December 2024

ACE American Insurance Company v. Rhenus Logistics LLC

United States District Court, S.D. Texas, Houston Division.

ACE AMERICAN INSURANCE COMPANY, as subrogee of Logicalis Group Storage, Plaintiff,

RHENUS LOGISTICS LLC f/k/a Rhenus Freight Logistics (MIA) LLC, and Evolution Logistics Corporation, Defendants.

CIVIL ACTION NO. 4:22-cv-2687

Signed October 30, 2024

Attorneys and Law Firms

Jason Steven Schulze, Cozen O’Connor, Houston, TX, for Plaintiff.

Kenneth Hugh Holt, Ferguson Braswell Fraser Kubasta PC, Houston, TX, for Defendant Rhenus Logistics LLC.

Alvaro L. Mejer, Mejer Law, P.A., Coral Gables, FL, for Defendant Evolution Logistics Corporation.

ORDER

Andrew S. Hanen, United States District Judge

*1 Pending before this Court are ACE American Insurance Company’s (“Plaintiff”) Motion for Summary Judgment, (Doc. No. 30), and Brief in Support, (Doc. No. 31). Rhenus Logistics LLC (“Defendant”) responded in opposition. (Doc. No. 32). Plaintiff did not file a reply, and the time to do so has passed, making the motion ripe for ruling. Having considered the motion and the relevant pleadings, the Court DENIES the motion. (Doc. No. 30).

I. Background

This case arises from a fire on Interstate Highway 10. Defendant was engaged by Logicalis Group Storage to arrange the transportation of telecommunications equipment from Houston, Texas, to Miami, Florida. (Doc. No. 32 at 2). The cargo, however, did not make it far, and “the entire load of telecommunications equipment was deemed a complete loss” when the trailer transporting it caught fire in east Harris County, Texas. (Doc. No. 18 at 3). For that loss, Logicalis tendered a claim to Plaintiff, who paid out $641,864.47. (Id.). Now, Plaintiff, as subrogee of Logicalis, seeks to hold Defendant responsible for that amount under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, et seq. (Id. at 4).

II. Legal Standard

Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “The movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact.” Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 253, 261 (5th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322–25 (1986)).

Once a movant submits a properly supported motion, the burden shifts to the non-movant to show that the court should not grant the motion. Celotex, 477 U.S. at 321–25. The non-movant then must provide specific facts showing that there is a genuine dispute. Id. at 324; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A dispute about a material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The court must draw all reasonable inferences in the light most favorable to the nonmoving party in deciding a summary judgment motion. Id. at 255. The key question on summary judgment is whether there is evidence raising an issue of material fact upon which a hypothetical, reasonable factfinder could find in favor of the nonmoving party. Id. at 248. It is the responsibility of the parties to specifically point the Court to the pertinent evidence, and its location, in the record that the party thinks are relevant. Malacara v. Garber, 353 F.3d 393, 405 (5th Cir. 2003). It is not the duty of the Court to search the record for evidence that might establish an issue of material fact. Id.

III. Analysis

A. Timeliness of the Motion

To start, Defendant argues that Plaintiff’s motion is untimely. The motion was filed on September 17, 2024. Three court-ordered deadlines are relevant: (1) Judge Sheldon’s scheduling order, setting the dispositive motions deadline as July 3, 2023, (Doc. No. 17); (2) this Court’s first amended scheduling order, pushing the pretrial conference to June 10, 2024, (Doc. No. 27); and (3) the Court’s second amended scheduling order, resetting the pretrial conference on November 25, 2024, (Doc. No. 29).

*2 Based on these deadlines, Defendant is correct that the motion was untimely. This Court’s Rules of Civil Procedure states that “[u]nless otherwise indicated in the Scheduling Order entered at the Initial Pretrial Conference, dispositive motions must be filed at least 120 days … before the date set for final pretrial conference.” Hanen, J., Civ. P. 7(B). The Court’s amended scheduling orders did not provide any extensions on the dispositive motion deadline set in the initial order by Judge Sheldon. Even if those orders did tacitly modify the initial deadline—which the parties should not infer—120 days before the new final pretrial conference date was July 28, 2024. Plaintiff missed both the initial, actual deadline and any other possible deadline. Thus, Plaintiff’s motion is late.

