Updates on Broker Liability In Trucking Defense Litigation

"The Impact of Sperl" posted on this blog in March 2012 remains one of the most viewed posts. Undoubtedly the impact of the Sperl decision of over $23 million against of the largest, if not THE largest, trucking broker remains a hot topic.


As recently reported by excellent panelists at the Trucking Industry Defense Association Annual Conference in San Antonio, Texas, aggressive plaintiffs, dissatisfied with the minimal cargo insurance ($750,000) mandated by the FMCSA, seeking additional "deep pockets" under innovative theories of liability. Brokers ordinarily are not liable for the negligent conduct of the independent contractors they hire, i.e. motor carriers.*

In recent years aggressive plaintiffs have concocted new theories upon which to fix liability on transportation brokers for casualty losses:

– Motor carrier violations of the FMSCRs
– Common law negligence
– Respondeat superior
– Vicarious liability–Negligent hiring/retention
– Negligent entrustment
– Joint venture /alter ego

Some Signs of Improvement

The Continued Debate on Discoverability of Social Media

The following is just another case (one of the most recent in Louisiana federal courts) on the issue: Are a plaintiff’s Facebook pictures discoverable when they are asserting a personal injury claim for neck injuries?

Farley v. Callais & Sons LLC, No. CIV.A. 14-2550, 2015 WL 4730729, (E.D. La. Aug. 10, 2015) addresses the issue of the extent of a person’s Facebook page that is discoverable square on.

The opinion follows a motion to compel filed by the defense after the plaintiff objected to the defense’s interrogatory and request for production. In short, the court did not compel the plaintiff to sign a Facebook release or to provide log-in information. The court did compel the plaintiff to produce some information and documents because the Court found the following categories of information discoverable from the plaintiff’s Facebook account, from the date of accident to the present:

1) postings by Farley that refer or relate to the accident in question;
2) postings that refer or relate to emotional distress that Farley alleges he suffered as a result of the accident and any treatment that he received therefor;
3) postings or photographs that refer or relate to alternative potential emotional stressors or that are inconsistent with the mental injuries he alleges here;
4) postings that refer or relate to physical injuries that Farley alleges he sustained as a result of the accident and any treatment that he received therefor;
5) postings that refer or relate to other, unrelated physical injuries suffered or sustained by Farley; and
6) postings or photograph that reflect physical capabilities that are inconsistent with the injuries that Farley allegedly suffered as a result of the accident.

 

The Farley court directed the plaintiff’s postings be made immediately available to plaintiff’s counsel for review for plaitniff’s counsel, not the plaintiff himself, to determine whether the Facebook postings fit into one or more of the categories outlined by the court. The court went on to say this is not particularly a complicated or unusual personal injury case and accordingly the limits placed on the social networking sites ("SNS") discovery was appropriate. This case also cites authorities from other jurisdictions:

 

Boudwin v. General Ins. Co. OfAmerica

In Boudwin v. General Ins. Co. OfAmerica. 2011 WL 4433578 (La. App. 1 Cir. 9/14/2011). Plaintiffs' Facebook pages were used to show routine physical activities. Entries were made regarding running or jogging, P90X, working out, exercising, and playing sports.

Mouton v. Old Republic Ins. Co.

In Mouton v. Old Republic Ins. Co., 2011-458 (La. App. 3 Cir. 10/5/11), 74 So. 3d 1245, 1248 writ denied, 2011-2490 (La. 2/3/12), 79 So. 3d 1028, the court of appeal held the trial court did not commit error for allowing testimony about a Facebook page despite the defense’s failure to list the Facebook page as an exhibit on their exhibit list, because the plaintiff failed to object to its admission at trial. Oddly, the court of appeal found the plaintiff objected to introduction of the Facebook page into evidence. That objection was sustained.

 

This ruling is somewhat confusing. What appears to have happened was the defense attempted to introduce the Facebook page into evidence but the plaintiff objected. The trial court sustained the objection, but the court of appeal opinion does not state why. It could very well have been because the defense failed to list the Facebook page as an exhibit on their exhibit list.

I assume the defense then elicited testimony about the Facebook page, but the plaintiff did not object. The court allowed the testimony, but did not allow introduction of the Facebook page into evidence. This case stands for the proposition that if you don’t put an exhibit on the exhibit list, you run the risk of not being allowed to introduce it into evidence. It does not say that Facebook materials are inadmissible.

