United States District Court,

S.D. Florida.

SODIKART USA, Plaintiff,

v.

GEODIS WILSON USA, INC., Defendant.

 

No. 13–CIV–22626.

Signed Sept. 3, 2014.

 

David Jon Feingold, Feingold & Kam LLC, Palm Beach Gardens, FL, for Plaintiff.

 

Brian E. Devilling, Michael L. Foran, Foran Glennon Palandech Ponzi & Rudloff, PC, Chicago, IL, Brandon Jay Hechtman, Wicker, Smith, O‘Hara, McCoy & Ford, P.A., Coral Gables, FL, Jordan Scott Cohen, Wicker Smith Tutan O’Hara McCoy Graham & Ford Fort Lauderdale, FL, for Defendant.

 

ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

BETH BLOOM, District Judge.

*1 This matter is before the Court on Defendant Geodis Wilson USA, Inc.’s (“Defendant” or “Geodis Wilson”) Motion for Summary Judgment, ECF No. [39] (the “Motion”). The Court has reviewed the Motion, all supporting and opposing filings and submissions, and the record in the case. For the reasons that follow, Geodis Wilson’s Motion for Summary Judgment is GRANTED.

 

I. PROCEDURAL BACKGROUND

Plaintiff Sodikart USA’s (“Plaintiff” or “Sodikart”) single-count Complaint seeks damages against Geodis Wilson under the Carmack Amendment, 49 U.S.C. § 14706.FN1 ECF No. [1]. Defendant timely answered the Complaint. See ECF No. [6]. The parties have engaged in mediation, discovery and trial preparation. Defendant filed the instant Motion on July 30, 2014; Plaintiff timely responded on August 14, 2014, ECF No. [40] (the “Response”); and Defendant timely replied on August 25, 2014, ECF No. [42] (the “Reply”). The parties have properly submitted statements of facts and attendant evidence in support of and opposition to the Motion. See ECF Nos. [38], [40–7], [41].

 

FN1. While the Complaint makes reference to the Carriage of Goods by Sea Act, Ch. 228, 49 Stat. 1207 (1936) (codified as a note to 46 U.S .C. § 30701) (“COGSA”), see Complaint ¶ 22, and Defendant dedicated considerable space in its Motion to that provision, Plaintiff has clarified that “the only recovery sought in the complaint was under the Carmack Amendment” and has eschewed any basis for relief in COGSA. ECF No. [40] at 2–3. The Court will read the Complaint no more broadly than does Plaintiff itself, and will consider it as seeking relief only under the Carmack Amendment.

 

II. MATERIAL FACTS

Plaintiff is in the business of importing racing and rental karts for sale in the United States. ECF No. [38] ¶ 1; ECF No. [40–7] ¶ 1. In January 2013, non-party Octane Raceway purchased karts and various related accessories from Plaintiff. ECF No. [38] ¶ 2; ECF No. [40–7] ¶ 2. The karts were manufactured in Coureon, France by an affiliate of Plaintiff, non-party Sodikart SA, and shipped by way of Le Havre, France, to Houston, Texas. The karts were then transported by rail and truck to Octane Raceway in Scottsdale, Arizona. ECF No. [38] ¶¶ 4, 9; ECF No. [40–7] ¶¶ 4, 9. Plaintiff asserts, and Defendant concedes, that the karts and accessories arrived damaged by water and corrosion, as well as by concussion due to the tipping or falling of pallets containing the karts in transit. See ECF No. [38] ¶ 5; ECF No. [40–7] ¶ 5; see also ECF No. [38–6] at p. 3 of 38; ECF No. [38–7] at p. 11 of 23.

 

The parties dispute Defendant’s role in the transport of those karts and accessories from France to their final destination in Arizona. Defendant contends that it did not transport or handle the karts and took no active role in shipping them, but acted as a receiving agent in the United States. ECF No. [38] ¶¶ 6, 13. Specifically, Defendant claims that the karts were transported from Sodikart SA to port at Le Havre by non-party Trans–Containers du Maine, and that Defendant arranged the shipment from Le Havre to port in Houston, and from there to Arizona, for non-party Cargo Container Line Ltd., which in turn arranged for transport with Mediterranean Shipping Company. Id. ¶¶ 7–9. Plaintiff does not dispute that Mediterranean Shipping Company actually transported the karts from France to their final destination. Plaintiff claims that Defendant represented itself to Plaintiff as a “one stop shop” for “ocean shipping, trucking, insurance and customs clearance” providing “the services of assembly, consolidation, breaking, bulk and distribution,” as a “freight forwarder” for purposes of the transport. See ECF No. [40–7] ¶¶ 6–7, 13; ECF No. [40–1] ¶¶ 5, 12. Plaintiff has also produced an email from an employee of Defendant to a third party which states, with reference to Defendant, “As you may already know, Sodikart has decided to change freight forwarders.” ECF No. [40–6] at 1.

 

*2 The parties further dispute the authenticity and validity of the bill of lading issued with respect to the transport. Defendant has exhibited copies of a single bill of lading for the transport from Le Havre to Arizona (issued by Defendant’s French Affiliate, Geodis Wilson France). See ECF No. [38–3] (“Bill of Lading”); ECF No. [38–4] (“Sea Waybill”); ECF No [38–2] at 15:7–9. It supports the authenticity of those copies as true and correct with the unrebutted deposition testimony of Defendant’s corporate representative to that effect, see ECF No. [38–2] at 19:21–24, and with the corroborative testimony of Plaintiff’s corporate representative that, following the routine practice between Defendant and Plaintiff in their three-year course of business, Defendant would have provided Plaintiff a bill of lading like the copy evidenced for the transport in question. See ECF No. [38–1] at 19:2–20:17. FN2 Controverting that evidence, Plaintiff stresses that Defendant has not introduced the original and executed bill of lading, notes (based on a sworn affidavit from its corporate representative) that Plaintiff could not locate an email from Defendant with the bill of lading for the transport in question attached (email attachment being the routine means of such communication between the parties), and highlights that the front and back of the Bill of Lading are in different colored inks. See ECF No. [40–7] ¶ 11; ECF No. [40–1] ¶¶ 8–10; Reply at 7–8. Plaintiff’s corporate representative stated (and Plaintiff argues), on those bases, that the Bill of Lading was produced by Defendant after Plaintiff alerted Defendant to their claim for damages. See ECF No. [40–1] ¶ 8.

 

FN2. Plaintiff’s corporate representative further testified that he did not remember if the Bill of Lading evidenced at his deposition was, in fact, the one issued with the shipment in question. See ECF No. [38–1] at 19:11–21.

