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Certain Underwriters at Lloyd’s v. Deol Transport

2019 WL 5459057

United States District Court, E.D. Virginia,
Alexandria Division.
CERTAIN UNDERWRITERS AT LLOYD’S LONDON SUBSCRIBING TO CERTIFICATE NO. Z178324-004APD, and Amlin Underwriting, Ltd. Plaintiffs,
v.
DEOL TRANSPORT, INC., Defendant.
1:18-cv-1383 (LMB/JFA)
|
Signed 10/24/2019
Attorneys and Law Firms
Wayne Barry Montgomery, Kalbaugh Pfund & Messersmith PC, Richmond, VA, for Plaintiffs.
Charles E. Gallagher, Jr., DeCaro Doran Siciliano Gallagher & DeBlasis LLP, Fairfax, VA, for Defendant.

MEMORANDUM OPINION
Leonie M. Brinkema, United States District Judge
*1 This Memorandum Opinion constitutes the Court’s factual findings and conclusions of law following a bench trial of this declaratory judgment action brought by plaintiffs Certain Underwriters at Lloyd’s, London Subscribing to Certificate No. Z178324-004APD and Amlin Underwriting, Ltd. (collectively, “Certain Underwriters” or “plaintiffs”) against defendant Deol Transport, Inc. (“Deol Transport” or “defendant”), in which plaintiffs seek a judgment stating that an insurance policy they issued to defendant does not cover defendant’s claim for damage to its vehicles because the employee driving the vehicles was not a covered driver under the policy. For the reasons that follow, the Court finds that the policy does not cover defendant’s claim.

I. FINDINGS OF FACT

A. Uncontested Facts1
The parties do not dispute the following facts, which the Court finds have been established. Plaintiffs are an insurance syndicate. Complaint ¶ 1, 3 Defendant is an interstate trucking company. Id. ¶ 2. On February 21, 2018, defendant, through its owner Gian Singh Deol (“Deol”), applied for insurance coverage for four of its vehicles and two of its drivers, Deol and Rajesh Kumar (“Kumar”). DTX 3, at 1.2 The application, which was signed by Deol, indicated that he had five years of driving experience and that Kumar had three years of driving experience. Id. As a result of this application, plaintiffs issued an insurance policy for automotive property damage to defendant (“the policy”). DTX 1, at 1. Defendant obtained the policy as a member of Continental Trucking Association (“Continental Trucking”),3 and with the assistance of National Insurance Agency, Inc. (“National Insurance”).4 Id.; PTX 2, at 1.

*2 The policy provided, in relevant part, that “[i]n consideration for the premium paid hereon … the Underwriters hereby agree to indemnify the Assured against direct and accidental loss or damage to the Automobiles specified in the schedule herein, during the Period of Insurance specified in the schedule.” PTX 4, at 8. Among other automobiles owned by defendant, the policy schedule included a 2017 tractor with the Vehicle Identification Number 3AKJGLDR7HSHD9415 (“the 2017 tractor”) and a 2016 trailer with the Vehicle Identification Number 1UYVS2531GU688819 (“the 2016 trailer”).5 DTX 1, at 2. The 2017 tractor was insured up to $135,000, and the 2016 trailer was insured up to $55,000. Id. The policy also provided that “strict compliance with the conditions and/or warranties contained in the contract of insurance is required,” and that “if [the insured] do[es] not strictly comply with the conditions and/or warranties contained within the contract of insurance, then the insurer, Certain Underwriters at Lloyd’s, may deny or limit coverage for any claim.” PTX 4, at 7.

Although not contained within the section labeled “Exclusions,” the policy contained a provision entitled “Driver Criteria” (“the Driver Criteria provision”), which stated:
Every driver must have his/her Motor Vehicle Report (MVR) approved by Continental Insurance Agency within 7 days of their employment with the subject trucking firm. They must comply with the following Driver Criteria, and have a Single Valid Full Commercial Driving License, endorsed for the specific type of equipment operated at the time of loss or damage. If any of the Driver Criteria, including the following, is not fully complied with, then the driver is not acceptable or approved and will result in any claim or loss involving such unacceptable or unapproved driver as being not covered for any and all coverage’s [sic] that might otherwise have been applicable….
Id. at 14 (emphasis added). Among the specific criteria listed in the Driver Criteria provision was a requirement that a “Driver must have a Minimum of two years [sic] Commercial Truck Driving Experience.” Id.

The policy issued to defendant also contained a “Declarations Page” (“the Declarations Page”)6 and an endorsement, which repeated the requirement that drivers must satisfy the policy’s driver criteria to be eligible for coverage:7
E. Drivers
All drivers must meet minimum policy requirements as set forth by your policy (see attached minimum driver criteria) before they are hired. All qualified drivers must be reported immediately upon hiring. Unreported drivers could cause cancellation of policies or result in an unpaid claim….
DTX 1, at 5 (emphasis added). The policy, including both the Driver Criteria provision and the Declarations Page, was in effect throughout March 2018. PTX 4, at 4.

In addition to these policy documents, Deol signed two documents that he received from his broker, National Insurance. The first document, entitled “Agreement to Report All Drivers and Vehicles to Policies,” stated:
This is a guideline of all commercial vehicle insurance carriers and a condition for all insured’s [sic] to abide by….
Your commercial insurance policy (Liability, Cargo and Physical Damage) requires:
All drivers must be reported upon date of hire. Failure to report all drivers may Jeopardize Coverage if a claim should occur. Your policy contains an Unreported-Driver endorsement that limits your policy. Please read your policy very carefully…. Unreported drivers or previously Excluded Drivers shall be subject to exclusion from the coverage. Therefore, no coverage will apply. A current and acceptable MVR must be submitted for approval for all drivers. I understand this condition and will report all drivers upon hiring and adding vehicles. Failure to do so may result in denial of claims.
*3 PTX 2, at 2 (emphasis added). The second document, entitled “Driver Guidelines,” stated:
All new drivers must be reported when hired. Please send MVR to us and we will provide quick help with acceptability. Accidents involving unreported drivers may be cause for adverse underwriting action.
Id. at 3 (emphasis added).

