Source: http://cabadvantage.com/articles/category/cases-from-bits/c44-volume-11-edition-7/
Timestamp: 2019-04-26 00:37:45+00:00

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Tymer YEATES and Shari Yeates, Defendants-Appellees.
This insurance case asks us to consider the scope of a federal regulation that requires interstate trucking companies to obtain insurance covering motor vehicle accidents. Tymer and Shari Yeates sued Bingham Livestock Transportation for injuries arising from a truck accident. Carolina Casualty provided a general liability insurance policy to Bingham Livestock that included a provision required by federal regulation covering final judgments for negligence from motor vehicle accidents. Bingham Livestock also had motor vehicle insurance with State Farm Insurance Company.
After State Farm tendered its policy limits to the Yeateses, Carolina Casualty filed a declaratory judgment action claiming that it was no longer liable for any additional damages arising from the accident. The district court granted summary judgment in favor of the Yeateses, concluding that under controlling Tenth Circuit law, Empire Fire & Marine Insurance Company v. Guaranty National Insurance Company, 868 F.2d 357 (10th Cir.1989), Carolina Casualty’s policy provided primary insurance covering the accident and thus Carolina Casualty may be liable for any judgment against Bingham Livestock resulting from the Yeateses’ accident. We agree with the district court that Empire Fire sides with the Yeateses.
The underlying facts are not in dispute. In 2003 Tymer Yeates was severely injured when a car his wife was driving was involved in a head-on collision with a livestock truck owned by Bingham Livestock. Yeates and his wife sued Bingham Livestock and the truck driver in state court. Bingham Livestock carried two insurance policies relevant to this accident, one issued by State Farm and one issued by Carolina Casualty. Bingham Livestock notified both carriers of the claim.
State Farm’s policy specifically insured the truck involved in the accident and it tendered the policy limit of $750,000 to the Yeateses. Carolina Casualty’s policy, however, was a general liability policy covering a variety of commercial claims. While the policy did not specifically cover the accident vehicle, it did include a so-called MCS-90 endorsement, which provided that Carolina Casualty would pay up to $1,000,000 for “any final judgment recovered against [Bingham Livestock] for public liability resulting from negligence in the operation, maintenance or use of motor vehicles.”R., App. 23 (MCS-90 endorsement).
Federal law requires common carriers to obtain insurance to cover motor vehicle accidents. Federal regulations specifically require all interstate carriers to maintain insurance or another form of surety “conditioned to pay any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance or use of motor vehicles” under the carrier’s permit. 49 C.F.R. § 387.301(a); see also id. § 387.7. To satisfy this insurance requirement, the regulations require the attachment of a specific endorsement to each insurance policy of the carrier, the MCS-90 endorsement, which guarantees payment in the amount of at least $750,000 per accident.49 C.F.R. §§ 387.7, 387.9; see 2 David N. Nissenberg, Law of Commercial Trucking, § 14.07at 788 (3d ed. 2003) (“Every liability policy covering a motor carrier must contain the MCS-90 endorsement.”).
The endorsement “eliminates the possibility of a denial of coverage by requiring the insurer to pay any final judgment recovered against the insured for negligence in the operation, maintenance, or use of motor vehicles subject to federal financial responsibility requirements, even though the accident vehicle is not listed in the policy.” 1 Auto. Liability Ins. 4th § 2:12 (2008). It ensures payment by amending the insurance policy to which it is attached so that “no condition, provision, stipulation, or limitation contained in the policy … shall relieve the company from liability” from paying the amount specified in the endorsement. R., App. 23.
