Food poisoning proof is focus of Georgia Supreme Court decision

On a warm October afternoon two years ago, wearing one of the yarmulkes that Jewish funeral directors provide for non-Jewish attendees, I helped shovel red Georgia dirt into the open grave of an old client and friend. As I did so, I pondered the unanswered question whether long-term side effects of her food poisoning a quarter century earlier had contributed to her death after years of internal organ illnesses.

A recent decision of the Georgia Supreme Court on what is required to get a food poisoning case to a jury brought that grim saga back to mind.

In Patterson v. Kevon, 2018 WL 3965745, the Georgia Supreme Court unanimously ruled on .August 20, 2018 that circumstantial evidence was sufficient to allow a jury trial on a suit against a caterer for alleged food poisoning of guests. In doing so, the Supreme Court overturned a line of Court of Appeals authority that classified food poisoning cases as “a unique species of negligence cases” imposing a heavier burden upon the plaintiff to show proximate cause than that generally required of nonmovants on summary judgment.

Briefly summarized, the Pattersons became ill after eating food at a wedding rehearsal dinner prepared, catered, and served by Big Kev’s Barbeque. They sued for negligence, violation of the Georgia Food Act (OCGA § 26-2-20 et seq.), and products liability, alleging that the food at the dinner was defective, pathogen-contaminated, undercooked, and negligently prepared.

The caterer moved for summary judgment, showing that the Pattersons also consumed items prepared by others at the rehearsal dinner, such as dessert or alcohol, as well as improperly stored leftovers from the rehearsal dinner and food at the wedding reception the following day. In addition, the caterer showed that the Pattersons ate other meals, including fast food, and drove to Florida before Mr. Patterson began to feel ill, three days after the rehearsal dinner, and that Mrs. Patterson did not begin to feel ill until several days later. In addition, the caterer asserted that the owners of the event venue, their employees, and other guests who consumed the food did not become ill.

On the other hand, the Pattersons presented evidence that several people became ill with similar symptoms after eating the caterer’s food at the rehearsal dinner. Both Mr. Patterson and a guest at the rehearsal dinner who thecaterer’s  meal but did not consume food at the wedding reception, both tested positive for salmonella. Three other guests testified that they became ill at around the same time after eating at the rehearsal dinner. Four other people who became ill, including Mrs. Patterson, did not eat at the wedding reception, and other guests who became ill testified that they did not consume dessert, drinks, or leftovers. As many as 16 to 20 people became ill after the dinner.

The trial court granted summary judgment and the Court of Appeals affirmed 5-4, holding:

suits alleging illness from food poisoning that are based entirely on circumstantial evidence are a unique species of negligence cases, and our prior decisions have required plaintiffs in this context to bring forth evidence demonstrating that the only reasonable hypothesis for why they became ill was due to acts or omissions of the defendant, to the exclusion of all other reasonable theories. This special element prevents a plaintiff from recovering solely on the basis of speculation and conjecture and requires plaintiffs to engage in a rigorous examination of all reasonable theories of contamination. This standard also shields defendants from what, in some cases, may amount to fallacious post hoc, ergo propter hoc arguments that advance the plaintiff’s theory of contamination. In so doing, this rule reserves to the jury only those cases in which evidence brought forth by the plaintiff establishes a clear and direct link between the defendant’s food and the plaintiff’s injuries.

Two vigorous dissents, by Judges Doyle and McFadden, detailed the Pattersons’ evidence and pointed out that the standard established by the majority was more appropriate for the burden of proof at trial rather than on motion for summary judgment.

The Supreme Court in an opinion authored by Justice Michael Boggs unanimously rejected any requirement to exclude every other reasonable hypothesis, noting that the Court of Appeals majority opinion conflated summary judgments cases with decisions on appeals after jury verdicts. These cases are highly fact specific. In most cases, either for plaintiffs or defendants, have turned upon the availability or unavailability of expert testimony evidence about presence or absence of pathogens. In this case, the caterer failed to counter the plaintiffs’ evidence of proximate cause.

This decision removes an anomaly the consideration of summary judgement motions on food poisoning cases in Georgia. However, the plaintiff still must prove causation. As a practical matter, “jury proof” still requires a preponderance of evidence that excludes other reasonable hypotheses of cause. In evaluating a claim of food poisoning, I want lab tests to prove what pathogen caused an illness, probability that it was related to the food consumed, evidence that people who ate the same food got sick and companions who did not eat the same food did not get sick, and some way to minimize other explanations of illness.

In that food poisoning case that I handled years ago, three coworkers at a bank went to dinner together. Two had fried chicken while the third ate something else. Two fell ill with similar symptoms. One of them was hospitalized and tests of stool samples showed the presence of Campylobacter which is common in uncooked poultry. Consumption of undercooked poultry can easily cause gastic infection within 2 to 5 days.

My client recovered from the acute gastric illness and we settled her case for what we felt was a good amount. But we stayed in touch over the subsequent years. Long-term complications of Campylobacter food poisoning infections are rare. But this lady developed complex long-term problems with internal organs which led to her death about 25 years after her food poisoning. No doctors could directly relate her lethal illness to the food poisoning, but as I took my turn tossing a shovel of dirt into her grave, I wondered if a supper of undercooked chicken contributed to her death a so many years  later.

If I handle food poisoning cases in the future, I will be sure to explore with physicians and experts the risks of long-term health consequences long after the initial acute illness has resolved.

.

.Ken Shigley is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. He is licensed to practice law in Georgia. Representation of clients in others states, which possible, can be undertaken only in strict compliance with the multijurisdictional practice and pro hac vice rules of the other state.

 

Outgoing text messages admissible in evidence

 

The Georgia Supreme Court ruled on 11/7/2016 that outgoing text messages found in a cell phone are admissible in evidence as admissions of the person who sent them. However, incoming text messages are inadmissible hearsay, though their admission in evidence was “harmless” under the circumstances of the case. Glispie v. State, decided November 7, 2016.

This ruling arose in the context of the criminal prosecution of an alleged drug dealer. That would have been a great interest in my past life as a prosecutor, though of course cell phones had not been invented when I was sending criminals to prison.

Text messages can be obtained by law enforcement with a search warrant based upon probable cause to examine the contents of a cell phone. If I were still a prosecutor, I would probably seek search warrants for contents of cell phones in a lot of cases.

In the civil context, however, we do not have that option. We cannot get search warrants in civil cases. Cell phone service providers, e.g., AT&T, Verizon, etc., typically do not keep text messages in the system more than perhaps 72 hours.

The only way to obtain those in a civil case is to obtain a court order for a forensic download of the phone. In addition to records of voice calls placed and received (though not the content of the calls, and text messages, forensic examination of wireless devices such as cell phones can reveal patterns of conduct and communication, including the times that the driver was using an app, typing a text, or watching a video.  It has location history for the phone, showing where the driver was at various points in time.  It includes calls, texts and emails between the driver and the trucking company.  It may include records of communications with employer personnel inconsistent with prudent driver supervision by a motor carrier regarding fatigue management.

Parties opposing forensic download of a cell phone may assert claim of personal privacy. However, where the cell phone user killed someone, that fact may outweigh personal privacy. A trial court judge would be justified in ordering the download subject to a protective order limiting delicate personal information to use in the case after in camera review by the court.

 


Ken Shigley was an Assistant District Attorney in Paulding County in the last 1970’s. he is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from auto accidentscommercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. 

Independent law schools teetering on the brink

Few people recall that my undergraduate alma mater, Furman University in South Carolina, once had a law school. In the depths of the Great Depression, Furman closed its law school in 1932.  A North Carolina school that was well-funded by a tobacco magnate, bought the library of Furman’s law school. It was rolled into Duke University Law School, which is now rated number 11 among U.S. law schools.

In the past two decades a boom in enrollments led to a glut in the law school market. Some of this was fueled by easy availability of government-guaranteed student loans.

Moving from boom to bust, the Great Recession roughly ten years ago brought about a decrease in law school applications and enrollments. The top law schools continued to fill up with well qualified applicants. Admission to lesser law schools became less competitive, opening opportunities for many students who might not have had stellar undergraduate records but were capable of becoming competent lawyers.

But independent law schools at the bottom on the rankings have been struggling to keep their doors open. Those include the Charlotte (NC) Law School, Thomas M. Cooley Law School in Michigan, Indiana Tech Law School, Whittier Law School in California, have announced closures. William M. Mitchell and Hamline University Law School, both in St. Paul, MN, have merged.

Valparaiso University Law School in Indiana has been teetering on the brink, and may move to Middle Tennessee State University. My lawyer friends in Tennessee have expressed great skepticism about the viability of a law school in Murfreesboro. There are three law schools right up the road in Nashville (Vanderbilt, Belmont and Nashville law schools), plus the University of Tennessee Law School in Knoxville and the University of Memphis Law School in the city of that name.

When Atlanta’s John Marshall Law School announced opening of a branch, Savannah Law School, back when I was president of the State Bar of Georgia, I was skeptical of there being enough demand to make it viable. Now that law school’s property has been sold. Students have the option of continuing at John Marshall’s Atlanta campus, or maybe something else. There have been unconfirmed rumors that some university might acquire it, but so far nothing has been confirmed. Students have filed a class action against John Marshall Law School over the closing.

I don’t want to discourage anyone who has a passion for becoming a lawyer from doing so. There are certainly great lawyers and judges who graduated from proprietary night law schools, with or without ABA accreditation. But if one does not have a prominent relative eager to bring him or her into an established practice, and the only option for law school admission is one that is on the brink of extinction, it might be good to consider another career choice.