Nevertheless, as the case is set to face trial soon, the Court finds it proper to rule on this dispositive motion as it may focus the parties on certain issues of concern. Nevertheless, the parties are warned that in the future they need to heed the Court’s orders (scheduling or otherwise), the Local Rules, and the Rules of Civil Procedure.

B. Merits of the Motion—the Carmack Amendment

The Carmack Amendment to the Interstate Commerce Act provides, in part, “[a] carrier … [is] liable … for the actual loss or injury to the property caused by (A) the receiving carrier, (B) delivering carrier, or (C) another carrier over whose line or route the property is transported. § 14706(a)(1). It also provides various definitions. A “carrier” means a “motor carrier, a water carrier, and a freight forwarder.” Id. § 13102(4). A “freight forwarder” means:

a person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business—

(A) assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;

(B) assumes responsibility for the transportation from the place of receipt to the place of destination; and

Id. § 13102(8). Finally, as relevant here, a “broker” means:

a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.

Id. § 13102(2) (emphasis added).

Plaintiff’s motion contends that Defendant is liable under the Carmack Amendment. To fall under that statute, Defendant must be a carrier, which includes a freight forwarder. If, however, Defendant is a broker, it is not liable under the Carmack Amendment. Thus, the Court must resolve Defendant’s status in these circumstances. The parties do not dispute that Defendant “made arrangements on behalf of the customers” to transport various pieces of cargo. (Doc. No. 32 at 2). Since the definition of “broker” is one of exclusion—partially defining it as what it is not—to survive summary judgment, Defendant must raise a genuine issue of material fact that it was not a freight forwarder. Notably, the final prong of the definition of “freight forwarder”—whether Defendant used a carrier for any part of the transportation—is not in dispute. See (Id. at 9). The remaining elements are analyzed in turn.

i. Defendant held itself out to the general public to provide transportation.

The first statutory prong of a “freight forwarder” asks whether Defendant held “itself out to the general public … to provide transportation of property for compensation.” Defendant clearly did. Indeed, the record is replete with instances of Defendant holding itself out to the public as a carrier. Its website states that “Rhenus develops transport solutions on all routes,” offers “efficient, reliable, and safe door-to-door transportation of your goods,” and is a “partner for international freight forwarding and transportation.” (Doc. No. 31-2 at 1-2). Defendant’s own witness acknowledged that the “nature of the business of Rhenus” is one of “service agent, freight forwarder.” (Doc. No. 31-1 at 7:7–8). Defendant admits as much but argues only that “with regard to the Cargo” at issue here, it was acting as a broker. (Doc. No. 32 at 6). The statute, however, asks how Defendant held itself out to the general public, not in a specific transaction. See § 13102(8). Thus, Defendant failed to raise fact issues as to this prong.

ii. Fact issue exists as to whether Defendant assembles or consolidates, or provides for assembling and consolidating of, shipments and provides for break-bulk and distribution of the shipment.

*3 A genuine issue of material fact exists as to the second prong. It asks whether Defendant assembles or consolidates, or provides for such of, shipments and provides for break-bulk and distribution of the shipment. § 13102(8)(A). Consolidation here means “consolidat[ing] less than carload freight into carloads for shipment by rail, truck, or water.” Chicago, Milwaukee, St. P & P.R. Co. v. Acme Fast Freight, 336 U.S. 465, 467 (1949). “Break-bulk and distribution” describes a situation when “the carload [of cargo] is broken up; some shipments may be distributed locally, some sent by trucks to off-line destinations, and some consolidated into carloads for reshipment to further break-bulk points.” Id.

Here, Plaintiff argues that Defendant agreed to break-bulk and distribute shipments. (Doc. No. 31 at 10). Plaintiff points to the deposition of Defendant’s witness, who testified that “Freight Logistics[ ]¹ will repackage or prepare for international shipment as necessary.” (Doc. No. 31-1 at 38:18–21) (interpreting a Logistics Services Agreement (Doc. No. 31-6)). That statement, however, was interpreting just one Logistics Services Agreement, see (Id. at 38:3–40:10), and, according to Defendant, there were “at least seven (7) and not just simply (1) [sic] logistics service[s] agreement that existed between Logicalis-related entities and Rhenus,” (Doc. No. 32 at 6); see also (Doc. No. 32-2) (the Logistics Services Agreements). Per Defendant, these agreements served to “compartmentalize the liability treatment of the handling of the Cargo at various [handling] stages.” (Id. at 8). Thus, the argument goes, interpretation of one contract that deals with break-bulking and distribution may not resolve the fact issues regarding transportation under another contract.

