Beck v. XPO Logistics, Inc. et al
Filing
102
ORDER denying 84 Motion for Partial Summary Judgment; denying 91 Motion for Summary Judgment. Signed by Judge David R. Herndon on 10/20/2017. (kmb2)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
SHELIA BECK as Special Administrator
for the Estate of Jeffery D. Beck, Deceased,
Plaintiff,
v.
No. 3:16-cv-00668-DRH-RJD
XPO EXPRESS, INC.,
ADAM ROCKHOLD,
JACK E. RUDOLPH, SR.,
and JOSHUA M. WILLIS,
Defendants.
ORDER
HERNDON, District Judge:
Before the Court is plaintiff’s Motion for Partial Summary Judgment (Doc.
84), and defendant XPO Express, Inc.’s Motion for Summary Judgment (Doc. 91).
Based on the following, both motions (Docs. 84, 91) are DENIED.
I. BACKGROUND
On
October
21,
2016,
plaintiff
Shelia
Beck
(“Beck”)—as
Special
Administrator for the Estate of Jeffery D. Beck—filed a four-count Second
Amended Complaint naming defendants’ XPO Express, Inc. (“XPO”), Adam
Rockhold (“Rockhold”), Jack Rudolph, Sr. (“Rudolph”), and Joshua Willis
(“Willis”) (Doc. 71).1 Beck alleged that on May 19, 2016, Coyote Logistics, LLC, a
1
XPO is an interstate for-hire motor carrier that provides logistics and transportation services
(Doc. 72 at 2); Rockhold provided transportation in interstate commerce on behalf of XPO (Doc.
75 at 3); Rudolph is an employee of Rockhold (Doc. 73 at 3); and, Willis is Rudolph’s son (Doc. 74
at 3).
subsidiary of United Parcel Service, contracted XPO to retrieve and transport a
shipment of blood—on behalf of the American Red Cross—from Cleveland, Ohio
to its final destination of St. Louis, Missouri2 (Id. at 5). Approximately one week
later
on
May
25th,
XPO
assigned
the
delivery
Subcontractor’s Agreement (Docs. 71 at 5; 71-2).
to
Rockhold
under
a
Rockhold then directed his
employee Rudolph to drive the shipment from Cleveland to St. Louis.3 In turn,
Rudolph invited his son Willis, and at some point between Ohio and Missouri,
Willis was permitted to operate the van (Doc. 71 at 5). At approximately 5:25am
on May 26th, Willis collided with a vehicle driven by the decedent while travelling
westbound on I-70 in Fayette County, Illinois (Id. at 6).
Unfortunately the
collision was fatal, and the decedent was pronounced dead at the scene of the
accident (Id.). Beck alleged the negligent acts and omissions made by XPO’s codefendants caused the decedent’s death, and moreover asserted claims of
Wrongful Death against all named defendants (Id. at 7-15).
For relief, she
requested judgment against XPO, in addition to the other defendants (Id. at 13).
On April 12, 2017, Beck filed a Motion for Partial Summary Judgment
against XPO (Doc. 84). Specifically, she alleges XPO ratified acts of each named
defendant, as well as their agency, by accepting and retaining benefits of
employee performance (Id. at 7). In other words, Beck argues summary judgment
is proper because XPO engaged in: billing Coyote Logistics for transport services;
2
3
Intermediate pick-up stops were to be made in Toledo, OH and Fort Wayne, IN (Doc. 84 at 3).
The van used for the transport was identified as a 2016 Dodge 2500 ProMaster, VIN number
3C6TRVDG0GE110157, License plate number GUD7096.
accepting payment for services rendered; accepting the performance of Rockhold,
Rudolph, and Willis; and, in paying Rockhold, sanctioning the actions of its codefendants (Id.). For relief, she requests grant of summary judgment in her favor
regarding the Wrongful Death count asserted against XPO (Id.).
XPO’s counterargument is simple: Beck failed to produce evidence that
Rockhold, Rudolph, or Willis were its agents; and further, Beck’s ratification
argument is premature because she must first prove existence of an agency
relationship before ratification can take place (Doc. 89).
Subsequently, XPO filed a Motion for Summary Judgment in its favor
arguing, inter alia, the transport van and its driver Willis were never under, nor
subject to, control of XPO; and, no vicarious liability exists for negligent conduct
of independent contractors—one of which was not a qualified driver and should
have never been operating the transport van (Doc. 91). Moreover, XPO reasons
facts indicate it had no possession of sufficient control over co-defendants to
warrant the involuntary creation of an agency relationship (Doc. 92).
In response, Beck argues, inter alia, that under the Federal Motor Carrier
Safety Regulations (FMCSR), XPO is responsible for operation of the leased
transport van—notwithstanding analysis of agency principles; and further, factual
questions still exist pertaining to who had the right to control how Rockhold and
his drivers performed services—which, in itself, precludes grant of summary
judgment in XPO’s favor (Doc. 100).