On March 12, 2018, National Insurance sent an email to plaintiffs entitled “Policy Change Request – Deol Transport, Inc.” DTX 4, at 1. This email requested, among other policy changes, that Sukhwinder Singh (“Sukhwinder”) be added to the policy as a covered driver, and stated that Sukhwinder had a valid Commercial Driver’s License issued in New Jersey in 2015. Id. The email also included the notation “MVR attached.”8 Id.

On the same day, defendant hired Tirath Singh (“Singh”) as a driver. PTX 15, at 1. Singh’s application for employment required that he “[l]ist the nature and extent of [his] experience operating different types of motor vehicles (eg. buses, trucks, & trailers).” Id. Singh listed “5 years” of experience driving a “car.” Id. Singh’s application also required that he provide an “employment record” in the form of certain information “on all employers during the previous three years” and “for all employers [he] ha[d] driven a commercial vehicle for the last seven years prior 10 [sic] the initial three years (total of ten years employment record).” Id. at 2. Singh provided only “N/A” in response to this question, which the Court interprets as meaning that he had no employment history during the previous three years, and no employment history driving commercial vehicles during the previous ten years. Id. Singh’s application was dated March 11, 2018, one day before he was hired. Id. at 3. Singh had a valid Commercial Driver’s License issued in New Jersey on February 9, 2018, less than six weeks before he was hired. PTX 6, at 1. In the letter offering Singh a job, Deol wrote: “You will now conduct a road test with an experienced co-driver from our company and once we have been assured that your driving is well we shall have you sign our contracts.” PTX 5, at 1.

On March 15, 2018, three days after he was hired, in what the Court presumes was his “road test,” Singh was driving the 2017 tractor and towing the 2016 trailer covered by the policy in Amboy, California, when he lost control of the tractor and drove it and the trailer off the road.9 PTX 7, at 9. As a result, both the 2017 tractor and the 2016 trailer were damaged. Id. It is uncontested that, as of March 15, 2018, Deol had not requested that Continental Insurance Agency approve Singh’s Motor Vehicle Report (“MVR”), and there is no evidence in the record that Deol had informed either his broker National Insurance, Continental Insurance Agency, or plaintiffs that he had hired Singh. Deol testified that he first contacted National Insurance about Singh on March 16, 2018, the day after the accident. Accordingly, as of the date of the accident, Continental Insurance Agency had not approved Singh’s MVR, and plaintiffs had not otherwise advised defendant that Singh had been added to the policy as a covered driver. DTX 22, at 1.

*4 On March 23, 2018, eleven days after defendant hired Singh and eight days after the accident, National Insurance sent an email to plaintiffs entitled “Policy Change Request – Deol Transport, Inc.” DTX 8, at 1. Much like the email regarding Sukhwinder, this email contained Singh’s name, date of birth, Commercial Driver’s License information—including the incorrect statement that Singh had a valid Commercial Driver’s License issued in New Jersey in 2017— and the following message:
Hello Underwriters,
Please add the driver listed below to the policy. Copy of the CDL & MVR is enclosed.
Thank you,
[National Insurance]
Id.10 The email sought to add Singh to the policy effective March 14, 2018, the day before the accident. Id.

Two days later, on March 25, 2018, defendant filed a claim under the policy seeking compensation for the damage to the 2017 tractor and the 2016 trailer (“the claim”). DTX 19, at 2. The claim was subsequently assigned to Mike Najafi (“Najafi”), a claims adjuster at Synergy Adjusting Corporation. Id. at 1. As part of his investigation, Najafi asked Continental Insurance Agency whether defendant had submitted Singh’s MVR for approval and whether it had been approved. Najafi determined that Singh’s MVR had never been submitted to or approved by Continental Insurance Agency, after receiving an email from Continental Insurance Agency on April 10, 2018 stating “Driver [Singh] Not Approved.” DTX 22, at 1. This information was repeated in an email sent on September 14, 2018 stating that Singh “was never reported [to] or approved by Continental.” DTX 32, at 1.

On or around April 18, 2018, plaintiffs instructed Najafi to issue a denial of the claim. PTX 13, at 1–2. In turn, Najafi sent defendant a “Letter of Denial,” which stated:
In reference to the above claim, we wish to advise you that we have been instructed by your Insurance Carrier, Underwriters at Lloyd’s, London to issue a Letter of Denial in conjunction with this loss.
Based upon the information thus far obtained, it appears that the driver involved, Tirath Singh was not an approved driver at the time of loss. We would refer to your policy for First Party Physical Damage policy number Z178324-004APD with effective dates April 1, 2017 – April 1, 2018, specifically to the additional clauses and endorsements applicable to this policy. We would refer your attention to the ‘Driver Criteria’ clause, which states:
‘Every driver must have his/her Motor Vehicle Report (MVR) approved by Continental Insurance Agency within 7 days of their employment with the subject trucking firm. They must comply with the following Driver Criteria, and have a Single Valid Full Commercial Driving License, endorsed for the specific type of equipment operated at the time of loss or damage. If any of the Driver Criteria, including the following, is not fully complied with, then the driver is not acceptable or approved and will result in any claim or loss involving such unacceptable or unapproved driver as being not covered for any and all coverage’s [sic] that might otherwise have been applicable.’
As the driver of this vehicle was not an approved driver at the time of loss, we would advise that coverage will not attach itself to this claim.
There may be other reasons why coverage does not apply. Certain Underwriters at Lloyd’s, London do not waive any of their rights in not mentioning these here and hereby specifically reserve their rights to any further issues that may arise now or in the future.
*5 Id.

On November 5, 2018, plaintiffs filed this declaratory judgment action against defendant in which they seek a judgment stating that the policy does not cover defendant’s claim because (1) Continental Insurance Agency did not approve Singh’s MVR within seven days of his employment with defendant, and (2) Singh had less than two years of commercial driving experience at the time of his employment with defendant, both in contravention of the policy’s Driver Criteria provision. Complaint ¶¶ 9, 14.

B. Contested Facts
At trial, only two witnesses testified—Najafi and Deol. Based on his demeanor, experience, and consistent testimony, the Court finds that Najafi was a credible witness. He answered questions from both counsel quickly and confidently. He explained that he had worked as an insurance adjuster for 29 years, and adjusted approximately 500 claims per year. He testified as to the relationship among the various insurance entities involved with the policy and the claim, his investigation of the claim, and the reason for plaintiffs’ decision to deny it.

