Carolina Cas. Ins. Co. v. E.C. Trucking, 03-1225.
| Decision Date | 31 January 2005 |
| Docket Number | No. 03-1225.,03-1225. |
| Citation | 396 F.3d 837 |
| Parties | CAROLINA CASUALTY INSURANCE COMPANY, Intervenor/Plaintiff-Appellant, v. E.C. TRUCKING et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
John F. Townsend, III (submitted), Townsend & Montross, Indianapolis, IN, for Plaintiff-Appellee.
Ronald J. Waicukauski, Price, Potter, Jackson, Waicukauski & Mellowitz, Eric D. Johnson, Kightlinger & Gray, Indianapolis, IN, for Defendants-Appellees.
Jacob Nance, Paris, KY, pro se.
R. Troy Mulder, Riley, Bennett & Egloff, Indianapolis, IN for Intervenor-Appellant.
Before COFFEY, ROVNER, and WILLIAMS, Circuit Judges.
Carolina Casualty intervened in Vanesse Fort's wrongful death action, seeking a declaratory judgment that it had no duty to provide coverage for any judgment rendered against its insured, C.W. Keller Trucking, Inc., in the wrongful death case. The district court denied Carolina Casualty the requested relief, finding that the federally-mandated MCS-90 endorsement attached to its policy was applicable. We agree and, therefore, affirm.
This appeal arises from a tragic accident on March 15, 2000 in Peru, Indiana, in which a tractor-trailer driven by Jacob Nance struck Eric Fort's vehicle, killing Fort. E.C. Trucking, Inc. owned the tractor, which it leased to Ryder Integrated Logistics. Ryder owned the trailer.
When the accident took place, Ryder and E.C. Trucking were parties to a lease agreement. Under this agreement, Ryder leased three tractors from E.C. Trucking and provided to E.C. Trucking its Interstate Common Carrier (ICC) authority, enabling E.C. Trucking to haul automobile parts in certain runs specified by Ryder. E.C. Trucking did not have its own ICC authority. Ryder also had an agreement with C.W. Keller Trucking, Inc. under which Keller acted as a subcontractor for Ryder, hauling automobile parts on runs designated by Ryder using Keller's own ICC authority. At the time of the accident, E.C. Trucking owned Keller and was legally entitled to use the name "E.C. Trucking d/b/a C.W. Keller Trucking."
On the day of the collision, Nance was scheduled to do a run pursuant to Ryder's agreement with Keller. As dictated by that agreement, Nance was to use a tractor bearing Keller's placards and ICC authority. The scheduled tractor experienced mechanical difficulty so Nance instead used a tractor owned by E.C. Trucking and leased to Ryder bearing Ryder's placards and ICC authority. A dispatcher employed by the owner of both E.C. Trucking and Keller made the switch, but did not get Ryder's permission to do so.
Vanesse Fort, Eric Fort's widow, brought a wrongful death action against Ryder, Nance, E.C. Trucking, and Keller. Carolina Casualty Insurance Company, Keller's insurer at the time of the accident, intervened in the lawsuit, seeking a declaration that its policy with Keller did not afford coverage for the dispute. The district court bifurcated the coverage dispute and the wrongful death action.
Before trial in the wrongful death suit, Fort entered into a loan receipt agreement with Ryder, agreeing to dismiss her suit against all defendants except Keller. Under the agreement, Fort received $2.25 million from Ryder and agreed that she would repay Ryder one-third of the amount she recovered from Keller, but no more than $2.25 million. Ultimately, a jury found Keller liable in the wrongful death action and awarded Fort $1,042,234.75. Keller requested that the district court reduce the judgment against it by the amount Keller would retain from the loan receipt agreement with Ryder (which would reduce Keller's payment to zero). The district court denied the request and this court affirmed in Fort v. C.W. Keller Trucking, 330 F.3d 1006 (7th Cir.2003).
In the coverage dispute, the district court found that, although the general provisions of Carolina Casualty's policy with Keller did not afford coverage, Fort was entitled to recover pursuant to a federally-mandated endorsement attached to Carolina Casualty's policy with Keller, the MCS-90 endorsement. The district court further found that Ryder's insurance policy with Old Republic Insurance Company (which was not a party to the action) did not afford coverage. Carolina Casualty appeals the district court's judgment in favor of Fort and its finding that the Old Republic policy did not provide coverage.
We first consider Carolina Casualty's argument that the district court erred by finding that the policy's MCS-90 endorsement entitled Fort to recover from the insurer. Regulations promulgated pursuant to the Motor Carrier Act, 49 U.S.C. § 13906(f), mandate that liability insurance policies providing coverage for motor carriers include a MCS-90 endorsement. 49 C.F.R. §§ 387.7(a), 387.9, 387.15. "Federal law applies to the operation and effect of [such] endorsements." John Deere Ins. Co. v. Nueva, 229 F.3d 853, 856 (9th Cir.2000). The MCS-90 endorsement provides, in pertinent part, as follows:
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 ... regardless of whether or not each motor vehicle is specifically described in the policy.... [N]o 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 financial condition, insolvency or bankruptcy of the insured.
Thus, "whatever limitation a policy expresses regarding coverage extending only to `covered' or `specified' autos, this limitation ceases to operate when an injured member of the public seeks indemnification on behalf of the insured." John Deere, 229 F.3d at 859.
We agree with the district court that the endorsement was intended to compensate members of the public such as Fort. See id. at 857 (); see also Travelers Ins. Co. v. Transport Ins. Co., 787 F.2d 1133, 1140 (7th Cir.1986) (). Indeed, in this case the endorsement is particularly applicable, as a jury rendered a final judgment against Keller, Carolina Casualty's insured, for liability arising from the negligent injury of a member of the public, namely Eric Fort.
Carolina Casualty argues that, despite the endorsement's language which plainly suggests that Fort is entitled to recover, the MCS-90 endorsement is not applicable to Fort, as she was already compensated when she received $2.25 million from Ryder pursuant to the aforementioned loan receipt agreement. We disagree. Our prior decision in Fort v. C.W. Keller Trucking held that the payment Fort received from Ryder was a loan, which under Indiana law is not considered satisfaction of a judgment. 330 F.3d at 1009-13. See American Transport Co. v. Central Indiana Ry. Co., 255 Ind. 319, 264 N.E.2d 64, 67 (1970) (); Sanders v. Cole Mun. Fin., 489 N.E.2d 117, 120 (Ind.Ct.App.1986) (same). Further, Carolina Casualty cites no authority (and we know of none) supporting the proposition that a member of the public is not entitled to recover pursuant to the MCS-90 endorsement if she receives funds pursuant to a loan receipt agreement. Therefore, in this case, we decline to find that the loan receipt agreement relieved the insurer, Carolina Casualty, of its obligation under the MCS-90 endorsement to pay Fort, a member of the public, for the final judgment rendered against its insured, Keller.
Carolina Casualty's remaining arguments warrant little...
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