Freight Brokers Granted Some Limitations to Plaintiffs’ Vicarious Liability and Negligence Theories

Since the Sperl v. C.H. Robinson Worldwide, Inc. decision in 2011, freight brokers have been battling vicarious liability claims for the actions of motor carriers and their truck drivers.

In Sperl, truck driver DeAn Henry was involved in a multi-vehicle collision, resulting in several deaths. Henry owned the tractor she was driving and leased it to Dragonfly, a motor carrier. When the collision occurred, she was delivering a load for CHR, a freight broker. Dragonfly and CHR entered into a contract carrier agreement, which described the relationship between the parties as follows:

“The parties understand and agree that the relationship of [Dragonfly] to [CHR] hereunder is solely that of an independent contract and that [Dragonfly] shall and does, employ, retain or lease on its own behalf all persons operating motor vehicles transporting commodities under this Contract.”

Nonetheless, Dragonfly gave Henry permission to use its carrier authority to book and deliver loads on her own. If Henry booked a load, she would be permitted to keep all the profit. If Dragonfly dispatched Henry, Dragonfly would be entitled to five percent. Suit was filed against CHR, among other defendants, for wrongful deaths and personal injuries.

At trial, Henry testified that Dragonfly did not dispatch her for the load she was transporting for CHR when the collision occurred, but instead Henry called CHR and requested the load herself.  Evidence revealed that CHR required Henry to have a refrigerated trailer of a specified length and CHR dictated special instructions concerning the load, including requirements that she pick up the load at a specified time, make daily check calls, and stay in constant communication with the CHR dispatchers. If Henry did not comply with the special instructions, she was subject to CHR’s system of fines.

At the close of trial, CHR moved for a directed verdict as to the agency issue, which was denied. The jury concluded that CHR was vicariously liable based on agency and entered judgment in favor of the plaintiffs in the amount of $23.8 million. The trial court denied CHR’s motion for a judgment notwithstanding the verdict and motion for new trial.

On appeal, the Appellate Court of Illinois for the Third District affirmed, holding that despite the contractual evidence that the parties intended an independent contractor relationship, CHR’s extensive requirements, coupled with Henry’s fine-based compliance, directed Henry’s conduct during the entire transportation process, supporting the jury’s finding that CHR had the right to control the manner in which Henry performed her job.

Sperl provided plaintiffs’ attorneys with a theory to expand liability up the ladder, including onto freight brokers. However, in 2019, the Appellate Court of Illinois for the Second District finally limited Sperl’s holding in Brettman v. M&G Truck Brokerage Inc, et al.

In Brettman, a freight broker contracted with a motor carrier to ship a load of cucumbers. Like Sperl, the freight broker provided special instructions for the trip, including temperature requirements, a deadline for delivery, and a requirement of daily check-in calls. The motor carrier assigned the load to one of its employee truck drivers, Isreal Vela.

After successfully delivering the load to its destination, Vela drove 25 miles to an intersection, where he was involved in a collision with the plaintiffs. The plaintiffs filed a 27-count lawsuit against the freight broker, motor carrier, and various other entities. As for the freight broker’s liability, the plaintiffs argued that the freight broker was liable under a theory of vicarious liability, as articulated in Sperl, in addition to a theory of negligent hiring and/or retention.

The trial court granted summary judgment for the freight broker. On appeal, the Second District affirmed, holding that even assuming that an agency relationship had been established, the truck driver had completed the work for which the freight broker had contracted the motor carrier to perform. The court reasoned that any alleged agency relationship between the truck driver and the freight broker would have terminated when the truck driver completed his contractual obligation in delivering the loan. At the time of the collision, the truck driver was open to new assignments from any other freight broker.

As for the negligent hiring and/or retention argument, the court explicitly rejected the plaintiffs’ attempt to expand Illinois law in this way. While the plaintiffs argued that the negligent act that caused the accident (the hiring/retention of the truck driver) occurred before the delivery, the court unequivocally expressed that the cause of the accident was “the worker, not the work.” The court went on to say: “Illinois does not have a policy of making those who select independent contractors insurers for the independent, post termination actions of those contractors.” Ultimately, the court held that the freight broker could not be held liable under the theory of negligent hiring or retention if the injury did not stem from the work for which the freight broker contracted.

In sum, the takeaway from Brettman is that any alleged agency relationship between a truck driver and freight broker terminates when the contracted delivery is completed. While Sperl continues to plague freight brokers throughout Illinois, decisions such as Brettman have helped limit some of the potential exposures.

Posted by Attorney Katherine M. Flett. Flett is a member of the litigation team whose primary focus is on assisting clients in insurance defense, business litigation, employment law, and bankruptcy matters.