Harris v. Fedex Nat'l LTL, Inc.

760 F.3d 780

Kena HARRIS, as Administrator of the Estate of Chaungene L. Ward, Deceased; Monica Nolan, Plaintiffs–Appellants

v.FEDEX NATIONAL LTL, INC., Defendant–Appellee.

No. 13–1981.

United States Court of Appeals, Eighth Circuit.

Submitted: March 25, 2014.

Filed: July 24, 2014.

Michael W. Blanton, argued, Evergreen, CO (Jonathan M. Soper, Daniel A. Thomas, Independence, MO, on the brief), for Plaintiffs–Appellants.

Joseph F. Gross, Jr., argued, Omaha, NE, for Defendant–Appellee.

Before LOKEN, BYE, and BENTON, Circuit Judges.

LOKEN, Circuit Judge.

On October 28, 2007, commercial truck driver Oleg Velichkov lost control and rolled his tractor-trailer, which came to rest blocking both lanes of westbound Interstate 80 in York County, Nebraska. A vehicle driven by Chaungene L. Ward collided with the over-turned truck, killing Ward and seriously injuring his passenger, Monica Nolan. At the time of the accident, Velichkov was employed by Fresh Start, Inc. (“Fresh Start”), driving a tractor leased by Mickey's Trucking Express, Inc. (“Mickey's”), to Fresh Start. The tractor was pulling two trailers owned by FedEx National LTL, Inc. (“FedEx”) from FedEx's Cincinnati, Ohio, service center to its service center in Salt Lake City, Utah. Ward's estate and Nolan brought this diversity action against Velichkov, Fresh Start, Mickey's, the husband and wife who owned Fresh Start and Mickey' s, and FedEx, alleging various theories of tort liability. After discovery, the district court ¹ granted FedEx's motion for summary judgment. Plaintiffs eventually dismissed their remaining claims with prejudice, resulting in a final judgment, and now appeal the grant of summary judgment to FedEx. Reviewing the grant of summary judgment de novo and applying the governing law of Nebraska, we affirm. See Williams v. TESCO Servs., Inc., 719 F.3d 968, 970, 972 (8th Cir.2013) (standard of review).

The ultimate issue is whether FedEx is liable for the admitted negligence of truck driver Velichkov. In opposing summary judgment, plaintiffs asserted four theories of liability under Nebraska law. The district court rejected the three theories asserted in plaintiffs' complaint on the merits. It rejected the fourth by denying as untimely plaintiffs' motion to amend their complaint. We construe plaintiffs' rather ambiguous briefs as appealing all four rulings. We consider the four theories in turn, viewing the facts material to each, when disputed, in the light most favorable to plaintiffs, the non-moving parties. Id. at 970.

I. The Employer/Independent Contractor Issue

FedEx, in addition to employing its own drivers and vehicles to deliver goods to its shipper-customers, contracts with independent motor carriers to transport goods and trailers between FedEx service centers. At times, these carriers provide the drivers, the tractors, and the trailers for this service. At other times, FedEx retains “subhaulers” that provide drivers and tractors to pull FedEx trailers in what FedEx refers to as a “power only” relationship. In mid-September 2007, Fresh Start and FedEx entered into a written Subhaul Agreement providing that Fresh Start would provide transportation services as an independent contractor. In an Addendum, Fresh Start agreed to comply with twelve detailed requirements when pulling FedEx-owned trailers on a “power only” basis. On October 26, Fresh Start's owner received a power-only assignment from FedEx's central dispatch and assigned driver Velichkov to complete the job. He drove the tractor to FedEx service centers to pick up and drop off trailers. The accident occurred during the last leg of the assignment, when Velichkov was transporting two FedEx-owned trailers from the Cincinnati service center to the Salt Lake City service center.

Under Nebraska law, one who employs an independent contractor is generally not liable for physical harm caused to another by the acts or omissions of the contractor or its servants. Plaintiffs' complaint alleged that FedEx was nonetheless liable for Velichkov's negligence because he was acting as FedEx's employee or servant at the time of the accident. Whether a truck driver is acting as an employee or as an independent contractor “depends on the facts underlying the relationship of the parties irrespective of the words or terminology used by the parties to characterize and describe their relationship.” Kime v. Hobbs, 252 Neb. 407, 562 N.W.2d 705, 711 (1997). Thus, the Subhaul Agreement, which provided that Fresh Start was an independent contractor, is relevant but not controlling. Though ordinarily a question of fact, “where the facts are not in dispute and where the inference is clear that there is, or is not, a master and servant relationship, the matter is a question of law.” Id.

