Bits & Pieces

Volume 20, Edition 10

Happy Halloween everyone!  This has been an interesting fall and we were happy to get to meet up with so many people at the MCIEF meeting in Orlando and the NTHECC in San Diego.  Thank you all for your continued support and your great suggestions on ways to use CAB to enhance your business.

Just a reminder that the IMUA has a seminar this Thursday, November 2, 2017 on  the Unique and Dangerous Trucking Exposures in “Commercial Auto Physical Damage, MTC Trailer Interchange, and Towing & Storage Expenses.”  This is for claims and underwriting.   You can attend remotely or on site in New York.  Interested?  Check it out here.

Thanks to a suggestion from Tim Kelly at Sentry Insurance Company (thanks Tim) we are going to start monitoring reported jury verdicts and settlements involving trucking companies. (nothing this month to report) If you are aware of the resolution of any litigation through trial or reported settlement please let us know. It is important for the industry to be aware of the judicial decisions but also the settlement numbers.

DOT REGULATION REVIEW – We can expect some changes in current proposed DOT regulations.  As you recall all impending regulations were frozen after President Trump took office.  The DOT has announced that it will start its review of all regulations.  They will be evaluating regulations to determine if they are still necessary, are effective and whether they burden the development or use of energy resources.   Regulations to be reviewed include the ELD mandate; NHTSA’s greenhouse gas Phase 2 regulation; the final rule on the drug and alcohol clearinghouse, and driver training regulations.

DOES THE PARKING SHORTAGE CAUSE CRASHES? – A recent study released by Oregon State University concludes that, at least in Oregon, the parking shortage may cause crashes and that reductions in speed can increase the problem. The study concluded that reducing average truck speed to 50 mph can lead to an 11 percent increase in the shortage at rest areas and a 14 percent increase at truck stops while reducing the average speed to 45 mph results in a 21 percent increase in parking shortages at rest areas and a 28 percent increase at truck stops. They analyzed the hot spot areas and found that most crashes are near a parking location. After 7 years of data collection on accidents in a certain venue the OSU College of Engineering found that at-fault truck crashes resulted in approximately $75 million of “crash harm.”

AUTONOMOUS VEHICLES – This seems to be one the hottest topics this year.  The Senate Committee on Commerce, Science and Transportation has sent the AV START Act to the Senate floor to start moving toward regulation of this exciting new world.  The Act exempts large commercial vehicles but it may not be far behind. In other news, the American Trucking Associations has unanimously approved its first-ever policy for the development of automated trucks. It is divided into 8 key points – Safety, Flow of Interstate Commerce, Federal Preemption and State’s Rights, Uniform State Laws, Infrastructure and Connectivity, Public Education and Maintainability.

Key points outlined in the new policy include:

* The trucking industry, led by ATA, should invest in coalition building with government, academia, research institutions, and private sector to demonstrate the rising level of safety related to automated and connected vehicle technology.

* Demonstrations of automated trucks are needed to provide data to establish safety and other benefits of this technology. Initial data generated by technology developers, based on their safety and validation testing, will be valuable.

* Government regulators and lawmakers should revise or remove outdated safety-related laws, regulations, and guidance as data demonstrates a technology’s ability to provide an equivalent or higher level of safety than current regulations support or incorporate.

* As automated truck technology is developed, tested, and commercialized, it is critical that federal, state and local laws do not create disparities that limit commerce and obstruct the successful adoption of these potentially safety- and productivity-boosting technologies.

* Conflicting or duplicative requirements among Federal and State agencies will create roadblocks to deployment of automated technology, delaying the safety benefits, fuel savings, emissions reductions, and potential efficiency improvements to our country’s transportation system. When conflicts arise between federal and state regulations, the federal government must take a clear leadership role and, if necessary, exercise federal preemption.

* States should commit to ensuring a unified national framework to facilitate the development, testing, and deployment of commercialized automated and connected truck technology, including further harmonization of state-level traffic and vehicle rules affecting the operation of such technology.

*  Federal and State laws and regulations should neither require, nor limit differing levels of automation. The trucking industry, when given a choice, will deploy technologies that are best suited for individual business needs. Carriers will increasingly adopt proven levels of automation in the interest of safety and productivity.

