Scott v. Milosevic
Opinion of the Court
I. INTRODUCTION
This matter is before me on a motion (Doc. No. 91) for summary judgment filed by defendant Forward Air, Inc. (Forward). Plaintiffs Gary, Nicholas and Ryan Rohlfs (the Rohlfs) have filed a resistance (Doc. No. 102) and Forward has filed a reply. Doc. No. 110. The Rohlfs' also filed a notice (Doc. No. 112) of supplemental authority. I find that oral argument is not necessary.
II. PROCEDURAL BACKGROUND
This case arises out of a fatal three-vehicle crash on Highway 175 west of Lake View, Iowa, on December 24, 2016. Ivan Milosevic was driving a semi-truck westbound when he crossed the center line into oncoming traffic, striking an eastbound vehicle occupied by Gary and Sharon Rohlf. This collision caused a second collision between the Rohlf vehicle and a vehicle occupied by Barbara Scott and Jeanette Fertig. Sharon Rohlf died as a result of the collision, while Gary Rohlf and Barbara Scott sustained injuries. On January 13, 2017, Barbara and Everett Scott (the Scotts) filed a complaint (Doc. No. 1) alleging negligence and vicarious liability against defendants Milosevic and U.S. Expediters, Inc. (Expediters).
On April 6, 2017, the Rohlfs filed a complaint alleging negligence, vicarious liability and negligent hiring, training and supervision against Milosevic and Expediters. Doc. No. 1 in C17-4022-LTS. The two cases were consolidated on June 8, 2017. Doc. No. 10. Subsequently, the Scotts and the Rohlfs amended their complaints to add defendants Sirius Air Logistics (Sirius) and Forward.
Milosevic and Expediters answered (Doc. Nos. 62, 63) the amended complaints while Sirius and Forward filed motions to dismiss for lack of personal jurisdiction, which were denied. Doc. No. 78. Sirius and Forward answered on May 30, 2018. Doc. Nos. 81, 82. The present motion for summary judgment was filed November 23, 2018. This matter is scheduled for a jury trial beginning April 22, 2019.
III. SUMMARY JUDGMENT STANDARDS
Any party may move for summary judgment regarding all or any part of the claims asserted in a case. Fed. R. Civ. P. 56(a). Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett ,
A material fact is one "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. ,
As such, a genuine issue of material fact requires "sufficient evidence supporting the claimed factual dispute" so as to "require a jury or judge to resolve the parties' differing versions of the truth at trial." Anderson , 477 U.S. at 249,
To determine whether a genuine issue of material fact exists, I must view the evidence in the light most favorable to the nonmoving party. Matsushita ,
IV. RELEVANT FACTS
Unless otherwise noted, the following facts are undisputed:
A. The Parties
Plaintiff Gary Rohlf was a resident of Odebolt, Iowa, and was married to Sharon Rohlf at the time of the accident. Doc. No. 61 at ¶¶ 2-3. Nicholas and Ryan Rohlf are residents of Iowa and are the children of Gary and Sharon. Id. at ¶¶ 4-5. Sharon died as a result of the motor-vehicle accident on December 24, 2016, that involved Milosevic and a second passenger car.
Milosevic was driving a 2007 Volvo semi-truck at the time of the collision. Doc. Nos. 60 at ¶¶ 5-6; 61 at ¶¶ 19. Sirius, an Illinois corporation with its principal place of business in Brookfield, Illinois, owned the semi-truck and employed Milosevic. Doc. No. 66 at 20. Sirius is not a motor carrier-it does not have authorization from the Federal Motor Carrier Safety Administration (FMCSA) to "engage[ ] in the transportation of goods or passengers for compensation." Id. , see also 49 C.F.R. 390.5 (defining for-hire motor carrier). Instead, Sirius enters leases as defined in
Expediters, an Illinois corporation with its principal place of business in Countryside, Illinois, is an authorized motor carrier. Doc. No. 60 at ¶ 2; Doc. No. 61 at ¶ 6. On November 11, 2016, Sirius and Expediters entered into a lease agreement whereby Expediters could use the semi-truck, operated by Milosevic, for hauling freight in interstate commerce. Doc. No. 66 at 21-31. At the time of the accident, Expediters was shipping freight on behalf of Forward, a Tennessee corporation. Forward is a licensed transportation broker under
B. Forward's Selection of Expediters as a Motor Carrier
Forward submitted the affidavit of Michael Casey, its Vice President of Safety, to describe how Forward qualifies motor carriers when it arranges for the transportation of goods. See Doc. No. 91-3 at 5-10. When selecting a motor carrier, Forward uses the following policy:
(1) a carrier must have current motor carrier authority from the United States Department of Transportation (USDOT), (2) the carrier must have public liability insurance in amounts that exceed the federal financial responsibility *763limits for motor carriers, and (3) the motor carrier must not have an "Unsatisfactory" safety rating.3 In addition, the motor carrier must sign a Broker-To-Carrier Agreement (BCA) with Forward Air, Inc.
