United States District Court, D. Maryland
W. Grimm United States District Judge.
November 2016, I issued a Memorandum Opinion in the instant
declaratory-judgment action holding Plaintiff Titan Indemnity
Company (“Titan”) not liable for a fatal accident
involving a truck driven by Defendant Santos Sifredo Romero
Garcia under a policy the insurance company issued to
Defendant Gaitan Enterprises, Inc. (“Gaitan”).
Mem. Op. 9-10, ECF No. 72. I also conditionally held that Titan
had no duties or obligations under an endorsement called an
MCS-90 that federal law requires to be attached to trucking
insurance policies. Id. at 11-12; see also
49 U.S.C. § 31139. I reached this conclusion because the
MCS-90 endorsement only covers liability incurred by an
insured named in the underlying insurance policy, Forkwar
v. Progressive Ins. Co., 910 F.Supp.2d 815, 825-26 (D.
Md. 2012), and the Titan policy named neither Garcia nor his
trucking companies, Form MCS-90, J.A. 14, ECF No.
Although the policy did name Gaitan, I understood the
company's only potential source of liability to stem from
Defendants' argument, which I rejected, that Garcia's
truck was a “temporary substitute” for a Gatain
truck that was out of commission on the day of the accident.
Mem. Op. 8-10. But because Titan did not argue that
Garcia's non-insured status resolved the issue, I
provided the Defendants an opportunity to show cause why my
conditional ruling was erroneous. Id. at 12.
response to my show-cause order, Defendants explain that,
despite my rejection of their “temporary
substitute” theory, Gaitan may still be found
vicariously liable for the accident in the pending case
before the Circuit Court for Prince George's County.
Defs.' Resp. 4-5, ECF No. 74. It was not apparent to me
from the state-court complaint or from the summary-judgment
briefing that the state-court plaintiffs assert a theory of
vicarious liability separate and apart from their
“temporary substitute” argument. See
Cir. Ct. Prince George's Cty. Second Am. Compl., J.A.
1-12. But Titan does not appear to dispute that Gaitan's
vicarious liability remains at issue in the state-court
action. See Pl.'s Reply to Defs.' Resp. 5-6
& n.1, ECF No. 75. Defendants cite Integral Insurance Co.
v. Lawrence Fulbright Trucking, Inc., 930 F.2d 258, 262
(2d. Cir. 1991), for the proposition that a MCS-90
endorsement may require an insurer to cover an insured's
vicarious liability, Defs.' Resp. 5, and neither
Titan's Reply nor my independent research has identified
authority to the contrary. Accordingly, I will now consider
the arguments raised by the parties in their original
summary-judgment briefing concerning the MCS-90 endorsement.
In doing so, I find that Titan would be required to pay for
any final judgment holding Gaitan vicariously liable for
Garcia's negligence, because the accident occurred during
interstate transportation of property.
judgment is proper when the moving party demonstrates,
through “particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations . . .,
admissions, interrogatory answers, or other materials,
” that “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A); see
also Baldwin v. City of Greensboro, 714 F.3d 828, 833
(4th Cir. 2013). If the party seeking summary judgment
demonstrates that there is no evidence to support the
nonmoving party's case, the burden shifts to the
nonmoving party to identify evidence that shows that a
genuine dispute exists as to material facts. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 585-87 & n.10 (1986). The existence of only a
“scintilla of evidence” is not enough to defeat a
motion for summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 251-52 (1986). Instead, the
evidentiary materials submitted must show facts from which
the finder of fact reasonably could find for the party
opposing summary judgment. Id.
MCS-90 “creates a suretyship by the insurer to protect
the public when the insurance policy to which the MCS-90
endorsement is attached otherwise provides no coverage to the
insured.” Canal Ins. Co. v. Distrib. Servs.,
Inc., 320 F.3d 488, 490 (4th Cir. 2003). Specifically,
the endorsement requires the insurer to pay for 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 . . . the Motor Carrier Act of
1980.” Form MCS-90, J.A. 14; see also 49
C.F.R. § 387.15, illus. 1. Thus, for the Titan
Policy's MCS-90 endorsement to cover liability arising
out of the accident, Garcia's vehicle must have been
subject to the Motor Carrier Act's
financial-responsibility requirements. The Motor Carrier
Act's minimum-financial-responsibility requirements apply
to “transportation of property by motor carrier . . .