While the Yeateses’ negligence case was pending in Utah state court, Carolina Casualty filed this declaratory judgment action. It sought a ruling that it had no liability to the Yeateses under the general liability policy because (1) State Farm had already tendered its $750,000 policy limits; (2) federal regulations require a minimum of $750,000 for accident claims; and (3) therefore, the MCS-90 endorsement would not be needed to provide minimum coverage. The district court rejected this argument on the basis of our holding in Empire Fire, and granted summary judgment in favor of the Yeateses that the Carolina Casualty policy provides primary insurance for the accident under the endorsement and thus Carolina Casualty may be required to pay any final judgment resulting from the Yeateses’ accident.
We review a district court’s grant of summary judgment de novo, applying the same legal standard as the district court. Byers v. City of Albuquerque, 150 F.3d 1271, 1274 (10th Cir.1998). Summary judgment is appropriate “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”Fed.R.Civ.P. 56(c). When applying this standard, we view the evidence and draw reasonable inferences in the light most favorable to the nonmoving party. Byers, 150 F.3d at 1274.
In Empire Fire we discussed the application of the MCS-90 endorsement in detail, and because Empire Fire controls the interpretation of the endorsement we find it helpful to review the case in some depth.
Empire Fire addressed a dispute between two insurance companies, Guaranty Insurance Company and Empire Fire Insurance Company, about which had primary insurance coverage for a truck accident. The Guaranty Insurance policy contained a clause limiting liability to excess coverage for accidents involving vehicles not owned by the insured. But the policy also contained an MCS-90 endorsement as required by federal regulations. The Empire Fire policy provided primary coverage, and did not contain an MCS-90 endorsement. Nonetheless, based on the MCS-90 endorsement, the district court concluded Guaranty Insurance was “the primary insurer as a matter of law over any other insurer.”Empire Fire, 868 F.2d at 359.
(1) The … endorsement makes the insurance policy to which it is attached primary as a matter of law over all other insurance policies that lack similar provisions.
(2) [T]he endorsement only negates limiting provisions in the policy to which it is attached, such as an “excess coverage” clause, but does not establish primary liability over other policies that are also primary by their own terms.
(3) [T]he endorsement applies only to situations in which a claim is being asserted by a shipper or a member of the public, and that the endorsement does not apply when allocating liability among insurance carriers.
A straightforward reading of the [MCS-90 endorsement] suggests only that it negates any clauses in the body of the policy to which it is attached that would have the effect of limiting that insurance carrier’s liability. That is, it deletes limiting clauses in the policy to which it is attached, but it does not create new, additional obligations in the policy, nor does it purport to limit or delete clauses in other policies issued by other insurance companies that may also have contractually assumed primary liability for the risk involved.
Applying these principles, we concluded that both Guaranty Insurance’s policy and Empire Fire’s policy were available to cover the accident. But we did not purport to decide how risk or liability would be spread between the two insurance policies. Instead, we determined, “once limiting language is read out … the two policies then must be compared pursuant to traditional state insurance and contract law principles to determine how liability should be allocated” among the insurers. Id. at 368.
The method of applying the MCS-90 endorsement set out in Empire Fire has been reiterated by subsequent Tenth Circuit cases examining the endorsement. See Adams v. Royal Indem. Co., 99 F.3d 964, 970 (10th Cir.1996) (“[O]ur decision in Empire Fire [ ] explicitly held that the effect of the endorsement negates any clauses in the body of the policy to which it is attached that would have the effect of limiting that insurance carrier’s liability.”(internal quotation omitted)); see also Campbell v. Bartlett, 975 F.2d 1569, 1581 (10th Cir.1992); Budd v. Am. Excess Ins. Co., 928 F.2d 344, 347 (10th Cir.1991); Railhead Freight Sys. v. U.S. Fire Ins. Co., 924 F.2d 994, 995 (10th Cir.1991) (describing result under Empire Fire as rendering policy modified by an MCS-90 endorsement “co-primary”).
