Levene v. Staples Oil Co.

685 F.Supp.3d 791

Alexander LEVENE and David Husman, Plaintiffs, v. STAPLES OIL CO., INC. and Albertus Schelhaas, Defendants.

4:20-CV-04171-KES

United States District Court, D. South Dakota, Southern Division

Signed August 1, 2023

Scott G. Hoy, Hoy Trial Lawyers, Prof. L.L.C., Sioux Falls, SD, Danny R. Ellis, Pro Hac Vice, Truck Wreck Justice, PLLC, Chattanooga, TN, for Plaintiffs.

Eric J. Steinhoff, Brandon D. Meshbesher, Lind Jensen, Sullivan & Peterson, P.A., Minneapolis, MN, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

KAREN E. SCHREIER, UNITED STATES DISTRICT JUDGE

This case revolves around a motor vehicle collision on December 27, 2018 on I-90 in Minnehaha County, South Dakota. See Docket 37 ¶ 1. Plaintiffs, Alexander Levene and David Husman, sued Defendants, Staples Oil Co., Inc. and Albertus Schelhaas on numerous negligence counts and negligence per se counts. See Docket 1. Plaintiffs seek, among other relief, punitive damages. See id. Defendants move for partial summary judgment on the following claims: punitive damages, negligent hiring, negligent retention, negligent entrustment, negligent maintenance, negligent training, negligent supervision,¹ negligence per se against Schelhaas for violation of SDCL §§ 32-18-26 and 49-28A, negligence per se for violation of federal regulations 49 C.F.R. §§ 173, 177.816(a)(3), 383, 390, 390.11, 392, 392.14, 393, 395, and 396. See Docket 30; Docket 39 at 15. For the following reasons, the court grants in part and denies in part defendants' motion for summary judgment.

I. Factual Background

Viewing the record in the light most favorable to the non-moving parties, Levene and Husman, the court recites the following factual background:

On December 27, 2018, Levene drove a pick-up truck and Husman rode along in the passenger seat. Docket 37 ¶¶ 1-3. Levene and Husman eventually stopped on I-90 due to another vehicle blocking traffic. See id. ¶ 14. Plaintiffs' truck stopped on a downward slope. Id. ¶ 15. The roads were icy and slushy at the time of the crash. See Docket 40 ¶¶ 89-90; see also Docket 35-1 at 50.

Schelhaas, an employee of Staples Oil, was driving a tanker truck with 7,802 gallons of ethanol that weighed 78,000 pounds. Docket 40 ¶¶ 5, 83-84. Earlier in the day on December 27, 2018, he had talked with Staples Oil employees about whether he should drive given the weather conditions. See Docket 34-4 at 17-18. Staples Oil had delayed Schelhaas's departure time due to the weather. Id. at 18. Schelhaas and Staples Oil nonetheless decided to have Schelhaas drive later that day, even though both knew of the bad weather. See id. at 18.

While driving, Schelhaas saw the ice and slush on the roads. See id. at 12, 14. Schelhaas passed an exit ramp with a truck stop but did not use the ramp. Id. at 14. Eventually, Schelhaas drove up a blind hill. See id. at 15. Although Schelhaas testified that he drove between 40 and 45 miles per hour, a GPS monitoring system shows Schelhaas drove 57 miles per hour just before the crash. Id. at 15; Docket 35-1 at 26. Soon after driving up the hill, Schelhaas saw Levene and Husman's pickup truck about halfway down the hill but could not brake in time and ran into Levene and Husman's truck. See Docket 34-4 at 15.

At all times relevant to this litigation, Schelhaas was acting within the course and scope of his employment with Staples Oil. See id. at 6. When Staples Oil hired Schelhaas, Staples Oil showed Schelhaas a one-hour hazardous materials video and a roll-over video. Id. at 11, 16; Docket 35-1 at 20-21. Schelhaas completed a road test with Staples Oil. Id. at 11-12. Peter Bartelt, the Director of Transportation at Staples Oil, testified that Staples Oil holds official safety meetings "every three years." Docket 34-7 at 31. Adam Grill, plaintiff's expert, submitted an expert report opining that having safety meetings this infrequently constitutes a "breakdown in the training and communication processes utilizing the Safety Management Cycle[.]" See Docket 34-9 at 20. Grill further testified that the Safety Management Cycle "is a critical tool in the development and maintenance of a safe and responsible fleet." Id. at 18.

II. Legal Standard

Under Federal Rule of Civil Procedure 56(a), "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." "[A] genuine issue of material fact exists if: (1) there is a dispute of fact; (2) the disputed fact is material to the outcome of the case; and (3) the dispute is genuine, that is, a reasonable jury could return a verdict for either party." Morrow v. United States, 47 F.4th 700, 704 (8th Cir. 2022) (alteration in original) (quoting RSBI Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 401 (8th Cir. 1995)). In reviewing the record, the court views the facts in the light most favorable to the non-moving party. Lissick v. Andersen Corp., 996 F.3d 876, 882 (8th Cir. 2021). While "[t]he mere existence of a scintilla of evidence in support of the [movant's] position will be insufficient[,]" Turner v. XTO Energy Inc., 989 F.3d 625, 627 (8th Cir. 2021), a party moving for summary judgment is not entitled to a judgment just because the facts he offers may appear to be more plausible or because the adversary may be unlikely to prevail at trial, see Handeen v. Lemaire, 112 F.3d 1339, 1354 (8th Cir. 1997).