in the United States between a place in a State and . . . (A)
a place in another state; (B) another place in the same State
through a place outside of that State; or (C) a place outside
the United States.” Motor Carrier Act, § 30, 49
U.S.C. § 31139(b). In other words, the MCS-90 only
covers accidents that occur during the interstate
transportation of property.
argues that it cannot be required to pay for any judgment
against Gaitan pursuant to the MCS-90 because, but for the
accident, Garcia would have hauled asphalt from the Fort
Meyer plant in Washington, D.C. to its final destination
without leaving the District. Pl.'s Mem. 28, ECF No. 60-2.
The Defendants argue that the relevant inquiry for MCS-90
coverage is whether the insured engages in interstate
shipping generally and, in any event, that the shipment at
issue constituted interstate shipping because the trip began
at Garcia's parking spot in Landover, Maryland.
Defs.' Opp'n 18-20, ECF No. 63.
have divided over whether the interstate or intrastate nature
of a shipment should be judged based exclusively upon the leg
of the shipment during which the accident occurs; the
entirety of the shipment; or, most broadly, the type of
commerce in which the shipper engages. This issue is one of
first impression in the Fourth Circuit. Brunson ex rel.
Brunson v. Canal Ins. Co., 602 F.Supp.2d 711, 715
(D.S.C. 2007). The Fifth Circuit has interpreted the statute
most narrowly, holding that “the [MCS-90] endorsement
covers vehicles only when they are presently engaged in the
transportation of property in interstate commerce.”
Canal Ins. Co. v. Coleman, 625 F.3d 244, 249 (5th
Cir. 2010). In Coleman, the accident at issue
occurred while a truck driver was parking his truck
“bobtail” (i.e. a tractor with no trailer
attached) at his home. Id. at 246. In the lower
court proceedings, the parties stipulated that, as the driver
was not hauling any cargo at the time of the accident, he
“was not engaged in transportation of property at the
time of the accident, ” making it easy for the
appellate court to find the MCS-90 inapplicable under its
test. Id. at 249, 254.
Eighth Circuit has adopted a somewhat broader test, though
one that in my view is not necessarily inconsistent with the
Fifth Circuit's interpretation. The Eighth Circuit has
held that whether or not property has traveled in interstate
commerce for MCS-90 purposes must be determined “at the
time of accident, ” but the court assesses whether a
shipment is interstate or intrastate by examining “the
‘essential character' of the shipment” from
the vantage point of the “shipper's intent.”
Century Indemnity Co. v. Carlson, 133 F.3d 591, 595,
599 (8th Cir. 1998) (quoting Roberts v. Levine, 921
F.2d 804, 812 (8th Cir. 1990)). In Carlson, the
court addressed the applicability of an MCS-90 endorsement to
an accident that occurred while a truck hauled corn from a
Minnesota farm to a river terminal. Id. at 593-94.
Although the route from the farm to the terminal was entirely
within Minnesota-state lines, the court characterized the
shipment as interstate because the farmer intended his grain
to be shipped from the river terminal to ports along the
length of the Mississippi River. Id. at 598-99. The
only Fourth Circuit court that has considered this question
has adopted the Eighth Circuit's test. Brunson,
602 F.Supp.2d at 717.
an even broader approach, in Royal Indemnity Co. v.
Jacobsen, a district court applied a MCS-90 endorsement
to a shipment of alfalfa hay, a product exempt from Motor
Carrier Act regulation. 863 F.Supp. 1537, 1541 (D. Utah
1994). Noting that “the purpose of the [MCS-90]
endorsement [is] to provide financial protection to members
of the public and shippers, ” id. at 1541-42
(quoting Empire Fire & Marine Insurance Co. v.
Guarantee National Insurance Co., 868 F.2d 357, 366 n.13
(10th Cir. 1989)), the court refused to exclude the shipment
at issue from MCS-90 coverage based on the “totally
fortuitous” happenstance that the carrier was
“hauling hay on the day of the accident instead of some
other” non-exempt product, ” id. at
1542. To vindicate the Motor Carrier Act's purpose, the
court held that the MCS-90 provides coverage whenever a
carrier that owns a policy to which the endorsement is
attached is liable for an accident for which the underlying
policy provides no coverage. Id. Similarly, in
Reliance National Insurance Co. v. Royal Indemnity
Co., a district court found that a MCS-90 applied to an
accident that occurred while a truck pulled a float in a
parade that occurred entirely within New York City. No. 99
Civ. 10920 NRB, 2001 WL 984737, at *1, *6 (S.D.N.Y. Aug. 24,
2001). Even though the truck was not engaged in interstate
commerce at the time of the accident, the court held that the
MCS-90 applied because the insured leased the truck
driver's services for the purpose of interstate trucking.
