Bits & Pieces

Cnty. Hall Ins. Co. v. Lowe


United States District Court for the District of Wyoming

August 18, 2022, Decided; August 18, 2022, Filed

Case No. 21-CV-171-NDF


2022 U.S. Dist. LEXIS 187095 *


Core Terms

driver, truck, endorsement, coverage, minutes, Scheduled, regulation, disabled, insured, tractor-trailer, driving, terms, triangles, tractor, collision, trailer, motor carrier, co-drivers, brakes, walked, seat, limitation of liability, summary judgment, motor vehicle, estimation, settlement, parties, locked, tires, hit

Counsel:  [*1] For County Hall Insurance Company Inc, a risk retention group, Plaintiff: Craig Paul Kapp, LEAD ATTORNEY, SUNDAHL POWERS KAPP & MARTIN, Cheyenne, WY USA; Jon M Hughes, LEAD ATTORNEY, PRO HAC VICE, MCMICKLE KUREY & BRANCH LLP, Alpharetta, GA USA; Patrick Michael Brady, LEAD ATTORNEY, SUNDAHL POWERS KAPP AND MARTIN LLC, Cheyenne, WY USA.

For Veronica Lowe; Defendant: Jeremy J Hugus, LEAD ATTORNEY, PLATTE RIVER LAW FIRM, Casper, WY USA.

For Curtis Lowe, Defendant: Jeremy J Hugus, LEAD ATTORNEY, PLATTE RIVER LAW FIRM, Casper, WY USA.





This is an action regarding insurance coverage under a business auto liability policy. Plaintiff County Hall Insurance Company (“County Hall”) seeks declaratory judgment that it is not responsible for coverage in excess of what it has already paid to Defendants Veronica and Curtis Lowe on behalf of its insured, Renny Harvey.

In an underlying suit against Harvey and his co-driver employee, Derrick Joseph, the Lowes alleged they were injured in a two-truck accident with Harvey’s tractor-trailer in the early hours of May 25, 2018. The Lowes alleged Harvey [*2]  was negligent with respect to the tractor-trailer’s maintenance, causing it to jack-knife on the highway while Joseph was driving. Minutes later, a tractor-trailer driven by Ms. Lowe collided with Harvey’s tractor-trailer, causing her and Mr. Lowe (as a passenger) injuries. Prior to litigation, County Hall paid the Lowes for the property damage they suffered under an “MCS-90” endorsement to the Policy. The MCS-90 endorsement provided the federal “minimum financial responsibility” coverage of $750,000. Pursuant to a “High/Low” settlement agreement, County Hall paid the Lowes the remainder of the MCS-90 coverage. The Lowes contend they are entitled to the full policy limit of $1,000,000, i.e., that they are entitled to an additional $250,000 from County Hall.

Both sides seek summary judgment. ECF 26-27 (Plaintiff’s motion and brief), ECF 28-29 (Defendants’ motion and brief). Both sides timely responded in opposition to the other’s motion.1 On August 18, 2022, the Court heard argument on the motions. As the Court indicated from the bench, the Court denies Plaintiff’s motion and grants Defendants’ motion.

I. Undisputed Facts

As best the Court understands the parties’ respective statements [*3]  of facts and responses thereto, the following facts are undisputed except where noted.

A. The Policy

Plaintiff County Hall issued a commercial auto policy to Renny Harvey, policy number CHL 01-01803-18, effective from March 8, 2018 to March 8, 2019, with a liability coverage limit of $1,000,000. ECF 27-1 at 12, 14 (hereafter, the “Policy”). Thus, the Policy was effective at the time of the accident. Harvey was a federally authorized motor carrier with Motor Carrier no. 870569 and DOT no. 2510188. He resided in Georgia, and the Policy was issued there. Id. at 8, 10, 12.

The Policy contains the following insuring agreement:

We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto.” … We will have the right and duty to defend any “insured” against a “suit” asking for such damages…. However, we have no duty to defend any “insured” against a “suit” seeking damages for “bodily injury” or “property damage” … to which this insurance does not apply.

