Market Overview

"Nuclear Verdict" Kills 540 Truck Carrier

"Nuclear Verdict" Kills 540 Truck Carrier

Country Wide RV Transport (CWRV), the nation's second largest RV and motor-home transportation provider, is shutting down for good, according to information received late Friday by FreightWaves.

The 540 drivers that currently work for the recreational vehicle transport company will be out of work effective November 1st. The news was first reported on the blog Freight Broker Live., which included a screen shot of an email sent to the company's employees. 

The CWRV site says the company is exclusive hauler for RV retail chain Camping World (NYSE: CHW). 

CWRV uses independent contractors to transport recreational vehicles and motor homes from the factory and retail stores to consumers that purchased the vehicles. The company's website says a driver must supply at least a 3/4 ton truck and necessary hitches and towing equipment. 

The company recently was the defendant in a civil lawsuit involving a driver who fell asleep at the wheel and killed a husband and wife. The jury awarded the children of the victims $26.6 million in a wrongful death lawsuit in a Denver, CO court-room just two weeks ago. 

According to the Denver Post, the CWRV driver was an independent contractor, but the jury determined that he should be treated as an agent of the company and therefore the company should be liable in the accident. The Post describes the family's reason for suing was "to make a change in sleepy driving habits and within the trucking industry, including ensuring drivers log hours and companies take responsibility for driver actions while on the job."'

The accident happened on July 4, 2017 at 2:30 PM, when the CWRV Dodge Ram plowed into the family's GMC Yukon. The driver for CWRV, Mark Bollinger, pleaded guilty last year to two charges of reckless driving resulting in injury and received a suspended sentence, avoiding jail time. 

The jury award, while substantial, is not the largest of 2019. A $280 million jury verdict was awarded against a Georgia steel hauler in Columbus, Georgia. In that trial, the jury deliberated for just 45 minutes before coming back with the verdict. In 2018, a $101 million award was levied in a Texas courtroom against an oil service company. 

"Nuclear verdicts" describe jury awards were the penalties exceed $10M. The growing trend of juries awarding nuclear verdicts have forced some insurance providers to exit the trucking industry altogether. In recent years, AIG and Zurich International both stopped covering the trucking industry. 

In the past, trucking companies that used independent owner operators were able to avoid nuclear verdicts by insulating themselves from direct responsibility. But lawyers that sue trucking companies have found juries to be sympathetic to the victims and willing to place blame on carriers, even if the driver wasn't an employee. 

The same has happened in the freight brokerage industry, where freight brokers have been dragged into personal injury lawsuits, especially when their actions appear to be in control of the driver or fleet. FreightWaves' John Paul Hampstead covered the topic in July.

He described a concept known as "vicarious liability,"when the broker appears to be controlling the carrier to the point of supervising its actions and therefore assuming liability for them. Call checks, text messages and emails both to the carrier and to the shipper can put a broker at risk for vicarious liability. If a broker tells a driver to move a load through inclement weather, or make a delivery even though the driver is tired, or if a broker refers to a carrier in a customer email as "my driver," a plaintiff's attorney will try to allege that the broker is controlling the driver and assuming vicarious liability.

Nuclear verdicts are top of mind across the trucking industry. 

"We're fed up," ATA President and Chief Executive Officer Chris Spear told members October 7 at the association's Management Conference & Exhibition in San Diego. "I'm sick of playing defense while trial lawyers buy jets and yachts at the expense of trucking jobs. These ‘nuclear' verdicts are strangling our industry."

The trucking industry has faced a brutal 2019, which has been described as a "bloodbath." Carriers and analysts that cover the sector have cited numerous reasons for carriers ceasing operations, ranging from Amazon restructuring its network, environmental regulations, low spot rates, lack of demand, General Motors Company (NYSE: GM) plant closures, insurance, trade policy and general economic malaise. 

With brutal conditions facing operators, it is highly unlikely that CWRV will be the last trucking carrier to fold in 2019.

Image Sourced from Pixabay

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Freight Freightwaves RV truckingNews General


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