Pennsylvania Lawyer Employs Creative Strategy in Crash Case

Eric Miller

The crash occurred on a chilly morning in Bensalem Township, Pa., between a tractor-trailer and a passenger vehicle traveling at what witnesses described as a “relatively fast speed.” The truck driver wasn’t injured, but the driver of the passenger car was killed. After a thorough investigation, police determined fault for the accident was shared between the two.

That determination provided trucking defense attorney Doug Marcello of Carlisle, Pa., with an opportunity to deploy a little-used legal strategy to protect Gypsum Express Ltd. — the motor carrier in the crash and his client — from the potential for a multimillion-dollar “nuclear” verdict.

The pre-emptive tactic, which he dubbed a “sue them first” strategy, was applicable since fault was shared and there was the potential for a liability dispute — in this case, damages to the truck or cargo. This accident, while tragic, provided an opportunity for the strategy.

In the October 2014 crash, the truck was stopped at a traffic signal to make a left turn. As the light changed and the truck began its turn, a Honda Civic traveling in the cross street and driven by the victim, 23-year-old Michael Baronofsky, ran the red light and collided with the truck.

Typically, in a case where a truck driver bears any portion of the blame in a fatal crash, the motor carrier and its insurance company could face a large jury verdict or out-of-court settlement.

Choosing against waiting for the Baronofsky estate to file a lawsuit against his client, Marcello filed a civil lawsuit against the estate seeking to recover $50,000 in damages to Gypsum’s truck. According to the lawsuit, Baronofsky operated his vehicle carelessly and recklessly, failed to obey a traffic signal, was speeding and a host of other allegations.

“If this was a rear-end accident caused by a driver, we’re probably not going to be able to do it,” Marcello said. “If at least partial fault could not be attributed to the other party, it wouldn’t be a good tactic. You wouldn’t use it if the accident is only blamed on your driver or your company.”

“In this time of nuclear verdicts, we must be innovative and aggressive,” Marcello wrote in an essay on the subject. “One of the tactics we frequently use is to sue the car driver. We do this before they sue our client.”

Marcello stressed that, in the case of a fatal accident, the family of a victim should be compensated fairly. In this instance, the strategy — one that is admittedly used sparingly ­— resulted in a $300,000 settlement with Baronofsky’s estate.

Gypsum received $19,000 from the opposing side’s insurance company for repairs to the truck.

Marcello believes filing the case in the local jurisdiction of Bucks County, Pa., gave him a better shot of a trial in a jurisdiction more advantageous to the motor carrier.

“Once we file it there, the action starts in that court,” he said. “It not only locks in the jurisdiction, but it also gives us a jump on discovery.” In legal terms, discovery is the formal process of exchanging information between parties about the evidence and witnesses that will be presented in the event of a trial, and could include depositions and/or subpoenas.

Marcello was convinced the estate’s Philadelphia attorney would have preferred a trial in his own backyard. For years, Philadelphia has earned infamous recognition as either being on the American Tort Reform Foundation’s Judicial Hellholes list, or on its watch list. “It’s a place one plaintiff’s attorney referred to with a smile as ‘that magical place,’ ” Marcello said.

Jeffrey Oster, a transportation attorney with the Philadelphia law firm of Vaughan Baio & Partners, noted the benefits of securing the right jurisdiction. “In Pennsylvania, I would much rather try a case before a jury in relatively conservative Dauphin County, near Harrisburg, over uber-liberal Philadelphia County because, statistically, any award potentially entered against my client would be lower in Dauphin County.”

While Marcello is not alone in using the strategy, he wants trucking defense attorneys to know that the tactic can help reduce financial exposure in some cases, including those where fault is either shared or unknown, and where trucks or cargo have been damaged. Unlike plaintiff attorneys, trucking attorneys generally don’t widely share legal tactics, according to Marcello.

“We lament the fact that these billboard attorneys are targeting trucks,” he said. “But while we may lament that, we have an advantage none of them have: We know about the accident before they do. If we aren’t prepared and don’t act immediately, we will squander our greatest advantage — immediacy.”

“I’ve used the tactic in limited ways,” said Ted Perryman of the St. Louis law firm of Roberts Perryman. “I’ve probably had a handful of these cases, but we always talk about it on every case. If I had a trucking company that had my headquarters situated in a judicial hellhole, and I had an accident out of state, I would certainly give the strategy some serious consideration.”

