District Court of Appeal of Florida,

Third District.

EAST FLORIDA HAULING, INC., Appellant,

v.

LEXINGTON INSURANCE COMPANY, Appellee.

Sept. 21, 2005.

CORTIÑAS, Judge.

The plaintiff, East Florida Hauling, Inc. (“EFH”) appeals from a final order granting the defendant’s, Lexington Insurance Company’s (“Lexington”), motion for summary judgment finding that Lexington owed no duty to defend and that Lexington’s liability, if any, is limited by the “limitation on certain commodities” clause (“target commodities endorsement”). We affirm.

EFH is in the business of transporting trailers throughout the United States. Under applicable federal law, EFH is required by the Federal Motor Carrier Safety Administration to maintain commercial auto liability and cargo liability insurance coverage for the protection of both the public and the owner of the cargo entrusted to EFH for transportation. EFH was covered by a motor truck cargo liability insurance policy (“policy”), which was written by Lexington. Subject to limitations, that policy assumed EFH’s legal liability for the property of others under EFH’s bill of lading while the property was in transit and in the custody of EFH.

On October 5, 2002, a sealed trailer was stolen from EFH’s possession near Tallahassee, Florida, while the trailer was enroute from Miami, Florida to Laredo, Texas. The stolen cargo belonged to Robinson Company, Inc. (“Robinson”). On October 21, 2002, EFH made a claim to Lexington under its motor cargo insurance policy for the theft of the cargo. At that time, Lexington began investigating the claim.

In April 2004, Robinson sued EFH for breach of contract for non-delivery, seeking over $300,000 for the value of the cargo contents and alleging that the cargo contained “electronic goods” (“main lawsuit”). EFH promptly forwarded the main lawsuit to Lexington asserting that Robinson’s allegations fell within the coverage provisions and demanding that Lexington defend the suit. On April 7, 2004, Lexington notified EFH that it declined to defend EFH and that its maximum exposure under the policy was $20,000 because the policy contained a clause setting forth a target commodities endorsement which stated, in relevant part:

FN1. This amount represents ten percent (10%) of the $250,000 policy limit per vehicle minus the $5,000 deductible.

H. LIMITATION ON CERTAIN COMMODITIES

In the event of “loss” by theft of the following commodities from a vehicle, we will not be liable for more than 10% of the Limit of Insurance applying to that vehicle:

a. Audio and Video Equipment.

Lexington further noted that, since EFH’s bill of lading provided for a 50 cents per pound limitation, the limit of liability would be $16,220 as the cargo weighed 32,440 pounds. Therefore, Lexington offered EFH a settlement of $16,220 minus $5,000 deductible for a net amount of $11,220. However, prior to offering to settle with EFH for $11,220, Lexington offered to resolve the claim with Robinson for $25,000, but Robinson refused.

Lexington’s refusal to defend EFH was based on the “Commercial Inland Marine Conditions” section of the policy which stated, in relevant part:

H. PRIVILEGE TO ADJUST WITH OWNER

In the event of “loss” involving property of others in your care, custody, or control, we have theright to:

1. Settle the “loss” with the owners of the property. A receipt for payment from the owners of that property will satisfy any claim of yours.

2. Provide a defense for legal proceedings brought against you. If provided, the expense of this defense will be at our cost and will not reduce the applicable Limit of Insurance under this insurance. (emphasis added).

On July 1, 2004, EFH filed a Third Party Complaint against Lexington, seeking declaratory relief and alleging that Lexington breached its contract with EFH when it failed to: 1) defend EFH; 2) investigate and resolve the subject claim directly with Robinson; 3) apply the correct principles of contract interpretation to the target commodities endorsement; 4) fulfill its obligation to EFH; and 5) act in good faith. EFH also sought indemnity for its costs to defend and investigate claims under the main lawsuit.

On October 15, 2004, Lexington filed a motion for summary judgment, attaching the affidavit of Mamie S. Landers (“Landers”), Lexington’s claims professional. The motion and affidavit were supported by three commercial invoices submitted by Robinson to EFH. Based on the invoices, Landers concluded that the contents contained in the cargo constituted audio and video equipment. This classification reduced Lexington’s coverage to ten percent (10%) of the policy limit.