 

III. SUMMARY JUDGMENT STANDARD

A party may obtain summary judgment “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 parties may support their positions by citation to the record, including inter alia, depositions, documents, affidavits, or declarations. Fed.R.Civ.P. 56(c). An issue is genuine if “a reasonable trier of fact could return judgment for the non-moving party.” Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir.2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A fact is material if it “might affect the outcome of the suit under the governing law.” Id. (quoting Anderson, 477 U.S. at 247–48). The Court views the facts in the light most favorable to the non-moving party and draws all reasonable inferences in its favor. See Davis v. Williams, 451 F.3d 759, 763 (11th Cir.2006); Howard v. Steris Corp., 550 F. App’x 748, 750 (11th Cir.2013) (“The court must view all evidence most favorably toward the nonmoving party, and all justifiable inferences are to be drawn in the nonmoving party’s favor.”).

 

“[T]he court may not weigh conflicting evidence to resolve disputed factual issues; if a genuine dispute is found, summary judgment must be denied.”   Carlin Commc’n, Inc. v. Southern Bell Tel. & Tel. Co., 802 F.2d 1352, 1356 (11th Cir.1986); see also Aurich v. Sanchez, 2011 WL 5838233, at *1 (S.D.Fla. Nov.21, 2011) (“If a reasonable fact finder could draw more than one inference from the facts, and that inference creates an issue of material fact, then the court must not grant summary judgment.” (citing Hairston v. Gainesville Sun Publishing Co., 9 F.3d 913 (11th Cir.1993)). The moving party shoulders the initial burden of showing the absence of a genuine issue of material fact. Shiver v. Chertoff, 549 F.3d 1342, 1343 (11th Cir.2008). Once this burden is satisfied, “the nonmoving party ‘must make a sufficient showing on each essential element of the case for which he has the burden of proof.’ ”   Ray v. Equifax Info. Servs., L.L.C., 327 F. App’x 819, 825 (11th Cir.2009) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Accordingly, the non-moving party must produce evidence, going beyond the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and admissions on file, designating specific facts to suggest that a reasonable jury could find in his favor.   Shiver, 549 F.3d at 1343. “A mere ‘scintilla’ of evidence supporting the opposing party’s position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Brooks v. Cnty. Comm’n of Jefferson Cnty., Ala., 446 F.3d 1160, 1162 (11th Cir.2006). Even where an opposing party neglects to submit any alleged material facts in controversy, the court must still be satisfied that all the evidence on the record supports the uncontroverted material facts that the movant has proposed before granting summary judgment. Reese v. Herbert, 527 F.3d 1253, 1268–69, 1272 (11th Cir.2008); United States v. One Piece of Real Prop. Located at 5800 S.W. 74th Ave., Miami, Fla., 363 F.3d 1099, 1103 n. 6 (11th Cir.2004).

 

VI. ANALYSIS

*3 Through this action, Plaintiff seeks recovery from Defendant under the Carmack Amendment regarding karts and accessories shipped by Plaintiff and damaged in transit from France to their final destination in Scottsdale, Arizona. Defendant, in the instant Motion, argues that Plaintiff’s Carmack Amendment claim fails as a matter of law because (a) the shipment at issue was governed by a single bill of lading for transport from a foreign country to a United States destination, with no separate bill of lading issued or required for the United States-domestic leg of transportation, rendering the Carmack Amendment inapplicable; and (b) Defendant acted neither as a “motor carrier” nor a “freight forwarder” as required for application of the Carmack Amendment. Defendant is correct on the first and, ultimately, dispositive issue.

 

A. The Carmack Amendment Does Not Apply to the Shipment at Issue Here

The Carmack Amendment “provides the exclusive cause of action for interstate shipping contract claims.” White v. Mayflower Transit, LLC, 543 F.3d 581, 584 (9th Cir.2008). Generally, the Carmack Amendment governs interstate cargo claims, controls and limits the liability of common carriers for in-transit cargo and preempts common or state law remedies that increase a common carrier’s liability beyond the actual loss or injury to the property. See, e.g., Smith v. United Parcel Serv., 296 F.3d 1244, 1246 (11th Cir.2002) ( “The Carmack Amendment creates a uniform rule for carrier liability when goods are shipped in interstate commerce.”); Hansen v. Wheaton Van Lines, Inc., 486 F.Supp.2d 1339, 1343–44 (S.D.Fla.2006) ( Carmack Amendment preempt all state, common and statutory law regarding the liability of an interstate common carrier for claims arising out of shipments within its purview). It was enacted in 1906 as an amendment to the Interstate Commerce Act of 1887 codifying a common law rule of strict liability on common carriers, and is now part of the Interstate Commerce Commission Termination Act of 1995, 49 U.S.C. § 14706. The Carmack Amendment imposes strict liability on “motor carriers” and “freight forwarders” and provides, in relevant part:

 

(1) Motor carriers and freight forwarders.—A carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 or chapter 105 are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by

 

(A) the receiving carrier,

 

(B) the delivering carrier, or

 

(C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading and, except in the case of a freight forwarder, applies to property reconsigned or diverted under a tariff under section 13702.

 

*4 Failure to issue a receipt or bill of lading does not affect the liability of a carrier. A delivering carrier is deemed to be the carrier performing the line-haul transportation nearest the destination but does not include a carrier providing only a switching service at the destination.

 

(2) Freight forwarder.—A freight forwarder is both the receiving and delivering carrier. When a freight forwarder provides service and uses a motor carrier providing transportation subject to jurisdiction under subchapter I of chapter 135 to receive property from a consignor, the motor carrier may execute the bill of lading or shipping receipt for the freight forwarder with its consent. With the consent of the freight forwarder, a motor carrier may deliver property for a freight forwarder on the freight forwarder’s bill of lading, freight bill, or shipping receipt to the consignee named in it, and receipt for the property may be made on the freight forwarder’s delivery receipt.

 

49 U.S.C. § 14706(a); see also UPS Supply Chain Solutions, Inc. v. Megatrux Transp., Inc., 750 F.3d 1282, 1285–86 (11th Cir.2014) (“The Carmack Amendment is a strict liability statute. When a shipper shows delivery of goods to a carrier in good condition and non-delivery or delivery in a damaged condition, there arises a prima facie presumption of liability.”).

 

However, the Carmack Amendment does not apply to shipments from a foreign country to a final destination in the United States unless the domestic leg of transportation is governed by a separate bill of lading. Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 701 (11th Cir.1986) (“[W]hen a shipment of foreign goods is sent to the United States with the intention that it come to final rest at a specific destination beyond its port of discharge, then the domestic leg of the journey (from the port of discharge to the intended destination) will be subject to the Carmack Amendment as long as the domestic leg is covered by separate bill or bills of lading.” (emphasis added)); Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., 561 U.S. 89, 100, 130 S.Ct. 2433, 177 L.Ed.2d 424 (2010) (adopting rule in Swift and holding that the Carmack Amendment does not apply to a shipment originating overseas under a single through bill of lading, i.e., without a separate bill of lading issued for the domestic, inland segment of an overseas import shipment); Altadis USA ex rel. Fireman’s Fund Ins. Co. v. Sea Star Line, LLC, 458 F.3d 1288, 1293 (11th Cir.2006) (a separate, domestic bill of lading is required for application of the Carmack Amendment).

