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Mahar v. US Xpress Enterprises

February 24, 2010

CORNELIUS MAHAR AND MAUREEN MAHAR, PLAINTIFFS,
v.
US XPRESS ENTERPRISES, INC.; US XPRESS LEASING, INC.; XPRESS GLOBAL SYSTEMS, INC.; AND GLORIA V. MORGAN, DEFENDANTS/THIRD-PARTY PLAINTIFFS,
v.
POLSINELLO FUELS AND POLSINELLO FUELS, INC., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Gary L. Sharpe District Court Judge

MEMORANDUM-DECISION AND ORDER

I. Introduction

Plaintiffs Cornelius and Maureen Mahar brought this action against US Xpress, Inc., US Xpress Enterprises, Inc., US Xpress Leasing, Inc., Xpress Global Systems, Inc., and Gloria Morgan for injuries and damages sustained in a tractor-trailer accident. (Am. Compl., Dkt. No. 5.) US Xpress and Morgan filed a counterclaim against Cornelius Mahar, (Dkt. No. 8), and a third-party complaint against Polsinello Fuels and Polsinello Fuels, Inc., (3d-Party Am. Compl., Dkt. No. 24). Pending are: Polsinello's motions for partial summary judgment and summary judgment; Morgan's motion for summary judgment; US Xpress and Morgan's motion for summary judgment; US Xpress's motion for summary judgment; and the Mahars' motions for summary judgment, leave to amend, and sanctions.

For the reasons that follow: (1) Polsinello's motion for partial summary judgment, (Dkt. No. 109), is granted insofar as US Xpress's claim for New York State cleanup costs is dismissed, but is denied as to US Xpress's claims for towing, storage, and loss of use damages; (2) Polsinello's motion for summary judgment, (Dkt. No. 111), is granted insofar as "Polsinello Fuels" is dismissed from the action and US Xpress and Morgan's claim for negligent hiring, training, and supervision is dismissed, but is denied as to the claims of negligence and vicarious liability; (3) Morgan's motion for summary judgment for improper service, (Dkt. No. 113), is denied; (4) US Xpress and Morgan's motion for summary judgment, (Dkt. No. 114), is denied as to the claims of negligence, vicarious liability, and negligent hiring, training, and supervision; (5) US Xpress's motion for summary judgment, (Dkt. No. 115), is granted and US Xpress Enterprises, US Xpress Leasing, and Xpress Global Systems are dismissed from the action; (6) the Mahars' motion for summary judgment, (Dkt. No. 116), is denied as to the claims of negligence and vicarious liability; (7) the Mahars' motion for leave to amend is granted; and (8) the Mahars' motion for sanctions is denied.

II. Background

A. Facts

Defendant Gloria Morgan began her employment with defendant US Xpress, Inc. on November 12, 2004. (See Pl. SMF ¶ 6, Dkt. No. 117:65.) Beginning on December 22, 2004, after obtaining her Commercial Driver's License (CDL) and receiving in-class and on-the-road training and testing, Morgan operated a 2004 Freightliner tractor numbered 40035, which was maintained by US Xpress. (See Def. Resp. SMF ¶¶ 1-2, 51-60, Dkt. No. 132:2.) On January 3, 2005, Morgan was driving tractor 40035 with a trailer in tow on Interstate 87 South when she saw smoke in the front of her truck. (See id. at ¶ 9.) In response, Morgan pulled her tractor into a rest stop and performed a "pre-trip" inspection of her engine. (See Morgan Dep. at 92, Dkt. No. 117:5.) After checking the tractor's engine, underside, and interior, and finding no smoke or other apparent problems, Morgan departed from the rest stop. (See id. at 92, 97.) Within thirty minutes of getting back on I-87, as Morgan was proceeding up a hill in Essex County, her tractor began slowing down and the "engine protect" light began to blink. (See id. at 113.) Morgan then merged from the middle lane into the rightmost lane of the highway, after which the engine light turned solid and the tractor stopped. (See id.) After coming to a stop in the right lane of traffic, Morgan turned on her hazard lights, called in the situation to Qualcomm, and exited the passenger side of the tractor, allegedly to put out hazard triangles. (See id. at 117-18.)

Immediately thereafter, Cornelius Mahar, who was driving a 1994 International tractor numbered 594 in the rightmost lane of I-87 South, collided with Morgan's tractor-trailer. (See Polsinello SMF ¶¶ 6, 29, Dkt. No. 111:9.) At that time, Mahar*fn1 was in the course of his employment with Polsinello Fuels, Inc., which owned tractor 594 and the fuel tanker in tow. (See id. at ¶¶ 4-7.) According to Mahar, he began driving tractors in 1969, and since then logged two- to three-million miles pulling trailers and tankers. (See id. at ¶ 31.) As to tractor 594, Mahar had operated it since 1994. (See id. at ¶ 29.) During his employment with Polsinello, Mahar also trained and verified new drivers in loading and hauling fuel tankers. (See id. at ¶ 33.)

