Bits & Pieces

Volume 14, Edition 10


Happy Halloween. We hope that the ghosts and goblins are treating you well and you are getting more treats than tricks.

Tiana Cain, our AVP of Business Development, attended the ATA conference exhibit hall and TIMTC annual meetings held this past month in Dallas. It gave her an excellent opportunity to meet with many of you who also attended the conference.  The focus at the TIMTC was on the exchange and use of data, as the transportation and insurance industries look to harness the data to better service their respective markets. At CAB, where data is our expertise, we are committed to always be on top of all the latest trending data relevant to the industry so we can continue to provide the most the most advanced and sophisticated analysis tools the industry has to offer.

One of the interesting things that came up in one of the sessions is the growing issue of Chameleon Carriers.  A motor carrier addressed this issue during a session, noting that one of their competitors was recently given an unsatisfactory rating by the DOT and simply applied for new authority under a new name which resulted in a clean slate.  As this is a growing trend in the industry, it is very important to use our advanced Carrier Search tool to help identify Chameleon Carriers.  If you are unfamiliar with how to identify Chameleon Carriers using our premium products and would like to set up training sessions, or are interested in a demo of our products, please contact Tiana

In other news:

NAFTA – The borders were a big issue this month. The FMCSA rejected the arguments raised by a number of organizations that a full environmental impact study was required before opening the border.  In other news the FMCSA engaged Teletrac to provide EOBRs for all Mexican trucks which will be part of the pilot program.  Only 2 Mexican carriers have received approval to participate in the program.  Right after the program started this month the first participant was granted permanent operating authority. Mexico has indicated that it will lift tariffs on 99 goods following the steps by the government to move toward border opening.

NATION’S INFRASTRUCTURE – As trucks travel across the country it is important to recognize that the roads and bridges may not be all that they are ‘cracked’ up to be.  One engineering firm sent me this link which allows you to determine the current status of all bridges within a certain radius of your listed location. I found it very interesting and guess many of you will be looking to see if the bridges in your community or where your truckers generally operate are structurally sound. Special thanks to Engineer Steve Gardner at W.J. Castle P.E. & Associates for this piece of data.

OWNER OPERATOR PORT BAN – A Federal Appeals Court has decided that the Port of Los Angeles cannot ban owner operators from local drayage operations.  Under the proposed rule only licensed motor carriers would have been permitted to operate, a rule fought by the ATA.

CSA – The FMCSA has indicated that new regulations concerning how motor carrier safety ratings will be determined will be coming.  The new regulations will base safety ratings on performance data.  The road side inspections and violations will be the focus of the safety ratings.  In other news the GAO issued its accountability report on the CSA program and concluded that there are numerous delays which are impacting the effectiveness of the program. The FMCSA is two years behind in implementing the rules needed to take unsafe carriers off the road.

CELL PHONE BAN? – The NTSB has recommended that truck drivers be banned from using cell phones, hands free or not, while operating commercial vehicles.  Whether the FMCSA will accept this recommendation and promulgate needed regulations remain to be seen.

SECRETARY LAHOOD – Secretary LaHood has announced that his reign at the DOT will come to an end after the 2012 elections.

EOBR – As we previously reported the Federal Court had invalidated the EOBR rule implemented by the FMCSA.  This month the FMCSA indicated that it would not appeal the ruling, but would instead look to formulate a new rule using the old rule as a starting point.  Industry reports indicate that motor carriers are assuming that the regulations will come down at some point and are already starting the process of utilizing the equipment.

CVSA SAFETY WEEK – The CVSA ran its annual Operation Safe Driver campaign this month.  The selective traffic enforcement program emphasizes enforcement in high-crash corridors with high traffic volumes, moving violations, driver infractions and aggressive driving behaviors.  Reports on the results of the inspections will be out soon and reported here.