 

Here, since there was no separate bill of lading issued for the domestic leg of transport—the rail and truck transportation of the karts from port in Houston, Texas to their final destination in Scottsdale, Arizona—the Carmack Amendment does not apply. The Bill of Lading provides for combined transport, through shipment from Le Havre, France to Scottsdale, Arizona. ECF No. [38–3]; ECF No. [38–4]. “Carmack does not apply if the property is received at an overseas location under a through bill that covers the transport into an inland location in the United States.” Kawasaki, 561 U .S. 103.

 

*5 Plaintiff attempts to create a factual dispute by challenging the validity and authenticity of the Bill of Lading. However, the Court need not addresses this issue of fact to resolve Defendant’s Motion. Assuming (despite Plaintiff’s generally unavailing evidence) that the through Bill of Lading produced by Defendant is invalid, and even assuming, as Plaintiff implies, that Defendant never issued a bill of lading prior to the shipment in question, Plaintiff’s Carmack Amendment fails because there was no separate bill of lading issued or required for the inland shipment from Houston to Scottsdale. Swift, Altadis, Kawasaki and their progeny uniformly hold that it is the existence of, or requirement for, a domestic bill of lading that determines whether the Carmack Amendment applies. See Kawasaki, 561 U.S. 102–03 (“Carmack applies only to transport of property for which Carmack requires a receiving carrier to issue a bill of lading, regardless of whether that carrier erroneously fails to issue such a bill.”); Altadis, 458 F.3d at 1291 ( Carmack Amendment does not apply unless the domestic, overland leg of transport is itself covered by a separate bill of lading); see also UPS Supply Chain Solutions, 750 F.3d at 1286 n. 2 ( Carmack Amendment would not apply to shipment from overseas to inland U.S. location “under one logistical plan”); Amer. Road Serv. Co. v. Consolid. Rail, 348 F.3d 565, 568 (6th Cir.2003) (the Carmack Amendment does not apply “to a shipment under a through bill of lading unless a domestic segment of the shipment is covered by a separate domestic bill of lading.”); Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 703 (4th Cir.1993) (same). If there is no separate bill of lading for the domestic, inland segment of the shipment, and no such bill of lading is required, the Carmack Amendment does not apply.

 

Plaintiff does not contend that a separate bill of lading for the Houston–to–Scottsdale segment of the shipment was actually issued by Defendant (or any other party). Rather, accepting arguendo the factual dispute manufactured by Plaintiff, Defendant did not issue any valid or binding bill of lading at all. While, if the Carmack Amendment is otherwise applicable to Defendant, Defendant was required to issue a bill of lading pursuant to 49 U.S.C. § 14706(a), Defendant was not required to issue a separate bill of lading for the domestic leg of the kart and accessories transportation. See Kawasaki, 561 U.S. 104–05 (explaining that the Carmack Amendment and COGSA permit through bills of lading for shipments from overseas to an inland U.S. destination, and do not require a separate bill of lading for the domestic leg of such a shipment). Therefore, whether Defendant issued a valid through bill of lading or none at all is not a genuine issue of material fact to be resolved. The domestic, inland leg of the combined, through transportation of the karts and accessories from Le Havre, France via Houston, Texas to Scottsdale, Arizona was not governed by a separate bill of lading. As such, the Carmack Amendment does not apply, and Defendant must be afforded summary judgment on this independent ground.

 

B. The Court Need Not Address Whether Defendant Qualifies as a Freight Forwarder Under the Carmack Amendment

*6 Defendant argues, in the alternative, that the Carmack Amendment does not apply because Defendant was not a “freight forwarder” with respect to the shipment at issue here. The Carmack Amendment defines a “freight forwarder” as:

 

[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

 

(C) uses for any part of the transportation a carrier subject to jurisdiction under this subtitle.

 

The term does not include a person using transportation of an air carrier subject to part A of subtitle VII.

 

49 U.S.C. § 13102(8).

 

By sworn affidavit of its designated representative, Plaintiff contends that Defendant represented itself to Plaintiff and generally functions as a “one stop shop” for what amounts to international sea and land shipping and transportation, providing services including all of those listed in the relevant statutory definition of a freight forwarder. See ECF No. [40–7] ¶¶ 6–7, 13; ECF No. [40–1] ¶¶ 5, 12. It has also produced an email in which Defendant’s employee describes Defendant to a third party as a “freight forwarder,” with specific reference to Plaintiff. See ECF No. [40–6]. In other words, Plaintiff contends that a genuine factual dispute precludes summary judgment on this material issue, i.e., whether Defendant is a freight forwarder within the meaning of the Carmack Amendment. While, seemingly, a factual issue may be raised, it has no import. As the Court finds that the Carmack Amendment is inapplicable to the shipment at issue here, see supra Section IV.A, it need not reach or address this issue.

 

V. CONCLUSION

For the foregoing reasons, it is hereby ORDERED and ADJUDGED that Defendant Geodis Wilson USA Inc.’s Motion for Summary Judgment, ECF No. [39], is GRANTED.

 

The Clerk of Court is directed to CLOSE this case and TERMINATE any impending deadlines, and any pending motions are DENIED as moot.

 

DONE and ORDERED.

Appellate Court of Illinois,

First District, Third Division.

ARGONAUT MIDWEST INSURANCE COMPANY, Plaintiff–Appellee,

v.

Gabriel MORALES, Land Truck Inc., and Insurance Company of the State of Pennsylvania, Inc., an Illinois Corporation, Defendants–Appellants

(Raymond J. Jones, Stanley Herbert, Morris K. Stevens, and Gloria Stevens, Defendants).

 

No. 1–13–0745.

Sept. 3, 2014.

 

Appeal from the Circuit Court of Cook County. No. 09 CH 27901, Rodolfo Garcia, Judge, presiding.

 

OPINION

Presiding Justice HYMAN delivered the judgment of the court, with opinion:

*1 ¶ 1 This case involves cross motions for summary judgment on issues involving insurance coverage of a trucking accident. Appellants–Defendants Gabriel Morales, Land Truck, Inc., and Insurance Company of the State of Pennsylvania, Inc., appeal the trial court’s summary judgment order in favor of plaintiff Argonaut Midwest Insurance Company, which held that Argonaut’s policy did not cover the accident. Appellants raise two issues on appeal: (i) whether coverage is excluded under the “Trucker—Insurance for Non– Trucking Use” endorsement; and (ii) whether Land Truck is entitled to a defense under the policy. We affirm, holding that Argonaut has no duty to defend or indemnify Morales under the “Trucker—Insurance for Non– Trucking Use” exception, and that Land Truck is not considered an insured under Argonaut’s policy.

