## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it

N o. 08

- 1163 C AR OLI NA C ASU ALT Y I NSURANCE C OMPAN Y, P la intif f-A pp ellee, v.
E S TATE OF D IMITRY K A R PO V, D ECEAS ED , a nd M AR GARI T A K A R PO V, Ad m i ni st r at r i x o fthe Estate o fDim i tr y Karpov, D efend a nts-A pp ella nts.

A pp eal from the United S t ates Di strictC our t fo r the N o rthernDi stricto f Indian a, Fo rtWayne D ivisi on. No . 06 C33

—Th eres a L . Sp ri ngmann, Judg e.

A RG UE D O CT OB ER 22, 2008

— D ECI DE D M AR CH 17, 2009

Befo re C UDAH Y, M A NI ON, a nd W I L L I A MS, C ircu it Judges. M A NI ON, C ircu it Judge. Carol in a C asual ty soughta decl arator y j udg m en t th ati ts l i ab i l i tywas l i m i te d t o the $1 m i l l i on p er- acci dent l i m i t s et f or th in the i nsurance p olic y it is su ed to N et T ru c kin g, Inc . an d Sta n isla w G ill. T h e d e fe n d a n t s , w h o w e r e amo n gs e v e r a l o fth e v i c t i ms i n a t r a c t o r - t r a i l e r / a u t o mo b i l e a c c i d e n t, a r g u e d th a tthe2 N o. 08

- 1163 M o to r Ca r r i erAct( “MCA ”) a nd a n e ndo r se m en t Car o l i na Ca s ua l t y i s s ue d v er i fy i ngc o mpl i a nc e wi th the MCA est abl i shed cov er ag e at $ 750, 000 per perso n. The di str i ct cour t r ej ecte d thi s a rgum ent, hol ding th at the pol i cy l i m i ted l i abi l i ty to $1, 000, 000 per acci dent. T h e d istr i ct co ur t g r an te d Caro l i na Ca su al tys um m ar y j udg m en t a n d w e a ffi r m.

I. On Sund ay A ugust 2 1, 20 05, S tani sl aw Gil l, wh o w as dri vi ng a tr acto r- tr ai l erf orN et Trucki ng, Inc. , r ear - ended a s to p p e d a u t o mo b i l e i n a c o n s t r u c t i o n z o n e o n t he I nd i ana Toll R oad. Thi s co l l i si on s et offa chai n re acti on w hi ch eve ntual l y led to the death o ff our i nd i vi du al s, the inj ury ofnum er ou s othe rs , and proper ty dam age to s e v e r a l a ut o mob i l e s a nd the Ind i a na T o l l R o a d. A t t h e t im e o f th e a c c id en t, bo th N et T r u c k i n g an d G ill w er e insured under a pol i cy i ssued byCaro l i na Casual ty. The po l i cys ta te d tha t Car o l i na Ca su al ty ’ s m ax i m um l i abi l i t y f o r a nyo ne a c c i de nt, r e g a r dl e s s o fthe n umber o fc l ai m ants o r v eh i cl es i nv o l ve d, was $ 1 m i l l i o n. A tta ched to the Car ol i na Casual ty pol i cy, as r equi re d fo r allcom m ercial tru cking insu ran ce p oli cies, w as an “M C S90 ” en do r sem en t whi chl i k ewi se pr o vi ded th atCa r o l i na Cas ua l ty ’ s m ax i m um l i ab i l i type r a cc i den t was $1 mil l i o n. C ar o l i na Ca su al tyi ni ti at ed th i s i nt er pl ea dera ct i o n, nam i ng as defendants Gi l l, N et Tru cki ng, and thos e i nd i vi du al s w h o w er e inj ured i n the A ugust 2 1, 20 05, ac c id en t o r w h o h ad filed cla im s a ris in g ou t o f th e a c c i-N o. 08

