Earth Tech, Inc. v. U.S. Fire Ins. Co.
| Decision Date | 04 January 2006 |
| Docket Number | No. 1:05CV172.,1:05CV172. |
| Citation | 407 F.Supp.2d 763 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | EARTH TECH, INC., Plaintiff, v. UNITED STATES FIRE INSURANCE COMPANY, Defendant. |
Jeffrey Christopher Shipley, Whitney & Bogis LLP, McLean, VA, for Plaintiff.
Carol Thomas Stone, Jordan Coyne & Savits LLP, Fairfax, VA, for Defendant.
This insurance coverage dispute arises out of a motor vehicle accident in Florida. An automobile struck a tractor-trailer that was backing into a work site aided by plaintiff's employee who was acting as a flagman for the tractor-trailer. The automobile's occupant suffered serious injuries and has sued plaintiff, among others, alleging with respect to plaintiff that its employee's negligence in acting as a flagman caused the accident. Plaintiff, in turn, seeks here a declaration that defendant, the insurer of plaintiff's subcontractor, has a duty to defend the plaintiff in the lawsuit brought by the injured automobile occupant.
Because the parties' sole disagreement concerns the interpretation of the insurance contract, the parties have filed a Joint Statement of Undisputed Facts, and crossmotions for summary judgment. Accordingly, the material facts recited here are undisputed and derived from the parties' stipulation and pleadings.
Plaintiff Earth Tech, Inc. ("Earth Tech"), is a California corporation with its principal place of business in Long Beach, California. It is in the business of providing services in the areas of global water management, environmental and waste remediation, architecture, engineering, construction, and transportation. Defendant United States Fire Insurance Company ("U.S.Fire") is a Delaware corporation with its principal place of business in Morristown, New Jersey. U.S. Fire is in the business of providing property and casualty insurance products and services.
This dispute arises out of an automobile collision that occurred on September 25 2002, involving a vehicle driven by Annette Carey and a 1999 Peterbilt diesel semitractor and attached trailer (the "tractor-trailer") operated by an employee of Freehold Cartage, Inc. ("FCI"). On the day of the accident, Earth Tech employees were working at the St. Mark's Refinery Complex pursuant to a contract with the Florida Department of Environmental Protection. Earth Tech subcontracted part of this work to Capitol Environmental Services, Inc. ("Capitol"), a Virginia corporation with offices located at 8339 Boone Boulevard, Vienna, Virginia. The subcontract required Capitol to "provide all labor, equipment, materials, supplies, and permits necessary to properly perform the transportation and disposal of materials." The "materials" at issue were Benzene contaminated liquids. Pursuant to its subcontract with Earth Tech, Capitol was required to remove the Benzene contaminated liquids from the St. Mark's Refinery Complex and transport them via vacuum tank truck to an acceptable state facility. To accomplish this, Capitol hired FCI to transport the Benzene contaminated liquids from the St. Mark's Refinery Complex. The contract between Capitol and FCI was for the provision of "transportation services," specifically the transportation of the benzene contaminated liquid from the St. Mark's Refinery in Tallahassee, Florida to Industrial Water Services in Mobile, Alabama. The quote provided by FCI required that the transportation services would be performed by a "tanker vac (any type)," but did not specify a particular vehicle, driver, or route. The quote also did not include certain terms of the contract which were later supplied orally, including the date the transportation services were to be performed. No Capitol employees were present at the St. Mark's Refinery on the day of the accident.
Prior to the accident, Peter Blash ("Blash"), an FCI employee, arrived at the Refinery Complex with the requested tractor-trailer and attempted to back the vehicle into the Complex with the assistance of an Earth Tech employee, who operated as a flagman to direct the tractor-trailer and any oncoming traffic. As Ms. Carey and her husband approached the refinery from the south, the tractor portion of the tractor-trailer was in the opposite lane with its lights on thereby creating the illusion that the entire vehicle was in the southbound lane. In fact, as a result of Blash's efforts to back into the Complex, the trailer was perpendicular to the tractor and in the opposite lane of traffic. At this point, the Carey's automobile struck the tractor-trailer and Mrs. Carey sustained serious injuries.
