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A One Commer. Ins. Risk Retention Grp., Inc. v. BZ Tranz, Inc.

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United States District Court for the Central District of California

August 23, 2022, Decided; August 23, 2022, Filed

Case No. 2:21-cv-06411-VAP-(JCx)

Reporter

2022 U.S. Dist. LEXIS 152603 *

A One Commercial Insurance Risk Retention Group, Inc., Plaintiff, v. BZ Tranz, Inc., Defendant.

Core Terms

endorsement, insured, final judgment, Declaration, Environmental, reimbursement, summary judgment motion, summary judgment, settlement, cleanup, trailer, material fact, Transportation, trigger, declaratory, coverage, invoices, notice, genuine issue, motor carrier, parties, started, moving party, lithium-ion, batteries, hazardous, nonmoving, courts, merits

Counsel:  [*1] For A One Commercial Insurance Risk Retention Group, Inc., Plaintiff: Ira D Goldberg, LEAD ATTORNEY, Woolls Peer Dolinger and Scher APC, Los Angeles, CA; John E Peer, Woolls Peer Dollinger and Scher, Los Angeles, CA.

For BZ Trans, Inc., Defendant: Jeffrey S Bolender, Bolender Law Firm, Torrance, CA.

For Jean M Lawler, Mediator (ADR Panel): Jean M. Lawler, LEAD ATTORNEY, Lawler ADR Services LLC, El Segundo, CA.

Judges: Hon. Virginia A. Phillips, United States District Judge.

Opinion by: Virginia A. Phillips

Opinion


Order GRANTING Motion for Summary Judgment (Doc. No. 34)

Plaintiff A One Commercial Insurance Risk Retention Group, Inc. (“Plaintiff”) filed a Motion for Summary Judgment (“Motion”) on July 11, 2022. (Doc. No. 34.) Defendant BZ Tranz, Inc. (“Defendant”) opposed the Motion (“Opp’n”) on July 18, 2022. (Doc. No. 35.) Plaintiff replied on July 25, 2022. (Doc. No. 38.)

After considering all papers filed in support of, and in opposition to, the Motion, the Court GRANTS Plaintiff’s Motion for Summary Judgment.


I. BACKGROUND

The Complaint alleges that a driver, on behalf of Defendant, was transporting eight Tesla vehicles when a fire started in the wheel casing of the trailer and the fire destroyed three vehicles. (Doc. [*2]  No. 1, Compl. ¶¶ 5-7.) The fire compromised the battery compartment of several Teslas and released lithium-ion materials onto the asphalt and the dirt shoulder of the highway. (Id. ¶ 8.) Ten-West Environmental Services (“Ten-West”) removed the hazardous material and submitted three environmental cleanup invoices to Defendant totaling $41,907.34. (Id. ¶ 8.) Defendant, an insurance policyholder with Plaintiff, then submitted the invoices to Plaintiff. (Id. ¶¶ 11, 13.) Plaintiff advised Defendant that although it had no duty to defend Defendant, it would satisfy the invoices under the MCS-90 endorsement. (Id. ¶ 12.)

Plaintiff alleges that no coverage existed to indemnify under its liability coverage with Defendant, (“A-ONE policy”), but Plaintiff was required to pay under the MCS-90 endorsement. (Id. ¶¶ 17-22.) Accordingly, Plaintiff filed this action on August 9, 2021, asserting claims for declaratory relief and recoupment against Defendant. (Id.) Plaintiff filed the instant Motion seeking summary judgment on its claims. (Doc. No. 34.)

On July 11, 2022, Plaintiff filed its Motion for Summary Judgment, (Doc. No. 34), and a Statement of Undisputed Facts. (“Plaintiff SUF,” Doc. No. 34-2.) [*3]  Plaintiff also filed three declarations: Declaration of Ira D. Goldberg (“Goldberg Decl.,” Doc. No. 34-3), attaching Exhibits 1 through 5, (Doc. No. 34-4); Declaration of William H. Grace (“Grace Decl.,” Doc. No. 34-5), attaching Exhibits 1 through 3 (Doc. No. 34-6); and Declaration of J.R. Cady (“Cady Decl.,” Doc. No. 34-7.) Plaintiff also filed a stipulation as to the authenticity of several documents. (Doc. No. 34-8.)

