Harris, et al v. Velichkov, et al

Filing 146

MEMORANDUM AND ORDER - IT IS ORDERED: FedEx's motion for summary judgment (filing 119 ) is granted in all respects. FedEx's Fed. R. Civ. P. 56(c)(2) objection (filing 133 ) is sustained. A separate judgment will not be entered at this time. Ordered by Judge John M. Gerrard. (TCL )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
KENA HARRIS, as administrator of
the Estate of CHAUNGENE L.
WARD, deceased, and MONICA
NOLAN,
Plaintiffs,

8:09-CV-349
MEMORANDUM AND ORDER

vs.
OLEG VELICHKOV, et al.,
Defendants.
This matter is before the Court on the Motion for Summary Judgment
(filing 119) filed by defendant FedEx National LTL, Inc. (FedEx), and a
related Objection Pursuant to Rule 56(c)(2) (filing 133) filed by FedEx with
respect to the evidence offered by the plaintiffs in opposition to the summary
judgment motion. As explained below, the Court finds that FedEx’s motion
for summary judgment should be granted, and that its 56(c)(2) objection
should be sustained on the basis of relevance.
BACKGROUND
This case arises out of an automobile accident. The plaintiffs are the
estate of Chaungene L. Ward, the decedent who was killed in the accident;
and Monica Nolan, who was injured in the accident. Filing 120 at 2,9.1 The
defendants are Oleg Velichkov, the driver of the vehicle that struck Ward’s;
Mickey’s Trucking Express, Inc., which owned Velichkov’s vehicle; Fresh
Start Inc., which employed Velichkov; Milco and Nermin Doneski, who are
husband and wife, and owned Mickey’s and Fresh Start, respectively; and

Pursuant to NECivR 56.1, a party moving for summary judgment must include in its brief
a statement of material facts about which the movant contends there is no dispute, and the
party opposing summary judgment must include in its brief a concise response to that
statement of facts, noting any disagreement. Properly referenced material facts in the
movant’s statement are considered admitted unless controverted in the opposing party’s
response. NECivR 56.1(b)(1). Except where noted, the facts stated in this Memorandum and
Order are contained in the statement of facts of FedEx’s summary judgment brief (filing
120) and not controverted by the plaintiffs.
1

FedEx, which contracted with Fresh Start for transportation services. Filing
120 at 2-4,9-10.
The primary issue presented by FedEx’s motion for summary judgment
is whether FedEx can be held liable for Velichkov’s alleged negligence. This,
as will be explained below, turns on the relationship (or lack thereof) between
FedEx and Velichkov. FedEx owned its own tractors and trailers and is
licensed to operate as a motor carrier. Filing 121-2 at 10-12. But FedEx also
contracted with various motor carriers to provide what it called “line haul”
service: transportation between cities where FedEx service centers are
located. Filing 120 at 4. Fresh Start was a so-called “power only” contractor
for line haul services, meaning that Fresh Start provided a driver with a
tractor to haul FedEx’s trailers (as opposed to a driver with a tractor and
trailer). Filing 120 at 5,10. FedEx pays power-only contractors on a per-mile
rate, based upon the established mileage between the service centers. Filing
120 at 5-7. Those payments are made to the carrier, not the individual
drivers. Filing 120 at 7. FedEx did not pay expenses or allowances on such
contracts, withhold any taxes, or pay workers’ compensation or other benefits
for such contractors. Filing 120 at 5-6. Power-only contractors pay for their
own liability, hazardous-materials, and cargo coverage. Filing 120 at 7. The
agreement between FedEx and Fresh Start specifically identified the
relationship as that of “independent contractor.” Filing 120 at 7.
The plaintiffs do dispute FedEx’s statements of fact with respect to
some aspects of FedEx’s control over power-only drivers’ activities. See filing
127. However, it appears that their disagreement is less over the facts, and
more over the legal significance of those facts. To begin with, FedEx asserts
that power-only drivers do not perform labor at service centers to load any
trailers, filing 120 at 6, but the plaintiffs claim that drivers were required by
contract to “‘verify the trailer seal, match the paperwork . . . and leave with
the load and all paperwork in order, immediately.’” Filing 127 at 3. The Court
does not view those statements as being inconsistent. It is clear from an
examination of the evidence that FedEx’s statement was meant to convey
that the drivers did not load the trailers, i.e., physically place the cargo in the
trailer; the plaintiffs’ statement is not to the contrary.
Similarly, the plaintiffs controvert FedEx’s contention that FedEx
permitted power-only drivers to control what route to follow, filing 120 at 6;
the plaintiffs point to a contractual addendum in which Fresh Start agreed
that its drivers would, for instance, minimize time spent in high-crime areas,
park units in secure areas when possible, and not take FedEx trailers to
private residences. Filing 128-3. Again, the Court does not view the parties as
really saying different things—it is apparent that while FedEx required
Fresh Start’s drivers to protect its cargo, FedEx did not, for instance, dictate
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that transportation between particular service centers would follow
particular highways.
Finally, the plaintiffs take issue with FedEx’s contention that FedEx
did not require a power-only driver to report to FedEx during a trip, filing
120 at 7; the plaintiffs note that FedEx was to be notified in the event of an
accident, theft, or break-in. Filing 128-3. The plaintiffs are correct on that
point, but have not contradicted FedEx’s broader point that power-only
drivers were not required to contact FedEx during the course of a routine trip
between service centers.
On October 28, 2007, Velichkov and his co-driver were westbound in a
tractor-trailer on Interstate 80 in York County, Nebraska. Filing 120 at 9.
The tractor was owned by Mickey’s and leased to Fresh Start. Filing 120 at 8.
Velichkov and his co-driver had picked up two FedEx trailers in Cincinnati,
Ohio, and were on the way to Salt Lake City, Utah. Filing 120 at 8. Velichkov
was driving. Filing 120 at 9. The vehicle went onto the median and returned
to the westbound lanes of the Interstate, but overturned, blocking both lanes
of westbound traffic. Filing 120 at 9. Ward was driving a rental truck
westbound on Interstate 80 and collided with the overturned tractor. Filing
120 at 9. Ward was killed, and Nolan, his passenger, was seriously injured.
Filing 1 at 9; filing 29 at 5-6.
Nolan and Harris, the personal representative of Ward’s estate, filed a
complaint in this Court (filing 1). As pertinent to FedEx, the plaintiffs allege
that the accident was caused by Velichkov’s negligence, within the scope of
his employment by FedEx, and that Velichkov’s negligence was imputed to
FedEx under the doctrine of respondeat superior. Filing 1 at 9-10,13-16. They
also allege that Velichkov was using drugs and that FedEx knew or should
have known that he was incompetent to drive, but negligently entrusted the
vehicle to him anyway, causing the accident. Filing 1 at 18-19. And the
plaintiffs allege that FedEx, as Velichkov’s employer, caused the accident by
not adequately training Velichkov, supervising him, or testing him for drugs.
Filing 1 at 20. FedEx denied the relevant allegations. Filing 29 at 6-13.
The plaintiffs’ complaint (filing 1) was filed on October 1, 2009. A
scheduling order (filing 41) was entered on March 8, 2010, which set a
deadline of April 9 for the plaintiffs to amend pleadings and/or add parties.
That provision was reconfirmed on July 13 (filing 46). An amended
scheduling order (filing 62) was entered on October 25, on the joint motion of
the parties, extending certain deadlines. That order did not discuss an
extended deadline for amending pleadings, and the initial deadline for
amendment had long since passed. The same was true of the second amended
scheduling order (filing 82), entered on July 28, 2011; the third amended