In response to Lexington’s motion, EFH filed the affidavit of Robert Acuna, president of EFH, admitting his knowledge of the target commodities endorsement in the policy since it had been the subject of Lexington’s prior reservation of rights letters. Acuna stated that, over the course of several years that Lexington provided cargo insurance to EFH, Lexington defended over five cargo claims filed against EFH similar to the instant claim. Lexington had never declined to defend EFH, although it had issued reservation of rights letters. Acuna also asserted that he was never advised that the duty to defend clause was exercised solely at the discretion of Lexington nor was he advised of any standards, rules, or guidelines by which the duty to defend was either exercised or refused.

On January 6, 2005, the trial court granted Lexington’s motion for summary judgment and dismissed EFH’s Third-Party Complaint. The trial court found that Lexington had “no duty to defend EFH in the main lawsuit and that Lexington’s liability, if any, is limited to a net amount of $20,000, 10% of $250,000 = $25,000, less the $5,000 deductible….”

We review the trial court’s interpretation of an insurance policy and entry of summary judgment de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (Fla.2000); Siegle v. Progressive Consumers Ins. Co., 788 So.2d 355, 357 (Fla. 4th DCA 2001) aff’d, 819 So.2d 732 (Fla.2002). When granting a motion for summary judgment, the trial court must determine that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.Volusia, 760 So.2d at 130. The moving party bears the burden of conclusively demonstrating the absence of triable issues. Moore v. Morris, 475 So.2d 666, 668 (Fla.1985). In reviewing a summary judgment, this court views the evidence in a light most favorable to the nonmoving party, drawing all reasonable inferences derivable from the evidence in favor of the nonmoving party. See Cox v. CSX Intermodal, Inc., 732 So.2d 1092, 1095 (Fla. 1st DCA 1999).

The first issue on appeal is whether the lower court properly determined that Lexington’s insurance policy created a right rather than a duty to defend EFH. Either a statute or a contract may confer on the insurer a duty to defend. Allstate Ins. Co. v. RJS Enters., Inc., 692 So.2d 142, 144(Fla.1997). Since there is no applicable statute, this court must examine the policy language to determine whether the trial court erred in granting summary judgment in favor of Lexington. When the language of an insurance policy is clear and unambiguous, a court must interpret it according to its plain meaning, giving effect to the policy as it was written. See Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So.2d 161, 165 (Fla.2003). However, if the language of the policy is susceptible to more than one reasonable interpretation, it is ambiguous, and a court will resolve such ambiguity in favor of the insured. Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla.2000).

EFH argues that the policy language regarding Lexington’s right to defend creates doubt as to whether there is an obligation, rather than an option to defend, and that such doubt must be resolved in favor of EFH. It further argues that Lexington’s fiduciary obligation to its insured forbids it from exercising an option, at its unilateral discretion, to refuse to defend its insured when the claim clearly falls within the policy’s coverage provisions.

Lexington, on the other hand, contends that the insurer does not have an absolute duty to defend in every instance where a claim falls under the coverage provisions. Lexington further contends that the nature and scope of the duty to defend is created in the insurance contract, which may relieve the insurer of any obligation to defend. “Since the contract terms govern the duty, an insurance policy may relieve the insurer of any duty to defend, or give the insurer the right, but not the duty, to defend.” 14 Lee R. Russ & Thomas F. Segalia, Couch on Insurance 3D 200:5 (1999). Lexington also contends that the clause at issue, “Section H, Privilege to Adjust with Owner,” is clear and unambiguous. It claims that the clause creates a right, rather than a duty to defend, as made clear by the language “if [defense is] provided,” thus confirming the discretionary nature of the subject section of the policy. We agree.

