Marina Kolchinsky v. Western Dairy Transport, LLC ( 2020 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued December 17, 2019
Decided January 6, 2020
Before
KENNETH F. RIPPLE, Circuit Judge
DIANE S. SYKES, Circuit Judge
AMY J. ST. EVE, Circuit Judge
No. 19‐1739
MARINA D. KOLCHINSKY and Appeal from the United States District
LIDIA L. KOLCHINSKY, Court for the Northern District
Plaintiffs‐Appellants, of Illinois, Eastern Division.
v. No. 15 C 10544
WESTERN DAIRY TRANSPORT, LLC, Matthew F. Kennelly,
and WD LOGISTICS, LLC, Judge.
Defendants‐Appellees.
ORDER
After Marina Kolchinsky and her mother, Lidia Kolchinsky, were severely
injured in a car collision with a tractor‐trailer in Illinois, they sued the truck driver and
the two companies that contracted with him. They filed in federal court based on
diversity of citizenship; Illinois law controlled. The district court entered partial
summary judgment in favor of Western Dairy Transport, LLC, and WD Logistics, LLC,
concluding that the driver was an independent contractor so the Kolchinskys could not
hold the companies responsible for the driver’s alleged negligence. Because the district
court properly classified the driver as an independent contractor, we affirm the
summary judgment for the companies.
No. 19‐1739 Page 2
William G. Bentley, a Colorado citizen and the owner and sole member of Bill
Bentley Trucking, LLC, a Colorado company, rear‐ended the Kolchinskys’ car while
driving a tractor‐trailer through Illinois.1 Bentley had just dropped off a load of milk in
Minnesota and was en route to Indiana with an empty trailer to pick up another load.
Both deliveries had been arranged by WD Logistics, an LLC consisting of Missouri and
Texas citizens. WD Logistics instructed Mr. Bentley to transport the milk from Indiana
to its destination; how he got to Indiana was up to him. The Kolchinskys, especially
Marina, were severely injured in the crash.
At the time Bentley Trucking regularly provided freight‐transportation services
to WD Logistics according to the terms of a Carrier/Broker Agreement. The
nonexclusive agreement provided that Bentley Trucking was an independent contractor
and retained “full control” over its personnel and that either party could terminate the
agreement upon 30 days’ written notice. When Bentley Trucking accepted a job from
WD Logistics, it agreed to call the broker daily with a status update, protect the freight,
notify the broker of any damage, and inform the broker of delivery. Bentley Trucking
was also responsible for determining delivery times but agreed to inform WD Logistics
if Bentley (in his capacity as a driver for Bentley Trucking) could not meet the schedule;
the broker reserved the right to withhold any resulting damages from Bentley
Trucking’s pay. Finally, the agreement required Bentley Trucking to pay its employees
and provide and maintain its own tractor, fuel, insurance, licenses, and permits.
The Kolchinskys, Wisconsin citizens, sued Bentley in federal court alleging that
he negligently collided with their car and asserting more than $75,000 in damages.
Citing theories of respondeat superior and vicarious liability, the Kolchinskys also sued
Bentley Trucking, WD Logistics, and Western Dairy Transport, an LLC with the same
members as WD Logistics.
WD Logistics moved for summary judgment, arguing that because Bentley
Trucking was not its agent, the broker could not be held liable for Bentley’s negligent
driving. In support the company offered evidence showing that WD Logistics did not
control how Bentley Trucking performed its work for WD Logistics. It pointed to the
agreement, which classified Bentley Trucking as an independent contractor, and to
testimony that the parties conducted their business consistently with the terms of the
agreement. Bentley Trucking also negotiated the rate for each job, and WD Logistics did
1The Kolchinskys’ claims against Bentley and Bentley Trucking are not part of
this appeal.
No. 19‐1739 Page 3
not withhold payroll‐related taxes or insurance. And apart from the few
communication requirements set out in the agreement, Bentley Trucking controlled the
details of the delivery, including providing and maintaining the tractor, and selecting
the driver, the route, the number of hours to drive per day, and where to refuel.
Western Dairy also moved for summary judgment, arguing that the only
possible basis for liability against it was through WD Logistics and that it had no
business relationship with WD Logistics with respect to the trip at issue. Western Dairy
and WD Logistics are owned by the same parent company, but their roles are distinct:
Western Dairy owns and leases trucks and trailers and hauls freight, while
WD Logistics brokers the hauls. In other words, Western Dairy was a carrier hired by
WD Logistics to transport loads for third parties; it also sometimes supplied trailers that
other carriers used to haul loads brokered by WD Logistics. Bentley Trucking was one
of those other carriers. And Bentley Trucking was the carrier for the load brokered by
WD Logistics at the time of the collision.
