that the Defendants must work exclusively with 3SIX5, and that to the contrary, the agreement signaled that the Defendants would remain independent. 3SIX5 pointed to a revised agreement which stated that one of the Defendant’s customers would remain a customer until a loan was repaid. However, the Court found that this provision was unenforceable as it lacked separate consideration. 3SIX5 next argued that even if there was no contract provision breached, that the Defendants owed fiduciary duties to them. The Court disagreed, holding that the Defendants were independent contractors, and that while independent contractors could still be agents in some circumstances, the facts of this case indicated that the Defendants remained independent from 3SIX5. Next, 3SIX5 alleged that one of the individual Defendants tortiously interfered with 3SIX5’s contract with the Defendant company in diverting clients to another entity. That company, Defendant’s sole member, was that individual Defendant. That Defendant argued that since he was the sole member of the company, the allegation essentially amounted to arguing that he interfered with his own contract. The Court declined to reach that issue, and instead held that even if the claim was proper in that respect, that no breach of contract occurred, because the diversion of clients was a result of 3SIX5’s inability to take on new clients due to lack of growth. Finally, the Plaintiff brought a cause of action for tortious interference with a business expectancy, which the Court dismissed because there was no business ever guaranteed in the industry and the clients were free to pursue other brokers.

J.V. & Sons Trucking, Inc. v. Asset Vision Logistics, LLC, C.A. No. 2024 WL 4747209 (8th Cir., Nov. 12, 2024). This case dealt primarily with the enforceability of a non-compete and non-disclosure agreement. Plaintiff was a crude oil hauling company who contracted with Defendant, a logistics broker. After an ongoing relationship was established and a number of loads had already been transported, the Defendant allegedly approached Plaintiff and told them they would have to change the way Defendant paid Plaintiff, which could be argued to be less favorable to Plaintiff, unless Plaintiff signed a Quick Pay Agreement (QPA). The QPA included a non-solicitation agreement which held that Plaintiff could not solicit or accept any business from anyone directly or indirectly introduced to them by the Defendant. It also contained a non-disclosure agreement in which Plaintiff agreed not to use any confidential information for its own benefit. About 6 months after signing this agreement, Plaintiff terminated its relationship with Defendant and requested payment of unpaid invoices. Defendant refused to pay the invoices, arguing both that the rate sheet attached to the invoices was unsigned and that even if the invoices were owed, the amount was entitled to set-off because Plaintiff breached the QPA. This action followed. The Court held that the QPA’s non-solicitation provision was unenforceable because under Texas law, the agreement must be ancillary to another agreement and required separate consideration which was reasonably related to its interests and designed to enforce return promises. The Court found that this was not the case, as the QPA was entered into after numerous loads had already been hauled. The Court held that the non-solicitation agreement could not have been designed to enforce Plaintiff’s return promise, because it changed nothing about the original agreement. “The covenant [not to complete] cannot be a stand-alone promise … lacking any new consideration.” Next, the Court considered the non-disclosure provision, and found that it was also unenforceable because it did not include any reasonable time, geographic, and scope-of-activity limitations. Lastly, the Court considered the issue of the unpaid invoices, and found that even though Defendant had not signed the rate sheet, the parties had carried on business as usual, indicating that they had an implied contract for the rate increases.

McElroy Truck Lines, Inc. v. Moultry, C.A. No. 3:23-cv-01056, 2024 WL 4593852 (M.D. Tenn., Oct. 28, 2024). This case dealt with numerous issues, including an analysis of an agency relationship and FAAAA preemption. Plaintiff McElroy sued to recover for damage to its tractor-trailer and cargo from a crash with a truck driven by Defendant Moultry. Moultry was delivering household appliances from Lowe’s. Lowes had contracted with a broker, Retail Direct, who in turn contracted with Sprout, who in turn contracted with ORHS to hire drivers; ORHS in turn hired Moultry. Lowe’s and Retail Direct filed a joint motion to dismiss the claims against them. First, they argued that they could not be held vicariously liable for the actions of Moultry because they did not employee Moultry. The Court ran through the different ways that a claim for vicarious liability could be shown. It determined that the moving parties had no actual authority over Moultry as they had no control over his work or hiring/firing powers. The Court found that they also had no apparent authority over Moultry. Plaintiff argued that the truck had a Lowe’s logo on it, but the Court found that even if that established authority, Plaintiff had not proven that it detrimentally relied on that logo in any way. The Court then rejected Plaintiff’s argument that all parties were involved in a joint venture, finding that “a chain of contracts does not create a joint venture” and that Plaintiff had failed to allege a common purpose. Plaintiff next argued that Moultry fell under the definition of “employee” found in the FMCSR. The Court found that while he may meet the definition of an employee under the regulations, the moving parties did not fall under the definition of “employer[s]”. Lastly, Plaintiff alleged that Lowe’s was the statutory employer of Moultry. Lowe’s did not address that point in its motion, so the Court allowed that cause of action to stand, finding it could be reasonably be inferred to be true. Next, the Court examined Plaintiff’s claims for Negligent Hiring and Entrustment. The moving parties argued that these claims were preempted by the FAAAA. The Court found that district courts were sharply divided about whether the FAAAA preempts state broker negligence claims. The Court adopted the Morales test and followed a two part test for preemption, whether: 1) a state enacts or attempts to enforce a state law; and 2) the law relates to the preemptive provision’s prohibitions, either expressly or by having a significant economic effect. The Court found that both these elements were easily satisfied, as Plaintiff’s claims have a significant effect on brokers. The Court then examined the safety exception, and found that it did not apply. The Court found that claims for negligence against brokers are not “with respect to motor vehicles.” In conclusion, the Court granted all motions for summary judgment except for the vicarious liability against Lowe’s in respect to Plaintiff’s claims that the driver was a statutory employee.

CARGO

Angela Fuelling, individually and as Personal Representative of the Estate of James Fuelling, v. S&J Logistics LLC, Jason Ricardo Gordon, Echo Global Logistics, Inc., and Echo Global Logistics, Inc., C.A. No. 7:22-cv-00905,2024 WL 4802709 (D.S.C., Nov. 14, 2024). This case involves FAAAA preemption of various claims alleged against a freight broker after a motor vehicle accident involving a motor carrier. Plaintiff brought causes of action for negligence, recklessness, negligence per se, vicarious liability, wrongful death, survival, and negligent hiring, entrustment, training, supervision, and retention against the broker. The Court concluded that these claims were subject to FAAAA preemption because they directly related to the broker’s core services as a broker. The Court then turned to the Safety Exception. The Court found that Congress’s choice of the words “with respect to” in the safety exception implied a different scope than the words “relating to” found in the general preemption provision. Therefore, the Court found that the safety exception had a narrower scope, only applying to claims that have a direct relationship to motor vehicles. The Court stated that because there was no direct link between motor vehicles and allegations of negligent hiring or selection by brokers, the safety exception did not apply and therefore, Plaintiff’s claims were preempted.