Applying the ten factors considered by the Supreme Court of Nebraska in Kime and other cases, the district court concluded that Fresh Start, and therefore its employee, Velichkov, were independent contractors of FedEx as a matter of Nebraska law. Addressing the critical control factor, the district court acknowledged that the Addendum to the Subhaul Agreement placed conditions on the manner in which Fresh Start and its servants could transport FedEx-owned trailers but concluded that these requirements “were to assure performance of the delivery—in other words, to control ‘the final result of the work’ instead of ‘the specific manner in which the work is performed.’ ” Harris v. Velichkov, 860 F.Supp.2d 970, 983 (D.Neb.2012), quoting Omaha World–Herald v. Dernier, 253 Neb. 215, 570 N.W.2d 508, 514 (1997). In addition, the court reasoned, “plaintiffs' focus on the element of control ignores the remaining nine factors listed above, several of which weigh (and weigh heavily) in favor of an independent contractor relationship.” Id.

On appeal, plaintiffs argue the district court erred in granting summary judgment on this issue because it misconstrued in FedEx's favor the extent to which FedEx controlled how power-only drivers performed this service. We disagree. The district court applied the proper standard under Nebraska law, carefully considered the control factor, and concluded “[t]here is no evidence from which a reasonable trier of fact could conclude that Fresh Start was FedEx's ‘employee’—much less that Velichkov was.” Id. at 983–84. The minor ways in which plaintiffs argue the district court improperly credited FedEx's view of the facts were not material to this ruling. The use of an independent power-only contractor to pull FedEx trailers between FedEx service centers was not comparable to the agreement in Huggins v. FedEx Ground Package System, Inc., where FedEx required an independent contractor and its drivers “to look and act like FedEx employees while they performed FedEx [package delivery] services” for FedEx customers. 592 F.3d 853, 859 (8th Cir.2010).

II. The Nondelegable Duty Theory.

The Supreme Court of Nebraska has recognized limited exceptions to the general rule that one who employs an independent contractor is not liable for harm caused by the contractor's employees. One exception is when “the employer [here, FedEx] has a nondelegable duty to protect another from harm. Nondelegable duties include ... a duty imposed by statute or rule of law, and ... the duty of due care when the independent contractor's work involves special risks or dangers.” Eastlick v. Lueder Constr. Co., 274 Neb. 467, 741 N.W.2d 628, 634–35 (2007) (citations omitted). Plaintiffs do not argue that “special risks or dangers” created a nondelegable duty in this case, no doubt because the Supreme Court of Nebraska has held that “a motor vehicle is not an inherently dangerous instrumentality,” including when used in “the transportation of cattle in a tractor-trailer under normal conditions.” Kime, 562 N.W.2d at 713; see Ek v. Herrington, 939 F.2d 839, 843–44 (9th Cir.1991). Rather, plaintiffs argue that FedEx as a “motor carrier” subject to the Federal Motor Carrier Safety Regulations (“FMCSR”) had a nondelegable duty under Nebraska law ² to ensure that Fresh Start and its drivers, as independent contractors, adhered to those safety standards by reason of 49 C.F.R. § 390.11, which provides:

Whenever ... in this subchapter 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. If the motor carrier is a driver, the driver shall likewise be bound.

Whether a duty is owed under Nebraska tort law is a question of law. Parrish v. Omaha Pub. Power Dist., 242 Neb. 783, 496 N.W.2d 902, 909 (1993). The Supreme Court of Nebraska has not addressed whether the FMCSR—or any other federal regulations—create a nondelegable duty that regulated parties are liable for the harm caused by their independent contractors' violations. Indeed, that Court “ha[s] never held that an administrative regulation can ... expand the scope of tort liability beyond the general duty to exercise reasonable care.” A.W. v. Lancaster Cnty. Sch. Dist. 0001, 280 Neb. 205, 784 N.W.2d 907, 920 (2010).

The district court assumed without deciding that 49 C.F.R. § 390.11 “would support a nondelegable duty if it applied to FedEx” but noted that plaintiffs had no supporting authority for this state law theory. The court rejected the theory because “FedEx was not acting as a motor carrier in this case.” While FedEx is a federally registered motor carrier and acts as such in delivering goods for its customers, the court explained, in this case it was a shipper of goods that hired Fresh Start, also a registered motor carrier, to provide transportation services. “A transportation company may have authority to act as a shipper, broker, or carrier, and the Court must focus on the specific transaction at issue, not whether FedEx acts as a motor carrier in other transactions.” 860 F.Supp.2d at 979, citing Schramm v. Foster, 341 F.Supp.2d 536, 548 (D.Md.2004) (“plaintiffs...