Brian Bassett and Phil Brandt Prevail On Appeal In Uninsured Motorist Coverage Dispute

On Friday, May 24, 2019, the Illinois Appellate Court, First District, affirmed a summary judgment ruling in favor of an insurance carrier that a police officer injured during a traffic stop was not “using” his police cruiser for liability coverage purposes, nor was he “occupying” the vehicle for uninsured motorist coverage. Traub Lieberman Straus & Shrewsbury Partner Brian Bassett represented the carrier in the circuit court and was assisted by associate Philip Brandt in the appellate court.

The plaintiff, a police officer for the City of Zion, filed a lawsuit against the carrier, which had issued a business auto policy to the municipality. During a traffic stop, the plaintiff parked his police cruiser behind another police cruiser at the scene in a manner to protect other officers already engaged in the traffic stop. The plaintiff exited his cruiser, passed the cruiser parked in front of him, and stood behind the stopped vehicle to serve as a cover officer. There, he noticed through the back window the suspect driver beginning to place the vehicle in gear. He ran toward the driver’s side of the stopped vehicle to pull the officer questioning the suspect driver out of the way. The driver struck the plaintiff as he drove off. When the Zion police apprehended the driver, they discovered the driver did not have insurance covering the vehicle. The plaintiff sought to recover under the carrier’s uninsured motorist provision, but was denied coverage because he was not “occupying” the police cruiser at the time he was injured as required to qualify as an insured under that provision.

The plaintiff argued, in part, that he qualified as a “user” of the police cruiser because he was “using” the police cruiser during the traffic stop to create a safety bubble or zone to shield him and others at the scene from both potential cars approaching from behind and also potential gunfire. The appellate court rejected this argument explaining that “use” of a motor vehicle for liability coverage purposes must be “rationally connected to the purpose of providing transportation or satisfying some other related need of the user.” The appellate court disagreed with plaintiff that using the cruiser as a shield was not a use connected to transportation or a related need.

The appellate court also rejected plaintiff’s argument that he was “occupying” the police cruiser during the traffic stop. The court explained that while it was questionable that the police officer had a “nexus” to the cruiser, he was not in “virtual contact” with the cruiser. In concluding there was no virtual contact, the appellate court considered that the plaintiff was 20-25 feet away from his cruiser at the time of his injuries and was out of the vehicle for approximately 30 seconds. As the plaintiff was unable to establish at least the “virtual contact” requirement to show he was “occupying” the police cruiser for uninsured motorist coverage purposes, the appellate court held that the circuit court properly granted summary judgment in favor of the carrier.

The decision is Arrington v. Certain Underwriters At Lloyds, London, Subscribing to Policy No.: BGA 300036-02, 2019 IL App (1st) 182345-U.

New York State to Enforce the Federal Electronic Logging Device (ELD) Rule for Drivers of Commercial Vehicles

By Jessica L. Lentini

The United States Department of Transportation, Federal Motor Carrier Safety Administration, developed hours-of-service (HOS) regulations which dictate when and how long an individual may drive a commercial vehicle. For purposes of the HOS regulations, commercial vehicle is defined as a truck or tractor-trailer involved in interstate commerce that: (i) weighs 10,001 pounds or more, (ii) has a gross vehicle weight rating or gross combination weight rating of 10,001 pounds or more, or (iii) is transporting hazardous materials of certain quantities.

The HOS regulations restrict drivers of commercial vehicles in at least three ways. First, the “14-hour Driving Window Limit” provides drivers a period of fourteen consecutive hours in which to drive after being off duty for at least ten consecutive hours. At the end of a fourteen-consecutive-hour period, a driver cannot drive again until he or she has been off duty for ten consecutive hours. Second, the “11-Hour Driving Limit” prohibits a driver from driving for more than eleven total hours. After driving for eleven hours, a driver must be off duty for ten consecutive hours before her or she is permitted to drive again. In conjunction with the 14-hour Driving Window Limit, a driver who drives eleven total hours must do so within the fourteen consecutive hour limit. Third, the “60/70-Hour Duty Limit” prevents drivers of commercial vehicles from driving more than sixty hours during seven consecutive days, or more than seventy hours during eight consecutive days, depending on a variety of other factors.

