Nevada Trucking Law

  

RESPONDING TO THE ANTICIPATED FALLOUT OF THE HAYGOOD AND HOWELL OPINIONS

No one is surprised when people who are hurt in accidents go to the doctor’s office for care.  In the past, many went to doctors who provided them care through their group health insurance programs.  These group healthcare providers usually have pre-negotiated reimbursement agreements with the group health insurance carriers.  Those insurance carriers pay the providers a sum certain for each service provided.  The pre-negotiated reimbursement agreements normally prevent the doctors from charging the patient more than the agreed reimbursement rate. 

The question presented in the cases of Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541, 257, P.3d 81, 128 Cal Rptr. 3d 658 (2011) and Haygood v. Escabedo, Slip Op. No. 09-0377 (Tex. Sup. Ct. July 1, 2011) is whether a defendant should be obliged to compensate the plaintiff for that difference between the doctor’s negotiated rate and the higher reimbursement rate that the provider would charge to someone who didn’t have insurance.  Even though the two courts followed different lines of reasoning, both reached the same conclusion.  Both courts said that Plaintiffs could recover from Defendants no more than the rate the doctor had negotiated with the health carrier.  The Plaintiff could not recover the higher un-negotiated rate because the Plaintiff never paid that higher amount. 

While Defendant’s and their attorneys may be celebrating these opinions, the fallout from these cases is easy to anticipate.  Plaintiffs’ attorneys will now have even more reason to encourage their clients to get their care from providers that are in the business of treating people who are injured in accidents.  In other words, more Plaintiffs will be seeking care on liens.  And without a doubt, the price of the lien care is going to be higher than the negotiated reimbursement rates authorized under a group health contract. 

So how does a good Defense attorney challenge the Plaintiff’s decision to choose the higher priced care over lower priced care that is available to her?  Usually the collateral source rule will prevent the defense from arguing to the jury that the Plaintiff failed to get the lower priced care from her own lower priced health insurance provider.  One tried and true attack is to challenge the credibility of the lien care provider as biased.  But what else can the defense do where the charges are out of line?

One choice is to obtain a medical bill audit.  Medical bill audits can be basic or in depth.  Basic medical bill audits will look simply at the bills to make sure that there are no duplicate charges and will determine whether charged amounts were within the “usual and customary” range of charges in the geographic area where the services were provided.  More in depth audits could also include a review of the medical records to insure that the providers delivered the services for which they billed.  Depending on the amount you want to spend, the medical bill auditors can provide a great amount of information from their review of the medical bills and records. 

Obviously, the defense can use these audit reports as negotiating points, in arbitrations and mediations.  However, if the matter is headed to trial, the defense is going to need an auditor that has the willingness and ability to take the stand and testify in support of the work that the auditor has done.  Finding the right auditor should start with that fact in mind. 

With an increasing percentage of Plaintiffs receiving their care on liens, Mills & Associates predicts that medical bill audits will become even more useful than they have been in the past.  In a recent case that we handled, Plaintiff had presented past bills in excess of $725,000.  The auditors that we used found almost $300,000 in reductions in charges. 

Please contact Mills & Associates to discuss how best to select and use medical bill auditors in the defense of your claim.

FREIGHT BROKERS BEWARE: YOU MAY BE ON THE SLIPPERY SLOPE TOWARD VICARIOUS LIABILITY FOR THE ACTS OF YOUR INDEPENDENT CONTRACTORS

Freight brokers have what many insiders consider the gravy job of the transportation industry: Matchmaker. Many brokers have no trucks to maintain and no drivers to qualify. The freight broker’s main duty is to find a trucking company that needs freight on its truck and match it with a customer with freight to move. Voila! Job complete! The customer pays the broker for moving its freight, the broker takes its cut off thetop of the full contract price, commonly 10-20%, then it pays the trucking company (sometimes months) after the run is complete.

But the brokers couldn’t leave well-enough alone. They pushed the envelope by attempting to exert more and more control over the independent contractor motor carriers until they landed in the cross hairs of the plaintiff’s attorneys. If a broker exerts too much control over the motor carrier, the law will convert what has been an independent contract relationship into that of a principal-agent, making the broker vicariously liable for the motor carrier’s negligent acts.

Title 49 U.S.C. §13102(e) defines a freight broker as follows:

(2) Broker. - The term "broker" means a person, other than a motor carrieror an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.

What could possibly be the downside to this arrangement? Before you answer that question, you may want to talk to C.H. Robinson Worldwide.