* Investments in infrastructure such as repairing, maintaining, and improving pavement, lane markings, and signs, as well as intelligent transportation systems (ITS) technology, will benefit both automated and conventional vehicles.

TRAFFIC FATALITIES – The NHTSA released the report of official traffic fatalities for 2016. A total of 37,461 people were fatally injured in 2016, an increase of 5.6%. Vehicle miles traveled increased by 2.2 percent to 3.16 trillion miles. There were 1.18 deaths per 100 vehicle miles. Distracted driving and sleepy driving fatalities dropped. Unbelted deaths increased by 4.6 percent, speeding-related deaths up by 4 percent, and drunk driving fatalities increased by 1.7 percent. There were 4,317 fatalities in crashes involving large trucks, 5.4 percent more fatalities than in 2015, the highest since 2007. However, large truck crash deaths accounted for less than 12 percent of all traffic fatalities. You can download the overview of the report here.

TOP TRUCKING CONCERNS – The ATRI annual report on the top concerns in the trucking industry was released this month.  The report is based upon 1,600 survey responses. The following is ATRI’s top 10 list for 2017:

Driver shortage
ELD mandate
Hours of service
Truck parking
Driver retention
Cumulative economic impact of trucking regulations
Driver distraction
Transportation infrastructure/congestion/funding
Driver health and wellness

OPERATIONAL COSTS OF TRUCKING – The ATRI also released its annual report on the operation costs associated with operating a trucking company.  The average cost per mile is $1.59 per mile.  There was a decline in fuel costs but an increase in driver wages and benefits.  Insurance premiums increased 1% to 7.5 cents per mile. But specialized carriers were higher, as much as 9 cents a mile. Carriers operating fewer than 100 power units reported the highest insurance CPM, while the largest fleet operators reported substantially lower costs of 4.4 cents per mile.



The District Court in Colorado refused to remand a coverage dispute to state court.  In an interesting turn of events the Court held that when the coverage action turned on the applicability of the MCS-90, even where there was no judgment against the motor carrier, the Court would have jurisdiction under federal law.  Even without federal question jurisdiction, the Court indicated that it would keep the case because adding the motor carrier to the suit, which would defeat diversity, was unnecessary. (Pacheco v.  Sparta Insurance Co.,  2017 WL 4296661)

The Western District of Pennsylvania granted summary judgment to one insurer it a coverage action against a second insurer.  The Court concluded that the defendant had a duty to defend a motor carrier in a personal injury action and that it breached its duty to the motor carrier.  The court ruled that the defendant owed contribution to the insurer who had provided the defense. The Court held that it was possible under the allegations contained in the Amended Complaint that a trucker had “borrow[ed]” a vehicle so as to trigger coverage under the terms of the Truckers Endorsement provision of the Policy.  (Great West Casualty Company v. Selective Insurance Company, 2017 WL 4386817)

When the complaint does not allege a demand for a specific sum of money, and the case is removed to federal court, the defendant bears the burden of establishing that the jurisdictional minimum of $75,000 was met.  The Southern District in Alabama held that the defendant, who was involved in a two-truck accident, had not established that the damages claimed by plaintiff were under limit and, on its own motion, sent the case back to the state court. (Thompson v. Ortensie, U.S. Dist. Lexis 174959)

A motor carrier who had sold a vehicle to another motor carrier, which was still being paid off and remained titled to the seller, was not liable for a truck accident involving the buyer.  The Western District of Louisiana confirmed that the conditional nature of the sale did not render the plaintiff liable for the actions of the buyer absent evidence that it was operating the vehicle.   (Young v. Waller, 2017 U.S. Dist. LEXIS 173392)

What are the minimum limits of insurance required when the shipment is intrastate non-hazardous but the carrier also has interstate authority?  The Middle District of Florida held that an insurer was entitled to assert the application of a non-reported driver endorsement which limited coverage to the statutory minimum.  In this case the applicable minimum was the state limit of $300,000 and not the interstate limit of $750,000. (National Independent Truckers Insurance Co. v. Mathieu, 2017 WL 4785455)


