United States District Court, S.D. West Virginia, Huntington Division
MEMORANDUM OPINION AND ORDER
C. CHAMBERS CHIEF JUDGE.
before the Court are Defendant Cardinal Transport's
Motion Summary Judgment, ECF No. 72, and Motion to Strike and
Exclude Untimely Evidence, ECF No. 84. For the reasons
explained in the following Memorandum Opinion the Court
GRANTS in part and DENIES in part the Motion for Summary
Judgment, and DENIES the Motion to Strike.
October 3, 2015, Plaintiff Richard Edwards was assisting
Defendant Danny McGowan, owner of McElliotts Trucking, load
large metal rods on to a flatbed trailer at McGowan's
truck yard in Kenova, West Virginia. Edwards Dep. 44,
Def.'s Mot. for Summ. J. Ex. 7, ECF No. 72-7. McGowan
used a forklift and straps to lift the rods on to the bed of
the trailer while Edwards attached the straps to the tines of
the forklift, guided the rods into place, and placed stops on
the trailer to prevent the rods from rolling off during
transport, also known as “scotching.” Edwards
Dep. 69-72. The rods weighed approximately two-thousand
pounds each. McGowan Dep. 91, Pl.'s Resp. to Mot for Summ
J. Ex. 4, ECF No. 79. During the course of loading the rods,
one fell from the bed of the trailer and struck Edwards'
leg. Edwards Dep. 71. Edwards was severely injured and
eventually lost the lower part of his leg.
that struck Edwards was part of a shipment of similar
materials produced by Special Metals, a Huntington, West
Virginia manufacturing firm, and destined for one of its
customers. McGowan Dep. 91; Pl.'s Resp. Ex. 7. Special
Metals placed the shipment with Defendant Cardinal Transport.
Cardinal is an interstate motor carrier that ships freight by
semi-truck. Riley Aff. ¶ 2, Def.'s Mot. for Summ. J.
Ex. 1, ECF No. 72. Cardinal leased the trucks owned by
McElliotts to deliver loads negotiated by McGowan as an
exclusive Cardinal sales agent. Exclusive Freight Sales
Agency Agreement, Def.'s Mot. for Summ. J. Ex. 3, ECF No.
72-3; Independent Contractor Agreement, Def.'s Mot. for
Summ. J. Ex. 4, ECF No. 72-4.
time of the accident, McGowan was an exclusive Cardinal sales
agent and leased his trucks to Cardinal to deliver shipments
for Cardinal customers. Id.; McGowan Dep. 47. As
both a sales agent and an owner-operator lessor, McGowan
solicited customers for Cardinal and arranged for transport
using his trucks to deliver shipments. Exclusive Freight
Sales Agency Agreement 2; Cardinal Agent's Policy Manual
1-5, Pl.'s Resp. Ex. 13; Independent Contractor Agreement
¶ 1. For his services as an exclusive sales agent with
Cardinal, Cardinal paid McGowan an 8.5 percent commission of
the first one million dollars in sales per annum and then
nine percent on all sales over one million dollars in the
same year. Cardinal Agent's Policy Manual 3.
McGowan's commission was contingent on placing the
shipments on Cardinal-leased trucks, unless Cardinal provided
its written permission for McGowan to arrange shipment on
another carrier. Exclusive Freight Sales Agency Agreement 1.
Cardinal permitted McGowan to negotiate shipping rates with
shippers, but the rate negotiated was subject to approval by
Cardinal. Cardinal Agent's Policy Manual 4.
shipment was ready for transport McGowan arranged for his
trucks, leased by Cardinal, to pick up the shipment and
transport it to its destination. McGowan Dep. 66-68. McGowan
was paid seventy-six percent of the shipping fee. McGowan
Dep. 63. From the commission McGowan was required to pay for
a driver, fuel, tolls, and maintenance for the trucks.
McGowan Dep. 63-64.
occasion Special Metals would place a shipment with Cardinal
that did not fill an entire trailer. McGowan Dep. 68. In
those instances, McGowan would haul the partial load back to
his truck yard in Kenova where he would unload it and store
it until he collected enough shipments to fill an entire
trailer. Id. He would then load multiple shipments
on one trailer. McGowan Dep. 68, 88, 90 Edwards was injured
while McGowan was reloading a trailer. McGowan Dep. 91.
brought suit for his injuries against McGowan, McElliotts
Trucking, Midkiff, and Cardinal Transport. Compl.
