Hinkle v. Delavan Industries, Inc.

• Decision Date: 30 September 1998
• Docket Number: No. 97-2458-TUV.,97-2458-TUV.
• Parties: Danny Ray HINKLE and Rebecca Lynn Hinkle, Plaintiffs, v. DELAVAN INDUSTRIES, INC.; Ryder Automotive Operations, Inc. d/b/a Delavan and f/k/a Delavan Industries, Inc.; Ryder System, Inc.; Ryder Automotive Carrier Group, Inc. f/k/a Ryder Automotive Carrier Division; Ryder Services Corporation a/k/a Ryder Claims Services; and Ryder's Automotive Carrier Division, Defendants.
• Court: U.S. District Court — Western District of Tennessee

Page 819

24 F.Supp.2d 819

Danny Ray HINKLE and Rebecca Lynn Hinkle, Plaintiffs, v. DELAVAN INDUSTRIES, INC.; Ryder Automotive Operations, Inc. d/b/a Delavan and f/k/a Delavan Industries, Inc.; Ryder System, Inc.; Ryder Automotive Carrier Group, Inc. f/k/a Ryder Automotive Carrier Division; Ryder Services Corporation a/k/a Ryder Claims Services; and Ryder's Automotive Carrier Division, Defendants.

No. 97-2458-TUV.

United States District Court, W.D. Tennessee, Western Division.

September 30, 1998.

Richard Baker, Gilreath & Associates, Knoxville, TN, for Danny Ray Hinkle, Rebecca Lynn Hinkle.

J. Brook Lathram, Andrew B. Carter, Todd Allen Rose, Burch Porter & Johnson, Paris, TN, for Ryder Automotive Operations, Inc., Ryder System, Inc., Ryder's Automotive Carrier Division.

J. Brook Lathram, Andrew B. Carter, Burch Porter & Johnson, Memphis, TN, for Ryder's Automotive Carrier Group, Inc.

Henry T.V. Miller, McDonald Kuhn Smith Miller & Tait, Memphis, TN, for Ryder Services, Corp.

ORDER ON DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

TURNER, District Judge.

The defendants in this case are all corporate relatives of Danny Ray Hinkle's employer, Commercial Carriers, Inc. ("CCI"). The plaintiff's job required him to drive a trailer that was manufactured by his employer. The plaintiff claims that he was injured by the trailer and that the injury was the result of a design defect. While the plaintiff's sole remedy against his employer is under worker's compensation law, he seeks to recover in tort against CCI's corporate parents and siblings, alleging that they breached a duty to ensure that CCI safely manufactured the trailer. Presently before the court are two motions for summary judgment; one filed separately by defendant Ryder Services Corporation and one on behalf of all the other defendants. The court finds summary judgment is appropriate with respect to all of the defendants.

I. Summary Judgment Standard

The moving party is entitled to summary judgment where there is no genuine issue of material fact and the party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). When considering a motion for summary judgment, the court's function is not to weigh the evidence or judge its truth; rather, the court must determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The substantive law governing the came will determine what issues of fact are material. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989).

A summary judgment movant "bears the burden of clearly and convincingly establishing the nonexistence of any genuine issue of material fact and the evidence as well as all inferences drawn therefrom must be read in a light most favorable to the party opposing the motion." Kochins v. Linden-Alimak, Inc., 799 F.2d 1128, 1133 (6th Cir.1986). Once met, the burden shifts to the nonmoving party to set forth specific facts showing a genuine issue of triable fact. Fed. R.Civ.P. 56(e). To meet this burden, the non-movant must present sufficient counter-vailing evidence such that a jury could return a verdict favorable to the non-moving party. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505.

II. Background

There are numerous corporate defendants involved in this case and it will be helpful to begin by identifying the parties involved. Defendant Ryder System, Inc. ("RSI") is a holding company which is engaged in the business of investing in and directing other companies. RSI owns 100% of Ryder Automotive Carrier Group ("RACG"), which in turn owns 100% of Ryder Automotive Operations, Inc. ("RAOI"). Hinkle's employer, CCI, was a wholly-owned subsidiary of RAOI during the relevant time period.

RACG and RAOI belong to RSI's Automotive Carrier Division ("RACD"). RACD is not a corporate entity; it is a term used to encompass a group of subsidiary trucking-related service corporations owned by RAOI and RACG.

Delavan Industries, Inc. no longer exists as a corporate entity. In December of 1991, Delavan was merged into RAOI. After the merger, Delavan existed only as a trade name. In December of 1993, RAOI divested itself of its Delavan manufacturing assets by making a capital contribution and transfer of assets to CCI. Finally, Ryder Services Corporation is a wholly-owned subsidiary of RSI responsible for handling all worker's compensation claims within the Ryder system.