Continental Western Insurance Company v. Hilton-Spencerport Express, Inc., 3:23-cv-631, 2024 WL 4785177 (N.D. Ind., Nov. 13, 2024). This case involves assertion of the FAAAA preemption defense. The case involved a motor vehicle accident in which a tractor-trailer driver, operating under the influence of drugs and/or alcohol, caused an accident resulting in a fatality. One of the Defendants, Arrive, argued that it served as the broker for the transaction and that therefore all of the claims against it were preempted by the FAAAA. In support of this motion, Arrive submitted a snapshot of the FMCSA website listing it as a “broker” and a Broker Carrier agreement characterizing Arrive as a “transportation broker”. The Court found that neither of these documents proved that Arrive was operating as a broker during the accident. Specifically, the snapshot did not prove that Arrive was operating as a broker at the time. Similarly there was no evidence that Arrive was operating pursuant to the Broker Carrier agreement at the time. The Court determined that because it could not be definitely determined that Arrive was a broker at the time, it did not need to reach the issue of FAAAA preemption. Arrive also claimed that the claims against it for vicarious liability were not supported by the complaint. The Court agreed, finding that the complaint did not contain any allegation of any agency relationship between Arrive and the driver. The Court denied Arrive’s motion in regards to FAAAA preemption and granted it in regards to the claims for vicarious liability.   

Indemnity Insurance Company Of North America, as subrogee of AT&T Services, Inc., v. Whitehorse Freight LLC And Cargo Team Solutions LLC, C.A. No. 4:23-cv-4585, 2024 WL 4753817 (S.D. Tex., Nov. 12, 2024). This case deals with a claim for cargo damage under the Carmack Amendment. AT&T arranged for Defendant to transport computer equipment, which was then damaged in transit. AT&T filed a claim with Plaintiff, which was paid. Plaintiff, as a subrogee of AT&T, filed the present action against Defendant. Defendant filed a motion to dismiss, arguing that it is not a carrier and thus not liable under Carmack. To support this contention, Defendant noted that it was licensed as a freight broker, not a common carrier, and that it owned no power units. The Court found that Defendants status as a broker was not dispositive, as the definition of freight forwarder specifically contemplated that an entity may use a carrier’s equipment rather than its own. The Court also noted that other jurisdictions had held that licensure, equipment, or personnel was not dispositive. Finding that licensure was not dispositive, the Court found that the Complaint sufficiently alleged that Defendant was a freight forwarder. The Court denied Defendant’s motion to dismiss.

Sema Logistics Incorporated v. Alternative Heavy Towing Incorporated, C.A. No. CV-23-2098, 2024 WL 4680579 (D. Ariz., Nov. 5, 2024). Plaintiff brought Carmack and state law causes of action stemming from Defendant’s towing of Plaintiff’s truck, which was damaged in transit.  Defendant argued that it was not subject to Carmack because Carmack contains an exception for emergency tow companies and that the state law causes of action were preempted by Carmack. The Court agreed that Defendant was not subject to Carmack given the statutory exception, but that due to that same exception, the state law claims were not preempted. The Court then dismissed the claims brought solely under Carmack but kept in the state law claims.

ACE American Insurance Company v. Rhenus Logistics LLC, C.A. No. 4:22-cv-2687,2024 WL 4633474 (S.D. Tex., Oct. 30, 2024). This case deals with a claim for cargo damage under the Carmack Amendment. Defendant was hired by Logicalis Group Storage to arrange for the transportation of equipment which was ultimately destroyed when it caught fire in transit. Logicalis tendered a claim to Plaintiff, who paid the claim. Plaintiff then, as a subrogee of Logicalis, sought to hold Defendant responsible for the amount paid under the Carmack Amendment. Plaintiff argued that Defendant was a freight forwarder subject to Carmack. Plaintiff moved for summary judgment on that basis. The Court went through each element in the definition of “freight forwarder”. The Court found that fact issues existed as to each one. The Court noted that the parties had several contracts with each other, some of which specifically stated that Defendant was not a freight forwarder and was only a logistics provider. The Court also noted that another issue of fact existed as to whether Defendant took responsibility for the transportation of the goods. Plaintiff pointed to some evidence that Defendant was a freight forwarder, including: Defendant’s employee stating in a deposition that they were “responsible” for the shipment, Defendant submitting the claim form on behalf of Logiscalis, and Defendant’s bill of lading bearing a freight logistics logo. The Court found that each of these may be evidence, but were not dispositive and had contradicting elements to them. Finally, Plaintiff argued that Defendant had a broker agreement with another company, which means that Defendant cannot be a broker because its agreement with Plaintiff prohibited double-brokering. Defendant countered that its agreement with Plaintiff prohibited brokering downstream, but not upstream. The Court found that this constituted an issue of fact and that the agreement was in fact silent to upstream brokering. In conclusion, the Court denied Plaintiff’s motion for summary judgment.

COVERAGE

Pamela Hansen v. GMB Transport, Inc., United Specialty Insurance Company and Gurpreet Singh, C.A. No. 24-cv-00255, 2024 WL 4896570 (N.D. Okla., Nov. 26, 2024). This case involved a direct action against an insurance company. The insurance company moved to dismiss. The Court noted that under Oklahoma law, direct actions against insurance companies were not allowed against the insurer of an alleged tortfeasor absent a statutory edict. Plaintiff attempted to point to the Motor Carrier Act’s requirements that all motor carriers of household goods file with the Oklahoma Corporation Commission (OCC). The Court found that in order to make such a claim, Plaintiff must prove that the motor carrier was required to be insured, and that the OCC did not have such a requirement. Since the OCC did not require motor carriers have insurance, Oklahoma law did not allow for a direct action in this case. The Court therefore dismissed the direct action claim against the insurance company.

Canal Insurance Company v. Kim Sammons, et al., C.A. No. 2:23-cv-00737, 2024 WL 4828731 (S.D. W.Va., Nov. 19, 2024). This case involved a court’s determination of coverage in a case involving a tractor-trailer in which a truck driver shot another driver in a road rage incident. The Court had to determine if this incident “arises from the ownership, maintenance, or use of an auto” pursuant to the policy. The Court found that Florida law (which applied), set out a 3 part test to see if an accident “arose” from the use of an auto: 1) whether the accident arose out of the inherent nature of the auto; 2) whether the accident was in the natural territorial limits of an auto, and the actual use, loading, or unloading must not have been terminated; and 3) the automobile must not merely contribute to cause the condition which produces the injury, but must, itself, produce the injury. The Court found that there was no coverage pursuant to this test because the vehicle did not produce the injury. The Court concluded that the Plaintiff owed no duty to defend or indemnify under the policy on that basis.

