G&P Trucking Co., Inc., Plaintiff, v. Zurich American Insurance Company, as subrogee of SKF USA, Inc.; SKF USA, Inc., Defendants.

 

Civil Action No. 3:14-cv-501

 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA, COLUMBIA DIVISION

 

2015 U.S. Dist. LEXIS 109951

 

 

August 19, 2015, Decided

August 19, 2015, Filed

 

 

COUNSEL:  [*1] For G&P Trucking Company Inc, Plaintiff, Counter Defendant: Casper Fredric Marcinak, III, Robert Daniel Moseley, Jr, LEAD ATTORNEYS, Smith Moore Leatherwood, Greenville, SC.

 

For Zurich American Insurance Company, as subrogee of SKF USA Inc, other, SKF USA Inc, SKF USA Inc, Defendants: Eric Richard Tonnsen, Eller Tonnsen Bach, Greenville, SC.

 

For SKF USA Inc, Zurich American Insurance Company, as subrogee of SKF USA Inc, Counter Claimants: Eric Richard Tonnsen, Eller Tonnsen Bach, Greenville, SC.

 

JUDGES: Margaret B. Seymour, Senior United States District Judge.

 

OPINION BY: Margaret B. Seymour

 

OPINION

 

ORDER AND OPINION

Before the court are motions for summary judgment by both Plaintiff G&P Trucking, Inc. (“G&P”) and Defendants SKF USA, Inc. (“SKF”) and Zurich American Insurance Company (“Zurich”). ECF Nos. 20 (G&P) & 26 (SKF). Zurich is insurer and subrogee of SKF. In this action, G&P seeks a determination of its liability for a trucking accident and a determination as to any limitation of liability available to it. ECF No. 1.

 

I. Factual and Procedural Background

On January 14, 2014, G&P moved the court for summary judgment in its favor and asked the court to find that it had no liability under the “Ocean or Combined Transport [*2]  Waybill,” ECF Nos. 20-3 & 26-5 (hereinafter the “Bill of Lading”), or, alternatively, that its liability was limited to $50.00 by the terms of the Delivery Order, ECF Nos. 20-6 & 26-3, or $500.00 by the Carriage of Goods by Sea Act (“COGSA”), Note following 46 U.S.C. § 30701 . ECF No. 20. On March 2, 2015, SKF and Zurich also moved for summary judgment on the issue of liability, asking the court to hold that G&P had not presented evidence of a viable limitation of liability. ECF No. 26.1 G&P filed a consolidated response in opposition to SKF’s motion and reply on April 2, 2015. The court held a hearing on the summary judgment motions on April 14, 2015. On May 6, 2015, the court entered an order requesting supplemental briefing from the parties on the issue of the condition of the goods when they were delivered to G&P in Savannah. ECF No. 43. The parties completed this briefing by May 18, 2015. ECF Nos. 45 & 46.

 

1   SKF’s motion for summary judgment also served as a response in opposition to G&P’s motion for summary judgment. ECF No. 27.

On June 19, 2015, the court issued an order addressing some of the issues raised by the parties in their summary judgment motions. ECF No. 49 (“June 19 Order”). In that order, [*3]  the court summarized the underlying facts and various details of the shipping documents involved. Id. at 2-6.2 The court noted the parties’ disagreement about the applicable law–COGSA or the Carmack Amendment, 49 U.S.C. § 14706—and provided background about each provision. Id. at 7-9. The court further observed that whether the Bill of Lading is a through bill determines whether COGSA or the Carmack Amendment applies. Id. at 6. The court held the through bill of lading question to be a question of fact resolvable by the court as an exercise of the court’s admiralty jurisdiction. Id. at 9. The court found the record to be ambiguous and scheduled an evidentiary hearing on the through bill of lading issue. Id. at 13. That hearing was held on July 29, 2015. ECF No. 57.

 

2   The court summarized the various carriers and documents in its June 19 Order: “The parties disagree as to which law governs the shipment at issue in this case. G&P’s position is that the shipment is governed by the terms of a bill of lading issued by the ocean carrier, Pantainer (H.K.) Limited (“Pantainer”), doing business as Pantainer Express Line, in Spain where the goods originated at a factory owned by SKF Espanola S.A. (“SKF Espanola”). G&P contends that the bill of lading may extend the provisions of the Carriage [*4]  of Goods by Sea Act (“COGSA”), Note following 46 U.S.C. § 30701, to the domestic inland portions of the journey. G&P characterizes the document issued by Pantainer as a through bill of lading. SKF, on the other hand, contends that the movement was in fact two shipments, and that the domestic inland portion from Savannah, Georgia, to Crossville, Tennessee, was a second transaction, governed by a delivery order issued in the United States by Panalpina, Inc. (“Panalpina”) and by the provisions of the Carmack Amendment, 49 U.S.C. § 14706.” ECF No. 49 at 1-2.

Considering the record as a whole, including the exhibits, depositions, and witness testimony, the court finds that the Bill of Lading is a through bill of lading. COGSA governs the shipment at issue in this case. G&P’s liability is limited by a valid Himalaya clause3 in the Bill of Lading. For the reasons set forth below, the court grants G&P’s motion for summary judgment and denies SKF’s motion for summary judgment. This order renders G&P’s motion in limine (ECF No. 35) moot; it is, therefore, denied as moot.

 

3   A Himalaya Clause is a provision in a bill of lading that extends the carrier’s defenses and the limitations of COGSA to third parties. Black’s Law Dictionary (10th ed. 2014), Himalaya clause. [*5]  Such clauses take their name from an English case commonly known as The Himalaya and reported as Adler v. Dickson, 1 Q.B. 158. See Michael F. Sturley, International Uniform Laws in National Courts: The Influence of Domestic Law in Conflicts of Interpretation, 27 Va. J. Int’l L. 729, 749 n.101 (1987).

