First off, our thoughts and prayers are with all those affected by Hurricane Ian. Our industry is strong and I’m sure many are helping their family, friends, and clients work through the devastation of the natural disaster. We look forward to a speedy recovery and a return to normalcy.

Much of the country is cooling as Fall seems to be upon us. Pumpkin spice everything is available, so enjoy it while you can.

Hopefully, Mike Sevret and I will have had a chance to connect with many of you while at the Motor Carrier Insurance Education Foundation (MCIEF) event in Orlando on October 5-7. If not, please feel free to reach out to us directly.

Have a great October!

CAB Live Training Sessions

Please Note! We have transitioned our web meeting resource from Go to Webinar to Zoom. Due to this switch, we encourage you to sign into the webinar a little earlier than normal to ensure there are no connectivity issues.

Tuesday, October 11^th, 12p EST: Mike Sevret will present on CAB for Agents and Brokers. Learn about enhancements to the CAB ecosystem that can help drive growth and save time. Identify ways to use CAB data to change the conversation with markets and advocate for fleet customers and prospects. Use CAB List™ to monitor customers and ‘drive the wedge’ with prospects. Learn tips on how to leverage the BASICs Calculator™ and CAB’s Lead Generation tool, SALEs™.

Tuesday, October 18^th, 12p EST: Chad Krueger will provide a review of the BASICs Calculator. The BASICs Calculator is a very powerful safety and loss control tool that allows the user to identify pain areas within a motor carrier’s fleet. Agents and Underwriters find great value as it can help clarify how a motor carrier is progressing. Run scores simulations, forecasts, and more!

To register for the webinars, click here to sign into your CAB account. Then click live training at the top of the page to access the webinar registration.

You can explore all of our previously recorded live webinar sessions by visiting our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks: Chameleon Carriers and Company Representatives

CAB’s Chameleon Detector has been a mainstay in the industry to help CAB Users understand the interrelationship between entities. Our Chameleon Detector is designed to help our users better understand some of the following questions: Does the motor carrier have additional divisions? Might the motor carrier have previously operated under a different name? Was there a merger between entities? Could there be a fraudulent representation? Is there a Freight Forwarder operation?

Remember, the Chameleon Carrier Detector can also help identify matching company representatives. Company Representatives become of value when your standard search has been run. From there, you can click the Chameleon Carrier^® icon and the Chameleon Carrier^® Report will identify if a similar name is also identified, which can warrant additional investigation and understanding.

Incorporating a motor carriers’ Representative into our Chameleon Carrier^® search algorithm has created additional clarity for our users. We’re happy to provide this feature and we know it will help provide clarity when searching motor carriers. 

We at CAB are constantly striving to improve our tools and resources to create value for our users. Please feel free to contact us directly if you have any suggestions as to how we can enhance our services. We are customer driven. Our goal is to help you Make Better Decisions!

THIS MONTH WE REPORT:

Health & Safety

Investing in Safety: The FMCSA has announced $80 Million in grant awards to make our trucking industry safer. The High Priority grants provide financial assistance to supplement motor carrier safety initiatives that impact the movement of hazardous materials, target unsafe driving, demonstrate new safety technologies, conduct safety data improvement projects and more. Read more

It’s not over yet. Covid waivers exempting a subset of truck drivers from maximum drive-time limits are extended through October 15. Read more

In the meantime, the Federal Motor Carrier Safety Association (FMCSA) is using feedback from a September comment period to see whether the waivers have had an impact on safety. Read more

Public comment period: The FMCSA is asking for comment on a proposal to require electronic identification for commercial vehicles, communicating wirelessly to federal or state motor carrier safety teams on request. Read more

Get the numbers: The Commercial Vehicle Safety Alliance (CVSA) International Roadcheck numbers are out. CVSA-certified inspectors conducted nearly 60,000 inspections May 17-19 in the US, Canada, and Mexico and placed more than 12,000 commercial motor vehicles out of service. Nearly 4,000 drivers were also placed out of service. Read more

Marketplace

Trucking operational costs reached a 15-year high in 2021, according to the American Transportation Research Institute. The organization reports a 13% increase in the cost of operations from 2020, with the largest increase reported in the cost of fuel. CCJ’s 10-44 reports on the details

Electronic Logging Devices: The FMCSA is ready to consider potential changes to electronic logging devices in pre-2000 model engines, ELD malfunctions, and more. The older models were initially exempted from current regulations, but we are seeing movement on this topic. Read more

Freight shipments: The Cass Freight Index shows that freight shipments hit an all-time high in August. Experts cite a shift from spot to contract, and other factors such as China emerging from lockdowns and pre-holiday inventory increases. Read more

October 2022 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Swift Transp. Co. v. Carman, 2022 Ariz. LEXIS 243, CV-20-0119-PR (Ariz. Aug. 23, 2022).  In this appeal, the Arizona Supreme Court set forth the standard for an award of punitive damages.  Citing precedent, the court held for punitive damages to be awarded, something rising to the level of an “evil mind”, “intent to cause harm motivated by spite or ill will” or “conscious disregard of a substantial risk of harm to others” is required.  Thus, there is an intent to harm element or a conscious disregard of a substantial risk of harm to others that must be met before punitive damages are appropriate.  A truck driver’s failure to reduce speed to avoid hydroplaning and losing control of his vehicle and his failure to direct or warn incoming traffic or place out traffic warning devices per the FMCSRs after he ran off the road did not rise to the level necessary to submit the issue of punitive damages to the jury. 

Mason v. McGuffey, 2022 U.S. Dist. LEXIS 150952, C.A. No. 2:20-cv-320 (M.D. Ala. Aug. 23, 2022).  A motor carrier and its driver were granted partial summary judgment on various claims arising from an accident that occurred while the tractor-trailer was either parked on the shoulder of an on-ramp to the interstate or while slowly moving from the shoulder into the lane of travel.  The plaintiff sued the motor carrier and the driver, alleging claims for negligence/wantoness; (2) respondeat superior; (3) negligent/wanton hiring, training, supervision and/or retention; (4) negligent/wanton supervision of the maintenance, operation, service, and/or repair of the tractor trailer; and (5) negligent/wanton entrustment.  At the time of the Accident, the driver had been an employee of the motor carrier for four months and had been a truck driver for thirty years.  Before hiring the driver, the motor carrier examined his motor vehicle record, his pre-employment screening program record, and his prior employment history.  The motor carrier did not provide training for its truck drivers on how to operate tractor trailers, but only hires those with extensive experience in the field. As an initial matter, the plaintiff acknowledged all claims based upon alleged wanton conduct and negligent maintenance should be dismissed.  The court then held the negligent entrustment cause of action should be dismissed because there was insufficient evidence of the driver’s incompetence to operation a tractor trailer, with the court citing to the fact that the driver had been employed as a truck driver for thirty years and had maintained his CDL for approximately twenty years, during which time he had no speeding tickets or moving violations rising to the level of that recognized by Alabama authorities as establishing incompetence.  Having determined that the driver was not incompetent, the court then dismissed the negligent hiring, training, supervision, and/or retention claims, noting that to succeed on these claims under Alabama law, one most establish by affirmative proof that the employer knew or reasonably should have known of the incompetence, but “[t]here can be no knowledge, actual or otherwise, of something that does not exist.” 

