John B. Barbour Trucking Co. v. State

• Citation: 758 S.W.2d 684
• Decision Date: 21 September 1988
• Docket Number: No. 3-87-206-CV,3-87-206-CV
• Parties: JOHN B. BARBOUR TRUCKING COMPANY, et al., Appellants, v. The STATE of Texas, Appellee.
• Court: Court of Appeals of Texas

Page 684

758 S.W.2d 684

JOHN B. BARBOUR TRUCKING COMPANY, et al., Appellants, v. The STATE of Texas, Appellee.

No. 3-87-206-CV.

Court of Appeals of Texas,

Austin.

Sept. 21, 1988.

Rehearing Denied Oct. 19, 1988.

Barbara J. Lipscomb, Brown, Maroney, Rose, Barber & Dye, Austin, for appellants.

Jim Mattox, Atty. Gen., Jerili R. Little, Asst. Atty. Gen., Austin, for appellee.

Before POWERS, BRADY and ABOUSSIE, JJ.

POWERS, Justice.

Barbour Trucking Company and its surety, Aetna Insurance Company, appeal from a judgment recovered by the State of Texas in its suit against them for property damage. ¹ We will reverse the trial-court judgment and render judgment that the State take nothing by its suit.

THE CONTROVERSY

Otis E. Conner, in the course and scope of his employment by Jefferson Truck Lines, drove a motor truck into a state-owned bridge in Harris County. To recover for the damage to its bridge, the State sued Jefferson on the ground that it was bound by the doctrine of respondeat superior to answer for the negligence of its employee Conner. Jefferson failed to appear for trial and judgment was taken against the company by default.

The State sued Barbour as well, contending it was bound also to answer for Conner's negligence under these allegations: (1) as Barbour's authorized agent, Conner obtained an oversized-load permit from State authorities (issued in Barbour's name) and drove the truck under Barbour's control; and (2) Barbour and Jefferson were engaged in a joint enterprise and shared control of the truck driven by Conner. After stipulating that Conner's negligence proximately caused damage to the bridge, requiring $19,553.38 to repair, Barbour and the State proceeded to trial on the question of the former's liability for Conner's want of care.

In answer to special issues, the jury found: (1) Conner was not Barbour's agent; (2) Jefferson operated the truck, through Conner, pursuant to a "Master Interchange Agreement" in force at the time between Jefferson and Barbour; and (3) Jefferson operated the truck as an interstate motor carrier under authority of a certificate or permit issued to Barbour by the Interstate Commerce Commission. On these findings, the trial court rendered judgment for the State.

On appeal, Barbour and the State join issue solely on a ground of vicarious liability not alleged expressly in the State's trial petition: whether Barbour was bound to answer for Conner's negligence, under the doctrine of respondeat superior, because he was Barbour's constructive or "statutory employee" even though he was, concurrently, the literal employee of Jefferson. We will discuss below the "statutory employee" principle. ² In Barbour's appeal, the company contends the jury findings are insufficient, as stated, to sustain application of the principle; and, if the findings be interpreted in a sense necessary to sustain the "statutory employee" principle, the evidence is legally and factually insufficient to support the findings.

THE "STATUTORY EMPLOYEE" PRINCIPLE

In 49 U.S.C. § 11107 (Pamp.1988), Congress delegated to the Interstate Commerce Commission a power to impose certain requirements on motor carriers in their operation of motor vehicles, which they do not themselves own, in providing transportation subject to the Commission's jurisdiction. ³ The general purpose of the statute was to enable the Commission to control a number of practices, related to the use of "non-owned" vehicles, that directly affected the regulatory scheme established in the federal Motor Carrier Act of 1935. American Trucking Assns. v. United States, 344 U.S. 298, 301, 73 S.Ct. 307, 310, 97 L.Ed. 337 (1953). One particular purpose, implicit in an amendment to the Act, was "to protect the public from the tortious conduct of judgment-proof operators of interstate motor carrier vehicles...." Price v. Westmoreland, 727 F.2d 494, 496 (5th Cir.1984).

