Bits & Pieces

Volume 19, Edition 5


This has been a quiet month overall with little news from the transportation industry and dearth of cases which impact trucking exposures.  I guess everyone is ready for the summer slowdown.  I heard everyone had a great time in San Diego at the IMUA annual meeting and I am sorry I missed it.  I extend my congratulations to Rich Soja, Michelle Blank and Alexander McGinley for receiving the well-deserved IMUA annual awards.

As we take the time to celebrate the Memorial Holiday please take a moment to remember the reason for the holiday as we thank those who have served our country well over the years.

This month we report:

UNIFIED CARRIER REGISTRATION – It’s coming.  As you may have heard the URS rule will apply to all interstate motor carriers (including private and for-hire passenger and property motor carriers), freight forwarders, brokers, intermodal equipment providers (IEPs), hazardous materials safety permit (HMSP) applicants/holders, and cargo tank manufacturing and repair facilities under regulation by the FMCSA, except Mexican-domiciled carriers conducting long-haul operations. The URS will require online registration and forgo use of the MC number, relying only on a DOT number. URS will also keep a record of insurance filings and BOC-3 requirements. It replaces multiple forms and the registration functions of several systems such as the Licensing and Insurance System and the Motor Carrier Management Information System (MCMIS).  All applicants will begin using URS for registrations and changes starting September 30 so insurers should start to pay attention to changes which they may need in their operational model.  Enforcement for existing operations will be effective December 31.

TOW COMPANIES – It has been reported that the Public Service Commission of West Virginia has recommended that a tow company refund $185,894.91 to a trucker after it determined that the wrecker overcharged and charged non-allowable charges.  It is an interesting issue to follow as the issue of outlandish tow bills continues to plague the industry.  As we find out more we will report further.

2016 POCKET GUIDE – The FMCSA announced the availability of its 2016 Pocket Guide to Large Truck and Bus Statistics. The pocket guide is an annual publication that contains extensive information on the overall state of the commercial motor vehicle (CMV) industry, safety enforcement activity, large truck and bus crashes, and further data.  You can download the guide here.

HOURS OF SERVICE – And the fight goes on. We have dueling transportation bills in the House and the Senate which would impact the hours of service restart rules.  The House bill defunds enforcement of the regulation that drivers take off between 1 am and 5 am on consecutive days.  Over in the Senate a funding bill was passed that sets 73 as the number of hours before a trucker must take a break.   We expect to report in the next month some movement toward resolution of the HOS rules between the two.



The applicability of bill of lading provisions when there is a service agreement in place continues to be a subject of litigation.  This month the Middle District of Florida held that a forum selection clause in a bill of lading would govern a dispute between the shipper and the carrier even though not mentioned in the service agreement.  The Court held that while the service agreement governs the overall relationship of the parties, the bill of lading governs the contractual terms for the specific transport and enforced the forum selection clause.   (Ponte Vedre Gifts & Accessories v. APL Logistics, 2016 WL 2854207)

Imposter claims are on the rise and the applicability of coverage for those losses continues to be an issue.  The Southern District of New York addressed the issue of first party coverage under a first policy with fraudulent bill of lading coverage where a shipper was duped into releasing freight. The Court held, initially, that the theft by the imposter was a theft in transit and not subject to any applicable exclusion under the transit policy. The Court went further, addressing the additional coverage afforded under the fraudulent bill of lading coverage extension and concluded that the clause applied when the shipment was stolen there was a fraudulent bill of lading issued and that acceptance of that bill of lading by the insured triggered the loss. The Court also considered the meaning of the phrase “shipping contract”, a phrase commonly used in cargo policies.   The Court concluded that the term meant any document used in the ordinary course of shipping and would not include a master service agreement or delivery receipts.  While coverage was afforded under the main form it was not afforded under this extension of coverage.  It should be noted that the result would have been different if in fact there was a bill of lading issued.  (AGCS Marine Insurance Co. v. World Fuel Services, Inc., 2016 WL 2918428)


An insured sought a defense and indemnity under a management liability policy for an action commenced against it by a driver.  The 7th Circuit held that the driver was a dispensable party to that suit and dismissed him to preserve federal court diversity. The Court concluded that the insured could not state a cause of action against the insurer as the policy contained an exclusion for contractual liability and the driver’s claims were all based on a contract with the motor carrier.  (Altom Transport, Inc. v. Westchester Fire Insurance Co., 2016 WL 2956834)

The last few months we have had a number of inquiries regarding liabilities stemming from the “Uber” type operations.  The Northern District in California considered a motion to dismiss filed by Uber for tort actions commenced against it seeking damages for alleged sexual assaults by drivers.  The Court denied the request to dismiss fraud claims, claims under respondeat superior and claims for punitive damages.  The Court ruled that there was a potential for Uber to be held liable as a common carrier and not a broker of carriage services.  Allegations of negligent hiring were also able to stand for tort claims against one driver.  (Doe v. Uber Technologies, Inc. 2016 WL 2348296)

An insurer was successful in defeating a claim under its auto liability, or exposure under the MCS-90 endorsement.  The Eastern District of Virginia held that when neither the tractor nor trailer was scheduled on the policy there would be no duty to defend or indemnify.  The Court held that the MCS-90 did not apply when the driver was not operating as for hire carrier at the time of the loss, was not transporting property and was not engaged in interstate or foreign commerce.  (OOIDA Risk Retention Group, Inc. v. Griffin 2016 US Dist LEXIS 57469)

An insurance agent was successful in defeating a claim by an insured that that the agent failed to procure a second level of excess coverage on all vehicles operated by the carrier.   The District Court in Colorado held that there was no evidence to support any failure by the agent, who properly advised the insured as to its coverage options when it sought that additional excess limit for certain operations only.  (Valley Equipment Leasing, Inc. v. McGriff, Seibels & Williams of Oregon, 2016 WL 1697861)

While this was an odd one!  The Eastern District of Louisiana held that it would not remand a personal injury action against a trucker and its insurer where it was apparent that the damages would exceed $75,000, the minimum limit for a diversity action.  It was odd because the plaintiff submitted an affidavit that the damages were not in excess of $75,000, yet both the defendant and the Court took the position that the damages were likely greater than what plaintiff insisted it suffered.  (Treqknia Bannister v Ace American Insurance Co., 2016 WL 2347861)

More and more brokers are getting sued for auto accidents and the question is where the coverage for that liability will rest.  The Eastern District of California considered whether a truck broker’s general liability policy provided coverage for allegations against the broker arising from a trucker’s accident.  The Court denied the insurer’s motion on the pleadings concluding that the issue and meaning of the applicability of the modified auto exclusion would need to be addressed in the suit and would not allow for judgment based only on the pleadings.  (Penn-Star Insurance Co. v. Trinity Logistics Group., 2016 WL 2625922)

Have a Safe and Happy Holiday.

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