MEMORANDUM OPINION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

JOHN R. TUNHEIM, District Judge.

Plaintiff Occidental Fire & Casualty Company of North Carolina ("Occidental") brings this declaratory judgment action against its insureds, Thomas Hipp and Hipp's Trucking, Inc. (collectively, "Hipp"). The underlying facts giving rise to this action involve a fatal truck accident. On March 10, 2009, Amy Soczynski was killed when a truck and trailer driven by Thomas Hipp collided with her vehicle. Amy's widower, Adam Soczynski ("Soczynski"), brought a personal injury action in Minnesota state court against Hipp and Airline Transportation Specialists, Inc., ("ATS"), a company for whom Hipp hauls cargo as an independent contractor. Hipp is insured by Occidental, and ATS is insured by Great West Casualty Company ("Great West"). The parties to the state court action settled when Great West tendered its liability policy limit of $1,000,000 to Soczynski. Occidental refused to tender its policy limit or engage in the settlement. Hipp assigned all of its causes of action against Occidental to Soczynski, and Occidental now seeks a declaratory judgment that its policy insuring Hipp does not provide coverage for damages arising out of the accident.

Both Occidental and Soczynski have moved for summary judgment on the issue of coverage, disputing the applicability of an endorsement to the Occidental policy which excludes coverage while Hipp is acting "for or on the behalf of" ATS. Soczysnki also seeks a determination of the liability limit of the Occidental policy. Because the Occidental policy provides coverage for the damages arising out of the accident, the Court will deny Occidental's motion for summary judgment and grant Soczynski's motion for partial summary judgment.

BACKGROUND

I. THE CONTRACTOR AGREEMENT

Thomas Hipp is a truck driver and the sole shareholder of Hipp's Trucking, Inc., a Minnesota S corporation. (First Decl. of Nadia Wood, Ex. 1 at 2, June 28, 2012, Docket No. 13.) Hipp has hauled freight exclusively for ATS as an independent contractor since 1996. (First Aff. of Ryan P. Myers, Ex. A (First Dep. of Thomas Hipp ("First Hipp Dep. A") 26:10-22), June 28, 2012, Docket No. 18.)

The relationship between Hipp and ATS is a critical issue in this matter and is governed by a nonexclusive Contractor Agreement entered into on March 4, 1996. (Compl., Ex. B at 1-2, Aug. 23, 2011, Docket No. 1.) The Agreement forms a continuous lease, unless terminated by either party by giving thirty days' notice. (Id., Ex. B at 2.) Both ATS and Hipp described the relationship formed by the Contractor Agreement as a long-term, continuous lease. (First Wood Decl., Ex. 5 (Second Dep. of Thomas Hipp ("Second Hipp Dep. A") 56:3-5); First Wood Decl., Ex. 7 (Dep. of Thomas Medved ("Medved Dep. A") 64:14-25).) Despite the nonexclusive nature of the Agreement, from 1996 onward Hipp did not haul freight for any other motor carriers. (First Hipp Dep. A 26:20-22.) Occasionally Hipp hauled freight for personal purposes. (Id. 26:23-25.)

With respect to the relationship between Hipp and ATS, the Contractor Agreement provides:

(Compl., Ex. B at 1.) The Agreement also limits ATS's "use, possession and control of the equipment as required by 49 CFR 1057, 12(c)"1 to "the period the equipment is actually transporting a shipment pursuant to this agreement." (Compl., Ex. B at 1.)

The Agreement requires Hipp to display ATS identification in compliance with federal regulations and to remove such identification "when Equipment is being used other than in service of [ATS]." (Id., Ex. B at 3.) Additionally, Hipp must provide the necessary equipment for hauling ATS's freight and cargo, and is responsible for maintaining its equipment "in safe operating condition and . . . insur[ing] that at all times it will be in compliance with all safety requirements mandated by all state and federal regulatory bodies." (Id., Ex. B at 3, 7-8.)

The Contractor Agreement also requires ATS and Hipp to procure insurance. The Agreement obligates ATS "to maintain public liability, property damage and cargo insurance coverage for the protection of the public pursuant to law under 49 U.S.C. 10927 and regulations under 49 CFR Part 1043."2 (Compl., Ex. B at 9.) Hipp is to "carry bobtail insurance coverage with respect to public liability and property damage."3 (Id.)

II. INSURANCE POLICIES

Both ATS and Hipp acquired the insurance called for by the Contractor Agreement. ATS obtained insurance under a policy issued by Great West ("Great West Policy"), and Hipp obtained an insurance policy from Occidental ("Occidental Policy").

A. The Great West Policy

Great West issued a commercial automobile insurance policy to ATS effective December 1, 2008, through December 1, 2009. (First Myers Aff., Ex. B at 11.) The policy provides a liability limit of $1,000,000 for covered autos, which includes Hipp's truck. (Id., Ex. B at 11, 15.) The liability coverage section of the policy provides:

(Id., Ex. B at 16.) ATS qualifies as an insured under the policy with respect to any covered auto. (Id.) The policy also defines Hipp as an insured under certain circumstances, providing:

The following are "insureds":

(Id.)

B. The Occidental Policy

Occidental issued a commercial auto insurance policy that provided coverage to Hipp from August 1, 2008, to August 1, 2009. (Compl., Ex. A at 65.)4 The policy provides liability coverage under which Occidental agrees to "pay all sums an `insured' legally must pay as damages because of `bodily injury' or `property damage' to which this insurance applies, caused by an `accident' and resulting from the ownership, maintenance or use of a covered `auto'." (Id., Ex. A at 77.) Hipp was a named insured at the time of the accident, and the 2009 Volvo semi-tractor involved in the accident was a covered auto. (Id., Ex. A at 22-24, 77.)