EFH relies on Rad Source Techs. Inc. v. Essex Ins. Co., 902 So.2d 264, 267 (Fla. 4th DCA 2005), to illustrate that, when policy language is determined to be ambiguous, such an ambiguity will be resolved in favor of the insured. However, the provision in question in Rad Source involved policy language which is distinguishable from the instant case. In Rad Source, the policy provided that “[t]his Company reserves the right as its sole option to defend … and will pay all legal expense incurred by this Company in connection with any action it undertakes to defend….” Id. at 265 (emphasis added). The Fourth District found that language to be ambiguous because the provision could be reasonably interpreted in at least three different ways: (1) “as its sole option” could mean that the insurer’s only option is to defend; (2) “it undertakes to defend” could refer to claims that the insurer could refuse to defend on the basis that the claims are not covered under the policy; or (3) the language could also mean that the insurer is reserving the right to defend to prohibit the insured from independently proceeding with its defense. Id. at 266-67. The policy language in our case is clearly different from the language in Rad Source and does not lend itself to more than one reasonable interpretation.

Although Florida courts have not interpreted the specific clause at issue in the instant case, Florida law has recognized that an insurance policy may relieve the insurer of an obligation to defend its insured by reserving a right, at the insurer’s discretion, to defend an action. See PT Indonesia Epson Indus. v. Orient Oversees Container Lines Inc.,No. 99CV3373, 2002 WL 561376, at *3 (S.D.Fla.2002). PT Indonesia involved an insurance provision which stated, in relevant part:

The insured shall not voluntarily admit any liability nor settle any claims … without the specific authority of this [c]ompany, nor shall they interfere with any negotiations for settlements…. In the event of legal action brought against the insured … which might constitute a claim under this policy, the insured shall give immediate notice … and this [c]ompany reserves the right at its sole option to defend such action.

Id. at *1 (emphasis added). The court concluded that the unambiguous language of the policy plainly meant that the insurer had the option not to provide a defense. Id. at *2. Thus, even when the insured agrees to relinquish control of the investigation to the insurer, the insurer may exercise the right to refuse to defend the insured.

Moreover, case law from other jurisdictions guides this court in its construction of the policy provision in the instant case. A state court in Nebraska and a federal court in Illinois addressed the exact same insurance provision at issue. Both courts were in agreement that where policy language creates a right to defend, it is clear and unambiguous that it does not create a duty on the part of the insurer. Centennial Ins. Co. v. Transittal Servs., Inc., No. 00C1383, 2001 WL 289879, at *3 (N.D.Ill.2001); Ohio Cas. Ins. v. Carman Cartage Co., Inc., 636 N.W.2d 862, 867 (Neb.2001).

The court in Centennial held that, even when the complaint in the underlying lawsuit alleges facts within the coverage of the policy, if the policy confers on the insurer only a right to defend, the insurer is not obligated to defend the insured.Centennial, 2001 WL 289879, at *3. It further held that the permissive language of the policy does not render the policy meaningless because the insurer is obligated, under a different provision, to pay for any loss covered under the policy.Id. In the instant case, even if it elects to refuse to defend EFH, Lexington will have to pay for any loss covered under the policy when liability is determined, because the duty to defend is separate from the coverage provisions of the policy.See Colony Ins. Co. v. G & E Tires & Serv., Inc., 777 So.2d 1034, 1036 (Fla. 1st DCA 2000).

Similarly, the Carman court concluded that the “Privilege to Adjust with Owner” provision at issue in that case, which contained the same language as the provision in the instant case, “clearly and unambiguously gives [the insurer] a right to defend claims against its insured and a right to settle such claims, but does not impose a duty upon it to do either.”Carman, 636 N.W.2d at 867. EFH’s attempt to cast Carman as inapplicable because the insurance contract involved inCarman was an inland marine policy providing for motortruck cargo coverage, rather than liability, is a distinction without a difference.

The second issue on appeal is whether the target commodities endorsement restriction applies to the goods that were contained in the stolen cargo. The burden is on the insured to prove that the insurance policy covers a claim against it.Hudson Ins. Co. v. Double D Mgmt. Co., Inc., 768 F.Supp. 1542 (M.D.Fla.1991). Once the insured shows coverage, the burden shifts to the insurer to prove an exclusion applies to the coverage. LaFarge Corp. v. Travelers Indem. Co., 118 F.3d 1511, 1516 (11th Cir.1997). If there is an exception to the exclusion, the burden once again is placed on the insured to demonstrate the exception to the exclusion. Id.