Policy at 34.

The Policy has a Scheduled Driver Endorsement, which [*4]  provides in relevant part as follows:


As a condition of the continuation of this policy, County Hall … will not be responsible or participate in any loss in excess of state minimum financial responsibility requirements involving any vehicle insured on the policy … that is operated or in control of the drivers not named on the driver schedule.

This endorsement applies to all loss in excess of the state minimum financial responsibility laws involving motor vehicles in effect at the time the loss occurs. This exclusion will apply to all coverages.

Policy at 51 (emphasis added).2 Harvey was the only driver listed in the schedule when the Policy issued.

Effective April 16, 2018, the Policy was amended to add Jeffrey Carver as a driver. Policy at 95 (Policy Change Number 3). Effective October 2, 2018 (months after the accident with the Lowes), the Policy was also amended to add Derrick Joseph as a driver. Id. at 100 (Policy Change No. 7).

The Policy also contains a Form MCS-90 Endorsement, in compliance with Sections 29 and 30 of the Motor Carrier Act of 1980 and the rules and regulations of the Federal Motor Carrier Safety Administration (the “MCS-90”). Policy at 30-32. The MCS-90 provides in relevant [*5]  part as follows:

[T]he insurer (the company) agrees 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 or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere.

It is understood and agreed that no condition, provision, stipulation, or limitation contained in the policy, this endorsement, or any other endorsement thereon, or violation thereof, shall relieve the company from liability or from the payment of any final judgment, within the limits of liability herein described, irrespective of the financial condition, insolvency or bankruptcy of the insured.

However, all terms, conditions, and limitations in the policy to which the endorsement is attached shall remain in full force and effect as binding between the insured and the company.

Policy at 31 (paragraph breaks added).3 The MCS-90 [*6]  provides a liability limit of $750,000 per accident. Id. at 30.

B. The Accident and Underlying Lawsuit

On the day of the accident, Harvey owned the 2019 Volvo tractor (the “Truck”) and it was a scheduled tractor under the Policy. ECF 27-1 at 6. It had approximately 800,000 miles on it. Harvey had been the main driver of that tractor from its purchase in 2015. At the time of the accident, a Great Dane trailer was attached to it. Harvey had also been the main operator of the semi-trailer since July of 2017 until the accident.

At all times leading up to the accident, Harvey was responsible for the maintenance of the tractor and semi-trailer. Harvey testified that he inspected the air lines daily.

Harvey and Joseph acted as team drivers or co-drivers, picking up a load in New York or New Jersey on or about May 23, 2018 and began transporting it west. On May 24, 2018, the day before the collision, Harvey walked around and checked if the tires were good. That inspection included a visual inspection of the tires, and Harvey used a hammer to test pressure. Harvey testified that the proper tread depth is “either one-eighth or one-fourth … [under] the DOT regulations. I’m not quite sure, but once [*7]  I see it getting low, I change the tires.” Harvey Depo. at 147.4 That evening of May 24, 2018, while Harvey was driving, they stopped in North Platte, Nebraska. After that stop, Joseph took over driving. Harvey went into the sleeper berth and went to sleep.

Shortly after 12:00 a.m. on May 25, 2018, while Joseph was operating the truck on Interstate 80 westbound in Sweetwater County, Wyoming, the truck started “riding rough,” and Joseph started slowing down. As he did so, the trailer brakes locked up and Joseph lost control. The truck and trailer jack-knifed and came to a stop in the roadway.

Joseph turned on his four-way flashers and got out to try to determine what had happened. Harvey had woken up and, when Joseph got out, Harvey got into the driver’s seat and cranked the truck. Although Harvey was able to crank the truck, he could not and did not move it.

It was nighttime, and there were no roadway lights. When Harvey got in the front seat to try to move the tractor-trailer off the roadway, Harvey did not know why it was disabled. It was later determined that the tractor-trailer was disabled because a blown tire ripped or tore an air line from the trailer braking system, causing [*8]  it to automatically lock up. During this time, at least a few vehicles passed on the right, including a tractor-trailer and some passenger cars. Harvey recalled they had slowed down and had their emergency lights on as they passed.