In 2002, C. H. Robinson Worldwide, Inc., a licensed freight broker and FMCSA-authorized motor carrier, brokered a contract between Groff Brothers Trucking and Jasper Products, LLC. to have Groff transport a load for Jasper from Joplin, MO to New Jersey. In the course of the run, Groff’s driver failed to yield the right-of-way at a Maryland intersection causing a serious motor vehicle accident resulting in two deaths and other catastrophic injuries.

In a holding that caught the attention of the entire transportation industry, the Illinois Appellate Court for the Third District affirmed the jury’s finding that C.H Robinson Worldwide had imposed so much control on the motor carrier that the driver had become defacto the agent of the broker. The court upheld the $23.8 million verdict that found broker C.H. Robinson vicariously liable for the negligence of the truck driver.

In affirming the jury’s finding that Robinson was vicariously liable under the doctrine of respondeat superior, the Court carefully examined the relationship between Robinson and Groff. It specifically discussed the nature and amount of control Robinson exerted over Groff regarding the manner in which Groff completed its run. Sperl v. C.H.Robinson Worldwide, Inc. 946 N.E. 2d. 469 (Ill. App. Ct. 2011).

The Robinson court distinguished a principal-agent relationship from that of an independent contractor in terms of the nature and degree of control the principal-broker exerts over its agent-independent contractor. Inherent in the principal-agent relationship is the principal’s right to control the acts of its agent – but this control comes at the price of vicarious liability. As the broker exerts increasing control over the motor carrier, the relationship becomes less consensual thereby destroying the carrier’s status as an independent contractor, exposing the broker to vicarious liability.

The Court found that the demands Robinson imposed upon Groff served to convert the carrier’s status from that of independent contractor to agent. In exerting such a high degree of control over the carrier, Robinson became liable for the carrier’s tortious acts.

A contract can define an independent contractor in as many different ways as the broker or its attorney can imagine. But as C.H. Robinson Worldwide learned, it’s not the language of the contract that controls but how the parties act in the relationship that will determine if this is an independent contract relationship or something else. At a bare minimum, brokers need to consider the following in the wake of the C.H. Robinson Worldwide decision:

1. It’s all about control … or, more specifically, lack thereof: don’t dictate every aspect of the manner in which the trucking company carries out the contract.

2. Don’t hold yourself out as having a partnership with your carrier or imply that the carrier’s insurance will cover a loss where the broker’s limits are insufficient.

3. Verify your carrier’s status and authority with the FMCSA and monitor its CSA2010 rating.

4. Obtain the carrier’s certificate of insurance certificate from the carrier's insurance company, not the carrier, and verify that this information conforms with SAFER’s insurance information for that carrier.

5. Have a transportation attorney review your contract to mitigate the risks of exposure to liability.

SEASON'S GREETINGS

I really enjoy this time of year.  It means that I get to spend more time with my family and splurge eating some foods that I would otherwise shun. 

I hope that all of the readers of the Mills Law Blogs will also be sipping something warm, eating a little too much and staying safe out of the weather.  Most importantly, I hope that you all will be sharing this wonderful Season with those that you love. 

From all of us to all of you, have a Happy Holiday.

WILL THE WIDER AVAILABILITY OF DRIVER QUALIFICATION DATA ENCOURAGE MORE CLAIMS OF NEGLIGENT HIRING?

The new CSA 2010 systems will gather and store more data on drivers than ever before. Even though the regulations themselves suggest that such data should not be admissible, plaintiff’s attorneys will never overlook the chance to try and stir the emotions of the jury by pointing to what they consider an inadequate driver history.

As we see from the case of Diaz v. Carcamo, 51 Cal.4th 1148126 (2011), Plaintiffs still have not given up on the argument that motor carriers should be called on to answer for the negligent hiring of its employee drivers even where the carrier has admitted that it is vicariously liable for the driver’s negligence.(See earlier posts on this topic HERE). In Diaz, plaintiff sued the defendant driver’s employer for negligent entrustment of the vehicle even though the employer admitted that the driver was in the course and scope of his employment at the time of the accident. The trial court allowed the jury to hear that thedriver was “undocumented”, had used a phony social security number and had two prior accidents. The jury found the employer 35% liable for negligent entrustment as well as 45% negligence for the driver. The Appellate Court reversed, finding that when an employer admits vicarious liability, a claim of negligent entrustment was barred, as was the evidence concerning the driver’s past accidents, and employment history.