“With the exception of the optics, which are never good, the tactic can help lower the cost of the case to the motor carrier,” Perryman said. “Ninety-five percent of these cases get settled.”

But, as he noted, it may not look good.

“You’re suing the family,” said Rob Moseley, a trucking attorney with Moseley Marcinak Law Group in Greenville, S.C. “Not necessarily the most empathetic of parties.”

Moseley added, “You never can tell just how it’s going to go. It could have the effect of galvanizing the other party when you’re suing [a] widow. And you can’t unring the bell when you do it. Once you do it, you could make them really mad and they’ll settle for nothing but putting your company out of business.”

“The situation is a regrettable and unfortunate one that we’ve got to address,” Marcello acknowledged. “[But] what you lose in optics more than makes up in terms of the jurisdictional benefits.”

“I think it’s something that might work in some jurisdictions where the judicial system moves with some expediency,” said Bradford Hughes, an attorney with Los Angeles-based Clark Hill, who defends truckers in civil cases. “In other jurisdictions it may not work as well. Further, it may not be well received by some jurors. It really depends largely on where the defense can file, and that jurisdiction.”

He added, “Being in California, and considering the various challenges that the defense has under California law, I have not yet had a circumstance where my client felt that filing a pre-emptive suit was prudent. However, we have had situations where a plaintiff will file suit, not serve the defense, and wait several additional years for the plaintiff to continue unnecessary treatments. In those situations, we will voluntarily appear in the case after it is filed so that we can try and get ahead of some of the treatment being sought by the plaintiff.”

Oster warned, however, that there are risks. “Suing a potential plaintiff pretty much guarantees counterclaims lodged against the motor carrier in a case where, in theory, the plaintiff may have originally had no intention of suing,” he said. “Therefore, by forcing the plaintiff to court and encouraging him or her to countersue, you are causing the motor carrier to incur a possibly avoidable claim against its insurance policy and likely face an increase in premiums — especially if the trucking company is regularly forcing others into litigation.”

But Marcello believes, in an accident lawsuit, it’s naive to think that a plaintiff’s lawyer won’t come after a motor carrier with everything they have, no matter the strategy being used by the trucking attorney.

AI Helps Fleets Navigate Risk Management

Stephen Bennett

Insurance companies and brokers are finding the benefits in artificial intelligence to better assist trucking companies with their risk management needs. The technology has helped by quickly collecting and deploying data, enhancing safety and potentially paving the way to lower insurance costs, technology and insurance  experts said.

“Insurance companies are using data and AI technology on the route, on the origin, on the destination, how the driver is driving, to ultimately price insurance,” said Lisa Paul, Hub International’s chief strategy officer, specializing in transportation. She added that commercial auto insurance “has not been profitable doing it the old-fashioned way” because it was based mainly on motor vehicle reports on drivers.

“But that really didn’t tell the insurance companies how those drivers were actually driving,” Paul said, adding that motor vehicle reports are a reflection of how many times you got caught, not what you were actually doing. Hub International offers an AI-supported contract review service that can sift a 50-page agreement in PDF or Word in two minutes and automatically generate a response.

Artificial intelligence has utilized data from electronic logging devices, telematics systems and dashcams to address issues like driving behavior and problematic routes. AI is also beneficial in proposing and revising agreements with shippers.

Dashcam Data

Jeff Davis, vice president of safety for Napa River Insurance Services, the third-party administrator for Hudson Insurance Group, said AI is already proving its benefits in many areas of trucking safety, especially in dashcam systems.

AI has been an effective tool, for example when used with dashcam technology. (drKokos via Getty Images)

By enabling the processing and management of large volumes of information, AI allows some dashcam systems to distill thousands of data points down to “actionable items for which drivers can more effectively be coached,” Davis said. “These devices are no longer simply event recorders.”

The more advanced systems observe following distance, intersection behavior and speed, scoring drivers on overall habits so they may be addressed before they lead to accidents, Davis said. “I feel we will see this technology become more widespread in identifying preventive/corrective measures that can be undertaken in all areas of performance,” he predicted.

