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Cincinnati Insurance Co. v. D & D Trucking and Delivery

March 2, 2006


The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge


On May 27, 2005, Plaintiff Cincinnati Insurance Company filed an amended complaint seeking a declaration that it has no duty to defend or indemnify Defendants D & D Trucking and Delivery, Donald Polen, Dena Polen, or Larry Reed in an underlying state action filed by Defendant Timothy Wood. This court entered default with respect to all Defendants with the exception of Timothy Wood on April 5, 2005, for failing to respond to Plaintiff's complaint. On December 5, 2005, Plaintiff filed a Motion to Stay Declaratory Judgment Proceedings (#30). Plaintiff and Defendant Wood have also filed cross-motions for summary judgment (#32, #38). For the reasons that follow, Plaintiff's Motion for Summary Judgment (#38) is GRANTED.


Cincinnati Insurance Company (Cincinnati) issued a policy to D & D Trucking which contained a commercial general liability coverage component and a business auto coverage component. The policy was issued for the period of August 8, 1998, through August 8, 2001. Donald Polen was the owner and sole proprietor of D & D Trucking. On April 4, 2001, Larry Reed was driving a Dodge Caravan from his home in Decatur to Springfield. Reed was going to pick up an envelope containing drug orders at a trucking service and return it to Decatur. Reed was instructed to pick up the envelope by D & D Trucking. While on his way to Springfield, Reed struck Timothy Wood. At the time of the accident, Wood, a member of the Niantic Fire Protection District, was fighting a grass fire on the edge of Interstate 72. According to Reed, he struck Wood because he was unable to see him due to the large amount of smoke emanating from the fire. Wood sustained severe injuries as a result of the accident.

In his deposition, Reed testified that at the time of his accident he was driving to Springfield because Donald gave him a "standing order" to drive to Springfield Monday through Friday, except on holidays. Reed would pick up prescription medications to be delivered to area pharmacies. Reed's work with D & D Trucking required him to take drug delivery receipts to D & D Trucking each night. The van driven by Reed was insured by State Farm Insurance Company and solely owned by Reed. D & D Trucking did not control the time or route on which Reed traveled for the deliveries, nor did D & D Trucking pay Reed a salary or withhold taxes from Reed's payments. Rather, Reed received $20 per trip to Decatur. Reed did not have a written employment contract with D & D Trucking. D & D also did not reimburse Reed for expenses incurred by him on the date of the accident. Reed testified in his deposition that he was an independent contractor and not an employee of D & D.

On January 30, 2003, Wood instituted an action in the Circuit Court of Macon County against Donald and Dena, D& D Trucking, and Reed. State Farm is providing a defense to D&D, Donald and Dena, and Reed in the state court lawsuit. On June 25, 2003, D & D Trucking, Donald, and Dena filed a Motion for Summary Judgment in that action on the issue of whether Reed was an independent contractor at the time of the accident. On December 9, 2003, the state court denied the motion for summary judgment finding "there is sufficient evidence in the record so that a jury could conclude that plaintiff was not an independent contractor of the defendants and that a factual dispute exists as to whether D & D Trucking had the right to control the details, manner, and method by which the work was to be done by defendant Larry Reed." On December 20, 2004, the state court granted a separate motion for summary judgment filed by Dena.

In her deposition, Dena testified that all of D & D Trucking's business records were destroyed in April 2002 due to flooding in the basement of the residence she shared with Donald. This location also was the place from which D & D Trucking operated. R.W. Troxell & Co. was D & D Trucking's insurance agent. On December 3, 2003, Wood contacted R. W. Troxell regarding his suit against D & D by letter. The letter indicated:

The owner of your insured, Donald Polen, suffered a stroke a couple of months after the accident and evidently did not report this loss to you. Mr. Polen's wife, Dena Polen, testified in a deposition recently that she knew nothing about the business and had no records of the business, except that she remembered an agency by the name of "Troxell."

An affidavit filed by a claims representative for Cincinnati indicates no notification was received from Donald, Dena, Reed, or D & D Trucking regarding the accident. On January 3, 2003, D & D ceased to exist as an entity.

The Commercial General Liability Coverage Form of the policy issued by Cincinnati states:

2. Duties in the Event of Occurrence, Offense, Claim or Suit

a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. . . .

b. If a claim is made or "suit" is brought against any ...

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