Court of Appeal of Louisiana,

First Circuit.

Lewis F. JUREY

v.

Harry T. KEMP, Dallas & Mavis Specialized Carrier Co., L.L.C, Great American Insurance Company, Liberty Mutual Fire Insurance Company and State Farm Mutual Automobile Insurance Company.

Clarence E. Jurey & Dorothy B. Jurey.

v.

Harry T. Kemp, Dallas & Mavis Specialized Carrier Co., L.L.C, Great American Insurance Company, Liberty Mutual Fire Insurance Company and State Farm Mutual Automobile Insurance Company.

 

Nos. 2011 CA 0142, 2011 CA 0143.

Sept. 20, 2011.

 

On Appeal from the Nineteenth Judicial District Court, In and for the Parish of East Baton Rouge, State of Louisiana, Docket No. C563867 Consolidated With 564504, Honorable Timothy E. Kelley, Judge Presiding.James F. Ledford, Baton Rouge, Louisiana, for Plaintiffs/3rd Appellants, Clarence E. Jurey & Dorothy B. Jurey.

 

Robert T. Myers, Metairie, Louisiana, for Defendant/Appellee Harry T. Kemp.

 

Nelson W. Wagar, III, Sarah Ney, Metairie, Louisiana, for Defendant/1st Appellant Great American Insurance Co.

 

Charles A. Schutte, Jr., Keith S. Giardina, Baton Rouge, Louisiana, for Defendants/Appellees Dallas & Mavis Specialized Carrier, L.L.C. & Liberty Mutual Fire Insurance Co.

 

John T. Roethele, Denham Springs, Louisiana, for Defendant/Appellee State Farm Mutual Automobile Insurance Co.

 

Karl E. Krousel, Baton Rouge, Louisiana, for Plaintiff/2nd Appellant Lewis F. Jurey.

 

Before PETTIGREW, McCLENDON, and WELCH, JJ.

 

McCLENDON, J.

This is an appeal from the granting of and denial of motions for summary judgment on the issue of insurance coverage. For the reasons that follow, we affirm.

 

FACTS AND PROCEDURAL HISTORY

On January 17, 2008, an automobile accident occurred between a 2002 Lincoln Town Car being driven by Lewis Jurey, one of the plaintiffs, and a 2001 Peterbilt Tractor, which was pulling a 50′ flatbed trailer, being driven by Harry T. Kemp, a named defendant. At the time of the accident, Kemp was leaving Baker Metal Works where he had just picked up the flatbed trailer.

 

Kemp was an independent contractor with Dallas & Mavis Specialized Carrier Co., LLC (D & M). D & M, through a policy issued by Liberty Mutual Fire Insurance Company (Liberty Mutual), maintained coverage for the operation of the tractor while Kemp was engaged in performing transportation services for D & M. As an independent contractor, Kemp was responsible for maintaining non-trucking liability (“bobtail”)  insurance for operation of the equipment outside the scope of performing transportation services for D & M. The Great American Insurance Company (Great American) provided Kemp “bobtail” coverage.

 

In consolidated actions, Lewis Jurey and his guest passengers, Clarence Jurey and Dorothy Jurey, filed suit, alleging that they sustained bodily injuries in the accident. They named Kemp, D & M, Liberty Mutual, and Great American, among others, as defendants.

 

Thereafter, Liberty Mutual filed a motion for declaratory relief, or in the alternative, a motion for summary judgment, asserting that its policy did not provide coverage because Kemp was not engaged in performing transportation services for D & M and that the bobtail policy issued by Great American should apply. D & M also filed a motion for summary judgment, asserting that Kemp was not in the course and scope of his employment at the time of the accident, and, as such, D & M was not vicariously liable for Kemp’s negligence. In response, Great American filed a cross-motion for summary judgment, alleging that Kemp was involved in transportation services for D & M at the time of the accident such that the policy issued by Liberty Mutual, rather than its “bobtail” policy, provided coverage for the accident.

 

Following a hearing, the trial court granted the motions for summary judgment filed by Liberty Mutual and D & M, and denied the cross-motions filed by Great American. In so ruling, the trial court indicated that Kemp was “not making a haul for [D & M]” nor was he “on duty or under any dispatch” at the time of the accident, but rather was “on his own time.” The trial court further indicated that this accident is “exactly what the bobtail [policy issued by Great American] is required to cover and what it’s intended to cover.”

 

Great American and plaintiffs (hereinafter collectively referred to as “Great American”) have appealed, assigning the following errors:

 

A. The Trial Court erred in granting summary judgment in favor of Liberty Mutual Fire [Insurance] Company on the basis that Kemp was not involved in transportation duties at the time of the Accident.

 

B. The Trial Court erred in denying summary judgment in favor of Great American Insurance Company.

 

C. The Trial Court erred in concluding that Great American Insurance Company, and not Liberty Mutual Fire [Insurance] Company, provides liability insurance with respect to the Accident in light of the numerous genuine issues of material fact.

