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Lester v. SMC Transport, LLC

United States District Court, W.D. Virginia, Roanoke Division

September 2, 2016

SMC TRANSPORT, LLC, et al., Defendants.


          Hon. Glen E. Conrad Chief United States District Judge.

         In this diversity action, plaintiff Brandon Lester contends that he sustained serious personal injuries when his vehicle struck a tractor trailer driven by Israel Martinez, Jr. in the early morning hours of October 26, 2015. The case is presently before the court on the plaintiffs motion for partial summary judgment, plaintiffs motion to strike the third-party complaint, and the defendants' motions to dismiss. For the reasons set forth below, the parties' motions will be denied in part and granted in part.


         Defendant Salinas Express, LLC ("Salinas") is a Texas limited liability company in the business of shipping goods through interstate travel. Salinas is co-owned by Rudy Salinas ("Rudy") and his sister, both citizens of Texas. Salinas leases nine trucks from their owner-operators and maintains that it only hires independent contractors to complete its shipping jobs. Nevertheless, Salinas's job applications are for "employment" and refer to the drivers as "employees." Through the course of a delivery, Rudy assigns drivers, and sometimes, Rudy will also instruct the drivers as to the specific tractor that will be used. Drivers are required to check in with Rudy every morning and must adhere to set delivery deadlines. At the end of a trip, drivers must also turn in log books to Rudy or his sister. After a successful delivery, Salinas is paid by its broker. At that point, Salinas pays its drivers in cash and issues a Form 1099 to those individuals it pays. Occasionally, Salinas performs certain repairs on tractors used in its business.

         The 1988 Peterbilt tractor involved in the accident was purchased by Rudy roughly fifteen years ago (the "Salinas Tractor"). Approximately seven or eight years ago, Rudy gifted the tractor to his father, who, in 2014, started the process of selling the tractor to Roy Salinas, Rudy's brother ("Roy"). Roy testified that he is purchasing the tractor from Rudy and that he is unsure as to the remaining balance or the amount he has paid towards its purchase. The Salinas Tractor, however, remains titled in Rudy's name.

         Prior to September 2015, Roy worked for both SMC Transport, LLC and Salinas. Roy sometimes used the Salinas Tractor while completing deliveries for both companies. Roy was not the exclusive driver of the Salinas Tractor, as it was also driven by Israel Martinez, Jr. at least twice.

         Defendant Israel Martinez, Jr. ("Martinez") is a driver for Salinas. Martinez completed employment paperwork in the first half of 2015 and had made three or four trips for Salinas prior to October 2015. According to the allegations in the complaint, Martinez "had a history of failing to adhere to state and federal regulations governing the operation of his vehicle." Am. Compl. ¶ 48.

         Defendant SMC Transport, LLC ("SMC") is a Texas limited liability company also in the shipping business. SMC is owned by Sergio Cuellar ("Cuellar"). Cuellar is Rudy and Roy's cousin. SMC owns two trucks and operates seven others through owner-operators. One of the tractors SMC owns (the "SMC Tractor") was also involved in the accident. Cuellar purchased this particular tractor in July of 2015 and made several mechanical repairs to the vehicle over the next few months. The October ride to Virginia was the SMC Tractor's first long-haul drive.

         I. The Events Leading to the Accident

         In the days before the October 26, 2015 accident, Roy was completing a delivery for Salinas by driving a trailer of goods from Maryland to Laredo, Texas using the Salinas Tractor. Eddie Lozano ("Lozano"), another Salinas driver, was not far behind Roy and was also in the process of completing a delivery for Salinas. During the trip, Roy started to have problems with the Salinas Tractor, and it eventually broke down. Roy left the Salinas Tractor at a rest stop in Botetourt County, Virginia. At that point in time, Roy notified Rudy that he had broken down. Lozano picked up Roy, and the two completed Lozano's delivery en route to Texas.

         Rudy instructed Lozano to return to Virginia to pick up the disabled Salinas Tractor. When asked how Rudy thought Lozano was going to get back to Virginia, Rudy replied, "I thought Roy was going to drive back with him." 30(b)(6) Dep. of Rudy Salinas 46:13. Martinez testified that Rudy called Martinez asking him to help Roy and Lozano pick up the disabled Salinas Tractor. Other testimony suggests that Roy, not Rudy, called Martinez to join him on the trip back to Virginia. To get Martinez's phone number, Roy called Rudy. During the phone call, Roy told Rudy he was asking for Martinez's contact information so that Martinez could help Roy pick up the disabled Salinas Tractor.

