2023 WL 2163467

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United States District Court, D. New Jersey.

SUPERIOR TOWING AND TRANSPORT, LLC, Plaintiff,

v.

J.B. HUNT TRANSPORT INC., et al., Defendants.

Civil Action No. 21-cv-00900-PGS-LHG

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Signed February 21, 2023

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Filed February 22, 2023

Attorneys and Law Firms

Timothy Donald Barrow, Grist Mill Square, Lebanon, NJ, for Plaintiff.

Anthony D. Luis, Rawle & Henderson LLP, New York, NY, for Defendants J.B. Hunt Transport, Inc., Crown Cork & Seal USA, Inc.

Stephen V. McHugh, Kent & McBride, PC, Cherry Hill, NJ, for Defendant Progressive Mountain Insurance Company.

MEMORANDUM AND ORDER

PETER G. SHERIDAN, United States District Judge

*1 This matter is before the Court on a Motion to Enforce a Judgment filed by plaintiff Superior Towing and Transport, LLC’s (“Plaintiff” or “Superior Towing”). (ECF No. 42). Superior Towing seeks to enforce a money judgment it previously obtained as to M & C Express Transport Inc. (“M & C Express”) against defendant Progressive Mountain Insurance Company (“Progressive”), the insurer of M & C Express, under the federally mandated policy endorsement (Form MCS–90).

I.

On January 19, 2021, Superior Towing commenced the instant action against defendants J.B. Hunt Transport, Inc., M & C Express, Crown Cork & Seal USA, Inc. and Progressive. Superior Towing seeks to recover clean-up and storage costs that stem from a motor vehicle accident that occurred when an M & C Express driver lost control of a freightliner and crashed into a guard rail on I-78 in Clinton, New Jersey. At the request of the police, Superior Towing responded to the scene of the accident, and undertook clean-up services at the site. These services included towing, transporting, impounding and storing of the freightliner as well as its cargo (food grade metal lids) strewn across the highway.

Previously, Superior Towing filed a motion for default judgment against M & C Express for the clean-up charges incurred (ECF No. 17),¹ and a motion to dismiss the complaint by Progressive for failure to state a claim (ECF No. 26). As time passed, Superior Towing’s storage charges continued to grow, so the Court granted Superior Towing’s Motion for Default Judgment against M & C Express as to liability under its quantum meruit theory, but denied the motion as to damages. (ECF No. 31). Additional proof was required to determine the reasonable value of the storage charges. Contemporaneously, Progressive sought dismissal of the Complaint under Rule 12. (ECF No. 26). Progressive argued that any obligation to Superior Towing would only arise when a final judgment against M & C Express is entered. As such, Progressive asserted that the suit against it was premature.

Thereafter, Superior Towing submitted an invoice of costs incurred and a Certification by a representative of Superior Towing attesting to the reasonableness of the damages. (ECF No. 32). At oral argument, Superior Towing addressed the amount of damages against M & C Express. Progressive’s counsel did not object to the entry of the judgment against M & C Express, but instead reserved Progressive’s rights and defenses, including its right to challenge Superior Towing’s recovery of the final judgment from Progressive. (Oct. 19, 2021 Hearing T. 3:13-4:16; 7:35-8:4). The Court entered judgment in favor of Superior Towing and against M & C Express in the amount of $217,333.32 plus $402.00 in costs. (ECF No. 34). Subsequent thereto, Progressive filed its Answer to Superior Towing’s Complaint (ECF No. 41); but never asserted that it had any problem with the merits of the litigation up to and including entry of the judgment against M & C Express.

II.