HOURS OF SERVICE – Will the new rules go away?  Republican leaders have recommended that the new rules be scrapped.  An amendment to an appropriations bill has been offered which would prohibit funds made available under the regulations to be used to finalize, enforce, or implement the Hours of Service regulations. We are waiting for the new rules, which would include reducing driving time to 10 hours, to come out any day.

TRUCKING CONCERNS – The ATRI has released its 2011 Critical Issues In The Trucking Industry. This report is based upon a survey conducted by ATRI of more than 4,000 motor carriers.  The top two issues concerning the trucking industry are the economy and the proposed hours of service.  A copy of the report can be viewed here.

DRIVER TURNOVER – The turnover rate for over-the-road truck drivers rose to 79% in the second quarter, according to American Trucking Associations’ latest Trucking Activity Report. This is the third quarter in a row where the rate has increased. This is an unwanted trend as increased turnover creates greater risk on a trucker where a more stable staff allows for better training and control and should be of concern to insurers.



Can a carrier contend that delivery is complete simply because the trailer has arrived at destination?  The District Court in Maryland ruled against the motor carrier where the evidence supported the fact that the driver still had to return to remove a pin lock before the shipper could actually take possession of the cargo. The court also held that there were questions of fact as to whether the driver was actually working for the motor carrier or was attempting to move loads under the radar of the motor carrier for his own benefit.  (Merchants Terminal Corp. v. L&O Transport, 2011 WL 4507002)

A rail carrier attempted to bring a third party action against a manufacturer whose goods caused a fire inside a rail car. The court held that the rail carrier had no claim for indemnity because the liability did not arise from harm which was apart from loss or damage to the goods and was therefore preempted from any indemnity claim.  In addition the court held that the carrier could not assert a contribution claim as it was liable only in contract and contribution was a tort concept and therefore inapplicable.  (Brightstar International Corp. v. Minuteman International, 2011 WL 4686432)

The Fourth Circuit Court of Appeals upheld the nine month claim requirement.  Interestingly enough, the court held that the nine months started to run, as to the broker’s claim against the motor carrier, when the broker received a bill from the shipper for the repair and not from the date of delivery.  (5K Logistics v. Daily Express, 2011 WL 5024223)

What does a shipper need to prove a prima facie claim for recovery against a motor carrier?  The District Court in Oregon held that a prima facie case was established when a motor carrier signed a bill of lading without exception and then there was damage at destination.  The damage at destination supported the conclusion that it was not damaged at origin. (Dan Zabel Trading Co. v. SAIA, Inc. 2011 WL 5025847)

A motor carrier’s claim against another motor carrier who was involved only in the loading of cargo was sent back to state court in the Middle District of Pennsylvania.  The Court held that such a claim was not subject to the Carmack Amendment and therefore there was no basis for federal court jurisdiction.  (Daily Express v. Maverick Transportation, 2011 WL 5008313)

What claim do you have against a mover who inadvertently ships weapons to the UAE instead of placing them in storage, and the act results in the arrest of the shipper?  The 9th  Circuit held that such a claim was in fact subject to the Carmack Amendment, and that the motor carrier’s foreign arbitration clause was invalid as it violated the provisions of the Carmack Amendment.  (Smallwood v. Allied Van Lines, 2011 WL 4927404)

The messes which arise in the transportation of household goods was examined in the Central District in California where no one seemed to be really clear on who was the carrier, whether a carrier was a broker, and who was preventing the delivery of the plaintiff’s goods.  The court held that when one motor carrier issues an estimate for services, fails to advise the shipper that someone else is taking the shipment, and accepted a down payment for the move, it could be liable for the acts of the actual motor carrier. Questions of fact abounded, compelling the court to allow claims to proceed on these issues.  (Buchanan v Neighbors Van Lines, 2011 WL 5005769)


A motor carrier’s delay in signing off on the end of a trip lease required an insurer to continue to provide PIP benefits.  The Eastern District of Michigan held that despite the fact that delivery of a shipment had been completed days earlier, under the terms of the lease it did not end until the carrier officially returned the vehicle.  Accordingly the insurer of the motor carrier which had trip leased the vehicle remained liable for benefits. (National Casualty Company v. Carolina Casualty Ins. Co., 2011 WL 4485055)

