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HomeMy WebLinkAbout2008-2216 EMPIRE FIRE AND : IN THE COURT OF COMMON PLEAS OF MARINE INS. CO. as : CUMBERLAND COUNTY, PENNSYLVANIA subrogee of KUNTZ & : SON, INC., : Plaintiff : CIVIL ACTION - LAW : v. : : PATRICIO LEON and : RIBB’S TRUCKING, : Defendants : : and : : GREENWICH : INSURANCE : COMPANY, : Garnishee : NO. 08-2216 CIVIL TERM ___________________________________________________ EMPIRE FIRE AND : IN THE COURT OF COMMON PLEAS OF MARINE INS. CO. as : CUMBERLAND COUNTY, PENNSYLVANIA subrogee of KUNTZ & : SON, INC., : Plaintiff : CIVIL ACTION - LAW : v. : : RIBBS TRUCKING, INC., : and GREENWICH : INSURANCE : COMPANY, : Defendants : NO. 08-4474 CIVIL TERM IN RE: MOTION FOR SUMMARY JUDGMENT FILED BY GARNISHEE/DEFENDANT GREENWICH INSURANCE COMPANY BEFORE HESS, P.J., OLER and MASLAND, JJ. OPINION and ORDER OF COURT OLER, J., September 13, 2010. In these consolidated cases involving an interesting issue of insurance law, one motor vehicle insurance carrier, in the capacity of a subrogee of its insured, seeks to recover from another motor vehicle insurance carrier on a liability policy issued by the latter to its insured. More specifically, Plaintiff Empire Fire and Marine Insurance Company (Empire), as subrogee of a vehicle owner to which it provided insurance coverage, seeks to recover on a policy issued by Garnishee/Defendant Greenwich Insurance Company (Greenwich) to another vehicle owner, where the Greenwich policy had generally lapsed but remained effective as to one of its federally-mandated endorsements. For disposition at this time is a motion for summary judgment filed by 1 Greenwich seeking, for the third time, a pre-trial termination of the case in its 2 favor. For the reasons stated in this opinion, the request will again be denied. STATEMENT OF FACTS Reduced to the simplest terms, the facts of this case which do not seem to be in dispute may be stated as follows: Plaintiff Empire Fire and Marine Insurance Company provided motor vehicle insurance coverage to the owner of a vehicle which was damaged in an accident by a motor carrier with lapsed motor vehicle 3 insurance that had been issued by Defendant Greenwich Insurance Company. A certain endorsement on the lapsed policy, however, remained in effect at the time 1 Defendant Greenwich Insurance Co.’s Motion for Judgment on the Pleadings, filed Mar. 10, 2009; Defendant Greenwich Insurance Co.’s Motion for Reconsideration or in the Alternative Motion for an Amendment of the Court’s Order To Certify an Interlocutory Appeal, filed May 29, 2009; Defendant Greenwich Insurance Co.’s Motion for Summary Judgment, filed June 1, 2010 (hereinafter Def. Mot. for Summary Judgment, filed June 1, 2010). 2 See Def. Mot. for Summary Judgment, filed June 1, 2010. 3 Def. Mot. for Summary Judgment, filed June 1, 2010; Plaintiff’s Answer to Defendant Greenwich Insurance Co.’s Motion for Summary Judgment, filed July 1, 2010 (hereinafter Pl.’s An. to Def.’s Mot. for Summary Judgment, filed July 1, 2010). 2 of the accident, pursuant to a federal regulation, by reason of Greenwich’s failure 4 to have notified a federal agency of the lapse in coverage. 5 The endorsement on this primary insurance policy that remained in effect was federally mandated for motor carriers such as the insured to assure financial 6 responsibility and included the following federally-prescribed language: The insurance policy to which this endorsement is attached provides automobile liability insurance and is amended [by this endorsement] to assure compliance by the insured, within the limits stated herein, as a motor carrier of property, with Sections 29 and 30 of the Motor Carrier Act of 1980 and the rules and regulations of the Federal Motor Carrier Safety Administration (FMCSA). In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere. Such insurance as is afforded, for public liability, does not apply to injury to or death of the insured’s employees while engaged in the course of their employment, or property transported by the insured, designated as cargo. It is understood and agreed that no condition, provision, stipulation, or limitation contained in the policy, this endorsement, or any other endorsement thereon, or violation thereof, shall relieve the company from liability or from the payment of any final judgment, within the limits of liability herein described, irrespective of the financial condition, insolvency or bankruptcy of the insured. However, all terms, conditions, and limitations in the policy to which the endorsement is attached shall remain in full force and effect as binding between the insured and the company. The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of the policy, and for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement. It is further understood and agreed that, upon failure of the company to pay any final judgment recovered against the insured as provided herein, the 4 Def. Mot. for Summary Judgment, ¶7, filed June 1, 2010; Pl.’s An. to Def.’s Mot. for Summary Judgment, filed July 1, 2010. 