As a result of the accident, on or about May 14, 2003, Annette R. Carey and Grayson Robert Carey, her husband, filed a lawsuit in the Circuit Court for the Second Judicial Circuit, in Wakulla County, Florida, captioned Annette R. Carey, et al. v. Peter H. Blash; Freehold Cartage, Inc.; and Earth Tech, Inc., Case No. 03-136-CA (the "Underlying Lawsuit"). The Underlying Lawsuit alleges that on September 25, 2002, plaintiff Annette Carey sustained serious injuries as a result of the accident that occurred when Mrs. Carey's vehicle collided with the tractor-trailer operated by Blash, who is also alleged to be an employee of one or both of the other named defendants in the underlying lawsuit, FCI and Earth Tech.
The complaint in the Underlying Lawsuit asserts theories of negligence and loss of consortium against all defendants, and includes the following allegations:
a. On the day of the accident, Blash arrived at the St. Mark's Refinery Complex in Wakulla County, Florida in the course and scope of his employment to "load petroleum products" from the Refinery Complex.
b. The tractor-trailer Blash was operating was owned by FCI.
c. At the same time, Earth Tech was performing work at or near the St. Mark's Refinery Complex.
d. In conjunction with the work being performed, Earth Tech negligently undertook to direct traffic on State Road 363 while Blash attempted to back the tractor-trailer into the St. Mark's Refinery Complex.
e. At approximately 6:20 a.m., Ms. Carey approached the refinery in the northbound lane of State Road 363. At the same time, the tractor portion of the tractor-trailer was in the southbound lane with its lights on, while its trailer remained in the northbound lane, thereby creating the illusion that the entire vehicle was in the southbound lane.
f. Earth Tech failed to provide adequate visual warning devices in the course of directing traffic.
Thus, the complaint alleges that Earth Tech was negligent in two respects: First, that it "negligently undertook to direct traffic on State Road 363, while Blash attempted to back the [tractor-trailer] into the St. Mark's Refinery complex," and second, that it failed to provide "adequate visual warning devices." In addition, the underlying complaint alleges that as a result of Earth Tech's negligence, Ms. Carey collided with the semi-trailer and sustained severe and permanent personal injuries.
Prior to the accident, Capitol had obtained liability insurance from U.S. Fire, including a Commercial Automobile Liability Insurance Policy, Policy No. 1336677777 ("the Auto Policy"), and an Excess Liability Insurance Policy, Policy No. 5520104937 ("the Excess Policy"), covering all sums Capitol legally must pay as damages because of bodily injury or property damage caused by an accident and resulting from the ownership, maintenance or use of a covered automobile. The operative dates of the U.S. Fire Auto and Excess Policies are October 25, 2001 to October 25, 2002, the time period encompassing the date of the accident at issue in the Underlying Complaint. Both the Auto Policy and the Excess Policy were delivered to Capitol at its offices in Vienna, Virginia.
The Auto Policy's coverage grant provides, in pertinent part:
We will pay all sums the insured must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto.
(emphasis added). Significantly, the Auto Policy defines "who is insured" as follows:
1 (emphasis added). The terms "you" and "your" are defined in the Auto Policy as "the person or organization shown as the named insured in ITEM ONE of the declarations." Capitol is the only entity listed in ITEM ONE of the declarations page of the Auto Policy. The Auto Policy defines "covered autos" as "any auto." The term "Auto" is, in turn, defined as a "land motor vehicle, trailer or semi-trailer designed for travel on public roads."
The Excess Policy states that U.S. Fire will pay the ultimate net loss in excess of all underlying insurance only after exhaustion of such underlying insurance. The Excess Policy further provides: "If any UNDERLYING INSURANCE does not pay a loss for reasons other than the exclusion of an aggregate limit of insurance, then WE shall not pay such loss." The Excess Policy also states:
The Definitions, Terms, Conditions, and Exclusions of the "CONTROLLING UNDERLYING INSURANCE" scheduled in Item 5 of the Declarations, in effect at the inception date of this policy, apply to this coverage unless they are inconsistent with the provisions of this policy, or relate to the premium, subrogation, any obligation to defend, the payment of expenses, limits of insurance, cancellation or any renewal agreement.
The Auto Policy is listed as "Controlling Underlying Insurance" in Item 5 of the Declarations page of the Excess Policy. Thus, only if the Auto Policy provides coverage will the Excess Policy coverage be triggered.
On December 17, 2004, Earth Tech tendered the defense of the Underlying Lawsuit to U.S. Fire under the Auto and Excess Policies that...
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