Here, Lexington submitted Landers’ affidavit, as well as three commercial invoices provided to EFH by Robinson and subsequently forwarded to Lexington as support for EFH’s claim. The invoices reflected that the cargo contained such items as “Sharp … Viewcam, 16X Zoom, … JVH SVHS-C Camera w/ … LCD-Light-Stabilizer, … Panasonic VHS-C Camcorder.” The relevant policy provision clearly and unambiguously reduced coverage for “Audio and Video Equipment,” and the items listed on the invoices squarely fall within this provision. EFH failed to present evidence demonstrating that there is a genuine issue of material fact as to whether an exception to the exclusion exists, or to dispute that it was transporting these items. Therefore, we find that the target commodities endorsement is clear and unambiguous and must be construed according to its plain meaning.

Affirmed.

United States District Court,

N.D. Texas, Dallas Division.

LINCOLN GENERAL INSURANCE COMPANY, Plaintiff,

v.

AUTOBUSES TIERRA CALIENTE, INC., Defendant.

Sept. 13, 2005.

MEMORANDUM OPINION AND ORDER

Before the court is Plaintiff’s Motion for Summary Judgment, filed January 28, 2005. After careful consideration of the motion, responses, briefs, reply, record, and the applicable law, the court denies Plaintiff’s Motion for Summary Judgment.

I. Factual and Procedural Background

Defendant Autobuses Tierra Caliente, Inc. (“Autobuses” or “Defendant”), a Texas corporation, operates passenger buses through several states, including Texas, and to the Mexican border. At that point, operation of the bus is taken over by Autobuses de Guerrerro, S.A. de C.V., as required by Mexican law. Plaintiff Lincoln General Insurance Company (“Lincoln” or “Plaintiff”) issued a business automobile coverage policy (“the Policy”) to Autobuses. The Policy covered the period from August 3, 2003, through August 3, 2004. The Policy provides:

SECTION II –LIABILITY COVERAGE

A. COVERAGE

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 have the right and duty to defend any suit asking for these damages. However, we have no duty to defend suits for bodily injury or property damage not covered by this Coverage Form. We may investigate and settle any claim or suit as we consider appropriate.

* * *

SECTION IV –BUSINESS AUTO CONDITIONS

* * *

B. GENERAL CONDITIONS

* * *

7. POLICY PERIOD, COVERAGE TERRITORY

Under this Coverage Form, we cover accidents and losses occurring;

a. During the policy period shown in the Declarations; and

b. Within the coverage territory.

The coverage territory is:

a. The United States of America;

b. The territories and possessions of the United States of America;

c. Puerto Rico; and

d. Canada.

We also cover loss to, or accidents involving, a covered auto while being transported between any of these places.

Plaintiff’s App. Exhibit C at 75, 81.

The Policy also had an Endorsement for Motor Carrier Policies of Insurance for Public Liability Under Section 18 of the Regulatory Reform Act of 1982 (“MCS-90B”). See Plaintiff’s App. Exhibit C at 100. The MCS-90B endorsement provides in pertinent part:

The insurance policy to which this endorsement is attached provides automobile liability insurance and is amended to assure compliance by the insured, within the limits stated herein, as a for-hire motor carrier of passengers with Section 18 of the Bus Regulatory Reform Act of 1982 and the rules and regulations of the Federal Highway Administration (FHWA) and the Interstate Commerce Commission (ICC).

In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees judg[ ]ment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to financial responsibility requirements of Section 18 of the Bus Regulatory Reform Act of 1982 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. Such insurance as is afforded, for public liability, does not apply to injury to or death of their employment, or property transported by the insured, designated as cargo. 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 judg[ ]ment, 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.

Id. (emphasis added).

On May 5, 2004, one of Defendant’s buses was involved in an accident along a highway in or around San Luis Potosí, Republic of Mexico. The bus was operated by Jorge Valdez Maldonado (“Maldonado”). Maldonado and three other individuals were killed. Fifteen other persons suffered personal injuries. Maria Lopez and Luis Enrique Alvarez, individually and as next friend of several others [FN1] (collectively “Intervenors”), filed suit against Autobuses as a result of the accident in the 298th Judicial District Court of Dallas County, Texas.

FN1. These persons are Rolando Mejia, Vanessa Alanis, Carlos Benitez, Ramona Patricia Alanis, and Ramona Patricia Alanis’s Unborn Child.

