Phila. Indem. Ins. Co. v. Transit U, Inc.
United States District Court for the District of Delaware
July 22, 2021, Decided; July 22, 2021, Filed
Civil Action No. 20-01216-RGA

Reporter
2021 U.S. Dist. LEXIS 136595 *
PHILADELPHIA INDEMNITY INSURANCE COMPANY, Plaintiff, v. TRANSIT U, INC.; JOLLY TROLLEY TRANSPORTATION SERVICE, LLC; JOLLY TROLLEY LIMOUSINE SERVICE, LLC; JOLLY TROLLEY SCHOOL BUS, LLC; DAVID 0. HASTINGS; CHRISTINE D. HASTINGS; WILLIAM HASTINGS; DAVID T. HASTINGS; THOMAS DOWD; AND NATIONAL INDEMNITY COMPANY, Defendants.

MEMORANDUM OPINION
ANDREWS, U.S. DISTRICT JUDGE:
Before the Court is Defendant National Indemnity Company’s Motion to Dismiss, or in the Alternative, to Stay Plaintiffs claims for failure to state a claim as well as Defendants Transit U., Inc., Jolly Trolley Transportation Service, LLC, Jolly Trolley Limousine Service, LLC, Jolly Trolley School Bus, LLC, David 0. Hastings, Christine D. Hastings, William Hastings, D. Turner Hastings, and Thomas Dowd’s Motion to Stay Proceedings. (D.I. 30, 34). The motions were fully briefed. (D.I. 31, 36, 37, 39, 40, 41).

I. BACKGROUND
In October 2016, a truck towing a homemade trailer overturned and injured twenty-six of the passengers. (D.I. 1 at ¶ 46; D.I. 31 at 6). The vehicles and driver [*2] had been hired to transport passengers from Dewey Beach, Delaware to the Indian River Life Saving Station, also located in Delaware. (D.I. 1 at ¶ 45). Two actions by injured passengers were filed in the Superior Court of Delaware (Kent County) against Defendants Jolly Trolley Transportation Service, LLC (“Transport”), Transit U, Inc. (“Transit”), Jolly Trolley Limousine Service, LLC (“Limo”), Jolly Trolley School Bus, LLC (“Bus”), Thomas Dowd, an employee of Transit and the driver of the vehicles at issue, and the individuals that owned these companies: David 0., Christine, William, and David T. Hastings (the “Hastings”). (D.I. 1 at ¶¶ 2, 50). The claims were consolidated into one action (the “State Action”). (D.I. 31 at 6).
Transport owned the truck and homemade trailer and leased them to its parent company, Transit. (D.I. 1 at ¶¶ 44, 53). Transit and Transport insured the vehicles with a commercial auto policy (the “Transport Policy”) issued by Defendant National Indemnity Company (“National Indemnity”). (Id. at ¶ 30).
Limo, a separate subsidiary of Transit, did not own, lease, or operate the vehicles involved in the accident. (Id. at ¶ 4). Limo maintained a different insurance policy [*3] for its vehicles (the “PIIC Policy”) with Plaintiff Philadelphia Indemnity Insurance Company (“PIIC”). (Id. at ¶¶ 25, 29; D.I. 1, Ex. C). “Limo is listed as the ‘First Named Insured’ and “Transit is listed as a ‘Named Insured’ on that policy. (D.I. 1 at ¶ 25). The PIIC Policy contains an MCS-90B endorsement with a “limit of liability of $5 million,” which essentially states that “PIIC will pay a final judgment against Limo involving negligence in the operation of a vehicle, regardless of whether the vehicle qualifies as a covered ‘auto’ in the PIIC Policy, and subject to all other terms, conditions, and requirements of the MCS-90B Endorsement.” (Id. at ¶¶ 38-39). The MCS-90B Endorsement functions as a surety agreement and allows PIIC to recoup from Limo any amount it pays for a final judgment against Limo. (Id. at ¶ 43). The purpose of such an endorsement is to satisfy a motor carrier’s minimum levels of financial responsibility in order to cover public liability and property damage as required by Section 18 of the Bus Regulatory Reform Act of 1982. (Id. at ¶¶ 32, 36) (citing 49 U.S.C. § 31138(a)(1)).
PIIC denied coverage for the accident at issue “because it did not involve automobiles covered under the policy that [*4] PIIC issued to Limo.” (Id. at ¶ 3). Nevertheless, Plaintiff still provided a courtesy defense to Transit and Limo in the State Action subject to a full reservation of its rights, including the right to withdraw from the defense. (Id. at ¶¶ 3, 72). Plaintiff believed a judgment against Limo could potentially trigger its surety obligations under the MCS 90B Endorsement. (Id. at ¶ 3).
In August 2020, Limo’s counsel planned to move for “summary judgment” seeking Limo’s “dismissal” from the State Action, but Defendants’ personal counsel instructed Limo’s counsel not to do so. (Id. at ¶¶ 74, 78). Plaintiff believed that this evidenced an improper attempt to access the surety limits of Limo’s MCS-90B Endorsement even though Limo lacked involvement in the accident. (Id. at ¶ 79). In response, PIIC withdrew its defense of Transit on July 13, 2020. (Id. at ¶ 73). A few months later, the parties moved for entry of a final judgment against the defendants including Limo. (Id. at ¶¶ 96-99). Plaintiff filed a motion to intervene in the State Action on September 3, 2020. (D.I. 31 at 10). While that motion was under consideration, Plaintiff filed suit in this Court against Defendants Transit, Transport, [*5] Limo, Bus, the Hastings, Dowd, and National Indemnity on September 11, 2020. (D.I. 40 at 2).
Plaintiff alleges the same claims in this case as it did in the State Action except for two additional claims against National Indemnity—a party only to this case. (D.I. 1 at ¶¶ 101-156; D.I. 36, Ex. A at ¶¶ 145-187). The counts which overlap with those in the State Action are:
(1) Alter-ego liability against the Hastings Defendants [(Count I)]; (2) Declaratory Judgment that the MCS-90B Endorsement applies only to Limo [(Count II)]; (3) Declaratory Judgment that Plaintiff has no duty to defend in the underlying, lawsuits [(Count III)]; (4) Fraud against [all] defendants [except National Indemnity (Count VI)]; and (5) Tortious interference with contractual relations against the Hastings defendants [(Count VII)].
(D.I. 36 at 6). The counts unique to this case are (1) “declaratory judgment that the policies issued by National Indemnity to Transit, Transport and Bus cover the accident of up to $5 million under each policy (Count IV)” and (2) “contribution and indemnification” from National Indemnity for any judgment Plaintiff is required to pay (Count V). (D.I. 37 at 19).
National Indemnity filed a [*6] motion to dismiss Counts IV and V of Plaintiff’s Complaint and, to the extent they apply to National Indemnity, Counts II and III for failure to state a claim under Rule 12(b)(6). (D.I. 34; D.I. 36 at 6-7). National Indemnity alternatively requests that this Court stay the proceedings. (D.I. 34; D.I. 36 at 9). Defendants Transit, Transport, Bus, Dowd, and the Hastings (collectively “Jolly Trolley Defendants”) filed a motion to stay the proceedings pending the outcome of the State Action. (D.I. 30).

II. LEGAL STANDARD
Rule 8 requires a complainant to provide “a short and plain statement of the claim showing that the pleader is entitled to relief . . .” Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) allows the accused party to bring a motion to dismiss the claim for failing to meet this standard. A Rule 12(b)(6) motion may be granted only if, accepting the well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the counter-complainant, a court concludes that those allegations “could not raise a claim of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).
“Though ‘detailed factual allegations’ are not required, a complaint must do more than simply provide ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action.'” [*7] Davis v. Abington Mem’l Hosp., 765 F.3d 236, 241 (3d Cir. 2014) (quoting Twombly, 550 U.S. at 555). I am “not required to credit bald assertions or legal conclusions improperly alleged in the complaint.” In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002). A complaint may not be dismissed, however, “for imperfect statement of the legal theory supporting the claim asserted.” See Johnson v. City of Shelby, 574 U.S. 10, 11, 135 S. Ct. 346, 190 L. Ed. 2d 309 (2014).
A complainant must plead facts sufficient to show that a claim has “substantive plausibility.” Id. at 12. That plausibility must be found on the face of the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). “A claim has facial plausibility when the [complainant] pleads factual content that allows the court to draw the reasonable inference that the [accused] is liable for the misconduct alleged.” Id. Deciding whether a claim is plausible will be a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.
In certain circumstances, a federal court may stay the proceedings. For legal claims, federal courts “have a virtually unflagging obligation . . . to exercise the jurisdiction given them” except in certain exceptional circumstances when a parallel state court action exists. Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976); Ryan v. Johnson, 115 F.3d 193, 195-96 (3d Cir. 1993).
For declaratory judgment claims, the standard is different. The Declaratory Judgment Act states that “any court of the United States . . . may declare the rights [*8] of and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). When only declaratory relief is sought, federal courts are granted more flexibility in exercising their discretion to hear the case. See Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 494-95, 62 S. Ct. 1173, 86 L. Ed. 1620 (1942); Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S. Ct. 2137, 132 L. Ed. 2d 214 (1995). In the Third Circuit, courts weigh various factors in determining whether to decline to hear a declaratory judgment case including:
(1) the likelihood that a federal court declaration will resolve the uncertainty of obligation which gave rise to the controversy; (2) the convenience of the parties; (3) the public interest in settlement of the uncertainty of obligation; (4) the availability and relative convenience of other remedies; (5) a general policy of restraint when the same issues are pending in a state court; (6) avoidance of duplicative litigation; (7) prevention of the use of the declaratory action as a method of procedural fencing or as a means to provide another forum in a race for res judicata; and (8) (in the insurance context), an inherent conflict of interest between an insurer’s duty to defend in a state court and its attempt to characterize that suit in federal court as falling within the scope of [*9] a policy exclusion.
Reifer v. Westport Ins. Corp., 751 F.3d 129, 146 (3d Cir. 2014).
In a case involving both declaratory relief and legal claims, as is the case here, the Third Circuit applies the independent claim test to determine the level of discretion federal courts may exercise in declining jurisdiction. Rarick v. Federated Serv. Ins. Co., 852 F.3d 223, 229 (3d Cir. 2017). Under the independent claim test, “a district court must [first] determine whether the legal claims are independent of the declaratory claims.” Id. “Non-declaratory claims are ‘independent’ of a declaratory claim when they are alone sufficient to invoke the court’s subject matter jurisdiction and can be adjudicated without the requested declaratory relief.” Id. at 228 (quoting R.R. St. & Co. v. Vulcan Materials Co., 569 F.3d 711, 715 (7th Cir. 2009)).
If the legal claims are not independent of the claims for declaratory relief, then the Wilton/Brillhart doctrine applies, and courts can use their discretion to abstain from hearing the entire case consistent with the factors listed in Reiter. Rarick, 852 F.3d at 229. If the legal claims are independent, then the Colorado River doctrine applies, and courts can only stay the proceedings under exceptional circumstances. Id. Courts consider:
(1) [in an in rem case,] which court first assumed jurisdiction over property; (2) the inconvenience of the federal forum; (3) the desirability of avoiding piecemeal [*10] litigation; (4) the order in which jurisdiction was obtained; (5) whether federal or state law controls; and (6) whether the state court will adequately protect the interests of the parties.
Spring City Corp. v. American Bldgs. Co., 193 F.3d 165, 171, 173 (3d Cir. 1999). Applying these factors “does not rest on a mechanical checklist, but on a careful balancing of the important factors . . . as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 2, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983). “Only the clearest of justifications will warrant dismissal.” Colorado River, 424 U.S. at 819.