1. Liability Limit

The liability limit of the Occidental policy is a key question in this matter. On the declarations page, the policy indicates that the liability limit for any single accident per covered auto is $500,000. (Id., Ex. A at 65.) A separate endorsement to the policy states, however, that the liability limit of the policy is $1,000,000. (Id., Ex. A at 75.) This separate "Monthly Payment and Reporting Endorsement" expressly states that it "forms a part of the policy" and is also listed in the policy's schedule of forms and endorsements which all "form[] a part of the policy to be effective on the inception date." (Id., Ex. A at 66, 75.) A series of monthly report endorsements5 attached to the policy represent the schedule of covered vehicles for each month during which the policy is effective. Each such monthly report lists "$500,000" as the insured value corresponding to Hipp's 2009 Volvo. (Id., Ex. A at 5, 9, 14, 18, 24, 28, 32, 36, 40, 44, 48, 52, 56, 61.) Each monthly report in the series notes that, other than the change to the current schedule of vehicles and the premium due "[a]ll other terms and conditions of this policy remain unchanged." (Id., Ex. A at 3.)

2. Non-Trucking Endorsement

The Occidental policy also includes an endorsement modifying Hipp's liability coverage which is central to the present dispute. The "Truckmen — Insurance for Non-Trucking Use" endorsement ("Non-Trucking Endorsement") provides that:

(Compl., Ex. A at 104.) Thomas Hipp testified regarding his understanding of the Non-Trucking Endorsement, and explained that the Occidental policy did not cover Hipp "under any lease. It was — that insurance was for in between leases or when I'm doing something on my own." (Second Hipp Dep. A 60:6-12.)

Occidental issued a Certificate of Insurance to Hipp on July 22, 2008, which also references the scope of the Occidental policy's "nontrucking liability" coverage. (Second Aff. of Ryan P. Myers, Ex. A at 1, July 19, 2012, Docket No. 22.) After listing the Occidental policy number and a coverage limit of $500,000, the Certificate of Insurance states that "[c]overage is afforded by this policy for nontrucking liability only" and references the policy's Non-Trucking Endorsement. (Id.) The Certificate of Insurance also states that "[c]overage afforded by this policy shall apply only to [Hipp] as lessor/contractor under a long term lease to [ATS.] This coverage shall cease to apply to [Hipp] as lessor/contractor at the same time the lease agreement ceases or upon the expiration of the policy whichever comes first." (Id.)6

III. THE ACCIDENT

On March 10, 2009, Thomas Hipp ran two separate errands in the 2009 Volvo semi-tractor owned by Hipp and insured by Occidental. (First Wood Decl., Ex. 1 at 1-2; First Myers Aff., Ex. B at 11, 15; First Hipp Dep. A 85:11-22.) In the morning, Thomas Hipp drove from his home in Ham Lake, Minnesota, to Twin Cities Mack & Volvo Trucks in Roseville, Minnesota, to have clean idle software installed on the Volvo's engine. (First Hipp Dep. A 78:9-17, 85:11-19, 87:12-13.) Clean idle software allows truck drivers to keep their engines idling in states where environmental regulations require that engines without the software be shut off after a specified period of time, usually five minutes. (Second Hipp Dep. A 16:5-10; First Wood Decl., Ex. 8 (Dep. of Catherine Moe ("Moe Dep. A")) 15:16-21.)

After the software was installed, Thomas Hipp drove to Blaine, Minnesota, to pick up outriggers he had ordered from Blaine Brothers Maintenance. (First Hipp Dep. A 81:5-7, 83:20-84:8, 87:8-10.) Outriggers are removable steel structures that can be attached to a trailer to make more floor space or distribute the weight of a load differently, allowing truck drivers to haul various types of cargo. (Second Hipp Dep. A 29:2-16; Medved Dep. A 37:5-21.) Because the outriggers were not ready to be picked up, Thomas Hipp drove to his home and ate lunch. (First Hipp Dep. A 86:12-23, 89:17-21.) After eating lunch, he returned to Blaine Brothers, at which point he loaded the outriggers into his trailer and left to return home. (Id. 87:17-22, 89:17-21.) On the way home, Hipp's trailer crossed the center line of a two-lane road and collided with Amy Socyznski's SUV, causing her death. (Id. 95:5-6; First Myers Aff., Ex. F.)

Before the accident, the last directive Hipp received from ATS was fulfilled when Thomas Hipp delivered a load of cargo to Chicago on Saturday, March 7, 2009, on behalf of ATS. (First Wood Decl., Ex. 15 at 2-3.) After delivering the load, Thomas Hipp returned to his home and remained there until the day of the accident. (Id., Ex. 15 at 3.) On March 10, 2009, Hipp was not under dispatch from ATS and was not logging his time in his driver's daily log.7 (Second Hipp Dep. A 41:25-42:4, 50:13-25, 61:15-62:8.) Additionally, the trip to Blaine Brothers to pick up the outriggers did not appear in Hipp's maintenance logs which Thomas Hipp regularly submitted to ATS. (Id. 55:5-11, 20-21.) But Hipp's truck displayed ATS's logo and federal registration numbers at the time of the accident. (First Hipp Dep. A 17:10-24.)