After a short space of time — the approximate duration of which will be discussed below — a tractor-trailer operated by Veronica Lowe, also traveling on Interstate 80, approached and collided with the truck and/or trailer. Curtis Lowe was a passenger in the tractor-trailer. Harvey never got out of the truck before the Lowes’ truck ran into it.

Harvey was familiar with the Federal Motor Carrier Safety Administration (FMCSA) Regulations. Those regulations applied to Harvey and his trucking company. Harvey acknowledged that flares and/or triangles were required by the FMCSA Regulations to be put out and should be put out as soon as possible, and within ten minutes at the latest. 49 C.F.R. § 392.22(a), (b)(1). Despite that knowledge, the triangles were not immediately placed behind the disabled tractor and semi-trailer before the accident. County Hall notes, however, that Joseph testified if he had tried to place triangles, he would have been struck and likely killed. Joseph Depo. at 91-92. [*9]  Harvey also testified that the first step for placing the triangles is to get to a safe location, and only then can the driver put the triangles out. Harvey Depo. at 104. And in Harvey’s opinion, the four-way flashers (which Joseph activated immediately) are more visible at greater distances than the triangles. Id. at 106.

The Lowes were allegedly injured as a result of the accident and subsequently filed an underlying lawsuit against Harvey and Joseph in this Court, 20-cv-88-F.5

C. The Declaratory Judgment Action

County Hall filed this action on September 14, 2021.6 It alleged that the Policy, which has an insurance coverage liability limit of $1,000,000, did not provide insurance coverage for this accident because Joseph was not listed in the Scheduled Driver Endorsement in the Policy. County Hall agreed, however, that the MCS-90 in the Policy created a suretyship obligation requiring County Hall to pay up to $750,000 for any final judgment entered against Harvey.

D. The High/Low Settlement

County Hall, Veronica Lowe, Curtis Lowe, Harvey, and Joseph subsequently entered into a “High/Low” settlement agreement, pursuant to which the underlying lawsuit was dismissed with prejudice. ECF 27-5. By its terms, the Lowes [*10]  received payment in the amount of $704,050 from County Hall, which was the amount remaining from the liability limit of the MCS-90. County Hall had previously paid $45,950 from that limit to resolve property damage claims arising out of the accident. The payment to the Lowes exhausted the remainder of the MCS-90’s limit.

The parties agreed to continue to litigate this coverage action to determine whether the MCS-90, and its $750,000 limit, represent the extent of County Hall’s obligations, or whether the Policy itself, with its $1,000,000 limit, provides actual coverage.7

II. Standards for Summary Judgment

The Court shall grant a motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). This standard requires “there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A material fact is one that “might affect the outcome of the suit under the governing law.” Id. at 248. “Summary judgment is inappropriate where there is a genuine dispute over a material fact, ‘that is, if the evidence is such that a reasonable [*12]  jury could return a verdict for the nonmoving party.'” Roberts v. Jackson Hole Mountain Resort Corp., 884 F.3d 967, 972 (10th Cir. 2018) (quoting Anderson, 477 U.S. at 248). “[W]e examine the record and all reasonable inferences that might be drawn from it in the light most favorable to the non-moving party, without making credibility determinations or weighing the evidence.” Roberts, 884 F.3d at 971, n. 3.