In cases where the driver is the motor carrier’s employee, admitting vicarious liability may be the first step to obtaining summary judgment on causes of action for negligent hiring and negligent entrustment and thereby reducing the risk that plaintiff will discover and proffer as evidence the driver’s employment record and driving history.

HAPPY THANKSGIVING FROM MILLS & ASSOCIATES

All of us at Mills & Associates would like to take a moment and wish clients, family and friends (including our blog readers), a very joyous and happy Thanksgiving. 

Whether you are celebrating with a small gathering, or preparing for what is shaping up to be dinner for a small country, we wish you and yours all the very best.

LexisNexis NAMES NEVADA INSURANCE LAW AS A TOP INSURANCE LAW BLOG FOR 2011

The Advisory Board of the LexisNexis Insurance Law Community has selected Mills & Associates' Nevada Insurance Law as one of the nation’s Top Insurance Law Blogs for 2011.  The Advisory Board described what it saw in the winning blogs.

The Top Blogs contain some of the best writing out there on insurance law.  They contain a wealth of information for the insurance law community with timely news items, practical information, expert analysis, practice tips, frequent postings, and helpful links to other sites.  These blogsites demonstrate how bloggers can impact the world of insurance law. 

Mills & Associates is proud to be among that group of great bloggers.  In the Nevada Insurance Law blog, Mills & Associates strives to provide its readers with concise, informative posts on Nevada’s most current insurance law developments and trends. 

We thank the Board for recognizing the Mills & Associates Nevada Insurance Law Blog as one of the best in the country.

ARE MOTIONS IN LIMINE EVEN WORTH THE TROUBLE?

Trying a case is an expensive proposition.  The attorneys need to prepare the evidence, the arguments and the examinations.  Clients see any opportunity to economize on the trial prep side as a positive.  In the past, attorneys have made it a practice to file pre-trial motions in limine.  Motions in limine are heard with the hope that the judge will make early evidentiary rulings and thereby speed up the trial.  However, the Nevada Supreme Court case of BMW v. Roth, 127 Nev. Adv. Op. 11 (2011) calls into question whether the attorney should even bother to file motions in limine.  Mills & Associates believes that in spite of this decision, motions in limine are still an important tool in pre-trial preparations.  Please let us explain why. 

Roth was rendered a paraplegic when the BWM in which she was riding rolled over and she was ejected.  Roth sued the driver for negligence and BMW for strict product liability.  Roth claimed that at the time of the accident she was wearing her seatbelt and that due to a defect it failed to restrain her.  BMW’s experts said Roth was not even wearing a seat belt. 

One of Roths’ pre-trial motions in limine dealt with NRS 484D.495(4), Nevada’s seatbelt statute which says that failure to use a seat belt “[m]ay not be considered as negligence or as causation in any civil action or as negligent or reckless driving under NRS 484B.653.”  Roth didn’t want BMW to even be allowed to say that she was not using her seatbelt.  BMW countered that it must be permitted to show that Plaintiff was not wearing her seatbelt in order to defend against her allegations of a vehicle defect. 

The district court granted in part and denied in part the motion.  The court ruled that BMW could not argue that Roth was negligent in failing to use her seatbelt.  However, BMW could introduce evidence that she was not using her seatbelt to demonstrate that the car was not defective.  The trial went forward.  The jury awarded Roth a $5.9 million verdict against the driver.  However, the jury found that the BMW automobile was not defective.

Roth asked for a new trial.  Plaintiff argued that during the trial BMW’s attorney had stepped over the line that had been drawn by the court’s order on the motions in limine.  Roth claimed that during the trial BMW’s attorneys had suggested in their questions and arguments that Roth had been negligent in failing to use her seatbelt.  The court granted the new trial.  BMW appealed. 

The Nevada Supreme Court had to decide whether the order in limine standing alone was enough to warn BMW’s attorney of where not to tread in his questions and arguments.  Or alternatively, whether Roth’s attorney was obligated to object contemporaneously to the violations of the order. 

The Nevada Supreme Court rejected Roth’s argument that the motion in limine constituted a continuous objection and that no contemporaneous object was necessary.  Rather the Court found that an objection must be made at the time of the alleged violation of an ambiguous order in limine in order to preserve the violation for appeal.

