John Deere Insurance Company, Plaintiff-Counter v. Truckin' U.S.A., Transport Insurance Company, Defendant-Counter Claimant-Appellant

Citations: 122 F.3d 270; 1997 U.S. App. LEXIS 25290; 1997 WL 542782Docket: 97-10025

Court: Court of Appeals for the Fifth Circuit; September 19, 1997; Federal Appellate Court

SummaryOriginalCytator Case TreatmentAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Transport Insurance Company appeals the district court's summary judgment favoring John Deere Insurance Company regarding its duty to defend, indemnify, or reimburse Transport and its insured, Copp Trucking, in a case stemming from a traffic accident that resulted in the deaths of Mr. and Mrs. Kurocik. The Kurocik heirs initially sued several parties, including Copp Trucking, which is insured by Transport, while Truckin' U.S.A., also involved, is covered by John Deere.

Transport settled the claims against Copp Trucking and Tompkins for $600,000 and subsequently sought reimbursement from Deere, asserting that Copp Trucking was covered under Deere's policy. Deere filed for a declaratory judgment to clarify its lack of duty to defend or indemnify, arguing that the rig involved was not a "covered auto" and that Copp Trucking did not qualify as an "insured" under its policy.

The district court ruled in favor of Deere, denying Transport's motion for summary judgment and dismissing its counterclaim. Transport now raises several points on appeal: it claims the district court improperly considered extrinsic evidence, erred by determining that the tractor-trailer was not a "covered auto," found that neither Copp Trucking nor Transport were "insureds," and incorrectly concluded that the MCS-90 endorsement did not impose a duty on Deere to indemnify or reimburse.

The Fifth Circuit Court of Appeals reviews the summary judgment de novo, applying the same standards as the district court.

The "complaint allegation rule" in Texas dictates that an insurer's duty to defend is determined solely from the plaintiff's complaint, without considering external facts. However, if the underlying complaint lacks sufficient factual allegations to establish a cause of action, evidence from a declaratory judgment action may be reviewed. In this case, the plaintiffs' underlying petition did not present adequate factual allegations to ascertain coverage, rendering the rule inapplicable.

The insurance policy requires that to claim coverage for damages due to "bodily injury" or "property damage," the plaintiffs must assert that the involved vehicle is a "covered auto." Their fifth amended complaint indicated that the tractor/trailer rig was provided to Defendant Tompkins by either Harold Suits or Ronald Schmoe, who had a working agreement with Copp Trucking Co. However, these assertions were insufficient to establish coverage.

Transport claimed the district court erred in ruling that the rig was not a "covered auto." A "covered auto" includes vehicles specifically scheduled on the policy, temporary substitute vehicles, after-acquired vehicles, or undescribed trailers. The policy defines a "substitute auto" as a vehicle used with permission as a temporary substitute for a covered vehicle that is out of service.

The district court, using extrinsic evidence, determined that Truckin' U.S.A. owned the tractor, disqualifying it as a "substitute auto." Transport's evidence, primarily Harold Suits's deposition testimony indicating Tompkins drove a truck labeled "Copp Trucking," failed to prove ownership or create a genuine issue of fact. Consequently, the district court correctly found the rig was not a "substitute auto" under the policy.

An "after-acquired auto" under the Policy is defined as a vehicle that replaces one previously owned by Truckin' U.S.A., contingent upon Truckin' U.S.A. notifying Deere within 30 days of acquisition to request coverage. The absence of evidence showing such notification for the rig in question led the district court to correctly conclude that the rig was not covered as an "after-acquired auto." The Policy's coverage for "any undescribed trailer" applies only while it is in the care, custody, and control of the insured, and is further limited to trailers attached to a scheduled power unit listed in the Declarations. As the trailer in question was not attached to such a unit, the court ruled that Deere had no duty to defend or indemnify under this provision.

Transport argued that the "undescribed trailer" provision independently provides coverage. However, the district court noted that even if such coverage existed, Transport could not benefit from it as neither it nor Copp Trucking qualified as "insureds" under the Policy. The definition of "insured" includes individuals liable for the conduct of another insured only to the extent of that liability. Transport attempted to include Copp Trucking as an insured by claiming liability arose from the actions of a Truckin' U.S.A. employee, Tompkins. However, the court found that neither Copp Trucking nor Transport was legally liable for Truckin' U.S.A.'s actions, as their settlement of a lawsuit did not equate to liability under the Policy. Therefore, the district court's ruling that neither Copp Trucking nor Transport was an "insured" under the Policy was upheld.

Transport argues that the MCS-90 endorsement in the Policy obligates Deere to indemnify Transport for settlements related to claims against Copp Trucking from the Kurocik lawsuit. This endorsement is included to meet the financial responsibility requirements under 49 U.S.C. 10927, part of the Motor Carrier Act of 1980. The MCS-90 states that the insurer will pay judgments for public liability due to negligence involving motor vehicle operations, irrespective of whether the vehicles are specifically listed in the policy.

However, Copp Trucking is not considered an "insured" under the Policy, thus the endorsement does not provide grounds for indemnification. The policy excludes coverage for non-listed vehicles in disputes among insurers. Consequently, the district court's decision is upheld.

Transport contends that Copp Trucking is an "insured" due to ownership of a covered auto, but the court determined that Truckin' U.S.A. owns the tractor, negating this claim. Transport also attempts to establish Copp Trucking as an insured based on allegations of Tompkins being an employee of both Truckin' U.S.A. and Copp Trucking. However, since the latest pleading does not support this claim, Transport cannot rely on it for indemnification or defense obligations. Provisions akin to those in 49 U.S.C. 10927 are now found in 49 U.S.C. 13906 (1997).