Grange Mut. Cas. Co. v. Pinson Trucking Co.

• Court: U.S. District Court — Middle District of Georgia
• Writing for the Court: MARC T. TREADWELL
• Decision Date: 05 February 2013
• Docket Number: CASE NO. 5:11-CV-487 (MTT)
• Citation: Grange Mut. Cas. Co. v. Pinson Trucking Co., CASE NO. 5:11-CV-487 (MTT) (M.D. Ga. Feb 05, 2013)
• Parties: GRANGE MUTUAL CASUALTY COMPANY, Plaintiff, v. PINSON TRUCKING COMPANY, INC., MAURICE DION LAKE, TAMMY JONES WILLIAMS, and MARCUS TERRELL BOATWRIGHT Defendants.

GRANGE MUTUAL CASUALTY COMPANY, Plaintiff, v. PINSON TRUCKING COMPANY, INC., MAURICE DION LAKE TAMMY JONES WILLIAMS, and MARCUS TERRELL BOATWRIGHT Defendants.

CASE NO. 5:11-CV-487 (MTT)

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA MACON DIVISION

SO ORDERED: February 5, 2013

ORDER

Before the Court are the Parties' Cross Motions for Summary Judgment. (Docs. 26 and 27). Essentially, the Parties ask the Court to determine whether Plaintiff Grange Mutual Casualty Company's insurance policy should be rewritten by the Court to provide coverage for a tractor leased by its insured to a motor carrier. For the following reasons, Grange's Motion is GRANTED, and the Defendants' Motion is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Defendant Pinson Trucking Company's and Lumber Transport's Lease Arrangement

The Parties have stipulated to the relevant facts. (Doc. 25). Defendant Pinson Trucking Company (Pinson), which is insured by Grange, and Lumber Transport, Inc. (Lumber) are "for-hire motor carriers operating commercial motor vehicles for the purpose of transporting property." (Doc. 25 at 3). However, only Lumber is authorized by the United States Department of Transportation to transport property across state lines and by the State of Georgia to transport property within Georgia. (Doc. 25 at 3).Pinson does not have any motor carrier authority, and thus cannot legally haul goods for hire. (Doc. 25 at 4). Presumably because of this, Pinson had for some time leased its truck, the tractor of a tractor-trailer rig, to Lumber, and Lumber operated the tractor pursuant to its motor carrier authority.¹ (Doc. 25 at 4).

Lumber agreed to provide liability insurance for the tractor. (Doc. 25 at 8). At the time of the accident giving rise to this action, Lumber had an insurance policy with Great West Casualty Company (Great West) providing liability coverage of $1,000,000 to Lumber, Pinson, and Pinson employees for any one accident or loss involving a motor carrier. (Doc. 25 at 9-10). The Great West policy included an endorsement for public liability pursuant to requirements under the Motor Carrier Act of 1980, 49 U.S.C. § 10101 et seq., commonly called a Form MCS-90 endorsement. (Doc. 25 at 9). Lumber also had an excess liability insurance policy with Hallmark Insurance Company providing Lumber, Pinson, and Pinson employees with $2,000,000 in additional coverage. (Doc. 25 at 10). Although the lease agreement required Pinson to provide a driver for the tractor, the tractor would "at all times be operated to the exclusive direction and supervision of" Lumber. (Doc. 25-7 at 2). Further, the lease agreement gave Lumber "exclusive possession, control, and use" of the tractor, and Lumber "assume[d] complete responsibility for operation" of the tractor. (Doc. 25-7 at 4).

B. The August 8, 2011 Accident

On August 8, 2011, Pinson employee Marcus Boatwright, while driving the Pinson-owned tractor leased to Lumber, was involved in an eight vehicle automobileaccident. (Doc. 25 at 10). Three people died and several more were injured in this accident. Defendants Maurice Dion Lake and Tammy Jones Williams² were among the injured. The accident also caused significant property damage to vehicles and the roadway. (Doc. 25 at 10). The tractor was being operated by Lumber pursuant to the lease between Pinson and Lumber. (Doc. 25 at 10). Of course, Lumber was operating the tractor pursuant to its motor carrier operating authority. (Doc. 25 at 11).

