Western Express, Inc. v. Lexington Insurance Company, No. M2006-02249-COA-R3-CV (Tenn. App. 2/20/2008)
| Decision Date | 20 February 2008 |
| Docket Number | No. M2006-02249-COA-R3-CV.,M2006-02249-COA-R3-CV. |
| Parties | WESTERN EXPRESS, INC. v. LEXINGTON INSURANCE COMPANY. |
| Court | Tennessee Court of Appeals |
Appeal from the Chancery Court for Davidson County; No. 05-2311-II; Carol McCoy, Chancellor.
Judgment of the Chancery Court Affirmed.
Isham B. Bradley, Nashville, Tennessee, for the appellant, Western Express, Inc.
H. Frederick Humbracht, Jr., Nashville, Tennessee, for the appellee, Lexington Insurance Company.
Frank G. Clement, Jr., J., delivered the opinion of the court, in which Patricia J. Cottrell, J., and E. Riley Anderson, Sp. J., joined.
In this declaratory judgment action, the insured contests the trial court's ruling that a Commercial Property Policy provided no coverage for a theft loss and imposed no duty on the insurer to provide a defense for a claim arising out of that loss. The trial court found that the policy's Attended Vehicle Protective Provision was applicable and unambiguous, and thereby excluded the theft loss from coverage under the policy. Because there was no coverage for the theft loss, the trial court found that the insurer had no duty to defend the insured for claims arising out of that loss. The insured contends that the provisions of the insurance contract were ambiguous, that coverage was not clearly excluded for this loss, and that regardless, the insurer was obligated to provide a defense per a mandatory federal endorsement. We affirm.
Western Express, Inc. is an interstate trucking company. Lexington Insurance Co. is an insurance carrier. Lexington provided a Commercial Property Policy to Western Express that was in effect at all times material to this action. The policy covered, inter alia, loss from theft of cargo.
The policy incorporated "Motor Truck Cargo Legal Liability Declarations" and within the Declarations were exclusions identified as "Protective Provisions." A "Protective Provisions" that was specifically applicable "while hauling for . . . Menlo Logistics" was identified as "Attended Vehicle."1
On February 15, 2004, while a Western Express tractor-trailer was left unattended at a truck stop, the vehicle and all of its cargo were stolen. The cargo, Hewlett-Packard computers, was being transported by Western Express pursuant to a contract with Menlo Logistics, Inc. Western Express' tractor-trailer was subsequently found but none of the stolen cargo was ever recovered.
Thereafter, Menlo Logistics filed suit against Western Express to recover the value of the lost cargo. When Western Express notified Lexington of the suit, Lexington denied the claim and advised Western Express that it would not provide a defense for Western Express. As a consequence of Lexington's refusal to provide a defense, Western Express filed this action against Lexington seeking a declaratory judgment that Lexington was obligated under the Commercial Property Policy to provide a defense for Western Express in the Menlo Logistics suit and to indemnify Western Express if a judgment was rendered against it. Western Express also contended that Lexington was obligated to provide a defense because of an endorsement mandated by the Interstate Commerce Commission, Form BMC-32, regardless of whether the Attended Vehicle Protective Provision applies.
Shortly after the filing of this action, the parties entered into an agreement whereby Lexington, with full reservation of rights, agreed to pay the legal fees incurred by Western Express in defending the Menlo Logistics action.2 The agreement also provided that Lexington would be entitled to reimbursement of any legal fees and costs paid by Lexington if it was subsequently determined that Lexington had no duty to provide a defense for Western Express in the Menlo Logistics action.
On November 16, 2005, a jury ruled that Menlo Logistics was entitled to recover its damages against Western Express for the loss of its cargo. Thereafter, Lexington filed an Answer and Counterclaim in this action seeking a declaratory judgment that it had no duty to defend or indemnify Western Express under the terms of the policy and a judgment against Western Express for all legal fees and costs it paid in defense of the Menlo Logistics action.
Thereafter, Lexington filed a Motion for Partial Summary Judgment seeking: (1) the dismissal of Western Express's claim against it, and (2) a "judgment declaring that the policy of insurance at issue in this action does not afford coverage for the loss resulting from a theft of cargo occurring on February 15, 2004, or for claims asserted against Western Express arising from that theft." Lexington argued that the loss was not covered by several of the Protective Provisions of the policy. Western Express contended, however, that due to the different Protective Provisions in the policy, the policy was ambiguous.
The Chancellor found there was no coverage under the policy because Western Express had failed to comply with the Attended Vehicle Protective Provision. The Chancellor also found that the BMC-32 Endorsement mandated by the Interstate Commerce Commission did not impose upon Lexington a duty to defend the claim by Menlo Logistics. Having prevailed on the coverage issue, Lexington was awarded a judgment of $99,999.30, as reimbursement of legal fees and costs paid to defend Western Express in the Menlo Logistics action in the amount. This appeal followed.