A. Clean Idle Software

The clean idle software Hipp obtained was not necessary in order for Hipp to perform under the Contractor Agreement. (First Hipp Dep. A 78:17-20; Second Hipp Dep. A 24:25-25:7.) Thomas Hipp testified that he had the software installed for his own convenience. (Second Hipp Dep. A 16:5-17.) Keeping the truck in idle for longer than the five minutes otherwise permitted by regulations allowed Hipp to run the truck's air conditioning and heating, power personal electronics, and refuel more quickly. (First Myers Aff., Ex. C (Second Dep. of Thomas Hipp ("Second Hipp Dep. B")), 16:25-17:13, 21:11-15, 24:16-21.) ATS did not know that Hipp was obtaining clean idle software and did not provide incentives for doing so. (Medved Dep. A 32:18-24; Moe Dep. A 15:3-10; Second Hipp Dep. A 24:22-25:13, 49:12-18.)

B. Outriggers

The outriggers Hipp purchased on March 10, 2009, served to extend the length of a trailer, and were specifically designed to haul wind tower parts. (Second Hipp Dep. A 34:7-15.) Thomas Hipp testified that, at the time he purchased the outriggers, ATS did not have the "type of freight that would require these particular outriggers." (Id. 29:17-21, 31:16-18, 34:4-6.) Indeed, Hipp already owned and used other, differently configured outriggers to haul cargo for ATS. (Id. 29:22-30:2.) Because wind towers were becoming more popular, Hipp had purchased the outriggers to "make the trailer more marketable" to other motor carriers or to use in the event that Hipp quit working for ATS. (Id. 31:23-25, 32:2-6.) Although Thomas Hipp conceded that he may have purchased the outriggers "in anticipation of possible loads to haul for ATS," he clarified that he had not purchased the outriggers "particularly for ATS" but rather because he felt they "might come in handy some day." (Id. 30:10-14.) Additionally, ATS gave Hipp no indication that it would be able, or was planning, to offer loads that would require the outriggers purchased on the day of the accident. (Id. 40:9-15.)

ATS was not aware at the time of the accident that Hipp was intending to or did purchase outriggers. (Medved Dep. A 74:7-12; First Myers Aff., Ex. E (Dep. of Thomas Medved ("Medved Dep. B")), 35:1-3.) The owner of ATS testified that the outriggers expanded Hipp's capability to haul freight, but were not necessary for Hipp to be able to haul ATS freight. (Medved Dep. B 36:15-37:3.) ATS kept track of the equipment purchased by its independent contractors and would contact the contractors if ATS had a load requiring that particular type of equipment. (Id. 46:6-12; Second Hipp Dep. A 36:20-37:2.) ATS attempted to use the special hauling capacity of its independent contractors but did not consider the ability to haul special loads an incentive for its drivers. (Medved Dep. B 46:23-47:10, 48:20-25.)

Despite Hipp's potentially increased hauling capacity, ATS did not dispatch Hipp differently "before or after" Hipp purchased the outriggers. (Id. 40:13-20.) As of April 2012, Hipp had never used the outriggers. (Second Hipp Dep. A 30:8-9.) At oral argument before this Court, all parties agreed that the outriggers purchased on March 10, 2009, have never been used.

IV. STATE COURT LITIGATION AND SETTLEMENT

Following the accident, Soczynski, the defendant in the instant action, was appointed as the trustee for the heirs and next of kin of Amy Soczynski. (First Wood Decl., Ex. 1 at 2.) On January 12, 2010, Soczynski commenced a personal injury lawsuit in Anoka County District Court against Hipp, alleging that the accident was the result of Thomas Hipp's negligence. (Id., Ex. 1 at 3, Ex. 3 at 5.) Soczynski later amended his complaint and named ATS as an additional defendant. (Id., Ex. 1 at 3.) In his amended complaint, Soczynski alleged that, at the time of the accident, Hipp was operating the truck with the "permission and consent" of, and "under the authority of Defendant [ATS] pursuant to [the Contractor Agreement]." (First Myers Aff., Ex. H at 57.)

On January 21, 2011, Soczynski made a demand upon the state court defendants for the policy limits of both the Great West and Occidental policies. (First Wood Decl., Ex. 1 at 4.) Occidental refused to tender its policy limits. (Id.) Great West, however, tendered its policy limits of $1,000,000. (Id.) Great West tendered its policy limits on the condition that Soczynski release and discharge the liability of all defendants. (Id.) Great West, Hipp, and ATS entered into a stipulation and agreement which specified that Great West's "offer and release is made with the understanding that [ATS] would maintain its denial of liability," and that "[d]ue to the possibility of exposure to a verdict greatly in excess of policy limits . . . Great West . . . made a business decision to tender its liability limits despite its available defenses." (Id., Ex. 1 at 1, 4, 6.) Pursuant to the stipulation, Hipp assigned any and all claims or causes of action it had against Occidental to Soczynski. (Id., Ex. 1 at 8-9.)

The parties subject to the stipulation appointed an arbitrator to decide the question of damages, and Soczynski agreed that the $1,000,000 payment from Great West would be applied first to reduce any damage award. (Id., Ex. 1 at 7-8, 11.) Soczynski further agreed not to execute any judgment "against the personal, individual, or business assets or holdings of" Hipp, and "expressly reserve[d] the right to execute on the judgment against Occidental Insurance Company." (Id., Ex. 1 at 9.) The parties provided Occidental with a notice of their intent to enter into the agreement as well as a copy of the executed agreement and stipulation. (Id., Ex. 1 at 10.)