Based on his demeanor and inconsistent testimony, the Court finds that Deol—who testified with the assistance of a Punjabi interpreter—was not a credible witness. For example, as to his demeanor, although Deol responded quickly and expansively to questions from his counsel, he responded slowly to questions from plaintiffs’ counsel, and often provided unresponsive answers to those questions. As to the substance of his testimony, Deol’s testimony was often inconsistent with prior pleadings, his own prior testimony, and his documentary evidence on various matters. For instance, defendant has asserted throughout this action that it was unaware that Singh’s lack of commercial driving experience was an alternative basis for plaintiffs’ denial of the claim until plaintiffs filed this declaratory judgment action in November 2018. See, e.g., Defendant’s Motion for Leave to File First Amended Answer to Plaintiffs’ Complaint [Dkt. 26], at 4; Defendant’s Proposed Findings for Court [Dkt. 33], at 3. Yet Deol testified that an employee of National Insurance told him as much approximately one month after the claim was denied. Similarly, on direct examination, Deol tearfully testified that plaintiffs’ denial of the claim has caused Deol Transport significant financial hardship. Yet on cross-examination, he admitted that the number of drivers and trucks that Deol Transport employs has increased since the claim was submitted, from four drivers and three trucks as of March 2018 to eight drivers and five trucks as of the date of trial in September 2019. Additionally, Deol’s testimony concerning Singh’s driving experience was not credible. Deol testified that Singh had several years of commercial truck driving experience in India, yet defendant offered no evidence to corroborate that statement, which this Court finds to be highly suspect given that Singh, who was 31 years’ old, indicated on his application for employment that his only driving experience was with a car, and that he had not been employed as a commercial driver in the last ten years. PTX 15, at 1–2.

*6 Lastly, Deol testified that on March 16, 2018 he verbally asked an employee of National Insurance to add Singh to the policy, but he offered no corroborating evidence, and the documentary evidence shows that National Insurance did not request that plaintiffs add Singh to the policy until March 23, 2018. DTX 8, at 1. That March 23, 2018 date is significant. First, it is more than eleven days after Deol hired Singh. Second, it strongly suggests that Deol did not have Singh’s MVR when he hired Singh. The Court reaches that conclusion based on how quickly National Insurance processed defendant’s request that Sukhwinder be added to the policy. The email National Insurance sent to plaintiffs about Sukhwinder was dated March 12, 2018, asked for coverage effective March 12, 2018, and included Sukhwinder’s MVR. DTX 4, at 1. If Deol had Singh’s MVR and actually asked National Insurance to add Singh to the policy on March.16, 2018, the Court would have expected the email National Insurance sent to plaintiffs about Singh to have been dated March 16, 2018 or March 17, 2018, not March 23, 2018.

In addition to uncorroborated and unreliable testimony, Deol signed documents clearly containing inaccurate information, which further undercuts his credibility. For instance, on defendant’s application for insurance coverage, Deol misrepresented Kumar’s driver’s license and driving experience information by indicating that that Kumar had a valid Commercial Driver’s License issued in New York—license number 933313604—and three years of driving experience. That information is inconsistent with his trial evidence, which included one Commercial Driver’s License issued to Kumar. That license was issued in California, not New York, had a different license number, Y3791731, and had been issued fewer than three years ago, expiring on November 16, 2016. DTX 3, at 1; DTX 13, at 1.

II. APPLICABLE LAW
Under Virginia law, “[c]ourts interpret insurance contracts, like other contracts, in accordance with the intention of the parties gleaned from the words they have used in the document.” Erie Ins. Exch. V. EPC MD 15, LLC, 822 S.E.2d 351, 355 (Va. 2019) (quotation omitted). Accordingly, “a judicial interpretation [of an insurance contract] should conform to the plain meaning that reasonable insurers and insureds likely would have attributed to the words.” Id. Yet “[t]he search for plain meaning does not myopically focus on a word here or a phrase there. Instead, it looks at a word in the context of a sentence, a sentence in the context of a paragraph, and a paragraph in the context of the entire agreement.” Id. “Consequently, every word, clause, and provision of the policy ‘should be considered and construed together and seemingly conflicting provisions harmonized when that can be reasonably done, so as to effectuate the intention of the parties as expressed therein.’ ” Id. (quotation omitted).

“If the plain meaning is undiscoverable, Virginia courts apply the contra proferentem canon, which construes ambiguities against the drafter of the ambiguous language.” Id. “In insurance cases, the disfavored drafter is almost always the insurer,” a fact that “alone counsels caution because of the analytical ease with which a court may give up quickly on the search for a plain meaning” by focusing on words or phrases in isolation. Id. Yet “[i]f [courts] took this approach, the contra proferentem thumb-on-the-scale approach would apply to nearly every interpretation of nearly every insurance policy,” a “temptation” that the Virginia Supreme Court has consistently “recognized … and resisted.” Id. Accordingly, “conflicting interpretations reveal an ambiguity only where they are reasonable.” Id. “A ‘reasonable’ … interpretation is one of two competing interpretations that are ‘equally possible’ given the text and context of the disputed provision.” Id. (quotation omitted).11

*7 Failure to satisfy a condition precedent of an insurance policy is an affirmative defense on which the insured bears the burden of production and the insurer bears the burden of persuasion. Commercial Underwriters Ins. Co. v. Hunt & Calderone, P.C., 540 S.E.2d 491, 494 (Va. 2001); see also Builders Mut. Ins. Co. v. Dragas Management Corp., 709 F. Supp. 2d 441, 449 (E.D. Va. 2010). A condition precedent is “[a]n act or event, other than a lapse of time, that must exist or occur before a duty to perform something promised arises.” Condition Precedent, Black’s Law Dictionary (11th ed. 2019).