Ken Shigley was an Assistant District Attorney in Paulding County in the last 1970’s. he is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from auto accidentscommercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. 

 

 

4-year-old killed when driver reaches for dropped cell phone in Paulding County

No words can ever be adequate when a young child is killed. For the child’s parents, grandparents and other family members, it is like having a hole punched in the heart. That wound never really heals. For parents, in the words of Willie Nelson, it’s something you don’t get over but you get through.  The tasks of mourning after death of a family member are all too familiar.

This week in Paulding County, GA, there was a car crash in which a 20-year-old driver was distracted by dropping his cell phone and water bottle. Leaning over to retrieve them from the floor of his truck while speeding, he struck a family’s minivan from behind.

The mom driving the minivan with her children, aged 3 and 4 in the back seat, said she was about to turn into her dad’s driveway  when she saw a speeding truck in her rear-view mirror. “I was, like, I saw it and then we were flipping,” she said.

When he struck the minivan it flipped over and landed in the ditch. The four-year-old child in the minivan was killed. She had  her “Hello Kitty” backpack ready  and was excited about the start of preschool.

The Paulding County Sheriff’s Office shared a GoFundMe page (“Alora Rose Gained Her Wings”) to assist the family with funeral costs and other expenses. The child was a granddaughter of a detention officer for the county.

The young man whose distracted driving killed this child may well spend some time in prison for vehicular homicide, but after that he will live the rest of his life with the feelings of guilt for causing this death.

The relevant Georgia statute on homicide by vehicle is OCGA Section 40-6-393 (c), which provides: ”

Any person who causes the death of another person, without an intention to do so, by violating any provision of this title other than subsection (a) of Code Section 40-6-163, subsection (b) of Code Section 40-6-270, Code Section 40-6-390 or 40-6-391, or subsection (a) of Code Section 40-6-395 commits the offense of homicide by vehicle in the second degree when such violation is the cause of said death and, upon conviction thereof, shall be punished as provided in Code Section 17-10-3.

Defining punishment for misdemeanors generally, OCGA Section 17-10-3 states:

(a) Except as otherwise provided by law, every crime declared to be a misdemeanor shall be punished as follows:
(1) By a fine not to exceed $1,000.00 or by confinement in the county or other jail, county correctional institution, or such other places as counties may provide for maintenance of county inmates, for a total term not to exceed 12 months, or both;
(2) By confinement under the jurisdiction of the Board of Corrections in a state probation detention center or diversion center pursuant to Code Sections 42-8-35.4 and 42-8-35.5, for a determinate term of months which shall not exceed a total term of 12 months.

News reports do not yet detail what criminal charges the at fault driver may face, but I suspect they will include following too closely (OCGA Section 40-6-49) driving too fast for conditions (OCGA 40-6-180), and distracted driving (OCGA 40-6-241, which has been amended to include new “hands free” provisions which went into effect on July 1, 2018),

Civil lawyers in these cases can only deal with financial compensation issues.

It is important to quickly obtain information about automobile and umbrella liability coverage on vehicles in the household of the at-fault driver under provisions of OCGA 33-3-28. A 20-year-0ld who purchases a vehicle and insurance on his own may have minimum coverage of $25,000 but one should not make that assumption. When my kids were that age, their vehicles were insured under my policies so they effectively had $2,250,000 liability coverage on their cars, though they probably did not even know it. Savvy lawyers recognize that insurance companies with multiple interlocking subsidiaries do not disclose additional coverage in response to a statutory request unless the request  is phrased just right.

It is also important to quickly gather all insurance policies on all vehicles in the family’s household, evaluate all uninsured / uninsured motorist coverage on all those policies, and notify the insurer(s) of the tragedy within thirty days. Some insurance companies are draconian in their application of contractual time limits for notice to the company.

Obviously no amount of money can ever make up for the loss of a beloved child. But we have seen many families who set aside money recovered from insurance companies in such situations to fund the education of surviving children.


 

Ken Shigley was an Assistant District Attorney in Paulding County in the last 1970’s. he is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from auto accidentscommercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. 

 

Tractor trailer merging from shoulder in darkness kills motorist on I-95

An approaching driver’s view of a tractor trailer pulling from breakdown lane into traffic in the dark

A tractor-trailer pulled from the highway shoulder in front of an approaching SUV on I-95 in Jasper County, SC, just north of Savannah, about 9:30 PM Wednesday night, August 8, 2018. The impact killed Raymond Jackson, Jr., driver of the approaching vehicle, a 1999 Ford Expedition. This happened about 3 miles north of the Georgia-South Carolina line, between the Savannah River and Hardeeville.

Initial news reports  of this crash involving vehicles emerging from Georgia do not identify the trucker, the trucking company or the person killed.  If all had Georgia residence at the time, then potentially a Georgia court might apply some points of Georgia law different from South Carolina law, such as the measure of damages and procedures regarding wrongful death claims.

Visibility of tractor trailers at night is a huge problem nationally.  All large commercial motor vehicles are required to have red and white reflective tape and/or conspicuity sheeting  to help make them visible to oncoming traffic. The tape often becomes dirty and worn, making it less effective. In addition, it loses effectiveness when viewed at an angle, such as when a truck is merging from the shoulder into traffic. The regulations are a bare minimum and prudent trucking companies exceed the minimum.

Recently I participated in a national truck driving and safety program for lawyers at a truck driving school’s proving ground in Montana. We went through night time exercises to check the distance and time for recognition of hazards on a dark road. Without getting into stopwatch and distance measurement numbers, it would be nearly impossible for a motorist approaching at the speed limit in the dark to perceive that a poorly illuminated tractor trailer is slowly merging from the shoulder into the roadway in time to react and avoid the hazard. In such situations, the driver of an oncoming vehicle may be a “sitting duck” unable to avoid a tragic crash.

In addition, merging a tractor trailer from the emergency or breakdown lane of the highway into oncoming traffic is highly dangerous even in daylight. The truck driver was charged with failure to yield right of way. South Carolina Code Section  56-5-2350, vehicle entering roadway, provides,

“The driver of a vehicle about to enter or cross a roadway from any place other than another roadway shall yield the right-of-way to all vehicles approaching on the roadway to be entered or crossed.”

If a wrongful death claim were made in South Carolina for the surviving spouse, children or other heirs of the person killed, it would be under the South Carolina wrongful death statute.

Any vehicle that stops on the shoulder of a highway must eventually merge back onto the highway from the shoulder emergency lane.  For trucks, because of their great size and weight, this is very dangerous. It takes a lot more time for a tractor trailer to accelerate to highway speed than it does for a passenger car.  That is why truck drivers are trained not to use the shoulder emergency lane unless they absolutely must. Because of their great weight, large trucks also take much longer to accelerate and safely match the speed of traffic so they can merge.

Experts such as my Ohio friend Michael Leizerman say that once a truck is ready to move from the shoulder emergency lane and reenter the flow of traffic, the truck driver should first deactivate the emergency hazard flashers. Then the truck driver should activate the left turn signal and and begin to accelerate the truck while still  in the shoulder lane.  Using the emergency lane as an acceleration lane the truck driver should reach a speed close to that of traffic and watch for an safe space to merge into.  The duty is on the truck driver to make sure that he can safely merge into traffic without causing an accident.

Turning the left turn signal on notifies other motorists that the semi-truck is going from a stopped condition to a mobile condition. The left turn signal should not be activated until the truck is ready to move — while the truck is immobile the emergency lights should be on at all times.

The Commercial Drivers License (CDL) Manual is essentially identical in all states though each state issues it with different cover and introductory material. In handling truck crash cases, we refer to the CDL manual of the state in which the truck accident occurs, the state in which the truck driver is licensed and the state in which the company is based. The South Carolina version of the CDL manual includes the following instructions:

2.4 – Seeing. To be a safe driver you need to know what’s going
on all around your vehicle. Not looking properly is a
major cause of accidents.

. . .

2.4.2 – Seeing to the Sides and Rear
It’s important to know what’s going on behind and to
the sides. Check your mirrors regularly. Check more
often in special situations.

Mirror Adjustment. Mirror adjustment should be
checked prior to the start of any trip and can only be
checked accurately when the trailer(s) are straight.
You should check and adjust each mirror to show
some part of the vehicle. This will give you a
reference point for judging the position of the other
images.

Regular Checks. You need to make regular checks
of your mirrors to be aware of traffic and to check
your vehicle.

Traffic. Check your mirrors for vehicles on either
side and in back of you. In an emergency, you may
need to know whether you can make a quick lane
change. Use your mirrors to spot overtaking
vehicles. There are “blind spots” that your mirrors
cannot show you. Check your mirrors regularly to
know where other vehicles are around you, and to
see if they move into your blind spots.

. . .

Special Situations. Special situations require more
than regular mirror checks. These are lane
changes, turns, merges, and tight maneuvers.
Lane Changes. You need to check your mirrors to
make sure no one is alongside you or about to pass
you. Check your mirrors:

 Before you change lanes to make sure
there is enough room.
 After you have signaled, to check that no
one has moved into your blind spot.
 Right after you start the lane change, to
double-check that your path is clear.
 After you complete the lane change.

. . .

Merges. When merging, use your mirrors to make
sure the gap in traffic is large enough for you to
enter safely.

. . .

2.5 – Communicating
2.5.1 – Signal Your Intentions
Other drivers can’t know what you are going to do
until you tell them.
Signaling what you intend to do is important for
safety. . . .

