Davis et al v. Rapid Response, Inc. et al
Filing
72
ORDER granting 51 Motion for Partial Summary Judgment. Signed by Chief Judge Jeffrey L. Viken on 1/23/15. (SB)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
JOHN DELANEY, Guardian Ad Litem
and Special Limited Conservator of
ANDY R. DAVIS, a Protected Person;
SHANNON HUMANN DAVIS,
Individually, and as Guardian Ad
Litem of KKD, minor child; and
DESTYN HUMANN,
CIV. 12-5076-JLV
ORDER
Plaintiffs,
vs.
RAPID RESPONSE, INC.;
MARK A. DEPROW; AND
RAPID RESPONSE 1, LLC,
Defendants.
INTRODUCTION
Plaintiffs John Delaney, guardian ad litem and special limited
conservator of Andy R. Davis, a protected person, Shannon Humann Davis,
individually, and as guardian ad litem of KKD, minor child, and Destyn
Humann (hereinafter all plaintiffs are referenced collectively as “Mr. Davis”)
bring this diversity action alleging negligence causing personal injury and
seeking compensatory damages plus prejudgment interest and
disbursements from Rapid Response Inc., Rapid Response 1, LLC and Mark
A. DeProw. (Docket 36). Mr. Davis alleges that Rapid Response, Inc., Rapid
Response 1, LLC and Mark DeProw are liable for injuries suffered by Andy
Davis as a result of a motorcycle accident caused by Mr. DeProw’s negligence.
Id. Defendants deny Mr. DeProw acted negligently and deny any liability for
the injuries suffered by plaintiffs. See Docket 41. On January 14, 2014,
this court entered an order granting Mr. Davis’ motion for partial summary
judgment against Rapid Response, Inc. on the issues of liability and
causation.1 (Docket 31). On July 18, 2014, Mr. Davis filed a motion for
partial summary judgment against Rapid Response 1, LLC on the issues of
liability and causation. (Docket 51). Rapid Response 1, LLC did not
respond to Mr. Davis’ motion for partial summary judgment.
FACTS
Having reviewed Mr. Davis’ statement of material facts in conjunction with
the submitted affidavits, the court finds Mr. Davis’ statement provides an
accurate portrayal of the events and circumstances surrounding Mr. Davis’
claim.
See Dockets 23, 26, 52, 54, 55.
Defendants failed to respond to
Mr. Davis’ statement of material facts and have waived any objections to
plaintiffs’ statement of material facts.
Pursuant to Federal Rule of Civil
Procedure 56(e)(2), defendants’ failure to controvert Mr. Davis’ statement of
undisputed material facts means those facts are admitted for purposes of the
case.
See also D.S.D. Civ. LR 56.1D.
The court incorporates Mr. Davis’
1On
January 9, 2014, Mr. Davis filed a joint stipulation indicating the
defendants did not object to the motion.
2
statement of material facts by reference.
(Dockets 23 & 52).
A brief description
of material facts follows.
On July 24, 2012, Mark DeProw was operating a semi-tractor and trailer
traveling westbound on Highway 212.
He was looking for American Colloid to
pick up a cargo load for his employer, Rapid Response Inc.
(Docket 23 at ¶ 1-2).
At the location of the accident, Highway 212 consisted of two westbound lanes, a
turning lane and one eastbound lane.
Id. at ¶ 3.
the far right-hand lane closest to the north curb.
a “U-turn” from the far right-hand lane.
Mr. DeProw was traveling in
Id. at ¶ 2.
Id. at ¶ 4.
Mr. DeProw made
Mr. DeProw’s semi-tractor
and trailer (“semi”) blocked all lanes of travel on Highway 212 while he completed
the U-turn.
Id. at ¶ 8.
Matthew Hoffman was operating a service truck traveling westbound on
Highway 212.
Id. at ¶ 5.
made the U-turn.
Id.
Mr. Hoffman was behind Mr. DeProw at the time he
Andy Davis was operating a motorcycle traveling
westbound on Highway 212.
Id. at ¶ 6.
Hoffman’s service truck.
At approximately the same time Mr. DeProw
Id.
Andy was initially behind Mr.
made the U-turn, Andy changed lanes from the right-hand lane to the left-hand
lane in an attempt to pass Mr. Hoffman.
Id. at ¶ 7.
With Mr. Hoffman’s service
truck on his right and Mr. DeProw’s semi directly ahead occupying all the traffic
lanes, Andy had nowhere to go and could not avoid a collision.
Id. at ¶ 9.
and his motorcycle slid down the turning lane of Highway 212 and passed
3
Andy
beneath Mr. DeProw’s trailer.
head during the collision.
