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Kreider Truck Service, Inc. v. Augustine





APPEAL from the Circuit Court of Madison County; the Hon. VICTOR J. MOSELE, Judge, presiding.


This is an appeal from a declaratory judgment action wherein the circuit court of Madison County found the plaintiff, Kreider Truck Service, Inc., not liable for injuries suffered by passengers on a shiftworkers' bus. The injuries resulted from a collision which occurred on Route 40, near Hamel, Illinois, between a shiftworkers' bus and a tractor-trailer. The tractor-trailer was owned by Mary Pfister, doing business as Milton Pfister Trucking (hereinafter referred to as Pfister), and driven by her employee, Darrel Reinacher. This same vehicle was being leased by Pfister to Kreider Truck Service (hereinafter referred to as Kreider).

This issue on appeal is whether the trial court erred in ruling that the plaintiff, under the facts and circumstances of the case, had no legal responsibility to the defendants.

The defendants contend that Kreider is liable pursuant to part II of the Interstate Commerce Act (49 U.S.C.A. § 301 et seq. (1973)) and the Rules and Regulations of the Interstate Commerce Commission (49 C.F.R. § 1057.4 (1976)), which set out the requirements to be followed by those traveling in interstate commerce under a lease agreement. This contention is based on the following facts.

For 17 years prior to his death, Milton Pfister of Highland, Illinois, had leased as an independent contractor certain tractors and trailers to the plaintiff, Kreider Truck Service, Inc. Subsequent to his death in March of 1973, Mary Pfister, widow of Milton and administratrix of his estate, continued to lease these tractors and trailers to Kreider. The leased tractors and trailers were driven for Kreider by Pfister employees in interstate commerce pursuant to Kreider's Interstate Commerce Commission (hereinafter I.C.C.) permit. The lease agreements between Kreider and Pfister provided that Kreider would not be liable when the equipment was not being used to further Kreider's business. An oral agreement also existed between Pfister and Kreider which allowed Pfister to drive the leased equipment on its own business when Kreider did not need to use it. The only stipulation placed upon Pfister in the oral agreement was that the Kreider name and I.C.C. permit number, which appeared on the doors of the equipment, be covered.

At the hearing on the complaint for the declaratory judgment it was established that each day in the late afternoon Mary Pfister or one of her drivers would call Kreider to determine if Kreider had any interstate hauls which needed to be made the following day. Kreider had no hauls for Pfister on September 11, 1973. Thus, pursuant to the oral agreement between Pfister and Kreider, Mary Pfister instructed her drivers to use the equipment to pick up a load of limestone at the Mississippi Lime Plant in Alton, Illinois. The limestone was then to be delivered to a Pfister customer in Grantfork, Illinois. It was uncontroverted that this intrastate trip was being made pursuant to an Illinois Commerce Commission permit issued to the deceased, Milton Pfister. However, no copy of this permit was presented at the hearing.

Mary Pfister and two of her drivers, Darrell Reinacher and Richard Sexton, testified that when the equipment was used for Pfister's business the Kreider signs were to be covered with Pfister signs, which were available at the Pfister place of business near Highland, Illinois. The drivers also stated that they usually covered the Kreider signs; however, on September 11 they were in a hurry and forgot to cover them. Thus, when the accident occurred on September 11 the name Kreider Truck Service, Inc., and Kreider's I.C.C. permit number were visible on the cab doors of the tractor.

Subsequent to the accident Pfister's driver, Reinacher, gave a statement to the police, in which he stated that he worked for Kreider. However, at the hearing Reinacher testified that he worked for Mary Pfister, was paid by her, and on the day of the accident was doing business for her.

It was undisputed that on the day of the accident the Pfister equipment was being operated in intrastate commerce. Pfister could operate the equipment in question in intrastate commerce pursuant to its Illinois Commerce Commission permit. Kreider acknowledged that it was licensed by the Illinois Commerce Commission as an intrastate carrier; however, the Pfister equipment was not included in Kreider's intrastate permit. Reinacher testified that he had never driven in intrastate commerce for Kreider. Rather, he only drove the Pfister trucks for Kreider in interstate commerce pursuant to Kreider's I.C.C. permit. Pfister and Kreider acknowledged that their lease agreements had not been registered with the Illinois Commerce Commission.

• 1, 2 The I.C.C. regulations controlling lease agreements were designed to protect the public by preventing an interstate carrier from escaping liability by means of a lease agreement with an independent contractor. The defendants contend that these rules and regulations impose vicarious liability upon a licensed interstate carrier for any negligent operation of the leased equipment during the lease period, regardless of whether the equipment is being operated in interstate or intrastate commerce. However, we think it is apparent from the wording of section 302 of part II of the Interstate Commerce Act (49 U.S.C.A. § 302(1973)), that the act does not apply to situations of intrastate commerce and therefore the provisions of part II of the Interstate Commerce Act (49 U.S.C.A. § 301 et seq. (1973)) and the rules and regulations of the Interstate Commerce Commission (49 C.F.R. § 1057.4 (1976)), have no applicability to the liability arising out of the accident in the case at bar. It is well recognized that the Interstate Commerce Commission does not have regulatory jurisdiction over intrastate shipments by motor carriers. Southern Pacific Transportation Co. v. Interstate Commerce Com. (9th Cir. 1977), 565 F.2d 615; In re Grand Jury Subpoena Duces Tecum (N.D. Ga. 1975), 405 F. Supp. 1192; Tucker v. Casualty Reciprocal Exchange (N.D. Ga. 1941), 40 F. Supp. 383.

Plaintiff cites the case of Schmidbauer v. Baltimore & Pittsburgh Motor Express Co. (1962), 228 Md. 637, 181 A.2d 325, wherein the Maryland Supreme Court held that part II of the Interstate Commerce Act does not impose liability on a lessee/interstate carrier when the non-owned equipment is being used in an activity that is not associated with interstate or foreign commerce. Because the facts of Schmidbauer are similar to the facts of the case at bar we find the Maryland opinion persuasive authority.

In Schmidbauer, Mr. Selle leased a tractor owned by him to Baltimore & Pittsburgh Motor Express Co. (hereinafter referred to as B & P), which was to be used in interstate commerce. B & P was licensed as an interstate carrier by the I.C.C.; Selle was not. B & P used Selle's tractor to haul B & P's trailers. Selle's tractor had decals on it which were provided by B & P and bore B & P's name and I.C.C. permit number. Selle was instructed by B & P to cross out the B & P name and permit number after arrival at their destinations.

The lease was not for a specified period of time. It provided Selle would have to make his tractor available to B & P whenever they wanted to use it. There was no rule as to the use of Selle's tractor when B & P did not need it.

On May 16, 1956, at 1:30 a.m., Selle was involved in a collision with an automobile while driving his tractor back to B & P's terminal after using it to see a movie. Selle had returned from an interstate haul for B & P on May 15, at approximately 9:30 p.m. At the time of the accident B & P's name and permit number had not been removed from the tractor. The Supreme Court of Maryland stated that despite the fact that the lessee's name and I.C.C. permit number appeared on the truck at the time of the accident, and despite the fact that the lessee had failed to obtain a receipt showing the return possession and control of the truck to the lessor, liability could not be imposed on the ...

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