- 1163 3 dent. Caro l i na Casual ty so u ght a decl ar ati on that i ts l i abi l i ty w as l i m i ted to $1 m illion f orthe enti re acc i dent. Car o l i na Ca su al tya l so depo si te d $ 1 m i l l i o n int o the d i s t r i c t c o u r t r e g i s t r y f o r th e b e n e fi t o f th e v a r i o u s c l a i mants. The pa r ti es to th e i nt er pl ea dera ct i o n fi l ed cr o ss - m o ti o ns f orsum m ar y j ud gm ent. The dist ric t co urt rul ed i n f avo r ofCaro l i na Casual ty, hol ding that i ts li abi l i ty w as l i m i te d t o the $ 1 m i l l i o n pe r - ac ci den t po l i cyl i m i t an d th atne i th erthe M CA no r the M CS

- 90 e ndo r sem en t issued by C aroli na Ca su alty established a $750,00 0 p erper so n po l i cy m i ni m um . I nt erp lead er def en dan t M ar ga rit a K a rp ov , in d ivid u ally an d as th e a d m in ist ra tr ix ofthe est ate o fDim i tr y Karpov, appeal s.

II. T h e C ar olin a C as u alt y in su ra n c e p olic y iss u ed to G ill an d N et T ruc king ex p r e s s ly estab li sh ed a $1 m il li on p erac ci den t po l i cyl i m i t. Sp ec i fi ca l l y, the “ TRUCK ERS COVE R A G E FO R M ,” “S E C T IO N II

— L IA B I LIT Y C O V E R A G E ,” pr o v i de d: C. Li m i t OfInsurance. Re g ar dl es s o fthe numbe r o fc o ve r ed “auto s, ” “insured ,” prem i um s pai d, cl ai m s m ade orve hi cl es i nv o l ve d i n the “a cc i den t, ” th e m o st we wi l l pay f o rthe to t a l o f a l l da mag e s a nd “ c o v e r e d po l l ut i o n c osto r expense” com bi ned, r esul ti ng fro m any one “acci dent” i s th e L i mi to fIn s u r a n c e f o r L i ab i l i t y C o v e r a g e s h o wn i n the Decl ar ati ons.4 N o. 08

- 1163 I n tu rn, the “T ruc kers/M otor C a r r ier C overage Form De c l a r a t i o n s ” p a g e l i s t e d $ 1 , 0 0 0 , 0 0 0 u n d e r“ L I M I T T HE M OS T W E WI LL PAY F ORANY O NE ACCI DENT OR LOS S

. ” Ad di t i o na l l y, the MCS

- 9 0 e nd o r s e men tp r o v i de d: “T he pol i cy to w hi ch thi s e nd or sem ent i s a tta ched provi des pri m ary o r e xc es s i ns ur an ce a s i ndi ca te d b ythe X, f orthe l i m i ts shown

. ” An “X” was p lac ed i n the box co r r es po ndi ngt o : “ Thi s i ns ur an ce i s pr i m ary an d the com pany shal l n ot b e li abl e foram ounts i n exces s o f $1 ,00 0,0 00 for e ac h ac c id en t.” N otw ithsta nd ing this clear and un am biguou s p erac ci den t l i m i t, the appe l l an ts ar g ue tha t the M CA and the M CS- 90 endors em ent e stabl i sh a $750 , 000 per- perso n li abi l i tymin i m um . The $ 75 0, 00 0 fi g ur e co m es fr o m the M CA , wh i ch pro vi des: ( b ) G e n e r a l r e q u i r e me n ta n d mi n i mu m a mo u nt

— ( 1) The S ecr eta ryo fTra nsport ati on s hal l pre scr ibe re gul ati ons to re quir e m i ni m um l eve l s of fi n anci al re sponsibi l i ty suffi ci en t to sat i sfy l i abi l i ty am ounts est ab l i s he d b y the S e c r e t a r y c o v e r i ngp ub l i c l i ab i l i ty, proper ty dam age, and envi ro nm entalr est or ati on f orthe tr anspor tat i on o fpro pert y b y m oto r car ri ero r m oto r pri vate car ri er. . . . ( 2) The l eve l o ffi nanci al re sponsibi l i ty est abl i shed und erparagr aph ( 1) o f thi s s ubsect i on s hal l be at l eas t $ 750, 000. 49 U

. S. C

. § 31139(b)(1)- (2). The appell ants ar gue that the $750, 000 m i ni m um l eve l offi nanci alr esponsibi lity appli es on a per - perso n basi s. I n s up po r to fthe i r po s i t i o n, the y p o i ntt o 4 9 U. S

. C. § 1 3906 ( a) ( 1) , wh i ch pro vi des:N o. 08

- 1163 5 ( 1) Li abi l i ty i nsurance re quirem ent.