*2 Superior Towing brings this motion to enforce its judgment against Progressive for failing to indemnify Superior Towing in the amount of the default judgment against M & C Express. In opposition, Progressive recognizes its obligation under Form MCS–90, but it argues that Superior Towing’s damages consist of excessive storage costs and miscellaneous administrative fees for which Progressive is not obligated to pay. To resolve the issue, Progressive requests discovery, including the deposition of a representative of Superior Towing with knowledge of the damages, a representative of the highway department with knowledge of the accident, and a representative of the New Jersey State Police Department. (ECF No. 47, Opp. Br. at 10). In addition, Progressive asserts it shall mount a defense to evaluate Superior Towing’s final judgment. (Id.) Such discovery could have been conducted earlier. Previously, the Court accepted Progressive’s theory that its obligation to Superior Towing rests on a “final judgment,” and payment was not due until one was entered; but it never clearly stated further discovery was necessary. Now that a “final judgment” has been entered, Progressive contends it has a right to defend itself against that judgment.

To enforce Superior Towing’s judgment against Progressive now without discovery would have the effect of thwarting Progressive’s ability to litigate the remaining claim against it, and to compel Progressive to make payment without the benefit of a defense or discovery. As such, the Court will deny the Motion to Enforce without prejudice, and allow Progressive to undertake discovery and defend itself in this matter.

The Court’s makes its decision to deny the Motion to Enforce reluctantly. This result is unfair and prejudicial to Superior Towing since Progressive had the opportunity to defend against the amount of the final judgment earlier. Progressive has been present in this case from its inception, but it declined to participate in the Motion for Default Judgment against its insured, M & C Express. (ECF No. 17). After the Motion for Default Judgment was granted as to liability (ECF No. 31), Progressive failed to object to the amount of the final judgment against M & C Express. Only now, at the eleventh hour after the final judgment has been entered, has Progressive challenged the final judgment. This circuitous course of action not only frustrates judicial economy, but it also forces the parties to unnecessarily expend resources. With that said, the attorney for Superior Towing may, in its discretion, apply for some appropriate relief, if any, that is just and reasonable.

ORDER

IT IS on this 21^st day of February, 2023,

ORDERED that plaintiff Superior Towing and Transport, LLC’s Motion to Enforce against defendant Progressive Mountain Insurance Company (ECF No. 42) is DENIED WITHOUT PREJUDICE; and

ORDERED that the parties shall proceed with discovery as to damages under the oversight of Magistrate Judge Goodman.

All Citations

Footnotes

1. The Court’s September 30, 2021 Memorandum (ECF No. 31) also granted the Motion to Dismiss by defendants Crown Cork & Seal USA, Inc. and J.B. Hunt Transport, Inc. as to Counts I and II, and denied the motion as to Count III.  

End of Document

United States District Court, W.D. Louisiana,

Lake Charles Division.

KIM KOOL INC.

v.

COBRA TRUCKING LLC et al.

CASE NO. 2:21-CV-00432

Signed January 30, 2023

Attorneys and Law Firms

John T. Andrishok, Taylor Porter et al., Baton Rouge, LA, for Kim Kool Inc.

Ian A. MacDonald, Jones Walker, Lafayette, LA, for Cobra Trucking LLC.

Michael P. Corry, Christie P. Noel, Briney Foret Corry, Lafayette, LA, for Progressive County Mutual Insurance Co.

OPINION

TERRY A. DOUGHTY, UNITED STATES DISTRICT JUDGE

*1 A bench trial was held in Lafayette, Louisiana, on August 15, 2022, in this proceeding. At the conclusion of trial, the issue of insurance coverage was taken under advisement by the Court.

The Court hereby enters the following findings of fact and conclusions of law. To the extent that any finding of fact constitutes a conclusion of law, the Court hereby adopts it as such. To the extent that any conclusions of law constitute a finding of fact, the Court hereby adopts it as such.

I. FINDINGS OF FACT

The plaintiff, Kim Kool (“Kim Kool”) Kim Kool designs and builds heat exchangers and cooling packages. It has a customer base in the United States, Canada, Australia, and Thailand. Kim Kool has an office in Sulphur, Louisiana and employs approximately twenty-two employees. The defendant, Cobra Trucking, LLC (“Cobra”) is a Texas limited liability company with a principal place of business in Rosenburg, Texas. Cobra is a common carrier which maintains a United States Department of Transportation assigned carrier number.

