Jones Truck Lines, Inc. v. Ryder Truck Lines, Inc., 74-1443
| Decision Date | 13 December 1974 |
| Docket Number | No. 74-1443,74-1443 |
| Parties | JONES TRUCK LINES, INC., Plaintiff-Appellee, v. RYDER TRUCK LINES, INC., and American Casualty Company, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Albert T. McRae, Nelson, Norvell, Wilson, McRae, Ivy & Sevier, Memphis, Tenn., for defendants-appellants.
Thomas R. Prewitt, Memphis, Tenn., for plaintiff-Appellee.
Before WEICK, CELEBREZZE and MILLER, Circuit Judges.
This appeal is from the judgment of the district court in a declaratory judgment action, declaring and adjudging an indemnification provision in a one-way motor carrier lease agreement void and unenforceable as against public policy and in violation of Interstate Commerce Commission Regulations.
The operative facts are substantially undisputed. Jones, a motor vehicle common carrier, accepted in Kansas City, Missouri, certain goods for transportation from that point to West Monroe, Louisiana. Jones had not been authorized by the I.C.C. to operate in the State of Louisiana and it was therefore necessary for it to make arrangements with some other carrier having a Louisiana authorization to complete the transportation of the goods from Memphis, Tennessee, to the destination point in Louisiana. The goods were transported by Jones in a truck which it had leased from the owner, one Orin Taylor, to Memphis, Tennessee. On this portion of the trip Taylor was also the driver of the vehicle. At Memphis, a proper inspection of the vehicle was made to comply with I.C.C. regulations. 1 The shipment was then transferred under a lease agreement between Jones and Ryder for completion of the trip to Louisiana. This lease, dated February 20, 1973, provided for the leasing of the equipment from Jones Truck Lines, Inc., as lessor, to Ryder Truck Lines, Inc., as lessee. It further provided for the transportation of the goods by use of the leased equipment from Memphis to the destination point.
The lease was actually signed by Taylor, at Memphis on behalf of the lessor Jones, acting as its agent. Since the lease contemplated that Taylor was to continue to operate the vehicle, he became Ryder's agent while driving it to complete the journey. He received the freight bills specifying the route he was to take to West Monroe and indicating that Ryder was the proper party to be contacted in case of an emergency. He actually took a route, however, contrary to that specified in the freight bill, a fact of no significance here. 2 In the course of the trip, he was involved in an accident from which litigation ensued in the Louisiana state courts. After the accident, Ryder acknowledged its responsibility to third parties for the acts of Taylor as its agent, although it did not concede liability. Subsequently, Jones instituted the present action to have the indemnification provision of the one-way lease agreement declared void and unenforceable. The provisions of the Jones-Ryder lease pertinent in this case are as follows:
It is understood that the leased equipment under this agreement is in the exclusive possession, control, and use of the authorized carrier Lessee and that the Lessee assumes full responsibility in respect to the equipment it is operating to the public, the shippers, ans the Interstate Commerce Commission. It is agreed that Lessor will cary acceptable Public Liability and Property Damage insurance. Lessor agrees to reimburse and otherwise indemnify Lessee for any and all losses sustained by Lessee resulting from the use of the aforesaid equipment.
. . . .ing
. . . Lessor indemnifies Lessee against any loss resulting from the injury or death of . . . drivers.
. . . .r i
The Lessor shall save the Lessee harmless from any loss, damage or happening giving rise to claims on the part of the shippers . . ..
It is Jones' contention that the indemnification provision in the lease is in conflict with Title 49, C.F.R. 1057.4(a) which provides:
1057.4 Augmenting equipment.
Other than equipment exchanged between motor common carriers in interchange service as defined in 1057.5, authorized carriers may perform authorized transportation in or with equipment which they do not own only under the following conditions:
(a) Contract requirements. The contract, lease, or other arrangement for the use of such equipment:
. . . .t r
(4) Exclusive possession and responsibilities. Shall provide for the exclusive possession, control, and use of the equipment, and for the complete assumption of responsibility in respect thereto, by the lessee for the duration of said contract, lease or other arrangement, except: (exceptions not relevant to this case).
The argument is that these regulations established a public policy obligating Ryder as the lessee of the equipment to assume 'complete' responsibility for Taylor's operation of the leased vehicle in Louisiana, whereas the indemnification provision of the lease would exempt Ryder from such responsibility and place the ultimate loss on Jones.
This argument, however, flies in the face of the express terms of the indemnification agreement which provides that the equipment under the lease 'is in the exclusive possession, control, and use of the authorized carrier Lessee and that the Lessee assumes full responsibility in respect to the equipment it is operating to the public . . ..' This provision is in conformity with the requirement of the regulation that a lease of equipment 'shall provide for the exclusive possession, control, and use of the equipment, and for the complete assumption of responsibility in respect thereto, by the...
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