Dashcam technology with AI can be instrumental in reducing risky driving behavior, help to lower the cost of insurance premiums and exonerate drivers, insurance executives and tech vendors said.

“Video evidence takes the guesswork out of the equation when fleets need to defend drivers against fraudulent claims,” said Ingo Wiegand, vice president of product management, safety, at Samsara. “It can also speed up investigations for legitimate claims when fleets can easily pull and share HD video footage as evidence directly with their insurance provider.”

Wiegand added that AI-enabled dashcams provide fleets with insights to build a safety program and culture. “With in-cab alerts and mobile workflows, you can proactively coach drivers in the moment and work toward reducing risk across your fleet,” he said.

Telematics Assistance

The implementation of AI-enhanced systems promises to yield maintenance benefits too. Paul of Hub International noted, “A vehicle that’s had multiple rapid acceleration events and speeding events is going to have a different maintenance requirement” than a vehicle that’s being driven by a more cautious hand, belonging to a driver who has received remedial training.

Davis of Napa River said that for any industry or end user, success with AI is dependent on the quality of data. “It directs the assumptions of any AI-based system,” he said. “This is why there must be constant and ongoing validation of the results from any AI process.”

Chuck Wallace, CEO of High Definition Vehicle Insurance (HDVI), said that his company works with a large set of data sources, including telematics systems, ELDs and camera systems. Data from all those sources “comes in different formats at different intervals,” he said. HDVI built its own technology to field the data, analyze and standardize it, and to cope “when there’s a little blurb or a bobble in the data which there inevitably will be — and then fix that” to maintain high-quality data.

“Different telematics vendors spin off data of varying levels of quality,” observed Keith Halasy, vice president of marketing for HDVI. “From a truck operating standpoint, it’s important to make technology selections that support” AI-assisted systems, Halasy said. Some fleets lack the tech resources to put together an AI program, which must be fed by large volumes of data, he noted. “But when you start getting into the pools of some of the leading telematics providers [that] have a substantial amount of data, you can start to take advantage of that.”

Hub International operates a technology portal that can “ingest” data from more than 100 different ELDs, video information from dashcams, and route optimization data to help clients assess their total cost of risk “for that mile for that driver, for that shipper,” Paul said.

The more clearly total cost of risk-per-mile is defined, and then combined with equipment and fuel costs, the better a trucking company can price its services, Paul noted. “But they also then can be more predictive in their own expected losses and premiums,” she said.

Data Use and Storage

Keeping data secure and managing it ethically are not only business priorities, experts noted.

“It all boils down to, legally, who owns data,” said Hub’s Paul.

A trucking company owns the data in an ELD, Paul said. Beyond that, trucking companies seeking to use driver behavior data need to ask drivers to sign a telematics user agreement, as they do for motor vehicle reports and background checks, Paul advised.

Carriers can encounter reluctance or refusal from independent owner-operators when it comes to sharing data. “It can present a problem, but it can present an opportunity,” Paul said.

The independent contractor owns their driver score. A carrier can win over a driver by explaining that the score will be used to leverage lower insurance costs, which will be passed on to the contracted driver.

For a transportation company delivering data to an insurance company, security, including defending against hacks, is a consideration, Paul and others said. “I would say that’s a new and emerging issue for transportation companies,” Paul said. She also pointed to inward-facing dashcams that might capture biometric facial data. “You’ve got to deal with all the state laws associated with that,” she said.

Davis of Napa River called AI a tool to be used in decision-making. “It should not be considered a replacement for the human thought process when it comes to ethical considerations,” he said.

Data privacy should be one of the first steps in implementing “any AI program,” Davis added. “There will be those that actively attempt to breach this data and AI systems in general to gain knowledge into business practices, etc.” He recommended that a data security specialist evaluate any AI project or vendor agreement ahead of time.

AI and video telematics play an important role by giving fleets insights and evidence to better inform rates and protect against false claims, Samsara’s Wiegand said. “I see a lot of potential for driver coaching at scale and proactive training on patterns of risky behavior. Getting ahead of these behaviors before they affect insurance rates is where fleets will be able to feel a tangible impact.”