The terms of § 11107 authorize the Commission to impose the following specific requirements upon motor carriers operating "non-owned" motor vehicles in providing transportation subject to the Commission's jurisdiction: (1) the "arrangement" between the carrier and the owner must be in a writing, signed by the parties, which specifies the compensation payable for use of the vehicle and the duration of the "arrangement"; (2) a copy of the writing must be carried in the vehicle, to which it applies, during the duration of the "arrangement"; (3) the carrier must inspect the vehicle and obtain liability and cargo insurance pertaining to its use; and (4) the carrier must "have control of and be responsible for operating" the vehicle, in compliance with applicable laws, "as if" the carrier actually owned the vehicle. Exercising its delegated power, the Commission promulgated a rather comprehensive set of regulations establishing these and certain subsidiary requirements. ⁴

Section 11107 and the Commission's regulations have direct and obvious effect in the regulatory field committed by Congress to the Commission's supervision. Because their underlying purposes might also be affected outside that field, in ordinary tort actions involving a carrier's use of a "non-owned" vehicle, the courts of several jurisdictions have fashioned and applied the "statutory employee" principle at issue in the present case. The principle holds that a carrier is vicariously liable for injury, caused by the driver's negligent operation of a vehicle, when three factors coincide: (1) the carrier does not own the vehicle; (2) the carrier operates the vehicle, under an "arrangement" with the owner, to provide transportation subject to the Commission's jurisdiction; and (3) the carrier does not literally employ the driver. In these circumstances, the driver is held to be the constructive or "statutory" employee of the carrier; and, in consequence of this fiction, the doctrine of respondeat superior imposes upon the carrier a vicarious liability for the negligence of its "employee" the driver. See, e.g., Price, 727 F.2d at 496; Simmons v. King, 478 F.2d 857, 867 (5th Cir.1973).

Because the "statutory employee" principle imposes liability upon the carrier "as if" it actually or literally employed the negligent driver, the carrier is permitted to raise any defenses available to such an employer under state law. White v. Excalibur Ins. Co., 599 F.2d 50, 53-54 (5th Cir.), cert. denied, 444 U.S. 965, 100 S.Ct. 452, 62 L.Ed.2d 377 (1979). That is to say, the "statutory employee" principle is not one of strict liability.

WHETHER BARBOUR WAS SHOWN TO BE LIABLE ON THE PRINCIPLE OF

"STATUTORY EMPLOYEE"

Two factors, essential to the "statutory employee" principle, are undisputed in the present case: (1) Barbour did not own the motor truck driven by Conner; and (2) Barbour did not literally employ Conner. To sustain Barbour's liability on the "statutory employee" principle, the State was required only to establish the requisite third factor: that Barbour was operating the truck to provide transportation subject to the Commission's jurisdiction. Curiously, this ultimate fact, essential to the "statutory employee" principle and Barbour's vicarious liability, was not submitted to the jury for determination. We are left then to inquire whether the ultimate fact is implicit in what the jury did determine or whether it was established as a matter of law. We hold it was neither.

In answer to special issues, the jury determined: (1) Jefferson operated the truck, through its employee Conner, "pursuant to" the "Master Interchange Agreement" that was in force between Jefferson and Barbour; and (2) Jefferson operated the truck as an interstate motor carrier under authority of a permit or certificate issued to Barbour by the Interstate Commerce Commission. How then may one reasonably infer Barbour's operation of the truck from the jury's rather specific and express finding that Jefferson operated the truck? If we understand correctly the State's theory, the State argues that Jefferson's operation of the truck must be imputed to Barbour, as a matter of law, for the reasons next to be discussed.

It is undisputed that Conner applied for and obtained from State authorities a permit to haul the oversize cargo, based on his representation that he acted for Barbour in whose name the permit was issued. ^{5 5} We hold these facts do not justify our assigning an opposite meaning to what the jury found--that Jefferson operated the truck driven by Conner. The jury found expressly that Conner was not Barbour's agent on the "occasion in question," and his obtaining the permit in Barbour's name may not be imputed to Barbour in light of that finding. (The State does not challenge the finding.)

The State contends next that we should impute Jefferson's operation to Barbour, as a matter of law, because the jury found expressly that Jefferson operated the truck pursuant to the "Master Interchange Agreement." Because Barbour did not own the truck or employ Conner, this finding necessarily implies in the State's view that Barbour had leased from Jefferson the truck and Conner's services as contemplated in the master agreement. We reject the State's argument for several reasons.

Firstly, the interchange of equipment under the master agreement is permissive merely and the expression "pursuant to" means, in ordinary usage, "in conformity with." If the jury had found that Barbour operated the truck "pursuant to" the master agreement, one might naturally and reasonably infer that Barbour had leased the truck and driver from Jefferson "pursuant to" the master agreement. But we have no such finding. We have, instead, the very opposite finding--that Jefferson operated the truck "pursuant to" the agreement. The master interchange agreement permitted, but did not require, the parties to interchange and lease vehicles "from time to time, as the need" arose. Therefore, when the fact of Jefferson's operation of the truck is coupled with the other...