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LIFE AFTER SCHRAMM:
SCHRAMM has been cited in the following cases:
2ND CIRCUIT - U.S. DISTRICT COURTS
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Travelers Indem. Co. v. Schneider Specialized Carriers, Inc., 2005 U.S. Dist. LEXIS 2029 (S.D.N.Y. Feb. 9, 2005) (Freight damage case) |
3RD CIRCUIT - U.S. DISTRICT COURTS
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Crosby v. Landstar, 2005 U.S. Dist. LEXIS 12008 (D. Del. June 21, 2005) (Case dismissed, personal injury, failure to assert fed jurisdiction) |
5TH CIRCUIT - U.S. DISTRICT COURTS
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Caballero v. Archer, 2007 U.S. Dist. LEXIS 12271 (W.D. Tex. Jan. 31, 2007) ( 2 DEATHS, SHIPPER ( CARGILL) CARRIER; NO BROKER) SMITH V SPRING HILL INTEGRATED LOGISTICS 6 TH CIRCUIT OHIO..US DIST CT. (NO DIST .EASTERN DIV)(CASE # 1:04 CV 13) OCTOBER 2005 ONE DEATH, BROKERED SHIPMENT .BROKER NOT LIABLE ( CARRIER DRIVER FELL ASLEEP WHILE DRIVING. NO LIABILITY FOR NEGLIGENT HIRING OF CARRIER; NO LIABILITY FOR NEGLIGENT INSTRUCTIONS/DESIGN OF ROUTES. SCHRAMM NOT CITED!)
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11TH CIRCUIT - U.S. DISTRICT COURTS
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Morris v. Fla. Transformer, Inc., 455 F. Supp. 2d 1328, 1829 (M.D. Ala. 2006) (ONE DEATH; NO BROKER) |
UNPUBLISHED CALIFORNIA APPELLATE DECISIONS
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Tokio Marine & Fire Ins Co v Megatrux Onc, 2006 Cal. App. Unpub. LEXIS 6964 (2006) (FREIGHT DAMAGE CASE) |
THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS a/s/o QUALITY CARTON, INC., Plaintiff, -against- SCHNEIDER SPECIALIZED CARRIERS, INC., et al., Defendants. (U.S. Dist. Ct. , SDNY 2005) (2005 U.S. Dist. LEXIS 2029)February 9, 2005, Decided
This action arises out of the interstate shipment of a printing press owned by Quality Carton Inc. ("Quality Carton") and delivered from California to Quality Carton's place of business in New York. Quality Carton's insurer and subrogee, Travelers Indemnity Company of Illinois ("Travelers Indemnity"), brought this action against Schneider Specialized Carriers, Inc. ("Schneider") and North American Van Lines, Inc. ("NAVL") (collectively "defendants"), asserting state statutory and common law claims ("state law claims") of negligence, recklessness, breach of contract, breach of bailment and breach of Uniform Commercial Code ("UCC")
, as well as for breach of contract pursuant to the Carmack Amendment against Schneider and NAVL. NAVL has not sought to dismiss the Carmack Amendment claim asserted against it.The following facts relevant: From December 14, 2003 until December 24, 2003, Travelers Indemnity provided damage-in-transit insurance coverage for Quality Carton, located in New York. Prior to December 23, 2003, Quality Carton engaged Schneider to transport a printing press owned by Quality Carton to Quality Carton's place of business in New York. Schneider then arranged for NAVL to deliver, by truck, the printing press.
It is undisputed that Schneider and NAVL entered into a Master Transportation Contract, which governed the rates and charges, as well as the apportionment of loss. At the time of the shipping, NAVL issued a comprehensive bill of lading and freight bill on December 17, 2003, which named Quality Carton as the consignee, Mark Container as the shipper and NAVL as the carrier. Schneider also issued a straight bill of lading on December 17, 2003, naming Quality Carton as the consignee and itself as the carrier. (Rodgers Decl., Ex. F.) NAVL holds a certificate of authority allowing it to operate as either a common carrier or contract carrier.
Travelers Indemnity alleges that on December 23, 2003, the tractor-trailer engaged and operated by NAVL struck a bridge pier and guardrail in Virginia, thereby damaging the printing press. Pursuant to the terms of the insurance policy issued to Quality Carton, Travelers Indemnity paid $ 153,329.35 to Quality Carton and was assigned Quality Carton's right to recover against defendants by written agreement. On January 29, 2004, NAVL inspected the damages from the incident and completed a report. Travelers Indemnity wrote letters to both Schneider and NAVL notifying them of the loss. To date, neither party has issued any payment to Travelers Indemnity
Contract Carriers and the Carmack AmendmentDefendant NAVL thus seeks to avail itself of provisions of the Carmack Amendment, thereby dismissing plaintiff's state law claims arising out of the allegedly negligent shipment of the printing press. While plaintiff begrudgingly acknowledges the preemptive scope of the Carmack Amendment, plaintiff asserts that NAVL has not established that it is a contract carrier, and that in any event, the Carmack Amendment only applies to common carriers.
