ATLANTIC CAS. & FIRE INS. v. NATIONAL AMER. INS. CO.

• Decision Date: 10 January 1996
• Docket Number: No. 93-2097-CIV-T-23E.,93-2097-CIV-T-23E.
• Parties: ATLANTIC CASUALTY AND FIRE INSURANCE COMPANY, a South Carolina corporation, Plaintiff, v. NATIONAL AMERICAN INSURANCE COMPANY, Intervenor/Defendant.
• Court: U.S. District Court — Middle District of Florida

915 F. Supp. 1218

ATLANTIC CASUALTY AND FIRE INSURANCE COMPANY, a South Carolina corporation, Plaintiff, v. NATIONAL AMERICAN INSURANCE COMPANY, Intervenor/Defendant.

No. 93-2097-CIV-T-23E.

United States District Court, M.D. Florida, Tampa Division.

January 10, 1996.

Charles Paul Schropp, William R. Daniel and Raymond T. Elligett, Jr., Schropp, Buell & Elligett, P.A., Tampa, FL, for Atlantic Casualty & Fire Insurance Company.

Mark H. Smith, Bradley, Johnson, Nelson & Laurent, PA, Lake Wales, FL, for Para-Marine, Inc.

George E. Carr, O'Neill, Chapin, Marks, Liebman, Cooper & Carr, Orlando, FL, for National American Insurance Company.

ORDER

McCOUN, United States Magistrate Judge.

THIS MATTER is before the court on cross motions for summary judgment, the Motion of National American Insurance Company for Final Summary Judgment, a Dispositive Motion, (Doc. 38) and Atlantic Casualty and Fire Insurance Company's Motion for Partial Summary Judgment, (Doc. 43). The parties have filed memorandums in support of their motions, (Doc. 55, 44), and in opposition of the cross-motions, (Docs. 47 and 53). The parties have also filed an Agreed Statement of Facts, (Doc. 36), and a Supplemental Agreed Statement of Facts, (Doc. 37).¹

I.

Atlantic Casualty and Fire Insurance Company (hereinafter, "Atlantic Casualty") seeks a declaratory judgment establishing its rights and obligations under certain policies of insurance with Indian River Transport Company, Inc. (hereinafter, "Indian River"). National American Insurance Company (hereinafter, "NAICO"), the insurer of Para-Marine, Inc. (hereinafter "Para-Marine"), has intervened and seeks its own declaratory judgment that Atlantic Casualty is or was obligated to defend Para-Marine, its employee, Donald Greene, or Indian River under its primary policy with Indian River and is now required to further indemnify NAICO.

In essence, this is a coverage dispute between two insurers. The ultimate issue resulting from the cross motions is whether Atlantic Casualty's primary policy is excess over NAICO's policy or co-primary with NAICO's policy for claims arising out of a June 20, 1993 accident.

Para-Marine and Indian River are interstate motor carriers regulated by the Interstate Commerce Commission. They are related companies, principally owned by the same individual. On June 20, 1993, a tractor-trailer rig driven by a Para-Marine employee was involved in a tragic accident in North Carolina when the rig slammed into a van carrying fifteen passengers. Three of the passengers in the van were killed. The other twelve were seriously injured. Several lawsuits resulted. The fifteen claims were ultimately settled by NAICO for $1,362,500.00. NAICO paid out $1 Million, its policy limits. Para-Marine paid the balance, although it was later reimbursed by Atlantic Casualty.

The NAICO policy at issue (policy no. TPO83809IH) is a standard form Truckers Liability Insurance Policy issued to Para-Marine and providing $1 Million primary coverage. The policy contained an MCS-90 form endorsement as required by the Motor Carrier Act of 1980.

Atlantic Casualty issued a standard form Truckers Liability Insurance Policy to Indian River providing $1 Million primary coverage (policy no. TAL1001249). This policy also included the MCS-90 form endorsement. Atlantic Casualty also issued an excess liability policy (policy no. TEX200438).

The tractor involved in this accident was owned by Para-Marine. The trailer being pulled at the time of the accident was owned by PLM Rental but leased to Indian River. At the time of the accident, the tractor and trailer were being used with the consent of Para-Marine and Indian River respectively.