III. DISCUSSION

A. National Indemnity’s Motion to Dismiss or in the Alternative, to Stay
National Indemnity filed a motion to dismiss, or alternatively, to stay Plaintiff’s claims against National Indemnity. (D.I. 34). Counts IV and V are directed specifically at National Indemnity: (D.I. 1 at In 123-36). Count IV requests declaratory judgment that “National Indemnity is liable under the Transport Policy, as required under federal and Delaware law, for any judgment in the [State] Action because the Transport Policy covers the automobiles at issue in the [State] Action and the Transport Policy must, as required under federal and Delaware law, contain minimum limits of liability of $5 million.” (Id. at ¶ 128). [*11] Count V alleges, “National Indemnity is liable to PIIC for contributions and/or indemnification for any judgment against [Limo] in the [State] Action that [] PIIC pays, because the Transport Policy covers the automobiles at issue in the [State] Action.” (Id. at ¶ 136).

1. National Indemnity’s Argument that Plaintiffs Claims Fail for Lack of Ripeness
National Indemnity argues that Plaintiffs claims against it are not ripe and that Plaintiff is seeking an advisory opinion. (D.I. 36 at 18). National Indemnity argues that in Delaware, claims are not ripe until there is “a reasonable likelihood that coverage under the disputed polices will be triggered.” (Id.) (quoting XL Specialty Ins. Co. v. WAII Liquidating Tr., 93 A.3d 1208, 1218 (Del. 2014)). A dispute is not ripe when a claim is based on “uncertain and contingent events” or where ‘future events may obviate the need’ for judicial intervention.” (Id.). National Indemnity argues that Plaintiff’s claims against it are contingent on whether Plaintiff will have any liability to cover the accident in the first place pursuant to its other claims. (Id.). So far, “Plaintiff has paid no money under the policy provisions at issue, and Plaintiff is not under any judicial order that it must pay.” (Id.)
Plaintiff argues that [*12] National Indemnity incorrectly applies Delaware law to federal justiciability issues. (D.I. 39 at 20) (citing Fed. Kemper Ins. Co. v. Rauscher, 807 F.2d 345, 352 (3d Cir. 1986)). Even under this erroneous standard, Plaintiff maintains that its claims are non-hypothetical, and thus ripe, because the “State Plaintiffs (1) have a present right to sue PIIC under the MCS-90B Endorsement to satisfy judgments in the State Action and (2) have an assignment from the State Defendants of their rights, if any, under the PIIC Policy to pursue PIIC.” Id.
Plaintiff argues that under federal law, “the Third Circuit uses a three part test to determine whether claims are ripe for judicial review: ‘1) the parties must have adverse legal interests; (2) the facts must be sufficiently concrete to allow for a conclusive legal judgment, and (3) the judgment must be useful to the parties.'” (Id. at 20-21) (quoting Aaron Enterprises, Inc. v. Fed. Ins. Co., 415 F. Supp. 3d 595, 600 (E.D. Pa. 2019)). First, Plaintiff argues that the Parties’ interests are adverse because National Indemnity opposes their request to apply “federal and Delaware law concerning minimum financial responsibility requirements to the National Indemnity Policies . . .” (Id. at 21). Second, Plaintiff claims the facts are sufficiently concrete to allow for a conclusive judgment because [*13] they “involve a legal interpretation of federal law applied to the insurance policies at issue.” (Id.). Third, Plaintiff argues that a judgment would be useful “since it would help PIIC and National Indemnity determine their rights and obligations with respect to the State Action.” (Id).
I agree with Plaintiff that federal justiciability law applies. See Fed. Kemper Ins. Co., 807 F.2d at 352. Under the first prong of the three-part test, courts consider whether “the claim involves uncertain and contingent events, or presents a real and substantial threat of harm” to determine the adversity of the parties’ interests. NE Hub Partners v. CNG Transmission Corp., 239 F.3d 333, 342 n.9 (3d Cir. 2001). “It is not necessary for the party seeking review to have suffered a completed harm in order to establish adversity of interest so long as there is a substantial threat of real harm that remains throughout the course of the litigation.” Surrick v. Killion, 449 F.3d 520, 527 (3d Cir. 2006). Plaintiff faces a substantial threat of real harm because judgments have been entered in the State Action against Jolly Trolley Defendants, and the Jolly Trolley Defendants have assigned their rights to the State Action plaintiffs, which give the State Action plaintiffs a current right to sue Plaintiff under the MCS-90B endorsement to satisfy the judgment against Limo. (D.I. [*14] 39 at 20).
Under the second prong of the test, the facts are also sufficiently concrete to allow for a conclusive legal judgment. The dispute must be based on a “real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” Aaron Enterprises, 415 F. Supp. 3d at 602. Plaintiff seeks a determination of whether the Transport Policy must contain minimum limits of liability at $5 million under federal or state law. (D.I. 1 at ¶ 126). These are not hypothetical insurance contracts, and therefore, a declaratory judgment on this issue would not be an advisory opinion because it would help establish the actual coverage obligations of the insurers in this case.
Under the third prong of the test, the judgment must be useful to the parties. “A judgment should ‘affect the parties’ plans of actions by alleviating legal uncertainty.” Aaron Enterprises, 415 F. Supp. 3d at 601 (citing Surrick, 339 F.3d at 529). A declaratory judgment as to whether insurers of motor carriers must provide minimum levels of financial responsibility would serve a useful purpose by establishing the insurers’ coverage obligations and alleviating legal uncertainty. Plaintiff’s claim satisfies [*15] the three-part test, and therefore, Count IV is ripe for adjudication.

2. National Indemnity’s Motion to Dismiss Count IV
National Indemnity claims that Plaintiff lacks standing to bring Count IV because it seeks reformation disguised as declaratory relief. (D.I. 36 at 12). Plaintiff is essentially asking this Court to “revise the Transport Policy’s existing liability coverage from $1 million to $5 million.” (Id.). National Indemnity argues that reformation relief may only be sought by a party to the contract. (Id. at 13) (citing Starr v. Nationwide Mut. Ins. Co., 548 A.2d 22, 28 (Del. Ch. 1988); Lawson v. Kellogg Marine, Inc., 2013 Del. Super. LEXIS 142, 2013 WL 1718022, at *2 (Del. Super. Ct. Apr. 18, 2013)). Since Plaintiff is not a party to the insurance contract between National Indemnity and Transport, it lacks standing to assert a reformation claim. (Id.).
On the merits, National Indemnity argues that neither federal nor Delaware law require insurers to include minimum limits of liability of $5 million in their policies with motor carriers. (D.I. 36 at 11). National Indemnity claims that the text of the federal regulations unambiguously places the duty on motor carriers, not insurers, to maintain mandated minimum amounts of financial responsibility as required by the Bus Regulatory Reform Act of 1982. (D.I. 36 at 11-12; D.I. 41 at 5-6). The text states, [*16] “The purpose of these regulations is to create additional incentives to motor carriers to maintain and operate their vehicles in a safe manner . . .” and requires only motor carriers to “obtain[] and [have] in effect the minimum levels of financial responsibility . . .'” (D.I. 41 at 6) (emphasis in original) (citing 49 C.F.R. §§ 387.27, 387.31). Delaware law governing minimum amounts of financial liability for motor carriers is identical to 49 C.F.R. Part 387. (Id. at 6 n.3) (citing 21 Del. C. § 4702).
National Indemnity claims federal courts, in interpreting the motor carrier regulations, have consistently held that reformation of an insurance policy to include an MCS-90B endorsement is improper because the duty is on motor carriers, rather than insurers, to maintain minimum levels of financial responsibility. (Id. at 9) (citing Illinois Central R. Co. v. Dupont, 326 F.3d 665, 668-69 (5th Cir. 2003); Waters v. Miller, 560 F. Supp. 2d 1318, 1323 (M.D. Ga. 2008) (“the failure to include the endorsement in the policy cannot give rise to the remedy [of] reformation of the policy deeming the endorsement to be a part of the policy.”)). Courts have also held that “‘writing a MCS-90 endorsement into the policy . . . would create a perverse incentive’ for motor carriers to avoid negotiating for the MCS-90 endorsement at the outset.” (Id. at 10) (quoting Grange Mut. Cas. Co. v. Pinson Trucking Co., 2013 U.S. Dist. LEXIS 15215, 2013 WL 443619, at *5 (M.D. Ga. Feb. 5, 2013)).
Plaintiff argues that [*17] it has standing to “seek declaratory relief against National Indemnity as requested in the Complaint, even despite the fact that PIIC is not a party or third-party beneficiary to the National Indemnity Policies.” (D.I. 39 at 15). Plaintiff claims, “An insurer may bring declaratory judgment claims against a separate insurer seeking a declaration that the separate insurer’s policy conform to legally-mandated financial responsibility limits . . .” (Id. at 14). Plaintiff cites to First Trenton Indemnity Co. v. Chrysler Ins. Co., in which the court held that a driver’s insurer had standing to sue the vehicle owner’s insurer for a declaration that the vehicle owner’s insurer conform its policy to minimum coverage limits required by state law when the driver’s insurer was not a party or third-party beneficiary to the contract. (D.I. 39 at 14-15) (citing 2010 U.S. Dist. LEXIS 98859, 2010 WL 3740841, at *8 (D.N.J. Sept. 20, 2010)). Plaintiff also cites to Progressive Express Ins. Co. v. Overdrive Specialized, Inc., in which the court held that an insurer could seek a determination regarding the parties’ rights and obligations even when it was not a party to or a third-party beneficiary of the insurance policy because the parties’ interests were adverse and a declaration [*18] would help clarify the parties’ rights and obligations as to which insurer owed coverage. (Id. at 15-16) (citing 2014 U.S. Dist. LEXIS 195508, 2014 WL 11512202, at *1 (N.D. Fla. Dec. 24, 2014)). Plaintiff claims that it has standing to request declaratory relief in this case because National Indemnity and PIIC’s interests are similarly adverse. (Id. at 16). The amount PIIC is obligated to pay for judgments satisfied against Limo depends on how much National Indemnity is obligated to cover. (Id.). Therefore, a declaration “would help establish the rights and obligations of National Indemnity and [Plaintiff].” (Id.).
Plaintiff also disagrees with National Indemnity’s claim that neither federal nor Delaware law impose a duty on insurers to satisfy minimum financial responsibility requirements. (D.I. 39 at 11). Plaintiff claims that a motor carrier’s insurer “must attest that the motor carrier has satisfied federal minimum financial responsibility requirements.” (Id. at 12) (citing Carolina Cas. Ins. Co. v. Travelers Prop. Cas. Co., 90 F. Supp. 3d 304, 321 (D.N.J. 2014)). Plaintiff argues that because National Indemnity issued policies with only $1 million in coverage, it failed to certify that the minimum limits of financial responsibility were met and violated its duty to provide the $5 million minimum liability limit required by state and federal law. [*19] (D.I. 39 at 13). Therefore, Plaintiff claims National Indemnity should be held liable for any judgment against Limo in the State Action, and Count IV should not be dismissed. (D.I. 39 at 13).
The Third Circuit summarized the requirements for standing as follows:
Article III constitutional standing contains three elements: (1) the plaintiff must have suffered an injury in fact—an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) there must be a causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant and not the result of the independent action of some third party not before the court; and (3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 484-85 (3d Cir. 1998). The standing issue in this case is related to the first element—whether Plaintiff has a legally protected interested that would allow Plaintiff to reform the Transport Policy to include an MCS-90B endorsement.
Plaintiff cites to Progressive Express in order to show that an insurer has standing to request declaratory [*20] relief to compel coverage from another insurer. (D.I. 39 at 15). But in that case, the plaintiff wanted the court to interpret the language of the applicable insurance policies and find that it did not have to defend or cover its insured unless no other coverage applied. Progressive Express, 2014 U.S. Dist. LEXIS 195508, 2014 WL 11512202, at *3. Here, there is no dispute that National Indemnity’s policy covered the accident—National Indemnity has already exhausted its liability limits. (D.I. 41 at 12). Rather than ask this Court to interpret the existing terms of the policies, Plaintiff seeks to amend the Transport Policy to expand its liability limit from $1 million to $5 million. Therefore, Plaintiff essentially seeks reformation of the Transport Policy.
Reformation allows a court to rewrite a contract “to express the ‘real agreement’ of the parties involved” when a mutual or unilateral mistake occurs. See Cerberus Intl, Ltd. v. Apollo Mgmt, L.P., 794 A.2d 1141, 1151 (Del. 2002). Plaintiff does not have standing to seek reformation. Plaintiff is not a party to the contract and does not point to any regulation or statute that would grant standing to a third-party insurer to rewrite an MCS-90B endorsement into a separate insurer’s policy.1 First Trenton, which Plaintiff cites to supports its standing argument, does not support [*21] Plaintiff’s claim because the applicable statute in that case provided a legal basis for reformation of an insurance contract. (DI 39 at 14) (citing First Trenton, 2010 U.S. Dist. LEXIS 98859, 2010 WL 3740841, at *8). The statute states, “The provisions of this chapter, so far as may be requisite, shall be read into and deemed to form a part of any such policy.” N.J. Stat. Ann. §45:21-3. The regulations at issue here provide no such remedy to Plaintiff because federal and state law do not place a duty on insurers to satisfy a motor carrier’s minimum amount of financial responsibility.
The interpretation of regulations follows the same rules as statutory interpretation. See, e.g., Burns v. Barnhart, 312 F.3d 113, 125 (3d Cir. 2002). If the text of the regulation is unambiguous, “[T]he regulation then just means what it means—and the court must give it effect, as the court would any law.” Kisor v. Wilkie, 139 S.Ct. 2400, 2415, 204 L. Ed. 2d 841 (2019).
The text of the Bus Regulatory Reform Act of 1982 and corresponding regulations place the burden on motor carriers, not insurers, to provide the federally required minimum amounts of liability. The purpose of the regulation “is to create additional incentives to motor carriers to maintain and operate their vehicles in a safe manner . . .” 49 C.F.R. § 387.1. The regulation states, “No motor carrier shall operate a motor vehicle transporting passengers [*22] until the motor carrier has obtained and has in effect the minimum levels of financial responsibility as set forth in § 387.33 of this subpart.” 49 C.F.R. § 387.31. Delaware law adopts the same language as the federal regulations regarding securing financial responsibility for motor carriers. See 21 Del. C. § 4702 (“Except as modified by this chapter, the State hereby adopts, as the laws of Delaware governing motor carrier safety, the following parts of the Code of Federal Regulations, as published and as subsequently amended: Title 49, Chapter III, Subchapter B, . . . Part 387 . . .”).
It is clear from the text of the regulations that the federal and Delaware law place a duty on motor carriers, not insurers, to maintain minimum amounts of financial responsibility. See Illinois Central R. Co., 326 F.3d at 669 (“Since the regulations requiring the MCS-90 endorsement are directed at the motor carrier, we do not read them as imposing a duty on the insurer to make sure that non-exempt motor carriers secure the required insurance.”); Brewer v. Maynard, 2007 U.S. Dist. LEXIS 53512, 2007 WL 2119250 at *2 (S.D.W. Va. July 20, 2007) (“A plain reading of the motor carrier regulations indicates that they place the burden of compliance on the motor carrier not on the insurer.”).
Because insurers have no duty to include an MCS-90B endorsement in their motor carrier policies [*23] or otherwise satisfy minimum amounts of financial responsibility for motor carriers under federal or Delaware law, Plaintiff cannot seek to reform the Transport Policy by raising its liability limit to $5 million. Plaintiff does not argue any other legal basis for reforming the Transport Policy to provide coverage beyond the $1 million policy limit. Therefore, Plaintiff has failed to state a claim that “National Indemnity is liable under the Transport Policy, as required under federal and Delaware law, for any judgment in the [State] Action.” (D.I. 1 at ¶ 128). National Indemnity’s Motion to Dismiss Count IV is granted.