Applying Empire Fire, we conclude that Carolina Casualty’s policy as amended by the endorsement may be available to cover a final judgment arising from the accident. By its terms, two conditions must be satisfied before the endorsement will operate to amend the underlying policy: (1) there must be a covered accident, and (2) the underlying policy must preclude coverage for that accident. See R., App. 23. When these conditions are met, the MCS-90 endorsement operates to “amend” the underlying policy and guarantee payment “regardless” of limiting provisions in the underlying policy. Id. For clarity we review each condition in more detail.
The accident involving the Yeateses easily meets the first condition. The endorsement provides coverage for any final judgment “resulting from negligence in the operation, maintenance or use of” motor vehicles of the insured party. R., App. 23. Carolina Casualty does not dispute that this provision of the MCS-90 endorsement has been met-the Yeateses’ injuries were from alleged negligence in operating one of Bingham Livestock’s vehicles.
The second condition is also easily met since Carolina Casualty admits the underlying policy would deny coverage. The general liability policy only covers specifically listed vehicles, and the accident vehicle in this case was not listed. In fact, Carolina Casualty denied coverage for the Yeateses’ accident because the vehicle involved in the accident was “not specifically listed as [a] covered vehicle[ ] in the Policy nor [was it] otherwise included in the specifically scheduled and described tractors and trailers of the policy.”R., App. 42, ¶ 3. Without the MCS-90 endorsement, this provision would preclude coverage for the Yeateses’ accident. With these two conditions met, under Empire Fire, the MCS-90 endorsement amends the underlying insurance policy so as to negate any limiting provisions. In short, Carolina Casualty’s policy provides primary insurance coverage for the accident under the terms of the endorsement.
This holding is necessarily limited, and, we emphasize, ultimate financial responsibility is not at issue in this case. The district court’s order is properly limited to stating that Carolina Casualty may be liable for any judgment in this case, in part because insurers remain free to allocate ultimate liability among themselves, so long as it does not “adversely affect the rights of the public or shippers.”Empire Fire, 868 F.2d at 366. This allocation often involves a comparison of competing insurance policies’ “other insurance” clauses. See generally Ostrager & Newman, Handbook on Insurance Coverage Disputes, § 11 (9th ed.1998) (describing traditional rules for allocating liability among insurers). Nothing in the MCS-90 endorsement, nor in Empire Fire, affects the insurers’ ability to contractually allocate liability as between multiple insurance policies which cover the same risk. We stated in a case following Empire Fire that the MCS-90 endorsement “is not intended to preclude insurers and carriers or multiple insurers from contractually apportioning ultimate liability among themselves as they wish.”Adams, 99 F.3d at 969. Ultimate allocation of liability as between Carolina Casualty and State Farm is simply not before us in this case.
Carolina Casualty argues we should not apply Empire Fire for three reasons. First, it contends the MCS-90 endorsement was never “triggered” under the facts here and therefore does not supply coverage. Second, it contends the MCS-90 is a surety provision which does not provide additional coverage when a primary policy has already provided coverage. Finally, it challenges the continued viability of Empire Fire and asks that we ignore it. We disagree with each of these arguments.
Carolina Casualty contends the MCS-90 endorsement is not “triggered” when the injured person receives insurance benefits at least equal to the minimum amount required for the MCS-90 endorsement. It argues, since the Yeateses received $750,000 from State Farm, and the regulatory minimum is $750,000, under 49 C.F.R. § 387.9, they are not entitled to any additional insurance benefits. Under this theory “the MCS-90 is not triggered [because] there was other coverage which should have provided the amount of financial responsibility required by the [Act].” Aplt. Br. at 20. For several reasons, this theory is unpersuasive.
First, the language of the endorsement does not support the contention that it is “triggered” by any conditions outside the policy. See R., App. 23. No language limits payment to the injured person conditioned on coverage by other policies. The terms of the MCS-90 endorsement are clear-the endorsement “amends” the underlying policy, requiring payment of final judgments “regardless of whether or not each motor vehicle is specifically described in the policy.” R., App. 23 (emphasis added). Carolina Casualty’s policy provides coverage regardless of other policies.