 

II. Law and Analysis

A bill of lading “records that a carrier has received goods from the party that wishes to ship them, states the terms of carriage, and serves as evidence of the contract for carriage.” A through bill of lading covers both the ocean and inland portions of the transport in a single document. Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 94, 130 S. Ct. 2433, 177 L. Ed. 2d 424 (2010) (quoting Norfolk So. R. Co. v. James N. Kirby, Pty. Ltd., 543 U.S. 14, 125 S. Ct. 385, 160 L. Ed. 2d 283 (2004)). Bills of lading may contain a so-called “Himalaya clause,” “which extends the bills’ defenses and limitations on liability to parties that sign subcontracts to perform services contemplated by the bills.” Id.4

 

4   The Fourth Circuit does not appear to have considered COGSA since the 2010 Supreme Court decision in Kawasaki.

Determining whether a shipment is governed by a through bill of lading is a question of fact. Am. Rd. Serv. Co. v. Consol. Rail Corp., 348 F.3d 565, 568 (6th Cir. 2003); see also Capitol Converting Equip., Inc. v. LEP Transp., Inc., 965 F.2d 391, 394 (7th Cir. 1992). In an admiralty proceeding, it is the duty of the court to settle factual disputes. New Jersey Steam Navigation Co. v. Merchant’s Bank of Boston, 47 U.S. 344, 423, 12 L. Ed. 465 (1847) (“[I]t is our duty to settle facts in an admiralty proceeding, when they are material to the merits.”). Whether a particular bill of lading [*6]  is a through bill is to be determined with reference to various factors, including: “(1) whether the bill of lading indicates the final destination for the goods; (2) whether the freight for the entire shipment was prepaid; and (3) whether a separate, domestic bill of lading ever issued.” Custom Rubber Corp. v. ATS Specialized, Inc., 633 F. Supp. 2d 495, 504 (N.D. Ohio 2009). The court may also consider other general aspects of the conduct of the shipper and the carriers. Marine Office of Am. Corp. v. NYK Lines, 638 F. Supp. 393, 399 (N.D. Ill. 1985) (collecting cases).5

 

5   The foregoing paragraph repeats verbatim the framework governing the bill of lading analysis that was set forth in the June 19 Order. ECF No. 49 at 10. The standard is recapitulated here for convenience.

 

1. Whether the bill of lading indicates the final destination for the goods

As the court noted in its June 19 Order, the Bill of Lading leaves the “Place of Delivery” blank, and does not, therefore, indicate clearly on its face the final destination of the goods. See ECF No. 26-5. G&P urges the court to construe the listing of SKF’s Tennessee address in the consignee box as being an indication of the final destination of the goods.

A consignee is the “person named in a bill to whom or to whose order the bill promises delivery.” Black’s Law Dictionary (10th ed. 2010), consignee. Looking [*7]  only at the document itself, there is ambiguity as to whether the address of the consignee is the final destination of the goods and was so understood by the parties, or, alternatively, whether the final destination of the goods was unclear and was to be provided by the consignee at some date after the issuance of the Bill of Lading.

The deposition of Philip Stender (“Stender”), Panalpina’s corporate designee pursuant to Federal Rule of Civil Procedure 30(b)(6), resolves this ambiguity in G&P’s favor. During the deposition, counsel for SKF questioned Stender about a shipment communication platform printout, “an internal document” that gives various information about the shipment. ECF No. 60 at 12 (Stender Depo.); see also ECF No. 60-1 at 11 (Printout). When he was asked whether Savannah was the final destination, Stender demurred. For example:

 

Q: What is the final destination listed under the file characteristics for the Pantainer Hong Kong Limited waybill?

A: Savannah. And then we delivered it on to Crossville, Tennessee as part of our contract rates.

Q. I understand that. What is the final destination that is listed for this particular waybill?

A. In the file characteristics it just says: Savannah, final destination. They shipped [*8]  it as far–Spain shipped it as far as Savannah. Then I picked up the ball and ran with it there and trucked it from Savannah to Crossville, the place of delivery.

 

 

ECF No. 60 at 15:3-17; see also id. at 20:2-23.

Stender testified that he understood the listing of SKF USA as the consignee to be tantamount to a listing of a place of delivery:

 

Q: And as far as this particular waybill goes, the port of discharge for the main carriage was Savannah, correct?

A: Correct.

Q: And the final destination of the goods for this particular waybill according to the internal Panalpina documents is Savannah, correct?

A: Incorrect. Consignee, again, you have to look at the consignee spot. Partner info, Crossville, Tennessee. We always move this freight from Spain via Savannah to Crossville. It never stops in Savannah. It’s always delivered to Crossville.

Q: I understand that. However, in this document it says final destination is Savannah, correct?

A: Yes. That’s what the document says, but is also says Crossville, Tennessee.

Q: That says consignee is Crossville, Tennessee, correct?

A: Correct. It also says consignee Crossville, Tennessee on the Pantainer waybill. If you, again, look down below on partner info . [*9]  . . it shows Crossville, Tennessee.

 

 

ECF No. 60 at 17:22-18:20. The court concludes from this testimony that the listing of SKF as consignee on the Bill of Lading was understood by the parties to be a designation of the place of delivery, or the final destination, of the goods. The inclusion of the final destination of the goods on the Bill of Lading favors a finding that the Bill of Lading is a through bill of lading.

 

2. Whether the freight for the entire shipment was prepaid

At the evidentiary hearing, the court heard the testimony of Stanley Nutt (“Nutt”), a corporate employee of G&P. Nutt testified that the designation “prepaid” is a term of art in the shipping industry. It does not mean, as the term does in everyday usage, that the shipper pays the carrier the total amount of the bill before the carrier takes the goods. In the shipping industry, the term “prepaid” indicates that the shipper has arranged a line of credit to cover payment of the freight charge. Nutt testified that the shipment in this case was prepaid according to the meaning of the term in the shipping industry. The court concludes that the freight for the shipment was prepaid. This conclusion favors a finding that [*10]  the Bill of Lading is a through bill.

 

3. Whether a separate, domestic bill of lading ever issued

The court noted in its June 19 Order that this third factor:

 

is no longer of much analytic value after Kawasaki in a case such as this. While the issuance of a separate bill of lading strongly implies that the case is within the Carmack Amendment, and therefore, that the original bill of lading is not a through bill, the Supreme Court held in Kawasaki that the absence of such a separate, domestic document does not ipso facto render the Carmack Amendment inapplicable, and, by default, render the original bill a through bill. Kawasaki Kisen, 561 U.S. at 103 (distinguishing several appellate cases where those courts placed primacy on the issuance or non-issuance of a separate domestic bill of lading). Thus, there exists the possibility that G&P may have erroneously failed to issue a separate bill of lading. That possibility substantially limits the value of this third factor in evaluating whether the Bill of Lading is a through bill.

 

 

ECF No. 39 at 12. With that caveat in mind, however, the court observes that G&P did not issue a separate bill of lading in this case. To the extent this third factor remains relevant in the post-Kawasaki landscape, it also favors a [*11]  finding that the Bill of Lading is a through bill.

