Serna v. Pettey Leach Trucking, Inc.

• Decision Date: 31 July 2003
• Docket Number: No. B157910.,B157910.
• Citation: 2 Cal.Rptr.3d 835,110 Cal.App.4th 1475
• Court: California Court of Appeals Court of Appeals
• Parties: Maria SERNA, et al., Plaintiffs and Appellants, v. PETTEY LEACH TRUCKING, INC., Defendant and Appellant.

2 Cal.Rptr.3d 835

110 Cal.App.4th 1475

Maria SERNA, et al., Plaintiffs and Appellants, v. PETTEY LEACH TRUCKING, INC., Defendant and Appellant.

No. B157910.

Court of Appeal, Second District, Division 1.

July 31, 2003.

Certified for Partial Publication.^*

Review Denied November 19, 2003.

Law Offices of Kumetz & Glick, Stephen Glick, Fred Kumetz, Los Angeles, and Jeffrey A. Levinson, for Plaintiffs and Appellants.

Tharpe & Howell, Paul W. Burke, Los Angeles, and Shawn Elliot, for Defendant and Appellant.

MIRIAM A. VOGEL, J.

In this wrongful death action against an interstate motor carrier, we hold that the carrier, having undertaken an activity which can be lawfully carried on only under a public franchise or authority and which involves possible danger to the public, is liable to the plaintiffs for harm caused by the negligence of the carrier's independent contractor notwithstanding that the carrier's cargo was exempt from certain economic regulations.¹

BACKGROUND

A.

The Surface Transportation Board (formerly the Interstate Commerce Commission) and the Secretary of Transportation enforce the United States Government's transportation policy with regard to transportation by motor carrier (49 U.S.C. § 13101(a)(2)), and the Board has jurisdiction over the transportation of property by motor carrier between a place in one state and a place in another state. (49 U.S.C. § 13501(1)(A).) Although there are several exemptions from this jurisdiction (49 U.S.C. §§ 13502, 13503, 13504, 13505), and although there is a specific statutory exemption for the transportation by motor carrier of agricultural or horticultural commodities, including poultry (49 U.S.C. § 13506(a)(6)(B); Gold Kist, Inc. v. United States (N.D.Ga.1971) 339 F.Supp. 1249, affd. sub nom. Interstate Commerce Commission v. Gold Kist, Inc. (1972) 409 U.S. 808, 93 S.Ct. 106, 34 L.Ed.2d 67),² it is the cargo that is exempt, not the carrier, and the exempt nature of the commodity has no bearing on the application of financial responsibility and safety regulations adopted by the Surface Transportation Board. (49 C.F.R. § 390.5 ["Exempt motor carrier means a person engaged in transportation exempt from economic regulation by the Federal Motor Carrier Safety Administration ... under 49 U.S.C. [§ ] 13506. `Exempt motor carriers' are subject to the [Federal Motor Carrier] safety regulations"]; Century Indem. Co. v. Carlson (8th Cir.1998) 133 F.3d 591, 600 [safety regulations govern trucks, and exemptions apply only to cargo]; Royal Indem. Co. v. Jacobsen (D.Utah 1994) 863 F.Supp. 1537, 1541-1542; Braden v. Turner (E.D.Tenn.1968) 284 F.Supp. 379; Dallum v. Farmers Co-operative Trucking Ass'n (D.Minn.1942) 46 F.Supp. 785, 787.)³

B.

In November 1999, in Georgia, Harrison Poultry, Inc. asked Pettey Leach Trucking, Inc. (PLT) to arrange transportation to California for a load of frozen poultry. PLT agreed, and Harrison Poultry issued a bill of lading in which PLT was identified as the "carrier." PLT arranged for Sky Transportation, Inc. to pick up the poultry, which it did (the bill of lading was signed by a driver employed by Sky and driving a truck registered to Sky). When it reached California on December 2, the truck negligently collided with a motorcycle driven by Juan Manuel Serna, killing Serna. Serna's widow and children (collectively Serna) sued Sky and the truck driver (but not PLT) for wrongful death damages and settled that action for about $1 million (Serna I). Serna then filed this action (Serna II) against PLT, claiming PLT is vicariously liable for Sky's negligence.⁴ PLT answered, alleging as an affirmative defense that it was acting as a broker, not a carrier.⁵

C.

At PLT's request, the trial court tried PLT's affirmative defense first and without a jury. At the conclusion of Serna's evidence, PLT moved for nonsuit and the motion was granted, the trial court finding (as Serna claimed) that PLT was acting as a carrier, not as a broker, and finding on undisputed evidence (as PLT claimed) that Sky was an independent contractor, but then concluding as a matter of law that PLT was not vicariously liable for Sky's negligence.

