Those Certain Underwriters v. Dti Logistics

• Decision Date: 02 November 2009
• Docket Number: No. A09A1432.,A09A1432.
• Citation: 686 S.E.2d 333,300 Ga. App. 715
• Parties: THOSE CERTAIN UNDERWRITERS AT LLOYDS, LONDON v. DTI LOGISTICS, INC.
• Court: Georgia Court of Appeals

686 S.E.2d 333

300 Ga. App. 715

THOSE CERTAIN UNDERWRITERS AT LLOYDS, LONDON v. DTI LOGISTICS, INC.

No. A09A1432.

Court of Appeals of Georgia.

November 2, 2009.

Fields, Howell, Athans & McLaughlin, Gregory L. Mast, Atlanta, for appellant.

Strawinski & Stout, James S. Strawinski, Atlanta, for appellee.

ADAMS, Judge.

The entire cargo of three trailers was stolen while the trailers were parked in a Ryder Truck facility parking lot. DTI Logistics, Inc., the company transporting the cargo, had cargo insurance provided by Those Certain Underwriters at Lloyd's, London Subscribing to Policy No. C6120102 (the "Underwriters"). The policy covers loss of cargo owned by third parties, and DTI requested reimbursement under the policy. The Underwriters denied coverage. DTI brought suit for breach of contract, and the case went to trial with DTI prevailing. On appeal, the Underwriters contend the trial court erred by denying their motion for directed verdict, by improperly instructing the jury regarding a term of the policy, and by awarding prejudgment interest.

Construed in favor of the verdict, the evidence shows that DTI is a small trucking company that leases many of its trucks from Ryder. As a consequence of the relationship, Ryder gave DTI permission to park trailers at a Ryder facility in Atlanta. In the matter at hand, Colgate-Palmolive hired DTI to ship cargo valued at over $100,000, which required three trailers. Between May 9 and May 11, 2003, DTI parked the three loaded trailers at the Atlanta Ryder facility. The trailers were detached from the tractors, closed, and securely locked with keys removed. Nevertheless, at some point, the trailers were taken from the Ryder facility by an unknown person and returned empty.

In order to protect itself, DTI had purchased motor truck cargo coverage from the Underwriters and paid the premiums. The insuring clause of the policy provides that the Underwriters agree "to indemnify the Insured" for ALL RISKS OF PHYSICAL LOSS OR DAMAGE FROM AN EXTERNAL CAUSE to lawful cargo in and/or on a truck whilst in the Insured's care, custody or control in the ordinary course of transit, including loading and unloading. . . .

The policy only covers cargo owned by third parties: the policy specifically excludes property of the insured; and "cargo" is defined not to include property or equipment owned, hired or leased by the insured. Colgate-Palmolive is not a party to this action.

Exclusion k of the policy excludes coverage for [a]ny losses from unattended¹ trucks while in the ordinary course of transit unless:

a) The truck is garaged in a building or parked in a fully enclosed yard which is securely closed and locked, or the truck is under constant surveillance, or on a guarded lot AND

b) The truck has all the openings closed and securely locked and keys removed, in so far as the local regulations permit.

The term "truck" is defined to include "trailers and semi-trailers." And even an unattended trailer temporarily detached from a truck or tractor is covered if parked and secured in the same manner set out above. But the policy does not define a "guarded lot."

Prior to trial, the court granted partial summary judgment in favor of the Underwriters, finding undisputed that the trailers were not in a building, parked in a fully enclosed yard, or under constant surveillance. The court submitted to the jury the question of whether the trailers were on a "guarded lot," as well as the question of the amount of damages DTI was entitled to recover. After the close of evidence, the court determined that the damages were liquidated at an amount of $101,718.07, after application of a deductible in the policy. The jury found that the trailers were located on a "guarded lot," and the court entered judgment against the Underwriters for the liquidated amount plus prejudgment interest of $25,496.40.

1. The Underwriters first contend the trial court erred by denying their motion for directed verdict on the ground that DTI suffered no loss and proved no damages. "A directed verdict is authorized only when there is no conflict in the evidence on any material issue and the evidence introduced, with all reasonable deductions, demands a particular verdict." (Footnote omitted.) H.J. Russell & Co. v. Jones, 250 Ga.App. 28-29, 550 S.E.2d 450 (2001).

Although Colgate-Palmolive presented claims to DTI for the losses, the Underwriters proffered testimony to show that, as of the date of trial, DTI had not paid Colgate-Palmolive nor paid the intended purchasers for the loss. Consequently the Underwriters argue that DTI suffered no loss and that all periods of limitation have expired on possible claims against DTI by these parties. Therefore, the Underwriters contend, DTI has failed to prove damages, which is essential to a claim of breach of contract, and any recovery under the policy amounts to a windfall for DTI.