3. National Indemnity’s Motion to Dismiss Count V
National Indemnity also moves to dismiss Count V in which Plaintiff claims, “National Indemnity is liable to PIIC for contribution and/or indemnification for any judgment against [Limo] in the [State] Action that [] PIIC pays, because the Transport Policy covers the automobiles in the [State] Action.” (D.I. 34; D.I. 1 at ¶ 136). National Indemnity argues Plaintiff lacks standing to assert an indemnification or contribution claim against National Indemnity. (D.I. 36 at 14). Because Plaintiff does not point to any positive [*24] law that would give Plaintiff a right to contribution or indemnification as a third-party to the contract, Delaware contract law controls. (Id). Under Delaware contract law, a party needs to be a third-party beneficiary or party to the contract to have standing to seek contribution or indemnification. (D.I. 36 at 16) (citing Broadway v. Allstate Prop. & Cas. Ins. Co., 2015 Del. Super. LEXIS 396, 2015 WL 4749176, at *5 (Del. Super. Ct. Aug 11, 2015); Schmelz v. Martone, 2019 Del. Super. LEXIS 226, 2019 WL 1977079, at *5 (Del. Super. Ct. May 2, 2019). Since Plaintiff is neither, Plaintiff lacks standing for a contribution and/or indemnification claim. (Id.).
Plaintiff argues that it can “recover from another insurer that failed to satisfy minimum financial responsibility requirements, regardless of whether the obliged insurer is a party to, or third-party beneficiary of, the other insurer’s policy.” (D.I. 39 at 19). Plaintiff argues that National Indemnity failed to satisfy minimum financial responsibility requirements for motor carriers in its policy, and therefore, is responsible for any judgment against Limo that Plaintiff must pay. Plaintiff claims it has a right to “seek recovery from the insurer ultimately responsible for satisfying the judgment—-i.e., National Indemnity.” (D.I. 39 at 18-19). (citing Am. Alternative Ins. Co. v. Sentry Select Ins. Co., 176 F. Supp. 2d 550, 556 (E.D. Va. 2001)).
“In the insurance context, the right to contribution among insurers arises in two basic circumstances: [*25] 1) an insurer of a joint tortfeasor has paid all, or greater than its share, of a loss;” or “2) a single insured is covered by concurrent or ‘double’ insurance, and one insurer paid all, or greater than its share, of a loss.” 15 Couch on Insurance, § 217:4 (3d ed. 2021). “Where one of two or more potentially liable insurers pays a loss, whether in satisfaction of a judgment or in settlement of a claim, it may then seek payment from the other insurers of their fair share of the loss.” Id. “An insurer’s right to contribution from a second insurer can rise no higher than the right of the insured of the second insurer to compel coverage of the loss.” Id.
Indemnification, which is distinct from contribution, is an “equitable or contractual device[] for placing the burden for a loss on the party ultimately liable or responsible for it and by whom it should have been discharged. . . The person seeking indemnification does so in his or her own right . . .” Id. at § 217:5.
I agree with National Indemnity that Plaintiff lacks standing for contribution or indemnification. Plaintiff only has a right to recover from a second insurer up to the amount “the insured of the second insurer [can] compel [*26] coverage of the loss.” Id. at § 217:4. Here, the parties do not dispute whether National Indemnity’s coverage applies to the accident, but rather whether National Indemnity’s policy violated federal and state law. As previously discussed, National Indemnity, as an insurer, did not have a duty to provide minimum liability limits required by motor carriers. National Indemnity has already paid out its liability limit of $1 million under the Transport Policy, thus satisfying its obligations to the insured. (See D.I. 1 at ¶ 59). Plaintiff cannot seek contribution or indemnification from National Indemnity for more than National Indemnity was legally and contractually obligated to pay to its insured. Moreover, Plaintiff has not actually made any payments for a judgment against Limo for which it can seek contribution. Therefore, Plaintiff has failed to state a claim for contribution or indemnification, and I grant National Indemnity’s motion to dismiss Count V.

4. National Indemnity’s Motion to Dismiss Counts II and III
Plaintiff does not contest National Indemnity’s Motion to Dismiss Counts II and III to the extent they relate to National Indemnity. Count II requests declaratory relief that [*27] the MCS-90B Endorsement applies only to Limo, and Count III requests declaratory judgment that PIIC has no duty to defend. (D.I. 1 at IN 113-122). Neither claim directly implicates National Indemnity. Whether the MCS-90B Endorsement applies and whether PIIC has a duty to defend are disputes between Plaintiff and its insured. Besides Plaintiff’s claims for contribution and indemnification, which I have dismissed, Plaintiff does not explain how Counts II and III individually implicate National Indemnity. Therefore, Plaintiff has failed to state a claim upon which relief can be granted, and National Indemnity’s Motion to Dismiss is granted with regards to Counts II and III “to the extent they address any purported obligations of National Indemnity.” (D.I. 36 at 17).

