Empire Fire and Marine Ins. Co. v. Liberty Mut. Ins. Co.
| Decision Date | 01 September 1996 |
| Docket Number | No. 1591,1591 |
| Citation | 699 A.2d 482,117 Md.App. 72 |
| Parties | EMPIRE FIRE AND MARINE INSURANCE COMPANY v. LIBERTY MUTUAL INSURANCE COMPANY. , |
| Court | Court of Special Appeals of Maryland |
Roy W. Anderson, Jr. (Kristen H. Woolam and Law Offices of J. Owen Bracken, Jr., on the brief), Baltimore, for Appellees.
Argued before WENNER and HARRELL, , JJ., and JOHN J. BISHOP, Judge (retired), Specially Assigned.
This case was decided initially by the Court on 26 June 1997. Both parties filed motions for reconsideration. We shall grant in part and deny in part those motions. Such revisions to the previously filed opinion, which has been recalled, necessary to effect those parts of the motions as we have granted are included in the following opinion. Those revisions do not change, however, the decision on the merits of the issues; they reflect merely clarifications of our reasoning.
Before us is yet another insurance coverage dispute stemming from an accident involving equipment leased to a carrier sanctioned by the former Interstate Commerce Commission. Empire Fire and Marine Insurance Company (Empire) appeals from a judgment of the Circuit Court for Baltimore County in a declaratory judgment proceeding in which the court concluded that Empire was obligated, under a policy it issued to James Perry, Jr. d/b/a J.P. Transportation to defend or indemnify for claims arising out of a motor tort case. Empire challenges the circuit court's conclusion that a truck driven by Mr. Perry was not operating in the business of O.S.T. Trucking Co., Inc. (O.S.T.), to whom the covered vehicle was leased, thereby preventing the application of a "business use" exclusion contained in the policy Empire issued to Mr. Perry. In addition, appellant claims that the court erred by not holding that appellee, Liberty Mutual Insurance Company (Liberty), was not obligated to provide coverage. Empire asserts that, based on a permissive use clause contained in a policy Liberty issued to O.S.T., Liberty was obligated to provide coverage for the vehicle leased to O.S.T. and being driven by Mr. Perry, the vehicle's owner.
We agree with the circuit court's holding that, at the time of the accident, the truck was not being operated in the business of O.S.T.. Because the circuit court failed to consider whether Liberty was obligated to provide coverage under its permissive use provision and because the record does not contain
sufficient undisputed facts from which such a determination can be made, however, we must reverse the judgment of the circuit court and remand this case for further proceedings. In remanding this case, we shall offer the trial court some guidance for determining whether the permissive use provision applies and in reconciling the potential dual coverage issues.
In order to facilitate our analysis of the instant appeal, we have reordered and rephrased the questions presented by appellant as follows:
I. Whether the Peterbuilt tractor driven by James Perry, Jr. was being used in the business of O.S.T. at the time of the accident.
II. Whether Mr. Perry is an insured under a permissive use provision contained in an insurance policy issued by Liberty to O.S.T.
III. Whether Empire's policy furnishes primary liability.
IV. Whether Liberty's policy furnishes primary liability.
V. If both policies furnish primary liability, how should the two policies' "other insurance clauses" be reconciled.
In the proceedings before the circuit court, the parties submitted an agreed statement of fact and exhibits. We have excerpted the relevant portions of that statement below.
James Perry, Jr. is the owner and operator of a 1986 Peterbuilt Tractor.... Mr. Perry owned the subject tractor in January 1995. Mr. Perry would haul trailers owned by other entities at the request of [O.S.T.]. Mr Perry did business under the trade name "J.P. Transportation".
In January 1995, the subject tractor was under lease with [O.S.T.].[ 1] [O.S.T.] was in the business of hauling loads of Mr. Perry was not employed by [O.S.T.], but was instead considered an independent trucker. [O.S.T.] did not withhold taxes or social security from payments made to Mr. Perry.
freight.... As stated in the lease, Mr. Perry cannot pick up or deliver trailers for another entity without [O.S.T.'s] prior permission. [O.S.T.] is a licensed I.C.C. [Interstate Commerce Commission] carrier operating under an I.C.C. permit.... In January 1995, the subject tractor was operated with [699 A.2d 487] an adhesive I.C.C. placard affixed, bearing the I.C.C. and D.O.T. [Department of Transportation] Permit Numbers assigned to [O.S.T.].
With regard to scheduling trucking assignments, Mr. Perry contacts the [O.S.T.] dispatch office on a daily basis to obtain his next assignment. The arrangement is described by Mr. Perry as a "non-force dispatch," ... [meaning that O.S.T] cannot force Mr. Perry to carry a load involuntarily.
Mr. Perry is compensated for each trip by [O.S.T.] Trucking in accordance with a designated standard mileage rate.
All repairs and maintenance to [Mr. Perry's] truck are the responsibility of Mr. Perry. Any needed repairs and maintenance to [Mr. Perry's] truck were arranged by Mr. Perry. Mr. Perry assumed the cost of all fuel, repairs and maintenance to his vehicle, and was not reimbursed for those expenses....
* * *
The accident which is the subject of the underlying case occurred in the late afternoon on Friday, [20 January 1995].
Mr. Perry was last under dispatch by [O.S.T.] on Monday, [16 January 1995], when he was dispatched to take an empty trailer to Bayonne, New Jersey from Baltimore; and was instructed to bring back a load to Baltimore. On the return trip from Bayonne, New Jersey, Mr. Perry began experiencing mechanical problems with the tractor concerning a pressure plate (related to the transmission). The mechanical problem did not render the tractor inoperable.