When coverage is limited to scheduled vehicles there is no duty to defend or indemnify if the accident does not involve a covered loss.  The District Court in Washington also held that when determining whether the vehicle fell within the “for hire” coverage, you looked to the totality of the circumstances, not just a particular shipment.  (Canal Ins. Co. v. YMV Transport, 2011 WL 4712242)

In the District Court in Mississippi the Court held that the MCS-90 applied to an injury which stemmed from a shipment of ordinary live stock, a commodity not subject to regulation. The Court also held that even though the motor carrier was transporting the cattle within the state, the ultimate intent was for the cattle to travel in interstate commerce at some point and therefore totality of the circumstances warranted it being in interstate commerce.  (Canal Ins. Co. v. Owens, 2011 WL 4833045)

Whether a vehicle fell within the definition of “non owned” was an issue in the Middle District in Georgia.  In an action in which the question resolved around whether a driver was operating for one of two motor carriers, the court held that there was a question of fact on coverage for non-owned autos. The insurer’s attempt to argue that the definition of non-owned autos applied to personal vehicles, and not tractor trailers, failed.  (Broad v. Hitts, 2011 WL 4543874)

The Southern District in Alabama refused a contractor’s claim for indemnity against a motor carrier for its liability for a fatal accident.  As the action was against the contractor for his own negligence the indemnity agreement was unenforceable absent an explicit statement that it would apply to the contractor’s negligence.  The court also held that the contractor was not insured under the motor carrier’s policy for its own negligence, only for claims for vicarious liability.  (Category 5 Management Group v. National Casualty Ins Co., 2011 WL 4702537)

The simple fact that a police report supported the defendant trucker’s claim of non-negligence for an accident was not enough to allow the court to grant summary judgment to the trucker in the District Court in New Jersey.  Plaintiff’s claim that her injuries prevented her from participating in the report preparation raised questions of fact as to fault.  (Monroy v. Slusher, 2011 WL 4729034)

They had it and were not going to take anymore. Unfortunately the court did not agree. A motor carrier sued various parties for abuse after it was sued for a truck accident in which it was determined that the deceased driver had a heart attack and died before the accident. The Superior Court of Pennsylvania held that as long as the plaintiffs had even a slim argument for the suit it could not be sued for the expenses incurred by the motor carrier.  (Keystone Freight Corporation v. Stricker, 2011 WL 4822565)

Covered auto questions seem to be the lead issue this month. In a direct action in Louisiana the court considered when the auto or the bob-tail policy provided coverage, questioning when a driver was “in the business of the trucker”.  The Court of Appeals in Louisiana held he was not when he was simply returning from picking up a trailer which needed maintenance.  The court also held that the MCS-90 had no application to an intrastate movement. (Jurey v. Kemp, 2011 WL 4371932)

The ability of the public to search out carrier issues reminds underwriters how important it is to know the status of the carrier during the underwriting and policy period.  In the Southern District of Georgia the court did dismiss a suit against an insurer and various agencies when a plaintiff attempted to argue that the insurer knew or should have known about the driver’s problems and refused to insure that driver. The court also held that there was no evidence that the insured relied upon the insurer’s evaluation.  Good for insurers, but obviously still litigated.  (Maier v Green Eyes USA 2011WL 4625979)

Another action suit commenced against a shipper and a load board concerning a personal injury action involving a truck driver with a compromised driving record.  Although the case deal with the issues of jurisdiction over these defendants, we bring this to your attention to show the influx of cases in which driver and motor carrier records and inspection detail are used to justify suits against other parties.  (American Timber & Steel Co. v. Lewis Trucking, 2011 WL 4425563)