An 80,000 pound semi truck does not take off with great speed from a standing stop when entering the highway from a parked position on the shoulder of a highway. The handling is simply not the same as a sports car. Thus, a professional truck driver must allow plenty of time and space to enter traffic lanes from the highway shoulder.

We have handled truck accident cases in which truck drivers decided it was a great idea to pull into a traffic lane within a few car length of a car approaching at highway speed, with predictable results. In one such incident, the truck driver was medically impaired by chronic obstructive pulmonary disorder (COPD), a disqualifying condition. It would have barred him from driving if disclosed to the DOT medical examiner. When I took the deposition of the truck driver’s personal physician, he testified that the trucker’s COPD was so severe he was not supposed to go anywhere without an oxygen tank and the lack of oxygen to the brain could have cognitive effects.

News reports of the crash on I-95 this week do not indicate why the truck driver chose to park on the shoulder at night. Nothing short of unforeseeable mechanical breakdown would justify that dangerous choice. Media reports also do not indicate why the trucker pulled into the path of an approaching vehicle without yielding the right of way. Was it due to fatigue, physical or cognitive impairment, distraction, or some other cause?

For an experienced trucking attorney, this appears to be a case of clear liability even though the insurance company’s lawyers would undoubtedly try to blame the victim who happened upon a truck executing a highly dangerous maneuver in the dark.

 


Ken Shigley is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. He is licensed to practice law in Georgia. Representation of clients in others states, which possible, can be undertaken only in strict compliance with the multijurisdictional practice and pro hac vice rules of the other state.

Overcoming the independent contractor defense

Much of our Atlanta-based litigation law practice is based upon referrals from other attorneys around Georgia and North America for catastrophic injury and wrongful death cases in Georgia. Most of these are not simple, slam-dunk cases. Often we have to contend with a rat’s nest of convoluted, multi-layered liability defenses. Among those is often the “independent contractor” defense. The company that is the prime mover in an activity may cloak itself behind an “independent contractor” shell game, capturing most of the profits while trying to outsource all the risks of harm to others.

Here is a paper I presented on overcoming the independent contractor defense at a national continuing legal education program in New Orleans in 2012. While I haven’t updated it lately, covered all the nuances or included all the Georgia case citations, it does outline major issues in seeking to get through this particular maze.


Effective representation of a seriously injured person requires that counsel reach the pockets of a responsible entity with sufficient insurance coverage or assets to pay a judgment. That often requires reaching behind a screen of independent contractor business relationships erected to evade financial responsibility. The general rule is that a defendant is not liable for the negligence of an independent contractor, but there are many exceptions.  While not comprehensive, this paper seeks to outline major theories for overcoming the independent contractor defense.

 

Interstate Motor Carriers

Prior to 1956, interstate motor carriers commonly sought to evade financial responsibility by hiding behind “independent contractor” arrangements. In 1953, while addressing carriers’ evasion of  accountability similar to that engaged in by the ATF in this case, the United States Supreme Court described such practices as “evils that had grown up” in the industry, and that the ICC need not “sit idly by and wink at practices that lead to violations of its provisions.” American Trucking Ass’ns v. United States, 344 U.S. 298, 301, 311 (1953).  Those “evils” were summarized in Rediehs Express, Inc. v. Maple, 491 N.E.2d 1006 (Ind. Ct. App. 1986):

The history of the regulations of motor carriers reveals that after the commencement of regulation in 1935, . . .  a substantial number of carriers . . . began to use equipment owned and driven by truckers who had no such ICC operating authority. This use was accomplished by a variety of leases, trip leases, and by other arrangements under which owner-operator truckers carried on the operations of the carriers with operating authority.  In contracting with such persons the carriers took care to constitute the lessors as independent contractors which enabled them to avoid the commission’s safety, financial, and insurance regulations that had been prescribed for equipment and drivers in order to protect the public. Many of the owner-operators without authority were itinerant truckers known as “gypsies,” fly-by-night truckers with poor, unsafe equipment who had little financial ability. They may or may not have had adequate insurance. The hard core of the problem was the trip lease and its attendant evils which permitted an indifferent carrier to evade its safety and financial responsibility. . . . The practice of leasing made it difficult in accident cases to fix responsibility, and certified carriers could thus escape the consequences of the regulations and responsibility for accidents by employing irresponsible persons as independent contractors who were not financially accountable and who had no insurance or were under-insured.

“The use of non-owned vehicles led to public confusion as to who was financially responsible for accidents caused by those vehicles.” Graham v. Malone Freight Lines, Inc., 948 F.Supp. 1124, n.3 (D. Mass. 1996).   Thus, interstate motor carriers often “were able to escape liability for virtually all motor vehicle accidents occurring in the motor carrier’s business.”  Cincinnati v. Haack, 708 N.E.2d 214 (Ohio Ct. App. 1997). In such cases, it was “clear that the scheme as a whole is a mere subterfuge, an unpermitted evasion, not a real avoidance of the provisions of the law.”  Georgia Truck System, Inc. v. Interstate Commerce Commission, 123 F.2d 210 (5th Cir. 1941), as it was “the motor carrier who has put the entire trip in motion,”American Transit Lines v. Smith, 246 F.2d 86, 87 (6th Cir. 1957).

Since 1956, federal law has treated independent contractors as statutory employees of a motor carrier in the interstate motor carrier context.  The 1956 amendment to the Interstate Common Carrier Act was intended to require a motor carrier to be fully responsible for the maintenance and operation of the leased equipment and the supervision of the borrowed drivers, thereby protecting the public from accidents, preventing public confusion about who was financially responsible if accidents occurred, and providing financially responsible defendants.  Price v. Westmoreland, 727 F.2d 494 (5th Cir. 1984); Morris v. JTM Materials, supra. “These are basic requirements that are inherent in the relation of the for-hire carrier to the public. When they are lacking, the chaotic conditions that preceded enactment of the Motor Carrier Act, 1935 inevitably ensue.” Cox v. Bond Transp., Inc., 249 A.2d 579 (N.J. 1969).  The purpose is “to protect persons who are injured in highway accidents, by increasing the likelihood that a substantial entity will be available to respond to any judgment rendered.”  Johnson v. Pacific Intermountain Express Co., 662 S.W.2d 237 (Mo. 1983).  This eliminates “the defense of independent contractor by making the owner/operator of the equipment the ‘statutory employee’ of the carrier.”  Shell v. Navajo Freight Lines, 693 P.2d 382 (Colo. Ct. App. 1984).

The Federal Motor Carrier Safety Regulations, 49 C.F.R. § 390.5, defines the term“employee” as,

any individual, other than an employer, who is employed by an employer and who in the course of his or her employment directly affects commercial motor vehicle safety.  Such term includes a driver of a commercial motor vehicle (including an independent contractor while in the course of operating a commercial motor vehicle), a mechanic, and a freight handler.

The Regulatory Guidance to 49 C.F.R. § 390.5 , at Question 17, explains:

The term “employee,” as defined in § 390.5, specifically includes an independent contractor employed by a motor carrier.  The existence of operating authority has no bearing upon the issue.  The motor carrier is, therefore, responsible for compliance with the FMCSRs by its driver employees, including those who are owner-operators.

62 Fed. Reg. 16,407 (April 4, 1997). 49 C.F.R. Chapter III: Regulatory Guidance for the Federal Motor Carrier Safety Regulations, Interpretation to § 390.5, question 17 (1997)(emphasis added).  See also 49 C.F.R. § 390.5 (2002).

The definition of “motor carrier” includes “a motor carrier’s agent,” “employee” includes “an independent contractor while in the course of operating a commercial motor vehicle.” 49  C.F.R.§ 390.5, and “lease” includes a “contract or arrangement in which the owner grants the use of equipment, with or without driver . . . .” 49  C.F.R.§ 376.2. The alternative and disjunctive reference to “contract or arrangement” must have some significance other than mere redundancy. Moreover, “[e]very motor carrier, its officers, agents . . .  shall be instructed in and comply with the rules . . . .” 49  C.F.R. § 392.1.

These Regulations were intended to safeguard the public by preventing motor carriers from circumventing applicable regulations by leasing the equipment and services of independent contractors exempt from federal regulation. The definition of “lease” as “contract or arrangement” extends to any arrangement by which a carrier allows another to haul its freight for compensation. Any other construction would defeat the Congressional policy of requiring financially responsible interstate transportation. Hartford Ins. Co. v. Occidental Fire & Cas. Co., 908 F.2d 235 (7th Cir. 1990); Transamerica Ins. Co. v. Maryland Cas. Ins. Co., 166 Ariz. 219, 801 P.2d 454 (1990).

 

Restatent of Torts 2nd – Liability Of An Employer Of An Independent Contractor

The Restatement includes 15 exceptions to the general rule that an employer is not responsible for the negligence of an independent contractor.  These exceptions are sometimes referred to as non-delegable duties. This paper is not intended as a comprehensive analysis of court decisions applying, approving, rejecting or distinguishing these Restatement provisions.

Contractor’s Conduct In Obedience To Employer’s Directions

Restatement (Second) of Torts  § 410 provides:

The employer of an independent contractor is subject to the same liability for physical harm caused by an act or omission committed by the contractor pursuant to orders or directions negligently given by the employer, as though the act or omission were that of the employer himself.