Waiver of a condition precedent “is the intentional relinquishment of a known right, with both knowledge of its existence and an intention to relinquish it.” Creteau v. Phoenix Assur. Co., 119 S.E.2d 336, 339 (Va. 1961); see also Hammond v. Pacific Life Mut. Ins. Co., 159 F. Supp. 2d 249, 256-57 (E.D. Va. 2001). “In the insurance context, therefore, a waiver occurs ‘where the [insurer] expressly or impliedly leads the insured to believe it has given up a right under its policy,” ’ Hammond, 159 F. Supp. 2d at 257 (quotation omitted) (alteration in original); however, “no one can acquiesce in a wrong while ignorant that it has been committed.” Id. The insured bears the burden of proving the insurer’s waiver of a condition precedent. Aetna Cas. & Sur. Co. v. Harris, 229 S.E.2d 84, 88 (Va. 1977).

III. ANALYSIS
In seeking coverage of its claim, defendant raises several arguments, none of which is successful. First, defendant argues that it satisfied the MVR approval requirement, but that even if it did not satisfy the MVR approval requirement, the requirement was not a condition precedent to coverage. Second, defendant argues that Singh satisfied the two-year commercial driving experience requirement, but that even if Singh did not satisfy the driving experience requirement, plaintiffs waived the requirement. Each of defendant’s arguments will be addressed in turn.

With regard to the MVR approval requirement, defendant first asserts that Deol satisfied it when he verbally asked an employee of National Insurance to add Singh to the policy on March 16, 2018. Defendant maintains that although this request occurred one day after the accident, it occurred four days after Singh was hired, and thus within the seven-day window permitted by the policy. As previously discussed, the only evidence of this request was Deol’s testimony, which the Court found not to be credible. Moreover, the uncontested evidence shows that National Insurance did not request that Singh be added to the policy until March 23, 2018, eleven days after Singh was hired, and well outside the seven-day window permitted by the policy, as evidenced by the email National Insurance sent to plaintiffs on that date. See DTX 8, at 1. Even more problematic for defendant is that the policy explicitly required that Continental Insurance Agency approve Singh’s MVR within seven days of his employment. PTX 4, at 14. There is no evidence that anyone ever requested that Continental Insurance Agency approve Singh’s MVR. In fact, the evidence, consisting of the emails from Continental Insurance Agency to Najafi, affirmatively shows that Singh was neither reported to nor approved by Continental Insurance Agency. DTX 22, at 1; DTX 32, at 1. Accordingly, there is no evidence in this record showing that defendant satisfied the policy’s MVR approval requirement with regard to Singh.

*8 Defendant next asserts that, in any event, the MVR approval requirement is not a condition precedent to coverage; rather it is an independent requirement the violation of which the policy does not specifically address. This assertion is belied by the text of the policy. Although not contained within the section labeled “Exclusions,” the MVR approval requirement was the first sentence of the Driver Criteria provision, which later clearly stated that “[i]f any of the Driver Criteria … is not fully complied with, then the driver is not acceptable or approved and will result in any claim or loss involving such unacceptable or unapproved driver as being not covered for any and all coverage’s [sic] that might otherwise have been applicable.” PTX 4, at 14. Similarly, the Declarations Page further provided that “[a]ll qualified drivers must be reported immediately upon hiring,” and that “[u]nreported drivers could cause cancellation of policies or result in an unpaid claim.” DTX 1, at 5. These provisions are entirely consistent with one another, and read together, they make clear that “the intention of the parties gleaned from the words they have used in the document” was that unreported or unapproved drivers would not be covered under the policy, and that to be covered under the policy a driver’s MVR had to be approved by Continental Insurance Agency within seven days of the driver being hired. Erie. Ins., 822 S.E.2d at 355.

Defendant maintains that the policy’s failure to tie a driver’s unreported or unapproved status more clearly to the denial of coverage renders it ambiguous, and that the Court must construe that ambiguity in its favor. As discussed above, “conflicting interpretations reveal an ambiguity only where they are reasonable,” meaning that each is “equally possible given the text and context of the disputed provision.” Erie. Ins., 822 S.E.2d at 355. On this record, the Court does not find that plaintiffs’ and defendant’s interpretations of the policy are “equally possible.” Accordingly, the MVR approval requirement is a clear condition precedent to coverage, and plaintiffs have met their burden to demonstrate that defendant did not obtain such approval for Singh. As a result, the policy does not cover defendant’s claim.12

With regard to the driving experience requirement, defendant first asserts that Singh satisfied it because he had several years of commercial truck driving experience in India. The only evidence of any such experience was Deol’s uncorroborated testimony, which the Court did not find credible. Moreover, Singh’s application for employment, which showed no commercial driving experience in the previous ten years, strongly suggests that he did not have the required two years of commercial truck driving experience. PTX 15, at 1–2. Deol provided no details whatsoever about Singh’s employment history.13 Singh’s Commercial Driver’s License was issued on February 9, 2018, just six weeks before he was hired by defendant, and there is no persuasive evidence that he had any commercial truck driving experience before that date. Accordingly, defendant also did not satisfy the driving experience requirement, an undisputed condition precedent to coverage, when it hired Singh.14

*9 Defendant next asserts—without any citation to case law—that in any event, plaintiffs waived the driving experience requirement by failing to present it as an alternative basis for denial of coverage until this declaratory action, as well as by approving other drivers—Kumar and Sukhwinder—who did not satisfy the requirement. Neither argument has merit because neither evinces “the intentional relinquishment of a known right, with both knowledge of its existence and an intention to relinquish it.” Creteau, 119 S.E.2d at 339.

Contrary to defendant’s first waiver argument, and as previously discussed, Deol testified that an employee of National Insurance told him one month after the claim was denied that the driving experience requirement was an alternative basis for the denial of coverage, well before this declaratory action was filed in November 2018. Moreover, the Letter of Denial, sent from Najafi to defendant on April 18, 2018, explicitly referred to the Driver Criteria provision and stated that “[t]here may be other reasons [in addition to the MVR approval requirement] why coverage does not apply,” and that plaintiffs “do not waive any of their rights in not mentioning these here.” PTX 13, at 1–2. The letter also explicitly “reserve[d] their rights to any further issues that may arise now or in the future.” Id. “An insurer can waive its right to deny coverage by failing to reserve its rights, or it may reserve its right to deny coverage” as long as the reservation is “communicated to the insured, … fairly inform[s] him [or her] of the insurer’s position, and notice thereof [is] timely given.” KitBar Ents., LLC v. Liberty Ins. Underwriters, Inc., 291 F. Supp. 3d 758, 768 (E.D. Va. 2018). On this record, the Court finds that the Letter of Denial sufficiently communicated plaintiffs’ position regarding the bases for the denial of coverage to defendant and therefore plaintiffs did not waive the driving experience requirement.