Lincoln filed this action against Autobuses on July 15, 2004, seeking a declaratory judgment that there is no coverage under the Policy for any damages claimed by Intervenors, and, therefore, it has no duty to defend Autobuses or Maldanado against any claims under the terms of the Policy. On January 28, 2005, Lincoln filed a motion for summary judgment contending that it does not have a duty to defend or indemnify the underlying lawsuit based on the following grounds: (1) as the accident occurred in Mexico, it was outside the Policy’s coverage territory; and (2) the MCS-90B endorsement to the Policy does not expand coverage to encompass an accident in Mexico because said location is beyond the jurisdiction of the Department of Transportation (“DOT”). On February 17, 2005, this court granted Intervenors’ Motion to Intervene. The court now considers the motion for summary judgment.

II. Analysis

A. Summary Judgment Standard

Summary judgment shall be rendered when 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 judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.1998). A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Ragas, 136 F.3d at 458. Further, a court “may not make credibility determinations or weigh the evidence” in ruling on motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000); Anderson, 477 U.S. at 254-55.

Once the moving party has made an initial showing that there is no evidence to support the nonmoving party’s case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir.1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to “sift through the record in search of evidence” to support the nonmovant’s opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n. 7 (5th Cir.), cert. denied, 506 U.S. 832, 113 S.Ct. 98, 121 L.Ed.2d 59 (1992). “Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248. Disputed fact issues which are “irrelevant and unnecessary” will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

B. Plaintiff’s Motion for Summary Judgment

The issues to be resolved by the court in deciding the motion for summary judgment depend on the extent of coverage by the Policy, the MCS-90B endorsement, and the DOT’s jurisdiction. Accordingly, the court addresses each of these matters in turn.

1. Coverage

a. Policy Coverage and the MCS-90B Endorsement

The specific liability coverage, policy period, covered territory, and MCS-90B endorsement are set out in Section I, supra. The DOT’s authority to require financial responsibility in the form of MCS-90B endorsement is pursuant to 49 U.S.C. 31138. This section provides:

The Secretary of Transportation shall prescribe regulations to require minimum levels of financial responsibility sufficient to satisfy liability amounts established by the Secretary covering public liability and property damage for the transportation of passengers for compensation by motor vehicle in the United States between a place in a State and–

(1) a place in another State;

(2) another place in the same State through a place outside of that State; or

(3) a place outside the United States.

Id. (emphasis added). Proof of financial responsibility may be shown by endorsements such as the Form MCS-90B endorsement in this case. Such endorsements are pursuant to Section 18 of the Bus Regulatory Reform Act of 1982 (“ACT”). This federally-mandated endorsement was required under the regulations of the now-defunct Interstate Commerce Commission (“ICC”). When the ICC was abolished, its authority to regulate carriers was transferred to the DOT, but the old regulations remain in effect until new ones are promulgated. See T.H.E. Ins. Co. v. Larsen Intermodal Servs., Inc., 242 F.3d 667, 672 (5 th Cir.2001) (citing John Deere Ins. Co. v. Nueva, 229 F.3d 853, 855 n. 3 (9 th Cir.2000). The policy embodied in the ICC regulations “was to assure that injured members of the public would be able to obtain judgments collectible against negligent authorized carriers.” Canal Ins. Co. v. First Gen. Ins. Co., 889 F.2d 604, 611 (5th Cir.1989). The insurer’s obligations under the endorsement are triggered when the policy to which it is attached provides no coverage to the insured. T.H.E. Ins. Co. v. Larsen, 242 F.3d at 272. The obligation placed upon the insurer by the endorsement is one of suretyship. See id.

b. DOT’s General Jurisdiction

The source of the DOT’s general jurisdiction is set forth in 49 U.S.C. § 13501(1)(E). This section provides:

§ 13501. General jurisdiction

The Secretary and the Board have jurisdiction, as specified in this part, over transportation by motor carrier and the procurement of that transportation, to the extent that passengers, property, or both, are transported by motor carrier–

(1) between a place in–

(A) a State and a place in another State;

(B) a State and another place in the same State through another State;

(C) the United States and a place in a territory or possession of the United States to the extent the transportation is in the United States;

(D) the United States and another place in the United States through a foreign country to the extent the transportation is in the United States; or

(E) the United States and a place in a foreign country to the extent the transportation is in the United States; and

(2) in a reservation under the exclusive jurisdiction of the United States or on a public highway.

