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Bits & Pieces

Volume 14, Edition 12

Did Santa treat you well? Hope he made you happy.  One client has inquired as to which of our clients might actually be insuring Santa?  You know – fat guy, drives outdated rig, poor maintenance, hauls mostly dry freight?  (Thanks for putting this thought in our head Ms. Jerrie Brannon!) I know that we all believe that Shuie can find out the most interesting of information about entities which haul other people’s property but even he has not figured that one out yet – Santa must not need a filing. Anyone going to come clean?   I wonder what his loss runs look like?

We are working away on the resumé so there is not much that we want to report at this end of the year – it will all be in resume which will be out shortly.  So for those of you who were actually stuck going to work this week, we give you these little bits of news:

HOURS OF SERVICE RULES – The Hours of Service of Drivers Final Rule has been published in the Federal Register. The effective date of the Final Rule is February 27, 2012, and the compliance date of selected provisions is July 1, 2013. A comparison between the old and new rules table provides:

SUMMARY OF 2011 HOS FINAL RULE PROVISIONS Changes Compared to Current Rule

PROVISION

CURRENT RULE

FINAL RULE

COMPLIANCE DATE JULY 1, 2013

Limitations on minimum “34-hour restarts”

None.

(1) Must include two periods between 1 a.m. – 5 a.m. home terminal time.

(2) May only be used once per week.

Rest breaks

None except as limited by other rule provisions.

May drive only if 8 hours or less have passed since end of driver’s last off-duty period of at least 30 minutes. [HM 397.5 mandatory “in attendance” time may be included in break if no other duties performed]

PROVISION

CURRENT RULE

FINAL RULE

COMPLIANCE DATE FEBRUARY 27, 2012

On-duty time

Includes any time in CMV except sleeper-berth.

Does not include any time resting in a parked CMV. In moving CMV, does not include up to 2 hours in passenger seat immediately before or after 8 consecutive hours in sleeper-berth. Also applies to passenger-carrying drivers.

Penalties

“Egregious” hours of service violations not specifically defined.

Driving (or allowing a driver to drive) 3 or more hours beyond the driving-time limit may be considered an egregious violation and subject to the maximum civil penalties. Also applies to passenger-carrying drivers.

Oilfield exemption

“Waiting time” for certain drivers at oilfields (which is off-duty but does extend 14-hour duty period) must be recorded and available to FMCSA, but no method or details are specified for the recordkeeping.

“Waiting time” for certain drivers at oilfields must be shown on logbook or electronic equivalent as off duty and identified by annotations in “remarks” or a separate line added to “grid.”

More on the new rules can be viewed here.

HAZARDOUS MATERIALS. – The FMCSA has agreed to review a hazardous materials safety permit regulation that has caused a number of carriers to lose their hazardous materials authority. The hazmat safety permit is required for carriers transporting certain explosives, poison inhalation hazard materials, radioactive materials, and liquefied natural gas. Currently a carrier loses his safety permit if it meets certain out of service standards. Proposed rules are expected in the coming year.


TRUCK FATALITIES
– Large truck fatalities increased 8.7% in 2010, the first increase in four years, according to the National Highway Traffic Safety Administration.  3,675 people were killed in truck-related accidents in 2010, an increase of 295 from last year’s totals.  Injuries also rose 12%.  Although truck-related fatalities went up it is still a 30% decline from 2000 when 5,282 people died in truck-related fatalities.

STAND UP FOR TRUCKING – Apparently there is going to be a big push on lobbying Congress for the interests of trucking this February.  Following the year of the protests of all types, the ATA is promoting a fly-in on Washington to lobby for truck related issues, including steps to prevent toll increases and a push to stop regulation that trucking contends impact productivity negatively. Interested?  Check it ou

TERMINATING AUTHORITY – The DOT means business. Another carrier, RC Investments has been placed out of service. This time the DOT focused on a bus operator deemed to be an imminent hazard to the road. In separate news, federal charges have been brought against one man who continued to operate DDL Transport, LLC. after imposition of out of services orders by the DOT.  He is alleged to have made false statement in an application for motor carrier authority when he said that he not had had a relationship with another motor carrier within the last three years, when in fact he operated Lewis Trucking Company, a two-truck operation that had been ordered out of service in October 2008 for posing an imminent safety hazard. 

DOT WARNINGS – Every new regulation results in new services being offered to truckers. This month the FMCSA published notices advising truckers that there were no third party companies authorized to provide safety certifications or to supervise drug training. The FMCSA does not certify trainers or training companies, nor does it pre-approve the curriculum presented. Employers are responsible for meeting the training requirement of 49 CFR §382.603 including ensuring that any training company/entity that they purchase training from provides training in the physical, behavioral, speech, and performance indicators of probable alcohol misuse and use of controlled substances.