Defendant’s second and more substantial waiver argument claims that plaintiffs added other drivers to the policy, specifically Kumar and Sukhwinder, who did not satisfy the two-year commercial driving experience requirement.15 “The insured bears the burden of proving the insurer’s waiver of a condition precedent.” Aetna, 229 S.E.2d at 88. The evidence defendant submitted undercuts its claim by showing that defendant, either by Deol or his broker National Insurance, represented to plaintiffs that these drivers had the required experience. As previously discussed, Deol signed defendant’s application for insurance, which stated that Kumar had three years of commercial truck driving experience. DTX 3, at 1. Similarly, the email sent from National Insurance to plaintiffs requesting the approval of Sukhwinder’s MVR stated that his Commercial Driver’s License had been issued in 2015, which would have given him more than two years of commercial truck driving experience. DTX 4, at 1. “[N]o one can acquiesce in a wrong [and thereby intentionally waive a right, such as the occurrence of a condition precedent] while ignorant that it has been committed,” and this evidence demonstrates that defendant has not shown that plaintiffs were aware of Kumar and Sukhwinder not satisfying the two-year commercial driving experience requirement. Hammond, 159 F. Supp. 2d at 257. Because there is no reliable evidence in this record that plaintiffs “intentional[y] relinquish[ed]… a known right, with both knowledge of its existence and an intention to relinquish it.” Creteau, 119 S.E.2d at 339, defendant has failed to meet its burden of showing that plaintiffs waived the driving experience requirement.

IV. CONCLUSION
*10 Plaintiffs have clearly met their burden to show that defendant failed to satisfy two independent requirements for coverage of the driver involved in the March 15, 2018 accident. Specifically, defendant failed to obtain approval of Singh’s MVR from Continental Insurance Agency within seven days of hiring Singh, and Singh did not have the required two years of commercial truck driving experience. The insurance policy criteria for driver coverage were clear and unambiguous and defendant did not produce any credible evidence either that it satisfied these criteria or that plaintiffs waived these criteria.

Accordingly, the Court will enter a judgment in plaintiffs’ favor by an Order to be issued with this Memorandum Opinion.

All Citations
Slip Copy, 2019 WL 5459057

Footnotes

1
The parties do not dispute, and the Court finds, that it has subject matter jurisdiction over this civil action pursuant to 28 U.S.C. § 1332—because plaintiffs’ principal place of business is in London, England, defendant’s principal place of business is in Haymarket, Virginia, and the amount in controversy is approximately $150,000—and pursuant to 28 U.S.C. § 2201—because this is a declaratory judgment action. The Court also finds that it has both personal jurisdiction over defendant, and that venue is proper, because defendant’s principal place of business is within this district.

2
Citations to “PTX” and “DTX” refer to plaintiffs’ and defendant’s trial exhibits, respectively.

3
Plaintiffs issued both a master insurance policy to Continental Trucking and an individual insurance policy to Deol Transport. See PTX 11, at 1; PTX 4, at 1. The certificate number of the former was Z178324-004APD, and the certificate number of the latter was Z178324-005APD. Id. There are no relevant differences between the two policies.

4
Deol received the policy and other documents from National Insurance, and largely communicated with plaintiffs and Continental Trucking through National Insurance. Deol utilized National Insurance as his broker because it employed individuals who were competent in both Punjabi, Deol’s native language, and English.

5
These two vehicles were listed on defendant’s initial application for coverage. DTX 3, at 1.

6
“A declarations page is usually the first page of an insurance policy, exclusive of the cover, and it contains limited information about the policy.” Klopman v. Zurich American Ins. Co., 233 F. App’x 256, 257 (4th Cir. 2007).

7
On its first page, the Declarations Page stated, in bold, “THE ORIGINAL COMPLETE POLICY INCLUDING TERMS, CONDITIONS, AND EXCLUSIONS, IS ISSUED TO YOUR ASSOCIATION WHERE IT IS AVAILABLE FOR INSPECTION. IN THE EVENT OF ANY CONFLICT BETWEEN THIS SUMMARY AND THE ACTUAL POLICY, THE TERMS OF THE ACTUAL POLICY WILL GOVERN.” DTX 1, at 1.

8
Defendant’s exhibit did not include the attached MVR. Therefore, the Court cannot determine from the exhibit exactly what additional information was presented to plaintiffs about Sukhwinder’s qualifications. Defendant did submit a photocopy of a Commercial Driver’s License issued to Sukhwinder; however, this photocopy differs from the information in the policy change request. DTX 14, at 1. The license submitted by defendant indicated that it was issued in California, not New Jersey, and that it was issued on December 14, 2016, not in 2015. Id.

9
Contrary to Deol’s representation that Singh’s road test would be with an “experienced co-driver,” the driver with Singh was Sukhwinder, who National Insurance had just requested be added to the policy on March 12, 2018, and who reported that he was sleeping during the accident. PTX 5, at 9; DTX 4, at 1.

10
Once again, defendant’s trial exhibit did not include the attached MVR, which deprives the Court of an opportunity to see exactly what additional information was presented to plaintiffs about Singh’s qualifications.

11
Additionally, in the event of an ambiguity on the face of the contract, “[i]f properly admitted extrinsic evidence renders clear and unambiguous what had been ambiguous, it is the duty of the court to construe the contract in light of such evidence.” Atkinson Dredging Co. v. St. Paul Fire & Marine Ins. Co., 836 F. Supp. 341, 344 n.8 (E.D. Va. 1993); see also Commercial Union Ins. Co. v. Charleston Marine Leasing Co., 843 F. Supp. 124, 128 (E.D. Va. 1994).

12
Even if there were an ambiguity on the face of the policy, extrinsic evidence would in turn “render[ ] clear and unambiguous what had been ambiguous.” Atkinson Dredging, 836 F. Supp. at 344 n.8 (E.D. Va. 1993). Deol signed two documents from his broker, National Insurance, each of which unequivocally tied a driver’s unreported or unapproved status to denial of coverage. For instance, the “Agreement to Report All Drivers and Vehicles to Policies” stated that “[u]nreported drivers or previously excluded drivers shall be subject to exclusion from coverage. Therefore, no coverage will apply.” PTX 2, at 2.