Travelers Indemnity first argues that because Schneider allegedly acted as a carrier alongside NAVL, the status of Schneider and the status of NAVL are both "in question." In support, Travelers Indemnity asserts that Schneider listed itself as a "carrier" on the straight bill of lading and set forth agreed rates for transportation and liability. Ultimately, the import of plaintiff's contention is that if NAVL can be considered a broker by virtue of Schneider's participation as a carrier, the Carmack Amendment will not apply to preempt state and common claims against NAVL.
1. Chubb Group of Ins. Companies v. H.A. Transp. Systems, Inc., 243 F. Supp. 2d 1064, 1068-69 (C.D. Cal. 2002) (stating that "the Carmack Amendment does not apply to brokers.").
The Court then reviews the statutory definitions of carrier and broker.
Plaintiff has failed to present any evidence suggesting that NAVL operated as a broker or otherwise. Instead, Travelers Indemnity simply argues that certain documents render Schneider's involvement in the transaction ambiguous. Despite the fact that Schneider listed itself as a carrier in the straight bill of lading, "what a party labels itself and what a party is registered as [are] not controlling."
Custom Cartage, Inc. v. Motorola, Inc., 1999 U.S. Dist. LEXIS 16462, No 98 Civ. 5182, 1999 WL 965686; Schramm v. Foster, 341 F. Supp. 2d 536, 549 (fact that entity was listed as "carrier" on bill of lading did not establish that it was a carrier). Indeed, "whether a company is a broker or a carrier/freight forwarder is not determined by how it labels itself, but by how it holds itself out to the world and its relationship to the shipper." Lumbermens Mut. Cas. Co. v. GES Exposition Servs., 303 F. Supp. 2d 920, 921 (N.D. Ill. 2003) (internal citations and quotations omitted).
The Court concluded that Quality Custom and Travelers Indemnity as subrogee are bound by and subject to the Carmack Amendment.The Court granted defendant NAVL's motion for summary judgment in its entirety, and dismissed plaintiff's claims of negligence, breach of contract, breach of bailment, and breach of Uniform Commercial Code provsions.
CANDELARIA CABALLERO, INDIVIDUALLY AND AS REPRESENTATIVE OF THE ESTATE OF MARGARET ANN CABALLERO, Deceased Plaintiff v. JACK A. ARCHER and CITY OF SAN ANTONIO, Defendants
(U.S. Dist. Ct., W.D. Texas 2007) (2007 U.S. Dist. LEXIS 1227)
January 31, 2007, Decided
Statement of the Case:This case arises 'from an auto accident that occurred in San Antonio, Texas on April 20, 2004. Margaret Ann Caballero overturned her car on 11-1 35, and a tractor-trailer owned and operated by Jack Archer Trucking collided with Ms. Caballero. Ms. Caballero and Travis Lanus were killed, and Juan Hernandez and Louis Pinkney, intervenors, were injured. Mr. Archer was carrying Cargill turkey products at the time. Intervenor Juan Hernandez is the only plaintiff or intervenor with unresolved claims. The remaining plaintiffs and intervenors have settled. The only defendant remaining in the lawsuit is Cargill, Incorporated d/b/a Cargill Turkey Products ("Cargill"). All other defendants have settled or the claims against them have been dismissed.
Vicarious Liability:The first issue raised is whether there is any evidence to support the theory that Cargill is vicariously liable for Archer's alleged negligence based on an employer/employee relationship. Cargill contends it lacked the requisite control over Archer to create any relationship beyond that of a shipper and independent contractor. The courts have developed a variety of factors to be considered in determining whether one is an employee or independent contractor, and the analysis is very fact-specific. Therefore, while case law may provide a useful road map, the answer to whether a person is an independent contractor or employee depends on the facts of each case.
The legal analysis of independent contractor versus employee status focuses on the employer's "right to control the progress, details and methods of operation of the work."