 

¶ 2 BACKGROUND

¶ 3 Gabriel Morales entered into an “Owner Operator Contract” with Land Truck in April 2007. The contract described Land Truck as “a common carrier by motor vehicle holding authority from the Federal Highway Administration.” The contract identifies Morales as an independent contractor and the owner of a motor vehicle who “is engaged in an independently established business of hauling commodities by motor vehicle pursuant to contract with contract or common carriers.” Land Truck agreed to pay Morales a “flat rate percentage of Gross revenue.” (Strikeout in original.)

 

¶ 4 Regarding insurance, the contract provides that “[u]nless required by statute or ordinance,” Land Truck will not provide any insurance to Morales. Moreover, the contract required Morales carry his own insurance, including “Bobtail Insurance naming Land Truck Inc as an ‘Additional Named Insured’ and Certificate Holder.” “ ‘Bob-tail’ in trucking parlance is the operation of a tractor without an attached trailer,” and “bobtail insurance” typically refers to insurance for when a tractor is not being used in the business of an authorized carrier. Prestige Casualty Co. v. Michigan Mutual Insurance Co., 99 F.3d 1340 (6th Cir.1996). Land Truck required Morales pay “all costs and expenses incident to the performance of” the contract, including premiums for insurance to cover physical damages, vehicle operating and maintenance costs, fees and taxes, and tolls, among others.

 

¶ 5 Morales agreed to haul commodities for Land Truck, but could refuse loads and do business with other carriers as long as Land Truck received proper notice. Morales would display Land Truck’s placards and identifications when hauling for it, and remove them when not. Morales had sole responsibility for the “direction and control” of his operators, and discretion regarding the “methods and means” of fulfilling his obligations to Land Truck.

 

¶ 6 Land Truck agreed to comply with the rules and regulations of the Interstate Commerce Commission, the Department of Transportation, and state regulatory authorities. Subject to those rules and regulations, Morales had the right to “control and direct, in all respects, the operation of the equipment used in the performance” of the contract. The contract lasted one year, subject to automatic renewal.

 

*2 ¶ 7 Effective early March 2009, plaintiff Argonaut Midwest Insurance Company issued a $1 million insurance policy to Morales. Under the policy, Argonaut agreed to “pay 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’ .” Argonaut agreed to “defend any ‘Insured’ against a ‘suit’ asking for these damages * * *. However, [it had] no duty to defend any ‘insured’ against a ‘suit’ seeking damages for ‘bodily injury’ or ‘property damage’ * * * to which this insurance does not apply.”

 

¶ 8 The policy defines “insureds” to include “You [Morales] for any covered ‘auto’.” Among the schedule of covered autos, Morales’s 2003 Freightliner truck is listed. An endorsement titled “Truckers—Insurance for Non– Trucking Use” states, “This insurance does not apply to: * * * A covered ‘auto’ while used in the business of anyone to whom the auto is rented.” (Emphasis added.)

 

¶ 9 Later in March 2009, Land Truck notified Morales of a pickup from Waukegan, Illinois. Morales got a dispatch sheet from Land Truck, went to get his truck and trailer from a parking spot he rented, and went to retrieve the empty container. Morales paid tolls with an I–Pass provided by Land Truck. Morales was driving north on I–294 when he struck a vehicle carrying Stanley Herbert, Raymond Jones, and Morris Stevens.

 

¶ 10 In 2009, Herbert, Jones, and Stevens sued Morales and Land Truck. Their amended complaint alleges negligence against Morales and Land Truck, and Stevens’ wife, Gloria, alleges lost of consortium.

 

¶ 11 Argonaut filed a complaint for declaratory judgment against Morales, Land Truck, Herbert, Jones, and the Stevenses, claiming it had no duty to defend or indemnify Morales or Land Truck in the underlying suit. Alternatively, Argonaut claimed that the defense costs of the underlying suit should be apportioned between itself and Land Truck’s insurer, defendant Insurance Company of the State of Pennsylvania.

 

¶ 12 The parties filed cross motions for summary judgment. The trial court granted Argonaut summary judgment, holding that it had no duty to defend either Morales or Land Truck. This appeal timely followed.

 

¶ 13 STANDARD OF REVIEW

¶ 14 Summary judgment may be granted where no triable issue of material fact is present and the movant is entitled to a judgment as a matter of law. 735 ILCS 5/2–1005(c) (West 2010). “A genuine issue of material fact * * * exists where the material facts are disputed or, if the material facts are undisputed, reasonable persons might draw different inferences from the undisputed facts.” (Internal quotation marks omitted.) Windmill Nursing Pavilion, Ltd. v. Cincinnati Insurance Co., 2013 IL App (1st) 122431, ¶ 18. Cross motions for summary judgment indicate none of the movants believe a factual disputes exist regarding the issues raised. Illinois Emcasco Insurance Co. v. Waukegan Steel Sales Inc., 2013 IL App (1st) 120735, ¶ 11. “We review the circuit court’s grant of summary judgment de novo.” Skokie Castings, Inc. v. Illinois Insurance Guarantee Fund, 2013 IL 113873, ¶ 27.

 

¶ 15 ANALYSIS

*3 ¶ 16 Appellants argue (i) the “Trucker—Insurance for Non– Trucking Use” endorsement does not apply, and (ii) Land Truck is an insured under Argonaut’s policy. We conclude that neither argument has merit.

 

¶ 17 Non– Trucking Endorsement

¶ 18 Appellants assert two reasons for the inapplicability of the endorsement: (i) Land Truck did not rent the Freightliner because it did not take exclusive possession or control of it; and (ii) the term “rented” is ambiguous. We reject both assertions.

 

¶ 19 We interpret an insurance policy as we would any other contract, reading the terms to give effect to the intent of the parties. Gaudina v. State Farm Mutual Automobile Insurance Co., 2014 IL App (1 st) 131264, ¶ 17. We give unambiguous policy terms their plain, ordinary, popular meaning. Id. ¶ 18. Ambiguity exists where the policy terms can produce more than one reasonable interpretation. Id. Where there is ambiguity, we construe the policy liberally in favor of coverage. Id.

 

¶ 20 Appellants note that the endorsement excludes coverage where the Freightliner “used in the business of anyone to whom the auto is rented.” They argue that Morales’s truck was never rented under the terms of the agreement between Land Truck and Morales. “Rent,” they assert, requires the right to exclusive possession and control. Dictionary definitions of “rent,” however, do not require exclusive possession. See Black’s Law Dictionary 1410 (9th ed.2009) (as a noun, “Consideration paid, usu. periodically, for the use or occupancy of property”); Webster’s Third New International Dictionary 1923 (1993) (as a verb, “to grant the possession and enjoyment of for rent: hire out”).