 

4. Other general aspects of the conduct of the shipper and the carriers

In addition to the three enumerated factors, the court may also consider other general aspects of the conduct of the shipper and the carriers. Marine Office of Am. Corp. v. NYK Lines, 638 F. Supp. 393, 399 (N.D. Ill. 1985) (collecting cases). The court finds the billing arrangements used by the parties to be particularly relevant. At the evidentiary hearing, copies of the invoices sent by Panalpina to SKF were introduced. ECF No. 60-1 at 8-9. These invoices reveal that Panalpina sent SKF one invoice which included charges for the inland freight in Spain, the ocean freight, and the “inland freight – domestic delivery.” Id. In other words, the invoice reflects billing for combined transport from Fontellas, Spain, to Crossville, Tennessee. Additionally, G&P’s invoices were introduced into evidence. ECF No. 60-1 at 13-14. These invoices reveal that G&P billed Panalpina–not SKF–for its services. Id. These invoices show that SKF contracted with Panalpina to move the goods from Spain to Tennessee and never independently contracted with G&P for the domestic inland freight potion of the journey. Stender’s testimony confirms that SKF never independently [*12]  contracted with G&P:

 

Q: Is this [ECF No. 60-1 at 8] a document that Panalpina would have issued to its customer for payment of charges for this shipment?

A: Correct, for door-to-door charges.

Q: Who was the customer that this invoice was issued to?

A: SKF in Kulpsville, Pennsylvania.

Q: Is that SKF USA, Inc.?

A: Yes.

Q: What charges are you invoicing to SKF in this invoice?

A: Origin handling charges, origin export clearance, ocean freight, USA terminal handling charge, inland freight to US door, customs clearance, end bond–you know, notificat[ion]–end bond is our customs clearance documentation and transfer documents. Total transportation, in other words, from door to door.

[ . . . .]

Q: When you say door to door, that means from the ground origin facility in Spain to the ground destination facility in Tennessee?

A: That’s correct.

Q: . . .. But is this invoice specifically invoiced for both ocean freight, tariffs charges, and ground freight carriage charges?

A: Yes, it does. Again, it’s an all-inclusive invoice. It has all of the various charges in there.

 

 

ECF No. 60 at 6:4-7:17; see also id. at 7:25-8:13. The course of conduct evidenced by the billing documents and Stender’s testimony indicates that the Bill [*13]  of Lading is a through bill of lading covering shipment of the goods door-to-door from Spain to Tennessee. In light of the foregoing, the court finds the Bill of Lading to be a through bill of lading. The court therefore concludes that COGSA governs the shipment at issue in this case.

By its terms, COGSA applies only to shipments from United States ports to ports of foreign countries and vice versa. Kawasaki, 561 U.S. at 94. The statute, however, allows parties “the option of extending [certain COGSA terms] by contract” to cover “the entire period in which [the goods] would be under [a carrier’s] responsibility, including [a] period of . . . inland transport.” Id. (quoting Kirby, 543 U.S. at 29). “While COGSA does not provide any limitation of liability in favor of third parties, the parties, by the bill of lading, may extend to third parties the limitation of liability granted the carrier [by COGSA]. . . . Such limitations of liability in the bill of lading in favor of third parties, however, are to be ‘strictly construed.'” Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714, 725 (4th Cir. 1990) (citations omitted). A carrier’s liability under COGSA is limited to $500.00 “per package.” Note following 46 U.S.C. § 30701.

The Terms and Conditions associated with the Bill of Lading specifically limited Carrier’s liability [*14]  to that provided by the COGSA, i.e., $500.00 per package. ECF Nos. 20-5 & 26-8 (hereinafter the “Terms and Conditions”)6 at ¶ 8.1. These terms and conditions also include other relevant provisions.

 

6   The parties have submitted two slightly differing versions of the Terms and Conditions. That submitted by G&P is dated 2011. ECF No. 20-5 at 12. That submitted by SKF is dated 2015. ECF No. 26-8. Because the 2015 version could not have governed a Bill of Lading issued in 2013, the court uses the 2011 version in this order.

First, in its “Definitions” section, the Terms and Conditions defines: “Sub-Contractors” as including “the owners, charterers and operators of any Vessel, stevedores, terminal operators, forwards, groupage operators, consolidators, warehouse operators, road, rail and air transport operators, and other independent contractors employed directly or indirectly by or for Carrier in the performance of any of Carrier’s obligations hereunder, and including subcontractors of any degree.” ECF No. 20-5 at 2.

Second, the Terms and Conditions also includes provisions constituting a so-called “Himalaya Clause”:

 

4.1 Carrier may sub-contract directly or indirectly on any terms the Carriage or any of its [*15]  obligations hereunder.

4.2 Merchant warrants that no claim or demand shall be made against any person whomsoever by whom the Carriage is performed or undertaken (including Carrier’s servants, agents and SubContractors) other than Carrier which imposes or attempts to impose on any such person or any vessel owned or operated or controlled by any such person, any liability whatsoever in connection with the Goods or the Carriage or this Waybill, whether or not arising out of negligence on the part of such person . . . . Every such person shall have the benefit of all Rights and Defenses herein provided for the benefit of or otherwise available to Carrier as if the same were expressly made also for such person’s benefit.

 

 

Id. at 3. The Terms and Conditions of the Bill of Lading extend COGSA to the domestic inland portions of the shipment at issue in this case. G&P was a subcontractor of Panalpina and is therefore shielded from liability by the Bill of Lading’s Himalaya clause.

SKF argues that the Bill of Lading was issued by Pantainer (H.K.) Limited (“Pantainer”) and that its Himalaya clause can only apply to subcontractors of Pantainer, not subcontractors of Panalpina. Laura Brennan, the country ground [*16]  transportation manager for Panalpina in the United States, testified that “Pantainer is a separate legal entity [from Panalpina] which handles the port-to-port move for Panalpina’s forwarding entity.” ECF No. 59 at 5:14-18. Although the Bill of Lading is on Pantainer letterhead, the internal document behind the Bill of Lading indicates that it was signed by, and therefore issued by, “Panalpina Transp. Mundiales S.A.” ECF No. 60-1 at 11. Panalpina Transp. Mundiales S.A. also appears on the face of the Bill of Lading itself. E.g., ECF No. 26-5 at 2. The court concludes from Stender’s deposition that the Bill of Lading was issued by “Panalpina Bilbao,” or the Spanish office of Panalpina. See ECF No. 60 at 16:13-25; 19:5-22. The court therefore rejects SKF’s contention that the Bill of Lading was issued by Pantainer. The Bill of Lading was issued by Panalpina and covers all subcontractors used by Panalpina, including, for example, G&P, Pantainer itself, and Hapag-Lloyd. SKF’s recourse is, therefore, against Panalpina rather than any of Panalpina’s subcontractors such as G&P. The court concludes that, pursuant to the terms of the Bill of Lading, G&P has no liability to SKF.7

 

7   This conclusion [*17]  bars SKF’s Carmack Amendment and negligence counterclaims. Summary judgment is, therefore, granted to G&P on SKF’s two counterclaims.