The relevant facts in this matter are as follows:¹ Kim Kool was designing and building a heat exchanger for Compression Leasing Services (“CLS”), a customer located in Casper, Wyoming; once the heat exchanger was completed, Kim Kool arranged for shipping through Total Quality Logistics (“TQL”), a third-party broker that hires truckers to haul items; Kim Kool completed a Customer Application to TQL on August 21, 2019, (P-6)² and agreed to payment terms (P-2)³ with TQL.

CLS required the heat exchanger to be “tarped” during the transportation, which was reflected in the Agreement (P-11)⁴ between TQL and the trucking service TQL hired, Cobra. TQL issued a Certificate of Liability Insurance (P-7)⁵, which reflected that Cobra had liability insurance and cargo insurance. A Bill of Lading (P-9)⁶ reflected the heat exchanger was to be shipped from Kim Kool’s facility in Sulphur, Louisiana to CLS’s facility in Casper, Wyoming by Cobra. The Bill of Lading contained the following relevant language, “Carrier to be fully responsible and absolutely liable for any loss or damage to the described cargo regardless of the circumstances occasioning such loss.”⁷

On December 17, 2019, the heat exchanger at issue was properly packaged for loading onto the delivery truck. TQL had arranged for Cobra to pick up and transport the heat exchanger to Casper, Wyoming. Cobra driver Avery Belcher (“Belcher”) arrived at the Kim Kool facility, and the heat exchanger was loaded onto the Cobra flatbed by Kim Kool’s overhead crane. Belcher applied chains and secured the heat exchanger. Marburger took photographs of the heat exchanger prior to it leaving the Kim Kool facility.

*2 After the heat exchanger was securely strapped onto the flatbed and chained down, Belcher pulled into the Kim Kool parking lot and began to tarp the heat exchanger in accordance with CLS’s instructions. After Belcher began putting on the tarp, Marburger went back into the facility. When he came out to inspect the load, Belcher had already left the facility. Kim Kool then sent an invoice to CLS for the total cost of the heat exchanger.⁸

The next day, December 18, 2019, Marburger received a call from a representative of Cobra who told Marburger that the heat exchanger was enroute to Casper, Wyoming, but that the driver made a stop in Houston, Texas in order to adjust and add tarps. The representative gave no indication that there was any damage to the heat exchanger.

On December 19, 2019, Marburger received a call from CLS that the heat exchanger was damaged upon arrival. CLS sent Marburger photographs, which showed all four cooler sections had fin and tube damage beyond repair, and the fan guards had paint damage and would have to be repainted. Marburger prepared an Inspection Report (P-10),⁹ which documented the damage to the heat exchanger. Marburger testified that one of the photographs taken by CLS showed that Belcher was the driver who arrived at CLS with the damaged heat exchanger. Additionally, the parties stipulated that Belcher was the driver of Cobra’s truck and was employed by Cobra at the time of this incident.

After Marburger became aware of the damage to the heat exchanger, he scrambled to come up with a solution. Due to a cramped schedule for customer orders that Kim Kool was working on, Kim Kool had to work weekends and after hours to complete a rebuild of the heat exchanger for CLS. This required extra wages and overtime wages. Marburger testified that the damage to the heat exchanger was caused by the tarp coming loose and whipping against the heat exchanger. He further testified that the Cobra driver did not maintain or inspect the load to ensure that the tarp was securely fastened.

Marburger further testified it cost Kim Kool $94,646.08 to rebuild the heat exchanger for CLS under a compressed time schedule (P-14).¹⁰ Marburger explained how each charge was calculated and testified how he used past data to determine the cost of overtime and the cost of a compressed time schedule. This Court ruled orally after the trial that it found Cobra was liable for the actions of its employee, Belcher, in negligently failing to properly monitor the tarp on the heat exchanger and in failing to take actions to make sure the tarp remained secure on the heat exchanger.¹¹ This Court further found that Cobra was contractually liable to Kim Kool because of the language in the Bill of Lading (P-9).¹²

This Court further found Kim Kool’s total damages were $94,646.08.