If the violation of the order is “objected-to”, the moving party must demonstrate that the “misconduct is so extreme that objection, admonishment, and curative instruction cannot remove its effect.”  Lioce v. Cohen, 124 Nev. 1, 17-18, 174 P.3d 970 (2008).  On the other hand, where the violations are “not objected-to”, the appeals court will consider the issue waived unless that misconduct constitutes plain error. Id. Nev. at 19.  The Court reasoned that that if the order in limine is unclear, contemporaneous objections give the trial judge an opportunity clear up any confusion as the trial moves forward.  The Supreme Court found that the subject order in limine was unclear and that contemporaneous objections were needed.  Because there were none, the Nevada Supreme Court ruled that the objections were waived and overturned the trial court’s grant of a new trial.  

This leads us to the question that is the subject of this post.  If you have to make contemporaneous objections anyway, why bother spending the time and money preparing, filing and arguing motions in limine?  The answers are simple.  Motions in limine teach the judge the evidentiary issues that are in play.  They give the judge the chance to better understand the reasoning and the precedent behind the arguments.  Thus, it helps the judge to more appropriately rule on the question both at the time of the motion in limine and during trial. 

Furthermore, filed motions in limine make a clear record of the legal arguments and issues that you could never make during the course of the trial.  At a side bar before the bench, there is insufficient time to make anything other than a brief argument.  Even if the court excuses the jury and gives the attorney a couple of minutes, the jurors will be cooling their heels in the hallway and chomping at the bit to get back in the box and get to work.  The court is very sensitive to that fact.  Furthermore, in the rush you might forget an important detail or critical citation. 

So if you, the consumer of the legal services, ever asks your attorney, do we really need to spend time and money on motions in limine when you have to object at trial anyway, the answer is a definitive yes.  It’s Mills & Associates advice that motions in limine are still absolutely necessary. 

HOW TO FIND THE INSURANCE CARRIER FOR COMMERCIAL TRUCKS

Trying to find information about a motor carrier’s insurance company or its coverage?

LOOK NO FURTHER! 

You’ve found a click-by-click guide that provides you with the insurance coverage details for any interstate trucking company and commercial motor vehicles.

On any given day, Mills & Associates fields a wide variety of questions about trucking insurance defense law.  A number of these calls concern the insurance companies and types of coverage provided for commercial trucks.  We thought our readers might benefit from a tutorial on how to access the wealth of motor carrier insurance information collected and retained by the Federal Motor Carrier Safety Administration.  These error-proof steps provide a direct path to the name and specific contact details for any motor carrier and it insurance company and limits, current or past. 

Enough talking.  Let’s get to work. 

Step 1:        

Click on this link:  http://www.safersys.org/CompanySnapshot.aspx.  It takes you to the Company Snapshot page on the Federal Motor Carrier Safety Administration’s Safety and Fitness Electronic Records System website (universally referred to by its acronym, SAFER):

Step 2:

As you can see from the example search page posted above, you can conduct a search using the carrier’s DOT Number, MC/MX number, or company name in the Enter Value field.  Be certain to select the category that corresponds to your entry (just above the Enter Value field).

DOT Number search:

If possible, search by the carrier’s DOT number.  It provides a direct link to the Company Snapshot.  If you want to try a search by DOT number, enter 428823 (Knight Transportation’s DOT No.) in the Enter Value field and select “USDOT Number” as the category then click Search to be taken directly to the full Company Snapshot:

NAME SEARCH:    

If you are doing a name search, type the name into the Enter Value field.  Your response will be a list of matches that include the search terms.  Here is an example of the search by name results for Knight Transportation Inc.  

As you can see, the name search produces a variety of companies with the words Knight, Transportation and Inc in the company name.  From here, to access Knight Transportation’s full Company Snapshot, click the carrier’s name on the left side of the screen. 

 STEP 3:

Whether you searched for your carrier by name or DOT number, SAFER will direct you to the carrier’s SAFER Company Snapshot.  Here is the Snapshot for Knight Transportation, DOT No. 428823.  :

On the Company’s Snapshot webpage, find the company name and DOT Number in the upper right hand corner.  Click the Licensing & Insurance link, located in the Other Information for this Carrier box located just below the company’s name and number.  This will open a new page specifically about this carrier. 

STEP 4:

When that next page opens, you will see a table that includes the USDOT Number and Legal Name of the company.  

Scan across the table headings until you find “View Details”.  Click the Report button.  Your browser will then open a PDF document that provides detailed information regarding the carrier’s contact and licensing information, like this:

Scroll down to find the company’s Active / Pending Insurance policies, usually near the bottom of the first page.  The Knight Transportation report reveals that it is self-insured with respect to the first $1,000,000 in bodily injury and property damage liability coverage.  However, Knight currently carries an excess policy with National Union Fire Insurance Co. of Pittsburgh, PA that provides coverage over and above the first $1,000,000 up to $5,000,000 per occurrence.

