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Martinez v. Empire Fire and Marine Insurance Co.

Supreme Court of Connecticut

July 12, 2016

RENEE MARTINEZ
v.
EMPIRE FIRE AND MARINE INSURANCE COMPANY

          Argued November 10, 2015

          Hugh D. Hughes, with whom, on the brief, was Vincent R. Falcone, for the appellant (plaintiff).

          Daniel P. Scapellati, with whom, on the brief, was Tracy L. Montalbano, for the appellee (defendant).

          Margaret A. Little filed a brief for the New England Legal Foundation as amicus curiae.

          Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald, Espinosa and Robinson, Js.

          OPINION

          ESPINOSA, J.

         In this certified appeal, we must determine whether a federally mandated insurance endorsement, known as an MCS-90 endorsement, requires the defendant, Empire Fire and Marine Insurance Company, to pay a judgment in favor of the plaintiff, Renee Martinez, [1] for injuries resulting from a motor vehicle accident. A truck being driven by an employee of the defendant's insured, Tony's Long Wharf Transport, LLC (Tony's), collided with a car being driven by the plaintiff, causing the plaintiff injuries. The plaintiff obtained a judgment against Tony's for negligence, and the judgment remains unpaid. The plaintiff sought to collect the unpaid judgment from the defendant, Tony's insurer, but the defendant denied responsibility under its policy with Tony's. The parties disagree whether the MCS-90 endorsement included in Tony's policy applies only to liability arising during interstate transportation, or whether it applies more broadly to liability arising from any accident caused by the negligence of a motor carrier with an MCS-90 endorsement on its policy, even if the accident occurs during an entirely intrastate trip. If the endorsement applies only to interstate transportation, the parties also dispute whether the particular trip at issue here was interstate in nature.

         We conclude that the MCS-90 endorsement does not apply to the accident at issue because it applies only to liability arising from the transportation of property in interstate commerce, and the accident at issue occurred while Tony's truck was on an intrastate trip entirely within Connecticut.

         I

         A

         Federal law requires certain motor carriers-essentially, companies that transport goods by motor vehicle-to maintain minimum levels of financial responsibility to cover liability arising from the motor carrier's transportation of property in interstate commerce. 49 U.S.C. § 31139; see also 49 C.F.R. § 387.3. Congress authorized the Secretary of Transportation (secretary) to prescribe regulations to carry out this mandate; 49 U.S.C. § 31139 (b); and the implementing regulations can be found at 49 C.F.R. § 387.1 et seq. The minimum levels set by the regulations apply to ‘‘for hire motor carriers operating motor vehicles transporting property in interstate . . . commerce.'' 49 C.F.R. § 387.3 (a); see also id., § 387.1. The amount of financial responsibility motor carriers must maintain varies based on the type of carriage (e.g., for hire or private) and the type of goods being transported (e.g., hazardous or nonhazardous). Id., § 387.9.

         Motor carriers can show compliance with the requirements by, among other methods, including in their liability insurance policies an MCS-90 endorsement in the form set forth in 49 C.F.R. § 387.15. Id., § 387.7 (b) (1) (ii). The MCS-90 endorsement is essentially a surety obligation that compels an insurer to pay certain judgments against the insured, even if the insurance policy otherwise excludes coverage. Canal Ins. Co. v. Cole-man, 625 F.3d 244, 247 (5th Cir. 2010); Carolina Casualty Ins. Co. v. Yeates, 584 F.3d 868, 878 (10th Cir. 2009). By its terms, the insurer must ‘‘pay, within the [specified] limits of liability . . . 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 [49 U.S.C. § 31139], '' and it must do so ‘‘regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere.'' 49 C.F.R. § 387.15, illustration I.

         B

         The material facts are not in dispute. The defendant issued a commercial insurance policy to Tony's that included an MCS-90 endorsement. Tony's is a towing company based in New Haven that operates in Connecticut and New York. On the date of the accident, Tony's directed one of its employees in New Haven to drive to Hamden to pick up repair parts for its tow trucks from a dealer, and drive them back to its New Haven facility. Tony's intended to use the parts to repair tow trucks that would later be used outside of Connecticut. The employee drove one of Tony's trucks, a wrecker, to travel to the parts dealer. While traveling from New Haven to Hamden, the truck driven by Tony's employee collided with a car driven by the plaintiff, and the plaintiff sustained injuries during the crash. The plaintiff obtained a judgment against Tony's for negligently causing her injuries, but Tony's has not paid the judgment.

         The plaintiff brought the present action against the defendant as a judgment creditor pursuant to General Statutes § 38a-321, claiming that Tony's insurance policy issued by the defendant requires the defendant to pay the judgment. Although the policy did not list the truck involved in the accident as a covered vehicle on the date the accident occurred, the plaintiff has claimed that payment is nevertheless due under the MCS-90 endorsement.

