Empire Fire & Marine Ins. v. Brantley Trucking, No. 99-20597

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtBefore EMILIO M. GARZA, DeMOSS, and STEWART; CARL E. STEWART
Citation220 F.3d 679
Decision Date15 August 2000
Docket NumberNo. 99-20597
Parties(5th Cir. 2000) EMPIRE FIRE AND MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. BRANTLEY TRUCKING, INC., ET AL, Defendants, and BLUE FLASH EXPRESS INC., ROBERT LEWIS HARRIS, JR., RELIANCE NATIONAL INDEMNITY COMPANY, Defendants-Appellees

Page 679

220 F.3d 679 (5th Cir. 2000)
EMPIRE FIRE AND MARINE INSURANCE COMPANY, Plaintiff-Appellant,
v.
BRANTLEY TRUCKING, INC., ET AL, Defendants,
and
BLUE FLASH EXPRESS INC., ROBERT LEWIS HARRIS, JR., RELIANCE NATIONAL INDEMNITY COMPANY, Defendants-Appellees.
No. 99-20597
IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
August 15, 2000

Appeal from the United States District Court from the Southern District of Texas

Before EMILIO M. GARZA, DeMOSS, and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

This is an appeal from a declaratory judgment action seeking to determine the respective rights and obligations between two insurance companies: Plaintiff Empire Fire & Marine Insurance Company ("Empire"), and Defendant Reliance National Indemnity Company ("Reliance"). The case stems from a vehicle collision involving a jeep and a trailer-tractor rig riding "bobtail"-- trucking parlance for driving the tractor without an attached trailer or

Page 680

chassis. A dispute arose regarding coverage between the insurance carrier for the truck owner and the insurance carrier for the lessee of the truck. Determining that the language of the exclusion in the owner's policy was clear and unambiguous, we find that the exclusionary provision in Empire's policy excluded coverage. We therefore reverse the district court's judgment.

Facts and Proceedings

The facts are undisputed. Robert Harris was employed by Brantley Trucking ("Brantley"), and was driving a truck owned by Brantley which was under lease to haul cargo for Blue Flash Express ("Blue Flash").1 On the morning of October 7, 1996, Harris was waiting for cargo to load at Blue Flash's terminal yard. Harris had arrived there the night before pulling a load, and slept overnight at the yard. While he was waiting, Harris decided to have his truck serviced. He left Blue Flash's facility bobtailing, had the oil changed, picked up some auto parts, and had some other maintenance work done at a station. On his way back to the Blue Flash facility, Harris' truck collided with a Jeep Cherokee driven by Douglas Keyzer.

Two insurance contracts were in effect at the time of the accident. Reliance had issued an insurance policy to Blue Flash which provided coverage to Blue Flash as a transporter for trucking operations.2

Empire issued an insurance policy to Brantley which provided insurance coverage for non-trucking operations, and contained a "Business Use" exclusion. 3

After the accident, Keyzer filed suit against Harris, Brantley Trucking and Blue Flash in state court.4 Empire defended its insureds Harris and Brantley, subject to a reservation of rights. Reliance did not provide a defense to Brantley or Harris, but Reliance defended its insured, Blue Flash. After negotiation in May of 1998, the state case settled for a total of $625,000. Empire paid $300,000 of the settlement and Reliance paid $325,000.

Empire filed a declaratory judgment suit January 8, 1998, seeking declaration, by virtue of the business use exclusion, that the Empire policy did not provide coverage, a duty to defend, or a duty to indemnify Brantley, Harris or Blue Flash, for the accident forming the basis of the state case, and declaring that Empire and Reliance bear the costs of the state court judgment on a pro-rata basis. Empire also filed for summary judgment.

On February 18, 1999 in its final judgment the district court denied Empire's motion for summary judgment, finding as a matter of law that no exclusion in Empire's policy precluded primary coverage for the truck accident made the basis of the underlying suit, resulting in a take nothing judgment. Empire appealed.

