Johnson Trucking — Hazardous Materials Safety Interpretation

Page 1U.S. Department of Transportation Office of the Chief Counse 400 Seventh SI. S.W Washington DC 20590 dministratior VIA FACSIMILE AND ORIGINAL BY CERTIFIED MAIL NOV 22 2002 Kenneth A. Miller, Esq. Attorney & Counselor at Law P.O. Box 1283 Williams, California 95987 Re: California Highway Patrol Citation of 49 C.F.R. § 173.24(b) Dear Mr. Miller: Your October 11, 2002 letter addressed to Mr. Ed Mazzullo, Director, Office of has been forwarded to me for response. Hazardous Materials Standards (OHMS), Research and Special Program Administration (RSPA) In your letter, you described a contractual relationship between your client, Harry L. Johnson Trucking (Johnson Trucking), and Richard Hancock (Mr. Hancock). Subsequently, your client provided OHMS with a copy of the contract between Johnson Trucking and Mr. Hancock, as well as a copy of a citation issued by the California Highway Patrol arising out Mr. Hancock's transportation of aqueous ammonia solution in trailers furnished by your client. You asked whether, in the fact situation you described, your client would be considered to be a "hazmat employer" and whether Mr. Hancock would be considered to be a "hazmat employee." The definitions of "hazmat employer" and "hazmat employee" are contained in 49 CFR § 171.8. Based on the information you provided, it appears that your client is a hazmat employer, at least with regard to its own employees. It also appears that Mr. Hancock is a hazmat employer as an "owner-operator of a motor vehicle which transports hazardous materials in commerce." The issues of whether your client is an employer of Mr. Hancock or whether Mr. Hancock is an independent contractor would be determined by State law. Those issues would require resolution before determining whether your client is a "hazmat employer" of Mr. Hancock. RSPA is not able to make that determination, nor can we interpret the terms of the contract between your client and Hancock. RSPA does not act as fact-finder with regard to the California enforcement proceeding, nor does RSPA review an administrative or iudicial enforcement . proceeding. 020272#

Page 22 I hope this information has been helpful. If you have further questions on the regulatory requirements, you may contact Mr. Del Billings in the Office of Hazardous Materials Standards at (202) 366-8553. Sincerely, Kari V. Christian fir Edward H. Bonekemper, Il Assistant Chief Counsel for Hazardous Materials Safety . CC: Paul Horgan California Highway Patrol#

Page 3of Transportatior S. Department Office of the Chief Counsel Washington DC 2059( 400 Seventh Si. S.V VIA FACSIMILE AND ORIGINAL BY CERTIFIED MAIL NOV 22 2002 Kenneth A. Miller, Esq. Attorney & Counselor at Law P.O. Box 1283 Williams, California 95987 Re: California Highway Patrol Citation of 49 C.F.R. § 173.24(b) Dear Mr. Miller: Your October 11, 2002 letter addressed to Mr. Ed Mazzullo, Director, Office of Hazardous Materials Standards (OHMS), Research and Special Program Administration (RSPA) has been forwarded to me for response. In your letter, you described a contractual relationship between your client, Harry L. Johnson Trucking (Johnson Trucking), and Richard Hancock (Mr. Hancock). Subsequently, your client provided OHMS with a copy of the contract between Johnson Trucking and Mr. Hancock, as well as a copy of a citation issued by the California Highway Patrol arising out Mr. Hancock's transportation of aqueous ammonia solution in trailers furnished by your client. You asked whether, in the fact situation you described, your client would be considered to be a "hazmat employer" and whether Mr. Hancock would be considered to be a "hazmat employee." The definitions of "hazmat employer" and "hazmat employee" are contained in 49 CFR § 171.8. Based on the information you provided, it appears that your client is a hazmat employer, at least with regard to its own employees. It also appears that Mr. Hancock is a hazmat employer as an "owner-operator of a motor vehicle which transports hazardous materials in commerce." The issues of whether your client is an employer of Mr. Hancock or whether Mr. Hancock is an indépendent contractor would be determined by State law. Those issues would require resolution before determining whether your client is a "hazmat employer" of Mr. Hancock. RSPA is not able to make that determination, nor can we interpret the terms of the contract. between your client and Hancock. RSPA does not act as fact-finder with regard to the California enforcement proceeding, nor does RSPA review an administrative or judicial enforcement proceeding.#