         To complete the trip, Lozano, Roy, and Martinez used the SMC Tractor to tow a third tractor ("Lozano's Tractor") to Virginia. This would allow Lozano to quickly deliver the now-late goods that remained in a trailer attached to the disabled Salinas Tractor. Before leaving for Virginia, however, Roy, Martinez, and Lozano had difficulty connecting Lozano's Tractor to the SMC Tractor. They called Cuellar for help; Cuellar met them at a truck stop in Texas and connected Lozano's Tractor to the SMC Tractor. Prior to this interaction, Cuellar had not met Martinez. During the entire trip, the SMC Tractor had SMC placards on it.

         i II. The Accident

         Upon arriving at the Botetourt rest stop, Lozano's Tractor was unhooked from the SMC Tractor and then used to deliver the goods Roy had left with the Salinas Tractor. The Salinas Tractor was then hooked up to the SMC Tractor, so that it could be towed back to Texas. Just before 6:00 a.m. on October 26, 2016, Martinez and Roy attempted to leave the rest stop using the SMC Tractor and with the Salinas Tractor in tow. To do so, Martinez drove north, through the entrance ramp of the rest stop, so that he could make a U-turn onto southbound Interstate 81 ("1-81").

         According to the complaint, Martinez was driving and Roy was directing him. Martinez proceeded to drive out of the rest stop's entrance ramp. He had "not attempted to place flares on 1-81 South to alert drivers that his vehicle would be blocking the southbound lanes." Am. Compl. ¶ 34. Additionally, other drivers on the highway had "very limited visibility of the entrance ramp" to the rest stop. Id. ¶ 42. In attempting to make a U-turn and enter onto 1-81 using the entrance ramp, Martinez caused the SMC Tractor, towing the Salinas Tractor, to block all lanes of traffic. At this time, Lester was cresting a rise immediately before the entrance ramp. Lester was unable to stop or maneuver his vehicle in time and struck the tractors. Subsequently, a second vehicle struck Lester's vehicle. According to Salinas's third-party complaint, the second vehicle was negligently driven by Anthony Shifflett in the course of his employment with CTWWM, Inc. After the accident, Martinez again attempted to exit onto southbound 1-81 by making the same illegal U-turn. Several hours later, phone records indicate that Cuellar called Martinez.

         Procedural History

         Lester filed his amended complaint against Salinas, SMC, and Martinez on June 6, 2016, alleging nine claims of negligence, willful and wanton negligence giving rise to punitive damages, common-law vicarious liability, negligence per se, negligent entrustment and negligent hiring, placard liability, and constructive fraud. On June 24, 2016, plaintiff filed a motion for partial summary judgment, asking the court to find as a matter of law that the disabled Salinas Tractor was owned by Rudy and controlled by Salinas; that Salinas Express is vicariously liable, either through a theory of placard liability or common-law vicarious liability, for the negligence of Roy and Martinez while they were using both the Salinas Tractor and the SMC Tractor; that SMC is vicariously liable, either through a theory of placard liability or common-law vicarious liability, for the negligence of Roy and Martinez; and that SMC was negligent per se in placing the SMC Tractor in interstate travel with its placards but without the requisite insurance coverage.

         On June 24, 2016, SMC filed a motion to dismiss several of Lester's claims. On June 27, 2016, Salinas did the same. On July 8, 2016, Salinas filed a third-party complaint pursuant to Federal Rule of Civil Procedure 14 against Anthony Ray Shifflett ("Shifflett") and CTWWM, Inc. d/b/a/ Carter's ("Carter's"), alleging that Lester's injuries arose when Shifflett negligently struck Lester with his vehicle. On July 11, 2016, Lester filed a motion to strike the third-party complaint.

         The motions have been fully briefed and argued, and they are ripe for decision.

         Defendants' Motion to Dismiss

         Standard of Review

         When deciding a motion to dismiss for failure to state a claim, the court must accept as true all well-pleaded allegations and draw all reasonable factual inferences in the plaintiffs favor. Vitol S.A. v. Primerose Shipping Co., 708 F.3d 527, 539 (4th Cir. 2013). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citation and quotation marks omitted). To survive dismissal for failure to state a claim, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

         When a federal court's jurisdiction rests upon diversity of citizenship, the court must apply the substantive law of the forum state, including the forum state's choice of law rules. See Ferens v.' John Deere Co., 494 U.S. 516, 519 (1990). In Virginia, the substantive law of the place of the wrong governs the proceeding. See Frye v. Commonwealth, 231 Va. 370, 376 (1986). ...

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