Top Issues for January 16, 2018
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- Opal Dinah Smith
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1 Top Issues for 2018 January 16, 2018 Presented by: Rob Moseley and Fredric Marcinak 2 West Washington Street, Suite 1100 Greenville, SC T:
2 Issues for 2018 I. Regulatory Update II. Cargo Update III. Insurance IV. Broker Liability/Trailers
3 I. Regulatory Update ELD Final Rule In effect December, 2017 Delayed Implementation of Fines, Points, OOS Grandfathered devices: December, 2019 Various exemptions: Ag haulers 90 days OOIDA small safe truckers (pending)
4 Personal Conveyance Regulatory Update More significance with ELDs New proposed guidance issued Eliminates laden/unladen as a bright line rule Current:.A driver may not operate a laden CMV as a personal conveyance. New: A driver may record time operating a CMV for personal conveyance (i.e., for personal use or reasons) as off-duty only when the driver is relieved from work and all responsibility for performing work. The CMV may be used for personal conveyance even if it is laden, since the load is not being transported for the commercial benefit of the carrier at that time.
5 Regulatory Update The future of CSA 2017 National Academy of Sciences conducted study mandated by Congress Identified failures in data: Not all violations included relate to safety geographic enforcement disparities clean inspections must be collected and input FMCSA has taken action: increased ability of carriers to challenge points and to remove accidents that were clearly not at fault The future?
6 Regulatory Update Tax Changes Elimination of employee business expense deduction Employee driver meals & incidentals no longer deductible Increased standard deduction may compensate Independent contractor meals & incidentals still deductible Employer provided benefits (per diems) still deductible by employer
7 Regulatory Update Labor & Employment NLRB reverses rules expanding joint employer doctrine 2015 rule allowed joint employment to exist based on indirect control of employee New decision restores pre-2015 rule that an employer must have direct control over the actions of a subcontractor or franchisee's employees in order to be considered a joint employer.
8 II. Cargo Update Trends for 2018 Continued increasing focus on brokers Tryg Ins. v. C.H. Robinson, 2017 WL (D.N.J. Nov. 28, 2017) CHR held itself out as a carrier and could be liable under the Carmack Amendment Listed as carrier on BOL Advertised seamless service Never identified itself to customer as a broker Did not reject cargo claim as being a broker Invoiced for line haul and fuel surcharge, no reference to broker fees
9 Cargo Update Terms and conditions: shall use reasonable care in its selection of third parties or in selecting the means, route, and procedure to be followed in handling, transportation, clearance, and delivery of shipment [.] But, preemption remains available: Georgia Nut Co. v. C.H. Robinson, 2017 WL (N.D. Ill. Oct. 26, 2017)» Negligent hiring/selection claims against broker are preempted in cargo case Continued use of FAAAA/ICCTA preemption: Monga v. A.B.S Moving & Storage, Inc., 2017 WL (D. Md. July 31, 2017)
10 Cargo Update Overcharge claims against HHG carrier that survived Carmack preemption were preempted by ICCTA» Applies to interstate only for HHG KZY Logistics v. Blue Grace Logistics, 2017 WL (Sept. 5, 2017) (state law claims that survive Carmack preemption are preempted by ICCTA). Disputes over jurisdiction: Dees v. Coleman American Moving Services, Inc., 2017 WL (S.D. Ala. Oct. 26, 2017) (preempted state law claims seeking damages in excess of $10,000 cannot be added to Carmack claim of $6k to satisfy federal jurisdiction)
11 Cargo Update Continued disputes over limitations of liability: Nabolle v. United Arab Agencies, Inc., 2017 WL (S.D.N.Y.) COGSA $500/package limitation enforced Enforced even though entered into by intermediary Contrast with some motor carrier decisions
12 III. Trucking Insurance
13 Employee Exclusion Spirit Commercial Auto Risk Retention Group v. Kailey, 2017 Westlaw (ED MO 2017) (CAL law applying) Owner of company in sleeper Co-driver in accident Both drivers had IC contracts Employee Exclusion in policy Found plaintiff to be IC Paid by the load and could work for other companies Refused to read into contract
