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May 17, 2005.

FIRST NATIONAL BANK OF DANVILLE, as Administrator of the Estate of ALLEN J. PIERCE, and MARY PIERCE, Individually and as Administrator of the Estate of ALLEN M. PIERCE, Plaintiffs,
SYSTEM TRANSPORT, INC., a Washington Corporation; GENIE INDUSTRIES, INC., a Washington Corporation; and MARKET TRANSPORT, LTD. d/b/a MARKET LOGISTICS, an Oregon Corporation, Defendants.

The opinion of the court was delivered by: HARRY LEINENWEBER, District Judge


Before the Court are the Partial Motions for Summary Judgment of Defendants System Transport, Inc. (hereinafter, "System"), Genie Industries, Inc. (hereinafter, "Genie"), and Market Transport, Ltd. (hereinafter, "Market").


  This diversity action arises from a tragic auto accident that occurred on September 1, 2001. On that day, System's driver Gregory Maine, was transporting two Z-60 lifts manufactured by Genie on a flatbed tractor-trailer. Maine loaded the lifts at the Genie facility in Moses Lake, Washington and was traveling southbound toward North Carolina on I-65. The Pierce family which included husband, wife and infant son, was also traveling in their family car on I-65 when they sustained a flat tire outside Hobart, Indiana. Mr. Pierce pulled over to the shoulder and began fixing the tire with Mrs. Pierce's assistance. Their son Allen remained in the car.

  While Mr. Pierce was fixing the flat tire, Maine lost control of the System trailer after driving through a construction zone lane shift and hitting a dip in the highway. The trailer fell to its right and the two Genie Z-60 lifts broke loose of their securement chains and straps. One lift hit the Pierce family car, which burst into flames and killed the couple's son, who was trapped inside the car. Mary Pierce watched the crash and the subsequent death of her son while standing outside the car. Another lift collided with Mr. Pierce and severed his leg, which he lost as a result of the accident.

  The Third Amended Complaint seeks compensatory and punitive damages based on theories of negligence, wrongful death, strict liability, and negligent infliction of emotional distress as a result of the collision.


  Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). A genuine issue of triable fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Pugh v. City of Attica, 259 F.3d 619, 624 (7th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)).


  A. System's Partial Motion for Summary Judgment

  System leased the flatbed tractor-trailer involved in the accident and employed the driver, Gregory Maine. Its partial summary judgment motion involves Plaintiffs' punitive damages claim against System. The Court already has concluded that Indiana law applies to this case. (See 4/23/02 Minute Order). System claims that Indiana law does not support punitive damages under the facts here.

  Under Indiana law, punitive damages will not stand if the facts demonstrate negligence only (i.e., merely failing to act as a reasonable person does not constitute the type of conduct punishable by punitive damages). See, e.g., Austin v. Disney Tire Co., Inc., 815 F. Supp. 287 (S.D. Ind. 1993). The purpose of punitive damages is to identify and deter conduct that is driven by a mental state of obduracy. Id. at 288. For conduct to be punishable by punitive damages, one must look to the actor's subjective state of mind and determine that the actor recognized the danger that would probably result in injury, and consciously and intentionally disregarded it. Id. at 288-89; see also Purnick v. C.R. England, Inc., 269 F.3d 851, 852 (7th Cir. 2001) (stating that the "punitive damages standard in Indiana . . . presents a high hurdle"). "Punitive damages may be awarded upon a showing of defendants' will and wanton misconduct, even absent malice, ill will, or intent to injury." Wanke v. Lynn's Trans. Co., 836 F. Supp. 587, 599-600 (N.D. Ind. 1993) (citing Picadilly, Inc. v. Colvin, 519 N.E.2d 1217, 1221 (Ind. 1988)). Negligent conduct, on the other hand, is judged by a reasonable person objective standard. Punitive damages must be proved by clear and convincing evidence and the analysis is fact-driven. Ind. Code § 34-51-3-2; Wanke, 836 F. Supp. at 599-600.

  System argues that the evidence shows that Maine did not act in an obdurate or iniquitous manner and was instead conscientious about the safety of the load, thus precluding punitive damages. System points out several factors to indicate Maine's safe and cautious driving: he drove 1900 miles without incident before the accident; he sped up beyond the 45 mile-per-hour limit in a construction zone only in an attempt to stabilize his load; he conducted a pre-trip inspection of the trailer and the load; he stopped and investigated the trailer when he initially felt the load lean to the right in Moses Lake, Washington; upon arriving at the System Spokane, Washington facility he asked a System mechanic to inspect the trailer; an Indiana Motor Carrier Enforcement Inspector found that the trailer load was in compliance with DOT regulations; and he tightened the chains and replaced the strap securing the Genie lift in Lake Station, Indiana on August 31 — one day before the accident. (Sys. Br. at 9-10).