Safeco Ins. Co. v. Heikka, 2024 WL 4683895 (Fl. Ct. App. Nov. 6, 2024).  In this case, the Florida Court of Appeals ruled an insurer was required to pay the full amount of a judgment entered against its insured, determining the insurer acted in bad faith in responding to an offer to settle prior to the case resulting in a judgment against the insured. Heikka was involved in a motor vehicle accident with Safeco’s insured, following which Safeco’s insured was charged, and later convicted, of driving under the influence of alcohol and leaving the scene of an accident. Safeco had issued an auto liability policy to its insured with $25,000 liability limits. Heikka incurred in excess of $195,000 in medical bills and via counsel issued a policy limits demand to Safeco, but which would have to exclude any claim to punitive damages, entitlement to UIM, and claims against the bar that allegedly served Safeco’s insured prior to the Accident. Safeco’s adjuster sent a fax to Heikka’s counsel the same day, which provided “[t]his letter will serve as confirmation of our agreement to settle the outstanding claim(s) of Rebecca Heikka for the amount of $25,000.00. Payment and acceptance of this sum is in return for a full and final release of all claims arising out of the above captioned accident.” The fax also included a general release. Heikka’s counsel contacted the adjuster in response, explaining he could not accept the release because it did not exclude the specific claims and punitive damages upon which he had conditioned the demand.  Heikka’s counsel made revisions to the proposed release to account for the carveouts and allegedly sent the signed release back to Safeco’s adjuster, which Safeco contended at trial it did not receive. Heikka’s counsel cashed the $25,000 check, then proceeded to sue Safeco’s insured as a predicate to seeking punitive damages. Safeco claimed it had not received the amended release containing the carveouts and moved to enforce the settlement.  Heikka’s counsel responded via letter, indicating if the amended release was not accepted in sixty days, then Heikka would be filing a bad faith claim against Safeco. Heikka also filed a motion to voluntarily dismiss the claim for compensatory damages in the pending action if the court found sufficient evidence for punitive damages. Rather than accepting the amended release under the letter’s terms, Safeco and the insured sought to enforce the full release in a declaratory action. Ultimately the court found there was no “meeting of the minds” as to the prior release, thereby permitting Heikka to pursue compensatory and punitive damages against Safeco’s insured. Following trial, a judgment was entered against Safeco’s insured in the amount of $1,169,292.83 in compensatory damages, but with no punitive damages awarded. After securing the judgment, Heikka moved to amend her complaint to allege statutory and common law bad faith claims against Safeco, which the trial court granted. On appeal, the court noted “[t]he facts most favorable to Safeco show that the claims adjuster tendered the policy limits together with a release of all claims, which [Heikka’s counsel] had already told the adjuster would be unacceptable. After receiving Safeco’s proposed release, [Heikka’s counsel] reiterated that he would not settle without a carve-out for punitive damages and other parties, and that he would revise the release accordingly.” The court further noted that Heikka’s counsel told defense counsel retained to represent Safeco’s insured of the discussions with Safeco’s adjuster regarding the revised release and conditions for settlement, but if Safeco continued to maintain that the revised release would not apply, then the release would be treated as void and he would seek punitive and compensatory damages from Safeco’s insured, yet Safeco failed to settle.  Under these facts, the court determined Safeco did not honor its obligations to the insured. Safeco contended it was in a no-win situation, with its options limited to: (1) to pay out the policy limits, which would protect the insured from an exorbitant excess compensatory damages verdict, but would expose the insured to a punitive damages verdict without Safeco providing a defense; or (2) to refuse to settle, which would expose the insured to both an imminent excess compensatory damages award and a potential punitive damage award, but with Safeco paying the insured’s litigation expenses. However, the court found that Safeco failed to adequately explain these options to its insured, which it was duty-bound to do under existing law. Last, it found that Safeco again failed its duties when it did not accept Heikka’s counsel re-iterated demand to settle on the previously discussed carve out terms after the issue regarding the dispute between the versions of the release was identified in connection with Safeco’s attempt to enforce the settlement. The appellate court summarized its ruling as follows: “Safeco failed to fulfill its duties to act in good faith in accordance with Boston Old Colony when it refused Heikka’s offer to settle her compensatory damages claim for the policy limits, subject to a carve-out for punitive damages. In doing so, Safeco increased the exposure of its insured, as he faced the possibility of both an excess compensatory damages judgment and punitive damages judgment against him.”

WORKERS COMPENSATION

C.R. England Inc. v. Labor Commission, 2024 WL 4795348 (Utah App., Nov. 15, 2024). Johnson, a long-haul truck driver, was injured when his truck was involved in an accident. Johnson claimed rib pain, and after an exam, he was diagnosed with a concussion. A few months later, he suffered a fall in his home. After this fall, a doctor found that he had three rib fractures and fractures of the spine. The doctor opined that these were injuries that occurred during the accident. He also treated with a neurologist for various cognitive issues. The Workers’ Compensation Commission referred the matter to a medical panel, which concluded that the cognitive issues had worsened from the subject accident. The panel noted Johnson’s use of cannabis, which could worsen cognitive issues, but still concluded these issues were caused by the accident. Johnson’s employer appealed, making several arguments. First, they challenged the finding of medical causation. However, the Court found that the Commission’s findings were supported by evidence that each of the claimed conditions were caused by the accident. They next argued that the case should be remanded back to the medical panel since Johnson claimed he had stopped using cannabis. The Court found that the medical panel (which had actually considered the issue twice after it was remanded once before), had reached its conclusion and that there was no evidence suggesting it would change its opinion. Lastly, Johnson requested attorneys’ fees as the result of the “frivolous appeal”. The Court concluded that the Plaintiff’s challenge was meritless and that some of the allegations contained in the challenge were controverted by the evidence. The Court concluded therefore that the appeal was “frivolous” and awarded Johnson attorneys’ fees.  

Hello All, 

Happy Fall!  

Like for many of you, it’s been a busy time here at Fusable. Convention season is now on hiatus for us, but it was great seeing everyone at MCIEF, ITC, ATA MCE, CVSA, WMCA, and other events recently. Check back for our 2025 events around the new year.  

Over the past few months, we’ve been fusing our data together. You may have seen the sneak peak of our Fleet Values Auditor on our new Fleet tab in The CAB Report^®. On that tab, you’ll find data pulling in precise equipment values to support accurate pricing and claims handling powered by Fusable’s Price Digests. 

More exciting news: Fusable has officially partnered with the strong industry trucking aggregator, TruckerCloud. This brings CAB to the forefront of the motor carrier insurance industry as we introduce telematics onto our platforms.  

“By incorporating TruckerCloud’s rich data set onto our platform, we’re empowering our clients with greater coverage and deeper insights on one single point of integration.” – Gavin McPhail, the EVP and GM of Fusable’s Risk Intelligence Division 

Stay tuned for more details as this is a fluid initiative for us. See the full press release here.

CAB Webinars

Tuesday, November 19^th | 12p EST

The CAB Report^® | Chad Krueger and Pam Jones

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THIS MONTH WE REPORT

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Tackling Soaring Trucking Insurance? How Improved Recruitment, Operations, and Telematics Can Help To reduce rising insurance premiums, trucking fleets are focusing on improved recruitment, operational practices, and telematics. Key measures include recruiting experienced drivers, enhanced training, and using telematics for real-time safety monitoring, which can help lower accident rates and insurance costs. Read more…

Hurricane Impact on Rates Temporary Until the Holiday Shipping Surge According to FTR’s Avery Vise, freight rates have remained lower than last year despite Hurricane Helene’s temporary boost. While dry van rates stay soft, flatbed rates saw the largest recent increase, spurred by post-hurricane recovery. Consumer spending, particularly on services, remains steady, but lower diesel prices and increased carrier presence are stabilizing market conditions. Read more…

Not Surprisingly the Economy Once Again Identified as Trucking’s Top Concern The American Transportation Research Institute (ATRI) released its 2024 report on top trucking concerns, with the economy ranked as the top issue. Other major concerns included truck parking, lawsuit abuse reform, insurance costs, and battery electric vehicle transition requirements. Read more…

Trucking and Marijuana Testing Find Their Way to The Supreme Court The U.S. Supreme Court is hearing a case involving trucker Douglas Horn, who was fired after failing a marijuana test despite taking a CBD product claimed to be THC-free. Horn is seeking damages under the RICO statute, citing economic harm from alleged fraudulent claims by the product manufacturer. Read more…