The parties do not make clear to the Court which one, if any, of these contracts governed their relationship in the leg of the journey at issue. Nevertheless, these contracts raise fact issues as to Defendant’s status because they specifically disclaim Defendant’s status as a freight forwarder and, instead, repeatedly references unspecified freight forwarders as third parties to the contract. For example, § 1 reads, in part:

The parties hereto acknowledge and agree that Freight Logistics will act only as a logistics provider and not as a freight forwarder or carrier and, as such, is not responsible for the actual movement of Goods to or from its Warehouse … except as otherwise provided in this Agreement.

(Doc. No. 31-6 at § 1) (emphasis added); see also (id. § 4.3(d)) (“The parties hereby acknowledge and agree that Freight Logistics is a warehouseman.”); (id. § 3) (“Freight Logistics is hereby appointed as Logicalis’ agent in the U.S. with express authority to coordinate inbound and outbound shipments of Goods, and to take all actions associated therewith, including … communicating and contracting with freight forwarders.” (Emphasis added)); (id. § 4.3(b)) (same); (id. § 4.5(c)(i)) (same); (id. § 4.3(f)) (requiring Defendant to notify Logicalis and the freight forwarder of failed inspections of goods). The other contracts state the same. See (Doc. No. 32-2).

As Plaintiff’s own cited case states, “[l]ooking to how the parties were described in the documents that governed the relationship … has tremendous probative value” in determining Defendant’s role and identity in the transaction. Zumba Fitness, LLC v. ABF Logistics, Inc., No. 2:15-cv-2151, 2016 WL 4544355, at *7 (W.D. Ark. Aug. 30, 2016). Here, these contractual provisions raise genuine issues of material fact as to Defendant’s role and identity.

iii. A genuine issue of fact exists as to whether Defendant took responsibility for the transportation from the place of receipt to the destination.

*4 If a fact issue regarding the second prong were not enough, a genuine issue of fact also exists as to the third prong that requires Defendant to take responsibility for the transportation of the goods. They key is whether Defendant “accepted and legally bound [itself] to transport” the shipment. 49 C.F.R. § 371.2(a). The underlying rationale is that “when a party holds itself out as the party responsible for the care and delivery of another’s property, it cannot outsource its contractual responsibility by outsourcing the care and delivery it agreed to provide.” Essex Ins. Co. v. Barrett Moving & Storage, Inc., 885 F.3d 1292, 1301 (11th Cir. 2018). Thus, the “operative inquiry is this: pursuant to the parties’ agreement, with whom did the shipper entrust the cargo?” Id. at 1302.

Plaintiff’s points to four pieces of summary-judgment evidence: (1) the deposition transcript of Defendant’s witness; (2) a claim form submitted by Defendant; (3) the Bill of Lading; and (4) Defendant’s agreement with Evolution, the broker-carrier for this shipment. Viewed in the light most favorable to the nonmovant, these pieces of evidence raise fact issues as to Defendant’s status.

First, Defendant’s witness stated in his deposition that it was “our [Defendant’s] responsibility is to bring the cargo to Miami.” (Doc. No. 31-1 at 42:6–7). To Plaintiff, this is Defendant admitting its legal responsibility. While it may be probative or even highly so, the Court finds the testimony to be less than conclusive. The word “responsible” carries many meanings. See Responsible, Merriam-Webster.com Dictionary (la: “liable to be called on to answer”; lb: “being the cause or explanation”; lc: “liable to legal review or in case of fault to penalties”).² A broker, not a carrier, might still be “the cause or explanation” for the transportation of the cargo. See § 13102(2) Moreover, the witness was a domestic transportation manager, not a lawyer. (Doc. No. 31-1 at 6:25–7:1). The Court declines to impute on the testimony of a non-lawyer the legal weight Plaintiff seeks—that Defendant was legally responsible under the Carmack Amendment. The witness could have just as easily meant Defendant’s task was to bring the shipment to Miami by arranging transportation, which it would be if Defendant was indeed a broker.