With the parties identified, the court turns to the events that prompted this action. As a truck driver, Hinkle's responsibilities included driving tractor-trailers that haul automobiles. To assist the loading and unloading of automobiles, the trailer used by Hinkle was equipped with skids. These skids were pulled from the storage area within the trailer for the loading and unloading process and pushed back into the storage area when not needed. On May 19, 1996, Hinkle was injured while attempting to maneuver a skid.

The particular trailer used by Hinkle was manufactured by his employer, CCI. When reduced to a reasonable summary, the complaint alleges that trailer was negligently designed and that CCI's parent corporations were negligent in not requiring a redesign of the trailer.

Six years prior to Hinkle's injury, in 1990, RSI formed a group known as the Herron Task Force ("HTF"), the purpose of which was to raise the consciousness of the subsidiaries about the severity of safety problems and of the related high costs. The HTF was made up of various persons from RSI and its subsidiaries. It looked for injury trends, gathered statistics and other related information and even discussed "in the most general terms" (Herron Dep. at 251) the unloading and loading of cars.

The issue then is whether a parent company which establishes a task force such as RSI did, may be held liable for negligence in not preventing injuries to its subsidiaries' employees.¹

III. Analysis

A corporation may be found liable to its subsidiary's employees in tort for independent acts of negligence if it has undertaken the duty to prevent injuries to the subsidiary's employees.² See, e.g., Gaines v. Excel Indus., Inc., 667 F.Supp. 569 (M.D.Tenn. 1987); Boggs v. Blue Diamond Coal Co., 590 F.2d 655, 663 (6th Cir.1979). In Gaines, the plaintiffs, who were employees of the subsidiary corporation, were injured while on the job. The plaintiffs sued the parent corporation claiming that it had assumed a duty of care towards the subsidiary's employees by undertaking safety inspection tours of the work site, reviewing the subsidiary's safety programs, and conducting safety audits. The court found that plaintiffs had created a genuine issue of material fact sufficient to survive summary judgment. Gaines, 667 F.Supp. at 573. Similarly, in Boggs the court found that the parent corporation had undertaken the primary responsibility for ensuring safety and could therefore be liable if it breached its duty. Boggs, 590 F.2d at 663. In contrast, in Thompson the court found that while plaintiffs argued that the parent corporation had a duty to provide a safe workplace, they failed to identify any independent acts of the parent which evidenced an assumption of a duty. Therefore, no liability could lie against the parent. The key distinguishing feature between Gaines and Boggs on the one hand, and Thompson on the other, is the presence or lack of evidence that the parent corporation assumed a duty to ensure safety.

To establish that RSI assumed a duty, plaintiffs submitted the deposition of James Herron, taken in connection with another case at which time Herron was general counsel for RSI.³ Plaintiffs' counsel lists numerous material facts which he claims to draw from the Herron deposition. In several instances, counsel quite simply appears to be attempting to mislead the court. For example, plaintiffs' counsel suggests that he relies on Herron's testimony to establish the "fact" that "RSI has a duty of safety to its employee and third persons." (Pls.' Resp. to Mot. for Summ.J. at 3). In fact, Herron's testimony was simply that the company and its employees must share responsibility for preventing accidents. Plaintiffs' counsel also cites Herron's deposition as support for the statement that "RSI was aware of a large number of injuries occurring to drivers and established the `Herron Task Force' (HTF) to address injury reduction."⁴ (Id.). In truth, Herron merely said that the task force's goal was to reduce accidents throughout the company by raising the safety consciousness of the entire Ryder enterprise. Plaintiffs' counsel also claims that Herron's deposition establishes that various mergers of RSI companies may have been orchestrated to extend worker's compensation immunity. (Id. at 3-4). in reality, Herron testified that he simply did not remember the reasons for the mergers. Plaintiffs' counsel also asserts as a fact that "the HTF records show that: a) the records are invaluable in proving defendants failed to make safe a hazardous condition; b) that HTF records show that drivers are at high risk for injury using the skids." (Id. at 4) (citations omitted). In reality, Herron testified that he could not agree or disagree with regard to statement a), and that although some person had made statement b), it was not a part of HTF records and Herron did not know it to be a fact. Moreover, the HTF report, shown as an exhibit in Herron's deposition, was not even filed in this case. These are just examples, and certainly not an inclusive list, of attempts by plaintiffs' counsel to mischaracterize testimony by Herron.⁵ In light of this lack of candor, the court has felt it necessary to examine with particularity all of the "material facts" plaintiffs claim in support of their case.

After wading through the 435 page Herron deposition, the court finds there is little, if any, support for the plaintiffs. The facts show that RSI formed a task force to look for ways to reduce accidents and increase safety...