Progressive Cas. Ins. Co. v. Hoover

• Decision Date: 25 October 2002
• Citation: Progressive Cas. Ins. Co. v. Hoover, 809 A.2d 353, 570 Pa. 423 (Pa. 2002)
• Parties: PROGRESSIVE CASUALTY INSURANCE COMPANY, Appellant v. Blanche M. HOOVER and James E. Hoover, her Husband, Loren J. Druist, Wayne S. Hursh, Marbec Trucking Company, Marvin SenseniG t/d/b/a Marbec Trucking Company, and K.B.S., Inc., Appellees.
• Court: Pennsylvania Supreme Court

809 A.2d 353

570 Pa. 423

PROGRESSIVE CASUALTY INSURANCE COMPANY, Appellant v. Blanche M. HOOVER and James E. Hoover, her Husband, Loren J. Druist, Wayne S. Hursh, Marbec Trucking Company, Marvin SenseniG t/d/b/a Marbec Trucking Company, and K.B.S., Inc., Appellees.

Supreme Court of Pennsylvania.

Argued March 4, 2002.

Decided October 25, 2002.

Wliiiam R. Tighe, Pittsburgh, Ira S. Lipsius, pro hac vice, New York City, for appellant, Progressive Cas. Ins. Co.

Francis C. Rapp, New Kensigton, for appellants, Blanche M. and James E. Hoover.

Richard Lewis Bushman, Spring Run, for appellee, Marvin Sensenig t/d/b/a Marbec Trucking.

John Thomas Pion, Pittsburgh, for appellee K.B.S., Inc.

Before ZAPPALA, C.J., and CAPPY, CASTILLE, NIGRO, NEWMAN, SAYLOR and EAKIN, JJ.

OPINION

Justice SAYLOR.

This appeal requires us to consider, for purposes of determining the effect of an interstate commerce endorsement appended to a commercial vehicle liability insurance policy, whether a tractor-trailer was engaged in interstate commerce when it collided with another vehicle.

The accident occurred in November, 1995, in Forward Township, Allegheny County; the tractor-trailer involved was dispatched by Appellee Marbec Trucking Company, leased from Appellee Wayne S. Hursh, and driven by Loren J. Druist. In a civil action commenced in Allegheny County against Marbec, Hursh, Druist, and others, Appellees Blanche M. and James E. Hoover averred that Druist failed to observe a traffic signal, causing the truck to strike the automobile driven by Mrs. Hoover, who sustained serious injuries. Marbec's insurer, Appellant Progressive Casualty Insurance Company, filed the present declaratory judgment action naming the parties to the underlying action as defendants and seeking a judicial determination concerning its obligations under the policy issued to Marbec.

Progressive's base policy covered vehicles scheduled within the declaration pages, which did not include Hursh's truck. Nevertheless, in connection with Marbec's federal certification to conduct interstate operations, the business had also obtained from Progressive an "Endorsement for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980."¹ Commonly referred to as an "MCS-90" or "interstate commerce endorsement," this rider required Progressive to pay a final judgment recovered against its insured "resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the [MCA] regardless of whether or not each motor vehicle is specifically described in the policy." Since Sections 29 and 30 of the MCA pertained to certain matters involving interstate commerce, see infra note 8, the endorsement was therefore implicated in relation to Hursh's truck only to the extent that it was operated, pursuant to the Marbec lease, in furtherance of interstate commerce.

Progressive and the Hoovers filed cross-motions for summary judgment to vindicate their respective views concerning the application of the MCS-90 and, in particular, to resolve whether the shipment at issue was interstate or intrastate in character. According to Progressive, because Hursh's tractor-trailer was transporting its cargo between two points within Pennsylvania, it was necessarily engaged exclusively in intrastate commerce. Appellees' position was that the carriage via Hursh's truck represented merely the final leg of a continuous, interstate shipment, since the truck's contents previously had moved between states. To further contextualize the question, the parties attached to their submissions transcripts from deposition testimony adduced from parties and witnesses.

The cargo involved was distiller's grain, a byproduct of the production of ethanol used as a feed additive for dairy cattle. The shipment derived from an order placed approximately one month prior to the accident by the Pennsylvania Agricultural Commodities Marketing Association, Inc. ("PACMA"), a grain broker,² with the Jesse Stewart Co. ("Jesse Stewart"), a grain wholesaler that sells primarily to feed mills in Pennsylvania. PACMA requested to purchase fifteen truckloads of the grain, or approximately 345 tons. Jesse Stewart's usual practice was to wait until it had accumulated enough orders to warrant the purchase of a bargeload (1,000 to 1,500 tons) of distiller's grain, and then arrange for a barge to transport the commodity from the producer's Illinois distillery to a storage facility owned and operated by Clairton Slag in West Elizabeth, Allegheny County, Pennsylvania.³ There, Clairton Slag unloaded, stored, and loaded grain onto trucks at Jesse Stewart's expense, with some trucks being commissioned by Jesse Stewart for delivery to its customers and others by the customers themselves. In the case of customers, including PACMA, making their own arrangements for land transportation, title to the grain transferred upon loading at the Clairton Slag facility.

