Am. Trucking & Transp. Ins. Co. v. Liberty Mut. Ins. Co.

• Decision Date: 30 March 2018
• Docket Number: 14–cv–5913 (LDH)(SIL)
• Citation: 305 F.Supp.3d 408
• Parties: AMERICAN TRUCKING AND TRANSPORTATION INSURANCE CO., RRG, et al., Plaintiffs, v. LIBERTY MUTUAL INSURANCE CO., et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

305 F.Supp.3d 408

AMERICAN TRUCKING AND TRANSPORTATION INSURANCE CO., RRG, et al., Plaintiffs,

v.LIBERTY MUTUAL INSURANCE CO., et al., Defendants.

14–cv–5913 (LDH)(SIL)

United States District Court, E.D. New York.

Signed March 30, 2018

James Robert Callan, Salmon Recchezza Singer & Turchi LLP, New York, NY, for Plaintiffs.

Marshall T. Potashner, Janet Jakyung Lee, Jaffe & Asher, LLP, New York, NY, for Defendants.

MEMORANDUM OF DECISION AND ORDER

LaSHANN DeaRCY HALL, United States District Judge

Plaintiffs American Trucking and Transportation Insurance Company, RRG ("ATTIC") and Watkins and Shepard Trucking, Inc. ("Watkins") and Defendants Peerless Insurance Company ("Peerless"), sued herein as Liberty Mutual Insurance Company ("Liberty Mutual"), and Valley Stream House of Carpets ("Valley Stream") cross-move pursuant to Federal Rule of Civil Procedure 56 for a declaratory judgment as to ATTIC's obligations under an insurance policy issued by ATTIC to Watkins.

UNDISPUTED FACTS¹

I. The Insurance Policies

Plaintiff ATTIC is a risk retention group formed under the laws of the State of Montana. (Defs.' Resp. 56.1 Statement ¶1, ECF No. 79.) Plaintiff Watkins is a Montana trucking corporation. (Id. ¶ 2.) Each plaintiffs' principal place of business is in the State of Montana. (Id. ¶¶ 1–2.) Defendant Valley Stream is a corporation formed under the laws of the State of New York, with its principal place of business in the State of New York. (Id. ¶ 4.) The legal status of Defendant Liberty Mutual is disputed by the parties. (Id. ¶ 3.)

A. The ATTIC Policy

In October 2009, ATTIC issued a Truckers Liability and Cargo Liability insurance policy to Watkins, as the first Named Insured, and Watkins and Shepard Leasing, LLC, as the additional Named Insured for the period of October 1, 2009, through September 30, 2010 (the "ATTIC Policy"). (Defs.' Resp. 56.1 Statement ¶ 6; Pls.' Resp. Additional 56.1 Statement ¶ 34, ECF No. 80–1; Pls.' Ex. A., ECF No. 78–3.) Under the ATTIC Policy, Watkins was insured "for liability to others resulting from the ownership, use, and/or maintenance of any Covered Trucking Unit as defined." (Pls.' Resp. Additional 56.1 Statement ¶ 36; Pls.' Ex. A, at 18.) The ATTIC Policy contains, in relevant part, the following provisions.

SECTION I—COVERED TRUCKING UNITS

Unless otherwise noted on the Liability Policy Declaration, your Trucking Liability Coverage extends to any and all trucks, tractors, or other commercially used motor vehicle, and trailers you own, lease, borrow or otherwise use in connection with providing transportation services to others (these are referred to as your "Covered Trucking Units") including any truck, tractor or other commercially used motor vehicle, or trailer, owned by someone other than the Named Insured(s) but who leases or contracts with the Named Insured(s) to use such unit under the authority and in furtherance of the transportation services provided to others by the Named Insured(s). Your Covered Trucking Units also include:

• any trucks, tractors or other commercially used motor vehicle, and trailers that you acquire ownership or authority to use after the policy begins;

• Any truck, tractor or other commercially used motor vehicle or trailer that you do not own but are using with the permission of the owner as a temporary substitute for your Covered Trucking Unit while such unit is out of service for any reason.

...

SECTION II—DEFINITIONS

...

Bodily Injury —any injury to a person other than the insured including sickness, disease or death.

Employee —includes all individuals employed, leased by or contracted to the Named Insured(s) who have authority granted by the Named Insured(s) to use operate or maintain any Covered Trucking Unit....

Insured —includes (1) the Named Insured(s) for any Covered Trucking Unit; (2) the employees or agents of the Named Insured(s) while using or maintaining any Covered Trucking Unit under the authority of the Named Insured(s); and (3) anyone else while using with the Named Insured's permission any Covered Trucking Unit. Except as it relates to the Limits of Coverage set out in the Liability Policy Declaration the coverage provided by ATTIC, RRG applies separately to each insured who is either seeking coverage or against whom a claim or suit has been brought.

...

SECTION III—TRUCKING LIABILITY COVERAGE

Coverage

Unless otherwise excluded as set out below, ATTIC, RRG will pay all sums an insured must pay to others for damages resulting from bodily injury or property damage caused by an accident and resulting from the ownership, maintenance or use of a Covered Trucking Unit. ATTIC, RRG will also pay all sums an insured must pay as pollution liability resulting from the ownership, maintenance or use of a Covered Trucking Unit.

