McCLENDON, J.
This is an appeal from the granting of and denial of motions for summary judgment on the issue of insurance coverage. For the reasons that follow, we affirm.
On January 17, 2008, an automobile accident occurred between a 2002 Lincoln Town Car being driven by Lewis Jurey, one of the plaintiffs, and a 2001 Peterbilt Tractor, which was pulling a 50' flatbed trailer, being driven by Harry T. Kemp, a named defendant. At the time of the accident, Kemp was leaving Baker Metal Works where he had just picked up the flatbed trailer.
Kemp was an independent contractor with Dallas & Mavis Specialized Carrier Co., LLC (D & M). D & M, through a policy issued by Liberty Mutual Fire Insurance Company (Liberty Mutual), maintained coverage for the operation of the tractor while Kemp was engaged in performing transportation services for D & M. As an independent contractor, Kemp was responsible for maintaining non-trucking
In consolidated actions, Lewis Jurey and his guest passengers, Clarence Jurey and Dorothy Jurey, filed suit, alleging that they sustained bodily injuries in the accident. They named Kemp, D & M, Liberty Mutual, and Great American, among others, as defendants.
Thereafter, Liberty Mutual filed a motion for declaratory relief, or in the alternative, a motion for summary judgment, asserting that its policy did not provide coverage because Kemp was not engaged in performing transportation services for D & M and that the bobtail policy issued by Great American should apply. D & M also filed a motion for summary judgment, asserting that Kemp was not in the course and scope of his employment at the time of the accident, and, as such, D & M was not vicariously liable for Kemp's negligence. In response, Great American filed a cross-motion for summary judgment, alleging that Kemp was involved in transportation services for D & M at the time of the accident such that the policy issued by Liberty Mutual, rather than its "bobtail" policy, provided coverage for the accident.
Following a hearing, the trial court granted the motions for summary judgment filed by Liberty Mutual and D & M, and denied the cross-motions filed by Great American. In so ruling, the trial court indicated that Kemp was "not making a haul for [D & M]" nor was he "on duty or under any dispatch" at the time of the accident, but rather was "on his own time." The trial court further indicated that this accident is "exactly what the bobtail [policy issued by Great American] is required to cover and what it's intended to cover."
Great American and plaintiffs (hereinafter collectively referred to as "Great American") have appealed, assigning the following errors:
Liberty Mutual issued an insurance policy (number AI2-791-001377-107) to Transport Industries, L.P., and pursuant to a Named Insured Endorsement, added D & M to Item 1 of the Declarations as a named insured. The Liberty Mutual policy
At the time of the accident, the parties do not dispute that Kemp's tractor was leased to D & M pursuant to a lease agreement between the parties. The parties, however, disagree as to whether the flatbed trailer was included in the lease. Even assuming that the trailer was part of the lease, in order for the Liberty Mutual policy to provide coverage, subsection (c) referenced above requires that the trailer must be connected to a "covered auto." Therefore, in determining whether Liberty Mutual afforded coverage for the accident at issue, the initial inquiry is whether the tractor was a "covered auto"—i.e., whether Kemp was using the tractor in D & M's business as required under subsection (d) referenced above at the time of the accident.
The language in the policy requiring that the covered auto be "used in your business" is unambiguous. Although the application of the endorsement to these facts may pose difficult questions, the difficulty of the questions does not create an ambiguity. Mahaffey v. General Sec. Ins. Co., 543 F.3d 738, 741 (5th Cir.2008).
At the time of the accident, Kemp was off-duty and was not in the process of performing any transportation services for D & M when he decided to pick the trailer up from Baker Metal Works in order to free up space in the shop for Baker Metal Works' owner. Kemp was not under D & M's control or on standby for any deliveries
Appellants contend that at the time of the accident, however, Kemp was on a trip for the business of D & M because he was having requisite maintenance performed on the trailer. Appellants note that the lease agreement required Kemp to "maintain the Equipment in proper operating condition and in full compliance with applicable governmental regulations." A few days prior to the accident, Kemp had taken the trailer to Baker Metal Works to have a door welded on the front, so it would be easier to access the wiring for the trailer's lights and air lines for the trailer's brakes. Baker Metal Works also replaced some of the decking boards on the trailer. Kemp testified that it was important for him to maintain his equipment pursuant to the terms of the lease and in order to maintain a good working relationship with D & M. Kemp concludes that Liberty Mutual's policy provides coverage because he was maintaining the equipment in accord with the terms of the lease agreement as required by D & M.
Several pertinent cases have addressed whether an independent truck owner/lessor was "in the business of" the motor carrier/lessee such that the liability insurance secured by a motor carrier/lessee, as opposed to the bobtail insurance secured by a truck owner/lessor, should apply. In LeBlanc v. Bailey, 97-0388 (La.App. 4 Cir. 10/1/97), 700 So.2d 1311, writ denied, 97-2988 (La.2/6/98), 709 So.2d 743, the fourth circuit found that an independent trucker's drive home after completion of his deliveries for the day on behalf of the motor carrier/lessee was more of a personal nature rather than a work-related function such that bobtail insurance coverage, as opposed to the liability insurance secured by the motor carrier/lessee, was the primary policy that applied.
In this context, the proper inquiry is whether Kemp was acting within the scope of the lease agreement with D & M. See National Continental Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 612 (8th Cir.1998). To the extent that Kemp was executing his contractual duties, he would be acting "in the business of" D & M. Id. We must therefore examine the terms of the lease to ascertain whether Kemp was fulfilling a contractual duty in having the work performed by Baker Metal Works.