 

DISCUSSION

Liberty Mutual issued an insurance policy (number AI2–791–001377–107) to Transport Industries, L.P., and pursuant to a Named Insured Endorsement, added D & M to Item 1 of the Declarations as a named insured. The Liberty Mutual policy providing coverage to D & M provides, in pertinent part:

 

1. Who is An Insured

The following are “insureds”:

 

a. You for any covered “auto”.

 

b. Anyone else while using with your express or implied  permission a covered “auto” you own, hire or borrow, except:

 

(1) The owner, or any “employee”, agent or driver of the owner, or anyone else from whom you hire or borrow a covered “auto”.

 

(2) Your “employee” or agent if the covered “auto” is owned by that “employee” or agent or a member of his or her household.

 

* * *

c. The owner or anyone else from whom you hire or borrow a covered “auto” that is a “trailer” while the “trailer” is connected to another covered “auto” that is a power unit, or, if not connected, is being used exclusively in your business.

 

d. The lessor of a covered “auto” that is not a “trailer” or any “employee”, agent, or driver of the lessor while the “auto” is leased to you under a written agreement if the written agreement does not require the lessor to hold you harmless and then only when the leased “auto” is used in your business as a “motor carrier” for hire.

 

e. Anyone liable for the conduct of an “insured” described above but only to the extent of that liability.

 

At the time of the accident, the parties do not dispute that Kemp’s tractor was leased to D & M pursuant to a lease agreement between the parties. The parties, however, disagree as to whether the flatbed trailer was included in the lease. Even assuming that the trailer was part of the lease, in order for the Liberty Mutual policy to provide coverage, subsection (c) referenced above requires that the trailer must be connected to a “covered auto.” Therefore, in determining whether Liberty Mutual afforded coverage for the accident at issue, the initial inquiry is whether the tractor was a “covered auto”—i.e., whether Kemp was using the tractor in D & M’s business as required under subsection (d) referenced above at the time of the accident.

 

The language in the policy requiring that the covered auto be “used in your business” is unambiguous. Although the application of the endorsement to these facts may pose difficult questions, the difficulty of the questions does not create an ambiguity. Mahaffey v. General Sec. Ins. Co., 543 F.3d 738, 741 (5th Cir.2008). Because the language is unambiguous, the issue is properly resolved as a matter of law on a motion for summary judgment. Id.

 

At the time of the accident, Kemp was off-duty and was not in the process of performing any transportation services for D & M when he decided to pick the trailer up from Baker Metal Works in order to free up space in the shop for Baker Metal Works’ owner. Kemp was not under D & M’s control or on standby for any deliveries and was free to go where he pleased. In addition, Kemp was not paid for his trip to or from Baker Metal Works and did not request or seek any reimbursement or payment in connection with this trip.

 

Appellants contend that at the time of the accident, however, Kemp was on a trip for the business of D & M because he was having requisite maintenance performed on the trailer. Appellants note that the lease agreement required Kemp to “maintain the Equipment in proper operating condition and in full compliance with applicable governmental regulations.” A few days prior to the accident, Kemp had taken the trailer to Baker Metal Works to have a door welded on the front, so it would be easier to access the wiring for the trailer’s lights and air lines for the trailer’s brakes. Baker Metal Works also replaced some of the decking boards on the trailer. Kemp testified that it was important for him to maintain his equipment pursuant to the terms of the lease and in order to maintain a good working relationship with D & M. Kemp concludes that Liberty Mutual’s policy provides coverage because he was maintaining the equipment in accord with the terms of the lease agreement as required by D & M.

 

Several pertinent cases have addressed whether an independent truck owner/lessor was “in the business of” the motor carrier/lessee such that the liability insurance secured by a motor carrier/lessee, as opposed to the bobtail insurance secured by a truck owner/lessor, should apply. In LeBlanc v. Bailey, 97–0388 (La.App. 4 Cir. 10/1/97), 700 So.2d 1311, writ denied, 97–2988 (La.2/6/98), 709 So.2d 743, the fourth circuit found that an independent trucker’s drive home after completion of his deliveries for the day on behalf of the motor carrier/lessee was more of a personal nature rather than a work-related function such that bobtail insurance coverage, as opposed to the liability insurance secured by the motor carrier/lessee, was the primary policy that applied. In Mahaffey, 543 F.3d at 743, however, the federal court, applying Louisiana law, found that the bobtail insurance policy did not provide coverage where an independent truck driver had been asked to remain in the area of the motor carrier/lessee’s business to be available to pick up a load when one became available. See also Robinson v. Guillot, 07–1260 (La.App. 3 Cir. 4/30/08), 980 So.2d 906 (unpublished), writ denied, 08–1162 (La.9/19/08) 992 So.2d 943. However, we have found no Louisiana case specifically addressing the question of when having leased equipment serviced falls within the scope of the business of the carrier. Assuming, without deciding, that the trailer was included in the lease, we must determine as a matter of law whether Kemp’s trip to and from Baker Metal Works to have the work performed on the trailer constituted the business of D & M. The facts here are undisputed.