Wiegand said that choosing “the right AI-enabled dash camera is the best way to lower insurance premiums.” He said certain insurance providers look for specific dashcam features, such as audio speakers, recording capabilities or a wide view for outward-facing cameras. He noted that there are “more nuanced features” such as proximity search and on-demand video retrieval. These can help fleets pinpoint a vehicle’s location and retrieve HD video footage within minutes, he said. “For some customers, this results in hundreds of thousands of dollars saved on claims by exonerating drivers with video footage,” Wiegand said.

“As insurance premiums continue to rise, it’s become increasingly important to take a data-driven approach to risk management,” Wiegand said.

Some insurance companies are changing their approach to pricing, focusing on “how many miles and what routes and what type of driver in order to better price and achieve better profitability,” said Paul of Hub International.

Realizing Savings

Greater flexibility in rates during the span of an insurance contract is possible with AI-processed data, insurance executives said.

If a fleet improves its safety performance score, some insurance companies now offer to decrease what they charge, Paul said. “The challenge is most trucking companies don’t have a feel for how their fleet is going to score,” and a poor score could cost them.

HDVI offers a “Safety Lookback,” analyzing fleets’ telematics data from the past 90 days when a policy is first quoted. If the data from that span shows a certain level of safety performance, a fleet can earn discounts from the beginning of the policy, the company said.

Todd Witte, vice president of insurance product for HDVI, said the percentage of customers willing to share data before buying insurance has been rising. “It’s above 50 percent,” he said.

“If you think about the old days,” Witte said, a trucking company seeking coverage might tell an insurance company about its trucks, provide driver MVRs and describe its operations area — “pretty simple stuff.”

With AI, Witte said, instead of yearly evaluation of risks, there can be monthly monitoring, enabling the insurance company to be more responsive to a carrier’s driver behavior and the fleet’s safety performance. “This data is able to paint a much more high-definition picture of the risk,” Witte said.

Another use of AI can be to counter a negative reaction from underwriters after a carrier has a major accident. Underwriters typically conclude that the carrier is a high risk, but Paul said, “Maybe the transportation carrier was just unlucky.”

AI-generated data might show that the driver involved in the loss scored high in driving performance, had no record of distracted driving, and also that the overall fleet score is above average. That information can be used to reassure an underwriter, Paul said.

“Underwriters have historically used FMCSA violation data to price insurance,” Paul said, but with driver turnover, operational changes and a different customer mix, driver and fleet safety performance changes, Paul pointed out. “Those violations that happened three years ago and two years ago may not be indicative of how that company is operating now.”

Underwriters need not use “stagnant” Federal Motor Carrier Safety Administration data “as the sole determinant in pricing insurance,” Paul said. “The AI data is fresh, it’s current.”

Have Trucking Insurance Premiums Peaked?

Mindy Long

With the year more than halfway completed, there has been much concern about rising insurance premium costs. However, are we getting close to an environment in which those rates are leveling out or even reversing course? And what are the main factors to get the industry there? Here’s what insurance experts are saying:

Leveling Off

Industry experts say that although there is evidence of premiums ebbing, there is still reason for caution:

• “It seems as though the market may be starting to soften, as we have seen smaller average renewal increases in 2022 and early 2023,” said Chris Gulker, senior vice president of transportation for TrueNorth, adding that well-run companies investing in safety and technology with a solid loss history are seeing small single-digit increases, flat renewals and in some cases, even small decreases.”
• “The trend is starting to level off and even go down,” said Michael Birge, president of Hub International’s transportation services division, adding that commercial auto has experienced about five straight years of double-digit increases.

Turning to Technology

As the industry is meeting an uncertain future about controlling premium costs, carriers are turning to technology, including cameras, telemetry and artificial intelligence, to help mitigate risk and reduce premiums:

• Stephanie Forster, principal strategic business developer, corporate development, for Omnitracs explained that some insurers subsidize the telematics devices and other in-cab AI or video safety systems while others require them, and more insurers are incorporating data from video safety solutions and telematics into their risk models for improved underwriting.
• On navigation technology, Luke Wachtel, senior vice president of transportation and logistics for Platform Science, noted it is not just providing a more conservative, safe route, but putting out driving alerts and warning the driver to pay attention. “Some of [the telematics is] new enough that insurance companies are offering lower premiums, but the fleets can go back and say, ‘Look at this data,’” he said.
• Bill Zenk, executive vice president of risk and workforce solutions for TrueNorth, said the best companies are using AI in lockstep with human-to-human interaction. “The technology looks at a motor carrier’s lawsuit vulnerability by pulling in multiple streams of data,” he said. “The tool churns out a score that informs us where the motor carrier’s nuclear verdict vulnerabilities are, so we can find ways to minimize the threat.”