Procedures are important.  When all of the parties in an action for a large cargo loss, pending in the District Court in Nebraska, filed summary judgment motions, the Court noted that the motions were filed before an amended complaint was filed and joined.  The Court concluded that all of the motions were moot as they addressed a pleading, the original complaint, which was mooted by the amended complaint.  Looks like everyone has to start anew and costs will continue to accrue.  (Certain Underwriters v Southern Pride, 2017 WL 4325726)

A provision in an ocean bill of lading which exonerated the steamship line for any damage when a container temperature malfunctioned when it was not in its possession (i.e while it was being trucked to final destination) was held valid in the Southern District of New York.  (Lamex Agrifoods, Inc. v. MSC Mediterranean Shipping, 2017 U.S. Dist. Lexis  175211)

Two months in a row for contingent cargo cases!  This time the Northern District of Illinois upheld the sub-limit under a contingent cargo policy for imposter thefts. The insured had argued that an endorsement which provided additional limits for a specific shipper trumped the sub-limit and the Court disagreed.  The Court did allow the suit to continue against the insurance agent for alleged negligent misrepresentation as to the extent of the coverage afforded by the endorsement.  (J&A Freight Systems v. Travelers Property & Casualty Co., 2017 U.S. Dist. LEXIS 158354)

Rejecting a shipment without a full analysis of the damages was a problem for one plaintiff in the Northern District of Illinois.  While the motor carrier was not permitted to rely on a ‘no touch policy’ to defeat all liability, the Court held that the plaintiff could not sustain its burden of proof as to the entire load when the evidence only showed that 5 pieces were damaged.  The Court also held that the plaintiff was only entitled to recover the cost of the five damaged pieces.  (Carrier Services Group v Schneider Logistics, 2017 WL 4271872)

The Southern District of New York denied both parties’ motions for summary judgment in a temperature abuse cargo case.  Strawberries were rejected at destination and the motor carrier claimed there was no reefer problem. The Court held that there were questions of fact as to the conditions of the strawberries at origin and whether the shipper took certain acts which resulted in the impact to the strawberries in transit. The case was sent to trial.  (Capital Logistics v. Gray Transportation, 2017 U.S. Dist. Lexis 174805)

The validity of a broker’s claim against a motor carrier was once again addressed in the Middle District of Tennessee. The Court held that the broker could sue the motor carrier, provided the broker had paid the claim and had an assignment from the customer. The Court further held that the downstream carrier was not subject to jurisdiction in Tennessee simply because it had the DOT required BOC-3 designated agent for service of process.  Finally the Court dismissed all of the insurer defendants as there was no recognized direct action on a liability policy in Tennessee without a judgement against the insured.  (Western Express v. Villaneuva, 2017 WL 4785831)

But over in the Eastern District in Missouri the Court remanded a case brought by a broker, which was removed by a motor carrier under the Carmack Amendment. The Court held that the indemnity claim under the broker carrier contract was not subject to Carmack and concluded that it was a state law breach of contract claim and that no assignment by the cargo owner was needed.  The case was sent back to state court.  (Mid-America Freight Logistics v.   Walters Trucking, 2017 WL 4778570)

In another removal action, the District Court in Minnesota held that the motor carrier could not prove the $10,000 damage requirement for removal of a Carmack claim by including potential damages in addition to the damages pled by the plaintiff.  Back the case went to state court. (Kaiser v. Fed Ex Cargo, 2017 U.S. Dist. LEXIS 166692)

A co-defendant filed a cross-claim against an interstate carrier under a theory of negligence.  The Eastern District in North Carolina concluded that because the codefendant was not the shipper or named on the bill of lading it was not subject to the Carmack Amendment preemption and denied a motion to dismiss. (PCX Holding v. Guy M. Turner, 2017 WL 4707017)


The Court of Appeals in Michigan addressed the priority of coverage under Michigan law.  The plaintiff was an owner operator operating under agreement with a motor carrier.  The Court held as the vehicle was under lease for more than 30 days the motor carrier’s insurer had the highest priority for PIP coverage.  (Marokay v. Total Heath Rehab., 2017 WL 4700030)

Hope you all get a treat for Halloween!

Volume 20, Edition 9

What a month.  Our hearts go out to all of those who have been impacted by the hurricanes.  The trucking industry was also focused on post storm events as rules were waived to permit the trucking industry to help facilitate getting supplies to those in hard hit areas.  It is a great industry that always comes to the help of those in need.  They should be proud of themselves. We thank them and all of our fellow citizens who go above and beyond to help those in need.