The arbitrator determined that the total amount of damages from the accident awardable to Soczynski was $2,750,000. (Id., Ex 2.) The Anoka County District Court found the damages awarded by the arbitrator to be reasonable and, after offsetting the $1,000,000 settlement, entered judgment against Hipp in the amount of $1,750,000. (Id., Ex. 3 at 2-3.)

V. FEDERAL LITIGATION

On August 23, 2011, Occidental filed a complaint with this Court seeking a declaratory judgment that the Occidental policy does not provide coverage for the accident. (Compl. at 10.) Soczynski, having been assigned Hipp's claims and causes of action against Occidental, filed an answer and a counterclaim. (Answer & Countercl., Sept. 13, 2011, Docket No. 2.) In the counterclaim, Soczynski requested that the Court determine that the Non-Trucking Endorsement in the Occidental policy does not preclude coverage for the accident, declare the Occidental policy limit to be $1,000,000, and award Soczynski damages based on Occidental's bad faith in failing to tender its policy limits in state court. (Id. at 4-5; First Wood Decl., Ex. 1 at 12.)

ANALYSIS

I. STANDARD OF REVIEW

Summary judgment is appropriate where there are no genuine issues of material fact and the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the suit, and a dispute is genuine if the evidence is such that it could lead a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court considering a motion for summary judgment must view the facts in the light most favorable to the non-moving party and give that party the benefit of all reasonable inferences to be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

II. JUDICIAL ESTOPPEL

Occidental argues as a preliminary matter that Soczynski is estopped from establishing coverage under the Occidental policy. Because Soczynski alleged in the underlying state court action that Hipp was operating his truck under the authority of ATS at the time of the accident, Occidental contends that Soczynski cannot now argue that Hipp was not acting "for or on the behalf of" ATS in order to avoid application of the coverage-barring Non-Trucking Endorsement.

Judicial estoppel is an equitable doctrine that is "intended to prevent a party from assuming inconsistent or contradictory positions during the course of a lawsuit." State v. Pendleton, 706 N.W.2d 500, 507 (Minn. 2005). Whether to apply judicial estoppel is a question of law for the Court. Id. The doctrine "protects the integrity of the judicial process" and is invoked by a court "when a party abuses the judicial forum or process by making a knowing misrepresentation to the court or perpetrating a fraud on the court." Stallings v. Hussmann Corp., 447 F.3d 1041, 1047 (8th Cir. 2006) (internal quotation marks omitted).

Because this is a diversity case, the Court "must apply" Minnesota substantive law to the question of whether judicial estoppel applies. See Monterey Dev. Corp v. Lawyer's Title Ins. Corp., 4 F.3d 605, 608-09 (8th Cir. 1993).8 The Minnesota Supreme Court has not determined if judicial estoppel exists in Minnesota. See Pendleton, 706 N.W.2d at 507. Although the Minnesota Supreme Court has not adopted judicial estoppel, it has identified three non-exclusive factors which must generally be met before a court would invoke the doctrine: (1) "there must be a clear inconsistency between the original and subsequent position of the party"; (2) "the party presenting the allegedly inconsistent theories must have prevailed in its original position"; and (3) "there must not be any distinct or different issues of fact in the proceedings." Id.

To establish judicial estoppel, the facts must demonstrate that there is a clear inconsistency in the position advanced by Soczynski in his state court complaint, and the one he advances here. See id. Soczynski has not, however, presented contradictory positions. ATS's potential liability for Hipp's acts committed while under "the authority of Defendant [ATS]" is not inconsistent with Occidental's obligation to pay for liabilities arising out of Hipp's actions not taken "for or on the behalf" of ATS. Essentially, application of judicial estoppel in this case would require the Court to find that the Great West policy and the Occidental policy are mutually exclusive.9 But such a finding is not supported by the law governing the liability of motor carriers and their leased truck drivers.

Under the doctrine of logo liability, it is possible for both ATS and Hipp to be liable for an accident within the meaning of their insurance policies, even if Hipp was acting on its own behalf at the time of the accident. Logo liability arises out of federal regulations which require a trucking company (such as ATS) that leases a vehicle and driver to have "exclusive possession, control, and use" of the leased vehicle. 49 C.F.R. § 376.12(c). Prior to 1986, federal regulations required a motor carrier to remove its logo and identification cards from a vehicle before terminating a lease. Based on this regulation, courts created logo liability which imputed liability to the motor carrier based on the presence of the carrier's logo on the equipment involved in an accident. See Rodriguez v. Ager, 705 F.2d 1229, 1231, 1236 (10th Cir. 1983). If a motor carrier had not complied with the regulation and removed its identification materials at the end of a lease, the carrier could still be held liable for the driver's negligence, even when the truck was not being driven on behalf of the carrier. See id.; Wellman v. Liberty Mut. Ins. Co., 496 F.2d 131, 136 (8th Cir. 1974).