Court Orders Start to Expose ‘Startling’ Data on Litigation Funding Sources A panel at the American Property Casualty Insurance Association’s meeting revealed insights into third-party litigation funding (TPLF), especially as jurisdictions begin requiring TPLF disclosures. Findings, such as Chinese-backed funders involved in U.S. intellectual property lawsuits, have raised national security and conflict-of-interest concerns. Read more…

I-40 Reopening Could Take ‘Months or Years’: DOT Secretary Buttigieg Transportation Secretary Pete Buttigieg announced that repairs on I-40, severely damaged by Hurricane Helene in North Carolina, could take months or even years, with estimated costs in the billions. Immediate efforts are focused on slope stabilization, with $100 million in federal funds allocated so far. Read more…

ATA’s Costello Feels a Return to Normal is in the Cards in 2025 American Trucking Associations (ATA) Chief Economist Bob Costello anticipates the trucking industry will stabilize by 2025. Costello highlights positive indicators such as easing inflation, stable interest rates, and a gradual recovery in freight demand. Read more…

November 2024 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinak Law Group LLP.

AUTO

Roberts, et al., v. Stewart, et al., No. 1-22-1841,2024 WL 4544124 (S.D.Ala., October 22, 2024). In this case, Plaintiffs brought causes of action against the motor carrier for Negligent Hiring, Retention, Monitoring, Supervision, and/or Training. The motor carrier moved for Summary Judgment on each of those counts. The Alabama District Court found that under Alabama law, a claim involving the above causes of action requires evidence that a driver is an incompetent driver such that the carrier should not have hired him. The Court found that evidence of a traffic ticket for careless driving in a personal vehicle approximately a year prior to the subject wreck and a ticket for speeding more than three years before the accident was insufficient to meet this standard.  The court noted the prior experience operating CMVs without incident or citation and recent training immediately prior to the accident. Therefore, the Court granted the carrier’s motion for summary judgment for those causes of action.

Scott v.. FL. Transportation, Inc. and Holt, No. 4:22-cv-000048-DCLC-SKL,2024 WL 4453283 (E.D.Tenn., October 9, 2024). This case involves a motion for summary judgment as to punitive damages and comparative fault. Plaintiff worked as a commercial truck driver and was driving on the roadway when his vehicle encountered mechanical problems, forcing him to stop. Defendant, another truck driver, stopped behind Plaintiff’s truck and began to honk. Plaintiff then exited his own truck and waved for Defendant to pass him. As Defendant was passing him, he accidentally struck Plaintiff, causing him injuries. The Defendant moved for summary judgment, arguing that Plaintiff was more than 50% at fault as a matter of law for exiting his own vehicle and for stopping in the middle of the roadway (he argued that Plaintiff was lying about the mechanical issues). The Court denied Defendant’s motion on comparative fault, finding that the issue of comparative fault was a “question of fact within the jury’s province.”  However, the motion was granted as to the punitive damages claim because Plaintiff agreed the evidence would not meet the standard to submit the issue to the jury. 

Raymundo Rivas, Plaintiff, v. Jose Ronaldo Martinez, Defendant., No. EP-24-CV-70-KC, 2024 WL 4206122 (W.D. Tex. Sept. 16, 2024). This case involved allegations of negligence per se against the Defendant for violating FMCSR Regulations related to a motor vehicle accident. The Defendant moved to dismiss Plaintiff’s Complaint because the language used was conclusory and failed to put the Defendant on notice of what statutes he violated. Plaintiff’s Complaint referenced numerous sections of the Texas Transportation Code. The Court found that each of these sections were either inapplicable or called for a driver to make a judgment call regarding how to act safely, which could not be used as the basis for a negligence per se claim. Plaintiff also cited 49 CFR 383.113 and referred to other sections in the federal regulations regarding driver knowledge requirements in support of its allegation that the Defendant’s employer failed to properly train its drivers. Plaintiff alluded to sections regarding requirements necessary to qualify drivers and general requirements regarding the inspection and maintenance of vehicles. The Court found that none of these sections “confer a specific standard of conduct” and therefore could not be used as a basis for a negligence per se cause of action. The Court found that a negligence per se claim had to be based on a specific standard rather than general guidelines. As such, the Court granted Defendant’s Motion to Dismiss. 

Carey and Carey v. First String Space, Inc., No. 3:22-CV-940-MMH-LLL, 2024 WL 4188361 (M.D. Fla. Sept. 13, 2024). This case involved the Court’s application of the doctrine of res ipsa loquitur. Plaintiffs were injured when a wheel fell off a tractor-trailer. The trailer was owned by Defendants. Plaintiffs brought a claim and alleged that, pursuant to the doctrine of res ipsa loquitur, the fact that the wheel fell off the trailer was evidence in and of itself that the Defendant must have been negligent. The Court found that to prevail under a res ipsa theory, the Plaintiffs must first show that they did not have the ability to prove negligence as a result of a lack of available evidence. The Court concluded that Plaintiffs had not met this burden because they had taken little efforts to investigate the cause of the accident and had not provided evidence that the accident could not be investigated. Therefore, the Court granted summary judgment in favor of the Defendant.

Ryan Arsenault v. One Call Logistics LLC, No. 2:24-CV-00022-JAW, 2024 WL 4134845 (D. Me. Sept. 10, 2024). In this case, the Court considered FAAAA preemption involving Plaintiff’s claims for negligence and under the Maine Unfair Trade Practices Act. The Plaintiff contracted with Defendant One Call to transport a custom-built Tiny House from Pennsylvania to Maine. Tiny House allegedly made false representations to the Plaintiff that it and its drivers and carriers were fully licensed and insured. One Call then subcontracted the actual transportation of the Tiny House to Yaniel Transportation. While the house was being transported, the driver for Yaniel lost control of the transport vehicle, during which the house overturned and was totally destroyed.

The Plaintiff argued that preemption should not apply to his unfair trade practices claim because his Complaint concerned representations regarding the quality and reliability of the service promised and paid for, rather than the aspects of service regulation that the Motor Carrier Act aimed to deregulate. The Court found that the Maine Unfair Trade Practices Act had an inherent connection to the price and service of motor carrier brokers, and thus was the type of statute that the FAAAA intended to preempt in order to deregulate the industry. The Court concluded that the claim was “with respect to the transportation of property” under the FAAAA and granted One Call’s motion to dismiss the UTPA cause of action.

The Court then turned to Plaintiff’s Negligence cause of action. The Court noted that Plaintiff’s cause of action for Negligence primarily dealt with One Call’s hiring of Yaniel. The Court found that ordinarily, negligent hiring would fall under FAAAA preemption. However, the Court applied the safety exception of the FAAAA and found that Maine had a safety interest in regulating who drives on its road. Therefore, the Court found that the safety exception applied to the negligent hiring cause of action. The Court also addressed allegations that Yaniel had unqualified, unlicensed, and uninsured drivers on the roadways, which the Court also found fell under the FAAAA’s safety exception for the same reason.  The Court therefore denied One Call’s motion to dismiss the negligence claim.

