Schramm v. Foster, No. Civ. JFM-02-3442.

• Decision Date: 23 August 2004
• Docket Number: No. Civ. JFM-03-2758.,No. Civ. JFM-02-3442.
• Citation: 341 F.Supp.2d 536
• Parties: John SCHRAMM, et al. v. Brian Ashley FOSTER, et al. Mitchell Thompson, et al. v. Brian Ashley Foster, et al.
• Court: U.S. District Court — District of Maryland

Page 536

341 F.Supp.2d 536

John SCHRAMM, et al. v. Brian Ashley FOSTER, et al.

Mitchell Thompson, et al. v. Brian Ashley Foster, et al.

No. Civ. JFM-02-3442.

No. Civ. JFM-03-2758.

United States District Court, D. Maryland.

August 23, 2004.

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Henry L. Belsky, Schlachman, Belsky and Weiner PA, Baltimore, MD, for Plaintiffs.

Jeffrey Schuyler Getty, Geppert, McMullen, Paye and Getty, Cumberland, MD, for Consolidated Plaintiffs.

Robert T. Franklin, Tamara B. Goorevitz, Franklin and Prokopik PC, Eric R. Harlan, Paul Mark Sandler, Shapiro, Sher, Guinot and Sandler, Baltimore, MD, for Defendant.

OPINION

MOTZ, District Judge.

Plaintiffs John and Marla Schramm, individually and as guardians of Tyler Schramm, and Plaintiffs Mitchell, Biff, and Dorothy Thompson have brought this action against Defendants Brian Ashley Foster, Groff Brothers Trucking, LLC ("Groff Brothers"), and C.H. Robinson Worldwide, Inc. ("Robinson") for personal injuries suffered by Tyler Schramm and Mitchell Thompson in a motor vehicle accident involving a tractor-trailer driven by Foster. Plaintiffs assert state common law claims for negligence, negligent entrustment, and negligent hiring and supervision, and federal claims under the Motor Carrier Act ("MCA") and Federal Motor Carrier Safety Regulations ("FMCSR"). Now pending before the Court are Robinson's motion for summary judgment and plaintiffs' cross motion for partial summary judgment as to the liability of Robinson.

I will deny plaintiffs' motion as to all claims, and I will grant Robinson's motion, except as to plaintiffs' claim for negligent hiring.¹

I. Facts

A.

This case arises out of a catastrophic accident between a passenger vehicle and a tractor-trailer in Allegany County, Maryland. Foster was transporting a load of soy milk from the warehouse of Jasper Products, LLC ("Jasper") in Joplin, Missouri, to White Rose Food Corporation in Cateret, New Jersey. Foster was an employee of Groff Brothers at the time.

On May 2, 2002, Jasper requested that Robinson arrange for transportation of the soy milk. Robinson made contact with Ronald Groff of Groff Brothers, with whom Robinson had a contract carrier agreement, and Groff Brothers accepted the shipment request. Groff then assigned the job to Foster who was one of his drivers.

On May 5, 2002, en route to New Jersey, Foster was traveling eastbound on I-68 in a tractor-trailer when he decided to exit onto Maryland Route 36. Upon reaching the stop sign at the end of the off-ramp, Foster failed to stop or yield the right of way to on-coming traffic and proceeded into the intersection, blocking all southbound lanes on Route 36. Tyler J. Schramm, a minor, was driving southbound in a pick-up truck with Mitchell A. Thompson on Route 36 at the time. Schramm's pick-up truck collided with the tractor-trailer and traveled underneath it until it came to a stop on the other side. The roof of the pick-up truck was severed as it proceeded underneath the tractor-trailer. Foster had been driving in excess of the maximum driving hours allowed by law for operators of property-carrying vehicles.

Schramm suffered neurological damage from which he is not expected to recover. He remains in a semi-vegetative state and suffers from various complications, including seizures, caused by injuries to his brain. As a result of these injuries, Schramm requires assistance with all basic life functions. In addition, Thompson sustained severe and permanent injuries to his head and body.

B.

Robinson describes its business in the following manner:

C.H. Robinson Worldwide, Inc., together with its subsidiaries and affiliates, is a third party logistics "3PL" company that specializes in brokering the shipment of goods via truck, rail, ocean and air. C.H. Robinson does not own transportation equipment (trucks, trains, ships or aircraft), but instead matches shippers together with carriers that do own and operate such equipment so that commercial goods can be moved efficiently from origin to destination. C.H. Robinson and its affiliates operate over 150 branch offices in the United States and abroad. They brokered approximately 2.8 million shipments in 2002 and 3.2 million shipments in 2003. As part of its motor carrier property brokerage operation, C.H. Robinson has brokerage contracts with more than 20,000 licensed motor carriers, whereby the carriers agree to haul loads for shippers through C.H. Robinson. At the same time, C.H. Robinson markets itself to businesses and manufacturers with transportation needs. With a simple phone call or fax to C.H. Robinson, shippers with transportation needs have ready access to available carriers to haul their loads, and carriers with available trucks can find shippers with goods requiring transportation.