Id. at ¶ 10.
A witness heard Andy strike his
Id. at 15.
Andy was operating his motorcycle within the posted 45-mile-per-hour
speed limit. Id. at 11. The South Dakota Highway Patrol cited Mr. DeProw for
making a prohibited U-turn in violation of SDCL § 32-26-25.
Id. at 12.
DeProw later pled guilty to making a prohibited U-turn.
As a result of the
Id.
Mr.
accident, Andy sustained a traumatic brain injury, including: a bilateral frontal
lobe cerebral contusion, subarachnoid hemorrhage, and subdural hematoma
and encephalopathy.
(Dockets 23 at ¶ 20, 52 at ¶ 44).
Rapid Response 1, LLC leased the semi from Rapid Response, Inc.
(Docket 54-4 at p. 7).2 The lease provided Rapid Response 1, LLC with exclusive
possession, control and use of the semi being driven by Mr. DeProw.
Id. at 8-9.
However, Rapid Response 1, LLC allowed Rapid Response, Inc. to continue to use
the semi. Id. Rapid Response 1, LLC placed no limitations on Rapid Response,
Inc.’s usage and control over the semi.
Id.
Rapid Response, Inc. also had
complete authority to supervise the drivers of Rapid Response 1, LLC, which
included Mr. DeProw.
Id. at 4-5.
The semi driven by Mr. DeProw displayed a
placard containing Rapid Response 1, LLC’s United States Department of
Transportation (“USDOT”) identification number of 1643875. (Dockets 54-4 at
p. 5; 55).
2All
page numbers refer to the page numbering assigned by the court’s
online docket, CM/ECF.
4
Further recitation of salient facts is included in the discussion section of
this order.
DISCUSSION
The court considers Mr. Davis’ motion for partial summary judgment on
the issues of liability and causation.
A.
Standard Applicable to Summary Judgment Motions
Under Federal Rule of Civil Procedure 56(a), summary judgment is
appropriate where the moving party “shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). The court must view the facts, and inferences from those
facts, in the light most favorable to the nonmoving party. See Matsushita Elec.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986) (citing United States v.
Diebold, Inc., 369 U.S. 654, 655 (1962)); Helton v. Southland Racing Corp., 600
F.3d 954, 957 (8th Cir. 2010) (per curiam). Summary judgment will not lie if the
evidence is such that a reasonable jury could return a verdict for the nonmoving
party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Allison v.
Flexway Trucking, Inc., 28 F.3d 64, 66 (8th Cir. 1994).
The burden is on the moving party to establish both the absence of any
genuine issue of material fact and that the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(a). Once the movant has met its burden,
the nonmoving party may not simply rest on the allegations in the pleadings but
must set forth specific facts, by affidavit or other evidence, showing that a
5
genuine issue of material fact exists. See Anderson, 477 U.S. at 256; Fed. R.
Civ. P. 56(e) (each party must support its own assertions of fact and address the
opposing party’s assertions of fact as required by Rule 56(c)).
The underlying substantive law identifies which facts are “material” for
purposes of a motion for summary judgment. Anderson, 477 U.S. at 248.
“Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment. Factual
disputes that are irrelevant or unnecessary will not be counted.” Id. (citing 10A
Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and
Procedure § 2725, at 93-95 (3d ed. 1983)). “[T]he mere existence of some alleged
factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact.” Id. at 247-48 (emphasis in original).
Essentially, the availability of summary judgment turns on whether a jury
question is presented: “The inquiry performed is the threshold inquiry of
determining whether there is the need for a trial—whether, in other words, there
are any genuine factual issues that properly can be resolved only by a finder of
fact because they may reasonably be resolved in favor of either party.” Id. at 250.
1.
Applicability of South Dakota Law
“ ‘It is, of course well-settled that in a suit based on diversity of citizenship
jurisdiction the federal courts apply federal law as to matters of procedure but
the substantive law of the relevant state.’ ” Jacobs ex rel. Jacobs v. Evangelical
6
Lutheran Good Samaritan Soc’y, 849 F. Supp. 2d 893, 896-97 (D.S.D. 2012)
(quoting Hiatt v. Mazda Motor Corp., 75 F.3d 1252, 1255 (8th Cir. 1996) (citing
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938))). “In a choice-of-law analysis for
a diversity action brought in federal district court, the choice-of-law rules are
substantive for Erie purposes, and the choice-of-law rules of the forum state are
applied to determine the litigating parties’ rights.” Id. at 897 (citing Allianz Ins.
Co. v. Sanftleben, 454 F.3d 853, 855 (8th Cir. 2006). The court applies South
Dakota choice-of-law rules.