Page 42 I hope this information has been helpful. If you have further questions on the regulatory requirements, you may contact Mr. Del Billings in the Office of Hazardous Materials Standards at (202) 366-8553. Sincerely, Kari V. Christian for Edward H. Bonekemper, III Assistant Chief Counsel for Hazardous Materials Safety CC: Paul Horgan California Highway Patrol#

Page 5Sent By: HP LaserJet 3100; 5301732758; Oct. 16.02 10:07AM; Page 2iл • : LAW OFFICES OF KENNETH A. MILLER Kenneth (Ken) A. Miller Attorney & Counselor at Law P.O. Box 1283 TELEPHONE (530) 473-2758 Williams, California 95987 OCTOBER 11, 2002 ingrum SENT VIA FAX (202) 366-3012 Definitions EDWARD MAZZULLO 02-0272 Director, Office of Hazardous Material Standards United States Department of Transportation 400 7% Street SW Washington, D.C. 20590 Re: Interpretation of 49 CFR § 171.8 - Hazmat Employee and Hazmat Employer Dear Mr. Mazzullo: Iropresent Harry and Elizabeth Johnson of Live Oak, California, who are doing business as Harry Johnson Trucking. The company is a general hauler of commodities as well as licensed to transport hazardous materials. Currently, they are being prosccuted for a violation of California law which specifically charges a violation of 49 CFR 173.24(b). At issue in the current case is whether or not the Johnsons were "hazmat employers" and whether or not the driver of the combination of' vehicles at the time of the alleged violation was a "harmal employee" of the Johnsons. Here is a factual scenario of the chain of events: On April 4, 2001, one Richard Hancock (Hancock) entered into a "Suh-hauler and Trailer Rental Agreement" with Harry L. Johnson Trucking (Johnsons). (A copy of that agrecment is attached hereto for your review). That agreement sets forth the terms and conditions that Hancock was to follow. During the course of the above agreement, Hancock would receive dispatch calls from Big Valley Agricultural Services to pick-up and deliver fertilizer and other agricultural products. Such dispatch calls would not comc from Johnsons. Hancock used his own truck-tractor as the power unit. Johnsons leased two tank trailers to llancock for a fee.#

Page 6Sent. By: HP LaserJet 3100; 5304732758; Oct -16-02 10:07AM; Page 3/4 Hancock was insured under his own liability insurance policy Hancock maintained his own California Public Utilities permit # CA 11168. carry Worker's Compensation Insurance. Hancock stated under penalty of perjury that he did not have employees and therefore did not Hancock was not under the supervision of Johnsons. For a fee, Johnsons would bill the agricultural companies for the transport of the products shipped, and from the accounts received, Johnsons would deduct monies for the fuel Hancock charged to their fuel account, parts that Hancock charged to their parts/scrvice account, and monthly rental fee for the trailers. The remainder, and majority of the monies were sent directly to Hancock On April 23, 2001, Hancock was dispatched by Big Valley to pick up a load of Aqueous Ammonia Solution (UN 2672) at Butte County Rice Growers Association (BUCRA) in Richvale; California and transport it to a farm in Robbins, California. Hancock drove his truck-tractor pulling the leased trailers to Richvale, loaded the trailers and began his drive to Robbins, approximately one (1) hours travel time. At Gridley, California, approximately ½ hour into his trip, Hancock was stopped by the Califomia Highway Patrol. During the subsequent stop, the CHP officer alleges he detected the odor of ammonia emanating from the combination of vehicles. He staled that he subsequently discovered that some liquid was "spewing" from a pipe on the top of the second trailer. The officer declared the situation to be a hazardous material spill incident and called for the fire department and hazardous materials team. Residents and businesses in the area were told to evacuate the area. During the course of time while all of the support agencies were responding, and after the hazardous materials team made entry onto the alleged leaking trailer, they discovered that the trailer was not leaking at that time. They did observe approximately 2 to 3 inches of liquid pooled in a revetment which surrounded the fill hatch of the trailer. They classified the amount of liquid as a "very minimal" amount. This liquid was absorbed utilizing kitty litter. Johnson, being licensed to where he used it as fertilizer. dispose of hazmat waste, removed the Aqueous Ammonia Solution soaked kitty litter to his garden The combination of vehicles was eventually moved to Big Valley Agricultural Services where the product was partially unloaded into another vehicle. While moving the vehicle to the unloading site, because the officer and the hazmat team had unlatched the filler cap and failed to secure that cap prior to moving the vehicle, approximately 20 to 30 gallons of Aqueous Ammonia Solution spilled out of the trailers and onto the ground. This spill was not contained by the hazmal tcam, nor were any residents or businesses in the surrounding area evacuated. My questions to you are these - to be a "hazmat employer"? Were the Johnsons, under this scenario, as per 49 CFR 171.8 definitions, considered Was Hancock a "hazmat employee" under the definition specified in 49 CFR 171.8?#