5 See Exhibit B (Endorsement for Motor Carrier Policies of Insurance for Public Liability Under Sections 29 and 30 of the Motor Carrier Act of 1980), affixed to Def.’s Mot. for Summary Judgment, filed June 1, 2010; Pl.’s An. to Def.’s Mot. for Summary Judgment, filed July 1, 2010. 6 Illinois Central RR Co. v. Dupont, 326 F.3d 665, 668 (5th Cir. 2003). 3 judgment creditor may maintain an action in any court of competent jurisdiction against the company to compel such payment. The limits of the company’s liability for the amounts prescribed in this endorsement apply separately to each accident and any payment under the policy because of any one accident shall not operate to reduce the liability of the company for the payment of final judgments resulting from any 7 other accident. Greenwich’s insured was an entity “subject to the FMCSA’s [Federal Motor Carrier Safety Administration’s] registration requirements” within the meaning of 8 this provision. In the above-captioned case docketed at No. 08-2216 Civil Term, a default judgment in the amount of $62,131.00 was entered against Greenwich’s insured in connection with property damage allegedly suffered by Empire’s insured in the 910 accident. Having paid its insured on its policy, Empire now seeks to recover 11 from Greenwich as the tortfeasor’s insurer. DISCUSSION On a motion for summary judgment, the record must be viewed “in the light most favorable to the nonmoving party, resolving all doubts as to the existence of a genuine issue of material fact against the moving party.” Atcovitz v. Gulph Mills Tennis Club, Inc., 571 Pa. 580, 585-86, 812 A.2d 1218, 1221 (2002). Summary judgment is not appropriate unless “the facts are so clear that reasonable minds cannot differ.” Id., at 586, 812 A.2d at 1222. The general principle of civil law that a tortfeasor is liable to a tortfeasee for harm caused by the tort is, of course, applicable to motor vehicle accident 7 See Exhibit B (Endorsement for Motor Carrier Policies of Insurance for Public Liability Under Sections 29 and 30 of the Motor Carrier Act of 1980), affixed to Def.’s Mot. for Summary Judgment, filed June 1, 2010; Pl.’s An. to Def.’s Mot. for Summary Judgment, filed July 1, 2010. 8 See Declaratory Judgment Action, ¶9, filed July 25, 2008. 9 See Praecipe for Judgment and Assessment of Damages, filed June 9, 2008. 10 See Def.’s Mot. for Summary Judgment, ¶¶ 5-6, filed June 1, 2010; Pl.’s An. to Def.’s Mot. for Summary Judgment, filed July 1, 2010. 11 Greenwich appears in the action at No. 08-2216 as a garnishee, and in the action at No. 08- 4474 as a defendant. 4 12 cases. In insurance law, it is also generally accepted that an insurer of a tortfeasee that has paid pursuant to the policy will be subrogated to the rights of its 13 insured as against the tortfeasor. Furthermore, in Pennsylvania (a) a motor vehicle insurance carrier, as a subrogee of its insured, may maintain an action against a putative tortfeasor who has caused property damage covered by the policy and may, in the event of a judgment in its favor, join as garnishee the tortfeasor’s motor vehicle insurance 14 carrier for purposes of execution on the judgment and (b) a declaratory judgment action is an appropriate vehicle to determine the issue of the existence of coverage 15 under a motor vehicle insurance policy. In these cases, both procedures are being employed by Empire. From these principles of Pennsylvania law it follows as a general rule that, as between a motor vehicle insurance carrier for a tortfeasor and a motor vehicle insurance carrier for a tortfeasee, the tortfeasor’s insurer will be responsible for 16 property damage suffered by the tortfeasee. Under a federal regulation, a motor carrier of property is, again in general, 17 required to maintain a certain level of financial responsibility and, if that responsibility is provided by virtue of insurance, to have included in the insurance 12 See Pusl v. Means, 2009 PA Super 192, ¶¶17-18, 982 A.2d 550, 555-56. 