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scheduling order (filing 87), entered September 7; and the final amended
scheduling order (filing 90), entered October 11.
On November 23, 2011, the parties filed a Joint Motion to Amend
Scheduling Order (filing 100) seeking yet another amendment. In particular,
the plaintiffs now sought leave to file an amended complaint that would,
among other things, “plead a theory of independent negligence against FedEx
National.” Filing 100. The Magistrate Judge entered an order (filing 101)
denying the motion. The Magistrate Judge reasoned that the case had been
pending for more than 2 years and “that to allow Plaintiffs to file an amended
complaint so as to add the theory of independent negligence against FedEx
National, and then give Defendants additional time to conduct discovery with
respect to this amendment, would unduly delay this litigation.” Filing 101.
The parties reargued the Magistrate Judge’s ruling in an off-the-record
conference with then-Chief Judge Joseph F. Bataillon, who entered a text
order (filing 109) finding that the Magistrate Judge’s ruling was sound.
Nonetheless, the plaintiffs filed a motion to amend their complaint
(filing 110). The Magistrate Judge entered yet another order (filing 112)
denying the plaintiffs’ motion. The plaintiffs then filed an objection to the
Magistrate Judge’s order (filing 113), which this Court overruled. Filing 140.
Specifically, the Court explained:
The plaintiffs argue that their original complaint (filing 1)
stated claims for both negligent hiring and negligent entrustment
on the part of FedEx. That much is true. But the plaintiffs’
complaint premised those claims entirely upon allegations that
FedEx was negligent in hiring, training, and supervising . . .
Velichkov. The proposed amended complaint (filing 101-1),
however, would add an entirely new theory of recovery. In the
amended complaint, the plaintiffs allege that FedEx was
negligent in contracting with . . . Fresh Start . . . and Mickey’s . . .
because FedEx knew or should have known that Mickey’s . . . had
a poor safety record. [See filing 101-1.] Even a liberal construction
of the plaintiffs’ original complaint would not have suggested this
theory of liability. The plaintiffs’ characterization of their
amended complaint as a “formality” that serves to “‘clarify’ the
causes of action”, see filing 114 at 8, is without merit.
Filing 140 at 2-3.
FedEx filed a Motion for Summary Judgment (filing 119), premised
largely on the facts set forth above. Summarized, FedEx’s motion is based on
its contention that there are no facts supporting imputation of Velichkov’s
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alleged negligence to FedEx. See filing 120 at 2. The plaintiffs’ opposition to
that motion relies in part on evidence that, generally, is consistent with the
theory of liability that they were not permitted to amend their complaint to
allege. See filing 127. Specifically, they point to evidence suggesting that
Mickey’s had a poor safety rating, which according to their expert witness
should have alerted shippers that Mickey’s was unsafe and should not be
used. Filing 127 at 4-5. The plaintiffs also note the close relationship between
Mickey’s and Fresh Start, and contend that Fresh Start was created by
Mickey’s in order to conceal Mickey’s poor safety record from potential
customers. Filing 127 at 6-7. The plaintiffs contend that FedEx employees
should have been aware of the relationship between Mickey’s and Fresh
Start, but failed to perform due diligence with respect to Fresh Start before
contracting with it. Filing 127 at 7-9.
FedEx filed a Fed. R. Civ. P. 56(c)(3) objection (filing 133) to much of
the evidence presented by the plaintiffs in opposition to summary judgment.
In addition to objecting on foundational grounds, FedEx objects that the
plaintiffs’ evidence is irrelevant to the extent that it is intended to prove that
FedEx was negligent in hiring Fresh Start, as opposed to Velichkov, because
the plaintiffs’ operative complaint only alleges negligence in hiring and
supervising Velichkov. See filing 132 at 5-7. Before the Court now are
FedEx’s Motion for Summary Judgment (filing 119) and Objection Pursuant
to Rule 56(c)(2) (filing 133).
SUMMARY JUDGMENT STANDARD
The Court’s analysis begins with some well-established propositions.
Summary judgment is proper if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to
any material fact and that the movant is entitled to judgment as a matter of
law. See Fed. R. Civ. P. 56(c)(2). The movant bears the initial responsibility of
informing the Court of the basis for the motion, and must identify those
portions of the record which the movant believes demonstrate the absence of
a genuine issue of material fact. Torgerson v. City of Rochester, 643 F.3d
1031, 1042 (8th Cir. 2011) (en banc). If the movant does so, the nonmovant
must respond by submitting evidentiary materials that set out specific facts
showing that there is a genuine issue for trial. Id.
On a motion for summary judgment, facts must be viewed in the light
most favorable to the nonmoving party only if there is a genuine dispute as to
those facts. Id. Credibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the evidence are jury functions, not
those of a judge. Id. But the nonmovant must do more than simply show that
there is some metaphysical doubt as to the material facts. Id. In order to
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show that disputed facts are material, the party opposing summary judgment
must cite to the relevant substantive law in identifying facts that might
affect the outcome of the suit. Quinn v. St. Louis County, 653 F.3d 745, 751
(8th Cir. 2011). The mere existence of a scintilla of evidence in support of the
nonmovant’s position will be insufficient; there must be evidence on which
the jury could conceivably find for the nonmovant. Barber v. C1 Truck Driver
Training, LLC, 656 F.3d 782, 791-92 (8th Cir. 2011). Where the record taken
as a whole could not lead a rational trier of fact to find for the nonmoving
party, there is no genuine issue for trial. Torgerson, supra, 643 F.3d at 1042.
An affidavit or declaration used to support or oppose a motion must be
made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the
matters stated. Fed. R. Civ. P. 56(c)(4). The Court must base its
determination regarding the presence or absence of a material issue of
factual dispute on evidence that will be admissible at trial. Firemen’s Fund
Ins. Co. v. Thien, 8 F.3d 1307 (8th Cir. 1993). A party may object that the
material cited to support or dispute a fact cannot be presented in a form that
would be admissible in evidence. Fed. R. Civ. P. 56(c)(2). And when such an
objection is made, the burden is on the proponent of the evidence to show that
the material is admissible as presented or to explain the admissible form that
is anticipated. Fed. R. Civ. P. 56 advisory committee’s note.
ANALYSIS
The Court’s analysis of the plaintiffs’ claims is controlled by Nebraska’s
substantive law.2 Generally, under Nebraska law, the employer of an
independent contractor is not liable for physical harm caused to another by
the acts or omissions of the contractor or his servants. Haag v. Bongers, 589
N.W.2d 318 (Neb. 1999). FedEx argues that Fresh Start was an independent
contractor engaged by FedEx, so FedEx is not liable for the acts or omissions
of Velichkov, Fresh Start’s employee.
In response, the plaintiffs offer several theories of liability. They will be
discussed in greater detail below, but briefly summarized, the plaintiffs argue
that FedEx is potentially liable because (1) FedEx failed to exercise
reasonable care in hiring its independent contractor, Fresh Start; (2) under
federal motor carrier safety regulations, FedEx had a nondelegable duty to
ensure that drivers operate their vehicles in a safe manner; (3) there is a
genuine issue of material fact as to whether Velichkov was an employee of