As of 1992 and continuing through the filing of this suit, the State of South
Dakota has used the most significant relationship approach to govern
multi-state tort conflicts. Chambers v. Dakotah Charter, Inc., 488 N.W.2d 63,
67 (S.D. 1992). Under the most significant relationship approach:
(1) The rights and liabilities of the parties with respect to an issue
in tort are determined by the local law of the state which, with
respect to that issue, has the most significant relationship to
the occurrence and the parties under the principles stated in
§ 6.
(2) Contacts to be taken into account in applying the principles of
§ 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicile, residence, nationality, place of incorporation
and place of business of the parties, and
(d)
the place where the relationship, if any, between the
parties is centered.
7
These contacts are to be evaluated according to their relative
importance with respect to the particular issue.
Id. at 68 (quoting Restatement (Second) of Conflicts of Laws § 145 (1971)). The
principles to be considered under section 6 are:
(1) A court, subject to constitutional restrictions, will follow a
statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice
of the applicable rule of law include[:]
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative
interests of those states in the determination of the particular
issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be
applied.
Id. (quoting Restatement (Second) of Conflict of Laws § 6 (1971)). The court
applies both sections 145 and 6 to the facts of this case.
Mr. Davis asserts this court is vested with diversity of citizenship subject
matter jurisdiction to adjudicate his claim under 28 U.S.C. § 1332. (Docket 36
at ¶ 1). Defendants have not objected to the plaintiff’s jurisdictional assertion.
The court finds that South Dakota law supplies the substantive law governing
this case. Mr. Davis crashed his motorcycle after taking evasive action to avoid
8
a collision with Mr. DeProw’s semi near Belle Fourche, South Dakota. (Docket
23 at ¶¶ 1-2). Mr. DeProw was attempting to complete a prohibited U-turn. Id.
at ¶ 12. Mr. DeProw pled guilty to the charge of making an illegal U-turn in
violation of SDCL § 32-26-25. Id. at ¶ 13. Thus, Mr. Davis’ injury, Mr.
DeProw’s conduct and the parties’ relationship with one another are all based in
South Dakota. The only factor weighing in favor of applying substantive law
other than that of South Dakota is that Rapid Response, Inc. is a Missouri
Corporation with its principal place of business in Missouri. (Dockets 36 at ¶ 4,
41 at ¶ 1). Sections 6 and 145 militate in favor of the court applying South
Dakota substantive law to the facts of this case.
2.
Defendants Admit Mr. DeProw’s Negligence Was a Proximate
Cause of Andy Davis’ Injuries
By failing to controvert Mr. Davis’ undisputed statement of material facts,
defendants admit “the negligence of Mark A. DeProw committed in the course
and scope of his authority as an agent of Rapid Response, Inc., was a proximate
cause of the traumatic brain injury sustained by Andy Davis on July 24, 2012.”
(Docket 23 ¶ 23 as to Rapid Response, Inc.). Mr. Davis’ statement of undisputed
material facts incorporates these same facts as to Rapid Response 1, LLC.
(Docket 52 at p. 1). Mr. Davis’ assertions of negligence and causation are
admitted by Rapid Response 1, LLC pursuant to Fed. R. Civ. P. 56(e)(2) and
D.S.D. Civ. LR 56.1D. The record developed by Mr. Davis fully supports the
granting of partial summary judgment on the issues of negligence and causation
as to Rapid Response 1, LLC.
9
“[Ordinarily] questions of negligence and contributory negligence are for
the jury in all but the rarest cases.” Robbins v. Buntrock, 550 N.W.2d 422, 427
(S.D. 1996) (citing Nelson v. Nelson Cattle Co., 513 N.W.2d 900, 903 (S.D.1994)).
However, under South Dakota law, “[t]he violation of a statute enacted to
promote safety constitutes negligence per se.” Engel v. Stock, 225 N.W.2d 872,
873 (S.D. 1975) (emphasis added).
The South Dakota Supreme Court has a long history of finding negligence
per se after a person has violated a traffic law. See Engel, 225 N.W.2d at 873;
Albers v. Ottenbacher, 116 N.W.2d 529, 530-32 (S.D. 1962) (holding that a
defendant who operated his car in violation of a South Dakota statute regulating
the brakes of motor vehicles (SDC § 44.0346) was guilty of negligence as a matter
of law); Grob v. Hahn, 122 N.W.2d 460, 462 (S.D. 1963) (The Court granted a
defendant’s motion for a directed verdict while holding the plaintiff was negligent
in attempting to pass the defendant’s vehicle.); Treib v. Kern, 513 N.W.2d 908,
912-913 (S.D. 1994) (finding that a violation of SDCL § 32-26-14 (entry of
highway from alley, building, or private road) and § 32-30-20 (unsafe backing
prohibited) constituted negligence per se).
