An insurance company was recently found not liable for damages because the truck blamed for causing an accident was actively involved in intrastate shipping, and not listed under the policy in question.
The decision in the case, Lyles v. FTL, was written Thomas E. Johnston, chief judge at the United States District Court for the Southern District of West Virginia.
According to court documents, Patricia Lyles was stopped at a red light on U.S. 119 in November 2014 when a loaded dump truck collided with her vehicle.
The truck was owned by K&K Trucking, but leased to FTL Inc. It was hauling materials from a building demolition site in Chapmanville, WV, to a landfill in Charleston, WV.
The rear-end collision forced Lyles’ vehicle off the road, causing permanent physical and psychological injuries, according to her lawsuit.
As part of an initial settlement, insurance firm National Casualty Company paid Lyles about $945,000 on behalf of K&K. The agreement allowed her to seek additional compensation from FTL.
Both K&K and FTL had insurance policies with National Casualty, along with the federally required MCS-90 endorsement.
K&K’s agreement with FTL stated it would obtain $1 million of liability coverage, and name FTL as an additional insured on the policy. However, the dump truck in the accident was not listed as a covered vehicle on FTL’s policy, leading National Casualty to deny further coverage.
National Casualty contended there was no liability under the MCS-90 endorsement because the dump truck was engaged in an intrastate trip at the time of the accident.
The judge agreed, stating “the fact that the trucking agreement between FTL and K&K contemplates occasional interstate transportation of property does not alter the nature of the accident at issue, which occurred during an intrastate shipment.”
Had this been an interstate shipment, FTL could potentially have been also been responsible for damages. The MCS-90 endorsement is required to provide all sides additional protection when using rented trucks, borrowed trailers, and any equipment not specifically covered under an insurance policy.
During a recent webinar, attorneys with Fox Rothschild LLP suggested that nuanced cases such as this one are becoming more commonplace across the country as more companies turn to independent contractors for at least some work.
Attorneys Fredric Marcinak and Rob Green recommended that fleets not overlook even the smallest detail when selecting insurance coverage and writing contracts.
They noted it is also important to stay on top of recent legal decisions across the country, which can be used to help guide strategies when litigation may arise. In this particular case, it could affect other pending cases in other jurisdictions involving intrastate trucking disputes.