 

Conclusion

The Farley decision is very recent. It is unknown whether courts will adopt the new standard that limits discovery of Facebook material to pictures and postings directly associated with or contrary to the injury claimed by the plaintiff. Additionally, the time period of the information requested may be limited.

 

Law-speak Translated...

Even if a legal professional may be lucky enough to speak with a client in the native language of the client, the attorney tends to use a special set of words unique to the profession.

Let me start with the obvious and boring stuff:

--speak clearly and efficiently
--simplify complex legal issues
--eliminate clutter
--develop your own unique style
--establish rapport with judges, juries, and clients
--eliminate stale, lawyerly speaking habits--use vibrant, expressive language

Now to the fun stuff (keep reading):

Experienced professionals who have grown comfortable using the words of the profession might want to think about whether they are using words not commonly used by non-professionals.

For example, a real estate attorney might use specific real estate words, easement, etc. unfamiliar to many. Patent attorneys speak a rather unusual language even though it is English. They use words like "prosecution". Most clients unfamiliar with patents, think of prosecution as what a prosecutor does but no, in the patent specialty arena, it refers to the events that occur between filing and issuing a patent application between the government agency and the patent attorney.

The first step in building a good relationship with a client is recognizing that the professional, particularly an experienced one, uses words that are quite often unfamiliar to their client.

The second step is to translate those words into words the client is comfortable with using, without misrepresenting any facts, timelines, or details that are materially important to serving the client.

Recognizing the special language spoken by the attorney, and tuning that vocabulary to communicate on the same level as the client, is critical to the success of the attorney/client relationship. By recognizing differences in vocabulary the attorney can build from a common basis with a client. That common basis is fundamental to building a trust relationship that can last for decades.

The following are examples of lawyer speak translated to common vernacular:

What do Truck Drivers Have in Common with Exotic Dancers?

Other than discouraging  drivers from attending a strip club, most of trucking companies would not be concerned that their drivers have anything in common with exotic dangers. Yet in recent decisions the status of an exotic dancer as an employee, rather than independent contractor, may significantly impact the way trucking companies do business.

 

A few years ago, I posted a blog about the Sperls case in which a major broker was deemed to be an employer because the amount of control imposed on the driver and the trucking company. In Sperls, the broker was found to be vicariously liable for the actions of the truck driver.

 

Many trucking companies hire "independent contractors" and the  United States Department of Labor is closely monitoring IF designated “independent contractors” should be employees.

 

Companies may think that hiring independent contractors rather than employees saves them money.  If you hire an independent contractor, you avoid having to withhold FICA and state and federal income taxes and paying for workers’ compensation, health insurance and other benefits that are otherwise available to your employees. 

 

Of course, not all independent contractors are really employees. In many other cases, however, it is not so easy to tell if someone is an independent contractor or really an employee.    Take exotic dancers.  Strip clubs in Phoenix and elsewhere around the country are being sued by exotic dancers for alleged violations of the Fair Labor Standards Act (FLSA), a federal law that requires employers to pay their employees minimum wages and overtime pay.  These dancers claim that strip club owners have misclassified them as independent contractors and that, because they are really employees, the owners have violated the FLSA and similar state laws by failing to pay them as employees entitled to minimum wages and overtime pay. So what makes them employees and not independent contractors?  

 

 

 

Obviously, there can be far-reaching implications and costs if someone is actually deemed to be an “employee.”  This was the exact  type of issue that caused so many problems for the broker in the Sperls case that I analyzed  a few years ago in the blog site: www.truckingalong-markperkins.blogspot.com. In Sperls the issue was whether the broker exhibited enough control over the day to day operations of the driver to be deemed an employer for vicarious liability purposes, but another important factor is whether  The DOL will make  enforcement a priority and may soon be asking questions at your place of business.

How to Dismiss Direct Action Against Excess Insurer When Trucking Company Has Sufficient Coverage

Many excess insurance carriers get nervous when sued under Louisiana's Direct Action Statute and want us to get them dismissed.

 

However, under the Direct Action Statute (La. R.S. 22:1269), a plaintiff can bring suit directly against an insurer if  the insurance policy was issued in Louisiana or if the accident or injury occurred in Louisiana.