  System also points to the fact that Maine initially requested that the lifts be loaded facing each other, but his request was denied. Also, both of Plaintiffs' experts, Nathan Ware and Kenneth Baker, opined that more likely than not, the accident would not have occurred if Genie had specified and loaded the lifts facing each other (basket-to-basket), and would not have occurred if loaded on a stepdeck trailer. System notes that Plaintiffs' experts state that Maine's speed above 45 m.p.h. only contributed to the accident, which was defined by the above-stated conditions. (Id. at 11; Pl. App. Exhs. 12 & 14). In addition, System points out that there is no evidence to show that Maine was impaired in his driving — for example, he was not intoxicated, he was not on drugs, and he had rested for twenty hours in Indiana shortly before the accident. These facts, System contends, indicate that any fault on System's part only could be attributed to mistaken judgment or human error, which actions do not contemplate a punitive award.

  Plaintiffs argue that System failed to paint a complete picture of the relevant facts. Plaintiffs indicate that beyond the above stated facts, Maine never hauled a Z-60 lift before and that System did not provide Maine with specific directions for Genie lift securement or Genie load tie-down instructions prior to the accident. Plaintiffs emphasize the fact that from the moment Maine left the Genie facility in Moses Lake, Washington, he felt that the load was insecure. Even after Maine and a System mechanic checked the load, he still felt that it was leaning "bad" and was "scary." (Pl. Res. at 3). While still in the Spokane area, Plaintiff alerted his dispatcher of the problem via a text message, who instructed him with urgency to return to System's Spokane yard due to the instability, but he did not and System did not further press the order. Throughout the trip, Maine indicated that he felt "uncomfortable" with the load, experiencing "instability" in left turns, but that he did not notify anyone. Maine's dispatcher Robert DeBolt testified that he may have resolved the situation by phone, but could not recall and there is no other record to indicate any conversation.

  The facts do not independently substantiate a punitive damage award. However, the analysis examines the totality of the circumstances. Wanke, 836 F. Supp. 604. By itself, the fact that Maine never transported a Z-60 lift before the accident is not enough. At the time of the accident, Maine was an experienced truck driver and in good standing. Further, Maine had a System safety manual, but it is disputed as to whether Maine also had a copy of recommended Genie tie-down securement instructions at the time of the accident. (System admits in response to Plaintiffs interrogatories that Genie communicated instructions to System regarding the Z-60 lifts and other products (Market App., Exh. 9)). Maine's actual securement method of the lifts, using three binders, three chains, and one strap is undisputed. Genie's tie-down instructions recommended further securement for safe transport. Even if Maine had no knowledge of Genie's specific instructions, outstanding issues remain as to whether the securement loop holes located throughout the lifts were obvious to Maine and whether their use in securement was a necessity for safe transport. Further, Maine's dispatcher at System, Robert DeBolt, stated in his deposition that if he had noticed the lifts only were secured with three chains, he would have resecured the lifts with at least five chains on each lift.

  With respect to Maine and System's load stability concerns, even given the facts in the light most favorable to Plaintiffs, there is no evidence to infer that System followed-up to resolve the potentially dangerous situation. Also, although Maine continually checked the securement chains throughout the trip, he never ceased to feel uncomfortable with his leaning load and never wholly rectified the problem. After the initial text message to System, Maine did not mention the leaning load to his supervisors again. Although it remains a fact issue, Maine's speed in the construction zone, somewhere between 45 and 60 m.p.h., as well as the "dip" in the construction zone and the lane shift, probably contributed to the accident. The speed limit was 45 m.p.h. Speeding alone, however, does not give rise to punitive damages. See Wanke, 836 F. Supp. at 604. System points to Maine's own statements regarding speeding through the construction zone that indicate he was consciously attempting to restabilize the lifts and avoid an accident by pushing on the throttle, which made the load feel more comfortable. (System 56.1 ¶ 41) (Pl. 56.1 Resp. ¶ 41). Plaintiffs contend, however, that slowing down, especially through turns, is intuitive to avoid tipping when transporting a load that has a high center of gravity. (Pl. Res. Br. at 5; see Beckley deposition). Also, Maine stated that throughout the trip the load felt unstable, but that it was more comfortable when slowing down through left turns.

  Maine's subjective mental state is at issue. The jury may determine that Maine and System's actions account only for gross misjudgment or human error. However, their actions also indicate a dangerous pattern of warning signs that were apparent and acknowledged by Maine and System, but that were insufficiently attended to or disregarded in order to proceed with the scheduled delivery. Because issues of intent and securement remain, the jury must make those factual determinations at trial. Based on the evidence, a reasonable jury could find that System and Maine acted with the requisite state of mind to justify a punitive award by clear and convincing evidence. Accordingly, System's motion for partial summary judgment is denied, and the punitive damage claim against System survives for trial.

  B. Genie Industries' Partial Motion for Summary Judgment

  Genie filed a motion for partial summary judgment on three issues. First, that strict liability is not applicable under Indiana's product liability statute. Second, that there is no basis for Allen Pierce's emotional distress damages claim. Third, that there is not enough evidence to support a punitive ...

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