Ross v. Wall Street Systems

• Decision Date: 14 March 2005
• Docket Number: No. 04-5051.,04-5051.
• Citation: 400 F.3d 478
• Parties: Terry ROSS, Plaintiff-Appellant, v. WALL STREET SYSTEMS and GULF INSURANCE COMPANY, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 478

400 F.3d 478

Terry ROSS, Plaintiff-Appellant, v. WALL STREET SYSTEMS and GULF INSURANCE COMPANY, Defendants-Appellees.

No. 04-5051.

United States Court of Appeals, Sixth Circuit.

Argued: February 2, 2005.

Decided and Filed: March 14, 2005.

William Kirk Hoskins, Louisville, Kentucky, for Appellant.

John G. McNeill, Landrum & Shouse, Lexington, Kentucky, Licha H. Farah, Jr., Clark & Ward, Lexington, Kentucky, for Appellees.

John G. McNeill, Landrum & Shouse, Lexington, Kentucky, Licha H. Farah, Jr. R. David Clark, Clark & Ward, Lexington, Kentucky, for Appellees.

Before: SILER, BATCHELDER, and DAUGHTREY, Circuit Judges.

OPINION

DAUGHTREY, Circuit Judge.

The plaintiff, Terry Ross, was seriously injured in a four-vehicle chain-reaction collision on October 24, 2000, when his pickup truck was rear-ended by a tractor-trailer rig driven by Richard Martin, in which the ostensible owner/operator, Willie Conway, was a passenger. Because the Conway rig carried a placard indicating that it was leased to Wall Street Systems, a long-distance hauling company, Ross sued both Wall Street Systems and its insurance carrier, Gulf Insurance Company, in Kentucky state court, claiming negligence.

The defendants removed the case to federal court on the basis of diversity jurisdiction and filed a motion for summary judgment. In support of the motion, they produced evidence that the lease executed between Willie Conway and Wall Street Systems on September 19, 2000, had been unilaterally terminated by Wall Street Systems on September 25, 2000, a month before the accident involving plaintiff Ross. The termination process complied with a provision in the lease that permitted unilateral termination on one day's notice sent in writing to the address provided in the lease agreement. There is no dispute that the notice sent by Wall Street systems complied with the terms of the lease. The dispute is over whether it was effective.

The decision to terminate came as a result of Willie Conway's inability to produce proof of supplemental ("bobtail") insurance for the tractor. Wall Street Systems offered to secure it for him, with the understanding that the company would be reimbursed when Conway checked in to pick up his first load. In the process of securing the supplemental insurance, however, company officials learned for the first time that Willie Conway's vehicle was actually titled to his mother, Evelyn Conway. A call to the regional dispatch office also turned up information that Conway had never reported in to accept a load. As a consequence, Wall Street Systems sent a certified letter to Evelyn Conway at the address specified in the lease, giving notice of termination. The letter requested the immediate return of Wall Street Systems's placard and the other documentation provided under the lease. The Conways had not complied with that demand at the time of the accident a month later, and the tractor still bore Wall Street Systems's placard when the collision took place.

Although the plaintiff's theories of recovery were not clearly stated in the complaint, the defense theory was obvious: the lease, if one had ever come into existence, had been terminated a month prior to the accident, and there was no basis on which to hold either Wall Street Systems or Gulf Insurance liable for Ross's injuries. Ross nevertheless maintained that liability could be predicated on the "current leasing practices" of national trucking companies such as Wall Street Systems, arguing generally that the public should be able to rely on the fact that Conway appeared to be operating under the auspices of Wall Street Systems.

The plaintiff contended specifically that Wall Street Systems was liable due to the presence of its placard on the Conway vehicle at the time of the accident. In the past, some courts followed a doctrine of "logo liability," under which the presence of a carrier's government-issued placard created an irrebuttable presumption that the lease continued in effect. See, e.g., Rodriguez v. Ager, 705 F.2d 1229, 1236 (10th Cir.1983). However, the underlying ICC regulations have changed, and this rule is no longer in effect. In Jackson v. O'Shields, 101 F.3d 1083, 1088 (5th Cir.1996), for example, the Fifth Circuit held that "the presence of [carrier's] placard on the [leased vehicle] and the lack of a termination receipt did not alone keep the otherwise-terminated agreement alive." As was the case in Jackson, Wall Street System's agreement with Willie Conway stipulated that Conway, as the independent contractor, bore the burden of removing the placards and returning them to Wall Street. Ross argued that Jackson should be interpreted as relieving the carrier of logo liability only if the carrier made "conscientious" efforts and "took reasonable steps" to reclaim the placards and insurance card. Jackson, 101 F.3d at 1088. In Graham v. Malone Freight Lines, Inc., 314 F.3d 7, 14-15 (1st Cir.1999), however, the First Circuit held that when the lease places the burden of retrieval on...