In their opposition to the motion for summary judgment, the Kolchinskys
pointed to several aspects of Bentley Trucking’s relationship with WD Logistics that,
they argued, supported finding an agency relationship. First, the Carrier/Broker
Agreement instructed that when Bentley Trucking was carrying a load, the driver had
to call WD Logistics with a daily status update and upon delivery, and also report any
damage to the load. WD Logistics paid Bentley Trucking directly and could withhold
damages resulting from a late delivery or lost load. Finally, WD Logistics provided
Bentley Trucking with trailers to haul the loads and had the power to fire Bentley
Trucking, and at the time of the accident, Bentley Trucking was hauling exclusively for
WD Logistics.
The judge granted the summary‐judgment motions, concluding as a matter of
Illinois law that Bentley Trucking was an independent contractor.2 And because any
2 A federal court exercising diversity jurisdiction must apply the choice‐of‐law
rules used by the state in which the court sits. NewSpin Sports, LLC v. Arrow Elecs., Inc.,
910 F.3d 293, 300 (7th Cir. 2018). When there is no dispute over which state’s law
applies, the court will apply the substantive law of the state in which the federal court
sits. Med. Protective Co. of Fort Wayne v. Am. Intʹl Specialty Lines Ins. Co., 911 F.3d 438, 445
(7th Cir. 2018). Here, the parties agree that Illinois law applies, and their choice is
consistent with Illinois’s presumption in personal‐injury cases to apply the law of the
No. 19‐1739 Page 4
possible path to liability for Western Dairy ran through WD Logistics, the details of
Western Dairy’s relationship to the broker were ultimately irrelevant.
The judge entered a final judgment for WD Logistics and Western Dairy under
Rule 54(b) of the Federal Rules of Civil Procedure, which permitted the Kolchinskys to
immediately appeal even though their claims against Bentley and Bentley Trucking
remain pending. In response to an order from this court, the judge explained that he
had entered final judgment because allowing immediate review of the summary‐
judgment order would be more expedient than trying the case against Bentley and
Bentley Trucking alone and then holding a second trial if the appeal was successful.
On appeal the Kolchinskys first argue that a reasonable jury could conclude
based on the summary‐judgment evidence that WD Logistics and Western Dairy
exercised enough control over Bentley Trucking to create an agency relationship. We
review a summary judgment de novo, drawing reasonable inferences in favor of the
Kolchinskys, the nonmoving parties. Walker v. Ingersoll Cutting Tool Co., 915 F.3d 1154,
1157 (7th Cir. 2019).
Under Illinois law, deciding whether an agency relationship exists requires a
multifactor analysis. The “cardinal consideration” for determing the existence of an
agency relationship is whether the alleged principal has the “right to control the
manner of work performance.” Sperl v. C.H. Robinson Worldwide, Inc., 946 N.E.2d 463,
471 (Ill. App. Ct. 2011). Other considerations include whether the nature of the work is
in the principal’s field, whether the principal has the right to discharge the purported
agent, the method of payment and whether taxes are deducted, the provision of
equipment, and the level of skill required. Id. Though no single factor controls, id., and
weighing them is typically a question of fact, a court may decide the question if the
underlying facts are not disputed, Dowe v. Birmingham Steel Corp., 963 N.E.2d 344, 351
(Ill. App. Ct. 2011).
We agree with the district judge that the evidence shows as a matter of law that
Bentley Trucking was not an agent of WD Logistics. The Kolchinskys’ strongest facts in
support of an agency relationship are that WD Logistics required Bentley to contact it at
various times when carrying its loads, including a daily status call and a call upon
delivery, and that WD Logistics could charge Bentley Trucking for damages if a
delivery was late or damaged. But none of these facts shows the degree of control that
state in which the injury occurred. Townsend v. Sears, Roebuck & Co., 879 N.E.2d 893, 903
(Ill. 2007).
No. 19‐1739 Page 5
Illinois courts have required when finding that an agency relationship exists. See, e.g.,
Sperl, 946 N.E.2d at 471–72 (upholding a finding of agency relationship where the
broker specified the trailer length, required the driver to take the trailer temperature
regularly, and imposed strict communication requirements and delivery times enforced
by fines); see also Powell v. Dean Foods Co., 7 N.E.3d 675, 698 (Ill. App. Ct. 2013)
(upholding a finding of agency relationship where the trial evidence showed that the
shipping company controlled the drivers’ actions, required drivers to wear uniforms,
and provided trailers; and the evidence also showed that the driver pulled exclusively
for the company for 60 years and used its letterhead).
Meanwhile, courts applying Illinois law consistently have declined to find an
agency relationship when a company hires an independent driver to deliver a load to
designated persons at designated hours but does not reserve the right to control the
manner of delivery. See Powell, 7 N.E.3d at 697–98 (citing Shoemaker v. Elmhurst‐Chi.