On July 18, 2022, Defendant filed his opposition to the Motion. (Doc. No. 35.) Jones also filed two declarations: Declaration of Dodnom Demberel (“Demberel Decl.,” Doc. No. 34); and Declaration of Jeff Bolender (“Bolender Decl.”), and Exhibit 1, (Doc. No. 34.) Defendant also filed a Statement of Genuine Issues (“Defendant SGI”), a Statement of Undisputed Facts (“Defendant SUF”), (Doc. No. 36), and request for Judicial Notice, (Doc. No. 37.)

On July 25, 2022, Plaintiff filed its reply to Defendant’s opposition and a Statement of Genuine Issues (“Defendant SGI,” Doc. No. 38-1). Plaintiff also filed its Objection to Judicial Notice (Doc. No. 38-2), and Evidentiary Objections to Defendant’s Declarations (Doc. No. 38-3 – 38-4.)


II. LEGAL STANDARD

A motion for summary judgment [*4]  or partial summary judgment shall be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

Generally, the burden is on the moving party to demonstrate that it is entitled to summary judgment. Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998). “The moving party may produce evidence negating an essential element of the nonmoving party’s case, or . . . show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc., 210 F.3d 1099, 1106 (9th Cir. 2000) (reconciling Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970) and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). The nonmoving party must then “do more than simply show that there is some metaphysical doubt as to the material facts” but must show specific facts which raise a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248.

In ruling on a motion for summary judgment, a court construes the evidence in the light most favorable to the non-moving party. Barlow v. Ground, 943 F.2d 1132, 1135 (9th Cir. 1991). “[T]he judge’s function is not [] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249.


III. JUDICIAL [*5]  NOTICE

In connection with the Motion, Defendant requests judicial notice of the complaint, answer, and dismissal filed in the Los Angeles Superior Court, Case No. 21STCV04191. (Doc. No. 37.) The Court GRANTS the request because the filings are a matter of public record. See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (pursuant to Rule 201(b) “a court may take judicial notice of ‘matters of public record.'”); Duckett v. Godinez, 67 F.3d 734, 741 (9th Cir. 1995) (“we may take judicial notice of proceedings in other courts, whether in the federal or state systems.”).


IV. EVIDENTIARY OBJECTIONS

Plaintiff asserts numerous objections to Defendant’s evidence. (Doc. No. 38.) “A trial court can only consider admissible evidence in ruling on a motion for summary judgment.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002); see also Weil v. Citizens Telecomm. Servs. Co., 922 F.3d 993, 998 (9th Cir. 2019) (“we may only consider admissible evidence when reviewing a motion for summary judgment”). At the summary judgment stage, a district court should “focus on the admissibility of the [evidence’s] contents” and not on the form in which the evidence is presented—it is sufficient that a party will be able to produce evidence in an admissible form at trial. See Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 2003); Block v. City of Los Angeles, 253 F.3d 410, 418-19 (9th Cir. 2001). Further, “objections to evidence on the ground that it is irrelevant, speculative, and/or argumentative, or that it constitutes an improper legal conclusion are [*6]  all duplicative of the summary judgment standard itself” and thus need not be considered on a motion for summary judgment. Burch v. Regents of Univ. of Cal., 433 F. Supp. 2d 1110, 1119 (E.D. Cal. 2006).

Plaintiff’s objections to Paragraphs 2 through 4 of Demberel’s Declaration, (Doc. No. 38-3), and Exhibit 1 of Jeff Bolender’s Declaration, (Doc. No. 38-4), on the grounds that they are irrelevant or are inadmissible legal opinions are unnecessary because these objections are “duplicative of the summary judgment standard itself.” See Burch, 433 F. Supp. 2d at 1120.

The Court overrules Plaintiff’s objection to Paragraph 2 of Demberel’s Declaration on the ground that the declarant lacks personal knowledge. (Doc. No. 38-3.) Demberel’s declaration establishes his personal knowledge of the events he recounts. (See Demberel’s Decl. ¶ 1.)

