Great W. Cas. Co. v. Nat'l Cas. Co.
| Citation | 53 F.Supp.3d 1154 |
| Decision Date | 09 October 2014 |
| Docket Number | Case No. 4:13–cv–012. |
| Court | United States District Courts. 8th Circuit. United States District Court of North Dakota |
| Parties | GREAT WEST CASUALTY COMPANY, Plaintiff, v. NATIONAL CASUALTY COMPANY and Steve Heinis, Defendants. |
Tamara L. Novotny, Cousineau McGuire Chartered, Minneapolis, MN, for Plaintiff.
Joel A. Flom, Flom Law Office, P.A., Fargo, ND, Scott W. McMickle, McMickle, Kurey & Branch, LLP, Alpharetta, GA, for Defendants.
Steve Heinis, Rapid City, SD, pro se.
In this declaratory action initiated by plaintiff Great West Casualty Company (“Great West”), the court must decide whether defendant Steve Heinis should be afforded liability coverage by Great West, by co-defendant National Casualty Company (“National”), or by neither of said insurers, for an accident that occurred on June 18, 2011, which is the subject of a pending state court action. Before the court are cross-motions for summary judgment by Great West and National. Unless otherwise indicated, the facts are either undisputed or have been construed most favorably for National.1
At the time of the June 18, 2011, accident, Heinis, a South Dakota resident, was working as a trucker in the oil fields of western North Dakota and eastern Montana, including the prolific Bakken field. Heinis owned a 2007 Volvo semi-tractor and a 1977 Trailmobile tanker-trailer that he leased to Avery Enterprises, Inc. (“Avery”), a local trucking firm headquartered in Powers Lake, North Dakota, pursuant to a written lease dated April 14, 2011. (Doc. Nos. 20–1, pp. 9–10; 20–2, pp. 4–9; 20–4).
Pursuant to the lease, Heinis had agreed to make his equipment and a driver (which in this case was himself) available to Avery for use in its business of providing trucking services to oil and gas companies operating in western North Dakota and eastern Montana. Specifically, Avery used Heinis and his equipment to haul either fresh water to drill sites for use in drilling operations or to haul contaminated “flowback” or “pit” water from the drill sites to authorized disposal facilities. (Doc. Nos. 20–1, pp. 19–20; 20–2, pp. 12, 21–22; 20–4).
The salient terms of the lease between Heinis (the “lessor”) and Avery (the “lessee”) were that:
Notably, the lease did not authorize Heinis to use the equipment he leased to Avery to haul loads for himself or other carriers during the term of the lease—at least not explicitly. In fact, as noted above, Heinis was obligated to remain in “constant contact” with Avery's dispatcher and respond to dispatched loads within a “reasonable” period of time. In addition, Avery's name was on the tractor during the entire time it was leased to Avery—including the day of the accident. Not surprisingly, Heinis never attempted to use the equipment to haul loads for himself or others while it was under lease to Avery. (Doc. No. 20–1, pp. 10, 18–19, 24).
As required by the lease, Avery maintained a policy with National that included commercial liability motor carrier coverage for the equipment it leased from Heinis. And, to satisfy his obligations under the lease, Heinis obtained a “Commercial Lines Policy” from Great West that provided non-trucking liability coverage (sometimes referred to as “bobtail” insurance) for when the equipment was not being used in support of Avery's business.2 (Doc. Nos. 20–2, p. 9; 25–4; 29–5; 29–6; 29–7).
On June 16, 2011, Heinis was dispatched by Avery to transport a load of contaminated flowback water from a well site in North Dakota to a disposal facility in eastern Montana. Heinis started out from Williston, North Dakota, where he often stayed while awaiting his next dispatch because of its central location to where the work was located and the fact it had supporting services, e.g., truck stops and a variety of places to eat.3 He traveled to the well site where he loaded the flowback water and then to the disposal facility where he unloaded it. He then returned to Williston, arriving during the late evening hours of June 16 or the early morning hours of June 17, which was a Saturday. (Doc. Nos. 20–1, pp. 14–16; 20–2, p. 18–19).
