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On the Road Again: Overcome Co-Defendant Transportation Companies’ Most Common Motion for Summary Judgment in Personal Injury Actions with This Handy Code of Federal Regulation

Author: Margarite Sullivan

April 1, 2019 1:42pm

Under the Non-delegable Duty Doctrine, a hirer is presumed to have delegated their duties to the independent contractor performing the work unless a relevant statute or regulation prohibits delegation.  (Vargas v. FMI, Inc. (2015) 233 Cal. App. 4th 638, 639.)

The Restatement Second of Torts provides guidance on the non-delegable duty doctrine in §424 and §428.  Under §424, “One who by statute or by administrative regulation is under a duty to provide specified safeguards or precautions for the safety of others is subject to liability to the others for whose protection the duty is imposed for harm caused by the failure of a contractor employed by him to provide such safeguards or precautions.” (Rest.2d Torts, §424; see Vargas, supra, 233 Cal. App. 4th at p. 652-654)

§428 provides, “an individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for physical harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity.” (Rest.2d Torts, §428; see Vargas, supra, 233 Cal. App. 4th at p. 652-654.)

In Eli v. Murhphy (1952) 39 Cal.2d 598, the Supreme Court applied the Non-delegable Duty Doctrine and found that a motor carrier is liable for the negligence of its independent contractor driver.  Applying §428 of the Restatement Second of Torts, the Court held that highway common carriers owe a non-delegable duty to the public.  The Court concluded, “both to protect the public from financially irresponsible contractors, and to strengthen safety regulations, it is necessary to treat the carrier’s duties as non-delegable.” (Eli, supra, 39 Cal.2d at p. 599-600.) “Highway common carriers may not, therefore, insulate themselves from liability for negligence occurring in the conduct of their business by engaging independent contractors to transport freight for them.” (Id. At p.601.)

The court in in Serna v. Pettey Leach Trucking, Inc. (2003) 110 Cal.App.4th 1475 extended Eli, “[T]he rule is that a carrier who undertakes an activity (1) which can be lawfully carried on only under a public franchise or authority and (2) which involves possible danger to the public is liable to a third person for harm caused by the negligence of the carrier’s independent contractor.” (Serna, supra, 110 Cal.App.4th 1475, 1486)

In SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590, the Supreme Court considered whether the Privette Doctrine applied outside the peculiar risk context to a case alleging breach of a non-delegable duty under §424 of the Restatement Second of Torts. (SeaBright Ins. Co., supra, 52 Cal.4th at p. 596.)  The court held “unless the relevant statutes or regulations provide otherwise, a hirer is presumed to have delegated to an independent contractor any tort law duty it owes to the contractor’s employees to ensure the safety of the workplace that is the subject of the contract.” (Id. at p. 594 & fn. 1.)

California extended the application of the Federal Motor Carrier Act to drivers of leased vehicles.  (Vargas, supra, 233 Cal. App. 4th at p. 654-658.)  In AmeriGas Propane, L.P. v. Landstar Ranger, Inc. (2010) 184 Cal.App.4th 981, the Court of Appeal adopted the federal circuit’s reasoning in Johnson v. S.O.S. Transport (6th Cir. 1991) 926 F.2d 516, extending a hirer’s liability to drivers of leased vehicles for the negligence of co-drivers or vehicle owners.  (Vargas, supra, 233 Cal. App. 4th 638; AmeriGas Propane, L.P., supra, 184 Cal.App.4th 981, holding that motor carriers are liable to drivers of leased vehicles for the negligence of co-drivers or vehicle owners.)

In Vargas v. FMI, Inc. (2015) 233 Cal. App. 4th 638, two drivers were transporting goods for a motor carrier when the driver operating the tractor trailer lost control and caused the trailer to roll over, injuring his co-driver who was asleep in the sleeper berth.  The court found that the company who hired each driver as independent contractors was vicariously liable for the injuries sustained by the sleeping co-driver.  The decision was based on the non-delegable duties established for motor carriers that are subject to the Federal Motor Carrier Act and related regulations.  (Vargas, supra, 233 Cal. App. 4th 638.)

Further, the presumption in Tverberg “that the independent contractor receives authority to determine how the work is to be performed and assumes a corresponding responsibility to see that the work is performed safely” does not apply where the injured party is “neither in the cab nor, indeed, awake.” (Id. at p.651-652; “It is illogical to suggest that a driver can or should be responsible for ensuring his own safety during hours that he is neither in the cab nor, indeed, awake.”)

Consequently, “A motor carrier, although acting through an independent contractor driving a leased vehicle, retains ultimate responsibility for the vehicle’s safe operation and, in the event of an accident, for satisfying a judgment for bodily injury to, or death of, an individual resulting from the negligent operation, maintenance, or use of motor vehicles, or for loss or damage to property.” (Id. at p. 654.)