Forward further requires that the Carrier maintain certain safety requirements and incorporates this requirement into the "Carrier's Representations and Warranties" section of the BCA:
Carrier shall have an active and effective safety program to monitor the safety of its fleet and its drivers. Carrier shall utilize only competent, able and legally licensed personnel in the performance of services hereunder. Carrier shall have full control of such personnel. Carrier shall be solely responsible for ensuring, and will ensure, at Carrier's cost and expense, that such personnel are fully qualified to perform services hereunder, and that such personnel have access to all locations into which access necessary to perform services under this Agreement.
[A]ll freight tendered to it by Broker shall be transported on equipment operated only under the authority of Carrier, and that Carrier shall not in any manner sub-contract, broker, or in any other form arrange for the freight to be transported by a third party without the prior written consent of Broker. If substituted service is utilized, carrier agrees to only use such carriers that comply with all of the safety, service, and insurance requirements set forth in this Agreement.
In October 2016, Expediters and Forward entered into a BCA.
Milos Milutinovic, the president and sole owner of Expediters, testified that the process of signing up for the BCA took about ten minutes. Doc. No. 102-3 at 21. Milutinovic stated that he never provided information on driver qualifications to Forward, and that he did not inform Forward that Expediters was leasing trucks and drivers from Sirius.
From October 1, 2016 to December 23, 2016, Expediters hauled seven loads for Forward without any reported problems, and with no change in Expediters' status on Carrier411. Doc. No. 91-3 at 8. On January 10, 2017, Forward requested a report from Carrier411 and the report showed that Expediters had one roadside inspection that showed no acute or critical safety violations for the months of October, November or December 2016.
C. Expediters' Record
Although Expediters' record on Carrier411 appeared clean, there is evidence to suggest that this was only because Expediters had not been operating long enough to incur violations at the time of the crash. Dr. Thomas Corsi, an expert for the plaintiffs, testified that Expediters was a "new entrant" carrier, i.e., a motor carrier that had received its motor carrier authorization only recently.
Milutinovic worked as a transportation manager for a different company for four years before starting Expediters. Doc. No. 102-3 at 17-18. Other than Milutinovic, Expediters had two part-time employees: Sonia Josipovic worked as the safety director and Bonnie Milicivic did accounting and dispatching.
Expediters was responsible for making sure that its drivers, including Milosevic, were qualified. Doc. No. 102-3 at 20. Milutinovic testified that he was concerned with making sure the leased drivers have a valid commercial driver's license (CDL), a clean safety record and a clean criminal record.
Milosevic is not a United States citizen but was present in the United States on a non-immigrant J1 visa that expired in August 2016. Doc. No. 102-7 at 28. Rather than working as permitted under the visa, Milosevic completed a 36-hour CDL course
V. DISCUSSION
The Rohlfs' second amended complaint claims that Forward is liable for negligently breaching its duty of investigating and hiring its independent contractor, Expediters.
A. Independent Contractor/Employer Liability
The parties generally agree that Forward and Expediters have a relationship akin to that of an employer and independent contractor, and that Expediters has responsibility for its driver's actions. Generally, one who employs an independent contractor cannot be held liable for the independent contractor's negligence. Lunde v. Winnebago Indus., Inc. ,
An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor
(a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or
(b) to perform any duty which the employer owes to third persons.
