United States District Court,

E.D. Pennsylvania.

OCCIDENTAL FIRE & CASUALTY COMPANY OF NORTH CAROLINA, Plaintiff

v.

WESTPORT INSURANCE CORP., Zurich Specialties London, Ltd., F.O. Transport,

Inc., Frank Oostdyk, Oscar Simpkins and B.K. Leasing Company, Inc. Defendants.

Sept. 10, 2004.

MEMORANDUM and ORDER

YOHN, J.

On October 31, 2001, a truck struck a pedestrian, Regina Smith, in Philadelphia, Pennsylvania. Smith subsequently filed an action in the Philadelphia Court of Common Pleas against the driver of the truck, Oscar Simpkins (“Simpkins”), and Frank Oostdyk (“Oostdyk”), F.O. Transport, Inc. (“F.O.”) and B.K. Leasing Company, Inc. (“B.K.”). Smith alleged that Frank Oostdyk or F.O. Transport, Inc. (Oostdyk’s corporation) was the owner of the tractor, that B.K. owned the trailer and leased or hired the tractor, and that Simpkins was an agent or employee of Oostdyk or F.O. or under the “control and dispatch” of B.K.

The insurers of these persons and entities seek a declaratory judgment defining their respective obligations to provide liability coverage for the accident. Plaintiff is Occidental Fire & Casualty Company of North Carolina (“Occidental”), which insures B.K. and brought this action to seek clarification of its obligations, if any, to provide liability coverage to defendants Simpkins, Oostdyk and F.O. [FN1] Since Westport Insurance Corp. (“Westport”) insures Oostdyk and/or F.O. and/or Simpkins in some respect, it was necessarily included in the suit. Westport, in turn, brought a claim for a declaratory judgment that B.K.’s insurance company, Occidental, provides coverage. Finally, Oostdyk and Simpkins seek a declaration that Occidental provides coverage for them. [FN2] In essence, then, the parties in this action seek a declaratory judgment defining which of the insurance companies is responsible for providing liability coverage to the defendants in the underlying action in the Philadelphia Court of Common Pleas.

FN1. There are references in the papers to F.O. Transport, an apparently unregistered fictitious name used by Frank Oostdyk. The court thus considers F.O. Transport to in fact be Frank Oostdyk, as opposed to F.O. Transport, Inc., a separate legal entity.

FN2. Zurich Specialities London, Ltd. was originally a party to this action but judgment was entered in its favor by agreement of the parties at oral argument on September 2, 2004. Therefore, the court does not here consider any arguments or facts pertaining only to Zurich.

Currently pending before the court are: (1) Occidental’s motion for summary judgment; (2) Westport’s motion for summary judgment; and (3) Oostdyk and Simpkins’ motion for summary judgment. For the reasons set forth below, I will: (1) grant Occidental’s motion for summary judgment; (2) grant Westport’s motion for summary judgment in part and deny it in part; and (3) deny Oostdyk and Simpkins’ motion for summary judgment.

BACKGROUND

On October 31, 2001, Simpkins, driving a tractor owned by F.O. or Oostdyk, [FN3] picked up a B.K. trailer and loaded the trailer in Wilmington, Delaware with a load of bananas from Chiquita. While transporting the trailer from Wilmington to Portland, Maine, Simpkins stopped in Philadelphia, where he rested for some time. Simpkins then disengaged the trailer and drove the tractor through the streets of Philadelphia in order to obtain cash for the trip from a particular gas station. While traveling to the gas station, Simpkins struck Regina Smith, a pedestrian. Simpkins reported the accident to B.K. and then continued on the trip to Maine. Smith has sued Simpkins, F.O., Oostdyk and B.K. for damages resulting from the accident.

FN3. The certificate of title, prima facie evidence of ownership under Pennsylvania law, is in the name of F.O. (a corporation apparently owned by Oostdyk). Oostdyk, however, testified that he owned the tractor and leased it to F.O. The factual issue of ownership is not relevant to the current motions.

All of the defendants in this action contend that B.K.’s insurance policy with Occidental covers the defendants in the underlying action. [FN4] B.K.’s Occidental policy covers “specifically described autos,” “hired autos,” and “non-owned autos.” Occidental Policy at Truckers Declarations & Truckers Coverage Form 1-2. No party argues that the tractor qualifies as either a “specifically described auto” or a “non-owned auto.” The defendants argue that the tractor qualifies as a “hired auto.” The only guidance the policy provides regarding what qualifies as a “hired auto” is: “Only those ‘autos’ you lease, hire, rent or borrow.” Occidental Policy at Truckers Coverage Form 1. “Hired” is not defined anywhere in the policy.

