97-0388 La.App. 4 Cir. 10/1/97, LeBlanc v. Bailey
| Decision Date | 01 October 1997 |
| Citation | 700 So.2d 1311 |
| Parties | 97-0388 La.App. 4 Cir |
| Court | Court of Appeal of Louisiana — District of US |
R. Henry Sarpy, Jr., Richard C. Badeaux, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, for Appellant.
Arthur W. Landry, Plauche, Maselli & Landry, New Orleans, for Appellee.
Before SCHOTT, C.J., and CIACCIO and MURRAY, JJ.
[97-0388 La.App. 4 Cir. 1] CIACCIO, Judge.
This is an appeal of the granting of a summary judgment on an issue of insurance coverage. We affirm.
Facts and Procedural History
The underlying dispute arises out of a vehicular collision between a tractor owned by Michael Bailey and an automobile driven by plaintiff, Gary LeBlanc. At the time of the collision, Bailey's tractor was under lease agreement with Mill Transportation Company. Plaintiff brought this action for damages against Michael Bailey, Mill Transportation Company, and Vanliner Insurance Company, Mill's insurer which issued a policy of commercial automobile insurance to Mill for its leased vehicles. Plaintiff subsequently added as defendant Reliance National Indemnity Company, which issued an automobile policy to Bailey covering the tractor which was involved in this accident. Defendants Vanliner and Reliance disputed the applicability of insurance coverage in this case and filed cross-claims against each other.
Plaintiff's main demand was bifurcated from the insurance coverage issues between Reliance and Vanliner. Prior to trial, plaintiff settled his claims with defendants for $850,000.00, of which $475,000.00 was paid by Reliance and $375,000 00 was paid by Vanliner. The insurance companies reserved their rights to resolve the issue of coverage.
After the insurers settled their claims with plaintiff, both Vanliner and [97-0388 La.App. 4 Cir. 2] Reliance brought motions for summary judgment on the coverage issue. The trial court granted Vanliner's motion and denied Reliance's motion, finding that the Reliance policy provided primary coverage for the tractor involved in this accident. The trial court rendered judgment in favor of Vanliner and against Reliance for the amount of $375,000.00. Reliance now appeals.
The pertinent facts giving rise to this appeal are as follows: In 1993, Mill Transportation Company was a carrier authorizied by the Interstate Commerce Commission ("I.C.C.") to carry regulated commodities in interstate commerce. In January of 1993 1 Mill entered into a lease agreement with Michael Bailey, a resident of Violet, Louisiana, to lease his 1984 International tractor-rig to perform transportation services under Mill's authority with Bailey as the driver. From January of 1993 until the end of Bailey's contract with Mill, Bailey drove his tractor exclusively for the benefit of Mill and in accordance with the terms and conditions set forth in the lease agreement. In compliance with applicable I.C.C. regulations, the lease provided that the lessee, Mill, had exclusive possession, control, and responsibility over the tractor-rig at all times during the lease period.
In addition, I.C.C. regulations required authorized carriers to specify in the lease agreement the carrier's legal obligation to maintain insurance coverage, including bobtail coverage. 2 Accordingly, the lease contained the following provision:
Lessee [Mill] supplies insurance coverage for liability, personal injury, property damage and bobtail coverage [97-0388 La.App. 4 Cir. 3] at times other than when en route to and from point of pick up, delivery, or engaged in actual bona fide movement from origin to destination.
Thus, pursuant to the I.C.C. regulations and the provisions of the lease, Mill was required to provide insurance for Bailey's tractor while it was making pickups or deliveries and also while the tractor was "bobtailing," or operating without a delivery load or a trailer.
In accordance with the terms of the lease, Mill secured a policy of commercial automobile insurance from Vanliner which provided liability coverage for its leased vehicles, including the tractor owned by Michael Bailey. The Vanliner policy was issued in the name of Mill Transportation and provided limits of $1,000,000.00.
In addition to the Vanliner policy, Mill also secured a business auto policy from Reliance Insurance Company to comply with the "bobtail coverage" provision in the lease agreement. This policy was issued to Michael Bailey as the named insured with a policy limit of $1,000,000.00, and it described as covered "autos" those which were under long term lease to Mill Transportation Company. However, this policy contained an endorsement for non-trucking use which provided the following exclusion:
This insurance does not apply to:
a. A covered "auto" while used to carry property in any business.
b. A covered "auto" while used in the business of anyone to whom the "auto" is rented.
The Reliance policy further provided that with regard to other insurance, the Reliance policy was primary as to covered vehicles owned by the insured, and the coverage was excess as to non-owned vehicles.
[97-0388 La.App. 4 Cir. 4] In support of its motion for summary judgment, Reliance argued that its policy excluded coverage in this case as the covered vehicle had been leased to Mill, and Bailey was "in the business" of Mill at the time the accident occurred. Conversely, Vanliner argued that Bailey had completed his work with Mill for the day, and at the time of the accident, Bailey was bobtailing and was covered by the Reliance policy. Following a hearing, the trial court determined that at the time of the accident, Bailey was no longer "in the business" of Mill, and the Reliance policy provided primary coverage for this accident.
Discussion
There is no dispute in the present case that both the Vanliner and Reliance policies provided coverage for Bailey's tractor. The dispute centers around whether the Reliance policy provided coverage at the time the accident occurred, and if so, which policy is primary. To determine the applicability of insurance coverage in this case, we must determine whether the trial court erred in finding that the exclusion in the Reliance policy did not apply and that the Reliance policy provided primary coverage for this accident. Specifically, the issue presented is whether, as a matter of law, Bailey was using his tractor-rig "in the business" of Mill when he collided with the LeBlanc vehicle while en route to his home in Violet, Louisiana.
The specific issue of whether an independent trucker who leases his vehicle to a transportation company is "in the business" of the lessee when he drives to his home following a day of deliveries has not been addressed by Louisiana courts....
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