Id. at *6.
Defendants urge this Court to adopt the broadest
interpretation of MCS-90 coverage. Defs.' Opp'n 19-20
(citing Jacobsen, 863 F.Supp. at 1541-42). I decline
to do so because I find the approach inconsistent with the
statute's text. The MCS-90 is the mechanism established
by the Department of Transportation to impose the
“minimum levels of financial responsibility”
required by § 30 of the Motor Carrier Act. 49 U.S.C.
§ 31139(b); 49 C.F.R. § 387.7(d). And those
requirements exist to “satisfy liability . . . for the
[interstate] transportation of property by motor
carrier.” 49 U.S.C. § 31139(b). The
Jacobsen and Reliance National courts
envisioned the MCS-90 as satisfying liability for intrastate
“transportation of property” that does not meet
the limited scope articulated in § 30 of the statute.
Accordingly, I am not persuaded that the approach taken by
the Jacobsen and Reliance courts is
appropriate. As between the Fifth Circuit and Eighth Circuit
interpretations, as I mentioned previously, I do not see them
as inconsistent with one another. In Coleman, the
Fifth Circuit had no occasion to consider whether the MCS-90
covers accidents that occur during intrastate legs of larger
interstate shipments, as the Eighth Circuit did in
Carlson, 133 F.3d at 598-99, because the parties
stipulated that the accident did not occur while the driver
was transporting property, Coleman, 625 F.3d at
I therefore hold that a court must “examine the
‘essential character' of the shipment from the
shipper's intent” at the time of accident in order
to determine whether a shipment constitutes interstate
transportation of property for MCS-90 purposes.
Carlson, 133 F.3d at 598 (quoting Levine,
921 F.2d at 812).
argues that the shipment at issue in this case does not
constitute interstate transportation under this trip-specific
test for three reasons: (1) “the accident took place on
private property”; (2) “[t]he truck was not
carrying any cargo at the time of the accident”; and
(3) had Garcia hauled the cargo, he would not have left the
District of Columbia between picking up and dropping off the
cargo at its final destination. Pl.'s Reply 6, ECF No.
Based on these arguments, it appears that Titan assumes that
the word “transportation, ” as used in § 30,
means “[t]he movement of goods or persons from one
place to another by carrier, ” Transportation,
Black's Law Dictionary (10th ed. 2014). But the statute
defines the term exceptionally broadly to include
“services related to” the movement of property.
49 U.S.C. § 13102(23)(B). Such related services include
“arranging for, receipt, delivery, elevation,
transfer in transit, refrigeration, icing, ventilation,
storage, handling, packing, unpacking and interchange of . .
. property, ” id. (emphasis added), performed
using not just the “motor vehicle” itself, but
also any “vessel, warehouse, wharf, pier, dock, yard,
property, facility, instrumentality, or equipment of any kind
related to the movement of . . . property.”
Id. § 13102(23)(A).
record shows that, at the time of the accident, Garcia was
waiting in line at the Fort Meyer yard to fill his truck bed
with a load of asphalt, see Garcia Dep. 29:11-30:1,
J.A. 119-20. In other words, Garcia was in the process of
“receiving” the cargo he was to haul at Fort
Meyer's “yard, ” terms explicitly included
with within the statutory definition of
“transportation.” And while Titan maintains that
the shipment was to take place entirely within the District
of Columbia, Fort Meyer “arrang[ed] for” the
movement of its asphalt by calling Marvin Gaitan, the owner
of Gaitan Enterprises, and asking him to send trucks from his
parking lot in Landover, Maryland. 2013 Gaitan Dep. 6:14-21,
8:19-21, J.A.144, 146; 2016 Gaitan Dep. Vol. I 22:4-5, J.A.
185. When Fort Meyer called Gaitan to arrange for its asphalt
to be hauled, it ...