Transamerican Freight Lines v. Brada Miller, 423 U.S. 28 (1975)

Transamerican Freight Lines, Inc. v.

Brada Miller Freight Systems, Inc.
No. 74-54

Argued October 8, 1975
Decided November 12, 1975
423 U.S. 28

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

Respondent Brada Miller and petitioner Transamerican, two licensed motor carriers, made an agreement whereby respondent leased a vehicle to petitioner, to be operated by respondent’s driver over petitioner’s authorized route. Under the lease, petitioner was to

have the control and responsibility for the operation of said equipment in respect to the public, shippers and Interstate Commerce Commission,

but respondent agreed to indemnify petitioner for claims arising out of respondent’s negligence, though the indemnification clause specifically did not limit petitioner’s liability to the public in connection with the use of the leased equipment. While the vehicle was being operated under the lease, an accident occurred, and a suit was brought against the carriers predicated on the negligence of the vehicle’s driver. Petitioner settled the claim, and then sought recovery against respondent in District Court under the indemnification clause. That court granted respondent’s motion for summary judgment on the ground that the clause contravened an ICC regulation requiring that lease agreements between regulated carriers must contain a written undertaking that "control and responsibility for the operation of the equipment shall be that of the lessee." The Court of Appeals affirmed, reasoning that, since respondent, contrary to the intent of the regulation, had agreed to bear the costs of its own negligence, it had assumed control and responsibility, and that the indemnification clause was ineffective.

Held: The indemnification agreement entered into by petitioner and respondent does not contravene ICC’s "control and responsibility" requirement. Pp. 35-43.

(a) An indemnification agreement violates the ICC requirement only if the lessor was in control of the service provided, as well as of the vehicle’s physical operation. Here, control over the vehicle, as agreed between the parties, remained in petitioner, and the furnishing of respondent’s driver involved only ministerial control, and not delegation of responsibility for the shipment. Pp. 38-40.

(b) Nor did the indemnification provision conflict with ICC safety regulations, because such a provision, which places ultimate financial responsibility on the negligent lessor, may tend to increase, rather than diminish, protection of the public. P. 41.

497 F.2d 926, reversed and remanded.

BLACKMUN, J. . delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, STEWART, WHITE, MARSHALL, POWELL, and REHNQUIST, JJ., joined. DOUGLAS, J., concurred in the judgment.