II. ANALYSIS
A. Motion for Partial Summary Judgment against XPO
Beck’s argument in favor of partial summary judgment boils down to
application of the legal doctrine of ratification. She contends XPO ratified acts of
Rockhold, Rudolph, and Willis, and in doing so, exposed itself to consequential
liability as if the aforementioned acts were performed under XPO’s actual
authority. See, e.g., Rosenthal & Co. v. Commodity Futures Trading Comm’n,
802 F.2d 963, 966 (7th Cir. 1986) (stating principals are strictly liable for agents’
actions, even if agents are not employees, if principal authorizes or ratifies acts, or
creates appearance that acts are authorized; even when principal does not himself
direct acts and knows nothing of acts when they occur). However, determining
whether ratification ensued turns on the existence of a principal-agent
relationship between XPO and its co-defendants. Cf. Sphere Drake Ins. Ltd. v.
Am. Gen. Life Ins. Co., 376 F.3d 664, 672 (7th Cir. 2004) (party alleging agency
relationship bears burden of proving its existence by preponderance of the
evidence). Put differently, if Beck cannot establish with sufficient proof that XPO
was principle and its co-defendants acted as agents—the Court will not entertain
the ratification argument.
i. Establishing Proof of Agency
In Illinois, “[t]he test of agency is whether the alleged principal has the
right to control the manner and method in which work is carried out by the
alleged agent and whether the alleged agent can affect the legal relationships
of the principal.” Chemtool, Inc. v. Lubrication Tech., Inc., 148 F.3d 742, 745
(7th Cir. 1998) (emphasis added) (“Principal among these considerations is the
right to control the manner that the work is done”).
For summary judgment
purposes, the complaint and filings made to support an agency relationship “must
allege specific facts regarding the circumstances from which the existence of the
relationship can be inferred. [And] the party alleging an agency relationship has
the burden of proving it.” Valenti v. Qualex, Inc., 970 F.2d 363, 367 (7th Cir.
1992) (citing Matthews Roofing v. Cmty. Bank & Trust, 194 Ill.App.3d 200, 206,
550 N.E.2d 1189, 119 (1990) and explaining under Illinois law agent’s authority
can only come from his principal; this relationship need not depend on express
appointment but may be found in situation of parties, their actions, and other
relevant circumstances).
Therefore, Beck is required to demonstrate XPO and its co-defendants
expressly agreed to agency; and in the absence of direct proof, she must establish
a principle-agent relationship existed through circumstantial evidence. See HPI
Health Care Serv., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill.2d 145, 163, 545
N.E.2d 672, 680 (Ill. 1989) (explaining plaintiff must still allege specific facts
regarding circumstances of situation from which existence of relationship can be
inferred).
ii. No Agency Relationship Sufficiently Alleged
Beck maintains Rockhold was XPO’s agent, and Rudolph was the agent of
both Rockhold and XPO in performance of transporting the blood shipment; and
even if Rockhold and/or Rudolph did not act under scope of express or implied
actual authority—under facts relating to what happened after the accident—XPO
is still bound by the action of its co-defendants. Conversely, unsubstantiated
conclusory allegations are not enough to prove existence of an agency
relationship. See Qualex, Inc., 970 F.2d at 368 (where plaintiff failed to allege
agency and only made unsupported conclusory assertion, burden of proof of
agency relationship was not satisfied). Beck’s mere labeling of XPO as principle
and its co-defendants as agents within the Amended Complaint and subsequent
pleadings is the epitome of an unsubstantiated conclusory allegation.
See
Chemtool, Inc. 148 F.3d at 746 (existence and scope of agency relationship are
questions of fact decided by trier of fact).
Under FED. R. CIV. P. 56(c) a party asserting that a fact cannot be genuinely
disputed must provide support by citing to particular parts of the record.
However, “[i]f a party fails to properly support an assertion of fact, the court
may[,] [among other things,] issue any other appropriate order.” FED. R. CIV. P.
56(e)(4). Here, Beck has not provided proper support by record citation, and
thereby has created a genuine dispute as to an asserted material fact, i.e. the
existence of a principal-agent relationship.
As a result, the Motion for Partial
Summary Judgment against XPO is DENIED.
B. XPO’s MOTION FOR SUMMARY JUDGMENT
XPO argues entitlement to summary judgment because it concludes
Rockhold, Rudolph, and Wills were not its agents; XPO retained no control over
Rockhold’s method of transportation; and, before Beck can proceed with a
vicarious liability argument she must prove existence of a principle-agent
relationship. Further, XPO proclaims Rockhold was an independent contractor
and therefore argues exemption from vicarious liability regarding his actions.
“Generally, a person injured by the tortious action of another must seek his
or her remedy from the person who caused the injury[,]” however, “[t]he principleagent relationship is an exception to this general rule.” Lawlor v. N. Am. Corp. of
Ill., 2012 IL 112530, ¶ 42 (stating under doctrine of respondeat superior principle
may be held liable for tortious action of agent which caused plaintiff’s injury even
if principal does not himself engage in conduct related to plaintiff). Also—as XPO
contends—generally, no vicarious liability exists for actions of independent
contractors,4 see id., but “independent contractor status” does not prohibit
vicarious liability if it is determined an independent contractor is also an agent.