In this case, Mr. DeProw was charged with and pled guilty to making a
prohibited U-turn in violation of SDCL § 32-26-25. (Docket 26-3 at pp. 3-4).
Mr. Davis would not have crashed his motorcycle and sustained his traumatic
brain injury had Mr. DeProw not made the prohibited U-turn. See infra Part
2.b. The court finds Mr. DeProw’s prohibited U-turn, a violation of SDCL
10
§ 32-26-25, constitutes negligence per se. Based on the record, the court finds
Mr. DeProw’s negligence was the legal cause of Andy Davis’ injuries.
3.
Rapid Response 1, LLC Can Be Held Liable For Mr. DeProw’s
Negligent Acts3
At the time of the July 24, 2012, incident, Mr. DeProw was acting as an
agent of Rapid Response 1, LLC and, as a result, Rapid Response 1, LLC can be
held liable for injuries caused by Mr. DeProw’s negligent actions which occurred
within the scope of his employment. As an initial matter, Rapid Response 1,
LLC and Mr. DeProw satisfy the statutory and regulatory definitions of
“employer” and “employee,” respectively. Compare 49 U.S.C. § 31132(3)(A) (An
“ ‘employer’ means a person engaged in a business affecting interstate commerce
that owns or leases a commercial motor vehicle in connection with that business,
or assigns an employee to operate it . . . .”), with Docket 54-4 at pp. 5, 7-8; and
compare 49 U.S.C. § 31132(2)(A) (An “ ‘employee’ means an operator of a
commercial motor vehicle (including an independent contractor when operating
a commercial motor vehicle) . . . who directly affects commercial motor vehicle
safety in the course of employment . . . .”), with Docket 54-4 at p. 4.4 The federal
motor carrier safety regulations apply to the actions of both parties.
This court granted Mr. Davis’ motion for partial summary judgment
against Rapid Response, Inc. on the issues of liability and causation. (Docket
31).
3
4The
court notes Rapid Response 1, LLC and Mr. DeProw also meet the
regulatory definition of “employer” and “employee” as defined in 49 C.F.R.
§ 390.5.
11
Section 376.12(c)(1), formerly § 1057.12(c)(1), of the federal motor carrier
safety regulations provides:
The lease shall provide that the authorized carrier lessee shall have
exclusive possession, control, and use of the equipment for the
duration of the lease. The lease shall further provide that the
authorized carrier lessee shall assume complete responsibility for
the operation of the equipment for the duration of the lease.
49 C.F.R. § 376.12(c)(1).
Prior to 1992, the majority view among courts interpreting § 1057.12(c)(1)
was to impose strict liability on lessee-carriers for the negligence of
owner-operators. Bays v. Summitt Trucking, LLC, 691 F. Supp. 2d 725, 730
(W.D. Ky. 2010) (citing Price v. Westmoreland, 727 F.2d 494, 495 (5th Cir. 1984);
Rodriguez v. Ager, 705 F.2d 1229, 1237 (10th Cir. 1983); Wellman v. Liberty
Mut. Ins. Co., 496 F.2d 131, 136 (8th Cir. 1974); Mellon Nat’l Bank & Trust Co. v.
Sophie Lines, Inc., 289 F.2d 473, 478 (3d Cir. 1961)); see also Grinnell Mut.
Reinsurance Co. v. Empire Ins. Co., 722 F.2d 1400, 1404 (8th Cir. 1983);
Acceptance Ins, Co. v. Canter, 927 F.2d 1026, 1027 (8th Cir. 1991).
Many courts characterized the strict liability called for by § 1057.12(c)(1)
as an “irrebutable presumption” of an employment relationship between the
carrier-lessee and the driver of a vehicle displaying an Interstate Commerce
Commission (“ICC”) placard of the carrier-lessee. UPS Ground Freight, Inc. v.
Farran, 990 F. Supp. 2d 848, 856 (S.D. Ohio 2014) (citations omitted). The
presumption of employment became known as “statutory employment.” Id.
(citations omitted). This pre-1992 interpretation of § 1057.12(c)(1) resulted in
12
courts holding a carrier-lessee liable, as a matter of law, for the negligent acts of
the driver if the lease was still in effect and the vehicle displayed the
carrier-lessee’s ICC placard. Id.
