Over The Road Drivers, Inc. v. Transport Ins. Co.

• Decision Date: 10 December 1980
• Docket Number: No. 79-1094,79-1094
• Citation: 637 F.2d 816
• Parties: OVER THE ROAD DRIVERS, INC., Plaintiff, Appellee, v. TRANSPORT INSURANCE COMPANY, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 816

637 F.2d 816

OVER THE ROAD DRIVERS, INC., Plaintiff, Appellee, v. TRANSPORT INSURANCE COMPANY, Defendant, Appellant.

No. 79-1094.

United States Court of Appeals,

First Circuit.

Argued Sept. 12, 1980.

Decided Dec. 10, 1980.

James E. Grumbach, Boston, Mass., with whom Paul L. McGill, Alan G. Miller, and Morrison, Mahoney & Miller, Boston, Mass., were on brief, for defendant, appellant.

Toni G. Wolfman, Boston, Mass., with whom Foley, Hoag & Eliot, Boston, Mass., was on brief, for plaintiff, appellee.

Before CAMPBELL and BOWNES, Circuit Judges, and NELSON, ^* District Judge.

LEVIN H. CAMPBELL, Circuit Judge.

Over The Road Drivers, Inc. sued appellant Transport Insurance Company for $26,482.27 in the district court. Transport did not deny that the sum was due Over The Road as a net return of premiums under a workmen's compensation policy issued by Transport but claimed the right to offset against this debt monies owed Transport by other companies insured under the same policy. Transport also sought dismissal because of Over The Road's failure to join its coinsureds as parties to the action. Summary judgment was entered in favor of Over The Road, and Transport appeals.

Transport and its wholly-owned subsidiary TICO Insurance Company issue insurance policies to trucking companies. In 1973 Transport issued both a general liability policy and a workmen's compensation policy to Old Colony Transportation, Inc. and various of its corporate affiliates. In early 1975 Over The Road, an affiliate of Old Colony newly formed for the purpose of leasing truck drivers to service a particular client, was added to the workmen's compensation policy as an insured.

In early 1976 the affiliated companies renewed their coverage and Transport issued two new policies. General Liability Policy No. GL-521-76-1 covered six companies, not including Over The Road. Workmen's Compensation Policy No. WCR-521-76-1-the policy at issue here-covered five of these companies, in addition to Over The Road. A seventh affiliated company was added to the policy on September 2, 1977.

The insured companies are under common ownership and are all engaged in trucking-related activities. George Vigeant, Jr., an officer and principal in all or most of the companies, purchased the insurance for all the companies.

Policy premiums were paid on the basis of a so-called "Retrospective Rating Plan." Under this plan, the companies were required to pay a "standard premium" calculated on the basis of the current salary of employees covered by the policy. Each of the seven companies was billed separately, and each paid a premium based on its own employees. At the expiration of the policy term, a retrospective premium was to be calculated, based in part on the companies' actual incurred losses under the policy. If the retrospective premium exceeded the amount of standard premiums paid, the companies were required to pay Transport the difference; if the standard premiums paid exceeded the retrospective premium, Transport was required to refund the difference to the companies. Transport periodically issued to each company separately an "Experience Report," which calculated that company's "Retrospective Position," i. e., the difference between the standard premium and the retrospective premium for the period of calculation as computed for that company alone.

In the spring of 1978, Transport terminated all insurance coverage of the affiliated companies. At that time, the retrospective premium calculation indicated a net return of $26,482.27 due Over The Road. However, other of the insured companies owed Transport a total of $161,185.13 under the 1976 policies. Transport took the position that it was entitled to offset against this larger amount the $26,482.27 owed to Over The Road. Over The Road disagreed and instituted this action. ¹

The critical issue is whether the seven companies insured by the Workmen's Compensation Policy became jointly and severally liable for all premiums owing by any of them under the policy. Unlike the General Liability Policy, which provides (by way of a "Premium Determination Agreement") that "(a)fter each computation, the NAMED INSURED(S) hereby agrees, jointly and severally, that it (they) shall pay to the COMPANY any Deficit Premium developed by such computations ...," the Workmen's Compensation Policy contains no such express language making each insured company jointly and severally liable for all premiums owed. The policy simply refers throughout to "the named insured" as being responsible for premium payments. On an attached "Declarations Amendment Endorsement," the "Name of Insured" is defined as:

"Old Colony Transportation Co., Inc. and/or Bay State Realty & Advertising Co. and/or Interstate Transport Leasing Corp. and/or Interstate-Carolina Transport Leasing Corp. and/or Over The Road Drivers, Inc. and/or A-O.K. Leasing Corp. and/or Vigeant Labor Leasing Corp."