Rayner v. Claxton, 2022 Tex. App. LEXIS 6651, C.A. No. 08-20-00145 (Tex. Ct. App. Aug. 31, 2022).  In this far-ranging opinion, the Texas Court of Appeal reversed the trial court’s multi-million-dollar award, including both compensatory and exemplary damages, and ordered a new trial on a limited issue.  First, the court held a member-manager of an LLC was not individually liable for an accident caused by a truck driver employed by the LLC.  Despite her testimony that she took responsibility for the accident, the court held that testimony did not impart a duty upon her individually where one did not otherwise exist under law and accordingly there was no basis of liability against the member-manager.  While the LLC had breached its duty by having a vehicle with out-of-service violations on the road, and it was foreseeable that the condition of the truck could cause harm, the evidence was insufficient to prove that the condition of the truck was a cause-in-fact of the occurrence and therefore there was no basis of liability for the LLC under a negligent maintenance theory of liability.  Likewise, the appellate court found there was no evidence to support a negligent entrustment theory of liability under which the LLC could be held liable.  The court also held there was insufficient evidence to establish an exemplary damages award against the LLC because its liability was based solely upon the vicarious liability of the driver.  Last, the court held the evidence did not support a finding that the driver, who deviated from the permitted route with his oversized load and struck a bridge, was grossly negligent, as the evidence did not support the inference that he discovered his mistake and yet continued traveling for several miles without looking for a place to stop.  The court remanded the case for a new trial against the driver and the LLC under a simple negligence and respondeat superior theory of liability, finding the trial court improperly submitted to the jury a single, broad-form liability questionnaire that included theories of liability for which there was insufficient evidence, “leaving doubt as to which theories the jury based its verdict, and gave no or inadequate instructions or definitions regarding [the LLC’s} vicarious liability.”

Finley v. Mora, 2022 U.S. Dist. LEXIS 157305, C.A. No. 20-11739 (E.D. Mich. Aug. 31, 2022).  In this case brought under Michigan’s no-fault auto insurance regime, the court granted summary judgment in favor of defendants.  Specifically, the court held the plaintiff’s treating physician’s opinion on causation was inadmissible because it was an etiological diagnosis based solely on the plaintiff’s complaints and plaintiff’s description of his medical history that did not consider alternative explanations for the plaintiff’s symptoms, and there were not sufficient indicators of reliability to support the treating physician’s opinion on medical causation. 

Germinaro v. Null, 2022 U.S. Dist. LEXIS 153885, C.A. No. 3:22-cv-115 (M.D. Ala. Aug. 26, 2022).  The Alabama federal court determined that a putative UIM carrier was a nominal party and accordingly its citizenship need not be considered for purposes of diversity jurisdiction.  In so ruling, the court affirmed the Broyles rule, which holds insurance companies should be considered real parties in interest only when they (1) have “become subrogated to the rights of their insured after payment of the loss,” (2) are “defending actions brought directly against them,” or (3) they “must assume primary and visible control of the litigation.”  In this instance, the court found the UIM carrier did not fall within any of the three noted exceptions and therefore was to be treated as a nominal party for purposes of diversity jurisdiction. 

Anthony v. Alvarez, 2022 U.S. Dist. LEXIS 162515, C.A. No. 7:20-cv-191 (M.D. Ga. Sep. 9, 2022).  In this case arising from a motor vehicle accident, the court dismissed negligent hiring, training, supervision, and entrustment causes of action against a motor carrier.  The court explained that under Georgia law, where an employer motor carrier admits vicarious liability and absent evidence supporting a meritorious claim for punitive damages against the motor carrier premised upon the motor carrier’s independent negligence, negligent hiring/training/supervision/and entrustment causes of actions must be dismissed.  

BROKER

Ortiz v. Ben Strong Trucking, Inc., 2022 U.S. Dist. LEXIS 156008, C.A. No. CCB-18-3230 (D. Md. Aug. 29, 2022).  A Maryland federal court held as a matter of law that an entity holding dual licensure as a broker and motor carrier operated as a broker in the disputed transaction.  The court found the evidence presented at the summary judgment stage established the entity held brokerage authority during all relevant times, held itself out to the shipper as a broker, not motor carrier, did not accept responsibility for the transportation of the freight, and that its failure to re-register as a broker post-MAP-21 was immaterial on the question of motor carrier versus broker.  As such, it could not be held vicariously liable for the negligence of the motor carrier’s driver.  The court rejected the broker’s argument that FAAAA preempted the negligent hiring claims against it, citing the safety exception to FAAAA.  Last, the court found there was a question of fact precluding summary judgment on the negligent hiring cause of action against the broker. 

CARGO

Beecher’s Handmade Cheese, LLC v. New Sound Transp., LLC, 2022 U.S. Dist. LEXIS 152984, C.A. No. 21-12809 (D.N.J. Aug. 25, 2022).  In this lawsuit arising from a rejected shipment of cheese, the shipper sued the company it contracted with for the transportation (Freezepak) as well as the delivering motor carrier (New Sound).  The operative pleading alleged a breach of contract claim against Freezpak and a Carmack claim against both Freezpak and the motor carrier.  Despite Freezpak being a transportation broker only, the court found the Complaint alleged facts sufficient to give rise to a Carmack claim against Freezpak because it alleged facts from which a jury could conclude that Freezpak “took responsibility for the transportation of the subject cargo” thereby subjecting it to liability as a carrier under Carmack. The court also noted that the question of whether a party has accepted responsibility for the shipment is “ultimately one of fact.”  Accordingly, the motion to dismiss the Carmack claim was denied.  With respect to the breach of contract claim, the court found the Complaint sufficiently alleged facts to avoid dismissal at the pleading stage, but nevertheless sua sponte requested supplemental briefing as to whether the breach of contract claim is preempted by Carmack. 