Following the accident and the filing of a civil lawsuit in the Superior Court of Greene County, Georgia against Great West, Pinson, Lumber and Boatwright, Great West undertook the legal defense of Pinson, Lumber and Boatwright. (Doc. 25 at 12). All these parties are represented by the same counsel. Boatwright admitted he was responsible for the August 8 accident; however, he reserved the issues of proximate cause and damages. (Doc. 25 at 13). Further, Pinson admitted that Boatwright was operating within the scope of his employment with Pinson at the time of the accident. (Doc. 25 at 13).³

C. The Grange Mutual Policy

Pinson had a "Commercial Package" policy with Plaintiff Grange Mutual Casualty Company (Grange). (Doc. 25 at 5). At the time Pinson's most recent policy with Grange was renewed,⁴ Grange knew "that Pinson was a for-hire motor carrier operating motor vehicles for the purposes of transporting property in interstate and intrastatecommerce." ⁵ (Doc. 25 at 5). However, neither Pinson nor Grange intended the Grange policy to provide liability coverage for Pinson-owned vehicles that were leased to Lumber and used in hauling freight and goods for hire. (Doc. 25 at 8).

The Grange policy provided "general liability insurance for risks associated with people coming on Pinson Trucking's premises" and "property damage coverage in case any of Pinson Trucking's building were damaged or destroyed." (Doc. 34 at 5) (citing Doc. 25-5). The policy included a commercial automobile coverage endorsement insuring only two scheduled vehicles—a 1999 Chevrolet pick-up and a 2000 Fleetwood motor home. (Doc. 25 at 7). Pinson owned both vehicles. Of course, neither vehicle was used by Pinson for hauling freight or goods for hire. The Grange policy did not contain a Form MCS-90 endorsement, nor did it contain a Georgia "Form 'F' endorsement. A Form F endorsement is somewhat similar to a MCS-90 endorsement and is required of certain intrastate motor carriers.⁶ (Doc. 25 at 7-8).

D. The Present Declaratory Judgment Action

On November 4, 2011, all known personal injury claims, and some property damage claims, were settled at mediation, with the exception of Defendants Lake and Williams. (Doc. 25 at 14). The settlement exhausted Great West's $1,000,000 policylimits, and Hallmark's $2,000,000 limits were reduced to $281,833.62. (Doc. 25 at 15). Lake and Williams have rejected Hallmark's remaining limits offered to settle their claims. (Doc. 25 at 15).

On November 21, counsel for Pinson, Boatwright, Lumber, Great West and Hallmark⁷ forwarded to Grange Williams' and Lake's settlement demand of $1,036,380.50. (Doc. 25 at 16). Williams and Lake argue that Grange's policy "by operation of law" should be rewritten to include coverage in the amount of $750,000, the amount required for a MCS-90 endorsement. (Doc. 25 at 16). On December 7, counsel for Pinson, Boatwright, Lumber, Great West and Hallmark also demanded (on behalf of Pinson), that Grange pay $750,000.00 to Williams' and Lake's claims. (Doc. 25 at 17). On December 12, Grange sought a declaratory judgment determining whether the Grange policy provides coverage to Pinson and Boatwright for the claims asserted by Williams and Lake. (Doc. 25 at 17; Doc. 1).

II. SUMMARY JUDGMENT STANDARD

A court must grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is not genuine unless, based on the evidence presented, "a reasonable jury could return a verdict for the nonmoving party." Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224 (11th Cir.2002); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant must cite "to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A).

The burden then shifts to the non-moving party, who must rebut the movant's showing "by producing...relevant and admissible evidence beyond the pleadings." Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315 (11th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The non-moving party does not satisfy his burden "if the rebuttal evidence is merely colorable, or is not significantly probative of a disputed fact." Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). However, "credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. ... The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255. Further, "[c]ross motions for summary judgment do not change the standard." Perez-Santiago v. Volusia Cnty., 2010 WL 917872 (M.D. Fla.) (internal citations and quotations omitted).

III. DISCUSSION

A. Whether the MCS-90 Should be Incorporated into the Grange Policy as a Matter of Law

Pursuant to the Motor Carrier Act of 1980 and regulations promulgated thereunder, certain interstate motor carriers must obtain an insurance policy containing a MCS-90 endorsement "providing that the insurer will pay within policy limits any judgment recovered against the insured motor carrier for liability resulting from thecarrier's negligence." Waters v. Miller, 564 F.3d 1355, 1357 (11th Cir. 2009) (internal citation and quotations omitted). The primary purpose of the MCS-90 endorsement is "to assure that motor carriers maintain an appropriate level of financial responsibility for motor vehicles operated on public highways." 49 C.F.R. § 387.1. "In order to accomplish this purpose, the endorsement makes the insurer liable to third parties for any liability resulting from the negligent use of any motor vehicles by the insured, even if the vehicle is not covered under the insurance policy." Waters v. Miller, 560 F. Supp. 2d 1318, 1321 (M.D. Ga. 2008) (internal quotations and citation omitted). The MCS-90 endorsement applies "regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere." 49 C.F.R. § 387.15. It is, in effect, a...