The second page of the report says that Lexington Insurance Company provides Knight with cargo insurance.  It names Edward T. Fox as the point of contact at Lexington and provides his telephone and facsimile number:

As you continue through a company’s insurance report, it will provide historic insurance information.  For example, Knight’s report details the company’s former bodily injury/property damage and cargo insurance carriers for as far back as 1990. 

 

 

 

WHAT IS THE FMCSA PRE-EMPLOYMENT SCREENING PROGRAM?

Although the Federal Motor Carrier Safety Administration launched the first phases of its Pre-Employment Screening Program (“PSP”) back in May of 2010, many in the industry are just now starting to comprehend its significance and put its tools to use.  PSP is a comprehensive data collection and rating system designed to improve the overall quality of commercial drivers.  It aims to reach this goal by providing carriers with the information necessary to make better decisions when hiring commercial drivers.

PSP is not simply an amped-up version of a Motor Vehicle Report (MVR) or DAC report with which drivers and carriers are all-too familiar.  A PSP report provides carriers with a far more expansive snapshot of a driver’s overall safety performance; it allows a carrier to purchase a report that contains five years of crash information and three years of DOT roadside inspection data collected by the FMCSA’s Motor Carrier Management Information System (MCMIS).  By adding the driver’s accident and roadside
inspection information to the DMV’s tracking of traffic violations, the FMCSA developed a system to make safety performance information electronically available for pre-employment screening purposes. 

As this new program becomes more widely used, legal questions are sure to follow.  Will data from the driver’s PSP report be admissible at a trial?  Will it become the standard of the industry for employers to use this program or face liability for negligent hiring?  How consequential must a driver’s past record be before it would become unreasonable for a carrier to hire that driver?  All of these questions will have to be considered as the data from this program become more available. 

For more details about the protection of the commercial driver’s privacy, as well information on how to obtain a PSP report, visit the FMCSA’s PSP website.

INSURANCE POLICY LIMITS FOR INTRASTATE COMMERCIAL VEHICLES IN NEVADA

Trucking professionals are readily familiar with the federal mandate for liability insurance.  They know that the interstate liability policy limit is $750,000.00 for freight and more for passengers.  Some can even tell you where to find that information in the U.S. Code.  49 U.S.C. §31139(b). 

But how many know the liability policy limit for a carrier operating exclusively intrastate in Nevada?  The answer is very few.  We at Mills & Associates had to look that up in a case that we just handled and
thought it would be a great idea to post that information on the blog so others could readily find it.  

You can find the answer to the question in the Nevada Administrative Code.  If a carrier is hauling freight only, look at NAC 706.288, which says:

NAC 706.288  Insurance. (NRS 706.171, 706.291)  Each common or contract motor carrier of property, other than a fully regulated carrier, and each private motor carrier shall maintain a contract of insurance against liability for injury to persons and damage to property in the following minimum amounts:

If the carrier is authorized to transport only freight:

 

	Limit for bodily injuries to or death of one person	Limit for bodily injuries to or death of all persons injured or killed in any one accident	Limit for loss or damage in any one accident to property of others, excluding cargo
A motor vehicle or a combination of vehicles with a gross vehicle weight rating of 10,001 to 26,000 pounds	$300,000	$300,000	$300,000
A motor vehicle or a combination of vehicles with a gross vehicle weight rating of 26,001 to 80,000 pounds	750,000	750,000	750,000

 

On the other hand, if the carrier transports passengers, the limits are higher.  NAC 706.191 reads as follows:

 NAC 706.191  Insurance. (NRS 706.171, 706.291, 706.303)

          1.  All common and contract carriers shall maintain a contract of insurance against liability for injury to persons and damage to property in the following minimum amounts:

          (a) Carriers authorized to transport persons only or persons and property:

 

	Limit for bodily injuries to or death of one person	Limit for bodily injuries to or death of all persons injured or killed in any one accident	Limit for loss or damage in any one accident to property of others, excluding cargo
Horse-drawn vehicles and taxicabs	$250,000	$500,000	$50,000
7 passengers or less, including the driver, other than a taxicab	1,500,000	1,500,000	1,500,000
8 to 15 passengers, inclusive, including the driver	1,500,000	1,500,000	1,500,000
16 passengers or more, including the driver	5,000,000	5,000,000	5,000,000
Freight only	750,000	750,000	750,000