 

In this context, the proper inquiry is whether Kemp was acting within the scope of the lease agreement with D & M. See National Continental Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 612 (8th Cir.1998). To the extent that Kemp was executing his contractual duties, he would be acting “in the business of” D & M. Id. We must therefore examine the terms of the lease to ascertain whether Kemp was fulfilling a contractual duty in having the work performed by Baker Metal Works.

 

The lease agreement required Kemp to “maintain the Equipment in proper operating condition and in full compliance with applicable governmental regulations.” Kemp acknowledged that adding the welded door to his trailer was not required by Department of Transportation (“DOT”) specifications or by D & M. He further indicated that the door provided no economic benefit to D & M, but rather was something he wanted to have done for his own benefit. Kemp also indicated that he chose to have some of the decking boards replaced, although the work was not required by DOT or by D & M. Nothing in the record explains how any of the work performed on the trailer furthered D & M’s business. Moreover, Kemp acknowledged that prior to the accident, D & M was unaware that he was having any work done to the trailer. In light of the foregoing, there is no showing that the improvements were required under the terms of the lease agreement between Kemp and D & M. Rather, it appears that these improvements were merely done for the convenience of the owner. Cf. Freed v. Travelers, 300 F.2d 395 (7th Cir.1962) (wherein the carrier/lessee’s insurance policy applied when the independent truck driver was involved in an accident while bringing the vehicle to be serviced-when the lease agreement required the independent truck driver to maintain the tractor “in good running order and condition” and “hold (it) ready at all times for the services of the Lessee” and the carrier/lessee did not urge that the major repair to the rear of the tractor was not necessary to its continued operation) and National Continental Ins. Co., 157 F.3d 610 (wherein the carrier/lessee’s insurance policy applied when the service contract required the driver’s tractor pass periodic inspections and comply with federal standards such that driving the vehicle to a shop for a front end alignment between dispatch orders was “in the business of” the carrier/lessee because the federal regulations required “[a]ll axles … be in proper alignment”). Unlike the contrasted cases, under the terms of the lease agreement here, Kemp’s trip to Baker Metal Works was not undertaken in the business of the employer.

 

Appellants also urge that the Federal Motor Carrier Safety Act–90 Endorsement applies herein. See 49 USCA § 13501, et seq. However, the endorsement only applies to interstate travel and does not apply to the intrastate trip at issue herein. See 49 USCA § 13501, 1 and Branson v. MGA Ins. Co., Inc., 673 So.2d 89 (Fla.App. 5 Dist.), review denied, 680 So.2d 421 (Fla.1996).

 

CONCLUSION

In light of the foregoing, we conclude that the trial court did not err in granting summary judgment in favor of Liberty Mutual and denying summary judgment as to Great American. Therefore, we affirm the district court’s September 17, 2010 judgment. Costs of this appeal are assessed to The Great American Insurance Company.

 

AFFIRMED.

 

WELCH, J., dissent and assigns reasons.

 

WELCH, J., dissenting.

I respectfully dissent. I believe that Kemp qualifies as an insured under an endorsement to the Liberty Mutual policy which expands the list of insured persons to include those who use any covered auto “by or for” the named insured. This endorsement is entitled “Hired Autos Specified as Covered Autos You Own,” and modifies the motor carrier coverage form. It modifies the schedule’s description of “auto” to include “any auto you lease, rent, or hire.” It also states that any auto described in the schedule will be considered a covered auto the insured owns and not a covered auto the insured hires. It further provides:

 

B. CHANGES IN LIABILITY COVERAGE:

The following is added to WHO IS AN INSURED:

 

While any covered “auto” described in the Schedule is rented or leased to you and is being used by or for you, its owner or anyone else from whom you rent or lease it is an “insured” but only for that covered “auto.”

 

For Kemp to be insured under this provision, the tractor he was driving at the time of the accident must be a “covered auto” that was leased to D & M. It is undisputed that the tractor was under lease to D & M at the time of the accident. Further, the schedule of covered autos contains two symbols designating the covered autos—72 and 73. Symbol 72 includes “owned autos used in operations other than those trucking operations that are subject to operating authority granted to the Insured by regulatory authority.” Symbol 73 describes “any auto except those described by Symbol 72.” Liability coverage extends to all autos designated by symbols 72 and 73. Reading all of the provisions together, I would find that a covered auto includes all autos owned by the named insured and all autos hired or leased by the named insured, which includes the tractor leased by D & M from Kemp.