Page 7Sent®By: HP LaserJet 3100; 5304732758; Oct -16-02 10:07AM; Page 4/4 It is my opinion that Hancock was working as an "independent contractor" and as such is cotally responsible for any alleged spill, violations of California law or violations of the Code of Federal Regulations, specifically 49 CFR. Johnsons were merely the lessors of' a set of tank trailers, having no supervisorial powers over Hancock. I am currently calendared to appear on this matter to argue special jury instructions on November 4, 2002 at 1:30 p.m. Any information or clarification as to this matter before that date would be greatly appreciated. I look forward to hearing from you in the immediate future. If you are in need of additional information, please contact me at (530) 473-2758 Bene Mele Attorney at Law#

Page 8HARRY Lo. JOUNSON TRICKING . 3814 Sandars-Road Live Oak, Callfornia 95953 C*# 020160 PINI: 530-673-1021 SUBHAULER AND TRAILEK RENTAL AGLEE-ENT BY AND BETWEEN: THIS AGAELIET INTERED INTO MIS 4 MAY OF 4 ,7900 PETHE GABRIEK BARRY L JOUNSOL MUCKING 3814 Sanders Road PERNTI: G.A # 020160 Live Oak, California 95953 AND SUNILAULAR:: NAME: R. Hancock BUSINESSR. HAncOCK TRUCKINK FED. TDA CA* 111168 Yuba City CA.. ADDRESS P.O. Box 18SS AGREE AS FOLLOWS: I. TIE PRINE CARRIER AND SUBLAULER AGREE TINI AS AN INDEPENDENT AGRICULTURAL, PRODUCIS, AND/OR GENERAL FREIGHT COMODITIES UNDER COHTRACTOR, SUBHAULER SIALL FROM TIME TO TINE TRANSPORT FERTILIZER, SUILAULER'S CALIFORNIA PUBLIC UTILITIES AUTORITY. REPRESENTED BY TIE ABOVE CA. 2. IHE SUNLAULER HARRANTS AND REPRKSENTS MIAT TUE OPERATING AUTIORITY IN GOOD STANDING WIT THE GAIFORNIA PUDLIC ITILITIES COMMISSION, NUMBER HAS BEIN FILEU, APPROVED AND IS IF SUBHAULER'S OPERATING AUTIORITY EXPIRES OR IS REVOKED DURING TIE LIFE OF THE SUMULER AGREENT, SAID AGREENT MAY BE VOIDED BY PRIME CARRIME UION WRITTEN NOTICE TO SUBIAULER. CONTRACTOL OF NOTORIZED QUIPILET CAPABLE AND SUITALE FOR HAULING 3. THE SUIAULER NARRATES AND REMESIS THAT ME IS MIE OWNER AND THE COMDODITIES FAMED ALOVE LOADED TO LAXIMUM CAPACITY. SUTHAULDE WARRANTS THAT NTS BOUIPMENT IS IN GOOD WORKING CONDITION AND STATE OF REPAIR AND TILAT HE WILT. PERPORN AT HIS EXPENSE, THE NECESSARY REPAIRS IO NALITAII! INE EQUIIRENT IN GOOD OLDER AND RUNNING CONDITION SCIDULE 4, ATTACHED HELLITO. WIILE THIS AGREENENT IS IN EFFECT. SUCIT EQUIPMENT IS DESCRIBED IN 4. THE SULLAULER, IT'S AGENTS AND IIVERS ARE NOT FHITLOYEES OF PRIME CAKRIER STALL UE AS AN INDCPENDETT CONTRACTOR, IHE PRIDE CARRIN: AND ALL SERVICES PERFORTED DY SUDLAULER FOR THE#