CASES:

AUTO:

Leaving blanks in insurance policies can come back to haunt an insurer.  The Eastern District of Missouri held a policy ambiguous when the selection of limits was not completed on the uninsured motor forms. Rather than the $500,000 intended by the insurer for those limits the court held that the full policy limit of $2 million available for the driver who suffered injuries.  (Munroe v. Continental Western Insurance Co, 2011 WL 6026999)

A truck driver was entitled to recover from the shipper when he was injured while on the premises for the loading of slag. The Court of Appeals in Indiana held jury instructions appropriate for the jury to understand its obligation to consider the burden of a property owner to an invitee.  (Rippe v. Edward C. Levy Co., 2011 5904666)

The criminal conviction of a driver for a fatal truck accident was held to collaterally estop the driver from contesting liability in the personal injury action in the Northern District of Indiana.  The court also considered that fact, as well as the fact that he was driving the vehicle under the influence of alcohol and had worked with his employer to falsify log books to grant summary judgment giving the plaintiff punitive damages.  (Karpov v. Net Trucking, 2011 WL 6056618)

The Appellate Court in Illinois upheld a judgment in favor of a shipper who was sued for a fatal bus-train accident. The court held that the driver was not operating as the agent of the shipper and that the shipper had no duty to insure that the driver had an enough hours to complete the trip and was not overly fatigued.  (Dowe v. Birmingham Steel Corp., 2011 WL 63820265.)

The 6th Circuit Court of Appeals held a non-trucking policy inapplicable to a loss when the driver was returning home after leaving a load at a shipper for later pick up.  After analyzing the facts the court held that the “in the business of” exclusion precluded coverage.  (Illinois National Insurance Co. v. Ohio Security Co., 2011 WL 6415048)

Personal injury actions against transportation brokers was held not preempted under the Federal Aviation Administration Authorization Act in the Middle District in Tennessee.  The court held that while the claims are related to services they are based upon highway safety which is exempted from the Act. The court also held that while violations of the safety regulations do not give rise to a cause of action, the violations can be used to establish negligence.  (Owens v. Anthony, 2011 WL 6056409.

CARGO:

Entering into Master Service Agreements often create confusion when there are other limitations of liability which might apply.  The Central District in California held that a trucking company working for Fed Ex was not entitled to any potential limitation of liability in the shipper’s Fed Ex agreement when the trucking company had a master service agreement which held the trucker to full liability.  (Certain Lloyds Underwriters v. Baldwin Distribution Services, 2011 WL 6010217)

UPS Supply Chain was found strictly liable for misdelivery of goods from a warehouse in the Court of Appeals in Arizona. The court also held that the customer had no duty to try and repossess the goods after the misdelivery and that UPS had no applicable limitation of liability as there was no evidence that the claimant had agreed to the limitation.  (Inter K v. UPS Supply Chain, 2011 WL 5826046)

A broker is not permitted to avoid the impact of Carmack preemption when it is simply suing on behalf of the motor carrier in the Southern District in Ohio.  The Carmack Amendment applies when there is no contractual indemnity between the broker and the carrier.  (Exel v. Southern Refrigerated Transport, 2011 WL 6258387)

With more and more parties opting into contracts instead of ordinary bills of lading, the applicability of Carmack strict liability is repeatedly called into question. In the District Court in Kansas the court considered the impact of a standard bill of lading, which incorporated classifications  and a separate contractual agreement on a cargo loss. In this case the plaintiff sought only to recover under the Carmack Amendment, to avoid the impact of contractual terms. Once the court held that Carmact did not apply, plaintiff was left with no cause of action.  The court did not even allow amendment in light of the fact that it had already entered judgment in favor of the defendant.  (ACE, USA v. Union Pacific R. Co., 2011 WL 609)

MISCELLANEOUS:

As we all know, the ability of truckers to work within the ports is generally governed, in part, by the terms and conditions of the UIIA agreement. The Central District in California refused to enforce the arbitration provision of the agreement contending that the contract was one of adhesion and it was unconscionable to require a trucker to arbitrate its suit against a steamship lines for excessive charges.  (Unimax v. COSCO North America, 2011 WL 5909881)

While an offer of judgment can be a good thing and help a defendant to recover fees, be careful when making the offer that you can establish good faith.  The Court of Appeals rejected the defendant’s request for attorney’s fees after obtaining a defense verdict.  The Court held that the offer of judgment was not in good faith when done before witnesses were interviewed, the offer was nominal and a greater offer was made before trial. (Great West Casualty Co. v. Bloomfield, 2011 WL 6004571)

A claim against an insurance broker for failure to procure adequate insurance on a crane was dismissed as premature when the plaintiff had not yet proven that there was no coverage in the District Court in Florida. In addition the court held that when the insurance broker was simply a nominal party to the suit its agreement to remove was not required.  (Mobro Marine v. Essex Insurance Co., 2011 WL 6328255)

Happy New Year To All.  Be safe and enjoy the holiday.

Jean Gardner

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