Von Der Ahe v. 1-800-Pack-Rat, LLC, 2022 U.S. Dist. LEXIS 148787, C.A. No. 3:21-cv-2526 (N.D. Tex. Aug. 19, 2022).  An interstate household goods mover prevailed on its motion to dismiss state common law causes of action for violation of the Texas Deceptive Trade Practices Act, common law breach of the duty of good faith, and deceptive practices under the Texas Insurance Code, with the court agreeing all such causes of action were preempted by the Carmack Amendment. 

Hadas Benhamou v. Moving Sols., LLC, 2022 U.S. Dist. LEXIS 152179, C.A. No. 21-10823 (E.D. Mich. Aug. 24, 2022). A Michigan federal court denied a household goods mover’s motions to dismiss based upon a forum selection clause.  The court first denied the 12(b)(3) motion, finding that rule was not the proper mechanism by which to enforce a forum selection clause.  Rather, it held a 12(b)(6) motion is the proper mechanism to enforce a forum selection clause, but nevertheless found issues of material fact remained as to whether the forum selection clause was valid insofar as it may have been “obtained unknowingly and unwillingly” by being included in the moving company’s terms and conditions and binding move estimate provided only a few days before the anticipated move.  Noting the stage of the proceedings and the obligation to accept all facts pled in the complaint as true, the court denied the motion, subject to the moving company’s right to later re-bring a motion to enforce the forum selection clause following some discovery on the issues.   

Wattiker v. Am. Auto Haulers, Inc., 2022 U.S. Dist. LEXIS 159625, C.A. No. 3:22-cv-00324 (N.D. Tex. Aug. 2, 2022).  In this lawsuit arising from alleged damage to a Porsche 911 transported from California to Texas, the court dismissed the direct-action claims against the insurer defendants.  The court rejected the plaintiff’s claims that Carmack’s “strict liability” regime allows for a direct action against a cargo insurer prior to obtaining a judgment against the putative insured motor carrier.  The court also denied, without prejudice, the pro se plaintiff’s motion for summary judgment on the pseudo-Carmack claim/strict liability claim against the putative insureds. 

Kelts v. King Ocean Servs., 2022 U.S. Dist. LEXIS 162359, C.A. No. 22-22299 (S.D. Fla. Sep. 8, 2022).  This case involves a pickup truck that was shipped from Florida to Costa Rica, but while still in possession of the ocean carrier at the destination port, was wrongfully released to an unauthorized individual.  The owner of the truck sued the ocean carrier for statutory civil theft and conversion under Florida common law.  The ocean carrier sought to dismiss the lawsuit against it on the basis that the claims were preempted by COGSA. The court noted that the ocean carrier’s bill of lading contained a “Clause Paramount” providing “[t]his bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of 1936 of the United States of America, as amended (“COGSA”) which shall apply to the Goods whether the Goods carried on or under deck to carriage of the Goods to, from, or between U.S. ports or between non-U.S. ports before the Goods are loaded on and after they are discharged from the vessel and throughout the entire time that they are in custody of the Carrier, whether acting as carrier, bailee, terminal operator, inland carrier, stevedore. Carrier shall be entitled to any and all defenses and limitations of liability provided under COGSA or any other compulsorily applicable law or for any and all claims arising out of Carrier’s custody or control of the Goods . . . .”  Applying Eleventh Circuit precedent holding that where COGSA applies, it provides the exclusive remedy, the court found the plaintiff’s sole recourse was pursuant to COGSA and dismissed the lawsuit subject to the plaintiff’s right to refile a lawsuit alleging claims only under COGSA. 

COVERAGE

Allstate Prop. & Cas. Ins. Co. v. Fowler, 2022 U.S. Dist. 151366, C.A. 1:21-cv-4534 (N.D. Ga. Aug. 23, 2022).  This case involves interpretation of the motor vehicle exclusion under a homeowner’s policy.  In interpreting the exclusion, the court applied the Hays test, which sets forth three factors for determining whether an injury arose out of the use of a motor vehicle: (1) the physical proximity of the injury site to the vehicle; (2) the nature of the conduct which caused the situation of jeopardy; and (3) whether the vehicle was being “utilized” in the plain and ordinary sense of the word.”  Applying the Hays test, the court found that the claimant, who was injured while assisting the homeowner load a purchased classic car onto a trailer owned by the claimant, arose out of the use of a motor vehicle and therefore was excluded from coverage under the homeowner’s policy.  The court went on to note that the claim would have likewise been excluded under the “but for causation” test and the clear language of the policy excluding bodily injury arising out of the “loading of any motor vehicle or trailer.” 

Gemini Ins. Co. v. Zurich Am. Ins. Co., 2022 U.S. Dist. LEXIS 150368, C.A. No. 8:21-cv-2052 (M.D. Fla. Aug. 22, 2022).  In this dispute between three insurers for indemnification obligations arising out of a fatal motor vehicle accident involving a tractor-trailer, the court held the policies’ respective other insurance clauses required two “excess” insurers to pay on a pro-rata basis.  The primary insurer (Old Republic) paid its $1 million limits while one of the two “excess” carriers (Gemini) paid $2 million of its $3 million limit to settle the case, then sought reimbursement of $1 million from the other “excess” insurer (Zurich), who had $1 million in coverage. The Gemini Policy’s Other Insurance provision provided “this insurance is excess over and shall not contribute with any of the other insurance, whether primary, excess, contingent or on any other basis.”  The Zurich Policy’s Other Insurance provision provided “when this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share.”  The court applied existing Florida law, which holds when two or more policies cover the same loss, but both contain excess other insurance provisions, the clauses are deemed “mutually repugnant” such that each policy shall pay on a pro rata basis determined by the policy limits in relation to the loss.  Applying this rule, the court agreed that Zurich’s indemnification obligation was limited to $500,000, not the full $1 million policy limits. 

Trisura Specialty Ins. Co. v. Blue Horse Trucking Corp., 2022 U.S. Dist. LEXIS 150255, C.A. No. 20-cv-24134 (S.D. Fla. Aug. 22, 2022).  In this Report and Recommendation, a Florida federal magistrate judge ruled that the settlement of the underlying tort action by the insurer, who agreed to pay the full settlement amount (amounting to the full limits under the policy) despite previously reserving its rights to deny coverage, providing a defense to the underlying claims under a reservation of rights, and instituting a separate declaratory judgment action seeking a determination of non-coverage, constituted an admission by the insurer that there was coverage under the policy for the loss sufficient to give rise to the putative insured’s recovery of reasonable attorney’s fees under Fl. Stat. § 627.428(1). 