 

Next, in order for Kemp to be an insured under the policy, the covered auto must have been used by him “by or for D & M.” Pursuant to the term of the lease agreement which incorporated DOT regulations, D & M had the exclusive possession, control, and use of the leased motor vehicle for the duration of the lease agreement. I would find that the leased vehicle was being used by Kemp “for” D & M whenever that use furthered D & M’s business interests and was not a purely personal use of the covered vehicle by Kemp. As D & M’s business is transportation, I would find that any use of the leased equipment that falls within the scope of D & M’s trucking business to constitute a use by Kemp “for” D & M.

 

In this case, the evidence showed that Kemp used his covered auto to bring his trailer to Baker Metal Works to have boards replaced on the bed of his trailer and for the installation of a metal box that would make it easier for him to access the wires and air lines that went to the trailer’s brakes and running lights. Kemp explained that he had wanted to make the modification for some time and the situation presented itself when he had to replace the decking on the trailer. He further stated that the improvement to the trailer was done to make it easier for him to maintain the trailer because he would only have to flip the lid of the box to get to the air lines and wiring harness, whereas previously, he had to pull all of the lines and wires out of the front of the trailer, leaving him little room to work on these items if he had to. I find that the installation of boards on the deck of the trailer that holds cargo being shipped for D & M, along with the installation of an accessory to the trailer that made it easier to maintain and repair the trailer’s brakes and lights is clearly trucking-related, and as such, furthered the commercial interest of D & M in keeping the leased vehicle and equipment in safe and proper running condition. The mere fact that the work done to the trailer may have made operating, repairing, and maintaining the leased vehicle more convenient to Kemp does not mean that the work did not serve D & M’s business interests. The possibility that a vehicle owner’s interest may coincide with those of the lessee does not diminish the benefits the lessee received from the owner’s actions. See National Continental Insurance Company v. Empire Fire & Marine Insurance Company, 157 F.3d 610, 613 (8th Cir.1998).

 

Moreover, even under the test employed by the majority in determining whether Kemp’s activity constituted a “business use” of the vehicle, I would find Kemp to be an insured under the policy. In replacing the decking on the trailer and the installation of an accessory to house the brake’s wires, Kemp was executing his contractual duty to maintain the leased equipment, and therefore, his trip to and from Baker Metal Works in his covered auto to have the work performed on the trailer constituted the business of D & M.

 

Pursuant to the lease agreement, Kemp was obligated to maintain the equipment in proper operating condition. Kemp was further obligated to furnish all maintenance, repairs, and other items necessary for the safe and efficient operation of the equipment and lease agreement vests the choice of locations and persons to perform any necessary repairs solely in Kemp. The lease further stipulates that in the event the equipment leased includes a trailer, Kemp was responsible for the periodic safety inspection of the trailer and accessorial equipment furnished by him. I do not believe it could fairly be said that the replacement of decking boards, which holds the transported cargo, and the installation of an accessory making it easier to perform maintenance on the leased equipment do not constitute vehicle maintenance. Because I believe that Kemp was executing his contractual duty to maintain the leased equipment, I would find that he was carrying out the business of D & M when he drove the trailer to and from Baker Metal Works for the replacement of decking boards and the installation of a box to house the trailer’s electrical wires and lines.  Accordingly, I conclude that the Liberty Mutual trucking policy provides coverage for the accident sued upon.

 

For the above reasons, I would reverse the judgment of the trial court and deny Liberty Mutual’s motion for summary judgment. I would further find that the exclusion in Great American’s non-trucking bobtail policy, denying coverage when the vehicle is used for the benefit or to further the commercial interest of D & M, is applicable in this case, and I would grant Great American’s motion for summary judgment and dismiss it from this litigation.

 

“Bobtailing” is a term generally used in the trucking industry to describe a tractor being operated without a trailer.

 

Great American has not appealed the summary judgment granted in favor of D & M. Liberty Mutual avers that because the trial court granted D & M’s motion for summary judgment and found that Kemp was not performing services for D & M at the time of the accident, review of that issue is precluded on appeal pursuant to LSA–R.S. 13:4231(3) insofar as that judgment is now final. However, under the circumstances presented herein, we find it unnecessary to address this issue.

 

The “express or implied” language is added by the Louisiana Change endorsement.

 

Similarly, we note that the bobtail policy issued to Kemp by Great American does not provide coverage if the “covered auto” was being used “for the benefit of or to further the commercial interest of [D & M]” or “while being used for the purpose of traveling to or from any location where the covered auto is regularly garaged or any terminal or facility of [D & M].”

 

The contractual language at issue in Mahaffey was “in the business of.”

 

Kemp indicated that he had originally planned to go to a farmer’s meeting, but instead chose to go to Baker Metal Works to retrieve the trailer.

 

The court also noted that the driver was free to go where he pleased, was not subject to the motor carrier/lessee’s control or paid for his time or mileage, and was not under dispatch or standby for further deliveries. Leblanc, 700 So.2d at 1314.

