JUSTIN TIME TRANSPORTATION, LLC, HAAG FOOD SERVICE, INC., DERELL L. BOYD, and INDIANA INSURANCE COMPANY, Plaintiffs-Appellees,
HARCO NATIONAL INSURANCE COMPANY, Defendant-Appellant
Appeal from the Circuit Court of Clinton County. No. 10-MR-57. Honorable Dennis E. Middendorff, Judge, presiding.
Reversed; judgment entered.
In an action arising from a dispute over the coverage for a fatal vehicular accident involving a truck leased by plaintiffs from defendant's insured, the trial court erred in entering summary judgment for plaintiffs based on the finding that the policy issued to the lessor of the truck was ambiguous and that defendant was not entitled to invoke the policy exclusions to avoid coverage, since the lease provided by defendant's insured required plaintiffs to obtain their own liability coverage and indemnify defendant's insured for any losses, plaintiffs complied with those obligations, and several states have upheld similar agreements and determined that the policy defendant issued to the lessor only provided contingent coverage; furthermore, the appellate court rejected plaintiffs' claims that the entire agreement between the parties was ambiguous and that defendant insurer waived its right to raise its policy endorsements as affirmative defenses.
For Appellant: Jennifer L. Dickerson, Robert J. Bassett, Ross S. Titzer, Williams Venker & Sanders LLC, St. Louis, MO; Ira Lipsius, pro hac vice, Lipsius-Benhaim Law, LLP, Kew Gardens, NY.
For Appellees: Hopey A. Gardner, Jeffrey K. Suess, Rynearson, Suess, Schnurbusch & Champion, LLC, St. Louis, MO.
Honorable Melissa A. Chapman, J. Honorable Stephen L. Spomer, J., and Honorable Judy L. Cates, J., Concur. JUSTICE CHAPMAN delivered the judgment of the court, with opinion. Justices Spomer and Cates concurred in the judgment and opinion.
[¶1] This case presents an insurance coverage question resulting from a fatal motor vehicle accident involving a leased truck. Hogan Truck Leasing (Hogan) owned the truck and leased it to Justin Time Transportation, LLC (Justin Time). The driver of the leased vehicle, Derell L. Boyd, lost control of the truck and slid on ice-covered roads. The truck driven by Boyd struck and killed Edwin W. Sargent. Harco National Insurance Company (Harco) issued the insurance policy involved with this appeal. The named insured under the Harco policy was Hogan. The Harco policy covered permissive users of Hogan's vehicles. Justin Time maintained a $1 million liability insurance policy issued by Netherlands Insurance Company (Netherlands). Justin Time also had a $3 million umbrella policy written by Indiana Insurance Company. Edwin W. Sargent's estate filed a civil suit for wrongful death against the plaintiffs. The lawsuit settled. The plaintiffs then filed a declaratory judgment action against Harco to determine their rights pursuant to Harco's policy. The trial court granted summary judgment for the plaintiffs, finding that provisions of Harco's policy were ambiguous and that Harco waived its right to use the policy exclusion. Harco appeals.
[¶3] The accident at issue in this coverage case occurred on December 23, 2008, on Interstate 70 in Warren County, Missouri. The road conditions were icy. Late that morning, a vehicle driven by Edwin W. Sargent was in an accident with a vehicle driven by Adam Leninger. Both vehicles parked along the westbound median of Interstate 70 immediately after the accident. Edwin W. Sargent got out of his vehicle and stood in between his vehicle and the Leninger vehicle.
[¶4] At approximately noon, a second collision occurred. A tractor-trailer operated by Derell L. Boyd of Justin Time collided twice with a tractor-trailer operated by Jeffrey Kollman. After the second collision between the two rigs, Boyd's rig slid on the ice and rotated counterclockwise toward the center median. Boyd's rig struck the median divider, the Sargent vehicle, Edwin W. Sargent, and finally the Leninger vehicle. Edwin W. Sargent died at the scene of the accident.
[¶5] Edwin W. Sargent's wife filed a wrongful death claim in federal court against Derell L. Boyd, Justin Time, and
Haag Food Service, Inc. (Haag Food), an entity connected to Justin Time.
[¶6] Hogan leased the truck involved in this accident to Justin Time. Paragraph 10 of the lease covers the category of insurance and provides detailed requirements for liability insurance responsibility between the parties. That provision provides as follows:
" A standard policy of automobile liability insurance *** with limits specified *** will be furnished and maintained by [Justin Time], written by a company satisfactory to Hogan, covering both Hogan and [Justin Time] as insured for the ownership, maintenance, use and operation of each Vehicle. Such policy will provide that the coverage is primary and not additional or excess coverage over insurance otherwise available to either party and that it cannot be cancelled or materially altered without 30 days' prior written notice to both parties."
Schedule A contains the express requirement that Justin Time provide liability insurance with $1 million in combined single limits. If Justin Time failed to provide and maintain this liability insurance, Justin Time was required to " RELEASE, DEFEND, INDEMNIFY AND HOLD HOGAN HARMLESS FROM ANY RESULTING CLAIM, LOSS OR DAMAGE, INCLUDING WITHOUT LIMITATION ANY CLAIM OR CAUSE OF ACTION FOR DEATH OR INURY TO PERSONS, LOSS OR DAMAGE TO PROPERTY, OR ECONOMIC DAMAGE."
[¶7] Haag Food and Justin Time maintained a $1 million business automobile liability policy with Netherlands. The policy language states that the policy covers " any auto," which ostensibly includes leased vehicles. Furthermore, the Netherlands policy lists the specific Hogan vehicle as a covered automobile. The policy defines an insured to include " [a]nyone else while using with your permission a covered 'auto' you own, hire, or borrow." The policy lists Hogan as a loss payee for certain vehicles, including the one involved in this accident.
[¶8] Haag Food and Justin Time also maintained a $3 million commercial umbrella liability policy, issued by Indiana Insurance Company (Indiana). Indiana wrote the policy as excess over several policies held by Haag Food and Justin Time, including the Netherlands policy. The Indiana policy defines an insured as " [a]ny other person or organization who is an insured in the 'scheduled underlying insurance.'" Indiana also agreed to pay sums in excess of the " retained limit" that the insured is obligated to pay as damages for bodily injury, property damage, or personal injury to which the insurance applies. The term " retained limit" is defined as " [t]he total amount of 'scheduled underlying insurance' or 'other underlying insurance' applicable to the injury or damage whether such insurance is collectible or not."
[¶9] Harco issued a business auto policy to Hogan in effect on the date of the loss providing $1 million in liability coverage. Permissive users of vehicles are covered. The policy contained a specific endorsement concerning leased vehicles:
" this endorsement applies when the 'lease or rental agreement' in effect at the time of an 'accident' specifies that the lessee or rentee is responsible for providing primary liability insurance or primary physical damage insurance."
The Harco policy defines a " leased auto" as " an auto that you lease to a customer." Harco's policy provides that the applicable liability insurance for a covered auto (a leased or rented auto) is limited to situations in which the insurance mandated by the lease agreement is uncollectible. The policy specifically states that " [t]he insurance provided by this endorsement does
not apply if any other insurance is collectible." The Harco coverage listed in the endorsement, by its own policy ...