By Christopher M. Kelly - Gallivan White & Boyd, PA and James W. Standard, Jr. - Gorby Reeves & Peters, PC
I. Introduction: A worst case scenario
Imagine that you were recently called out to the scene of an accident to investigate and protect the interests of a commercial carrier whose truck driver was involved in a serious accident resulting in multiple fatalities. You have completed your investigation, and it appears that your client's driver could not have avoided the vehicle that pulled out in front of him. However, as part of your investigation, you have the driver's logs and trip receipts audited to determine whether issues concerning log falsifications or hours-of-service violations may exist. To the dismay of both you and your client, it appears that the driver, who has 20 years of on-the-road experience, may have been, at the time of the accident, driving his vehicle in excess of federal regulations limiting the time a driver may legally spend behind the wheel. Furthermore, the audit also reveals that the driver may have engaged in a practice of falsifying time entries to hide clear hours of service violations in the last six months.
Counsel for the decedents has stated that he believes trucking companies are good "target" defendants and submits a high demand, despite the fact that the accident was not the driver's fault. Opposing counsel suggests that the company can either settle now and avoid litigation or be compelled to produce the driver's driving record, hours-of-service records and prior work history through formal discovery. Plaintiff's counsel knows that any commercial motor vehicle accident may involve a driver with a poor prior driving record, past accidents, and possibly issues with his log books prior to the accident which would support a claim for negligent entrustment, negligent supervision, or negligent hiring and retention as well as a punitive damages award.
These are all-too-common facts confronted by counsel retained to defend trucking companies. Such allegations can cause carriers and their insurers to pay settlements that do not reflect the law or the facts. The leverage sought by plaintiff's counsel in obtaining a driver's history can, however, be mitigated, and perhaps even nullified. To combat opposing counsel's strategy, it is important to understand that a carrier can, without admitting liability, admit that the driver was acting within the course and scope of his employment at the time of the accident and avoid the use of evidence that would normally support a claim of negligent hiring, retention or supervision. To defeat a plaintiff's claim for punitive damages, it is important to challenge the sufficiency and relevance of the plaintiff's evidence concerning log book violations and falsifications as it relates to plaintiff's burden in establishing reckless conduct.
II. Strategies to Mitigate and Nullify a Plaintiff's Claims of Negligent Hiring, Supervision or Retention
In alleging a theory of negligent entrustment, negligent supervision or negligent retention, plaintiff's counsel seeks to introduce evidence of "prior bad acts" which would otherwise be inadmissible under Rule 404(b) of the Federal Rules of Evidence. However, the rule adopted by many jurisdictions states that where an employer has admitted that it may be vicariously liable for the acts of an employee performed in the scope and course of his employment, any additional claim against the employer under the theories of negligent entrustment, negligent retention, negligent supervision or the like cannot stand. Bowman v. Norfolk Southern Ry. Co., 832 F. Supp. 1014 (D.S.C. 1993). In Bowman, Plaintiff brought suit against Defendant railway company after he was struck by one of the Defendant's trains at a railway crossing. Plaintiff asserted several counts of negligence against the engineer of the train and maintained that the Defendant company was vicariously liable for the engineer's acts of alleged negligence. While Defendant did not concede that its employee engineer was in fact negligent, it nonetheless admitted that the engineer was acting within the course and scope of his employment at the time of the accident such that any negligence on the engineer's part could be legally imputed to the railroad. The plaintiff in Bowman also sought to hold Defendant liable under a theory of negligent entrustment. In granting the Defendant's motion for summary judgment on Plaintiff's negligent entrustment claim, the Court observed that "[o]bviously, Plaintiff's motivation behind his negligent entrustment theory is to get the engineer's prior driving record into evidence. Such evidence would otherwise be inadmissible under Fed. R. Evid. 404(b). . . ." Id. at 1021. While noting that South Carolina had apparently not addressed the issue, the Court found that "the general rule is that when vicarious liability has been admitted, a plaintiff may not proceed on a negligent entrustment theory." Id.
