Marvin J. Garbis, United States District Judge.
The Court has before it Defendant National Casualty Company's Renewed Motion for Summary Judgment [ECF No. 62], Plaintiff's Second Cross-Motion for Summary Judgment or in the Alternative, Motion for Partial Summary Judgment [ECF No. 63], and the materials submitted relating thereto. The Court has held a hearing and had the benefit of the arguments of counsel.
On October 26, 2007, the husband of Plaintiff Kara Daniel ("Daniel") was killed in a truck-automobile collision in Queen Anne's County, Maryland. Daniel filed suit against the driver and others in this Court, seeking $10,000,000 in damages.
The situation regarding insurance coverage for the defendants was complicated. Northland Insurance Company ("Northland") acknowledged that it had issued a $1,000,000 commercial trucking liability insurance policy that insured certain of the defendants and tendered its policy limits. National Casualty Insurance Company ("National Casualty") had issued a $750,000 policy to some of the defendants but claimed that the policy was not in effect at the time of the accident and refused to provide a defense or coverage for any defendant.
Daniel settled the underlying case, receiving the $1,000,000 policy limits of the Northland policy and also an assignment of any rights that Northland and any defendant she released may have had against National Casualty. Northland paid the settlement "on behalf of" these defendants. As part of the settlement, Northland and the settling defendants assigned to Daniel:
[ECF No. 1-3].
On May 23, 2013, Daniel, as the assignee of Northland and others, filed the instant lawsuit against National Casualty for indemnification. Daniel filed an Amended Complaint on July 26, 2013 as the assignee of Northland, BDH, and three others — Aaron Hines, Derrick Hines and R & H Trucking, Inc. — who are collectively referred to herein as the Driver Group members. [ECF No. 22].
National Casualty filed a Motion to Dismiss. [ECF No. 30]. After a hearing on November 27, 2013, the Court dismissed the Amended Complaint. The Court stated at the hearing: "There is nothing in the [Amended] complaint that shows any basis to believe that any assignor of rights, other than Northland, was out of pocket or had any loss, or anything that they could claim against National Casualty." Hr'g Tr., Nov. 27, 2013, [ECF No. 47-2] at 3. The Court allowed Daniel to file a Second Amended Complaint ("SAC") and instructed Daniel that she should explain "whatever the relationship is ... that puts National Casualty on the hook to pay indemnity or some kind of contribution." Id.
Daniel filed the SAC on January 3, 2014, alleging claims, as assignee, against National Casualty in two Counts:
See [ECF No. 46].
National Casualty filed a Motion to Dismiss, or in the Alternative, Motion for Summary Judgment, [ECF No. 47], and Daniel filed a Cross-Motion for Partial Summary Judgment. [ECF No. 55].
In the Memorandum and Order issued September 29, 2014, [ECF No. 61] at 4-6, the Court stated:
National Casualty filed the instant Renewed Motion for Summary Judgment, [ECF No. 62], and Daniel filed the instant Second Cross-Motion for Summary Judgment or in the Alternative, Motion for Partial Summary Judgment. [ECF No. 63].
A motion for summary judgment shall be granted if the pleadings and supporting documents "show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a).
The well-established principles pertinent to summary judgment motions can be distilled to a simple statement: The Court may look at the evidence presented in regard to a motion for summary judgment through the non-movant's rose-colored glasses, but must view it realistically. After so doing, the essential question is whether a reasonable fact finder could return a verdict for the non-movant or whether the movant would, at trial, be entitled to judgment as a matter of law. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir.1991).
Thus, in order "[t]o defeat a motion for summary judgment, the party opposing the motion must present evidence of specific facts from which the finder of fact could reasonably find for him or her." Mackey v. Shalala, 43 F.Supp.2d 559, 564 (D.Md.1999) (emphasis added). However, "self-serving, conclusory, and uncorroborated statements are insufficient to create a genuine issue of material fact." Int'l Waste Indus. Corp. v. Cape Envtl. Mgmt., Inc., 988 F.Supp.2d 542, 558 n. 11 (D.Md. 2013); see also Wadley v. Park at Landmark, LP, 264 Fed.Appx. 279, 281 (4th Cir.2008).