— T he Secretary m a y r e gis te r a m ot or ca rrie r u n d er se c tio n 13 90 2 o n ly ifthe regist r a n t fil es w ith th e Secretary a bon d , i ns urance pol i cy, o r othe r type ofse cu rity a pp ro ved by the S ecr eta ry, in an a m ount notl ess than such am ount a s the S ecr eta rypre scr ibes pu rs ua n t to, o r as i s r equi r ed by, se ct i o ns 31 13 8 an d 31 13 9, an d the law s o f th e St at e o r St at es in w h ich th e re gis tr an t is oper ati ng, to the extent appli cabl e. T h e securi ty m ust be s uffi ci en t to pa y no t m o r e th anthe a m o unto fthe se c u rit y, for each f

inal j udgm ent ag ains t th e r eg i st r an t fo r b o d i ly inj u ry to , or d ea th of, an individual re sul ti ng fro m the negl i gent oper ati on, m ai ntenan c e, or use o fm oto r vehi cl es, o r f orl oss o r dam age to pr o pe r ty ( e xc e ptp r o pe r t y r e fe r r e d t o i n pa r a g r a ph ( 3) o fthi s subsec ti o n) , o r b o th

. A r eg i st r at i o n r emai ns i n effect onl y a s l ong as the r egistr ant co nti nues to sa ti sfy the s ec ur i tyr equi r ement s o fthi s par ag r aph

. (E m p h as is a d d ed .) The appell ants ar gue that because 49 U

. S. C. § 1 3906 ( a) ( 1) sta tes thatthe sec u rity m ust be suffi ci ent t o pay “for each fi nal j ud gm ent” f orbo dil y inj ury to, o r d ea th o f, “a n i nd i vi du al, ” the m i ni m um am ount o fse curi ty re quir ed by sect i on 3113 9, nam el y $ 750, 000, appli es on a per - perso n ba si s an d no t o n a per - ac ci den t ba si s, notw i th st an di ng the c l earl anguage o fthe i nsurance pol i cy. T h e a p p ella n ts ’ arg u m en t, h ow ev er , i gn or es th e fu ll te xto fs ec ti o n 1 39 06

. The r el ev an t prov i si o n s ta te s: “ The se curi ty m ust be suffi ci ent t o pay n o t more t h an t he am ount of th e se cu ri ty, f o r e ac h fi na l j udg m en t ag ains t th e re gi str ant forbo dil y inj ury to, o r dea th o f, a n6 N o. 08

- 1163

Fo ur th Ci r c ui tLo c a l Rul e 3 2

. 1 pe r m i t s th e ci t a t i ont o un pu b- 1 l i s he d dec i s i ons i s s ued pri or t o J anu ar y 1, 20 07, i f the d ec i s i on has pr ec edential val ue and the re i s “n o publ i s he d dec i s i on th a t w o u ld ser v e a s w el l.” ind ivi d ua l

. . . . ” 49 U

. S. C

. § 13906(a)(1) (em p ha sis add ed ). The c o ur t i n Ham m v. Canal Insura nc eCom pany, 10 F. Su p p . 2d 53 9 ( M . D . N . C . 199 8), aff’d, 17 8 F

. 3d 1283 ( 4th Ci r . 1 99 9) , a ptly e xpl aine d the mean i ng o fthi s st atutor y l anguage . W i threspe ctt o the s ta tu te , i t pr o vi des tha t “the s ec urit y m u s t be su fficie n t t o p ay , notm orethan t he am ount o

f the s ec uri ty .” T h e c lea r m ea n in g of t h is st at em en t is th at w h at ev er am ou n t is to b e p aid w i l l notexce ed the am ount o fthe securi ty w hi ch ha s been estab li sh ed by th e statu te or th e po li cy itself