These regulations were designed to keep the roadways safe for motorists by preventing drivers of commercial vehicles from operating trucks and tractor-trailers while fatigued. Drivers of commercial vehicles must track their hours of service in a daily log referred to as a “record of duty status.” In 2017, the federal government began enforcing the Electronic Logging Device (ELD) Rule to make it easier and faster for driver’s to accurately track, record, manage and share their hours of service and records of duty status. Prior to the ELD Rule, drivers of commercial vehicles logged their hours manually, on paper, or using automated onboard recording devices.

Electronic logging devices are plugged into a commercial vehicle’s engine control module to track things like whether the vehicle’s engine is running, the vehicle’s odometer, and the vehicle’s GPS location. These devices make it more difficult for drivers to falsify their records of duty status, which occurred frequently when drivers kept manual logs.

States were instructed to incorporate the federal ELD mandate into their own laws after the federal law took effect in 2017. In 2018, the Owner-Operator Independent Drivers Association and other plaintiffs brought suit in the New York Supreme Court against the Acting New York State Commissioner of Transportation, the Superintendent of the New York State Division of State Police, and the Executive Deputy Commissioner for the New York State Department of Motor Vehicles to restrain New York officials from enforcing the federal ELD Rule while lacking a similar, state-level law. 93 N.Y.S. 3d 802 (2018).

Interestingly, the Court found that the State of New York had not been enforcing the federal ELD Rule. Drivers of commercial vehicles were not being stopped, cited, or placed out of service pursuant to the law. On December 31, 2018, the Court dismissed the plaintiffs’ complaint on these grounds.

The New York State Department of Transportation has since announced that state inspectors will enforce the ELD Rule in compliance with federal regulation and implement the federal mandate into state law.

Many drivers of commercial vehicles believe the ELD Rule hinders their ability to complete deliveries on time and triggers reckless driving. In 2014, however, the Federal Motor Carrier Safety Administration estimated ELDs could prevent up to 1,714 motor vehicle accidents, 522 injuries, and 24 deaths each year.

Are Taxi Drivers Independent Contractors? New Jersey Court Finds Cab Driver Qualifies for Worker’s Compensation Benefits

By Ralph Cretella

In a recent New Jersey Appellate Division matter, Pendola v. Milenio Express Inc. d/b/a Classic,the appellant, an auto cab driver, was denied workers’ compensation benefits on the basis that appellant was not an employee of the auto cab company. Appellant appealed claiming he established an employment relationship because his work was an integral part of the auto cab company’s business controlled by the company. The Appellate Court agreed and reversed.

Compensation courts in New Jersey apply the twelve factor set forth in Pukowsky v. Caruso, 312 N.J. Super. 171, 182-83 (App. Div. 1998). The twelve factors are: (1) the employer’s right to control the means and manner of the worker’s performance; (2) the kind of occupation-supervised or unsupervised; (3) skill; (4) who furnishes the equipment and workplace; (5) the length of time in which the individual has worked; (6) the method of payment; (7) the manner of termination of the work relationship; (8) whether there is annual leave; (9) whether the work is an integral part of the business of the “employer[”;] (10) whether the worker accrues retirement benefits; (11) whether the “employer” pays social security taxes; and (12) the intention of the parties. [Ibid. (citation omitted).]

The compensation judge in Pendola, concluded the driver/petitioner was not an employee of the cab company. The judge found the cab company “exercised very little control over the means and manner of petitioner’s performance.” He noted that although petitioner was required by the “Taxi Division to paint his vehicle silver and to place the name ‘Classic’” and the company’s phone number on it, “he was otherwise left on his own to drive and pick up fares and unaccountable to Milenio/Classic.” The judge noted claimant set his own schedule and was free to accept or reject the fares dispatched to him by Classic.

