Augustine Forkwar v. Empire Fire and Marine Insuran
Filing
UNPUBLISHED AUTHORED OPINION filed. Originating case number: 8:09-cv-01543-WGC. Copies to all parties and the district court/agency. [998884047].. [10-2160]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-2160
AUGUSTINE F. FORKWAR,
Plaintiff - Appellant,
v.
EMPIRE FIRE AND MARINE INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt.
William Connelly, Magistrate Judge.
(8:09-cv-01543-WGC)
Argued:
May 16, 2012
Decided:
June 27, 2012
Before WILKINSON, GREGORY, and FLOYD, Circuit Judges.
Affirmed by unpublished opinion.
Judge Gregory wrote
opinion, in which Judge Wilkinson and Judge Floyd joined.
the
ARGUED: Michael S. Blumenthal, BLUMENTHAL & ASSOCIATES, LLC,
Landover, Maryland, for Appellant. Joseph Wolf, GOODELL DEVRIES
LEECH & DANN, LLP, Baltimore, Maryland, for Appellee. ON BRIEF:
Linda S. Woolf, GOODELL DEVRIES LEECH & DANN, LLP, Baltimore,
Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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GREGORY, Circuit Judge:
This
case
involves
a
dispute
over
whether
Appellee,
an
insurance company, is obligated under the terms of an insurance
contract to pay Appellant for injuries he suffered in a car
accident.
summary
The
district
judgment,
court
finding
granted
there
was
Appellee’s
motion
no
such
obligation.
for
J&J
Logistics,
for
We
affirm.
I.
Hameed
Mahdi
was
a
contractor
working under an independent contractor agreement.
Inc.,
Mahdi leased
his tractor to J&J, and J&J paid Mahdi for its exclusive use of
the
tractor.
Pursuant
to
the
contract,
Mahdi
called
J&J’s
office each morning to see if J&J had a job for him to do.
On
November 25, 2004, Mahdi called J&J and was instructed to pick
up a load at the Giant Food warehouse in Jessup, Maryland at
midnight on November 26.
the
26th
Commerce
and
began
Commission
to
Mahdi left his home late at night on
drive
(“I.C.C.”)
to
Jessup.
numbers
Logistics” were on his tractor.
and
J&J’s
the
Interstate
name
“J&J
On the way to Jessup, Mahdi
decided to stop to grab something to eat, but before he could
exit the highway he was involved in an accident with Appellant
Augustine Forkwar.
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Mahdi had been issued a commercial auto insurance policy
(“the
Policy”)
by
Company (“Empire”).
Appellee
Empire
Fire
&
“business
use”
Insurance
After receiving notice of the accident,
Empire conducted a routine investigation.
the
Marine
exception
to
the
It determined that
Policy
applied
and
that
Empire was therefore under no obligation to defend or indemnify
Mahdi for the accident.
The business use exception provides:
This Insurance does not apply to any of the following . . .
14. BUSINESS USE
“Bodily injury” or “property damage” while a
covered “auto” is used to carry people or
property in any business or while a covered
“auto” is used in the business of anyone to whom
the “auto” is leased or rented.
J.A. 134, 138.
In October of 2006, Forkwar filed suit (“the underlying
action”) against both Mahdi and J&J seeking $500,000 in damages.
The
lawsuit
alleged
that
Mahdi
negligently
caused
injury
to
Forkwar in connection with the accident and that J&J was liable
under
the
doctrine
of
respondeat
superior.
Based
on
its
investigation and interpretation of the business use exception,
Empire declined to defend Mahdi.
At trial, Forkwar made no
effort to affirmatively demonstrate that J&J was liable. 1
1
In his
While Appellant never explains his strategy, it appears
that he brought suit against J&J solely to have a verdict
entered in J&J’s favor on the respondeat superior claim, which
he believes collaterally estops Empire from asserting the
(Continued)
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opening statement, Forkwar’s attorney told the jury that the
judge “will take care of J&J, and I expect that they will be
walking out of the courtroom.”
He said he would “attempt to
show ironically that J&J didn’t have anything to do with Mr.
Mahdi.”
And when J&J made a mid-trial motion for judgment as a
matter of law, Forkwar did not oppose the motion.
failed to show up to the trial.
was
negligent
in
the
Mahdi also
The jury later found that Mahdi
operation
of
his
vehicle
and
awarded
state
court,
Forkwar $180,756.67.
After
securing
judgment
against
Mahdi
in
Forkwar filed this action in the Circuit Court of Maryland for
Prince George’s County.
Empire removed the case to the U.S.
District Court for the District of Maryland, and the parties
filed cross-motions for summary judgment.
The district court
denied Forkwar’s motion for summary judgment, granted Empire’s
cross-motion for summary judgment, and denied Forkwar’s counter
motion for summary judgment.
This timely appeal followed.
II.
Forkwar makes two arguments on appeal.
She first contends
that the district court erroneously determined that Empire was
business use
disagree.
exception.
For
the
4
reasons
given
below,
we
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not
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collaterally
estopped
by
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the
judgment
in
the
underlying
action from arguing that the business use exception applies.
