Here is part 3 of a brief I submitted to a North Carolina court several years ago in opposition to a motor carrier’s motion for summary judgment. The basis for the motion was that the lease agreement stated that the driver was an independent contractor, and the motor carrier was not liable for the driver’s negligent acts or omissions. We won the motion and the case settled soon thereafter. A summary of the case is described here: https://kevinjwilliamslaw.com/case-result/5-5-million-settlement-2/.
Part 1 of this short blog series provided a historical explanation of the Federal Motor Carrier Safety Regulations (FMCSR) and their treatment of independent contractors. Part 2 focused on the specific requirements under federal regulations pertaining to lease agreements. Part 3 focuses on North Carolina law applicable to trucking cases. Disclaimer – I have not Shepardized the case law discussed below, so you’ll want to update the research for your own purposes.
I. TRUCKING COMPANIES ARE LIABLE FOR THE NEGLIGENCE OF THEIR “INDEPENDENT CONTRACTORS” PURSUANT TO NORTH CAROLINA LAW
Motor carriers are liable for the negligence of their purported independent contractor drivers pursuant to authoritative and persuasive case law beginning with the seminal case of Parker v. Erixon, 123 N.C. App. 383, 473 S.E.2d 421 (1996). In Parker, defendant Erixon was the owner and operator of a 1990 White GMC highway tractor which he had leased by an independent contractor service agreement, to defendant Chemical Leaman Tank Lines, Inc. (Chemical Leaman). The contract between Chemical Leaman, a common carrier, and Erixon, the independent contractor and driver of the tractor which hauled Chemical Leaman’s trailer, was governed by Interstate Commerce Commission rules and regulations.
On December 17, 1991, Erixon left Texas with his tractor pulling a Chemical Leaman trailer loaded with materials bound for the DuPont plant near Wilmington, North Carolina. Erixon arrived the morning of December 18, 1991, and dropped the trailer at the Chemical Leaman yard. That afternoon, Erixon went off duty and departed the yard in his tractor bound for Trenton, North Carolina, on a personal trip to see his son. While he was traveling to his son’s house, Erixon crossed the centerline and collided head-on with plaintiff, James Parker.
In the subsequent civil action, the trial court denied Chemical Leaman’s motion for summary judgment and granted the plaintiff’s motion for summary judgment as to the issue of agency between Chemical Leaman and Erixon. After examining the history of statutory employment, placard liability and I.C.C. regulations, the Court of Appeals reversed the trial court. The Court found that Erixon was acting as an independent contractor; further, that motor carriers are liable for the negligence of their independent contractors when the independent contractors act within the course and scope of the hauling arrangement. However, the Court concluded that negligence could not be imputed to Chemical Leaman under the narrow set of facts because the independent contractor was on a frolic and not acting within the course and scope of the hauling arrangement.
In so doing, the Parker Court looked at Brown v. Truck Lines, 227 N.C. 299, 42 S.E.2d 71 (1947), in which the plaintiff truck driver leased his equipment to defendant L.H. Bottoms Truck Lines, Inc., for the purpose of hauling cargo from High Point to Norfolk, Virginia. Plaintiff died from injuries he received as a result of “an accident arising out of and in the course and scope of his employment.” Brown, 227 N.C. at 302, 42 S.E.2d at 73. The Supreme Court addressed the question of whether Brown was an independent contractor or an employee for workers’ compensation purposes. The Court noted that defendant Bottoms Truck Lines was a motor carrier of goods in interstate commerce and was, therefore, subject to the federal regulations and requirements of the Interstate Commerce Commission and that the plaintiff’s truck was only entitled to engage in interstate commerce under the authority vested in defendant by the Commission. The Brown Court concluded:
Hence it would seem to follow that control of the operation for the period of the lease was given to the licensed carrier, and that the owner-driven truck was in contemplation of law in it employ and the driver for the trip stood on the relationship of its employee, as found by the Industrial Commission. We think the applicable rule, under the facts here presented, is that the lease or contract by which the equipment of the authorized interstate carrier was augmented, must be interpreted as carrying the necessary implication that possession and control of the added vehicle was, for the trip, vested in the authorized operator.
Parker, 123 N.C. App. at 389, 473 S.E.2d at 425 (quoting Brown, at 304-05, 42 S.E.2d at 75). The Parker Court agreed that Brown established the rule that lessors who operate in interstate commerce under the license tags and authority granted to the lessee by the I.C.C. are deemed employees of the lessee for the duration of the trip. However, the Court refused to read Brown as requiring the lessee to be held strictly liable for all of the actions of the lessor. Parker, 123 N.C. App. at 389, 473 S.E.2d at 425. The Parker Court noted that a key distinction with the Brown case was that in Brown, the plaintiff’s death was due to an accident arising out of and in the course and scope of the plaintiff’s employment. Whereas in Parker, Erixon’s off-duty trip to visit his son was held to constitute a distinct departure from his employment, and was not within the course and scope of his employment. Id.
The Parker Court also looked at Reeves v. B&P Motor Lines, Inc., 82 N.C. App. 562, 346 S.E.2d 673 (1986), in which the Court of Appeals suggested that North Carolina followed the rebuttable presumption of agency view and imposes liability on the carrier when the independent contractor is acting in the course and scope of his employment. Specifically, the Court stated:
[W]e look to the public policy behind I.C.C. regulations, which imposes strict liability on the lessee-motor carrier for injuries to third parties when the lessor-independent contractor is operating in the course and scope of the business of the lessee-motor carrier. That policy is to prevent the motor carrier from avoiding safety standard (and insurance requirements) imposed by the I.C.C. regulations by leasing equipment from non-regulated independent contractors.
Parker, 123 N.C. App. at 390, 473 S.E.2d at 426 (quoting Reeves, 82 N.C. App. at 565, 346 S.E.2d at 675).