 Comment b states that this section deals only with the “liability of an employer who does not intend that the contractor shall cause physical harm to any other person, but who either employs a contractor to do work which, no matter how carefully done, involves an unreasonable risk of physical harm to others to whom he owes a duty to exercise care, or who employs a contractor to do work which could be safely done but for the fact that he directs the contractor to do it in a manner involving such risk. The liability is based upon the fact that the employer has been negligent in directing his contractor to do work which is dangerous in itself or in the manner in which it is done. Therefore, the employer is subject to liability, under the rule stated in this Section, for only such physical harm as is caused by the dangerous character of the work or the dangerous manner in which it is directed to be done. He is not subject to liability for any harm caused by some improper method which the contractor, without any direction of his employer, adopts in doing the work.”

Comment c clarifies that “the orders and directions are not negligently given if the employer neither knows nor should know that the work involves such risk even though the contractor discovers during the progress of the work that such risks will be involved in following the orders and directions.”

Comment d explains that “this Section is most usually applicable where construction or repair work is entrusted to an independent contractor under plans and specifications provided by the employer, which prescribe the result to be attained and the material to be used in the work and the manner in which it is to be used. It is, however, equally applicable wherever an employer otherwise directs his independent contractor to do work which, in itself or as ordered to be done, is unreasonably dangerous to others.”

One of the illustrations in the comments is as follows: “A hires a taxicab, tells the driver, B, that he has only five minutes to catch his train, directs B to ignore traffic signals, and offers him a reward of five dollars if he will get to the station in time for the train. While B is driving the taxicab at an excessive rate of speed, it collides with the car of C, causing harm to C. A is subject to liability to C.” It would seem this should be applicable to a shipper, freight broker or logistics company who knowingly establishes positive or negative incentives for a trucker or trucking company to ignore hours of service and other safety regulations,

Comment h provides: “The act of the contractor which subjects the employer to liability under the rule stated in this Section is usually negligence on the part of the contractor. But this is not necessarily true. It may happen that the employer knows or should know of circumstances of which the contractor is excusably ignorant, and which make the work or the manner in which it is directed to be done unreasonably dangerous. In such a case, the contractor would not be subject to liability since he, as a reasonable man, would not realize the risk involved in his conduct. On the other hand, the employer, as a reasonable man, should realize the danger and is negligent in directing the work to be done.”

In Posner v. Paul’s Trucking Service, Inc., 380 F.2d 757 (1st Cir.,1967), a freight broker required delivery by an independent contractor on a schedule that could not be made in compliance with hours of service rules, thus creating a jury question of the broker’s liability in negligently giving those instructions. Restatement § 410 has been seldom followed in Southern states but has been applied in at least a couple of Tennessee cases. See Givens v. Mullikin ex rel. Estate of McElwaney, 75 S.W.3d 383, 394 (Tenn., 2002)(Insurer and insured could be held vicariously liable for insurance defense lawyer’s abuse of process directed, commanded, or knowingly authorized by insurer or insured), and Waggoner Motors, Inc. v. Waverly Church of Christ, 159 S.W.3d 42, 53 (Tenn.Ct.App.,2004)(Where a church acting as its own general contractor retained and exercised control over independent contractor’s work, knew or had reason to know of the unreasonable risks posed by overspray, and ordered contractor to proceed despite his warnings of potential overspray damage, it was liable for the negligence of the subcontractor).

Negligence In Selection Of Contractor

Restatement (Second) of Torts  § 411 provides:

An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor

(a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or

(b) to perform any duty which the employer owes to third persons.

Safety rather than financial responsibility is the focus of this section, so merely hiring an independent contractor that is not financially responsible is not enough

Failure To Inspect Work Of Contractor After Completion

Restatement (Second) of Torts  § 412 provides:

 One who is under a duty to exercise reasonable care to maintain land or chattels in such condition as not to involve unreasonable risk of bodily harm to others and who entrusts the work of repair and maintenance to an independent contractor, is subject to liability for bodily harm caused to them by his failure to exercise such care as the circumstances may reasonably require him to exercise to ascertain whether the land or chattel is in reasonably safe condition after the contractor’s work is completed.

 Comment c enumerates factors considered under this section as follows: (1) the danger involved in the condition of the structure or chattel if the work is entrusted to the contractor is not carefully and skillfully done; (2) the character of the work—whether it is of the kind which a competent contractor is so likely to do properly that it is reasonable to rely entirely or to a certain extent upon his competence as a sufficient assurance that the work has been safely done; (3) the ability which the employer has or should have to appreciate the proper or improper character of the work done for him by the contractor; (4) the ease or difficulty of ascertaining the actual character of the completed work; and (5) the existence of a relation between the contractor’s employer and those injured by the careless or incompetent work of the contractor which entitles them to expect that the employer will personally exercise care for their safety.”

Comment e states that “[t]he rule stated in this Section subjects the employer of an independent contractor to liability only if, as a result of his failure to exercise such care as the circumstances require in inspecting the completed work done by his contractor, he fails to discover its bad condition and as a result bodily harm is caused to someone to whom he owes a duty of maintaining his land or chattels in reasonably safe condition.”

The extent of the employer’s knowledge and experience in the field of work to be done is to be taken into account.

 

Duty To Provide For Taking Of Precautions Against Dangers Involved In Work Entrusted To Contractor

Restatement (Second) of Torts  § 413 states:

One who employs an independent contractor to do work which the employer should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the absence of such precautions if the employer

(a) fails to provide in the contract that the contractor shall take such precautions, or

(b) fails to exercise reasonable care to provide in some other manner for the taking of such precautions.

 This section is not concerned with routine precautions such as driving at a safe speed with good brakes. Rather, it deals with “peculiar risks” such as demolition of buildings, excavations, etc.

 

Negligence In Exercising Control Retained By Employer

Restatement (Second) of Torts  § 414 states:

One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.

This requires more than a general right to determine objectives. There must be some retention of control of operative details, such as when a principal has a foreman on site to supervise work of contractors.

 

Duty Of Possessor Of Land To Prevent Activities And Conditions Dangerous To Those Outside Of Land

 Restatement (Second) of Torts § 414A provides:

A possessor of land who has employed or permitted an independent contractor to do work on the land, and knows or has reason to know that the activities of the contractor or conditions created by him involve an unreasonable risk of physical harm to those outside of the land, is subject to liability to them for such harm if he fails to exercise reasonable care to protect them against it.

 This does not create a duty to inspect, or any reason not to assume that an apparently contractor will not perform work properly. However, when the principal knows or has reason to know that the contractor is engaging or is about to engage in an activity, or that he has created or is about to create conditions, which will involve such an unreasonable risk to others outside of the land, it is his duty to interfere, and to exercise reasonable care to prevent physical harm to such persons. . . ”

 

Duty To Supervise Equipment And Methods Of Contractors Or Concessionaires On Land Held Open To Public

Restatement (Second) of Torts  § 415 states:

A possessor of land who holds it open to the public for any purpose is subject to liability to members of the public entering for that purpose for physical harm caused to them by his failure to exercise reasonable care to protect them against unreasonably dangerous activities of, or unreasonably dangerous conditions created by, an independent contractor or concessionaire employed or permitted to do work or carry on an activity on the land.

 This is “based upon the failure of the possessor of the land in question to exercise reasonable care to supervise the equipment or methods of his contractor or concessionaire who carries on an activity which endangers the public attracted to the possessor’s land. In order that the liability shall exist, it is, therefore, necessary, not only that the contractor shall be negligent, but also that the possessor shall have a reasonable opportunity to ascertain the improper equipment or method of his contractor and to secure the substitution of safe equipment and methods.”  Comment c.

 

Harm Caused By Negligence Of A Carefully Selected Independent Contractor

Restatement (Second) of Torts § 416 states:

One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise.

“[T]he employer remains liable for injuries resulting from dangers which he should contemplate at the time that he enters into the contract, and cannot shift to the contractor the responsibility for such dangers, or for taking precautions against them. . . . the fact that the contract contains express stipulations for the taking of adequate precautions and that the contractor agrees to assume all liability for harm caused by his failure to do so, does not relieve his employer from the liability stated in this Section. . . . It is sufficient that it is likely to involve a peculiar risk of physical harm unless special precautions are taken, even though the risk is not abnormally great. A “peculiar risk” is a risk differing from the common risks to which persons in general are commonly subjected by the ordinary forms of negligence which are usual in the community. It must involve some special hazard resulting from the nature of the work done, which calls for special precautions.” For example,” if the principal employs an independent contractor to operate a truck this does not apply to speed, maintenance of brakes, etc., but “if the contractor is employed to transport giant logs weighing several tons over the highway, the employer will be subject to liability for the contractor’s failure to take special precautions to anchor them on his trucks. . . . It is sufficient that it is a risk which the employer should recognize as likely to arise in the course of the ordinary and usual method of doing the work, or the particular method which the employer knows that the contractor will adopt.”  Comments a, c and d.  Cross reference with Restatement §427, infra.

 

Work Done In Public Place

Restatement (Second) of Torts 417 states:

One who employs an independent contractor to do work in a public place which unless carefully done involves a risk of making the physical condition of the place dangerous for the use of members of the public, is subject to liability for physical harm caused to members of the public by a negligent act or omission of the contractor which makes the physical condition of the place dangerous for their use.

It is not necessary for work be done under or require a franchise, license or permit, or that such a franchise, permit, or license. It is enough that the work, unless carefully done, will involve making the physical condition of the public place dangerous for the use of the public. The words “public place” denote any place includes public highways, parks and public buildings, etc.