 

In Mahaffey, the trucker was involved in an accident driving to his motel. The court noted that unlike driving home after completing deliveries as was the driver in LeBlanc, the driver in Mahaffey was “driving to a motel far from home in order to sleep to be adequately rested, when asked to remain in the area to see if a load becomes available,” which the court found “is a work-related function for a commercial driver because commercial drivers are required to have a certain number of rest hours between hauls.” Mahaffey, 543 F.3d at 743.

 

Additionally, we note that the maintenance on Kemp’s trailer had been completed and he was returning home at the time of the accident. Cf. Empire Fire and Marine Ins. Co. v. Liberty Mut. Ins. Co., 117 Md.App. 72, 699 A.2d 482 (Md.App.), cert denied, 348 Md. 206, 703 A.2d 148 (1997), wherein the lease agreement between the independent truck driver and the motor carrier/lessee required the truck driver to maintain “all additions, accessories, and equipment … in good safe operating and mechanical condition.” Empire Fire and Marine Ins. Co., 669 A.2d at 488. The court found that even if the trucker’s stop at a dealership to obtain parts for a toolbox attached to the exterior of the leased tractor was in “furthering the business of the … carrier, once he purchased the parts for the toolbox, his business with the … carrier was complete. He was in the area of his ‘home terminal’ and heading home.” 669 A.2d at 496–97.

 

While National Liberty insists that the trailer was not part of the leased equipment, the undisputed facts of this case indicate otherwise. While none of the three trailers owned by Kemp are listed on the equipment schedule, the evidence on the motion for summary judgment demonstrated that Kemp’s trailers, in addition to the tractor that pulled them, were leased to D & M by Kemp. Therefore, I disagree with National Liberty’s attempt to bring the trailer outside the scope of the lease agreement and would find that any provision in the lease relating to the maintenance of the trailer applicable in this case.

 

The mere feet that Kemp did not request reimbursement for the work performed at Baker Metal Works is of no moment as Kemp testified that he was responsible for all maintenance on his vehicle and was never reimbursed by D & M for maintenance work.

United States District Court,

E.D. Louisiana.

Petro BARABASH

v.

LOVE’S TRAVEL STOPS & COUNTRY STORES, et al.

 

Civil Action No. 10–4160.

Sept. 20, 2011.

 

C. Perrin Rome, III, Blake G. Arata, Jr., William Chad Stelly, Rome, Arata & Baxley, LLC, New Orleans, LA, for Petro Barabash.

 

Terry Thibodeaux, Frohn & Thibodeaux, LLC, Lake Charles, LA, Robert Emmett Kerrigan, Jr., Isaac H. Ryan, Deutsch, Kerrigan & Stiles, LLP, D. Russell Holwadel, Phillip J. Rew, Adams, Hoefer, Holwadel & Eldridge, LLC, New Orleans, LA, Thomas Livingston Gaudry, Jr., Michael Don Peytavin, Gaudry, Ranson, Higgins & Gremillion, LLC, Gretna, LA, Angela M. Hinds, Robert P. Monyak, Peters & Monyak, LLP, Atlanta, GA, for Love’s Travel Stops & Country Stores, et al.

 

ORDER AND REASONS

MARTIN L.C. FELDMAN, District Judge.

Before the Court are two motions for summary judgment, one filed by Sherman & Son Transportation Corp. and the other filed by Zurich American Insurance Company. For the reasons that follow, Sherman & Son Transportation Corp.’s motion is DENIED, and Zurich American Insurance Company’s motion is GRANTED.

 

Background

This personal injury litigation arises out of injuries suffered by a truck driver when the left front tire he had recently purchased for the tractor-trailer car hauler he was driving blew out, causing the tractor-trailer to swerve into the wooded median of the interstate.

 

At the time of the accident Petro Barabash was driving a tractor trailer car hauler owned by Sherman and Son Transportation Corp., a New York corporation. He had driven from New Jersey to Texas and was on his way back to New Jersey when the accident happened, on May 25, 2010. Barabash was driving the 2004 Freightliner tractor and pulling a trailer transporting a load of automobiles.  He was traveling east on Interstate 12, near its intersection with Louisiana Highway 1085 in St. Tammany Parish, Louisiana when the front left tire failed suddenly and without warning; the tire threads separated and the tractor trailer left the road and traveled into the median between the east and west bound lanes of Interstate 12. Upon entering the median, the front of the tractor struck several trees, resulting in Barabash being partially thrown from the tractor’s cab. Barabash was taken to the emergency room at University Hospital in New Orleans, where it was determined that he had suffered severe injuries, including a detached retina, abdominal and back injuries, deep cuts and bruises, and a fractured leg that required emergency surgery and extensive hospitalization.

 

Barabash was hauling automobiles owned by third parties to destinations requested by S & S’s customers. Barabash received a 20% commission on the fees S & S generated by hauling these vehicles.