The Court in Bowman went on to observe the soundness of this rule, noting that "permitting proof of previous misconduct would only serve to inflame the jury and result in the danger that the jury might draw the impermissible inference that because the [driver] had been negligent on other occasions that he was negligent at the time of the accident." Id. at 1021-22 (internal quotations and citations omitted). Accordingly, because Defendant carrier admitted that its engineer was acting within the course and scope of his employment at the time of the accident such that it could be imputed with vicarious liability, the Court granted Defendant's motion for summary judgment on Plaintiff's negligent entrustment claim.
The Court's holding in Bowman reflects the majority view. See e.g. Willis v. Hill, 159 S.E.2d 145 (Ga. App. 1968), Rev'd on other grounds, 161 S.E.2d 281 (Ga. 1968). As explained by the Missouri Supreme Court in McHaffie v. Bunch, 891 S.W.2d 822, 826 (Mo. 1995):
If all of the theories for attaching liability to one person for the negligence of another were recognized and all pleaded in one case where the imputation of negligence is admitted, the evidence laboriously submitted to establish other theories serves no real purpose. The energy and time of courts and litigants is unnecessarily expended. In addition, potentially inflammatory evidence comes into the record which is irrelevant to any contested issue in the case.
Id. at 826; see also Libersat v. J & K Trucking, Inc., 772 So. 2d 173 (La. App. 2000) (where a trucking company was responsible for conduct of its driver under a theory of respondeat superior, Plaintiff's claims for negligent hiring and training of drivers where superfluous and would only serve to confuse the issues); Houlihan v. McCall, 78 A.2d 661 (Md. App. 1951) (where Plaintiff alleged negligence as to driver and also claimed driver's employer was negligent "in selecting or retaining truck driver . . . known to be incompetent and reckless," Plaintiff's claims for negligent hiring and retention were properly dismissed when employer admitted agency); Hackett v. Washington Metropolitan Area Transit Authority, 736 F.Supp. 8 (D.D.C. 1990) (holding that negligent entrustment claim is "unnecessary, prejudicial and redundant" when defendant employer admits that the employee was acting within the scope of employment); Hood v. Dealers Transport Co., 459 F.Supp. 684 (N.D. Miss. 1978) (where vicarious liability of the carrier is established by admission of the parties in the pleadings, a negligent entrustment act of the carrier "would add nothing to the case" and is not relevant); Elrod v. G&R Construction Co., 628 S.W.2d 17 (Ark. 1982) (following the majority rule barring a plaintiff from alleging multiple theories for recovery when liability is admitted as to one theory); Tittle v. Johnson, 185 S.E.2d 627 (Ga. App. 1971) (holding that an admission of an agency relationship by a defendant wife in allowing her husband to driver her car will bar the plaintiff from asserting a cause of action of negligent entrustment); Cole v. Alton, 567 F. Supp. 1084 (N.D. Miss. 1983) (granting summary judgment on a claim of negligent entrustment where vicarious liability was not disputed); but see Breeding v. Massey, 378 F.2d 171 (8th Cir. 1967)(where a defendant employer denies liability, the plaintiff is entitled to proceed on theories of respondeat superior as well as negligent entrustment); Plummer v. Henry, 171 S.E.2d 330 (N.C. App. 1969)(holding trial court erred in striking portions of the complaint alleging negligent entrustment by defendant owner/father to son, even though defendant father had admitted liability under the family purpose doctrine).