Limestone Products Distribution, Inc. v. McNamara, 71 S.W.3d 308, 312, 45 Tex. Sup. Ct. J. 382 (Tex. 2002); see also Campbell, 138 F.3d at 1006. The Texas Supreme Court has emphasized that the employer must control "not merely the end sought to be accomplished, but also the means and details of its accomplishment." Limestone, 71 S.W.3d at 312. In analyzing the facts, the Court "must measure the right of control by considering: (1) the independent nature of the worker's business; (2) the worker's obligation to furnish necessary tools, supplies, and materials to perform the job; (3) the worker's right to control the progress of the work except about final results; (4) the time for which the worker is employed; and (5) the method of payment, whether by unit of time or by the job."The facts in this case reflect that Jack Archer was engaged in the trucking business as a sole proprietor at the time of the accident. He had been "self-employed" and doing business as Jack Archer Trucking for over twenty years. During that time, he never worked as an employee for any other company. Mr. Archer owned his own tractor and trailer, and was a motor carrier for purposes of the Federal Motor Carrier Safety Regulations. He had his own DOT or ICC number. Mr. Archer was responsible for the loss of any load that he carried, and he had his own insurance, which would pay for such losses. Mr. Archer hauled products for different companies, either through brokers or by dealing with the company directly. He called companies or brokers that he knew, told the shipper or broker when he was available, and then accepted loads that he "liked." Mr. Archer had a tax ID number, used his own invoices, and received a 1099 for tax purposes. He kept his own records on income, expenses, insurance, depreciation "and all those sort of things." After hauling and delivering a load, he mailed the invoice and bills of lading to the shipper to prove delivery, and then he was paid by check.From Cargill's standpoint, all shipments of finished turkey products were outsourced to independent motor carriers with interstate or intrastate permits. Cargill designated the goods to be shipped and specified the time and place for pick-up and delivery. It also required that the truck driver report by phone on the status of the load, when the load was delivered, or if there was going to be a delay in delivery. However, Cargill had no control over the truck driver's performance.
Mr. Archer hauled only three loads for Cargill in 2004, and possibly four or five loads the previous year. With regard to the load of frozen turkeys that was being hauled on the date of the accident, Mr. Archer talked to Cargill by telephone and made arrangements to transport the load from Cargill's Plant in California, Missouri to HSW P&O Cold Storage in San Antonio, Texas; Cargill then sent Archer a fax, confirming when and where the load needed to be picked up, when and where it needed to be delivered, and the amount that he would be paid for hauling the goods. Cathy Lemley, the representative for Cargill who made the initial arrangements with Jack Archer, stated that all the loads she arranged for Cargill were negotiated or fluctuating rates. They had already agreed on a rate with Mr. Archer on a similar previous load, and the rate used for the load in question was the same. The load was initially scheduled to be picked up on April 19th and delivered on April 21st . Mr. Archer wanted to change the delivery date to April 20th, but Ms. Lemley did not agree. After Ms. Lemley made the arrangements and left on vacation, Mr. Archer again requested that the delivery date be moved up, and Patrice Katz in Cargill's Wichita office agreed to the change after she checked with the storage facility in San Antonio to determine whether the delivery could be accepted on that day.
No instructions were given regarding the manner in which the Mr. Archer performed his task. As noted by Ms. Lemley, it was the driver's responsibility to keep accurate logs and records on hours of service. Cargill did not know if "he's going to run it on a team; we don't know if he's going to relay it; we don't know if he is a solo driver; we don't know what his logs look like; we don't know what breaks look like, his sleeper berth time, ... any of that ... [t]hat's solely his responsibility." Nor did Cargill give instructions about the route that should be taken. In sum, it appears that Cargill's only concern was getting its product from point A to point B, and that it arrived in the same condition in which it was loaded. The manner and means in which that was accomplished was Mr. Archer's responsibility. This business arrangement is consistent with an independent contractor relationship because it is generally, understood that "an employer controls the details of an employee's work, but is concerned only with the results of an independent contractor's work." Carlson, Variations on a Theme of Employment,
The facts in this case, when analyzed under the factors established by the Texas courts, conclusively negate an employer/employee relationship
Intervenor also argues that Cargill should be liable for Archer's conduct based on the rules and regulations created by the Federal Motor Carrier Safety Administration ("FMCSA"). See 49 C.F.R. § 300, et. seq. However, these regulations apply only to motor carriers, not shippers who engage independent contractors to transport goods. In an attempt to overcome this ominous hurdle, Intervenor essentially argues that Cargill, which holds DOT authority and has the ability to carry its own goods and operate as a motor carrier, could have transported the cargo in question and should therefore be treated as a motor carrier in this case. However, as Defendant notes, the fact that Cargill had FMCSA authority to operate as a private motor carrier is irrelevant. n6 The question is whether Cargill exercised that role in this case. In other words, the Court must focus on the specific transaction in question, and not whether Cargill acts as'a private motor carrier in other transactions.
Schramm v. Foster, 341 F.Supp.2d 536, 549 (D. Md. 2004)("the fact that Robinson has FMCSA authority to operate as a motor carrier is irrelevant to the instant transaction. A transportation entity may have authority to operate as both a broker and a carrier"). As the facts in Schramm revealed, there was nothing in the record
to suggest that the broker was accepting responsibility to ship the load itself pursuant to its motor carrier authority.