¶¶ 2-5. Only Cardinal filed a summary judgment
motion and thus the Court will only address the claims
against Cardinal. Edwards alleges that as McGowan's
ultimate employer, Cardinal is vicariously liable to him for
the injuries caused by the accident in McGowan's truck
yard. Compl. ¶¶ 60-87. Edwards advances two
theories of vicarious liability. The first is based on West
Virginia common law and the second on federal regulations
that impose certain requirements on Cardinal's
relationship with McGowan. Id. Edwards also alleges
negligent training, hiring, and supervision and negligent
obtain summary judgment, the moving party must show that
there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). In considering a motion for summary
judgment, the Court will not “weigh the evidence and
determine the truth of the matter[.]” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Instead,
the Court will draw any permissible inference from the
underlying facts in the light most favorable to the nonmoving
party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587-88 (1986).
the Court will view all underlying facts and inferences in
the light most favorable to the nonmoving party, the
nonmoving party nonetheless must offer some “concrete
evidence from which a reasonable juror could return a verdict
in his [or her] favor[.]” Anderson, 477 U.S.
at 256. Summary judgment is appropriate when the nonmoving
party has the burden of proof on an essential element of his
or her case and does not make, after adequate time for
discovery, a showing sufficient to establish that element.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). The nonmoving party must satisfy this burden of proof
by offering more than a mere “scintilla of
evidence” in support of his or her position.
Anderson, 477 U.S. at 252.
Court will address Edwards' common law vicarious
liability claim and Cardinal's arguments against it,
first and address his federal vicarious liability claim,
negligent hiring, and negligent entrustment claims in turn.
Common Law Vicarious Liability
the burden of the proponent of vicarious liability, in this
case Edwards, to make a prima facie showing of the
existence of a master-servant relationship. Zirkle v.
Winkler, 585 S.E.2d 19, 22 (W.Va. 2003) (quoting
Sanders v. Georgia-Pacific Corp., 225 S.E.2d 218,
222 (W.Va. 1976)). Once that showing has been made “it
is incumbent upon one who would defeat liability on the basis
of an independent contractor relationship to show such
features of a relationship must be present to sustain a claim
of vicarious liability in West Virginia common law. They are:
“(1) Selection and engagement of the servant; (2)
Payment of compensation; (3) Power of dismissal; and (4)
Power of control.” Cunningham v. Herbert J. Thomas
Mem'l Hosp. Ass'n, 737 S.E.2d 270, 277 (W.Va.
2012) (quoting Paxton v. Crabtree, 400 S.E.2d 245,
Syl. pt. 5 (W.Va. 1990)). The determinative feature, the West
Virginia Supreme Court of Appeals held, is the power of
power of control, the West Virginia Supreme Court expounded
“the entity engaging an independent contractor is not
required to surrender all control in order to maintain an
independent contractor relationship.” The Court
described the power to control the outcome of the contract as
insufficient to create an employer-employee relationship.
Instead, it is the power over the process, not just the
outcome, that demonstrates the essential feature of control
such that a master-servant relationship exists. Roberston
v. Morris, 546 S.E.2d 770, 773 (W.Va. 2001).
admits that the first three elements are present in its
relationship with McGowan, but it contests the fourth
element-the power of control. It argues that it did not have
the kind of control over McGowan to create a master-servant
relationship exposing it to vicarious liability for his
allegedly negligent acts. It further argues that Edwards has
not presented any evidence contrary to its argument and
therefore cannot survive summary judgment.
summary judgment phase, the plaintiff is not required to
prove the case; the plaintiff must only present more than a
“scintilla” of evidence supporting the claim such
that a reasonable juror could find in the plaintiff's
favor. In a claim for vicarious liability of an employer, a
plaintiff meets this burden “[w]here the evidence
relative to whether a particular person in an independent
contractor or an employee is in conflict or, if not in
conflict, admits of more than one reasonable inference . . .
.” Zirkle, 585 S.E.2d 19, Syl. pt. 3 (quoting
Levine v. Peoples Broad. Corp., 140 S.E.2d 438
(W.Va. 1965)). The evidence before the Court is conflicting
and subject to more than one reasonable inference.