Second, she argues on the merits that the business use exception
does not bar coverage.
We reject both of these arguments.
This Court reviews the grant or denial of summary judgment
de novo.
Overstreet v. Kentucky Life Ins. Co., 950 F.2d 931,
938 (4th Cir. 1991).
pleadings,
Summary judgment is appropriate “if the
depositions,
answers
to
interrogatories,
and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”
FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986).
The Court must construe the facts in the light most
favorable to the non-moving party.
Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986).
In diversity cases, federal
courts
of
apply
the
substantive
action was brought.
78 (1938).
law
the
state
in
which
the
Erie Railroad Co. v. Tompkins, 304 U.S. 64,
Here, Maryland substantive law governs.
A.
Appellant argues that the district court erred in failing
to find the Appellee was collaterally estopped from claiming
that the business use exception applies.
Under Maryland law, a
party seeking to invoke collateral estoppel must satisfy a fourpart test:
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1. Was the issue decided in the prior adjudication
identical with the one presented in the action in
question?
2. Was there a final judgment on the merits?
3. Was the party against whom the plea is asserted a
party or in privity with a party to the prior
adjudication?
4. Was the party against whom the plea is asserted
given a fair opportunity to be heard on the issue?
Colandrea v. Wilde Lake Cmty. Ass’n, 761 A.2d 899, 909 (Md.
2000) (citations omitted).
Appellant cannot meet her burden because the issue in the
underlying action is not identical to the one presented by this
case.
permits
Under Maryland law, the doctrine of respondeat superior
“an
employer
to
be
held
vicariously
liable
for
the
tortious conduct of its employee when that employee was acting
within
the
scope
of
the
employment
relationship.”
Connors, 660 A.2d 423, 426 (Md. 1995).
Oaks
v.
But because “a strict
application of the doctrine . . . in the modern commercial world
would result in great injustice,” Maryland law holds
that a master will not be held responsible for negligent
operation of a servant’s automobile, even though engaged
at the time in furthering the master’s business, unless
the master expressly or impliedly consented to the use of
the automobile, and had the right to control the servant
in its operation, or else the use of the automobile was
of such vital importance in furthering the master’s
business that his control over it might reasonably be
inferred.
Gallagher’s
Estate
(emphasis omitted).
v.
Battle,
122
A.2d
93,
97
(Md.
1956)
As a result, there are four elements to
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establish respondeat superior in Maryland: (1) the existence of
an employer-employee relationship 2; (2) the tortious act must
have occurred “within the scope of the employment relationship”;
(3) the employer consented, explicitly or implicity, to the use
of the automobile; and (4) the employer had the right to control
the employee in the operation of the automobile or the use of
the automobile was vitally important in furthering the master’s
business.
In contrast, the business use exception applies whenever “a
covered
‘auto’
is
used
to
carry
people
or
property
in
any
business or while a covered ‘auto’ is used in the business of
anyone to whom the ‘auto’ is leased or rented.”
Plainly, the
respondeat superior doctrine and the business use exception are
not identical issues.
While respondeat superior requires the
existence of an employer-employee relationship, the business use
exception has no such element.
who
was
acting
“in
the
Thus, an individual like Forkwar
business
of”
J&J
but
who
is
an
independent contractor rather than employee would be subject to
the Policy’s exclusion without falling under the doctrine of
respondeat superior.
2
Maryland courts resolve this question by asking whether
the employer had the right “to control and direct the employee
in the performance of the work and in the manner in which the
work is to be done.” B.P. Oil Corp. v. Mabe, 370 A.2d 554 (Md.
1977).
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While the Appellant never makes this argument in her brief,
she could have relied on some of the Court of Special Appeals of
Maryland’s language in Empire Fire & Marine Ins. Co. v. Liberty
Mutual Ins. Co, 699 A.2d 482 (Md. Ct. Sp. App. 1997).
There, in
construing Empire Fire’s business use exception, the court said
that
it
“follow
guidance
from
sought
would
respondeat
the
the
superior.”
application
of
the
course
of
analogous
Id.
at
courts
common
495.
business
This
use
superior are identical issues.
other
law
that
doctrine
suggests
exception
have
and
that
of
the
respondeat
It is true that the requirement
in the business use exception that bodily injury occur while an
auto “is used in the business of anyone” is quite similar to the
second element for respondeat superior, that the accident occur
“within the scope of the employment.”
However, that is not to
say that all of the elements are identical.
Respondeat superior
requires that there be an employer-employee relationship, and
Maryland
--
like
other
states
--
recognizes
a
distinction
between an employee and an independent contractor.
See, e.g.,
Greer Lines Co. v. Roberts, 139 A.2d 235 (Md. 1958) (“Whether
the relation of the parties is that of master and servant, or
employer
and
. . . .”).
exception
independent
In
contractor,
contrast,
suggests
there
no
depends
language
must
be
in
an
upon
the
the
business
facts
use
employer-employee
relationship; it requires only that the accident occur while the
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auto is used in someone’s business.
Thus at best Appellant has
proven that one of the four elements of respondeat superior are
met, but cannot establish the remaining three.
