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Risky Business

Interesting Court Cases

By Shelly Benisch, T.R.S., C.I.C.
Posted Oct 14th 2015 12:44PM

Just returned from the Transportation Risk Specialist conference in Orlando where Attorney Rob Moseley was one of the speakers.   Every year Rob educates and amuses us as only he can with summaries of court cases and how they apply to our industry....

Here's a few highlights:

Armstrong v U.S. Fire Ins. Co, 606 F. Supp.2d 794 (E.D. Tenn. 2009)

This is the first case in which a court has applied that the new regulations holds that the MCS-90 applies only to Motor Carriers, and not a driver, lessor, etc.

This means the buck still stops with the Motor Carrier in the 91X promise to the public that all units operated on behalf of the Motor Carrier are properly insured.

Two similar cases Global Hawk v. Century National, 203 Cal. App 4th 1458 (2012) and Southern County v. Great West, 436 SW3d 348, 2014 WL 2153963 (Ct. App. TX 2014) ruled that an Uninsured Motorist Insurance Carrier or a Worker's Comp Insurance Carrier can "stand in the shoes" of an injured plaintiff and can collect on an MCS-90.

This means that those insurance carriers can seek judgement on behalf of their insured for payment of UM and WC under the MCS-90 attached to a Motor Carrier.

Shropshire v. Shaneyfelt, 2013 WL 3666353 (W.D. PA 2013) is an interesting case where a company called GDA leased a truck to the contractor Kaszas.   Then Kaszas hired a driver and leased to Eurotrans.  GDA was found to be the Motor Carrier because it leased a tractor for use in transporting goods in interstate commerce.

So in the end the courts can decide who the Motor Carrier IS regarding the MCS-90 obligation on complex leasing arrangements.

Canal v. YMV Transport, 2011 US Dist. Lexis 115089 (WD Wash. 2011) is an case where the vehicle was not listed on the policy, so there was no actual insurance coverage.   The question was whether the MCS-90 applies because the vehicle in the accident was reportedly being used for personal use to move 4 vehicles as a favor, not a carrier for hire.   The sole basis for Canal's contention that the truck was not operating in a for-hire capacity at the time of the collision was this reported testimony by YMV representative M. Yasinskiy:

Q: Who was the friend you were referring to who you were helping out by transporting his vehicles westbound?

A. His name is Ivan.

Q. What is his last name?

A. I don't know.

Q. Was he a customer of YMV Transport?

A. No.

Q. Was he a customer of M & H Trailers, Inc.?

A. No.

Q. Just a personal friend of yours?

A. Yes.

* * *

Q. Was payment made by your friend for the transport of the four vehicles that we see in the photographs in this case that were being carried on the trailer and on the flatbed of the truck?

A. No, I didn't charge him at all.

Canal's request for summary judgement under trip specific was denied, and MCS-90 promise to the public applies for YMV. The Motor Carrier closed it's doors four months after the collision.

Great West v. Cobra Trucking, 2013 WL 431949 (D. Mont.2013) is a question of Broker or Carrier?   The Great West insurance excluded brokerage operations, and Cobra Trucking contracted with a carrier to haul extra loads.   Cobra's contract was with Haliburton and remained liable to transport the load.

This would be illegal brokering today.

Bartkowiak v. Underwriters at Lloyd's Lindon, 2015 IL App 133549 (Ct. App. 2015) is a case where the argument was made that "Contingent Liability " was intended to be excess over the carrier's policy but it was not accepted by the court.

This was rejected.

The court also stated, "[T]o accept the proposition that Northland's policy was not collectible because the policy limits have been exhausted leaving a portion of the underlying settlement unsatisfied would require the court to transform the Contingent Automobile Liability coverage into excess coverage—something this court cannot do."

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