 

The Direct Action statute does NOT distinguish between a primary liability insurer and an excess carrier. In fact, the definitions section of the Insurance chapter defines an insurer as “includ[ing] every person engaged in the business of making contracts of insurance, other than a fraternal benefit society.” La. R.S. 22:46. Later in the Chapter, there is an explanation of “stop-loss insurance coverage” which is excess coverage but there is no distinction between an excess insurer and a primary or self-insurer.

 

Though there are few, the cases that include excess carriers do not support dismissal under the Direct Action statute. In fact, all of the reported cases  required an excess carrier to provide coverage even when the limits of the primary or self-insurance policies were not actually paid but when the primary insurer was given credit for paying the limits.

 

 

From the jurisprudence, there is an obvious inference that the courts prefer to find coverage than limit it.  An excess insurer could not be dismissed from  a lawsuit by a  summary judgment under the terms of the Louisiana Direct Action statute; however, summary judgment could be possible under the terms of the policy after additional discovery is conducted.

 

 

For example if the trucking company were  self-insured for $2 million and it was established by admissions that the total damages would not exceed $2 million, then on could show that excess coverage is not necessary. 

 

 

While we typically do  not want to give the plaintiff the information without her asking for it that there is so much coverage available, one could, through requests for admissions, medical records, and possibly experts, a defense attorney could ultimately get the excess carrier dismissed.

 

 

A typical way that claims against insurers (and excess insurers) has been denied under the direct action statute, is make the policy a "claims-made" policy.

 

 

Typical claims-made insurance policies require claims to be both made and reported within the applicable policy period. Under this type of policy, the risk of a claim incurred but not made, as well as a claim made but not reported, is shifted to the insured. See, generally, Bob Works Excusing Non-Occurrence of Insurance Policy Conditions in Order to Avoid Disproportionate Forfeiture: Claims-Made Formats as a Test Case, 5 CONN. INS. L.J. 505, 546 (1999).

 

 

“The purpose of the reporting requirement [in a claims-made policy] is to define the scope of coverage [purchased by the insured] by providing a certain date after which an insurer knows it is no longer liable under the policy.” Resolution Trust Corp. v. Ayo, 31 F.3d 285, 289 (5th Cir. 1994). Thus, once the policy period and reporting period expire, the insurer closes its books on that policy.

 

 

The Louisiana Supreme Court in Gorman v. City of Opelousas, 2014 WL 2937129 (La. Aug. 25, 2014) held that a claims-made policy provision requiring a claim to be made and reported within the period specified by the policy was not violative of public policy because of Louisiana’s direct action statute.The Louisiana Supreme Court in Gorman focused its analysis on its prior decision in Hood v. Cotter, 08-0215, 08-0237, 5 So.3d 819 (La. 12/2/08). In Hood, the plaintiff patient’s claim for medical malpractice was neither first made against the doctor nor reported to the insurer during the policy period as required by the policy.

 

 

In Hood, the Court considered whether Louisiana’s public policy as expressed in the direct action statute would permit insurer’s to deny coverage to the patient where the doctor had failed to properly report the claim to the insurer. In reversing the prior court decision in favor of the injury party in Hood, the Louisiana Supreme Court had recognized that the direct action statute “grants a procedural right of action against an insurer where the plaintiff has a substantive cause of action against the insured.” Hood, 08-1215, 08-0237 at 17-18, 5 So.3d at 829.

 

 

Thus, the Louisiana Supreme Court, as a follow up to the Hood decision has now recognized that in the claims-made insurance policy context the insured’s failure to report the claim as required by the policy will bar coverage irrespective of Louisiana’s direct action statute.

 

If you would like to visit more about the Louisiana Direct Action statute or any other matter pending (or not) in Louisiana or Texas, feel free to contact me.

Negotiating Despite the Agression of "Versus"

As a trial lawyer, I take the word "versus"  for granted. It has been in  every caption of every case that I have ever been involved. Sadly, it has become more than part of the caption, it has become synonymous with an attitude of aggression.

 

Look  more closely at the definition and  learn "versus" come from Latin meaning   “against, turned." We  also get the phrase vice-versa: reverse from the way it has been assumed, conversely, inversely.  Copernicus was the first to suggest that the earth revolves around the sun, and not vice versa. Likewise, the way we think NOW may be in error or contrary to reality.