A One Commer. Ins. Risk Retention Grp., Inc. v. BZ Tranz, Inc., 2022 U.S. Dist. LEXIS 152603, C.A. No. 2:21-cv-06411 (C.D. Cal. Aug. 23, 2022).  An insurer was held to be entitled to reimbursement under the MCS 90 endorsement for cleanup costs it paid following a loss.  The involved tractor-trailer was carrying eight Teslas when a wheel casing of the trailer caught fire, resulting in damage to the Teslas.  As a result of the fire, the battery compartments of several of the Teslas were compromised and lithium-ion materials were released onto the asphalt and dirt shoulder of the highway.  An environmental cleanup company removed the hazardous material and submitted invoices totaling approximately $45,000.00 to the motor carrier.  The motor carrier, in turn, tendered the invoices to the insurer for payment.  The insurer advised the motor carrier that it had no duty to pay the invoices because there was no coverage for the loss under the policy, nevertheless it would satisfy the cleanup invoices under the MCS 90 endorsement.  The court first held that the payment of the invoices, prior to the cleanup company filing suit, nevertheless was a “final judgment” for purposes of the MCS 90 endorsement.  It then held that despite no court or other proceeding concluding the motor carrier/insured acted negligently, as is required for triggering the MCS 90, applying res ipsa loquitur principles there was prima facie proof that the fire was caused by the motor carrier’s negligent maintenance of the trailer.  As such, this was sufficient to trigger the MCS 90 endorsement.

Anderson v. Nationwide Agribusiness Ins. Co., 2022 U.S. Dist. LEXIS 148976, C.A. No. 4:21-cv-4101 (D.S.D. Aug. 17, 2022).  A farm employee injured while driving her employer’s John Deere Gator on a public roadway was not entitled to UIM benefits under her employer’s business auto policy.  The policy was a scheduled auto policy, and the Gator was not listed on the schedule of covered autos.  However, the insured paid $162.00 to add the farm employee and another employee to the Schedule of Nonownership Coverage for liability coverage.  From this, the employee argued she was a Named Insured entitled to UIM benefits under the policy.  The court disagreed, finding that the Named Insured, despite not being defined in the policy, meant only the two individuals listed on the declarations page.  Because the Gator was not a covered auto and the injured employee was not a “Named Insured” or resident relative, the employee was found to not be entitled to UIM benefits. 

Am. Serv. Ins. Co. v. Webber’s Transp., LLC, 2022 U.S. Dist. 154092, C.A. No. 4:20-cv-013 (S.D. Ga. Aug. 26, 2022).  An insurer for a non-emergency medical transport company prevailed on summary judgment and was found to not be responsible for providing a defense or indemnification to the medical transport company, its owners, or the driver in multiple underlying lawsuits alleging personal injuries out of a motor vehicle accident involving one of the company’s vehicles.  First, the court found the named insured and its owners had not complied with the cooperation and notice provisions of the policy, to the detriment of the insurer, and therefore there was no coverage.  The court held these provisions were conditions precedent to coverage.  It was uncontested for the motion that the named insured and/or its owners did not notify the insurer of the Accident or turn over the lawsuit to the insurer, resulting in default judgment against multiple putative insureds in at least one of the actions.  Further, the court held none of the putative insureds qualified as insureds because the relevant policy language conditioned insured status on the accident involving a covered auto “driven by an approved driver.” The policy further provided a driver was not an approved driver unless he/she was reported to the insurer at the time of the application or subsequent thereto and approved by the insurer with said approval being provided via written notification from the insurer.  Neither occurred with the driver operating the covered auto at the time of the Accident.  As such, the court held the insurer had no duty to defend or indemnify any of the putative insureds in connection with the claims/lawsuits arising from the Accident. 

Hoops v. Auto Owners Ins. Co., 2022 U.S. Dist. LEXIS 165802, C.A. No. 4:20-cv-1712 (E.D. Miss. Sep. 14, 2022).  Determining that the evidence adduced to date raised a question of fact as to whether there was a phantom driver, and accordingly if there was uninsured motorist coverage available in connection with the loss, the court held the plaintiff was not entitled to recovery penalties under Missouri’s “vexatious litigation” statute. 

Holland v. Cypress Insurance Co., 2022 U.S. Dist. LEXIS 169220, C.A. No. 2:17-cv-120 (N.D. Ga. Sep. 12, 2022).  In this remand proceeding from the Eleventh Circuit Court of Appeals, the court upheld the jury’s award of $6 million in attorneys’ fees and litigation expenses under Georgia’s “bad faith” statute, O.C.G.A. § 13-6-11.  Noting that “Georgia law provides no specific formula to calculate attorney’s fees for bad faith;” typically the issue presents a question of fact; that the primary consideration is the overall reasonableness; and that any award will be affirmed if there is evidence to support it, the court found the award was reasonable under the facts of the case. 

Great West Cas. Co. v. Maric Transp.,Inc., 2022 U.S. Dist. LEXIS 168194, C.A. No. 1:21-cv-00441 (N.D. Ohio Sep. 16, 2022).  In this insurance coverage dispute, the Non-Trucking Liability Insurer was found to have no duty to indemnify or defend any putative insured in connection with a motor vehicle accident.  At the time of the Accident, it was undisputed the driver was transporting cargo in interstate commerce.   The NTU liability policy defined “covered autos” as including only those trucks, tractors, and trailers on file with the insurer leased by the motor carrier shown in the Declarations and only while under a written lease agreement of thirty (30) days or more.  It further provided the NTU policy would pay as damages bodily injury or property damage caused by an accident and resulting from the ownership, maintenance, or use of a covered auto only while the covered auto is “not used to carry property in any business” and “not used in the business of anyone to whom the auto is rented, leased, or loaned.”  The NTU Policy included a Motor Carrier Operations exclusion, but also included a Motor Carrier Reimbursement Endorsement providing the NTU insurer would pay any contractual obligation the insured has to reimburse a motor carrier to whom the insured is leased for any loss due to an accident and resulting out of the ownership, maintenance, or use of a covered auto, provided the loss is in a written agreement and is a type of loss listed in the schedule on the endorsement.  The court found that the loss was not covered because the parties stipulated the subject tractor-trailer was not listed or on file with the NTU policy, but even if it was, the policy did not afford coverage, either under the Insuring Agreement or the Motor Carrier Operations exclusion, whenever the auto was being used to carry property in any business or while being used in the business of the anyone to whom the auto is rented, leased, or loaned.  The court further rejected that the Motor Carrier Reimbursement Endorsement altered the determination of non-coverage, finding there was no written agreement in place sufficient to trigger coverage under the endorsement.