The key point to take from these cases is that, under the majority rule, a carrier can defuse a plaintiff's claims of negligent supervision or retention by admitting that, assuming the driver were found to have been negligent, it would be vicariously liable for the driver's negligence under a theory of respondeat superior or similar agency theory. Whether the driver was an employee of the company or acting within the course and scope of his employment at the time of the accident is often not in dispute, or alternatively, would not be difficult for plaintiff's counsel to establish. Thus, in the right circumstances, by making this tactical concession, the defendant carrier does not concede anything that is not, or would not be, already established. At the same time, the defendant carrier gains a strong basis for defeating a plaintiff's claim of negligent supervision or retention, and the inflammatory evidence which can be introduced into evidence in support of such claims. The defendant carrier can make this simple, yet tactical, concession without conceding that the driver in fact was negligent at the time of the accident, or that any alleged negligence was the proximate cause of the accident. This tactic can go a long way towards eliminating prejudical evidence introduced primarily to inflame the sentiments of the jury, while enabling the carrier to keep the jury's focus on where it wants it to be - the preventability of the accident.
It should be noted that, while a powerful too, this tactical concession does not necessarily mean that evidence of an hours-of-service violation at the time of the accident would be excluded. Such evidence may be relevant to issues of proximate cause, to wit, whether, by virtue of the hours-of-service violation, the driver was fatigued at the time of the accident, and whether such fatigue played a contributing role in the accident. Moreover, evidence of an hours-of-service violation may be relevant to a claim for punitive damages. However, prior violations or incidents remote in time and place to the accident, such as log book violations and falsifications a month to six months prior to the accident, prior accidents, prior tickets, or other remote "prior bad acts," should arguably be inadmissible as irrelevant as to whether the driver caused the accident in question.
Another important line of cases to consider in attacking these types of claims by plaintiffs is set forth in the decision of the United States Supreme Court in State Farm Mut. Aut. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L.Ed.2d 585 (2003). There, the United States Supreme Court held that the general conduct of a particular defendant, aside from the acts upon which liability is based in the case at hand, may not serve as the basis for punitive damages. The reasoning behind the Court's holding is that a defendant should be punished for the conduct that was the cause of harm to the Plaintiff, as opposed to being punished for being an "unsavory" individual or business. Evidence of other bad conduct unrelated to any damages to the Plaintiff should be inadmissible under Rule 404(b) of the Federal Rules of Evidence and should not be allowed into evidence even if allegedly submitted to support an award of punitive damages. See also IGEN Int'l., Inc. v. Roche Diagnostics GmbH, 335 F.3d 303 (4th Cir. 2003) (evidence of other "bad conduct," typically inadmissible under Rule 404(b) of the Federal Rules of Evidence, cannot be used to support an award of punitive damages). This line of cases holding that prior bad acts unrelated to the Plaintiff's claim should not be admitted as a basis for a punitive damages claim is important to consider in attacking claims premised on negligent supervision and retention.
III. Strategies to Mitigate and Nullify a Plaintiff's Claim for Punitive Damages as they Relate to Log Book Violations and Falsifications
Plaintiff's counsel may also try to use the existence of log book violations and log book falsifications against the driver and carrier to demonstrate reckless conduct. For instance, Plaintiff's theory may be that the falsifications and log violations evidence reckless conduct, resulting in the operation of a commercial motor vehicle while fatigued, that supports a punitive damages claim. Opposing counsel will often equate fatigue to intoxication, and argue that the driver knew he was impaired, and knew that operating his vehicle while impaired would likely cause harm, making his decision to drive reckless.