III. Analysis

A. Choice of Law

County Hall notes that as a diversity case, the Court applies the substantive law of the forum state including for choice of law issues. Pepsi-Cola Bottling Co. of Pittsburgh v. PepsiCo, Inc., 431 F.3d 1241, 1255 (10th Cir. 2005). In this case, the accident occurred in the forum state (Wyoming), and the Policy issued in another state — Georgia. Under Wyoming law, the Court need only engage in a choice of law analysis when Wyoming law actually conflicts with the law of another state. Employers Matt. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1170 (10th Cir. 2010); Act I, LLC v. Davis, 2002 WY 183, 60 P.3d 145, 149 (Wyo. 2002). County Hall argues the laws of both states are consistent with regard to the interpretation of insurance contracts, thus the Court need not choose between them. It notes that both states interpret insurance contracts as a matter of law to ascertain the parties’ intent, using the ordinary meaning of terms therein to carry out the parties’ intention. ECF 27 at 9-10, 15 (citing Georgia and Wyoming cases). It does not point to any choice of law provision in the Policy.8

Defendants do not directly respond [*13]  regarding choice of law, but they cite among other things Georgia statutes to define “driver” and “operator” for purposes of construing those terms in the Policy. ECF 31 at 6. However, for their own motion, Defendants cite only Title 49 of the Code of Federal Regulations — they do not cite any state law.

Since Georgia and Wyoming interpret insurance contracts by the same legal principles (at least as pertinent here), and to the extent it is necessary to reach legal definitions outside the Policy for the meaning of terms in the Scheduled Driver endorsement, both parties rely on federal regulations for that point (albeit not the same ones), the Court concludes there is no need to choose between Georgia and Wyoming law. “When there is no conflict, the [c]ourt applies the law of the forum.” Employers Mut., 618 F.3d at 1170; Act I, 60 P.3d at 149.

B. The Coverage Issue

The Court interprets the Policy as a contract to ascertain the parties’ intent, using the ordinary meaning of terms therein to carry out their intention. Aaron v. State Farm Mut. Auto. Ins. Co., 2001 WY 112, ¶ 15, 34 P.3d 929, 933 (Wyo. 2001). “The words used will be given their common and ordinary meaning…. Neither will the language be ‘tortured’ in order to create an ambiguity.” Id. “The intention of the parties is the primary consideration and is to be ascertained, [*14]  if possible, from the language employed in the policy, viewed in the light of what the parties must reasonably have intended.” Id. “Absent ambiguity, there is no room for construction and the policy will be enforced according to its terms.” Id.

The key language of the Scheduled Driver Endorsement provides:

County Hall … will not be responsible or participate in any loss in excess of state minimum financial responsibility requirements involving any vehicle insured on the policy … that is operated or in control of the drivers not named on the driver schedule.

ECF 27-1 at 51 (emphasis added). A “loss” is defined as “direct and accidental loss or damage.” Id. at 46 ¶ J.

It is undisputed that the loss the Lowes experienced did not occur when Joseph was driving the truck. When the Lowes’ truck hit him head-on, Harvey was the one in the driver’s seat and was attempting to move it off the roadway. Just prior to the collision, Joseph was reporting back to him what he had seen in his walk around the truck. “Driver,” “operate” and “control” are not defined in the Policy. But in the ordinary meaning of those words, Harvey — not Joseph — was “in control of the truck at the time of the Lowes’ loss. [*15]  He was also “operating” it to the extent the disabled truck could be operated at the time.

County Hall does not point to any terms in the Policy that would contradict this interpretation or show an ambiguity therein. It does not, for instance, point to any language in the Policy suggesting that more than one driver could “operate” or be “in control of the vehicle simultaneously. Such an interpretation would contradict the ordinary meaning of the words. Nor does County Hall point to language in the Policy suggesting that if an unscheduled driver was operating or in control of the truck at the beginning of a chain of events ultimately leading to a loss at the end of that chain, the loss is excluded despite it occurring when a scheduled driver is operating or in control of the vehicle.9 Again, this would contradict the ordinary meaning of these terms.