I had the opportunity to attend the public session on the NSA study of CSA in Washington this month.  Anyone interested in the report can download a copy of the report here.  It was an interesting meeting as various stakeholders presented their views on the pros and cons of CSA and ways to make the system better.  We expect changes in the program in the future and will, as always, stay on top of those changes which will impact you.

I have gotten the attendee list of those currently registered at the MCIEF and I am looking forward to meeting old friends and getting acquainted with many more.  I will be presenting a session on cargo liability and cargo insurer.  Come on by and join the session as we plan an interactive session with all.

This month we report:

AAA REPORT – The AAA Foundation for Traffic Safety released a 15 month study titled Leveraging Large Truck Technology and Engineering to Realize Safety Gains. AAA notes that large trucks with gross vehicle weight rating of more than 10,000 pounds drove approximately 280 billion miles on U.S. roads in 2015 and were involved in a total of over 400,000 crashes, which resulted in 116,000 injuries and 4,067 deaths.   The report focuses on advances in vehicle safety technology which will assist in reducing crashes including braking systems designed to shorten a truck’s stopping distance, systems that warn the driver if the truck begins to drift out of its lane, and systems that can detect when a crash is imminent and automatically apply the brakes if the driver fails to do so. The studies fact sheet can be viewed here.

UCR RULEMAKING – The FMCSA has published its proposed rule to reduce UCR fees. The fees would be reduced below the current level by approximately 9.10 percent. For the 2019 registration year and beyond, the fees would be reduced below the current level by approximately 4.55 percent. The fees for brokers and leasing companies are currently $76 per entity, but the proposal would reduce the fees to $69 and $73 per entity, respectively, in 2018 and 2019.  You can view the rulemaking here.

ELECTRONIC LOGGING DEVICES – We have been reporting on the efforts to delay implementation of the ELD mandate.  The efforts appear to have failed. An amendment that would have delayed the ELD mandate has failed in the U.S. House of Representatives by a vote of 173 to 246.The DOT appropriations bill still contains an active provision that would delay the ELD deadline for livestock haulers only.

TRUCK PLATOONING – The Federal Highway Administration conducted a two day demonstration of three-truck platoons .  This was the result of a four-year research project to test the effectiveness of state-of-the-art driving and communications technologies. Truck platooning uses vehicle-to-vehicle communications technology to allow trucks to follow each other more closely – at about one second apart – and travel in a more coordinated fashion. They are now using Cooperative Adaptive Cruise Control (CACC) technology. CACC adds vehicle-to-vehicle communications to the adaptive cruise control capability now available in new vehicles. This connectivity allows trucks to operate more smoothly as a unit, reducing and controlling the gaps between vehicles. Federal officials expect truck platooning to dramatically enhance highway mobility as freight numbers rise.

MC NUMBERS – For a while we were reporting on the fact that the Uniform Registration System would do away with MC numbers. The URS was suspended after its initial start date and MC numbers continued to be issued pending reactivation of the system.  It appears that MC numbers are expected to continue to be used as the FMCSA has announced that the 6 digit number will increase to 8 digits next year to allow more numbers to be released.

AUTOMATIVE DRIVING SYSTEMS – The DOT and the NHTSA released new federal guidance for Automated Driving Systems (ADS):  A Vision for Safety 2.0. This is the latest guidance for automated driving systems to industry and states. Specifically, the new Voluntary Guidance:

* Focuses on SAE International Levels of Automation 3-5 – Automated Driving Systems (ADSs) – Conditional, High, and Full Automation);

* Clarifies the guidance process and that entities do not need to wait to test or deploy their ADSs;

* Revises unnecessary design elements from the safety self-assessment;

* Aligns Federal Guidance with the latest developments and industry terminology; and

* Clarifies Federal and State roles going forward.

The Guidance and more information on automated vehicles can be found here.