This interpretation of § 1057.12(c)(1) became colloquially known as the
“logo liability” doctrine and was adopted by the Eighth Circuit and others. See
Occidental Fire & Cas. Co. of N.C. v. Soczynski, Civil No. 11-2412 (JRT/JSM),
2013 WL 101877, at *8-9 (D. Minn. Jan. 8, 2013), aff’d sub nom. Occidental Fire
& Cas. Co. v. Soczynski, 765 F.3d 931 (8th Cir. 2014); see also Wellman, 496
F.2d at 136; Grinnell Mut. Reinsurance Co., 722 F.2d at 1404; Acceptance Ins,
Co., 927 F.2d at 1027; Rodriguez v. Ager, 705 F.2d 1229, 1231, 1236 (10th Cir.
1983). However, as will be discussed later, “the continued vitality of the logo
liability doctrine remains unclear, and courts have struggled with apportioning
liability” following the 1992 amendments. Occidental Fire & Cas. Co. of N. C.,
2013 WL 101877, at *8.
Prior to the 1992 amendments, only a minority of courts interpreting the
ICC regulations read § 1057.12(c)(1) as “creating . . . a rebuttable presumption of
an employment relationship between the driver and the carrier-lessee.” UPS
Ground Freight, Inc., 990 F. Supp. 2d at 856.
In 1992, 49 C.F.R. § 376.12 was amended, specifically § (c)(4) was added,
which provided in pertinent part:
Nothing in the provisions required by paragraph (c)(1) of this section
is intended to affect whether the lessor or driver provided by the
lessor is an independent contractor or an employee of the authorized
13
carrier lessee. An independent contractor relationship may exist
when a carrier lessee complies with 49 U.S.C. 14102 and attendant
administrative requirements.
49 C.F.R. § 376.12(c)(4).
Even prior to the addition of § (c)(4), the ICC stated it “did not intend that
its leasing regulations would supersede otherwise applicable principles of State
tort, contract, and agency law and create carrier liability where none would
otherwise exist. Our regulations should have no bearing on this subject.
Application of State law will produce appropriate results.” Ex Parte No. MC-43
(SUB–NO 16), Lease & Interchange of Vehicles (Identification Devices) (49 C.F.R.
Part 1057), 3 I.C.C.2d 92, 93 (I.C.C. Oct. 10, 1986).
The ICC made clear the 1992 addition of section (c)(4) was meant to
reaffirm the neutrality of § (c)(1) when determining the liability obligations of a
carrier-lessee. See Petition to Amend Lease & Interchange of Vehicle
Regulations, 8 I.C.C.2d 669, 671 (I.C.C. June 29, 1992). The ICC stated section
376.12 did “not affect ‘employment status.’ ” Id.; see also UPS Ground Freight,
Inc., 990 F. Supp. 2d at 857-58. Because the ICC is an administrative agency,
its interpretation of its own regulation is entitled to deference. Bowles v.
Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945) (“[T]he ultimate criterion is
the administrative interpretation, which becomes of controlling weight unless it
is plainly erroneous or inconsistent with the regulation.”).
Following the 1992 amendments to the federal motor carrier safety
regulations, courts interpreting § 376.12(c) generally agreed the regulations
14
create only a rebuttable presumption of an agency relationship between the
lessee-carrier and the driver. See, e.g., Bays, 691 F. Supp. 2d at 730-32
(holding that § 376.12 created a rebuttable presumption of agency between a
lessee-carrier and a driver); Thomas v. Johnson Agri-Trucking, 802 F. Supp. 2d
1242, 1249 (D. Kan. 2011) (Section 376.12 “creates only a rebuttable
presumption of agency.”); UPS Ground Freight, Inc., 990 F. Supp. 2d at 857-60
(concluding that § 376.12 created a rebuttable presumption of an agency
relationship between the carrier-lessee and the driver.); see also Penn v. Virginia
Int’l Terminals, Inc., 819 F. Supp. 514, 523 (E.D. Va. 1993) (Interpretations of
§ 376.12(c), and its predecessor 1057.12(c), made prior to the addition of § (c)(4)
result in “a misinterpretation of the regulation, especially with the hindsight
provided by the 1992 amendment[.]”); but see Zamalloa v. Hart, 31 F.3d 911, 917
(9th Cir. 1994) (“The parties agree that compliance with [§ 376.12] creates an
irrebuttable presumption of an employment relationship sufficient to establish
the carrier’s liability . . . .”).
The interpretation that § 376.12(c)(1) creates a rebuttable presumption of
an agency relationship is confirmed by the legislative history supporting
Congress’ 1956 amendment of the Interstate Common Carrier Act. Bays, 691 F.
