Trial News

An Illinois appellate court has affirmed a multimillion dollar punitive damages verdict against a trucking company for its negligent hiring and retention of a driver who seriously injured another driver in a crash. The court determined that the trial court had properly applied the law of the forum and the law of Indiana, where the crash occurred, and that the punitive damages award was not excessive and was supported by the weight of the evidence presented to the jury. (Denton v. Universal Am-Can, Ltd., No 2015 L 1727 (Ill. App. Ct. Sept. 24, 2019).)

After suffering severe injuries when a speeding truck on the highway struck his SUV, James Denton and his wife, Theresa, sued Universal Am-Can, Ltd. (UACL); Broadwell, LLC, the company that leased the semi-trucks to UACL; and UACL’s driver, who caused the crash. UACL hired the driver, David Lee Johnson, despite his poor driving record and evidence of road rage. The company’s safety coordinator reviewed Johnson’s application, which included his driving record and a background check. The application raised several red flags: Johnson had a commercial driver’s license but had not completed a truck driving course; in the previous three years, Johnson had been involved in four motor vehicle crashes and had his license suspended twice; and Johnson had been terminated from at least four prior employers for poor driving. He also had a felony conviction for assault when he struck another vehicle with a tire thumper during a road rage episode.

The safety coordinator rejected Johnson’s application, which should have been placed in a “no hire” file. Instead, the company’s safety director reconsidered the application, admitting at trial that even though Johnson was a “marginal driver,” the company had to consider such drivers to make a profit, and he hired Johnson anyway.

After he was hired, Johnson delayed attending a required safety orientation, received five warnings for his failure to complete the safety orientation, and then was placed on a six-month probation. Despite additional safety violations—including a speeding ticket and having his license suspended again—the trucking company continued to employ Johnson and allowed him to drive while his license was suspended because it failed to monitor his license’s status and driving record after it hired him.

In February 2011, Johnson was speeding in his truck and driving with a suspended license when he rear-ended the plaintiff. The plaintiff's car was pushed into another lane, where it crashed into a semi-truck. The plaintiff suffered severe injuries that required multiple surgeries and still experiences pain, anxiety, and depression. The defendants claimed that a wrong-way driver who was traveling down the highway right before the crash was the “sole protagonist” and that Johnson was not responsible for the events that led to the crash with the plaintiff—but that driver did not hit any vehicles, and two other cars were able to swerve out of the way without causing a crash.

Because the crash occurred in Indiana, the jury was instructed to apply Indiana substantive law for punitive damages, gross negligence, comparative fault, and contribution liability. The jury found for the plaintiffs on their negligence and negligent hiring and retention claims, awarding approximately $19 million in compensatory damages and $35 million in punitive damages against UACL. The defendants filed a posttrial motion to reverse the punitive damages verdict, which the trial court denied.

On appeal, the defendants argued that, based on an earlier ruling by the Illinois appellate court, the trial court failed to apply Indiana law to the damages phase as it did for the liability portion of the trial and that the defendants’ effort to introduce evidence under the collateral source rule for reductions in medical costs the plaintiff received was improperly decided under Illinois law. The appellate court disagreed, finding that the trial court was instructed to apply Indiana law on damages apportionment specifically to the question of contribution liability, which differs from Illinois joint and several liability by mandating that a culpable defendant be held responsible only for his or her percentage of fault, not the entire judgment. The trial court’s instructions on damages were not inconsistent with the appellate court’s earlier ruling because the appellate court did not explicitly instruct the trial court to apply Indiana law to all damages. It also explained that evidentiary and procedural issues are governed by the forum’s law, which would bar the collateral source evidence under Illinois law as inadmissible.

Relying on the Indiana Supreme Court’s decision in Sedam v. 2JR Pizza Enterprises, LLC, 94 N.E.3d 1174 (2017), the defendants also contended that UACL could not be liable for negligent hiring and retention because it had accepted vicarious liability for Johnson’s negligence. But the appellate court disagreed, finding that Indiana courts have carved out an exception when “the sole possible advantage to the pursuit of a negligent hiring theory . . . would be the potential assessment of punitive damages.” To assess punitive damages against an employer under Indiana law, “there must be evidence of positive or collusive action”—vicarious liability is not sufficient. The court concluded that those special circumstances applied to a negligent hiring and retention claim would be the only option to hold the company liable for punitive damages.

Finally, the court considered the merits of the punitive damages award. The defendants argued that the damages were not supported by the evidence, but the court found that there was “extensive evidence” presented at trial that UACL knew about Johnson’s driving history and that it violated its safety policies when it chose to hire him anyway—and that the company continued to employ him and allow him to drive even after it became aware of additional violations and failed to monitor his driving record.

The court also rejected the defendants’ argument that the verdict should be overturned because the jury did not assign any fault to the wrong-way driver who caused other vehicles to swerve out of his way before Johnson hit the plaintiff. But Johnson had testified that he had no idea there was a wrong-way driver on the highway, and he and the plaintiff were traveling in a different lane from that driver. The court further explained that both Illinois and Indiana law would not find the wrong-way driver to be a proximate cause of the crash.