WORKERS COMPENSATION

Solis v. Indus. Comm’n of Arizona, 2022 Ariz. App. Unpub. 679, CA-IC-21-0046 (Ariz. Ct. App. Aug. 25, 2022).  The Court of Appeals of Arizona affirmed the Arizona Industrial Commission’s finding that a trucker was not entitled to workers compensation benefits from the broker or the broker’s associated motor carrier operation, when he was killed while performing transportation of a load brokered to him by the broker.  The court found that neither defendant exercised that level of control over the trucker’s operations to subject them to liability for workers compensation benefits. 

Why do we celebrate Labor Day? According to the U. S. Department of Labor, “Observed the first Monday in September, Labor Day is an annual celebration of the social and economic achievements of American workers. The holiday is rooted in the late nineteenth century, when labor activists pushed for a federal holiday to recognize the many contributions workers have made to America’s strength, prosperity, and well-being.”

Both the United States and Canada will be celebrating Labor Day on Monday, September 5^th. We hope everyone enjoys this break as we head into the last part of the year.

For CAB, September starts an active stretch as we will be attending InsurTech Connect the week of September 18^th in Las Vegas, and a couple weeks later we’ll be at the Motor Carrier Insurance Education Foundation (MCIEF) annual Seminar in Orlando. We look forward to seeing many of you at these shows and conferences. We always love meeting up with our users. Please feel free to reach out if you would like to connect at these events.

CAB is excited to be a Gold Sponsor of this year’s MCIEF Annual Conference. If you have never attended an MCIEF event, I would encourage you to look into it. Information can be found at the link here. We hope to see you there!

Have a great September!

CAB Live Training Sessions

Please Note! We have transitioned our web meeting resource to Zoom. We previously used Go to Webinar. Due to this switch, we encourage you to sign onto the webinar a little earlier than normal to ensure there are no connectivity issues.

Tuesday, September 13th, 12p EST: Chad Krueger will present on CAB’s very new CAB Express report. The Express report was released for trial in April and May of this year. Since then, a number of organizations have taken advantage of the report. This session will provide details on the CAB Express report, company specific trial periods, and discuss other potential unique customized reports for individual organizations. Do not miss out on this opportunity to learn about this powerful CAB feature. Click here to register.

Tuesday, September 20th, 12p EST: Mike Sevret will present on Introduction to CAB: Flow and Navigation. This is a great session for new users or folks looking for a refresher. Mike will provide an overview of the basic flow and navigation of the overall CAB environment. Do not miss out on this opportunity to learn the ins and outs of CAB. Click here to register.

You can explore all of our previously recorded live webinar sessions by visiting our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks: How to find the Chameleon Carrier^® Report

A Chameleon Carrier^® is a very important part of understanding a motor carrier and its associated risk. As it relates to Central Analysis Bureau resources, a Chameleon Carrier® is a company that is related to another entity that used the carrier’s vehicles and shares a phone (landline, cell, or fax), address (physical or PO Box), email, or representative.

Occasionally, when reviewing a motor carrier and its associated entities, a CAB user might be subject to a bit of information overload. That is where the Chameleon Carrier^® Report can provide clarity. Once you have done your search in Carrier Central and an orange and green Chameleon Carrier^® icon appears. You can click on that icon and you will be taken to another page where the associated motor carriers will appear.

From there, click on the Chameleon Carrier^® Report link (green highlight above) and the concise report below will appear, providing a clear view as to the relationship with the additional entities. As we can see below, the carrier we identified had 4 additional related entities. The green checkmarks detail the data points are specifically related.

If you’re looking for additional information on Chameleon Carriers^® and Interrelated Entities, feel free to click the webinar link here that covers the concept of a chameleon carrier, interrelated entities and the features CAB provides to identify and understand the relationships that may exist between motor carriers.

THIS MONTH WE REPORT:

Marketplace

More cameras in more places.

The cost of trucking in 2021 increased to its highest level in the 15-year history of the American Transportation Research Institute’s annual Operational Costs of Trucking research. Learn more on Overdrive

More truck models, more electric trucks, and higher MSRP. Price Digests’ lead analyst Jessica Carr examines the changing truck market. Read more 

Health & Safety

The NHTSA boss resigns for a California board position and there’s a new medical manual on the horizon for truckers, after the old one was withdrawn in 2015. Learn more in this news roundup

Trucking companies have again asked federal regulators to allow hair testing for drugs to determine if a person is fit to drive — and this time the government has agreed to consider their case. Read more

Slow down out there! Speeding might get a little tougher for those driving heavy duty trucks. Regulators are reviving a proposal to add speed limiters on most heavy duty trucks. Read more

Diversity

Women in Trucking: the numbers are up for leadership, support and driving roles. The Women in Trucking Association says 33.8% of C-suite executives in transportation companies are women, an increase of 1.5%. Read more

Legal

Developing a culture of safety, utilizing data, are ways to reduce the risk of a nuclear verdict. Read more

Should brokers be held liable for the safety outcomes of the motor carriers they utilize?  That question is playing out, with owner-operators watching closely. Read more

September 2022 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Coakley v. Cole, 2022 U.S. Dist. LEXIS 130224, C.A. No. 3:22-cv-00251 (N.D. Miss. July 22, 2022).  Finding the allegations of a tort complaint “do not plausibly suggest anything more than simple negligence” the court dismissed the punitive damages claim.  The court likewise dismissed the negligent hiring/retention/investigation/training/ entrustment/supervision claims because the employer admitted vicarious liability for the negligence of its employee driver. 

Est. of Grillo v. Thompson, 2022 U.S. Dist. LEXIS 137048, C.A. No. GLR-21-3132 (D. Md. Aug. 1, 2022).  The Maryland federal court granted a motor carrier summary judgment on all counts, finding the decedent was contributorily negligent in causing the accident.  The undisputed evidence established the tractor trailer was traveling between 59.5 and 66.5 mph (in excess of the 50-mph speed limit) approximately 1,000 feet from (but almost two minutes before) the Accident; the tractor-trailer entered the intersection while the light was yellow; and the decedent’s vehicle entered the intersection while his light was red.  The court rejected what it considered speculative conjecture that the decedent had a sudden medical event, which the Estate argued would prevent assignment of contributory negligence to the decedent.  The court likewise rejected that any alleged gross negligence by the operator of the tractor-trailer would preclude the normal application of the contributory negligence rule.  Last, the court rejected the Estate’s reliance upon the last clear chance doctrine, finding the Estate failed to show “something new or sequential” that afforded the driver of the tractor-trailer a fresh opportunity (which he failed to avail himself of) to prevent the accident. 