Second, under Empire Fire, the MCS-90 endorsement is construed without comparing it to other insurance policies, even if those other policies are themselves primary. In fact, Carolina Casualty’s “trigger” argument is but a variation on one of the other methodologies we expressly rejected in Empire Fire-that the clause does not apply when allocating liability among insurance companies. See Empire Fire, 868 F.2d at 361. Carolina Casualty asks us to consider its coverage alongside State Farm’s payment and decide the MCS-90 endorsement does not apply, regardless of the terms of the endorsement.Empire Fire does not allow us to do so. In Empire Fire, we declined to interpret the MCS-90 endorsement to give it “only selective application,” and instead concluded “the parties may enter into contractual agreements among themselves that will be enforced so long as such agreements do not adversely affect the rights of the public and shippers.”Id. at 366.After reviewing precedents outside the Tenth Circuit using a variation of the trigger theme we “decline[d] to follow these cases … insofar as they disregarded the effect of an [MCS-90] endorsement on the policy to which it is attached when the public or a shipper is not involved in the dispute.”Id. at 367.Carolina Casualty’s trigger argument is the functional equivalent of asking this court to ignore the MCS-90 endorsement in disputes between insurers, and only give effect to the endorsement when disputes involve members of the public, a construction foreclosed by Empire Fire.
Third, apart from the textual problems, the trigger argument creates undesirable incentives. MCS-90 insurers would have an incentive to withhold payment from injured persons in situations where there were two potentially liable insurers. In those situations, whichever insurer paid first would relieve the other insurer of any liability, creating a situation where neither insurer would want to provide coverage voluntarily. This result would undercut the very purpose behind the MCS-90 endorsement.
Finally, Carolina Casualty’s trigger argument makes little sense in a case such as this, where there is a coverage gap between Carolina Casualty’s policy limit and the amount paid by State Farm. Carolina Casualty argues the MCS-90 endorsement is not triggered in this case because the Yeateses received $750,000 from State Farm. However, the Carolina Casualty endorsement was for coverage up to $1,000,000. While it is true the Yeateses received the minimum coverage allowed by law, that does not mean Carolina Casualty can avoid higher coverage limits because a second carrier provided a lesser benefit that happened to coincide with the regulatory minimum of $750,000. This would ignore the contractual language of the policy and create a ceiling where the endorsement established only a floor.
In sum, we reject Carolina Casualty’s arguments that its policy is not available because of State Farm’s previous payments.
Carolina Casualty alternatively contends that the MCS-90 endorsement “acts as a surety only” and is “not an insurance policy.” Aplt. Br. at 30. It argues the endorsement operates to make it an insurer of last resort, operating only when there is no other insurance available.
In general, a surety is “a contractual relation resulting from an agreement whereby one person, the surety, engages to be answerable for the debt, default or miscarriage of another, the principal.”74 Am.Jur.2d Suretyship § 1 (1974). Because the MCS-90 endorsement operates to guarantee payment to the public, with an indemnity right against the insured, courts have occasionally described the endorsement as creating a surety as between the insured party and the insurer. See, e.g., Travelers Indem. Co. v. W. Am. Specialized Transp. Servs., 409 F.3d 256, 260 (10th Cir.2005) (analyzing the MCS-90 endorsement as a surety).
Carolina Casualty’s surety argument is also foreclosed by Empire Fire.While the relationship between Carolina Casualty and Bingham Livestock has the earmarks of a suretyship relationship, that fact does not relieve Carolina Casualty of its primary insurance obligation to cover the Yeateses’ accident. Under the MCS-90 endorsement and Empire Fire, Carolina Casualty may be able to seek recovery from Bingham Livestock for any payments made under the endorsement. The rights between the insurance company and the insured do not provide a basis for concluding that the policy is not available to provide primary coverage to the injured third party. Thus, for the same reasons the trigger argument is unpersuasive under Empire Fire, we reject the contention that State Farm’s prior payment relieves Carolina Casualty of coverage for the accident on account of the suretyship status of the endorsement.