Moreover, Defendant’s witness specifically denies that Defendant was a freight forwarder. Instead, he testified repeatedly that Defendant is “a service agent for Logicalis brand.” (Doc. No. 31-1 at 16:19); see also (id. at 26:13–14) (same), (id. at 31:9–10) (same), (id. at 41:25–42:7) (same), (id. at 46:5) (same). These repeated assertions in the record by Defendant’s witness raise genuine issues of fact as to whether Defendant was a freight broker or a service agent in this transaction.

Second, Plaintiff argues that the fact that Defendant submitted the claim form on behalf of Logicalis meant Defendant was responsible for the transport. True, the form states that Defendant is the claimant, which may lend support to Plaintiff’s claim that Defendant had responsibility. (Doc. No. 31-5). What it also states, however, is that Defendant is the “consignee (whom shipped to).” (Id.) Read in the light most favorable to Defendant, the claim form shows that Defendant submitted it because it was the recipient—not a carrier or a freight forwarder—that never received the promised shipment.

Third, Plaintiff also contends that, because the Bill of Lading bears a Freight Logistics logo, Defendant was responsible for the shipment, and thus, was a forwarder. The Bill of Lading does bear Defendant’s logo, but it is silent as to Defendant’s status, other than that the shipment must be delivered to its warehouse. (Doc. No. 31-4). That is entirely consistent with its function as a warehouseman, as agreed to by the parties in the Logistics Services Agreements. (Doc. No. 31-6); (Doc. No. 32-2). Therefore, the presence of the logo on the Bill of Lading here, without more, does not resolve genuine fact issues as to this element.

*5 Fourth and last, Plaintiff points to Defendant’s agreement with Evolution.³ In it, Evolution agrees to serve as broker and acknowledges that “double brokering” is prohibited. (Doc. No. 31-4). If Evolution is a broker, and the agreement with Defendant prohibits “double brokering,” then, Plaintiff contends, Defendant must not be a broker and, consequently, must be a carrier. (Doc. No. 31 at 14).

In response, Defendant argues that, whatever the agreement prohibited downstream from Defendant, it does not speak to Defendant’s ability to be a broker upstream from the agreement. (Doc. No. 32 at 9). Defendant is correct that the agreement is silent on its upstream effect, and thus, Plaintiff’s argument based upon this point does not carry the day.

IV. Conclusion

“The difference between a carrier and a broker is often blurry.” Morales v. OK Trans, Inc., No. 2:19-cv-94, 2023 WL 2495065, at *2 (S.D. Tex. Jan. 3, 2023). As such, “[t]he inquiry is fact-intensive and often not well-suited for summary judgment.” Id. Here, Plaintiff has failed to show as a matter of law that this case deviates from that norm. The Court DENIES Plaintiff’s Motion for Summary Judgment. (Doc. No. 30).

All Citations

Slip Copy, 2024 WL 4633474

Footnotes
¹	The deposition and other exhibits refer to “Freight Logistics, Inc.,” but Freight was acquired by Rhenus. (Doc. No. 31-1 at 8:10–12) (“Q: So you were with Freight Logistics and it then was acquired by Rhenus? A: Correct”). The parlies do not dispute that Rhenus stands in place of Freight Logistics.
²	Available at https://www.merriam-webster.com/dictionary/responsible, (last visited Oct. 21, 2024).
³	Evolution, once a party to this suit, was dismissed by Plaintiff in Plaintiff’s amended complaint. See (Doc. No. 18).

End of Document

Canal Insurance Company v. Kim Sammons, et al.

United States District Court, S.D. West Virginia.

CANAL INSURANCE COMPANY, Plaintiff,

KIM SAMMONS, et al., Defendants.