The issues were resolved in the trial court upon summary judgment. Summary judgments do not enjoy a presumption of correctness on appeal. BellSouth Adver. & Publ'g Co. v. Johnson, 100 S.W.3d 202, 205 (Tenn. 2003). This court must make a fresh determination that the requirements of Tenn. R. Civ. P. 56 have been satisfied. Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn. 1997). Summary judgment should be granted at the trial court level when the undisputed facts, and the inferences reasonably drawn from the undisputed facts, support one conclusion, which is the party seeking the summary judgment is entitled to a judgment as a matter of law. Pero's Steak & Spaghetti House v. Lee, 90 S.W.3d 614, 620 (Tenn. 2002); Webber v. State Farm Mut. Auto. Ins. Co., 49 S.W.3d 265, 269 (Tenn. 2001).
On appeal, this court must take the strongest legitimate view of the evidence in favor of the non-moving party, allow all reasonable inferences in favor of that party, discard all countervailing evidence, and, if there is a dispute as to any material fact or if there is any doubt as to the existence of a material fact, summary judgment cannot be granted. Byrd v. Hall, 847 S.W.2d at 210; EVCO Corp. v. Ross, 528 S.W.2d 20 (Tenn. 1975). Because the issues on appeal in the instant case involve a question of law only, the standard of review is de novo with no presumption of correctness as to the trial court's findings. Phoenix Ins. Co. v. Estate of Ganier, 212 S.W.3d 270, 274-275 (Tenn. Ct. App. 2006).
Issues concerning an insurance policy's coverage and an insurer's duty to defend require "the interpretation of the insurance policy in light of claims asserted against the insured." Id. at 275 (quoting Allstate Ins. Co. v. Jordan, 16 S.W.3d 777, 779 (Tenn. Ct. App. 1999)). "These issues present a question of law which can be resolved by summary judgment when the relevant underlying facts are not in dispute." Phoenix, 212 S.W.3d at 275 (citations omitted).
The rights and responsibilities of the parties arise from and are limited by the policy of insurance at issue. Courts are to construe insurance contracts in the same manner as any other contract. Alcazar v. Hayes, 982 S.W.2d 845, 848 (Tenn. 1998) (citations omitted). As with any other contract, the rule is to "ascertain the intention of the parties and to give effect to that intention consistent with legal principles." Id. (citing Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc., 521 S.W.2d 578 (Tenn. 1975)). The policy language must be given its common and ordinary meaning. Angus v. Western Heritage Ins. Co., 48 S.W.3d 728, 731 (Tenn. Ct. App. 2000) (citing Tata v. Nichols, 848 S.W.2d 649, 650 (Tenn. 1993)).
When the language of an insurance contract is plain and unambiguous, its meaning is a question of law and it must be interpreted as written according to its plain terms. See Erwin v. Moon Prods., No. M2002-00877-COA-R9-CV, 2003 WL 21797584, at *3 (Tenn. Ct. App. Aug. 5, 2003) (citing Petty v. Sloan, 277 S.W.2d 355 (Tenn. 1955)). "If the language of a written instrument is unambiguous, the Court must interpret it as written rather than according to the unexpressed intention of one of the parties." Erwin, 2003 WL 21797584, at *3 (citing First Nat. Bank of Crossville, 620 S.W.2d 526 (Tenn. Ct. App. 1981)). Courts cannot "rewrite an insurance policy simply because we do not favor its terms or because its provisions produce harsh results." Angus, 48 S.W.3d at 731 (citations omitted). It is the duty of this court, in the absence of fraud, overreaching, or unconscionability, to "give effect to an insurance policy if its language is clear and its intent certain." Id. (citing Quintana v. Tennessee Farmers Mut. Ins. Co., 774 S.W.2d 630, 632 (Tenn. Ct. App. 1989); Black v. Aetna Ins. Co., 909 S.W.2d 1, 3 (Tenn. Ct. App. 1995)).
With these principles in mind, we begin our examination of the policy and provisions at issue. The relevant portion of the policy included what was identified as the "Motor Truck Cargo Legal Liability Declarations." The Declarations page specifically identified certain "Protective Provisions" that were applicable to Western Express and which imposed affirmative duties or conditions upon Western Express for there to be coverage for claims resulting from the theft of cargo. Six Protective Provisions were specifically identified as being applicable, and one of the Protective Provisions was specifically applicable when Western Express was hauling cargo for Menlo...
To continue reading
Request your trial