The Court sustains Plaintiff’s objection to Paragraph 3 of Demberel’s Declaration on the ground that it is improper opinion testimony of a lay witness. (Doc. No. 38-3.) Demberel’s assertion that “Defendant . . . [was] not negligent for the losses . . .” is an impermissible legal conclusion. See Griggin v. Chevron U.S.A. Inc., No. 01-7751, 2003 U.S. Dist. LEXIS 27564, 2003 WL 25667612, at *2 n.1 (C.D. Cal. Feb. 26, 2003) (“a lay or expert opinion may not be given regarding legal conclusions, such as the existence of a legal duty or whether or not a party was negligent.”)

The Court overrules [*7]  Plaintiff’s objection to highlighted portions of Exhibit 1 of Bolender’s Declaration on the ground that they are hearsay. (Doc. No. 38-4.) Not only did the parties stipulate to the authenticity of the documents, but also Plaintiff produced the emails in response to discovery requests and thus constitute a party admission. See Anand v. BP W. Coast Prods. LLC, 484 F. Supp. 2d 1086, 1092 n.11 (C.D. Cal. 2007) (“Documents produced in response to discovery requests are admissible on a motion for summary judgment since they are self-authenticating and constitute the admissions of a party opponent.”)

Finally, “[t]o the extent that the Court relie[s] on objected-to evidence, it relie[s] only on admissible evidence . . . .” Capitol Recs., LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198, 1200 n.1 (C.D. Cal. 2010) (quotation omitted).


V. FACTS

Both Plaintiff and Defendant filed statements of undisputed facts, (“Plaintiff SUF,” Doc. No. 34-2; “Defendant SUF,” Doc. No. 36), to which the other party filed statements of genuine dispute (“Plaintiff SGI,” Doc. No. 38-1, “Defendant SGI,” Doc. No. 36.) Local Rule 56 allows the Court to find that “the material facts as claimed and adequately supported by the moving party are admitted to exist without controversy except to the extent that such material facts are (a) included in the “Statement of Genuine Issues” and (b) controverted by [*8]  declaration or other written evidence filed in opposition to the motion.” C.D. Cal. L.R. 56-3 (emphasis added). The Court notes that many facts and contentions are not mentioned in this Order as the Court has found it unnecessary to consider them in reaching its decision.


A. Undisputed Facts

The following material facts are supported adequately by admissible evidence and are uncontroverted. They are “admitted to exist without controversy” for the purpose of deciding Plaintiff’s Motion. See C.D. Cal. L.R. 56-3.

1. Background

Plaintiff issued to Defendant Motor Carrier Liability Coverage Policy (“A-ONE policy”). (Plaintiff SUF No. 1; Defendant SGI No.1.) The A-ONE policy includes an MCS-90 endorsement. (Plaintiff SUF No. 3; Defendant SGI No. 3.)

On February 18, 2020, a driver, on behalf of Defendant, transported eight Tesla vehicles on a tractor with an attached auto hauler trailer. (Plaintiff SUF No. 4; Defendant SGI No. 4.) A fire started and destroyed three Teslas, damaged two other Tesla vehicles, and damaged the trailer. (Plaintiff SUF Nos. 5-6; Defendant SGI Nos. 5-6.) The fire compromised the battery compartment of several Teslas and released 3,600 pounds of lithium-ion materials onto the asphalt and the dirt shoulder [*9]  of the highway. (Plaintiff SUF Nos. 7, 9; Defendant SGI Nos. 7, 9.)

Ten-West Environmental Services (“Ten-West”) removed the hazardous material for proper disposal and submitted three environmental cleanup invoices to Defendant of approximately $45,000. (Plaintiff Nos. 13-14; Defendant SGI Nos. 13-14.) Defendant, as an insurance policyholder with Plaintiff, then submitted the invoices to Plaintiff. (Plaintiff SUF No. 15; Defendant SGI No. 15.)