FN4. B.K. has not filed a motion for summary judgment in the instant action. However, B.K. owner Brian Kargman stated in his deposition that he believed B.K.’s Occidental policy would cover this type of action. See Kargman Dep. at 65-66 (stating that the vehicles driven on behalf of B.K are “for hire”); id. at 18 (“If a person only had bobtail [insurance], then while the individual is transporting my load from point A to point B, my insurance company would kick in on what they call a non-owned hired auto policy.”).

Westport issued a truckers policy to F.O. Transport d/b/a Frank Oostdyk or to F.O. Transport, Inc. [FN5] The Westport policy only provides coverage for “specifically described autos.” Westport Policy at Truckers Coverage Form Declarations & Truckers Coverage Form. The tractor Simpkins was driving at the time of the accident is not listed in the policy as a covered auto. Id. However, the Westport policy also contains a MCS-90 endorsement which requires Westport to satisfy any final judgment against F.O.T. when there is no other collectible insurance. Id. at MCS-90 Endorsement.

FN5. Westport disputed at oral argument which is the insured. Again, this dispute is irrelevant to the current motions and I will hereafter refer to Oostdyk and F.O. Transport, Inc. collectively as F.O.T.

STANDARD OF REVIEW

Any party to a lawsuit may file a motion for summary judgment, and the court will grant it “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). “Facts that could alter the outcome are ‘material,’ and disputes are ‘genuine’ if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct.” Ideal Dairy Farms, Inc. v. John Lebatt, LTD., 90 F.3d 737, 743 (3d Cir.1996) (citation omitted). When a court evaluates a motion for summary judgment, “[t]he evidence of the non-movant is to be believed,” Anderson v. Liberty Lobby, Inc. ., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and “all justifiable inferences are to be drawn in [the non-movant’s] favor.” Id. Additionally, “[s]ummary judgment may not be granted … if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed.” Ideal Dairy, 90 F.3d at 744 (citation omitted). However, “an inference based upon a speculation or conjecture does not create a material factual dispute sufficient to defeat entry of summary judgment.” Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d Cir.1990).

To defeat summary judgment, the non-moving party cannot rest on the pleadings, but rather that party must go beyond the pleadings and present “specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e). Similarly, the non-moving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir.1989) (citing Celotex v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Further, the non-moving party has the burden of producing evidence to establish prima facie each element of his claim. Celotex, 477 U.S. at 322-23. The non-movant must show more than “[t]he mere existence of a scintilla of evidence” for elements on which he bears the burden of production. Anderson, 477 U.S. at 252. Thus, “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.” ‘ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted).

DISCUSSION

There are two insurance policies that arguably cover one, some, or all of the defendants in the underlying case. The outcome of this case is entirely dependent on the wording of the relevant insurance contracts. Since this court’s jurisdiction is based on diversity of citizenship, I am required to apply the choice of law rules of the forum state, Pennsylvania, in construing the Occidental and Westport insurance contracts. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Under Pennsylvania law, interpretation of an insurance contract is governed “by the law of the state where the contract was made.” Crawford v. Manhattan Life Ins. Co. of N.Y., 208 Pa.Super. 150, 221 A.2d 877, 880 (Pa.Super.1966). “The place of making an insurance contract is the place of delivery … (and)(i)n the absence of any proof as to the place of delivery … there is a presumption of delivery at the residence of the insured.” Id. at 880-81. B.K. is a New Jersey corporation with a principal place of business in New Jersey. Therefore, New Jersey law applies to the interpretation of B.K.’s Occidental insurance policy. F.O. is a Pennsylvania corporation with a principal place of business in Pennsylvania and Oostdyk is a Pennsylvania resident. Therefore, Pennsylvania law applies to the interpretation of F.O.’s insurance policy with Westport. Pennsylvania and New Jersey law regarding interpretation of insurance contracts is nearly identical.

“The task of interpreting a contract of insurance is generally performed by a court rather than by a jury, which must read the insurance policy as a whole and construe it according to the plain meaning of its terms.” Britamco Underwriters, Inc. v. C.J.H., Inc. ., 845 F.Supp. 1090, 1092 (E.D.Pa.1994), aff’d, 37 F.3d 1485 (3d Cir.1994). See Bateman v. Motorist Mut. Ins. Co., 527 Pa. 241, 590 A.2d 281, 283 (Pa.1991); Gibson v. Callaghan, 158 N.J. 662, 730 A.2d 1278, 1278 (N.J.1999). As a question of law, the interpretation of a provision in an insurance contract is properly made on a motion for summary judgment. See The Aetna Casualty and Surety Co. v. Roe, 437 Pa.Super. 414, 650 A.2d 94, 98 (Pa.Super.1994); Weedo v. Stone-E-Brick, Inc., 155 N.J.Super. 474, 382 A.2d 1152 (N.J.Super.1977), reversed on other grounds, 81 N.J. 233, 405 A.2d 788 (N.J.1979). “Where ambiguities are found, they must be construed in the light most favorable to the insured.” Ryan Homes, Inc. v. Home Indem. Co., 647 A.2d 939, 346 (Pa.Super.1994) (citing Bateman, 590 A.2d at 283), appeal denied, 657 A.2d 491 (Pa.1995); Zacarias v. Allstate Ins. Co., 168 N.J. 590, 775 A.2d 1262, 1270 (N.J.2001). However, clear and unambiguous terms in an insurance contract must be given their plain and ordinary meaning. See Ryan Homes, 647 A.2d at 346; see also Ambrosio v. Affordable Auto Rental, Inc., 307 N.J.Super. 114, 704 A.2d 572, 575 (N.J.1998).