While the defending party in this case is a shipper rather than a broker, the same evidence necessary to a finding of motor carrier status is lacking. Cargill did not engage in conduct that would give rise to a finding that it assumed the responsibility of transporting the cargo. That was clearly the job of Archer Trucking. Cargill was obviously interested in the time of pick up and delivery; it wanted to monitor its cargo to make sure it was in fact delivered; and, it wanted to maintain the. quality of its product, which was accomplished by requesting that reefer be kept at a certain temperature throughout the trip. However, the facts do not suggest that Cargill was acting as a transporter or carrier of the goods. To hold otherwise would require the Court to exaggerate or stretch the facts beyond their logical meaning.
Independent or direct liabilityIntervenor further alleges that Cargill is directly liable for its own negligence in scheduling the delivery of the load, allegedly in violation of the FMCSA's Hours of Service Rules. In examining this issue, the Court starts with the basic premise that shippers are not subject to the FMCSA safety rules, which includes regulations on the amount of time a motor carrier can be in service. Because Cargill was acting as a shipper, it had no duty to comply with the Hours of Service rules. Only Archer, the motor carrier, had such a duty.
49 C.F.R. §§ 390.3, 390.11. The Court must also, start with the general rule that employers are not liable for the tortious acts of an independent contractor. Fifth Club, Inc. v. Ramirez, 196 S.W.3d 788, 791, 49 Tex. Sup. Ct. J. 863 (Tex. 2006); Scott Fetzer Co. v. Read, 945 S.W.2d 854, 859 (Tex. App.-Austin 1997), aff'd, 990 S.W.2d 732, 42 Tex. Sup. Ct. J. 264 (Tex. 1998). Because. Archer was an independent contractor, Cargill is not liable for his actions unless an exception to the general rule of non-liability
applies.
However, even assuming that Cargill's approval constituted an "order or directive," the evidence does not support a finding of negligence. In order to be negligent in approving the new delivery time, Intervenor would need to show that Cargill knew or should have known that its "directive" involved an unreasonable risk of causing physical harm to others. Although Ms. Lemley testified that Cargill generally allowed two days for the trip from California, Missouri to San. Antonio, Texas, she also testified that it was the carrier's responsibility to compute the mileage and trip time in accordance with safety regulations, and to keep track of his logs and hours of service. Cargill was never provided with copies of the driver's logs. They did not know if the carrier was going to relay the trip, run it on a team or if the driver was going to make the trip solo. They did not know which route the driver took, when he stopped, when he slept, when he took
breaks, or how fast he was driving. With this lack of knowledge, Cargill was certainly not in the position to assess the risks involved in changing the delivery date.
Intervenor relies on a First Circuit case: Posner v. Paul's Trucking Service, Inc., 380 F.2d 757 (1st Cir. 1967), in support of his argument. Although the broker in that case was held liable, the evidence showed that the broker, who unilaterally set the delivery time, knew that the carrier did not have a relief driver. The broker also knew that the driver had driven 400 miles, from Chicago to Detroit and back, for a 10-hour trip the day before. The driver was then instructed to drive from Chicago to Fall River, Massachusetts in one day. Here, there was no unilateral directive or order to deliver the load in one day, but simply an acquiescence or approval of the carrier's request. Cargill did not know whether Archer had a relief driver, and Archer was not fatigued when he started the trip, unlike the driver in Posner. The evidence is simply not sufficient to hold Cargill liable based on allegations of negligent orders or directives.
(THE POSNER CASE SHOULD SERVE AS A WARNING TO BROKERS, SHIPPERS AND ANYONE ELSE WHO PURCHASES MOTOR CARRIER SERVICES).
