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Pace v. Southern Express Company.

April 1, 1969


Castle, Chief Judge, and Cummings and Kerner, Circuit Judges.

Author: Cummings


In this diversity action, plaintiff, the administratrix of the estate of Floyd J. Pace, Jr., sought $750,000 in damages for the death of her son in a May 1965 automobile accident in Michigan City, Indiana. On that occasion, Pace and Velma Becker were passengers in the automobile being driven by plaintiff. The other vehicle was a trailer-type tractor being driven by Peter Couture. Couture was the owner of this tractor but it was leased to defendant Southern Express Company, an Illinois corporation. The complaint alleged that the accident was caused by Couture's negligence while operating the tractor "with the permission of and under the direction, control, and operating authority" of defendant.

The tractor lease between Couture and defendant provided that "During the period of this lease, said vehicle and driver shall be solely and exclusively under the direction of the [defendant] Lessee." It also provided:

"In the event the Lessor [Couture] is employed by the Lessee as a driver of equipment owned or leased by the Lessee said Lessor shall be deemed an employee of the Lessee * * *."

Under the lease, Couture was obligated to provide insurance coverage when the tractor was being driven for non-business purposes, but he failed to purchase any.

Through defendant's sworn answer to plaintiff's request for admission of facts, it developed that Couture was driving the tractor from defendant's Cicero, Illinois, terminal on the way to his home in South Bend, Indiana; that the tractor was on the wrong side of the highway when the collision occurred; and that the tractor was skidding at that time. However, this answer asserted that the tractor was not being operated under the terms of the lease.

Defendant took the depositions of the two drivers. Couture's deposition showed that he was driving the tractor (without any trailer) on that Saturday to his home to spend the weekend, and that he was not being paid by defendant for this trip. As usual, he purchased the gas and oil for the tractor. He was paid as an employee by defendant only when taking the tractor out on the defendant's business. Mrs. Pace's deposition does not contain any material relevant to this appeal.

Defendant filed a motion for summary judgment based on the pleadings, the depositions, the answers to the request for admissions of fact, and the lease. At the same time it filed a supporting brief. No response was ever filed.

About four months thereafter, plaintiff filed a motion to dismiss the complaint without prejudice, stating "Defendant will not be prejudiced in any substantial right by a dismissal of the complaint." Twelve days thereafter, defendant filed its objections to plaintiff's motion to dismiss. Promptly thereafter, the district court entered an order denying plaintiff's motion to dismiss without prejudice and granting defendant's motion for summary judgment. This appeal followed. We affirm.

Under Indiana law, which is controlling, it is well settled that where an employee, with or without the consent of the owner of the vehicle, uses the vehicle for purposes of his own, when not on regular duty, the owner is not liable for injury to another resulting from the driver's negligence. Haynes v. Stroh, 99 Ind. App. 595, 597, 193 N.E. 721 (1935); Marion Trucking Co. v. Byers, 121 Ind. App. 592, 597, 97 N.E. 2d 635 (1951). Here the uncontroverted facts show that Couture was off duty and performing no task for defendant at the time of the collision. He was neither engaging in defendant's business nor acting within the scope of his employment. Therefore, under Indiana law, defendant was not responsible for Couture's negligence on this occasion, whether or not the relation of employer and employee existed at the time of the accident.*fn*

To avoid summary judgment, plaintiff relies on Rule 12(b) of the Public Service Commission of Indiana:

"Lease of Equipment by and to Carriers. The leasing of equipment to a common and/or contract carrier shall result in the complete control of the equipment by said carrier as lessee. The motor carrier to which the vehicle is leased shall for the term of the lease be deemed the operator thereof and the terms of the lease shall indicate that said lessee motor carrier shall be responsible for the operation of the vehicle, including equipment, physical condition, insurance coverage, registration thereof, markings, driver's qualifications, and all other related matters, to the same degree and extent as if said lessee motor carrier were the regular owner thereof."

In our view, this rule only applies where the tractor is being operated on the lessee's business. We so held with respect to a comparable Interstate Commerce Commission regulation in Gudgel v. Southern Shippers, Inc., 387 F.2d 723, 725-726 (7th Cir. 1967). Wilcox v. Transamerican Freight Lines, Inc., 371 F.2d 403, 404 (6th Cir. 1967) (per curiam), certiorari denied, 387 U.S. 931, 18 L. Ed. 2d 992, 87 S. Ct. 2053, is to the same effect. Similarly, the provisions of the lease on which plaintiff relies were effective when Couture was operating the tractor on defendant's business, but here there ...

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