The court reasoned thus: The truck involved in this accident was (by stipulation) a commercial motor vehicle within the meaning of the National Traffic and Motor Vehicle Safety Act (49 U.S.C. § 31101; see also id. § 13102(12); 49 C.F.R. § 390.5 (2003)) and ordinarily would have been subject to the Surface Transportation Board's registration and permit requirements (49 U.S.C. §§ 13101-16106). But because this truck was transporting frozen poultry, it was exempt from the Act's registration and permit requirements (49 U.S.C. § 13506(a)(6)(B); Gold Kist, Inc. v. United States, supra, 339 F.Supp. 1249) and, therefore, not (at the time of the accident) "`carrying on an activity which can be lawfully carried on only under a franchise granted by public authority'" within the meaning of Eli v. Murphy (1952) 39 Cal.2d 598, 599, fn. *, 248 P.2d 756, and Gamboa v. Conti Trucking, Inc. (1993) 19 Cal.App.4th 663, 666, fn. 3, 23 Cal.Rptr.2d 564. Hence, said the trial court, PLT is not liable for the negligence of Sky, an independent contractor. (Millsap v. Federal Express Corp. (1991) 227 Cal.App.3d 425, 433-135, 277 Cal.Rptr. 807; Fonseca v. County of Orange (1972) 28 Cal.App.3d 361, 365, 104 Cal.Rptr. 566.)⁶

Judgment was entered in favor of PLT. Serna appeals, and PLT has filed a protective cross-appeal.

DISCUSSION

I.

The essence of Serna's primary claim is that "exempt" and "unregulated" are not synonymous, that the frozen poultry exemption does not leave PLT unregulated by a statutory scheme enacted for the protection of the public, and that PLT was at the time of the accident carrying on an activity (1) which could be lawfully conducted only under a public franchise or authority and (2) which involved an unreasonable risk of harm to others. It follows according to Serna, that PLT is vicariously liable for the torts of Sky, its independent contractor. We agree, and therefore do not reach Serna's other claims of error.

A.

Taylor v. Oakland Scavenger Co.

The seminal California case is Taylor v. Oakland Scavenger Co. (1941) 17 Cal.2d 594, 110 P.2d 1044. In Taylor, a garbage truck struck a high school student on the school's premises. The student sued the truck's driver, the truck's owner, the school district, and Oakland Scavenger Company, a garbage collector working under a contract with the City of Oakland. On Oakland Scavenger's appeal following a verdict in favor of the plaintiff, Oakland Scavenger claimed it was not liable for the driver's negligence because the truck's owner was an independent contractor over whom Oakland Scavenger exercised little supervision or control. (Id. at p. 603, 110 P.2d 1044.) The Supreme Court disagreed:

"An employer is generally liable for negligent acts of an employee performed within the scope of employment, but if an independent contractor rather than master and servant relationship exists, the independent contractor usually is alone liable for his negligent acts. If, however, an individual or corporation undertakes to carry on an activity involving possible danger to the public under a license or franchise granted by public authority subject to certain obligations or liabilities imposed by the public authority, these liabilities may not be evaded by delegating performance to an independent contractor. The original contractor remains subject to liability for harm caused by the negligence of the independent contractor employed to do the work." (Taylor v. Oakland Scavenger Co., supra, 17 Cal.2d at p. 604, 110 P.2d 1044, emphasis added.)

Gaskill v. Calaveras Cement Co.

In Gaskill v. Calaveras Cement Co. (1951) 102 Cal.App.2d 120, 226 P.2d 633, the Court of Appeal refused to apply the rule announced in Taylor to a defendant who was not operating under a franchise. According to Gaskill, the Taylor rule "is principally applicable to public service corporations, which, as such, are permitted by their franchises to use instrumentalities which are peculiarly dangerous unless carefully operated, and ... the rule ... does not apply to the carrying on of activities which involve no special danger and which can be lawfully carried on by private persons without liability for the misconduct of the contractors to whom they are entrusted." (Id. at p. 125, 226 P.2d 633.)

Eli v. Murphy

The rule articulated in Taylor was reaffirmed by the Supreme Court in Eli v. Murphy, supra, 39 Cal.2d 598, 248 P.2d 756.⁷ In Eli, the plaintiffs were injured when their car was struck by a tractor and semitrailer driven and owned by the Murphys and used to transport freight under a contract between the Murphys and C.M.T., a highway common carrier licensed by the California Public Utilities Commission (PUC). (Id. at p. 598, 248 P.2d 756.) On C.M.T.'s appeal following a verdict in favor of the plaintiffs, the Supreme Court agreed with the plaintiffs that "under both the common law and certain regulations of the [PUC], C.M.T., as a highway common carrier, could not delegate its duties to an independent contractor so as to escape liability for their negligent performance." (Id. at p. 599, 248 P.2d 756.)

"The common law principle upon which plaintiffs rely has been enunciated in section 428 of the Restatement of Torts,[ ] and has frequently been applied to impose liability upon franchised common carriers who have engaged independent contractors to transport goods over the public highways. [Citations.] We have concluded that it is applicable here. [¶] C.M.T., operating as a highway common carrier, is engaged in a `business attended with very considerable risk' [citations], and the Legislature has subjected it and similar carriers to the full regulatory power of the [PUC] to protect the safety of the general public. [Citations.] The effectiveness of safety regulations is necessarily impaired if a carrier conducts its business by engaging...