Defense

ATTIC, RRG will defend any insured against a claim, suit or other demand seeking damages for bodily injury or property damage of others or for pollution liability. However, ATTIC, RRG has no duty to defend any insured against a suit seeking damages for bodily injury, property damage or pollution liability if the coverage contained within this policy does not apply or is otherwise excluded. ATTIC, RRG may investigate and settle any claim or suit as it considers appropriate. ATTIC, RRG's duty to defend or settle any claim or suit stops when the Limits of Coverage set out in the Liability Policy Declaration have been reached through payment of judgments or other settlements.

...

Coverage Conformance to State Law

ATTIC, RRG will provide the state statutorily required amounts and types of coverage required of the Named Insured(s), such as no-fault, personal injury protection, personal property insurance, uninsured or underinsured motorist coverage or any other coverage required by virtue of the Named Insured(s) licensing or use of any Covered Trucking Unit within the particular state. However, ATTIC, RRG will not pay any damage, loss or claim more than once for the same loss just because it is covered twice within this extension.

Exclusions from Coverage

The trucking liability insurance provided by ATTIC, RRG to the Named Insured(s) does not apply to any of the following:

...

Workers Compensation, Employer's Liability, and Co–Employees —any bodily injury to any employee of an insured arising out of and in the course of the employee's employment by an insured or while performing any duties in furtherance of the business of an insured, including any bodily injury to any co-employee of any employee if the injury occurred in or arises out of and in the course of the co-employee's employment by an insured or while performing any duties in furtherance of the business of an insured.

Operations of any Equipment other than Covered Trucking Units —.... If the cargo moving equipment used by an insured during the loading or unloading process is not owned, leased or under the control of the Named Insured(s) this coverage will apply only in excess of any other available coverage.

...

SECTION V—OBLIGATIONS OF THE NAMED INSURED(S)

...

In the Event of a Claim or Suit —In the event of a claim or suit being made or served on any insured, the Named Insured(s) must:

Immediately deliver to ATTIC, RRG a copy of such claim or suit including any demand, request, notice, order, summons or other legal paper received by any insured.

...

(Pls.' Ex. A, at 18–22, 24.)

The ATTIC Policy listed Jesse Elison as the Claims Counsel responsible for Claims Management. (Pls.' Resp. Additional 56.1 Statement ¶ 35.)

B. The Peerless Policy

Peerless issued an insurance policy to Valley Stream, Policy No. BOP9427507, with a policy period of June 1, 2010, through June 1, 2011, (the "Peerless Policy"). (Defs.' Resp. 56.1 Statement ¶ 7; Pls.' Resp. 56.1 Statement ¶ 5, ECF No. 82–3.) The Peerless Policy includes an "Other Insurance" provision that provides, in relevant part, that:

1. If there is other insurance covering the same loss or damage, we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance, whether you can collect on it or not. But we will not pay more than the applicable Limit of Insurance.

2. Business Liability Coverage is excess over any other insurance that insures for direct physical loss or damage.

3. When this insurance is excess, we will have no duty under Business Liability Coverage to defend any claim or "suit" that any other insurer has a duty to defend. If no other insurer defends, we will undertake to do so; but we will be entitled to the insured's rights against all those other insurers.

(See Pls.' Resp. 56.1 Statement ¶ 6; Cass Cossairt Decl. ¶ 9, ECF No. 81–1; Cossairt Decl. Ex. 4, at 25, ECF No. 81–6.)

II. The Underlying Action

On June 21, 2010, Mohamed Turay, then-employed as a truck driver by Watkins, was injured while making a carpet delivery to Valley Stream. (Defs.' Resp. 56.1 Statement ¶¶ 8–9; Pls.' Resp. 56.1 Statement ¶ 2.) On January 10, 2012, Turay and his wife commenced a lawsuit in the Supreme Court of the State of New York, County of Nassau against Valley Stream seeking recovery for Turay's injuries (the "Underlying Action"). (Defs.' Resp. 56.1 Statement ¶¶ 10, 11; Pls.' Resp. 56.1 Statement ¶ 1.) Peerless assigned counsel to defend Valley Stream in the Underlying Action. (Defs.' Resp. 56. Statement ¶ 13.)

By letter dated October 17, 2012, Peerless tendered a claim to Watkins for the defense and indemnification of Valley Stream in the Underlying Action. (Defs.' Resp.56. Statement ¶ 14; Pls.' Resp. 56.1 Statement ¶ 7.) Peerless reasoned in that letter that because Turay's "injury occurred while loading/unloading a motor vehicle," as Turay's employer, "we turn to [ATTIC] for defense and indemnification of Valley Stream House of Carpets under [ATTIC's] Commercial Automobile Policy." (Defs.' Resp. 56. Statement ¶ 14; Pls.' Ex. C, ECF No. 78–5; Pls.' Resp. 56.1 Statement ¶ 7; Cossairt Dec. Ex. 5, ECF No. 81–7.) On November 9, 2012, Mr. Elison, corporation counsel at Watkins, responded to Peerless by letter stating that he wa...