INSURANCE (MCS 90) / Context: Lawsuit following three-fatality truck accident. Where neither motor carrier deemed responsible for accident nor defendant insurance company intended that such insurance company insure operation of the tractor used in the accident, and such insurance company therefore did not issue an MCS-90 – held: The court refused to rule that MCS-90 coverage was “implied in law”.

“[Defendant insurance company] did not undertake to insure [defendant motor carrier’s] trucking operations and, importantly from a ‘policy’ standpoint, the victims had available to them the $3,000,000 coverage provided by [tractor lessee’s] insurers. Tragically, that coverage is not adequate, but it nevertheless far exceeds the statutory minimum.

“In sum, the Court will not rewrite the [defendant insurance company’s] policy to incorporate a MCS-90 endorsement.”

Grange Mutual Casualty Co. v. Pinson Trucking Co., Inc., Slip copy, 2013 443619 (U.S. District Court for the Middle District of Georgia, February 5, 2013). Free copy available here.  Continue reading

FREIGHT LOSS STATUTE (CARMACK) / Subcontractor held liable to shipper’s insurer for collision damage where insurer brought suit as subrogee against motor carrier and carrier’s subcontractors: (1) Carmack did not extend carrier’s limitation on liability to third-party contractors; and (2) federal law of bailment did not extend shipping contract limitation did not extend bailee’s limitation to bailee’s sub-bailees.

Extension of liability limitations in shipper-carrier contract to third-party subcontractors was entirely a function of contract language that would express parties’ intent to that end – or the lack of such language.

Royal & Sun Alliance Ins., PLC v. International Management Services Co., Inc., — F.3d —, 2013 WL 57847 (U.S. Court of Appeals for the 2nd Circuit, January 7, 2013). Free copy available here.


“I. Carmack Amendment Continue reading


Ritter v. Penske Trucking Leasing Co., L.P., 2012 WL 6049186 (Wisconsin Court of Appeals, December 6, 2012). Free copy available here.

Court construction of insurance policy rejecting major truck lessor’s argument that insurance company should have accepted its tender of defense for claims against truck lessor for equipment failure of truck it had leased to operator of truck – where court found that policy covered only such operator of truck and made no mention of truck lessor. Continue reading

CASE STUDY: MOTOR CARRIER & INSURANCE / California Court of Appeals for the 1st District rules that one insurer can recover from another insurer under an MCS-90 endorsement – Any operative effect elsewhere in light of prevailing contrary law?

Global Hawk Insurance Co. v. Century-National Insurance Co., 203 Cal.App.4th 1458, 138 Cal.Rptr. 363, (California Court of Appeal, 1st Dist. February 29, 2012). Free copy of opinion available here.


Despite prevailing precedent elsewhere, in California Court of Appeals 1st District on these facts, issuer of MCS-90 endorsement can be required to reimburse directly another insurer. Put another way, MCS-90 extends beyond just the driving public who may be injured by an otherwise judgment proof motor carrier.

What Happened: 

  • Motor Carrier #2′s driver injured in collision with Motor Carrier #1’s truck.
  • Issuer of Motor Carrier #1’s MCS-90 was also its liability policy insurer.
  • Motor Carrier #1’s colliding truck not listed on schedule of liability policy.
  • Motor Carrier #2’s driver filed claim with Motor Carrier #1’s MCS-90 endorser and liability insurer (one and the same company) – and was declined due to absence of truck from liability policy vehicle schedule.
  • Motor Carrier #2’s uninsured motorist policy insurer paid driver $100,000 policy limits because Motor Carrier #1 “uninsured” as to particular truck.

Arguments & Decision:

Issuer of MCS-90 to Motor Carrier #1: MCS-90 functions as a “surety” – “not insurance”. It’s “protected class” is “the public that share the roads with big rigs” – not other insurers.

Uninsured Motorist Policy Insurer to Motor Carrier #2: Despite citation of cases from around the U.S., no California court has held what MCS-90 issuer argues here – that MCS-90’s “protected class” is restricted to “the public” and inoperative as to other insurers. If direct reimbursement not allowed here between insurers, it raises unfair procedural to those MCS-90 meant to protect: Those harmed by “fly-by-night” motor carriers that lack financial resources to shoulder financial responsibilities.

The Court: Despite absence of relevant Motor Carrier #1 truck from liability policy, MCS-90 endorsement required insurer to reimburse uninsured motorist insurer that paid out claim to $100,000 policy limit after liability insurer for Motor Carrier #1 refused on grounds that relevant truck was absent from policy schedule.

So What?

The question for the future is whether or not this holding will be limited to its specific facts (whose detail would consume more paragraphs) – at least within the jurisdiction covered by the California intermediate level appellate court that issued this ruling.

The case appears to go against a major en banc (full circuit of judges after initial decision by a three-judge panel of this circuit) holding for the U.S. Court of Appeals for the 10th Circuit which ruled that an MCS-90 endorsement applies only where both (1) underlying insurance policy to which MCS-90 endorsement is attached does not provide coverage for a motor carrier’s accident, and (2) motor carrier’s insurance coverage is either not sufficient to satisfy the federally-prescribed minimum levels of financial responsibility or it is non-existent. Carolina Casualty Insurance Co. v. Yeates, 584 F.3d 868, 875-79 (10th Cir. 2009)(See multiple precedents from around the federal appellate circuits).

Global Hawk’s core subtlety is that (1) there was liability insurance coverage for the motor carrier, and (2) such coverage was in fact sufficient to cover federally-mandated minimum financial responsibility – but neither (1) nor (2) was true of the particular truck involved in the accident.

Petition for review by the California Supreme Court was denied June 13, 2012, but legal argument on this MCS-90 point remains: 

The question nationwide is whether or not this holding will eventually be adopted elsewhere in the nationwide – or whether instead it stands as a minor one-off instance of judicial activism that will comprise at best a distinctly minority position, with decisions like Carolina Casualty Insurance Co. v. Yeates continuing to comprise the majority view.