The Occidental and Westport policies will be addressed in turn.

I. Coverage Under Occidental Policy

Occidental argues that B.K.’s Occidental policy does not cover the tractor in question because B.K. never had a lease with either Simpkins or F.O. for the tractor. [FN6] Occidental’s argument is based on the requirements of 49 C.F.R. § 376.11, which states:

FN6. Whether B.K.’s relationship was with Frank Oostdyk or F.O. Transport, Inc. is unclear. I will refer to both of them hereafter collectively as F.O.T.

Other than through the interchange of equipment as set forth in § 376.31, and under the exemptions set forth in Subpart C of these regulations, the authorized carrier may perform authorized transportation in equipment it does not own only under the following conditions:

(a) Lease. There shall be a written lease granting the use of the equipment and meeting the requirements contained in § 376.12.

49 C.F.R. § 376.11. [FN7] No party disputes that B.K. was an authorized carrier and that there was no written lease between B.K. and any other party. Occidental goes on to argue that since B.K. could not “perform authorized transportation” in the tractor involved in the accident according to the regulations (since it neither owned nor leased the tractor), [FN8] it could not “control” the tractor and therefore could not be considered liable as the owner or lessee of the tractor. Occidental also spends a considerable amount of time arguing that B.K. was really a broker, as defined in 49 C.F.R. § 371.2, and that the relationship between B .K. and F.O.T. was controlled by a brokerage agreement. See 49 C.F.R. § 371.2(c). However, as apparent from an argument Occidental makes later in its brief, determination of which C.F.R. definition best describes the relationship between B.K. and F.O.T. is unnecessary.

FN7. The remainder of the regulation delineates the form of the lease agreement and other requirements for the lease relationship.

FN8. Although Occidental does not perform an analysis of the remaining requirements for performing authorized transportation in equipment [a motor carrier] does not own, there is no question that B.K. did not meet these requirements in the instant case.

In its argument on the reciprocal insurance coverage clause, which is discussed later in this section of the opinion, Occidental refers to a number of Third Circuit cases which hold “that where the case is ‘concerned with responsibility as between insurance carriers,’ and not with the federal policy of protecting the public, ‘I.C.C. [FN9] considerations are not determinative’ and a court should consider the express terms of the parties’ contracts.” [FN10] Carolina Casualty Ins. Co. v. Insurance Co. of N. Am., 595 F.2d 128, 138 (3d Cir.1979) (quoting Allstate Ins. Co. v. Liberty Mutual Ins. Co., 368 F.2d 121, 125 (3d Cir.1976)). [FN11] The instant case is only concerned with responsibility as between insurance carriers. So, under the reasoning of Carolina Casualty, the fact that B.K and F.O.T. did not follow the regulations (there was no written lease between B.K. and F.O.T.) is not dispositive on the issue of whether or not B.K. assumed responsibility and control of the tractor, and therefore on the issue of whether or not Occidental could be considered liable for the negligent operation of the tractor. Rather, as the Third Circuit has directed, it is necessary to “consider the express terms of the parties’ contracts.” Id.

FN9. The Interstate Commerce Commission (“ICC”) regulates the use by motor carriers (under leases, contracts, or other arrangements) of motor vehicles not owned by them for the purpose of transporting property.

FN10. At oral argument, Occidental argued against this position on this point, although it did cite this case in support of its position.

FN11. I note that at oral argument Westport cited Mustang Transportation Co. v. Ryder Truck Lines, Inc., 688 F.2d 823 (3d Cir.1982). This citation, however, only refers to the Third Circuit’s affirmation of the district court’s opinion in this case, without a Third Circuit opinion providing any analysis. As such, this case is not afforded any precedential value.