In circumstances where a driver has numerous log violations, courts have held that, even assuming a driver has violated hours of service regulations and was fatigued at the time of the accident, a claim for punitive damages cannot stand where the plaintiff has failed to show, by clear and convincing evidence, that the driver or his employer was consciously aware that his conduct was likely to cause injury to another. For instance, in Purnick v. C.R. England, Inc., 269 F.3d 851 (7th Cir. 2001), a tractor-trailer collided with a vehicle in the roadway, causing the plaintiff injuries. The tractor-trailer driver had violated federal hours-of-service regulations by driving more than 10 hours at a stretch several times during the week prior to the collision. At the time of the collision, the driver had even admitted that he had become "mesmerized" by the road such that he did not brake until after impact, and could not recall when he first saw the plaintiff's vehicle. There was evidence that the driver had intentionally falsified his log books so as to enable him to drive in excess of these hours of service regulations; however, the Qualcomm data showed the driver had not driven for 17 hours before the trip that ended in the crash. The plaintiff sued the driver and his employer, and sought punitive damages, arguing that the driver's "intentional falsification of log books and habitual deprivation of sleep the week before the crash culminated in his dangerous fatigue at the time of the crash." Id. at 852. The defendants moved for summary judgment on plaintiff's claim for punitive damages, and the trial court granted the defendants' motion.
In upholding the trial court's granting of the defendants' motion for summary judgment, the Seventh Circuit held that "[e]ven assuming that [the plaintiff] has shown that [the driver] falsified his logs, drove beyond the ten-hour limit several times in the week preceding the crash, and was fatigued when he hit her car, she presents no evidence that [the driver] actually knew that his misconduct would probably result in injury." Id. at 853. The court observed that even if it could be argued that a "reasonable person" would know that exceeding the regulatory limits for hours of service could lead to a level of fatigue that would likely result in injury to others, negligence is not enough to support an award for punitive damages. Id. at 853. The court found that the plaintiff "simply cannot show that [the driver] actually knew that he was so tired that continuing to drive would likely cause injury. . . ." Id.
With regard to the driver's alleged falsification of his log books, the court found that:
[t]he log violations, even when construed in the light most favorable to [the plaintiff], are merely evidence that [the driver] drove beyond the ten-hour limit earlier in the week and, therefore, may have been tired when he hit [the plaintiff's] car. They do not show [the driver's] knowledge that an accident would probably occur, however.
Id. The Court found it important that the driver had rested for 17 hours before the trip, which had a positive impact on the driver's assessment of his own fatigue. Rejecting the plaintiff's argument that, by falsifying his log books the driver intentionally and systematically caused himself to become fatigued, the court found that the plaintiff had presented no evidence as to the amount of sleep the driver had obtained in the several days prior to the crash. Id. Consequently, the court found that the plaintiff had failed to present any evidence, much less clear and convincing evidence, that the driver engaged in any conduct which he knew would result in injury, and that the defendants were entitled to summary judgment on plaintiff's punitive damages claim. Id. at 853-854.
Other courts have also followed this line of reasoning with regard to punitive damage assessments. In Burke v. Massen, 904 F.2d 178 (3d Cir. 1990), the plaintiff's decedent was killed after being struck by a tractor-trailer. At the time, the tractor-trailer was moving in excess of the speed limit, and the driver had driven for over fourteen hours that day, in excess of federal motor carrier safety regulations. There was evidence indicating that the driver had fallen asleep at the wheel and that the driver had falsified his log books to make it appear that he was driving within the hours of service guidelines of the federal regulations. The driver had also falsified information concerning his prior employment and driving experience on his employment application, and gave false deposition testimony, all of which the Court held evidenced an intent to cover up his wrongdoing. The plaintiff sought an award of punitive damages against the driver and his employer, alleging that the driver knowingly violated the hours of service regulations, resulting in his fatigue and the fatal accident at issue. The defendants moved for Judgment N.O.V. on the plaintiff's claim for punitive damages, and the trial court denied this motion.
