Martinez v. Empire Fire & Marine Ins. Co. ( 2014 )

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RENEE MARTINEZ v. EMPIRE FIRE AND MARINE
INSURANCE COMPANY
(AC 35367)
DiPentima, C. J., and Beach and Keller, Js.
Argued February 14—officially released June 24, 2014
(Appeal from Superior Court, judicial district of New
Haven, Zemetis, J.)
Stacey D. Lafferty, with whom was Vincent R. Fal-
cone, for the appellant (plaintiff).
Tracy L. Montalbano, with whom was Daniel P. Sca-
pellati, for the appellee (defendant).
Opinion
KELLER, J. The plaintiff, Renee Martinez, appeals
from the summary judgment rendered by the trial court
in favor of the defendant, Empire Fire and Marine Insur-
ance Company. The plaintiff sought to recover under
an insurance policy that the defendant had issued to
Tony’s Long Wharf Transport, LLC (Tony’s), a towing
company registered as an interstate motor carrier.1 The
plaintiff previously had obtained a judgment against
Tony’s for personal injuries she sustained in a motor
vehicle accident involving her vehicle and a truck
owned by Tony’s and driven by one of its employees.
At issue before the trial court on summary judgment
was whether the federally mandated MCS-90 endorse-
ment2 attached to the insurance policy was triggered,
so as to obligate the defendant to pay the judgment
rendered against its insured. On appeal, the plaintiff
claims that the trial court erred in finding that the MCS-
90 endorsement did not apply. The plaintiff also argues
that the public policy of protecting innocent motorists
from negligent motor carriers mandates the enforce-
ment of the MCS-90 endorsement in this case. We dis-
agree and conclude that because Tony’s vehicle was
not being operated as a ‘‘for-hire’’ motor carrier at the
time of the accident, the MCS-90 endorsement was not
triggered. Accordingly, we affirm the judgment of the
trial court.
The record reveals the following undisputed facts
and procedural history. On April 11, 2006, the plaintiff
was involved in an automobile collision with a 2000
Ford F-450 Dynamic Wrecker (truck) owned by Tony’s.
The truck was being operated by Edward Reynolds,
who at the time was employed by Tony’s as a heavy-
duty truck mechanic. At the time of the collision, Rey-
nolds was retrieving motor vehicle parts from a facility
in Hamden, which he then was to transport to Tony’s
facility in New Haven. Reynolds was to use those motor
vehicle parts to repair other vehicles owned by Tony’s
at the New Haven facility. On July 24, 2006, the plaintiff,
alleging personal injuries as a result of Tony’s tortious
conduct, commenced an action against Tony’s, Rey-
nolds, and Anthony Juliano, who formerly was the man-
aging member of Tony’s.
On May 5, 2010, the court rendered judgment against
Tony’s and awarded to the plaintiff damages in the
amount of $693,025.69, plus costs. The judgment was
not satisfied within thirty days of the date it was ren-
dered because, in a letter to Tony’s dated April 26, 2006,
the defendant had denied liability coverage under an
insurance policy that it had issued to Tony’s prior to
the collision.
The insurance policy at issue in this appeal is a Com-
mercial Lines Policy, effective April 27, 2005 through
April 27, 2006.3 Although the truck originally was listed
on the schedule of covered vehicles of the policy, it
later had been removed, at the request of Tony’s, by
way of an endorsement dated October 7, 2005. The
effective date of the truck’s removal from the policy
was September 30, 2005, more than six months before
the collision. Nevertheless, a federally mandated MCS-
90 endorsement was attached to the policy. The MCS-
90 endorsement provides in relevant part: ‘‘[The defen-
dant] . . . agrees to pay, within the limits of liability
described herein, any final judgment recovered against
the insured for public liability resulting from negligence
in the operation, maintenance or use of motor vehicles
subject to the financial responsibility requirements of
Sections 29 and 30 of the Motor Carrier Act of 1980
regardless of whether or not each motor vehicle is spe-
cifically described in the policy . . . . It is further
understood and agreed that, upon failure of the [defen-
dant] to pay any final judgment recovered against the
insured as provided herein, the judgment creditor may
maintain an action in any court of competent jurisdic-
tion against the [defendant] to compel such payment.’’