14 Approved Drivers National Independent Truckers v. Wilner, 2017 US Dist Lexis (MD FL 2017) Policy required drivers be approved Policy dropped down to $300k under FL Intrastate Financial Responsibility for non approved driver Court allowed drop down
15 Nontrucking Williams v. Great American 2017 Westlaw (ED LA 2017) Driver on break asleep in berth Dropped trailer at consignee Would pick up empty next morning Was in the business of trucking
16 Cooperation Forward Air v. CR Williams, 2016 WL (ED TN 2016) Default judgment against carrier Progressive declined coverage based on cooperation Intervened in suit Showed prejudice No proof that carrier cooperated
17 Trailer Not A Warehouse LaptopPlaza v. Starr Indemnity, (2d Cir 2017) Trailer of laptops stolen outside warehouse Coverage under warehouse policy Trailer not part of warehouse Argued temp storage
18 Insurance Required Before the Loss Occurs ITN Consolidated v. Northern Marine Underwriters, (11 th Cir. 2017) Arrangement to call in and obtain coverage for specified shipments Had loss and then requested coverage
19 IV. Broker Liability and Trailers
20 Permissive Use Great American v. Moore Freight, 1:15-CV SCJ (ND GA 2017) Moore Freight Canal $1M Judgment for $10 M Great American insured trailer owner under business auto policy Driver was permissive user GA coverage in play On appeal
21 Tractor As Trailer Falls Lake Ins. v. Martinez, 2016 Westlaw (WD VA 2016) Tractor was pulling another tractor Powered tractor was VNOP on United Specialty policy Towed Tractor insured by Falls Lake Towed company is insured under use of the towed vehicle Coverage did not extend to Powered Tractor owner No reciprocal coverage because of VNOP
22 Broker Insurance Products Contingent Cargo Protection for you in the event underlying carrier has no coverage or denies coverage Your cargo coverage for a carrier will not apply Errors and Omissions CGL Contingent Auto or Hired and Non-Owned Auto Broker Bond
23 Contingent Cargo MGN Logistics, Inc. v. Travelers Property Casualty Company, et al, No. 16 CV 4301, (N.D. Ill. Aug. 31, 2017). MGN brokered a load of copper wire worth more than $130,000 Primary cargo policy limited certain thefts to $5,000 unless security measures taken Stated $250,000 in coverage. Contingent policy limited to $5000
24 Bowman v. Benouttas, 2016 Tenn. App. LEXIS 668 (Tenn. Ct. App. Sept. 9, 2016) Claims were vicarious liability, joint venture, and implied partnership. Plaintiff argued factors: (1) motor carrier got over 50% of its freight from broker, (2) MC safety violations publicly available (not quantified); (3) instructions on loads, (4) determined type of equipment, (5) monitored progress of loads, (6) direct contact with drivers, (7) assembled freight loads. SJ to broker granted.
25 Ramos-Becerra v. Hatfield, 2016 Westlaw (MD PA 2016). Power only carrier pulling JB Hunt trailer. Carrier had a bad history and involved in accident with a positive drug test and fleeing the scene. Negligence claim not preempted Court cites mostly carrier cases Mentions Schramm. Allows Negligent hiring under Restatement 411 Still pending
26 Puga v. About Thyme Transport, Inc., 2017 Westlaw (SD TX 2017). Broker (Sunset) retained RCX. RCX listed as carrier on Bill of Lading. RCX double brokered the load to About Thyme. RCX did not have broker authority. RCX SJ Motion. (1) Can be vicariously liable as a co-employer without a lease. (2) There may be 2 statutory employers. (3) Dismissed negligent hiring because no proof of proximate cause (that an accident was more likely to occur). (4) Punitives dismissed.
27 Mann v. CH Robinson, 2017 Westlaw (WD Va. 2017). CHR motion for Summary Judgment. Problems with Carrier: 16 Negative comments in TMS (No Load) Quick Pay Unrated CSA court called alerts high risk - NOT ACCURATE 3 inspections and 3 OOS MC had not updated MCS-150 and was technically OOS Preemption Argument rejected. Defense expert excluded
28 Rob Moseley Smith Moore Leatherwood, LLP 2 West Washington Street, Suite 1100 Greenville, SC T: (864) F: (864) rob.moseley@smithmoorelaw.com Fredric Marcinak Smith Moore Leatherwood, LLP 2 West Washington Street, Suite 1100 Greenville, SC T: (864) F: (864) fredric.marcinak@smithmoorelaw.com
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