NATIONAL INTERSTATE INSURANCE COMPANY v. CHAMPION TRUCK LINES, INC. et al
Filing
41
MEMORANDUM OPINION. Signed by Chief Judge Jerome B. Simandle on 5/8/2013. (dmr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
NATIONAL INTERSTATE INSURANCE
CO.,
Plaintiff,
Civil Action
No. 11-5097 (JBS-KMW)
v.
MEMORANDUM OPINION
CHAMPION TRUCK LINES, INC., et
al.
Defendants.
SIMANDLE, Chief Judge:
The issue in this declaratory judgment action is which
insurer, Plaintiff National Interstate Insurance Co. (“National
Interstate”) or Defendant Carolina Casualty Insurance Company
(“Carolina Casualty”), is the primary insurer for a June 15,
2010 accident. On that date, a tractor driven by Thirdparty
Defendant Paul Dillard, an employee of Defendant Champion Truck
Lines Services, Inc. (“Champion”) struck and injured Defendant
John Davis. Champion was insured by Carolina Casualty. The Court
presently addresses the briefing submitted by the parties in
response to the Court’s March 21, 2013 Show Cause Order [Docket
Item 38] directing Defendants Champion and Davis to show cause
why judgment should not be entered in favor of Plaintiff
National Interstate declaring that Carolina Casualty is the
primary insurer. The Court finds as follows:
1.
Champion and Thirdparty Defendant Northstar Services,
Ltd. (“Northstar”), which is insured by National Interstate, had
a verbal agreement for Champion to handle several container
deliveries for Northstar. Dillard was returning a chassis used
in one of the deliveries when he struck Davis. Both Champion’s
and Northstar’s insurance contracts have identical clauses
stating:
This Coverage Form's Liability Coverage is primary for
any covered “auto” while hired or borrowed by you and
used exclusively in your business as a “trucker” and
pursuant to operating rights granted to you by a
public authority. This Coverage Form's Liability
Coverage is excess over any other collective insurance
for any covered “auto” while hired or borrowed from
you by another “trucker”.
Nat'l Interstate Ins. Co. v. Champion Truck Lines, Inc., Civ.A.
11-5097 (JBS), 2013 WL 1192395, at *2 (D.N.J. Mar. 21, 2013)
(“March 21, 2013 Opinion”). Champion’s policy is therefore
primary if Northstar did not “hire” the vehicle in the accident.
2.
The Court’s March 21, 2013 Opinion found that
Northstar did not hire Dillard because Northstar did not
exercise control over Dillard, and control is the determinative
factor in hired auto cases. Id. at *3-4. As a result, the March
21, 2013 Opinion denied the summary judgment motions of
Defendants Davis and Carolina Casualty, which sought to
establish that National Interstate, Northstar’s insurer, is the
primary insurer.
2
3.
The March 21, 2013 Opinion did not, however, hold that
Champion’s insurer, Carolina Casualty, was primary because
Northstar’s insurer, National Interstate, had not perfected its
cross-motion for summary judgment. Instead, the Court issued a
Show Cause Order [Docket Item 38] pursuant to Rule 56(f)(1),
Fed. R. Civ. P., that
Defendants shall show cause why judgment should not be
entered in favor of the nonmovant National Interstate
Insurance Co. declaring that Policy No. CBP 354244
issued by Carolina Casualty Insurance Company to
Champion
Services,
Inc.
is
the
primary
policy
available
to
Northstar
Services,
Ltd.,
Champion
Services, Inc., and Paul Dillard to the extent that
any of them are liable for the injuries suffered by
Johnny Davis on June 15, 2010 when he was allegedly
struck by a Champion tractor driven by Paul Dillard at
the Packer Terminal in Pennsylvania and whether
judgment should be ordered declaring that Carolina
Casualty Insurance Company, having issued the primary
policy, has a duty to defend Northstar Services, Ltd.,
Champion Services, Inc., and Paul Dillard in any
lawsuit brought by Johnny Davis relating to the
injuries he sustained on June 15, 2010 . . . .
[Docket Item 38 at 1-2.]
4.
Defendant Carolina Casualty filed an “Answer in
Opposition to Plaintiff’s Cross-Motion and In Further Support of
its Motion for Summary Judgment Pursuant to Rule 56(a).”1 [Docket
Item 39.] Defendant Carolina Casualty argues that National
Interstate’s summary judgment motion should be denied because
1
Defendant Davis did not file a response to the Court’s Show
Cause Order.
3
Northstar’s control was demonstrated by its “insistence on
acting as the motor carrier and maintaining its carrier
identity.” [Docket Item 39 ¶ 7.] Carolina Casualty notes that
Northstar controlled the motor carrier identity, all bills of
lading, access to the terminals, the chassis carrying the
container, and all contact with the customer. [Docket Item 39 ¶
9.] Carolina Casualty does not provide any controlling legal
authority to support its argument that these factors determine
whether the vehicle was “hired.” The March 21, 2013 Opinion
noted “factors that courts consider when evaluating ‘hired auto’
clauses in the hauling context, including, the degree of control
exerted over the vehicle, driver, and route.” March 21, 2013
Opinion at *4. The March 21, 2013 Opinion found, based on these
factors, that Northstar did not control and thus did not hire
Dillard. Id. at *3-4. The Court need not repeat its analysis
absent contrary authority from Carolina Casualty.
5.
Carolina Casualty also argues that Northstar was not
legally authorized to broker loads. As noted in the March 21,
2013 Opinion, “Defendants do not cite case law or clauses in the
insurance contracts establishing that the absence of freight
broker authorization establishes that the National Interstate
Policy is primary.” Id. at *5 n.10.2
2
The Court takes no position on Northstar’s status as a broker.
4
6.
Carolina Casualty also argues that National Interstate
is primary pursuant to the insurance contract terms because
“[i]t is beyond cavil that Northstar hired the Champion vehicle
to be used in its business as a ‘trucker’ . . . .” [Docket Item
39 ¶ 16.] Carolina Casualty’s insurance contract states that its
coverage is “primary for any covered ‘auto’ while hired or
borrowed by you and used exclusively in your business as a
‘trucker’ . . . .” [Docket Item 39 ¶ 15.] Even if, arguendo, the
dispositive issue was whether the auto was used in trucking
business, the specific language of the contract states that the
auto must be “used exclusively in your business as a trucker.”
In other words, the contract terms require exclusive use. The
March 21, 2013 Opinion stated that “Dillard did not work
exclusively for Northstar; returning the chassis . . . was the
first job he performed on Northstar's behalf.” March 21, 2013
Opinion at *4. Moreover, Carolina Casualty has provided no case
law or statutory support for its argument that the determinative
factor is whether the auto was involved in trucking business.
7.
In short, absent any case law or statutory support for
Carolina Casualty’s arguments, and in the absence of any dispute
of material fact, the Court holds that Northstar did not “hire”
Dillard and his truck and that the Carolina Casualty policy is
the primary policy.
5
8.
Carolina Casualty’s response also noted, “this Court
may not rightly issue an Order declaring that the CCIC Policy
No. CBP 354244 is primary as to Northstar Services . . . .”
[Docket Item 39 ¶ 1.] National Interstate responded that it
“agrees that the issue of whether Northstar was a primary
insured under the CCIC policy was never raised as an issue . . .
.” [Docket Item 40 at 2.] The Court will therefore omit any
reference to Northstar being a primary insured under the
Carolina Casualty Policy.
9.
The accompanying Order will be entered.
May 8, 2013
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
6
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