(Emphasis added.)
The plaintiff brought the underlying action, as a judg-
ment creditor, against the defendant, as an insurer, pur-
suant to General Statutes § 38a-321.4 In her one count
complaint, dated October 4, 2010, the plaintiff alleged
that the defendant is liable to her because, at some
point prior to the day of the collision, the defendant
had issued an automobile liability policy to Tony’s, and
under the terms of that policy, the defendant promised
to indemnify Tony’s against claims arising from the
negligence of its agents and employees while operating
its motor vehicles, including the truck involved in the
collision, owned by Tony’s. The plaintiff concluded that,
pursuant to § 38a-321, she was subrogated to the rights
of Tony’s as against the defendant for its failure to
pay the underlying judgment, and that the defendant,
therefore, is liable to her for the unpaid balance thereof.
The defendant moved for summary judgment,
asserting that the truck had been removed from the
insurance policy as a covered vehicle prior to the colli-
sion. The plaintiff subsequently filed an objection to
the defendant’s motion. Therein, the plaintiff did not
dispute that the truck had been removed from the policy
prior to the collision. Instead, she argued that the MCS-
90 endorsement attached to the policy was triggered
and therefore the defendant was obliged to pay the
judgment rendered against its insured. The court heard
oral argument on the motion, and in a memorandum
of decision filed on December 24, 2012, granted the
defendant’s motion for summary judgment. The court
found, essentially, that because there was no genuine
issue of material fact that Tony’s was not transporting
goods in interstate commerce at the time of the acci-
dent, the MCS-90 endorsement was not triggered so as
to obligate the defendant to pay the judgment rendered
against its insured.5 The court also concluded, however,
that there was no issue of fact that Tony’s was operating
as a ‘‘for-hire’’ motor carrier at the time of the automo-
bile collision because ‘‘[u]ncontradicted evidence was
proffered to show that Reynolds . . . was being com-
pensated for transporting the property of another
. . . .’’ This appeal followed.
Before turning to the relevant statutory and regula-
tory background, we begin with the well established
standard of review. ‘‘The standards governing our
review of a trial court’s decision to grant a motion for
summary judgment are well established. Practice Book
[§ 17-49] provides that summary judgment shall be ren-
dered forthwith if the pleadings, affidavits and any other
proof submitted show that there is no genuine issue as
to any material fact and that the moving party is entitled
to judgment as a matter of law. . . . In deciding a
motion for summary judgment, the trial court must view
the evidence in the light most favorable to the nonmov-
ing party. . . . The party seeking summary judgment
has the burden of showing the absence of any genuine
issue [of] material facts which, under applicable princi-
ples of substantive law, entitle him to a judgment as a
matter of law . . . and the party opposing such a
motion must provide an evidentiary foundation to dem-
onstrate the existence of a genuine issue of material
fact. . . . Finally, the scope of our review of the trial
court’s decision to grant the plaintiff’s motion for sum-
mary judgment is plenary.’’ (Internal quotation marks
omitted.) CitiMortgage, Inc. v. Coolbeth, 147 Conn. App.
183, 190–91, 81 A.3d 1189 (2013), cert. denied, 311 Conn.
925, 86 A.3d 469 (2014).
Having set forth the pertinent facts and standard of
review, we now turn to the background of the Motor
Carrier Act of 1980 (MCA), 49 U.S.C. § 10101 et seq.
Federal law applies to the operation and effect of the
MCS-90 endorsement. See, e.g., John Deere Ins. Co. v.