Cost Squeeze

Prices for parts and labor plus new technology on vehicles are driving costs higher, giving fleet owners and managers another challenge when weighing premium costs:

• “Social inflation, medical costs and truck replacement costs and repair rates all continue to put pressure on insurance rates as they all experience increases that are driving loss costs and severity,” said Gary Flaherty, chief insurance officer for OpenEyes.
• Flaherty was a senior vice president at Nationwide before moving to OpenEyes in May. Nationwide’s claims data shows OEM parts on as much as a six-month delay or more. Flaherty said this is creating extraordinary demand for used parts, and Nationwide saw those part prices skyrocket. “This is causing increased storage costs when parts delays occur and experiencing more units being totaled due to repair costs now at such high levels,” he added.
• “Any new car out there that has cameras, sensors and radars. Even a mild collision can be a costly repair,” said Michael Dorfman, chief operating officer of Koffie Financial.

Getting Up to Speed

Dorfman said that, historically, insurers had a problem understanding what equipment carriers are using, how it is being used and how they monitor it:

• “Legacy insurance companies have a challenge understanding that at a granular level to build that into insurance policies. The broad approach has been, ‘That’s great. Let us see how it plays out, and then you can be eligible for discounts,” he said. “We’re trying to segment the trucking market better, so if you’re in the top tier of trucking companies, you can get a discount.”
• Ian White, CEO of Koffie, said that his firm wants to “identify these safety technologies, knowing they can have benefits and price them in now rather than wait five years.” Koffie offers a dividend program that gives fleets up to 10% back on their renewal based on their loss ratio from the prior year.

Court Costs and Preparedness

While nuclear verdicts remain a factor, the cost of small claims is increasing, and the fine line between victory and defeat is a good defense:

• “A $2,500 claim is now $5,000 over the last three years. Underwriters are looking at the frequency of claims and costs. If you do the math, those small claims are significant,” said Hub International’s Birge.
• Telematics, specifically video, when used properly, has had a major impact on claim defense. When a professional driver can immediately show the video to a state trooper, it can change how a report gets written up, which can make a big difference in court, Koffie’s Dorfman explained. Even if the video does show a driver is at fault, companies can still benefit from the information. “Ideally, if the driver is at fault, you still know that faster so we can make quick settlements and save on legal and defense costs,” he said.
• The majority of professional drivers are not at fault but get accused, said Jacques DeLarochelliere, CEO and co-founder of Isaac Instruments. “If they know you have a camera, it is a different conversation. If they know you have telemetry, it is a different conversation,” he noted.

GPS in the 1990’s

I friend of mine sent me this clip, mostly to make fun of my 90’s computer monitor and 90’s hair. Regardless, it’s interesting to see how widely accepted #GPS technology has been accepted. Nobody is surprised, we all saw this coming. The same question remains, what happens in the unlikely event of a system outage? Or, the more likely event of system interference.

Some of the higher end telematrics systems have redundancy built in with the other navigation systems out there – BDS, Galileo, GLONASS. I am sure US DoD has redundancy we know nothing about. Aircraft and maritime navigation have radio and manual backups.

Root Cause of Critical Crashes: Process of Elimination Method

2022 FMCSA Audits Year in Review

Daren Hansen

With the COVID-19 pandemic waning, on-site DOT audits are roaring back and hitting motor carriers’ bottom lines. Are you prepared?

The Federal Motor Carrier Safety Administration (FMCSA) relied heavily on off-site audits during the height of the pandemic and its need for social distancing. But last year brought a resurgence in traditional on-site investigations, which were up a whopping 54% over the prior year.

The Closer They Look, The More They Find

With more auditors going on-site, it’s no surprise they’re finding more violations — and issuing more fines and penalties. Last year saw a 40-percent jump in fines paid, and a similar rise in audits that uncovered the most serious types of violations.

Only about 5 percent of motor carriers escape an audit without a violation. So are you ready for that knock on the door? If not, it’s time to prepare for a DOT investigation of your compliance program.

