(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In this appeal, the Court considers the propriety of an order granting summary judgment in favor of Browning-Ferris Industries of New York, Inc., (BFI-NY), where the complaint alleges that BFI-NY had a duty to ensure the safety of trucks used by its independent contractors.
The Puckreins were killed and Alecia Puckrein's mother, Jean Graeves, was seriously injured in 1998 when their automobile was struck by an unregistered and uninsured tractor-trailer with seriously defective brakes. The tractor-trailer was owned by ATI Transport, Inc., (ATI). At the time of the accident, the tractor-trailer was transporting a load of glass residue for BFI-NY from Brooklyn to American Ref-Fuel, an incinerator plant in Newark. BFI-NY actually had contracted with World Carting Corp., to transport the load, and World Carting, in turn, had assigned its responsibilities to ATI.
The driver of the tractor-trailer, Gaizka Idoeta, was issued several summonses, including reckless driving, operation of an unsafe vehicle, and operation of an uninsured vehicle. ATI, as owner of the tractor-trailer, received summonses for operation of a vehicle with a suspended registration, operation of an unsafe vehicle, and operation of an uninsured vehicle. Idoeta was also charged with manslaughter and was acquitted. John Stangle, the owner of ATI and World Carting, was charged with manslaughter as well. After his trial resulted in a hung jury, Stangle pled guilty to fourth-degree creating a risk of widespread injury or damage, and to the motor vehicle offenses of suspended registration, unsafe vehicle, and uninsured vehicle.
At the time of the accident, BFI-NY was one of Browning-Ferris Industries' nearly 200 North American wholly-owned subsidiaries. BFI-NY used a facility in Brooklyn as a central hub for the five boroughs of New York City. Pursuant to two contracts with the City, BFI-NY collected and hauled the City residents' waste and recyclable materials to Brooklyn. BFI-NY used independent carriers to transport recyclables and solid waste from Brooklyn to sites in other states and around the world. BFI-NY also purchased trucks and registered them to BFI-NJ, an affiliate and a registered federal motor carrier, to transport waste from Brooklyn to American Ref-Fuel in Newark.
In July 1997, BFI-NY contracted with World Carting to haul glass residue and solid waste to American Ref-Fuel and other sites. Pursuant to the contract, World Carting was to provide all necessary equipment complying with all federal, state and local laws, rules, regulations, permits and licenses. World Carting also agreed to maintain required insurance, to furnish BFI-NY with proof of insurance, and to indemnify BFI-NY for injuries or death to persons resulting from work performed under the agreement. Finally, the contract stipulated that World Carting was not to subcontract the work without prior written approval from BFI-NY.
Jeff Randazzo, Transportation Manager of BFI-NY, oversaw all material going outbound from the Brooklyn facility. He indicated that the contract with ATI arose when BFI-NY's Operation Manager recommended Stangle. Randazzo testified that he received Stangle's certificate of insurance from the Operations Manager. According to documentation provided by investigating officers in 1998, World Carting's liability insurance expired two months before the accident.
Despite BFI-NY's contract with World Carting, Randazzo testified that ATI trucks "showed up for World Carting," leading him to believe they were the same company. In fact, World Carting and ATI had the same address and were both owned by Stangle. Randazzo said he could not remember what the invoices for loads hauled by ATI said, though he thought all payments were issued to World Carting. Procedures for admittance to the BFI-NY facility are unclear. One employee testified that for ATI to haul for World Carting, they would just show up and say they were hauling for World Carting, or World Carting would call to inform BFI-NY. Another employee, who was responsible for health and safety at the facility, stated that BFI-NY would not allow just anybody to come in off the street -- they [the trucks] would have to have some sort of agreement with BFI. And, although Randazzo said that a hauler had to have an inspected and registered tractor and trailer along with insurance to haul for BFI-NY, he acknowledged that nobody checked to determine if ATI's registration, insurance, and other licenses were in order.
The Puckreins' estate and the Greaves filed suit against twenty-two defendants. Idoeta, the Stangles, ATI and World Carting defaulted. The trial court granted BFI-NY's motion for summary judgment. In a damages trial, the jury returned verdicts against the defaulting defendants, including one million dollars in punitive damages against Stangle. Plaintiffs appealed from the grant of summary judgment in favor of BFI-NY, and the Appellate Division affirmed. The Supreme Court granted certification.
HELD: The facts alleged in the complaint were sufficient to establish BFI-NY's liability for negligent hiring of an incompetent contractor, and summary judgment should not have been entered in favor of BFI-NY.