When evaluating a motion for summary judgment, the Court must bear in mind that the "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Celotex, 477 U.S. at 327, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 1).
In October 2007, H & F Bros., LLC, ("H & F"), a Wisconsin commercial trucking
R & H obtained the truck involved in the accident, a 1997 Freightliner tractor — truck, power unit, or cab — as lessee from Basic Trucking, Inc., ("Basic Trucking"). Second Amended Complaint ("SAC") [ECF No. 46] at ¶ 15. The truck was subleased by R & H to H & F. SAC ¶ 11. A Ryder cargo trailer was attached to the tractor that "was leased and provided by Hotchkiss Trucking, Inc., [("Hotchkiss")] to H & F ... and R & H." SAC ¶ 11.
At the time of the accident, the truck with trailer was driven by Derrick Hines, an employee of R & H. The driver's side door of the truck was labelled "R & H, Inc. Trucking" and contained the North Carolina address and telephone number of R & H. There also was a placard on the truck that stated "Lease to H & F Bros, LLC" and contained H & F's motor carrier and Department of Transportation numbers. [ECF No. 55-10] at 10.
H & F obtained, and had in effect on the date of the accident, a commercial trucking liability insurance policy through Northland Insurance Company ("Northland") with a combined single limit liability in the amount of $1,000,000. [ECF No. 47-3] at 4. H & F required R & H to have commercial trucking liability insurance. R & H obtained a policy through National Casualty Insurance Company ("National Casualty") with a combined single limit liability in the amount of $750,000. [ECF No. 10-8] at 2. However, as discussed herein, the policy was not in effect on the date of the accident.
As discussed herein, the Court grants summary judgment to National Casualty on the following grounds:
In the underlying suit, Plaintiff sued for $10,000,000. Of course, that amount is not, in itself indicative of what a plaintiff would accept to settle a case. However, Daniel consistently proceeded on the basis of a claim against Defendants for a multi-million recovery. There is no evidence that she ever offered to settle her claim for less than a multimillion dollar recovery. Nor is there any contemporaneous evidence that she actually contemplated accepting anything less than at least $2,000,000 to resolve her claim.
In the Memorandum in Support of Plaintiff's Opposition to Motion for (sic) to Dismiss or in the Alterantive (sic) Motion
In proceedings in the instant case on November 27, 2013, the Court stated that the Complaint was dismissed, and an Amended Complaint was permitted and that the Amended Complaint had to present:
Hr'g Tr., Nov. 27, 2013, [ECF No. 47-2] at 3.
On January 3, 2014, Plaintiff filed the Second Amended Complaint [ECF No. 46]. On January 17, 2014, National Casualty filed Defendant National Casualty Company's Motion to Dismiss Second Amended Complaint, or in the Alternative, Motion for Summary Judgment [ECF No. 47-1] asserting, inter alia, that Plaintiff had failed to alleged facts establishing that Northland suffered any damages.
On January 17, 2014, National Casualty filed Defendant National Casualty Company's Motion to Dismiss Second Amended Complaint, or in the Alternative, Motion for Summary Judgment [ECF No. 47]. On February 21, 2014, Plaintiff, in response to that contention, filed an affidavit [ECF No. 54-11] stating that she and her husband had uninsured motorist coverage with Erie Insurance Company with a policy limit of $1,250,000. Erie denied coverage. She said that prior to the denial of the claim by Erie she would have accepted $500,000.00 "to avoid the emotional pain of litigating over the death of my husband." She further stated:
Daniel Aff. [ECF No. 54-11] at ¶¶ 10-25.
As discussed below, Daniel would not prevail even if a jury were to find this affidavit credible and a court were to find it sufficient to prove that Northland would have paid less than its policy limits. However, the Court finds Plaintiff's affidavit so grossly incredible on its face that such testimony could not result in any reasonable jury relying upon it.
