In Gramercy Insurance
Co. v. Expeditor’s Express, Inc., 2104 U.S. App. LEXIS 15262 (6th
Cir. Aug. 5, 2014), a truck driver died after the truck he was driving suffered
a flat tire, veered off the road, turned over and caught fire. As a result, the
driver’s estate sued the trucking company, the owner of the truck and others in
state court. The trucking company asked its insurance company to defend the
lawsuit and indemnify it against any judgment. In response, the insurer filed a
declaratory judgment action in federal court to determine whether it had any
responsibility for coverage.
The insurance policy did not cover “bodily injury” to any of
the trucking company’s employees arising out of and in the court of their
employment with the trucking company or performing duties related to the
conduct of the trucking company’s business. The policy defined the term “employee”
to include a “leased worker” or a person leased to the trucking company by a
labor leasing firm under an agreement between the trucking company and the
labor leasing firm, but it did not include a “temporary worker,” or a person furnished
to the trucking company to substitute for a permanent employee on leave or to
meet seasonal or short-term workload conditions.
The insurer moved for judgment on the pleadings which
consisted of the complaint, the answer, and the insurance policy. The district
court granted the insurer’s motion, finding that the insurance policy did not
apply because the driver was an “employee” of the trucking company.
On appeal, the Sixth Circuit was asked to review the issue
of whether the truck driver was actually an “employee” of the trucking company
and, therefore, excluded from coverage under the policy issued by the insurer.
According to the pleadings, at the time of the accident, the
truck driver was transporting magazines from Tennessee to Georgia for the
trucking company in a truck owned by a third party and leased to the trucking
company. However, the pleadings did not answer the central question of whether
the truck driver was an “employee” of the trucking company.
To overcome this issue, the insurer pointed to an
endorsement which amended the policy to require the insured to comply with
Sections 29 and 30 of the Motor Carrier Act of 1980 and its relevant rules and
regulations. The insurer argued that by way of this endorsement, the truck
driver was an “employee” because the Motor Carrier Act of 1980 includes a
broader definition of “employee” that includes any “operator of a commercial
motor vehicle” who “directly affects commercial motor vehicle safety in the
court of employment” and who is not a government employee.
The Sixth Circuit disagreed, holding that the relevant
language of the endorsement did not incorporate the Motor Carrier Act’s
definition of “employee” into the policy. Rather, the endorsement, instead,
acted as a form of extra insurance for the policy. Therefore, if the policy covered
less than the Act required, the endorsement amended the policy to comply with
the Act. However, here, the policy covered more than the Act required. This is
because the policy used a narrower definition of employee than the Act permits.
Therefore, the policy covered more people, or in other words, excluded fewer
people from coverage. Accordingly, the Sixth Circuit reversed the judgment of the
district court and remanded it for further proceedings.