 

III. Conclusion

In accordance with the foregoing, the court grants G&P’s motion for summary judgment (ECF No. 20) and denies SKF’s motion for summary judgment (ECF No. 26). Because summary judgment has been granted to G&P, G&P’s motion in limine, ECF No. 35, is denied as moot.

IT IS SO ORDERED.

/s/ Margaret B. Seymour

Margaret B. Seymour

Senior United States District Judge

Columbia, S.C.

August 19, 2015.

CANAL INSURANCE COMPANY, Plaintiff, v. XMEX TRANSPORT, LLC, et al., Defendants.

 

EP-13-CV-156-KC

 

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS, EL PASO DIVISION

 

2015 U.S. Dist. LEXIS 111301

 

 

August 21, 2015, Decided

August 21, 2015, Filed

 

 

COUNSEL:  [*1] For Canal Insurance Company, Plaintiff: George T. Jackson, Bush & Ramirez LLC, Houston, TX.

 

For Lorena Munoz, Individually and on behalf of the Estate of Lorenzo Munoz and as next friend of L.M. and C.M., Minor Children, Virginia Munoz, Defendants: James F. Scherr, LEAD ATTORNEY, El Paso, TX.

 

For Rosa Franceware, Individually and as next friend of E.L.F., a Minor, and as Administratrix of the Estate of Roger Franceware, Defendant: Stewart W. Forbes, LEAD ATTORNEY, Forbes & Forbes, El Paso, TX.

 

For Jessica Lopez, Administratrix of the Estate of Roger Franceware and as next friend of A.F. and J.F., Minor Children, Defendant: Langdon Milton Smith, III, LEAD ATTORNEY, Jim S. Adler & Associates, Houston, TX.

 

For A-Z Trailers, Inc., Dykes & Dykes Trailers, Inc., Goal Transports, Inc., doing business as Calvin K. Transportation, LLC, Jose M. Gomez, Defendants: Christopher Robert Johnston, LEAD ATTORNEY, Firth Johnston Martinez, El Paso, TX.

 

JUDGES: KATHLEEN CARDONE, UNITED STATES DISTRICT JUDGE.

 

OPINION BY: KATHLEEN CARDONE

 

OPINION

 

ORDER

On this day, the Court considered Plaintiff Canal Insurance Company’s (“Canal”) Motion for Summary Judgment of Canal Insurance Company on the Duty to Indemnify and All Counterclaims of Jessica [*2]  Lopez as Administratrix of the Estate of Roger Franceware and as Next Friend of A.F. and J.F. (“Canal Motion”), ECF No. 107, and the Munoz Defendants’1 Motion for Summary Judgment on Plaintiff Canal Insurance Company’s Duty to Pay Based on the MCS-90 Endorsement (“Munoz Motion”), ECF No. 109, in the above-captioned case (the “Case”). For the following reasons, the Canal Motion is GRANTED in part and DENIED in part, and the Munoz Motion is DENIED in its entirety.

 

1   Throughout this Order, the Court refers to Lorena Munoz, individually and on behalf of the Estate of Lorenzo Munoz, and as next friend of L.M. and C.M., minor children, and Virginia Munoz, collectively as the “Munoz Defendants.”

 

I. BACKGROUND

Unless otherwise noted, the following facts are undisputed.

Canal issued auto insurance policy number PIA0603370 to XMEX Transport LLC (“XMEX”). See Ins. Policy Number PIA0603370 (the “Policy”), Compl. Ex. A, ECF No. 1-10.2 The Policy was in effect from August 6, 2010, to “Until Cancelled.” See id. at 1. On August 17, 2010, a 2007 International tractor with VIN number 2HSCNSCR57C432761 (the “Truck”) was involved in a single-vehicle accident resulting in the deaths of both Roger Franceware (“Franceware”) [*3]  and Lorenzo Munoz (“Munoz”) (collectively the “Decedents”). See Proposed Undisputed Facts ¶ 2 (“Canal Proposed Facts”), Canal Mot. Attach. 5, ECF No. 107-5; Def. Lopez’s Resp. to Canal’s Proposed Undisputed Facts in Connection with its Mot. for Summ. J. on the Duty to Indemnify and All Countercls. of Jessica Lopez as Administratrix of the Estate of Roger Franceware and as Next Friend of A.F. and J.F. ¶ 2 (“Lopez Response to Proposed Facts”), Def. Lopez’s Resp. to Canal’s Mot. for Summ. J. on the Duty to Indemnify and All Countercls. of Jessica Lopez as Administratrix of the Estate of Roger Franceware and as Next Friend of A.F. and J.O. Attach. 6, ECF No. 116-6; Munoz Defs.’ Resp. to Canal’s Proposed Undisputed Facts and Additional Proposed Facts ¶ 2 (“Munoz Response to Proposed Facts”), Munoz Defs.’ Resp. in Opp’n to Canal’s Mot. for Summ. J. on the Duty to Indemnify Ex. A, ECF No. 118-1.

 

2   Though Canal has attached a copy of the Policy to its motion, the Court notes that the attached copy is divided into two separate electronic attachments. See Ins. Policy Number PIA0603370, Canal Mot. Ex. A, Attach. 1 4-51, ECF No. 107-1; Ins. Policy Number PIA0603370, Canal Mot. Ex. A, Attach. 2 1-22, [*4]  ECF No. 107-2. Accordingly, for ease of reference the Court cites to the undivided copy of the Policy provided with Canal’s original Complaint. See Compl. for Declaratory J. Ex. J, ECF No. 1-10.

Following the accident, on October 25, 2010, the Munoz Defendants filed Cause No. 2010-4169 in the 168th District Court of El Paso County, Texas (the “Underlying Suit”), seeking damages arising from Munoz’s death. See Munoz Defs.’ Original Pet., Canal Mot. Ex. C, ECF No. 107-2. The Munoz Defendants specifically listed the Estate of Roger Franceware as a defendant in their October 25, 2010, petition. See id. at 36. Lopez subsequently intervened in the Underlying Suit as administratrix of the Estate of Roger Franceware. Nearly three years later, on May 7, 2013, Canal initiated the instant Case, seeking a declaratory judgment that it had no duty to defend or indemnify Defendants in relation to the Underlying Suit, and that the MCS-90 endorsement found in the Policy is not applicable to any of Defendants’ demands for payment. See Compl. for Declaratory J. 12 (“Complaint”), ECF No. 1.3

 

3   The Court’s citations to documents filed in the Case refer to the page numbers superimposed upon them by the Court’s electronic [*5]  docketing system.

