McMickle, Kurey and Branch, LLP Blog

In the realm of trucking litigation, practitioners are often confronted with the issue of "statutory employment" or "logo/lease liability." These terms relate to claims against motor carriers and the interpretation by various federal and state courts of the Federal Motor Carrier Safety Regulations regarding leasing requirements, particularly 49 C.F.R. § 376.12. The relevant regulations address the relationship between motor carriers and the owner-operators of the trucks leased by those carriers. In applying these regulations to tort cases, courts initially took a narrow view of the leasing provisions, creating an irrebuttable presumption of an employer-employee relationship between the motor carrier and the owner-operator irrespective of common law agency principles. The blanket application of these principles led to often wildly unreasonable results and upended traditional state law on the principal-agent relationship.

After some courts began essentially imposing strict liability on motor carriers, the leasing regulations were amended in 1992 to clarify this troubling misapplication of the law. Specifically, a sub-section was added that provided: "Nothing in the provisions required by paragraph (c)(1) of this section is intended to affect whether the lessor or driver provided by the lessor is an independent contractor or an employee of the authorized carrier lessee." 49 C.F.R. § 376.12(c)(4). Since this amendment to the regulations, many courts have revisited the issue of statutory employment and reasserted the importance of state agency laws to the motor carrier and owner-operator relationship.

Recently, the Supreme Court of Georgia came down with another important ruling in the long line of "bad faith" cases in Georgia. In this most recent case, First Acceptance Insurance Company of Georgia, Inc. v. Hughes, S180517, the Court asked the parties to address whether an insurer's duty to settle only arises when an injured party presents a valid offer to settle within the insured's policy limits or whether, even absent such an offer, a duty arises when the insurer knows, or reasonably should know that settlement within the insured's policy limits is possible. The Court concluded that an insurer's duty to settle only arises when the injured party presents a valid offer to settle within the insured's policy limits.

In this particular case, the injured parties presented the insurer with a valid offer to settle within the insured's policy limits, but they did not include a deadline for response. It was concluded as a matter of law that the insurer could not have acted unreasonably in failing to accept the offer before it was withdrawn. The reasoning being that prior rulings on this issue express that "[a]n insurance company may be liable for the excess judgment entered against its insured based on the insurer's bad faith or negligent refusal to settle a personal injury claim within its policy limits." Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683, 684(1), 580 S.E. 2d 519 (2003). The Court in Brightman further stated that an "insurer is negligent in failing to settle if the ordinarily prudent insurer would consider choosing to try the case created an unreasonable risk. The rationale is that the interests of the insurer and insured diverge when a plaintiff offers to settle a claim for the limits of the insurance policy." Id. at 685(1). The Court in Hughes further applied that an insurance company's bad faith refusal to settle a claim depends on whether the insurer "acted reasonably in responding to a settlement offer," and whether the insurer accorded its own interests and the interests of its insured equally. See Fortner v. Grange Mut. Ins. 286 Ga. 189, 190, 686 S.E. 2d 93 (2009).

Georgia's primary premises liability statute is O.C.G.A. § 51-3-1, which requires the "owner or occupier" of land to keep his premises and approaches safe for those he "induces or leads" to come onto the property. These people are termed "invitees" and they are entitled to certain protections. In Georgia, our seminal case controlling the duties of a landlord is Robinson v. Kroger, 222 Ga. App. 711, 476 S.E.2d 29 (1996).

Most lawyers are very familiar with owner/occupier liability and the so-called "premises liability statute." O.C.G.A. § 51-3-1 is typically the first statute cited in any Complaint involving an individual who is injured on a premises. However, not all premises owners are created alike.

The answer, perhaps unsurprisingly, is "no." What is surprising is that the law in Georgia was unsettled until October 2017. In Osprey Cove Real Estate, LLC v. Towerview Construction, LLC, 2017 WL 4856319, *3, ___ S.E.2d ___ (Ga. Ct. App., October 27, 2017), as a matter of first impression, the Georgia Court of Appeals adopted what appears to be the majority view that "business entities [...] cannot recover on claims of intentional or negligent infliction of emotional distress as a matter of law because [they] lack the cognizant ability to experience emotions."