 

¶ 21 Appellants also cite foreign case law indicating that renting or leasing property requires the transfer of exclusive possession. E.g., Canal Insurance Co. v. Liberty Mutual Insurance, 395 F.Supp. 962 (N.D.Ga.1975) (holding use of truck incidental to service contract did not constitute lease of vehicle). In addition, they point to Millenium Park Joint Venture, LLC v. Houlihan, 241 Ill.2d 281, 309 (2010), where our supreme court stated, regarding real property, “[i]f the contract gives exclusive possession of the premises against all the world, including the owner, it is a lease, but if it merely confers a privilege to occupy the premises under the owner, it is a license.” (Internal quotation marks omitted.) They cite as well the Automobile Renting Occupation and Use Tax Act (35 ILCS 155/1 et seq. (West 2012)), which defines vehicle rental as requiring “any transfer of the possession or right to possession of an automobile.” 35 ILCS 155/2 (West 2012). Appellants acknowledge this statute does not apply to commercial trucks.

 

¶ 22 Further, appellants argue that Morales did not transfer complete possession or control of his truck to Land Truck, and therefore the non-trucking endorsement does not apply, noting the owner operator contract states, “Subject to the specific requirements of the Interstate Commerce Commission and/or D.O.T. and of any State regulatory agency having jurisdiction: * * * The Contractor [Morales] shall control and direct, in all respects, the operation of the equipment used in the performance of this Contract.” (Emphasis added.) Because the agreement purports to leave control of the Freightliner in Morales’s possession, appellants assert that it is not a “rental” agreement. They conclude that Land Truck did not rent Morales’s truck, and therefore the nontrucking endorsement does not apply.

 

*4 ¶ 23 We disagree with appellants’ logic. Under the facts here, transferring exclusive control, possession, and use of a vehicle do constitute renting, and the owner operator contract between Morales and Land Truck is a rental agreement.

 

¶ 24 While the agreement does not say so, statutes and regulations require Land Truck to assume exclusive control of Morales’s truck. As the owner operator contract states, Land Truck is a common carrier registered with the United States Department of Transportation (DOT). Registration requires motor carriers be willing and able to comply with DOT rules and regulations. 49 U.S.C. § 13902(a)(1)(A)(i) (2012). Those rules provide that an “authorized carrier may perform authorized transportation in equipment it does not own only” if there is “a written lease granting the use of the equipment.” (Emphasis added.) 49 C.F.R. § 376.11(a) (2012). Federal law further requires that a written lease “provide that the authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease. The lease shall further provide that the authorized carrier lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.” (Emphasis added.) 49 C.F.R. § 376.12(c)(1) (2012).

 

¶ 25 While the owner operator contract appears to contradict these terms, those contradictory terms are “[s]ubject to the specific requirements of the Interstate Commerce Commission and/or D .O.T. and of any State regulatory agency having jurisdiction.” (Emphasis added.) Critically, the words “subject to” create a condition to apply the terms that follow. Catholic Charities of the Archdiocese of Chicago v. Thorpe, 318 Ill.App.3d 304, 309 (2000). That is, the agreement that Morales controls the use of his truck is conditioned on the conformance of those contract terms with DOT regulations. Because those contract terms contradict DOT regulations, the regulations control. 11 Richard A. Lord, Williston on Contracts § 30:19 (4th ed. 2012) (“When a contract expressly incorporates a statutory enactment by reference, that enactment becomes part of the contract for the indicated purposes just as though the words of that enactment were set out in full in the contract.”). Thus, under DOT regulations and the owner-operator agreement, Land Truck assumed “exclusive possession, control, and use” of Morales’s Freightliner. 49 C.F.R. § 376.12(c)(1) (2012).

 

¶ 26 Argonaut notes that, under Illinois law, the motor carrier’s exclusive possession is implied in the lease:

 

“The following terms, if not stated in a lease, shall be implied. Any contrary provisions in the lease shall be void.

 

1) Exclusive possession and control. The lessee shall have exclusive possession and control of leased equipment during all periods when the equipment is operated under the lease. Such exclusive possession and control shall extend also to the drivers of leased equipment.” (Emphasis added.) 92 Ill. Adm.Code 1360.40(b)(1) (1993).

 

*5 But it is unclear whether Land Truck is subject to this code provision, which only applies to carriers “regulated by the Illinois Commerce Commission.” 92 Ill. Adm.Code 1360.10(a)(1) (1987). Under the Illinois Commercial Transportation Law (625 ILCS 5/18c–1101 et seq. (West 2010)), the commission’s jurisdiction over “for-hire transportation by motor carrier” is limited to intrastate commerce. 625 ILCS 5/18c–1201 (West 2010); Canal Insurance v. A & R Transportation & Warehouse, LLC, 357 Ill.App.3d 305, 312–13 (2005). It is unclear from the record whether Land Truck and Morales’s business involves intrastate or interstate commerce. Thus, we cannot say that the above section of the administrative code applies. See Triple 7 Illinois, LLC v. Gaming & Entertainment Management–Illinois, LLC, 2013 IL App (3d) 120860, ¶ 22 (“interpreting the regulations to apply to agreements between nonlicensed entities would violate the right of private parties to freely contract”).

 

¶ 27 Appellants urge the court to follow Canal Insurance Co. v. United States Fire Insurance Co., an unpublished order from the United States District Court for the Southern District of Alabama. Canal Insurance Co. v. United States Fire Insurance Co., No. 04–0094–KD–C (S.D.Ala. May 26, 2006). We decline. There, a semi truck lost a break drum, which flew through the windshield of a nearby vehicle, striking one of the occupants who died several days later. A trucking company owned the semitruck, and a peanut company owned the trailer. The trucking company’s insurer filed a suit for declaratory judgment, arguing that a “Truckman’s Endorsement” limited coverage. That endorsement (similar to the one here) read, “no coverage is extended to any person, firm or organization using the described automobile pursuant to any lease, contract for hire, bailment, rental agreement, or any similar contract or agreement.” The federal district court held under Georgia law that the agreement between the trucking and peanut companies was a service contract, and not a lease or rental agreement.

 

¶ 28 The court noted that federal law might have defined the agreement as a “lease.” The statute defines such a lease as a between a truck owner and “an authorized carrier.” 49 C.F.R. § 376 .2(e) (2012). But the insurer offered nothing to prove that the peanut company was an authorized motor carrier under the statute and regulations. In addition the court noted that the agreement did not require the peanut company to take exclusive possession of any truck, which was a required term of the lease. 49 C.F.R. § 376.12(c)(1) (2012). The court reasoned that, because the contract between the trucking and peanut companies was a service contract, the endorsement did not apply.

 

¶ 29 The Canal case is distinguishable in that no evidence identified the peanut company as a DOT-regulated authorized carrier. It was therefore not subject to DOT regulations. Unlike Canal, no one disputes that Land Truck is an authorized carrier, as acknowledged in the owner-operator contract. Moreover, the contract incorporates DOT requirements into the agreement. No similar provision appears in the Canal case.