Applicable Statute or Regulation – The Federal Motor Carrier Act

Vargas, operated as a motor carrier engaged in the movement of cargo and as such, is subject to the Federal Motor Carrier Act (“Act”) and regulations promulgated thereunder, referred to as the Federal Motor Carrier Safety Regulations (“Regulations”).  (Vargas, supra, 233 Cal. App. 4th at p. 654-655.)

The Act defines “motor carrier” as “a person providing motor vehicle transportation for compensation.” (49 U.S.C.S. §13102(14).)  A person may provide transportation as a “motor carrier” only if they are registered under 49 U.S.C.S. §13901(a).  The Secretary of Transportation will make a determination “that the person is willing to comply with” various regulations, including those prescribed by 49 U.S.C.S. §13902(a)(1) which govern control and financial responsibility.

Exclusive Possession, Control, and Use

The Act and Regulations enumerate a variety of requirements related to safety and control.  49 U.S.C.S. §14101(a) requires a motor carrier to “[…] provide safe and adequate service, equipment, and facilities.”  This requirement extends to leased vehicles. (49 C.F.R. §376.12(c)(1) (2017).)  The lease “shall provide that the authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease” and “shall further provide that the authorized carrier lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.” (49 C.F.R. §376.12(c)(1) (2017); Vargas, supra, 233 Cal. App. 4th at p. 656.)

Further, 49 U.S.C.S. §14102 prohibits a motor carrier from fully delegating responsibility for the operation of motor vehicles to independent contractors.[1] (49 U.S.C.S. §14102; Vargas, supra, 233 Cal. App. 4th at p. 655.)

Financial Responsibility

49 U.S.C.S. §13906 enumerates the financial responsibility[2] requirements applicable to motor carriers.  (Vargas, supra, 233 Cal. App. 4th at p. 657; 49 USCS §13906 (2017).)  Motor carriers must carry and provide proof of public liability insurance or financial responsibility.  (49 U.S.C.S. §13906 (2017).)  “A motor carrier transporting property must obtain public liability insurance or other proof of financial responsibility in an amount prescribed by the Secretary, which “must be sufficient to pay … for each final judgment against the registrant for bodily injury to, or death of, an individual resulting from the negligent operation, maintenance, or use of motor vehicles, or for loss or damage to property.”  (Vargas, supra, 233 Cal. App. 4th at p. 657; 49 U.S.C.S. §13906(a)(1) (2017); see 49 C.F.R. §387.7(a) (2017) [“No motor carrier shall operate a motor vehicle until the motor carrier has obtained and has in effect the minimum levels of financial responsibility as set forth in the regulations.”].)

The insurance endorsement required by the Act is for “public liability” and excludes employees.  (49 C.F.R. §387.15 (2017); Vargas, supra, 233 Cal. App. 4th at p. 657.)  Independent contractors are not explicitly excluded from coverage.  (Vargas, supra, 233 Cal. App. 4th at p. 657, citing 49 C.F.R. §387.15 (2017).)  “Nothing in the regulations suggests that a motor carrier’s financial responsibility does not extend to its independent contractors. To the contrary, the insurance endorsement required by the regulations covers, among other things, “injury to the body, sickness, or disease to any person.’”  (Vargas, supra, 233 Cal. App. 4th at p. 657.)  “The endorsement further provides that ‘“[s]uch insurance as is afforded, for public liability, does not apply to injury to or death of the insured’s employees while engaged in the course of their employment, or property transported by the insured, designated as cargo,” it does not contain a similar exclusion for the insured’s independent contractors.’” (Id. at p. 657, emphasis added.)

Takeaway

If you are a motor carrier hiring independent contractors, do not count your chickens before they hatch.  Motor carriers will likely be subject to liability exposure for the torts of your independent contractors even though they are not employees.  If you are a co-defendant opposing a motor carrier’s motion for summary judgment rest easy knowing the party in the best position to cover the loss will not be able to hide behind the shroud of its drivers’ status as “independent contractors.”

 

[1] “The reason for these requirements has been described as follows: During the first half of the twentieth century, interstate motor carriers attempted to immunize themselves from liability for negligent drivers by leasing trucks and nominally classifying the drivers who operated the trucks as “independent contractors.” In order to protect the public from the tortious conduct of the often judgment-proof truck-lessor operators, Congress in 1956 amended the Interstate Common Carrier Act to require interstate motor carriers to assume full direction and control of the vehicles that they leased “as if they were the owners of such vehicles.” The purpose of the amendments to the Act was to ensure that interstate motor carriers would be fully responsible for the maintenance and operation of the leased equipment and the supervision of the borrowed drivers, thereby protecting the public from accidents, preventing public confusion about who was financially responsible if accidents occurred, and providing financially responsible defendants.” (Vargas, supra, 233 Cal. App. 4th at p. 657, [internal cites and quotes omitted].)

[2] The purpose of the financial responsibility requirement “is to create additional incentives to motor carriers to maintain and operate their vehicles in a safe manner and to assure that motor carriers maintain an appropriate level of financial responsibility for motor vehicles operated on public highways.” (49 C.F.R. §387.1 (2017); Vargas, supra, 233 Cal. App. 4th at p. 657.)

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