13
Deol attempted to bolster his testimony by testifying that he investigated Singh’s background to confirm his commercial truck driving experience in India. He provided no details about that investigation such as the names of the employers, the dates of employment, or the type of commercial vehicle driven. Given that Singh’s application for employment was dated March 11, 2018 and he was offered a job the next day, Deol could not have conducted much investigation in that 24-hour period. PTX 15, at 1; PTX 5, at 1.

14
Defendant briefly argues that the term “driving experience” is ambiguous, and should be construed in its favor to include any experience Singh gained while training to get his Commercial Driver’s License. As previously discussed, “conflicting interpretations reveal an ambiguity only where they are reasonable,” meaning that that each is “equally possible given the text and context of the disputed provision.” Erie. Ins., 822 S.E.2d at 355. On this record, the Court does not find that defendant’s broad interpretation of “driving experience” is “equally possible” as compared to plaintiffs’ license-based interpretation of “driving experience.” Moreover, defendant failed to produce any evidence concerning Singh’s training. Therefore, there is no evidence or even suggestion that his training took two years.

15
Defendant’s failure to include in its exhibits the MVRs for these drivers deprived the Court of an opportunity to determine whether plaintiffs were on notice of any facts that would show that these drivers lacked the required commercial driving experience. Because there is no evidence before the Court that the two commercial driver’s licenses, which support defendant’s argument, were shown to plaintiffs, defendant’s waiver argument fails.

Transport America v. Illinois Workers Compensation Commission

2019 IL App (4th) 180709WC-U
UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING.
Appellate Court of Illinois, Fourth District,
WORKERS’ COMPENSATION COMMISSION DIVISION.
TRANSPORT AMERICA, Appellant,
v.
THE ILLINOIS WORKERS’ COMPENSATION COMMISSION et al. (Dale Dougherty, Appellee.)
Appeal No. 4-18-0709WC
|
November 4, 2019
Appeal from the Circuit Court of the Fifth Judicial Circuit Vermilion County, Illinois
Circuit No. 17-MR-448
Honorable Derek J. Girton, Judge, Presiding.

ORDER
PRESIDING JUSTICE HOLDRIDGE delivered the judgment of the court.
*1 ¶ 1 Held: The Commission’s finding that the claimant failed to prove that he sustained an accidental injury in the course of his employment with the employer was not against the manifest weight of the evidence.

¶ 2 The claimant, Dale Dougherty, filed an application for adjustment of claim under the Workers’ Compensation Act (Act) (820 ILCS 305/1 (West 2010)), seeking benefits for an accidental injury he allegedly sustained while working for the employer, Transport America. After conducting a hearing, an arbitrator found that the claimant failed to prove that he sustained an accidental injury arising out of and in the course of his employment and denied benefits.

¶ 3 The claimant appealed the arbitrator’s decision to the Illinois Workers’ Compensation Commission (Commission), which affirmed and adopted the arbitrator’s decision. The claimant sought judicial review of the Commission’s decision before the circuit court of Vermilion County, which reversed and remanded the Commission’s decision, finding that the claimant’s injury arose out of and in the course of his employment. On remand, the Commission awarded the claimant benefits. The employer sought review before the circuit court of Vermilion County. The court confirmed the Commission’s decision on remand. This appeal followed.

¶ 4 FACTS
¶ 5 The following factual recitation is taken from the evidence presented at the arbitration hearing conducted on September 23, 2014, and the Commission’s Decision and Opinion on Remand dated September 18, 2017.

¶ 6 The claimant was employed by the employer as an over-the-road truck driver for approximately five and a half years. He drove a truck owned by the employer. The claimant testified that he would begin his trip on Sunday or Monday and would return home on Friday or Saturday. His route began and ended in Danville, where he resided, and he drove throughout all the states east of the Mississippi. In addition to driving the truck, the claimant was responsible for loading and unloading the truck when he reached his destination. When the claimant returned after his week of work, he parked the truck on a dead-end street about three miles from his home. After he parked the truck, his wife would pick him up. The claimant stated that the employer was aware of where he parked his truck when he was off duty. While on the road, he would take clothes, food, a blanket, and sheets with him. The claimant stated that his schedule was determined by the load he was carrying and dispatch. He would typically complete five loads per week and was compensated by the mile.

¶ 7 The claimant testified, that he was responsible for completing paperwork, such as logbooks and trip sheets. He stated that the trip sheets were to be completed at the end of every trip when the load was delivered. Despite the employer’s policy, the claimant stated he usually completed all his trip sheets at the end of the week. He further testified that the employer required the trip sheets to be turned in by midnight on Saturday night or else he would not get paid. He turned in his trip sheets at the closest Pilot Truck Stop because it had a fax machine.

*2 ¶ 8 The claimant testified, that on Friday, April 16, 2010, he returned home to Danville between 5:00 p.m. and 6:00 p.m. and parked the truck at his usual spot on the dead-end street. When he arrived, his wife was waiting for him. The claimant testified that he exited the truck, completed his vehicle inspection, and got in the car wife his wife. His work schedule indicated his next workday would be the following Monday. Upon leaving with his wife, they went to dinner and then went shopping to look around and stretch his legs. After the shopping trip, but before returning home, the claimant returned to his truck at about 9:00 p.m. to retrieve his personal belongings and fill out his trip sheets. He stated that he completed trip sheets for three trips that were completed earlier in the week, not for the load he was currently hauling when he arrived home, as he was in the middle of a trip. It took him approximately 30 to 40 minutes to complete his paperwork and his wife waited in the car. We note that the claimant testified that he did not tell his employer or the employer’s insurance carrier that he returned to his truck to complete the trip sheets because he did not think it was important. Instead, he only reported that he returned to the truck to retrieve his personal belongings.