 

*6 ¶ 30 Appellants next argue that the term “rented” is ambiguous. Ambiguity exists where language is subject to more than one reasonable interpretation. Gaudina v. State Farm Mutual Automobile Insurance Co., 2014 IL App (1 st) 131264, ¶ 18. Appellants fail to explain what definitions of the term “rented” lead to multiple, reasonable interpretations of coverage. We cannot discern any definitions of “rented” that would lead to differing outcomes regarding coverage. Thus, appellants’ argument is not well taken.

 

¶ 31 Even if the owner operator agreement is read in light of DOT regulations, according to appellants that simply indicates Morales “leased” his vehicle to Land Truck, as federal law does not describe the document at a “rental” agreement. They note that Argonaut’s policy uses the terms “lease” and “rent” separately, and that the terms must be interpreted differently to avoid surplusage.

 

¶ 32 But appellants fail to cite any sources that define these terms differently, or that define “lease” as requiring exclusive possession while “rent” does not. We acknowledge that Argonaut’s policy uses both terms, and while courts endeavor to avoid reading a contract to create surplusage, it happens nevertheless. Coles–Moultrie Electric Cooperative v. City of Sullivan, 304 Ill.App.3d 153, 159 (1999). Out of an abundance of caution, contract drafters often string synonyms or closely related words together to prevent a narrow interpretation. If courts were to attempt to interpret every synonym differently, the strain would produce absurdities. See Rubin v. Laser, 301 Ill.App.3d 60, 68 (1998) (“Courts construe contracts so as to avoid absurd results.”). Generally, when referring to types of contracts, “rent” and “lease” are synonymous, and we detect no meaningful differences in their definitions. See Black’s Law Dictionary 970 (9th ed.2009) (defining “lease” as “[a] contract by which a rightful possessor of real property conveys the right to use and occupy the property in exchange for consideration, usu. rent.”); Webster’s 3d New International Dictionary Unabridged 1923 (1993) (defining “rent” as “to take and hold under an agreement to pay rent”).

 

¶ 33 Appellants next argue that, even if regulations must be used to interpret the owner-operator contract as giving exclusive control of Morales’s vehicle to Land Truck, the regulations are irrelevant because, in reality, Land Truck did not control Morales’s vehicle. In support, appellants point to Roberson v. Industrial Comm’n, 225 Ill.2d 159 (2007). In Roberson, a trucker operated his own truck under contract with a federally regulated motor carrier. Id. at 162–63. The contract expressly stated that under federal regulations, the carrier had “exclusive possession, control and use of the” truck, and “assumed complete responsibility for” its operation. (Internal quotation marks omitted.) Id. at 162. The contract also labeled the trucker as an independent contractor, and gave the trucker great leeway in satisfying the contractual duties. Id. at 163.

 

*7 ¶ 34 The trucker was injured while unloading freight for the carrier and filed a worker’s compensation claim. Id. at 164–66. The arbitrator found that as an independent contractor, the trucker was ineligible for compensation. Id. at 170. The Industrial Commission reversed, finding that the trucker was an employee and noting that the carrier had the right to exclusive possession and use of the trucker’s vehicle. Id. at 172. The supreme court affirmed, finding the conclusion was not against the manifest weight of the evidence. Id. at 187.

 

¶ 35 Appellants and the dissent argue that, under Roberson, regulations between motor carriers and truckers do not alter the contractual relationship between the two. We disagree. Roberson does not stand for the proposition that federally mandated language in the owner operator contract is meaningless. As the supreme court noted, “the regulation requiring a motor carrier to have exclusive possession, control, and use of leased equipment does not mandate that the driver is an employee for all purposes. * * * Compliance with federal regulations is merely a factor that may be considered in a common law analysis of whether a driver is an employee of a trucking company.” Id. at 178. The Roberson court concluded that courts may consider federally mandated language included in the contract between a motor carrier and a trucker (among many other factors) to determine whether the trucker is an employee or independent contractor. Id. at 184–87. Accordingly, this language is not meaningless, and use of federal regulations to interpret the owner operator agreement is proper.

 

¶ 36 Even if this court reads federal regulations into the agreement between Land Truck and Morales, appellants contend those terms create a “legal fiction” and do not reflect whether Land Truck in fact had exclusive control over Morales’s vehicle. (A “legal fiction” is a rule that assumes “that something is true even though it may be untrue.” Black’s Law Dictionary 976 (9th ed.2009).) In support, appellants cite Transamerican Freight Lines, Inc. v. Brada Miller Freight Systems, Inc., 423 U.S. 28 (1975). There, the Supreme Court noted that an owner who leases a truck to a motor carrier maintains an “aspect of control” over the truck. Id. at 39. But the court described that as “ministerial control,” and not the kind of control that federal regulations were concerned with. Id. Rather, the concern

 

“was with operating authority, with routes and destinations and classes of freight, with the integrity of certifications, and with that ultimate control in the lessee [motor carrier] that makes and keeps it responsible to the public, the shipper, and the Commission. The Commission observed:

 

It now seems to be accepted that when an authorized carrier furnishes service in vehicles owned and operated by others, he must control the service to the same extent as if he owned the vehicles, but need control the vehicles only to the extent necessary to be responsible to the shipper, the public, and this Commission for the transportation.” (Internal quotation marks omitted.) Id.

 

*8 Legal fiction or not, if a motor carrier opts not to exercise its right to control the vehicle, it does so at its own peril, as its responsibility for the vehicle does not abate. See Carl Subler Trucking, Inc. v. Splittorff, 482 N.E.2d 295, 297 (Ind.Ct.App.1985) (“regulations require that carriers operating under permits exert actual control over leased equipment; the borrowed drivers and the carriers are not permitted to circumvent such regulation by contract”); Hershberger v. Home Transport Co., 103 Ill.App.3d 348, 352 (1982) (noting one goal of regulation which imposes responsibility on carrier includes preventing carriers from avoiding safety standards by leasing equipment from non-regulated carriers). Regardless whether Land Truck chose to exercise its right to control Morales’s vehicle, the terms giving it those rights make the owner operator contract a rental agreement.

 

¶ 37 Appellants next maintain that Argonaut failed to prove Morales rented his vehicle to Land Truck. Appellants assert that there are no “extrinsic facts” suggesting that Morales gave possession and control of his vehicle to Land Truck. But appellants point to no case law requiring extrinsic facts be found in the owner operator agreement, nor do they explain why extrinsic facts are necessary to establish that Land Truck had exclusive control over Morales’s vehicle. The term “rented” typically refers to a contract. Accordingly, the agreement between Morales and Land Truck sufficiently to prove the rental of the vehicle.

 

¶ 38 Appellants and the dissent further maintain that DOT regulations should not be used to guide an insurance coverage dispute. In support, they cite Carolina Casualty Insurance Co. v. Insurance Co. of North America, 595 F.2d 128 (3d Cir.1979). The dissent puts much stock in the Roberson court’s citing Carolina Casualty for the proposition that terms inserted in private contracts by federal regulations do not alter obligations “ ‘under contracts allocating financial risk among private parties.” ’ (Emphasis omitted.)   Roberson, 225 Ill.2d at 178 (quoting Carolina Casualty, 595 F.2d at 138).