B. Jolly Trolley Defendants’ Motion to Stay
Jolly Trolley Defendants move to stay the proceedings. (D.I. 30). Applying the independent claim test, they argue that this Court should exercise its discretion to decline to hear the claims under the Brillhart doctrine because all of Plaintiff’s legal claims are dependent on its declaratory claims. (D.I. 31 at 16). They argue the legal claims are dependent because “all of PIIC’s legal [*28] claims would be moot if this Court (or Delaware Superior Court) declares that PIIC has no obligation to satisfy any judgment under the policy it issued to Jolly Trolley Limousine and Transit U.” (D.I. 31 at 19).
Plaintiff disagrees with Jolly Trolley Defendants’ definition of independent claims. Plaintiff argues that its legal claims are independent of the declaratory relief it seeks because the legal claims “would continue to exist if the request for a declaration simply dropped from the case,” and therefore the Colorado River doctrine should apply. (D.I. 37 at 16, 19) (citing Lukoil, 2017 U.S. Dist. LEXIS 207241, 2017 WL 6450482, at *8).
The Third Circuit has adopted the independent claim test in cases where a complaint contains claims for both legal and declaratory relief. Rarick, 852 F.3d at 229. The test determines whether the Brillhart doctrine or Colorado River abstention doctrine will govern how much discretion the court has to decline to exercise jurisdiction. Id. Under the test, “a district court must [first] determine whether the legal claims are independent of the declaratory claims.” Id.
I agree with Plaintiff’s definition of independent claims. A claim is independent when it “could stand alone in federal court—both jurisdictionally and substantively—irrespective [*29] of the declaratory claim.” Id. at 228 (citing R.R. St. & Co., 569 F.3d at 715). Legal claims are substantively independent of declaratory claims when they “can be adjudicated without the requested declaratory relief,’ or in other words, the claims would continue to exist if “the request for a declaration simply dropped from the case.” Cont’l Cas. Co. v. Westfield Ins. Co., 2017 U.S. Dist. LEXIS 61889, 2017 WL 1477136, at *5 (E.D. Pa. Apr. 24, 2017) (citations omitted). “When the legal claims are independent, courts generally will not decline the declaratory judgment action in order to avoid piecemeal litigation.” Rarick, 852 F.3d at 228 (citing R.R. St. & Co., 569 F.3d at 715-16).
Plaintiff has three surviving legal claims in this case: “(1) alter-ego liability against the Hastings (Count I); (2) fraud against all Moving Defendants (Count VI); [] (3) tortious interference with contractual relations against the Hastings (Count VII).” (D.I. 37 at 16). Plaintiff seeks declaratory relief for:
(1) a declaration that the MCS-90B Endorsement in the PIIC Policy does not apply to any person or entity aside from Limo, including without limitation Transit (Count II); (2) a declaration that PIIC has no duty to defend Limo and Transit in the State Action (Count III); and (3) a declaration that National Indemnity—not a party to the State Action—failed to satisfy federal and Delaware minimum financial responsibility [*30] requirements in the policies issued to Bus and Transport (including the policy that undisputedly covers the vehicles involved in the October 1, 2016 accident) (Count IV).
(Id.).
Plaintiff’s legal claims are independent of its declaratory relief claims because they could stand alone in federal court both jurisdictionally and substantively. The claims are jurisdictionally independent because there is diversity of citizenship between PIIC, a citizen of Pennsylvania, and Defendants, citizens of Delaware, and the amount in controversy exceeds $75,000. (Id. at ¶¶ 10-22).
Substantively, Plaintiff’s claims for alter-ego liability, fraud, and tortious interference can all stand alone in federal court. They can be resolved without having to decide the remaining declaratory relief claims: that the MCS-90B Endorsement does not apply to Limo and that PIIC has no duty to defend Limo and Transit. In other words, “the requested declaratory relief is not a prerequisite to the resolution of [the legal] claims.” R.R. St. & Co., 569 F.3d at 717. The fact that the declaratory relief and legal claims relate to the same underlying legal obligations is not dispositive for establishing substantive independence. Cont’l Cas. Co., 2017 U.S. Dist. LEXIS 61889, 2017 WL 1477136, at *5.
When the legal claims are independent, [*31] the Colorado River doctrine, rather than the Brillhart doctrine, applies and courts have a “virtually unflagging obligation” to hear the case except in exceptional circumstances. Rarick, 852 F.3d at 229. As a threshold issue, courts first consider whether the federal and state proceedings are parallel. Ryan, 115 F.3d at 196. Concurrent state and federal actions are parallel when they involve the same parties and claims. Id.
After granting National Indemnity’s Motion to Dismiss, the parties are the same, and the only remaining counts are virtually identical to the counts in the State Action. (D.I. 37 at 19). These cases are parallel. Courts can only stay parallel proceedings under certain exceptional circumstances and apply a six-factor test to determine whether to exercise jurisdiction. Supra, at 7.
Jolly Trolley Defendants argue that the factors weigh in favor of a stay because of the lack of proceedings in federal court in comparison to the “extensive litigation in the state court” and the absence of the State Action plaintiffs in federal court. (D.I. 31 at 24).
Plaintiff argues that the factors weigh in favor of exercising jurisdiction. (D.I. 37 at 19). Plaintiff’s arguments are generally presented as though National Indemnity [*32] remains in the case, and thus are less helpful than they might be. Plaintiff claims no res is at issue in this case, both the state and federal forum are convenient to the parties, there is no federal policy that supports trying the types of claims at issue here in state court, the claims involve the interpretation and application of federal law, and there is no allegation that the state forum is inadequate. (D.I. 37 at 20-21).
The application of the six-factor test weighs in favor of not staying the case. The first factor, which court first assumed jurisdiction over the property, does not apply because no res is at issue in this case. It is therefore neutral.
The second factor, the inconvenience of the federal forum, does not weigh in favor of abstention because the federal forum and state court are equally convenient since they are both located in Delaware. It is therefore neutral.
The third factor, the desirability of avoiding piecemeal litigation, applies when there is a “strongly articulated congressional policy against piecemeal litigation in the specific context of the case under review.” Ryan, 115 F.3d at 198 (emphasis in original). “The presence of garden-variety state law issues has not . . . been [*33] considered sufficient evidence of a congressional policy to consolidate multiple lawsuits for unified resolution in the state courts.” Id. Plaintiff’s claims for alter-ego liability, fraud, and tortious interference with contractual relations can be fairly characterized as garden-variety state law claims. See, e.g., Nihon Tsushin Kabushiki Kaisha v. Davidson, 595 F. Supp. 2d 363, 370 (D. Del. 2009) (state law breach of contract and fraud claims are garden-variety state law issues). Moreover, neither party has pointed to a congressional policy against piecemeal litigation which would apply to these types of claims. Therefore, the third factor weighs in favor of exercising jurisdiction.
The fourth factor, the order in which jurisdiction was obtained, weighs in favor of abstention because Plaintiff first filed a motion to intervene in the State Action eight days before filing its complaint in federal court. (D.I. 40 at 2). The State Action had also been ongoing since 2016 and the parties have already proceeded with discovery in the underlying tort suit. (D.I. 31 at ¶¶ 1, 6).
The fifth factor, whether federal or state law controls, weighs in favor of abstention. Absent Counts IV and V regarding the MCS-90B endorsement, which I have dismissed, the remaining claims for alter-ego [*34] liability, fraud, and tortious interference are state law claims. The state court is better versed in Delaware law than I am.
The sixth and final factor, whether the state court will adequately protect the interests of the parties, is neutral. “[T]he mere fact that the state forum is adequate does not counsel in favor of abstention, given the heavy presumption the Supreme Court has enunciated in favor of exercising federal jurisdiction. Instead, this factor is normally relevant only when the state forum is inadequate.” Ryan, 115 F.3d at 200. There is every reason to believe the state court will adequately protect the interests of the parties, and no party argues to the contrary, so this factor is neutral.
On the whole, the factors do not weigh strongly in favor of staying the proceedings and do not amount to exceptional circumstances which overcome this Court’s “virtually unflagging obligation” to exercise jurisdiction under the Colorado River doctrine. It is true that the State Action has been ongoing for years, and Plaintiff first moved to intervene in the State Action. The state court is also better suited to address matters of Delaware law, which is now the only law at issue. But the other factors are [*35] neutral or weigh in favor of exercising jurisdiction. Therefore, Jolly Trolley Defendants’ Motion to Stay is denied.

C. CONCLUSION
For these reasons, I grant National Indemnity’s Motion to Dismiss regarding Counts IV and V, and to the extent they apply to National Indemnity, Counts II and III also. (D.I. 34). I deny Jolly Trolley Defendants’ Motion to Stay for the remaining counts.2 (D.I. 30).

ORDER
For the reasons stated in the accompanying memorandum opinion, Defendant National Indemnity’s Motion to Dismiss (D.I. 34) is GRANTED, and Jolly Trolley Defendants’ Motion to Stay (D.I. 30) is DENIED.
IT IS SO ORDERED this 22 day of July 2021.
/s/ Richard G. Andrews
United States District Judge

Am. Inter-Fidelity Exch. v. Johnson
United States District Court for the Northern District of Illinois, Eastern Division
July 23, 2021, Decided; July 23, 2021, Filed
17 C 7934

Reporter
2021 U.S. Dist. LEXIS 137644 *
AMERICAN INTER-FIDELITY EXCHANGE, Plaintiff/Counter-Defendant, vs. JOSEPH HOPE and CINDY JOHNSON, as Trustee of the Bankruptcy Estate of Joseph and Cassidi Hope, Defendants, and IURII RYPNINSKYI, Defendant/Counter-Plaintiff/Third-Party Plaintiff, vs. CASSIDAY SCHADE, LLP, JOSEPH PANATERA, ALEX CAMPOS, JAMES KOPRIVA, and KEITH AUBIN, Third-Party Defendants.

MEMORANDUM OPINION AND ORDER
In this diversity suit against Iurii Rypninskyi and Joseph Hope—and Hope’s bankruptcy trustee, who can be ignored—American Inter-Fidelity Exchange (“AIFE”) seeks a declaratory judgment that it owes no duty to indemnify Rypninskyi for a monetary judgment entered in a case that Hope brought against him in state court, or to further defend Rypninskyi in connection with that case. Doc. 81. Rypninskyi in turn brought a third-party complaint against his state court counsel—Cassiday Schade, [*2] LLP and several of its attorneys (collectively, “Cassiday Schade”)—alleging that their legal malpractice caused him to lose the state court case and therefore that they should pay the state court judgment if AIFE does not. Doc. 51.
In an earlier decision, familiarity with which is assumed, the court denied Hope’s motion to dismiss AIFE’s coverage claim. Docs. 49-50 (reported at 2018 WL 3208481 (N.D. Ill. June 29, 2019)). The court also denied Cassiday Schade’s motion for summary judgment on the thirdparty claim. Docs. 150-151 (reported at 2019 WL 4189657 (N.D. Ill. Sept. 4, 2019)). Rypninskyi, Hope, and AIFE now cross-move for summary judgment on AIFE’s claim. Docs. 243, 250, 253. The motions are denied.

Background
Because the parties cross-move for summary judgment, the court must consider the facts in the light most favorable to Rypninskyi and Hope when considering AIFE’s motion and in the light most favorable to AIFE when considering Rypninskyi’s and Hope’s motions. See First State Bank of Monticello v. Ohio Cas. Ins. Co., 555 F.3d 564, 567 (7th Cir. 2009) (“[B]ecause the district court had cross-motions for summary judgment before it, we construe all facts and inferences therefrom in favor of the party against whom the motion under consideration is made.”) (internal quotation marks omitted). To the extent a disputed fact relates to two or more of [*3] the parties’ motions, the court will set forth the parties’ respective positions. At this juncture, the court does not vouch for any party’s version of the facts. See Gates v. Bd. of Educ. of Chi., 916 F.3d 631, 633 (7th Cir. 2019).
On May 31, 2014, Rypninskyi and Hope got into a vehicular accident while Rypninskyi was driving a truck owned by Leasing Truck Solution, Inc. Doc. 263 at ¶ 9; Doc. 264 at ¶¶ 3-4; Doc. 268 at ¶ 9 n.1. Hope filed a negligence suit against Rypninskyi and Leasing Truck in the Circuit Court of Cook County, Illinois. Doc. 268 at ¶ 9 n.1 (citing Doc. 81 at pp. 29-34). In February 2015, AIFE retained Cassiday Schade to defend Rypninskyi, its insured, under a “Truckers Policy” for auto liability. Doc. 264 at ¶ 41; Doc. 268 at ¶ 9; Doc. 271 at ¶ 9; Doc. 249-18 at pp. 10-54. Rypninskyi participated in discovery but did not appear at his September 2017 trial, Doc. 249-7, and the jury returned a $400,000 verdict against him, Doc. 21-14. AIFE claims that Rypninskyi violated the policy’s cooperation clause by not appearing at trial, thus relieving it of its defense and indemnification obligations to him. Doc. 81 at p. 2, ¶ 9.

A. The AIFE Truckers Liability Policy
Three aspects of the AIFE policy are pertinent here.
First, the policy defines [*4] “Persons Insured” as “[t]he Named Insured as appears on the Policy Declarations Page”—i.e., an entity called “Expeditor Systems, Inc.”—as well as “[e]mployee drivers of the Named Insured, and [certain additional] drivers under … lease[.]” Doc. 249-18 at pp. 10, 44-45. Although Expeditor Systems is the policy’s only “Named Insured,” in the underlying suit Cassiday Schade—in its capacity as counsel for Rypninskyi—identified Expeditor Systems and Rypninskyi as the policy’s “[n]amed insureds” in response to an interrogatory asking Rypninskyi to identify “all liability insurance” for Rypninskyi, Leasing Truck Solutions, and “any other person or entity” with an interest in the truck Rypninskyi was driving. Doc. 264 at ¶¶ 16-17.
Second, the policy includes duty-to-defend and duty-to-indemnify provisions. The duty-to-indemnify provision states that AIFE “will pay, for and on behalf of … the Named Insured, all sums legally owed by an ‘Insured’ 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,'” and that AIFE “will also pay all sums an ‘insured’ legally must pay [*5] as a ‘covered pollution cost or expense’ to which this insurance applies, caused by an ‘accident’ and resulting from ownership, maintenance, or use of a covered ‘auto,’ … if there is either ‘bodily injury’ or ‘property damage’ to which this insurance applies that is caused by the same ‘accident.'” Doc. 249-18 at p. 45. The duty-to-defend provision states that AIFE has “the right and duty to defend an ‘insured’ against a ‘suit’ asking for such damages or a ‘covered pollution cost or expense.'” Ibid.
Third, the policy includes a cooperation clause, which provides that “any involved ‘insured’ must … [c]ooperat[e] with [AIFE] in the investigation or settlement of the claim or defense against the ‘suit.'” Id. at p. 49. The question whether Rypninskyi violated that clause, and thus whether AIFE has a duty to indemnify and further defend him in the underlying suit, is at the center of AIFE’s coverage claim.