Page 9HARRY 1. JOHNSON TRUCKING 3814 Sanders Road Live Oak, California 95959 • 5. ALL EXPENSES RELATED TO OR THCIDENT TO OPERATION OF TIE SUBLAIER'S MOTORIZED TRACTHE (FUET, OIL, TIRES, PATROLL, COSIS, FIG.) SHALL BE SUBLADLER'S EXPENSES. INSURANCE ON HIS EQUINENI AT AlL. TIES WITIL A MINIMUM AMOUNI OF 6. SUBAULER SUAL. MAINTATH FUDLIC LIABILITY AND PROPERTY DAMACE REQUIRED EY DIE DINU AND TIE I.C.C.) DADILY INJURY AND FROPERIY $1,000,000.00 COMBINED SINGLE LIMIIS (OR HIGHER LIMITS AS MAY BE HARMLESS THE TRINE CARRIER AGAINSI ANY AND ALL SUITS, ACTIONS, CLAIMS, DAMAGE PER OCCURRENCE. FURTIER, SUBIAULER SIALL INDEMNITI AND IOLD GOSTS OF, AND EXPENSES TH CONNECTION WITI ANY INJURY, DEATI AND OR DAMAGE ARISING FROM OPERATION OF SUBILAULER. 1. II IS AGREEN THAT IHE SUNLAULER SHALL NAME HARRY L. JOLINSON TRUCKINK AS AN ADDITIONA, MAED INSURED TO. TINIE POLICY. 8. PROOF OF THE ACOVE INSURANCE COVERAGE HUST BE FROVIDED IO MIE CARRIFE. TRIME CARRIE BEFORE ANY SUDANER CAN BEGIN HAULING FOR TIE PRIME OR CHANGE JH SATD INSURAHCE COVFRAGF.. 9. SUMIAULER SIALI, GIVE L'RINE CARRIER 15 DAYS NOTICE OF CANCELLATIOH TIE PRIME CARRIER SHALL PAY THE RATE PUND ERPS DUE TO TIE P.U.C. AHOUNT FRIS PAYHET TO SUILIER. MME CARRIER HILL ISSUE FEE PAIN ON TRANSPORTATION SERVICES PERENAHED BY TIE SUMAULER AND DEDUCT LIKE STATEMENTS ON A QUARTERLY BASIS. A RATE DETERNINED ON A PER LOAD MASIS FOR SATO DISPATCIING SERVICES. THE PRIME: CARRIE! SIALL ACT AS THE DISPATCHING AGENI AND CHANGE 12. IP ANY OF THE IPENS AND CONDITIONS OF THIS AGREEMENI ARE VIOLATED MIB PRIME CARRIEK HAY VOID THE SODIAUT, ACRESIS IMHEDIATELY UPON DECEMBER 31, 2D-=. WRITTEN NOTICE. IN ALI. CASES THIS AGREEHENT WILJ. IRMINATE ON SUITABLE TRAILAIL EQUITENT FOR ME IRANSPORTATION SERVICES RENDERRD. 13. PRIME CARIER SILATJ, HAKE AVAILABLE FOR MIF USE OF SUMFAULER DETERMINED BY THE DISPATCHER. THIS TRAILE EQUIRE CHAT.I, BE NADE AVAILAELE TO TIE SUBLAULER AS 14. FOR USE OF SAID TRAINES, PRINE CARNIER SHALL CHARGE A TRAILER RENT FEE AT THE RATE DETERHINED ON A TER LOAN BASIS. IN CASE OF REVENUP. EARNED FROM RULING FOR HARRY I. JONSON TRUCKING, HAULER SALL DEDIKT STATED RATE AS RENT MEIOR TO PAYHENT OF SUBLAULER. 15. MR SUNDAULER WILL. MOVIDE INIDPHCIPIED IRAIT.PT INSURANCE FOR TRAILERS OHMED OR PASE DY HARRY T,. KHINSON TRUCKING OR ANY TRAILERS LIMITS ARE TO BE TIE SANE AS IN PARAGRAM "6". USED WILL: OPERATING AS A SURIATER FOR HARRY L. JOHNSON TRUCKING, COVER BOIII UNTNENTIPIEN SHIT-TRAILERS AND PULA-THAILERS. THE SUBILAUTER MIS INSURANCE SHALI. SHALL COHPENSATE TIF MITHE CARRIER FOR AL. WINGIBLES OF ANY AND AL.I. TAN HIS A LAPORTOO#