By focusing on the lease/brokerage distinction, Occidental fails to actually cite the policy at issue–probably because it obviously defeats Occidental’s simple “no lease-no coverage” argument. The policy also covers “hired autos,” which is simply stated as “autos you lease, hire, rent or borrow.” Occidental Policy at Truckers Coverage Form 1. None of the parties disputes that B.K. did not lease, rent or borrow the tractor at issue. Defendants Westport, Oostdyk and Simpkins do argue, however, that B.K. “hired” the tractor, thereby making the tractor a vehicle covered by B.K.’s Occidental policy. In response, Occidental points out that the idea that B.K. “hired” the tractor is incongruous with the premium B.K. paid for its coverage, Occidental Reply Br. 2, and the regulations that control interstate trucking. Id. at 8. Although these incongruities might highlight unethical, improper or illegal conduct by B.K., they do not affect the real issue in the instant case, which is whether or not the tractor driven by Simpkins at the time of the accident qualifies as a “hired auto” under B.K.’s Occidental policy. Occidental does not directly address what it means to “hire” a vehicle under the law. Fortunately for Occidental, though, some facts Occidental points to in support of other arguments make it clear that B.K. actually did not “hire” the tractor in question.

As defendants Oostdyk and Simpkins point out, “the term ‘hired’ is not defined in the Policy, and has not been defined by either Pennsylvania courts or this Circuit.” Oostdyk & Simpkins Br. 9. As explained above, the contract terms must be given their “plain and ordinary” meaning when left undefined in the contract itself. Rather than relying on their own dictionaries to provide the “plain and ordinary” meaning of “hire” or “hired,” Oostdyk and Simpkins cite a Tenth Circuit case for a definition. Id. In Avalon v. Duros, the court, also seeking to find the plain and ordinary meaning of “hire,” wrote:

The Oxford English Dictionary defines the term in the following manner: “[t]o procure the temporary use of (any thing) for stipulated payment.” OXFORD ENGLISH DICTIONARY (2d ed.1989) (on-line version, http://dictionary.oed.com ). Webster’s similarly defines the term: “to engage the temporary use of for a fixed sum.” WEBSTER’S THIRD NEW INT’L DICTIONARY 1072 (1993). Likewise, Black’s Law Dictionary defines the term to mean: “[t]o purchase the temporary use of a thing.” BLACK’S LAW DICTIONARY 729 (6th ed.1990).

Avalos v. Duron, 37 Fed. Appx. 456, 460-61 (10th Cir.2002) (unpublished opinion) (cited in Oostdyk & Simpkins Br. 9). Oostdyk and Simpkins do not reference any other portion of the Avalos opinion. However, applying the plain and ordinary meaning to the circumstances in Avalos, which are nearly identical to those in the instant case, the Tenth Circuit concluded that the party in B.K.’s position did not “hire” the tractor of the party in F.O .T.’s position.

The relevant facts of Avalos are as follows. Citywide (analogous to B.K.) had a contract with UPS under which Citywide would provide drivers with equipment to transport UPS cargo. Avalos, 37 Fed. Appx. at 457. Citywide also had a “Common Carrier/Contract Agent Contract” with EDT (analogous to F.O.T.). Id. The Citywide-EDT agreement provided that EDT would transport UPS shipments for Citywide ” ‘in situations where Citywide did not have enough tractors or drivers of its own to transport all UPS … loads.” ‘ Id. EDT was transporting a UPS load when the truck became involved in the accident at issue in the case. Both Citywide and EDT had commercial insurance policies in effect at the time of the accident that arguably provided coverage for the tractor involved in the accident.

To emphasize the similarities, the relevant facts of the instant case are as follows. B.K. had a contract with Chiquita to transport its cargo. Although B.K. did not have a written contract with F.O.T., B.K. often contracted with F.O.T. through Oostdyk to arrange for F.O.T. to transport a Chiquita load when B.K. did not have the equipment or personnel available to transport the load itself. F.O.T. owned its own tractors, which it would use to haul B.K.’s trailers. F.O.T. (via driver Simpkins) was transporting the B.K. trailer, which was carrying Chiquita’s load, at the time of the accident. [FN12] Both B.K. and F.O.T. have insurance that arguably covers the tractor involved in the accident.

FN12. Actually, the trailer was not attached to the tractor at the time of the accident. Although the defendants spend a significant amount of time in their respective briefs arguing that the trailer not being connected at the time of the accident is insignificant, Oostdyk & Simpkins Br. 11-13, Westport Br. 12, Occidental neither raises that as an issue in its primary brief nor responds to defendants’ argument on that issue in its reply brief. Accordingly, I will consider the point conceded, and therefore insignificant for the analysis of the main issue, whether or not B.K. “hired” F.O.T.’s tractor.