Ten-West did not file suit against Defendant for payment of the invoices. (Plaintiff SUF No. 17; Defendant SGI No. 17.) Plaintiff did not hire an attorney to represent Defendant as to Ten-West’s invoices. (Plaintiff SUF No. 18; Defendant SGI No. 18.) Instead, under the MCS-90 endorsement, Plaintiff settled with Ten-West, on behalf of Defendant, and paid $45,000 in exchange for a release on May 14, 2020. (Plaintiff SUF No. 19; Defendant SGI No. 19.)

2. MCS-90 Endorsement

The MCS-90 endorsement reads, in part:

In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability [*10]  resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere. Such insurance as is afforded, for public liability, does not apply to injury to or death of the insured’s employees while engaged in the course of their employment, or property transported by the insured, designated as cargo.

(Defendant SUF No. 20; Plaintiff SGI No. 20.)


B. Disputed Material Facts

The parties dispute whether Defendant authorized Ten-West to remove the hazardous material. Plaintiff contends that Defendant authorized Ten-West to perform the cleanup, removal, and disposal of the lithium-ion batteries. (Plaintiff SUF No. 11; Plaintiff SGI No. 25.) According to Defendant, it never authorized Ten-West to perform any services on its behalf. (Defendant SGI. No. 11; Defendant SUF No. 25.)

The parties also dispute the cause of the fire. According to Plaintiff, a California Highway Patrol officer [*11]  concluded that “due to an unknown mechanical reason, a fire started in the rear portion of [Defendant’s] trailer. (Plaintiff SUF No. 12.) Moreover, the Kings County Fire Department concluded that “[a]fter talking to the driver of the transport, and seeing video he took after the fire started, the fire appeared to have started on the passenger side of the trailer in the wheel area.” (Plaintiff SUF No. 12.) Defendant contends that various investigations found different potential causes of the fire. (Defendant SGI No. 12; Defendant SUF No. 21.) According to Defendant, no trier of fact ever ascertained the cause of the fire. (Defendant SGI No. 12.)


VI. DISCUSSION


A. Plaintiff’s Motion for Summary Judgment

Plaintiff moves the Court to enter summary judgment as to its claims against Defendant. Plaintiff argues that Defendant was negligent in the maintenance of its trailer and hence it triggers the MCS-90 endorsement. (Motion at 10.) Plaintiff also contends that as the A-ONE Policy did not cover the cost of the cleanup, it was required to pay the costs to Ten-West under the MCS-90 endorsement. (Id. at 10-13.) According to Plaintiff, it need not have waited for a judgment against Ten-West for [*12]  Plaintiff to pay the cost of the cleanup. (Id. at 13-19.) Plaintiff also argues that requiring a final judgment to compensate Ten-West contravenes the intent of Congress.1 (Id. at 19-22.)

In Opposition, Defendant argues that Plaintiff’s Motion should be denied for several reasons. First, it claims the MCS-90 endorsement creates a suretyship and requires a final judgment of legal liability, or default, against the motor carrier. (Opp’n at 8-9, 12-14.) Second, Plaintiff cannot prove any final judgment against Defendant that triggers the MCS-90 endorsement. (Id. at 9-11.) And third, Plaintiff fails to plead a claim for reimbursement under California’s Blue Ridge Ins. Co. v. Jacobsen, 25 Cal. 4th 489, 106 Cal. Rptr. 2d 535, 22 P.3d 313 (2001), standard. (Id. at 11-12.) The Court addresses each argument in turn.

1. Federal Law Controls MCS-90 Endorsement

As a threshold matter, the Court previously rejected Defendant’s argument that Plaintiff fails to plead a claim for reimbursement under California’s Blue Ridge Ins. Co. v. Jacobsen, 25 Cal. 4th 489, 106 Cal. Rptr. 2d 535, 22 P.3d 313 (2001), standard. (Opp’n at 11-12). The Court further expands on its reasoning here.