While the instant Case remained pending, the Underlying Suit proceeded to trial in Texas state court, resulting in a verdict. Canal Proposed Facts ¶ 11; Lopez Resp. to Proposed Facts ¶ 11; Munoz Resp. to Proposed Facts ¶ 11. See also Charge of the Ct. (“Jury Verdict”), Canal Mot. Ex. P, ECF No. 107-4; Corrective J. Signed June 3, 2014 (“Underlying Judgment”), Canal Mot. Ex. N, ECF No. 107-4. By their verdict, the jury found that “[i]n connection with the events giving rise to this suit” Franceware was “acting as an employee in the scope of his employment [with XMEX].” See Jury Verdict 100. The jury found, however, that Munoz was not acting as an employee in the scope of his employment with XMEX at the time of the accident. See id. at 101. On June 9, 2014, the state court entered its judgment, ordering that both Franceware and Munoz recover damages against XMEX. See Underlying J. 82-83. Neither the Underlying Judgment nor the Jury Verdict addressed the issue of whether the Truck was a covered auto under the Policy. See generally Underlying J.; Jury Verdict.

Subsequently, on September 4, 2014, this Court found that Canal had a duty to defend Franceware in the Underlying Suit. See Sept. [*6]  4, 2014, Order 34-35, ECF No. 77. As a result, on October 31, 2014, Lopez, as administratrix of the Franceware estate, filed her First Amended Answer and Counterclaim (“Lopez Counterclaims”), ECF No. 90, asserting causes of action against Canal for (1) breach of contract, (2) breach of the common law duty of good faith and fair dealing, (3) breach of the Texas Insurance Code, (4) breach of the Texas Deceptive Trade Practices Act, (5) gross negligence, and (6) claims based upon Lopez being a third-party beneficiary of the Policy. Id. at 6-10.

Canal filed the Canal Motion on April 17, 2015, praying for the Court to declare that “no duty to indemnify exists” under either the Policy’s indemnification clause or the Policy’s MCS-90 endorsement. Canal Mot. 21.4 Lopez filed her response to the Canal Motion on May 1, 2015. See Def. Lopez’s Resp. to Canal’s Mot. for Summ. J. on the Duty to Indemnify and All Countercls. of Jessica Lopez as Administratrix of the Estate of Roger Franceware and as Next Friend of A.F. and J.O. (“Lopez Response”), ECF No. 116. On May 4, 2015, the Munoz Defendants also filed a response to the Canal Motion. See Munoz Defs.’ Resp. in Opp’n to Canal’s Mot. for Summ. J. on the Duty [*7]  to Indemnify (“Munoz Response”), ECF No. 118. Canal filed its replies to both the Lopez and Munoz Responses on May 12, 2015. See Reply of Canal Ins. Co. to the Resp. of Jessica Lopez as Administratrix of the Estate of Roger Franceware and as Next Friend of A.F. and J.F. and the Adoption of Rosa Franceware to the Mot. for Summ. J. of Canal Ins. Co. (“Canal Reply to Lopez”), ECF No. 123; Reply of Canal Ins. Co. to the Resp. of the Munoz Defs. to the Mot. for Summ. J. of Canal Ins. Co. (“Canal Reply to Munoz”), ECF No. 124.

 

4   Canal and Lopez later requested that the Court dismiss the Lopez Counterclaims. Mot. 21. However, for the reasons set forth in Canal’s and Lopez’s sealed Notice, ECF No. 137, the Court need not address Canal’s requests in relation to the Lopez Counterclaims.

The Munoz Defendants filed the Munoz Motion on April 18, 2015, seeking summary judgment that “Canal has a duty to pay the [Underlying Judgment] against XMEX based on the MCS-90 endorsement contained in the [P]olicy.” Munoz Mot. 21. Canal filed its response to the Munoz Motion on April 27, 2015. See Resp. of Canal Ins. Co. to the Mot. for Summ. J. of the Munoz Defs. (“Canal Response to Munoz”), ECF No. 111. Lopez did not [*8]  respond to the Munoz Motion.

 

II. DISCUSSION

 

A. Standard

A court must enter 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); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008). “A fact is ‘material’ if its resolution in favor of one party might affect the outcome of the lawsuit under governing law.” Sossamon v. Lone Star State of Tex., 560 F.3d 316, 326 (5th Cir. 2009) (quoting Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000) (per curiam)). A dispute about a material fact is genuine only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Ellison v. Software Spectrum, Inc., 85 F.3d 187, 189 (5th Cir. 1996).

“[The] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323; Wallace v. Tex. Tech. Univ., 80 F.3d 1042, 1046-47 (5th Cir. 1996). To show the existence of a genuine dispute, the nonmoving party must support its position with citations to “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials[,]” or show “that the materials cited [by the movant] do not establish [*9]  the absence . . . of a genuine dispute, or that [the moving party] cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c).

The court resolves factual controversies in favor of the nonmoving party; however, factual controversies require more than “conclusory allegations,” “unsubstantiated assertions,” or “a ‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). Further, when reviewing the evidence, the court must draw all reasonable inferences in favor of the nonmoving party, and may not make credibility determinations or weigh evidence. Man Roland, Inc. v. Kreitz Motor Express, Inc., 438 F.3d 476, 478-79 (5th Cir. 2006) (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)). Thus, the ultimate inquiry in a summary judgment motion is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.

 

B. Analysis

 

1. Canal has no duty to indemnify under the Policy’s indemnification clause

Canal argues that it has no duty to indemnify under the Policy’s indemnification clause because neither Lopez nor the Munoz Defendants have presented evidence establishing that the Truck was a “covered auto” under the Policy. See Canal Mot. 5. Specifically, Canal asserts that “[t]here is no evidence the [Truck] was being acquired by [XMEX] or had been [*10]  acquired by [XMEX],” nor that the Truck “was being used with the permission of the owner of the vehicle . . . as a temporary replacement vehicle.” Id. Lopez responds that whether the Truck was covered under the Policy “is not dispositive [because] the [Policy’s] MCS-90 endorsement . . . may still require Canal to pay [the Underlying Judgment].” Lopez Resp. 2. The Munoz Defendants agree with Lopez that “pursuant to the MCS-90 endorsement . . . Canal has a duty to pay . . . the [Underlying Judgment].” Munoz Resp. 6. The Munoz Defendants further assert that “fact issues exist as to whether the [Truck] was ‘acquired’ by XMEX and therefore a covered vehicle under the Policy.” Id. at 8, 24.

