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M. FORTUNOFF OF WESTBURY CORP. v. PEERLESS INSURANCE CO.

March 27, 2003

M. FORTUNOFF OF WESTBURY, CORP., PLAINTIFF,
v.
PEERLESS INSURANCE CO., A SUBSIDIARY OF LIBERTY MUTUAL, GROUP, DEFENDANT.



The opinion of the court was delivered by: Joanna Seybert, District Judge.

MEMORANDUM AND ORDER

Pending before the Court are cross motions for summary judgment brought by both the Plaintiff, M. Fortunoff of Westbury Corp. ("Fortunoff" or "Plaintiff"), and the Defendant, Peerless Insurance Co. ("Peerless" or "Defendant"). Plaintiff commenced suit against the Defendant on June 1, 2001, by filing a Complaint alleging Breach of Contract.

BACKGROUND

On December 17, 2001, the parties jointly submitted a "Stipulation of Facts" which sets forth the following:

Peerless issued a policy to Fredrickson which was in effect from September 1, 1994 through March 13, 1998. Stip. ¶¶ 34. An endorsement on ICC Form BMC-32 is attached to the policy. Id. ¶ 5. At all relevant times, Fredrickson operated as a motor common carrier as certified by the Interstate Commerce Commission ("ICC") and under an ICC permit which authorized it to operate as a motor contract carrier in interstate commerce. Id. ¶¶ 6-7. On or about March 1, 1997, Fortunoff and Fredrickson entered into a Transportation Service Agreement whereby they agreed that Fredrickson would charge Fortunoff in consideration for transportation services. Id. ¶ 9. On or about March 9, 2001, Fortunoff presented damages claims to Peerless in connection with services provided by Fredrickson that it contended were covered under the insurance policy and the BMC-32 Endorsement. Id. ¶¶ 10-11. There is no dispute that Fredrickson, although liable, is insolvent and that Peerless has denied liability. Id. ¶¶ 13-15.

The controlling statute and regulation (referenced as 49 C.F.R. § 387.303(c) and 387.313) requires any insurance company that issues a cargo liability policy to issue a BMC-32 Endorsement to the policy. In this case, Defendant issued a cargo liability policy to Fredrickson which covered damage to property while Fredrickson performed transportation services, as a common carrier, for its customers and annexed the BMC-32 Endorsement. The Endorsement provided that the [insurance] company pay for property damage "`belonging to such shipper or consignee, and coming into the possession of the insured [motor carrier] in connection with such transportation service. . . .'" Cmplt. ¶ 7 (quoting BMC-32 Endorsement). Fortunoff alleges that Peerless's denial of liability constitutes a breach of its obligations under the Endorsement and seeks damages of $13,249.42. Cmplt. ¶¶ 17-18.

DISCUSSION

A district court may properly grant summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, 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." Fed.R.Civ.P. 56(c). The burden of proof is on the moving party to show that there is no genuine issue of material fact, Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1223 (2d Cir. 1994) (citing Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir. 1975)), and "all ambiguities must be resolved and all inferences drawn in favor of the party against whom summary judgment is sought." Id. (citing Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir. 1985)); see also Hayes v. New York City Dept. of Corrs., 84 F.3d 614, 619 (2d Cir. 1996). "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citing 10A Charles A. Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 2725, at 93-95 (1983)).

A party opposing a motion for summary judgment "may not rest upon the mere allegations or denials of his pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 248, 106 S.Ct. 2505 (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). Under the law of the Second Circuit, "when no rational jury could find in favor of the nonmoving party because the evidence is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo, 22 F.3d at 1224 (citing Dister v. Continental Group, Inc., 859 F.2d 1108, 1114 (2d Cir. 1988)). Mere conclusory allegations, speculation or conjecture will not avail a party opposing summary judgment. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996). It is within this framework that the Court addresses the present summary judgment motions.

Plaintiff has moved for summary judgment arguing that ICCTA abolished the difference between common carriers and contract carriers. As such, Plaintiff asserts that the insurance requirements for both common and contract carriers are now the same; the BMC-32 Endorsement applies to all carriage contracts, and Defendant is thereby liable to Plaintiff pursuant to the BMC-32 Endorsement. Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment at 11 ("Pl.'s Mem."). Plaintiff argues, in the alternative, that assuming the insurance requirements are still different for common and contract carriers, Fredrickson contracted with Plaintiff and agreed to accept liability as a common carrier. Thus, the BMC-32 Endorsement, which allegedly applies only to common carriers, would make Defendant liable to Plaintiff. Pl.'s Mem. at 19.

No material issues of fact exist in this case. Therefore, this case is ripe for summary judgment. For the reasons set forth herein, the Court hereby GRANTS summary judgment in favor of the Plaintiff.

Whether Congress intended to eliminate all distinctions between common and contract carriers, specifically here, in respect to insurance requirements, is a question of law properly determined by the Court on a motion for summary judgment. In determining the meaning of a statute, the Court must first look to the plain language of the statute, and, if it is clear on its face, the analysis stops there. See Blum v. Stenson, 465 U.S. 886, 896, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984) ("Where, as here, resolution of a question of federal law turns on a statute and the intention of Congress, we look first to the statutory language and then to the legislative history if the statutory language is unclear."). With this general principle in mind, the Court will look to the statute's language for guidance.

The plain language of ICCTA abolishes the distinction between common carriers and contract carriers. The ICCTA defines motor ...


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