Discussion

Before us is an appeal from a declaratory judgment action in which federal

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jurisdiction was based on the parties' diversity of citizenship, thus per Erie, Texas law applies. 28 U.S.C. §1332, Assicurazioni Generali, S.p.A v. Ranger Ins. Co. , 64 F.3d 979, 980 (5th Cir. 1995); generally Erie R.R. Co. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 118 (1938). Under Texas law, "[i]nsurance policies are contracts, and their constructions are governed by ordinary contract principles."Gomez v. Hartford Company of the Midwest, 803 S.W.2d 438, 441 (Tex.1991)(citation omitted). We review the district court's interpretation of the contract de novo, as that involves determinations of legal questions. See Rutgers State Univ. v. Martin Woodlands Gas Co., 974 F.2d 659, 661 (5th Cir. 1992).5

The pertinent language in Empire's policy excludes coverage "while a covered 'auto' is used in the business of anyone to whom the 'auto' is leased or rented." Reliance argues that applying the phrase "in the business of" to the facts of this case creates more than one reasonable interpretation of the policy language, thus the provision itself is ambiguous. As the district court found, the question of whose business Harris was pursuing at the time of the wreck created two reasonable interpretations; either Harris was not engaged in Blue Flash's business because he was riding bobtail (not carrying a load) or Harris was engaged in Blue Flash's business because he was performing work (maintenance), that would ultimately benefit the interests of Blue Flash. The district court's finding of ambiguity, resulted in favor of providing coverage, since it is well accepted that "[a] contract is ambiguous if, after applying the rules of contract interpretation, a provision remains reasonably susceptible of two meanings." Gomez, 803 S.W.2d at 442 (Tex. 1991). Texas courts have further recognized that when an ambiguity exists, the dispute is resolved against the drafter, or in favor of providing coverage. Duzich v. Marine Office of America Corp., 980 S.W.2d 857, 868 (Tex.App.1998)(meaning of exclusionary clause was ambiguous, and thus construed against insurer.)

We disagree with the district court's finding...

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33 practice notes
  • In re Enron Corp. Securities, Derivative, No. MDL-1446.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • August 1, 2005
    ...is governed by ordinary state law contract principles. Empire Fire and Marine Insurance Company v. Brantley Trucking, Page 568 Inc., 220 F.3d 679, 681 (5th Cir.2000). New York law in accord, Bell v. Cendant Corp., 293 F.3d at 566 (2d Cir.) (Although the FAA "creates `a body of federal subst......
  • Classic Performance v. Acceptance Indem., CIV.A. No. H-05-3929.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 13, 2006
    ...is determined, first, by examining "the language of the contract itself." Empire Fire and Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir.2000) (citing Puckett, 678 S.W.2d at 938). In doing so, the court must give all words in an insurance contract "their plain, ordin......
  • Alea London Ltd. v. Bickford, Civil Action No. H-08-648.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • June 12, 2009
    ...(Tex.1995). The court must first examine "the language of the contract itself." Empire Fire & Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir.2000) (citing Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984)). If the insurance policy language is susceptible ......
  • Great W. Cas. Co. v. Nat'l Cas. Co., Case No. 4:13–cv–012.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of North Dakota
    • October 9, 2014
    ...explicitly or implicitly, that the language is not ambiguous. See, e.g., Empire Fire and Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681–82 (5th Cir.2000) (“ Empire Fire ”)(quoting Hartford ); National Continental Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 612 (8......
  • Request a trial to view additional results
33 cases
  • In re Enron Corp. Securities, Derivative, No. MDL-1446.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • August 1, 2005
    ...is governed by ordinary state law contract principles. Empire Fire and Marine Insurance Company v. Brantley Trucking, Page 568 Inc., 220 F.3d 679, 681 (5th Cir.2000). New York law in accord, Bell v. Cendant Corp., 293 F.3d at 566 (2d Cir.) (Although the FAA "creates `a body of federal subst......
  • Classic Performance v. Acceptance Indem., CIV.A. No. H-05-3929.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 13, 2006
    ...is determined, first, by examining "the language of the contract itself." Empire Fire and Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir.2000) (citing Puckett, 678 S.W.2d at 938). In doing so, the court must give all words in an insurance contract "their plain, ordin......
  • Alea London Ltd. v. Bickford, Civil Action No. H-08-648.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • June 12, 2009
    ...(Tex.1995). The court must first examine "the language of the contract itself." Empire Fire & Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir.2000) (citing Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984)). If the insurance policy language is susceptible ......
  • Great W. Cas. Co. v. Nat'l Cas. Co., Case No. 4:13–cv–012.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of North Dakota
    • October 9, 2014
    ...explicitly or implicitly, that the language is not ambiguous. See, e.g., Empire Fire and Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681–82 (5th Cir.2000) (“ Empire Fire ”)(quoting Hartford ); National Continental Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 612 (8......
  • Request a trial to view additional results

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