Mr. Perry returned to Baltimore on Monday evening, [16 January 1995] and delivered the full trailer to a warehouse in Baltimore. After completing this dispatch which had been given by [O.S.T.], Mr. Perry took the tractor without any trailer attached for repairs.
By Tuesday, [17 January 1995], Mr. Perry had taken the tractor to Chuck's Fleet Service on North Point Road in Baltimore for repair of the pressure plate. The tractor remained in the shop throughout Wednesday, Thursday and Friday, i.e., [18, 19, 20 January].
By the late afternoon hours on Friday, [20 January], the repairs had been completed; and Mr. Perry retrieved the tractor from Chuck's Fleet Service at approximately 4 or 5 p.m.. Mr. Perry paid for the repairs, and was not reimbursed by [O.S.T.].
Mr. Perry had spoken with the dispatch office of [O.S.T], and anticipated his next dispatch by [O.S.T.] to be on Monday, [23 January].
Approximately two weeks earlier, Mr. Perry had ordered parts from Beal's GMC Peterbuilt dealership located on Route 40 East. The Peterbuilt dealership is located in route between Chuck's Fleet Service and Mr. Perry's home. Beal's dealership is the only Peterbuilt dealership in Baltimore furnishing parts for Peterbuilt tractors such as the subject tractor. Mr. Perry recalls that the parts on order were related to a toolbox attached to the exterior of the subject tractor. The toolbox is approximately three feet long, and is located on the side frame of the tractor. The toolbox acts as a step upon which the driver enters and exists the trucking cab compartment, and can be used to store tools or other belongings. Mr. Perry believes that the parts on order were for a lock for the toolbox and possibly a hinge. After retrieving the tractor from Chuck's Fleet Service on Friday, [20 January], Mr. Perry drove into the Peterbuilt dealership, purchased the parts and drove out of the dealership onto Route 40. [O.S.T] did not reimburse Mr. Perry for these parts. The accident that is the subject of the underlying case then occurred on Route 40.
Mr. Perry was not en route to pick up or deliver a trailer at the time of the accident. Mr. Perry was not receiving any compensation by [O.S.T] from [17 January 1995--Friday 20 January 1995]. At the time of the accident, Mr. Perry was on his way home. At the time of the accident, Mr. Perry was not operating under a bill of lading. The tractor was not under dispatch. Mr. Perry was not hauling a load, and the tractor was not connected to a trailer. Mr. Perry was bobtailing[ 2] when the accident occurred. (Operating a tractor unattached to a trailer is commonly referred to as "bobtailing"). Mr. Perry was "off-duty" [17 January through 20 January 1995, inclusive], the day of the accident. Mr. Perry did not believe that he was within the control of [O.S.T.] at the time of the accident, nor operating the tractor pursuant to [O.S.T.] instructions.
(Footnote omitted).
On 22 March 1994, Mr. Perry and O.S.T. entered into a one-year written motor vehicle lease and agreement. The lease included the following terms:
... O.S.T. shall adhere to and perform said provisions and Independent [Mr. Perry] will operate the Equipment as the business of O.S.T. may require, and perform such other * * *
services herein stated for and in behalf of O.S.T., subject to the following terms and conditions.
3. INSURANCE. O.S.T. shall maintain insurance for the protection of the public as required by the Interstate Commerce Commission while Independent is operating in the business of O.S.T., except Independent agrees to pay $500.00 for damage to property, caused by accident arising out of the use of said tractor in the business of O.S.T, which O.S.T. is obligated to pay any third person. During the term of this agreement, the Independent agrees to provide and maintain, at his sole expense, with O.S.T. as an additional named insured, public liability and...
To continue reading
Request your trial
-
Balt. Scrap Corp. v. RLI Ins. Co.
...to be most strongly construed against the insurer.’ " Capital City , 788 F.3d at 379 (quoting Empire Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co. , 117 Md. App. 72, 97, 699 A.2d 482, 494 (1997) ); see Megonnell , 368 Md. at 655, 796 A.2d at 771 ; Bushey v. N. Assurance Co. of Am. , 362 M......
-
Allstate Ins. Co. v. Rochkind
...to be most strongly construed against the insurer.’ " Capital City , 788 F.3d at 379 (quoting Empire Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co. , 117 Md. App. 72, 97, 699 A.2d 482, 494 (1997) ); see Megonnell , 368 Md. at 655, 796 A.2d at 771 ; Bushey v. Northern Assurance Co. of Ameri......
-
Nautilus Ins. Co. v. 200 W. Cherry St., LLC
...to be most strongly construed against the insurer.’ " Capital City , 788 F.3d at 379 (quoting Empire Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co. , 117 Md. App. 72, 97, 699 A.2d 482, 494 (1997) ); see Megonnell , 368 Md. at 655, 796 A.2d at 771 ; Bushey v. Northern Assurance Co. of Ameri......
-
Cordish Cos. v. Affiliated FM Ins. Co.
...to be most strongly construed against the insurer.’ " Capital City , 788 F.3d at 379 (quoting Empire Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co. , 117 Md. App. 72, 97, 699 A.2d 482, 494 (1997) ); see Megonnell , 368 Md. at 655, 796 A.2d at 771 ; Bushey v. N. Assurance Co. of Am. , 362 M......