The Indiana Court of Appeals recently decided that an Indianapolis warehouse facility was not liable for a fatal tractor-trailer accident because it owed no contractual or common law duty to the victims.[1]
In January 2010, Kendall Transportation dispatched its driver to haul a 40,000-pound steel coil from ADS Logistics Co., LLC (“ADS”), a warehouse facility, to Eagle Steel Products, Inc. While at the ADS warehouse, the Kendall Transportation driver directed the loading of the steel coil and then secured it himself to his trailer. He testified that it was his responsibility to do so. While in transport, the coil became unsecured, left the trailer and struck two vehicles, killing three people and injuring another.
The injured person and the estates of the three deceased victims filed various lawsuits, including one against ADS, alleging that it owed a duty to the plaintiffs “regarding securing the load to the tractor trailer that was involved in the accident.” The trial court granted ADS’ motion for summary judgment, finding that ADS did not owe the plaintiffs any duty.
On appeal, the plaintiffs argued ADS had a duty toward them via its contract with ArcelorMittal USA, LLC, which paid ADS to warehouse the coil. The victims pointed to sections of that contract that required ADS to adhere to certain safety protocols. However, the Indiana Court of Appeals found that those requirements were limited only to the warehousing of the coil, not its transportation.
In reaching its decision, the Court stated, “No contractual language requires or implies that ADS assumed a duty to secure the warehoused coil onto another driver’s trailer…Therefore, we simply cannot conclude that this contract created a duty owed by ADS to the Appellants with respect to the way in which the steel coil was secured to [the driver’s] flatbed trailer.”
The victims also claimed ADS owed a common law duty to them, but the Court noted that duty could not exist because there was no relationship between ADS and the appellants. The court also found the harm was unforeseeable as a matter of law and that public policy did not support a finding of a common law duty. In doing so, the Court wrote, “It is apparent that the party best suited to prevent an injury to motorists with respect to commercial cargo secured to a flatbed trailer is the entity responsible for securing, hauling, and checking on the cargo during the drive.”
The decision is an important reminder for business owners to be certain of the contractual limits of liability they have. Well-drafted contracts are the backbone of exposure limitation. The Court also upheld Indiana common sense principles that some kind of relationship must be formed between parties before a common law duty exists. If you have any questions regarding this recent decision and its impact on warehousing or transportation businesses, please contact any member of our Trucking and Commercial Transportation Practice Group.
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[1] The recently decided opinion is Estate of Zachary D. Staffs by and through his personal Rep., Denise Coulter, and Mackenzie Taylor, by and through her Parent and Guardian, Denise Coulter; Jennifer L. Daugherty, Individually and as Personal Representative of the Estate of Michael G. Daugherty, Deceased, and Dennis Byrd, as Special Administrator of the Estate of Shannon R. Steele, v. ADS Logistics Co., LLC 64A03-1708-CT-19
This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.
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