Jones v. Schneider Nat., Inc. ,
The Rohlfs argue that driving a semi-truck is "work which will involve a risk of physical harm unless it is skillfully and carefully done," and that Forward did not comply with the industry standard of care in selecting Expediters, a new company with no track record of safety and demonstrated incompetence. Forward argues that it exercised reasonable care in selecting Expediters, that Expediters is a "competent and careful contractor" as defined in the Restatement because it is certified by the FMSCA, and that driving a semi-truck does not fall into the circumstances in § 411 in which vicarious liability applies. Neither party has addressed the proximate cause element of the negligent selection claim. As such, I will assume that material disputed facts exist as causation.
1. Application of § 411
Forward argues that "[t]he duty of an experienced shipper or broker to investigate the competence of the carrier it hires applies only where the shipment is unusually dangerous." Doc. No. 91-2 at 8. (citing Alaubali v. Rite Aid Corp. ,
The amount of care which should be exercised in selecting an independent contractor is that which a reasonable man would exercise under the circumstances, and therefore varies as the circumstances vary.
Certain factors are important: (1) the danger to which others will be exposed if the contractor's work is not properly done; (2) the character of the work to be done - whether the work lies within the competence of the average man or is work which can be properly done only by persons possessing special skill and training; and (3) the existence of a relation *767between the parties which imposes upon the one a peculiar duty of protecting the other.
Restatement (Second) of Torts § 411 cmt. c. While the Iowa Supreme Court has not had occasion to address this issue, I predict that it would decline to limit the application of § 411 to those instances in which a shipment is unusually dangerous. I will therefore consider whether Forward has established a lack of material disputed facts on the remaining elements of negligent selection.
2. Expediters' Competence
Forward argues that Expediters was a competent and careful contractor, such that it cannot be held liable under a negligent selection theory. Riley ,
The Rohlfs respond that there is sufficient evidence to generate a jury question as to Expediters' competence. Expediters was a new carrier and its sole owner, president and full-time employee, Milutinovic, did not have prior experience operating motor carriers. Further, Expediters was a participant in the new entrant program and new entrants have a statistically higher rate of accidents coupled with a lack of data to prove that they can comply with the relevant safety regulations. At the time Expediters was hired, it had not yet finished its new entrant safety audit and had not yet been rated by the FMCSA. Finally, Expediters did not vet their drivers beyond certifying that they had a valid CDL and a clean criminal background check, and hired Milosevic, who had never had a job as a truck driver, had little training and lacked lawful status in the United States.
Comment a to § 411 defines "competent and careful contractor" as:
[A] contractor who possesses the knowledge, skill, experience, and available equipment which a reasonable man would realize that a contractor must have in order to do the work which he is employed to do without creating unreasonable risk of injury to others, and who also possesses the personal characteristics which are equally necessary.
Restatement (Second) of Torts § 411 cmt. a. Competency does not require perfection. See Jones ,
I find that there is a triable issue of fact as to whether Expediters was competent to perform the work it was contracted *768to perform. The Rohlfs' expert, Dr. Corsi, testified that new entrant motor carriers have a crash rate that is 50% higher than experienced motor carriers and that they are known to be less reliable, in part because of difficulty complying with the numerous regulations that affect interstate hauling. In this case, there is evidence that Expediters did not thoroughly vet the drivers or the trucks that it leased, which did not have their own FMCSA motor carrier certificates and operated under Expediters' certificate. Further, between October 1 and December 23, 2016, Expediters had seven DOT inspections, which resulted in four violations, including two out-of-service violations. Forward has not offered any evidence that Expediters was competent at the time of hiring other than its motor carrier certificate and its proof of insurance. A reasonable jury could infer from these facts that Expediters was not competent.