In 1986, the federal regulations were amended to allow a lease between a motor carrier and a driver to state which party was responsible for removing the identification materials. Further amendments in 1992 provided that the "control" language in 49 C.F.R. § 376.12(c) was not intended to create carrier liability where none would exist under state common law doctrines of agency and vicarious liability. See Bays v. Summitt Trucking, LLC, 691 F.Supp.2d 725, 730-31 (W.D. Ky. 2010). Since these amendments, the continued vitality of the logo liability doctrine remains unclear, and courts have struggled with apportioning liability in cases like the present one.10 Both of the Eighth Circuit's applications of the logo liability doctrine predate the 1992 amendments to the federal regulations, see Acceptance Ins. Co. v. Canter, 927 F.2d 1026, 1027 (8th Cir. 1991); Wellman v. Liberty Mut. Ins. Co., 496 F.2d 131, 136 (8th Cir. 1974), and the Eighth Circuit has not yet interpreted a motor carrier's liability in light of the amended regulations. In 2010, however, the Eighth Circuit indicated in dicta that the basic theory underlying logo liability may still be viable. See Huggins v. FedEx Ground Packages Sys., Inc., 592 F.3d 853, 862 (8th Cir. 2010).

The Court need not decide whether logo liability exists, or whether it would apply in this case because such a determination is irrelevant to the application of judicial estoppel. What is relevant is that enough uncertainty surrounds the viability and scope of the doctrine to render Soczynski's position in state court arguably consistent with his current position under a good faith interpretation of existing law. In other words, the possibility of logo liability renders a complaint based on ATS's authority or control of Hipp and Great West's subsequent settlement consistent with the position that Hipp was not acting for or on the behalf of ATS at the time of the accident.11 Therefore, the Court concludes that Soczynski has not presented inconsistent positions, but rather has consistently maintained throughout this litigation that both ATS and Hipp are potentially liable and that both Great West and Occidental have an obligation to pay.

Moreover, even if the amended complaint had alleged that Hipp was acting "for or on the behalf of" ATS at the time of the accident, nothing in the settlement entered into in state court indicates that Soczynski "prevailed" in that position. First, the state court did not accept the factual basis for ATS's liability that Soczynski advanced in his amended complaint. See Pendleton, 706 N.W.2d at 507 ("[J]udicial estoppel requires that the party have actually previously succeeded at trial on a factual theory inconsistent to the one in question.").12 Absent judicial acceptance of a party's original position "a party's later inconsistent position introduces no risk of inconsistent court determinations, and thus poses little threat to judicial integrity." New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001) (citations and internal quotation marks omitted). Second, the state court stipulation and agreement itself provides no indication that Great West adopted the position that Hipp was acting "for or on the behalf of" ATS at the time of the accident. The stipulation agreement clearly states that "[t]he offer and release is made with the understanding that [ATS] would maintain its denial of liability." Additionally, the stipulation provides that "Great West[] made a business decision to tender its liability limit despite its available defenses." Great West never conceded that any coverage was applicable under the policy, and certainly did not determine that Hipp was acting in the business of ATS at the time of the accident such that Hipp qualified as an additional insured under the Great West policy. Great West merely tendered the limits of its insurance policy without making any coverage determinations. Because Soczynski has not degraded the integrity of the judicial process by abandoning a position that prevailed in a previous proceeding, the Court concludes that the doctrine of judicial estoppel is inapplicable. See New Hampshire, 532 U.S. at 750; Pendleton, 706 N.W.2d at 507.

III. COVERAGE UNDER THE OCCIDENTAL POLICY

To resolve the coverage dispute presented in this case, the Court must interpret the scope and application of the Non-Trucking Endorsement which provides, in relevant part, that for any vehicles "leased to a Motor Carrier under a 30 day lease agreement":

This insurance does not apply at any time that the named insured is operating, maintaining, or using a covered auto for or on the behalf of any other person or organization.

The parties agree that if the Non-Trucking Endorsement does not apply, the Occidental policy provides coverage for the damages arising out of the accident. Therefore, in order to conclude whether the Occidental policy provides coverage, the Court must determine whether Hipp was under a "30 day lease agreement" and acting "for or on the behalf of" ATS at the time of the accident.

A. Insurance Policy Interpretation

The parties agree that Minnesota law applies to interpretation of the Occidental policy. See Allstate Ins. Co. v. Blount, 491 F.3d 903, 908 (8th Cir. 2007). Under Minnesota law, the initial burden of demonstrating coverage rests with the insured, but "the insurer carries the burden of establishing the applicability of exclusions." Travelers Indem. Co. v. Bloomington Steel & Supply Co., 718 N.W.2d 888, 894 (Minn. 2006). Policy exclusions are "construed narrowly and strictly against the insurer." Id.

Interpretation of an insurance policy is a question of law for the Court which is properly resolved on a motion for summary judgment. See Quade v. Secura Ins., 814 N.W.2d 703, 705 (Minn. 2012). In determining whether coverage exists, "general principles of contract interpretation apply." Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998). The Court must construe the terms of the policy "according to what a reasonable person in the position of the insured would have understood the words to mean." Canadian Universal Ins. Co. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn. 1977). "[U]nambiguous language must be given its plain and ordinary meaning." Henning Nelson Constr. Co. v. Fireman's Fund Am. Life Ins. Co., 383 N.W.2d 645, 652 (Minn. 1986). A policy is ambiguous if its language "is susceptible to two or more reasonable interpretations." Carlson v. Allstate Ins. Co., 749 N.W.2d 41, 45 (Minn. 2008). Ambiguous language is construed in favor of the insured. See Bobich v. Oja, 104 N.W.2d 19, 24 (Minn. 1960).