Finally, Carolina Casualty asks us to reject the authority of Empire Fire, calling the precedent questionable and flawed under the reasoning adopted by the majority of other circuit courts. But, in reaching its decision the Empire Fire panel extensively and carefully reviewed competing views in circuit court precedent regarding the scope of the MCS-90 endorsement, 868 F.2d at 361-62, 366-68, before selecting the rule it announced. To be sure, Empire Fire has been a minority position for quite some time. See generally Appleman on Insurance Supp. to § 4467 (Supp.2008) (describing split). But even if we were persuaded that the holding is wrong, we are bound by Empire Fire unless it is changed by an en banc court of the circuit. See United States v. Walling, 936 F.2d 469, 472 (10th Cir.1991) (“One panel of the court cannot overrule circuit precedent.”).
Accordingly, we AFFIRM the district court’s disposition below.
FN* Hon. James A. Parker, Senior U.S. District Court Judge, District of New Mexico, sitting by designation.
Although not relevant to this appeal, the regulations do allow for limited exceptions to the MCS-90 endorsement requirement for carriers who have an approved form of financial guaranty, such as self-insurance, for an equivalent amount of financial responsibility. See49 C.F.R. §§ 387.7, 387.309.
Carolina Casualty points to Kline v. Gulf Ins. Co., 466, F.3d 450 (6th Cir.2006), as contrary authority. In Kline, the policy at issue was for pure excess, and thus coverage on the underlying policy was never refused, a necessary condition for the endorsement to provide coverage. See id. at 452, 453.Here, the endorsement stated the underlying policy was providing “primary” coverage. Nothing prevents a carrier from providing pure excess coverage, when another carrier provides primary coverage, as was the case in Kline.
HERITAGE INSURANCE SERVICES, INC.; Insuramax, Inc.; and Fireman’s Fund Insurance Company, Appellees.
Before KELLER, MOORE and THOMPSON, Judges.
Ann Taylor, Incorporated, seeks review of Jefferson Circuit Court’s grant of summary judgment to Heritage Insurance Services, Incorporated, Insuramax, Incorporated, and Fireman’s Fund Insurance Company. Upon de novo review, we find no error and affirm.
IMC is not a party to the present appeal.
Later, Ann Taylor agreed to lower the limits of coverage for cargo liability to $750,000 per shipment.
IMC obtained the coverage required by the agreement from Fireman’s Fund. Heritage was the “agent of record” for the policy issued by Fireman’s Fund to IMC, and Insuramax functioned as the broker.
On March 15, 2003, IMC was transporting a shipment of cargo for Ann Taylor via a tractor and trailer truck, which was driven by Richard Luce. Luce stopped for a break at an IMC authorized truck stop in Pennsylvania. While Luce was inside the truck stop, the truck containing the Ann Taylor cargo was stolen.
Ann Taylor submitted a claim to its own insurer, American Home Assurance Company, which paid Ann Taylor $1,651,668.37 for the stolen cargo and became subrogated to Ann Taylor’s rights.
Ann Taylor made a claim for the stolen cargo to IMC, which subsequently submitted the claim to its insurer, Fireman’s Fund. Fireman’s Fund issued a declination of coverage letter based on an exclusion in the policy for unattended vehicles. According to this exclusion, theft occurring while a cargo truck is unattended is not covered.
Ann Taylor contends that it requested a certificate of insurance (COI) to confirm the insurance coverage required in the transportation agreement with IMC. Heritage and Insuramax responded to this request by preparing a COI, naming Ann Taylor as a “certificate holder” and that the coverage applied only to Ann Taylor. The COI did not disclose the attended vehicle exclusion. According to Ann Taylor, it relied on the COI regarding coverage, yet coverage was denied for an exclusion not listed on the COI. Ann Taylor subsequently brought a cause of action against Fireman’s Fund, Heritage and Insuramax for negligent misrepresentation on a theory that they failed to disclose the attended vehicle exclusion.