As to the conditions at the time of the accident, Morgan testified that she did not notice any fog or weather conditions that would have affected her visibility. (See Morgan Dep. at 117, Dkt. No. 117:5.) However, several individuals testified to encountering heavy fog precisely where Morgan's tractor-trailer had stopped, limiting the visibility in the area to between twenty and sixty feet. (See Tuz Dep. at 21-22, Dkt. No. 117:20; Nichols Dep. at 19-20, 28-30, Dkt. No. 117:21.) And according to Patricia Bashaw, an emergency medical technician (EMT) who was one of the first responders, she was "stunned" by how fast the fog came on as she approached the accident. (See Bashaw Dep. at 23-25, Dkt. No. 117:22.)

Upon arriving at the scene, Bashaw found Mahar in critical condition. (See id. at 27-30.) Bashaw and Leslie Fleury, another EMT, transported him to Elizabethtown Community Hospital, and then to Fletcher Allen Healthcare in Burlington, Vermont. (See id. at 27-44.) As a result of the collision, Mahar suffered serious injuries, though the extent of those injuries are in dispute. (Compare Pl. SMF ¶ 13, Dkt. No. 117:65, with Def. Resp. SMF ¶ 13, Dkt. No.132:2.)

B. Procedural History

On June 13, 2006, Mahar, and his wife, Maureen Mahar, filed suit against US Xpress Enterprises, Inc., US Xpress Leasing, Inc., Xpress Global Systems, Inc., and Morgan, in New York State Supreme Court, Rensselaer County, alleging negligence resulting in injuries to Mahar and derivative injuries to Maureen Mahar. (See Dkt. No. 1.) On October 25, the action was removed to the United States District Court for the Northern District of New York based on diversity jurisdiction under 28 U.S.C. § 1332(a)(1).*fn2 (See id.) On November 15, the Mahars amended their complaint to add US Xpress as a party. (See Am. Compl., Dkt. No. 5.) The defendants filed an answer and a counterclaim against Mahar for negligence, (see Dkt. No. 8), and a third-party complaint against Polsinello Fuels and Polsinello Fuels, Inc. for contribution and indemnification and for property damage,*fn3 (see Dkt. No. 24). In response, Polsinello filed a counterclaim for damages sustained to its property. (See Dkt. No. 25.)

After extensive discovery, a flurry of dispositive motions followed, including: Polsinello's motions for partial summary judgment and summary judgment, (Dkt. Nos. 109, 111); Morgan's motion for summary judgment, (Dkt. No. 113); US Xpress and Morgan's motion for summary judgment, (Dkt. No. 114); and the Mahars' motions for summary judgment, leave to amend, and sanctions, (Dkt. Nos. 116, 117).

In addition, US Xpress moved for summary judgment seeking dismissal of all claims against US Xpress Enterprises, Inc., US Xpress Leasing, Inc., and Xpress Global Systems, Inc. (See Dkt. No. 115.) By letter, both the Mahars and Polsinello conceded that these parties should be released and the claims against them dismissed. (See Dkt. Nos. 118, 130.) Accordingly, the court grants US Xpress's motion for summary judgment insofar as it pertains to dismissal of all claims against US Xpress Enterprises, Inc., US Xpress Leasing, Inc., and Xpress Global Systems, Inc. Polsinello likewise moves to dismiss Polsinello Fuels from this action because it is not an existing legal entity and therefore is not a party capable of being sued. (See Polsinello Mem. of Law, Dkt. No. 111:10.) In light of US Xpress and Morgan's concession that Polsinello Fuels should be dismissed, (see Def. Resp. Mem. of Law at 9, Dkt. No. 131:4), and without affecting the claims against Polsinello Fuels, Inc., the court grants Polsinello's summary judgment motion insofar as it concerns the claims against Polsinello Fuels as a non-entity.

III. Standard of Review

The standard for the grant of summary judgment is well established, and will not be repeated here. For a full discussion of the standard, the court refers the parties to its previous opinion in Bain v. Town of Argyle, 499 F. Supp.2d 192, 194-95 (N.D.N.Y. 2007).