(Def.'s Mem. Supp. Summ. J. at 3.)

Plaintiffs assert, and Robinson does not dispute, that third party logistics companies such as Robinson have emerged in the wake of the deregulation of the trucking industry. Prior to deregulation, independent owner operators typically associated themselves with larger carriers who entered into contracts with shippers, either directly or through brokers. Because of the size of their internal networks, the large carriers could provide integrated services to the shippers. Shippers were able to rely upon the large carriers' quality control monitoring of the independent owner operators (incentivized by the carriers' potential liability) and their established processes for handling freight claims.² The carriers also provided excess liability insurance coverage, over and above the required regulatory minimum (presently $750,000) the independent owner operators were required to carry.

Robinson proclaims that it provides such "one point of contact" service to shippers. It maintains what apparently can fairly be described as a "stable" of small carriers who can pick up loads from one of Robinson's shipping clients at a moment's notice. In the event that the cargo is damaged during transit, "we [Robinson] are the ones to write them [the shipper] the check for the damage if we decide that it is a viable claim. They don't go to the trucking company directly. That's one of the points of being a one point of contact." (Birdwell Dep. at 38-39.) Robinson also addresses the issue of personal injury liability in its promotional materials:³

Just as CHRW [Robinson] takes responsibility for freight claims, we also step forward when liability issues arise. We insulate the shipper in three important ways:

1. We work only with carriers who carry full insurance coverage. When CHRW begins to do business with a carrier, we verify their insurance coverage and keep a copy in our files of documents that prove the carrier has Federal Operating Authority and a current insurance certificate, with a minimum of $25,000 and $750,000 auto liability coverage. In addition, we check in with carriers regularly to make sure their coverage is current and renewed at necessary levels.

2. If an accident occurs, the carrier indemnifies both the shipper and CHRW from liability.

3. In the rare event that the damage goes beyond the carrier's insurance limits, CHRW maintains a liability insurance policy that pays the rest.

(Transport Folio Article, Pls.' Mem. Supp. Summ. J. Ex. 27; see also Commercial Umbrella policy Ex. 28.) (Emphasis added).

C.

Groff Brothers entered into a contract carrier agreement with Robinson on January 26, 2001. Prior to that date, Ronald Groff (one of the Groff brothers), doing business as "RG Transportation," had been a carrier in Robinson's stable of carriers. He had entered into a master transportation contract with Robinson on March 18, 1998, and a contract carrier agreement on November 21, 2000. RG Transportation was originally granted motor common carrier authority by the Federal Motor Carrier Safety Administration ("FMSCA") on January 29, 1998. This authority was voluntarily revoked as of March 13, 2002, and was reinstated on August 20, 2002.

Robinson's contract carrier agreement with Groff Brothers (like its agreements with other carriers) required Groff Brothers to have a "Satisfactory" U.S. Department of Transportation rating. However, Groff Brothers did not have such a rating at the time it entered into the agreement with Robinson because it was a new company. Robinson was aware of this fact by virtue of a response Groff Brothers submitted to a Carrier Information Survey sent out by Robinson.

The FMSCA provides information regarding carriers on several websites and internet pages. This information includes "SafeStat," which reports on and rates carriers' safety performance.⁴ "Safety Evaluation Area" values used on this site range from 0 (best) to 100 (worst). According to SafeStat, only SAE ratings of 75 or higher are deemed to be deficient. In September, 2001, Groff Brothers had an SEA rating of 74.00 in the driver safety evaluation area. By March 23, 2002, this rating had decreased to 70.63.

II. Negligence/Respondeat Superior

A.

Plaintiffs argue that Robinson is liable for Foster's negligence under a respondeat superior theory because Foster acted as an agent of Robinson in the transportation of the Jasper load. Under the doctrine of respondeat superior, an employer is vicariously liable for the tortious conduct of his employee or agent when that employee or agent is acting within the scope of the master-servant relationship. Schweizer v. Keating, 150 F.Supp.2d 830, 839 (D.Md.2001); Hunt v. Mercy Med. Ctr., 121 Md.App. 516, 545, 710 A.2d 362 (1998); Kersten v. Van Grack, Axelson & Williamowsky, P.C., 92 Md.App. 466, 469, 608 A.2d 1270 (1992).

An agency relationship "results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." Restatement (Second) of Agency, § 1(1) (1958). An agency relationship may be...