Bradley v. Big’s Trucking, No. 2:23-CV-122-ECM, 2024 WL 4045467 (M.D. Ala. Sept. 4, 2024). This case involved the Court’s determination of whether the FAAAA preempted Plaintiff’s negligence and negligent hiring causes of action against various defendants. The Plaintiffs were stopped in a long line of vehicles when a tractor-trailer rear-ended them. Defendant ABDC had contracted with Defendant Commercial Express to transport its products, who in turn contracted with Defendant Big’s Trucking. The Plaintiffs claimed that both ABDC and Commercial Express were negligent in contracting with Big’s Trucking. The Court found that FAAAA preemption expressly applies when a claim relates to the “service of any motor carrier . . . , broker, or freight forwarder with respect to the transportation of property.” The Court specifically stated that an allegation of negligence against a transportation broker for its selection of a motor carrier to transport property relates to a broker’s “core transportation-related services.”

The Court then turned to the facts of the case and found that FAAAA preemption applied to both ABDC and Commercial Express. There was some contention over the different roles each entity was fulfilling in the transaction. For ABDC, the Court found that, despite arguments regarding whether it was a broker or a shipper, “At bottom, the claims against ABDC by the Plaintiffs stem from the actions of entities acting as motor carriers.” For Commercial Express, the Court found that it was acting either as a motor carrier or freight forwarder, either of which would fall under FAAAA preemption.  Plaintiff’s argued that these claims should be subject to the FAAAA’s safety exception. However, the Court found that none of Plaintiff’s claims against ABDC or Commercial Express were “with respect to motor vehicles”, pursuant to the standard laid out in Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023) because the claims against the Defendants were for negligent hiring, which did not directly relate to the operation of a motor vehicle.

BROKER

Milk Specialties Company, d/b/a Milk Specialties Global, Plaintiff, v. Sandair Corporation, d/b/a California Freight Sales, Defendant., No. 2:24-cv-01310, Oct. 15, 2024 WL 4495150 (E.D.Cal., 2024). This case involves a California district court’s analysis regarding Carmack and FAAAA preemption. Plaintiff, the shipper, contracted with Defendant, the broker, for the shipment of goods. Defendant then contracted with a carrier, who subsequently stole the shipment. Plaintiff filed suit against the Defendant, alleging negligence and promissory estoppel. Defendant first argued that Plaintiff’s claims were actually disguised Carmack claims, that the claims were therefore preempted, and that the claims should be dismissed because brokers are not subject to Carmack Amendment liability. The Court rejected the Defendant’s argument at the first point, finding that the Plaintiff’s claims were state law claims, not Carmack claims, and that nothing in the Carmack Amendment prevented Plaintiff from bringing them against a broker, which is not subject to Carmack preemption. Defendant next argued that the claims were preempted by the FAAAA. Plaintiff argued that its claims did not relate to the price, route, or service of the trucking injury because the allegations were essentially that the broker negligently selected a fraudulent carrier. The Court rejected Plaintiff’s argument, finding that the selection of a motor carrier was a “service” within the meaning of the FAAAA. The Court then turned to the safety exception, applying the broad reading under Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020) and distinguishing the treatment of the safety exception in Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453, 465 (7th Cir. 2023) as not applying within that jurisdiction. The Court found that the safety exception applied because Plaintiff’s negligence claim was “fundamentally genuinely responsive to the safety of other vehicles and individuals.” The Court noted that Plaintiff’s claim “seeks to promote safety by requiring brokers to vet carriers, thereby precluding the selection of carriers who commit misconduct related to their services, such as theft . . . Because protecting against theft and the conduct that can arise and harm individuals who interact with carriers engaged in theft, the safety exception applies.” The Court rejected Defendant’s argument that the claims were not “with respect to motor vehicles”, finding that Plaintiff’s claims, whether directly or indirectly, had a connection to motor vehicles. The Court concluded that FAAAA preemption did not apply because Plaintiff’s claims fell under the safety exception.

Pinder v. Lancer Insurance Company, No. 7:23-CV-53, 2024 WL 4335913 (M.D.Ga.,  September 27, 2024). In this case, a Georgia district court examined issues relating to a respondeat superior claims against a broker a shipper, as well as FAAAA preemption. The case involved a motor vehicle accident with a tractor trailer. The Complaint alleged that Defendants MTL and Walmart acted as a broker and shipper respectively, and that they undertook an agency relationship with the motor carrier and driver such that they could be held responsible for their actions under a respondeat superior theory. The district court disagreed, finding that negligence can only be imputed to an employer who exercises control over the manner and means of the work. The court found that based on the allegations in the complaint, MTL and Walmart were independent contractors, and therefore the actions for the driver could not be imputed to them. On that basis, the court granted MTL and Walmart’s motions to dismiss the respondeat superior claims. Next, the court turned to claims for general negligence against MTL and negligent hiring, training, entrustment, supervision, retention, and shipping causes of action against Walmart. MTL and Walmart argued that these claims were preempted by the FAAAA. The Court agreed. The Court examined the FAAAA’s safety exception, and found that it was inapplicable because the negligence claims did not have a “direct relationship to motor vehicles”. The Court also rejected Plaintiff’s argument that the fact that he was seeking bodily injury damages put the claim into the parameters of the safety exception, finding “the nature of the injury is not what matters for purposes of the Act’s preemption provision.” On that basis, the Court dismissed the negligence claims against MTL and Walmart.

CARGO

Manifest Destiny Transport Corporation v. South Bay Freight System, LLC, No. BC661231, 2024 WL 4341526 (C.A. Ct. App., September 30, 2024). This case involved a breach of contract dispute between a motor carrier, MDT, and cargo delivery service, South Bay Freight. South Bay had purposefully withheld payment on invoices in order to recoup on a loss it incurred when cargo was stolen from an MDT truck. MDT sued South Bay for the unpaid invoices. At trial, South Bay argued that any award should be set-off by the amount it would be entitled to recoup as a result of the stolen cargo. The trial court disagreed, finding that South Bay was not entitled to a set-off because of the doctrine of unclean hands. The California Court of Appeals affirmed, finding that a party must come to court with clean hands in order to be entitled to any set-off. By withholding payment on independent invoices without any justifiable reason for doing so, especially when the amount withheld was far greater than the value of the stolen cargo, South Bay had engaged in “self-help” and was therefore coming to the litigation with unclean hands on that issue. Therefore, the Court did not apply any set-off. The Court also affirmed the award of attorneys’ fees to MDT pursuant to the contract and sanctions against South Bay for being purposefully evasive during discovery.

