Militello et al v. Ican Logistics Inc et al, No. 5:2017cv00290 - Document 75 (W.D. Okla. 2018)
Court Description: ORDER denying the amended motion for summary judgment 49 filed by third-party defendant Wesco and the motion for partial summary 57 filed by plaintiff Militello...see order for specifics. Signed by Honorable Joe Heaton on 4/11/2018. (cla)
Download PDF
<![CDATA[
t for the MCS-90 endorsement to be triggered have not been satisfied here. It contends that a final judgment has not been entered against Hongyue, the named insured, and “the other motor carrier’s aggregate coverage is [sufficient] to satisfy the federally mandated minimum levels of financial responsibility.” Doc. #49, p. 25. 7 Wesco also argues that, for the endorsement to be triggered, Hongyue must have been “operating as a for-hire motor carrier at the time of the accident.” Herrod v. Wilshire Ins. Co., 499 Fed. Appx. 753, 760 (10th Cir. 2012). As explained by the Tenth Circuit in Herrod, the “financial responsibility requirements of the MCA apply to ‘motor carriers.’” Herrod, 499 Fed. Appx. at 759 (citing 49 U.S.C. §31139(b)). The MCA defines the term as “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). A “motor carrier” is defined by the regulations promulgated pursuant to the MCA and accompanying the MCS-90 endorsement as a “for-hire motor carrier or a private motor carrier.” 49 C.F.R. § 387.5. “[F]or-hire carriage is defined as “the business of transporting, for compensation, the goods or property of another.” Id. A motor carrier includes “a motor carrier’s agent, officer, or representative.” 49 C.F.R. § 387.5. Wesco claims ICAN was the for-hire carrier, not Hongyue, when the tractor trailer Wang was driving collided with the decedent’s car. It also asserts that the MCS-90 endorsement in Wesco’s Policy is not triggered because other 7 Wesco assert that the policy issued by Arch Insurance Company, a nonparty, to ICAN (the other motor carrier) provides $1,000,000 in coverage, which meets the federally–mandated minimum. 6 insurance is available to provide the federally mandated minimum coverage. Plaintiff claims Hongyue was a, if not the, for-hire carrier when the accident occurred. The court agrees with Wesco that the MCS-90 endorsement cannot be triggered unless and until Ms. Militello obtains a negligence judgment against Hongyue. See Yeates, 585 F.3d at 879. It does not agree with Wesco, though, that it is relieved of its MCS-90 surety obligation because the federally mandated limits are available through another insured’s policy (here ICAN’s policy with Arch). Several courts, including the Tenth Circuit in an unpublished opinion, have rejected the position urged by Wesco that “the public liability to be satisfied is per accident, not per carrier.” Fairmont Specialty Ins. Co. v. 1039012 Ontario, Inc., 2011 WL 3651333, at *3 (N.D. Ind. Aug. 19, 2011); see Herrod, 499 Fed. Appx. at 759-60. The critical issue is whether Hongyue was “transporting the goods of another for compensation at the time of the accident in order to qualify it as a forhire motor carrier for purposes of triggering [Wesco’s] MCS-90 obligation.” Id. at *5 n.7; see 49 C.F.R. § 387.5. Material questions of fact exist which preclude its resolution. The lease Hongyue and ICAN executed required Hongyue to employ the driver to operate the leased equipment and to pay all expenses associated with operating the tractor trailer during the term of the lease including, but not limited to, fuel, maintenance, and repair costs. Doc. #57-1, p. 1, ¶4. The lease did not include any reference to compensation. Among other thing it did not identify “[t]he amount to be paid by the authorized carrier for 7 equipment and driver’s services” as required by 49 C.F.R. 376.12(d). 8 While, as Wesco points out, ICAN received payment for the shipment of goods that were being transported on the day of the accident, it immediately turned around the next day and paid that entire sum to Hongyue. See Park Ins. Co. v. Lugo, 2015 WL 1535791, at *5 (S.D.N.Y. April 6, 2015) (“Here, the relationship between Sav–On and Eco was much more than that of lessor and lessee. Sav–On maintained close control over Eco's operations of the vehicle. Sav–On provided cash advances and general financing for any upkeep of the vehicle. Sav–On, and not Eco, received direct payment for the vehicle's transportation services.”). That is sufficient evidence from which a reasonable jury could conclude that Hongyue was operating as a for-hire carrier at the time of the accident. Wesco’s motion for summary judgment will therefore be denied. Plaintiff’s motion for partial summary judgment will also be denied because the evidence is disputed as to Hongyue’s status on March 6, 2016. One additional matter needs to be addressed. In its response to plaintiff’s motion for summary judgment, Wesco raises a new argument – that because Hongyue is an insured under the policy Arch provided to ICAN, Hongyue’s insurance coverage is sufficient to satisfy the MCA’s financial responsibility requirements so the MCA-90 endorsement under its policy with Wesco is not triggered. 9 Plaintiff contends that, pursuant to the terms of the 8 Under the paragraph heading “Compensation,” the Agreement states, “Lessor will be compensated for lease of the equipment in the following manner: Lessor shall pay 0% of the gross earning of the Equipment each week.” Doc. #57-1, p. 1. 9 The Tenth Circuit and other courts have concluded that the MCS-90 endorsement is not triggered if the motor carrier’s insurance coverage is sufficient to meet the federally-mandated minimum levels. See Yeates, 584 F.3d at 885-86. 8 Arch policy and the lease agreement between Hongyue and ICAN, the Wesco policy is deemed primary and the Arch policy is considered to provide excess coverage. Plaintiff argues that, because under California law primary insurance must be exhausted before a secondary insurer has exposure, “Hongyue would only have coverage under the Arch policy once its MCS-90 coverage is exhausted.” Doc. #63, p. 10. Plaintiff also asserts that Wesco’s new position is barred by the “mend the hold” doctrine. The court will not consider Westco’s argument that Hongyue is considered an insured under the Arch policy at this time. That coverage issue has not been sufficiently briefed, plus plaintiff raises serious questions as to whether Westco should be allowed to assert a new position late in the proceedings. Notably Westco did not rely on the argument in support of its motion for summary judgment, but asserted it only in response to plaintiff’s motion. Material questions of fact exist regarding Hongyue’s status as a for-hire motor carrier at the time of the accident underlying plaintiff’s claims. Accordingly, the amended motion for summary judgment [Doc. #49] filed by third-party defendant Wesco and the motion for partial summary [Doc. #57] filed by plaintiff Militello are DENIED. IT IS SO ORDERED. Dated this 11th day of April, 2018. 9
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