IV. Discussion

A. Sufficiency of Service

Morgan individually moves for summary judgment on the Mahars' claims based on an alleged failure to effectuate proper service. (See Dkt. No. 113.) However, because the failure to effectuate service is a matter related to personal jurisdiction, the defense to which Morgan has waived, and because the court prefers resolution of cases on their merits, Morgan's motion for summary judgment based on insufficient service of process is denied.

"Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied." Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104 (1987), superseded by statute on other grounds, Futures Trading Practices Act of 1992 § 211, Pub. L. No. 102-546, 106 Stat. 3590 (1992).

As a prerequisite to personal jurisdiction, the defendant must be amenable to service based on legislative authorization or consent. See id. at 104. But, because personal jurisdiction is a privileged defense, "[i]t may be lost by failure to assert it seasonably, by formal submission in a cause, or by submission through conduct." Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168 (1939) (citation omitted). And even where a defense of improper service is raised in a timely-filed answer, a defendant's significant delay in challenging by motion the inadequate service may nonetheless act as a waiver of that defense.*fn4 See Datskow v. Teledyne, Inc., Cont'l Prods. Div., 899 F.2d 1298, 1303 (2d Cir. 1990) (citing Burton v. N. Dutchess Hosp., 106 F.R.D. 477 (S.D.N.Y. 1985) (three year delay), and Vozeh v. Good Samaritan Hosp., 84 F.R.D. 143 (S.D.N.Y. 1979) (two year delay)). A finding of waiver is particularly appropriate where a defendant's amenability to personal jurisdiction is clear, where the defendant participated in the litigation during the period prior to expiration of the statute of limitations, and where the defect in service could have been easily cured during the limitations period. See id.

Contrary to Morgan's contentions, and despite the subtle distinction between a defense based on personal jurisdiction and one based on insufficiency of service, see Santos v. State Farm Fire & Cas. Co., 902 F.2d 1092, 1095 (2d Cir. 1990), the court finds that Morgan has waived her defense to improper service. From the day defendants, including Morgan, filed their answer on December 12, 2006, to the day Morgan moved for summary judgment based on improper service on September 11, 2009, approximately two years and nine months passed. Prior to and during this time, and before the statute of limitations expired, Morgan joined in filing a notice of removal, joined in filing several counterclaims and motions, engaged in discovery and pretrial conferences, and was deposed. However, during this time she did not move to dismiss based on improper service of process. Furthermore, in addition to the fact that the defect in service could have been easily cured at various points in the pretrial proceedings, such as at her deposition, Morgan was clearly amenable to personal jurisdiction. Under the New York long-arm statute,*fn5 at the time this action was instituted, specific jurisdiction existed over Morgan as a non-domiciliary because the cause of action arises from a tortious act she allegedly committed within New York State. See N.Y. C.P.L.R. § 302(a)(2). Therefore, for the above reasons, Morgan's delay in asserting a defense for improper service constitutes waiver of that defense. Accordingly, Morgan's motion for summary judgment based on the Mahars' failure to properly serve her with process is denied.

B. Leave to Amend

Rule 15(a) provides that where a party seeks to amend his pleading before trial, "[t]he court should freely give leave when justice so requires." FED. R. CIV. P. 15(a)(2). "A motion to amend should be denied only for such reasons as undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party." Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 653 n.6 (2d Cir. 1987) (internal quotation marks and citation omitted). While a court has discretion to grant or deny an opportunity to amend, "outright refusal to grant the leave without any justifying reason" is an abuse of discretion. Foman v. Davis, 371 U.S. 178, 182 (1962).

1. Punitive Damages

First, the Mahars seek leave to file a second amended complaint to assert punitive damages. US Xpress counters that the motion to amend is untimely, futile, and filed in bad faith, and that granting the amendment would cause undue delay and result in prejudice.

While mere delay is not a sufficient basis to deny the right to amend, prejudice may arise where the amendment is sought after discovery has closed and would create new problems of proof requiring additional discovery. See State Teachers Ret. Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981); see also Finlay v. Simonovich, No. 97 CIV. 1455, 1997 WL 746460, at *1 (S.D.N.Y. Dec. 2, 1997). Where there is "an inordinate delay" between the filing of the complaint and the motion to amend, then the party seeking to amend has the burden "to provide a satisfactory explanation for the delay." Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72 (2d Cir. 1990) (citations omitted). Whether the movant seeks to assert mere variations of the original claims-including claims which the original complaint may have forecasted or claims arising from the same set of operative facts-or entirely new claims is of particular importance. See Hanlin v. Mitchelson, 794 F.2d 834, 841 (2d Cir. 1986). Leave to amend may be denied where the movant appears to be raising a new claim in ...


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