Neither Blue Ridge nor Mosier v. Southern Calif. Physicians Ins. Exch., 63 Cal. App. 4th 1022, 74 Cal. Rptr. 2d 550 (1998) involve an MCS-90 endorsement. The Blue Ridge and Mosier courts found that insurers that undertake a courtesy defense on behalf of the insureds for noncovered claims may seek reimbursement under certain conditions. [*13]  Blue Ridge, 25 Cal. 4th at 502 (“the [insureds] were on notice both by the policy language and by Blue Ridge’s express reservation of rights when it assumed the defense that Blue Ridge might seek reimbursement from them for what were ultimately determined to be noncovered claims.”); Mosier, 63 Cal. App. 4th at 1040 (“one who voluntarily comes to the aid of another, having no initial duty to do so, becomes bound to exercise due care in the performance of the duties it undertakes to provide”). Plaintiff here, however, does not assert a voluntary defense on behalf of Defendant, but rather asserts its obligation to pay Ten-West under a federally mandated endorsement: the MCS-90 endorsement. (Plaintiff SUF No. 19; Defendant SGI No. 19.) Defendants also cite no case law applying Blue Ridge‘s standard to the right of reimbursement under an MCS-90 endorsement. Moreover, Defendant correctly describes the MCS-90 endorsement as a suretyship, and suretyships inherently provide for a right of reimbursement. See Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 878 n.8 (10th Cir. 2009) (“the [MCS-90 endorsement] surety obligation does not alter the underlying insurance policy and does not preclude the insurer from seeking reimbursement for its surety-based payments on behalf of the motor carrier.”).

Finally, “[f]ederal law applies [*14]  to the operation and effect of ICC-mandated endorsements,” like the MCS-90 endorsement. John Deere Ins. Co. v. Nueva, 229 F.3d 853, 856 (9th Cir. 2000) (citations omitted). Accordingly, Plaintiff need not assert a reimbursement claim under Blue Ridge.

2. Settlement is a “Final Judgment”

The Court next addresses the definition of a “final judgment” under the MCS-90 endorsement. The MCS-90 endorsement reads, in part, that “the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles . . . .” (Defendant SUF No. 20; Plaintiff SGI No. 20) (emphasis added). As the Ninth Circuit has not explicitly defined this term, this Court analyzes federal jurisprudence to determine whether an insured’s voluntary payment fits within the definition of a “final judgment.”

Some courts have defined “final judgment” narrowly as requiring a judgment on the merits. The Auto-Owners Ins. Co. v. Munroe, court found that the MCS-90 endorsement was not triggered where the insured settled with the third parties. 614 F.3d 322, 324, 327 (7th Cir. 2010) (“there will never be an unpaid final judgment in this case: the parties have settled and [*15]  the underlying case will presumably be dismissed once this declaratory judgment action is complete.”). Although the Auto-Owners court never defined “final judgment,” it implied a judgment on the merits was required to trigger the MCS-90 endorsement. Id.; see also Artisan and Truckers Casualty Co. v. Neron Logistics LLC, No. 18-2220, 2021 U.S. Dist. LEXIS 27171, 2021 WL 535531, at*4 (S.D. Ill. Feb. 12, 2021) (“There is no evidence of any final judgment against [the insureds] that would trigger the MCS-90 endorsement.”); Artisan and Truckers Casualty Co. v. Neron Logistics LLC, No. M2012-00057, 2013 Tenn. App. LEXIS 217, 2013 WL 1281856, at *5 (Ct. App. Tenn. March 27, 2013) (“the MCS-90 endorsement was not triggered in this case because [the third party] did not first obtain a judgment against [the insured] for its negligence.”).

Nevertheless, the majority of courts have defined “final judgment” more broadly as permitting reimbursement absent a judgment on the merits. In Harco Nat. Ins. Co. v. Bobac Trucking Inc., the court affirmed the district court’s finding that the “[insured] must reimburse [insurer] for the $225,000 payment it made under the MCS-90 endorsement to [injured] on [insured’s] behalf.” 107 F.3d 733, 735 (9th Cir. 1997). The insurer had contributed $225,000 on behalf of the insured to the settlement of the underlying action, “pursuant to [the insurer’s] obligations under an Interstate Commerce Commission (“ICC”)-mandated MCS-90 endorsement for public liability on the policy issued to [the insured].” [*16]  Id. at 735; see also Herrod v. Wilshire Ins. Co., 737 F. Supp. 2d 1312, 1319-20 (D. Utah 2010) (“The Motor Carrier Act requires only a final judgment, not a judgment on the merits.”) (vacated in part on other grounds); Cagle v. Wesco Ins. Co., No. 21-52, 2021 U.S. Dist. LEXIS 253756, 2021 WL 6931808, at *5 (N.D. Ga. Dec. 6, 2021) (“a voluntary settlement of a plaintiff’s claims, even without an admission of liability or judgment of negligence, constitutes a final judgment under an MCS-90 endorsement.”)