The compensation judge also found the cab company did not supervise petitioner, and that he was required to have an auto cab license and comply with the rules of the Taxi Division, that he furnished his own car and that, although he had been “associated with” Classic for eleven years, it was “only to the extent of being a driver of an auto cab which was dispatched by Milenio/Classic.” The judge further found petitioner received no salary from Classic but was required to pay a dispatching fee of $150 per week. As to factor seven, the manner of termination of the relationship, the judge found that claimant “would only be prohibited from operating an auto cab by the Taxi Division for failing to comply with the Taxi Division rules and regulations, which would result in the revocation of his auto cab license by the Taxi Division.” The judge found there was no annual leave.As to factor nine, whether petitioner’s work was an integral part of company’s business, the judge found Classic’s business was “dispatching claimant and drivers of auto cabs.” He found the cab company was not dependent on petitioner’s, reasoning that were he “not available to transport a fare, another cab driver was waiting to do so. No one driver was essential to the effective functioning of the business.” The judge further found that petitioner did not accrue retirement benefits and Classic did not pay social security taxes. As to the final factor, the judge found “based upon the arrangement” between the parties, “it is clear there was no intention that petitioner was to be an employee of Milenio/Classic.”

The petitioner appealed, arguing the compensation court underestimated the degree of control the cab company exercised over its drivers relevant to factor one of the Pukowsky test and misconstrued critical factor nine, representing the “relative nature of the work test,” which measures “the extent of the economic dependence of the worker upon the business he serves and the relationship of the nature of his work to the operation of that business.”

The Appellate Court agreed with appellant, reasoning that The New Jersey Supreme Court has reiterated on numerous occasions that our State’s comprehensive statutory scheme of workers’ compensation coverage “for the compensation of injured workers ‘is remedial social legislation and should be given liberal construction in order that its beneficent purposes may be accomplished.’” Cruz v. Cent. Jersey Landscaping, Inc.,195 N.J. 33, 42 (2008) (quoting Torres v. Trenton Times Newspaper, 64 N.J. 458, 461 (1974)).

As the Court held in D’Annunzio v. Prudential Insurance Co. of America, 192 N.J. 110, 122-24 (2007),and reiterated in Estate of Kotsovska ex rel. Kotsovska v. Liebman, 221 N.J. 568, 576, 595 (2015), “when ‘social legislation must be applied in the setting of a professional person or an individual otherwise providing specialized services allegedly as an independent contractor,’ the trial court should consider three factors: ‘(1) employer control; (2) the worker’s economic dependence on the work relationship; and (3) the degree to which there has been a functional integration of the employer’s business with that of the person doing the work at issue. ‘” Kotsovska, 221 N.J. at 594 (quoting D’Annunzio, 192 N.J. at 122);

The Appellate Court found that there was no dispute regarding appellant’s economic dependence on the cab company. Appellant had been driving for the cab company for eleven years, and it was his sole source of income. Although one could debate whether the requirement that appellant paint his car silver and display prominently the Classic name and phone number was indicia of control by the cab company or merely enforcement of Newark auto cab regulations, the court found that other aspects of the relationship point unequivocally to a significant level of control by the cab company over its drivers. Besides requiring its drivers install a two-way radio in the cars, at their expense, the drivers were subject to the cab company’s rules as to which drivers would receive a dispatched fare. Drivers were not free to pick up any nearby passenger calling the cab company for a ride. Drivers were required, pursuant to rules established by the cab company, to request the ride from the dispatcher, who would decide which driver would pick up the passenger based on how long the driver had waited since his last fare.

The Appellate Court concluded that the judge of compensation misapplied factor nine of Pukowsky, “whether the work is an integral part of the business of the ’employer.'” The Appellate Court applied the reasoning used in D’Annunzio 192 N.J. at 123.