Joyce v. Rich, 2022 U.S. Dist. LEXIS 141562, C.A. No. 20-11638 (E.D. Mich. Aug. 9, 2022).  In a personal injury case arising from a winter pile-up during a “snowy winter day,” the court held the sudden emergency doctrine applied and granted summary judgment to the driver of tractor-trailer who was unable to stop, resulting in him striking the rear of the tractor-trailer traveling directly in front of him (who also ran off the road to avoid striking the car stopped in front of him).  There was no evidence of speeding, distraction, or impairment by either driver.  The court likewise granted summary judgment on the related/derivative claims. 

Madera v. KTC Express, Inc., 2022 U.S. Dist. LEXIS 131859, C.A. No. 3:19-cv-01516 (N.D. Ohio July 25, 2022).  In this case, the tort plaintiff argued he was entitled to summary judgment on his negligence per se claim based upon various alleged violations of state and federal law and regulations.  The court held that the alleged violations of the FMCSRs did not give rise to a private right of action and therefore could not support negligence per se.  The tort plaintiff’s reliance upon a state statute fared no better because it was a statute of general duty, rather than a “specific duty statute”, and as such it could not form the basis of a negligence per se claim.  The only statute sufficient to give rise to summary judgment in favor of the plaintiff on the negligence per se claim was the one providing that drivers stay in their own lanes and only change lanes when safe to do so.  Concluding there was no disputed material fact that the Accident was caused by the driver crossing the lane, the court held the tort plaintiff entitled to summary judgment on his negligence per se claim.  The court held fact issues precluded summary judgment on the remaining claims for negligence, strict liability, negligent hiring/training/supervision, punitive damages, and veil piercing. 

Rattlesnake Ridge Ventures, LLC v. Ortiz, 2022 Tex. App. 5453, C.A. No. 4-22-00004-CV (Tex. Ct. App. Aug. 3, 2022).  The Texas Court of Appeals held that a Texas-domiciled tort plaintiff failed to establish personal jurisdiction under Texas’ long-arm statute.  The Accident happened in Minnesota.  The driver of the alleged at-fault tractor-trailer was not a resident of Texas.  The motor carrier was a Wyoming limited liability company.  Thus, the only connection to Texas was the citizenship of the tort plaintiff.  Under these facts, personal jurisdiction was lacking in Texas. 

BROKER

Echo Glob. Logistics, Inc. v. Dep’t of Revenue, 2022 Wash. App. LEXIS 1551, C.A. No. 83548-3-I (Wash. Ct. App. Aug. 1, 2022).  The Washington Court of Appeals affirmed the Board of Tax Appeals’ finding that a freight broker did not operate motor vehicles and therefore it was not a motor transportation business subject to a public utility tax under state law.  The court found the broker’s work or labor was the coordination and management of the movement of goods, not “the impact on a motor propelled vehicle” that would otherwise qualify it for public utility tax treatment.    

Reynolds v. Singh, 2022 U.S. Dist. LEXIS 139552, C.A. No. 2:22-cv-00601 (E.D. Cal. Aug. 5, 2022).  This case arises from a fatal auto accident in Oklahoma wherein the driver of a CMV rear-ended another vehicle during a winter storm.  The CMV driver and motor carrier removed the state-court tort action, invoking federal question jurisdiction under the Federal Aviation Administration Authorization Act (“FAAAA”).  Citing the safety-regulatory carve-out for FAAAA preemption, the court found there was no basis for complete preemption sufficient to give rise to federal question jurisdiction.  The court likewise held that the alleged violation of a FMCSR as an element of a state law cause of action was insufficient to give rise to federal question jurisdiction under established precedent.  As for possible diversity jurisdiction, the forum defendant rule precluded that basis of federal jurisdiction.  Finding there was no legitimate basis for removal, the court granted recovery of fees/costs to the parties seeking remand.

Russ v. XPO Logistics, LLC, 2022 U.S. Dist. LEXIS 145938, C.A. No. 19-2719 (D. Minn. Aug. 16, 2022).  In this wide-ranging opinion, the court was faced with numerous summary judgment motions by various individuals and entities involved in some capacity in the shipment of a load that was involved in a fatal accident.  XPO served as the freight broker in connection with the shipment.  It brokered the load to Ecklund Logistics (“Ecklund”).  Ecklund, in turn, leased equipment from KLE.  KLE and Ecklund operated out of the same location and shared common ownership.  Ecklund hired a driver, who had previously worked for multiple other carriers.  However, Ecklund’s inquiry with the prior employers was limited to determining whether the driver complied with drug and alcohol testing regulations.  Ultimately, while on his first trip for Ecklund, the driver was involved in a fatal accident while transporting a load of freight brokered to Ecklund by XPO.  XPO’s onboarding process involved checking Ecklund’s SAFER rating—which was “Satisfactory”—the highest available.  The rating was six years old at the time of the Accident, during which time Ecklund had never been re-rated.  XPO also utilized Carrier411 to monitor carriers.  XPO also verified Ecklund had the required insurance coverages.  Finding no red flags during onboarding, Eckluch was added to XPO’s database of carriers.  Despite Ecklund having a satisfactory rating, the evidence showed it had a history of insurance claims in the five years preceding onboarding, including 104 property damage claims, 44 collision claims, and 20 bodily injury claims.  XPO did not investigate or consider the insurance claims prior to adding Ecklund to its database.  The Broker-Carrier agreement between XPO and Ecklund specified Ecklund must immediately notify XPO if its rating was downgraded to conditional or unsatisfactory and develop and provide to XPO a corrective action plan for any safety or safety rating issues.  The Agreement further required Ecklund’s drivers be fully trained, screened by a criminal background check, complete substance abuse testing procedures, and conduct themselves in a courteous and professional manner.  Under these facts, the court denied XPO summary judgment on the claim it negligently selected Ecklund as a carrier.  The court found a reasonable juror could conclude that additional precautions/investigation were necessary.  Specifically, the court noted that Ecklund’s safety rating was over six years old at the time of the Accident and XPO never attempted to investigate Ecklund’s financial status “despite evidence that such information is directly tied to a carrier’s safety.”  Further the court noted there was some evidence suggesting Ecklund had inadequate safety management controls as evidenced by its high number of incidents and insurance claims.  XPO was granted summary judgment on the claims alleging it was a motor carrier and that it was vicariously liable for the negligence of the driver under various agency, joint enterprise, and aiding and abetting theories.  XPO’s claim for indemnification from Ecklund was deemed premature given that a great number of the claims alleged XPO’s direct negligence, for which it could not be entitled to indemnification.  The court also granted summary judgment to XPO and all defendants on the claim alleging violations of the FMCSRs, finding the regulations did not create any private right of action.  KLE was granted summary judgment for the claims alleging joint venture and alter ego with Ecklund.  KLE was likewise granted summary judgment under the Graves Amendment for the claims alleging vicarious liability for the negligence of the driver but was denied summary judgment on the claim it negligently entrusted its equipment to Ecklund, which would not be covered under the Graves Amendment.  Ecklund was denied summary judgment on the claim alleging it negligently hired the driver, but the court granted Ecklund summary judgment on the negligent retention and supervision claims. 