Nueva, 229 F.3d 853, 856 (9th Cir. 2000), cert. denied,
534 U.S. 1127, 122 S. Ct. 1063, 151 L. Ed. 2d 967 (2002).
Although no Connecticut appellate court has done so,
several other state and federal courts have discussed
the MCA, and the MCS-90 endorsement specifically, in
great detail. See, e.g., Canal Ins. Co. v. Coleman, 625
F.3d 244 (5th Cir. 2010); Carolina Casualty Ins. Co. v.
Yeates, 584 F.3d 868 (10th Cir. 2009); John Deere Ins.
Co. v. Nueva, supra, 229 F.3d 853; Newman v. State
Farm Mutual Auto Ins. Co., 62 So. 3d 808 (La. App.
2011).
Congress enacted the MCA ‘‘to deregulate the truck-
ing industry, increase competition, reduce entry barri-
ers, and improve quality of service. . . . Importantly,
enactment of the MCA sought, in part, to address abuses
that had arisen in the interstate trucking industry which
threatened public safety, including the use by motor
carriers of leased or borrowed vehicles to avoid finan-
cial responsibility for accidents that occurred while
goods were being transported in interstate commerce.’’
(Citation omitted; internal quotation marks omitted.)
Herrod v. Wilshire Ins. Co., 499 F. Appx. 753, 754 (10th
Cir. 2012). To that end, the MCA provides that a com-
mercial motor carrier may operate only if registered to
do so; 49 U.S.C. § 13901 (a); and if it is ‘‘willing and
able to comply with . . . [certain] minimum financial
responsibility requirements . . . .’’ 49 U.S.C. § 13902
(a) (1) (A); see also Carolina Casualty Ins. Co. v.
Yeates, supra, 584 F.3d 875 (MCA and regulations there-
under require proof of financial responsibility demon-
strating that motor carrier is ‘‘adequately insured in
order to protect the public from risks created by the
[carrier’s] operations’’).
In response to the passage of the MCA’s minimum
financial responsibility requirements mandate, the fed-
eral Secretary of Transportation promulgated a motor
carrier endorsement form known as the MCS-90
endorsement. See 49 C.F.R. 387.15. ‘‘The MCS-90
endorsement constitutes such proof of requisite finan-
cial responsibility under the MCA. See 49 U.S.C. § 31139
(f) (1) (A); 49 C.F.R. § 387.7 (d) (1). Consequently, every
liability insurance policy issued to motor carriers of
interstate commerce contains the MCS-90 endorse-
ment. . . . The MCS-90 endorsement, in pertinent part,
provides that the motor carrier’s insurer agrees to pay,
within the limits of liability described herein, any final
judgment recovered against the insured for public liabil-
ity resulting from negligence in the operation, mainte-
nance or use of motor vehicles subject to the financial
responsibility requirements of . . . the [MCA] whether
or not the vehicle involved in the accident is specifi-
cally described in the policy. 49 C.F.R. § 387.15 . . . .
The MCS-90 endorsement is intended to impose a surety
obligation on the motor carrier’s insurer—in other
words, the endorsement is a safety net that covers the
public in the event other insurance coverage is lacking.’’
(Citations omitted; emphasis added; footnote omitted;
internal quotation marks omitted.) Herrod v. Wilshire
Ins. Co., supra, 499 F. Appx. 755–56; see also Century
Indemnity Co. v. Carlson, 133 F.3d 591, 594 (8th Cir.
1998) (‘‘[t]he MCS-90 provides a broad guaranty that
the insurer will pay certain judgments . . . regardless
of whether the motor vehicle involved is specifically
described in the policy or whether the loss was other-
wise excluded by the terms of the policy’’).
The MCS-90 endorsement is required to be attached
to any liability policy issued to ‘‘for-hire’’ motor carriers
operating motor vehicles transporting property in inter-
state commerce. See Canal Ins. Co. v. Coleman, supra,
625 F.3d 246. The MCA defines a ‘‘motor carrier’’ as
‘‘a person6 providing motor vehicle transportation for
compensation.’’ 49 U.S.C. § 13102 (14). Federal regula-
tions promulgated pursuant to the MCA expand on that
definition and define ‘‘motor carrier’’ as a ‘‘for-hire
motor carrier or a private motor carrier.’’7 49 C.F.R.
