Caballero v. Stafford

Citation202 S.W.3d 683
Decision Date23 August 2006
Docket NumberNo. 27272,27272
PartiesRAUL CABALLERO and K. STACEY CABALLERO, Plaintiffs-Appellants, v. LELAND D. STAFFORD, JR., Defendant, and NEW PRIME, INC., Defendant-Respondent.
CourtCourt of Appeal of Missouri (US)

Shannon A. Vahle, for Appellant.

Stuart A. King, for Respondent.

PHILLIP R. GARRISON, Judge.

Raul Caballero ("Caballero"), and his wife, K. Stacey Caballero (collectively referred to as "Appellants"), appeal from the trial court's judgment granting summary judgment in favor of New Prime, Inc. ("Respondent") in their suit arising from a tractor/trailer accident, in which Caballero was injured. The accident involved a tractor, leased by Caballero to Respondent, and a trailer, owned by Respondent. At the time of the accident, Caballero was in the sleeper of the tractor which was being operated by Leland Stafford ("Stafford"). This appeal involves the effect of contractual language in agreements between Caballero and Respondent. Specifically, contrary to the trial court's ruling, Appellants allege that the contract language does not result in Respondent being relieved of liability as a matter of law. We agree and reverse and remand.

FACTS

In 2002, Caballero and Respondent entered into a written Independent Contractor Operating Agreement ("ICOA") and a written Personnel Service Agreement ("PSA"). Pursuant to the ICOA, the parties established an independent contractor relationship, whereby Caballero would lease a 2003 Freightliner tractor (referred to in the contract as the "Equipment") to Respondent, in order to haul freight for Respondent's customers. Caballero could operate the Equipment himself, employ his own drivers, or lease drivers from Respondent pursuant to the terms of the PSA. Stafford was a driver "leased" by Respondent to Caballero.

Appellants allege that on January 17, 2003, a tractor-trailer unit driven by Stafford left the roadway and overturned on its side while Caballero was a passenger in the sleeping berth. On April 30, 2004, Appellants filed a four-count petition against Respondent and Stafford for injuries sustained by Caballero in the accident. In Count I, Appellants sought relief from Respondent under the doctrine of respondeat superior based upon the alleged negligence of Stafford in his operation of the truck. In Count II, K. Stacey Caballero alleged loss of consortium by reason of her husband's injuries. In Count III, Appellants sought relief from Respondent for its alleged negligent hiring and retaining of Stafford, and in Count IV, Appellants sought punitive damages.

Respondent filed a motion to dismiss, which was later amended, asserting that it was not liable for Caballero's injuries based on either of two grounds: (1) Stafford was the "borrowed servant" of Caballero, and (2) clauses in the contracts between the parties relieved Respondent from liability for Stafford's negligence. Respondent's amended motion to dismiss referenced both the ICOA and the PSA, and both were included with the motion as exhibits.

The terms and provisions of the ICOA provide in relevant part:

1. LEASE. You hereby lease to [Respondent] the Equipment from the date of this Agreement through December 31 of the same year. Thereafter, this Agreement shall continue from year to year unless otherwise terminated as provided herein. During the term of this Agreement, [Respondent] shall have exclusive possession, control and use of the Equipment and complete responsibility for the operation of the Equipment. . . .
The parties agree that the intent of this Agreement is to establish an independent contractor relationship at all times.
. . . .
2. SERVICE. You agree to make the Equipment available to [Respondent], with qualified and [Respondent] Certified drivers, to pick up loads and transport them to destinations designated by various shippers. Provided, however, You may refuse to haul any load offered to You by [Respondent][.]
. . . .
10. DRIVERS. You shall (i) drive the Equipment Yourself, (ii) employ, on Your own behalf, drivers for the Equipment, or (iii) lease drivers for the Equipment.
. . . .
11. INSURANCE
(a) Liability. [Respondent] shall provide and maintain auto liability insurance for the protection of the public pursuant to FHWA Regulations under 49 USC 13906. Said liability insurance may not necessarily insure You against loss.
. . . .
(e) Occupational Injuries. You shall either (i) make an election to procure Workers' Compensation insurance protection against injuries sustained while in pursuit of Your business, for Yourself and Your drivers, and thereafter provide and maintain at Your own expense such insurance; or (ii) provide and maintain at Your expense a suitable alternative insurance, such as occupational accident insurance, for Yourself and Your drivers, which insurance must be approved by [Respondent].
. . . .
12. ACCIDENTS, CLAIMS, LOSSES AND EXPENSES.
. . . .
(e) HOLD HARMLESS AND INDEMNIFICATION. YOU AGREE TO INDEMNIFY AND HOLD HARMLESS [RESPONDENT], ITS AFFILIATED COMPANIES AND THEIR RESPECTIVE OFFICERS, DIRECTOR, SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, FROM AND AGAINST ANY AND ALL LIABILITIES AND EXPENSES WHATSOEVER, INCLUDING, WITHOUT LIMITATION, CLAIMS, DAMAGES, JUDGEMENTS, AWARDS, SETTLEMENTS, INVESTIGATIONS, COSTS AND ATTORNEY'S FEES (COLLECTIVELY," CLAIMS") WHICH ANY OF THEM MAY INCUR OR BECOME OBLIGATED TO PAY ARISING OUT OF YOUR ACTS OR OMISSION OR THOSE OF YOUR AGENTS AND EMPLOYEES (INCLUDING DRIVERS LEASED FROM [RESPONDENT]). YOU FURTHER AGREE TO HOLD [RESPONDENT] HARMLESS AND TO INDEMNIFY [RESPONDENT] AGAINST ALL CLAIMS BY YOU AND YOUR AGENTS AND EMPLOYEES.