When purchasing quantities of distiller's grain, Jesse Stewart's intention was to have the product move through the storage facility to customers as quickly as possible. A bargeload apparently remained in the facility for seven to fifteen days on average.⁴ Although it appears that an order such as that placed by PACMA would aid in prompting Jesse Stewart toward purchasing a bargeload, a representative of the company testified that it would have done so only in the context of an overall buying strategy, not in the sense that the quantity ordered by PACMA could be traced to a particular bargeload (the storage facility could hold approximately one and one-half bargeloads). Moreover, the depositions do not reflect knowledge on the part of Jesse Stewart of the ultimate destination of the relevant portion (one of fifteen truckloads) of the distiller's grain. This destination was Kreider's Feed Mill in Loysville, Perry County, Pennsylvania (PACMA's customer), with PACMA arranging for the transportation with Marbec as the carrier. The timing of the lodging of the order of Kreider's Feed Mill with PACMA is also not clear.⁵

Based on the above, the common pleas court denied Progressive's motion for summary judgment and granted the Hoovers', noting that even though the route of a shipment may be entirely within a single state (here, West Elizabeth to Loysville, Pennsylvania), the shipment may nevertheless be part of a larger, continuing movement in interstate commerce. See Texas v. United States, 866 F.2d 1546, 1553 (5th Cir.1989). The common pleas court explained that whether a particular shipment is interstate or intrastate depends upon the essential character of the commerce—the primary determinant of which is the shipper's fixed, persisting intent at the time of shipment—and that all of the circumstances surrounding the shipment at issue are to be considered in ascertaining the shipper's prevailing intent. See Century Indem. Co. v. Carlson, 133 F.3d 591, 595 (8th Cir.1998) (quoting Roberts v. Levine, 921 F.2d 804, 812 (8th Cir. 1990)). Having implicitly identified Jesse Stewart as the shipper, the common pleas court summarized the facts of the case and concluded that

[clearly] this grain was moving in interstate commerce. When Jesse Stewart purchased the grain from [the producer] in Illinois, its ultimate destination had in large part been predetermined. It would ultimately be shipped to Jesse Stewart's customers at various locations in Pennsylvania based upon preexisting orders. The barge trip from Illinois to West Elizabeth was intended to be only the first leg of shipment. Once the grain was unloaded into the storage facility, it would only remain there briefly until Jesse Stewart's customers picked it up to transport it to the final destinations within Pennsylvania.

Thus, Jesse Stewart clearly intended that the distillers grain would move beyond its storage facilities in West Elizabeth.

Therefore, the common pleas court determined that the MCS-90 applied and, accordingly, directed Progressive to pay any final judgment obtained by the Hoovers against Marbec, up to the policy limits.⁶ On Progressive's appeal, the Superior Court affirmed, applying the same focus as the common pleas court in terms of the essential character of the commerce, the fixed and persisting intent of the shipper, and the totality of the circumstances surrounding the shipment. See Progressive Cas. Ins. Co. v. Hoover, 768 A.2d 1157 (Pa.Super.2001). The Superior Court also agreed with the common pleas court's position that Jesse Stewart was the relevant shipper, and Jesse Stewart's intent was to move the grain as far into Pennsylvania as barge transportation would allow, with the understanding that the product's ultimate destination beyond the warehouse had already been determined when PACMA's customers placed their orders. See Hoover, 768 A.2d at 1161-62. In response to Progressive's argument that the common pleas court erred in focusing on Jesse Stewart rather than PACMA as the shipper (since title to the distillers grain passed to PACMA in West Elizabeth and PACMA arranged the relevant carriage by Marbec), the Superior Court cited Middlewest Motor Freight Bureau v. ICC, 867 F.2d 458 (8th Cir.1989), noting that in that case the court deemed an instance of transportation between two in-state points to have been one leg of an interstate journey without reference to the identity of the shipper for each particular segment. See Hoover, 768 A.2d at 1162-63 (citing Middlewest, 867 F.2d at 460-61).

The Superior Court also made an assessment of the temporary storage of the distiller's grain at the Clairton Slag facility following its journey from Illinois. In this regard, the court distinguished decisions in which shipments came to rest for manufacturing or processing reasons, see Hoover, 768 A.2d at 1161 (citing National Retail Transp., Inc. v. Pennsylvania Pub. Utility Comm'n, 109...