When neither party raises a conflict of law issue in a diversity case, a federal court applies
the law of the state in which the federal court sits. See BBSerCo, Inc. v. Metrix Co., 324
F.3d 955, 960 n. 3 (8th Cir. 2003).
2

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FedEx under federal motor carrier safety regulations and Nebraska law; and
(4) FedEx negligently entrusted its trailers to Velichkov because federal
motor carrier safety regulations required FedEx to verify that Velichkov was
properly trained in the operation of double trailers. The Court will address
each of these theories in turn.
REASONABLE CARE IN CONTRACTING WITH FRESH START
FedEx notes that under Nebraska law, an employer may be subject to
liability for physical harm to third persons caused by the employer’s failure to
exercise reasonable care in selecting an employee, even if the employee is an
independent contractor. Kime v. Hobbs, 562 N.W.2d 705 (Neb. 1997). The
plaintiffs argue that FedEx was negligent in contracting with Fresh Start,
because Mickey’s had a poor safety rating (according to the plaintiffs’ expert
witness) and FedEx knew or should have known that Fresh Start was
associated with Mickey’s. The plaintiffs also argue that FedEx was negligent
in contracting with Fresh Start because at the time of the contract, Fresh
Start had no safety rating of its own.
FedEx replies that these arguments are beyond the scope of the
plaintiffs’ complaint. FedEx’s 56(c)(2) objection is based on the same
contention. Essentially, FedEx is arguing that the plaintiffs’ theory is outside
the pleadings and that as a result, the evidence supporting that theory is
irrelevant and therefore objectionable. As suggested by the Court’s
Memorandum and Order of February 21, 2012 (filing 140), the Court agrees
with FedEx.
Fed. R. Civ. P. 8(a) provides simply that pleadings must contain a short
and plain statement of the claim showing that the pleader is entitled to relief.
But the essential function of notice pleading is to give the opposing party fair
notice of the nature and basis or grounds for a claim, and a general indication
of the type of litigation involved. Northern States Power Co. v. Federal
Transit Admin., 358 F.3d 1050 (8th Cir. 2004). While the pleading
requirements under the Federal Rules are relatively permissive, they do not
entitle parties to manufacture claims which were not pled, late into the
litigation, for the purpose of avoiding summary judgment. Id.; accord, Cole v.
Homier Distributing Co., Inc., 599 F.3d 856 (8th Cir. 2010); Rodgers v. City of
Des Moines, 435 F.3d 904 (8th Cir. 2006).
As explained above and in the Court’s February 21, 2012, order (filing
140), the negligent hiring and negligent entrustment claims set forth in the
plaintiffs’ complaint were premised entirely upon allegations that FedEx was
negligent in hiring, training, and supervising Velichkov. There is nothing in
the complaint that would have notified FedEx that the plaintiffs were
seeking damages arising out of FedEx’s decision to contract with Fresh Start.
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See Cole, supra. The complaint alleges that the defendants should have
known Velichkov was an unsafe driver—not that FedEx should have known
Fresh Start was an unsafe company. See, id.; Satcher v. University of
Arkansas at Pine Bluff Bd. of Trustees, 558 F.3d 731 (8th Cir. 2009). There is
nothing in the complaint about Fresh Start’s safety rating, Mickey’s’ safety
record, or FedEx’s duty to investigate either. Having not raised those facts in
their complaint, the plaintiffs cannot rely on them now. See Satcher, supra.
For similar reasons, the Court finds merit to FedEx’s 56(c)(2) objection
to plaintiffs’ filings 128-1 and 128-2, submitted in opposition to summary
judgment. Filing 128-1 contains the company safety profiles for Mickey’s and
Fresh Start, and filing 128-2 contains the opinion of plaintiffs’ expert witness
that FedEx disregarded an obligation to perform due diligence in
investigating and screening motor carriers with whom it contracted. The
Court finds that because the plaintiffs’ complaint did not allege that FedEx
was negligent in contracting with Fresh Start, filings 128-1 and 128-2 are not
relevant to any fact of consequence in determining the action, and are
therefore inadmissible. See Fed R. Evid. 401(b) and 402. The Court sustains
FedEx’s 56(c)(2) objection based on relevance, and does not comment on any
of the other grounds asserted in support of FedEx’s objection.
Simply put, the plaintiffs’ argument is an attempt to inject an issue
into the case over 2 years after their complaint was filed, and nearly 2 years
after the deadline passed for amending their complaint. It is contrary to
proper pleading and scheduling practices and does not defeat FedEx’s motion
for summary judgment.
NONDELEGABLE DUTY
As noted above, the general rule is that the employer of an independent
contractor is not liable for physical harm caused to another by the acts or
omissions of the contractor or his servants. Haag, supra. But one of the
exceptions to that general rule is when the employer by rule of law or statute,
has a nondelegable duty to protect another from harm caused by the
contractor. See, id.; Kime, supra. The plaintiffs argue that FedEx had a
nondelegable duty based upon 49 C.F.R. § 390.11.3 That section of the federal
motor carrier safety regulations provides that
[w]henever in part 325 of subchapter A [dealing with noise
emissions] or in this subchapter [containing general motor carrier
A nondelegable duty can also exist when the contractor’s work presents a peculiar risk of
danger, but the Nebraska Supreme Court held in Kime, supra that operating a loaded
tractor-trailer presents only ordinary risk, and the plaintiffs do not argue that a peculiar
risk was presented here.
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safety regulations] a duty is prescribed for a driver or a
prohibition is imposed upon the driver, it shall be the duty of the
motor carrier to require observance of such duty or prohibition.
§ 390.11.
But the applicability of that section to FedEx rests on the assumption
that FedEx is the “motor carrier” at issue, within the meaning of this
regulation. The Court assumes, without deciding, that the regulation would
support a nondelegable duty if it applied to FedEx—although, the Court
notes, the plaintiffs fail to cite any authority supporting the proposition that
this federal regulation can create or enforce a duty under state law. The
Court need not decide that question because the Court concludes that FedEx
was not acting as a motor carrier in this case. Instead, Fresh Start was. The
plaintiffs seem to assume that because FedEx is licensed as a motor carrier,
FedEx is always acting as a motor carrier, regardless of the transaction at
issue. But that assumption is inconsistent with the regulatory scheme.
Under these regulations, a motor carrier is either a for-hire motor
carrier, engaged in the transportation of goods or passengers for
compensation, or a private motor carrier, which provides transportation of
property or passengers by commercial motor vehicle, but is not for hire. 49
C.F.R. § 390.5. The term “motor carrier” also includes the term “employer,”
which is a person who owns or leases a commercial motor vehicle in
connection with a business affecting interstate commerce. Id. A “shipper,” on
the other hand, is someone who sends or receives property transported in
interstate or foreign commerce. 49 C.F.R. § 376.2(k). And the relevant
regulations, including § 390.11, are applicable to those who transport
property, not those who send or receive it. 49 C.F.R. § 390.3(a).
In this case, FedEx was acting as a shipper of goods, not a motor
carrier. Fresh Start was the motor carrier, hired by FedEx to provide
transportation services from one FedEx service center to another. The fact
that FedEx might have had the authority to operate as a motor carrier is
irrelevant to the transaction at issue in this case. See, Alaubali v. Rite Aid
Corp., 2007 WL 3035270 (N.D. Cal. Oct. 16, 2007), aff’d, 320 Fed. Appx. 765
(9th Cir. 2009); Caballero v. Archer, 2007 WL 628755 (W.D. Tex. Feb. 1,
2007); Schramm v. Foster, 341 F. Supp. 2d 536 (D. Md. 2004).4 A
transportation company may have authority to act as a shipper, broker, or