3. Forward's Duty of Care
Forward argues that regardless of whether Expediters was a competent independent contractor, it exercised reasonable care in hiring Expediters. Before entering into a BCA with Expediters, Forward took steps to make sure that Expediters was a "legally qualified" independent contractor. Forward confirmed that Expediters possessed a motor carrier certificate from the FMCSA and that it carried appropriate liability insurance. Forward also monitored the status of Expediters' certificate using Carrier411. Forward further required Carrier to warrant that it would hire only qualified drivers, comply with certain safety procedures and protocols, and use safe equipment.
In response, the Rohlfs rely heavily on the fact that Expediters were a "new entrant" motor carrier with no record of safety and argue that this fact should have triggered a more extensive inquiry because new entrants have a statistically higher rate of motor vehicle collisions. Had Forward inquired further, the Rohlfs argue, it would have discovered that Expediters' president and sole full-time employee had no experience in hiring or managing truck drivers, that Expediters had misrepresented the number of trucks available to it, and that Expediters neither vetted nor trained its drivers. The Rohlfs also argue that Forward could have discovered that Milosevic was issued a CDL in error, had only completed 36 hours of training and had no previous experience as a truck driver. The Rohlfs' criticize Forward's decision to use only the Carrier411 website, which apparently did not contain sufficiently up-to-date information. Forward has not offered evidence to explain why it did not rely on FMCSA's websites, nor has it submitted expert opinions on the "industry standard" as it relates to hiring new entrant motor carriers or investigating motor carriers generally.
The Rohlfs have submitted expert testimony as to the industry practice when dealing with new entrant motor carriers and unrated motor carriers like Expediters. Dr. Corsi testified that some brokers will not enter into BCAs with new entrants until they have been in the business for at least a year (or in extreme cases, five years). Doc. No. 95-5 at 10. Further, some brokers will not enter into BCAs with motor carriers who do not have a successful compliance review ("unrated") without further inquiry. Id. at 9.
I find that the Rohlfs have submitted enough evidence to generate a jury issue as to whether Forward's investigation of Expediters was reasonable. Other courts have held that the red flags present in this case - the fact that Expediters was a "new entrant" motor carrier with no record of inspections and very little experience *769- should have prompted further inquiry. See, e.g. , Jones , 558 F.Supp.2d at 644-46 (motor carrier's low safety scores, history of regulatory violations and hiring of novice driver generated a fact issue on duty to investigate further); Beavers , 38 F.Supp.3d at 1272-73 (same). It does not automatically follow that it would have been negligent to hire Expediters if Forward had all the above information at the time of hiring, or that Forward's alleged negligence was a proximate cause of the collision. These are issues for the jury.
B. Preemption
Forward argues that the Federal Aviation Administrative Authorization Act of 1994 (FAAAA) preempts personal injury claims. The FAAAA preemption clause states:
(c) Motor carriers of property. -
(1) General rule. - Except as provided in paragraphs (2) and (3), a State ... may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.
(2) Matters not covered. - Paragraph (1) -
(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization.
Two circuit courts of appeal have interpreted this provision in the context of personal injury claims arising from an airline's negligent acts and have held that such claims are not preempted. See Charas v. Trans World Airlines, Inc. ,
While the Supreme Court has not yet addressed the issue of whether state personal injury claims should be preempted, nothing in the Supreme Court decisions considering FAAAA or ADA preemption forecloses such claims. In Am. Airlines, Inc. v. Wolens ,
*770The Eighth Circuit has not ruled definitively on whether personal injury claims are exempted from preemption under the FAAAA. However, the court has noted that such preemption would likely be inconsistent with the purposes of the statute:
Laws related to "safety" are not synonymous with laws related to "service." It is unlikely, for example, that all personal-injury claims against air carriers based on unsafe operations or maintenance are expressly pre-empted by the ADA, given that federal law requires carriers to maintain insurance for bodily injury, death, or property damages resulting from "the operation or maintenance of the aircraft."49 U.S.C. § 41112 (a) ; see Wolens ,513 U.S. at 231 n.7,115 S.Ct. 817 ; Taj Mahal Travel, Inc. v. Delta Airlines, Inc. ,164 F.3d 186 , 194 (3d Cir. 1998). Congress was concerned with variations in state law only insofar as they related to a price, route, or service of an air carrier. See Dilts [v. Penske Logistics, LLC] , 769 F.3d [637,] at 647-48 [ (9th Cir. 2014) ].