CIVIL ACTION NO. 2:23-cv-00737

Filed 11/19/2024

MEMORANDUM OPINION AND ORDER

IRENE C. BERGER UNITED STATES DISTRICT JUDGE SOUTHERN DISTRICT OF WEST VIRGINIA

*1 The Court has reviewed Canal Insurance Company’s Motion for Judgment on the Pleadings (Document 24), the Defendants’ Response in Opposition to Canal Insurance Company’s Motion for Judgment on the Pleadings and Cross-Motion for Judgment on the Pleadings (Document 27), and Canal Insurance Company’s Response in Opposition to Defendants’ Cross-Motion for Judgment on the Pleadings (Document 32). For the reasons stated herein, the Court finds that the Plaintiff’s motion should be granted.

FACTS AND PROCEDURAL HISTORY

James Armstrong is a Florida resident who owns Armstrong Trucking 1 (“Armstrong Trucking”), a Florida-based LLC. Mr. Armstrong has a Florida CDL license and owns a tractor trailer. The tractor trailer is registered to Armstrong Trucking in Florida but is contracted to EMA Express (“EMA”), also a Florida-based LLC. EMA engages in general freight transportation throughout the United States and is insured by Canal Insurance Company (“Canal”) under Policy No. 1-59442500-1. The policy is a claims-made Business Automobile and Commercial General Liability Policy and was in effect from April 21, 2021, to April 21, 2022. The Canal Policy covers “all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.’ ” (Document 1 at 6).

On October 7, 2021, Mr. Armstrong was driving his tractor trailer northbound on U.S. 119 in Williamson, West Virginia. Eric Sammons, a Williamson resident, was also traveling on that portion of the highway. Mr. Armstrong allegedly cut Mr. Sammons off, which enraged Mr. Sammons. Some time later, Mr. Sammons blocked Mr. Armstrong’s tractor trailer with his car and exited his vehicle. Mr. Sammons approached the tractor trailer and Mr. Armstrong rolled down the window of the tractor trailer. Canal contends that Mr. Sammons made threatening comments and opened Mr. Armstrong’s door. Mr. Armstrong fired a pistol at Mr. Sammons, hitting him in the chest. The gunshot wound resulted in Mr. Sammons’ death.

On March 27, 2023, Kim Sammons, Mr. Sammons’ widow, filed the underlying action (Case No. 2:23-cv-236) in this Court alleging various tort claims against Armstrong Trucking, EMA, and Mr. Armstrong. On November 13, 2023, Canal filed this case seeking declaratory judgment that the claims in the underlying action are not covered under the Canal Policy, and that Canal therefore has no duty to defend or indemnify the defendants. Canal’s motion for judgment on the pleadings and Mrs. Sammons’ cross motion for judgment on the pleadings are now pending before the Court.

APPLICABLE LAW

The Declaratory Judgment Act, 28 U.S.C. § 2201, provides that district courts “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.”¹ 28 U.S.C. § 2201. This authority is discretionary, but the Fourth Circuit Court of Appeals has explained that a declaratory judgment action “is appropriate when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and … when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Penn–America Ins. Co. v. Coffey, 368 F.3d 409, 412 (4th Cir. 2004) (internal quotation marks omitted). “It is well established that a declaration of parties’ rights under an insurance policy is an appropriate use of the declaratory judgment mechanism.” United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 494 (4th Cir. 1998).

STANDARDS OF REVIEW

A. Summary Judgment

*2 The instant motion for judgment on the pleadings is brought pursuant to Fed. R. Civ. P. 12(c), which states, in relevant part, that “after the pleadings are closed – but early enough not to delay trial – a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings must be analyzed under the same standard as a motion for summary judgment pursuant to Fed. R. Civ. P. 56. King v. Gemini Food Servs. Inc., 562 F.2d 297 (4th Cir. 1977). “[A] party is entitled to summary judgment in its favor if the pleadings … show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(a); McMellon v. U.S., 395 F.Supp.2d 411 (S. D. W. Va. 2005) (Goodwin, J.); See also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).

The moving party bears the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Celotex, 477 U.S. at 322–23. However, the non-moving party must offer some “concrete evidence from which a reasonable juror could return a verdict in his favor.” Anderson, 477 U.S. at 256. In considering a motion for summary judgment, the Court will not “weigh the evidence and determine the truth of the matter.” Anderson, 477 U.S. at 249. Instead, the Court will draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986).