It is undisputed, however, that Ann Taylor was not the insured. Nor is it disputed that Ann Taylor was never a party to the contract between IMC and Fireman’s Fund.
Other individuals and entities were also named in Ann Taylor’s complaint but were voluntarily dismissed.
Fireman’s Fund, Heritage and Insuramax moved for summary judgment, arguing that Ann Taylor should not have reasonably relied upon the COI. Based upon the language of the COI, the circuit court granted the summary judgments; we agree.
The circuit court ruled that Kentucky law applies to this case. This ruling was not appealed by the parties; thus, it is waived.
Id. at 580 (footnote omitted).
We note that Ann Taylor first addresses in its brief the privity of contract issue in this matter. However, the more elementary element of negligent misrepresentation is “justifiable reliance upon the information.” See Foremost Ins. Co. v. Parham, 693 So.2d 409, 421 (Ala.1997).
We note that parties to this action have cited to unpublished cases failing to meet the requirements of Kentucky Civil Rule 76.28(4)(c). This is particularly true where the parties have cited to unpublished cases from other jurisdictions. Kentucky Civil Rule 76.28(4)(c) only allows citation to unpublished Kentucky appellate opinions rendered after January 1, 2003. Accordingly, those cases cited in the parties’ briefs failing to meet this criteria were not considered in deciding this matter.
As mentioned earlier, Ann Taylor requested a COI for its review to verify that IMC carried acceptable insurance as required by their transportation agreement. In response to this request, Heritage provided two sample COIs to Insuramax, one specifically for Ann Taylor as a certificate holder and one with the certificate holder information left blank. Insuramax retyped the information from Heritage’s sample COIs, onto a slightly different ACORD form and provided it to Ann Taylor.
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND, OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE [INTERSTATE MOTOR CARRIERS, INC.] FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
The sample COI did include policy numbers, dates, and a reference to coverage of $750,000 per vehicle. It did not list any exclusions or other information.
The declaration page issued in conjunction with the policy Fireman’s Fund issued to IMC included that when hauling for Ann Taylor, “[t]he ‘Attended Vehicle’ wording per Motor Truck Cargo Form-Supplemental Provisions Endorsement CM 70 55 09 90 applies to this customer only.”Thus, for coverage to apply, the vehicle must be attended.
Ann Taylor brief at p. 4.
(b) CARRIER’S cargo insurance policies shall not exclude coverage for infidelity, fraud, dishonesty or criminal acts of CARRIER’S employee’s agents, officers or directors. In the event said policy contains such exclusions, CARRIER shall obtain and furnish a surety bond providing such coverage to the satisfaction of ANN TAYLOR, INC.
(g) Prior to commencement of any services to be performed hereunder, CARRIER shall deliver to ANN TAYLOR, INC. copies of such insurance policies for ANN TAYLOR, INC.’s approval.
Nothing in the agreement between Ann Taylor and IMC required that the insurance policy could not contain an attended vehicle exclusion. Moreover, the agreement provided that IMC would provide copies of the policies for Ann Taylor’s approval, not certificates of insurance.
We agree with the circuit court that the COI clearly set forth that it was not a complete recitation of the exclusions and applicable provisions of the insurance policy between Fireman’s Fund and IMC. Further, the COI prominently set forth that it conferred no rights and should not be relied upon. “Where an entity requires another to procure insurance naming it an additional insured, that party should not rely on a mere certificate of insurance, but should insist on a copy of the policy. A certificate of insurance is not part of the policy-if it states that there is coverage but the policy does not, the policy controls.”RUSS & THOMAS F. SEGALLA, COUCH ON INSURANCE § 242:33 (3d ed.2008). We find no meaningful difference when this precept is applied to a certificate holder as compared to an additional insured.