Additionally, the Court construes an insurance policy as a whole. Watson v. United Servs. Auto. Ass'n, 566 N.W.2d 683, 692 (Minn. 1997). "A construction of an insurance policy which entirely neutralizes one provision should not be adopted if the contract is susceptible of another construction which gives effect to all its provisions and is consistent with the general intent." Wyatt v. Wyatt, 58 N.W.2d 873, 875 (Minn. 1953). Endorsements form part of the contract for insurance. Associated Indep. Dealers, Inc. v. Mut. Serv. Ins. Cos., 229 N.W.2d 516, 520 (Minn. 1975).

B. Thirty-Day Lease

The plain language of the Non-Trucking Endorsement provides that the listed exclusions only apply to "any automobile described in the policy and leased to a Motor Carrier under a 30 day lease agreement." (Emphasis added.) The lease between ATS and Hipp, memorialized in the Contractor Agreement, had been in continuous effect for almost thirteen years at the time of the accident, and was subject to cancellation by either party by giving thirty days' notice. The Court must determine whether this lease was a "30 day lease agreement" within the meaning of the Non-Trucking Endorsement.

The term "30 day lease agreement" is not defined in the Occidental policy, and the parties have cited to no cases construing this phrase in the context of a trucking insurance policy. The parties advance two possible interpretations of "30 day lease agreement." One interpretation of the phrase is that the Non-Trucking Endorsement applies only to leases that have a duration of exactly thirty days, in which case the Non-Trucking Endorsement does not apply to Hipp's lease under the Contractor Agreement. Another possible interpretation is that "30 day lease agreement" refers to a lease with a duration of at least thirty days, bringing the Contractor Agreement within the scope of the Non-Trucking Endorsement.13

After analyzing the Occidental policy as a whole, the Court concludes that the phrase "30 day lease agreement" as used in the Non-Trucking Endorsement is unambiguous and refers to a lease with a duration of at least 30 days, bringing the Contractor Agreement within the scope of the Non-Trucking Endorsement. The term "30 day lease agreement" is unambiguous because it is subject to only one "reasonable interpretation." See Carlson, 749 N.W.2d at 45 (emphasis added). The Court finds that interpreting "30 day lease agreement" to mean only a lease with a duration of precisely 30 days is unreasonable in the context of the Occidental policy.

Examining the meaning of thirty days in another context highlights the unreasonableness of interpreting "30 day lease agreement" to mean only leases of exactly thirty days in duration. For example, the Contractor Agreement is subject to cancellation by either ATS or Hipp "by giving thirty (30) days written or verbal notice." With respect to the Contractor Agreement it would be nonsensical to conclude that if ATS provided notice of cancellation of the Contractor Agreement thirty-five days before it intended to cancel, that such notice would be insufficient under the agreement because it was not the exact "thirty (30) days . . . notice" prescribed by the Agreement. Similarly, it is unreasonable to conclude that the Non-Trucking Endorsement by using the term "30 day lease agreement" references only leases that are exactly 30 days in duration. The fact that the Contractor Agreement had a continuous term, lasting for at least thirty days, is sufficient to bring the Agreement within the meaning of the Non-Trucking Endorsement.

Moreover, in determining whether an interpretation is reasonable, the Court is mindful that it must construe the terms of the policy "according to what a reasonable person in the position of the insured would have understood the words to mean." Canadian Univ. Ins. Co., 258 N.W.2d at 572. At the time Hipp entered into the insurance agreement with Occidental, it was under what Thomas Hipp characterized as a long-term lease with ATS. But Hipp also understood that the Occidental policy did not provide coverage when Hipp was hauling cargo for or on the behalf of ATS while the Contractor Agreement was still in effect. To read the Non-Trucking Endorsement as applying only to a lease of exactly thirty days would mean that the endorsement could never be effective with respect to Hipp and ATS, and that Hipp had contracted for general liability insurance — insurance which Hipp did not think he had purchased based on the inclusion of the Non-Trucking Endorsement. Because the parties reasonably understood the Non-Trucking Endorsement to apply while the Contractor Agreement was in effect, interpreting a "30 day lease agreement" to mean only a lease of exactly thirty days in duration would fail to effectuate those expectations, and the Court declines to adopt such an interpretation. See Nathe Bros., Inc. v. Am. Nat'l Fire Ins. Co., 615 N.W.2d 341, 344 (Minn. 2000) ("[I]nsurance policies are interpreted to give effect to the intent of the parties."). Therefore, the Court concludes that the Contractor Agreement between Hipp and ATS constitutes a "30 day lease agreement" within the meaning of the Non-Trucking Endorsement.

C. "For or on the behalf of" ATS

Next, the Court must determine whether Hipp was acting "for or on the behalf of" ATS at the time of the accident, in which case the Non-Trucking Endorsement would apply and bar coverage. The parties dispute the meaning of the phrase "for or on the behalf of" as used in the Non-Trucking Endorsement. Soczynski argues that the phrase refers to acting as a common law agent. Occidental argues, however, that "for or on the behalf of" broadly refers to any actions which confer a commercial benefit to another.

The Occidental policy does not define the phrase "for or on the behalf of," and therefore the Court must look to the plain and ordinary meaning of the phrase. Webster's Dictionary defines "on behalf of" as "in the interest of," "as the representative of," and "for the benefit of." Webster's Third New International Dictionary 198 (1993); see also American Heritage Dictionary of the English Language 685 (5th ed. 2011) (defining "on (or in) behalf of" as "as the agent of," "on the part of," "[f]or the benefit of" and "in the interest of"). Similarly, numerous courts from other jurisdictions have concluded that "on behalf of," when used in various contexts, is not strictly limited to the concept of agency, but unambiguously means in the interest of, as a representative of, or for the benefit of.14 See United States v. Dish Network, L.L.C., 667 F.Supp.2d 952, 963 (C.D. Ill. 2009) ("[T]he FCC Rule does not say `agent' or `at the direction of.' The FCC Rule says, `on behalf of'. Thus, the Attorneys General need only . . . show . . . the Dealers acted as [Defendant]'s representatives, or for the benefit of [Defendant].").15 The Court likewise concludes that the phrase "for or on the behalf of" is unambiguous and means in the interest of, as a representative of, or for the benefit of.