MCS-90 endorsements are required by federal law for all interstate motor carriers pursuant to sections 29 and 30 of the Motor Carrier Act of 1980. The respective MCS-90 endorsements in each primary policy here state in pertinent part,

This insurance is primary and the company shall not be liable for amounts in excess of $1,000,000. for each accident....

... In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy ... 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 judgment, 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....

(See Doc. 36, Exh. A).

Atlantic Casualty's primary policy with Indian River contains the following pertinent language concerning "Other Insurance",

This Coverage Form's Liability Coverage is primary for any covered `auto' while hired or borrowed by you and used exclusively in your business as a `trucker' and pursuant to operating rights granted to you by a public authority. This Coverage Form's Liability Coverage is excess over any other collectible insurance for any covered `auto' while hired or borrowed from you by another `trucker'. However, while a covered `auto' which is a `trailer' is connected to a power unit, this Coverage Form's Liability Coverage is:

(1) On the same basis, primary or excess, as for the power unit if the power unit is a covered `auto'.

(2) Excess if the power unit is not a covered `auto'.

(See Doc. 36, Exh. B).

II.

According to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is only appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The party seeking summary judgment bears the initial burden of demonstrating to the court the basis for the motion and identifying those portions of the pleadings and evidentiary submissions which show an absence of any genuine issue of material fact. Hairston v. Gainesville Sun Publishing Co., 9 F.3d 913, 918 (11th Cir.1993). If the ultimate burden of persuasion at trial rests on the non-movant, the party seeking summary judgment can meet this standard either by demonstrating that the non-movant's evidence is not sufficient to establish an essential element of the claim, or by submitting affirmative evidence that negates an essential element of the claim. Celotex Corporation v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The burden then shifts to the non-movant to establish the existence of an essential element to the claims, on which they bear the burden of proof at trial. Id. To satisfy this burden, the non-movant cannot rest on the pleadings, but must, by affidavit or other appropriate means, set forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e).

In deciding a motion for summary judgment, the court must determine whether there exists genuine, material issues of fact to be tried. If there are not, the movant is entitled to a judgment as a matter of law. See Dominick v. Dixie National Life Insurance Company, 809 F.2d 1559 (11th Cir. 1987). "Genuine disputes are those in which the evidence is such that a reasonable jury could return a verdict for the non-movant." Hairston, 9 F.3d at 919 (citations omitted). It is the substantive law that identifies those facts which are material on motions for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

In this instance, each party has filed suit for declaratory judgment to resolve a dispute as to an insurance coverage issue. The ultimate issue is succinctly framed by the cross-motions for summary judgment. After putting aside a factual dispute explained in footnote 1 above, the parties have submitted two statements of agreed facts and exhibits. (See Docs. 36, 37). With one exception,² the parties appear to agree that the dispute in this case is a legal one, rather than a factual one, and both agree the matter is ripe for resolution by way of summary judgment.

III.

As Atlantic Casualty argues the matter, existing precedent in this circuit supports a determination that its policies of insurance with Indian River provide excess coverage over NAICO's policy with Para-Marine, regardless of the existence of MCS-90 provisions. The argument is founded chiefly upon the Fifth Circuit decision in Carolina Casualty Insurance Company v. Underwriters Insurance Company, 569 F.2d 304 (5th Cir. 1978). Although Carolina Casualty dealt with a different ICC endorsement requiring security against personal injury and property damage, the case is significant because it rejects a similar argument made by an insurer that the ICC endorsement makes insurance coverage primary "in all circumstances and for all purposes as a matter of law...." Id. at 311. Furthermore the case establishes, as a policy statement, that the Interstate Commerce Act and regulations are intended to protect the public and shippers from losses at the hands of interstate carriers and are not intended to effect the relationship between insurers and insureds. Atlantic Casualty argues that in light of this precedent and because the policy provisions establish that its coverage is excess over other coverage, it is entitled to a summary judgment.

The heart of NAICO's argument is that because of Atlantic Casualty's claims practice in this instance and...