B. The MCS-90 Endorsement
The Motor Carrier Act, 49 U.S.C. § 10101 et seq., and its implementing regulations require certain interstate “motor carriers” to provide the Federal Motor Carrier Safety Administration (“FMCSA”) with proof of financial responsibility. See 49 U.S.C. § 31139(b)-(c); 49 C.F.R. § 387.7(d). One way a motor carrier can satisfy that requirement is to [*6] file an endorsement, called an “MCS-90,” that modifies its truckers’ liability policy. 49 C.F.R. § 387.7(d)(1). AIFE asserts in its Local Rule 56.1(b)(3)(C) statement that it filed an MCS-90 endorsement on behalf of Expeditor Systems in connection with the policy at issue here. Doc. 265 at ¶ 20 (citing Doc. 265-1 at pp. 5-6); Doc. 265-1 at p. 3 ¶ 6. That endorsement—which by its terms was “issued to” Expeditor Systems—states in relevant part that AIFE “agrees to pay … any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles,” notwithstanding any “limitation contained in the policy.” Doc. 265-1 at p. 5 (emphasis added). AIFE and Hope disagree over whether Rypninskyi is “the insured” for purposes of the endorsement—AIFE says no, while Hope says yes—and thus whether the endorsement precludes AIFE from asserting Rypninskyi’s non-cooperation as a ground for declining to indemnify and further defend him in the underlying suit.
Hope’s objections to the admission of evidence pertaining to the MCS-90 endorsement, Doc. 275 at ¶ 20, are overruled. While Hope contends that “AIFE’s judicial admission that Rypninskyi was a Named Insured of [the AIFE [*7] policy] precludes introduction of facts to contradict or controvert that admission,” ibid., the scope of the MCS-90 endorsement presents an issue distinct from “named insured” status under the policy. Hope also asserts that the endorsement is inadmissible because there is no evidence that it was filed with the FMCSA and AIFE did not produce it during discovery. Ibid. However, AIFE’s assertion that it filed the endorsement is supported by its president’s affidavit, Doc. 265-1 at p. 3, ¶ 6, and its failure to timely produce the endorsement in discovery is harmless because it is difficult to imagine any line of inquiry that Hope could not pursue due to the belated production. See Fed. R. Civ. P. 37(c)(1) (allowing a party to use a document, despite the party’s failure to properly disclose it in discovery, if the failure was “harmless”).

C. Rypninskyi’s Participation in His Defense Before Trial
Rypninskyi is a Ukrainian citizen and a lawful permanent resident of the United States. Doc. 263 at ¶ 2; Doc. 264 at ¶ 2. He understands English “[i]n a limited ability up to [his] professional demand” and can read some English. Doc. 252-1 at 1-2 (4:16-21, 5:1-10); Doc. 263 at ¶ 2; Doc. 264 at ¶ 2.
As noted, AIFE retained [*8] Cassiday Schade in February 2015 to represent Rypninskyi in the underlying suit. Doc. 264 at ¶ 41. On several occasions early in the representation, Rypninskyi provided Cassiday Schade with information pertinent to his defense, both over the phone and in meetings. Doc. 263 at ¶ 18; Doc. 264 at ¶¶ 42-49, 55-59. Those interactions included several discussions in June 2016 concerning his written discovery responses, which he signed during a meeting on June 30. Doc. 264 at ¶¶ 45-49. Shortly after that meeting, Rypninskyi left the country for several months. Id. at ¶ 50. He came back to the United States in September 2016, and then made two additional trips abroad before returning on March 6, 2017. Id. at ¶¶ 50-52.
Joseph Panatera, one of the Cassiday Schade lawyers, testified at his deposition that while Rypninskyi was in and out of the country, he and his Cassiday Schade colleagues sent Rypninskyi letters at several addresses and called him multiple times to attempt to schedule his deposition. Doc. 275 at ¶ 1 (citing Doc. 249-1 at 7 (21:12-18)). (Hope disputes this assertion on hearsay grounds, Doc. 275 at ¶ 1, but Panatera and his colleagues’ sending letters and making phone calls are [*9] not hearsay because they are not “statements” under Evidence Rules 801(a) and (c).) Cassiday Schade enlisted the help of a private investigator to track Rypninskyi down. Id. at ¶ 2 (citing Doc. 249-1 at 7 (21:19-22)). On March 1, 2017, Panatera spoke to Rypninskyi’s wife, who said that he was visiting Ukraine through the following week and living in Illinois, but that it was “complicated.” Doc. 249-1 at 60 (234:23-235:5); Doc. 264 at ¶¶ 53-54.
On April 3, 2017, another Cassiday Schade lawyer, Victoria Shoemaker, who speaks Russian, Doc. 21-12 at 1, spoke with Rypninskyi by phone about appearing for his deposition, Doc. 264 at ¶ 55; Doc. 21-7 at 1. On April 11 and 13, Shoemaker and Rypninskyi exchanged a series of text messages. Doc. 268 at ¶¶ 13 & n.2, 14; Doc. 271 at ¶¶ 13 & n.2, 14. (There is no need to resolve whether the texts were “iMessages”—a type of text sent between two iPhone users—or ordinary text messages, see ibid., because resolving that question would not affect the outcome of the present motions.) On April 11, Shoemaker texted Rypninskyi the following message, which included a Russian translation:
Iurii, please come to Cassiday Schade’s office at 20 N. Wacker Drive, Suite 1000 in Chicago this [*10] Friday [April 14] at 12pm. If you can make it a little earlier, it would be great. You will meet with your lawyer Joe Panatera with interpreter and then give the deposition. I copied Joe on this text.
Doc. 249-4 at 1 (text message screenshot). Rypninskyi replied, “Ok,” that day. Id. at 2. On April 13, Shoemaker texted Rypninskyi a second time—again with an accompanying translation—stating: “I called and left you a message. We moved the meeting and your deposition to Monday, April 17, at 12 pm.” Ibid. That day, Rypninskyi again replied, “Ok.” Ibid. According to AIFE, Cassiday Schade sent Rypninskyi a third text message on April 17 asking him to confirm his plan to attend the deposition later that day, to which Rypninskyi never responded. Doc. 247 at ¶ 15; Doc. 249-4 at 2-3. Rypninskyi asserts that “he has no recollection of ever receiving th[at] message[] and a diligent search of his mobile phone did not reveal the[] message[].” Doc. 249-5 at ¶ 1; Doc. 268 at ¶ 15; Doc. 271 at ¶ 15.
As planned, on April 17, Rypninskyi sat for a discovery deposition and an evidence deposition. Docs. 249-16, 249-17. As of that date, trial was set for July 11, 2017. Doc. 264 at ¶ 60. Two points about Rypninskyi’s [*11] depositions bear mention here.
First, Rypninskyi testified that he lived at an address in Parma, Ohio, and had no plans to move. Doc. 268 at ¶ 17; Doc. 271 at ¶ 17. Specially, he testified:
Q: Do you have any plans on moving from that address in Parma?
A: Right now, no.
Q: Do you have any plans as you’re sitting here today to return back to Ukraine?
A: No.
Q: Your plan as we’re sitting here talking today is to continue living in the United States?
A: Yes.
Doc. 249-17 at 5 (9:16-24).
Second, the parties disagree over whether, on the day of the depositions, Panatera told Rypninskyi that he needed to attend trial if the case did not settle. Doc. 275 at ¶ 5. To support its position, AIFE cites Panatera’s deposition testimony that he twice “advise[d] … Rypninskyi that if this matter went to trial that he needed to attend and participate in trial.” Doc. 255-7 at 40-41 (39:21-23, 40:1-16). According to Panatera, he initially communicated that message to Rypninskyi before the depositions using a translator and repeated it afterward without a translator. Ibid. Panatera “came away with thinking” that Rypninskyi understood him in English, particularly because the pair had “spoken during breaks and other [*12] times in English” and “the investigator … [had] advised [Panatera] that he was able to speak to … Rypninskyi in English.” Id. at 41-42 (40:24-41:16). Hope denies that Panatera told Rypninskyi that he was obligated to attend trial, Doc. 275 at ¶ 5, and cites Rypninskyi’s deposition testimony that, when he was deposed in the underlying suit, he did not “understand that there was going to be a trial sometime in the future,” Doc. 252-1 at 8 (30:24-31:17).

D. Efforts to Secure Rypninskyi’s Attendance at Trial
Shortly after Rypninskyi’s depositions, Cassiday Schade moved to continue the trial from July 11 to September 28, 2017. Doc. 264 at ¶ 62. The state court granted the motion on June 9, 2017. Ibid. On July 29, Rypninskyi left for Ukraine and did not return until November 2, well after the trial had concluded. Id. at ¶ 68. The parties dispute what efforts were taken to inform Rypninskyi of the September 28 trial date, and whether he knew of that date before leaving for Ukraine. The pertinent facts are as follows.

1. July 7 Text Message
AIFE asserts that Panatera sent Rypninskyi an iMessage on July 7 informing him that the trial date had been continued to September 28. Doc. 249 at ¶ 22 [*13] (citing Doc. 249-4 at 3 and Doc. 255-7 at 58-59 (57:16-58:7)). The message—to which Rypninskyi never responded— purportedly stated: “Iurri, your case is set for TRIAL in Chicago on September 28. You will have at [sic] be there on September 29, October 2, and October 3. Please confirm that you will be able to attend. Thank you[.]” Doc. 249-4 at 3. AIFE further asserts that the message was sent through “the same chain” of messages that Panatera and Shoemaker had used to contact Rypninskyi to schedule his deposition, Doc. 249 at ¶ 23; Doc. 275 at ¶ 9; see Doc. 255-7 at 58-59 (57:16-58:3); Doc. 249-4 at 3, and that Panatera had “no indication that [the message] did not go through,” Doc. 255-7 at 220 (219:1-19); Doc. 249 at ¶ 24; Doc. 275 at ¶ 13. In support, AIFE notes that the iMessage “appeared in blue on … Panatera’s phone” and that “iMessage only works (and only appear[s] to the sender in blue) when both users have a working Internet connection.” Doc. 249 at ¶¶ 13 n.2, 24 n.3 (citing About iMessage and SMS/MMS, apple.com, https://support.apple.com/en-us/HT207006 (last visited July 21, 2021)).
Rypninskyi and Hope assert that Rypninskyi did not receive an iMessage from Panatera on July [*14] 7, citing Rypninskyi’s averment that “he ha[d] no recollection of ever receiving th[e] message[] and a diligent search of his mobile phone did not reveal the[] message[].” Doc. 249-5 at ¶ 1; see Doc. 268 at ¶ 24; Doc. 271 at ¶¶ 22-24. Moreover, Hope objects on hearsay grounds to AIFE’s assertion, supported by Panatera’s testimony and the text message screenshot, that the July 7 iMessage was sent through “the same chain” of messages that Panatera and Shoemaker used to contact Rypninskyi previously. Doc. 268 at ¶ 23. Because Panatera’s conduct (sending a message through a particular means) is not a statement, the objection is overruled. Joined by Rypninskyi, Hope further contends that AIFE’s assertion concerning the message’s “blue” color is inadmissible because the Apple webpage cited by AIFE does not substantiate the assertion. Doc. 268 at ¶¶ 13 n.2, 23; Doc. 271 at ¶¶ 13 n.2, 24 n.3. That objection is sustained; the webpage does not support AIFE’s assertion that “iMessage only works (and only appear[s] to the sender in blue)” when both phones are connected to the Internet, Doc. 249 at ¶ 13 n.2 (emphases added), and AIFE in any event does not show that the information on the webpage [*15] accurately conveys how iMessage worked on July 7, 2017, more than two years before the page was published (September 19, 2019).