Page 10HARRY I. JOHNSON TRUCKING 3814 Sanders Road Live Oak, California 95953 15. cout. FIRE & MIKET ON UMIDENTITED SEE AND MI, TRAILERS. SUBHAULERS SIMIA, FURTHURHORE, SHILALERS SHALL, BE RESPONSIILE FOR COLLISION, DOLLAKS ($20,000.00) PER CONBIRATTON IM OCCURRENCE. PROVIDE CARCO INSURANCE IM THE MIN OR POT LESS MAN TWENTY MOUSAND THE SUHAULER IS RESINSIRE FOR CHECKING ALL TRAILERS AND L. JOINSON TRICKTHE SHALL BE THE RESIYNGIBILTTY DF THE SUBILAULER. VIOLATIONS HE HAY HECIVE MILLE IN OPERATION OF SAID TRAILERS AND 17. TOE SUADER IS TO ASSTRE AND RE RESPONSIALE FOR ALL TRAFFIC EQUILMENT. CARRIER MAY DECLARE THE AGREMENT TERHTNATEN. 18. IF SUBER HOTTES ANY OF THE A CONDITIONS, THE PRIME 19. THIS AGREEHENT MAY NE TERMINATED BY TIE PRINE CARRIER OR FURTHUR AGREES: SHOUT." TILS AGKREMENT TF TERMINATED, TO RETURN SUBHAULER BY GIVING THE OTHER PIFTEEN PAYS WRITTEN NOTICE. - SUBILA!R TRAILERS AND OR EQUTPHENT TO PRIME CARRIES TRUCKING FACILITY. IN 20. THE SUBAHULER AND TRAILER RENTAL AGREINENT. THE SUBHAILER HAS SIGNED AND AGREED TO ALL TERMS STIPULATED AN ATTORNEY TO COLLECT ANY NOMIES INE THE PRIME CARRIER UNDER TILIS 21. IN THE NVENT IT BECCHIES NECESSARY TO INSTITUTE SUIT OR EMPLOY AGREEMENT OR ANY MODTETCATION TEROP, SUBALER AGREES TO PAY ALL CARRIER. COURT COSTS AND REASONAILE ATIURNEY'S FEES SO INCURRED DY PRIME PRIME CARRIER: S BILADLER: •. JOINSON TRUCKING n: Real duces 6. 3#

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Page 12• Sent ,By: HP LagerJet 3100; 5301733758; Oct •16.02 10:07AM; Page 3/1 LAW OFFICES OF KENNETH A. MILLER Kenneth (Ken) A. Miller Attomey & Counselor at Law P.O. Bux 1283 TELEPHONE (530) 473-2758 Williams, California 95987 OCTOBER 11, 2002 SENT VIA FAX sangrum (202) 366-3012 Definitions EDWARD MAZZULLO Director, Office of Hazardous Material Standards 02-0272 United States Department of Transportation 400 7% Street SW Washington, D.C. 20590 Re: Interpretation of 49 CFR § 171.8 - Hazmat Employee and Hazmat Employer Dear Mr. Mazzullo: I represent Harry and Elizabeth Johnson of Live Oak, Califomia, who are doing business as Farry Johnson Trucking. The company is a general hauler of commodities as well as licensed to transport hazardous materials. Currently, they are being prosccuted for a violation of California law which specifioally charges a violation of 49 CFR 173.24(b). At issue in the current case is whether or not the Johnsons were "hazmat employers" and whether or not the driver of the combination of vehicles at the time of the alleged violation was a "hazmat employee" of the Johnsons. Here is a factual scenario of the chain of events: On April 4, 2001, one Richard Hancock (Hancock) entered into a "Sub-hauler and Trailer Rental Agreement" with Harry L. Johnson Trucking (Johnsons). (A copy of that agremont is attached hereto for your review). That agreement sets forth the terms and conditions that Hancock was to follow. During the course of the above agreement, Hancock would receive dispalch calls from Big Valley Agricultural Services to pick-up and deliver fertilizer and other agricultural products. Such dispatch calls would not com from Johnsons. Hancock used his own truck-tractor as the power unit. Johnsons leased two tank trailers to Ilancock for a fee.#