County Hall nonetheless argues against coverage based on definitions of “operator” and “driver” outside the Policy. It cites a federal regulation, 49 C.F.R. § 390.5 (and Wyoming and Georgia’s adoption thereof) defining “operator” by reference to its definition of “driver,” which is “any person who operates any commercial motor vehicle.” County Hall also points [*16]  to the Merriam-Webster definition of the verb “to drive” as “to operate the mechanism and controls and direct the course of (a vehicle).” ECF 27 at 13.10

But the Scheduled Driver endorsement is not ambiguous regarding operation or control of the vehicle, and these outside definitions add nothing to the analysis. County Hall argues the dictionary definition of “drive” shows that “control” in the endorsement means control of the course of the vehicle — and here, the vehicle was disabled so there was no “course.” At the hearing, County Hall argued a somewhat broader version of this theory, that Harvey was not “in control of” the vehicle because he was unsuccessful in attempting to move it. But nothing in the Policy suggests that “control of a vehicle requires successfully causing the vehicle to move. County Hall’s arguments interpret “operate” and “control” in the endorsement as synonyms for “drive.” But “drive” is not a synonym for either; it is narrower than both of these terms. If the endorsement meant only “control over the course of the vehicle,” or “successful control,” it would say so.

Nor do County Hall’s cited cases help its position., United Financial Casualty Company v. Mid State [*17]  Logistics, No. 4:21-cv-177 2022 WL 2111360 (M.D. Penn. Jun. 10, 2022), regards an issue of whether co-drivers — one of whom was in the sleeping berth when the other careened the truck into a guardrail — were both “operating” the truck for purposes of a claim one brought against the other and the employer, where the employer’s insurance policy excluded claims by employees. The parties looked to 49 C.F.R. § 390.5 to define who was an “employee;” the regulation considers not only employees but also an “independent contractor while in the course of operating” the vehicle as employees. United Financial, 2022 WL 2111360, at *1. The court found the independent contractor in the sleeping berth was still “operating” the vehicle for purposes of the employer’s policy, and thus there was no coverage for his claim.

The scenario in United Financial has no bearing on the interpretation of the Scheduled Driver endorsement. The salient question here is not whether Joseph was an employee versus independent contractor. The question is instead how the Scheduled Driver endorsement applies to co-drivers who switched the operation and control of the vehicle after it became disabled but before the loss occurred. United Financial is not on point for the ordinary meaning of “operate” or “control” in the endorsement at hand.

The same is [*18]  true of Pouliot v. Paul Arpin Van Lines, 292 F. Supp. 2d 374, 380 (D. Conn. 2003) and Lancer Ins. Co. v. Newman Specialized Carriers, Inc., 903 F. Supp. 2d 1272, 1274, 1278-81 (N.D. Ala. 2012). These cases similarly revolve around the definition of “employee” under the same federal regulation. They do not involve co-drivers, a scheduled driver endorsement regarding “operation” or “control,” or a chain of events like the one in this case. These cases have no bearing here.

Likewise, Canal Insurance Company v. Moore Freight Services, Inc., No. 3:13-cv-447-TAV-HBG, 2015 WL 3756840 (E.D. Tenn. June 16, 2015), does not help County Hall. The policy in question excluded coverage for bodily injury of an employee incurred in the course of employment or performing duties related to the insured’s business. Id. at *3. The driver had gotten out of the truck after he noticed the braking system was smoking or on fire, and while he was responding to the situation, his heart stopped beating and he died. His widow filed tort claims against the employer. The question was whether he was still “operating” the vehicle when he died and thus was acting in the course of employment or of duties related to the insured’s business. The court found he was “operating” the truck because “one need not be driving the commercial motor vehicle to be ‘operating’ it.”

Canal Insurance only underscores that Harvey was “operating” and “in control of the truck [*19]  regardless that it was disabled from moving when the Lowes collided with it. County Hall relies on this case to instead argue Joseph was still “operating’ the truck by walking around it and inspecting, but that stretches the facts of the case too far. In Canal Insurance, there was no co-driver sitting in the driver’s seat cranking the truck to move it. And again, Joseph was reporting back to Harvey when the Lowes’ truck approached.