2. Phone Calls
AIFE asserts that, in the months preceding the September 28 trial, attorneys from Cassiday Schade called Rypninskyi’s mobile phone multiple times in an effort to reach him. Doc. 247 at ¶¶ 21, 34; Doc. 275 at ¶ 14. That assertion rests on Panatera’s testimony that, starting in late July, he directed other attorneys at Cassiday Schade to call Rypninskyi’s phone, and that he himself tried to call Rypninskyi “more than ten times” but Rypninskyi never picked up and he “could not leave a voice message” because “the voice mail was not set up.” Doc. 255-7 at 66-67 (65:19-66:14). It is undisputed that Rypninskyi was in Ukraine during that time, and when traveling to Ukraine, he would remove the SIM card from his phone and replace it with a local SIM card. Doc. 252-1 at 36 (142:22-143:15); see Doc. 268 at ¶ 27; Doc. 271 at ¶ 27.
Hope objects on hearsay grounds to AIFE’s assertion that Cassiday Schade attempted to call Rypninskyi several times and, joined by Rypninskyi, disputes that assertion as a factual matter. Doc. 268 at ¶¶ 21, 34; Doc. 271 at ¶¶ 21, [*16] 34; Doc. 275 at ¶ 14. Because Panatera’s actions (calling Rypninskyi and directing his colleagues to call him) are not statements under Evidence Rule 801, and because Panatera testified that he made the calls and asked his colleagues to call as well, the hearsay objection is overruled. As to whether Panatera and his colleagues in fact called Rypninskyi “more than ten times,” the record offers support for both sides.
According to Rypninskyi and Hope, Panatera’s and Rypninskyi’s phone records contradict Panatera’s testimony that Cassiday Schade lawyers called Rypninskyi more than ten times. Doc. 268 at ¶¶ 21, 34; Doc. 271 at ¶¶ 21, 34; Doc. 275 at ¶ 14. (Contrary to AIFE’s submission, Doc. 272 at 8-9, the phone records are accompanied by custodial affidavits that satisfy Evidence Rule 803(6), allowing their admission, Doc. 279 at 1; Doc. 280 at 1; see Woods v. City of Chicago, 234 F.3d 979, 988 (7th Cir. 2000).) True enough, Panatera’s phone records reflect no phone calls to Rypninskyi from June 2017 onward, and Rypninskyi’s phone records reflect only one call from Cassiday Schade’s main line on September 8, 2017. Docs. 279-280; see Doc. 268 at ¶¶ 21, 34; Doc. 271 at ¶¶ 21, 34; Doc. 275 at ¶ 14; Doc. 269 at 13. However, as AIFE observes, it is not clear whether [*17] the records capture various attempted calls—that is, calls made but not answered, sent directly to voicemail, sent to a full voicemail, or sent to a phone with its SIM card removed. Doc. 272 at 9; Doc. 281. Panatera’s phone records do not speak to those questions. Doc. 279 at 1-49. Rypninskyi’s phone records purport to capture incoming calls sent to voicemail, Doc. 280 at 6, which is evidenced by the fact that they document the September 8 call from Cassiday Schade’s main line, id. at 771. But it is conceivable, for example, that the September 8 call was documented, but earlier calls were not, because Rypninskyi did not have a SIM card in his phone in July and August but obtained a local SIM card in September. Rypninskyi’s deposition testimony further muddles the record, as he testified that he would not “have received a phone call made to [his] U.S. phone number while in Ukraine.” Doc. 252-1 at 36 (143:16-19). Accordingly, the court cannot conclude on summary judgment that Cassiday Schade lawyers either did or did not call Rypninskyi’s phone multiple times in the months preceding the September 28 trial.

3. Letters
Cassiday Schade hired private investigators to inform Rypninskyi that [*18] it was imperative for him to attend the September 28 trial. Doc. 268 at ¶ 29; Doc. 271 at ¶ 29. The investigators attempted to deliver several letters to Rypninskyi.
On September 20, an investigator delivered to Rypninskyi’s Ohio address a letter dated September 18 advising him of the upcoming trial. Doc. 264 at ¶ 71 (citing Doc. 255-7 at 233-234 (232:1-233:20)); Doc. 275 at ¶¶ 15-16. The investigator gave the letter to Rypninskyi’s exwife, who had divorced him the previous day. Doc. 264 at ¶¶ 70, 71. The letter, which was signed by Panatera, stated:
It is absolutely imperative that you at [sic] the trial. If you fail to do so, the plaintiff can have you “defaulted” and judgment entered against you. In addition, you are jeopardizing any coverage that the insurance company for Leasing Truck Solutions, Inc. may provide you, and should that occur, you may be held personally liable for payment of any judgment entered against you.
Doc. 21-8 at 1-2. On September 21 and 24, the investigator gave Rypninskyi’s ex-wife Russian translations of the letter. Doc. 21-9; Doc. 268 at ¶ 30; Doc. 271 at ¶ 30; Doc. 275 at ¶¶ 15-16.
At some point, Cassiday Schade learned from the papers filed in Rypninskyi’s [*19] divorce case that he might be living at an address in Chicago. Doc. 264 at ¶ 69; Doc. 268 at ¶ 29; Doc. 275 at ¶ 17; Doc. 255-7 at 70 (69:6-14). Cassiday Schade provided that information to another private investigator, who, on September 25 and 27, delivered two letters to the Chicago address, leaving them with a man identifying himself as Rypninskyi’s “roommate.” Doc. 21-11 at 2; Doc. 268 at ¶ 32; Doc. 271 at ¶ 32.
On September 30, two days after the start of jury selection, the second investigator left another letter, dated that same day, at the doorstep of Rypninskyi’s Chicago residence. Doc. 268 at ¶ 31; Doc. 21-11 at 2. The letter stated:
This letter is a follow-up to our previous letters. As we have told you, trial has begun in the case involving the accident on May 31, 2014. YOU MUST APPEAR AT COURT ON MONDAY, OCTOBER 2, 2018. YOUR FAILURE TO DO SO MAY RESULT IN PLAINTIFF ENTERING A DEFAULT JUDGMENT AGAINST YOU, AND MAY HAVE THE EFFECT OF JEOPARDIZING ANY INSURANCE COVERAGE THAT YOU MAY HAVE AVAILABLE TO YOU. YOU WOULD THEN BE PERSONALLY RESPONSIBLE TO PAY ANY JUDGMENT ENTERED AGAINST YOU.
Doc. 21-12 at 1. A copy of the letter was left again at the doorstep of the Chicago residence [*20] on October 1. Doc. 268 at ¶ 31; Doc. 21-11 at 2. (AIFE asserts that the letter—which is addressed to Rypninskyi’s Ohio address, Doc. 21-12 at 1—was also sent to the Ohio address, Doc. 247 at ¶ 31. Hope contends that there is no evidence to support that assertion, and adds that even if the letter was sent to Ohio, it could not have been received by Rypninskyi’s ex-wife until October 4. Doc. 268 at ¶ 31. That dispute need not be resolved because it does not impact resolution of the present motions.)
In October, AIFE hired Bates Carey LLP—its counsel in this case—to evaluate whether it had a valid coverage defense against Rypninskyi under the policy’s cooperation clause. Doc. 264 at ¶ 37. On October 4, Bates Carey sent a reservation of rights letter to Rypninskyi’s Illinois and Ohio addresses. Doc. 264 at ¶ 36; Doc. 252-6 at 11-13 (“Your failure to cooperate in the defense of the Hope Lawsuit is a breach of the [cooperation clause]. As a result, it appears that no coverage may be available under the Policy. … AIFE maintains a full reservation of all rights, remedies and defenses under the Policy, including, but not limited to, the right to withdraw from its defense of the Hope Lawsuit [*21] and disclaim coverage for any indemnity sought under the Policy in connection with this matter.”). Although Hope disputes that the letter was in fact sent, Doc. 264 at ¶¶ 36, 38, AIFE’s assertion that it was sent is supported by the cited evidentiary materials, Doc. 264 at ¶ 36; Doc. 252-6 at 5-6 (19:5-22:3). Hope also disputes whether the letter, if sent, was delivered to either the Ohio or Illinois addresses, Doc. 264 at ¶ 39, but it is unnecessary to resolve that dispute because—as explained below—Hope fails to show that Rypninskyi was prejudiced by (assertedly) not having received a reservation of rights from AIFE.

E. The Impact of Rypninskyi’s Absence from Trial
Cassiday Schade had planned to offer Rypninskyi’s testimony at trial. Doc. 268 at ¶ 43; Doc. 271 at ¶ 43. Assuming that Rypninskyi would have given the same testimony he gave at his evidence deposition, he would have testified that Hope collided with the back of his truck a short while after he had changed lanes; that he used his turn signal before changing lanes; that the damage to his truck was “barely noticeable” and “just scratches”; and that Hope told him after the accident that “everything is all right.” Doc. 268 at [*22] ¶ 44; Doc. 271 at ¶ 44. Rypninskyi in fact gave a statement along those lines to a police officer following the crash. Doc. 21-2 at 2. According to the officer’s report, Rypninskyi stated that “he was driving in the left lane,” that he “applied his brakes due to traffic slowing down ahead of him,” and that Hope “rear ended him.” Ibid. Also according to the report, Hope stated that “he was in the left lane and was looking at traffic to his right so he could change lanes,” and “that while he was looking back, he didn’t notice [Rypninskyi’s truck] change lanes in front of him and stop.” Ibid.; see Doc. 268 at ¶ 53; Doc. 271 at ¶ 53.
When trial commenced, Hope moved for sanctions based on Rypninskyi’s failure to appear. Doc. 268 at ¶¶ 39-40; Doc. 271 at ¶¶ 39-40. The court granted the motion, (1) striking Rypninskyi’s affirmative defense that Hope was contributorily negligent by rear-ending Rypninskyi’s truck; (2) giving the jury an adverse inference instruction stating that, had Rypninskyi testified, his testimony would have been contrary to his interests; and (3) barring Rypninskyi’s liability expert from offering any opinions based on Rypninskyi’s deposition testimony or his statements [*23] in the police report. Doc. 268 at ¶ 41; Doc. 271 at ¶ 41. In addition, the court barred the defense from introducing Rypninskyi’s evidence deposition testimony because the defense could not show that Rypninskyi was outside Cook County. Doc. 268 at ¶ 41 (citing Doc. 249-8 at 4 (15:6-19)). And the court granted Hope’s motion in limine to bar the defense from introducing into evidence the police report because the officer could not vouch for its accuracy. Doc. 249-8 at 15 (57:1-59:4); Doc. 268 at ¶ 52; Doc. 271 at ¶ 52.
While the trial was underway, Cassiday Schade asked the court whether its ruling concerning the police report barred the defense from referring to the report and the witness statements therein. Doc. 268 at ¶ 54; Doc. 271 at ¶ 54. The court declined to provide additional guidance. Doc. 268 at ¶ 55; Doc. 271 at ¶ 55. When cross-examining Hope’s expert, Panatera asked about Hope’s statements in the police report. Doc. 268 at ¶ 56; Doc. 271 at ¶ 56. Hope’s counsel objected, citing the in limine ruling. Doc. 268 at ¶ 57; Doc. 271 at ¶ 57. The court agreed that the question violated its ruling, and as a sanction defaulted Rypninskyi as to liability. Ibid. After being instructed [*24] that it must find against Rypninskyi on liability, the jury assessed $400,000 in damages. Doc. 268 at ¶¶ 58-59; Doc. 271 at ¶¶ 58-59. The court entered a final judgment on October 6. Doc. 264 at ¶ 27. Cassiday Schade did not appeal the judgment. Doc. 268 at ¶¶ 61-63; Doc. 271 at ¶¶ 61-63.
On November 2, AIFE filed this suit. Doc. 264 at ¶ 28.