Sometime prior to hauling this load, Heinis noted that there was a small leak on his tanker-trailer during loading and unloading. As a temporary measure, he used a bucket to prevent the leaking material from spilling on the ground. On June 17, Heinis decided to get the leak fixed and called Avery's principal, Kevin Avery, about having Avery's shop fix the leak. After Avery agreed, Heinis pulled the tanker-trailer from Williston to Avery's shop at Powers Lake the same day. (Doc. Nos. 20–1, pp. 21–22; 20–2, p. 13).
There is no dispute over the fact that, when Heinis took his tanker-trailer to Avery's shop for repair, he was not under dispatch from Avery. Also, there is no dispute that the repair was Heinis's responsibility under the lease, that he was free to have the repair done elsewhere, and that the cost of having the leak repaired would ultimately be charged to his account. (Doc No. 20–1, pp. 7, 17, 22).
Avery's shop was not able to get to the repair immediately. After spending the evening, Heinis backed his tanker-trailer partway into Avery's shop on the morning of Sunday, June 18, and, an employee of Avery, Jesse Miller, undertook to make the repair. When Miller applied his lit torch to the location of the leak to begin welding, there was an immediate explosion in which Miller was injured.4 It is undisputed that what exploded were residual petroleum fumes from the contaminated flowback water that Heinis had been hauling, presumably from his last load. (Doc. Nos. 20–1, p. 16; 20–2, pp. 14–15; 20–3, p. 6).5
The only factual dispute with respect to the accident, which potentially could be material for reasons discussed later, is whether Heinis had unhooked his trailer from the tractor before the repair was attempted. Heinis claimed he unhooked it because he was concerned the welding could damage the computer on the tractor and that he reconnected the tractor to the trailer following the accident to pull it out of the shop so the ambulance could get to Miller. (Doc. No. 20–1, p. 16). Kevin Avery, on the other hand, was adamant that the tractor was still hooked to the trailer when he ran into the shop following the explosion, recalling that all Heinis had to do to move the trailer was to get into the tractor and pull the trailer out of the shop. (Doc. No. 20–2, p. 15). Miller testified he too did not believe the trailer was unhooked, but could not be certain. (Doc. No. 20–3, pp. 6–7).
There is currently pending in state court a personal injury action brought by Miller against Heinis.
The standards for addressing motions for summary judgment are well known to the court and need not be repeated here. E.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Barnhardt v. Open Harvest Co-op., 742 F.3d 365, 369 (8th Cir.2014).
The court's jurisdiction in this case arises out of the diversity of citizenship of the parties. Consequently, the court looks to state law to resolve the substantive questions. E.g., George K. Baum & Co. v. Twin City Fire Ins. Co., 760 F.3d 795, 799 (8th Cir.2014). The question of which state's law applies is resolved by applying the choice-of-law rules of the forum state. Id.; Platte Valley Bank v. Tetra Financial Group, LLC, 682 F.3d 1078, 1082–83 (8th Cir.2012).
The complete copy of National's policy contains a myriad of different coverages, endorsements, schedules, and other changes. What has been submitted to the court is more than 1150 pages long and, even when copied double-sided, is 2 ½ inches thick. In deciding whether the policy provides coverage to Heinis, the court must necessarily limit its consideration to those portions of the policy the parties have identified as being relevant.
Also, the court will apply North Dakota law in construing National's policy given that: (1) National has not pointed to any policy provision purporting to dictate what law governs its interpretation; (2) the policy was issued to Avery as the “Named Insured” and Avery was headquartered and doing business in North...
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Great W. Cas. Co. v. Nat'l Cas. Co.
...53 F.Supp.3d 1154GREAT WEST CASUALTY COMPANY, Plaintiff,v.NATIONAL CASUALTY COMPANY and Steve Heinis, Defendants.Case No. 4:13–cv–012.United States District Court,D. North Dakota,Northwestern Division.Signed Oct. 9, [53 F.Supp.3d 1155]Tamara L. Novotny, Cousineau McGuire Chartered, Minneapo......