Nor does County Hall cite any language in the Policy (or in regulations or case law) suggesting that the two events in this case — the disabling of Harvey’s truck and the Lowes’ collision with it — should instead be construed as only one event, as though the Lowes had crashed into Harvey’s truck at the moment it came to rest. It is undisputed that Harvey’s truck had come to a complete stop, multiple cars and another tractor-trailer had passed it at slow speeds on the right, Harvey had taken the driver’s seat and was attempting to move the truck, and Joseph had walked entirely around it before the accident with the Lowes happened.

Although County Hall characterizes the space of time between the two events as “moments,” (ECF 27 at 6 ¶ 24, citing Harvey Depo. [*20]  at 78) this is not supported by the record. The cited deposition question and answer were as follows:

Q. … So we’re on May 24th. Somewhere prior to Sweetwater County, Wyoming, Derrick Joseph takes over driving your unit. Tell me as much as you can remember about what you were doing in the time leading up to the point where your tractor became disabled.

A. I was asleep in the back, and what I remember is when the — I felt the brakes lock up so I got up halfway, and I was looking and I seen Derrick was fighting with the truck to try to keep it on the road. He slid a long way on highway 80, and then when he came to a stop, I sat up immediately and put my boots on. And I said, “What happened?” He says he don’t know, the brakes on the trailer locked up. So he got out and walked around the trailer. When he did that, I got in the front seat, and I cranked the truck up to build up the air pressure to try to remove the truck completely off of the road. And I had my — and Derrick had came back around. He said, “I don’t see anything. I don’t know why the brakes locked up.”

And then — then I had my head down, and I said — I’m just trying to hit the gas to build up the pressure, and then all [*21]  of a sudden, I seen lights through my peripheral vision and it was over with. She just came out of nowhere. I mean, she was flying. She hit me so fast; by the time I looked up, it was over with.

Harvey Depo. at 77-78. In this testimony, Harvey was not asked how much time passed between his truck coming to rest and the Lowes’ collision with it. He testified only that the time between Joseph reporting to him and his seeing the Lowes’ oncoming truck was “sudden” and “over with” by the time he looked up.

County Hall also points to Harvey’s testimony that triangles were not placed within the federal regulation’s required 10 minutes after the disabling event because the time from the disabling event to the collision lasted much less than 10 minutes. ECF 30 at 2 (citing Harvey Depo. at 107-108). Specifically, the cited question and answer were:

Q. … I’ve also highlighted a paragraph of provision B(1) [of the federal motor carrier regulation] that says, “The triangles should be put out as soon as possible but in any event within 10 minutes of the disabling event.” Is that your understanding of the regulation, Mr. Harvey?

A. I mean, it says within 10 minutes. The whole thing, it didn’t take — [*22]  it was only a few minutes. I didn’t have — I wasn’t there 10 minutes before she hit me.

Harvey Depo. at 107-108 (emphasis added).

This is consistent with the excerpts of Harvey’s and Joseph’s depositions on which Defendants rely to assert the interval between Harvey’s truck coming to rest and the collision was “[s]omewhere between a few minutes and five minutes.” ECF 31 at 4 ¶ 10 (citing Harvey Depo. at 97:17-23; 98:8-9; Joseph Depo. at 75:1-12). Harvey testified:

Q. … If I were to ask you what your best estimation of the amount of time was in between the moment when your tire blew and the time you got struck by Killpack [the employer of the Lowes], what would you estimate that amount of time to be?

A. Let me see. I got up, put my boots on, that didn’t take no time, walked around the truck, probably a minute, maybe two, three minutes.

Q. Okay. Do you recall providing a written report of this accident to your insurance company?

A. It’s possible, but I don’t recall it.

Q. In this document I’m thinking of — and I’ll see if I can find it again here — there was a statement in there where you said or it was reported that you said, “About five minutes later, a truck came flying down and ran [*23]  into me.” Do you remember writing that statement?

A. It could have been. I could have said that. You know, it wasn’t accurate. It was about maybe five minutes.

Q. Okay.

A. I mean, I don’t know minutes. I know it was quick, but it wasn’t, you know…

Q. And you would agree with me that these are all just kind of estimates that we didn’t have a clock running so that’s the best of our estimation at this time?