In the District Court in New Mexico the Court held that a plaintiff failed to comply with the claim filing requirements under the Carmack Amendment. The Court held that the many letters to the motor carrier and its insurer were insufficient when a determinable amount of money was never demanded by the claimant.  The fact that the motor carrier had started an investigation did not preclude the motor carrier from asserting the claim requirement. The Court also preempted all other state law claims. (Kellogg v. Wheaton Van Lines, 2017 WL 3881417)

What happens when a driver expresses concern about the loading of a shipment but takes it anyway?  The Eastern District in Pennsylvania held that the motor carrier could not rely on a “shipper’s act” defense when the driver was aware of the problem and should have taken additional steps to protect the cargo.  The Court further concluded, unlike the above case, that a multitude of documents, when taken together supported compliance with the claim filing requirements under the bill of lading.  The Court held that there also remained questions of fact as to whether there was a limitation of liability available to the motor carrier. (Alterra American Ins. Co. v. Daily Express, 2017 WL 3891960)

We do not see many coverage cases dealing with cargo insurance.  This month a cargo insurer was successful in declining coverage for an insurer who voluntarily paid a claim that the insurer disputed.  In the Middle District in Tennessee a motor carrier sought recovery for payments it made to a customer who rejected a shipment which was delivered outside required temp but which was held by the USDA to be undamaged. The Court held that when the policy covered the insured’s legal liability a voluntary payment would not suffice to establish coverage when there was a potential defense to the claim.  The Court also held that assumed liability under a transportation contract would not be covered when the main policy excluded liability assumed under contract. (Dark Horse Express, Inc. v Lancer Insurance Co., 2017 WL 3977692)

Shipments which arrive outside required temperature, but not necessarily damaged, are a constant problem for motor carriers. The District Court in New Jersey held that a motor carrier who paid the claim to the cargo owner was entitled to recover from the carrier upon whose line the loss occurred for the payments it made.  The Court also held that the plaintiff was entitled to recover storage, inspection and disposal costs too.  (Mecca & Sons Trucking Corp. v. White Arrow, Inc., 2017 WL 3981134)

A broker’s effort to have a complaint for cargo loss dismissed was denied in the District of New Jersey. The Court held that the allegations that the broker acted as a carrier would withstand a motion to dismiss.  The Court also held that ICCTA and FAAAA did not preempt a cause of action for breach of contract.  (Hartford Fire Insurance Co. v. Dynamic Worldwide Logistics, 2017 WL 3868702)

In a different case the same Court held that ICCTA and FAAAA did preempt an unjust enrichment claim and a claim arising from breach of contract.  It also dismissed all state law negligence claims asserted by plaintiff.  (Mrs. Ressler’s Food Products v. KZY Logistics, 2017 WL 3868703)

Even when the plaintiff settles with an originating carrier it is still permitted to seek the balance from a delivering carrier.  The Western District in North Carolina entered a judgment on default against the delivering carrier, with interest.  (B&W Fiber Glass, Inc. v. Kerns Trucking, Inc., 2017 WL 3741977)

I am excited to see a case on a contingent cargo policy.  The Northern District of Illinois held that a contingent cargo insurer was not obligated to pay a claim in full when the underlying motor carrier’s insurance policy had a sub-limit for specified commodities.   While the insurer was required to pay the sub-limit, which had not been accepted from the motor carrier’s insurer, it was the determination that additional limits were not triggered simply because the motor carriers overall policy limit was higher which is important to underwriters and claims alike.  (MGN Logistics v. Travelers Property Casualty Company of America, 2017 WL 3270280)


The Western District of Kentucky held that the 2 year suit clause in a policy for uninsured motorist coverage would not be enforced against the insured who was seeking recovery more than 2 years after the loss.  The Court held that the clause was invalid because it did not grant the insured the same right as it would have against another party.  In other words the suit clause cannot allow for a period less than the insured would have had against the tortfeasor. (Acuity Insurance Co. v. Decker, 2017 WL 3710805)

A motor carrier was not charged with spoliation of evidence when it failed to keep the video recording from the truck even though it may have captured the accident.  The Eastern District in Louisiana held that it would not impose severe penalties on the trucking company when there were issues as to whether there was even going to be a litigation at the time it was lost.  The simple absence of the camera and the video was not enough to allow for a spoliation claim.  (Wright v National Interstate Ins. Co., 2017 WL 4011206)