Citing a Fifth Circuit case, the court in Avalos found that “Citywide did not procure, engage or purchase the temporary use of EDT’s tractor,” Avalos, 37 Fed. Appx. at 461 (citing Liberty Mut. Fire Ins. Co. v. Canal Ins. Co., 177 F.3d 326, 333-34 (5th Cir.1999)), and accordingly concluded that “Citywide did not ‘hire’ EDT’s tractor.” Id. The court found, instead, that Citywide had subcontracted with EDT to perform work that Citywide had contracted with UPS to perform. “In other words, Citywide engaged EDT to perform a service, i.e., ‘the transportation of commodities’ from one location to another.” Id. (citation omitted). The court reasoned that “Citywide had no right under its contract with EDT to specify the use of a particular vehicle, nor did it have the right to specify a particular driver or route (even though the start and destination were obviously controlled by UPS).” Id. (emphasis added) Rather, as the court pointed out, “EDT had complete control over the vehicle, driver, and route chosen to complete the task …. [and] EDT had the right under the contract to ‘decline any load with or without reason to’ Citywide.” Id. Despite failing to address this issue directly, Occidental has pointed out facts that make it clear B.K. and F.O.T. were in the exact same situation as Citywide and EDT, respectively.

Occidental simply points out that “F.O.[T.] remained in exclusive control of the truck,” Occidental Reply Br. 13, and “B.K. never had any authority over the truck.” Id. at 16. Although it does not reference Canal (nor any case in support of its position, for that matter), this statement addresses the reasoning the Fifth Circuit used in that case. The court wrote, “Although it incidentally contemplated the use of a vehicle in order for McConnell to fulfill his contractual obligations, the Agreement does not require McConnell to use any particular vehicle and did not entitle ATCO to operate, direct, or control any of McConnell’s vehicles or drivers.” Canal, 177 F.3d at 334. The point Occidental is apparently trying to make is that B.K. never had exclusive control of F.O.T.’s tractor or driver Simpkins. As the court made clear in Avalos, the factors to consider when determining whether or not B.K. had “exclusive control” of the tractor are the extent to which B.K. controlled the driver, the vehicle or the route taken by the driver with the vehicle. See Avalos, 37 Fed. Appx. at 461. Relying on these decisions from the Fifth and Tenth Circuits, I consider each of these factors in turn.

A. Route

Oostdyk and Simpkins readily admit that “[t]he only requirement that B.K. Leasing puts on owner/operators carrying its loads is the time of delivery. [B.K.] does not dictate the route an owner/operator takes to get a load to its final destination.” Oostdyk & Simpkins Br. 4; see also Kargman Dep. at 14 (“[F.O.T.] gets the information on the particulars, as far as where the load is going. I tell [F.O.T.] what time the load should be there, within a range, and then [F.O.T.] does the rest ….”); id . at 109-10 (responding to the question, “As long as [the driver] gets the load up to Portland, Maine by nine a.m. or whenever it’s due, it’s not dictated by you, what route he takes; is that correct?,” by saying, “Not dictated, no.”). Westport does not contend, nor produce evidence in support of a contention that B.K. controlled the route taken by F.O.T.’s drivers transporting B.K. trailers. Occidental did not discuss this issue in any of its briefs, as neither party disputed this fact. So, it is undisputed that B.K. did not control the route taken by F.O.T.’s drivers hauling B.K. loads.

B. Drivers

Westport does contend that B.K. had a certain amount of control over the drivers. In support of its contention that B.K. had sufficient control over the tractor to conclude that B.K. “hired” the tractor, Westport writes, “B.K., on occasion, instructed [F.O.T .] not to use certain drivers. Ultimately, B.K. had the right to say yes or no to a particular driver.” Westport Br. 13. Westport cites the deposition testimony of Kargman, who explained, “There have been some drivers that, due to bad attitude or customer complaints, I would say [to F.O.T.] I never want to haul a load again.” Kargman Dep. at 99. Kargman also said that he had told F.O.T. that it had to get rid of a certain driver. Id. Oostdyk and Simpkins also cite deposition testimony of Simpkins, in which he explained that while hauling loads for B.K. Simpkins would call in to B.K. after he picked up the load, after he unloaded, and sometimes at some point on the way back from Maine to see if B.K. wanted any other loads picked up for the return trip. Simpkins Dep. 28-30. Although these statements indicate a certain amount of control over the driver of B .K.’s loads and its trailer, it is clear that B.K. did not assert the kind of control necessary to conclude that B.K. “hired” the tractor.