Page 13Sent By: HP LaserJet 3100; 5304732758; Oct-16-02 10:07AM; Page 3/4 Hancock was insured under his own liability insurance policy Hancock maintained his own California Public Utilities permit # CA 11168. Hancock stated under penalty of perjury that he did not have employees and therefore did not carry Worker's Compensation Insurance. Hancock was not under the supervision of Johnsons. For a fee, Johnsons would bill the agricultural companies for the transport of the products shipped, and from the accounts received, Johnsons would deduct monies for the fuel Hancock charged to their fuel account, parts that Hancock charged to their parts/scrvicc account, and monthly rental fee for the trailers. The remainder, and majority of the monies were sent directly to Hancock On April 23, 2001, Hancock was dispatched by Big Valley to pick up a load of Aqueous Ammonia Solution (UN 2672) at Butte County Rice Growers Association (BUCRA) in Richvale, California and transport it to a farm in Robbins, California. Hancock drove his truck-tractor pulling the leased trailers to Richvale, Jualed the trailers and began his drive to Robbins, approximately one (1) hours travel time. At Gridley, California, approximately ½ hour into his trip, Hancock was stopped by the Califomnia Highway Patrol. During the subsequent stop, the CHP officer alleges he detected the odor of ammonia emanating from the combination of vehicles. He stated that he subsequently discovered that some liquid was "spewing" from a pipe on the top of the second trailer. The officer declared the situation to be a hazardous material spill incident and called for the fire department and hazardous materials team. Residents and businesses in the area were told to evacuate the area. During the course of time while all of the support agencies were responding, and after the hazardous materials team made entry onto the alleged leaking trailer, they discovered that the trailer • was not leaking at that time. They did observe approximately 2 to 3 inches of liquid pooled in a revetment which surrounded the fill hatch of the trailer. They classified the amount of liquid as a "very minimal" amount. This liquid was absorbed utilizing kitty litter. Johnson, being licensed to dispose of hazmat waste, removed the Aqueous Ammonia Solution soaked kitty litter to his garden where he used it as fertilizer. The combination of vehicles was eventually moved to Big Valley Agricultural Services where the product was partially unloaded into another vehicle. While moving the vehicle to the unloading site, because the officer and the hazmat team had unlatched the filler cap and failed to secure that cap prior to moving the vehicle, approximately 20 to 30 gallons of Aqueous Ammonia Solution spilled out of the trailers and onto the ground. This spill was not contained by the hazmal tcam, nor were any residents or businesses in the surrounding area evacuated. My questions to you are these - Were the Johnsons, under this scenario, as per 49 CFR 171.8 definitions, considered to be a "hazmat employer"? 2. Was Hancock a "hazmat employee" under the definition specified in 49 CFR 171.8?#

Page 14Sent By: HP LaserJet 3100; 530473275B; Oct-16-02 10:07AM; Page 4/4 It is my opinion that Hancock was working as an "independent contractor" and as such is totally responsible for any alleged spill, violations of California Law or violations of the Code of Federal Regulations, specifically 49 CFR. Johnsons were merely the lessors of'a sot of tank trailers, having no supervisorial powers over Hancock. I am currently calendared to appear on this matter to argue special jury instructions on November 4, 2002 at 1:30 p.m. Any information or clarification as to this matter before that date would be greatly appreciated. 1 look forward to hearing from you in the immediate future. If you are in need of additional information, please contact me at (530) 473-2758. Batht. Melen Attorney at Law#

Page 15Interpretadion Letters Requester Kenneth A. Miller Date Received: 10/23/2002 Company Law Offices of Kenneth A. Miller Tracking Number: 02-0272 Phone (530) 473-2758 Revision Date: 10/23/2002 Date Assigned 10/23/2002 Date of Letter 10/16/2002 Staff Engrum First Draft Due: 11/13/2002 Section 171.8 First Draft Date: Subject Definitions Concurrence Status Status Date Sign Date Signor HBP Copy to Docket Copy to DHMM-60 Comment Called 10/30/02-Reg. copy of cilation t Wisette Pental Agenest !..... 1/22/02 et signed lu determination letter trang to Legal - Chinted a ETm (Sce Grid)#