DTI responds that the policy was intended to cover cargo that DTI did not own and that the damages are determined by the terms of the contract. DTI presented evidence that it paid premiums to insure just such a loss, yet the Underwriters refused to pay without any basis to do so in the policy itself. Also, the policy gives the Underwriters the right to adjust with the cargo owner in the event of a loss but the Underwriters have not done so. Finally, DTI asserts that damages for breach of an insurance contract are to be measured at the time of the loss, which makes moot any argument about whether it has compensated any other party for the loss.

"The Carmack Amendment to the Interstate Commerce Act makes common carriers liable for actual loss of or damage to shipments in interstate commerce. 49 U.S.C. § 14706(a)(1)." A.I.G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir.2003). See also Great West Cas. Co. v. Flandrich, 605 F.Supp.2d 955, 964 (S.D.Ohio2009). As a result of this liability, carriers have an insurable interest in the cargo because "`insurable interest' means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment." OCGA § 33-24-4. See also Conex Freight Systems v. Ga. Ins. Insolvency Pool, 254 Ga.App. 92, 96-97(1)(b), 561 S.E.2d 221 (2002) (person has an insurable interest in property if person "has such a right, title, or interest therein, or relation thereto, that he will be benefitted by its preservation and continued existence, or suffer a direct pecuniary loss from its destruction or injury"); Altadis USA, Inc. v. NPR, Inc., 344 F.Supp.2d 1349, 1356 (M.D.Fla. 2004) ("Courts have agreed that common carriers . . . can be held liable for shipments of goods, and therefore they have an insurable interest in the goods. Such an interest can be insured for the carrier's own benefit or for the benefit of the owner. See, e.g., Couch on Insurance, § 42:16."). Given an insurable interest, we need look no further than the policy itself to determine whether the Underwriters were required to compensate DTI and in what amount. See generally American Ins. Co. v. Bateman, 125 Ga.App. 189, 193(2), 186 S.E.2d 547 (1971); Amalgamated Transit Union Local 1324 v. Roberts, 263 Ga. 405, 409-410(2), 434 S.E.2d 450 (1993).

"An insurance policy is simply a contract, the provisions of which should be construed as any other type of contract." (Punctuation omitted.) Hunnicutt v. Southern Farm etc. Ins. Co., 256 Ga. 611, 612(4), 351 S.E.2d 638 (1987).

In construing an insurance policy, we begin, as with any contract, with the text of the contract itself. Where the contractual language unambiguously governs the factual scenario before the court, the court's job is simply to apply the terms of the contract as written, regardless of whether doing so benefits the carrier or the insured." (Footnote omitted.)

Reed v. Auto-Owners Ins. Co., 284 Ga. 286, 287(2), 667 S.E.2d 90 (2008).

Here, the insuring clause of the policy provides that the Underwriters will "indemnify" DTI for "all risks of physical loss or damage from an external cause to lawful cargo." Black's defines "indemnify" as "to reimburse (another) for a loss suffered because of a third party's or one's own act or default," and it defines the related term "indemnity" as "[a] duty to make good any loss, damage, or liability incurred by another." Black's Law Dictionary 783-784 (8th ed. 2004). In the context of the policy language herein, the use of the term "indemnify" is broad enough to include any loss, not just liability to third parties. Moreover the peril being insured against is the risk of physical loss of the cargo even though it is owned by third parties. Thus the plain terms of the insuring clause provide that damage or loss of the cargo immediately gives rise to a claim under the policy. See J.N. Futia Co., Inc. v. Nat. Surety Corp., 30 A.D.2d 989, 294 N.Y.S.2d 74 (1968) ("It seems too clear to require extended discussion that the insurance contract in suit is one of indemnity and that the `peril' insured against, being the `physical loss of or damage to the property . . . from any external cause' . . . was just that; it became a debt immediately due from the insurer directly and was not a contingent liability.") (emphasis in original.) The insuring clause could have been written to cover only the legal liability of the insured to third parties as a result of loss or damage to the cargo, but it was not.

Nothing in the rest of the policy is inconsistent with this construction nor warrants a different construction. Although the policy grants the Underwriters the privilege to adjust and settle with the cargo owner, that provision does not indicate that only claims asserted against the insured are covered by the policy; and it provides that the insured's right to recover is only affected if the Underwriters pay the owner.² Other policy provisions give the Underwriters the opportunity...