The only remaining issue for the Court to determine is whether the Progressive policy (P-5)¹³ provides coverage to Cobra. As will be addressed further herein, Progressive maintains that its policy had a named driver exclusion provision, which excluded coverage for actions of Belcher (P-5, p 98)¹⁴. Kim Kool and Cobra maintain other provisions in the Progressive policy, Form MCS–90 (P-5) and Form F-1 (P-5,)¹⁵ resulted in coverage, even though Belcher was an excluded driver.

*3 The remainder of this opinion will address the insurance coverage issues. Kim Kool filed its Post-Trial Memorandum Regarding Insurance Coverage¹⁶ on August 22, 2022. Cobra filed a response¹⁷ on August 29, 2022. Kim Kool filed a reply¹⁸ on September 1, 2022.

II. PROGRESSIVE COVERAGE DISPUTE

The Progressive insurance policy (P-5)¹⁹ policy number 00550984-0 was issued to Cobra Trucking, LLC with an effective date of March 28, 2019, to March 28, 2020. This incident, which occurred between December 17, 2019, and December 19, 2019, was within the effective date of the policy. Molnar, a Progressive Senior Claims Adjuster for Commercial Lines testified that Exhibit (P-5) was a correct copy of the policy, with all policy endorsements.

A. Named Driver Exclusion

The Named Driver Exclusion in the Progressive Policy p. 3 and 98 (P-5, Doc. No. 50-2, p 98) reads:

Exclusion Of Named Driver And Partial Rejection Of Coverages

Except as specifically modified by this endorsement, all provisions of the Commercial Auto Policy apply.

We agree with you that the insurance provided under your Commercial Auto Policy is modified as follows:

Warning – Read This Endorsement Carefully

This acknowledgement and rejection is applicable to all renewals issued by us or any affiliated insurer. However, we must provide a notice with each renewal stating: “This policy contains a named driver exclusion.”

You agree that none of the insurance coverages afforded by this policy, or any related endorsements, shall apply while an insured auto or any other motor vehicle is operated by the following driver(s):

• AVERY BELCHER  
• WAYLAND M. BREAUX    
• DARRICK BREAUX    

You further agree that this endorsement will also service as a rejection of Uninsured/Underinsured Motorists Coverage and Personal Injury Protection Coverage while an insurance auto or any other motor vehicle is operated by the excluded driver or drivers.

All OTHER TERMS, LIMITS AND PROVISIONS OF THE POLICY REMAIN UNCHANGED. (Signed on August 01, 2019.)

Rated and Excluded drivers

Important information regarding excluded drivers

If any drivers are shown as excluded drivers, then you agree that there is no coverage under any parts of this policy, for any accident or loss arising out of the operation of any motor vehicles by the excluded drivers.

Additional information    

3. AVERY BELCHER – excluded driver    

The parties stipulated at trial that Avery Belcher was driving the Cobra truck when the damage occurred. So, if this provision applies, Progressive has no coverage for the damage. However, Cobra and Kim Kool argue the Form F-1²⁰ and Form MSC-90²¹ overrides the Named Driver Exclusion and results in coverage to Cobra.

B. Cargo Endorsement

Liability coverage in the Progressive policy does not apply to property transported by the insured, designated as cargo²² unless the policy contains a cargo endorsement. This policy does. The cargo endorsement is set forth on pages 13-23 of the Progressive policy. The cargo endorsement modifies the policy to include liability for damages to cargo. The pertinent provisions state:

We will pay for the direct physical loss to covered property that you are legally liable to pay as a trucker under a written bill of lading, tariff document, rate confirmation sheet, shipping receipt, or contract of carriage. For this coverage to apply, the covered property must, at the time of the loss, be in your exclusive physical custody and control:

