Cherkaoui v. Pinel et al

Filing 72

ORDER AND REASONS as to 41 Motion for Summary Judgment; 42 Motion for Summary Judgment. IT IS HEREBY ORDERED that the Motion for Partial Summary Judgment filed by defendant, Prime Property & Casualty Insurance, Inc. (Doc. #41), is GRANTED, and the claim made against it by plaintiff, Fouad Cherkaoui, is DISMISSED WITHOUT PREJUDICE. IT IS FURTHER ORDERED that the Motion for Summary Judgment filed by defendant, Inland Lease & Rental, Inc. (Doc. #42), is GRANTED, and the claim made against it by plaintiff, Fouad Cherkaoui, is DISMISSED WITH PREJUDICE. Signed by Judge Mary Ann Vial Lemmon. (cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FOUAD CHERKAOUI

CIVIL ACTION

VERSUS

NO. 16-03

J.A. BENOIT PINEL,

SECTION "S"(1)

ARTISAN FREIGHT, LLC,
INLAND LEASE & RENTAL, LLC
AND PRIME PROPERTY &
CASUALTY INSURANCE, INC.
ORDER AND REASONS
IT IS HEREBY ORDERED that the Motion for Partial Summary Judgment filed by
defendant, Prime Property & Casualty Insurance, Inc. (Doc. #41), is GRANTED, and the claim
made against it by plaintiff, Fouad Cherkaoui, is DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that the Motion for Summary Judgment filed by defendant,
Inland Lease & Rental, Inc. (Doc. #42), is GRANTED, and the claim made against it by plaintiff,
Fouad Cherkaoui, is DISMISSED WITH PREJUDICE.
BACKGROUND
This matter is before the court on a motion for partial summary judgment filed by
defendant, Prime Property & Casualty Insurance, Inc. This matter is also before the court on a
motion for summary judgment filed by defendant, Inland Lease and Rental, Inc.1
Plaintiff, Fouad Cherkaoui, filed this action against defendants, J.A. Benoit Pinel, Artisan
Freight, LLC, Inland, and Prime seeking damages for injuries that he allegedly sustained in an
automobile accident that occurred on May 16, 2015, on Interstate 10 in Jefferson Parish, Louisiana.
Cherkaoui alleges that Pinel, who was employed by Artisan and driving a 2015 Kenilworth T680

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Plaintiff improperly named this entitled as “Inland Lease & Rental, LLC.”

truck, collided into the rear driver’s side of Cherkaoui’s vehicle, which caused Cherkaoui’s vehicle
to spin off of the roadway. Inland owned the 2015 Kenilworth T680, and leased it to PACCAR,
which in turn leased it to Artisan, as a replacement vehicle for one that was earlier leased to Artisan
by PACCAR Leasing Corp. Cherkaoui’s claims include property damage, past and future lost
wages, medical expense and loss of future earning capacity. Cherkaoui alleges diversity subject
matter jurisdiction under 28 U.S.C. § 1332.
Prime issued an automobile insurance policy to Artisan. Cherkaoui alleged that the 2015
Kenilworth T680 was covered under that policy. Inland filed a cross claim against Artisan and
Prime alleging that the lease agreement required Artisan to purchase insurance to cover the leased
vehicle, which included Inland as an additional insured, and to indemnify Inland for any claims
made against it arising out of Artisan’s operation of the leased vehicle. Inland alleged that Prime
and Artisan owe Inland defense and indemnity as to Cherkaoui’s claims.
Prime filed a motion for partial summary judgment on Inland’s cross claim arguing that it
does not owe defense and indemnity to Inland because the 2015 Kenilworth T680 was not listed
as a covered auto and is not an insured under the policy. The court granted Prime’s motion and
dismissed Inland’s cross claim against Prime, finding that the 2015 Kenilworth T680 was not
covered by the terms of the insurance policy. See Rec. Doc. #40.
Thereafter, Prime filed the instant motion for partial summary judgment seeking dismissal
of Cherkaoui’s claim against it under Louisiana’s Direct Action Statute arguing that Cherkaoui
cannot maintain that claim because this court has already found that the 2015 Kenilworth T680
was not covered by the insurance policy. Cherkaoui agrees that this court has found that the vehicle
was not covered by the Prime policy, but argues that his claim against Prime should not be
dismissed because Prime may by liable to him under the MCS-90 endorsement.