The Court finds it interesting that the plaintiffs cited Schramm v. Foster extensively in
support of their argument regarding reasonable care in hiring an independent contractor—
but completely failed to mention or distinguish the case insofar as it discussed the relevant
provisions of the C.F.R.
4

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carrier, and the Court must focus on the specific transaction at issue, not
whether FedEx acts as a motor carrier in other transactions. Caballero,
supra; Schramm, supra.
One of the bedrock principles of statutory and regulatory interpretation
is to avoid interpretations that would produce absurd results, see e.g. Griffin
v. Oceanic Contractors, Inc., 458 U.S. 564 (1982), and the plaintiffs’
construction of the relevant regulations would produce just such an
absurdity. For instance, the regulations require motor carriers to obtain and
maintain records on each of the drivers they employ, such as driving and
medical records. See 49 C.F.R. §§ 391.25 and 391.51(a). The motor carrier
must retain the driver’s application for employment. § 391.51. The motor
carrier must even conduct a road test for the driver, or designate a tester. 49
C.F.R. § 391.31. All of those requirements make sense when a motor carrier
is actually employing a driver, i.e., hiring the driver and paying him or her
for services. The relevant documents would be in the possession and control
of the motor carrier.
But to read FedEx as a “motor carrier” in this case, and thereby an
employer of Fresh Start or Velichkov, would not only burden FedEx with the
compliance duty assigned by § 390.11—it would also burden FedEx with the
nonsensical duties to conduct road tests, and retain records, for drivers with
whom it has no relationship. Simply put, it makes no sense to read the C.F.R.
to require FedEx to retain the employment application of someone who never
applied to it for employment. Nor does it make sense to place such a burden
on FedEx because it has the ability to act as a motor carrier and could have
transported the cargo in question, when another shipper could establish an
effectively identical relationship with a carrier such as Fresh Start and not be
regarded as a motor carrier. See Caballero, supra.
If the regulations are read in pari materia, however, see McFarland v.
Scott, 512 U.S. 849 (1994), their application to this case makes perfect sense.
The plaintiffs’ attempt to “bootstrap” FedEx into “motor carrier” status by
stretching the regulatory language fails because the definitions of motor
carrier and employer, as used in the regulations, describe precisely the role
assumed by Fresh Start in this instance as an independent contractor.
Alaubali, supra, 2007 WL 3035270 at 6. “[Fresh Start], not [FedEx],
controlled the execution of those services.” Alaubali, supra, 320 Fed. Appx. at
767; see also Caballero, supra. In this case, FedEx chose not to use its carrier
authority to transport its cargo from Cincinnati to Salt Lake City; instead, it
shipped that cargo via another authorized carrier. See Schramm, supra. And
it was Fresh Start, not FedEx, that assumed responsibility for the duties and
prohibitions imposed on the drivers it employed. See Alaubali, 2007 WL
3035270; see also § 390.11.
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Nor does this leave the plaintiffs without a remedy, even if Fresh Start
might seem to be less capable of satisfying a judgment than a company the
size of FedEx. Federal law provides that the Secretary of Transportation may
register a motor carrier only if the registrant files a bond, insurance policy, or
other type of security approved by the Secretary. 49 U.S.C. § 13906. A
commercial motor carrier may operate only if registered to do so, and must be
willing and able to comply with minimum financial security requirements.
See, 49 U.S.C. § 13901; Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868 (10th
Cir. 2009). This requirement, and the regulations promulgated by the Federal
Motor Carrier Safety Administration, require interstate motor carriers to
obtain a special endorsement providing that the insurer will pay within
policy limits any judgment recovered against the insured motor carrier for
liability resulting from the carrier’s negligence. Yeates, supra. The purpose of
requiring such proof of financial responsibility is to ensure that the public is
adequately protected from the risks created by a motor carrier’s operations
and to ensure the collectability of a judgment against the motor carrier. Great
West Cas. Co. v. General Cas. Co. of Wisconsin, 734 F. Supp. 2d 718 (D. Minn.
2010). In sum, this means that FedEx’s use of an independent contractor did
not place the public at particular risk; Fresh Start, as a licensed motor
carrier, would have been required to provide sufficient proof of financial
responsibility to provide a source of recovery for members of the public, such
as the plaintiffs, who are injured in a collision.
For the foregoing reasons, the Court finds that § 390.11 did not place a
nondelegable duty on FedEx to guarantee Velichkov’s compliance with
federal regulations. Even if FedEx could have acted as a “motor carrier”
within the meaning of § 390.11, it did not do so in this case.5
EMPLOYEE STATUS OF VELICHKOV
The plaintiffs present one more theory against applying the general
rule that the employer of an independent contractor is not liable for physical
harm caused to another by the acts or omissions of the contractor or his
servants. See Haag, supra. They argue that instead of being an employee of
an independent contractor, Velichkov was actually an employee of FedEx.