 

The tire that failed had been purchased a couple weeks before when Barabash stopped at Love’s Travel Stops & Country Stores in Katy, Texas. Barabash bought and paid for the tire, which was manufactuered by Michelin North America, Inc., with a credit card that S & S had provided him for such expenses. Love’s Travel Stops employee, Byron Hickman, mounted the tire onto the wheel and performed other services associated with replacing the tire.

 

Following the accident, the investigating state trooper apparently observed that the left front tire had a hole measuring about 8 inches by 8 inches on the surface, and the tire tread was separated and parts of the inner belts were pushed outward.

 

S & S had an insurance policy during this time with Zurich American Insurance Company. Zurich American had issued a Truckers Liability Policy to S & S, which covered the truck operated by Barabash. Pursuant to the policy, Zurich American agrees to pay all sums an “insured” must pay as damages because of bodily injury to which the insurance applies. The policy excludes from coverage any obligation for which the insured is liable under a workers’ compensation law. The policy (as amended by an endorsement) also excludes from coverage bodily injury to an “employee” of the insured arising out of employment or performing the duties related to the insured’s business, whether the insured is liable as an employer or in another capacity. The final relevant exclusion (as amended by an endorsement) excludes from coverage “bodily injury” to a fellow “employee” of the “insured” arising out of the fellow employee’s employment. “Employee” is defined in the policy as “includes a ‘leased worker.’ “

 

On November 1, 2010 Barabash sued Michelin North America, Inc., Love’s Travel Stops and Country Stores and its employee, Byron Hickman, and S & S and its insurer, Zurich American Insurance Company in this Court, invoking this Court’s diversity jurisdiction, and seeking damages for the parties’ negligence as well as for products liability. (Among other claims, Barabash alleges that Love’s and Hickman selected, sold, and installed an improperly sized tire on the front driver’s side; the tire failed to comply with the specifications in that it was for “trailer usage only”, and it was the wrong size for the front axle of the tracter.) Parallel with this lawsuit, Barabash filed a claim against S & S in the New York State Workers’ Compensation Board. In the workers comp proceedings, one of the issues in dispute was whether Barabash was an employee of S & S, or an independent contractor. The Workers Compensation Board determined that Barabash was S & S’s employee. In determining that, as a matter of fact, Barabash was S & S’s employee, the Board found:

 

Based upon the testimony of Mr. Sherman and Mr. Barabash, I find that there was an employer/employee relationship. Mr. Sherman provided the truck, set the schedule for the drivers fo the trucks, and had the right to hire and fire the drivers. Moreover, Mr. Sherman arranged for all of the transport of the cars. He was also responsible for the maintenance of the vehicles and paid all gas and tolls. The photographs of the destroyed truck accident[ ] clearly show the name of Sherman & Son Transportation. As such, I find that the claimant was an employee of Sherman & Son Transportation….

 

Judgement was rendered in favor of Barabash against S & S, and workers compensation benefits, medical expenses, and penalties were awarded against S & S. However, S & S has appealed the Board’s ruling and has yet to pay any portion of the judgment to Barabash. A decision on that appeal is pending.  S & S now seeks summary judgment on the ground that Barabash has elected the sole and exclusive remedy of Workers’ Compensation against S & S under New York law and that the ruling by the Board that Barabash was S & S’s employee is res judicata. Similarly, Zurich American seeks summary judgment on the ground that Barabash was S & S’s employee at the time of the accident, and the truckers liability policy it issued to S & S excludes coverage for injury to an “employee” of S & S.

 

Neither S & S nor Zurich pointed out to this Court that S & S appealed the finding of employment status and that the appeal remains pending.

 

I. Standard for Summary Judgment

Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine dispute as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio., 475 U.S. 574, 586 (1986). A genuine issue of fact exists only “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

 

The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, “[i]f the evidence is merely colorable, or is not significantly probative,” summary judgment is appropriate. Id. at 249–50 (citations omitted). Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 649 (5th Cir.1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.1987). Finally, in evaluating the summary judgment motion, the Court must read the facts in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255.

 

II.

Invoking the doctrine of res judicata, S & S seeks summary judgment on the sole ground that the New York State Workers’ Compensation Board determined that Petro Barabash was its employee. S & S contends that Barabash’s tort claims are barred by statute and that, by obtaining the award from the Board, Barabash has waived any tort remedies against S & S.

 

Under New York law, the liability of an employer for Workers’ Compensation benefits shall be exclusive and in place of any other liability to the employee or his dependents for the employee’s injury. In Cunningham v. State, 60 N.Y.2d 248 (N.Y.1983), the Court of Appeals of New York summarized the law:

 

The initial question to be resolved whenever a defense of workers’ compensation is presented is whether the claimant has a right to bring a plenary action. “If the right to sue the employer has been stripped away by [workers’ compensation coverage, it is an arrogation of jurisdiction to consider a tort complaint on the merits.” ( O’Rourke v. Lang, 41 N.Y.2d 219, 221, 391 N.Y.S.2d 553, 359 N.E.2d 1347). Section 11 of the Workers’ Compensation Law provides that the liability of an employer under that law shall be exclusive and in place of any other liability to the employee or his dependents for the injury or death of the employee. Under subdivision 6 of section 29 of the Workers’ Compensation Law, the right to compensation is the exclusive remedy to an employee or his dependents against the employer when such employee is injured or killed by the negligence or wrong of another in the same employ. A decision or award of the Workers’ Compensation Board is, pursuant to section 23 of the Workers’ Compensation Law, final and conclusive upon the parties and the State Insurance Fund as to all questions within its jurisdiction, unless modified or reversed on appeal. These provisions operate to preclude claimants’ actions.