Supp. 2d at 731. Congress amended the Interstate Common Carrier Act “to
protect the public from the tortious conduct of the often judgment-proof
truck-lessor operators . . . [by] . . . requir[ing] interstate motor carriers to assume
full direction and control of the vehicles as if they were the owners of such
vehicles.” Id. (citations and internal quotation marks omitted). The
15
application of a rebuttable presumption standard under § 376.12(c) both
adheres to the ICC’s “neutrality” objective regarding state agency, tort and
contract law, and also thwarts any attempts by a carrier to lease equipment from
unregulated independent contractors by presuming an agency relationship
between the common carrier-lessee and the lessor/driver. Id.
Nonetheless, the Eighth Circuit, in dicta, indicated the continued vitality of
strict liability underlying the logo liability doctrine as espoused in Mellon Nat’l
Bank & Trust Co., Grinnell Mut. Reinsurance Co., Wellman and Acceptance Ins.
Co., supra, even though those cases were decided prior to the 1992 amendments
to § 379.12(c). Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853, 862
(8th Cir. 2010); see also Occidental Fire & Cas. Co. of N. Carolina, 2013 WL
101877, at *8.
The court finds it unnecessary to determine whether the irrebutable
presumption standard underlying the logo liability doctrine continues to be good
law in the Eighth Circuit in the wake of the 1992 amendments to the federal
motor carrier safety regulations. Under either standard, Mr. DeProw is a
statutory employee of Rapid Response 1, LLC for purposes of the federal motor
carrier safety regulations, and Rapid Response 1, LLC is liable for Mr. DeProw’s
negligent acts.5
5The
court is persuaded by the Ninth Circuit’s reasoning in Zamalloa
in which the court held that 49 C.F.R. § 1057.12(c)(1)—now 19 C.F.R.
§ 376.12(c)(1)—did not preclude a driver from having more than one statutory
employer where the statutory employers were also common carriers. 31 F.3d at
914-16.
16
a.
Irrebutable Presumption of Liability
Under the irrebutable presumption of liability interpretation of
§ 376.12(c)(1), Mr. DeProw qualifies as a statutory employee of Rapid Response
1, LLC, and that entity is strictly liable for injuries to the public caused by his
negligent acts while operating the leased semi. Only two requirements must be
satisfied in order to hold a carrier-lessee liable to the public for injuries caused
by the negligent operation of a leased vehicle: (1) a valid lease must be in effect
and (2) the vehicle must display the carrier-lessee’s ICC placard containing
the lessee’s USDOT identification number in accordance with 49 C.F.R.
§§ 376.11(c)(1), 390.21. Wellman, 496 F.2d at 136; Grinnell, 722 F.2d at 1404;
Acceptance Ins. Co., 927 F.2d at 1027; see also UPS Ground Freight, Inc., 990 F.
Supp. 2d at 856.6
On February 18, 2011, Rapid Response 1, LLC executed an “Independent
Contractor Vehicle Lease Agreement” with Rapid Response, Inc. in which it was
the lessee and Rapid Response, Inc. was the lessor. (Docket 54-4 at p. 7). This
lease was in effect on July 24, 2012, the date on which Mr. DeProw made the
prohibited U-turn which injured Andy Davis. Id. Paragraph B of the lease
states, “[i]t is agreed that the control and possession of the equipment and the
6Although
not specifically stated in the cited cases, the court included the
requirement that a valid lease be in effect at the time of the negligent conduct to
account for situations where the lease had expired and the driver improperly
continued to operate the vehicle while displaying the carrier-lessee’s USDOT
number.
17
responsibility therefor shall be exclusively the lessee’s for the full period of this
lease.” Id. Paragraph C of the lease states, “[i]t is agreed that the equipment
shall not be used during the period of this lease for any purpose other than as
directed by the lessee in the pursuance of its services to the public.” Id. at 8.
Rapid Response 1, LLC and Rapid Response, Inc. entered into a lease in
accord with 49 C.F.R. §§ 376.11(a) and 376.12. Additionally, the court finds the
lease complies with 49 C.F.R. § 376.12(c)(1), as paragraph B vests Rapid
Response 1, LLC with exclusive possession and control of the equipment and
paragraph C vests Rapid Response 1, LLC with exclusive control of how the
equipment is used during the term of the lease. Thus, a lease agreement in
compliance with the federal motor safety regulations existed between Rapid
Response 1, LLC and Rapid Response, Inc. at the time Mr. DeProw injured Andy
Davis.
The undisputed facts show that the semi driven by Mr. DeProw displayed a
placard containing Rapid Response 1, LLC’s USDOT identification number of
1643875 at the time of the incident. (Dockets 54-4 at p. 5, 55). The evidence
also indicates, and Rapid Response 1, LLC does not assert otherwise, that Andy
Davis was a member of the traveling public at the time of his collision with Mr.
