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The Illinois First District Appellate Court recently issued a
decision that reversed a trial court’s ruling, and granted a
judgment notwithstanding the verdict on appeal. The Court declined
to find an agency relationship where a shipping broker hired a
motor carrier to deliver loads to designated persons at designated
times, but did not reserve the right to control the motor
carrier’s hired driver’s routes or manner of
delivery.
In Cornejo v. Dakota Lines, Inc., 2023 IL App
(1st) 220633, the Court considered whether a shipping broker,
Alliance Shippers (Alliance), that contracted with a motor carrier,
Dakota Lines Inc. (Dakota), to transport goods on behalf of one of
the shipper’s clients was vicariously liable for the
carrier’s driver’s negligence, since neither the driver
nor the carrier were the shipping broker’s agents. The Court
ruled that there were no facts from which a reasonable jury could
find an agency relationship between the shipping broker and the
carrier.
Background
The plaintiff suffered injuries when a tractor-trailer struck
him while he was standing on the shoulder of a highway. The tractor
was owned by Dakota and was operating under Dakota’s
Department of Transportation authority. Dakota had a contractual
relationship with Alliance to transport trailers owned by another
company. During trial, the jury answered a special interrogatory
finding Dakota to be an agent of Alliance, and held that all
defendants (the driver, Dakota and Alliance) were jointly liable
for the damages totaling $18,150,750.
Court Analysis
The Appellate Court reviewed the nature of the relationship
between Dakota and Alliance and concluded that the evidence
overwhelmingly supported Alliance, and found that the contract
between Dakota and Alliance explicitly identified Dakota as an
independent contractor responsible for its employees and agents. In
reaching its decision, the Court highlighted that Alliance did
not:
- Pay, hire or train Dakota’s drivers
- Withhold taxes from Dakota drivers’ pay
- Control routes or provide tools or equipment
- Own any of the vehicles used by Dakota’s drivers.
The Court found that Dakota held complete autonomy over its
operations and personnel, and the agreement allowed Dakota to work
for other brokers, which underlined its status as an independent
contractor. In explaining the high degree of control required by
the Illinois courts, the Appellate Court relied on Sperl
v. C.H. Robinson Worldwide,
Inc.1 and Powell v. Dean Foods
Co.2
In Sperl and Powell, the Court
found that agency relationships existed because the evidence
presented in both cases showed a high degree of control by the
shipping broker over the pay, routes and manner of delivery. The
Court also cited and distinguished McHale v. Kiswani
Trucking, Inc.,3 where the shipping broker
owned the loaded trailer involved in the collision at issue and an
expert testified the driver was an employee of both the broker and
the carrier.
In distinguishing the case at bar from Sperl, the
Court noted that only Dakota had the power to fire the driver, and
Alliance had no ability to fine him. In addition, the driver never
communicated with Alliance, Dakota dispatched the driver and there
was no evidence that Alliance controlled the manner in which the
load was hauled.
Notably, the Court declined to accept the plaintiff’s
evidence and opinions from her expert as evidence of control, such
as Alliance’s requirement that Dakota add Alliance as an
additional insured, issue requirements regarding seal integrity,
freight bills and cargo security, or Alliance requiring Dakota to
use its software to communicate when shipments were ready for
transport.
The Court concluded that no reasonable jury could deduce an
agency relationship between Dakota (and its driver) and Alliance
because none of the facts presented showed the high degree of
control required by Illinois courts when determining whether an
agency relationship exists.
Takeaway
This judgment highlights liability determinations in agency
versus independent contractor cases, underscoring the necessity for
clear, definite contractual terms that distinctly define the roles,
responsibilities and liabilities of each party. The decision also
serves as a reminder for businesses and their legal teams to
understand and document contractual relationships to avoid
unforeseen liabilities.
Footnotes
1. 408 Ill. App. 3d 1051, 1057, 349 Ill. Dec. 269,
946 N.E.2d 463 (2011).
2. 2013 IL App (1st) 082513-B, ¶¶ 74-75,
379 Ill. Dec. 837, 7 N.E.3d 675.
3. 2015 IL App (1st) 132625, 396 Ill. Dec. 46, 39
N.E.3d 595.
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