Watson v. Air Methods Corp. ,
Based on the authorities discussed above, I hold that the FAAAA does not preempt personal injury claims such as the Rohlfs' claim against Forward. Forward is not entitled to summary judgment on this basis.
VI. CONCLUSION
For the foregoing reasons, Forward's motion (Doc. No. 91) for summary judgment is granted in part and denied in part , as follows:
1. The motion is denied as to the Rohlfs' claim for negligent hiring of an independent contractor. That claim will proceed to trial.
2. The motion is granted as to all other claims asserted against Forward by the Rohlfs, as set forth in Division V of the Rohlfs' Second Amended Complaint (Doc. No. 61). Those claims are hereby dismissed .
IT IS SO ORDERED .
The Rohlfs have filed motions (Doc. Nos. 92, 93) to exclude two of Forward's expert witnesses. Because Forward's motion for summary judgment does not rely on testimony from either of those witnesses, I will address the Rohlfs' motions in a separate order.
On January 4, 2019, the Scotts filed a joint stipulation of dismissal (Doc. No. 107), and on January 7, 2019, I entered an order (Doc. No. 111) dismissing all the Scotts' claims. The Rohlfs are the only remaining plaintiffs in this consolidated action.
The FMCSA conducts periodic compliance reviews and issues carriers a safety rating of "satisfactory," "conditional," or "unsatisfactory." A "satisfactory" rating indicates that the motor carrier "has adequate safety management controls in place, which function effectively to ensure acceptable compliance with applicable safety requirements."
There is some dispute over whether this particular term (¶ 1.j.) is actually included in the BCA between Expediters and Forward. The copy of the agreement signed by the parties contains only the last half of the last sentence of ¶ 1.j. Doc. No. 91-3 at 28. Forward asserts that the term was in the signed BCA, but that a formatting error resulted in the inadvertent deletion of part of ¶ 1.j. See
An "out-of-service" violation is a citation issued to a motor carrier for a driver who has driven more than the permitted amount of time. See
"New entrants" are authorized to conduct business with their motor carrier certificate but they are subject to safety audits. Expediters passed a safety audit and exited the New Entrant program on February 12, 2018. Doc. No. 110-2 at 8, 11.
Milosevic did not complete a "classroom" CDL course, rather he took private driving lessons through Amaral Auto & Truck Driving School in Massachusetts. Doc. No. 102-6 at 17. Milosevic signed a waiver acknowledging that this training would not qualify as "the minimum training requested by the state" for the purposes of issuing a CDL.
The amended complaint also states claims for vicarious liability based on an employer-employee relationship between the parties, a joint venture relationship between the parties, and Forward's status as a motor carrier. Doc. No. 61 at 11. Although Forward has moved for summary judgment on each theory advanced in the complaint, the Rohlfs have responded only to the argument that Forward did not negligently hire Expediters as an independent contractor. As such, I deem the other theories of negligence advanced against Forward to be abandoned and will grant Forward's motion as to those claims.
The parties assume that Iowa law applies to this claim, and I will as well.
Although the Ninth Circuit cases cited by Forward are not binding, they are also not particularly persuasive. In L.B. Foster Co. , the Ninth Circuit held that the defendant broker could rely on an assumption that its chosen independent contractor was operating in compliance with the law and utilizing proper equipment if it was a "casual shipper of goods or commodities of a weight or character which did not involve any unusual risk to other highway users."
Other jurisdiction have similarly applied § 411 to brokers that select or hire motor carriers to complete shipments without regard to the dangerousness of the contents of the shipments. See, e.g. Riley v. A.K. Logistics, Inc. , 1:15-cv-69-AR,
In interpreting the preemption provision of the FAAAA, courts may rely on cases applying the nearly identical preemption provision of the Airline Deregulation Act (ADA) at
Reference
- Full Case Name
- Barbara SCOTT v. Ivan MILOSEVIC
- Cited By
- 16 cases
- Status
- Published