The Court further concludes that "for or on the behalf of" is unambiguous and cannot refer to a common law agency relationship, because such an interpretation is inconsistent with the Non-Trucking Endorsement as a whole. A different exclusion in the Non-Trucking Endorsement, not at issue in this case, provides that:

This exclusion embodies the common law concept of agency,17 and would be rendered superfluous if the Court were to construe the disputed exclusion as another agency provision. See Auto-Owners Ins. Co. v. Redland Ins. Co., 549 F.3d 1043, 1044, 1046 (6th Cir. 2008) (construing an "in the business of" exclusion in a similar non-trucking policy to mean something other than agency where an exclusion already existed for use "at the direction of, under the control of, under orders from, after being dispatched by"). The Court therefore holds that "for or on the behalf of" as used in the Non-Trucking Endorsement refers to actions taken by Hipp in the interests of, as a representative of, or for the benefit of ATS.

The Court must next determine whether Hipp was in the interests of or for the benefit18 of ATS at the time of the accident. The parties have cited no case law interpreting when a truck driver is acting "for or on the behalf of" of a motor carrier in the context of a Non-Trucking Endorsement.19 For a truck driver to be acting for the benefit of or to further the interests of a motor carrier there must be a direct link between the activity engaged in by the driver and the motor carrier's benefit or interests. For example, in Auto-Owners Ins. Co., the court determined that a truck driver was operating to further the commercial interests of the carrier when the driver had unloaded goods and was either on his way to sleep in anticipation of hauling a load the next morning or driving toward the pick-up location of his next scheduled load. 549 F.3d at 1045-46. The court explained, "[b]oth activities related to and directly served [the carrier]'s commercial interests." Id. at 1045 (emphasis added).20 The court distinguished the case from one in which a truck driver was "engaged in some frolic and detour" or "heading somewhere for his own purposes and no other." Id.21

Although there is no Minnesota case directly on point, with respect to repairs or improvements, courts generally require a direct relationship between the repairs undertaken and the carrier's business before determining that the repairs served the commercial interests of or benefitted the motor carrier. When repairs are required to keep the truck in a condition in which it can be driven on behalf of the motor carrier, such repairs directly further the commercial interests of the motor carrier. See Nat'l Cont'l Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 613 (8th Cir. 1998) (holding that because a front end alignment was required to keep the truck in compliance with federal regulations, a truck driver was acting in the commercial interests of the motor carrier when taking the truck to be aligned).22

The contract or lease between the truck driver and the motor carrier can provide useful evidence of the scope of repairs that further the commercial interests of or benefit the motor carrier. See Nat'l Cont'l Ins. Co., 157 F.3d at 612-13 (holding that in determining whether repairs furthered the commercial interests of a motor carrier "[w]e. . . look to the terms of the service contract to determine whether [the truck driver] was fulfilling a contractual duty when he drove the truck to Eugene for a front end alignment"). When repairs are made by a driver to comply with the terms of his lease, such repairs are "to be regarded as an activity exclusively in the business of the [motor carrier] and not a personal use." Freed v. Travelers, 300 F.2d 395, 398 (7th Cir. 1962) (concluding that repair work done on a truck was necessary for the driver to maintain his truck in "safe and proper operating condition" under the lease, and therefore was in the motor carrier's commercial interest).

With the parameters of the "for or on the behalf of" exclusion in mind, the Court has examined the facts of this case, and concludes that Hipp was not acting for or on the behalf of ATS at the time of the accident. As an initial matter, in determining that the Non-Trucking Endorsement does not apply, the Court analyzes only the trip made by Hipp to pick up the outriggers which took place immediately prior to the accident.23 The trip to obtain clean idle software is separated by several hours and three other stops — first at Blaine Brothers, then Thomas Hipp's home, then Blaine Brothers again — from the trip during which the accident occurred. In order to accurately determine on whose behalf Hipp was acting at the time of the accident, the Court must carefully consider when particular tasks or trips ended. Absent such careful examination, the Non-Trucking Endorsement would effectively swallow the coverage provided by the Occidental policy, as personal errands could be considered business trips any time they occurred on the same day as a business trip. See, e.g., Hartford Ins. Co. of SE v. Occidental Fire & Cas. Co. of N.C., 908 F.2d 235, 239 (7th Cir. 1990) (examining only the exact trip in which the driver "was en route to pick up his trailer in order to complete his delivery . . . when the collision occurred" in determining whether a non-trucking endorsement applied); Acceptance Ins. Co. v. Canter, 927 F.2d 1026, 1027 (8th Cir. 1991) (analyzing only the driver's "trip home" during which an accident occurred in determining whether the driver was acting "in the business" of the carrier).