§ 387.5. In turn, ‘‘for-hire carriage’’ is defined in those
regulations as ‘‘the business of transporting, for com-
pensation, the goods or property of another.’’ 49
C.F.R. § 387.5.
Moreover, the great weight of authority throughout
the country is that the analysis must consider whether
the vehicle was ‘‘presently engaged in the transporta-
tion of property in interstate commerce.’’ (Emphasis
added.) Canal Ins. Co. v. Coleman, supra, 625 F.3d 249,
251 (‘‘the weight of authority from [the Fifth] Circuit
and beyond supports [the] conclusion that the MCS-90
does not cover vehicles when they are not presently
transporting property in interstate commerce’’). Addi-
tionally, the majority of courts have agreed that a ‘‘trip-
specific’’ approach is appropriate in determining the
applicability of the MCS-90 endorsement, by finding
the relevant question in these cases to be whether the
accident occurred while the vehicle was transporting
property, for-hire, in interstate commerce. Id., 253–54;
see also Brunson v. Canal Ins. Co., 602 F. Supp. 2d
711, 715–16 (D.S.C. 2007) (issue in determining applica-
bility of MCA is whether ‘‘at the time of the accident’’
motor vehicle was operating for-hire, transporting prop-
erty, and in interstate commerce); Newman v. State
Farm Mutual Auto Ins. Co., supra, 62 So. 3d 811–12
(trip-specific review showed MCS-90 endorsement inap-
plicable where vehicle was not being used for-hire or
in interstate commerce); but see Royal Indemnity Co.
v. Jacobsen, 863 F. Supp. 1537, 1540–42 (D. Utah 1994)
(declining to use trip-specific reading).
Finally, an insurer’s obligation to pay a judgment
recovered against its insured pursuant to an MCS-90
endorsement is triggered only when two elements are
satisfied. That is, a MCS-90 endorsement is ‘‘triggered
only when (1) the underlying insurance policy to which
the endorsement is attached does not otherwise provide
coverage, and (2) either no other insurer is available
to satisfy the judgment against the motor carrier, or
the motor carrier’s insurance coverage is insufficient
to satisfy the federally-prescribed minimum levels of
financial responsibility.’’ (Emphasis omitted.) Carolina
Casualty Co. v. Yeates, supra, 584 F.3d 878.
In the present case, neither party disputes that the
truck involved in the collision was not a ‘‘covered vehi-
cle’’ under the insurance policy or that no other insurer
is available to satisfy the judgment against Tony’s.
Accordingly, the sole issue before the court is whether
there is a disputed issue of material fact that the truck
was operating as a for-hire motor carrier transporting
property in interstate commerce at the time of the colli-
sion. The court found that although there was evidence
that Tony’s truck was operating for-hire, it was not
engaged in interstate commerce at the time of the colli-
sion. The plaintiff argues that the court erred in conclud-
ing that there was no genuine issue of material fact that
the truck was not engaged in interstate commerce at
the time of the accident. The defendant responds that
the court properly found that the truck was not engaged
in interstate commerce. In its brief to this court, the
defendant argued, as an alternative ground for
affirmance, that the court improperly determined the
threshold issue that there was no issue of fact that
Tony’s was operating the vehicle ‘‘for-hire’’ at the time
of the collision.8 We agree with the defendant that the
court improperly found that Tony’s was operating the
vehicle ‘‘for-hire’’ at the time of the accident.
As noted previously, to be considered a ‘‘for-hire car-
riage,’’ the insured had to be in the ‘‘business of trans-
porting, for compensation, the goods or property of
another’’; 49 C.F.R. § 387.5; at the time of the accident.
The United States Court of Appeals for the Second
Circuit has explained the ‘‘for-hire’’ provision in an
exposition of the history and purpose of the MCA. ‘‘The
MCA originally contemplated three categories of motor
carriers: common, contract, and private. Common and
contract carriers were known as for-hire carriers. . . .