A. Yeah, because I definitely did not have a clock running. I had no idea she was going to hit me.

Harvey Depo. at 97 (emphasis added). Similarly, Joseph testified:

Q. … [D]o you have an estimation of the amount of time that elapsed in between the time when your tractor became stopped in the interstate — when your truck became stopped in the interstate and when it was impacted by the Killpack tractor?

A. It was only, like, a few minutes. Because by the time I put my four-ways on and got out the truck and went around, and, you know, was talking to Renny, you know, I had to run out the way. It was, like, all so quick. I didn’t even get a chance to warn him that a truck was coming. That’s how, you know, how fast it happened.

Joseph Depo. at 75 (emphasis added). The disabling of the truck and [*24]  the collision were separated by at least a few minutes, and no reasonable jury could find that these two events were instead one uninterrupted event.

County Hall further argues that the Court’s interpretation defeats the purpose of the Scheduled Driver endorsement. It points to a provision in the Policy that requires new drivers to be reported to County Hall immediately, and that “Accidents with UNREPORTED drivers will be viewed as an increase in HAZARD/EXPOSURE and may result in CANCELLATION or NONRENEWAL of your coverage.” Policy at 9. County Hall cites Jerman v. Insurance Company of New York, No. 05-cv-5968, 2007 U.S. Dist. LEXIS 67650, 2007 WL 2702816, *1 (E.D. Pa. Sept. 12, 2007) for the purpose of this endorsement being for the insurer to evaluate its own risk.

But County Hall’s argument is not persuasive. The purpose of the Scheduled Driver endorsement is not defeated by excluding only losses incurred while a vehicle is operated or in control of an unscheduled driver. This interpretation leaves intact the endorsement’s purpose of excluding any losses that occur while unscheduled drivers are operating or in control of the vehicle. It also leaves intact County Hall’s ability (after learning of the accident and Joseph) to cancel or nonrenew Harvey’s policy [*25]  because he had not immediately reported Joseph as a new driver.

Accordingly, because Harvey was a scheduled driver in the endorsement, and he was operating and in control of the tractor-trailer at the time of the Lowes’ loss, the Scheduled Driver endorsement does not bar coverage in this case. As there is no other dispute that the Policy applies to the Lowes’ claim,11 Defendants are entitled to the declaratory relief they request.

IV. Conclusion

Defendants’ motion for summary judgment is GRANTED, and Plaintiff’s motion is DENIED. Defendants are entitled to the declaratory relief they request in their motion. Therefore, the Court concludes that County Hall is responsible for insurance coverage under the Policy for any claims or judgments against Harvey arising out of the accident with the Lowes. County Hall is responsible under the Policy and the settlement agreement to pay the Lowes’ the full policy limit of $1,000,000. Defendants are therefore entitled to an additional $250,000 to the amount County Hall already paid under the MCS-90 endorsement and underlying settlement agreement. The Clerk shall enter judgment accordingly.

Dated this 18th day of August, 2022.

/s/ Nancy D. Freudenthal



End of Document

Defendants also filed a reply, which the Court struck as unauthorized due to these motions being set for hearing. ECF 33.

A signature page follows, signed only by County Hall. The line for Harvey’s signature is blank. In their briefs, neither side argued the lack of Harvey’s signature as a material fact. At the hearing, Defendants argued it shows a fact dispute whether the endorsement represents County Hall and Harvey’s intent at all, i.e., whether Harvey accepted the endorsement. Plaintiff countered that the same certified copy of the Policy is attached to the complaint (ECF 1, Ex. B), amended complaint (ECF 21, Ex. B), and Plaintiff’s motion for summary judgment. Plaintiff also pointed to Defendants’ answer, but it is perhaps less definitive than Plaintiff understood it: Plaintiff avers that the Policy includes the endorsement; Defendants answer that the Policy attached to the amended complaint speaks for itself and deny to the extent of any misinterpretation thereof. ECF 21 ¶ 19 (amended complaint), ECF 22 (answer). But regardless, Defendants rely on the same copy of the Policy for their motion for summary judgment, and they did not challenge the endorsement’s effectiveness until the hearing. ECF 29 at 4 ¶ A.1. Accordingly, the Court finds there is no dispute that the Scheduled Driver endorsement is effective.