 

Id. at 590.

 

New York law is clear, like many other states’ laws, that an employee injured in the course and scope of his employment is limited to pursuit of workers compensation benefits; he may not also recover in tort against his employer. Here, S & S contends that the New York Workers Compensation Board already found, as a matter of fact, that Barabash was S & S’s employee at the time of the accident and that the Board awarded benefits, thus precluding Barabash from recovering damages for negligence here. Had S & S not appealed the Board’s ruling, S & S would have established that it was entitled to judgment as a matter of law that the Board’s decision was res judicata and barred by statute.  As the plaintiff points out, however, S & S has appealed the Board’s decision. Accordingly, even assuming S & S has carried its burden to show that Barabash’s tort claim is barred here by the statute and by application of res judicata, Barabash submits evidence showing that S & S has appealed the Board’s determination. Accordingly, an issue of fact as to whether the workers compensation award is “final” precludes summary judgment in favor of S & S.

 

The Court notes that none of the parties bother to articulate the res judicata standard. (Zurich American comes closest by citing a New York state case that holds that once a plaintiff accepts an award of workers’ compensation benefits an alternative remedy at law is foreclosed.   Bardere v. Zafir, 477 N.Y.S.2d 131 (S.Ct.N.Y.1984), aff’d, 482 N.Y.S.2d 261 (Ct.App.N.Y.1984); here, of course, the plaintiff has not accepted an award because S & S has not paid the award.) Nonetheless, the elements that must be satisfied in order for res judicata principles to apply are well-settled: (1) the parties must be identical in both suits; (2) a court of competent jurisdiction must have rendered the prior judgment; (3) there must have been a final judgment on the merits in the previous decision; and (4) the plaintiff must raise the same cause of action or claim in both suits. In re Texas Wyoming Drilling, Inc., 647 F.3d 547, 553 (5th Cir.2011) (citations omitted). As New York law confirms, the Board’s ruling is final and conclusive “unless modified or reversed on appeal”.

 

Barabash’s complaint that S & S’s request for summary relief should be denied because S & S failed to advise the Court that it had appealed the Board’s determination appears to be an attempt to invoke judicial estoppel principles: he argues that the actions of S & S “are an affront to the integrity of this Honorable Court.” Indeed, this Court admonishes counsel for the defendant that it must at all times act as an officer of the Court and disclose material information, even if it might undermine its client’s position—here, the fact that S & S has appealed the very determination it seeks to invoke here to bar the plaintiff’s recovery. Interestingly, however, the Court notes that the requirements for invoking judicial estoppel might have been satisfied as against the plaintiff had he argued that he was not S & S’s employee here, as there would appear to be (1) clearly inconsistent positions between the position here and the one taken before the workers compensation board; (2) the court’s (here, the board’s) acceptance of the previous position; and (3) absence of inadvertence. See In re Texas Wyoming Drilling, Inc., 647 F.3d 547, 552 (5th Cir.2011) (citation omitted).

 

The Court notes that, unlike Zurich American, S & S relies solely on the Board’s finding and award (which it is presently appealing) in its effort to bar Barabash’s claim against it here; it does not seek a finding from this Court as to whether Barabash was, in fact, its employee.

 

III.

Zurich American seeks summary relief on the ground that the truckers liability policy excludes from coverage Barabash’s claims.

 

The law applicable to interpreting insurance contracts is substantially similar in Louisiana and New York. Under both state’s laws, insurance policies must be construed to give effect to the intent of the parties. La. Civ.Code art.2045; Village of Sylvan Beach v. Travelers Ind. Co., 55 F.3d 114, 115 (2d Cir.1995). And, if the provisions are clear and unambiguous, courts must enforce them as written. La. Civ.Code art.2046; Hebert v. Webre, 982 So.2d 770, 773–74 (La.2008); Maurice Goldman & Sons, Inc. v. Hanover Ins. Co., 80 N.Y.2d 986 (1992). Finally, the burden is on the person claiming coverage to show the existence of coverage, whereas the burden is on the insurer to establish the applicability of an exclusion from coverage.   Tunstall v. Stierwald, 809 So.2d 916 (La.2002); Maurice Goldman, 80 N.Y.2d at 987–88.