DeProw. Therefore, if the irrebutable presumption standard is applied to the
facts of this case, Mr. Davis has shown that Mr. DeProw was a statutory
employee of Rapid Response 1, LLC. As a result, Rapid Response 1, LLC is
18
liable for all damages sustained by plaintiffs as a result cause of the traumatic
brain injury suffered by Andy Davis.
b.
Rebuttable Presumption of Liability
Rapid Response 1, LLC also failed to adduce any evidence rebutting the
presumption Mr. DeProw was an agent of Rapid Response 1, LLC. Because the
court already determined Mr. DeProw was a statutory employee of Rapid
Response 1, LLC under the federal motor carrier safety regulations, the court
need only determine if Rapid Response 1, LLC provided sufficient evidence to
rebut the presumed agency relationship between itself and Mr. DeProw.7 Rapid
Response 1, LLC failed to satisfy its burden. Indeed, Rapid Response 1, LLC
entirely failed to respond to plaintiff’s motion for partial summary judgment.
Rapid Response 1, LLC and Rapid Response, Inc. entered into a lease
agreement which gave Rapid Response 1, LLC exclusive possession, control and
usage of the leased equipment. (Dockets 54-4 at pp. 7-9, 54-5 at p. 2) (The
deposition of David Plumley, the corporate designee of Rapid Response 1, LLC
and Rapid Response, Inc.). However, Rapid Response 1, LLC ceded its operating
authority to Rapid Response, Inc. (Docket 54-4 at pp. 8-9). Rapid Response 1,
LLC placed no limits on Rapid Response, Inc.’s usage of its operating authority
7The
court applies the same analysis in determining whether Mr. DeProw
was a statutory employee for purposes of the federal motor carrier safety
regulations under both the irrebutable presumption of liability standard and the
rebuttable presumption of liability standard. The only difference is that under
the rebuttable presumption of liability approach Rapid Response 1, LLC is given
an opportunity to rebut the presumed agency relationship between itself and
Mr. DeProw.
19
on either the leased equipment or on the operations of its drivers, including Mr.
DeProw. Id. Mr. Plumley testified that Rapid Response, Inc. did not
compensate Rapid Response 1, LLC for this privilege. Id. at 9; see also Docket
54-6 at p. 3.
Rapid Response 1, LLC entirely relied on Rapid Response, Inc. to hire,
supervise, pay and manage Mr. DeProw. Id. at 4-5. Rapid Response 1, LLC
had only two employees—both of whom were truck drivers. (Docket 54-6 at
p. 2). Rapid Response 1, LLC’s drivers received oversight from a safety director,
Deana Vanderwall. Id. Ms. Vanderwall was employed by Rapid Response, Inc.
but acted as the safety director for both Rapid Response 1, LLC and Rapid
Response, Inc. (Dockets 54-4 at pp. 2-3, 54-6 at p. 2). Rapid Response 1, LLC
did not have its own general manager. (Docket 54-4 at p. 2).
Rapid Response 1, LLC cannot avoid the presumption of an agency
relationship between itself and Mr. DeProw by simply granting Rapid Response,
Inc. unfettered control of its semi-tractors, trailers and drivers. To allow as
much would be violative of the congressional intent supporting the 1956
amendment of the Interstate Common Carrier Act. Bays, 691 F. Supp. 2d at
730 (The Interstate Common Carrier Act was amended “to protect the public
from the tortious conduct of the often judgment-proof truck-lessor operators . . .
[by] . . . requir[ing] interstate motor carriers to assume full direction and control
of the vehicles as if they were the owners of such vehicles.”) (citations and
internal quotation marks omitted). Rapid Response 1, LLC is an operational
20
arm of Rapid Response, Inc. and although it did not act on its exclusive right to
possess, control and use the leased equipment, the law requires its responsibility
for the actions of Mr. DeProw to be determined by applying the terms of the
vehicle lease agreement it signed with Rapid Response, Inc. Rapid Response 1,
LLC failed to rebut the presumption of an agency relationship with its driver.
The court presumes an agency relationship between Rapid Response 1, LLC and
Mr. DeProw.
c.
South Dakota Agency Law
An agency relationship exists between Rapid Response 1, LLC and Mr.
DeProw through the application of South Dakota agency law. “Agency is the
representation of one called the principal by another called the agent in dealing
with third persons.” SDCL § 59-1-1. “[A] principal is responsible to third
persons for the negligence of his agent in the transaction of the business of the
agency, including wrongful acts committed by such agent in and as part of the
transaction of such business.” SDCL § 59-6-9. “The liability of an employer for
the tortious acts of his employee rests upon the doctrine [of] respondeat superior.