2. Analysis

Lincoln contends that the Policy does not cover the accident that is the basis of this lawsuit because it occurred in Mexico, which was not part of the coverage territory. Lincoln also maintains that the MCS-90B endorsement does not extend coverage for this accident because the DOT is without jurisdiction to regulate commerce or transportation in Mexico. Lincoln asserts that § 13501 limits the DOT’s jurisdiction to regulation of transportation and commerce inside the United States. Lincoln maintains that nowhere in the legislation creating or authorizing the DOT has Congress evidenced an intent that the MCS-90B endorsement applies to territories outside the United States. Lincoln further contends that congressional legislation is meant to apply only within the territorial jurisdiction of the United States, unless a contrary intent appears in the legislation.

Autobuses counters that Lincoln is mistaken in its interpretation of 49 U.S.C. § 13501. Autobuses contends that the grant of jurisdiction in 49 U.S.C. § 13501(1)(E) applies to acts of motor carriers that occur in the United States, such as selling tickets and operating buses. It argues that 49 U.S.C. § 31138 specifically provides that the DOT shall require minimum levels of financial responsibility to cover property damages and injuries to passengers including transportation between the Unites States and places outside the United States.

Intervenors likewise argue that 49 U.S.C. § 31138 specifically vests the DOT with the authority to require financial responsibility for individuals traveling from the United States to places outside the United States. They also point out that the MCS-90B endorsement in this case states that the coverage area includes “any route or in any territory authorized to be served by the insured or elsewhere. See Plaintiff’s App. Exhibit C at 100. Intervenors maintain that “elsewhere” includes Mexico, and that is the purpose of the MCS-90B endorsement. Intervenors further argue that since Autobuses travels between Texas and Mexico, the original Policy without the endorsement covers all travel within Texas; and the purpose of the MCS-90B endorsement is to extend coverage when the buses are in Mexico in compliance with 49 U.S.C. § 31138.

Regarding Lincoln’s argument that the DOT does not have jurisdiction to regulate transportation outside the United States, Intervenors maintain that the statute cited by Lincoln, 49 U.S.C. 13501(1)(E) only applies to interstate transportation and that the applicable provision is 49 U.S.C. § 31138. This section specifically mandates the Secretary of Transportation to require bus companies to carry minimum financial responsibility in cases of an accident.

The court agrees with Autobuses and Intervenors. The meaning of 49 U.S.C. § 31138 is clear. The DOT has authority to require bus companies to have a minimum level of financial responsibility that protect travelers between the United States and places outside the United States. Thus, the MCS-90B endorsement in this case covers the accident that occurred in Mexico. Further, the endorsement here states that it provides liability protection “whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere.” See Plaintiff’s App. Exhibit C at 100. Lincoln has therefore not established that no genuine issue of material fact exists with respect to the issue of coverage; and thus it is not entitled to judgment as a matter of law. Accordingly, the court finds that Lincoln’s motion for summary judgment should be denied.

III. Conclusion

For the reasons stated herein, Lincoln has not shown that there is no genuine issue of material fact as to whether the MCS-90B endorsement imposes a duty on Lincoln to defend and indemnity the underlying lawsuit. Accordingly, Lincoln is not entitled to summary judgment on its claim for declaratory judgment, and the court denies Plaintiff’s Motion for Summary Judgment.

Neither Defendant nor Intervenors filed a motion for summary judgment. The essence of the court’s ruling is that Defendant and Intervenors appear to be entitled to summary judgment on the issue of Lincoln’s duty to defend and indemnify Defendant for the underlying lawsuit. In order to determine whether summary judgment is appropriate on behalf of Defendant and Intervenors, the court directs Defendant and Intervenors to file a motion for summary judgment no later than October 3, 2005. The response and replies are to be filed in accordance with the Local Rules of the Northern District of Texas.

It is so ordered.