 

Neither side invites the Court to determine, based on choice of law principles, whether New York or Louisiana law applies to this insurance contract interpretation dispute. Zurich American simply points out that New York law may apply because the relevant policy was issued to S & S at its office in New York.

 

Zurich American contends that the employee exclusions contained in the policy it issued to S & S apply to preclude coverage for Barabash’s claims here. Zurich American points out that the policy it issued is a public-liability policy designed for use by motor carriers in the interstate trucking industry to comply with federal insurance requirements under the Motor Carrier Safety Act of 1984, 49 U.S.C. § 13906; 49 C.F.R. § 387.1, et seq.

 

Zurich American contends that Barabash is a statutory employee of S & S under § 390.5 of the Department of Transportation regulations, regardless of whether he is considered an employee or an independent contractor at common law or under Louisiana law. The Court agrees.

 

The Motor Carrier Safety Act and its related regulations govern the meaning of terms under insurance policies designed to comply with federal requirements for motor carriers. Consumers County Mut. Ins. Co. v. P.W. & Sons Trucking, Inc., 307 F.3d 362, 366 (5th Cir.2002). 49 C.F.R. § 390.5, defines “employee” as:

 

Any individual, other than an employer, who is employed by an employer and who is in the course of his or her employment directly affects commercial motor vehicle safety. Such terms include a driver of a commercial vehicle (including an independent contractor while in the course of operating a commercial motor vehicle)….

 

“Employer” is defined as:

 

[A]ny person engaged in business affecting interstate commerce who owns or leases a commercial motor vehicle in connection with that business, or assigns employees to operate it….

 

49 C.F.R. § 390.5.

 

Invoking this definition of “employee”, Zurich American contends that: (1) the Fifth Circuit consistently holds that the definition of “employee” under liability policies for truckers subject to the Motor Carriers Safety Act includes direct employees and independent contractors while in the course of operating a motor vehicle;  and (2) this definition of employee is the same as the definition in the Zurich American policy. Under the circumstances, Zurich American urges that Barabash is, at a minimum, a statutory employee of S & S for the purposes of application of the “employee” exclusion to the claims against S & S and Zurich and that, therefore, Zurich American is entitled to judgment as a matter of law dismissing the claims against it based on the “employee” exclusion. Applying the expansive definition of “employee” contained in 49 C.F.R. § 390.5, the Court agrees.

 

Zurich American invokes Ooida Risk Retention Group, Inc. v. Williams, 579 F.3d 469 (5th Cir.2009) and Consumers County Mut. Ins. Co. v. P.W. & Sons Trucking, Inc., 307 F.3d 362 (5th Cir.2002)(holding that the district court properly relied on definition of employee contained in Department of Transportation regulations in determining that injured truck driver was employee of insured).

 

Zurich American covers accidents and losses occurring in the coverage territory, defined as the United States, its territories and possessions, and Canada. Zurich American draws attention to convincing facts that are not disputed: S & S owned the freightliner driven by Barabash; the freightliner bore placards of Sherman & Son Transportation Corp., which operated under U.S. Department of Transportation # 1898479 and MCI # 683180, that S & S paid pro-rated registration fees on the freightliner operated by Barabash in multiple states including Louisiana; S & S maintained a driver’s log for trips; Barabash was the only driver of the freightliner; and Barabash made multiple trips each month across the northeast and southeast using the interstates to travel from New York to Texas and back home again, including when Barabash drove from New Jersey to Texas and was on his way back to New Jersey when the accident happened on I–12 in Slidell, Louisiana.

 

Zurich American has shown that Barabash, at a minimum, is an independent contractor such that he constitutes an “employee” within the Motor Carrier Safety Act and the applicable Department of Transportation regulations. See Consumers County Mut. Ins. Co. v. P.W. & Sons Trucking, Inc., 307 F.3d 362, 365 (5th Cir.2002)(holding that injured truck driver was an “employee” of insured excluded under the policy pursuant to the definition of employee contained in the Department of Transportation regulations). Indeed, the Fifth Circuit has observed that § 390.5 “eliminates the traditional common law distinction between employees and independent contractors for [certain] drivers.” Id. And Barabash fails to show that a disputed issue of fact precludes summary judgment as to his status as a “employee” under § 390.5. Accordingly, because the record is clear that Barabash was an “employee” driving the freightliner covered by the policy, Zurich American has carried its burden to show that the policy’s employee exclusion applies to preclude coverage for Barabash’s bodily injuries.0

 

0. The Court need not reach Zurich American’s alternative arguments.

 

Accordingly, S & S’s motion for summary judgment is DENIED,1 and Zurich American’s motion is GRANTED. This case is administratively closed pending resolution of the New York proceedings.

 

1. The Court notes that the parties are to advise by timely motion to the Court whenever the workers compensation proceedings are final; Barabash will of course be barred from recovery in tort here against S & S if the Board’s finding of fact as to Barabash’s employment is ultimately affirmed.