*4 1. while in due course of transit in, on, or attached to an insured auto; or

2. during loading or unloading.²³

The damage to the heat exchanger occurred in due course of transit while on an insured vehicle while the cargo was in the exclusive custody, care, and control of Cobra. Additionally, the Court has found that Cobra is responsible both due to the negligence of Belcher and contractually based upon the language in the Bill of Lading. Therefore, the Cargo Endorsement would cover this incident unless it were excluded by other provisions of the policy.²⁴

C. Limits of Liability

The Progressive policy only requires payment of the least of, (1) Cobra’s legal liability for the direct physical loss to the covered property, or (2) the declared value of the covered property shown in the bill of lading. (P-5, p 25). Because the amount of legal liability ($94,646.08) is more than the declared value of the property, ($63,464.04), in the event of coverage, Progressive’s liability would be limited to $63,464.04.

D. Form F

Kim Kool and Cobra argue Form F²⁵ amends the policy to provide coverage. However, although Paragraph #1 of the Form F does state that this provision amends the policy, the provision only amends the policy to provide automobile bodily injury and property damage liability. Because Form F does not amend the policy as it relates to cargo liability coverage, Form F does not apply to cargo liability and, therefore, does not result in coverage under the policy.

E. Form MCS–90

The Form MCS–90 Endorsement²⁶ amends the policy to assure compliance by the insured as a motor carrier of property in accordance with Sections 29 and 30 of the Motor Carrier Act of 1980 and the rules and regulations of the Federal Motor Carrier Safety Administration (FMCSA).

Form MCS–90 does not apply. The language specifically does not apply to cargo.

Such insurance as it is afforded, for public liability, does not apply to injury to or death of the insured’s employees while engaged in the course of their employment, or property transported by the insured, designated as cargo.

(P-5, Doc. No. 50-2, p 9).

III. CONCLUSIONS OF LAW

The Named Driver Exclusion in the Progressive policy applies to exclude Progressive for the actions of Avery Belcher, the driver of the Cobra truck and trailer. This provision has been applied to exclude coverage. Bryant v. United Services Automobile Association, 881 So.2d 1214 (La. 2004); Williams v. Watson, 798 So.2d 55 (La. 2001); and Filipski v. Imperial Fire & Casualty Ins. Co., 25 So.3d 742 (La. 2009). Accordingly, Form F and Form MCS–90 do not apply to provide coverage to Cobra.

The Court finds that Kim Kool is entitled to an award of $94,646.08, to be paid in full by Cobra.

Additionally, the Court finds no coverage under the Progressive policy. Progressive will be dismissed from this proceeding with prejudice.

All Citations

Footnotes

1. These facts were testified to at trial by Travis Marburger (“Marburger”), the owner of Kim Kool, and Christine Molnar (“Molnar”), Progressive’s Senior Claims Adjuster for Commercial Lines. At trial, Kim Kool introduced exhibits P-2, P-5, P-6-21, P-25, and P-27-33. Progressive introduced Exhibit D-3.
2. [Doc. No. 50-3]  
3. [Doc. No. 20-1]  
4. [Doc. No. 50-8]  
5. [Doc. No. 50-4]  
6. [Doc. No. 50-6]  
7. [Id., p.1]  
8. $63,464.04 (P-8), [Doc. No. 50-5]  
9. [Doc. No. 50-7]  
10. [Doc. No. 50-11]  
11. [Doc. No. 48]  
12. [Doc. No. 50-6]  
13. [Doc. No. 50-2]  
14. [Id., p. 98]  
15. [Id., p. 12]  
16. [Doc. No. 53]  
17. [Doc. No. 54]  
18. [Doc. No. 55]
19. [Doc. No. 50-2]  
20. [Doc. No, 50-2, p. 12]  
21. [Id., pp. 8-9]  
22. [Id., p. 9]  
23. [Id.]  
24. Loss of use or delay is excluded under the provisions of the Cargo policy [Doc. No. 50-1, p 16].  
25. [Id., p. 6]  
26. [Id., pp. 8-9]  

End of Document