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Inland argues that summary judgment should be granted on Cherkaoui’s claim against it
because it did not negligently entrust the vehicle to PACCAR. Cherkaoui argues that Inland is not
entitled to summary judgment because there is a genuine issue of material fact regarding Inland’s
insurance coverage for the 2015 Kenilworth T680. Specifically, Cherkaoui seeks to discover
whether Inland had an insurance policy that may have covered Artisan or included a MCS-90
endorsement.
ANALYSIS
I.

Summary Judgment Standard
Rule 56 of the Federal Rules of Civil Procedure provides that the "court shall grant

summary judgment if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law." Granting a motion for summary judgment
is proper if the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits
filed in support of the motion demonstrate that there is no genuine issue as to any material fact that
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v.
Liberty Lobby, Inc., 106 S.Ct. 2505, 2509-10 (1986). The court must find "[a] factual dispute . . .
[to be] 'genuine' if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party . . . [and a] fact . . . [to be] 'material' if it might affect the outcome of the suit
under the governing substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir.
1989) (citing Anderson, 106 S.Ct. at 2510).
If the moving party meets the initial burden of establishing that there is no genuine issue,
the burden shifts to the non-moving party to produce evidence of the existence of a genuine issue
for trial. Celeotex Corp. v. Catrett, 106 S.Ct. 2548, 2552 (1986). The non-movant cannot satisfy
the summary judgment burden with conclusory allegations, unsubstantiated assertions, or only a

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scintilla of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). If
the opposing party bears the burden of proof at trial, the moving party does not have to submit
evidentiary documents to properly support its motion, but need only point out the absence of
evidence supporting the essential elements of the opposing party’s case. Saunders v. Michelin Tire
Corp., 942 F.2d 299, 301 (5th Cir. 1991).
II.

Prime’s Motion for Partial Summary Judgment
Prime argues that it is entitled to summary judgment on Cherkaoui’s claim against it under

Louisiana’s Direct Action Statute because this court has found that the insurance policy does not
provide coverage for the 2015 Kenilworth T680 that Pinel was driving at the time of the accident.
Louisiana’s Direct Action Statute, La. Rev. Stat. § 22:1259(B)(1), provides that an injured
person has “a right of direct action against the insurer within the terms and limits of the policy. .
.” “[T]he Direct Action Statute does not alter the scope of claims covered by insurance polcies[,]”
and does not “‘extend any greater right to third-party tort victims who were damaged by the
insured.’” First Am. Title Ins. Co. v. Cont’l Cas. Co., 709 F.3d 1170, 1173-74 (5th Cir. 2013)
(quoting Anderson v. Ichinose, 760 So.2d 302, 307 (La. 1999)). In other words, the Direct Action
Statute “does not extend the protection of the liability policy to risks that were not covered by the
policy or were excluded thereby.” Robicheaux v. Adly, 779 So.2d 1048, 1054 (La. Ct. App. 2001).
“Instead, the statute provides a cause of action to injured third parties for claims that fall ‘within
the terms and limits’ of an insurance policy.” First Am. Title Ins. Co., 709 F.3d at 1174 (quoting
La. Rev. Stat. § 22:1269(B)(1)).
This court has already found that the Prime policy did not provide coverage for the 2015
Kenilworth T680 involved in the accident. See Rec. Doc. #40. Thus, Cherkaoui does not have a
claim against Prime under Louisiana’s Direct Action Statute. However, Cherkaoui argues that