The Court notes the plaintiffs’ citation to Neb. Rev. Stat. § 25-21,239 (Reissue 2005) as
showing that their negligent entrustment argument “is consistent with Nebraska law and
public policy.” Filing 127 at 26. But that section clearly applies only to the owner of a truck,
tractor-trailer, or trailer who has leased that equipment to another for a period of less than
30 days. There is no indication that FedEx was a lessor, and the Court does not read the
plaintiffs’ argument as relying on the statute for anything more than tangential support.
This statute might be useful against Mickey’s, but not FedEx.
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They offer two arguments in support of this claim. The first is quickly
disposed of. The plaintiffs argue that under § 390.5, an “[e]mployee . . .
includes a driver of a commercial motor vehicle (including an independent
contractor while in the course of operating a commercial motor vehicle). . . .”
So, they claim, Velichkov must be considered an employee. It is questionable
whether that definition was intended to have the effect of fundamentally
rewriting state tort law. But leaving that aside, the plaintiffs are misapplying
the definition. No one disputes that Velichkov was an employee of someone.
But who was his employer? The obvious answer is Fresh Start. The plaintiffs’
argument fails because Velichkov was not an independent contractor with
anyone. He had no contract with FedEx, and he was undeniably an employee
of Fresh Start. So, it is Fresh Start, not FedEx, that is vicariously liable for
his alleged negligence.
The plaintiffs’ second argument that Velichkov was an employee of
FedEx is based in Nebraska common law. There is no single test to determine
whether or not a truck driver such as Velichkov is an employee, as
distinguished from an independent contractor. Such a determination must be
made from all the facts in the case. Kime, supra. Whether an agency exists
depends on the facts underlying the relationship of the parties irrespective of
the words or terminology used by the parties to characterize or describe their
relationship. Id. There are 10 factors which are considered in determining
whether a person is an employee or an independent contractor: (1) the extent
of control which, by the agreement, the employer may exercise over the
details of the work; (2) whether the one employed is engaged in a distinct
occupation or business; (3) the kind of occupation, with reference to whether,
in the locality, the work is usually done under the direction of the employer
or by a specialist without supervision; (4) the skill required in the particular
occupation; (5) whether the employer or the one employed supplies the
instrumentalities, tools, and the place of work for the person doing the work;
(6) the length of time for which the one employed is engaged; (7) the method
of payment, whether by the time or by the job; (8) whether the work is part of
the regular business of the employer; (9) whether the parties believe they are
creating an agency relationship; and (10) whether the employer is or is not in
business. Id.
The plaintiffs focus exclusively on the first element: the right of control.
The right of control is the chief factor distinguishing an employment
relationship from that of an independent contractor.6 Kime, supra. But in

The Court notes that the employer of an independent contractor may also be liable if the
employer retains some control over the relevant work and fails to exercise reasonable care
6