Accordingly, the classification of the relationship between
McGowan and Cardinal is committed to the jury.
contracts govern McGowan's relationship with Cardinal.
The first is the “Exclusive Freight Sales Agency
Agreement” and the second is titled “Independent
Contractor Agreement.” The substance of the first
governs McGowan's rights and duties as a sales agent. The
second governs Cardinal's lease of McGowan's trucks
to deliver the shipments arranged by McGowan under the sales
agent agreement. A review of the sales agent agreement
reveals Cardinal exerted significant control over
McGowan's operation. Although the contract itself is
quite short, the contract incorporates the “Cardinal
Agent's Policy Manual”-a tome-like document that
touches on every aspect of an agent's business.
See Cardinal Agent's Policy Manual 1-97. The
Manual requires, among other things, every customer to go
through a credit check and meet standards set by Cardinal,
and that all shipping rates negotiated by the sales agent be
reviewed by Cardinal. Id. 1, 4-5. These two
requirements give Cardinal, at the very least, veto power
over the primary functions of the sales agent-soliciting
customers and negotiating shipping rates. The Manual goes on,
however. Shipping contracts are only completed once Cardinal
provides a finalized contract to the agent. Id. 5.
Billing is also largely handled by Cardinal. Id. 14.
Cardinal issues invoices to shippers for each load moved,
sends a report to agents twice a month informing them of
outstanding invoices, and sends statements to each customer
with an open invoice. Id.
sales agent agreement further supports an inference of
control. Most notably, the contract contains a non-compete
clause, barring the sales agent from working with a customer
or competitor of Cardinal as a sales agent for one year.
Exclusive Freight Sales Agency Agreement 3. The contract also
states that any money collected by the sales agent is the
sole property of Cardinal until Cardinal remits to the sales
agent his or her commission. Id. 1-2. The agreement
bars the sales agent from shipping any freight on any carrier
except Cardinal unless he or she receives Cardinal's
express written permission. Id. 1. It also bears
repeating that McGowan was an exclusive sales agent, meaning
he worked solely for Cardinal. Id.
Independent Contractor Agreement, despite its name, further
supports an inference of Cardinal's meaningful control
over the process of shipping loads placed with McGowan. The
lessor, in this case McGowan, could only hire drivers that
complied with certain qualifications, including a particular
driver ranking on “CSA2010.” Id. ¶
5(b)(viii). McGowan was further required to purchase and
maintain at least $500, 000 of public liability and property
damage insurance as well as an insurance policy covering
collision, fire, theft, or other catastrophes. Id.
¶ 6(e). McGowan was also required to file with Cardinal
all log sheets, physical examination certificates, and
accident reports and keep a copy of the contract in the truck
at all times. Independent Contractor Agreement ¶
5(a)(ii)-(iii). McGowan testified in his deposition that his
drivers were required to contact Cardinal dispatch daily to
inform Cardinal of their progress. McGowan Dep. 68. All of
McGowan's trucking business was through Cardinal. McGowan
together, McGowan's business with Cardinal stretched from
soliciting customers and negotiating shipping rates to
leasing his trucks to Cardinal and finding drivers to deliver
the shipment to its destination. At each of these stages,
however, Cardinal had the power to exercise meaningful
control over McGowan's business. Cardinal had the power
to review potential customers and the rates negotiated with
McGowan. Cardinal provided McGowan with forms and advice on
how best to conduct his sales agent business, collected
shipping fees, paid McGowan his commission, and reminded
customers of their outstanding balances. Cardinal further
required all drivers to meet certain qualifications, checked
up on them daily, imposed insurance requirements on McGowan,
and set reporting requirements on a range of information.
both McGowan and Cardinal's owner testified that they
understood their relationship to be that of an independent
contractor, their characterization of the relationship is not
determinative. Zirkle, 585 S.E.2d 23. Neither are
the labels used for the parties in their agreements.