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Prime is not entitled to summary judgment because Prime may be liable to him under the MCS-90
endorsement.
The MCS-90 endorsement must be attached to a liability insurance policy issued to a forhire motor carrier operating motor vehicles transporting property in interstate commerce in order
to “assure compliance” with federal minimum levels of financial responsibility for motor carriers.
Canal Ins. Co. v. Coleman, 625 F.3d 244, 247 (5th Cir. 2010) (citing 49 C.F.R. §§ 387.3, 387.7,
387.15). “The endorsement creates a suretyship, which obligates an insurer to pay certain
judgments against the insured arising from interstate commerce activities, even though the
insurance contract would have otherwise excluded coverage.” Id. (citing Minter v. Great Am. Ins.
Co. of N.Y., 423 F.3d 460, 470 (5th Cir. 2005)). The endorsement provides in pertinent part:
In consideration of the premium stated in the policy to which this
endorsement is attached, [Prime] agrees to pay, within the limits of
liability described herein, any final judgment recovered against
[Artisan] for public liability resulting from negligence in the
operation, maintenance or use of motor vehicles subject to the
financial responsibility requirements of Sections 29 and 30 of the
Motor Carrier Act of 1980 regardless of whether or not each motor
vehicle is specifically described in the policy and whether or not
such negligence occurs on any route or in any territory authorized to
be served by the insured or elsewhere. . . It is understood and agreed
that no condition, provision, stipulation, or limitation contained in
the policy, this endorsement, or any other endorsement thereon, or
violation thereof, shall relieve [Prime] from liability or from the
payment of any final judgment, within the limits of liability herein
described, irrespective of the financial condition, insolvency or
bankruptcy or [Artisan]. However, all terms, conditions, and
limitations in the policy to which the endorsement is attached shall
remain in full force and effect as binding between [Artisan] and
[Prime]. [Artisan] agrees to reimburse [Prime] for any payment
made by [Prime] on account of any accident, claim, or suit involving
a breach of the terms of the policy, and for any payment that [Prime]
would not have been obligated to make under the provisions of the
policy except for the agreement contained in this endorsement.
It is further understood and agreed that, upon failure of [Prime] to
pay any final judgment recovered against [Artisan] as provided

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herein, the judgment creditor may maintain an action in any
court of competent jurisdiction against [Prime] to compel such
payment.
See 49 C.F.R. § 387.15 (emphasis added).
The MCS-90 endorsement clearly states that an injured party has an action against the
insurer if it does not pay a final judgment recovered against the insured. Here, Cherkaoui has not
obtained a final judgment against Artisan, nor has Prime failed to pay a final judgment rendered
against Artisan. Therefore, Cherkaoui does not have an action against Prime under the MCS-90
at this time. Prime’s motion for summary judgment regarding Cherkaoui’s claim against it under
Louisiana’s Direct Action Statute is GRANTED. However, Cherkaoui retains the right to pursue
an action against Prime under the MCS-90 should he obtain a judgment against Artisan that Prime
fails to pay.
III.

Inland’s Motion for Summary Judgment
Inland argues that it is entitled to summary judgment on Cherkaoui’s claim against it

because it did not negligently entrust the vehicle to PACCAR.
Under Louisiana law, “the lessor of a vehicle is not liable for the negligent acts committed
by the lessee.” Frances v. Crawford, 732 So.2d 152, 155 (La. Ct. App. 1999) (citing Payne v.
Blankenship, 558 So.2d 1315, 1317 (La. Ct. App. 1990)). However, a lessor may be held liable if
it negligently entrusts its vehicle to the lessee. Id. (citing Payne, 558 So.2d at 1317). Thus, under
the negligent entrustment theory, the lessor of a vehicle is not liable for the lessee’s negligence
unless the plaintiff can establish that the lessor had actual or constructive knowledge that the lessee
was incompetent to operate the vehicle or had a disability that was apparent at the time of the lease.
Id. (citing Payne, 558 So.2d at 1317).

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Inland leased the vehicle to PACCAR in the regular course of business, and PACCAR
leased it to Artisan. There is no evidence that Inland had actual or constructive knowledge that
PACCAR was incompetent to lease the vehicle. Moreover, there is no evidence that Inland had
any actual or constructive knowledge that Artisan or its driver was incompetent. Therefore, Inland
did not negligently entrust the vehicle to PACCAR.
Cherkaoui does not argue that Inland negligently entrusted the vehicle to PACCAR.
Instead, he argues that Inland may have had insurance coverage that would cover Artisan or include
a MCS-90 endorsement. If such insurance exists, Cherkaoui’s potential claim would be against
that insurance company, not Inland. Thus, Inland’s motion for summary judgment is GRANTED.
CONCLUSION
IT IS HEREBY ORDERED that the Motion for Partial Summary Judgment filed by
defendant, Prime Property & Casualty Insurance, Inc. (Doc. #41), is GRANTED, and the claim
made against it by plaintiff, Fouad Cherkaoui, is DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that the Motion for Summary Judgment filed by defendant,
Inland Leas & Rental, Inc. (Doc. #42), is GRANTED, and the claim made against it by plaintiff,
Fouad Cherkaoui, is DISMISSED WITH PREJUDICE.

11th
New Orleans, Louisiana, this _____ day of January, 2017.

____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE

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