B. Determination of Insurance Policy Coverage

The Supreme Court of Appeals of West Virginia has instructed that the “[d]etermination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.” Syl. Pt. 1, Tennant v. Smallwood, 568 S.E.2d 10 (W. Va. 2002) (citation and quotation omitted). “[W]here the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended.” Keffer v. Prudential Ins. Co., 172 S.E.2d 714, 715 (W. Va. 1970) (citations omitted).

On the other hand, if a policy’s provisions are ambiguous, they will be liberally construed in favor of the insured. Aetna Cas. & Sur. Co. v. Pitrolo, 342 S.E.2d 156, 160 (W. Va. 1986) (citations omitted) (“since insurance policies are prepared solely by insurers, any ambiguities in the language of insurance policies must be construed liberally in favor of the insured.”) However, “such construction should not be unreasonably applied to contravene the object and plain intent of the parties.” Syl. Pt. 6, Hamric v. Doe, 499 S.E.2d 619 (W. Va. 1997) (quoting Syl. Pt. 2, Marson Coal Co. v. Ins. Co. of State of Pennsylvania, 210 S.E.2d 747 (W. Va. 1974)). A policy provision is ambiguous if it is “reasonably susceptible of two different meanings or … of such doubtful meaning that reasonable minds might be uncertain or disagree as to its meaning.” Glen Falls Inc. Co. v. Smith, 617 S.E.2d 760, 768 (W. Va. 2005) (quoting Syl. Pt. 5, Hamric, 499 S.E.2d 619 (emphasis in original)).

If coverage is not intended to apply, the policy should clearly indicate that insurance is not available. “An insurer wishing to avoid liability on a policy purporting to give general or comprehensive coverage must make exclusionary clauses conspicuous, plain, and clear, placing them in such a fashion as to make obvious their relationship to other policy terms, and must bring such provisions to the attention of the insured.” Satterfield v. Erie Ins. Property and Cas., 618 S.E.2d 483, 487 (W. Va. 2005) (quoting Syl pt. 10, Nat’l Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W. Va. 734, 356 S.E.2d 488 (1987), overruled on other grounds by Parsons v. Halliburton Energy Services, Inc., 237 W. Va. 138, 785 S.E.2d 844 (2016)).

DISCUSSION

*3 Canal argues that under Florida law,² physical violence stemming from a road rage incident does not result from the ownership, maintenance, or use of a vehicle, as required by the language of the policy. This argument hinges on the Florida Supreme Court’s decision in Race v. Nationwide Mut. Fire Ins. Co., which established a three-prong test to determine if liability for an injury arises from the ownership, maintenance, or use of an automobile. 542 So.2d 347, 349 (Fla. 1989). First, “the accident must have arisen out of the inherent nature of the automobile, as such.” Id. Second, “the accident must have arisen within the natural territorial limits of an automobile, and the actual use, loading, or unloading must not have been terminated.” Id. Finally, “the automobile must not merely contribute to cause the condition which produces the injury, but must, itself, produce the injury.” Id. In Race, the court ruled that an assault between drivers after a car accident was not covered under an automobile liability policy that limited coverage to injuries arising out of ownership, maintenance, or use of a vehicle, because the assault was unrelated to the vehicle’s use. Id. at 351. Canal argues that Race applies here because Mr. Sammons’ death did not arise out of the nature of the vehicle.

In their response and cross motion, the Defendants cite Allstate Ins. Co. v. Gillespie, in which a Florida appeals court found that policy language identical to the Canal Policy should be construed liberally to afford broad coverage. 455 So.2d 617, 620 (Fla. 2d DCA 1984). In that case, the insured fired a gun at another driver after he cut that driver off in traffic. Id. at 619. The court found that the incident was “inexorably tied to [the insured’s] use of his automobile” and therefore covered by the policy. Id. at 620. The Defendants also cite Valdes v. Smalley, in which an insurer was required to provide coverage for an incident in which a driver threw a glass mug from a moving car, killing a bystander. 303 So.2d 342, 345 (Fla. 3d DCA 1974). The court reasoned that coverage was required because an insured throwing items from a moving vehicle was a reasonably foreseeable action. Id. The Defendants argue these cases are similar to the facts presented here and should lead to a comparable result.