Stone Co., 652 N.E.2d 1037 (Ill. App. Ct. 1994), as modified (July 12, 1995)); Manahan v.
Daily News‐Tribune, 365 N.E.2d 1045, 1046–47, 1050–51 (Ill. App. Ct. 1977). Even if a
broker requires an exclusive relationship, has the power to fire, and sets rules governing
the manner of loading the trucks, no agency relationship exists if the broker does not
have the power to control the details of the manner of delivery. See Dowe, 963 N.E.2d
at 351 (finding no agency relationship where a trucking company chose the route, set
hours, and provided and maintained equipment and insurance). Here, it is undisputed
that WD Logistics and Bentley Trucking adhered to the terms of their agreement, which
explicitly states that Bentley Trucking had “full control” over its personnel, was solely
responsible for its own operational costs and its equipment, and would perform
services as an “independent contractor.” See Manahan, 365 N.E.2d at 1051 (“If the parties
to the relation are bound by a contract which by its terms clearly defines that
relationship as that of employer/independent contractor, and the parties abide by that
contract, then the contract may be conclusive of their relationship.”).
The Kolchinskys’ remaining points do not support finding an agency
relationship. The fact that Bentley Trucking was hauling exclusively for WD Logistics is
irrelevant because the broker did not require it. See Sperl, 946 N.E.2d at 471 (focusing on
the employer’s right to control behavior); see also Trzaska v. Bigane, 60 N.E.2d 264, 265–67
(Ill. App. Ct. 1945) (finding no agency relationship where the driver is free to refuse a
load). Likewise, the fact that WD Logistics provided Bentley Trucking with trailers also
cannot support a finding of an agency relationship. See Petersen v. U.S. Reduction Co.,
641 N.E.2d 845, 851 (Ill. App. Ct. 1994) (finding no agency relationship despite
providing a trailer). And the Kolchinskys’ arguments that WD Logistics (as opposed to
No. 19‐1739 Page 6
the owners of the freight) paid Bentley Trucking directly and had the power to fire the
company are somewhat distracting: WD Logistics did not deduct income taxes or social
security contributions like it would for an employee, and the Carrier/Broker Agreement
provided that either party could terminate the relationship. Bentley Trucking,
moreover, was solely responsible for paying all payroll‐related expenses for its drivers,
including workers’ compensation, unemployment, and social security.
The Kolchinskys next argue that Bentley and Bentley Trucking had apparent
authority to act for WD Logistics. To support this theory, the Kolchinskys point to
various bills of lading from Bentley Trucking’s trips—including the trip it completed
before the collision—on which Mr. Bentley signed boilerplate forms on behalf of
WD Logistics or Western Dairy, some designating him as a pickup “agent.” The
Kolchinskys also note that the trailer bore Western Dairy’s logo and was en route to
pick up a load for WD Logistics when the collision happened. The forms, however,
more often designated Bentley as “driver.” And when Bentley was en route from
Minnesota to Indiana, he was not yet working on a job under the Carrier/Broker
Agreement. He had accepted a new job for WD Logistics, but it did not begin until he
picked up the new load in Indiana, which never happened because of the intervening
accident. So regarding the trip in question, Bentley was not acting on the broker’s
behalf.
And it is difficult to imagine how an apparent‐agency theory could fit the facts of
this case. The Kolchinskys do not argue that Mr. Bentley ever appeared to them as
Western Dairy’s agent. But even if the bills of lading and Western Dairy’s logo could
create apparent agency, to survive summary judgment the Kolchinskys needed
evidence that could create an inference that their injuries would not have occurred “but
for [their] justifiable reliance on the apparent agency.” OʹBanner v. McDonaldʹs Corp.,
670 N.E.2d 632, 634–35 (Ill. 1996). They offered no such facts, and this failure alone is
reason enough to reject this theory. See id. The undisputed record, moreover, contradicts
any such inference: The Kolchinskys stopped their car on the side of the road before
they could have seen the truck bearing Western Dairy’s logo, and the truck struck their
car from behind.
Finally, the Kolchinskys argue that the judge erred in failing to address their
argument that Western Dairy could be held liable for the accident based on a joint
venture relationship with WD Logistics. But the judge did address it—he simply
concluded that this argument was irrelevant given his conclusion that any theory of
liability against Western Dairy required finding WD Logistics liable (either individually
No. 19‐1739 Page 7
or as part of a joint venture). We agree with this analysis. The evidence shows that
Western Dairy had no part in the transaction leading to Mr. Bentley’s fateful trip. And
even if there were a joint venture between WD Logistics and Western Dairy, Bentley
Trucking was not its agent for the same reason it was not the agent of WD Logistics
alone.
AFFIRMED