         The defendant denied that it was responsible for Tony's liability for the accident and moved for summary judgment. The defendant argued that the MCS-90 endorsement applies only to liability arising from the interstate transportation of property, and not to any liability for accidents occurring while the motor carrier's vehicle is on a purely intrastate trip. Under this interpretation, commonly called a ‘‘trip-specific'' interpretation, coverage turns on whether the specific trip at issue by the motor carrier was interstate in nature. According to the defendant, the accident at issue in the present case did not qualify because it occurred during a trip entirely within the state of Connecticut.

         The plaintiff objected to the motion. Disagreeing with the defendant's trip-specific approach, the plaintiff urged the trial court to adopt a broader interpretation of when the MCS-90 endorsement applies. The plaintiff argued that the MCS-90 endorsement covers a commercial carrier's liability for any accident caused by the motor carrier's negligence, irrespective of whether the particular trip was interstate or not, as long as the carrier had the endorsement on its liability insurance policy at the time of the accident. Alternatively, the plaintiff argued that, even if the MCS-90 endorsement applies only to interstate travel, the accident at issue here qualifies for coverage because it occurred while Tony's truck was en route to pick up parts that would be installed in trucks that would later move across state lines in interstate commerce.

         The trial court rendered summary judgment in favor of the defendant. Relying on a case from the United States Court of Appeals for the Second Circuit, Lyons v. Lancer Ins. Co., 681 F.3d 50, 57-60 (2d Cir. 2012), cert. denied, U.S., 133 S.Ct. 1242, 185 L.Ed.2d 178 (2013), the trial court adopted the defendant's suggested trip-specific interpretation, and concluded that the MCS-90 endorsement applied only to accidents occurring while the motor carrier's vehicle was moving in interstate commerce. Applying the trip-specific interpretation to the undisputed facts, the trial court determined that the MCS-90 endorsement did not apply because Tony's truck was engaging in a purely intrastate trip to pick up repair parts when the accident occurred. According to the trial court, Tony's intention to install those parts into trucks that it intended to later use across state lines did not change the intrastate character of the specific trip at issue. The trial court thereafter rendered judgment in favor of the defendant.

         The plaintiff appealed from the judgment of the trial court to the Appellate Court, which affirmed the judgment on an alternative ground.[2] Martinez v. Empire Fire & Marine Ins. Co., 151 Conn.App. 213, 216, 226, 94 A.3d 711 (2014). We then granted the plaintiff's petition for certification to appeal.[3] Martinez v. Empire Fire & Marine Ins. Co., 314 Conn. 924, 100 A.3d 855 (2014). Because we conclude that the trial court properly applied a trip-specific analysis and that Tony's truck was not operating in interstate commerce at the time of the accident, we affirm the Appellate Court's judgment on that basis and do not address the alternative ground relied upon by the Appellate Court.

         II

         A trial court's decision on whether to grant a motion for summary judgment presents a question of law, and our review of that decision is plenary. Brooks v. Sweeney, 299 Conn. 196, 210, 9 A.3d 347 (2010). Summary judgment is appropriate when the record before the trial court reveals that there is no genuine dispute of material fact and that the moving party is entitled to judgment as a matter of law. Id. The material facts of the present case are undisputed; we therefore must determine whether, on the basis of those facts, the MCS-90 endorsement is inapplicable as a matter of law.

         Our analysis proceeds in two parts. We first consider whether the MCS-90 endorsement applies to liability arising out of any accident caused by the negligence of a commercial motor carrier, or only to liability for those accidents occurring while the motor carrier's vehicle is traveling in interstate commerce. Because we conclude that the MCS-90 endorsement applies only to liability for accidents involving vehicles traveling in interstate commerce, we then consider whether the trip at issue in the present case was interstate in nature.

         A

         The text of the MCS-90 endorsement and its governing statutes and regulations suggest that the MCS-90 endorsement applies only to accidents occurring while the motor carrier's vehicle is traveling in interstate commerce, except in limited circumstances, described later in this opinion, that are not present here. The MCS-90 endorsement requires the insurer to cover liability for a motor carrier's negligence in the operation of its ‘‘motor vehicles subject to the financial responsibility requirements of [49 U.S.C. § 31139] . . . .'' 49 C.F.R. § 387.15, illustration I. The statute cited by the MCS-90 endorsement, however, does not directly explain which vehicles are subject to its requirements; instead, it commands the secretary to adopt regulations to create financial responsibility requirements that shall apply to liability for ‘‘the transportation of property by motor carrier . . . in the United States between a place in a [s]tate and . . . a place in another [s]tate . . . .'' 49 U.S.C. § 31139 (b). The regulations provide that they apply generally to ‘‘for-hire motor carriers operating motor vehicles transporting property in interstate or foreign commerce.'' 49 C.F.R. § 387.3 (a). The requirements apply to the intrastate transportation of property only when the transported property is hazardous in nature; there is no evidence in the present case that the repair parts were considered to be hazardous under federal law. Id., § 387.3 (b). Given the statutory and regulatory language limiting application of the financial security requirements to the interstate transportation of property, with the exception of hazardous materials, it follows that those requirements do not apply to wholly intrastate transportation and, consequently, that a motor carrier's ...


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