Courts have reasoned that a broader interpretation of “final judgment” encourages settlement and efficient resolution of cases. The T.H.E. Ins. Co. v. Larsen Untermodal Servs., Inc., court found that “there is no reason why [an insurer] could not seek a favorable settlement rather than risk litigating to a final judgment that could be more onerous.” 242 F.3d 667, 676 (5th Cir. 2001); see also Cagle, 2021 U.S. Dist. LEXIS 253756, 2021 WL 6931808, at *5 (“This interpretation makes sense because it encourages settlement and the efficient resolution of litigation. Conversely, a finding that a final judgment requires a judgment on the merits (and therefore that a settlement without a determination of liability cannot constitute a final judgment) would disincentivize parties from settling their cases and in turn lead to unnecessary litigation and expenses and an inefficient use of judicial resources.”). The Harco court also found that “[t]he purpose of the MCS-90 is to protect [*17]  the public, not to create a windfall to the insured.” 107 F.3d at 736.

This Court is persuaded by the majority of circuits finding that settlements constitute judgments under an MCS-90 endorsement. Plaintiff here paid Ten-West $45,000 under the MCS-90 endorsement because Defendant was not covered under the A-ONE policy. (Plaintiff SUF No. 19; Defendant SGI No. 19.) As a result, Ten-West waived any claims against Defendant and thus avoided “unnecessary litigation and expenses and an inefficient use of judicial resources.” Cagle, 2021 U.S. Dist. LEXIS 253756, 2021 WL 6931808, at *5. Moreover, were Defendant to be absolved of its reimbursement obligations, it would create a $45,000 windfall to Defendant contrary to the purpose of the MCS-90 endorsement. See Harco, 107 F.3d at 736 (“[t]he purpose of the MCS-90 is to protect the public, not to create a windfall to the insured.”). Finally, the Court notes that the MCS-90 endorsement reimbursement provision “permits the insurer to recover ‘any payment,’ not just final judgments.” Larsen, 242 F.3d at 676; (Ex. 1, Grace Decl.) Accordingly, Plaintiff may seek reimbursement for its settlement with Ten-West from Defendant.

3. Defendant’s Negligence

The Court turns now to whether Defendant acted negligently to trigger the MCS-90 endorsement. “[W]hen an injured party [*18]  obtains a negligence judgment against a motor carrier, an insurer’s obligation under the MCS-90 endorsement is not triggered unless (1) the underlying insurance policy (to which the endorsement is attached) does not provide liability coverage for the accident, and (2) the carrier’s other insurance coverage is either insufficient to meet the federally-mandated minimums or non-existent.” Yeates, 584 F.3d at 879.

Although Defendant asserts that no court or other proceeding concluded that it acted negligently, (Opp’n at 14), Plaintiff met its burden as the moving party establishing Defendant’s negligent maintenance of the trailer. (Plaintiff SUF No. 12; Defendant SGI No. 12.) Plaintiff presents evidence of two reports that found that “the fire appeared to have started on the passenger side of the trailer in the wheel area.” (Exs. 4-5, Goldberg Decl.) As no other vehicles were involved, and Defendant had management of the trailer, this is the gap that res ipsa loquitur fills. See Steele v. Pacific Elec. Ry. Co., 168 Cal. 375, 378, 143 P. 718 (1914) (“It is not necessary for the passenger to prove the cause of collision, derailment, or other accident. It is sufficient for him to prove that it occurred, and such proof makes a prima facie case of negligence on the part of the carrier, [*19]  which throws upon it the duty of explaining how it occurred, and showing that it was the result of causes beyond its control . . . .”) Moreover, Plaintiff raised res ipsa loquitur in its Motion and Defendant did not contest it. Cf. Ocegueda v. Union Pac. R.R. Co., No. 06-6539, 2008 U.S. Dist. LEXIS 139837, 2008 WL 11411092, at *5 (C.D. Cal. Sept. 11, 2008) (“because the res ipsa loquitur issue was not raised by Plaintiff, the Court will request further briefing to give Defendant a chance to explain why res ipsa loquitur would not prevent summary judgment on Plaintiff’s derailment-related negligence claim.”)