And if you think you’re too small to be targeted, think again. Over half of all audits in 2022 (54%) were on companies with fewer than seven power units. About 97 percent of those audited had fewer than 100 units.

A Rebalancing

2020 saw a steep rise in off-site “desk audits” performed at the DOT’s offices. In fact, there were more off-site audits that year than on-site for the first time.

The easing of the pandemic has brought a rebalancing. Though many audits (about 27 percent last year) were conducted off-site, auditors are returning to the field. In 2022, the FMCSA and its state partners performed 12,500 investigations, including roughly:

• 3,600 on-site comprehensive audits (up 54%)
• 5,400 on-site focused reviews (up 7%)
• 3,400 off-site audits (down 31%)

An off-site audit involves a review of documents sent to the auditor. By nature, they’re less intensive than an on-site investigation, where the auditor has more freedom to conduct interviews, inspect vehicles, request documents, and take the audit in new directions.

Over 40 percent of audits were “on-site focused,” where the auditor targets a specific safety problem, such as hours of service (HOS) or driver files.

Penalties are Up

As noted, an increase in on-site audits means more violations are being found, and higher penalties are being paid. Last year saw a 10-percent rise in investigations that led to some type of enforcement.

When fines are levied, they are higher than ever. The maximum fines the FMCSA is allowed to levy are tied to inflation and have increased by 14 percent over the past two years.

2022 By the Numbers

• 95% of audits resulted in at least one violation
• 27% resulted in fines or other penalties
• 3,620 enforcement cases were finalized (up 31%)
• $25,700,000 in fines were collected (up 40%)
• $7,100 was paid per settlement, on average (up 7%)
• 47% of audits resulted in acute or critical violations (up 24%)

o   30% of audits resulted in critical violations (up 15%)

o   17% of audits resulted in acute violations (up 39%)

• 36% of audits resulted in a less-than-satisfactory safety rating

o   30% were conditional

o   6% were unsatisfactory

Audits are hitting motor carriers on the bottom line. However, they also have longer-range impacts, given that a less-than-satisfactory safety rating can lead to lost customers, higher insurance rates, and increased liability in court.

Top 5 FMCSA fines of 2022

1. $791,640 — CDL and HOS violations
2. $91,620 — HOS violations
3. $88,450 — log falsification
4. $75,080 — drug/alcohol testing, HOS, and vehicle violations
5. $72,300 — HOS violations

It’s All About Your Records

The state of your documentation will make or break your audit results. If you’re unsure where to begin preparing for an audit, getting your DOT-mandated paperwork in good shape is a great place to start. Sixty-four percent of all critical violations found during audits last year related to recordkeeping, including 7 out of the top 10.

Why does it matter?

Consider one of the FMCSA’s favorite targets: false logs. If an auditor finds that just 1 in 10 of your drivers’ logs are falsified, the best you can hope for is a Conditional safety rating. If additional problems are found, you could easily end up having your vehicle operations shut down for good.

Top 10 audit violations of 2022 that could affect your safety rating*

1. Failing to follow local laws and regulations (§392.2)
2. Falsifying records of duty status
3. Not using the correct method to record hours
4. Using a driver before getting pre-employment drug test results
5. Violating the 14-hour on-duty limit
6. Violating the 11-hour driving limit
7. Failing to keep initial MVRs
8. Failing to inspect vehicles annually
9. Failing to keep driver qualification files
10. Driving with a suspended/revoked CDL

*These are the most commonly found “acute” and “critical” regulations, which are the ones used to calculate safety ratings.

Digital is Critical

No matter what type of audit you might face, you may be asked to submit records electronically on short notice. If you can’t, you’ll be at a disadvantage.

For more and more companies and auditors alike, digital records management is no longer a novelty — it’s expected. The more organized and digitized your DOT records are, the easier you can spot problems before an auditor does, and the quicker any audit will conclude.

Where should you focus your efforts? Your driver qualification, drug/alcohol testing, HOS, and vehicle inspection/maintenance files should top the list — most acute and critical regulations fall into those areas. You may also be asked for proof of insurance, an accident register, and other compliance documents.

Your documentation is often your only proof of compliance. If you fail to create a record or toss one out too soon, you’ll have no way to prove you were doing what’s required.