Maintenance Of Public Highways And Other Public Places

 Restatement (Second) of Torts § 418 provides:

(1) One who is under a duty to construct or maintain a highway in reasonably safe condition for the use of the public, and who entrusts its construction, maintenance, or repair to an independent contractor, is subject to the same liability for physical harm to persons using the highway while it is held open for travel during such work, caused by the negligent failure of the contractor to make it reasonably safe for travel, as though the employer had retained the work in his own hands.

(2) The statement in Subsection (1) applies to any place which is maintained by a government for the use of the public, if the government is under the same duty to maintain it in reasonably safe condition as it owes to the public in respect to the condition of its highways.

Insofar as this section is directed to liability of governmental entities, its application is in many localities limited by statutory limitations on governmental liability. However, it may also apply to a contractor who undertakes to repair, construct, or maintain a highway, and entrusts the work to a subcontractor;

  

Repairs Which Lessor Is Under A Duty To His Lessee To Make

 Restatement (Second) of Torts § 419 provides:

 A lessor of land who employs an independent contractor to perform a duty which the lessor owes to his lessee to maintain the leased land in reasonably safe condition, is subject to liability to the lessee, and to third persons upon the land with the consent of the lessee, for physical harm caused by the contractor’s failure to exercise reasonable care to make the land reasonably safe.

 This rule “applies only where a legislative enactment imposes the duty of repair or where the lessor by a covenant in the lease or otherwise has assumed a contractual duty to make repairs.”  Comment a.

 

Repairs Gratuitously Undertaken By Lessor

 Restatement (Second) of Torts § 420 provides:

 A lessor of land who employs an independent contractor to make repairs which the lessor is under no duty to make, is subject to the same liability to the lessee, and to others upon the land with the consent of the lessee, for physical harm caused by the contractor’s negligence in making or purporting to make the repairs as though the contractor’s conduct were that of the lessor.

 

Maintenance Of Structures On Land Retained In Lessor’s Possession Necessary To Tenant’s Enjoyment Of Leased Land

Restatement (Second) of Torts § 421 provides:

 A possessor of land who, having leased a part of the land, is under a duty to maintain in reasonably safe condition the part retained by him, and who entrusts the repair of such part to an independent contractor, is subject to the same liability to the lessee, and to others upon the retained part of the land with the consent of the lessee, for physical harm caused by the negligence of the contractor in failing to maintain such part of the land in reasonably safe condition, as though the lessor had himself retained the making of the repairs in his own hands.

 

 Work On Buildings And Other Structures On Land

Restatement (Second) of Torts § 422 states:

A possessor of land who entrusts to an independent contractor construction, repair, or other work on the land, or on a building or other structure upon it, is subject to the same liability as though he had retained the work in his own hands to others on or outside of the land for physical harm caused to them by the unsafe condition of the structure

(a) while the possessor has retained possession of the land during the progress of the work, or

(b) after he has resumed possession of the land upon its completion.

This applies “only to injuries occurring while the possessor has retained possession of the premises during the progress of the work, or after he has resumed possession of the land upon the completion of the work. The rule stated in this Section has no application to injuries occurring while the land is turned over to the contractor and he is in exclusive possession of it. Thus where the employer moves out of his building and surrenders it to the contractor while it is undergoing construction, demolition, or repair, there is no liability under the rule here stated.” Comment c.

Work Withdrawing Lateral Support

Restatement (Second) of Torts § 422A states:

One who employs an independent contractor to do work which the employer knows or should know to be likely to withdraw lateral support from the land of another is subject to the same liability for the contractor’s withdrawal of such support as if the employer had retained the work in his own hands.

“[O]ne who employs an independent contractor to do work involving excavation, or other work of a kind which the employer knows or should know to be likely to result in the withdrawal of lateral support from the land of another, is subject to the same liability for a withdrawal of such support by the contractor as if he had retained the work in his own hands.” Comment b.

Making Or Repair Of Instrumentalities Used In Highly Dangerous Activities

Restatement (Second) of Torts § 423 provides:

One who carries on an activity which threatens a grave risk of serious bodily harm or death unless the instrumentalities used are carefully constructed and maintained, and who employs an independent contractor to construct or maintain such instrumentalities, is subject to the same liability for physical harm caused by the negligence of the contractor in constructing or maintaining such instrumentalities as though the employer had himself done the work of construction or maintenance.

This has been applied to high voltage electric lines and appliances, brakes on vehicles, explosives, radioactive materials, etc.

Precautions Required By Statute Or Regulation

  Restatement (Second) of Torts § 424 provides:

One who by statute or by administrative regulation is under a duty to provide specified safeguards or precautions for the safety of others is subject to liability to the others for whose protection the duty is imposed for harm caused by the failure of a contractor employed by him to provide such safeguards or precautions.

This has been applied to support a nondelegable duty to comply with a variety of building and safety codes.

Repair Of Chattel Supplied Or Land Held Open To Public As Place Of Business

Restatement (Second) of Torts § 425 provides:

One who employs an independent contractor to maintain in safe condition land which he holds open to the entry of the public as his place of business, or a chattel which he supplies for others to use for his business purposes or which he leases for immediate use, is subject to the same liability for physical harm caused by the contractor’s negligent failure to maintain the land or chattel in reasonably safe condition, as though he had retained its maintenance in his own hands.

This has been applied to elevators (Gaffney v. EQK Realty Investors, 213 Ga.App. 653, 445 S.E.2d 771 (1994)), escalators, hotel water heaters, security systems, premises safety and a wide variety of other context.

Negligence Collateral To Risk Of Doing The Work

 Restatement (Second) of Torts § 426 provides:

Except as stated in §§ 428 and 429, an employer of an independent contractor, unless he is himself negligent, is not liable for physical harm caused by any negligence of the contractor if

(a) the contractor’s negligence consists solely in the improper manner in which he does the work, and

(b) it creates a risk of such harm which is not inherent in or normal to the work, and

(c) the employer had no reason to contemplate the contractor’s negligence when the contract was made.

This “collateral negligence” or “casual negligence” in the operative detail of the work, as distinguished from the general plan or method followed or the result to be accomplished. It relates to negligence which is unusual or abnormal, or foreign to the normal or contemplated risks of doing the work, as distinguished from negligence which creates only the normal or contemplated risk. Comment a.

Negligence As To Danger Inherent In The Work

 Restatement (Second) of Torts § 427 states:

One who employs an independent contractor to do work involving a special danger to others which the employer knows or has reason to know to be inherent in or normal to the work, or which he contemplates or has reason to contemplate when making the contract, is subject to liability for physical harm caused to such others by the contractor’s failure to take reasonable precautions against such danger.

This is closely related to Restatement §16. However, It is not, necessary to the employer’s liability that the work be of a kind which cannot be done without a risk of harm to others, or that it be of a kind which involves a high degree of risk of such harm, or that the risk be one of very serious harm, such as death or serious bodily injury. It is not necessary that the work call for any special skill or care in doing it. It is sufficient that work of any kind involves a risk, recognizable in advance, of physical harm to others which is inherent in the work itself, or normally to be expected in the ordinary course of the usual or prescribed way of doing it, or that the employer has special reason to contemplate such a risk under the particular circumstances under which the work is to be done. Comments a and b.

 

Work Involving Abnormally Dangerous Activity

 Restatement (Second) of Torts § 427A provides:

One who employs an independent contractor to do work which the employer knows or has reason to know to involve an abnormally dangerous activity, is subject to liability to the same extent as the contractor for physical harm to others caused by the activity.

This has been applied in a wide variety of cases involving premises security, explosions, structure collapses, electrocution, toxins, etc.

 

Work Likely To Involve Trespass Or Nuisance

 Restatement (Second) of Torts § 427B provides:

One who employs an independent contractor to do work which the employer knows or has reason to know to be likely to involve a trespass upon the land of another or the creation of a public or a private nuisance, is subject to liability for harm resulting to others from such trespass or nuisance.

This provision has been invoked in a variety of circumstances, especially in cases involving flooding, pollutants or fire spreading to another’s property. 

Public Franchise / Unreasonable Risk of Harm

Restatement (Second) of Torts § 428 states:

An individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for physical harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity.

Prior to adoption of the statutory employer rules in the interstate motor carrier context, this Restatement rule was used to overcome the independent contractor defense. See, e.g., Black v. Montgomery Trucking Co., Inc., 129 Ga.App. 36,(followed Restatement rule), reversed on other grounds without mention of either Restatement rule or federal statutes or regulations, 231 Ga. 211 (1973)(compare Dove v. National Freight, Inc., 138 Ga.App. 114 (1976)); Venuto v. Robinson, 118 F.2d 679 (3rd Cir., 1941)( Restatement 428 applied to hold interstate motor carrier liable for negligence of independent contractor driver); Hodges v. Johnson, 52 F.Supp. 488 (D.C.VA. 1943); War Emergency Co‑op. Ass’n v. Widenhouse, 169 F.2d 403 (4th Cir. 1948); Lehman v. Robertson Truck‑A‑Way, 122 Cal.App.2d 82, 264 P.2d 653 (Cal.App. 3 Dist. 1953); Louis v. Youngren, 12 Ill.App.2d 198, 138 N.E.2d 696 (Ill.App. 1 Dist., 1956); Eli v. Murphy, 39 Cal.2d 598, 248 P.2d 756 (Cal, 1952)(nondelegable duty of motor carrier to public).