Accordingly, no issues of material fact remain as to whether Defendant’s negligent maintenance that caused the fire. Cf. Anderson, 477 U.S. at 247-48.


VII. CONCLUSION

For the reasons stated above, the Court GRANTS Plaintiff’s Motion for Summary Judgment.

IT IS SO ORDERED.

Dated: 8/23/22

/s/ Virginia A. Phillips

Virginia A. Phillips

United States District Judge


JUDGMENT

The Court having granted the motion for summary judgment of Plaintiff A-ONE Commercial Insurance Risk Retention Group, Inc. (“A-ONE”) on its Complaint against BZ Trans, Inc. That decision is dispositive of the issues raised by A-ONE in its Complaint for Declaratory Relief and Recoupment. Accordingly,

IT IS ORDERED, ADJUDGED AND DECREED as follows:

1. A declaratory judgment is [*20]  entered in favor of A-ONE Commercial Insurance Risk Retention Group, Inc. on its Complaint that A-ONE had no duty to defend and no duty to indemnify BZ Trans for the underlying claim by Ten-West Environmental Services for the cost of cleanup, removal and disposal of hazardous lithium-ion batteries and contaminated soil performed by Ten-West Environmental Services on behalf of the California Department of Transportation because the pollutants cleaned up by Ten-West Environmental Services were contained in property being transported by BZ Trans at the time of the incident and no coverage applies under the A-ONE policy.

2. A declaratory judgment is entered in favor of A-ONE Commercial Insurance Risk Retention Group, Inc. on its Complaint that A-ONE was entitled to settle the Ten-West Environmental Services’ claim for the cost of the cleanup, removal and disposal of hazardous lithium-ion batteries and contaminated soil performed by Ten-West Environmental Services on behalf of the California Department of Transportation pursuant to the MCS-90 endorsement and A-ONE was not required to force Ten-West Environmental Services or the California Department of Transportation to file an action against [*21]  BZ Trans and obtain a final judgment before A-ONE satisfied its obligation under the MCS-90 endorsement.

3. A declaratory judgment is entered in favor of A-ONE Commercial Insurance Risk Retention Group, Inc. on its Complaint that A-ONE owed no defense or indemnity obligations with respect to the Ten-West Environmental Services claim, with the exception of that required by the MCS-90 form attached to the A-ONE policy and A-ONE’s payment of Ten-West Environmental Services’ cleanup charges under the MCS-90 endorsement was proper.

4. A declaratory judgment is entered in favor of A-ONE Commercial Insurance Risk Retention Group, Inc. on its Complaint that A-ONE is entitled to recoup the full amount of the payment made in satisfaction of the Ten-West Environmental Services’ charges ($45,000), plus interest from BZ Trans from the date of A-ONE’s payment because no coverage existed under the A-ONE policy and the MCS-90 endorsement requires reimbursement of such payments under these circumstances.

5. BZ Trans is ordered to reimburse A-ONE for its payment of Ten-West Environmental Services’ $45,000 environmental cleanup charge, plus interest from the date of A-ONE’s payment.

6. A-ONE shall recover [*22]  its costs of suit.

Dated: August 23, 2022

/s/ Virginia A. Phillips

Hon. Virginia A. Phillips

UNITED STATES DISTRICT JUDGE


End of Document


The Court need not address Plaintiff’s remaining arguments as they are inapposite or unnecessary to resolve the Motion.

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