 

Unfortunately, when we see “versus” there is the assumption of stern, belligerence: "North v. South,"  "Wrong v. Right,"  "Us v. Them."  Often things are not as they seem and it’s not until the complete presentation  of all information that we  can come to a conclusion. Even then it may not be "all versus nothing"; it may be “some, but not all.”

 

 

We have to get out of this poor thinking that “she is ALL wrong and I am all right.” Yes, there absolute truths, but NONE of us are absolutely truthful, “…No matter how thin the pancake, there are  still two sides,” to quote Dr. Phil McGraw.

 

How we deal with conflict reveals much about our maturity and character. Is it all about being right, winning at all costs, speaking our mind no matter what the consequence? On the other hand (“vice versa”), do we consider the other side, do we analyze the risk and cost of winning (or losing), do we temper our words to reduce the emotions of the conflict?

 

Yes, we need to be READY to defend or pursue a claim when unjustly treated, but we need to always negotiate fairly and seek compromise. We must do ALL that is within OUR power  to bring about peace. *

 

“Making” peace and “keeping” peace are not the same.  Keeping peace is often docile and overly conciliatory; giving  the other side whatever he wants to “keep the peace.” Making peace requires a level of meekness (strength under control) in zealously presenting your case but always with an attitude of being reconciliatory -- bringing both sides together -- if possible.

 

Unfortunately, even  when we feel like handling a matter peacefully, there are those who push us to “take stand” or “fight back.”   Quiet that noise as you evaluate with clear conviction if you are 100 percent right? Do you really believe you have NO part in where you find yourself? I am not talking about the initial cause, but the present result. Perhaps the ball started rolling because of an initial harm; however, how far the ball continues to roll depends on when you pick  it up.

 

If you don’t want to think beyond your own closed mind, you won’t want someone else’s ideas in there mixing things up. So that makes fertile ground for narrowing your  perspective. It creates a mindset of ubiquitous obnoxiousness. Perhaps when you finally give up the quest to exceed others  in the Guinness Book of Obnoxiousness, you will find a way to say, “We agree.”

 

Once  we agree, let’s not poke the agreement full of "nut words, green cherry words, and little chunks of pineapple word" and  plump it up like we’re  baking a fruitcake. All that butter and rum just to say, “We agree.”

 

Rather than making things simple, we fob it off, and get something like:  

“We would also like to come to complete agreement on a resolution to this matter (but we have to appear combative, ridiculous, uncompromising, and therefore interesting, or we will never get our own TV reality show when we’re through with this gig, and why are we in this if not for that?).”

A better idea would be:

“You have heard that it was said, ‘Love your friends, hate your enemies.’ But now I tell you: love your enemies and pray for those who persecute you, so that you may become the children of your Father in heaven. For he makes his sun to shine on bad and good people alike, and gives rain to those who do good and to those who do evil. Why should God reward you if you love only the people who love you? Even the tax collectors do that! And if you speak only to your friends, have you done anything out of the ordinary? Even the pagans do that!”  Matthew 5:43-47

So the next time you think about those opposing you, remember your attitude in the situation. Don’t seek only to change THEIR mind, but to see from their perspective. All good lawyers/negotiators know that "versus" is just part of the caption; not the final resolution.

 

 

 

 

 

 

 

If there is anything we can do to assist you bringing a dispute to resolution, please feel free to call day or night.

 

Mark Perkins

Perkins & Associates, LLC

318-222-2426

 

_______________

 

* I am ready, willing and able to try any case that needs to be tried. I have tried more jury trials than most lawyers try in their entire career; however, "discretion is the better part of valor."

Defense Guidelines for Truck Driver Interview

Much of this information, you may already have available electronically, but I have a checklist available in  PDF or Word version. Please let me know and I will forward it to you.

 

Legal counsel need to  know the good, the bad and the ugly. If an attorney is  taking the driver’s statement, his investigation is arguably privileged work product.  This is NOT to say that the driver’s deposition will not be taken ultimately, so the information is discoverable; however, if field adjuster or in-house claims professional take the statement, then the information IS more likely to be discoverable unless you can argue that the information was prepared in anticipation of litigation.

With Hours of Service issues that may come up as to the driver’s negligence or even the independent negligence of the company negligent supervision, I want to be sure that I get the following:

Number of hours driving that day Time day Started _______

Amt.of sleep ______

Are log books current Y or N –

Under dispatch Y or N - To Whom:__________ (This issue is increasingly important when evaluating possible shipper or broker liability)