However, some jurisdictions have declined to classify trucking as an unreasonably dangerous activity giving rise to a nondelegable duty under this statement of the Restatement, reasoning that “[t]he operation of any motor vehicle may be said to involve some risk to others but the use of [this independent contractor’s] equipment involved no more risk than that of any other.” Gaskill v. Calaveras Cement Co. 102 Cal.App.2d 120, 226 P.2d 633 (1951).   Lebrun v. Stop & Shop Supermarket Co., 67 Mass.App.Ct. 1102, 851 N.E.2d 478 (Table)(Mass.App.Ct.,2006).See also, Brown v. Truck Connections Intern., Inc., 526 F.Supp.2d 920 (E.D.Ark.,2007); Walker v. Wittenberg, Delony & Davidson, Inc., 241 Ark. 525, 531, 242 Ark. 97, 412 S.W.2d 621, 625 (1967).

There are also cases holding this inapplicable to a shipper which does not have a public franchise. See, e.g., Wilson v. IESI N.Y. Corp., 444 F.Supp.2d 298 (M.D.Pa.,2006).

Exempt commodity loads. In Serna v. Pettey Leach Trucking, Inc., 110 Cal.App.4th 1475, 2 Cal.Rptr.3d 835 (2003), the California Court of Appeals held that the Restatement (Second) of Torts § 428 applied to a interstate motor carrier even though that carrier was carrying a commodity (poultry) that was exempt from the economic regulations of the DOT.

Taxi cabs. Courts in several jurisdictions have applied Restatement § 428 to operation of taxi cabs under a public franchise so that taxi companies that lease cabs to drivers as independent contractors are vicariously liable. See, e.g., Belder v. Dandridge, 2002 WL 32076963 (Va.Cir.Ct. 2002); Teixeira v. Car Cab Three, Inc., 1994 WL 413034 (Mass.App.Div. 1994); Paige v. Red Top, Inc., 255 A.2d 279 (NJ App. Div. 1969).

Negligence In Doing Work Which Is Accepted In Reliance On The Employer’s Doing The Work Himself

Restatement (Second) of Torts § 428 provides:

One who employs an independent contractor to perform services for another which are accepted in the reasonable belief that the services are being rendered by the employer or by his servants, is subject to liability for physical harm caused by the negligence of the contractor in supplying such services, to the same extent as though the employer were supplying them himself or by his servants.

Where a customer relies upon the principal to provide goods or services, and the principal substitutes goods or services from an independent contractor, the principal may be liable for the contractor’s negligence.

 

Conclusion.  Counsel for plaintiffs facing an independent contractor defense may use this paper as  a starting point for research, exploration and perhaps a bit of creativity, weaving together Restatement, statutes, regulations, local ordinances and common law to obtain fair compensation for their clients.

 


Ken Shigley is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. Work on all these types of cases requires expertise in insurance law.

Four big rig pileup kills woman on I-285 near Camp Creek Parkway exit

A chain reaction crash involving four big rig tractor trailers on I-285 near Camp Creek Parkway in south Fulton County, GA, killed a woman in a passenger car on June 19, 2018.

According to the Georgia State Patrol, A tractor-trailer was traveling northbound when it struck three other big rigs and the rear of a car, pushing the car underneath another tractor-trailer.

News photos showed that at least one truck’s cab was badly crushed and the roof of the passenger car was caved in.

In addition to the one fatality, five others were taken to Grady Memorial Hospital. It took several hours to clear the debris.

As with most fatal traffic crashes on Georgia highways, the Georgia State Patrol Specialized Collision Reconstruction Team (SCRT) is undertaking a painstaking reconstruction of the chain reaction collision. While news reports have not identified the cause of the fatal truck crash, experience in handling many tractor trailer accident cases over the years suggests likely factors, all of which are related to failure of safety management in trucking companies. Truck driver fatigue and distraction are common factors.

Safety management by trucking companies

Most often when commercial truck drivers crash due to fatigue, the root cause analysis leads back to corporate management issues as the motor carrier had a duty under the Federal Motor Carrier Safety Regulations to require observance by their drivers of safety rules. Trucking companies are required to manage safety so as to require their drivers to follow the rules. The Federal Motor Carrier Safety Regulations at 49 C.F.R. §390.11 provides: “Whenever . . . a duty is prescribed for a driver or a prohibition is imposed upon the driver, it shall be the duty of the motor carrier to require observance of such duty or prohibition.” In addition, “No person shall aid, abet, encourage, or require a motor carrier or its employees to violate the rules of this chapter.” 49 C.F.R. §390.13.

Speed

Speed too fast for conditions is almost always a factor when a tractor trailer crashes into a line of vehicles slowed by traffic conditions or in a construction zone. Excessive speed is involved in 58% of crashes and attributable to the large truck in 65% of those. I suspect that is underestimated because the data comes from police reports. The SCRT unit will gather data from electronic control module and possibly other electronic data sources in the tractor trailers and possibly other vehicle to show the speed, braking and deceleration in each vehicle.

Driver impairment

One of the most important and most frequently violated safety rules for truck drivers, as to which motor carriers have a duty to enforce among their drivers, is one related to impaired driving. “No driver shall operate a commercial motor vehicle, and a motor carrier shall not require or permit a driver to operate a commercial motor vehicle, while the driver’s ability or alertness is so impaired, or so likely to become impaired, through fatigue, illness, or any other cause, as to make it unsafe for him/her to begin or continue to operate the commercial motor vehicle. . . .” 49 C.F.R. §392.3.

News reports are silent on possible fatigue factors in this crash, but among those we see most often are violation of work hours rules and untreated sleep apnea.

Fatigue

News reports are silent on whether fatigue related was have been a factor in this crash, but it is something we look into when appropriate.

Truck drivers work long, hard hours, and some tend to drive too long and sleep too little, with tragic outcomes. Trucking safety rules include “hours of service limits.” Truck drivers required to log their time driving, on duty but not driving, off duty and in the sleeper berth. The current limits are 11 hours driving out of 14 hours on duty, followed by at least 10 hours off duty, up to 60 hours in a week or 70 hours in an 8 day period on the road. But they can under certain circumstances restart the clock and get behind the wheel. That provision can allow a truck driver to legally drive at 80,000 semi rig up to 81 hours per week.

As many as one-third of truck drivers admit to falsifying their hours of service logs, often under pressure from employers and shippers to get the job done quickly, to meet financial incentives, or simply to make more money. Electronic logging systems now automate that process, but the systems are subject to being hacked in order to squeeze in more hours than are legal.

In a big rig semi truck crash we are handling in the Savannah area, we have a video of the truck driver admitting to an officer, “I must have went to sleep.”

While there is no blood test to determine when fatigue contributes to the cause of a crash, we often can dig through layers of of trip records to prove violation of the work hours rules. In once case we deconstructed trip records in the deposition of an Ohio truck driver until he admitted that he had been driving 20 of the previous 24 hours, had driven from Ohio to Atlanta, back to Ohio, and after a one hour nap started driving back to Atlanta. He ran over a family and killed their son.

Sleep apnea

When physical characteristics of at-fault big rig truck drivers suggest the likelihood of obstructive sleep apnea that if untreated can contribute to dangerous driver fatigue, we explore whether the trucking company failed to monitor that as part of safety management. The US Department of Transportation Medical Review Board has recommended that individuals with a Body Mass Index (BMI) over 40 “should be referred for diagnostic sleep evaluations.”

The National Transportation Safety Board has reported, “Drivers with sleep apnea are seven times more likely to be involved in an automobile accident than those without sleep apnea” Drivers with undiagnosed obstructive sleep apnea who are not receiving proper treatment are prone to making critical mistakes or even fall asleep while driving due to their fatigue.”

The Federal Motor Carrier Safety Administration has warned truck drivers that, “Untreated sleep apnea can make it difficult for you to stay awake, focus your eyes, and react quickly while driving. In general, studies show that people with untreated sleep apnea have an increased risk of being involved in a fatigue-related motor vehicle crash.”

In one fatal big rig crash we have handled, our review of the driver qualification file in the company’s records shoed that the truck driver was “morbidly obese” with a BMI of 41.5, putting him severely at risk of obstructive sleep apnea. The company had not done anything to get evaluation or treatment for sleep apnea. After crashing into a line of stopped traffic stopped at a red light, he admitted that he was impaired by fatigue only  four and one-half hours after reporting for work.

Driver distraction

There is nothing in news reports to indicate whether the big rig truck driver in this crash was distracted, but that is a common factor we investigate in major truck crashes. Cell phones, texting, fiddling with GPS units, food and beverages are among the common causes of driver distraction leading to crashes.

When fitting, we fight discovery battles with trucking companies’ insurers over production and forensic download of data from smart phones that law enforcement typically does not attempt to access. A cell phone download may reveal voice  and text connections and use of other communications apps such as Facetime, Facebook Messenger, etc.

In addition, GPS data from the cell phone may be compared with electronic data from the truck regarding locations, speed and activity of the truck, and patterns and practices that may cast light upon the root cause of the crash. Cell phone data may reveal the truck driver’s off-duty activities contributing to dangerous fatigue on the job. For example, a driver was working a second job in his off hours which would have contributed to accumulated fatigue, chronic sleep deprivation, and irregular work and rest cycles which could likely lead to the inevitable result of a catastrophic truck crash.

Direct solicitation of accident victims

Victims in such big rig semi truck crashes should be aware that any lawyer who directly solicits them is violating both a State Bar ethics rule punishable by disbarment and a Georgia criminal law.

 

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Ken Shigley‘s “singular focus has been filing lawsuits for people hit by trucks.” Atlanta Journal-Constitution, May 7, 2018. He is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. Work on all these types of cases requires expertise in insurance law.