As the Fifth Circuit has noted, “Courts have repeatedly held that an employer has a right to exercise such control over an independent contractor as is necessary to secure the performance of the contract according to its terms in order to accomplish the results contemplated by the parties in making the contract.” Johnson v. Royal Indem. Co., 206 F.2d 561, 564 (5th Cir.1953). B.K. only asserted the minimum amount of control necessary to ensure (or, at least, increase the probability) that the loads B.K. was engaging F.O.T. to transport would arrive on time and in accordance with B.K.’s contract with Chiquita. It is important to remember that the “control over the driver” criterion is only important as far as it indicates a degree of control over the tractor (i.e., to the degree it shows that B.K. had “exclusive use and control of the vehicle”). The driver is ultimately the person who “controls” the tractor. However, if the driver takes orders from his employer regarding use of the tractor (i.e., where to get fuel, what type of fuel to get, what route to take, how to properly maintain the tractor, etc.), then it is clear that the employer is really in control of the tractor, though not operating its physical mechanisms. So, the point in the inquiry is whether B.K. controlled the driver to the point of controlling the tractor. Obviously, if B.K. had provided its own employee to drive F.O.T.’s tractor, then B.K. would have had complete control of the tractor through its driver. Such was not the case. Refusing to accept a particular driver on a particular load (but not the load involved in the instant case) and requiring minimal reports on the status of a particular shipment do not indicate the degree of control of a driver that can be equated with control of the tractor.

The overwhelming majority of uncontradicted testimony from B.K.’s owner supports this conclusion. Kargman explained that, in general:

I don’t have any dealings with his drivers. When I have loads going to Portland, Maine, going to Buffalo, New York, I will tell [F .O.T.], today I have two loads, three loads. He assigns drivers. And since he has control of the drivers and it’s none of my concern who the drivers are, as long as they get there on time, we don’t know if Oscar Simpkins, Joe Blow, et cetera, is the driver, unless there’s a breakdown or a problem…. Otherwise, we don’t know, on a regular basis, who the drivers are on these loads.

Kargman Dep. at 11-12. Kargman also stated that he never dictated to F.O.T. who could drive a certain load, id. at 98, and he never told F.O.T. that it had to use a certain driver for a particular load. Id. at 99. Neither Oostdyk and Simpkins nor Westport points to testimony or evidence that contradicts these statements. Hence, it is clear that B.K. did not exert sufficient control over the drivers to conclude that it “hired” F.O.T.’s tractor.

C. Vehicle

Defendants argue that B.K. obtained the temporary use of the tractor in exchange for a fixed sum of money. See Westport Br. 10; Oostdyk & Simpkins Br. 9. Of course, defendants do not define “use” or provide court interpretations of “use” in the context of the tractor. Rather, they seem to argue that since F.O.T. cannot use the tractor for any other purpose while hauling B.K.’s load or while returning from hauling B.K.’s load, B.K. is obtaining the use of the tractor. First, Westport’s assumption that the load consists only of the items within the trailer is flawed. B.K. pays F.O.T. a fixed sum for F.O.T. to transport B.K.’s trailer to point A, load the trailer, travel to point B, unload the trailer and then return B.K.’s trailer. See Kargman Dep. 104 (“I pay him up and back, one rate.”). In other words, until F.O.T. returns B.K.’s trailer, F.O.T .’s tractor is still hauling B.K.’s “load.” Second, as evidenced from the facts surrounding the accident, F.O.T. was free to use the tractor for purposes other than the explicit transport of B.K.’s trailer during its trip from point A to point B. More specifically, F.O.T.’s driver could detach the trailer, containing B.K.’s load, and drive the tractor to a gas station in order to obtain cash. If the tractor was in exclusive use and control of B.K., such activity would not be permitted, or, at least, F.O.T.’s driver would need to obtain permission from B.K. for such an excursion.

The Fifth Circuit clarified the necessary relationship between the entity allegedly hiring the tractor and the tractor itself for a court to find that the entity was, for legal purposes, “hiring” the tractor. The court looked at whether the “hiring” entity: (1) furnished the gas or oil or otherwise maintained the tractor; (2) required the trucks to be a certain size or require a certain number of loads per day; (3) selected individual drivers; (4) could fire truck drivers; (5) was interested only in the results of transporting from point A to point B; and (6) assumed control of the truck or driver by directly loading and unloading operations. Toops v. Gulf Coast Marine Inc., 72 F.3d 483, 487-88 (5th Cir.1996) (citing a prior case from the Fifth Circuit and a case from the Eighth Circuit). According to Kargman’s testimony, B.K. was only interested in getting the load from point A to point B, and there is no evidence that B.K had any other relationship with either the tractor or driver directly.