“The insurer’s duty to indemnify depends on the facts proven and whether the damages caused by the actions or omissions proven are covered by the terms of the policy.” D.R. Horton-Tex., Ltd. v. Markel Int’l Ins. Co., Ltd., 300 S.W.3d 740, 744 (Tex. 2009). Generally, the duty to indemnify is “controlled by the facts proven in the underlying suit.” See Gilbane Bldg. Co. v. Admiral Ins. Co., 664 F.3d 589, 601 (5th Cir. 2011) (citing Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 279 S.W.3d 650, 656 (Tex. 2009)). However, where the underlying case does not resolve all the factual issues necessary to determine coverage, a district court may consider other evidence “regarding facts necessary to determine coverage that were not adjudicated in the underlying [*11]  case.” See Nat’l Union Fire Ins. Co. of Pitts., Pa. v. Puget Plastics Corp., 532 F.3d 398, 404 (5th Cir. 2008).

Under the Policy’s indemnification clause, Canal has a duty to “pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which [the Policy] applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.'” Policy 29. The Policy defines “covered autos” as “[o]nly those ‘autos’ described in Item Three of the Declarations for which a premium charge is shown.” See id. at 23, 28. Section I.C.3 of the Policy, however, creates an exception to the rule that only listed autos are covered. Specifically, “[a]ny ‘auto’ [XMEX]5 do[es] not own while used with the permission of its owner as a temporary substitute for a covered ‘auto’ [XMEX] own[s] that is out of service” is also a “covered auto” under the Policy.6 Id. at 29.

 

5   The exact language of the Policy states that “[a]ny ‘auto’ you do not own while used with the permission of its owner as a temporary substitute for a covered ‘auto’ you own that is out of service” is also a “covered auto” under the Policy. Id. at 29 (emphasis added). Throughout the Policy, the words “you” and “your” refer “to the Named Insured shown in the Declarations.” See id. at 28. XMEX is the named insured shown in the Declarations. See id. at 1.

6   The Policy [*12]  also provides that “‘[t]railers’ with a load capacity of 2,000 pounds or less designed primarily for travel on public roads [and] ‘[m]obile equipment’ while being carried or towed by a covered ‘auto'” also qualify as “covered autos” under the Policy. See Policy 29. However, because none of the parties argue that these provisions are applicable, the Court does not address them in this Order.

Here, the parties do not dispute that the Truck is not one of the specifically listed vehicles in Item Three. See Canal Proposed Facts ¶ 15; Lopez Resp. to Proposed Facts ¶ 15; Munoz Resp. to Proposed Facts ¶ 15. As a result, in order to establish that the Truck was a covered auto, Lopez and the Munoz Defendants must show that XMEX borrowed the Truck as a temporary substitute vehicle and that XMEX was using the Truck “with the permission of its owner.” See Policy 29; Nat’l Union, 532 F.3d at 401 (“In Texas, the insured carries the burden to establish the insurer’s duty to indemnify by presenting facts sufficient to demonstrate coverage.”).

Before turning to the parties’ summary judgment arguments, the Court first notes that though “[t]he insurer’s duty to indemnify depends on the facts proven [at trial],” see D.R. Horton-Tex., 300 S.W.3d at 744, neither the Jury Verdict nor the Underlying [*13]  Judgment address or resolve the factual issues pertinent to determining whether the Truck was a temporary substitute vehicle. As a result, the Court considers, as it may, the evidence provided by the parties in determining whether an issue of fact exists as to coverage. See Nat’l Union, 532 F.3d at 404.

In support of its position that “[t]here is no evidence the [Truck] was being used with the permission of [its] owner,” see Canal Mot. 5, Canal has provided a Certificate of Title for the Truck which lists Moore Freight Services, Inc. (“Moore Freight”) as the Truck’s owner. See Certificate of Title (“Truck Title”), Canal Mot. Ex. O, Attach. 4, ECF No. 107-4. Canal has further provided excerpts of Charles Strader’s (“Strader”) sworn testimony from the Underlying Suit in which Strader, the owner of XMEX, admitted that XMEX did not “have even implied [or] remotely implied authority” to use Moore Freight equipment. See Mar. 21, 2014, Tr. of Oral Arg. 42 (“Strader Testimony”), Canal Reply to Lopez Attach. 3, ECF No. 123-3. Accordingly, Canal has presented evidence that Moore Freight owned the Truck, and that Moore Freight had not given XMEX permission to use the Truck. By presenting evidence that XMEX could not have used the [*14]  Truck with the Truck’s owner’s permission, Canal has met its initial burden on summary judgment of “identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact” as to whether the Truck was a “covered auto” under the Policy. See Celotex, 477 U.S. at 323; see also Policy 29 (stating that a temporary substitute vehicle must be “used with the permission of its owner”). Accordingly, the burden shifts to Lopez and the Munoz Defendants, as the non-moving parties, to “designate specific facts showing that there is a genuine issue for trial.” See Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015).

To rebut Canal’s argument, Lopez relies entirely on her assertion that Canal’s duty to indemnify arises from the MCS-90 endorsement “regardless [of] whether or not [the Truck] is specifically described in the [P]olicy.” Lopez Resp. 2. Lopez’s argument fails. An insurer’s obligations under a policy’s indemnification clause and those under an MCS-90 endorsement, “while linked, impose different obligations based on different requirements.” Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 882 (10th Cir. 2009). “[T]he obligation placed upon the insurer by the MCS-90 [is] one of suretyship,” which is “triggered when the policy to which it is attached provides no coverage to the insured.” T.H.E. Ins. Co. v. Larsen Intermodal Servs., Inc., 242 F.3d 667, 672 (5th Cir. 2001). As a result, [*15]  “[t]he fact that [Canal] may ultimately have to satisfy a final judgment against [XMEX] in the [Underlying Suit], pursuant to the MCS-90 endorsement, does not preclude the court from holding as a matter of law that [Canal] has no duty to indemnify [XMEX] under the [Policy’s indemnification clause].” See John Deere Ins. Co. v. Truckin’ USA, Civ.A. No. 3:95-CV-1556-D, 1996 WL 734952, at *5 (N.D. Tex. Dec. 10, 1996); see also Travelers Indem. Co. of Ill. v. W. Am. Specialized Transp. Co., Inc., 317 F. Supp. 2d 693, 698-99 (W.D. La. 2004) (collecting cases). In relying entirely on Canal’s potential liability under the MCS-90 endorsement, Lopez has made no attempt to present any evidence, or even argument, showing that the vehicle was a covered auto for the purposes of the Policy’s separate indemnification clause. See generally Lopez Resp.