Several questions elicit the type of facts that would demonstrate a functional integration: Has the worker become one of the “cogs” in the employer’s enterprise? Is the work continuous and directly required for the employer’s business to be carried out, as opposed to intermittent and peripheral? Is the professional routinely or regularly at the disposal of the employer to perform a portion of the employer’s work, as opposed to being available to the public for professional services on his or her own terms? Do the “professional” services include a duty to perform routine or administrative activities? If so, an employer-employee relationship more likely has been established. [Id. at 123-24.]

Asking these questions here, the Appellate Court found that, the petitioner was one of the “cogs” in Classic’s operation. His work as a driver willing to provide the rides Classic arranged was essential to the success of its business. The work of the drivers was certainly continuous, Classic operated twenty-four hours a day, and thus needed many drivers day and night to carry out its operations. Drivers such as the petitioner could not use their own silver Classic car to pick up fares dispatched from competitors of Classic or those attempting to call them directly. The drivers were thus prohibited from using their own cars to further any business but Classic’s. Although a driver’s passengers or hours might vary, the daily routine of picking up Classic’s customers and delivering them to their destinations throughout Newark did not change.

The Appellate Court concluded that Classic was dependent on the petitioner and other drivers like him. The fact that the business required multiple drivers to operate did not reduce petitioner’s importance to Classic’s business or make him any less a “cog” in Classic’s enterprise. Accordingly, the Appellate Division concluded that application of the Pukowskytest established petitioner as an employee of the cab company under New Jersey workers’ compensation laws.

With the Appellate Division’s holding that Pendola was one of the “cogs” in Classic’s operation and that he qualified for workers’ compensation benefits, it is unknown what effect this holding could potentially have on drivers who work for worldwide ridesharing programs such as Uber and Lyft. While Uber and Lyft drivers share more freedoms than the petitioner inPendola, the argument can certainly be made that drivers who work for worldwide ridesharing programs such as Uber and Lyft are nonetheless “cogs” in these ridesharing programs’ operations.

Spoliation of Evidence in Serious Bodily Injury Cases– Recent Trends in the Trucking Industry

By Rina Clemens and Michael Hale.

There is a growing nationwide trend towards the imposition of an increased duty to preserve evidence. The below cases are examples of how far the courts are willingly to extend this duty. While they do not represent the view of every court across the country they demonstrate the growing nationwide trend from courts in the Southeast, Midwest, and Southwest. In Daniels v. United States, 86 F. Supp. 3d 1375 (S.D. Ga. 2015) the Plaintiffs claimed Lucious Allen Daniels Sr. died when the County owned truck he was driving was struck by a gate maintained by the U.S. Army Corps of Engineers.

Following the accident the Brunswick Police Department took custody of the truck. When Plaintiff’s counsel sought to inspect the truck the County informed him that he had approximately two months to conduct an inspection. At the end of the two months the truck would be disposed of unless Plaintiff made arrangements to store the vehicle at its own expense.

Plaintiff’s counsel chose to inspect the truck while it was in the County’s custody and declined to preserve it at the end of the two month period; it was subsequently disposed of. Following its disposal Defendant sought to inspect the truck. Upon learning of its disposal Defendant moved for sanctions for Plaintiff’s spoliation of evidence.

Plaintiff argued that it was not in possession of the truck and thus could not be held accountable for its disposition. The Court disagreed holding that Plaintiffs’ failure to take advantage of the opportunity to preserve the truck or at least advise Defendant of its impending disposal, constituted spoliation of evidence. The Court granted Plaintiffs’ request and issued sanctions in the form of an order prohibiting Plaintiff’s expert from testifying concerning his physical observation of the truck and any resulting conclusions.

In Christoffersen v. Malhi, No. CV-16-08055-PCT-JJT, 2017 U.S. Dist. LEXIS 94700, at *1 (D. Ariz. June 20, 2017), Defendant Hardeep Malhi, the owner of MD Trucking, was driving MD’s tractor-trailer when he collided with the rear of Plaintiff’s vehicle. Two weeks after the accident Plaintiff’s husband, who was driving the subject vehicle, died. Plaintiff’s counsel notified MD’s insurer of Plaintiff’s injuries and her husband’s death, which the insurer relayed to Mr. Malhi.

