Opinion ID: 2773335
Heading Depth: 2
Heading Rank: 1

Heading: Liability Insurance. The party designated

Text: on Schedule A (the Insuring Party) agrees to -3- furnish and maintain, at its sole cost, a policy of automobile liability insurance with limits specified on each Schedule A for death, bodily injury and property damage, covering both you and Ryder as insureds for the ownership, maintenance, use, and operation of each Vehicle (Liability Insurance). . . . The Liability Insurance must provide that its coverage is primary and not additional or excess coverage over insurance otherwise available to either party . . . . The Insuring Party agrees to designate the other party as an additional insured on the Liability Insurance . . . . On the form titled Schedule A, the Insuring Party is identified as Ryder alone. DAM agreed that Ryder shall have the sole right to conduct accident investigations and administer claims handling and settlements and [DAM] shall adhere to and accept Ryder's conclusions and decisions. Ryder obtained liability insurance from Old Republic, under which Old Republic agreed to pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto' and to defend any 'suit' asking for these damages. Insureds included Ryder for any covered 'auto' and [a]ny person or organization for whom [Ryder] is obligated by written agreement to provide liability insurance . . . . Covered autos included any 'auto,' the definition of which included '[t]railers' with a load capacity of 2000 pounds or less designed -4- primarily for travel on public roads. For a coverage limit of $1,000,000, Ryder paid a premium of $459,961. In a section titled Other Insurance, Old Republic specified: For any covered 'auto' you own, this Coverage Form provides primary insurance. However, while a covered 'auto' which is a 'trailer' is connected to another vehicle, the Liability Coverage this Coverage Form provides for the 'trailer' is: . . . [p]rimary while it is connected to a covered 'auto' you own. DAM separately obtained insurance from Stratford. Stratford agreed to pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto,' and to defend any 'insured' against a 'suit' asking for such damages. The Stratford Policy specified three categories of vehicles as covered autos: (1) specifically described 'autos,' (2) hired 'autos,' and (3) nonowned 'autos.' For a maximum coverage of $1,000,000, DAM paid a premium of $4,808. Specifically described 'autos' are defined as [o]nly those 'autos' described in Item Three of the Declarations for which a premium charge is shown (and for Liability Coverage any 'trailers' [DAM doesn't] own while attached to any power unit described in Item Three). Item Three lists two Chevy Express vans and any non-owned trailer while attached to a covered auto. -5- Hired 'autos' are defined as [o]nly those 'autos' [DAM] lease[s], hire[s], rent[s] or borrow[s]. In Item Four, DAM estimated the cost of hire of these autos to be $5,000 per year. The $5,000 per year estimate yielded a liability premium of $400. Nonowned 'autos' are defined as [o]nly those 'autos' [DAM] do[es] not own, lease, hire, rent or borrow that are used in connection with [DAM's] business. In the Other Insurance section, the Stratford Policy specifies that it provides primary coverage for autos that fall into one of these three categories of covered autos. It reads: This Coverage Form's Liability Coverage is primary for any covered auto while hired or borrowed by [DAM] and used exclusively in [DAM's] business as a trucker and pursuant to operating rights granted to [DAM] by a public authority. This Coverage Form's Liability Coverage is excess over any other collectible insurance for any covered auto while hired or borrowed from [DAM] by another trucker. However, while a covered auto which is a trailer is connected to a power unit, this Coverage Form's Liability Coverage is: (1) On the same basis, primary or excess, as for the power unit if the power unit is a covered auto. (2) Excess if the power unit is not a covered auto. The Bendors sued Ryder, DAM, and Girginoff in federal court in Connecticut on December 3, 2010, for damages in connection -6- with the April 7, 2010, accident.1 As required by its policy with Ryder, Old Republic immediately began providing a defense. In March 2011, Old Republic asked Stratford to participate in the defense of its insureds. In August 2011, after learning about the underlying lawsuit, Stratford proposed a general change endorsement to its policy with DAM that was retroactively effective on the inception date of the policy. That endorsement specified: For a covered 'auto' leased or rented to [DAM] by [Ryder] or any related entity, LIABILITY COVERAGE is excess over any other collectible insurance. Stratford and DAM executed the agreement on November 29, 2011. By letter dated December 1, 2011, Stratford informed Old Republic that it had no obligation to share in the cost of defending or indemnifying its insureds against the underlying lawsuit. Stratford's Senior Litigation Specialist, Sandra McFarlane, wrote that the endorsement reflects [DAM]'s understanding that [it] had opted to purchase primary insurance for [its] Ryder vehicles through Ryder. McFarlane stated that [a]ny coverage provided to either DAM or Mr. Girginoff by Stratford is excess to the coverage provided by Ryder and/or Old Republic. For this reason, McFarlane took the position that Stratford is not . . . obligated to, and will not, share in the cost of defending or indemnifying [their] mutual insureds at this time. 1 Coca-Cola was subsequently added as a defendant. -7-