Opinion ID: 170978
Heading Depth: 1
Heading Rank: 6

Heading: Textual Provisions

Text: As an initial matter, an understanding of when the MCS-90 endorsement comes into play can be obtained by examining two seemingly divergent provisions in the MCS-90 endorsement: the first provision dictates that no condition, provision, stipulation, or limitation contained in the policy... shall relieve the [insurance company] from liability or from the payment of any final judgment, within the limits of liability herein described; and the second provision requires that all terms, conditions, and limitations in the policy to which the endorsement is attached shall remain in full force and effect as binding between the insured and the company. 49 C.F.R. § 387.15, Illus. I. The first provision requires the insurer to pay a public liability judgmententered against the motor carrier for negligence with respect to vehicles subject to the financial responsibility requirements whether or not the events giving rise to the judgment come within the policy's express coverage. See id. (requiring payout even if the particular vehicle involved in an accident was for some reason not specifically described in the policy or was driven on a route the carrier was not authorized to serve, and irrespective of the financial condition, insolvency or bankruptcy of the insured); see also Larsen Intermodal Servs., Inc., 242 F.3d at 671. At first blush, the provision appears to automatically invalidate any contrary or limiting terms in the underlying insurance policy. The second provision, however, reiterates the underlying insurance policy remains in force on its original terms as between the motor carrier and the respective insurance company. Any policy exclusions, or outright lack of coverage by the policy for the accident at issue, remain valid and enforceable as between the motor carrier and its insurer. This conclusion is supported by the endorsement's reimbursement provision: if the insurer would not have been obligated to pay the judgment absent the endorsement, the insurer is entitled to reimbursement by the motor carrier. See 49 C.F.R. § 387.15, Illus. I (The insured agrees to reimburse the company ... 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 ... [the MCS-90] endorsement.). The motor carrier therefore is free to negotiate the terms of its insurance policies with various insurers as it sees fit. Consequently, with respect to the ultimate allocation of responsibility, the MCS-90 endorsement should be irrelevant. [10]