Claims Handling 101

Specialized Commercial Vehicles

- Commercial Trucking Claims -

October 12, 2010

Twin Cities Claims AssociationCharles J. Noel

Charles J. Noel & Associates, P.A.145 Grand Oak Office Center X

2805 Dodd RoadEagan, MN 55121-1519

(651) 365-5020

Schipper v. Dahl Trucking, Inc.

Tractor-Trailer involved in

accident with a fatality.

What are you waiting for?

• Plaintiffs and Defendants are Minnesota residents/Iowa corporation which is headquartered in Minnesota.

Plaintiffs – Doug and Mary Schipper

Defendants – Dahl Trucking, Inc., and Chad Jongbloedt.

Schipper v. Dahl Trucking, Inc., No. A06-666 (Minn. Ct. App. 2007)

• Accident occurred in Iowa.

• Lawsuit venued in Martin County District Court (Fairmont, MN).

• Defendant Chad Jongbloedt – employee of Defendant Dahl Trucking Inc.

Driving Dahl Trucking, Inc., tractor.

• Plaintiff Doug Schipper – independent contractor working on the same project for Dahl Trucking under the terms of a Contract Hauling Agreement between Doug Schipper and Dahl Trucking, Inc.

Driving his own tractor.

• Contract Hauling Agreement – Exculpatory Clause

• Doug Schipper – claims for personal injuries and property damage.

Doug Schipper waives any claim against Dahl Trucking arising from any injury occurring in connection with Doug Schipper’s performance of the Contract Hauling Agreement. Doug Schipper further agrees to hold Dahl Trucking harmless and indemnify Dahl Trucking from any claim arising from the performance of the Contract.

• Mary Schipper – claim for loss-of-consortium.

• Plaintiffs and Defendants both moved for Summary Judgment based upon the language of the exculpatory clause in the Contract Hauling Agreement.

• District Court grants Defendants’ motion – dismissing lawsuit – Plaintiffs appeal.

Plaintiffs – the exculpatory clause is ambiguous and against public policy.

Defendants – the exculpatory clause is enforceable, requiring a dismissal of Plaintiffs’ lawsuit.

Court of Appeals Holding:

Bars claims of Doug Schipper asserted against Dahl Trucking

• Affirms District Court holding that the exculpatory clause is valid and enforceable.

• Remands to District Court to explain legal theory under which District Court determined that the negligence claim against Chad Jongbloedt was waived.

Iowa law – Mary Schipper’s loss-of-consortium claim is an independent claim.

Minnesota law – Mary Schipper’s loss-of-consortium claim is a derivative claim.

• Remands to District Court to perform a choice-of-law analysis regarding whether Minnesota law or Iowa law applies to Mary Schipper’s loss-of-consortium claim.

Court of Appeals Holding:

Remand to Martin County District Court:

• The Contract Hauling Agreement did not bar the claims of Doug Schipper against Chad Jongbloedt.

• Iowa law, rather than Minnesota law, applies to Mary Schipper’s loss-of-consortium claim.

Iowa law – Mary Schipper’s loss-of-consortium claim is an independent claim.

On remand, Martin County District Court made the following determinations:

Procedural Posture for Trial:

• Doug Schipper’s claims against Dahl Trucking are barred.

• Doug Schipper’s claims against Chad Jongbloedt are not barred.

• Mary Schipper’s loss-of-consortium claim is viable against both Dahl Trucking and Chad Jongbloedt.

Basis for Settlement Negotiations:

• M.S. 181.970 requires an employer to defend and indemnify its employee for civil damages claimed against the employee, provided that the employee was acting in the performance of the duties of the employee’s position

District Court erred in construing the language of the Contract Hauling Agreement in conjunction with M.S. 181.970 – Employee Indemnification Statute.

A “Circuity of Obligation” exists.

• M.S. 181.970 requires Dahl Trucking, Inc., to defend and indemnify Chad Jongbloedt for the claims made by Doug and Mary Schipper.

• The Contract Hauling Agreement waiver and indemnity provisions provide that Dahl Trucking, Inc., is then entitled to indemnity from Doug Schipper.

• National Hydro Systems v. M.A. Mortenson Company, 529 N.W.2d 690 (Minn. 1995)

A finding of “Circuity of Obligation” will defeat a Plaintiff’s claim as a matter of law.

A “Circuity of Obligation” is created when, by virtue of pre-existing indemnity agreements, the Plaintiff is obligated to indemnify the Defendant for the Plaintiff’s own claims.• Erroneous ruling that Iowa law, rather

than Minnesota law, applies to the loss-of-consortium claim of Mary Schipper.

Outcome:

• Settled at Mediation.

State Regulations:

M.S. 169 – Traffic Regulation

M.S. 221 – Motor Carriers

M.S. 65B – Automobile Insurance

Minnesota Rules 7800 – Motor Carrier Operation

Minnesota Rules 8850 – Motor Carrier Safety

Commercial trucking is highly regulated by both the State and Federal Government.

Title 49 Code of Federal Regulations – Transportation

Federal Regulations:

Title 49 United States Code – Transportation

Covers everything from Interstate Transportation to

Amtrak to Commercial Space Transportation

Selected Statutes/Regulations:

• M.S. 221.0314(5) and Minn. R. 8850.7100(4)

• 49 CFR 391 – Qualifications of drivers.

Employers are required to maintain a driver’s qualification file during the course of employment and for 3 years after employment ends.

Includes sections dealing with qualification and disqualification of drivers; background and character; tests; physical qualifications and examinations; files and records; and limited exemptions.

49 CFR 395 – Hours of Service of Drivers Includes sections dealing with:

• Maximum driving times;

• Driver’s record of duty status;

• Automatic on-board recording devices;

• Electronic on-board recording devices; and

• Supporting documents required. M.S. 221.0314(9)

State law incorporates federal regulations applicable to permissible hours of service for a driver.

• M.S. 169.81 – Height and length restrictions.

• M.S. 169.824 – Weight limits.

• 49 CFR 376.11 – 376.12 and M.S. 221.031 Requirements of a written lease agreement between a motor carrier who leases equipment it does not own from an owner-operator. • 49 CFR 376.1 Lease must state that the motor carrier is obligated to maintain insurance coverage required by 49 U.S.C. 13906 and 49 U.S.C. 31139.

• 49 U.S.C. 31139 Minimum limit for transporting property – $750,000Minimum limit for some hazardous materials – $1,000,000Minimum limit for other hazardous materials – $5,000,000

Great investigation – Great result!

Claims Handling 101

Specialized Commercial Vehicles

- Commercial Trucking Claims -

October 12, 2010

Twin Cities Claims AssociationCharles J. Noel

Charles J. Noel & Associates, P.A.145 Grand Oak Office Center X

2805 Dodd RoadEagan, MN 55121-1519

(651) 365-5020