Apiary Industries, LLC, v. C&M Logistics, LLC, No. 4:23-CV-00428-NCC,2024 WL 4527191 (E.D.Mo., Oct. 18, 2024). This case involves the Court’s interpretation of a Broker-Carrier Agreement (BCA). Plaintiff, an interstate property broker, contracted with Defendant, an interstate motor carrier. During one of their shipments, goods were stolen from the Defendant’s trailer. Plaintiff and Defendant had executed a BCA prior to the theft. After the theft, Defendant obtained six waybills, which it relied upon to contest its liability. First, the Court found that it had proper personal jurisdiction over Defendant because the BCA contained a forum selection clause. Plaintiff moved for summary judgment because the BCA stated that Defendant must pay the fair market value for the stolen goods. Defendant also moved for summary judgment, arguing that Plaintiff’s rights were subject to the terms of the waybills, and that the terms of those waybills barred Plaintiff’s claims. Defendant also claimed that Plaintiff voluntarily paid for the shipper’s loss, which further limited its recovery under the waybills. The crux of Defendant’s argument was based on a sentence in the cargo loss section of the BCA which held that the broker shall have no liability for any loss or damage to goods transported by the carrier and that if the broker paid such claims to a shipper, the carrier would then be responsible to the broker for such claims “as though the broker were the shipper.” Defendant argued that because of this sentence, the Plaintiff, as the broker, should be treated as the shipper, and would be subject to terms in the waybills. The Court disagreed, finding that to read the agreement this way would be to ignore the large majority of the BCA that set out specific rights and obligations for the broker. The Court also noted that the BCA clearly spelled out Defendant’s liability and excluded any outside agreements or documents. Defendant also argued that the waybills should apply because they were “through bills of lading”. The Court found that it was not necessary to reach that issue, because the Plaintiff in this action was the broker, not the cargo owner or a party that is relying on the waybills. The Court did note that it did not believe waybills to be considered bills of lading and that the waybills in this case specifically failed the test to be considered through bills of lading because they did not contain the information required to be included on through bills of lading. The Court concluded that the parties entered into a valid BCA, and that it should apply. “Defendant here faces the exact liability to which it agreed and must be held to its contractual obligations. The BCA is clear, and the Defendant freely negotiated its terms.” The Court granted summary judgment in favor of the Plaintiff for the fair market value of the lost cargo.

Frutera Agrosan Export SPA v. GT USA Wilmington, LLC, No. 23-cv-000248-SRF, 2024 WL 4333141 (D.Del., Sept. 27, 2024). This case involved the Court’s determination of preemption under COGSA. The case arose from a shipment of fresh grapes from Chile to Delaware. The grapes were not properly fumigated, which resulted in some of them being lost. Plaintiff, the shipper, sued, among others, GT, which operates and manages cargo at the Delaware port. GT moved to dismiss. GT argued that COGSA preempted the Plaintiff’s action, necessitating the dismissal of Plaintiff’s state and common law claims. GT also presented Sea Waybills, which contained a Himalaya clause stating that COGSA applied to the pre-loading and post-discharge periods and another clause which held that the carrier shall be responsible for the custody of goods from their receipt up to delivery. GT argued that these provisions showed that the intent was to apply COGSA coverage to all downstream entities, including GT. Plaintiff responded that GT was not a signatory to the Sea Waybills and could not rely on them. Plaintiff also argued that the Sea Waybills did not explicitly adopt COGSA, but instead incorporated Chilean law. The Court found that these arguments could turn on the intent of the parties, which is a fact question not appropriate for the motion to dismiss stage. The Court found that cases cited by both parties all involved rulings that were made after factfinding was complete. The Court denied GT’s motion to dismiss on that basis.

Bleything v. North American Van Line, Inc., No. CIV-23-00764, 2024 WL 4341592 (W.D.Okla., Sept. 27, 2024). This case involved the Court’sdetermination of preemption under the Carmack Amendment. Plaintiffs contracted with Defendants NAVL and A-1 to transport personal property for a cross-country move. Upon arrival, Plaintiffs discovered some of the property was broken or destroyed. Plaintiffs sued Defendants for negligence. Defendants moved to dismiss, arguing that Plaintiffs’ claims were preempted by the Carmack Amendment. Plaintiffs conceded that the Carmack Amendment preempted their claims, but argued that their complaint should be converted into a Carmack Amendment claim. Defendants argued that the conversion should not be allowed because the complaint did not make a prima facie Carmack Amendment claim in that it failed to specifically allege delivery in good condition to the carrier. The Court rejected this argument, finding that the allegation that the items were broken or destroyed gave rise to a reasonable inference that the items were in good condition when they were delivered to the carrier. The Court concluded that it was proper to convert Plaintiff’s claim into a Carmack Amendment claim. A-1 separately moved to dismiss the complaint on the basis that it was an agent of the disclosed principal, NAVL and therefore could not be held liable under Carmack. The Court found that Plaintiffs had waived this issue by not responding to it, but even if it had not been waived, the Court stated it would have agreed with A-1 because the bill of lading clearly disclosed NAVL as the carrier, which shielded A-1 from liability under Carmack. The Court granted A-1’s motion to dismiss, and converted Plaintiff’s state law claims into a Carmack Amendment claim.   

Peterfai and Peterfai v. USA Logistics et al., No. 23-CV-1695-WQH-KSC, 2024 WL 4279506 (S.D. Cal. Sept. 24, 2024). This case involved the Court’s determination of preemption under the Carmack Amendment. Plaintiffs were moving from California to Texas and hired Defendant Hercules. Hercules represented that it only hired moving companies with 5 star ratings. Hercules then contracted with USA Logistics to facilitate the move. When USA Logistics employees appeared at Plaintiffs’ house for the move, they moved all of Plaintiffs’ things onto the truck before telling them that the move would actually cost 3 times the amount quoted. When Plaintiffs said they would call off the move, the USA Logistics employees threatened that they would charge them $5,000 to unload the items from the truck, after which Plaintiffs paid them. A few days later, an individual from Defendant Monopoly Moving, LLC, called Plaintiffs and told them they owed more money, and that if it wasn’t paid, he would drop their items in the desert. When Plaintiffs complied, they found that the vast majority of their items were damaged or missing. Plaintiffs’ credit card statement reflected that the payment had gone to Defendant Rado Transportation. Plaintiffs brought claims for violations of the RICO act, violations of the Carmack Amendment, and various causes of action relating to fraud.

The Court quickly rejected Defendants’ argument that they were subject to a limitation of liability provision in the bill of lading, finding that the Complaint alleged that all contractual agreements were rescinded due to fraud, which must be accepted as true for the purpose of a motion to dismiss. The Court then turned to Defendants USA Logistics and Hercules’ arguments that the Carmack Amendment preempted Plaintiffs’ claims against them. Plaintiffs agreed that Carmack preempted their negligence and conversion claims, but argued that their claims based on conduct independent from the loss or damage of Plaintiffs’ property, such as the RICO claims, arose out of allegations of fraud and extortion. The Court disagreed and found that since Plaintiffs’ claims of fraud and extortion arose out of a refusal to deliver property, they were all preempted by Carmack, explaining “Courts have consistently held that the amendment preempts all state claims related to a shipping agreement.”

Defendant Rado also moved to dismiss the constructive fraud and conversion claims against it, arguing that it had no fiduciary duties to Plaintiff. The Court examined the Carmack Amendment and ruled that a broker does not have a fiduciary duty to the party who owns the shipped goods. On that basis, the Court dismissed the fraud claims against Rado. The Court did find that Plaintiffs made a sufficient claim for conversion against Rado.

Finally, Defendant Hercules argued that the Carmack Amendment claim against it was improper as Carmack did not apply to it as a broker. The Court disagreed, finding that the Complaint alleged Hercules operated both as a motor carrier and a broker, which would place it under Carmack.