. Thi s would m ea n tha t i fthe a ctua l a m o unto fthe se c ur i t y i s the mi ni mum r e qu i r e d b y the s t a t ut e , then th e lim it of p ot en t i a l lia b ility for a n ins u re r w ou ld be $ 750, 000. H owever, i fas i n thi s ca se, t h e ins ured vol untari l y el ects to obt ai n a secur i ty i n a larg er am ount, such a s $ 1 m i l l i on, then that am ount be

com es the l i m i ts ofpote nti al liab i l i ty f orthe i nsurer f orcl ai m s r esul ti ng fro m a si ngl e a cci dent. Id. at 544 (em p ha sis add ed ). The Ha mm deci si on w as app eal ed to the Four th Ci rcui t, w hi c h i n a n un pu b l i s he d d e c i s i o n he l d tha t“ the di str i ct cour t cor re ctl y deter m i ned that Canal’ s potenti alfi nanci al o bl i g at i o n i s l i m i te d b y the t er m s o fthe Po l i cya nd th e M C A t o $1 m illion p er ac c id en t.” Ha mm , 17 8 F

. 3d 1 1283 at* 1.N o. 08

- 1163 7 S i m i l ar l y, i n St e ve ns v. Fire m an’s Fu nd Ins uranc eCo. , 20 02 W L 31 95 12 74 (S.D . Oh io N ov . 7, 200 2), aff’d 37 5 F

. 3d 464 ( 6th Ci r . 2 00 4) , th e in su r erha d i ss ue d a po l i cywi tha l i abi l i ty l i m i t o f$1 m i l l i on perac c id ent. The i nsured wa s i n v o l v e d i n a n a c c i d e n t r e s u l t i n g i n i nj u r i e s t o f o ur i nd i vi du al s a n d envi ro nm entalcl eanup, co sting i n exces s of $ 2.5 m illion

. Id. a t *1, n. 1. The i nj ured part i es ci ted to 49 U

. S. C. § 1 3906 forthe propos i ti on that the i nsurer m ust pay not m or e than the am ount o fthe secur i ty f or each fi nal j ud gm ent a nd thus a rgued that the ins u rer w as re quir ed to pay up to $1 m i l l i on f orea ch inj ured p er so n . Id. a t * 5. The di st r i ct co ur t i n St e ve ns f o und the Ha mm deci si on per suasiv e a nd r ej ecte d thi s a rgum ent, hol ding that no co ver age exi ste d beyo n d the $1 m i l l i on lim it of lia b ility

. Id. at * 7- 8. W e ag r ee wi th Ha mm a nd St evens a nd l i k ewi se c o nc l u d e th att he “not m ore than theam ount of the s ec uri ty ” statu tory langu age refers to the $1,000,000 secu rity p era c c i d e n tth a tNe tT r u c k i n go b t a i n e d fr o m C a r o l i n a C as ual ty. The a ppel l an ts ha ve no t ci te d a ny c ase l aw i nt er pr et i ng sect i on 1 3906 as es tabl i shi ng a per- perso n l i m i t. N onethel ess , the ap p ella n ts cl ai m thatev en i fthe sta tute did not est abl i sh a per- perso n l i abi l i ty l i m i t, the M CS- 90 endors em en t, wh i c h Ca r o l i na Ca s ua l t y a t t a c he d t o i t s i ns ur ance po l i cy, s etthe l i ab i l i tyl i m i t at$ 75 0, 00 0 p er p er so n. The M CS- 90 endors em ent pr ovi ded that : T h e in su r a n c e p olic y t o w h ich th is e n d or se m en t is at ta ch ed pr o vi des au to m o bi l e l i ab i l i tyi ns ur an ce a nd i s a men de d t o a s s ur e c o mpl i a nc e b y the i ns ur e d,8 N o. 08