Page 16• • • ILARRY L. JOLINSON TRICKING . 3811 Sahdars-Road Live Oak, Callfornia 95953 • Cz# 020160 TINE 530-673-1071 SUBIAULER AND IRAILER RENTAL AGREEMENT BY AND BETWEEN: THIS ACKBEET INTERED INTO THIS 4 MAX OF 4 _ 1900 PRINE CABRIE HARRY L. JOINSON DUCKING 3814 Sanders Road PERMIT: G. A # 020160 Live Oak, California 95953 AND SUNLAULEI: NAME: R. Hancock BUSINESSR. Hancock TRuCKINK FED. ID#_ CA* 1168 ADDRESS P.O. Box 185S _ Yuba SIX CA. AGREE AS FOLLOWS: 1. THE PRINE CARRIER AND SUBIAULEI AGRER TIAT AS AN INDEPENDENI CONTRACTOR, SUBHAULER SIAL, FROM TINE TO TIME IRANSPORT FERTILIZER, AGRICULTURAL PRODUCIS, AND/OR GENCILAL FREIGIT COMODITIES UNDER SUMIAULER'S CALIFORNIA PUBLIC UTILITIES AUTORITY. REPRESENTED BY THE ABOVE GA. THE SUBLAULEK HARRAVIS AND RAPKRSENTS TIAT THE OPERATING AUTIORITY NUMBER HAS BEEN FILED, APPROVED AND IS IF SUBIIAULER'S OPERATING AUTIORITY EXPIRES OR IS REVOKED DURING THIE IN GOOD SADL HITE THE CALIFORNIA PUBLIC UTILITIES COMISSION. LIFE OF TIE: SUMIULER AGREENINT, SAID AGREEIENT MAY BE VOIDED BY PRIME CARRIER UPON HRITTEN NOTICE TO SUBTIAULIR. 3. THE SUCHAULE! WARNAMES AND REPESETS THAT HE IS THE OWNER AND CONTRACTOL OF NOTORIZED QUIET CAPABLE AND SUITABLE FOR HAULING THE COMODITIES MAHEN ABOVE LOADED TO LAXTHUN CAPACITY. SUBHAULER WARRANTS THAT HIS QUIPENT IS IN GOOD WORKING CONDITION AND STATE OF REPAIR AND THAT HE WILT, PERFORM AT HIS EXPENSE, THE NECESSARY REPAIRS IO MALITIAII! INE EQUIIENT IN GOOD OLDER AND RUINING CONDITION SCHLEDULE d, ATTACHED HERETO. WILLE THIS AGREENINT IS IN EFFECK. SUCI EQUIPMENT IS DESCRIBED IM 4. THE SULIAULER, IT'S AGENTS AND IIVERS ARE NOT IMPLOYEES OF THE IRIME GRIM AND ALL SERVICES PERFORTED DE SUCIULER FOR THE PRIME CARTER STALE DE AS AN INDEPENDENT CONTRACTOR.#

Page 17HARRY I. JOHNSON TRUCKING 3814 Sanders Road Ilve Oak, California 95959 5. ALL EXPENSES RELATED•TO OR TACTDENT TO OPERATION OF TIE SUNAILER'S MOTOBIZED TRACTOR (FUtl., OIl, TIRES, PAYROLL COSTS, ETC.) SHALL BE SUBIAULEK'S EXPENSES. G. SUBAILER SIALI. MAINIAIN FUDLIC LIABILITY AND PROPERTY DAMAGE INSURANCE ON HIS EQUIINENI AT ALL. TIMES HITTI A MINIMUM AMOUNT OF 'EQUIRED BY DIE DIMV AND MIE I.C.C.) DADILX INJURY AND PROPERTY 2,000,000.00 COMBINED SINGLE LIMITS ( OR HIGHER LIMITS AS MAY BI DAMAGE PER OCCURRENCE. HARMLESS THE PRIME CARRIER AGANST ANY AND ALL SUIIS, ACTIONS, CLAINS, FURMIER, SUBALLER SIAL INDENIFY AND 1O1.D DAMAGE ARISING FROM OPERATION OF SUNLAULER. GOSTS OF, AND EXPENSES TH CONNECTION WITI ANY INJURS, DEAT AND OR 7. IT IS AGRREN TIAT THE SUELAULER SHALI, NAME HARRY L. JOLINSON IRUCKING AS AM ADVITIONAI, HAMED INSURED IO. MIKIR POLICI. B. PROOF OF TIE ACOVE INSURANCE COVERAGE AUST DE FROVIDED IO TIE CARRIER. PRIME CARRIER TEFOLE ANY SULATER CNA BEGIN LAULING FOR THE PRIME. OR CILANGE IN SATD INSURANCE COVFRAGE. SUMIAULER, SIALI. GIVE ININE CARRIER 15 DAYS NOTICE OF CANCELLATIOH TIE PRINE CARIER SHALL PAY THE RATE FIND PRES DUE DO THE P.U.C. AHOUNT FROM PAYHENT TO SUNILER MIME CARRTER HILL ISSUE FEE PAID ON TRANSPORTATTON SERVICES PERFORED BY TE SUBIAULER AND DEDUCI JIKE; STATEHENTS ON A QUITERIY BASIS. A RATE DETERMINED ON A PER LOAD MASIS FOR SATD DISPATCUING SERVICES. 11. TIE PINE CARRIER SIALL ACT AS THE DISUATCHING ACENT AND CHANGE TIE IRIME CARRIEK HAY VOID THE SUDIAUT. AGREEIT IMHEDIATELX UPON 12. IR ANY OF TIE TERES AND COHDITIONS OF THIS AGREEMENT ARE VIOLATED WRITTEN NOTICE. IN N.I. CASES THIS AGREEHENT HIJ. TERMINAIE ON DECENTER 31, 20-=. SUITABLE INAILAIL EQUIIENT FOR IE TRANSFORTATION SERVICES RENDERED. 13. PRIME CARRIER SILALJ, MAKE AVAILABLE FOR MIF USE OF SUBHAULER DETERMINED DY TIE DISIATCHER. THIS IRAILE EQUIPENT CHATT BE NADE AVAILAELE TO THE SUBIAULER AS 14. FOR USE OF SAID TRAILERS, PRIME CARRIER SHALL CHARGE A IRAILER RENT FEE AT TIE RATE DETERHINED ON A EER LOAN BASIS. IN CASE OF REVENUE EARNED FROM MAULING PH HARRY I. JOINSON TRUCKIN:, HAULER SHALL DEIRT STATED RATE AS RENT PRIO TO PAYMENT OF SUBILAULER. 15. THE SURIAULER WILL. MOVIDE ITNIDENTIYTED TRAITRE INSURANCE FOR USED MILLE: OPERATING AS A SUMIAITER FOR HARRY L. JOHNSON TRUCKING, TRAILERS ONED OR 1RASED BY HARRY I.. KINSON TRUCKING OR ANY TRAIIERS LIMITS ARE TO IF THE SAND AS IN PARACRAM "6". MIIS INSURANCE SHAL.I. COVER BOTH UNTDENTIFIED SHIT-TRATIERS AND PULI-THAILERS. THE SUBHAULER SHALL, COMPENSATE THE MRIHE CARRIER PON AJ. IMITICTIBLES OF ANY AND ALI.#

