Hathaway v. Tucker, 14 A.3d 968

Tucker, a trucker, operated a Casella-haul business, treated as an independent contractor but with Casella exercising significant control.
Tucker collided with Hathaway in 2002, killing Hathaway; settlement reached around $1,000,000 split between Peerless (Casella’s insurer) and Old Republic (Casella’s insurer) with disputes over apportionment.
Casella’s policy (Peerless) and Old Republic policy both claimed primary coverage; policy limits were Peerless $500,000 and Old Republic $3,000,000.
Old Republic argued its policy is secondary and that Peerless should pay first; caseload argued for pro rata allocation due to identical “other insurance” clauses.
Peerless asserted Tucker was Casella’s employee, making Tucker’s liability under Old Republic primary by “other insurance” language; trial court found Tucker an employee based on control over means and methods.
Court held both policies provide primary coverage and should be allocated pro rata; it also held Tucker was Casella’s employee under the right-to-control test, and Fireman’s Fund/MCS-90 issues do not alter the allocation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Casella and Tucker covered under Peerless policy for this accident?	Peerless should cover Tucker as Casella’s employee.	Casella/Tucker not properly included under Peerless; coverage arguments focus on policy form.	Casella is within Peerless’s insureds via the Named Insured Summary.
Is Tucker an employee of Casella for insurance purposes?	Evidence supports employee status under right-to-control.	Tucker was an independent contractor; Casella intended contractor relationship.	Yes; Tucker was Casella’s employee for insurance purposes.
Do Peerless and Old Republic both provide primary coverage requiring pro rata allocation?	Two primary policies require pro rata sharing.	If one policy were primary, allocation should reflect that priority.	Yes; pro rata allocation applies because both provide primary coverage.
Does the MCS-90 endorsement require reforming Peerless to $750,000 limit?	Endorsement would raise Peerless limit to $750,000.	MCS-90 reform not required; not controlling in insurer-to-insurer allocation.	MCS-90 does not require reform; no effect on allocation between insurers.

Fireman's Fund Ins. Co. v. CNA Ins. Co., 2004 VT 93 (Vt. 2004) (endorsement/other insurance provisions control allocation when both primary)
RLI Ins. Co. v. Agency of Transp., 171 Vt. 553 (Vt. 2000) (right-to-control test used to classify employee status in insurance contracts)
Crawford v. Lumbermen's Mut. Cas. Co., 126 Vt. 12 (Vt. 1966) (employee defined by common-law right-to-control test)
Kelley’s Dependents v. Hoosac Lumber Co., 95 Vt. 50 (Vt. 1921) (establishes right-to-control standard for employment status)
State Farm Mut. Auto Ins. Co. v. Powers, 169 Vt. 230 (Vt. 1999) (mutually repugnant other-insurance clauses require pro rata sharing)
Fireman's Fund Ins. Co. v. CNA Ins. Co., 2004 VT 93 (Vt. 2004) (endorses reading endorsements with policy terms for coverage)