Progressive Commercial Casualty Company v. Xpress Transport Logistics, LLC, 4:21-cv-02683

Xpress Transport Logistics (Xpress) was insured by Progressive under a commercial auto policy that included an MCS-90 endorsement; Progressive reserved rights and defended Xpress in the underlying Texas wrongful-death suit.
Miguel Cuellar (18) and Fabian Santiago (19) died when a truck rolled; Santiago (an ESD Transport driver) had been hired to haul a load Xpress rebrokered to ESD Transport; Cuellar took the wheel at some point.
Veronica Cuellar (Miguel’s mother) sued Xpress, ESD Transport, and others in state court and, in this federal action, counterclaimed that Progressive has a duty under the MCS-90 to accept and pay a reasonable settlement within MCS-90 limits.
Veronica moved for partial summary judgment that Miguel was not a statutory employee of Xpress (so MCS-90 applies to the claim); Progressive sought discovery under Rule 56(d).
Progressive moved to dismiss Veronica’s counterclaim arguing there is no cause of action for a duty-to-settle under the MCS-90 endorsement.
The court denied Veronica’s partial-summary-judgment motion as premature and granted Progressive’s motion to dismiss the counterclaim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Miguel was a "statutory employee" of Xpress for MCS-90 exclusion	Veronica: undisputed facts show Miguel was not Xpress’s statutory employee, so MCS-90 applies to allow public recovery	Progressive: Miguel was operating a commercial motor vehicle in interstate commerce and may have been paid or otherwise provided value—facts that could make him a statutory employee; discovery needed	Denied Veronica’s summary-judgment motion as premature; granted Progressive Rule 56(d) discovery to resolve factual disputes
Whether MCS-90 creates an insurer "duty to settle" (counterclaim)	Veronica: because MCS-90 lets judgment creditors sue insurer and insurer can seek reimbursement, insurer must have duty to accept reasonable settlement within endorsement limits	Progressive: MCS-90 is a suretyship obligation triggered only after final judgment; it does not create a duty to settle absent an independent policy-based duty to defend/indemnify	Court granted dismissal: no recognized duty-to-settle under MCS-90 itself; obligation is triggered by final judgment absent other policy terms

Ooida Risk Retention Grp., Inc. v. Williams, 579 F.3d 469 (5th Cir. 2009) (helper who received value held to be independent contractor/statutory employee under Motor Carrier Act)
Travelers Indem. Co. v. W. Am. Specialized Transp. Servs., Inc., 409 F.3d 256 (5th Cir. 2005) (MCS-90 endorsement treated as suretyship for public protection)
John Deere Ins. Co. v. Truckin' U.S.A., 122 F.3d 270 (5th Cir. 1997) (MCS-90 does not itself create duty to indemnify)
T.H.E. Ins. Co. v. Larsen Intermodal Servs., Inc., 242 F.3d 667 (5th Cir. 2001) (MCS-90 does not impose duty to defend absent other policy terms)
Auto-Owners Ins. Co. v. Munroe, 614 F.3d 322 (7th Cir. 2010) (MCS-90 surety obligates insurer only after final judgment)
Canal Ins. Co. v. Coleman, 625 F.3d 244 (5th Cir. 2010) (MCS-90 creates suretyship obligation; insurer may seek reimbursement from insured)
Consumers Cty. Mut. Ins. Co. v. PW & Sons Trucking Inc., 307 F.3d 362 (5th Cir. 2002) (independent contractor may be a statutory employee under §390.5)
Am. Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842 (Tex. 1994) (explaining insurer's Stowers duty to accept reasonable settlement within policy limits)