Civil conspiracyFinally, Intervenor contends that Archer and Cargill conspired to violate the FMCA hours of service rules. The essential elements of a claim for civil conspiracy are: (1) a combination of two or more persons; (2) an object to be accomplished (an unlawful purpose or lawful purpose by unlawful means); (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. INA v. Morris, 981 S.W.2d 667, 675, 41 Tex. Sup. Ct. J. 1227 (Tex. 1998)
(citing Massey v. Armco Steel Co., 652 S.W.2d 932, 934, 26 Tex. Sup. Ct. J. 438 (Tex. 1983)). Assuming arguendo that the change in delivery date (a lawful purpose) resulted in Archer violating the FMCSA safety regulations (unlawful means), there is no evidence of a meeting of the minds. As discussed above, Cargill had no duty as a shipper to follow the safety regulations, and the fact that Cargill simply approved a new delivery time at the carrier's request is not enough to give rise to a conspiracy to achieve an object or course of action by unlawful means. As the Texas Supreme Court stated in Schlumberger Well Surveying Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 857, 12 Tex. Sup. Ct. J. 106 (Tex. 1968), "[t]here must be an agreement or understanding between the conspirators to inflict a wrong against, or injury on, another, a meeting of minds on the object or course of action, and some mutual mental action coupled with an intent to commit the act which results in injury; in short, there must be a preconceived plan and unity of design and purpose, for the common design is of the essence of the conspiracy." (Citing 15a C.J.S. Conspiracy § 2, p. 600). Under the facts herein, Cargill did not have sufficient information to form an intent to inflict a wrong or injury. Moreover, Cargill's acquiescence or approval cannot be construed as a meeting of the minds.For these reasons, the Court ORDERS that the Motion for Summary Judgment filed by Defendant Cargill, Inc. d/b/a Cargill Turkey Products is hereby GRANTED, and all claims asserted by Intervenor Juan Hernandez are DISMISSED with prejudice.
Lee POSNER et al., Plaintiffs, Appellants, v. PAUL'S TRUCKING SERVICE, INC., et al., Defendants, Appellees
380 Fed.2d 757( 1st Cir 1967)
July 14, 1967
COFFIN, Circuit Judge.This is an appeal from a judgment for defendant, following jury verdict in a negligence action. The accident happened on the Massachusetts Turnpike during a foggy day when the driver-owner of a tractor-trailer, one Hoefle, fell asleep at the wheel and the truck collided with an automobile parked on the breakdown lane. Plaintiff, a passenger in the automobile, suffered serious injuries and (with her husband) brought this action against defendant, Paul's Trucking Service, Inc. (Paul's).Paul's was a transportation broker, with its office in Chicago. It owned and operated no trucks but contracted with individual truckers to deliver commodities for its customers. It had used the services of Hoefle on several occasions during the months preceding the accident. Indeed, Paul's was the chief source of his work during this period. Hoefle owned his own tractor-trailer and continued to drive it although he had leased it to one Thomas and carried the name "Jim Thomas Produce" on the side of the tractor.
Hoefle's arrangement with Paul's was that, if a job was available when Hoefle checked at the office, Paul's would determine a flat fee for the trip, give some money to Hoefle as an advance, and pay the balance due when Hoefle reported for his next trip. Paul's did not carry Hoefle on its payroll and did not deduct withholding tax, etc., from its payments to him. Hoefle would sign a bill of lading, receipting on behalf of Paul's for goods picked up at a warehouse. The bill of lading bore the proviso that "* * * the truck operator is an independent contractor and does not expect [Paul's] to furnish any * * * insurance covering said truck operator."On February 21, 1961, Hoefle had driven 400 miles, from Chicago to Detroit and back, during 10 hours on a trip for Paul's. On the next day he called at Paul's office at 10:30 a.m., then drove to a warehouse where his van was loaded with cans of frozen eggs. Since the refrigerating equipment on the trailer was out of order, a Paul's employee put fifteen blocks of dry ice with the load to maintain the temperature. The load's destination was Portland, Maine, but, since Hoefle lacked the necessary plates to enter Maine, his instructions were to arrive at a terminal in Fall River, Massachusetts, the next day n1 so that transshipment to Maine could be made that night. The distance between Chicago and Fall River was stipulated to be 1050 miles.
On February 22, Hoefle, driving alone, left Chicago -- at noon, according to his testimony and log book; between 4:00 and 5:00 p.m., according to one of defendant's officers -- using the toll roads as being the quickest way to arrive in Fall River by 4:00 p.m. on the following day. At 10:00 p.m., he reached a way station in Pennsylvania called Larry's Truck Stop, 400 to 450 miles from Chicago. He slept from 10:30 to 3:30 a.m., then, because his truck was stuck in the mud, worked until 5:30 a.m. extricating the truck with the aid of a wrecker. He left at 5:30 a.m., driving without stopping except to pay tolls, and began to feel drowsy at around 1:00 p.m. Being "in a hurry" to reach the terminal, he did not stop to rest, though the day was very foggy and the road was wet. He fell asleep at the wheel and the accident happened at about 2:00 p.m
The dispositive issue raised by this appeal is that presented by the district court's instructions to the jury concerning defendant's possible negligence. The court properly ruled that Hoefle was an independent contractor. Having done so, it properly set forth the legal standard that the employer of an independent contractor may be liable for physical harm caused by the contractor carrying out orders or directions negligently given by the employer.
According to the court the jury should have been given an instruction that would have allowed it to find that Paul, ( the broker) was negligent in giving the driver/carrier instructions which if followed subjected the driver and the public to unreasonable risk of harm.