Common carriers offered transportation for property
and passengers for the general public, while contract
carriers arranged transportation services by contract.
. . . Private carriers transported property of which
they were the owner, lessee, or bailee, when such trans-
portation is for the purpose of sale, lease, rent, or bail-
ment, or in furtherance of any commercial enterprise.’’
(Citations omitted; internal quotation marks omitted.)
Bilyou v. Dutchess Beer Distributors, Inc., 300 F.3d
217, 226–27 (2d Cir. 2002).
In the present case, the trial court correctly noted
that undisputed evidence indicated that Reynolds, as
Tony’s employee, was being compensated to transport
the motor vehicle parts. There is no dispute, however,
that Tony’s, as the actual insured, was not being com-
pensated for the transport of the motor vehicle parts.
That is, the insured, through its employee, was trans-
porting its own property, for its own benefit, without
being compensated by any third party. Tony’s was nei-
ther transporting goods for the general public, nor was
it transporting goods in fulfillment of a contract at the
time the collision occurred. The defendant’s insured,
through its employee, simply retrieved motor vehicle
parts in Hamden, to be delivered to New Haven, where
they ultimately were to be used for repairing other
vehicles owned by the insured. Under these circum-
stances, where the insured effectively was undertaking
a personal errand, we cannot construe Tony’s to have
been operating its vehicle ‘‘for-hire’’ at the time the
collision occurred. See Herrod v. Wilshire Ins. Co.,
supra, 499 Fed. Appx. 759–60 (lack of factual predicate
to determine whether insured was transporting prop-
erty of another for compensation at time of accident);
see also Brunson v. Canal Ins. Co., supra, 602 F. Supp.
2d 716 (driver was not operating for-hire at time of
accident where he ‘‘was solely on a personal mission
to drive the . . . tractor-trailer a few miles from his
home for the purpose of trying to sell the truck’’); New-
man v. State Farm Mutual Auto Ins. Co., supra, 62 So.
3d 811–12 (vehicle was not operated for-hire, as insured
driver merely was hauling materials he had personally
purchased). Accordingly, because there was no evi-
dence that Tony’s was operating its vehicle for-hire at
the time the collision occurred, the plaintiff could not
prevail in demonstrating that the MCS-90 endorsement
was triggered, and the court properly granted the defen-
dant’s motion for summary judgment.
We briefly address the plaintiff’s argument that the
public policy of providing ‘‘financial protection to mem-
bers of the public’’ calls for the enforcement of the
MCS-90 endorsement in this case. The thrust of the
plaintiff’s argument is that a strict reading of the statu-
tory language would thwart the broad, remedial pur-
pose of the minimum financial responsibility scheme
for motor carriers, resulting in injustice to the plaintiff
and similarly situated individuals. We disagree.
We recognize that the MCS-90 endorsement was
intended to ensure ‘‘that the public be adequately pro-
tected when a licensed carrier uses a . . . vehicle to
transport goods . . . .’’ Wells v. Gulf Ins. Co., 484 F.3d
313 (5th Cir. 2007). As we have discussed previously
in this opinion, however, the purpose of the MCS-90
endorsement is to protect the public from negligent
motor carriers while they are engaged in the transporta-
tion of property, for-hire, in interstate commerce. See,
e.g., Herrod v. Wilshire Ins. Co., supra, 499 F. Appx.
755–56. Simply, the policy goals of the minimum finan-
cial responsibility mandate are not inconsistent with
our holding today. Tony’s was not operating for-hire at
the time the accident occurred, and, therefore, this is
not an instance in which Congress intended that the
MCS-90 endorsement provide coverage. As the United
States District Court for the District of South Carolina
noted: ‘‘Congress and the appropriate regulatory agen-
cies could broaden and clarify the relevant language
now in place to provide coverage in factual scenarios
similar to the one in this matter.’’ Brunson v. Canal
Ins. Co., supra, 602 F. Supp. 2d 719. In the absence of
such clarification, we must interpret the statutes and
regulations as written. See Perry v. Harco National Ins.