The Parker Court concluded that “[t]he I.C.C. regulations were not intended to impose upon carriers using leased equipment or the services of independent contractors greater liability than that imposed when a carrier uses its own equipment or employees.” Parker, 123 N.C. App. at 390, 473 S.E.2d at 426. However, the court went on to state the rule that governs the present case:
Under North Carolina law, liability of an owner of a motor vehicle for the acts of his employee is governed by the principle of respondeat superior. Under this principle, the employer is held vicariously liable for the negligent actions of his employee “if the negligent conduct occurred while the employee was acting within the course and scope of his employment.” This same rule should apply to carriers who have leased equipment or arranged for services of an independent contractor.
Id. (emphasis added).
Since Erixon was on a frolic and, therefore, acting outside the course and scope of his employment at the time of the collision, the Court held that under the doctrine of respondeat superior, Chemical Leaman was not liable for Erixon’s actions. 123 N.C. App. at 391, 473 S.E.2d at 427. Thus, the Court reversed the trial court’s order and remanded for entry of summary judgment in favor of Chemical Leaman. Id.
While Parker ultimately ruled in favor of the defendant motor carrier, the message was clear. Where the driver operates in the course and scope of the agreement between the truck owner and the motor carrier, under Parker, Reeves and Brown, and pursuant to the principle of respondeat superior, the motor carrier is liable for the collision. Further, Parker makes it clear that the motor carrier may not insulate itself from liability by claiming that it maintained an independent contractor relationship with the truck owner. Parker explicitly states that the principle of respondeat superior applies to a motor carrier’s liability for independent contractors so long as the independent contractor was acting within the course and scope of his employment with the carrier at the time the negligence occurred.
In Shinn v. Greeness, 218 F.R.D. 478 (M.D.N.C. 2003), Plaintiff Gordon Shinn was involved in a wreck with a tractor-trailer driven by Defendant Greeness. Greeness was operating a tractor rig owned by Roger and Ella Townsend and hauling cargo for Defendant Anna Beck, d/b/a Zippway Transport, an authorized motor carrier. Defendant Beck contested the exercise of personal jurisdiction, arguing that Greeness was not her agent at the time of the wreck.
Plaintiffs argued that because “the goods being shipped at the time of the wreck were placed into interstate commerce under [Beck’s] authority as a federal motor carrier,” under North Carolina law, that Beck was vicariously liable for Greeness’ negligence regardless of whether he was an employee or independent contractor. Shinn, 218 F.R.D. at 485. In so doing, they relied heavily on the Parker case which Judge Beaty discussed at some length. Judge Beaty reiterated Parker’s holding that, under North Carolina law, there is a rebuttable presumption of agency between an authorized motor carrier and its driver. Id. (citing Parker, 123 N.C. App. at 391, 473 S.E.2d at 426). He concluded that “Parker would therefore apply in the present case so as to create a presumption of agency because there is no indication that Greeness was acting outside the scope of his employment at the time of the wreck.” Id.
In her attempt to rebut the presumption of agency, Beck pointed to 49 C.F.R. § 376.12(c)(4), which states:
Nothing in the provisions required by paragraph (c)(1) of this section is intended to affect whether the lessor or driver provided by the lessor is an independent contractor or an employee of the authorized carrier lessee. An independent contractor relationship may exist when a carrier lessee complies with 49 U.S.C.
14102 [formerly 11107] and attendant administrative requirements.
49 C.F.R. § 376.12 (1997). Consequently, Beck argued that the determination of whether the driver is an employee or an independent contractor as to the carrier is left to state law and, specifically, to the doctrine of respondeat superior. Judge Beaty pointed out that the Parker Court specifically cited 49 C.F.R. § 376.12(c)(4), but still recognized a rebuttable presumption of agency between the driver and the authorized motor carrier. Id. (citing Parker, 123 N.C. App. at 387, 390-91, 473 S.E.2d at 424, 426). Judge Beaty ultimately held:
Therefore, under North Carolina law, Beck, as an authorized motor carrier, is presumptively liable for Greeness’ actions. Plaintiffs’ First Amended Complaint alleges that Greeness was the “agent, actual, implied, or apparent” of Beck. Plaintiffs’ allegations are supported by the fact that Beck is an authorized motor carrier and Greeness was driving under her authority as an authorized motor carrier. Therefore, Plaintiffs have satisfied their burden to establish a prima facie showing of personal jurisdiction with respect to Defendant Beck.
Shinn, 218 F.R.D. at 486. Under Shinn, if a tractor truck is being operated in the course and scope of the employment agreement with the motor carrier, the motor carrier is liable for the driver’s negligence.
Looking at Shinn and Parker together, it is clear that an authorized motor carrier will be presumptively and ultimately liable pursuant to respondeat superior theory for the negligence of its independent contractor so long as the negligence occurs in the course and scope of the job. The presumption of agency may be rebutted only upon a showing that the independent contractor was acting outside the course and scope of the job.
The Law Office of Kevin J. Williams handles catastrophic injury and wrongful death cases in North Carolina arising from crashes involving tractor trailers and other commercial motor vehicles. As is evident from the discussion above, holding the responsible parties to account is not always clear-cut. Often, the motor carrier responsible for the negligent truck driver hides behind the independent contractor defense. They create layers of liability between themselves and the negligent driver. The trucking company that profits most from transporting a load shifts the risks of harm to you by trying to avoid liability and financial responsibility for your terrible losses.
If you have been seriously injured or lost a loved one due to a large truck crash, contact the Law Office of Kevin J. Williams for a free consultation. If you are a lawyer looking to associate counsel, the Law Office of Kevin J. Williams can help you find all sources of coverage available and bringing all responsible parties to justice.