Moreover, it appears that Daniel may not be the only Plaintiff from whom Daniel would need an affidavit regarding the acceptance of a settlement less than $1,000,000. The record in the underlying case
In June 2011, counsel for H & F informed Judge Bredar that Northland had tendered its policy limits of $1,000,000 as a result of informal settlement discussions during which Daniel "demanded policy limits." [ECF No. 63 in 10-cv-2757-JKB]. The $1,000,000 from Northland was not enough for Daniel. She and the additional plaintiffs pursued litigation against Hotchkiss — the entity that leased the Ryder trailer to R & H and H & F — ultimately obtaining a $250,000 settlement payment from Sentry Insurance, the insurance carrier
The Court concludes that Plaintiff has not presented evidence adequate to permit a reasonable jury to find that, had National Casualty accepted coverage of its insureds, Northland would have paid less than its policy limits to settle the case against its insureds H & F and BDH.
The National Casualty policy went into effect on August 9, 2007. [ECF 10-8] at 3. R & H entered into a Premium Service Agreement with Prime Rate Premium Finance Corporation, Inc. ("Prime Rate") to finance the premium on the National Casualty policy. [ECF 30-5]. The Premium Service Agreement granted Prime Rate a Power of Attorney as "Attorney-In-Fact with full authority to effect cancellation of the policies covered hereby." Id.
The Driver Group members did not pay their premium installments to Prime Rate, and Prime Rate cancelled the policy. Daniel contends that the cancellation was ineffective on the grounds that Prime Rate did not comply with North Carolina's procedural requirements in effecting cancellation.
North Carolina General Statutes § 58-35-85 permits a premium finance
N.C. Gen.Stat. Ann. § 58-35-85. "[T]he burden of proving compliance with N.C. Gen.Stat. § 58-35-85 is on the insurance company.... `In order to cancel a policy the carrier must comply with the procedural requirements of the statute or the attempt at cancellation fails and the policy will continue in effect despite the insured's failure to pay in full the required premium.'" Cahoon v. Canal Ins. Co., 140 N.C. App. 577, 537 S.E.2d 538, 540 (2000).
On September 13, 2007, Prime Rate mailed a "10 Day Notice of Intent to Cancel" to R & H.
on September 25, 2007, Prime Rate mailed a "Notice of Cancellation" to R &
Daniel contends that the cancellation was ineffective because the Notice of Intent to Cancel did not comply with the administrative regulation applicable to § 58-35-85, which states that "[a] copy of the ten-day notice, or a listing of delinquent insureds showing the same general information shall be sent to the insurance agent shown on the premium finance agreement at the same time notice is given to the insured." 11 N.C. Admin. Code 13.0317 (emphasis added).
Frances Townsend, a Senior Vice-President at Prime Rate stated in an Affidavit that "[f]or North Carolina agents, it is Prime Rate Premium Finance Corporation, Inc.'s normal course of business to send to the listed agent for each affected insurance policy a list of accounts for which 10 Day Notices of Intent to Cancel have been sent." Townsend Aff. [ECF No. 36-1] at ¶ 4. Daniel contends that this Affidavit is insufficient to prove compliance with the North Carolina regulation.
The Court finds the circumstances of the instant case similar to those of Cahoon v. Canal Ins. Co., 140 N.C. App. 577, 537 S.E.2d 538 (2000), in which the Court of Appeals of North Carolina overruled the trial court's finding that the cancellation of an insurance policy by a premium finance company had been ineffective. In Cahoon, the court stated:
Even if the National Casualty policy were in effect on October 26, 2007, National Casualty is entitled to summary judgment because the Driver Group members were not "insureds" under the Northland policy.
"An insurer is not entitled to indemnification or contribution from another insurer for payment of a liability claim unless both insurers insure the same interests." Great Plains Mut. Ins. Co. v. Nw. Nat. Cas. Co., 914 F.Supp. 459, 464 (D.Kan.1996); see also Vance Trucking Co. v. Canal Ins. Co., 395 F.2d 391, 396 (4th Cir.1968) ("The requirement for contribution is that the insurers must have insured the same risk and interest, or, as it has been stated, there must exist a common liability upon the same obligation."); Hartford Acc. & Indem. Co. v. Scarlett Harbor Associates Ltd. P'ship, 109 Md.App. 217, 674 A.2d 106, 134 (Md.Ct.Spec.App.1996) ("[T]he right to indemnity is premised on the obligations between the wrongdoers, who `must have had some sort of relationship' justifying indemnity. Indemnity has also been described as `a right which inures to a person who has discharged a duty which is owed by him but which, as between himself and another, should have been discharged by another.'" (internal citation omitted)).