In reversing the trial court's denial of the defendant's motion for Judgment N.O.V. as to punitive damages, the Third Circuit found that the "record is critically deficient of evidence showing [the driver] consciously appreciated the risk of fatigue and the potential for fatal accidents that accompanies driving for more than ten hours." Id. at 183. While the driver had read the federal motor carrier safety regulations and was aware of the ten hour rule set forth in those regulations, there was no evidence that the driver consciously appreciated the risk of a fatal accident occurring by virtue of his driving in excess of the ten hour rule. Id. Consequently, absent a conscious realization that his conduct was likely to result in serious harm to another, there was inadequate proof to support an award of punitive damages against the driver. Id. The court stated, "[i]t is impossible to deter a person from taking risky action if he is not conscious of the risk." Id. (internal quotations and citations omitted). Finally, the court found that the falsification of the log books was also insufficient evidence to show that the driver consciously appreciated the risk of serious harm befalling another as a result of driving more than ten hours, given that "punitive damages are intended to deter risky behavior that causes harm; they are not a sanction for obstruction of justice." Id.
Finally, in Boomsma v. Star Transport, Inc., 202 F. Supp. 2d 869 (E.D. Wis. 2002), a tractor-trailer collided with a car, tragically killing a family of four. The plaintiffs alleged that the driver of the tractor-trailer was in violation of the federal regulation limiting driving time to 70 hours in any eight-day period at the time of the collision, and that the driver must have necessarily been fatigued. The plaintiffs further alleged that the driver's employer did an insufficient job in auditing it driver's log books to ensure that its drivers were not violating federal law regarding driving time, therefore allowing the driver to drive in excess of the 70 hour rule. Taking this argument one step further, the plaintiffs argued that the driver's employer was "so profit-hungry that it permitted or encouraged [the driver] to violate federal hours of service regulations and/or drive in a fatigued condition. . . ." Id. at 881.
In ruling that there was insufficient evidence to submit the claim of punitive damages to the jury, the court observed that the plaintiff must show by clear and convincing evidence that the defendant was aware that his conduct would likely result in the plaintiff's rights being disregarded. Id. The court found that, even assuming all of the plaintiffs' allegations to be true, there was no showing that either the driver or his employer intentionally disregarded the rights of the family of four. Id.; see also Lemaire v. Younger Transportation, Inc. of Texas, 443 So. 2d 662 (La. App. 1983) (intentional dispatch of driver so as to require him to drive beyond hours of service limits set forth in federal regulations insufficient to support claim for punitive damages, as it must be shown that trucking company knew that injury or death would likely arise from its conduct).
The key point to take away from these decisions is that past hours-of-service violations and log book falsifications, coupled with an accident occurring when a driver has surpassed the maximum number of hours allowed under federal regulations, is insufficient to support the conclusion that the driver or carrier knowingly or recklessly operated, or allowed operation of, a commercial motor vehicle in an impaired state. Courts have found this evidence insufficient to clear the evidentiary hurdle that there be "clear and convincing evidence" that a defendant was aware his conduct would result in injury, with the emphasis on "aware." When successfully argued, this theory can nullify the plaintiff's theory of punitive damages.
IV. Conclusion
Carriers must do business in the real world and as such attempt to hire quality employees. However, they cannot screen out every driver with a criminal record, traffic violation or other past misdeed, without exception. The Courts recognize this reality and acknowledge that, so long as the employer takes responsibility for the potentially reckless and grossly negligent conduct of the employee, the employer may succeed in avoiding any claims related to negligent supervision, retention and hiring. In addition, the standard required to establish reckless conduct as it relates to theories of fatigue and operation of a commercial vehicle is high and unless opposing counsel can meet that standard evidence of prior log falsifications or hours of service violations should be inadmissible. When negotiating with opposing counsel don't hesitate to raise the case law that is favorable to carriers and that nullifies a plaintiff's ability to explore the prior history and bad acts of a driver completely unrelated to his performance at the time of the accident in question.
By: Christopher M. Kelly and James W. Standard, Jr.
Christopher M. Kelly, Esq. is a shareholder with the law firm Gallivan, White & Boyd, P.A. in Greenville, SC and James W. Standard, Jr., Esq. is a partner with the law firm Gorby Reeves & Peters, P.C. in Atlanta, GA.
1 Most states have a counterpart to F.R.E. 404(b) limiting the admissibility of "prior bad act" evidence.
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