The MCS-90 also requires Harvey to reimburse County Hall for payments made under it if County Hall otherwise would not have been required to pay under the Policy, but it appears irrelevant in light of the parties’ settlement agreement. ECF 27-5 at 3-4 ¶ E.

Under the Federal Motor Carrier Safety Regulations, the minimum required tread depth for tires on a steering axle of a power unit was 4/32 inch, or one-eighth. 49 C.F.R. § 396.17, Appendix A ¶ 10(a)(1). The minimum required for all tires other than those found on the steering axles of a power unit was 2/32 inch, or one-sixteenth. Id. ¶ 10(b)(8).

Harvey and his wife also filed a separate suit against the Lowes and their employer, Killpack Trucking, Inc., 20-cv-39-F. Both 20-cv-39 and 20-cv-88 were dismissed with prejudice upon stipulated motions.

In addition to the Lowes, County Hall also named Harvey and Joseph as defendants in this case. County Hall later voluntarily dismissed them without prejudice. ECF 15.

The settlement agreement provides as follows:

E. Based upon the consideration of the Advance Payment, the Parties agree to the following “High/Low Provision”:

1. In the event that the Court in the Coverage Action (through all available appeals) concludes that the County Hall Policy provides insurance coverage (exclusive of the MCS-90 Endorsement) for the claims of Veronica Lowe and Curtis Lowe arising out of the Accident, then County Hall will pay to Veronica Lowe; Curtis Lowe; and Platte River Injury Law, the additional amount of $250,000.00 in exchange for a complete Release of All Claims against Releasees and County Hall within thirty (30) days after the Coverage [*11]  Action is concluded.

2. In the event that the Court in the Coverage Action (through all available appeals) concludes that the County Hall Policy does not provide insurance coverage (exclusive of the MCS-90 Endorsement) for the claims arising out of the Accident, the Parties agree that County Hall, Harvey, and Joseph shall have no further obligation under the County Hall Policy or the MCS-90 endorsement for the claims asserted by Veronica Lowe and Curtis Lowe against Releasees in the Tort Lawsuit, and Veronica and Curtis Lowe agree to execute a complete Release of All Claims against Releasees and County Hall within thirty (30) days after the Coverage Action is concluded.

ECF 27-5 at 3-4.

County Hall’s operating agreement as a limited liability company, of which the insured was required to own one class B share, has a governing law provision (choosing North Carolina law, ECF 27-1 at 70) but neither side argues that has any relevance here, and the Court sees none.

At the hearing, County Hall argued that is the purpose of the endorsement, to exclude any loss “involving” an unscheduled driver. But counsel did not point to any language in the Policy supporting that interpretation.

10 Defendants also cite the definitions of “driver” in the Federal Motor Vehicle Safety Standards regulations, 49 C.F.R. § 571.3, and of “driver” and “operator” in the Georgia Motor Vehicles and Traffic Code. Ga. Code § 40-1-1(14). As County Hall points out, 49 C.F.R. § 571.3 regards safety standards for the manufacture of vehicles (Id. § 571.7(a)), not the operation of commercial motor vehicles. In any case, the definitions in § 571.3 and the Georgia code do not show any ambiguity in the Policy’s language or add anything to its analysis.

11 Defendants briefed among other things their allegations that Harvey was negligent in the maintenance of the truck, and that the negligent maintenance caused the tire blow-out and disabling of the vehicle. County Hall did not respond to those arguments. It thereby concedes this theory of negligence. Defendants also allege Harvey was negligent in not putting out triangles and flares immediately. County Hall briefed facts regarding why Harvey and Joseph did not do so. The Court does not reach the latter theory of negligence.

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