[Plaintiff] argues that it acted diligently in obtaining a certificate of insurance listing it as an additional insured. But the certificate warned that it conferred no rights and was limited by the underlying policy. [Plaintiff] argues, with some force, that there is little use for certificates of insurance if contracting parties must verify them by reviewing the full policy. But the purpose of such certificates is more general, “acknowledging that an insurance policy has been written, and setting forth in general terms what the policy covers.”BLACK’S LAW DICTIONARY 240 (8th ed.2004). Given the numerous limitations and exclusions that often encumber such policies, those who take such certificates at face value do so at their own risk.
the holder of a certificate of insurance, was warned it was not entitled to rely on the certificate itself for coverage. The certificate stated to the holder that the certificate did not create coverage. The certificate of insurance issued by [Defendant] prominently stated that it was “issued as a matter of information only” and did not “amend, extend or alter” coverage provided by the listed policies. Had Plaintiffs taken the reasonable step of obtaining a copy of [the] Policy …, Plaintiffs would have learned there was no additional insured coverage in the policy at all.
Thus, the Court finds that Plaintiffs’ reliance upon [defendant’s] representation of [Plaintiff’s] additional insured status was not reasonable. Accordingly, as a matter of law, Plaintiffs’ claims for negligent and fraudulent misrepresentation fail.
Id. at 604 (internal citations and footnotes omitted); see also,Donegal Mut. Ins. Co. v. Grossman, 195 F.Supp.2d 657, 671 (M.D.Pa.2001) (plaintiffs could not reasonably rely on the certificate alone).
We agree with the reasoning in this line of cases. The disclaimer language that is included in the COI at issue in the present case was included in the cases cited supra.This fact, particularly when taken in light of the purpose of COI, i.e., to give evidence of the existence of insurance, illustrates that it was not reasonable for Ann Taylor to rely upon the COI as setting forth all terms and exclusions of the insurance policies at issue. Moreover, the COI naming Ann Taylor as a certificate holder met the requirements of insurance provided for in the transportation agreement.
Ann Taylor has cited to published cases from other jurisdictions supporting a different viewpoint. However, these cases are distinguishable, and we believe the cases we cited supra are the better view based on the specific facts of this case.
Ann Taylor cites to St. Francis De Sales Federal Credit Union v. Sun Ins. Co. of New York, 818 A.2d 995 (Me.2002). In that case, a transportation agreement included that the carrier would maintain insurance against the loss of property and annually, at the carrier’s request, the insurer would issue to each plaintiff a COI to verify that the insurer had issued a policy of insurance to the carrier “for loss of property of its customers from any cause.”Id. at 999.The COIs contained disclaimers similar to the ones in the case at bar. However, the COIs described coverage in the underlying policy as “ ‘[c]overing liability assumed by [the carrier] for loss of damage, from any cause whatsoever, to property of customers….’ “ (Emphasis added in St. Francis, 818 A.2d at 999). The certificates then listed a number of exclusions but failed to mention any exclusions for theft. The actual policy did include an exclusion for certain thefts.
A theft occurred in the St. Francis case but the insurer denied coverage based on an exclusion in the policy that was not one of the exclusions listed in the COIs. Based on the specific language of the COIs regarding that loss would be covered from any cause whatsoever and that certain exclusions, but not all exclusions, were listed in the COIs, plaintiffs brought suit. A jury found that the COIs overstated the extent of coverage and returned a plaintiffs’ verdict. Regarding a fraudulent misrepresentation claim, the appellate court determined that the terms in the COI that the carrier had insurance to cover its customers for losses “ ‘from any cause whatsoever’ were not mere casual comments or off-hand remarks; rather the representations contained formalized statements of fact concerning insurance coverage, complete with seals and signatures that conveyed credibility.”Id. at 1004.Because of the affirmative overstatement of coverage made in the COIs regarding coverage that did not exist, the appellate court determined that these representations were “made in reckless disregard of their truth or falsity.”Id.