Discussion
AIFE claims that Rypninskyi violated the policy’s cooperation clause by failing to appear at trial, thus relieving it of its duty to indemnify and further defend him in connection with Hope’s lawsuit. Doc. 81 at ¶¶ 59-66. Hope contends that certain threshold obstacles prevent AIFE from invoking the cooperation clause, and he and Rypninskyi argue on the merits that Rypninskyi did not violate the clause in any event.

I. Threshold Issues

A. MCS-90 Endorsement
As noted, AIFE filed an MCS-90 endorsement that modified the policy in question. The endorsement, whose language is dictated by 49 C.F.R. § 387.15, states in relevant part that AIFE “agrees to pay… any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles,” notwithstanding any “limitation contained in the policy.” [*25] Doc. 265-1 at p. 5 (emphasis added).
The parties dispute whether Rypninskyi is an “insured” for purposes of the endorsement. Hope answers yes, and if he is right, AIFE must pay the state court judgment notwithstanding Rypninskyi’s asserted violation of the policy’s cooperation clause. Doc. 251 at 4-9; Doc. 274 at 2-11. AIFE responds that Expeditor Systems is the only “insured” for purposes of the endorsement, and that because judgment was entered against Rypninskyi, the endorsement’s limitation on its ability to invoke the cooperation clause against Expeditor Systems does not apply here. Doc. 267 at 3-10.
To support his view, Hope focuses on the interrogatory response served in the underlying suit on Rypninskyi’s behalf by Cassiday Schade identifying Rypninskyi, as well as Expeditor Systems, as the “named insureds” under the AIFE policy. Doc. 251 at 4-9. The court will assume without deciding that Rypninskyi is a “named insured” under the policy. Hope proceeds to argue that Rypninskyi’s status as a “named insured” under the policy necessarily means that he is an “insured” for purposes of the MCS-90 endorsement. Ibid. AIFE responds that Rypninskyi’s status as a “named insured” under the [*26] policy is immaterial because he is not also the “motor carrier” named in the policy and the endorsement. Doc. 267 at 3-10. As AIFE sees it, what triggers the endorsement is a final judgment against “the motor carrier on whose behalf the endorsement was filed,” which is Expeditor Systems, not Rypninskyi. Id. at 8.
AIFE has the better of the argument. The Motor Carrier Act states that, before an entity may be “register[ed] [as] a motor carrier,” it must provide proof of insurance “sufficient to pay[] … for each final judgment against the registrant for bodily injury to, or death of, an individual resulting from the negligent operation, maintenance, or use of motor vehicles[.]” 49 U.S.C. § 13906(a)(1) (emphasis added). The emphasized language makes clear that the MCS-90 endorsement’s purpose is to assure payment of a final judgment against the “registrant”—that is, the registered “motor carrier” to which the endorsement is issued. The FMCSA’s implementing regulations provide that the insurer, in the MCS-90 endorsement, must “agree[] to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance [*27] or use of motor vehicles[.]” 49 C.F.R. § 387.15 (“The Forms … MCS-90 are available from the FMCSA website at http://www.fmcsa.dot.gov/mission/forms.”). Because the regulation must be read in conjunction with the statute, the “insured” against which the “final judgment” is entered (as stated in the regulation) must be the “registrant” against which the “final judgment” is entered (as stated in the statute)—and because the statute makes clear that the “registrant” is the “motor carrier,” the “insured” in the endorsement must be the registered motor carrier.
Other provisions in the implementing regulations confirm the point. The regulations state that the term “[i]nsured … means the motor carrier named in the policy of insurance, surety bond, endorsement, or notice of cancellation, and also the fiduciary of such motor carrier.” 49 C.F.R. § 387.5 (emphasis added). And the regulations require that “[t]he endorsement … be issued in the exact name of the motor carrier.” 49 CFR § 387.15. It follows from those provisions that Expeditor Systems, as the “motor carrier named in the … endorsement,” is “the insured,” and the only “insured,” in the endorsement. Doc. 265-1 at p. 5 (listing “Expeditor Systems Inc.” in the “[i]ssued to” line [*28] of the endorsement). Finally, Expeditor Systems indisputably qualifies as “the motor carrier named in the policy of insurance,” 49 C.F.R. § 387.5 (emphasis added), because it is the “motor carrier” that was issued the endorsement and the “named insured” under the AIFE policy. That Expeditor Systems is the named “motor carrier” in the policy and the endorsement is unsurprising, given that the thrust of the Motor Carrier Act’s scheme is to assure payment of a final judgment against the entity “register[ed] [as] a motor carrier.” 49 U.S.C. § 13906(a)(1).
Hope retorts that Rypninskyi, as one of the policy’s “named insureds,” is also a named “motor carrier” under the policy and thus an “insured” for purposes of the endorsement. Doc. 274 at 8-9. Central to Hope’s view is the proposition that Rypninskyi is a “motor carrier” within the meaning of the FMCSA regulations. The regulations state:
Motor carrier means a for-hire motor carrier or a private motor carrier. The term includes, but is not limited to, a motor carrier’s agent, officer, or representative; an employee responsible for hiring, supervising, training, assigning, or dispatching a driver; or an employee concerned with the installation, inspection, and maintenance of motor [*29] vehicle equipment and/or accessories.
49 C.F.R. § 387.5. The regulations state in turn that “[f]or-hire motor carrier means a person engaged in the transportation of goods or passengers for compensation,” and that “[p]rivate motor carrier means a person who provides transportation of property or passengers, by commercial motor vehicle, and is not a for-hire motor carrier.” 49 C.F.R. § 390.5T.
Hope’s argument is unpersuasive. Granted, as “a person” transporting goods or passengers for compensation, Rypninskyi might at first blush be thought a “private motor carrier” under 49 C.F.R. § 390.5T. And given the (assumed) fact that Rypninskyi is a “named insured” under the policy, it might also appear at first blush that Rypninskyi, like Expeditor Systems, is the “insured” for purposes of the endorsement, i.e., “the motor carrier named in the policy of insurance.” 49 C.F.R. § 387.5.
The flaw with this line of reasoning is that it rests on the faulty premise that Rypninskyi is a “motor carrier” named in the AIFE policy even though he is not the “motor carrier” named in the MCS-90 endorsement modifying the policy. To be sure, the definition of “insured” in 49 C.F.R. § 387.5 is phrased in the disjunctive, encompassing “the motor carrier named in the policy of insurance, surety bond, [*30] endorsement, or notice of cancellation.” 49 C.F.R. § 387.5 (emphasis added). To Hope’s credit, the disjunctive “or” could suggest that a “motor carrier” named in the policy may not be the “motor carrier” named in the endorsement and still qualify as an “insured” under the endorsement.
This conclusion has surface appeal but is incompatible with the statutory and regulatory scheme. The Motor Carrier Act contemplates several means by which a motor carrier may satisfy its obligation to provide proof of financial responsibility. See 49 U.S.C. § 13906(a)(1) (“The Secretary [of Transportation] may register a motor carrier under section 13902 only if the registrant files with the Secretary a bond, insurance policy, or other type of security approved by the Secretary … .”) (emphasis added). The regulations state that a motor carrier may provide such proof with an MCS-90 endorsement to its insurance policy, a surety bond, or written authorization from the FMCSA to self-insure. See 49 C.F.R. § 387.7(d). With that context in mind, the regulatory definition of “insured”—”the motor carrier named in the policy of insurance, surety bond, endorsement, or notice of cancellation, and also the fiduciary of such motor carrier”—is best understood as identifying the entity or [*31] entities that qualify as “the motor carrier” because the definition refers to one or more of several documents providing proof of financial responsibility, each naming that same entity or entities. 49 C.F.R. § 387.5 (emphasis added). Accordingly, “the motor carrier” named in the endorsement—here, Expeditor Systems—is necessarily “the motor carrier” named in the insurance policy. Ibid.
This conclusion is confirmed by regulatory guidance issued by the FMCSA in 2005. The guidance states in relevant part:
Question: Does the term “insured,” as used on Form MCS-90, Endorsement for Motor Carrier Policies of Insurance for Public Liability, or “Principal”, as used on Form MCS-82, Motor Carrier Liability Surety Bond, mean the motor carrier named in the endorsement or surety bond?
Guidance: Yes. Under 49 CFR 387.5, “insured and principal” is defined as “the motor carrier named in the policy of insurance, surety bond, endorsement, or notice of cancellation, and also the fiduciary of such motor carrier.” Form MCS-90 and Form MCS-82 are not intended, and do not purport, to require a motor carrier’s insurer or surety to satisfy a judgment against any party other than the carrier named in the endorsement or surety bond or its fiduciary. [*32]
Federal Motor Carrier Safety Administration, Regulatory Guidance for Forms Used to Establish Minimum Levels of Financial Responsibility for Motor Carriers, 70 Fed. Reg. 58,065, 58,066 (Oct. 5, 2005) (emphasis added). As the guidance explains, the MCS-90 endorsement here required AIFE to provide coverage for a (hypothetical) lawsuit by Hope against Expeditor Systems—the motor carrier named in the policy and the endorsement—but not for a suit against “any party other” than the motor carrier, including Rypninskyi. The guidance is entitled to Auer deference, as it reflects the FMCSA’s “authoritative” position on the issue, implicates the agency’s “substantive expertise,” and represents the agency’s “fair and considered judgment” as opposed to a convenient litigating position. Kisor v. Wilkie, 139 S. Ct. 2400, 2416-18 (2019). Accordingly, even if the pertinent regulatory provisions were ambiguous as to whether Rypninskyi is an “insured” for purposes of the endorsement, the ambiguity would be resolved in AIFE’s favor by answering that question in the negative. See id. at 2415-23 (holding that courts should defer to “reasonable agency constructions” of “genuinely ambiguous” regulations).
In sum, Expeditor Systems, not Rypninskyi, is “the insured” for purposes of the MCS-90 endorsement, as Expeditor Systems is the registered motor carrier named in the endorsement and policy. See 49 C.F.R. § 387.5. The endorsement therefore does not preclude AIFE from asserting its [*33] non-cooperation defense against Rypninskyi.