Though the Munoz Defendants also rely heavily on the MCS-90 endorsement, they additionally argue that “fact issues exist as to whether the [Truck] was ‘acquired’ by XMEX and therefore was a covered vehicle under the Policy.” Munoz Resp. 8, 24. In support of that position, the Munoz Defendants cite to portions of a June 20, 2011, deposition of Strader. See id. at 14-16; see also June 20, 2011, Dep. of Charles Strader (“Strader Deposition”), Munoz Defs.’ Supplemental App. of Evidence in Supp. of their Mot. for Summ. J. on Pl. Canal [*16]  Ins. Co.’s Duty to Pay Based on the MCS-90 Endorsement and Resp. to Canal’s Mot. for Summ. J. on the Duty to Indemnify Ex. E, ECF No. 119. The excerpt of the Strader Deposition does not raise a genuine issue that the Truck was a covered temporary substitute vehicle. At his deposition, Strader stated that by August 17, 2010, he had “started securing trucks” for XMEX, but did not indicate in any way that XMEX secured, or even attempted to secure, either a Moore Freight automobile or the Truck specifically. See Strader Dep. 15. Moreover, nothing in the Strader Deposition even hints that XMEX sought to acquire any vehicle as a temporary substitute for a covered auto XMEX owned that was out of service. Nor do any facts in the Strader Deposition either address or contradict Strader’s testimony that Moore Freight never granted XMEX permission to use Moore Freight’s equipment. See Strader Test. 42. Accordingly, the Strader Deposition falls far short of showing a genuine issue of fact as to whether XMEX had obtained the Truck with the permission of Moore Freight as a temporary substitute vehicle for a covered auto XMEX owned — as the Munoz Defendants must show to survive summary judgment.  [*17] See Policy 29.

Therefore, the Court finds that both Lopez and the Munoz Defendants have failed, despite having nearly two years to conduct discovery, to “designate [any] specific facts showing that there is a genuine issue” that the Truck was a “covered auto” under the Policy. See Nola Spice, 783 F.3d at 536. As a result, Canal “has shown the absence of a genuine issue of material fact concerning” the Truck’s coverage under the Policy, and is entitled to summary judgment that it owes no duty to indemnify under the Policy’s indemnification clause.7 See Dilworth v. Box, No. 94-41088, 53 F.3d 1281, at *3 (5th Cir. Apr. 20, 1995); see also Celotex, 477 U.S. at 322.

 

7   Canal argues that “because Franceware and Munoz were either employees or statutory employees of [XMEX], no duty to indemnify either [XMEX] or Strader or Munoz or Franceware exists for the judgments rendered for the claimants seeking recovery through them or against them.” Canal Mot. 8. Because the Court has resolved the issue of Canal’s duty to indemnify based on the lack of evidence establishing that the Truck was a covered auto, the Court need not address Canal’s additional argument.

 

2. The Court stays determination of Canal’s liability under the MCS-90 endorsement pending resolution of the state court appeals

The Munoz Defendants argue that the MCS-90 [*18]  endorsement obligates Canal to pay the Underlying Judgment against XMEX because, inter alia, the Jury Verdict “established that Munoz was not an XMEX employee” and therefore the endorsement’s employee exclusion does not negate coverage. Munoz Mot. 7. Canal responds that the Jury Verdict is not determinative of Munoz’s employment status because the definition of “employee” submitted to the jury did not comport with the federal definition of “employee” that is relevant in interpreting MCS-90 endorsements. Canal Resp. to Munoz 6. Lopez asserts that, though “the [Underlying Suit] developed and adjudicated [the Decedents’] employment status with XMEX[,] . . . that adjudication is incomplete, because multiple parties appealed the trial court’s judgment.” Lopez Resp. 5.

“[An] MCS-90 endorsement must be attached to any liability policy issued to for-hire motor carriers operating motor vehicles transporting property in interstate commerce.” See Canal Ins. Co. v. Coleman, 625 F.3d 244, 247 (5th Cir. 2010) (citing 49 C.F.R. §§ 387.3, 387.7). “The purpose of [an] MCS-90 endorsement is to ‘assure compliance’ with federal minimum levels of financial responsibility for motor carriers.” Id. “Basically, the MCS-90 makes the insurer liable to third parties for any liability resulting [*19]  from the negligent use of any motor vehicle by the insured, even if the vehicle is not covered under the insurance policy.” Larsen Intermodal, 242 F.3d at 671. An insurer’s obligations under an MCS-90 endorsement “impose different obligations based on different requirements” from those under a policy’s indemnification clause. See Yeates, 584 F.3d at 882. Nonetheless, the Fifth Circuit has stated that an analysis of an insurer’s duty under an MCS-90 endorsement, like its duty to indemnify under an indemnification clause, is “determined by all the facts and circumstances that result in the insured’s potential liability.” See Ooida Risk Retention Grp., Inc. v. Williams, 579 F.3d 469, 477 (5th Cir. 2009) (citing Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 82 (Tex. 1997)). Accordingly, the Court, as it did in analyzing Canal’s duty to indemnify under the Policy’s indemnification clause, looks first to the “facts proven in the underlying suit” to determine Canal’s obligations under the MCS-90 endorsement. See Gilbane Bldg. Co., 664 F.3d at 601.

Here, coverage under the Policy’s MCS-90 endorsement “does not apply to injury to or death of [XMEX’s] employees while engaged in the course of their employment.” See Policy 54. The Munoz Defendants argue that this employee exclusion does not bar coverage because “the [Jury Verdict] established that Munoz was not an XMEX employee.” See Munoz Resp. 7. Interpretation of the [*20]  MCS-90 endorsement is governed by federal law. See Minter v. Great Am. Ins. Co. of N.Y., 423 F.3d 460, 470 (5th Cir. 2005). Therefore, the federal definition of “employee” found in 49 C.F.R. § 390.5 “clearly applie[s]” to a determination of coverage under the MCS-90 endorsement. See Consumers Cnty. Mut. Ins. Co. v. P.W. & Sons Trucking, Inc., 307 F.3d 362, 367 n.7 (5th Cir. 2002). Section 390.5 defines “employee” as:

 

[A]ny individual, other than an employer, who is employed by an employer and who in the course of his or her employment directly affects commercial motor vehicle safety. Such term includes a driver of a commercial motor vehicle (including an independent contractor while in the course of operating a commercial motor vehicle).