Bart Flanagan Tree Service, LLC v. RKD Trans., Inc. et al, No. 2:24-CV-00221-JCN, 2024 WL 4252681 (D. Me. Sept. 20, 2024). This case involved the Court’s determination of preemption under the Carmack Amendment. Plaintiff purchased a wood chipper and contracted with Defendant Load Em Up to have the chipper sent to its business. Load Em Up then contracted with RKD for delivery of the chipper. Either Load Em Up or RKD then contracted with Shyft for Shyft to deliver the chipper. During the transport with Shyft, the chipper hit a highway overpass, rendering it unusable without significant repair. Plaintiff’s Complaint alleged negligence by each defendant. The defendants argued that the claims were preempted by the Carmack Amendment. The Plaintiff essentially conceded that point, but argued that they should be given leave to amend. The Court agreed, and found that Plaintiff’s claims were “clearly based on the loss or damage of shipped goods” under the Carmack Amendment. However, the Court ruled that alone did not require or warrant dismissal. The Court found that it could proceed with the understanding that the state law claims plead a claim under Carmack, but that since Plaintiff asked leave to amend the Complaint, it would grant Plaintiff leave to amend to clearly plead that it was making a claim under Carmack.

HDI Glob. Ins. Co. v. Kuehne + Nagel, Inc., No. 23-CV-6351 (LJL), 2024 WL 4188345 (S.D.N.Y. Sept. 13, 2024). This case involved the Court’s interpretation of the word “package” in the context of COGSA’s limitation of liability provision. Defendant’s shipping container fell into the water while it was being loaded for shipment in Spain on its way to South Carolina. The container contained electrical wire harnesses loaded onto pallets. The 4 Sea Waybills listed both “120 Packages” and “6 pallets” as the goods being transported. Meanwhile, the terms and conditions between the parties defined the word package as “any palletized and/or unitized assemblage of cartons.” The parties disputed whether the relevant “packages” under COGSA were the 480 cartons or 24 pallets and each brought a motion for summary judgment on that issue. The Court, citing a previous 2^nd circuit decision, found that “the primary question [is] whether the bill of lading, construed as a contract, reveals the parties’ agreement on the appropriate COGSA package.”. The Court found that there was evidence supporting each interpretation and that there were disputes of fact regarding why the Sea Waybills were written as they were. On that basis, the Court denied both motions and allowed the case to proceed to a bench trial.

COVERAGE

Prime Property & Casualty Insurance Inc. v. Elantra Logistics LLC, No. 22-CV-191,2024 WL 4350696 (E.D.N.Y., September 30, 2024). In this action, the Plaintiff insurer sought indemnification/reimbursement related to a payment of its obligations under an MCS 90 endorsement. The insured had concealed the fact it was involved in a motor vehicle accident and attempted to add the vehicle to its policy an hour after the accident. The policy contained an MCS 90 endorsement. However, it also contained an indemnity agreement which stated that the insured would indemnify the insurer for any claim paid which was not pursuant to the policy, including any payment made under the MCS 90 endorsement. The insurer subsequently settled with the plaintiff involved in the accident for $150,000 under the MCS 90 and sought indemnification from the insured in that amount. The insured argued that the action seeking that amount was premature, pointing to a case in which a district court had dismissed a similar claim when there had been no money paid and the underlying litigation was ongoing. The Court rejected that argument, finding that here, the insurer had already settled its claim under the MCS 90, and that the insurer was therefore entitled to indemnification in that amount pursuant to the contract.

Melerine v. Williams, No. 22-CV-06127,2024 WL 4361594 (W.D.La., Sept 30, 2024). This coverage matter involved a summary judgment motion in which the defendant insurer asked the Court to find no coverage for an accident involving an unlisted auto on the insured’s policy. The insured acknowledged that the involved auto was unlisted, but argued that it had asked its broker to add the vehicle, and that the broker had mistakenly duplicated a prior request and failed to add the requested auto. The Court implied that such a contention could potentially result in a genuine issue such that the insurer would not be entitled to summary judgment. However, the insured had failed to back up this contention with any evidence from the record. The Court found that since there was no evidence to support this, the Court would only look to the four corners of the contract, which clearly indicated that there was no coverage. Separately, another insurer for one of the other vehicles involved in the accident argued that the MCS-90 should apply over its policy. The Court declined to reach that issue, finding that “the interplay of the MCS 90 endorsement and the [other policy] is unclear in the event a judgment for the Plaintiffs is rendered.” The Court granted the insurer’s motion for summary judgment, finding that there was no coverage under its policy.

Tejeda v. Dixon, No. CV 22-2758, 2024 WL 4024717 (E.D. La. Sept. 3, 2024). This case involved the Court’s interpretation of an insurance exclusion clause for any injury which occurred while the truck was being used “in the business” of anyone to whom the truck was rented. The underlying motor vehicle accident occurred between truck driver Jonathan Dixon and Plaintiff Edgar Tejeda. Dixon, as an independent contractor, had contracted with Fifth Wheel Transportation, LLC to deliver loads. The day before the accident, Dixon used a broker website to line up for a job for himself which required him to pick up a load to Tickfaw, Louisiana. The night before the accident, Dixon hung out with his friends at a neighborhood tint shop. After the evening wound down, Dixon began on his way to a local gas station in order to fuel his truck. Dixon testified in his deposition that this gas station was located in the opposite direction of Tickfaw, but that he knew the gas station had the cheapest gas. Dixon also testified that he wasn’t planning on leaving Tickfaw until the next day, but that he wanted to fuel up on his own time so that it wouldn’t count against his federally-mandated daily driving allowance. While Dixon was on his way to the gas station, the subject accident occurred.

Fifth Wheel Transportation had a policy issued by Sentry Select Insurance Co. which provided coverage when the truck was being used in Fifth Wheel’s business. Fifth Wheel also had two non-trucking insurance policies with CorePoint Insurance Co. These policies expressly excluded coverage “while [the truck] is used in the business of anyone to whom the [truck] is rented.”  The Court noted that the Fifth Circuit had previously considered clauses with the phrase “in the business of” and found that they were unambiguous. Specifically, the Court considered several non-exclusive factors: whether the driver was free to go where he pleased; whether the driver was paid for time or mileage; whether the driver was under dispatch or standby for further deliveries; and whether the activity was more of a personal or work-related function.

When applying these factors, the Court found that Dixon was not “in the business of” Fifth Wheel at the time of the accident. The Court rejected CorePoint’s argument that Dixon’s fuel trip was a necessary part of the trip. The Court noted that Fifth Wheel did not require Dixon to be fueled up prior to embarking on the trip and that Fifth Wheel got no benefit from Dixon driving to a gas station with cheaper gas. The Court concluded that Dixon was not furthering the commercial interests of Fifth Wheel when the accident occurred, and therefore was not “in the business of Fifth Wheel.” The Court denied CorePoint’s Motion for Summary Judgment on that ground.

Silva v. Muhammad, 2024 WL 4133277 (Ohio App. 10 Dist., 2024). This case involved the Court’s interpretation of a setoff provision for sums paid by anyone “legally responsible” for an accident. The underlying accident occurred when one person lost control of her car and spun out, coming to rest in the opposite lane of traffic. This caused another car to stop in the interstate, after which a semi-truck being driven by the Defendant rear ended it, killing the occupant. The Defendant was driving a vehicle covered by a Westfield Policy. The decedent’s estate filed a lawsuit against several individuals and companies. One of those companies, CEVA, settled with the estate for $5,000,000 but denied liability. The Westfield Policy stated that its limit of insurance was reduced for all sums paid for bodily injury by or on behalf of anyone who is “legally responsible.” The estate argued that CEVA had not been found legally responsible by a jury. However, the Court found that the term “legally responsible” did not require a jury finding and that the parties contemplated that the term would include a settlement. In reaching this determination, the Court examined Black’s Law Dictionary definitions for the term “legally responsible”, as well as other sections of the Westfield policy which included the terms “legally must pay” and “settlement” together. Therefore, the Court found that Westfield was entitled to a setoff of its limits for the settlement.

