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Trucking Companies May Be Liable For Injuries Sustained To Persons Injured By An “Incompetent” Independent Contractor

Trucking Companies May Be Liable For Injuries Sustained To Persons Injured By An “Incompetent” Independent Contractor

When utilizing independent contractors for transportation services, trucking companies must be aware of their legal duties with regard to the hiring of “competent” independent contractors, and the scope of investigation that the law requires be undertaken to determine the competency of such contractors. The ramifications of the failure to do so can be significant, and may result in liability to a company who hires an incompetent independent contractor. The duties, responsibilities, and legal ramifications of a company’s failure to perform a reasonable investigation concerning an independent contractor’s competency was recently the subject of a New Jersey Supreme Court decision entitled Puckrein v. A TI Transport, Inc., et al.

In the Puckrein matter, BFI-NY was one of Browning-Ferris Industries 200′ American wholly owned subsidiaries. BFI-NY used a facility in Brooklyn as a central hub for the five boroughs of New York City. Pursuant to contracts with the City, BFI-NY collected and hauled the City residents’ waste and recyclable materials to Brooklyn. BFI-NY used independent carriers to transport recyclables and solid waste from Brooklyn to sites in other states and around the world. It had also purchased trucks and registered them to BFI-NJ, an affiliate and a registered federal motor carrier, to transport waste from Brooklyn to American Ref-Fuel in Newark, New Jersey.

In 1997, BFI-NY contracted with World Carting to haul glass residue and solid waste to American Ref-Fuel and other sites. Pursuant to the contract, World Carting was to provide all necessary equipment complying with all federal, state and local laws, rules, regulations, permits and licenses. World Carting also agreed to maintain insurance, to furnish BFI-NY with proof of insurance, and to indemnify BFI-NY for injuries or death to persons resulting from work performed under the agreement. Finally, the contract stipulated that World Carting was not to subcontract the work without prior written approval from BFI-NY.

With regard to this agreement, World Carting assigned its responsibilities to ATI Transport, Inc. World Carting and A TI were both owned by the same individual (Stangle), and had the same address. Witnesses testified that despite BFI-NY’s contract with World Carting, ATI trucks “showed up for World Carting” to pick up the materials to be hauled to Newark. Testimony also revealed that ATI would indicate that they were hauling for World Carting, or they would simply call to inform BFI-NY that ATI would be picking up materials at the site. There was also testimony that no employees of BFI-NY would check to determine if ATI’s registrations, insurance, or other licenses were in order.

In 1998, while an ATI truck was transporting materials for BFI-NY in accordance with the above-referenced contract, it collided with a vehicle operated and occupied by the Puckrein family. Certain members of the family were killed and others were seriously injured. It was thereafter determined that A TI, as owner of the tractor-trailer involved in the accident, received summonses for operating a vehicle with a suspended registration, operating an unsafe vehicle, and operating an uninsured vehicle. Both the owner of A TI and the operator of the vehicle were thereafter charged with manslaughter and other miscellaneous criminal offenses.

Thereafter, the Puckrein family filed suit against BFI-NY, World Carting, ATI Transport, and others. The Puckrein family sought to hold BFI-NY legally responsible for the negligence of ATI Transport. Included in the causes of action was the Puckreins’ claim that BFI-NY was liable for hiring an “incompetent contractor.” In short, the Puckreins alleged that BFI-NY failed to ensure that the A TI truck involved in the accident was registered and insured.

In determining whether BFI-NY was liable for the actions of ATI (an independent contractor), the New Jersey Supreme Court recognized that “it is well settled that when a person engages an independent contractor to do work that is not itself a nuisance, he is vicariously liable for the negligent acts of the contractor and performance of the contractor.” The “immunity” of the principal who hires an independent contractor rests on the distinction between such a contractor and an employee. The important difference between an employee and an independent contractor is that one who hires an independent contractor has no right or control over the manner in which the work is to be done, since it is to be regarded as the contractor’s own enterprise, whereas an employer has such a “right of control” of the manner in which work is done by an employee. The Court nonetheless recognized that there are several exceptions to the general rule that principals are not liable for the actions of independent contractors: (1) where the principal retains control of the manner and means of doing the work subject to the contract; (2) where the principal engages an incompetent contractor; or (3) where the activity constitutes a nuisance per se.

The second exception – the incompetent contractor exception – was the exception cited by the Puckreins, who alleged that BFI-NY hired an incompetent contractor (ATI Transport). The Court determined that to prevail against BFI-NY for hiring an incompetent contractor, the Puckreins were required to show that the contractor was, in fact, incompetent or unskilled to perform the job for which he/she was hired, that the harm resulted out of that incompetence, and that the principal (BFI-NY) knew or should have known of the incompetence.

As to ATI Transport, the Court determined that a hauler’s basic competency includes, at a minimum, a valid driver’s license, a valid registration certificate, and a valid liability insurance identification card. The Court determined that a company like BFI-NY, whose core purpose is the collection and transportation of materials on the highways, has a duty to use reasonable care in the hiring of an independent carrier, including the duty to make an inquiry into the carrier’s ability to travel legally on the highways. The Court determined that there was a lack of evidence showing that BFI-NY inquired about World Carting/ATI’s ability to travel on the highways, and the jury would ultimately be required to determine the reasonableness (or lack thereof) of BFINY’s inquiry concerning the ATI truck in question. That is, the question of whether BFI-NY violated its duty to use “reasonable care,” i.e., whether it “knew or should have known” of World Carting/ATI’s incompetence would be determined by the jury. The Court determined that the apparent lack of evidence to establish that BFI-NY made any inquiry with regard to the licensing, registration, and insurance of the vehicle in question precluded BFI-NY from being dismissed from the case, and the jury would ultimately determine whether BFI-NY’s actions/inactions were unreasonable so as to subject it to civil liability, with regard to the “incompetent contractor” claim alleged by the plaintiff.

It is clear from the Puckrein holding that a company who hires independent contractors for transportation services is wise to conduct a reasonable investigation as to the “competency” of the hauler, including, but not limited to, making sure that the hauler holds all required licenses, registration and insurance. One should also be aware that such a duty to investigate may require additional steps over and above such a basic investigation. The nature and extent of the inquiry required is not specifically defined, and will presumably be determined by courts on a case-by-case basis. Nonetheless, a company hiring an independent hauler is best served to perform as thorough an investigation as possible so as to limit potential liability in the event that the independent contractor causes injury to person or property.

Another lesson learned from Puckrein is that trucking companies should also make sure that the trucks that arrive on site to pick up and haul materials are actually vehicles owned and operated by the company with which the company has contracted, and not some other entity which may or may not be affiliated with the company hired.

Our law firm services clients in Central and Northern New Jersey, including Warren County, Sussex County, Morris County, Essex County, Somerset County, Hunterdon County, and Passaic County out of our two offices in Hackettstown and Morristown, New Jersey.

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