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Great West Casualty Co. v. Trucking

United States District Court, C.D. Illinois, Springfield Division

September 1, 2017




         This cause is before the Court on Plaintiff Great West Casualty Company's Motion for Judgment on the Pleadings (d/e 34). Plaintiff asks the Court to find that Plaintiff has no obligation to defend or indemnify Defendants Ross Wilson Trucking, Transport Services of Sullivan, IL, LLC (Transport Services), or Mark J. Muncy for the allegations in the underlying lawsuit filed by Defendants Stevan Schmelzer and Shelly Schmelzer. Because Plaintiff has failed to demonstrate that Plaintiff is entitled to judgment as a matter of law, the Motion is DENIED.


         A party may move for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). The standard for a Rule 12(c) motion is the same as the standard for a Rule 12(b)(6) motion to dismiss for failure to state a claim. Lodholtz v. York Risk Servs. Group, Inc., 778 F.3d 635, 639 (7th Cir. 2015). That is, the Court asks “whether the pleadings state a claim for relief that is plausible on its face.” Andy Mohr Truck Ctr., Inc. v. Volvo Trucks N. Am., ---F.3d ---, 2017 3695355, *8 (7th Cir. Aug. 28, 2017). The Court draws “all reasonable inferences and facts in favor of the nonmovant, but need not accept as true any legal assertions.” Wagner v. Teva Pharm. USA, Inc., 840 F.3d 355, 358 (7th Cir. 2016). The Court may consider only the pleadings-the complaint, the answer, and any written instruments attached as exhibits. N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir. 1998); see also 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002) (on a motion to dismiss pursuant to Rule 12(b)(6), the court may also consider documents referred to in the complaint that are central to the claim).


         The Court takes the following background from the Complaint for Declaratory Judgment, the exhibits attached thereto, and the Answers.

         A. Transport Services and Ross Wilson Trucking Enter Into an Independent Contractor Agreement for Owner-Operator

         Transport Services and Ross Wilson Trucking entered into an “Independent Contractor Agreement for Owner-Operator” (Agreement) dated January 1, 2012. Compl., Ex. 2 (d/e 1-3). The Agreement provides that Transport Services is:

a for[-]hire motor carrier of property holding licenses from the Federal Motor Carrier Safety Administration (“FMCSA”) as well as various state regulatory agencies, is engaged in the business of providing transportation services for shippers, and intends to contract with CONTRACTOR, on a non-exclusive basis for the lease of motor vehicle equipment as set forth herein and for the performance of certain tasks[.]

         Agreement at 1. The Agreement identifies Ross Wilson Trucking as the “CONTRACTOR.” The Agreement reflects that Ross Wilson Trucking hauls under the authority of Transport Services.

         The Equipment leased includes a 2012 Peterbilt tractor, model 386, and a 2016 Peterbilt tractor, model 579 (the latter added to the Agreement in May 2015). Agreement, App. A. Ross Wilson Trucking was required, under the Agreement, to furnish qualified drivers to operate all Equipment leased pursuant to the Agreement. Agreement ¶ 8E.

         To put the Agreement in context, the Court notes that a motor carrier like Transport Services can own its own trucking equipment or can enter into a written lease with the owner of trucking equipment. See Clarendon Nat'l Ins. Co. v. Medina, 645 F.3d 928, 931 (7th Cir. 2011); see also 49 C.F.R. § 376.11 (providing the conditions under which an authorized carrier may perform authorized transportation with equipment it does not own). Under the written lease, the owner of the equipment (in this case, Ross Wilson Trucking) “grants the use of equipment, with or without a driver, for a specified period to an authorized carrier for use in the regulated transportation of property, in exchange for compensation.” 49 C.F.R. § 376.2(e) (defining “lease”); see also Clarendon, 645 F.3d at 931. The written lease must provide that the:

authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease. The lease shall further provide that the authorized carrier lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.

49 C.F.R. § 376.12(c)(1).

         In this case, the Agreement contains such a provision, which provides that, for the term of the Agreement, the Equipment is under Transport Service's exclusive possession, use, and control and that Transport Services assumes full responsibility for the operation of said equipment as to all third parties and the public at large. Agreement ¶ 3B. The Agreement also provides, however, that Ross Wilson Trucking could lease or “trip” other carriers when the Equipment was not being used by Transport Services. Id. ¶ 13B.Ross Wilson Trucking agreed to remove any signs or other identification on the Equipment containing Transport Services' name or motor carrier identification number when Ross Wilson Trucking was not operating under Transport Services' operating authorities or otherwise operating in service of Transport Services pursuant to the Agreement. Id. ¶ 13C.

         The Agreement addresses which party is required to provide the necessary insurance:

INSURANCE. It is recognized that the United States Department of Transportation and various other regulatory bodies require the carrier under whose certificates or permits leased Equipment is being operated to be responsible to the public with respect to such Equipment while the same is being operated under its authority. TRANSPORT SERVICES will file, or has on file, with the United States Department of Transportation and any other regulatory body having jurisdiction over its operations, evidence of insurance in such amounts as may be required by law or regulation of said agencies, and will continuously maintain in effect insurance in such amount.
CONTRACTOR shall secure, at its sole expense, insurance in the minimum amount of $1, 000, 000 combined single limits covering bob-tail and dead-heading[1] on the Equipment leased herein and shall furnish TRANSPORT SERVICES with a certificate naming TRANSPORT SERVICES as an additional insured thereunder. In addition, CONTRACTOR will carry, at its sole expense, its own insurance coverage on the Equipment leased for collision, fire, theft and other occurrence or catastrophe, and TRANSPORT SERVICES shall be named as an insured thereunder also.

         Agreement ¶ 7G. In addition, the Agreement requires that Ross Wilson Trucking carry, at its own expense, Commercial General Liability Coverage, Commercial Automobile coverage, and Workers' Compensation Coverage. Id. ¶ 8A.

         Finally, the Agreement contains the following indemnification provision, which Defendants assert constitutes an “insured contract”:

As between TRANSPORT SERVICES and CONTRACTOR only, without any regard or effect upon the obligations of TRANSPORT SERVICES to any third party, CONTRACTOR agrees to be responsible for, indemnify, defend and hold TRANSPORT SERVICES harmless from any and all claims of any nature, losses, personal injury, death, and/or damage to cargo or other property, and/or claim for any such loss or occurrence which may arise from or in connection with the operations performed or to be performed pursuant to this Agreement, however arising, without regard to fault or negligence on the part of CONTRACTOR. This is to include, but is not limited to, attorneys' fees and any other expenses incurred in defending or prosecuting any claim arising as a result of any of the above or operation of the Equipment leased herein.

Id. ¶ 14.

         B. Plaintiff Issues Non-Trucking Use Policy

         Plaintiff issued a Non-Trucking Use policy of Commercial Auto Insurance to the “Independent Contractors of Transport Services of Sullivan IL, LLC” for the policy period November 1, 2015 to November 1, 2016 (the Policy). Compl. ¶ 16. There is no dispute that Ross Wilson Trucking is an independent contractor of Transport Services. See Pl. Mem. at 2 (d/e 34-1).

         The Policy provides for coverage as follows:

         A. COVERAGE

         We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ...

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