The lease agreement required Kemp to "maintain the Equipment in proper operating condition and in full compliance with applicable governmental regulations." Kemp acknowledged that adding the welded door to his trailer was not required by Department of Transportation ("DOT") specifications or by D & M. He further indicated that the door provided no economic benefit to D & M, but rather was something he wanted to have done for his own benefit. Kemp also indicated that he chose to have some of the decking boards replaced, although the work was not required by DOT or by D & M. Nothing in the record explains how any of the work performed on the trailer furthered D & M's business. Moreover, Kemp acknowledged that prior to the accident, D & M was unaware that he was having any work done to the trailer. In light of the foregoing, there is no showing that the improvements were required under the terms of the lease agreement between Kemp and D & M. Rather, it appears that these improvements were merely done for the convenience of the owner. Cf. Freed v. Travelers, 300 F.2d 395 (7th Cir.1962) (wherein the carrier/lessee's insurance policy applied when the independent truck driver was involved in an accident while bringing the vehicle to be serviced-when the lease agreement required the independent truck driver to maintain the tractor "in good running order and condition" and "hold (it) ready at all times for the services of the Lessee" and the carrier/lessee did not urge that the major repair to the rear of the tractor was not necessary to its continued operation) and National Continental Ins. Co., 157 F.3d 610 (wherein the carrier/lessee's insurance policy applied when the service contract required the driver's tractor pass periodic inspections and comply with federal standards such that driving the vehicle to a shop for a front end alignment between dispatch orders was "in the business of" the carrier/lessee because the federal regulations required "[a]ll axles . . . be in proper alignment"). Unlike the contrasted cases, under the terms of the lease agreement here, Kemp's trip to Baker Metal Works was not undertaken in the business of the employer.
Appellants also urge that the Federal Motor Carrier Safety Act-90 Endorsement applies herein. See 49 U.S.C.A. § 13501,
In light of the foregoing, we conclude that the trial court did not err in granting summary judgment in favor of Liberty Mutual and denying summary judgment as to Great American. Therefore, we affirm the district court's September 17, 2010 judgment. Costs of this appeal are assessed to The Great American Insurance Company.
WELCH, J., dissent and assigns reasons.
WELCH, J., dissenting.
I respectfully dissent. I believe that Kemp qualifies as an insured under an endorsement to the Liberty Mutual policy which expands the list of insured persons to include those who use any covered auto "by or for" the named insured. This endorsement is entitled "Hired Autos Specified as Covered Autos You Own," and modifies the motor carrier coverage form. It modifies the schedule's description of "auto" to include "any auto you lease, rent, or hire." It also states that any auto described in the schedule will be considered a covered auto the insured owns and not a covered auto the insured hires. It further provides:
For Kemp to be insured under this provision, the tractor he was driving at the time of the accident must be a "covered auto" that was leased to D & M. It is undisputed that the tractor was under lease to D & M at the time of the accident. Further, the schedule of covered autos contains two symbols designating the covered autos—72 and 73. Symbol 72 includes "owned autos used in operations other than those trucking operations that are subject to operating authority granted to the Insured by regulatory authority." Symbol 73 describes "any auto except those described by Symbol 72." Liability coverage extends to all autos designated by symbols 72 and 73. Reading all of the provisions together, I would find that a covered auto includes all autos owned by the named insured and all autos hired or leased by the named insured, which includes the tractor leased by D & M from Kemp.
Next, in order for Kemp to be an insured under the policy, the covered auto must have been used by him "by or for D & M." Pursuant to the term of the lease agreement which incorporated DOT regulations, D & M had the exclusive possession, control, and use of the leased motor vehicle for the duration of the lease agreement. I would find that the leased vehicle was being used by Kemp "for" D & M whenever that use furthered D & M's business interests and was not a purely personal use of the covered vehicle by Kemp. As D & M's business is transportation, I would find that any use of the leased equipment that falls within the scope of D & M's trucking business to constitute a use by Kemp "for" D & M.
In this case, the evidence showed that Kemp used his covered auto to bring his
Moreover, even under the test employed by the majority in determining whether Kemp's activity constituted a "business use" of the vehicle, I would find Kemp to be an insured under the policy. In replacing the decking on the trailer and the installation of an accessory to house the brake's wires, Kemp was executing his contractual duty to maintain the leased equipment, and therefore, his trip to and from Baker Metal Works in his covered auto to have the work performed on the trailer constituted the business of D & M.
Pursuant to the lease agreement, Kemp was obligated to maintain the equipment in proper operating condition. Kemp was further obligated to furnish all maintenance, repairs, and other items necessary for the safe and efficient operation of the equipment and lease agreement vests the choice of locations and persons to perform any necessary repairs solely in Kemp. The lease further stipulates that in the event the equipment leased includes a trailer, Kemp was responsible for the periodic safety inspection of the trailer and accessorial equipment furnished by him.
For the above reasons, I would reverse the judgment of the trial court and deny Liberty Mutual's motion for summary judgment. I would further find that the exclusion in Great American's non-trucking bobtail policy, denying coverage when the vehicle is used for the benefit or to further the commercial interest of D & M, is applicable in this case, and I would grant Great American's motion for summary judgment and dismiss it from this litigation.