1. Plaintiffs argue that BFI-NY qualified as a motor carrier under federal statutes and was thus vicariously liable for the negligence of World Carting and ATI; that BFI-NY was liable for hiring an incompetent contractor; and that the strong public policy in favor of highway safety devolved a non-delegable duty on BFI-NY to assure that its waste and recyclables were safely transported on the highways. The Court first addresses plaintiffs' incompetent contractor claim. Ordinarily, one who hires an independent contractor is not liable for the negligent acts of the contractor in the performance of the contract. There are, however, exceptions to this general rule: where the principal retains control of the manner and means of the work; where the principal engages an incompetent contractor; and where the activity constitutes a nuisance. Only the second exception is at issue here. (pp. 11-14)
2. To prevail against the principal on a claim of hiring an incompetent contractor, a plaintiff must show that the contractor was incompetent or unskilled to perform the job for which he or she was hired; that the harm that resulted arose out of the incompetence; and that the principal knew or should have known of the incompetence. Mavrikidis v. Petullo, 153 N.J. 117 (1998), is this Court's most recent opinion on the incompetence exception. There, the principal, Clar Pine, hired an independent contractor to replace the asphalt on its commercial property. A dump truck belonging to the contractor and overloaded with hot asphalt that was being transported to the job site collided with plaintiff's car, injuring her. This Court held that Clar Pine could not be held liable, primarily because the accident did not result from negligence in the work that was the subject of the contract -- paving. The Court explained that Clar Pine had no reason to inquire about peripheral issues such as the contractor's mode of transporting equipment or supplies to the job site. (pp. 14-17)
3. Unlike Mavrikidis, transportation was not peripheral to the BFI-NY/World Carting contract, it was the contract. The very job that BFI-NY hired World Carting/ATI to do was to haul waste and recyclables across state lines. Clearly, the hauler's basic competency included, at a minimum, a valid driver's license, a valid registration certificate, and a valid liability insurance identification card. The question is whether BFI-NY knew or should have known of World Carting's incompetence. A company like BFI-NY, whose core purpose is the collection and transportation of materials on the highways, has a duty to use reasonable care in the hiring of an independent trucker including a duty to make an inquiry into the trucker's ability to travel legally on the highways. According to the record, BFI-NY imposed such a duty of inquiry on its own employees. Yet, there is no indication that anyone at BFI-NY inquired about World Carting's ability to travel on the highways. Finally, BFI-NY cannot avoid liability at this point by claiming it had contracted with World Carting, and had no relationship with ATI. Plaintiffs' evidence suggests that World Carting and ATI were one and the same, and that BFI-NY knew it and treated them as one entity. (pp. 18-24)
The judgment of the Appellate Division is REVERSED, plaintiffs' complaint against BFI-NY is REINSTATED, and the matter is REMANDED to the Law Division for further proceedings.
CHIEF JUSTICE PORITZ and JUSTICES LaVECCHIA, ZAZZALI, ALBIN, WALLACE and RIVERA-SOTO join in JUSTICE LONG's opinion.
The opinion of the court was delivered by: Justice Long
On certification to the Superior Court, Appellate Division.
In 1998, Kevin and Alecia Puckrein were killed when their automobile was struck by an unregistered and uninsured tractor-trailer with seriously defective brakes. The tractor-trailer was owned by ATI Transport, Inc., (ATI) and, at the time of the accident, had been transporting a load of glass residue for Browning-Ferris Industries of New York, Inc., (BFI-NY) from Brooklyn, New York, to an incinerator plant in Newark, New Jersey. BFI-NY actually had contracted with World Carting Corp., to transport the load and World Carting, in turn, had assigned its responsibilities to ATI.
Plaintiffs sued a series of defendants including Gaizka Idoeta (the driver of the tractor-trailer), ATI, World Carting, John Stangle (the owner of ATI and World Carting), and BFI-NY. The trial judge dismissed the case against BFI-NY on summary judgment. Plaintiffs prevailed at trial but all defendants were, by then, judgment proof.
The issue before us is the propriety of the grant of summary judgment in BFI-NY's favor. Plaintiffs argue that BFINY had a duty to ensure the safety of the trucks it used under federal statutory and regulatory provisions relevant to interstate motor carriers and under common-law negligence principles applicable to the hiring of incompetent independent contractors.
Because the facts in this case, viewed in the light most favorable to plaintiffs, did not warrant the grant of summary judgment in BFI-NY's favor on the issue of the hiring of an incompetent contractor, we now reverse that judgment.
On June 22, 1998, the Puckreins were killed and Alecia Puckrein's mother, Jean Graeves, was seriously injured when a tractor-trailer with faulty brakes went through a red light on Rock Avenue in North Plainfield and struck the automobile in which they were riding. At the time, the tractor-trailer contained glass residue produced in the glass-crushing process and had a gross weight of 79,000 pounds. Idoeta had picked up the residue at BFI-NY's Brooklyn site and transported it to American Ref-Fuel in Newark. Because the hydraulic system on the truck was not operating, he could not drop off the load and was asked to leave. Idoeta was on his way back to ATI when the accident occurred. An automotive engineer retained by the State Police determined that at the time of the accident, a "maximum of 54 percent of the required braking existed" on the truck. According to a police report, the truck had markings identifying it as "ATI Transport."
Idoeta was issued summonses for reckless driving, N.J.S.A. 39:4-96; failure to observe a traffic signal, N.J.S.A. 39:4-81; operation of an unsafe vehicle, N.J.S.A. 39:3-44; and operation of an uninsured vehicle, N.J.S.A. 39:6b-2. ATI, as the owner of the tractor-trailer, received summonses for allowing operation of a vehicle with a suspended registration, N.J.S.A. 39:3-40; allowing operation of an unsafe vehicle, N.J.S.A. 39:3-44; and allowing operation of an uninsured vehicle, N.J.S.A. 39:6b-2. Idoeta was also charged with manslaughter, of which he was acquitted.
Stangle was charged with manslaughter as well. After the trial resulted in a hung jury, Stangle pled guilty to fourth-degree creating a risk of widespread injury or damage, N.J.S.A. 2C:17-2, and to motor vehicle offenses of suspended registration, N.J.S.A. 39:3-40; unsafe vehicle, N.J.S.A. 39:3-44; and uninsured vehicle, N.J.S.A. 39:6b-2. In entering the pleas to the charges, Stangle admitted he knew that at least one of the brake drums on the truck that killed the Puckreins was completely missing and that, in sending the truck out onto the road, he consciously ...