Page 18HARRY L. JOHNSON TRUCKING 3814 Sanders Road Live Oak, California 95953 15. cont:. FIRE & MIKET ON UNINNTIPTED SAI AND MULI TRAILERS. SUBNAULERS SITA, FURTHURHOE, SUBALERS SHALL, BE RESPONSIBLE FOR COLLISION, DOLLARS ($20,000.00) III COMLIRTTON OM OCCURRENCE. PROVIDE CARGO INSURANCE IM MIT SUM OF NOT LESS TIAN IANTY IOUSAND 16. THE SUBHAULER IS NESSIE FOR CHECKING ALL TRAILERS AND EQUIPMENT PRIOR TO TIER USH. ALL SAFETY VIOLATIONS (BRAKES, LIGHTS, ETC.) NOT REORTED TO THE NISPATCHER DESIGNATED BY HARRY L. JOINSON TRICKING BHALI, BE THE RESIONIIBILTTY OF THE SUBILAULER. VIOLATIONS HE MAT HECEIVE MITTE IN OPERATTON OF SAID TRAILERS AND 17. THE SUBADOR IS TO ASSINE AND RE BESPONSIBLE FOR ALI, TRAFFIC EQUIIMENT. CARRIER MAY DECLARE TIE AGREEMENT TERNATEN. 18. IF SUBAILER MIOTATES ANY OF THE ABOVE CONDITTONS, THE PRIME SUBHAULSE BY GIVIN THE OTHER PIFTEEN PAYS WRITTEN NOTICE. SUBEAULAT 19. THIS AGREIENT MAY MI: TERMINATIN BY THE PRIME CARRIER OR PURTHUR AGREES: SHOUT." MISS AGREEMENT BE TERMINATED, TO RETURN TRAILERS AND OR EQUIPMENT TO PRIME CARRIERS TRUCKING FACILITY. IN THE SUBAIULER AND TRAILER RENTAL AGREEMENT. 20. THE SUBIAULER HAS SIGNED AND AGREED TO ALL TERMS STIPULATED AN ATTORNEY TO COLLECT ANY MONTES INIE THE PRIME CARRIER UNDER TITS 21. IN THI: EVENT IT RECHES NECESSARY TO INSTITUTE SUIT OR EMPLOY AGREEMENT OR ANY MODJETCATION THEREOF, SUBALER AGREES IO PAX ALL CARRIER. COURT COSTS AND REASONAMLE ATTORNEY'S FEES SO INCURRED DY PRIME PRIME CARRIER: SIBILADLER: HARRY L. JOINSON TRICKIN MArE: kich Hanoock or any Getwe 3#

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Page 20.. Elizabeth Johnson 530-673-9049 fy 530-673-1021 offee. re: interp lefter Harry Johnson Tac Fing Co. Kenneth A Mill en 02 - 0272 (Elizabeth Johnson.) fax response to attorney 530-385-1693 new telephone # 530-228-5527 cell phone. (attorney 530-473-2758 old')#