Approximately eight months later MD Trucking dissolved and disposed of all of its records. Sixteen months after MD Trucking’s dissolution Plaintiff filed suit against Mr. Mahli and MD Trucking (Defendants), among others. During discovery MD could not produce any company records due to their pre-suit disposal. In response, Plaintiff sought sanctions for Defendants’ spoliation of evidence. Defendants’ argued that the records were disposed of due to the dissolution of the company, not with the intent to destroy evidence. Defendants’ further argued that the records were disposed of pre-suit and thus they were not under any duty to preserve them.

While the court agreed that the destruction of records was not done in bad faith, it stated that it was “hard to imagine a set of circumstances – personal injury resulting in loss of life – more likely to result in litigation.” For that reason, Defendants had knowledge of a potential claim and were under a duty to preserve their records. Consequently, the Court granted sanctions in the form of an adverse inference instruction regarding the spoliation.

In White v. Rasner, 865 N.W.2d 885 (Wis. Ct. App. 2015) a semi-truck owned by J&R Schugel Trucking collided with a minivan on a state highway. Plaintiff, the driver of the minivan, sustained personal injuries as a result of the accident. Each party claimed that the other’s intrusion into his/her right of way was the cause of the accident. Neither party admitted fault and litigation ensued.

Two and a half years after the accident Plaintiff sought the black box data from the truck. The black box contained the speed and brake status of the truck immediately before and after a sudden deceleration event, such as the accident at issue. However, the box only stored the three most recent deceleration events. By the time the data was sought during discovery, three more recent deceleration events had occurred and the data from the subject accident was gone. Plaintiff moved for sanctions for Defendant’s spoliation of evidence.

The Court found that even though the Defendant did not intentionally dispose of the data, sanctions were appropriate. Defendant was under a duty to preserve the data and failed to do so. The Court went on to state that trucking companies have a responsibility to preserve evidence that might reflect what happened during an accident, especially one involving personal injury. Consequently, the Court affirmed the Circuit Court’s imposition of a $5,000 sanction and the giving of a spoliation instruction to the jury.

What can we learn from these cases? In the case of accident involving personal injury or death, you are under a duty to preserve any evidence in your possession or over which you can exercise some level of control; regardless if there is a formal preservation request or pending litigation. If you fail to preserve such evidence it will likely end in sanctions and hurt your case in the long run.

Self-Driving Semi-Trailer Trucks: An Exercise in Futility or a Future Reality?

Reminiscing of the days of afternoon cartoons, The Jetsons futuristic society always seemed far-fetched and nothing more than fantasy. Fast forward 30+ years… while the concept of a flying car still seems far off, innovations in technology have brought the reality of autonomously driven vehicles closer than ever. Automobile manufacturers, ride-sharing companies and Silicon Valley are all in, and this is equally true for the trucking industry, with Mercedes Benz, Tesla, Walmart, Waymo and Uber currently experimenting with autonomous semi-trailer trucks. Uber, for instance, has successfully tested autonomous semi-trailer trucks on long distance hauls in Arizona. Waymo is also testing self-driving trucks in Atlanta. A safety driver in the driver’s seat is positioned to monitor the roadway and navigate any challenging sections of highways and city streets. Industry analysts argue that autonomous semi-trailer trucks are safe and more efficient. With a trucker shortage on the horizon, the nation’s hard-working, dedicated truckers should not fear this infusion of technology into the lifeblood of our country, since there are routes, loading procedures, inspections and certain logistics that no computer or robotics can take away. The ultimate goal, would be to increase efficiency, safety and jobs (including job training and salaries.)  Certainly, there will be some legal and regulatory potholes, but this future reality would be a victory for all Americans.