Source: http://cabfinancial.com/articles/category/cases-from-bits/c104-volume-7-edition-9/
Timestamp: 2017-05-26 16:39:53
Document Index: 656626439

Matched Legal Cases: ['§ 376', '§ 376', '§ 376', '§ 371', '§ 371', '§ 14706']

Category: Volume 7, Edition 9	Occidental Fire & Casualty Co. v. Westport Insurance Corp.	Posted on March 18, 2010Author Categories Volume 7, Edition 9	United States District Court,
FN6. Whether B.K.’s relationship was with Frank Oostdyk or F.O. Transport, Inc. is unclear. I will refer to both of them hereafter collectively as F.O.T. Other than through the interchange of equipment as set forth in § 376.31, and under the exemptions set forth in Subpart C of these regulations, the authorized carrier may perform authorized transportation in equipment it does not own only under the following conditions: (a) Lease. There shall be a written lease granting the use of the equipment and meeting the requirements contained in § 376.12. 49 C.F.R. § 376.11. [FN7] No party disputes that B.K. was an authorized carrier and that there was no written lease between B.K. and any other party. Occidental goes on to argue that since B.K. could not “perform authorized transportation” in the tractor involved in the accident according to the regulations (since it neither owned nor leased the tractor), [FN8] it could not “control” the tractor and therefore could not be considered liable as the owner or lessee of the tractor. Occidental also spends a considerable amount of time arguing that B.K. was really a broker, as defined in 49 C.F.R. § 371.2, and that the relationship between B .K. and F.O.T. was controlled by a brokerage agreement. See 49 C.F.R. § 371.2(c). However, as apparent from an argument Occidental makes later in its brief, determination of which C.F.R. definition best describes the relationship between B.K. and F.O.T. is unnecessary.
As defendants Oostdyk and Simpkins point out, “the term ‘hired’ is not defined in the Policy, and has not been defined by either Pennsylvania courts or this Circuit.” Oostdyk & Simpkins Br. 9. As explained above, the contract terms must be given their “plain and ordinary” meaning when left undefined in the contract itself. Rather than relying on their own dictionaries to provide the “plain and ordinary” meaning of “hire” or “hired,” Oostdyk and Simpkins cite a Tenth Circuit case for a definition. Id. In Avalon v. Duros, the court, also seeking to find the plain and ordinary meaning of “hire,” wrote: The Oxford English Dictionary defines the term in the following manner: “[t]o procure the temporary use of (any thing) for stipulated payment.” OXFORD ENGLISH DICTIONARY (2d ed.1989) (on-line version, http://dictionary.oed.com ). Webster’s similarly defines the term: “to engage the temporary use of for a fixed sum.” WEBSTER’S THIRD NEW INT’L DICTIONARY 1072 (1993). Likewise, Black’s Law Dictionary defines the term to mean: “[t]o purchase the temporary use of a thing.” BLACK’S LAW DICTIONARY 729 (6th ed.1990). Avalos v. Duron, 37 Fed. Appx. 456, 460-61 (10th Cir.2002) (unpublished opinion) (cited in Oostdyk & Simpkins Br. 9). Oostdyk and Simpkins do not reference any other portion of the Avalos opinion. However, applying the plain and ordinary meaning to the circumstances in Avalos, which are nearly identical to those in the instant case, the Tenth Circuit concluded that the party in B.K.’s position did not “hire” the tractor of the party in F.O .T.’s position.
The overwhelming majority of uncontradicted testimony from B.K.’s owner supports this conclusion. Kargman explained that, in general: I don’t have any dealings with his drivers. When I have loads going to Portland, Maine, going to Buffalo, New York, I will tell [F .O.T.], today I have two loads, three loads. He assigns drivers. And since he has control of the drivers and it’s none of my concern who the drivers are, as long as they get there on time, we don’t know if Oscar Simpkins, Joe Blow, et cetera, is the driver, unless there’s a breakdown or a problem…. Otherwise, we don’t know, on a regular basis, who the drivers are on these loads. Kargman Dep. at 11-12. Kargman also stated that he never dictated to F.O.T. who could drive a certain load, id. at 98, and he never told F.O.T. that it had to use a certain driver for a particular load. Id. at 99. Neither Oostdyk and Simpkins nor Westport points to testimony or evidence that contradicts these statements. Hence, it is clear that B.K. did not exert sufficient control over the drivers to conclude that it “hired” F.O.T.’s tractor.
Further, the Fifth Circuit explicitly stated that “for a vehicle to constitute a hired automobile, there must be a separate contract by which the vehicle is hired or leased to the named insured for his exclusive use or control.” Sprow v. Hartford Ins. Co., 594 F.2d 418, 422 (5th Cir.1979); see also Russom v. Ins. Co. of North America, 421 F.2d 983, 993 (6th Cir.1970) ( “Where there is a separate contract for hiring or leasing a vehicle in addition to an agreement to haul a particular load, courts have held that the vehicle becomes a ‘hired automobile.” ‘). Even if there is no specific contract in place for a certain truck, if the “hiring” entity demands a particular vehicle, one could argue that he is legally “hiring” the truck in addition to contracting for the hauling service. Kargman’s testimony makes clear that he did not demand any particular tractor from F.O.T.: I don’t know if he has exclusive trucks that work with me or not. Again, we have no record of what he owns, what he doesn’t own, what he leases. We know he owns trucks. I deal with him. He assigns the trucks and drivers…. [T]here’s nothing exclusively I’m under the control of, because he has the right–if I need extra trucks, [F.O .T.] has the right to say[, “W]e don’t want to haul today, we’re too busy today, we don’t have any trucks today.[“] There’s no exclusive use of any such nature. Kargman Dep. 10-11. According to Kargman, he could not demand a particular tractor from F.O.T. because he was not even aware of what tractors F.O.T. had for hauling loads. Defendants do not produce evidence to contradict this statement by Kargman. Hence, it is clear that B.K. did not exert sufficient control over the vehicle for this court to find that B.K. “hired” the tractor.