 

¶ 39 The Carolina Casualty case involved a motor carrier that entered into a trip-lease contract with a truck owner. Carolina Casualty, 595 F.2d at 129–31. When the trucker was involved in a car accident, the trucker’s insurer filed a declaratory judgment action against the carrier’s insurer to determine which policy was primary. Id. at 130. The trial court held that, because the DOT “responsibility-and-control” regulations made the carrier liable to the injured parties, the carrier and its insurer were primarily liable. Id. at 132. The court of appeals disagreed, holding that courts should not rely solely on those regulations when determining which policy is primary. Id. at 138. Instead, the court “should consider the express terms of the parties’ contracts.” Id.

 

¶ 40 In Carolina Casualty, the issue was whether the carrier’s or the trucker’s insurance was primary. Neither policy contained a nontrucking endorsement like the one here. Absent the endorsement, we agree that these DOT regulations would not control the interpretation of which policy is primary. The question of whether a policy is primary versus excess may sometimes be resolved by referencing the policy terms alone. See, e.g., Certain Underwriters at Lloyd’s, London v. Central Mutual Insurance Co., 2014 IL App (1st) 133145, ¶¶ 10–12.

 

*9 ¶ 41 But we disagree that either Roberson or Carolina Casualty stands for the proposition that DOT regulations are irrelevant in an insurance coverage dispute. Our inquiry differs from that of Carolina Casualty. Argonaut’s nontrucking endorsement conditions coverage on the type of relationship between Morales and Land Truck at the time of the accident. That is to say, whether the contract between Land Truck and Morales constitutes a rental agreement. When one party takes exclusive possession, control, and use of a vehicle in exchange for money, that’s a rental agreement. The fact that the source of the possession-and-control terms is federal law is irrelevant to our interpretation of the endorsement. But federal law does control our interpretation of the owner-operator agreement because that agreement is “subject to” DOT regulations.

 

¶ 42 Our analysis aligns with the purpose of Argonaut’s bobtail insurance policy, providing coverage when Morales is using his truck for his own purposes, not when he is renting it to Land Truck. For the latter circumstances, federal law requires Land Truck to procure its own insurance to cover Morales when Land Truck is using his vehicle. 49 C.F.R. § 376.12(j)(1) (2012) (“The lease shall clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public pursuant to [Federal Motor Carrier Safety Administration] regulations under 49 U .S.C. 13906. The lease shall further specify who is responsible for providing any other insurance coverage for the operation of the leased equipment, such as bobtail insurance.”).

 

¶ 43 Accordingly, the “Trucker—Insurance for Non– Trucking Use” endorsement applies, and Argonaut has no duty to defend or indemnify Morales.

 

¶ 44 Land Truck’s Status as Insured

¶ 45 As a threshold issue, Argonaut argues that the denial of a motion for summary judgment is not appealable. Arangold Corp. v. Zehnder, 187 Ill.2d 341, 357 (1999). This is true, but not here where the case is disposed of on cross motions for summary judgment. Ruby v. Ruby, 2012 IL App (1st) 103210, ¶ 34.

 

¶ 46 Appellants assert that Land Truck is an insured under Argonaut’s policy. We disagree.

 

¶ 47 Included under the “Who Is An Insured” section of Argonaut’s policy, is “[a]nyone liable for the conduct of an ‘insured’ described above but only to the extent of that liability.” But, the “Insurance for non-trucking use” endorsement adds, “Who Is An Insured does not include anyone engaged in the business of transporting property by ‘auto’ for hire who is liable for your conduct.”

 

¶ 48 Appellants argue that the term “for hire,” like the term “rented,” requires the exercise of control, and the right to direct the use of the vehicle. See Selective Way Insurance Co. v. Travelers Property Casualty Co. of America, 724 F.Supp.2d 520, 526 (E.D.Pa.2010) (“The majority of courts that apply the plain meaning of ‘hire’ when interpreting policies like the one at issue have found the term to contain an element of control.”). As already noted, the owner operator agreement and applicable federal law require Land Truck to control and possess Morales’s vehicle. Under the agreement, Land Truck is “engaged in the business of transporting property by ‘auto’ for hire.” Thus, the endorsement applies. Sprow v. Hartford Insurance Co., 594 F.2d 418, 422 (5th Cir.1979). (“for a vehicle to constitute a hired automobile, there must be a separate contract by which the vehicle is hired or leased to the named insured for his exclusive use or control”).

 

*10 ¶ 49 Accordingly, Argonaut has no duty to defend or indemnify Land Truck under Morales’s policy.

 

¶ 50 Affirmed.

 

¶ 51 Justice MASON, dissenting:

¶ 52 Because I do not agree that Argonaut has sustained its burden, under the unambiguous language of its policy, to demonstrate the applicability of the exclusion it relies on, I respectfully dissent.

 

¶ 53 The majority acknowledges that the terms of the owner operator contract between Morales and Land Truck contradict the conclusion that Morales agreed to “rent” his truck to Land Truck. That contract clearly provides that Morales retains exclusive possession and control over the truck, which is clearly inconsistent with the notion that the contract constitutes an agreement to rent the truck to Land Truck.

 

¶ 54 The legal effect of incorporation of the federal regulations into the owner operator contract is to render Land Truck liable for Morales’s operation of his truck, but that does not lead to the conclusion that we should construe this private agreement as something other than it is. In other words, despite the clear provisions of the private contract between Land Truck and Morales that unambiguously provide that Morales shall have exclusive control over the operation of the truck, Land Truck’s liability as a common carrier is governed by federal law and thus Land Truck is precluded from contending that it is not liable for Morales’ conduct because he is an independent contractor. But this conclusion does not either (1) compel us to rewrite the owner operator contract or (2) control the interpretation of the terms of Argonaut’s insurance policy in which it agreed to insure Morales as a named insured and the truck as a scheduled vehicle.

 

¶ 55 Whether Argonaut must defend Morales depends on whether, under the terms of its policy measured against the owner operator contract, Argonaut has established the applicability of the exclusion for a covered auto “while used in the business of anyone to whom the auto is rented.” And because it is clear that the terms of the owner operator contract refute Argonaut’s contention that Morales “rented” his vehicle of Land Truck, I believe Argonaut’s argument should be rejected.

 

¶ 56 The purpose of the federal regulations providing for the liability of common carriers was recognized by our supreme court in Roberson v. Industrial Comm’n, 225 Ill.2d 159 (2007). In that case, Roberson was injured while unloading steel coils delivered for P.I. & I. Motor Express (P.I. & I.) from a truck Roberson owned. P.I. & I. contended that pursuant to an agreement with Roberson, the latter was an independent contractor who could not be deemed an “employee” for purposes of claiming workers compensation benefits. The supreme court ultimately disagreed with P.I. & I., not because federal regulations required P.I. & I., as a common carrier, to have “exclusive possession, control, and use of the equipment” for the duration of the lease, but because the particular facts and circumstances of Roberson’s relationship with P.I. & I. created an employer-employee relationship.