Further, the Fifth Circuit explicitly stated that “for a vehicle to constitute a hired automobile, there must be a separate contract by which the vehicle is hired or leased to the named insured for his exclusive use or control.” Sprow v. Hartford Ins. Co., 594 F.2d 418, 422 (5th Cir.1979); see also Russom v. Ins. Co. of North America, 421 F.2d 983, 993 (6th Cir.1970) ( “Where there is a separate contract for hiring or leasing a vehicle in addition to an agreement to haul a particular load, courts have held that the vehicle becomes a ‘hired automobile.” ‘). Even if there is no specific contract in place for a certain truck, if the “hiring” entity demands a particular vehicle, one could argue that he is legally “hiring” the truck in addition to contracting for the hauling service. Kargman’s testimony makes clear that he did not demand any particular tractor from F.O.T.:

I don’t know if he has exclusive trucks that work with me or not. Again, we have no record of what he owns, what he doesn’t own, what he leases. We know he owns trucks. I deal with him. He assigns the trucks and drivers…. [T]here’s nothing exclusively I’m under the control of, because he has the right–if I need extra trucks, [F.O .T.] has the right to say[, “W]e don’t want to haul today, we’re too busy today, we don’t have any trucks today.[“] There’s no exclusive use of any such nature.

Kargman Dep. 10-11. According to Kargman, he could not demand a particular tractor from F.O.T. because he was not even aware of what tractors F.O.T. had for hauling loads. Defendants do not produce evidence to contradict this statement by Kargman. Hence, it is clear that B.K. did not exert sufficient control over the vehicle for this court to find that B.K. “hired” the tractor.

In sum, although B.K. exerted some limited control over the driver (ability to refuse certain drivers, requiring drivers to report to B.K. occasionally while hauling B.K. loads), B.K. did not exert any control over the route or the vehicle itself. The minor amount of control exerted over the driver is insufficient to support a finding that B.K. “hired” the tractor, as opposed to the transportation services of F.O.T. This means that the tractor was not a “hired auto” under B.K.’s Occidental policy.

Occidental also argues that even if the vehicle is found to be a “hired auto,” F.O., Oostdyk and Simpkins are not insured under B.K .’s Occidental policy because of the reciprocal insurance coverage clause of the policy. The policy provides:

[N]one of the following is an “insured”:

a. Any “trucker” or his or her agents or “employees” other than you and your “employees”: …

(2) If the “trucker” is not insured for hired “autos” under an “auto” liability insurance form that insures on a primary basis the owners of the “autos” and their agents and their “employees” while the “autos” are being used exclusively in the “truckers” [sic] business and pursuant to operating rights granted to the trucker by a public authority.

Occidental Policy at Truckers Coverage Form 3. As explained above, the Westport policy only provides coverage for “specifically described autos.” Westport Policy at Truckers Coverage Form Declarations & Truckers Coverage Form. It does not cover “hired” autos generally, as does the Occidental policy. There were no “hired” autos listed on the Westport policy at the time of the accident. Id. Occidental argues that since F.O.T.’s insurance policy with Westport did not provide for coverage of any hired autos, the reciprocal insurance coverage clause precludes F.O., Oostdyk and/or Simpkins from being covered as “insureds” under the Occidental policy. Although Westport does not respond to this argument in its brief, at oral argument it argued that “hired” autos were not specifically excluded from coverage under the Westport policy and therefore could be covered if they were listed on the appropriate schedule. Although there is the possibility that a “hired” auto could be covered by F.O.T.’s Westport policy, the fact of the matter is that at the time of the accident, the only point in time the court can consider when interpreting an insurance policy, the policy did not cover any “hired” autos. Therefore, it is clear that even if the court found the vehicle to be a “hired” auto under the Occidental policy, which I do not, F.O., Oostdyk and Simpkins would not be considered “insureds” under the policy because of the reciprocal insurance coverage clause. Accordingly, Occidental’s motion for summary judgment will be granted.

II. Coverage Under Westport Policy

Westport argues that since the tractor involved in the accident is not a “covered auto” under its policy, it has no liability for the accident. More specifically, Westport contends that since the tractor was not “specifically described” in item three of the declaration attached to the policy, it is not a covered auto under the policy. At oral argument the parties agreed that F.O.T.’s Westport policy did not specifically list the tractor as a “covered auto” and, therefore, does not cover the tractor. It is clear that the Westport policy does not cover the tractor involved in the accident and summary judgment was entered in favor of Westport on this point, accordingly.

However, in its motion for summary judgment Westport admits that it is liable “to satisfy ‘any final judgment recovered against the insured …’ where there is no other collectible insurance.” Westport Br. 3. Since the court has already concluded that neither the Occidental policy nor the Westport policy applies to the tractor at issue, it is clear that Westport is liable to its insured [FN13] pursuant to its MCS-90 endorsement. As Westport explains:

FN13. As noted earlier, Westport raised an issue at oral argument as to who was its insured, Frank Oostdyk or F.O. Transport, Inc. That issue is not before the court at this time.

The MCS-90 endorsement requires an insurance carrier to pay “any final judgment recovered against such motor carrier for [public liability] (personal injury or property damage) resulting from the negligent operation, maintenance or use” of vehicles operated by a motor carrier. The endorsement requires payment “regardless of whether or not each motor vehicle is specifically described in the policy.”