The terms and provisions of the PSA provide in relevant part:

1. DRIVERS.
(a) Supplying Drivers. [Respondent] shall, upon the request of [Caballero], lease drivers to [Caballero] who are employees of [Respondent] ("Drivers") to operate motor vehicles transporting freight which are owned or leased by [Caballero]. (the "Equipment").
(b) Status of Drivers. Drivers shall at all times be deemed to be and shall be employed by [Respondent] only.
(c) Qualification of Drivers. All Drivers shall be duly licensed and legally qualified under all state and federal regulations to drive the Equipment in interstate or intra-state commerce.
(d) Employment of Drivers. [Respondent] shall have the sole authority to hire and fire the drivers. If [Caballero] becomes dissatisfied with the performance of a Driver, [Caballero] may request [Respondent] to substitute another driver in his place and [Respondent] shall endeavor to provide a substitute driver as soon as practical. Any expenses incurred in relieving a Driver and replacing him with another driver, including the transportation of both Drivers to and from Springfield, Missouri shall be borne solely by [Caballero].
2. COMPENSATION OF DRIVERS.
(a) Wages and Deductions. [Respondent] shall be solely responsible for the payment of the Driver's wages and shall have the responsibility of making all deductions from such wages as are required by law, and forwarding such deductions and reports of the same to the proper state and federal authority.
3. WORKERS['] COMPENSATION INSURANCE. [Respondent] shall provide workers['] compensation coverage on all Drivers as required by applicable law.
. . . .
5. [CABALLERO'S] RESPONSIBILITIES WITH RESPECT TO DRIVERS.
(a) Supervisor of Drivers. On those occasions when the equipment is being furnished to [Respondent] by [Caballero] to haul freight, [Respondent] shall dispatch the Drivers. In all other respects, however, during the term of this Agreement, [Caballero] shall be responsible for the supervision and conduct of the Drivers, including causing the Drivers to abide by all work and safety rules of the Department of Transportation and [Respondent].
(b) Regulatory Compliance. [Caballero] shall require the Drivers to keep and maintain proper daily logs, daily vehicle inspections, on-the-road inspections by law enforcement officers, trip reports and all other records and data necessary to comply with all applicable regulations of the Department of Transportation and such other state and federal agencies having authority over the operation of [Caballero's] equipment. . . .
6. HOLD HARMLESS AND INDEMNIFICATION.
(a) Damage to [Caballero] and Equipment. [Caballero] agrees not to hold [Respondent] or the Drivers responsible for any damage or injuries suffered by [Caballero] or to [Caballero's] Equipment as a result of any action by Drivers and hereby releases [Respondent] and the Drivers from any such claims.
(b) Other damage and Claims. Because [Caballero] is responsible for the supervision and conduct of the Drivers, [Caballero], notwithstanding the fact that the Drivers are the employees of [Respondent], shall pay to [Respondent] all amounts required by paragraph 12 contained in the separate Operating Agreement between the parties.
(c) Business Interruption. [Caballero] agrees not to hold [Respondent] responsible for any damage or loss of business suffered by [Caballero] caused by and [sic] interruption of services by the Drivers furnished to Lessee hereunder and hereby releases [Respondent] from any such claim.

On October 5, 2004, the court determined that Respondent's amended motion to dismiss would be treated as a motion for summary judgment, because it presented matters outside the pleadings. Before filing their response, Appellants were given time to depose two employees of Respondent: Darrell Hopkins ("Hopkins"), who is responsible for accounting and administrative functions; and Donald Lacy ("Lacy"), Respondent's director of safety.

Hopkins provided the following information in his deposition testimony: (1) Drivers such as Stafford were employed in order to further Respondent's business interests, and Stafford was employed by Respondent on the date of the alleged accident; (2) Respondent carries workers' compensation insurance for its employed drivers including Stafford; (3) at the time of...

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