 

 

California trucker killed sideswiping truck parked overnight on shoulder of I-16

A young truck driver from California lost his life on the side of I-16 in Laurens County, Georgia, on March 2nd. This  tragedy highlights how truck drivers are in one of the most dangerous occupations.

According to news reports, a 22-year-old California truck driver was killed when he sideswiped a disabled semi in predawn darkness on the shoulder of I-16 in Laurens County, Georgia.

Shortly after 5 a.m., an 18-wheeler loaded with tangelos from Delano, California, sideswiped a disabled tractor-trailer on the right shoulder on I-16. The California citrus truck then went off the right side of the highway into a ditch and overturned, striking a a tree and destroying the cab. The 22-year-old truck driver died at the scene.

The driver of the other 18-wheeler had mechanical trouble and had been parked on the shoulder for nine hours since about 8 p.m. Thursday, according to the Georgia State Patrol. He was not hurt.

The circumstances of this crash raises a question of whether the truck parked on the shoulder may have violated safety rules on visibility of parked trucks on the road, contributing to cause of the crash.

Most often when commercial truck drivers crash the root cause analysis leads back to corporate management issues as the motor carrier had a duty under the Federal Motor Carrier Safety Regulations to require observance by their drivers of safety rules. Trucking companies are required to manage safety so as to require their drivers to follow the rules. In a crash involving two interstate tractor trailers, that analysis may involve both companies.

As with most fatal traffic crashes on Georgia highways,  the Georgia State Patrol Specialized Collision Reconstruction Team (SCRT)  probably undertook a detailed reconstruction of the crash. In most tractor trailer accident cases over the years  we have seen that  failure of safety management in trucking companies. If the employer of the stopped tractor trailer did not enforce safety rules about visibility of stopped trucks, that could be a big factor.

Federal Motor Carrier Safety Regulations at 49 C.F.R. § 392.22 requires:

(a) Hazard warning signal flashers.

Whenever a commercial motor vehicle is stopped upon the traveled portion of a highway or the shoulder of a highway for any cause other than necessary traffic stops, the driver of the stopped commercial motor vehicle shall immediately activate the vehicular hazard warning signal flashers and continue the flashing until the driver places the warning devices required by paragraph (b) of this section. The flashing signals shall be used during the time the warning devices are picked up for storage before movement of the commercial motor vehicle. The flashing lights may be used at other times while a commercial motor vehicle is stopped in addition to, but not in lieu of, the warning devices required by paragraph (b) of this section.

(b) Placement of warning devices –

General rule. Except as provided in paragraph (b)(2) of this section, whenever a commercial motor vehicle is stopped upon the traveled portion or the shoulder of a highway for any cause other than necessary traffic stops, the driver shall, as soon as possible, but in any event within 10 minutes, place the warning devices required by § 393.95 of this subchapter, in the following manner:

(i) One on the traffic side of and 4 paces (approximately 3 meters or 10 feet) from the stopped commercial motor vehicle in the direction of approaching traffic;

        (ii) One at 40 paces (approximately 30 meters or 100 feet) from the stopped commercial motor vehicle in the center of the traffic lane or shoulder occupied by the commercial motor vehicle and in the direction of approaching traffic; and

        (iii) One at 40 paces (approximately 30 meters or 100 feet) from the stopped commercial motor vehicle in the center of the traffic lane or shoulder occupied by the commercial motor vehicle and in the direction away from approaching traffic.

Warning devices may be reflective triangles or flares, though reflective triangles are most common. The Commercial Drivers License (CDL) Manual at Section 2.5.2 goes into more detail about placement of warning devices:

Other drivers may not notice your vehicle even when it’s in plain sight. To help prevent accidents, let them know you’re there.

. . . .

 When Parked at the Side of the Road.

When you pull off the road and stop, be sure to turn on the four-way emergency flashers. This is important at night. Don’t trust the taillights to give warning. Drivers have crashed into the rear of a parked vehicle because they thought it was moving normally.

If you must stop on a road or the shoulder of any road, you must put out your emergency warning devices within ten minutes. Place your warning devices at the following locations:

If you must stop on or by a one-way or divided highway, place warning devices 10 feet, 100 feet, and 200 feet toward the approaching traffic.

News reports of this crash do not reveal whether the disabled tractor trailer had reflective triangles or flares, but none are visible in news photos and video of the crash scene.

Georgia wrongful death law provides for recovery of the “full value of the life” of the decedent, including both economic and intangible aspects of what the decedent’s life was worth to him. There is no deduction for living expenses and no need to prove dependency.  If a person dies due to the fault of someone else, Georgia law defines who has the claim for wrongful death. If married, the surviving spouse has the claim. If married with children, the statute defines the formula for dividing recovered funds between the spouse and children. If not married, the parents of the deceased have the right to recover for the wrongful death. If there is no surviving spouse, children or parent, then the representative of the estate can make the claim on behalf of heirs at law. There is never a wrongful death in Georgia for which no one can make the claim.

Of course, whenever anyone runs into a stopped truck, there is a question whether he was partially or entirely at fault even if the stopped truck did not have hazard flashers, reflective triangles or flares as required by law. Defense lawyers would certainly explore issues of driver impairment by fatigue affecting the young truck driver who was killed. Under Georgia’s modified comparative negligence law, if the victim is responsible for more than 50% of negligence leading to his injury, he or his survivors get nothing. If less than 50%, the recovery is reduced by the percentage of his negligence.

It is for the jury to decide negligence of all parties and the amount of damages.

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Ken Shigley‘s  is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. Work on all these types of cases requires expertise in insurance law.

Fatality and burn injury in truck crash on I-95 at Richmond Hill, Georgia


A fiery crash on I-95 at Richmond Hill near Savannah in Chatham County on July 26th caused the wrongful death of a woman and sent her husband to a specialized burn unit in Augusta. It appears all too typical of other truck accident cases we have handled throughout Georgia, including those in the Savannah area and along I-95 and I-16.

According to news reports, as a southbound tractor trailer approached the exit the driver moved from the center lane to the right lane. Approaching a line of cars slowed in traffic, the truck driver then tried to get back into the middle lane when struck another tractor-trailer, causing it to spin out of control and into the line of cars waiting to exit. The tractor-trailer struck two SUVs. One SUV was thrown over a concrete barrier onto railroad tracks.

The second SUV was pinned against a concrete barrier over the CSX railroad tracks and burst into flames. The occupants, a husband and wife, were caught in their burning vehicle. The wife was killed and the husband was badly burned and transported to a specialized burn unit in Augusta.

As with most fatal traffic crashes on Georgia highways, the Georgia State Patrol Specialized Collision Reconstruction Team (SCRT) is undertaking a painstaking reconstruction of the chain reaction collision. While news reports have not identified the cause of the fatal truck crash, experience in handling many tractor trailer accident cases over the years suggests likely factors, all of which are related to failure of safety management in trucking companies. Truck driver fatigue and distraction are common factors.

 

Safety management by trucking companies

.

Most often when commercial truck drivers crash due to fatigue, the root cause analysis leads back to corporate management issues as the motor carrier had a duty under the Federal Motor Carrier Safety Regulations to require observance by their drivers of safety rules. Trucking companies are required to manage safety so as to require their drivers to follow the rules. The Federal Motor Carrier Safety Regulations at 49 C.F.R. §390.11 provides: “Whenever . . . a duty is prescribed for a driver or a prohibition is imposed upon the driver, it shall be the duty of the motor carrier to require observance of such duty or prohibition.” In addition, “No person shall aid, abet, encourage, or require a motor carrier or its employees to violate the rules of this chapter.” 49 C.F.R. §390.13.

Speed

Speed too fast for conditions is almost always a factor when a tractor trailer crashes into a line of vehicles slowed by traffic conditions or in a construction zone. Excessive speed is involved in 58% of crashes and attributable to the large truck in 65% of those. I suspect that is underestimated because the data comes from police reports. The SCRT unit will gather data from electronic control module and possibly other electronic data sources in the tractor trailers and possibly other vehicle to show the speed, braking and deceleration in each vehicle.

 

Driver impairment

 

One of the most important and most frequently violated safety rules for truck drivers, as to which motor carriers have a duty to enforce among their drivers, is one related to impaired driving. “No driver shall operate a commercial motor vehicle, and a motor carrier shall not require or permit a driver to operate a commercial motor vehicle, while the driver’s ability or alertness is so impaired, or so likely to become impaired, through fatigue, illness, or any other cause, as to make it unsafe for him/her to begin or continue to operate the commercial motor vehicle. . . .” 49 C.F.R. §392.3.

News reports are silent on possible fatigue factors in this crash, but among those we see most often are violation of work hours rules and untreated sleep apnea.

 

Truck driver fatigue

 

Hard working truckers tend to drive too long and sleep too little, with outcomes that are predictable. They have “hours of service limits” and are required to log their time driving, on duty but not driving, off duty and in the sleeper berth. The current limits are 11 hours driving out of 14 hours on duty, followed by at least 10 hours off duty, up to 60 hours in a week or 70 hours in an 8 day period on the road. But they can under certain circumstances restart the clock and get behind the wheel. That provision can allow a truck driver to drive up to 81 hours per week.

As many as one-third of truck drivers admit to falsifying their hours of service logs, often under pressure from employers and shippers to get the job done quickly, to meet financial incentives, or simply to make more money. In a truck crash we are handling at I-16 and I-95, we have a video of the truck driver at the scene saying, “I must have went to sleep.”