Id. The provisions of the agreements and other
testimony from McGowan support a reasonable inference that
McGowan was an employee of Cardinal and thus Cardinal could
be subject to vicarious liability for the negligent acts of
Scope of Employment
McGowan is ultimately found to be an employee of Cardinal,
Cardinal is only liable for McGowan's negligent acts done
in the scope of his employment. West Virginia common law
defines the scope of employment with three elements: (1) the
conduct is of the kind he or she is employed to perform; (2)
the conduct occurs within the authorized space and limits;
and (3) it is actuated, at least in part, by a purpose to
serve the master. W.Va. Reg'l Jail and Corr. Facility
Auth. v. A.B., 766 S.E.2d 751, 770 (W.Va. 2014). Again,
the West Virginia Supreme Court explained
“[o]rdinarily, the determination whether an employee
has acted within the scope of employment presents a question
of fact.” Id. Where there is conflicting
evidence or where the evidence is in accord but is subject to
conflicting inferences, the determination is for the jury.
Id. Here again the evidence presented to the Court
is either in conflict or susceptible to contrary but
reasonable inferences. Thus, the jury must decide whether
McGowan was acting within the scope of his employment when
Edwards was injured.
commits much of its argument to highlighting that it never
expressly authorized McGowan to load or unload anything,
thus, rendering his loading practices outside the kind of
conduct for which Cardinal employed McGowan. Whether McGowan
was expressly permitted or required to do any loading is not
determinative of whether he was acting within the scope of
his employment. On this issue the West Virginia Supreme Court
held “[w]here a master sends forth an agent he is
responsible for the acts of his agent within the apparent
scope of his authority, though the agent oversteps the strict
line of his duty.” Nees v. Julian Goldman Stores,
Inc., 146 S.E. 61, 62 (W.Va. 1928). An employee may be
acting within the scope of employment even if the act is
unauthorized when the act “can fairly and reasonably be
deemed to be an ordinary and natural incident or attribute of
that act or a natural, direct or logical result of it.”
Levine v. Peoples Broadcasting Corp., 140 S.E.2d
438, 442 (W.Va. 1965); see also Travis v. Alcon Labs.
Inc., 504 S.E.2d 419, 431 (W.Va. 1998) (“[A]n
employer may be liable for the conduct of an employee, even
if the specific conduct is unauthorized or contrary to
express orders, so long as the employee is acting within his
general authority and for the benefit of the
employer.”). Whether the act is a natural incident to
one's employment is a “relative term” that
“requires a consideration of surrounding circumstances
. . . ordinarily determined by the jury.” Griffith
v. George Transfer & Rigging, Inc., 201 S.E.2d 281,
288 (W.Va. 1973).
not a far stretch to deem loading a truck a natural incident
to shipping freight by truck. Indeed, it is fair to say that
it is necessary. The fact that McGowan was not loading
shipments at their destination does not, as a matter of law,
transform the act into “something different in kind
from that authorized.” A.B., 766 S.E.2d at
770. From the evidence presented to the Court, partial loads
are often dispatched by Special Metals to McGowan's
trucks. It is reasonably expected that McGowan would then
attempt some form of consolidation to make his operation more
efficient. See Riley Dep. 48-49, Pl.'s Resp. Ex.
1, ECF No. 79 (“You know, the idea is to put as much
money, legally, on your truck as possible.”).
Accordingly, a reasonable inference can be drawn that loading
and unloading to consolidate partial loads onto a single
truck were natural incidents to McGowan's employment. It
is for the jury, not this Court, to make the ultimate
determination whether McGowan's loading practices were in
fact a natural incident to his employment.
also argues that McGowan was not actuated by a purpose to
serve Cardinal because any efficiencies realized by McGowan
accrued solely to McGowan. For each truckload he transported
McGowan was paid seventy-six percent of the total shipping
fee. Out of that fixed commission McGowan had to pay tolls,
fuel, and his drivers; the remainder was his profit. Thus,
Cardinal argues, any savings by consolidating loads would
accrue only to McGowan in the form of lower labor, toll, and
fuel costs by using one truck instead of multiple trucks. The
Court agrees with Cardinal's description, but it is only
a partial account of the division of benefits realized by
McGowan and Cardinal.
need not be actuated solely by a desire to serve Cardinal.
A.B., 766 S.E.2d at 770 (finding the act must be
“actuated, at least in part, by a purpose to
serve the master.” (emphasis added)). It is reasonable
to infer that where McGowan was able to create efficiencies
in his trucking operation he could use those savings to
present more competitive shipping rates to Special Metals
thereby ensuring continued use of Cardinal as its carrier.
The actuating purpose of McGowan's consolidation method
was undeniably self-serving, but a reasonable inference can
be drawn ...