Westport Br. 16 (quoting MCS-90 endorsement). Again, no party disputes that Westport is liable pursuant to its MCS-90 endorsement.

Despite Westport’s admission of liability for any judgment recovered against its insured (whether its insured is F.O. Transport d/b/a Frank Oostdyk or F.O. Transport, Inc.), Westport also argues that it is entitled to reimbursement from its insured “for any monies Westport is required to expend, including, but not limited to, counsel fees in defending the underlying action.” Westport Br. 16-17. The language of the endorsement specifically provides for this:

‘The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of the policy, and for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.’

Id. at 16 (quoting MCS-90 endorsement). The Third Circuit has also made it clear that if an insurer is forced to defend the insured because of the endorsement, “the insurer may subsequently proceed against its insured for any payments which the insurer makes under the endorsement, but which it would not otherwise have been required to make.” Carolina Cas. Ins. Co. v. Insurance Co. of North America, 595 F.2d 128, 136 (3d Cir.1979). Accordingly, Westport requests this court to enter an order compelling F.O. and Oostdyk to reimburse Westport for its expenses (including defense costs and indemnity payments) related to the underlying suit. Surprisingly, Oostdyk and Simpkins do not present any arguments in opposition to this position. It is clear that Westport is entitled to reimbursement from its insured. However, because Westport has raised a factual issue concerning the identity if its insured and apparently has not yet made any payments under the policy, the court cannot grant summary judgment against Frank Oostdyk or F.O. Transport, Inc. at this juncture.

CONCLUSION

B.K. engaged F.O.T. to haul B.K.’s trailer to Wilmington, Delaware, pick up a load from Chiquita, travel to Portland, Maine, drop off the Chiquita load, and return the trailer to B.K. During this trip, F.O.T.’s tractor, driven by Simpkins, was involved in an accident with a pedestrian. The pedestrian has sued B.K., F.O., Simpkins and Oostdyk in the Philadelphia Court of Common Pleas. The insurance companies, whose policies with one or more of the defendants in the underlying action arguably cover one or more of these defendants in some respect, all argue that the other company’s policy actually covers the defendants and that their respective policy does not cover these defendants. Based on the undisputed facts of the case, it is clear that B.K.’s Occidental policy does not cover any of the defendants other than B.K. Although F.O.T.’s Westport policy does not explicitly cover any of the defendants, Westport must provide coverage to its insured (whoever that may be) for the accident because of the MCS-90 endorsement contained in the policy. However, Westport is entitled to reimbursement from its insured for its expenses related to the underlying suit. An appropriate order follows.

ORDER

And now, this ______ day of September, 2004, upon consideration of Occidental Fire and Casualty Company of North Carolina’s motion for summary judgment and accompanying memorandum of law (Doc. # 43), defendants’ responses in opposition thereto, defendant Westport Insurance Corp.’s motion for summary judgment and accompanying memorandum of law (Doc. # 46), defendants’ response thereto, defendants Oostdyk and Simpkins’ motion for summary judgment and accompanying memorandum of law (Doc. # 47), defendants’ response thereto, and plaintiff’s response in opposition to all motions for summary judgment by defendants and after oral argument, it is hereby ORDERED that:

(1) Occidental Fire and Casualty Company of North Carolina’s motion for summary judgment is GRANTED, the court DECLARES that Occidental is not obligated to provide coverage to Oscar Simpkins, Frank Oostdyk or F.O. Transport, Inc. on the claims of Regina Smith arising out of the October 31, 2001 accident and judgment is entered in favor of Occidental and against all defendants;

(2) Westport Insurance Corp.’s motion for summary judgment is DENIED on its counterclaims against Occidental Fire and Casualty Company of North Carolina and the court DECLARES that Westport is obligated to provide coverage to its insured (whether it is Frank Oostdyk or F.O. Transport, Inc. or both) on the claims of Regina Smith arising out of the October 31, 2001 accident based on Westport’s MCS-90 endorsement;

(3) Westport Insurance Corp.’s motion for summary judgment is GRANTED IN PART on its crossclaims against Frank Oostdyk and F.O. Transport, Inc. and the court DECLARES that Westport Insurance Corp. is entitled to reimbursement from its insured (whether it is Frank Oostdyk or F.O. Transport, Inc. or both) for monies expended pursuant to the MCS-90 endorsement;

(4) Frank Oostdyk and Oscar Simpkins’ motion for summary judgment is DENIED’

(5) A status conference is SCHEDULED for September 23, 2004 at 4:15 p.m. in chambers. If the parties do not feel that a status conference is necessary to conclude this litigation they should so advise the court, the conference will be cancelled and final judgment entered in accordance with the above.