B. Estoppel and Waiver
Hope next argues that AIFE’s suit is “untimely as a matter of law” because it was filed after judgment was entered in the underlying suit. Doc. 251 at 9-10; Doc. 269 at 3. Citing Employers Insurance of Wausau v. Ehlco Liquidating Trust, 708 N.E.2d 1122 (Ill. 1999), Hope contends that an insurer that files a declaratory judgment action after a final judgment in the underlying suit is estopped from asserting defenses to coverage.
As this court explained in denying Hope’s motion to dismiss, 2018 WL 3208481 (N.D. Ill. Sept. 4, 2019), this argument reads Ehlco far too broadly. Ehlco holds that “an insurer which takes the position that a complaint potentially alleging coverage is not covered under a policy that includes a duty to defend may not simply refuse to defend the insured.” 708 N.E.2d at 1134. Rather, Ehlco explains, the insurer must either: “(1) defend the suit under a reservation of rights or (2) seek a declaratory judgment that there is no coverage. If the insurer fails to take either of these steps and is later found to have wrongfully denied coverage, the insurer is estopped from raising policy defenses to coverage.” Id. at 1134-35.
AIFE submits that it chose the first option and defended Rypninskyi under a reservation of rights. Doc. 267 at 10-16; Doc. 272 at 3; see [*34] Great W. Cas. Co. v. Cote, 847 N.E.2d 858, 862 (Ill. App. 2006) (“The [Ehlco] [c]ourt specifically stated that its holding was based on an estoppel theory and was applicable only to an insurer that had breached its duty to defend.”). In so arguing, AIFE suggests that Cassiday Schade’s communications to Rypninskyi before trial and shortly after trial began (several letters and the July 7 iMessage) might qualify as a valid reservation of AIFE’s rights, Doc. 267 at 14 n.6, but that point is buried in a footnote and therefore forfeited for summary judgment purposes. See Cross v. United States, 892 F.3d 288, 294 (7th Cir. 2018) (holding that a party forfeited an issue by raising it only “succinctly in a footnote” in the district court) (internal quotation marks omitted). Accordingly, the only communication that could possibly qualify as a reservation of rights is the letter that Bates Carey attempted to send to Rypninskyi on October 2, two days after the day he was supposed to appear at trial and several days after the start of jury selection. Doc. 267 at 13.
Hope contends that the letter did not reserve AIFE’s rights because it was never delivered and because, in any event, it was “sent too late as a matter of law.” Doc. 251 at 11; Doc. 269 at 3-4, 10; Doc. 274 at 13-14. There is no need to resolve that [*35] dispute, for even if Hope were correct, his estoppel argument fails because he does not point to any way Rypninskyi was prejudiced by AIFE’s failure to deliver its reservation of rights. Under Illinois law, if “an insurer assumes an insured’s defense without a reservation of rights, the insurer will not be equitably estopped from denying coverage unless prejudice exists,” and “prejudice will be found if the insurer’s assumption of the defense induces the insured to surrender her right to control her own defense.” Standard Mut. Ins. Co. v. Lay, 989 N.E.2d 591, 596 (Ill. 2013) (emphasis added). Estoppel is an affirmative defense under Illinois law, one on which Hope bears the burden of proving “by clear, precise and unequivocal evidence.” Essex Ins. Co. v. Stage 2, Inc., 14 F.3d 1178, 1181 (7th Cir. 1994) (citing Illinois cases). Having waited until his reply brief to assert that Rypninskyi was prejudiced by the (asserted) lack of a reservation of rights from AIFE, Hope has forfeited the point and thus his estoppel defense. See O’Neal v. Reilly, 961 F.3d 973, 974 (7th Cir. 2020) (“[W]e have repeatedly recognized that district courts are entitled to treat an argument raised for the first time in a reply brief as waived.”); Narducci v. Moore, 572 F.3d 313, 324 (7th Cir. 2009) (“[T]he district court is entitled to find that an argument raised for the first time in a reply brief is forfeited.”).
Even setting aside forfeiture, [*36] there is no evidence of prejudice sufficient to support an estoppel defense. Hope’s reply brief cites ¶¶ 40-49 of his Local Rule 56.1(a)(3) statement in arguing that the evidence “clearly establishes that AIFE monopolized … Rypninskyi’s defense and, in reliance thereon, Rypninskyi refrained from seeking other counsel.” Doc. 274 at 13. But ¶¶ 40-49 merely describe several meetings that Rypninskyi had with Cassiday Schade’s lawyers to discuss his defense. Doc. 252 at ¶¶ 40-49. That evidence does not demonstrate any reliance by Rypninskyi on AIFE’s (asserted) failure to reserve its rights, let alone that he was “induce[d] … to surrender h[is] right to control h[is] own defense.” Lay, 989 N.E.2d at 596; see also State Farm Fire & Cas. Co. v. Kiszkan, 805 N.E.2d 292, 298-99 (Ill. App. 2004) (in holding that an insurer that issued a reservation of rights letter one month before trial was not estopped from asserting coverage defenses, reasoning that the insurer followed through with representing the insured at trial and that there was “nothing in the record [to show prejudice] other than the Defendants’ assertion that [the insured] was prejudiced by surrendering its defense to [the insurer]”).
Equally unavailing is Hope’s and Rypninskyi’s contention that AIFE waived its non-cooperation defense by waiting [*37] too long to send a reservation of rights letter. Doc. 269 at 8-10; Doc. 274 at 13; Doc. 276 at 5-6. Under Illinois law, waiver is an affirmative defense requiring “evidence to support the intentional relinquishment of a known right, either expressly or impliedly, by [the insurer] of its ultimate policy defense.” Kiszkan, 805 N.E.2d at 299 (internal quotation marks omitted); see also Stage 2, Inc., 14 F.3d at 1181. “An implied waiver arises when [the insurer’s] conduct … is inconsistent with any intention other than to waive[.]” State Farm Mut. Auto. Ins. Co. v. Easterling, 19 N.E.3d 156, 163 (Ill. App. 2014). The record quite plainly shows that AIFE affirmatively demonstrated an intent not to waive its non-cooperation defense by sending the reservation of rights letter in the immediate wake of Rypninskyi’s failure to appear at trial. Doc. 252-6 at 11-12 (“Your failure to cooperate in the defense of the Hope Lawsuit is a breach of the [cooperation clause]. As a result, it appears that no coverage may be available under the Policy. … AIFE maintains a full reservation of all rights, remedies and defenses under the Policy, including, but not limited to, the right to withdraw from its defense of the Hope Lawsuit and disclaim coverage for any indemnity sought under the Policy in connection with this matter.”). This case [*38] is therefore unlike Johnson v. Wade, 365 N.E.2d 11, 14 (Ill. App. 1977), which held that the insurer implicitly waived a non-cooperation defense because, “even after counsel discovered that [the] assured would not attend trial, no attempt was made to inform her of the consequences of her action.”
In sum, AIFE is not precluded, by estoppel or waiver, from asserting its non-cooperation defense to support its coverage claim.

II. The Cooperation Clause
On the merits, the parties dispute whether Rypninskyi violated the policy’s cooperation clause, and thus whether AIFE was relieved of its duty to defend and indemnify him in the underlying suit. Doc. 245 at 7-13; Doc. 251 at 11-15; Doc. 254 at 3-7.
“In order to establish [a] breach of a cooperation clause, the insurer must show [1] that it exercised a reasonable degree of diligence in seeking the insured’s participation and [2] that the insured’s absence [at trial] was due to a refusal to cooperate.” United Auto. Ins. Co. v. Buckley, 962 N.E.2d 548, 556 (Ill. App. 2011) (quoting Founders Ins. Co. v. Shaikh, 937 N.E.2d 1186, 1193 (Ill. App. 2010)). The “refusal to cooperate” by the insured must be “willful.” Ibid. Under the governing standard, then, an insurer cannot successfully invoke a cooperation clause “if it was not sufficiently diligent in attempting to secure the insured’s appearance or if the insured’s failure to attend [*39] was not due to a [willful] refusal to cooperate.” Wallace v. Woolfolk, 728 N.E.2d 816, 818 (Ill. App. 2000) (emphasis added). Moreover, an insurer must prove “substantial prejudice” stemming from the insured’s refusal to cooperate. Buckley, 962 N.E.2d at 557. “To prove substantial prejudice, the insurer has the burden to demonstrate that it was actually hampered in its defense by the violation of the cooperation clause.” Ibid. (internal quotation marks omitted).
The summary judgment record indisputably shows that Rypninskyi’s failure to attend trial substantially prejudiced his defense. Doc. 245 at 13-16; Doc. 272 at 15-17. Because Rypninskyi did not appear, the state court struck his contributory negligence defense, gave the jury an adverse inference instruction, and barred his liability expert from offering opinions based on his deposition testimony or the statements he made in the police report. Doc. 268 at ¶ 41; Doc. 271 at ¶ 41. Those sanctions, coupled with the court’s ruling excluding Rypninskyi’s deposition testimony, made it nearly impossible for the defense (carried on in his absence by Cassiday Schade) to contest liability or damages. In essence, the jury heard only Hope’s side of the story, and never heard Rypninskyi’s testimony that Hope rear-ended him, [*40] that the damage to his truck was “barely noticeable” and “just scratches,” and that Hope told him after the accident that “everything is all right.” Doc. 268 at ¶ 44; Doc. 271 at ¶ 44. Substantial prejudice is plain under these circumstances. See Shaikh, 937 N.E.2d at 1196 (holding that the insurer’s “defense of the [underlying] action was plainly and substantially prejudiced by the absence” of the insured, who was “the only known witness to the collision besides [the plaintiff],” and whose testimony would have been “essential” to rebut the plaintiff’s testimony as to “the speed of the two vehicles, the force of impact, and the [plaintiff’s] appearance and any complaints of injury after the collision”).
AIFE is not entitled to summary judgment, however, because genuine fact disputes preclude holding as a matter of law that it used reasonable diligence to advise Rypninskyi of the trial date and that his failure to attend trial was willful. Did Panatera tell Rypninskyi on the day of his depositions that he had an obligation to attend trial? Did Rypninskyi receive the July 7 text message advising him of the trial date and stating that he “will have [to] be there”? Did Panatera and his colleagues attempt to call [*41] Rypninskyi “more than ten times” in the months preceding trial? As shown above, the record does not conclusively answer those factual questions in either side’s favor. See Buckley, 962 N.E.2d at 556-57 (noting that whether the insurer used reasonable diligence and whether the insured’s refusal to cooperate was willful are “determinations [that] are made by examining the particular facts of the case at hand”); see also Hotel 71 Mezz Lender LLC v. Nat’l Ret. Fund, 778 F.3d 593, 603 n.5 (7th Cir. 2015) (“[E]ven when both parties have moved for summary judgment, each contending that the relevant facts are undisputed and the case may be resolved without a trial, the proper outcome may be to deny both motions, on the ground that the material facts are, in fact, disputed.”).
Granted, as to diligence, AIFE’s investigators attempted to reach Rypninskyi, but their earliest efforts were taken only days before trial, which is likely why AIFE does not argue that those efforts, standing alone, suffice to establish diligence. AIFE does contend that Rypninskyi’s receipt of the July 7 text is “sufficient[,] without more[,]” to show that he breached the cooperation clause. Doc. 245 at 9-11; Doc. 272 at 4-5. But the record does not establish that Rypninskyi received the text. Contrary to AIFE’s submission, Doc. [*42] 272 at 5, Rypninskyi does not merely aver that he did not “recall” whether he received that text; rather, he also avers that a “diligent search of his mobile phone did not reveal the[] message[].” Doc. 249-5 at ¶ 1. Construing the facts in the light most favorable to Rypninskyi and Hope, that is sufficient to create a genuine dispute on that factual issue.
Even if the record indisputably showed that Rypninskyi received the text, AIFE does not cite—and the court cannot find—any case holding that it is reasonably diligent for an insurer to send a single text message advising its insured that he must attend trial. To the contrary, it would appear from the cases that delivering a single communication is insufficient to show reasonable diligence. See Johnson, 365 N.E.2d at 14 (holding that the insurer’s “form letter … informing assured of her trial date one month later was an insufficient effort on its part to secure her presence there”); Ray v. Johnson, 225 N.E.2d 158, 159-61 (Ill. App. 1967) (in holding that the insured did not refuse to cooperate, reasoning that a letter to the insured, to which the insured did not respond, was the only notice provided of the trial date).
In sum, no party is entitled to summary judgment on AIFE’s declaratory judgment claim because [*43] genuine factual disputes preclude the court from resolving whether Rypninskyi breached the cooperation clause under the standard imposed by Illinois law.

Conclusion
The parties’ cross-motions for summary judgment on AIFE’s declaratory judgment claim are denied. The declaratory judgment claim must be tried.
July 23, 2021
/s/ Gary Feinerman
United States District Judge