See Horwitz v. Holabird & Root, 212 Ill.2d 1, 13, 816 N.E.2d 272 (2004)
(individual may be both independent contractor and agent with authority to
control details of work and also power to act for and bind principal in business
within scope of agency).
Facts and circumstances of each case determine the status of an individual.
See Petrovich v. Share Health Plan of Ill., Inc., 188 Ill.2d 17, 46, 719 N.E.2d 756
(1999) (explaining no precise formula exists for deciding status as independent
contractor or agent; facts and circumstances of each case determine as such).
The “right to control the manner of doing the work” is chief amongst all
4
“An independent contractor is one who renders service in the course of an occupation
representing the will of the person for whom the work is done only to the result of the work and
not as to the means by which it is accomplished, and is one who undertakes to produce a given
result without being in any way controlled as to the method by which he attains that result. * * *
The test of the relationship is the right to control. It is not the fact of actual interference with the
control, but the right to interfere, that makes the difference between an independent contractor
and a servant or agent.” Carney v. Union Pac. R.R. Co., 2016 IL 118984, ¶ 31 (quoting Hartley v.
Red Ball Transit Co., 344 Ill. 534, 538-39, 176 N.E. 751 (1931) (internal citation omitted).
considerations,5 and the burden of proving existence of an agency relationship is
on the party attempting to impose liability on the principle. See Lawlor, at ¶ 44.
In all, the determination of either agent or independent contractor status is a
question of fact to be answered by the trier of fact, see Dowe v. Birmingham
Steel Corp., 2011 IL App (1st) 091997, ¶ 29; and “[w]hen the facts are
undisputed, the trial court is permitted to decide the issue as a matter of law.”
Pekin Ins. Co. v. Campbell, 2015 IL App (4th) 140955, ¶ 38.
After carefully reviewing the record, and considering all evidence in the light
most favorable to Beck, see FED. R. CIV. P. 56; see also Smith on Behalf of Smith
v. Severn, 129 F.3d 419, 426 (7th Cir. 2017) (“‘In the light most favorable’ simply
means that summary judgment is not appropriate if the court must make ‘a
choice of inferences[]’”), the Court cannot definitively state that Rockhold, Rudolf,
and Willis were acting as XPO’s agents upon transporting the blood shipment
from Cleveland to St. Louis.
In this case, the plain language of the Subcontractor’s agreement identifies
Rockhold and his employees as independent contractors.
On the other hand,
Beck contends the right to control trumps the label of “independent contractor”
since she alleged XPO dictated the route of travel to Rockhold and Rudolph.
Similarly, XPO argues it had no control over how the blood shipment was
transported once the job was assigned to Rockhold; yet Beck alleged, inter alia,
5
The following factors should also be considered a court’s determination between agent and
independent contractor: the question of hiring; right to discharge; manner direction was given;
right to terminate relationship; and character of supervision of work completed. It is noted that
one or more of these factors are not necessarily conclusive. See Lawlor, at ¶ 44.
XPO is subject to compliance with FMCSR regulations which would manufacture
automatic vicarious liability for licensed motor carriers.6 None of these facts,
whether combined or free-standing, sufficiently establishes that no genuine
dispute of material fact existed as to whether XPO and Rockhold entered into a
principal-agent relationship.
Based on the pleadings, the facts determining “control” are in dispute. See,
e.g., Chemtool, at 745 (“While an agency relationship can be created by contract
or by conduct, not all contracts create agency relationships and not all conduct
creates agency relationships.”). Both arguments turn on the status of Rockhold.
See Petrovich, at 31 (“Vicarious liability may nevertheless be imposed for the
actions of independent contractors where an agency relationship is established
under either the doctrine of apparent authority or the doctrine of implied
authority”); see also Lawlor, at ¶ 43 (explaining fact that individual is an
independent contractor does not prohibit vicarious liability for actions if said
individual is also an agent).
The bottom line is the decision of whether Rockhold is an agent or
independent contractor—for purposes of assigning vicarious liability—needs to be
determined by the trier of fact. See Dowe, at ¶ 29. Subject to the fact that several
genuinely disputed material facts exist, and no party—at this stage—is entitled to
judgment as a matter of law, XPO’s Motion for Summary Judgment is DENIED.
III. CONCLUSION
6
Conversely, XPO argues the FMCSR definition of “commercial motor vehicle” requires the
transport van to have a gross vehicle weight of over 10,000lbs—and further alleges the transport
van weighs less than 10,000lbs.
Based on the foregoing—and pursuant to FED. R. CIV. P. 56—Beck’s Motion
for Partial Summary Judgment against XPO (Doc. 84) is DENIED; likewise, XPO’s
Motion for Summary Judgment (Doc. 91) is also DENIED.
IT IS SO ORDERED.
Judge Herndon
2017.10.20
16:28:06 -05'00'
UNITED STATES DISTRICT JUDGE
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