With respect to the trip to Blaine Brothers to pick up outriggers, the Court concludes that no genuine issue of material fact remains as to whether Hipp was acting for or on the behalf of ATS. ATS did not require Hipp to purchase the outriggers, was not aware that Hipp was purchasing outriggers, and was unaware of Hipp's whereabouts altogether on the day of the accident. Hipp was not on assignment from ATS and had completed its most recent assignment three days before the accident took place.24 Therefore, this case does not involve a minor personal detour in what was otherwise a trip on behalf of a motor carrier. See Ill. Nat'l Ins. Co. v. Ohio Sec. Ins. Co., 452 Fed. Appx. 651, 2011 WL 6415048, at *4 (6th Cir. Dec. 21, 2011) (concluding that a driver was acting to further the commercial interests of his motor carrier even though the driver took a brief detour to look for a truck wash while otherwise returning from delivering a load for the motor carrier).

Additionally, Hipp's obligations under the Contractor Agreement support the Court's conclusion that purchasing the outriggers was not for the benefit of or in the interests of ATS. Pursuant to the Contractor Agreement, Hipp must provide the necessary equipment for hauling ATS's cargo. The outriggers were undisputedly not necessary equipment. ATS gave Hipp no indication that it would be able, or was planning, to offer loads that would require the outriggers purchased on the day of the accident. And the outriggers Hipp purchased were for use hauling windtowers, a type of freight which ATS did not haul. The Contractor Agreement also requires Hipp to maintain its equipment "in safe operating condition and to insure that at all times it will be in compliance with all safety requirements mandated by all state and federal regulatory bodies." Unlike repairs which are essential to the operation of a truck, Hipp's purchase of the outriggers was not connected to keeping its equipment in safe operating condition. See, e.g., Nat'l Cont'l Ins. Co., 157 F.3d at 613 (front tire alignment); Hartford Ins. Co. of SE, 908 F.2d at 239 (refrigeration mechanism on a truck hauling frozen goods); Great W. Cas. Co. v. Carolina Cas. Ins. Co., Nos. A05-1619, A05-1773, A05-1804, 2006 WL 1704125, at *7 (Minn. Ct. App. June 20, 2006) ("repairs" and refueling). The outriggers were also not required by any safety regulations.25 The fact that the outriggers were not required by the Contractor Agreement provides compelling evidence that the purchase was not made to benefit ATS or to further ATS's commercial interests.

Of great significance in the Court's analysis is the fact that the outriggers Hipp purchased on the day of the accident have never been used. This fact alone takes Hipp's actions well outside the scope of activities which further the commercial interests of ATS. ATS did keep track of the equipment owned by its independent contractors and attempted, when possible, to utilize the special hauling capacity of its drivers. But in more than three years there is no evidence that ATS attempted to or has never been able to use the outriggers. And representatives of ATS testified that ATS did not, in fact, dispatch Hipp differently "before or after" he purchased the outriggers. Occidental has pointed to nothing in the record that explains how the purchase of the outriggers furthered ATS's business interests. Any benefit that ATS could derive from Hipp's purchase of the outriggers is simply too remote to be legally relevant to application of the Non-Trucking Endorsement. See Carolina Cas. Ins. Co. v. Panther II Transp., Inc., 402 Fed. Appx. 62, 68 (6th Cir. 2010) (concluding that when a truck driver drove his truck to the motor carrier's headquarters for orientation to save on motel expenses for himself, any benefit that the motor carrier potentially may "have gotten . . . was so remote as to be legally irrelevant"). Therefore, the Court concludes that because Hipp was not acting for or on the behalf of ATS at the time of the accident, the Non-Trucking Endorsement does not apply and the Occidental policy provides coverage for the damages from the accident.

IV. LIABILITY LIMIT OF THE OCCIDENTAL POLICY

Because the Occidental policy lists its liability limit as both $500,000 and $1,000,000 in different portions of the policy, the Court must determine which liability limit controls. Determination of the Occidental policy's liability limit involves interpretation of the policy, and the determination is subject to the same interpretation principles outlined in the previous section. Under Minnesota law, if an insurance policy contains endorsements that state different liability limits, these irreconcilably inconsistent provisions create an ambiguity and the larger limit controls. See Rusthoven v. Comm. Standard Ins. Co., 387 N.W.2d 642, 643-45 (Minn. 1986). Construing the ambiguity created by conflicting liability limits in favor of the insured must not, however, "exceed the reasonable expectations of the insured." Id. at 645.

The Occidental policy states the liability limit in several places. The declarations page provides that the liability limit is $500,000. Additionally, at least twelve monthly report endorsements incorporated into the policy state the liability limit for Hipp's 2009 Volvo as $500,000.26 But the Monthly Payment and Reporting Endorsement lists the liability limit for the policy as $1,000,000.27 The inconsistencies in the policy create an irreconcilable conflict and render the policy ambiguous. See Rusthoven, 387 N.W.2d at 644-45. The Court construes this ambiguity in favor of Hipp and concludes that the Occidental policy limit is $1,000,000. See id. at 645. The Court further concludes that construing the Occidental policy to provide liability coverage of $1,000,000 does not exceed the reasonable expectations of Hipp. See id. (concluding that resolving a conflict between liability limits of $25,000 and $1,675,000 in favor of the larger limit did not exceed the reasonable expectations of the insured).

This case will be placed on the Court's next available trial calendar.

ORDER

Based on the foregoing, and all the files, records, and proceedings herein, IT IS HEREBY ORDERED that:

1. Defendant Soczynski's motion for partial summary judgment [Docket No. 11] is GRANTED;

2. Plaintiff's motion for summary judgment [Docket No. 16] is DENIED.