As pertinent hereto, there are five possible definitions of an "insured" under the
Section II.A.1.a of the Northland policy states that "you [are an "insured"] for any covered `auto'." [ECF No. 46-2] at 6. Covered "autos" under the Northland policy include, inter alia: "Only those `autos' you lease, hire, rent or borrow." [ECF No. 46-2] at 2, 4.
Daniel contends that "at the time of the accident, R & H was leased to H & F and was therefore acting as H & F, not R & H (making section a. apply)." [ECF No. 66-1] at 9. However, Daniel provides no legal support for her argument that the policy should be read to include additional parties under the term "Named Insured."
Moreover, H & F did not, as Daniel contends, concede in the underlying lawsuit that Driver Group members were operating under the authority of H & F. Rather, counsel for H & F stated in a Declaration submitted to the Court that:
Garber Dec. [ECF No. 54-5] at ¶¶ 6-7 (emphasis added).
Daniel also contends that the Driver Group members were insured under the Northland policy because "Derrick Hines was, an employee of H & F, not R & H, pursuant to the MCS-90 and 49 C.F.R. § 390.5. This is because ... North Carolina... incorporates the Federal Motor Carrier Safety Regulations, specifically... the definition of `employee(s)' contained in 49 C.F.R. 390.5." [ECF No. 46-2] at 9. The Northland policy contains an MCS-90 endorsement.
The Driver Group members are not Named Insureds, and, therefore, are not covered under II.A.1.a of the Northland policy.
Section II.A.1.b(1) of the Northland Policy provides that "insureds" include:
H & F leased the 1997 Freightliner from R & H. See SAC ¶ 11 ("Derrick Hines was operating the truck tractor leased by Aaron Hines and R & H Trucking, Inc. and thereafter leased to H & F."). As the owner of the 1997 Freightliner, R & H is excluded as an "insured" by the plain language of Section II.A.1.b(1). Similarly, because Aaron Hines was the owner and Derrick Hines was an employee of R & H, they fall into Section II.A.1.b(1)'s exception for employees of the owner of the covered "auto" and are not considered an "insured." Therefore, none of the Driver Group members is an "insured" under H & F's Northland policy.
Section II.A.1.c of the Northland Policy provides that "insureds" include:
H & F leased the Ryder trailer from Hotchkiss. See SAC ¶ 11 ("The trailer attached to the truck tractor being operated by Derrick Hines was leased and provided by Hotchkiss Trucking, Inc. to H & F, Derrick Hines, Aaron Hines, and R & H Trucking, Inc."). Because none of the Driver Group members is the owner or lessor of the trailer, none is covered under II.A.1.c of the Northland policy.
Section II.A.1.d of the Northland Policy provides that "insureds" include:
R & H was the lessor of the 1997 Freightliner to H & F. See SAC ¶ 11. The executed lease agreement between R & H and H & F did contain a "hold harmless" clause, stating that "CONTRACTOR [the Driver Group] agrees to ... hold CARRIER [H & F] harmless." [ECF No. 54-8] at 42. However, as discussed in more detail herein, that clause is found under a provision for bobtail liability,
Section II.A.1.e of the Northland Policy provides that "insureds" include:
Plaintiff has provided no evidence that any Driver Group member is "liable for the conduct of an `insured'" and so the Court finds that this section does not apply to the Driver Group members. For the reasons discussed supra, the Driver Group member are not themselves "insureds" under any of the pertinent definitions. Therefore, no Driver Group Member is covered, either directly or indirectly, under II.A.1.e of the Northland policy.
Finally, even if the National Casualty policy had been in effect on October 26, 2007 and the Driver Group members had been insureds under the Northland policy, National Casualty is entitled to summary judgment because coverage under the National Casualty policy was excess to coverage under the Northland policy.