We therefore
reject Appellant’s collateral estoppel claim.
B.
Appellant goes on to argue that the district court erred in
finding
that
the
business
underlying action.
use
exception
applies
to
the
Maryland law construes insurance policies
like any other contract.
E.g., N. River Ins. Co. v. Mayor &
City Council of Balt., 680 A.2d 480 (Md. 1996).
“The first
principle of construction of insurance policies in Maryland is
to apply the terms of the contract” to determine the scope and
limitations of coverage.
Mutual Fire, Marine & Inland Ins. v.
Vollmer, 508 A.2d 130, 133 (Md. 1986).
as
a
whole,
provision.
1995).
without
emphasis
on
any
particular
Sullins v. Allstate Ins. Co., 667 A.2d 617 (Md.
Finally,
“ordinarily
putting
The policy is reviewed
and
when
usually
examining
the
accepted”
policy’s
meaning
language,
should
be
the
applied,
Aragona v. St. Paul Fire & Marine Ins. Co., 378 A.2d 1346 (Md.
1977), unless the parties intended to use the word “in a special
or technical sense.”
Cheney v. Bell Nat’l Life Ins. Co., 556
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A.2d 1135, 1138 (Md. 1989). 3
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Unlike most states, Maryland does
not apply the rule that insurance policies are construed against
the insurer.
Empire Fire & Marine Ins. Co. v. Liberty Mutual
Ins. Co., 699 A.2d 482, 494 (Md. Ct. Spec. App. 1997).
In
Court
Empire
of
Fire
Appeals
v.
Liberty
considered
Mutual,
the
same
under an analogous fact pattern.
Perry,
was
contracted
the
out
owner
to
a
and
language
of
company,
I.C.C. license was in O.S.T.’s name.
Maryland
at
Special
issue
here
There the plaintiff, James
operator
shipping
the
a
tractor
O.S.T.;
the
Id. at 486.
that
was
tractor’s
O.S.T. also
had a similar method of assigning work: Perry contacted O.S.T.
daily to obtain his next assignment.
Id. at 487.
The timing of
the accident, however, is different: Perry had completed his
dispatch on January 16, dropped his tractor off at a service
station that day, and returned four days later to pick it up.
Id.
On his way home from the service station, he was involved
in an accident.
Id.
The Maryland court found that the business
use exception did not apply, noting that Perry was driving to
his
home,
not
receiving
any
compensation
3
from
O.S.T.,
not
The Maryland courts have determined that this contractual
language is not ambiguous. Liberty Mutual Ins. Co., 699 A.2d at
494 (“No ambiguity is present in Empire’s business use exception
clause.”).
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operating under a bill of lading, not under dispatch, and not
hauling a load at the time of the accident.
Id. at 487-88.
Appellant suggests that Liberty Mutual is dispositive.
disagree.
Liberty
We
While most of the facts parallel the instant case, in
Mutual
the
accident
occurred
several
days
after
the
completion of Perry’s last dispatch, while he was driving home.
Here, in contrast, Mahdi was under dispatch -- a fact expressly
noted in Liberty Mutual.
Id.
There is unfortunately very little additional case law on
the applicability of the business use exception.
However, the
decisions of other circuits provide guidance that Maryland law
considers persuasive in interpreting its own law.
See Stanley
v. Am. Motorists Ins. Co., 73 A.2d 1 (Md. 1950) (“[P]arties who
adopt an insurance policy, which apparently has had nationwide
use . . . adopt with it the uniform judicial construction that
it has received in other states.”).
Circuits,
in
considering
Both the Seventh and Fifth
similarly
worded
business
use
exceptions, have held that the purpose of the exclusions is to
retract coverage for “occasion[s] when the truck is being used
to further the commercial interest of the lessee.”
Hartford
Ins. Co. v. Occidental Fire & Cas. Co., 809 F.2d 235, 239 (7th
Cir. 1990) (emphasis added); see also Mahaffey v. Gen. Sec. Ins.
Co., 543 F.3d 738 (5th Cir. 2008); Empire Fire & Marine Ins. Co.
v. Brantley Trucking, Inc., 220 F.3d 679 (5th Cir. 2000).
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this interpretation, the question is whether Mahdi’s conduct at
the time of the accident “furthered the commercial interest” of
J&J.
In applying the furthering-the-interests test to this case,
we
find
that
exception.
Mahdi’s
conduct
fell
under
the
business
use
The accident occurred while Mahdi was on his way to
pick up a load for J&J; his driving to Jessup was a necessary
step in completing his work.
was
not
“pursuing
leisurely
frolic [or] detour.”
As the district court noted, Mahdi
engagement
nor
engaged
in
some
Rather, he had received instructions from
J&J to go to Jessup to pick up a load and was in the process of
completing that task.
Although Mahdi had decided just before
the accident to stop for a meal before making his way to the
warehouse,
he
was
operating
his
vehicle
at
the
time
of
the
accident solely for the purpose of furthering J&J’s commercial
interests.
We therefore find that the business use exception
applies and bars coverage.
III.
For the reasons given above, we affirm the district court.
AFFIRMED
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