Alford v. Major

• Decision Date: 06 July 1970
• Docket Number: Civ. No. 4967.
• Parties: Oreathal ALFORD, Administratrix of the Estate of Ezell Alford v. Hugh MAJOR d/b/a Hugh Major Truck Lines and Carriers, Inc.
• Court: U.S. District Court — Northern District of Indiana

314 F. Supp. 979

Oreathal ALFORD, Administratrix of the Estate of Ezell Alford v. Hugh MAJOR d/b/a Hugh Major Truck Lines and Carriers, Inc.

Civ. No. 4967.

United States District Court, N. D. Indiana, Hammond Division.

July 6, 1970.

Max Cohen, Cohen, Delph & McKenna, Gary, Ind., for plaintiff.

Edmond J. Leeney, Galvin, Galvin & Leeney, Hammond, Ind., for defendant Hugh Major.

William S. Spangler, John McQuillan, Spangler, Jennings, Spangler & Dougherty, Gary, Ind., Peter C. Bomberger, Friedrich, Bomberger, Tweedle & O'Connor, Hammond, Ind., for defendant Carriers, Inc.

This is a wrongful death action, arising out of a collision that occurred at an intersection in Gary, Indiana. The facts relevant to the motions now before the Court are established by stipulation. On December 22, 1967, Ezell Alford was struck and killed by a tractor-trailer unit operated by Gary L. Forrer. Forrer was arrested, charged with running a red light, pleaded guilty, and was fined.

The truck he was driving belonged to Marvin Schoaff. At the time of the accident, it was under a one-year lease to Carriers, Inc. Under the terms of that lease, Schoaff supplied tractor, trailer and driver, in return for 75% of the truck's gross revenues. Out of that sum, Schoaff paid all maintenance and operating expenses, including the driver's salary.

The day before the accident, Carriers had sub-leased the truck, along with its driver, to Hugh Major, for a single trip from Hammond, Indiana, to Cozad, Nebraska, under Major's I.C.C. operating permit. The terms of the trip lease were similar to those of the lease with Schoaff. The parties have stipulated that at the time of the accident Forrer was on his way to Hammond for the sole purpose of picking up Major's cargo.

The complaint alleged that Major and Carriers were engaged in a joint venture at the time of the accident, and that Forrer was acting as the servant of both. Major filed two cross-claims against Carriers, both based on the indemnity provisions of the trip lease. Both parties have moved for summary judgment on the cross-claims.

The critical provision reads as follows:

Lessor agrees to indemnify and hold Lessee harmless from any damages, loss or expenses to carge sic transported on leased equipment resulting from negligence of Lessor or his driver; or from and against claims demands judgments, loss, damages and expenses arising from death or bodily injuries to third persons or to property of third persons resulting from negligent operation of leased equipment by lessor or his driver; or against claims, demands, loss or action brought or asserted against Lessee by reason of any workmen's compensation law or employers liability law arising out of use or operation of leased equipment under this lease.

Carriers contends, first, that the clause is inapplicable to the facts of this case; and second, that if it does apply, it should be declared void as contrary to public policy.

The first argument is based on Carriers' interpretation of the phrase "Lessor or his driver." Carriers argues that the driver was "Lessor's" only at times when he was not acting as the servant of the lessee. As an example, it cites a case where "the trip lease had just ended, Hugh Major was not actually operating the unit, and nevertheless a claim was filed against Hugh Major by an injured party." But that interpretation makes no sense in view of the indemnity clause as a whole. The clause covers damage to the lessee's cargo, as well as injuries suffered by third parties. If a driver was "Lessor's" only at times when the truck was not being operated for the lessee's benefit, damage to the lessee's cargo through the negligence of "Lessor's driver" would have been an extremely remote possibility. Moreover, in a lease as short and to the point as this one, it seems highly unlikely that the parties would have taken the trouble to draft an indemnity provision whose only function was to protect the lessee from the relatively minor inconvenience of being sued by mistake.

Carriers' next line of defense is the argument that under the facts of this case Forrer was a "borrowed servant." Its assumption is that even if a joint servant can be "Lessor's driver," a borrowed servant cannot. However, the borrowed servant doctrine is a tort concept, and the question here is one of contract. Without deciding the factual issue, it is sufficient to observe that even if Forrer was a borrowed servant for tort purposes, he could still have been "Lessor's driver" within the meaning of the indemnity agreement.

Finally, Carriers emphasizes the fact that it made no profit out of the trip lease to Major.¹ Carriers argues that it would be unreasonable to characterize Forrer as "Lessor's driver" when Carriers neither paid his salary nor profited from his services.

But whatever the arrangement between Carriers and Schoaff may have been, the trip lease between Carriers and Major expressly provided that "Lessor shall pay driver's salary, maintain workmen's compensation coverage, and pay all taxes * * * based on payroll." Forrer customarily worked for Carriers, driving the same truck he was driving at the time of the accident. Moreover, it was Forrer that signed the lease, in a space reserved for the lessor's "authorized agent." Under those circumstances, this Court is of the opinion that Forrer was "Lessor's driver" for the purposes of the indemnity agreement.

The only remaining question is whether or not the agreement is valid. Carriers relies on the common law...