CARGO

Creative Lifting Servs. v. Steam Logistics, LLC, 2022 U.S. Dist. LEXIS 136158, C.A. No. 1:20-cv-337 (E.D. Tenn. Aug. 1, 2022).  The plaintiff contracted with the defendant to ship a crane from Italy to Houston, but when the shipment arrived at the Port of Houston it was rejected because the wood utilized to support the crane during shipment was allegedly infested with insects.  The entire shipment had to be shipped back to Italy to be fumigated before being re-shipped to Houston.  The plaintiff sued the defendant under various theories based upon the professed expertise in shipping arrangements contained on defendant’s website.  The court denied the defendant’s motion to dismiss the Tennessee Consumer Protection Act claim, finding the operative pleading contained sufficient allegations to make out a viable claim.   The court found, with respect to the negligent misrepresentation claim, the “essential element” of how or why defendant failed to use reasonable care in communicating the alleged misrepresentations on its website, was lacking.  However, the court granted the plaintiff the opportunity to amend the pleading to correct the deficiency.  With respect to the breach of contract claim, which the court had previously permitted the plaintiff to amend, the court found it still lacked the necessary allegations to support this cause of action.  As such, this claim was dismissed.  Last, with respect to the negligence claim, which the plaintiff had also previously been allowed to amend, the court found the plaintiff still pled all obligations/duties arose pursuant to contract (bill of lading), and therefore the court was required to dismiss the negligence action because any violation of the contractual duties sounds solely in contract, not tort.    

D&J Distrib. & Mft. Co. v. Bella+Canvas Retail, LLC, 2022 U.S. Dist. LEXIS 143919, C.A. No. 3:22-cv-599 (N.D. Ohio Aug. 11, 2022).  The plaintiff alleged the motor carrier inexplicably delivered goods that were intended for plaintiff’s customer to another location (“recipient”).  The plaintiff alleged the recipient kept the goods and would not return them.  In turn, the plaintiff filed suit against the recipient and the motor carrier.  The claims against the motor carrier included: (1) breach of contract/ unjust enrichment; (2) specific performance/constructive trust; (3) theft /conversion; and (4) negligence.  The carrier successfully moved to dismiss all claims under Carmack preemption. 

Stewart v. Fed. Express Corp., 2022 U.S. Dist. LEXIS 138114, C.A. No. 21-2478 (D.D.C. Aug. 3, 2022).  The court dismissed, without prejudice, a pro se plaintiff’s complaint alleging losses related to stolen packages delivered to her residence by the motor carrier.  Noting the deferential standard applied to pro se pleadings, the court held the complaint, as pled, was not sufficiently definite to establish standing of the claimant to sue under Carmack.  However, in so holding, the court rejected the motor carrier’s argument that only shippers are entitled to recovery under the Carmack Amendment, and thus the court allowed the pro se plaintiff to file a second amended complaint.

COVERAGE

Koch v. Progressive Direct Ins. Co., 2022 Pa. Super. LEXIS 327, C.A. No. 1302 MDA 2021 (Pa. Super. Ct. Aug. 4, 2022).  The Pennsylvania Superior Court (intermediate appellate court) overturned a trial court’s decision in favor of an insured holding he was entitled to UIM benefits.  At policy inception, eleven years before the Accident, the insured executed a UIM rejection form.  However, nine months prior to the Accident, the insured had telephonic conversation with a representative of Progressive during which the insured requested to purchase additional coverage for the involved motorcycle.  During the conversation, the Progressive representative discussed the availability of uninsured motorist coverage, but not underinsured motorist coverage.  Following the call, the insured purchased $300,000 in UM coverage (but no UIM coverage).  The insured argued if the representative had discussed the availability of UIM coverage during the call, he would have purchased that as well.  The court held that the 2004 UIM rejection form remained valid and met the state’s statutory requirements for rejection of UIM benefits.  Additionally, the court stressed that Progressive routinely mailed the insured declarations pages showing he had rejected UIM coverage, including after the phone call in which he added additional UM coverage.  The applicable statutes provided once an insured executes a UM/UIM rejection form, the rejection is presumed to be in effect throughout the life of the policy unless affirmatively changed by the insured.  They also provided that an insured having completed a UM/UIM rejection form cannot claim liability of any based upon inadequate information.  Based upon this, the appellate court held Progressive was not required to inform the insured about the availability of UIM coverage or obtain a new UIM rejection form in response to the call seeking additional coverage.  As such, the appellate court held the insured was not entitled to UIM benefits in connection with the Accident. 

Nat’l Cas. Co. v. Eagle Eye Truck Lines, LLC, 2022 U.S. Dist. LEXIS 133124, C.A. No. 22-cv-147 (N.D. Ok. July 27, 2022).  A federal court entered a stay in the federal insurance coverage declaratory judgment action, citing disputes over choice of law, which it determined needed to first be decided in the underlying state court tort action. 

Pierson v. White Pine Ins. Co., 2022-Ohio-2702, C.A. No. 21CA3 (Ohio Ct. App. July 28, 2022).  In this insurance coverage declaratory judgment action, the court was tasked with addressing the scope of a towing-transporting-autos exclusion.  The exclusion excluded from coverage bodily injury or property damage “arising out the ownership, operation, maintenance or use of any ‘auto’ that is not identified in ITEM SEVEN in the Auto Dealer Declarations used to move, tow, haul or carry ‘autos.’”  The policy separately defined “auto” as “a land motor vehicle, ‘trailer’ or semitrailer.”  ITEM SEVEN was a schedule of covered autos and only listed one vehicle—a 1999 International Rollback.  The Accident involved a 1999 Freightliner hauling load of inoperable cars being transported on a trailer.  First, the court held the policy provisions were not ambiguous.  It stressed that the mere fact that provisions cross-referenced other provisions was not alone sufficient to render it ambiguous.  The court next held the 1999 Freightliner was not listed in Item Seven.  Further, it found the trailer itself constituted an “auto” under the policy definition, which specifically included trailers. As such, the court concluded a vehicle not identified in Item Seven was being used to move, tow, haul or carry an auto (i.e. the trailer).  The court held that under these circumstances, the exclusion applied.  It further rejected the policy provided illusory coverage, noting that had the 1999 Freightliner simply been listed in ITEM SEVEN, there would have been coverage.  As such, it reversed the trial court’s decision that the insurer had the duty to defend and indemnify in connection with the Accident.