Occidental also argues that even if the vehicle is found to be a “hired auto,” F.O., Oostdyk and Simpkins are not insured under B.K .’s Occidental policy because of the reciprocal insurance coverage clause of the policy. The policy provides: [N]one of the following is an “insured”: a. Any “trucker” or his or her agents or “employees” other than you and your “employees”: … (2) If the “trucker” is not insured for hired “autos” under an “auto” liability insurance form that insures on a primary basis the owners of the “autos” and their agents and their “employees” while the “autos” are being used exclusively in the “truckers” [sic] business and pursuant to operating rights granted to the trucker by a public authority. Occidental Policy at Truckers Coverage Form 3. As explained above, the Westport policy only provides coverage for “specifically described autos.” Westport Policy at Truckers Coverage Form Declarations & Truckers Coverage Form. It does not cover “hired” autos generally, as does the Occidental policy. There were no “hired” autos listed on the Westport policy at the time of the accident. Id. Occidental argues that since F.O.T.’s insurance policy with Westport did not provide for coverage of any hired autos, the reciprocal insurance coverage clause precludes F.O., Oostdyk and/or Simpkins from being covered as “insureds” under the Occidental policy. Although Westport does not respond to this argument in its brief, at oral argument it argued that “hired” autos were not specifically excluded from coverage under the Westport policy and therefore could be covered if they were listed on the appropriate schedule. Although there is the possibility that a “hired” auto could be covered by F.O.T.’s Westport policy, the fact of the matter is that at the time of the accident, the only point in time the court can consider when interpreting an insurance policy, the policy did not cover any “hired” autos. Therefore, it is clear that even if the court found the vehicle to be a “hired” auto under the Occidental policy, which I do not, F.O., Oostdyk and Simpkins would not be considered “insureds” under the policy because of the reciprocal insurance coverage clause. Accordingly, Occidental’s motion for summary judgment will be granted.
FN13. As noted earlier, Westport raised an issue at oral argument as to who was its insured, Frank Oostdyk or F.O. Transport, Inc. That issue is not before the court at this time. The MCS-90 endorsement requires an insurance carrier to pay “any final judgment recovered against such motor carrier for [public liability] (personal injury or property damage) resulting from the negligent operation, maintenance or use” of vehicles operated by a motor carrier. The endorsement requires payment “regardless of whether or not each motor vehicle is specifically described in the policy.” Westport Br. 16 (quoting MCS-90 endorsement). Again, no party disputes that Westport is liable pursuant to its MCS-90 endorsement.
Despite Westport’s admission of liability for any judgment recovered against its insured (whether its insured is F.O. Transport d/b/a Frank Oostdyk or F.O. Transport, Inc.), Westport also argues that it is entitled to reimbursement from its insured “for any monies Westport is required to expend, including, but not limited to, counsel fees in defending the underlying action.” Westport Br. 16-17. The language of the endorsement specifically provides for this: ‘The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of the policy, and for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.’ Id. at 16 (quoting MCS-90 endorsement). The Third Circuit has also made it clear that if an insurer is forced to defend the insured because of the endorsement, “the insurer may subsequently proceed against its insured for any payments which the insurer makes under the endorsement, but which it would not otherwise have been required to make.” Carolina Cas. Ins. Co. v. Insurance Co. of North America, 595 F.2d 128, 136 (3d Cir.1979). Accordingly, Westport requests this court to enter an order compelling F.O. and Oostdyk to reimburse Westport for its expenses (including defense costs and indemnity payments) related to the underlying suit. Surprisingly, Oostdyk and Simpkins do not present any arguments in opposition to this position. It is clear that Westport is entitled to reimbursement from its insured. However, because Westport has raised a factual issue concerning the identity if its insured and apparently has not yet made any payments under the policy, the court cannot grant summary judgment against Frank Oostdyk or F.O. Transport, Inc. at this juncture.
Mach Mold, Inc. v. Clover Associates	Posted on September 9, 2004Author Categories Volume 7, Edition 9	United States District Court,
The Carmack Amendment provides, in relevant part: A carrier providing transportation or service … shall issue a receipt or bill of lading for property it receives for transportation…. That carrier and any other carrier that delivers the property and is providing transportation or service … are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier….” 49 U.S.C. § 14706(a)(1). In essence, the Carmack Amendment “provides shippers with the statutory right to recover for actual losses to their property caused by carriers.” Am. Nat’l Fire Ins. Co. v. Yellow Freight Systems, Inc., 325 F.3d 924, 928-29 (7th Cir.2003) (internal quotations and citation omitted). [FN3] In so doing, it codifies “the common law liability of carriers for damage to shippers’ goods.” Pizzo v. Bekin Van Lines Co., 258 F.3d 629, 633 (7th Cir.2001). The Seventh Circuit has held that the Carmack Amendment’s preemptive force extends to all “state and common law remedies inconsistent” with the federal Act. Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir.1987).
FN4. Rule 12(b) provides in pertinent part, If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56. (Emphasis added).