. . . [which states] . . . that an employer is not liable for an act or omission of an
employee that is not within the scope of his employment.” Antonen v. Swanson,
48 N.W.2d 161, 167 (S.D. 1951) (citations omitted) (emphasis added); see also
Gruhlke v. Sioux Empire Fed. Credit Union, Inc., 756 N.W.2d 399, 406 (S.D.
2008) (“[W]hen employees act within the scope of their employment, their acts
are the acts of their company.”).
21
The South Dakota Supreme Court has had several occasions to consider
and refine its definition of “scope of employment.” The Court characterized
“within the scope of employment” as a “vague but flexible [standard], referring to
‘those acts which are so closely connected with what the servant is employed to
do, and so fairly and reasonably incidental to it, that they may be regarded as
methods . . . of carrying out the objectives of the employment.’ ” Deuchar v.
Foland Ranch, Inc., 410 N.W.2d 177, 180 (S.D. 1987) (quoting Prosser and
Keeton on the Law of Torts § 70, at 502 (5th ed. W. Keeton 1984)).
In 1986, the Court adopted a “foreseeability” test to determine whether an
agent’s acts were within the scope of employment:
We think it fairly stated that a principal is liable for tortious harm
caused by an agent where a nexus sufficient to make the harm
foreseeable exists between the agent’s employment and the activity
which actually caused the injury; foreseeable is used in the sense
that the employee’s conduct must not be so unusual or startling
that it would be unfair to include the loss caused by the injury
among the costs of the employer’s business.
Leafgreen v. American Family Mutual Insurance Co., 393 N.W.2d 275, 280-81
(S.D. 1986).
“ ‘Foreseeability’ as used in the respondeat superior context is different
from ‘foreseeability’ as used for proximate causation analysis in tort law. . . . In
respondeat superior, foreseeability includes a range of conduct which is fairly
regarded as typical of or broadly incidental to the enterprise undertaken by the
employer.” Kirlin v. Halverson, 758 N.W.2d 436, 444 (S.D. 2008) (citations and
internal quotation marks omitted, emphasis in original). Typically, “ ‘whether
22
the act of a servant was within the scope of employment must, in most cases, be
a question of fact for the jury.’ ” Id. at 445 (quoting Deuchar, 410 N.W.2d at
181) (emphasis added).
The Court has endorsed the consideration of numerous factors when
determining whether an agent’s actions were foreseeable. See, e.g., Deuchar,
410 N.W.2d at 181 (“Were the servant’s acts in furtherance of his employment?
If the answer is yes, then employer liability may exist even if his servant’s
conduct was expressly forbidden by the master.”); Leafgreen, 393 N.W.2d at
280-81 (The court considered whether a benefit ran to the principal, whether the
agent’s actions were remote in time from the principal’s involvement with the
victim, whether the agent’s opportunity to commit the tortious act arose outside
of his employment with the principal, and whether imposing liability on the
principal would be “unfair.”); Kirlin v. Halverson, 758 N.W.2d at 445 (quoting
Rodgers v. Kemper Constr. Co., 50 Cal. App. 3d 608, 622-23 (Ct. App. 1975) (The
Court considered whether the agent’s conduct “was [a] manifest[] . . . outgrowth
of the employment relationship [which resulted in] a risk which may fairly be
considered as typical of, or incidental to, the employment.); see generally
Restatement (Second) of Agency: Use of Force § 245 (1958).
In this case, it is undisputed that Rapid Response 1, LLC ceded all of its
operating authority under the lease to Rapid Response, Inc. (Dockets 54-4 at
pp. 8-9). It is also undisputed that while Mr. DeProw was driving to Belle
Fourche, South Dakota, to pick up a cargo load from American Colloid, he was
23
operating within the scope of his employment as agreed by Rapid Response 1,
LLC to Rapid Response, Inc. in the vehicle lease agreement. (Dockets 36 at
¶¶ 42-43; 41 at ¶¶ 21-22; 52 at p. 1). Mr. DeProw’s trip was done under the
direction and supervision and with the permission of Rapid Response, Inc.
(Dockets 54-4 at p. 6). In light of the undisputed facts of this case, the court
finds it was foreseeable that Mr. DeProw, a truck driver, would perform a
prohibited U-turn while driving his semi. Therefore, Mr. DeProw was acting
within the scope of his employment when he injured Andy Davis. Under the
rebuttable presumption of liability standard, Rapid Response 1, LLC is liable for
all damages sustained by plaintiffs as a result of the traumatic brain injury
suffered by Andy Davis.
ORDER
Based on the above analysis, it is hereby
ORDERED that plaintiffs’ motion for partial summary judgment on the
issues of liability and causation (Docket 51) is granted.
Dated January 23, 2015.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE
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