Progressive Cas. Ins. Co. v. Jason Boire, 2022 U.S. Dist. LEXIS 141120, C.A. No. 8:21-cv-0666 (N.D.N.Y. Aug. 9, 2022).  The New York federal court dismissed a declaratory judgment insurance coverage action, subject to the right to file an amended complaint, where it found the operative pleading failed to allege a case or controversy.  In particular, the court found the declaratory judgment complaint failed to allege that the underlying tort action sought recovery from the plaintiff insurer or any party was claiming coverage under the at-issue policy.  As such, the court concluded there was merely a “hypothetical dispute” and the case or controversy requirement was not satisfied. 

Travelers Prop. Cas. Co. of Am. v. H.E. Sutton Forwarding Co., 2022 U.S. Dist. LEXIS 140768, C.A. No. 2:21-cv-719 (M.D. Fla. Aug. 8, 2022).  In this insurance coverage declaratory judgment action, the excess insurer sought declaratory judgment it had no duty to defend or indemnify an entity in connection with claims arising from an accident, occurring on an airfield, in which the plaintiff collided with the wing of an aircraft that the putative insured had rented in connection with its aircraft charter business.  The excess policy excluded from coverage “[d]amages arising out of the ownership, maintenance, use or entrustment to others of any aircraft owned or operated by or rented or loaned to any insured.”  In response to the putative insured’s demand for coverage, the excess insurer reserved its rights but advised the insured there was no coverage on account of the aircraft exclusions.  The insurer then filed the declaratory judgment coverage action before moving for summary judgment that it had no duty to defend or indemnify the putative insured.  First, the court dispatched with the putative insured’s claim the action was not ripe, noting that the insured had requested coverage that had been denied.  Under Florida law, the court held the demand for coverage was sufficient to constitute a justiciable controversy.  As for the policy exclusions, the court noted the broad language used in the exclusion, explaining ‘arising out of’ is broader in meaning than the term “’caused by’ and means ‘originating from,’ ‘having its origin in,’ ‘growing out of,’ ‘flowing from,’ ‘incident to’ or ‘having a connection with.'”  Insofar as the underlying tort complaint alleged damages allegedly originating out of the use/rental of an aircraft by the putative insured, the court found the aircraft exclusion applied to bar coverage.  However, the court held the insurer had not met its burden to establish, for purposes of summary judgment, that the policy did not provide illusory coverage.  The putative insured argued application of the aircraft exclusion would nullify all coverage since all of its business involved the use of an aircraft.  Accordingly, this issue was left to be decided and the insurer’s motion for summary judgment was denied. 

Williamsburg Nat’l Ins. Co. v. New York Marine & Gen. Ins. Co., 2022 U.S. Dist. LEXIS 144658, C.A. No. 21-04377 (C.D. Ca. Aug. 12, 2022).  In this dispute between insurers over defense and indemnification obligations for various individuals and entities in connection with a motor vehicle accident, the court granted in part and denied in part the parties’ respective summary judgment motions.  Williamsburg issued a motor carrier liability policy with $1,000,000 limits and that included a MCS 90 endorsement to DLR Express (“Williamsburg Policy”).  New York Marine issued a motor carrier liability policy with $1,000,000 limits to Intermodal Contractor’s Association of North America, which also included a MCS 90 endorsement (“New York Marine Policy”).  Arthur Trimble was later added as a certificate holder to the New York Marine Policy.  DLR leased a tractor with attached trailer to Trimble under an equipment lease agreement and sub-haul agreement.  The Agreement provided Trimble would indemnify and release DLR against any liability arising out of Trimble’s use of the equipment.  Pursuant to the Agreement, Trimble also added DLR as an additional insured to the New York Marine Policy.  While using the leased tractor, Trimble was involved in an accident with Foster.  Foster filed a complaint against Trimble in California State Court (“Foster Litigation”).  DLR was later added as a defendant to the Foster Litigation.  New York Marine provided a defense to Trimble in the Foster Litigation.  All claims against Trimble in the Foster Litigation were resolved for $155,000.  It appears DLR never requested a defense and neither New York Marine nor Williamsburg provided a defense to DLR in the Foster Litigation.  A default judgment for over $6,000,000 was entered against DLR in the Foster Litigation.  After unsuccessfully moving to set aside the default judgment, DLR tendered its defense to Williamsburg, who agreed to defend DLR in the Foster Litigation pursuant to a full reservation of rights.  A month later, DLR tendered its defense and made a request for indemnification as an additional insured to New York Marine.  The Foster plaintiffs then agreed to settle all claims against DLR for $1,000,000.  DLR and Williamsburg demanded New York Marine tender the remaining $845K in available limits under the New York Marine Policy to settle the claim, but New York Marine refused.  Ultimately, Williamsburg paid the entire $1,000,000 demanded to settle the claim against DLR and then instituted suit against New York Marine seeking recoupment of those amounts.  The court held under these facts New York Marine had sufficient notice of a potential contribution claim from Williamsburg based upon the involvement of DLR in the Foster Litigation.  Even assuming DLR had not provided notice to New York Marine or demanded a defense, the court explained “an insured’s lack of tender or compliance with a policy provision is not fatal to a coinsurer’s right of equitable contribution; rather adequate notice of the potential for contribution and the opportunity for the investigation and participation in the defense of the underlying litigation will suffice.”  It therefore found New York Marine had sufficient notice of a possible contribution claim to preclude dismissal of the contribution claim.  While the court determined it need not reach the impact of the MCS 90 endorsement in light of its other ruling, it went on to explain that the MCS 90 endorsement only applies to injuries to the public and does not apply to disputes as between co-insurers.  With respect to the remaining claims of negligence and tort of another by Williamsburg against New York Marine, the court held New York Marine was entitled to dismissal of those claims because those were premised upon a viable claim by DLR for which Williamsburg was subrogated and since DLR did not provide adequate notice to New York Marine of its request for defense/indemnification in connection with the Foster Litigation, DLR had no assignable cause of action. 

WORKERS COMPENSATION

No cases of note to report this month.