The decision in favor of the broker was reversed and the case remanded for a new trial.
LORI ANN MORRIS, as administratrix of the estate of Vernell Brian Morris, Plaintiff, v. FLORIDA TRANSFORMER, INC., and EDWARD NEAL THOMPSON, Defendants.
455 F. Supp. 2d 1328; 2006 U.S. Dist. LEXIS 72951; October 5, 2006, Decided
In this lawsuit, which arises out of a collision between two tractor-trailer trucks on an Alabama interstate highway, plaintiff Lori Ann Morris, as administratrix of the estate of the deceased Vernell Brian Morris, charges defendants Edward Neal Thompson and Florida Transformer, Inc. with the following state-law claims: wrongful death; negligence; negligent hiring, training, supervision, and retention; negligent entrustment; and negligent and wanton violation of state regulations. The plaintiff also attempts to assert a federal claim that the defendants negligently and want only violated Federal Motor Carrier Safety Regulations.
The plaintiff alleges that the defendants violated the Federal Motor Carrier Safety Regulations developed under the Federal Motor Carrier Safety Improvement Act of 1999,
49 U.S.C. § 101 et seq., as prescribed by the U.S. Department of Transportation, 49 C.F.R. Part 107, Parts 171-180, Parts 382-384, and Parts 390-399. Although Plaintiff does not cite to a statute that grants her a private cause of action under the statute, 49 U.S.C. § 14704(a)(2) is the only provision on which the courts have relied. Section 14704(a)(2) provides that, "a carrier or broker providing transportation or service subject to jurisdiction under chapter 135 is liable for damages sustained by a person as a result of an act or omission of that carrier or broker in violation of this part."One court has found that § 14704 (a) (2) creates a private cause of action for personal injuries, Marrier v. New Penn Motor Express, Inc., 140 F. Supp. 2d 326 (D. Vt. 2001) (Sessions, J.); while others have held that it only creates a cause of action for commercial disputes. Stewart v. Mitchell Transp., 241 F. Supp. 2d 1216, 1220 (D. Kan. 2002) (VanBebber, J.) ("Section 14704(a)(2) creates a private right of action for damages in commercial disputes involving violations of the Motor Carrier Act and its regulations, but not for personal injury actions such as the one in this case."); Schramm v. Foster, 341 F. Supp. 2d 536, 547-548 (D. Md. 2004) (Motz, J.) ("[Section 14704(a)(2)] was intended to apply only to commercial damages, not personal injuries."); Crosby v. Landstar, 2005 U.S. Dist. LEXIS 12008, No. Civ. 04-1535-SLR, 2005 WL 1459484 (D. Del. June 21, 2005) (Robinson, C.J.) ("Section 14704 does not give this court jurisdiction over negligence claims.").This court need not reach this issue.With this lawsuit, as stated, the plaintiff attempts to assert a number of state and federal claims, based on wrongful death, negligence, wantonness, and violation of various regulations. Critical to all these claims is whether Thompson was the proximate cause of the decedent's death; absent this proximate cause all the claims must fail.The case was dismissed for lack. of evidence.
TOKIO MARINE & FIRE INSURANCE CO., LTD., Plaintiff and Appellant, v. MEGATRUX, INC., Respondent.
(CA Ct. Apps. 2006)2006 Cal. App. Unpub. LEXIS 6964
August 9, 2006, Filed
BACKGROUNDTokio Marine insured TEAC Corporation (TEAC) against the risk of damage to a trailer-load of computer parts that TEAC was shipping from its premises in Montebello, California to Austin, Texas. TEAC hired Megatrux, a licensed broker and freight forwarder, to arrange for the shipment. Megatrux contracted with P&P Transportation, LLC (P&P) for the transport. Because no trucks were available on the day before Christmas, when TEAC wanted to ship, TEAC requested that the shipment be picked up and temporarily stored in Megatrux's warehouse in the City of Industry. Megatrux hired Rhino Transportation (Rhino) for the transport to the warehouse where Megatrux employees unloaded the cargo, stored it and reloaded it on December 26, when it was picked up by P&P. Intending to begin the journey to Texas the next day, the P&P driver parked the load overnight on the street outside his residence in Los Angeles. The cargo was stolen from that location that night. Tokio Marine paid TEAC on its claim and acquired subrogation rights. Tokio Marine filed a complaint against P&P, Megatrux and Megatrux Transportation, Inc. as "motor common carriers, freight forwarders and bailees" for nondelivery of cargo, negligence/willful misconduct, breach of contract, breach of bailment and breach of warranty, seeking damages in excess of $ 356,095.49.Both Megatrux Transportation, Inc. and Megatrux were granted summary judgment. The trial court held that Megatrux Transportation, Inc., a licensed motor carrier, was a separate corporate entity that played no part in the shipment of the subject cargo. With respect to Megatrux, the court found that it acted solely as a broker as a matter of law and was not negligent.