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examining the extent of the employer’s control over the worker in this
context, it is important to distinguish control over the means and methods of
the assignment from control over the end product of the work to be
performed. An independent contractor is one who, in the course of an
independent occupation or employment, undertakes work subject to the will
or control of the person for whom the work is done only as to the result of the
work and not as to the methods or means used. Id. But even the employer of
an independent contractor may, without changing the status, exercise such
control as is necessary to assure performance of the contract in accordance
with its terms. Id.
The plaintiffs rely on the contractual arrangement between Fresh Start
and FedEx. In an addendum to their contract, Fresh Start agreed to several
conditions on the conduct of its driver. See filing 128-3. For instance, the
driver was not to leave the load unattended except for meal breaks, during
which the tractor and trailer unit were to be visible. The driver was not to
uncouple the trailer or take a FedEx unit to a private residence. The driver
was to travel a minimum of 150 miles after loading, and was to be alert to
being followed, especially when leaving the loading area. The driver was to
minimize any time spent in a known high theft area. During breaks, the
driver was to park the unit in a secured area if possible but at least in a welllighted public parking area, and lock the tractor at all times. The driver was
not to discuss the cargo with anyone, or mix the cargo with other shipments.
And in the event of an accident, theft, or break-in, the driver was to call his
or her carrier, and 911 in the event of a theft or break-in; the carrier was to
call FedEx immediately. Filing 128-3.
According to the plaintiffs, this was enough control to at least create a
genuine issue of fact as to whether Velichkov was an employee of FedEx. The
Court does not agree, for three reasons. First, the plaintiffs again overlook
the fact that Velichkov had no contract with FedEx, so he was not an
independent contractor of FedEx. To the extent that the contract evidences a
right of control, it is FedEx’s right of control over Fresh Start, which was then
required to use its authority over its employees to ensure that they took the
required precautions with FedEx’s cargo.
Second, as noted above, even the employer of an independent contractor
may, without changing that relationship, exercise such control as is
necessary to assure performance of the contract in accordance with its terms.
See, Omaha World-Herald v. Dernier, 570 N.W.2d 508 (Neb. 1997); Kime,
supra; Stephens v. Celeryvale Transport, Inc., 286 N.W.2d 420 (Neb. 1979).
in the use of that control. See id.; see also Haag, supra. The plaintiffs do not rely on that
theory here, nor does it appear to be applicable. Compare, e.g., Haag, supra.