III. Applicable Law

Federal courts sitting in diversity apply the substantive law of the forum state. See Chew v. Am. Greetings Corp., 754 F.3d 632, 635 (8th Cir. 2014). In doing so, federal courts must follow the decisions of the state's supreme court interpreting the forum's law. See C.S. McCrossan Inc. v. Fed. Ins. Co., 932 F.3d 1142, 1145 (8th Cir. 2019). But if a state's supreme court "has not spoken on an issue, [federal courts] must predict how it would decide the issue[,]" and "may consider relevant state precedent, analogous decisions, considered dicta . . . and any other reliable data." Olmsted Med. Ctr. v. Cont'l Cas. Co., 65 F.4th 1005, 1008 (8th Cir. 2023) (quoting Brill ex rel. v. Mid-Century Ins. Co., 965 F.3d 656, 659 (8th Cir. 2020)). Here, the court is sitting in diversity and thus South Dakota substantive law applies. See Docket 1.

IV. Discussion

A. Punitive Damages

South Dakota law prohibits punitive damages unless the state legislature authorizes them. Dahl v. Sittner, 474 N.W.2d 897, 900 (S.D. 1991) (citing SDCL § 21-1-4). The jury may award punitive damages in "any action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, actual or presumed[.]" Dahl, 474 N.W.2d at 900 (quoting SDCL 21-3-2). The South Dakota Supreme Court has clarified that "[m]alice is an essential element of a claim for punitive damages." Smizer v. Drey, 873 N.W.2d 697, 703 (S.D. 2016) (citation omitted). A punitive damages claim may not be submitted to the jury unless the court finds by clear and convincing evidence that there is a reasonable basis to believe the defendant acted with malice. See SDCL § 21-1-4.1; Estate of Stengle by Stengle v. Walgreen Co., 2021 WL 858836, at *3 (D.S.D. 2021).²

Malice can be actual or presumed. Smizer, 873 N.W.2d at 703. "Actual malice is a positive state of mind, evidenced by the positive desire and intention to injure another, actuated by hatred or ill-will towards that person." Dahl, 474 N.W.2d at 900. Plaintiffs appear to concede that the record contains no evidence that defendants acted with actual malice towards plaintiffs. See Docket 36 at 16-20 (arguing only that defendants acted with presumed malice). Without evidence of actual malice, the court will permit punitive damages only if the record, viewed in the light most favorable to plaintiffs, shows clear and convincing evidence that defendants' actions were sufficient to presume their malice.

Presumed, legal malice may be inferred when the defendant acts willfully or wantonly to the injury of another. Dahl, 474 N.W.2d at 900. Malice cannot be presumed by "simply the doing of an unlawful or injurious act," but rather from acts that are "conceived in the spirit of mischief or of criminal indifference to civil obligations." Id. (quoting Hannahs v. Noah, 83 S.D. 296, 158 N.W.2d 678, 682 (1968)). Willful and wanton misconduct is behavior that demonstrates the defendant "consciously realized that his conduct would in all probability, as distinguished from possibility, produce the precise result which it did produce and would bring harm to the plaintiff." Flockhart v. Wyant, 467 N.W.2d 473, 478 (S.D. 1991) (quoting Tranby v. Brodock, 348 N.W.2d 458, 461 (S.D. 1984)). A claim for presumed malice can be shown by demonstrating a disregard for the rights of others. Id. Although whether one acts willfully or wantonly is normally a jury question, the conduct must be more than mere mistake, inadvertence, or inattention. See Gabriel v. Bauman, 847 N.W.2d 537, 542-43 (S.D. 2014). The court looks to an objective standard rather than a subjective standard in determining whether a jury could find the defendant acted willfully or wantonly. See id.

The South Dakota Supreme Court has found sufficient evidence that the defendant acted willfully or wantonly in causing an automobile accident in several cases. In Brewer v. Mattern, 85 S.D. 356, 182 N.W.2d 327 (1970), the Supreme Court found there was sufficient evidence for a jury to find the driver acted willfully and wantonly when the driver ignored warnings from a guest who was familiar with the road and road signs that the sloshy, gravel road curved while driving at least double the speed limit on a dark and rainy night. See id. at 329, 331. In Lukens v. Zavadil, 281 N.W.2d 78 (S.D. 1979), the Supreme Court held that a jury could find the driver acted willfully and wantonly where a 16-year-old defendant with limited driving experience consumed...