DISCUSSION:Contentions on Appeal and Standard of ReviewTokio Marine contends on appeal that summary judgment was erroneously granted in favor of Megatrux because there remained triable issues of material fact regarding Megatrux's status as a motor carrier or freight forwarder rather than a broker. These factual issues were that: (1) Megatrux generally held itself out to be a carrier and freight forwarder; and (2) Megatrux acted as a carrier and freight forwarder in this case by unloading, storing and reloading the cargo and by allowing itself to be identified as the carrier on the bill of lading.
Liability Under the Carmack AmendmentClaims for the nondelivery of cargo in interstate commerce are governed by the Carmack Amendment (the Amendment) to the Revised Interstate Commerce Act (ICA).
49 U.S.C. § 14706.) Under the Amendment, motor carriers and freight forwarders are strictly liable to a shipper of damaged or lost cargo regardless of where in the chain of carriage the damage occurred. ( § 14706, subd (a)(1) & (2); PNH Corp. v. Hullquist Corp. (1st Cir. 1988) 843 F.2d 586, 588 (PNH).) A "motor carrier" is "a person providing commercial motor vehicle transportation for compensation." ( § 13102(14).) "The statue absolutely preempts all state common law claims against such carriers and freight forwarders." (Chubb Group of Ins. Companies v. H.A. Transp. Sys. (C.D.Cal. 2002) 243 F. Supp. 2d 1064, 1068 (Chubb); see also Power Standards Lab, Inc. v. Federal Express Corp. (2005) 127 Cal.App.4th 1039, 1048.). The Amendment applies even if the damaged or lost cargo did not cross a state line so long as the shipper's initial intent was to ship interstate. (Bilyou v. Dutchess Beer Distributors, Inc. (2d Cir. 2002) 300 F.3d 217, 223 [applicability of Amendment determined by "'the essential character of the commerce, reflected by the intention formed prior to shipment . . . .'"]; see § 13501(1)(A).)A shipper proves its prima facie case by showing: Cargo delivered to carrier in good condition; cargo arrived at destination in damaged condition; amount of actual losses. Negligence is then presumed and can be rebutted only by proving that the damage was caused by an act of God, a public enemy, an act of the shipper, a public authority or an inherent vice or the nature of the goods.
Vacco Industries v. Navajo Freight Lines, Inc. (1976) 63 Cal.App.3d 262, 270, 133 Cal. Rptr. 628; Bauer v. Jackson (1971)15 Cal. App.3d 358, 365.)
The court then sets out the statutory definitions of a motor carrier and a broker.
The distinction between a motor carrier who provides motor vehicle transportation and a broker who arranges transportation by a motor carrier can be blurred in practice because a motor carrier may perform ancillary tasks that are principally identified with a broker, and vice versa.
Recognizing that Megatrux is licensed as a broker, it is Tokio Marine's position that Megatrux acted as a motor carrier by providing "transportation" as defined by section 13102(23)(A) and (B). Those sections provide as follows: "The term 'transportation' includes a motor vehicle, vessel, warehouse, wharf, pier, dock, yard, property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, regardless of ownership or an agreement concerning use; and services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property." Tokio Marine argues that by unloading, storing and reloading the cargo as it did here, Megatrux acted as a motor carrier providing transportation services rather than as a broker of transportation services.The contention fails here because the Megatrux's activities of which Tokio Marine complains were limited to providing loading and storage services and facilities. Tokio Marine never proffered evidence that Megatrux provided motor vehicle transportation, which is the only basis on which it could be characterized as a motor carrier.
Clearly, there is no rigid test to determine carrier status. (See 13 C.J.S. Carriers § 2 (2006).) It is necessary to examine the expectations of the parties and the circumstances of the specific transaction in each case for indicia of carriage and brokerage services. (See Schramm v. Foster (D.Md. 2004) 341 F. Supp. 2d 536, 548-549 (Schramm).)No Triable Issues of Material Fact RaisedIn support of its motion for summary judgment Megatrux offered the following evidence: it was licensed as a broker; TEAC had hired it as a broker on over 1,000 prior occasions; the transaction in question followed the established procedures between TEAC and Megatrux; Megatrux hired Rhino, a licensed carrier, to transport the cargo from TEAC to the Megatrux warehouse for temporary storage; and it brokered the remainder of the carriage to P&P, also a licensed carrier.