¶ 9 The claimant then testified, that once he finished his trip sheets, he gathered his clothes and a souvenir coffee cup. As he exited the truck, his foot slipped off the step and he lost his balance and fell. The claimant testified that he attempted to hold on to the truck with his right hand to prevent himself from falling but was unsuccessful and landed on his left hip and left elbow. Upon falling, he immediately felt pain in his ribs and left shoulder and was unable to move his left arm. He heard something rip and snap in his left shoulder. The claimant stated he was unable to stand up at first, but after 20 minutes, he was able to stand. His wife took him to the emergency room at Provena Covenant Medical Center.

¶ 10 The claimant testified that he was diagnosed with contusions to the left shoulder and elbow. X-rays taken of his shoulder showed no fractures or other abnormalities. About three months after the accident, the claimant presented to Dr. James Hensold at Christie Clinic reporting pain in his left shoulder and problems raising his left arm. He reported a history of arthritis and noted he was taking Mobic, Ibuprofen, and Tylenol regularly. The claimant was diagnosed with arthralgia. On July 30, 2010, an MRI revealed a full thickness rotator cuff tear, partial tears of the infraspinatus and subscapularis tendons, and a partial subluxation of the biceps tendon. Based on these results, the claimant was referred for an orthopedic surgical evaluation with Dr. Edward Kolb at Orthopedics of Illinois. On September 20, 2010, Dr. Kolb recommended left shoulder arthroscopy with rotator cuff repair. On September 30, 2010, the claimant had such surgery. The postoperative findings included a left shoulder rotator cuff repair, left shoulder SLAP tear, impingement syndrome, and anterior labral tearing. Dr. Kolb referred the claimant to physical therapy. After completing physical therapy, Dr. Kolb released the claimant for work effective February 14, 2011. However, due to the claimant’s reports of discomfort with overhead activities, he was referred for a functional capacity evaluation.

¶ 11 On June 30, 2011, a functional capacity evaluation was completed. Dr. Kolb released the claimant for maximum medical improvement on July 22, 2011, with lifting restrictions. However, Dr. Kolb noted that the claimant would likely be able to drive a truck. Dr. Kolb testified by evidence deposition and opined that the claimant’s accident on April 16, 2010, was the cause of his left shoulder condition that he began treating on September 20, 2010. The claimant testified that he had not worked for the employer since September 30, 2010, the date of his surgery. The employer terminated the claimant upon expiration of his leave under the Family and Medical Leave Act of 1993 (see 29 U.S.C. § 2601 et seq. (2010)). At the time of the claimant’s testimony, he was employed by a different trucking company.

¶ 12 The claimant testified that he did not immediately report this accident to his employer because he was concerned about reporting a work injury because he already had a couple of prior workers’ compensation cases. Thus, he advised the emergency room to bill his group health insurance carrier. The claimant eventually notified the employer of this accident but could not recall the exact date. He testified that he notified the employer after he received a letter from his health insurance carrier on June 7, 2010, denying payment of his medical bills. The claimant filed his application for adjustment of claim on September 20, 2010.

*3 ¶ 13 Catherine Axtell, the Safety and Health Administrator for the employer, testified that she handled work injuries for the employer. She testified that the employer had a policy that all work injuries were to be reported to a supervisor immediately and that this policy was communicated to all employees during orientation and in the driver’s manual. Axtell also testified that she is generally the second point of contact when an accident occurs and that the employee’s direct supervisor is typically the first point of contact. She is responsible for conveying a reported work injury to the employer’s workers’ compensation insurance carrier, Zurich North America Claims.

¶ 14 In June 2010, Axtell was advised via a chain of emails that the claimant called asking for assistance in responding to a letter from his health insurance carrier denying his medical bills relating to an accident he sustained on April 16, 2010. Axtell testified this was the first notice the employer received in relation to the claimant’s accident on April 16, 2010. In response to the claimant’s email, Axtell called the claimant. Axtell testified that the claimant reported, that on April 16, 2010, he completed some errands with his wife while off duty but returned to his truck to retrieve his laundry and coffee cup when he fell and injured his left shoulder. Based on this report, she completed a First Report of Injury on July 15, 2015, to submit to Zurich North America Claims. Axtell testified, that at no time did the claimant report to her that he returned to his truck to complete his trip sheets. She also confirmed that the employer’s policy required all trip sheets to be completed by drivers at the end of each load.

¶ 15 Paula Smith, a Claims Specialist for Zurich North America Claims, testified that she received the July 15, 2010, report completed by Axtell. She testified that she was assigned to a dedicated account for the claimant. Upon receiving the report, Smith contacted the claimant for a recorded statement. The recorded statement was taken on July 19, 2010, and was subsequently transcribed. Smith testified that she was familiar with the claimant as she handled his prior claims. She also stated that the claimant did not report that he returned to his truck to complete his trip sheets, but rather only to retrieve his coffee mug and laundry.

¶ 16 On November 3, 2014, the arbitrator concluded that the claimant did not sustain an accidental injury arising out of and in the course of his employment with the employer on April 16, 2010. The arbitrator made the following findings: (1) that the claimant’s act of returning to his truck to retrieve his personal belongings did not arise out of his employment with the employer, (2) he already completed his route and was no longer on duty when he returned to his truck, (3) his testimony that he also returned to the truck to complete his trip sheets was not credible, (4) he did not report to either Axtell or Smith that he returned to his truck to complete his trip sheets, and (5) his wife did not testify at trial to corroborate his testimony that she waited for him for about 30 to 40 minutes while he completed his trip sheets. The claimant filed a Petition for Review before the Commission. On July 16, 2015, the Commission affirmed and adopted the arbitrator’s decision. The claimant then sought review before the circuit court of Vermilion County.

¶ 17 On June 6, 2016, the circuit court, stating it conducted de novo review, found that the claimant’s injury arose out of and in the course of his employment with the employer because it was reasonable and foreseeable that he would return to the company-owned truck to gather his personal belongings for the weekend. The court reversed the Commission’s decision on the issue of accident and remanded the case back to the Commission for further proceedings consistent with that ruling. On October 11, 2017, the Commission found that (1) the claimant sustained an accidental injury arising out of and in the course of his employment with the employer; (2) his condition of ill-being was causally related to that accident; (3) he was temporarily totally disabled from September 30, 2010, through February 14, 2011, for a period of 19-5/7 weeks; (4) he was entitled to reasonable and necessary medical expenses relating to the accident and relative to the left shoulder; and (5) he suffered a permanent loss of use of 20% person-as-a-whole. A dissenting Commissioner stated that the circuit court’s reversal was erroneous as the manifest-weight standard applied and the issue involved a credibility issue. The employer sought review of the Commission’s decision before the circuit court of Vermilion County. On October 26, 2018, the circuit court confirmed the Commission’s decision.

