Under federal regulations and case law the lack of a written agreement between a motor carrier and a driver is not relevant in determining that liability for the driver’s negligence is imputed to the motor carrier.
In Fuller v. Riedel
, 464 N.W.2d 97 (Wis. Ct. App. 1990), the Wisconsin Court of Appeals held that,
The cases are uniform in holding that the absence of a written trip lease is legally irrelevant. In Cox v. Bond Transportation, Inc., 53 N.J. 186, 249 A.2d 579 [586-87] (1969), cert. denied, 395 U.S. 935, 89 S.Ct. 1999, 23 L.Ed.2d 450 (1969) ....
The regulations described above have the force and effect of law. A franchised interstate carrier cannot evade them by making an oral or written lease with an owner-operator of equipment for a trip, for a day or for an indefinite period, which attempts to exclude or to limit their application. When such a carrier engages an owner-operator of a tractor intending to have him transport goods for it on the public highways and interstate commerce ... the regulations must be deemed included in their contract.
In another case the same court held that “… a lease may be formed by conduct or words; it need not be written. Although ICC regulations require the carrier to have a written lease, the failure to have one does not absolve the carrier of liability if an oral lease exists.” Williamson v. Steco Sales, Inc
., 530 N.W.2d 412 (Wis. Ct. App. 1995). See also, Zamalloa v. Hart
, 31 F.3d. 911, 917-918 (9th Cir. 1994)).
In Cheney v. Hailey,
686 P.2d 808 (Colo. Ct. App. 1984), the Colorado Court of Appeals discussed oral “agreements” between drivers and motor carriers similar to the situation in the case at bar and determined that,
During trial, Johnson's deposition was admitted into evidence. In the deposition, Johnson stated that an American Red Ball agent [orally] instructed him to drive to Colorado Springs to "pick up a load of 6,000 pounds going to Utah." This evidence was corroborated by the testimony of an operations manager for American Red Ball, as well as by a stipulation entered into by the parties "that Johnson was sent to Colorado Springs as a directive [sic] of American Red Ball Company."
This evidence, which is neither disputed nor conflicting, establishes an agreement between American Red Ball and Johnson wherein Johnson agreed to act on behalf of American Red Ball. Therefore, the trial court did not err in determining as a matter of law that an agency relationship existed.
In Johnson v. Pacific Intermountain Express Co
., 662 S.W.2d 237 (Mo. 1983). the Missouri Supreme Court addressed unwritten/oral agreements when it noted, in 1983, that,
Perhaps it will be helpful first to explore the practicalities of the situation rather than the legalities. Marlo was in touch with a customer who had a truckload of steel. It was looking for a truck. Brown and Singleton had a truck provided to them by Tabor, who had leased it, and, with full authority from Tabor, were trying to locate payloads. Marlo and the truckers got together on a proposition to haul a load for Franklin Steel to Broken Arrow, Oklahoma. They did not put the details in writing but rather operated informally. Marlo was to collect from the customer, retain 25%, and remit the balance to Tabor. Nobody seemed to have the least concern about the total absence of operating authority.; * * *
Marlo, then, was instrumental in launching and directing the truck journey. This is not a situation in which Marlo should be allowed to escape liability by asserting independent contractor status. Our courts have been hesitant to uphold claims for this kind of immunity. There is a distinct tendency to find that truck operators are agents or servants rather than independent contractors.;B0099;B0099 Marlo's case is not helped by the fact that it did not try to place the load with a regular, certified carrier, having regular routes and published tariffs, but rather did business with itinerant truckers with no semblance of operating authority. It is easier to find an independent contractor relationship when the purported contractor holds itself out to the public as having a regular and established business.
But the illegality of the operation is not the controlling circumstance. The usual rule holds those who engage in business for profit liable in damages, on the usual negligence principles, to those who are injured in the course of the business operations. There is no reason to relieve Marlo of this normal and usual liability.
In Cox v. Bond Transportation, Inc., 53 N.J. 186, 249 A.2d 579, the court noted that,
[t]hus when a lessor-operator is engaged by the carrier for operation within the scope of the regulations he becomes what has been described as a ‘statutory’ employee of the carrier, Brannaker v. Transamerican Freight Lines, Inc., 428 S.W.2d 524, 535 (Mo.Sup.Ct.1968), and the relation between them, whether oral or written, is governed by the regulations. And when the relation arises, the carrier-lessee takes ‘exclusive possession, control, and use of the equipment, and * * * the complete assumption of responsibility….
So, despite non-compliance with the provisions of 49 C.F.R. §§ 376.11 and 376.12, liability will nonetheless attach to motor carriers which fail to follow the law by not executing a written trip lease. In the case of Zamalloa v. Hart
, 31 F.3d 911 (9th Cir. 1994), the United States Court of Appeals for the Ninth Circuit squarely addressed the issue of motor carriers failing to meet the written leasing requirements by having only oral agreements when it held that,
The leading case in this circuit on whether liability can be imposed on a carrier even absent substantial compliance with § 1057.11(a)-(d) is Planet Insurance v. Transport Indemnity, 823 F.2d 285 (9th Cir.1987). In Planet Insurance, the plaintiff attempted to hold a carrier liable for injuries resulting from an accident involving a leased truck. The truck driver had signed a written lease with the carrier lessee, but had neither picked up his load nor begun displaying the carrier lessee's placard at the time of the accident. The carrier argued that compliance with the regulatory requirements, specifically, display of the carrier's placard, was a precondition to establishing statutory employment and liability under the ICC regulations. We did not agree, holding that failure to comply with the regulatory requirements could not relieve the carrier from liability so long as the vehicle was in fact under the control of the carrier. To hold otherwise would be to ‘stray impermissibly from the allocation of responsibility contemplated by Congress and the ICC’… No court has held that a written lease is a condition precedent to imposition of statutory liability on carrier lessees. See Wilson v. Riley Whittle, Inc., 145 Ariz. 317, 701 P.2d 575 (Ct.App. 1985) (“the absence of a written trip lease is legally irrelevant”); see also Fuller v. Riedel, 159 Wis.2d 323, 464 N.W.2d 97 (Ct.App. 1990) (finding statutorily liable a carrier lessee who entered into an oral trip lease and whose sign was not displayed at the time of the accident); Cox v. Bond Transportation, Inc., 53 N.J. 186, 249 A.2d 579 (carrier lessee statutorily liable under an oral lease for an accident that occurred while the driver was on his way home), cert. denied, 395 U.S. 935, 89 S.Ct. 1999, 23 L.Ed.2d 450 (1969).
The Montana Court of Appeals in Ronish v. St. Louis
, 621 F.2d 949 (Mont. Ct. App. 1980). noted while holding against a noncompliant motor carrier that “[h]ere, a written lease between the parties was absent, and, more importantly, TVT ignored the ICC safety regulations designed to protect the public from the type of accident here involved.”
In Wilson v. Riley Whittle, Inc.
, 145 Ariz. 317, 701 P.2d 575 (Ct.App. 1985), the court, citing a sister court as support, emphasized that the carrier lessee's own loose internal procedures had allowed the load to be picked up without a signed lease by recognizing that " It would defeat the intent behind § 1057 to enable carriers to benefit from their own failure to comply with ICC regulations." The Wilson Court noted that “[n]o court has held that a written lease is a condition precedent to imposition of statutory liability on carrier lessees.”
A Pennsylvania court opined that, “[w]e cannot expose the public to the indifference of a motor carrier who escapes liability simply because it has either failed to execute a written lease or has not covered the particular activity of the lessor in the written leases.” Rankin v. Fischer
, 441 A.2d 426 (Pa. Super. Ct. 1982).