The burden then shifted to Tokio Marine to raise a triable issue of material fact as to Megatrux's status as a broker. Aguilar, supra, 25 Cal.4th at p. 849.) We address each item of Tokio Marine's proffered evidence in turn and conclude that no triable issue was raised.A. Evidence of Holding Itself Out as a CarrierTokio Marine contends that Megatrux's status as a carrier can be established based solely on the manner in which it portrayed itself in its public advertising. Tokio Marine offered in evidence a copy of Megatrux's Web site and testimony from various individuals commenting on their understanding of Megatrux's public image.
We note that Tokio Marine provided no evidence whatsoever from TEAC. Specifically, it proffered nothing to evidence TEAC's reliance on Megatrux's advertising. The complete lack of evidence of TEAC's reliance on Megatrux's advertising renders Megatrux advertising irrelevant here and fails to raise a triable issue of material fact.
Tokio Marine contends it raised a triable issue of material fact as to the status of Megatrux by evidence that Megatrux was identified as the carrier on over 1,000 bills of lading prepared by TEAC, including the bill of lading for the transaction at issue here. But the evidence was undisputed that in the course of dealing between TEAC and Megatrux, TEAC hired Megatrux to broker a shipment by faxing a bill of lading. Because TEAC did not know the name of the carrier at that point, it listed Megatrux as the carrier on the bill of lading. Megatrux would then hire a carrier whose driver was instructed to identify himself or herself as Megatrux when the cargo was picked up from TEAC as TEAC would not know the identity of the carrier in advance.
Appellant has failed to effectively distinguish two cases on which the trial court relied in rejecting this contention: Chubb, supra, 243 F. Supp. 2d 1064 and Schramm, supra, 341 F. Supp. 2d 536.The factual circumstances in Chubb are similar to those here. Bills of lading identifying a party as the "carrier" and a driver identifying himself as working for that party were offered as evidence of the party's status as a carrier. But the evidence also established that the party had not created the bill of lading and the driver was not an employee of the party. As such no link was established to connect the creation of the bill of lading or the driver's representation to the party, the court found insufficient facts to show a genuine issue of fact as to the status of the party as a carrier. (Chubb, supra, 243 F. Supp. 2d at p. 1070.) Schramm cited Chubb in coming to the same conclusion: that designation of an entity as a carrier on a bill of lading prepared by a third party was insufficient to establish that entity's carrier status. (Schramm, supra, 341 F. Supp. 2d at p. 549).Appellant argues that Megatrux's acquiescence in accepting the large number of bills of lading with its designation as carrier was a critical difference from the facts in Chubb involving a single bill of lading. But we do not find this distinction raises a triable issue in the context of this case. Evidence was offered that TEAC's system of sending bills of lading when ordering carrier services through Megatrux was a long-standing method of its doing business with Megatrux. There was no evidence that TEAC actually believed that Megatrux vehicles were used in the transportation of its goods, or that by listing Megatrux as the carrier it was relying on Megatrux to be strictly liable for any loss to its goods, or that it understood that Megatrux was acting as anything other than its broker.Loading, Unloading and Storage of Cargo Under Megatrux Work OrdersTokio Marine also contends that the Megatrux work order to pick up and store the shipment over Christmas for future delivery raises a triable issue of material fact as to its status as a carrier. But here again we note that Megatrux did not do any of the actual transportation. Rather, it hired Rhino to transport the cargo to the warehouse and P&P to provide the remainder of the carriage. As such, this evidence simply did not establish that Megatrux acted as a carrier rather than a broker here.
Tokio Marine contends that it raised triable issues of material fact as to Megatrux's status as a freight forwarder. We disagree.A freight forwarder is one who holds "itself out . . . to provide transportation . . . for compensation and in the ordinary course of its business (A) assembles and consolidates . . . shipments and performs or provides for break-bulk and distribution operations of the shipments; [P] (B) assumes responsibility for the transportation . . .; and © uses . . . a carrier subject to jurisdiction under this subtitle." ( § 13102(8).)There was no evidence presented that Megatrux performed consolidation or break-bulk services in this case because the shipment at issue was a full trailer-load. But Tokio Marine contends that freight forwarder status is determined by the services proffered rather than by the services actually performed. While this argument finds support in one district court opinion, Phoenix Assur. Co. v. K-Mart Corp. (D.N.J. 1997) 977 F. Supp. 319, 325, it appears better reasoned cases hold to the contrary.(See Chemsource, Inc. v. Hub Group, Inc. (7th Cir. 1997) 106 F.3d 1358, 1361; Japan Line, Ltd. v. United States (N.D.Cal. 1975) 393 F. Supp. 131, 136.) Because it was undisputed that Megatrux did not satisfy each of the requirements of section 13102(8), the trial court correctly determined that Megatrux did not act as a freight forwarder, but acted as a broker as a matter of law.
DISPOSITION:The judgment in favor of Megatrux is affirmed.