The National Casualty policy states, as pertinent hereto:
[ECF No. 10-8] at 30 (emphasis added). A covered "auto" is "[o]nly those `autos' described in Item Three of the Declarations for which a premium charge is shown (and for Liability Coverage any `trailers' you don't own while attached to any power unit described in Item Three)." [ECF No. 10-8] at 5, 20. The 1997 Freightliner and Ryder trailer are covered "autos" under the National Casualty policy; the tractor was leased from R & H, and the trailer was attached to the tractor, a covered "auto." Therefore, under Section V.B.5.a, the National Casualty policy was excess over the Northland policy.
Daniel, seeks to rely on Section V.B.5.e to contend that the National Casualty policy was primary. Section V.B.5.e states:
[ECF 10-8] at 30. An "insured contract" is defined as "[t]hat part of any other contract or agreement pertaining to your business ... under which you assume the tort liability of another to pay for `bodily injury' or `property damage' to a third party or organization." [ECF No. 10-8] at 32.
Daniel contends that "R & H and Derrick Hines were leased on to H & F under a written agreement [that] required R & H, Aaron Hines and Derrick Hines to assume any liability incurred by H & F in performance of the contract." [ECF No. 67] at 10. Daniel cites to a provision of a "Motor Vehicle Lease Agreement" that states "CONTRACTOR [the Driver Group] agrees to assume, pay, identify and hold CARRIER [H & F] harmless from any loss or damage caused by the negligent operation ... of the equipment leased hereunder." [ECF No. 54-8] at 42.
The parties have provided the Court with a copy of the Motor Vehicle Lease Agreement, but there is no evidence that R & H and/or H & F ever signed the agreement. Counsel for H & F in the underlying lawsuit informed the Court in a Declaration that "the Hines Defendants never completed the paperwork to be leased on to H & F." Garber Dec. [ECF No. 54-5] at ¶ 6. Counsel for Daniel informed National Casualty, "I do not have a contract. Mr. Hotchkiss [of H & F] testified the contract was not signed. He also testified that if it was signed, it was burned by him .... Mr. Hines testified he signed the contract and sent it back without making a copy." [ECF No. 47-4].
Moreover, the "hold harmless" provision falls under a section of the agreement titled "Bobtail Liability and Insurance." "Bobtailing refers to the operation of a tractor without an attached trailer."
Accordingly, the Court finds that the National Casualty policy was excess to any other collectible insurance.
The Northland policy states, as pertinent hereto:
[ECF No. 46-2] at 14.
Daniel contends that the Northland policy was excess on the grounds that "[t]he tractor operated by Derrick Hines was leased to H & F Bros. by written agreement at the time of the occurrence, and the agreement contains a hold harmless provision." [ECF No. 66-1] at 12. Alternatively, Daniel contends that the Northland policy was excess, pursuant to Section V.B.5.b.e, because Northland did not own the 1997 Freightliner.
For the reasons discussed supra, the Court finds that the Motor Vehicle Lease Agreement
Accordingly, the Court finds that the Northland policy was primary to any other collectible insurance.
For the foregoing reasons:
SO ORDERED.
Travelers Indem. Co. v. Ins. Co. of N. Am., 69 Md.App. 664, 519 A.2d 760, 767 (Md.Ct. Spec.App.1987).
However, Ryder is distinguishable from the instant case:
Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md.App. 595, 638 A.2d 1220, 1222-23 (Md. Ct. Spec.App.1994) (emphasis added).
However, for the reasons discussed hereinafter, National Casualty did not have a duty to defend the Driver Group members in the underlying lawsuit.
Judge Young of this Court stated in Rouse Co. v. Fed. Ins. Co., 991 F.Supp. 460 (D.Md. 1998):
Id. at 462-63 (citations omitted).
Daniel contends that Wisconsin law applies to the interpretation of the Northland policy because the last act necessary to form the contract — delivery of the policy to H & F and payment of the premium — occurred in Wisconsin. Id. at 5-6. However, there is a countersignature on the front page of the Northland policy on behalf of an organization with a mailing address in Minnesota. Thus, Daniel would not be entitled to summary judgment on the issue of the application of Wisconsin law because there may be a fact issue as to where the last act necessary to form the contract occurred.
Moreover, as discussed herein, National Casualty is entitled to summary judgment because Northland did not suffer any damages, the National Casualty policy was cancelled, and/or the National Casualty policy was excess to the Northland policy.