While there is no easy scientific test to determine when fatigue contributes to the cause of a crash, but we can often peel away the layers of deception through detailed review of trip records. Once after deconstructing his trip records, a trucker in Ohio admitted to me in deposition that he had been driving 20 of the previous 24 hours, had driven from Ohio to Atlanta, back to Ohio, and after a one hour nap started driving back to Atlanta. He ran over a family and killed their son. In another case, a truck driver actually admitted on police video at the crash scene, “I must have went to sleep.”

 

Sleep apnea

 

There is nothing in the news reports to suggest whether or not fatigue related to sleep apnea may have been a factor in this crash, but it is something we look into when appropriate.

The US Department of Transportation Medical Review Board has recommended that individuals with a Body Mass Index (BMI) over 40 “should be referred for diagnostic sleep evaluations.” The National Transportation Safety Board has reported, “Drivers with sleep apnea are seven times more likely to be involved in an automobile accident than those without sleep apnea” Drivers with undiagnosed obstructive sleep apnea who are not receiving proper treatment are prone to making critical mistakes or even fall asleep while driving due to their fatigue.”  The Federal Motor Carrier Safety Administration has warned truck drivers that, “Untreated sleep apnea can make it difficult for you to stay awake, focus your eyes, and react quickly while driving. In general, studies show that people with untreated sleep apnea have an increased risk of being involved in a fatigue-related motor vehicle crash.”

In one fatal truck crash we have handled, just a cursory review of the driver qualification file in the trucking company’s records revealed that the truck driver was “morbidly obese” with a BMI of 41.5, putting him severely at risk of obstructive sleep apnea. There was nothing in the records to indicate any evaluation or treatment for sleep apnea. After crashing into a clearly visible line of stopped traffic at a red light, he admitted to an officer that he was fatigued four and one-half hours after reporting for work.

 

Driver distraction

 

While there is nothing in news reports to indicate whether the truck driver was distracted, that is a common factor we investigate in major truck crashes. Cell phones, texting, fiddling with GPS units, food and beverages are among the common causes of driver distraction leading to crashes.

We often fight with trucking companies’ insurers over production and forensic download of data from smart phones that law enforcement typically does not attempt to access. A cell phone download may reveal vice and text connections and use of other communications apps such as Facetime, Facebook Messenger, etc. In addition, GPS data from the cell phone may be compared with electronic data from the truck regarding locations, speed and activity of the truck, and patterns and practices that may cast light upon the root cause of the crash. Cell phone data may reveal the truck driver’s off-duty activities contributing to dangerous fatigue on the job. For example, a driver was working a second job in his off hours which would have contributed to accumulated fatigue, chronic sleep deprivation, and irregular work and rest cycles which could likely lead to the inevitable result of a catastrophic truck crash.

 

Direct solicitation of accident victims

 

Victims in such crashes should be aware that any lawyer who directly solicits them is violating both a State Bar ethics rule punishable by disbarment and a Georgia criminal law.

 

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Ken Shigley‘s “singular focus has been filing lawsuits for people hit by trucks.” Atlanta Journal-Constitution, May 7, 2018. He is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section, and a member of the board of governors of the Academy of Truck Accident Attorneys. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brainneckbackspinal cordamputation and burn injuries. Work on all these types of cases requires expertise in insurance law.

11th Circuit Court of Appeals sides with insurance company on “examination under oath”

Property insurance policies typically include provisions that the policyholder must cooperate in investigation and adjustment. This includes an examination under oath (EUO) — answering a lot of questions from the insurance company’s lawyer. Failure of the policyholder to submit to the examination may preclude even an innocent insured from any recovery under the insurance contract.

Policyholders who represent themselves against insurance company lawyers make fatal errors.

Generally insurance companies may impose almost any conditions upon their obligations so long as they are not inconsistent with public policy.  An insured cannot avoid the binding effect by neglecting to read the insurance policy. With rare exceptions, the policyholder must comply with the conditions in order to hold the insurer liable in court.

Policyholders who appear for an EUO without a lawyer knowledgeable about property insurance law may make fatal mistakes that cannot be undone.

In the decade I spent in a law firm representing insurance companies, part of my work involved property insurance claims, particularly those of suspected fraud and arson. For years I spent a lot of time going through burned out residential and commercial buildings to see the evidence of arson that investigators had found.

In many cases, insurance companies hired me to conduct examinations under oath of policyholders. It was never a contest of equals because so many policyholders either came alone or hired a lawyer who knew nothing about this aspect of insurance law.

No do-overs: Eleventh Circuit decision on policyholder’s fatal error before hiring a lawyer.

In a recently reported decision an Allstate policyholder’s house burned. The insurer developed doubts whether he complied with condition of the homeowner’s insurance policy that the property must be used as a residence. The insurer gave notice for the policyholder to appear for an examination under oath. He showed up, angry and unrepresented, and refused to answer substantive  about his residence until the insurer recanted statements in a letter from its attorney which he found offensive.

The insurance company’s attorney, whose attitude can easily provoke such counterproductive anger, said, “[I]f you do not respond to the questions that are put to you here today, Allstate will treat that failure to respond as a material breach of the contract…. And … refusal to respond could result—probably will result in the denial of this claim for that reason standing alone.” The policyholder stated that he would answer the insurer’s questions but insisted that the insurer recant the disputed statements in the letter first. Of course, the insurance company recanted nothing.

A year later, the policyholder hired a lawyer who demanded payment and offered to have the policyholder appear for an EUO. The U.S. Eleventh Circuit Court of Appeals held that the offer to submit to an EUO a year after refusing to answer questions was too little too late, and ruled for the insurance company. Hutchinson v. Allstate Insurance Company, 2018 WL 3359549 (11th Cir., decided July 10, 2018).

Long history of courts supporting insurers’ position on EUO’s.

For well over a century, Georgia law has recognized that a policyholder who fails to provide information requested by the insurance company in this process breaches the terms of the policy. That results in loss of the right to collect under the policy. Few excuses for failure to comply suffice. In an early case, the Georgia Supreme Court held that if an insured absents himself so that he cannot be found to be served with an EUO notice, that is construed as refusal to submit to the EUO. Firemen’s Fund Ins. Co. v. Sims, 115 Ga. 939, 42 S.E. 26 (1902)

Cooperation with the insurer’s investigation of the claim, including submitting to an examination under oath, is a condition precedent to the right to recover under the contract. Buffalo Ins. Co. v. Steinberg, 105 Ga.App. 366 (1), 124 S.E.2d 681 (1962).

This is ordinary contract law, which applies to contracts of insurance. “When a plaintiff’s right to recover on a contract depends upon a condition precedent to be performed by him, he must allege and prove the performance of such condition precedent, or allege a sufficient legal excuse for its nonperformance. ” Wolverine Ins. Co. v. Sorrough, 122 Ga.App. 556, 560 (3), 177 S.E.2d 819 (1970). See also, Halcome v. Cincinnati Ins. Co., 254 Ga. 742, 334 S.E.2d 155 (1985).

The intimidating EUO notice.

In cases of suspected insurance fraud, including arson, insurance companies typically have their lawyers send policyholders formal written notices to produce a long list of documents.

The list of documents requested may be overwhelming, especially when the policyholder’s files may have been lost in a fire. It may include several years of records of income taxes, banking, income, expenses, insurance policies and claims, debt, credit records, and the purchase of all the personal property claimed to be lost.

They notify the insured to show up at a specific time and place to answer questions under oath. To appear reasonable and avoid being accused of violating an implied covenant of good faith and fair dealing, the insurer may show some flexibility about scheduling. If the insurance company’s lawyer can subtly bait the policyholder into refusing to answer questions, the insurance company wins.

Possible defenses against EUO notices.

While the law is clear about the requirement for policyholders to cooperate with the insurer’s investigation and participate in an EUO, there are a few circumstances that have precluded summary judgment in favor of the companies. Then the reasonableness of the EUO notice becomes a jury question and may open the door to settlement negotiations. Examples include:

  • Medical inability to comply. Blackburn v. State Farm Fire & Cas. Co., 174 Ga.App. 157, 329 S.E.2d 284 (1985).
  • Reasonableness of notice for EUO more than sixty days after receipt of a demand for payment before. Northern Assur. Co. of America v. Karp, 257 Ga. 403, 54 S.E.2d 129 (1987).
  • Alleged errors in EUO transcript as justification for refusal to sign transcript. Nichols v. Pearl Assur. Co., 71 Ga. App. 378, 31 S.E.2d 127 (1944).

Hire a property insurance lawyer early.

Remember that adage that anyone who tries to represent himself has a fool for a client.

Anyone facing an insurer that sends a notice to appear for an examination under oath should not try to go it alone. It is important to immediately hire a lawyer with experience in property insurance. Many lawyers who are good in automobile insurance matters are clueless about property insurance.

While my practice no longer focuses on this area, I can guide folks to other lawyers who practice property insurance law.

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Ken Shigley is a past president of the State Bar of Georgia, past chair of the State Bar’s Tort & Insurance Practice Section, past chair of the Georgia Insurance Law Institute, and past chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section. He is lead author of Georgia Law of Torts: Trial Preparation & Practice (Thomson Reuters West, 2010-2018). His Atlanta-based law practice is focused on catastrophic injury and wrongful death including those arising from commercial trucking accidents and those involving brain, neck, back, spinal cord, amputation and burn injuries. Work on all these types of cases requires expertise in insurance law.