 

*11 ¶ 57 In the course of its opinion, the supreme court in Roberson discussed the purpose of the federal regulations at issue here. In particular, the court noted that the regulations were prompted by a decades-old practice of common carriers to shield themselves from liability for their drivers’ negligence by leasing trucks from independent contractors. Id. at 176. “Such arrangements invariably led to abuses that threatened public safety, as unscrupulous motor carriers leased inexpensive, and unsafe, equipment from shallow-pocket drivers.” Id. The federal regulations, as ultimately enacted, “prevent[ed] motor carriers from escaping liability to injured persons by claiming that their drivers were independent contractors, rather than employees.” Id. at 177.

 

¶ 58 But notwithstanding regulations requiring motor carriers to have exclusive possession, control and use of leased equipment, the Roberson court concluded that the regulations did not mandate treating the driver as an employee for all purposes, stating, “ ‘[w]hile a lessee cannot free itself of its federally imposed duties when the protection of the public is at stake, the federal requirements are not so radically intrusive as to absolve lessors * * * of otherwise existing obligations under applicable state tort law doctrines or under contracts allocating financial risk among private parties.’ “ (Emphasis in the original.) Id. at 178, quoting Carolina Casualty Insurance Co. v. Insurance Co. of North America, 595 F.2d 128, 138 (3d Cir.1979). Thus, the court concluded that Roberson and P.I. & I. were free to “structure their relationship as they see fit, provided they do not neglect the requirements of federal law.” Id.

 

¶ 59 As applied in the context of this case, the reasoning of Roberson mandates a finding that Land Truck and Morales were free to structure their relationship in any way that did not circumvent federal regulations requiring Land Truck to be responsible for Morales’s operation of the truck. And it is clear that they did not. Notwithstanding the provisions of the owner operator contract that vested exclusive control of the truck in Morales, the parties agreed to incorporate federal regulations applicable to Land Truck as a common carrier. Incorporation of the federal regulations thus preserves, in the interest of public safety, Land Truck’s liability for Morales’ operation of the truck, but does not alter the private contractual relationship between Land Truck and Morales, pursuant to which Morales retained possession and control of the truck.

 

¶ 60 Nothing in the federal regulations renders the terms of the owner operator agreement “illegal,” as Argonaut contends; rather, those regulations simply require that the terms of the otherwise enforceable agreement cannot be used by Land Truck to escape responsibility for injuries caused by Morales’s operation of the truck in furtherance of Land Truck’s business. Further, because pursuant to the terms of the owner operator contract, Morales did not “rent” his truck to Land Truck, the exclusion relied on by Argonaut does not apply.

 

*12 ¶ 61 Argonaut contends that the purpose of the policy of insurance issued to Morales is consistent with the interpretation of the owner operator agreement adopted by the trial court. In particular, Argonaut asserts that its “Truckers—Insurance for Non– Trucking Use” endorsement provides only limited coverage “during those times when possession of the vehicle, and any liability for its operation, remain with the owner-insured itself.” Argonaut reasons that because Land Truck remains responsible for damages resulting from Morales’s operation of the truck, Morales did not need insurance while traveling to pick up a load for Land Truck.

 

¶ 62 But while this may have been Argonaut’s intent in drafting the endorsement, this is not what the endorsement says. The endorsement provides that Argonaut’s agreement to pay “all sums” Morales must pay “as damages” because of “bodily injury” caused by an “accident” does not apply to his truck “while used to carry property in any business” or “while used in the business of anyone to whom [the truck] is rented.” Because the truck was not “rented” to Land Truck according to the plain terms of the owner operator contract and because Morales was on his way to pick up a load when the accident occurred, his truck was not then being used to “carry property” either. In any event, Argonaut has not invoked the “while used to carry property” clause of its endorsement. While Argonaut certainly could have drafted an exclusion that limited its insuring agreement in the manner it urges on appeal (e .g., “when used in the business of anyone subject to state or federal regulation as a common carrier”), the exclusion included in Morales’ policy does not accomplish this result. See Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 117 (1992) (“if the insurer had desired to restrict coverage to only those suits seeking legal, compensatory damages, it could have easily included among its exclusionary provisions an exclusion pertaining to the costs of complying with mandatory injunctions”).

 

¶ 63 I do not believe the decision in Clarendon National Insurance Company v. Medina, 645 F.3d 928 (7th Cir.2011), compels a different result. The driver of the truck involved in the accident in Medina was not the owner of the truck (which was owned by his wife), but he signed the agreement with the common carrier. On appeal, the husband and wife contended that the agreement with the common carrier could not be a lease because the owner of the vehicle did not execute it. The Seventh Circuit rejected this contention finding that the wife gave her husband permission to enter into the agreement with the common carrier. The Medina court also concluded that the agreement between the driver and the common carrier was a lease as a matter of law. Medina did not address the terms of the agreement between the driver and the common carrier and, in particular, did not discuss whether the agreement in that case contained terms similar to those here, i.e., providing that the driver retained “exclusive possession and control” of the truck, terms that are inconsistent with construction of the owner operator contract as an agreement to lease Morales’ truck to Land Truck. Therefore, while I agree with the Medina court’s conclusion that, as a matter of law and for purposes of Land Truck’s liability to injured parties, the owner operator contract must be deemed to be a lease despite its terms, I do not believe it appropriate to completely disregard those terms in determining Argonaut’s responsibility to defend and potentially indemnify its insured.

 

*13 ¶ 64 Because the provisions of the owner operator contract do not constitute an agreement by Morales to “rent” his vehicle to Land Truck, it is unnecessary to address whether the term “rent” is ambiguous and whether any ambiguity must be construed in favor of coverage under Argonaut’s policy. I do note that several provisions of Argonaut’s policy use “rent” and “lease” in the same paragraph, but the endorsement at issues here does not, thus lending credence to the appellants’ argument that the terms are not necessarily synonymous. Further, because the trial court denied summary judgment to appellants on count II of Argonaut’s complaint, which invoked a provision of the endorsement excluding from the definition of an “insured” under the Argonaut policy “anyone engaged in the business of transporting property by ‘auto’ for hire who is liable for your conduct,” I would not address this issue and instead leave that to the trial court on remand.

 

¶ 65 For these reasons, I would reverse the trial court’s award of summary judgment to Argonaut, direct that summary judgment on the applicability of paragraphs A. and B. of the “Truckers—Insurance for Non– Trucking Use” endorsement be entered in favor of Morales and Land Truck, and remand for further proceedings as to whether Land Truck qualifies as an additional insured under Argonaut’s policy.

 

Justice NEVILLE concurred in the judgment and opinion.

Justice MASON dissented, with opinion.