The Defendants also contend that Race is distinguishable from Gillespie and Valdes because Race involved an intentional assault, rather than a negligent shooting. Specifically, they state that Race addressed whether recovery was possible under an uninsured motorist policy for an intentional assault by an uninsured motorist after a car accident. They further argue that Race is distinguishable from Gillespie and this case because the drivers here and in Gillespie created the conflicts because of their driving behavior.

Canal responds that the Defendants’ distinction based on intent is irrelevant, as the Race court did not consider the parties’ intent, nor did the decision depend on it. Canal also argues that Gillespie is inapplicable here because it predates Race and is limited to personal injury protection (PIP) claims. Finally, Canal points to several other cases decided by Florida courts emphasizing that, under Race, the automobile must cause the injury for liability to attach to the insurer. Lancer Ins. Co. v. Gomez, 799 So.2d 334 (DLA 3d DCA 2001); Progressive Express Ins. Co. v. Rasier (FL), LLC, No. 23-cv-60654, 2024 WL 1529143.333 (S.D. Fla. Apr. 9, 2024).

The parties have presented no disputed facts. The Court finds that under Florida law, Mr. Sammons’ injuries do not arise out of the ownership, maintenance, or use of Mr. Armstrong’s tractor trailer. Both Gillespie and Valdes predate Race. Race addresses an uninsured motorist insurance policy that limits recovery for injuries to those that “[arise] out of the ownership, maintenance, or use” of a motor vehicle. 542 So.2d at 348. However, more specifically, in that case, the court declined to apply the more liberal PIP interpretation of claim nexus, which simply requires that there be “some nexus” between the vehicle and the injury, to uninsured motorist benefits. Id. Instead, the court applied the stricter standard, used in automobile liability policies, which requires that the accident arise out of the “inherent nature of the automobile,” within the “natural territorial limits of an automobile” such that its actual use “must not have terminated,” and that the automobile “must not merely contribute to cause the condition which produces the injury, but must, itself produce the injury.” Id. at 349. This standard thus excludes remote injuries from coverage. Id.

*4 In this case, both Mr. Armstrong’s and Mr. Sammons’ vehicles were parked, and the use of their respective vehicles was thus terminated. Additionally, the shooting of the gun was wholly unrelated to the inherent nature of the vehicle. The vehicle also did not contribute to Mr. Sammons’ injury, nor did it increase the likelihood of injury, as in Valdes. At most, Mr. Armstrong’s driving may have contributed to the hostilities between the parties that created the circumstances for the deadly confrontation. However, Mr. Armstrong’s driving was not what produced the injury, as there was no contact between Mr. Sammons and Mr. Armstrong’s vehicle. Therefore, Mr. Sammons’ death did not arise out of Mr. Armstrong’s ownership, maintenance, or use of his vehicle, as required by the Canal Policy.

The Defendants’ attempt to distinguish Race from the case at hand based on the intentions of the parties is unavailing. The only time Race makes a distinction based on intent is when the court assumed that the tortfeasor’s actions were negligent, rather than intentional, simply to avoid considering any intentional act policy exclusions. Thus, the Defendants’ argument that the “claims in this matter are couched in negligence”, and therefore distinguishable from Race, is immaterial and flatly unpersuasive. (Document 27 at 5). The critical question here is not whether Mr. Armstrong’s actions were intentional or negligent, but whether the incident met the three-prong test from Race. As established above, it does not meet this test, and, therefore, Canal owes no duty to defend or indemnify under the policy.

CONCLUSION

For the reasons stated herein, the Court ORDERS that the Canal Insurance Company’s Motion for Judgment on the Pleadings (Document 24) be GRANTED, and the Defendants’ Cross-Motion for Judgment on the Pleadings (Document 27) be DENIED. The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and to any unrepresented party.

All Citations

Slip Copy, 2024 WL 4828731

Footnotes
¹	Title 28, Section 2201, of the United States Code provides, in pertinent part: “[i]n a case of actual controversy within its jurisdiction … any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.” Id.
²	The Defendants concede that Florida law should be applied for purpose of determining the question of insurance coverage. Therefore, the Court will not recount Canal’s conflict of laws argument.

End of Document