Ann Taylor also cites to R.H. Grover, Inc. v. Flynn Ins. Co., 777 P.2d 338 (Mont.1989). In R.H. Grover, a COI was prepared erroneously, listing plaintiff as the certificate holder and listing professional liability insurance for errors and omissions by the insured up to $400,000. Although policy numbers were stated on the COI, the error on the COI was that the insured did not have professional liability insurance and never had any such coverage or policy. Thus, the COI listed coverage that did not exist.
Despite the errors in the COI, the Montana Supreme Court determined that the insured had not requested from its insurer to procure professional liability insurance and did not pay any premiums for this type of policy. The Court ruled that “[i]t is impossible to find that [the insurer’s] erroneous certificate created a ‘contract’ under which they were bound to procure insurance.”Id. at 283-84.The Court further held that “[i]ssuing the certificate cannot create a ‘duty’ to procure insurance at a later date.”Id. at 284.The plaintiff argued, however, that the COI was a promise that the insurance policy existed and that the insured should be estopped from denying coverage. The Court disagreed, ruling that “[t]he certificate cannot be a contract or promise. [The insurer] has promised nothing by issuing the certificate.”Id.
Despite these rulings, the Court in R.H. Grover, determined that the record was replete with evidence that the insured was negligent and negligently misrepresented the coverage based on evidence of: “inadequate supervision of an employee new to the job, failure to follow other established internal office procedures which would have caught the error immediately and failure to notify [the plaintiff].”Id. at 285.
[w]e therefore hold that a certificate of insurance is evidence of insurance coverage, and is not a separate and distinct contract for insurance. However, because a certificate of insurance is an insurance company’s written representation that a policyholder has certain insurance coverage in effect at the time the certificate is issued, the insurance company may be estopped from later denying the existence of that coverage when the policyholder or the recipient of a certificate has reasonably relied to their detriment upon a misrepresentation in the certificate.
construed together to determine the meaning and effect of the policy. If there is a conflict between the provisions contained in the master policy and the certificate, the certificate controls. In such cases, it is especially significant that the party claiming coverage did not receive a copy of the master policy but instead was furnished only the certificate.
City of Northglenn, 634 F.Supp. at 225.
And, regarding Fagan, 200 F.Supp. at 144, the Court cited to Konrad v. Hartford Acc. & Indem. Co., 137 N.E.2d 855 (1956), for the proposition urged by Ann Taylor, i.e.,“that in the event the terms of a master policy and a certificate are in conflict, the certificate will control.”However, the Fagan case did not turn on this.
As examined, Ann Taylor has cited to several cases wherein, despite disclaimers in COIs similar to the ones presently under review, courts have allowed recovery because affirmative representations or overstatements of coverage in the COI and the policy were in conflict. Thus, in each of the published cases cited by Ann Taylor, the COIs affirmatively set forth provisions that differed from the language in the respective policies. The case at hand does not deal with conflicting language or terms. Accordingly, the situation of conflicting language between a COI and a policy is not presently before this Court, and we decline to rule on this issue.
Rather, the COIs at issue gave evidence of the insurance coverage required in the transportation agreement, as Ann Taylor requested. The COIs did not include provisions conflicting with the terms of the insurance coverage provided in the policy at issue. The coverage detailed in the COI listing Ann Taylor as a certificate holder included the coverage required by the transportation agreement: $750,000 per cargo. The fact that the COI did not include any exclusions listed in the policy does not change this. The COI explicitly stated that it should not be relied upon, and while we do not rule today regarding conflicting terms in COIs and policies, we follow the line of cases that hold that a COI is only evidence of insurance coverage and should not be relied upon by a claimant for the full terms of the policy.
Accordingly, the judgment of the Jefferson Circuit Court is affirmed.

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