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Here, FedEx required its independent contractor to instruct its drivers to
take particular measures to protect the security of FedEx’s cargo. Those
requirements were to assure performance of the delivery—in other words, to
control “the final result of the work” instead of “the specific manner in which
the work is performed.” Dernier, supra, at 223. Compare Kime, supra.
Finally, the plaintiffs’ focus on the element of control ignores the
remaining nine factors listed above, several of which weigh (and weigh
heavily) in favor of an independent contractor relationship. Fresh Start was
engaged in a distinct business from FedEx, insofar as Fresh Start was not
exclusively bound to FedEx’s shipments and could take work from other
shippers. See, Dernier, supra; Kime, supra; Eden v. Spaulding, 359 N.W.2d
758 (Neb. 1984). Velichkov, in particular, could have been substituted for
another driver. See, Dernier, supra; Kime, supra; Eden, supra; Stephens,
supra. Long haul trucking is often performed outside the direct supervision of
the shipper. See Eden, supra. And significantly, Fresh Start provided the
instrumentalities and tools of performance—it provided the truck, fueled and
maintained the truck, was required to carry its own insurance, and was
required to bring its own authorization to operate as a motor carrier. Filing
121-5 at 103-04. See, Dernier, supra; Kime, supra; Eden, supra; Stephens,
supra. The contract specified a term of 1 year, renewable year-to-year. Filing
121-5 at 102.
Furthermore, Fresh Start was paid under the contract, not with wages.
Fresh Start paid its employees, not FedEx. Filing 121-5 at 105. Normally an
employee is compensated while he or she works. An independent contractor’s
compensation, on the other hand, usually depends on whether he or she
makes a profit from the contract. Dernier, supra; Kime, supra; Eden, supra;
Spaulding, supra. Nor did FedEx withhold taxes from its payments to Fresh
Start; the failure to withhold taxes indicates that an independent contract
exists. Dernier, supra, Kime, supra; Eden, supra. And perhaps most
importantly, the contract between Fresh Start and FedEx clearly stated that
their relationship was to be one of an independent contractor. Filing 121-5 at
105. Whether the parties believed they were creating a master-servant
relationship is an important guideline. Dernier, supra, Kime, supra; Eden,
supra. And the Court again notes that while there is scant evidence that
FedEx had an “employment relationship” with Fresh Start, there is even less
indication that FedEx had an employment relationship with Velichkov—and
that is the linchpin of the plaintiffs’ argument.
Ordinarily, a party’s status as an employee or an independent
contractor is a question of fact. However, where the facts are not in dispute
and where the inference is clear that there is, or is not, a master and servant
relationship, the matter is a question of law. Kime, supra. And when there is
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a written contract between the parties which denominates and describes the
relationship as that of independent contractor, and nothing in the manner of
performance by the parties is inconsistent with the relationship described,
then the independent contractor is not deemed to be an employee as a matter
of law. Dernier, supra; see, also, Eden, supra; Stephens, supra. That is the
case here. The record establishes, as a matter of law, that Fresh Start was an
independent contractor and that Velichkov was Fresh Start’s employee.
There is no evidence from which a reasonable trier of fact could conclude that
Fresh Start was FedEx’s “employee”—much less evidence that Velichkov was.
NEGLIGENT ENTRUSTMENT
The plaintiffs also argue that FedEx is liable under a theory of
negligent entrustment. As the Court understands their argument, it is that
FedEx had a duty under federal law to ensure that Velichkov was properly
certified to operate a double trailer. But, the plaintiffs contend, FedEx did not
perform that duty, and entrusted two trailers to Velichkov, despite the fact
that he was not properly certified. This, the plaintiffs contend, supports a
claim for negligent entrustment under Nebraska law.
It is negligence to permit a third person to use a thing or to engage in
an activity which is under the control of the actor, if the actor knows or
should know that such person intends or is likely to use the thing or to
conduct himself in the activity in such a manner as to create an unreasonable
risk of harm to others. DeWester v. Watkins, 745 N.W.2d 330 (Neb. 2008)
(citing Restatement (Second) of Torts § 308 (1965)). And one who supplies a
chattel for the use of another whom the supplier knows or has reason to know
to be likely because of his youth, inexperience, or otherwise, to use it in a
manner involving unreasonable risk of physical harm to himself and others