How often do we see that one accident starts the chain for multiple incidents?  In the Court of Appeals in Kentucky a truck driver sued an emergency responder and another truck driver when he hit the emergency vehicle which was assisting in an overturn. The court rejected his claim, granting judgment to the defendants.  The court held that there was no duty owed by the initial carrier involved in the loss and that the plaintiff could not avoid its obligation to maintain control over his vehicle on the road and should have seen the emergency vehicle.  (Hall v. Moore, 2011 WL 4502641)

A leasing company and its insurer sued the insurer of a motor carrier who used an owner/operator who had leased a vehicle from the leasing company.  The owner operator was killed in an accident and his estate filed suit against the leasing company.  The court held that the motor carrier was not a party to the lease and therefore was not bound by its terms.  The court also held that federal leasing regulations do not impact that leasing relationship and that the leasing company was not an insured under the motor carrier’s policy for driver injuries.  (Harco National Ins. Co. v. Zurich American Insurance Co., 2011 WL 4460261)


In the District Court in New Jersey the court ruled that a Pennsylvania distribution facility would not be subject to suit in its jurisdiction for an accident which occurred in Pennsylvania. The simple fact that the facility was engaged in operations which facilitated the movement of goods in interstate commerce, and truck drivers from other states were routinely present would not afford jurisdiction.  (Posada v. Big Lots, Inc., 2011 WL 4550158)

An insurer’s ability to decline based upon the breach of a “no voluntary payment” clause was questioned in the Northern District in California.  The court held that under Washington law an insurer was required to show actual prejudice, which meant an identifiable and material detrimental effect on its ability to defend its interest. The insurer could not meet its burden as it was aware of the loss and the matter was vigorously defended and reasonably settled.  (Columbia Casualty Co. v. Gordon Trucking Co., 2011 WL 4434722)

A default judgment against a co-defendant carrier was held invalid in Second District in California. Although there was no question that a default was entered, the fact that the cross-claim was a generic cross-claim for indemnity, and the carrier was never given a statement of damages invalidated a default in excess of $2 million.  (Globe Con Freights Systems, Inc. v. APM Terminals Pacific, 2011 WL 4639921)

The District Court in Florida held that an insurer was entitled to have a forum selection clause in a policy. The court also held that the clause would apply even for a claim for rescission of the policy. (American Safety Casualty Ins Co. v. Mijares Holding, 2011 WL 4578097)

It is always better to spell out then assume, as we have all learned over the years. The Court of Appeals in Tennessee taught one plaintiff that lesson this month.  When the court ruled against plaintiff on certain causes of action, and then plaintiff accepted an offer of judgment on the remaining causes of action it was barred from appealing the judgment on the other causes of action. The plaintiff should have ensured that the right to appeal was preserved.  (Jackson v. Purdy Brothers Trucking, 2011 WL 4824198)

Can you get a driver’s employment file from a subsequent employer after a loss?  The District Court in Virginia held that the subsequent employer’s file was relevant regarding representations on driver history and was subject to subpoena in a personal injury action.  Once again we would note that the plaintiff was seeking data on inspection reports and SMS scoring on the driver.   (Vanduser v. Purdy Brothers Trucking, 2011 WL 5025732)

How often has withholding monies from a defendant been used to force a settlement of a claim?  In the Appeals Court in Massachusetts the court held that the withholding of owed monies to a trucking company in an effort to force settlement of a claim for indemnity for a related loss was bad enough to justify a claim for treble damages under a 93A action in the state.  (Kelley v. Riccelli Enterprises of Massachusetts, 2011 WL 4711990)

Be careful in Florida when seeking an EUO.  The Court in Florida held an insurer liable for fees when it took an examination under oath of insured who presented a claim for a stolen truck.  The court found that the EUO was replete with intrusive inquires into the personal life of an insured and took over 8 hours.  The court held that the insured was reasonable in refusing to answer and instead filing suit.  Attorney’s fees were awarded even though the claim was paid in full.  (DeLeon v. Great American Assurance Co., 2011 WL 4824135)

Next month’s report will be out after the Thanksgiving break so we wish to extend to you a Happy Thanksgiving.  Don’t eat too much.

Jean Gardner

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