- 1163

w i thi n the l i m i ts sta ted her ei n , as a m oto r car ri ero f proper ty w i th S ecti ons 29 and 3 0 ofthe M oto r Carr i er Act o f1 98 0 an d the r ul es a nd r egul ati ons of the Fed eral [ M otor C arrier Safety A d m inistration]. The appell ants ar gue that thi s e nd or sem ent e stabl i sh ed as a pol i cy l i m i t the $750, 000 per- perso n m i ni m um es tabl i shed by sect i on 1 3906

. There ar e three p robl em s with thi s a rgum ent. Fi rs t, as not ed abo ve, se cti on 1 3906 d o e s n o tma n d a t e a $ 7 5 0 , 0 0 0 p e r - p e r s o n min i mu m. Se c on d , eve n if th e s ta tu te d id es ta b lish su c h a m in im um , the endorsem en t e xpressly s tat ed that i t pr ovi des co ve r ag e “wi th in t he l i m i ts s ta te d he r ein, ” an d the e nd orsem en t set th e li m it at $1, 000,000. Th ird, th e Secretary ofTra nsport ati on has set forth i n 49 C.F

. R. § 387. 15, I l l us tr at i o n I, th e appr o pr i at e f o r m f o r the M CS

- 90 e nd orsem en t. T his form states th e po lic y l im its on a pe rac c id e n t b as is, p ro vid in g: “T h e p olic y t o w h ich th is endors em ent i s a tta ched p ro vi des pri m ar y o r excess in su ra n c e, as ind ica te d by ‘X ’, for th e lim its s h ow n : Th is in su ra n c e is p ri m a ry an d th e c om p an y s h all n otbe liab le for am ou nt s in exc ess of $ ______ for e ac h ac ci de nt
. ” 4 9 C. F

. R. § 3 87. 15, I l l us t r a t i o n I( e mpha s i s a dde d)

. Ac c o r di ng l y, the M CS

- 90 e ndo r se m en t di d note st ab l i sha $ 7 5 0 , 0 0 0 p e r - p e r s o n l i ab i l i ty min i mu m. The a ppel lants at te m pt to o ve r co m e th e ex pr es s l an guage of the pol i cy and the M CA by re fer rin g to l egi sl ati ve hi sto ryand publi c pol i cy. H owever, nei ther l egi sl ati ve hi sto rynorpubli c pol i cy can o ver com e the cl ear statu tor y l anguage and re gul ato ryf or m , wh i ch es tabl i sh $7 50 ,00 0 a s t h e m in im u m am ou n t o f fina n c ial re sp on s i-N o. 08

- 1163 9 bi l i ty, and the pol i cy l anguage wh i ch defi nes the l i abi l i ty on a p er -ac c id en t b as is. Fi vePoi nts Rd. J t
. Ve nt
. v. Johan ns , 542 F. 3d 1121 , 11 28 ( 7th Ci r. 20 08) ( sta ti ng tha t r eso rtto l eg i sl at i ve hi st o r y i s o nl y ne ce ss ar y i fth e st atut o r y l an gu ag e is am b igu ou s); s e ea l s o Ha mm , 10 F. Supp.2d a t 544- 48 ( r ej e c t i n g p u b l i c p o l i c y a r g u me n t th a t MCA- 9 0 en do r se m en t es tabl i sh es a $ 75 0, 00 0 per -pe r so n l i m i t)

. The $1, 000, 000 per acci dent pol i cy l i m i t g ove rns.

III. The i nsurance pol i cy clea rly and expres sl y l i m i ted Carol i na Casual ty’ s l i abi l i ty to a m axi m um o f$1 , 000, 000 per acci dent. N ei therthe M CA northe M CS- 90 endors em en te s t ab l i s h e s a p e r - p e r s o n l i mi t
. Ac c o r d i n g l y, the d i s t r i c tc o u r tp r o p e r l y g r a n t e d C a r o l i n a Ca s ua l t y s u mm ar y j ud gm ent. Fo r these a n d the f or ego i ng r eas ons, w e A FFIRM
.

3- 17- 09