In granting summary judgment, and thus concluding that the policy did not create joint and several liability for premium payments, the district court stated, "there is simply no ambiguity in the language of the workmen's compensation policy such as would permit the Court to go into the history of the formation of the policy and make a construction different from what I think are the plain terms." While we agree, ultimately, that Over The Road may recover, we do not agree that the policy language is clear and unambiguous. Inclusion of the seven companies as "the named insured" under a single insurance contract might indicate that the companies were to be treated as a group or joint operation. And the definition of "named insured" as company A "and/or" company B, etc., while not sufficient in itself to create joint and several liability, In re John B. Rose Co., 275 F. 409 (2d Cir. 1921); 6 Couch on Insurance 2d § 31:146 (1961), suggests at least a possibility that each company was intended to be liable for the defaults of all. We can find nothing in "the plain terms" of the contract which tells us unambiguously that liability is to be separate, not joint. We therefore think that evidence concerning "the history of the formation of the policy" and the course of dealing under it would be admissible, if available and relevant, to establish the intention of the parties. 3 Corbin on Contracts §§ 559, 579 (2d ed. 1960).

It does not follow, however, that summary judgment was inappropriate here. ² The judgment is entitled to stand if there is "no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). For us to vacate and remand, it must appear that issues of fact were adequately raised below that need to be resolved before the legal issues in the case can be decided. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 88 S.Ct. 1575, 1592-1593, 20 L.Ed.2d 569 (1968). Transport argues that a genuine factual dispute indeed exists "as to the meaning of the policy and as to the parties' intent regarding premium liability." But Transport is unable to point to specific facts that were properly asserted in its affidavits and supporting materials which, if established at trial, would entitle it to prevail on these matters. The affidavits submitted by Transport in opposition to the summary judgment motion state, for the most part, either irrelevancies or bare conclusions which cannot be accepted as sufficient for summary judgment purposes. The affidavit of Mr. Ayres, Transport's Regional Manager for New England, who personally dealt with Mr. Vigeant concerning issuance of insurance to the affiliated companies, says, in pertinent part, only that,

"it was agreed and understood between Transport and the Old Colony Group that, with regard to premiums, there would be joint and several liability with regard to both of the Policies among the various affiliates comprising the Old Colony Group. It was further agreed and understood that said joint and several premium liability was a prerequisite and condition to the issuance of the Policies to the Old Colony Group by Transport."

Mr. McLaughlin, Vice President of Underwriting for Transport in its Dallas, Texas home office, who supervised the underwriting of the Workmen's Compensation Policy, avers in his affidavit that,

"it was the intent of both Transport and The Old Colony Group to consider that the Policies were issued to the group as a whole. Accordingly, all the premiums owed by or all the credits owed to each corporation within the Old Colony Group were to be added together, with the final amount owed or owing to be a joint obligation or right."

To the extent these statements put forth the unilateral understanding of Transport and its officers concerning the meaning of the insurance contract, they prove nothing; it is the parties' mutual understanding of what the contract meant that is important here. Cf. Klopfenstein v. Pargeter, 597 F.2d 150, 152 (9th Cir. 1979) ("(u)ndisclosed, subjective intentions are immaterial in this commercial transaction"). To the extent the statements purport to be evidence of what representatives of Over The Road and the affiliated companies understood the obligation to be, they are conclusory and not "made on personal knowledge" of the affiant as Fed.R.Civ.P. 56(e) requires. The affidavits contain no hint of any conduct or communications on the part of Mr. Vigeant or other representatives of the affiliated companies that would have manifested to a contracting party "understandings" and "intentions" such as the ones described. ³ "Conclusory allegations, unsupported by factual data, do not create a triable issue of fact." Kung v. Fom Investment Co., 563 F.2d 1316, 1318 (9th Cir. 1977); see Maiorana v. MacDonald, 596 F.2d 1072 (1st Cir. 1979); Hahn v. Sargent, 523 F.2d 461 (1st Cir. 1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 54 (1976); Klopfenstein v. Pargeter, supra, 597 F.2d 150; ...