*4 ¶ 18 The employer appeals.

¶ 19 ANALYSIS
¶ 20 On appeal, the employer argues that the Commission’s first decision, finding that the claimant’s accident did not arise out of and in the course of his employment, was correct and that the circuit court erred when it reversed that decision and remanded for further proceedings. Consequently, the employer also argues that the circuit court’s order confirming the Commission’s decision on remand was erroneous.

¶ 21 Generally, an employee injured while going to or returning from his place of employment has not sustained an injury that arose out of or in the course of the employment. Commonwealth Edison Co. v. Industrial Comm’n, 86 Ill. 2d 534, 537 (1981). In explaining the purpose of this rule, our supreme court stated that “the employee’s trip to and from work is the product of his own decision as to where he wants to live, a matter in which his employer ordinarily has no interest.” Sjostrom v. Sproule, 33 Ill. 2d 40, 43 (1965). An exception to this rule applies when an employee qualifies as a “traveling employee.”

¶ 22 A traveling employee, just like a non-traveling employee, is required to prove that his accidental injury arose out of and in the course of his employment with the employer. However, the rules for traveling employees differ from non-traveling employees to accommodate the traveling nature of their employment. Accordingly, a traveling employee is considered to be “in the course of” his employment from the time he leaves his home until he returns. Pryor v. Illinois Workers’ Compensation Comm’n, 2015 IL App (2d) 130874WC, ¶ 20. An injury sustained by a traveling employee “arises out of” his employment if he is injured while engaging in conduct that was reasonable and foreseeable. Id.

¶ 23 I. “Traveling Employee”
¶ 24 First, we address whether the claimant was a “traveling employee.” “A ‘traveling employee’ is one whose work duties require him to travel away from his employer’s premises.” Id. The work-related travel “must be more than a regular commute from the employee’s home to the employer’s premises.” (Internal quotation marks omitted.) United Airlines, Inc. v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 151693WC, ¶ 21. Here, the claimant testified that he was employed as an over-the-road truck driver for the employer for approximately five and a half year and stated that he would begin his trip on Sunday or Monday and would return home on Friday or Saturday. His route began and ended in Danville and he drove throughout all the states east of the Mississippi. Therefore, it is evident that the claimant was a traveling employee as his work required him to travel away from his employer’s premises. Thus, we agree with the decisions below that the claimant qualified as a traveling employee.

¶ 25 II. “In the Course Of”
¶ 26 Next, we address whether the claimant was “in the course of” his employment when the accidental injury occurred because we find that it is dispositive. We reiterate that a traveling employee is deemed to be in the course of his employment from the time that he leaves home until he returns. Pryor, 2015 IL App (2d) 130874WC, ¶ 20. The employer argues the claimant “returned” when he parked his truck, completed his vehicle inspection, and then proceeded to go out to dinner with his wife and shop for three or four hours. Thus, the employer argues that the claimant was not in the course of his employment when the accidental injury occurred. The claimant argues he was in the process of his return when he was injured as he exited his truck, and therefore, his accident occurred in the course of his employment.

*5 ¶ 27 Conflicting evidence was presented as to the reason the claimant returned to his truck three to four hours after he parked, completed his vehicle inspection, then went to dinner and shopped with his wife. Thus, it is clear that a dispute of facts and inferences was presented to the Commission, rendering the circuit court’s de novo review in this case erroneous. The Commission’s decision on questions of fact is reviewed under the manifest-weight standard. Venture-Newberg v. Illinois’ Workers Compensation Comm’n, 2013 IL 115728, ¶ 14. A decision is against the manifest weight of the evidence only if the record discloses that the opposite conclusion clearly is the proper result. Id.

¶ 28 Here, the claimant’s own testimony established that he was not in the course of his employment when the accident occurred. At the time of the accident, he returned to his truck to obtain his personal belongings. He was not scheduled for his next shift until Monday. Although there was disputing evidence as to why the claimant returned to his truck after three or four hours, the Commission found the claimant’s claim that he returned to his truck to complete his trip sheets to not be credible. It was the Commission’s function to judge the credibility of the witnesses and resolve the conflicting evidence. Potenzo v. Illinois Workers’ Compensation Comm’n, 378 Ill. App. 3d 113, 118 (2007). Regardless, even if the claimant returned to the truck after three or four hours to fill out the trip sheets, the employer’s policy required him to fill out those trip sheets after he delivered each load—not when he arrived at his parking spot for the weekend. Here, the evidence showed that he was carrying a load at the time of the accident and the trip sheets for the prior trips that week should have already been completed per the employer’s policy, the claimant’s own testimony, and Axtell’s testimony. Thus, at the time the claimant exited his truck and completed his vehicle inspection, he returned and was no longer in the course of his employment.

¶ 29 We also note that the parties raised certain arguments pertaining to whether the claimant’s three- or four-hour outing with his wife constituted a personal deviation. See Cox v. Illinois Workers’ Compensation Comm’n, 406 Ill. App. 3d 541, 544 (2010). However, because we found that the claimant “returned” when he parked and completed his truck inspection and did not resume work after that time, we need not answer that question. Additionally, since we have decided that the claimant was not engaged in the course of his employment with the employer when the accidental injury occurred, we also need not address whether his act of returning to his truck to retrieve his personal belongings arose out of his employment.

¶ 30 CONCLUSION
¶ 31 We reverse the judgment of the circuit court of Vermilion County, which confirmed the Commission’s decision on remand. We then vacate the Commission’s decision on remand and reverse the circuit court’s order remanding. Finally, we reinstate the Commission’s original decision dated July 16, 2015.

Justices Hoffman, Hudson, Barberis, and Cavanagh concurred in the judgment.
All Citations
Not Reported in N.E. Rptr., 2019 IL App (4th) 180709WC-U, 2019 WL 5867506

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