The same result happened in the Northern District of Alabama when the Court would not grant harsh spoliation sanctions when a trucker failed to keep downloaded information on the truck at the time of the accident, but agreed that it would instruct the jury that the trucker elected to not secure the information when its protocol generally required it to.  The Court did dismiss claims for wantonness, negligent hiring entrustment, training and supervision, allowing the remaining causes of action and asserted defenses to proceed. (Barry v Big M Transportation, 2017 WL 3980549)

A shipper was not entitled to summary judgment when it was sued for personal injuries caused when cargo it loaded spilled from the motor carrier’s vehicle, causing injury to the plaintiff.  The Appellate Court in Texas held that a shipper could not avoid its obligation to third parties by pointing to the fact that the federal regulations required that the motor carrier make sure that cargo was safely loaded.  (Bujnoch v. National Oilwell Vacaro, 2017 WL 4197451)

A truck driver was not permitted  to recover against a consignee when she was injured unloading freight in ice and snow  The Court held that the consignee owed no duty to the driver to make sure that the location was free of ice and snow.  (Flook v, The TJX Companies, 2017 WL 4099753)

Over in the Court of Appeals in Texas the Court upheld the entry of judgment in favor of a trucking company when a plaintiff was unable to establish that the trucking company was responsible for a subcontractor twice removed from the transport. The Court held that the plaintiff failed to present sufficient evidence that the defendant exercised control over the driver.  (Elvir v. Brazos Paving, 2017 WL 3769015)

Despite the fact that a complaint alleged that the truck driver was operating a tractor which was attached to a motor carrier’s trailer and further alleged that he was the agent of the trucking company defendant, the Central District of Illinois held that the NTL insurer would not be entitled to a judgment that it was not obligated to defend the defendant.  The Court held that certain allegations made it unclear that there was no chance of coverage and with a duty to defend greater than a duty to indemnify judgment on the pleadings was not warranted.  (Great West Casualty Insurance Co. v. Ross Wilson Trucking, 2017 WL 3835699)

A plaintiff was successful in keeping a personal injury action in his selected forum when the Court concluded that the trucking company, as a result of its interstate operations, would be deemed to have sufficient contacts with the venue to establish personal jurisdiction.  With personal jurisdiction over the defendant venue was determined to be proper in the Eastern District of Pennsylvania.  (McMahon v. Arsenberger Trucking Co., 2017 WL  3740643)

The 5th Circuit Court of Appeals reversed a Trial Court’s decision to grant summary judgment on causes of action which were not part of the original motion When the plaintiff failed to file opposition to a trucker’s motion to dismiss negligent hiring, retention, entrustment training causes of action the Court determined that it would also dismiss the simple negligence and respondeat superior claim. The Appellate Court held that it was unwarranted and that plaintiff should be given a chance to submit evidence on the issue, sending the case back down for further proceedings. (Fret v. Melton Truck Lines, 2017 WL 3841581)


An insurer was granted summary judgment in a bad faith action filed by an employee who had been granted workers compensation benefit, but apparently not quick enough.  The District Court in Arizona held that the insurer did not act in bad faith in undertaking an investigation into the claim. The Court held that the insurer’s actions throughout the investigation was proper and founded.  (Roman v. Berkshire Hathaway Homestate Insurance Co., 2017 WL 3896291)

The Appellate Court in Illinois upheld the Worker’s Compensation Board‘s determination that all of a truck driver’s injuries were not casually related to an event during the unloading of cargo.  The Court held that an injury arises out of and in the course of employment where the origin of the injury is somehow connected or incidental to the employment. The aggravation or exacerbation of a preexisting condition will be enough to establish a causal connection between a claimant’s current condition and his employment.  (Garderewicz v Illinois Worker’s Compensation Commission, 2017 Ill App (1st) 161303 WC-U)

The Commonwealth of Pennsylvania held that the Worker’s Commission Board was not in error when it afforded full temporary benefits to a truck driver while he delayed treatment for the work related injury because he was undergoing chemotherapy. The Court agreed that the employment injury was also a substantial part of the disability and justified the payment. (Arms Trucking Company v, Worker’s Compensation Appeal Board 2017 WL 3597263)

See you next month!  Happy Halloween – Hope you get a treat and not a trick


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