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CONNECTICUT INDEMNITY COMP. v. 21ST CENTURY TRANSPORT CO.

February 25, 2002

CONNECTICUT INDEMNITY COMPANY, PLAINTIFF
V.
21ST CENTURY TRANSPORT CO., INC., SAMUEL SEYMOUR, D/B/A SAM'S TRUCKING, CLIFTON MESSAM, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, RAMPART INSURANCE COMPANY, LEDIAN WILLIAMS, LEGION INSURANCE COMPANY, RUTIGLIANO PAPER STOCK, INC., ALLIED WASTE INDUSTRIES, INC., KAREN CARR, GREGORY VAZ AND JOHN HAYNES, DEFENDANTS.



The opinion of the court was delivered by: I. Leo Glasser, U.S. District Court Judge

  MEMORANDUM AND ORDER

This action arises out of three motor vehicle accidents, each of which involved a passenger car and a tractor-trailer. Each of the tractors involved in the accidents was owned and operated by defendant 21st Century Transport Co., Inc. ("21st Century"), and two of the three trailers involved in the accidents were owned by defendant Rutigliano Paper Stock, Inc. ("Rutigliano"). Connecticut Indemnity Company ("CI"), 21st Century's insurer, commenced this declaratory judgment action against a number of defendants, including Rutigliano's insurer, Rampart Insurance Company ("Rampart"),*fn1 seeking a declaratory judgment that CI is not obligated to indemnify any of the defendants as a result of the accidents.

Rampart now moves for summary judgment on each of the three claims in the complaint in which it is implicated. Those claims are:

Count I: In this claim, CI seeks a declaration that Rampart is required to indemnify 21st Century and its drivers because, at the time of the accidents, the tractor-trailers were being used in Rutigliano's business, and therefore 21st Century and its drivers are "insureds" under Rampart's policy with Rutigliano.
Count IV: In this claim, CI seeks a declaration that it is not required to indemnify 21st Century or its drivers as a result of the accidents, because the tractor-trailers involved in the accidents were being used in Rutigliano's business, and therefore fall within an exclusion in CI's policy with 21st Century.
Count V: In this claim, which is pled in the alternative of CI's other claims, CI seeks a declaration that, in the event the Court determines that CI is obligated to indemnify 21st Century or its drivers, its exposure is limited to the mandatory minimums set by New York law, in accordance with a provision in its policy with 21st Century.

CI has cross-moved for summary judgment on these three claims. For the reasons set forth below, Rampart's summary judgment motion is granted in part and denied in part. CI's cross-motion also is granted in part and denied in part.

BACKGROUND

Three separate motor vehicle accidents are at the heart of CI's complaint, but only two of those accidents are relevant for present purposes. The first occurred on November 26, 1997, when a tractor-trailer driven by John Haynes — who was working for and operating a tractor owned by 21st Century which was attached to a trailer owned by Rutigliano — hit another vehicle in which defendants Ledian Williams and Karen Carr were passengers (the "Williams Accident"). The second accident occurred on February 20, 1998, when defendant Gregory Vaz — who also worked for and was driving a tractor owned by 21st Century which was attached to a trailer owned by Rutigliano — hit another vehicle driven by defendant Clifton Messam (the "Messam Accident"). Williams and Carr commenced a lawsuit in New York state court against 21st Century and Haynes as a result of the Williams Accident, and Messam commenced a lawsuit in New York state court against 21st Century and Vaz as a result of the Messam Accident.

21st Century and its drivers then looked to CI, 21st Century's insurer, to provide coverage for liability arising out of either of these lawsuits, since each accident occurred while a 21St Century employee was driving a 21st Century tractor. CI, however, claimed that it was not required to indemnify 21st Century, Haynes or Vaz under its insurance policy with 21st Century (the "CI Policy"). The CI Policy, also known as a Non-Trucking Automobile Liability ("NTAL") policy, includes a Non-Trucking Use Endorsement that states:

This insurance does not apply to:

a. A covered "auto" while used to carry any property in any business.

b. A covered "auto" while used in the business of anyone to whom the "auto" is rented.

(Def. Mem. at 9; see also Am. Compl. Ex. 1.) CI asserted that, in this case, the tractor-trailers involved in the Williams and Messam Accidents were being used in Rutigliano's business, i.e., they were "under dispatch" to Rutigliano. Accordingly, CI claimed that it had no duty to indemnify 21st Century, Haynes or Vaz, due to the Non-Trucking Use Endorsement in the CI Policy. Instead, CI asserted that coverage should be provided by Rampart, Rutigliano's insurer, because the tractor-trailers were being used in Rutigliano's business at the time of the accidents, and therefore 21st Century, Haynes and Vaz qualified as "insureds" under Rampart's policy.

In light of these facts, CI commenced this action against 21st Century, Haynes, Vaz, Rutigliano and Rampart, among others. The three causes of action relevant to the present motions — Counts I, IV, and V of the Amended Complaint — are set out above. (See supra at 2.) In support of its Count V claim, CI relies upon an endorsement in the CI Policy (the "Limitation of Liability Endorsement") which reads:

We agree with YOU that if any of the provision of the endorsement, "Truckers Insurance for Non-Trucking Use" . . . are held to be void or unenforceable under the law of any jurisdiction, . . . WE will not pay any sums in excess of the minimum amounts required by the Financial Responsibility Laws of such jurisdiction, and then only after all valid and collectible insurance available . . . has been exhausted.

(See id. ¶ 89.)

With respect to Count I — the claim that Rampart is required to indemnify 21st Century, Haynes and Vaz because each is an "insured" under Rampart's policy with Rutigliano — Rampart raises the following argument. Rampart first argues that CI cannot prove that the tractor-trailers were "under dispatch" to Rutigliano at the time of the accidents. Therefore, because the tractor-trailers allegedly were not "under dispatch" to Rutigliano, neither 21st Century, Haynes nor Vaz could be an "insured" under Rampart's insurance policy with Rutigliano. Accordingly, Rampart asserts that it cannot be required to indemnify 21st Century, Haynes or Vaz under that policy. (See Def. Mem. at 6-8.)*fn3

Finally, with respect to Count V, Rampart argues that the Limitation of Liability Endorsement in the CI Policy, like the Non-Trucking Use Endorsement, is void because it violates New York public policy. (See id. at 13-14.) Accordingly, Rampart argues that, if the Court finds that CI is required to indemnify 21st Century, Haynes ...


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