 

 

49 C.F.R. § 390.5 (emphasis added); see also Ooida Risk, 579 F.3d at 473; Consumers Cnty., 307 F.3d at 365.

The Munoz Defendants are correct that the jury found that Munoz was not “an employee in the scope of his employment for [XMEX]” at the time of the accident. See Jury Verdict 101. However, § 390.5 has “eliminat[ed] the common law employee/independent contractor distinction” for the purposes of coverage under MCS-90 endorsements. See Consumers Cnty., 307 F.3d at 366. “Both the modern common law . . . and the law of Texas make the distinction between [a common law employee] and that of independent contractor turn on the absence of authority in the principal to control the physical conduct of the contractor in performance of the contract.” See Logue v. United States, 412 U.S. 521, 527 (1973); see also Schievink v. Wendylou Ranch, Inc., 227 S.W.3d 862, 866 (Tex. App. 2007) (“An independent contractor [*21]  has been defined as ‘any person who, in the pursuit of an independent business, undertakes to do a specific piece of work for other persons, using his own means and methods, without submitting himself to their control in respect to all its details.'” (quoting Indus. Indem. Exch. v. Southard, 160 S.W.2d 905, 907 (Tex. 1942))); Restatement (Second) of Agency § 2(3) (1958). Here, as charged to the state jury, Munoz was XMEX’s “employee” only if he was “in the service of [XMEX] under a contract of hire . . . with the understanding that [XMEX] ha[d] the right to direct the details of the work and not merely the result to be accomplished.” See Jury Verdict 96. Accordingly, by requiring a finding that XMEX had the right to control the details of Munoz’s work, the state court’s jury charge precluded a finding that Munoz was an XMEX “employee” for the purposes of the MCS-90 endorsement based on an independent contractor relationship. As a result, the Jury Verdict does not fully determine Munoz’s employment status as defined under federal law.

Further, the MCS-90 endorsement obligates Canal to pay any “final judgment” recovered against XMEX. See Policy 54. The parties dispute whether the Underlying Judgment, which is currently on appeal, is a “final judgment” under the MCS-90. Relying on a state law [*22]  interpretation of “final judgment,” the Munoz Defendants argue that the state trial court’s judgment is final because under Texas law “although enforcement of a final judgment may be suspended (superseded) during the pendency of an appeal . . . the pendency of an appeal does not affect its finality.” See Munoz Mot. 15. Both Canal and Lopez, on the other hand, relying on United States v. Lemaire, 826 F.2d 387 (5th Cir. 1987), argue that the “federal definition [of ‘final judgment’] refers to a judgment after all appeals have been exhausted.” See Lopez Resp. 6; see also Canal Resp. to Munoz 13-16. After review of the parties’ authorities, and upon the Court’s independent research, the Court has found no authority directly addressing the meaning of “final judgment” under federally mandated MCS-90 endorsements. Nonetheless, because, as discussed below, the subject of the parties’ pending state court appeals counsels against ruling on the MCS-90 at this time, the Court does not reach the issue of whether the Underlying Judgment is a “final judgment” within the meaning of the MCS-90.

Canal’s obligations under the MCS-90 endorsement are controlled by the facts proven in the Underlying Suit. See Gilbane Bldg. Co., 664 F.3d at 601; Ooida Risk, 579 F.3d at 477. Though the Court has found that the Underlying [*23]  Judgment does not fully determine the Decedents’ employment statuses under § 390.5’s definition of “employee,” at least one party has appealed the Underlying Judgment on the ground that an “additional element [in the definition of ’employee’] materially changed the definition [of ’employee’] and materially affected the jury’s assessment of course and scope of employment.” See Docketing Statement 16, Lopez Resp. Ex. C, ECF No. 116-3. Accordingly, though it is not clear what “additional element” is at issue on appeal, the Court finds that the Decedents’ employment status is not sufficiently developed at this time for the Court to rule on Canal’s liability under the MCS-90 endorsement. The Court accordingly denies both the Canal Motion and the Munoz Motion in so far as they seek a determination of Canal’s liability under the MCS-90, without prejudice to re-file after resolution of the state court appeals.8

 

8   Though the Court considered evidence outside the Underlying Judgment and Jury Verdict in determining Canal’s liability under the Policy’s indemnification clause, the Court did so because whether the Truck was a covered vehicle under the Policy, a factual determination necessary to Canal’s duty [*24]  under the indemnification clause, was not adjudicated, or even addressed, by the Underlying Suit. See Policy 29; Underlying J.; Jury Verdict. In relation to coverage under the MCS-90 endorsement, however, both the Underlying Judgment and the Jury Verdict addressed the Decedents’ employment status, which is highly relevant to the applicability of the MCS-90 endorsement. See Underlying J. 66-67; Jury Verdict 100-101. Accordingly, because Canal’s obligations under the MCS-90 endorsement are determined by the facts proven in the Underlying Suit, see Gilbane Bldg. Co., 664 F.3d at 601; Ooida Risk, 579 F.3d at 477, and because those issues are currently on appeal, the Court stays consideration of Canal’s liability under the MCS-90 until resolution of the state court appeals.

Further, both Canal and Lopez agree that Munoz is not now entitled to summary judgment because the MCS-90 issue is not ripe due to the state court appeal. Canal Resp. to Munoz 16; Lopez Resp. 6.

 

III. CONCLUSION

For the reasons set forth above, it is hereby ORDERED that the Canal Motion, ECF No. 107, is GRANTED in part and DENIED in part. The Canal Motion is GRANTED to the extent it seeks a declaration that Canal has no duty to indemnify under the indemnification clause found at page [*25]  29 of the Policy. The Canal Motion is DENIED to the extent that it seeks a declaration that Canal has no duty under the federally mandated MCS-90 endorsement found at page 54 of the Policy.

IT IS FURTHER ORDERED that the Munoz Motion, ECF No. 109, is DENIED in its entirety.

IT IS FURTHER ORDERED that the Clerk shall ADMINISTRATIVELY CLOSE the Case pending resolution of the state court appeal. Any party may file a petition with the Court to re-open the Case upon final resolution of all state court appeals, or upon settlement.

SO ORDERED.

SIGNED this 21st day of August, 2015.

/s/ Kathleen Cardone

KATHLEEN CARDONE

UNITED STATES DISTRICT JUDGE