whom the supplier should expect to share in or be endangered by the use, is
subject to liability for physical harm resulting to them. Id. (citing
Restatement (Second) of Torts § 390 (1965)). See, also, Restatement (Third) of
Torts: Physical and Emotional Harm § 19 cmt. e (2010); A.W. v. Lancaster
Cty. Sch. Dist. 0001, 784 N.W.2d 907 (Neb. 2010).
But the only reason identified by the plaintiffs that FedEx knew or
should have known that Velichkov was not certified to operate a double
trailer is a federal safety regulation—one of the same regulations that, as
discussed above, did not apply to FedEx in this case. Specifically, a driver
who wishes to operate a longer combination vehicle (LCV) such as a double
trailer must be trained and certified to do so. See 49 C.F.R. §§ 380.101 et seq.
And no “motor carrier” is to permit a driver to operate an LCV unless the
driver has been issued an LCV driver-training certificate. § 380.113(a). A
LCV driver is required to provide a copy of the certificate to his or her
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employer to be retained in his or her driver qualification file, and the
employer must provide evidence of the certification when requested by law
enforcement. §§ 380.113(a) and 380.401(b).
The Court assumes that there is, at least, a genuine issue of fact as to
whether Velichkov was properly certified.7 But FedEx was not obliged, under
federal law, to inquire about Velichkov’s certification. As previously
discussed, FedEx was not a “motor carrier” in this case. And it is clear from a
reading of the relevant regulations, as described above, that the “motor
carrier” bound by these regulations is the actual employer of an LCV driver.
See Alaubali, supra, 2007 WL 3035270. A driver is not required to carry his
or her LCV certificate—rather, the certificate is provided to the driver’s
employer, to be retained along with the other documents a motor carrier is
required to retain with respect to its drivers. FedEx neither employed nor
contracted with Velichkov—FedEx contracted with Fresh Start, and Fresh
Start employed Velichkov. If Velichkov was, in fact, not LCV-certified, that
could only support a claim against Fresh Start, not FedEx. See id.
FED. R. CIV. P. 54(B)
The Court finds, for the reasons explained above, that FedEx is entitled
to judgment as a matter of law. The Court notes that when multiple parties
are involved in an action, the Court may direct entry of a final judgment as to
one or more, but fewer than all the parties if the Court determines that there
is no just reason for delay. Otherwise, an order or other decision that
adjudicates the rights and liabilities of fewer than all the parties does not end
the action as to any of the parties and may be revised at any time before
entry of a judgment adjudicating all the parties’ rights and liabilities. Fed. R.
Civ. P. 54(b).
In this case, the Court has the discretion to direct a final judgment as
to FedEx. But the Court, having weighed and examined the competing
interests involved in a certification decision, concludes that a final judgment

The record on that point is not as definitive as the plaintiffs suggest. The plaintiffs
contend that Velichkov “testified that he had a [commercial driver’s license] with a double
trailer endorsement, [but] this is only a first step in being qualified to operate a double
trailer.” Filing 127 at 25. But Velichkov’s actual deposition testimony, when asked whether
he had been trained to drive a double trailer, was that he had been trained, and that “you
got to go and pass the test, and from there on, it’s just the experience.” Filing 121-1 at 44.
The “test” to which Velichkov was presumably referring actually comes after the
commercial driver’s license to which the plaintiffs referred, and is in fact the last step of
LCV training before issuance of a certificate. See 49 C.F.R. §§ 380.201 et seq. In other
words, Velichkov implied that he had passed the test, which would have entitled him to a
certificate. And he was not directly asked whether he had a certificate.
7

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is not appropriate in this case at this time. See Huggins v. FedEx Ground
Package System, Inc., 566 F.3d 771 (8th Cir. 2009).
CONCLUSION
The Court finds that FedEx is not, as a matter of law, liable for any
negligence of Velichkov. Nor would the evidence permit a finding against
FedEx based upon any of the theories of independent negligence presented by
the plaintiffs’ complaint. Therefore,
IT IS ORDERED:
1.

FedEx’s motion for summary judgment (filing 119) is
granted in all respects.

2.

FedEx’s Fed. R. Civ. P. 56(c)(2) objection (filing 133) is
sustained.

3.

A separate judgment will not be entered at this time.

Dated this 4th day of May, 2012.
BY THE COURT:

John M. Gerrard
United States District Judge

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