Co., 129 F.3d 1072, 1074–75 (9th Cir. 1997) (rejecting
context-specific approach to interpreting MCS-90
endorsement regulations and holding that definition in
regulations applied regardless of whether its applica-
tion promoted regulatory goal).
‘‘An appellate court is authorized to rely upon alterna-
tive grounds supported by the record to sustain a judg-
ment.’’ (Internal quotation marks omitted.) Mortgage
Electronic Registration Systems, Inc. v. Goduto, 110
Conn. App. 367, 372, 955 A.2d 544, cert. denied, 289
Conn. 956, 961 A.2d 420 (2008). In light of our conclusion
that the truck in question was not operating for-hire
when the collision occurred, the MCS-90 endorsement
attached to the policy was not triggered and the defen-
dant, as a matter of law and in the absence of any
genuine issue of material fact, was not required to pay
the judgment rendered against its insured. Because we
affirm the court’s decision to grant summary judgment
on this alternative ground, we need not decide whether
the court properly concluded that Tony’s truck was not
being operated in interstate commerce at the time of
the collision.
The judgment is affirmed.
In this opinion the other judges concurred.
1
The plaintiff’s complaint identifies the insured as Tony’s Long Wharf
Transport, LLC, Tony’s Long Wharf, Inc., and/or Tony’s Long Wharf Towing,
LLC. The sole named insured on the insurance policy, however, is Tony’s
Long Wharf Transport, LLC. We refer to this entity throughout this opinion
as Tony’s.
2
As explained later in this opinion, an MCS-90 endorsement is a standard
endorsement required to be included in a commercial motor carrier’s insur-
ance policy by the Motor Carrier Act of 1980 (MCA), 49 U.S.C. § 10101 et
seq., and the regulations promulgated thereunder, 49 C.F.R. § 387.15 et seq.
3
As noted previously, the sole named insured on the insurance policy
was Tony’s Long Wharf Transport, LLC. See footnote 1 of this opinion.
4
General Statutes § 38a-321 provides in relevant part: ‘‘Upon the recovery
of a final judgment against any . . . firm . . . by any person . . . for loss
or damage on account of bodily injury . . . or damage to property, if the
defendant in such action was insured against such loss or damage at the
time when the right of action arose and if such judgment is not satisfied
within thirty days after the date when it was rendered, such judgment
creditor shall be subrogated to all the rights of the defendant and shall have
a right of action against the insurer to the same extent that the defendant
in such action could have enforced his claim against such insurer had such
defendant paid such judgment.’’
5
The court reasoned that the trip, from Hamden to New Haven, occurred
entirely within the state, and that there was no intention that the motor
vehicle parts, as ‘‘the actual goods,’’ were ‘‘to be transported in interstate
commerce to a final destination’’ after being delivered to New Haven and
used in repairs. (Emphasis in original.)
6
The MCA’s definition of ‘‘person’’ incorporates the meaning under 1
U.S.C. § 1. See 49 U.S.C. § 13102 (18). Title 1 of the United States Code, § 1,
provides in relevant part that the word ‘‘person’’ includes ‘‘corporations,
companies, associations, firms, partnerships, societies, and joint stock com-
panies . . . .’’ Accordingly, Tony’s, a limited liability company, clearly is
considered to be a ‘‘person’’ under the MCA.
7
The term ‘‘motor carrier,’’ as defined in the regulations, also includes ‘‘a
motor carrier’s agent, officer, or representative; an employee responsible
for hiring, supervising, training, assigning, or dispatching a driver; or an
employee concerned with the installation, inspection, and maintenance of
motor vehicle equipment and/or accessories.’’ 49 C.F.R. § 387.5.
8
The plaintiff did not timely file with this court a reply brief addressing
the alternative ground for affirmance raised by the defendant.