WORKERS COMPENSATION

Colon v. Illinois Central Railroad Company, 2024 WL 4549401 (Ill.App. 1 Dist., October 23, 2024). In this workers’ compensation appeal, the Illinois Court of Appeals examined whether a successful workers’ compensation claim was a bar to a subsequent claim under the Federal Employers Liability Act (FELA). The Plaintiff was a mechanic/welder and was injured on the job. He filed a Complaint against Illinois Central in which he alleged that it was his employer and that his position involved interstate commerce, which made him entitled to benefits under FELA. Illinois Central moved to dismiss, arguing that the Plaintiff was not an employee for it, but was instead an employee of one of its independent contractors, Autoport. In the alternative, Illinois Central argued that the Plaintiff was estopped from recovering over FELA because he already received workers’ compensation benefits from Autoport. The Plaintiff responded that he was only “nominally” employed by Autoport. The trial court granted Illinois Central’s motion to dismiss, finding that since the Plaintiff received compensation benefits from Autoport, he was an employee of Autoport, not Illinois Central, as a matter of law. On appeal, the Court first examined whether workers’ compensation benefits barred the FELA claim. The Court examined precedent from prior cases which held that an employee can be held to be an employee under FELA despite being “nominally employed” elsewhere if he falls into one of three categories: (1) as a “borrowed servant” of the railroad at the time of the injury, (2) being deemed to be acting for “two masters” simultaneously, and (3) as a subservant of a company that is in turn a servant of the railroad.  The Court of Appeals found that the trial court failed to examine whether the plaintiff fell under these categories, and therefore reversed its decision. Illinois Central also argued that, even if the claim was not barred, it still should not be allowed because the evidence did not show that Plaintiff fell into any of the three categories. The Court found that both sides had provided competing affidavits on this issue, and that it would be inappropriate to rule on it at the motion to dismiss stage. Plaintiff also brought personal injury causes of action, which the trial court dismissed for both lack standing and under the doctrine of judicial estoppel. First, the trial court had found that the Plaintiff lacked standing because he failed to disclose the claims in a previous bankruptcy proceeding; and that therefore, the claims still belonged to the estate. Second, the trial court found that Plaintiff was judicially estopped from bringing these claims because he had deceived the bankruptcy court. The Court reversed both grounds, holding that exact standing argument had already recently been rejected by the Illinois Supreme Court. On the judicial estoppel issue, the Court ruled that in the trial court’s written order, the trial court had improperly stated that failure to disclose a claim was per se evidence of deception, when under Illinois law, it only shifted the burden to Plaintiff to provide evidence of an innocent oversight. The Court concluded that judicial estoppel is an “extraordinary doctrine that should be applied with caution.” For these reasons, the Court reversed the trial court’s dismissal on all counts.

Lleshaj v Delta D., No., CV-23-0805, 2024 N.Y. Slip Op. 05010, 2024 WL 4453937 (N.Y.A.D. 3 Dept., Oct. 10, 2024). In this workers’ compensation appeal, the claimant, a New York resident, argued that his claim should be able to be heard in New York. The Court disagreed, and upheld the workers’ compensation board’s dismissal, finding that it lacked jurisdiction to hear the matter when the trucking company was based out of Illinois and the injury occurred in Pennsylvania. The Court found that the company did not have sufficient contacts with the state of New York in order to have any matter against it heard there, as it had no office in the state and no connection to it other than hiring the claimant while he was living there.

Ibrahim v. The Industrial Commission of Arizona, et al, No. CA-IC 24-0004, 2024 WL 4442832 (A.Z. Ct. App., October 8, 2024). In this workers’ compensation appeal, the Arizona Court of Appeals examined an administrative law judge’s finding that an injured trucker was an independent contractor who was not entitled to workers’ compensation benefits. The trucker’s primary argument was that his agreement with the trucking company, MKTS, was “integral” to its business, and that MKTS “cannot contract out the very heart of [its] business.” The Court found that the importance to MKTS’s business was not the relevant inquiry, but rather how much control MKTS exerted over the trucker. The trucker argued that MKTS had assisted him in filling out paperwork, procuring his preferred routes, and moving from Los Angeles to Arizona. However, the Court found that this was not enough to exercise the degree of control that an employer would have. Among other factors the court considered, the trucker was not limited to a particular route or specific times to drive, he was free to deliver the cargo in any way that ended in a timely, undamaged arrival at the destination, he was not required to lease a truck from MKTS,  and MKS did not supply any of his costs of doing business. On that basis, the Arizona Court affirmed the Administrative Law Judge’s finding that he was an independent contractor not entitled to benefits.

Patrick v. Velocity Rail Sols., Inc., No. 652 C.D. 2023, 2024 WL 4163385 (Pa. Commw. Ct. Sept. 12, 2024). In this appeal of a workers’ compensation judge’s denial of benefits, the Court examined a claimant’s burden of proof required in order for him to receive benefits. The claimant, who was employed as a diesel and hydraulic technician, alleged that while he was riding as a passenger in a tractor-trailer, he suffered a perforated eardrum and loss of hearing in his right ear when a line of box cars came down an incline, causing a loud noise. The following day, the claimant had his ears flushed, which he claimed made his hearing even worse. There was contradictory evidence regarding the claimant’s claimed injuries. The Court ultimately found that the claimant did not meet his burden to establish he was entitled to benefits. The Court upheld the decision of the compensation judge finding that the claimant was not credible because several aspects of his testimony were contradicted by medical records such that it could not be shown that the claimant’s injury occurred at work. The Court also rejected the Claimant’s attempt to use his expert’s testimony to support his testimony, finding that where a judge “rejects a claimant’s testimony concerning the history of an alleged work-related injury, it follows that the expert medical testimony premised on that history is not competent.”

Alabama Trucking Ass’n Workers’ Comp. Self Ins. Funds, Inc., v. Christopher Chadwick, No. 24A-CT-167, 2024 WL 4261756 (Ind. Ct. App. Sept. 23, 2024). In this case, the Court of Appeals of Indiana examined Alabama’s workers’ compensation lien statute. The truck driver, Chadwick, was injured while driving for his employer, Bama Truck Lines, and hauling a load of heavy steel bars belonging to Niagra Corporation. Chadwick sought and received workers’ compensation benefits. He also filed a lawsuit against Niagra, which was settled out of court. His employer’s workers’ comp insurance carrier then filed suit, alleging that it was entitled to a lien on part of the settlement proceeds. The Indiana Court, applying Alabama law, used a formula to calculate the carrier’s lien amount. The carrier also argued it should be granted a credit for the portion of the settlement allocated to Chadwick’s future medical expenses. The Court agreed that the carrier would have been entitled to a credit, but found that it did not provide supporting evidence regarding what portion of the settlement was allocated to future expenses, and therefore waived the issue. The Court ultimately remanded the case as the trial court had used the incorrect formula.