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Canal Insurance Co. v. Shelter Insurance Co.

October 28, 2010


The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge



Before the Court are motions for summary judgment brought by Plaintiff Canal Insurance Company and Intervenor/Counter-claimant Shelter Insurance Company. Upon a full review of the record, the Court finds that Canal's motion should be granted and Shelter's motion should be denied. An MCS-90 endorsement is not implicated in disputes regarding allocation between insurers. Canal's insurance policy provided no primary coverage for the vehicles involved in the accident, and did not extend coverage to leased vehicles. As there are no conflicting or competing insurance policies, principles of contribution, subrogation, and indemnity are not implicated.


Plaintiff Canal Insurance Company issued an insurance policy (the "Policy") insuring Just Cars Shipping of Olathe, Kansas, for the period beginning May 10, 2007, continuing though May 10, 2008. See Canal Policy, Dkt. 38-2 at 3. The Policy provided for $1,000,000 in liability coverage and listed one truck, a 2003 Ford F-350, as covered. Id. at 4-5. The Policy also included an MCS-90 endorsement, a federal liability document required by the Federal Motor Safety Carrier Act. Id. at 84. A change in the Policy, effective August 17, 2007, added a 2007 Ford F-650 to the list of covered automobiles. Id. at 24. This change also added a document to the Policy entitled "Driver Schedule" which listed one covered driver, Caroline M. Ndungu. Id. at 30.

On December 4, 2007, Intervenor and Counter-claimant Shelter Insurance Company issued an insurance binder, a precursor to the formal issuance of an insurance policy, to Safari Auto Transport of Lenexa, Kansas. See Shelter Policy, Dkt. 37-5 at 1. The binder provided $500,000 of liability coverage and included a blank MCS-90 endorsement. Id. A 2006 Hino semi-tractor (the "Truck") and a 2007 Kaufman trailer (the "Trailer") were expressly covered by the binder. Id. at 9. Two Safari employees were listed as covered drivers, Noombey Bitendelo and Mark Hughes. Id. at 5.

On December 29, 2007, Mr. Hughes was driving the Truck and attached Trailer on Interstate 15 near Blackfoot, Idaho. Mr. Hughes was delivering a shipment of automobiles originating in Phoenix, Arizona, to a drop-off point along the Montana- Canada border. See Excerpt of Hughes Deposition, attached to Affidavit of Maguire, Dkt. 37-4 at 13. The day was cold and Interstate 15 was icy. Mr. Hughes lost control of the Truck as he attempted to move into the passing lane to avoid a slowing automobile. Id. at 19-32. As he did so, the Trailer lost traction and flipped onto its side, landing atop a vehicle that had slipped onto the shoulder due to the icy conditions. Id. Mrs. Chris Gray was killed in this collision. See Settlement Agreement and Release, attached to Affidavit of Maguire, Dkt. 37-6 at 9.

Mr. Hughes alleges that the Truck and Trailer were leased by Safari to Just Cars at the time of the accident. See Excerpt of Hughes Deposition, supra, at 44. Though he never had a copy of the purported lease agreement between Safari and Just Cars in his possession, Mr. Hughes claims that he saw the lease on Mr. Bitendelo's laptop at a Kinko's when Mr. Bitendelo printed the agreement. Id. at 45-46. At the time of the accident, the Truck bore the U.S. Department of Transportation and Motor Carrier numbers for Just Cars on the driver's door, and was also displaying a sign on the door stating "Leased to Just Cars Shipping." Id. at 42-45; Deposition Exhibit D, Dkt. 37-6 at 1. The Idaho State Police examination report of the accident indicates that Mr. Hughes was driving the Truck for Just Cars. See Idaho State Police Incident Report, Dkt. 37-6 at 2. The Certificate of Liability Insurance that Mr. Hughes had with him in the cab of the Truck listed "Just Cars Shipping LLC" as the insured. See Excerpt of Hughes Deposition, supra, at 48-49; Certificate of Liability Insurance, Dkt. 37-6 at 3. Mr. Hughes' daily driver's logs for the period beginning on December 18, 2007 and continuing through December 29, 2007, list "Just Cars Shipping" in the box labeled "Name of Carrier." See Driver's Logs, Dkt. 37-6 at 4-7. Canal did not receive notice of this accident until January 7, 2009, more than a year after it occurred, and alleges that Just Cars was uncooperative as it attempted to investigate. See Affidavit of Fleming, Dkt. 38-6 at 2.

On June 18, 2008, Mrs. Gray's husband and surviving children sued Mr. Hughes, Safari, and Just Cars in Idaho state court. Idaho Action #CV08-2411 PI. On March 2, 2010, Shelter, defending the state court matter on behalf of Mr. Hughes and Safari, settled for $600,000. See Settlement Agreement and Release, supra, at 9-20. Canal defended the action on behalf of Just Cars, but did not participate in settlement discussions. Shelter reserved the right to seek "subrogation, contribution, or indemnity" against Just Cars and Canal based on its belief that Just Cars leased the Truck and Trailer. Id. at 10.

On September 11, 2009, while the Idaho state court matter was pending, Canal filed suit against Just Cars, Mr. Hughes, and the surviving members of the Gray family seeking declaratory relief regarding the rights and relationships of the parties. See Complaint, Dkt. 1. Just Cars did not appear, and a Clerk's Entry of Default was entered against it on May 5, 2010. See Clerk's Entry of Default, Dkt. 31. Shelter intervened and, along with Mr. Hughes, filed a counter-claim against Canal on June 1, 2010, seeking subrogation, contribution, or indemnity to offset the $600,000 settlement paid the surviving members of the Gray family. See Counterclaim, Dkt. 34. On June 4, 2010, this Court, pursuant to the parties' agreed stipulation, dismissed the Complaint with prejudice as to Mr. Hughes and the surviving members of the Gray family, and dismissed Mr. Hughes' counter-claim against Canal with prejudice. See Order of Dismissal, Dkt. 35. Coupled with the default of Just Cars, this dismissal left Shelter and Canal as the only parties in this matter. Id.


One of the principal purposes of the summary judgment "is to isolate and dispose of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000).

This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Id. at 256-57. The non-moving party must go beyond the pleadings and show "by her affidavits, or by the depositions, answers to interrogatories, or admissions on ...

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