13 Public Service Mut. Ins. Co. v. Kidder-Friedman, 1999 PA Super 310, ¶7, 743 A.2d 485, 488. Subrogation rights can arise contractually and/or be based upon equitable principles. Valora v. Pennsylvania Employees Benefit Trust Fund, 595 Pa. 574, 587-88, 939 A.2d 312, 320 (2007). 14 See generally Wiilkosz v. Employer’s Liability Assur. Corp., 13 D. & C. 2d 746 (Erie Co. 1957). 15 Pressley v. Travelers Prop. Cas. Corp., 2003 PA Super 58, ¶9, 817 A.2d 1131, 1137-38. 16 See generally Fireman’s Fund Ins. Co. v. Empire Fire & Marine Ins. Co., 152 F. Supp. 2d 687, 689 (E.D. Pa. 2001). 17 Motor Carrier Act of 1980, 49 C.F.R. §387 et seq., P.L. 96-296, July 1, 1980, 94 Stat. 793. 5 18 policy a so-called MCS-90 endorsement. The prescribed form of the 19 endorsement has been quoted above. It has been noted, however, that “where [a] case is concerned with responsibility as between insurance carriers, and not with the federal policy of protecting the public, [federal] considerations are not determinative and a court should consider the express terms of the parties’ contracts.” Carolina Casualty Insurance Company v. Insurance Company of North America, 595 F.2d 128, 138 (3d Cir. 1979). In other words, the mere fact that by reason of a federal regulation a motor carrier must, through insurance or otherwise, secure the public against loss from its negligence does not mean that an indemnity agreement between the insured carrier and another insured tortfeasor with respect to responsibility for 20 such damages, or state law on the subject, will be disregarded. In the present case, the state of the present record does not lead the court to conclude that the position of Empire as subrogee of the putative tortfeasee is inimical as a matter of law either to private agreement or legal precedent in the Commonwealth. Accordingly, the following order of court will be entered: ORDER OF COURT th AND NOW, this 13 day of September, 2010, upon consideration of the motion for summary judgment filed by Defendant/Garnishee Greenwich Insurance Company, and for the reasons stated in the accompanying opinion, the motion is denied. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 18 See Canal Ins. Co. v. Underwriters at Lloyd’s London, 435 F.3d 431, 442 (3d. Cir. 2006). 19 See text accompanying note 3-4, supra. 20 Cf. Carolina Cas. Ins. Co. v. Insurance Co. of North America, 595 F.2d 128 (3d. Cir. 1979). 6 Paul F. D’Emilio, Esq. Paul M. Schofield, Jr., Esq. 905 W. Sproul Road Suite 105 Springfield, PA 19064 Attorneys for Plaintiff Anne R. Myers, Esq. Helen C. Lee, Esq. KAUFMAN DOLOWICH VOLUCK & GONZO, LLP 1777 Sentry Park West Gwynedd Hall, Suite 301 Blue Bell, PA 19422 Attorneys for Garnishee/Defendant, Greenwich Insurance Co. Patricio Leon th 2414 97 Street East Elmhurst, NY 11369 Defendant, pro Se Ribbs Trucking, Inc. 116 Hobart Avenue Bayonne, NJ 07002 Defendant, pro Se 7 8 EMPIRE FIRE AND : IN THE COURT OF COMMON PLEAS OF MARINE INS. CO. as : CUMBERLAND COUNTY, PENNSYLVANIA subrogee of KUNTZ & : SON, INC., : Plaintiff : CIVIL ACTION - LAW : v. : : PATRICIO LEON and : RIBB’S TRUCKING, : Defendants : : and : : GREENWICH : INSURANCE : COMPANY, : Garnishee : NO. 08-2216 CIVIL TERM ___________________________________________________ EMPIRE FIRE AND : IN THE COURT OF COMMON PLEAS OF MARINE INS. CO. as : CUMBERLAND COUNTY, PENNSYLVANIA subrogee of KUNTZ & : SON, INC., : Plaintiff : CIVIL ACTION- LAW : v. : : RIBBS TRUCKING, INC., : and GREENWICH : INSURANCE : COMPANY, : Defendants : NO. 08-4474 CIVIL TERM IN RE: MOTION FOR SUMMARY JUDGMENT FILED BY GARNISHEE/DEFENDANT GREENWICH INSURANCE COMPANY BEFORE HESS, P.J., OLER and MASLAND, JJ. 10 ORDER OF COURT th AND NOW, this 13 day of September, 2010, upon consideration of the motion for summary judgment filed by Defendant/Garnishee Greenwich Insurance Company, and for the reasons stated in the accompanying opinion, the motion is denied. BY THE COURT, _________________ J. Wesley Oler, Jr., J. Paul F. D’Emilio, Esq. Paul M. Schofield, Jr., Esq. 905 W. Sproul Road Suite 105 Springfield, PA 19064 Attorneys for Plaintiff Anne R. Myers, Esq. Helen C. Lee, Esq. KAUFMAN DOLOWICH VOLUCK & GONZO, LLP 1777 Sentry Park West Gwynedd Hall, Suite 301 Blue Bell, PA 19422 Attorneys for Garnishee/Defendant, Greenwich Insurance Co. Patricio Leon th 2414 97 Street East Elmhurst, NY 11369 Defendant, pro Se Ribbs Trucking, Inc. 116 Hobart Avenue Bayonne, NJ 07002 Defendant, pro Se