SCOTTSDALE INDEMNITY COMPANY, Plaintiff and Appellant, v. NATIONAL CONTINENTAL INSURANCE COMPANY, Defendant and Respondent.
No. C071416
Third Dist.
Aug. 20, 2014.
1166
COUNSEL
Yocis & Cox and Stephen M. Smith for Defendant and Respondent.
OPINION
RAYE, P. J.—In this insurance coverage action, plaintiff Scottsdale Indemnity Company (Scottsdale) and defendant National Continental Insurance Company (NCI) seek this court‘s determination whether they are coprimary insurers or whether NCI is an excess insurer for an underlying fatality involving a tractor-trailer rig operated by Manuel S. Lainez. The trial court granted NCI‘s motion for a summary judgment, concluding that Scottsdale was the primary insurer pursuant to California
FACTS
By January of 2007 Manuel Lainez had been independently driving commercial vehicles for eight and one-half years. He owned his own truck, also known as a power unit or tractor, and his own business, Lainez Trucking. He had his own motor carrier permit and operating authority in the State of California. He purchased a trucker‘s liability policy from Scottsdale with a $1 million liability limit. The policy specifically described and rated a 1999 Freightliner tractor Lainez had purchased about three years earlier and expressly covered any attached trailer.
Lainez entered into a motor carrier agreement with Western Transportation Services (Western Transport), a non-asset-based corporation that contracts exclusively with owner/operators and arranges for them to pick up and deliver loads to various customers in California and Nevada. It does not own tractors or trailers, but contracts with owner/operators or drivers. The agreement provided that Lainez was an independent contractor and was responsible for all costs and expenses incidental to the performance of transportation services. He agreed to maintain liability insurance and to name Western Transport as an additional insured.
Western Transport, through the California Automobile Assigned Risk Plan (CAARP), purchased a commercial assigned risk policy from NCI. The policy stated, “Named Insured‘s Business: 1 Trucker for Hire-Excess” and named Lainez as a driver. It did not list, describe, or rate any vehicle. It was rated on an excess cost of hire basis at a premium that was 4 to 10 percent of the cost of a policy rated on a primary cost of hire basis.
Both policies were in effect on January 10, 2007, when Lainez, hauling goods for Western Transport in his 1999 Freightliner tractor with an attached 1984 Hyundai 53-foot box trailer, was involved in a fatal collision with Constancio Acayayan Barcenas. Barcenas‘s wife and children filed various wrongful death actions. On February 6, 2008, NCI tendered the defense of Western Transport to Scottsdale. Scottsdale accepted the defense and indemnification, and the representative handling the claim stated, “Scottsdale‘s coverage would be primary and that Western Transport‘s policy with NCI was excess to the Scottsdale policy and would not have to make any payment unless the judgment or settlement exceeded the limits of the Scottsdale policy.” Scottsdale exclusively handled the defense of both Lainez and Western Transport and did not tender the defense of either defendant to NCI.
NCI did participate in a mediation in which the wrongful death claims were settled, and it contributed $200,000 of the $675,000 settlement. Scottsdale paid $475,000. As part of the settlement, NCI reserved the right to seek reimbursement for its payment from Scottsdale, and Scottsdale reserved its right to seek contribution from NCI for defense costs and for part of its settlement payment.
Scottsdale asserts causes of action against NCI for declaratory relief regarding both the duty to defend and the duty to indemnify as well as for equitable contribution for defense costs and indemnification. The insurers filed cross-motions for summary judgment. The trial court granted NCI‘s motion and denied Scottsdale‘s. Scottsdale appeals.
DISCUSSION
To minimize insurance coverage litigation when more than one insurance policy provides coverage, the Legislature has created a series of conclusive presumptions. (Hartford Accident & Indemnity Co. v. Sequoia Ins. Co. (1989) 211 Cal.App.3d 1285, 1296-1297 [260 Cal.Rptr. 190].) ”
Under
The trial court found that subdivision (d) was the more specific subdivision. The court explained: “[I]n this situation, subdivision (d) appears to be
We agree. The application of subdivision (d) is quite straightforward and determined by an answer to a simple question. “Whether
Scottsdale insists that
Subdivision (h) states: “Notwithstanding subdivision (b), when two or more policies affording valid and collectible automobile liability insurance apply to a power unit and an attached trailer or trailers in an occurrence out of which a liability loss shall arise, and one policy affords coverage to a named insured in the business of a trucker, defined as any person or organization engaged in the business of transporting property by auto for hire, then the following shall be conclusively presumed: If at the time of loss, the power unit is being operated by any person in the business of a trucker, the insurance afforded by the policy to the person engaged in the business of a trucker shall be primary for both power unit and trailer or trailers, and the
Both insurers and the trial court appear to agree that subdivision (h) was added to address a conflict in the decisions whether the insurer of the power unit or the insurer of the trailer was primary when two different policies covered separate parts of the rig. (See, e.g., Transport Indemnity, supra, 189 Cal.App.3d 250; Mission Ins. Co. v. Hartford Ins. Co. (1984) 155 Cal.App.3d 1199, 1212-1213 [202 Cal.Rptr. 635].) Here, however, both policies covered the tractor and the trailer. Again the trial court‘s insightful analysis is instructive: “The Court rejects Scottsdale‘s argument set forth more fully in its cross-motion for summary adjudication that subdivision (d) could not apply. Indeed, its very argument against its application actually supports why it should apply. It argues that virtually every court has held that a tractor-trailer unit is a single ‘motor vehicle’ for purposes of
We accept Scottsdale‘s premise that two insurance policies can be equally ranked or coprimary under
But Scottsdale contends that if we apply subdivision (d) to any case involving a tractor-trailer rig we will unravel the resolution of the battle between tractor and trailer insurers and undo all that subdivision (h) was designed to achieve. Not so. Subdivision (h) does solve the battles between insurers of power units and insurers of trailers. And that is precisely what it was intended to accomplish. (U.S. Fire Ins. Co. v. Williamsburg National Ins. Co. (E.D.Cal., Nov. 19, 2008, No. 1:07-cv-00718 GSA) 2008 U.S.Dist. Lexis 93991, pp. *22-*24, citing Progressive Casualty Ins. Co. v. Peerless Ins. Co. (E.D.Cal., June 7, 2007, No. CV F 06-1113 LJO SMS) 2007 U.S.Dist. Lexis 44153.) But to conclude, as we do, that subdivision (d) is the specific statute that applies to the facts of our case, even though a tractor-trailer rig is involved, is not to resurrect the old conflicts between insurers of tractors and insurers of trailers.
Scottsdale argues that subdivision (h) renders both insurers primary because both were “engaged in the business of a trucker” when the fatality occurred. Scottsdale accuses the trial court of adding language to the statute by reasoning that the use of the term “operated” in the first clause automatically meant that it applied in the second clause. By adding words to the statute, Scottsdale argues the trial court erroneously interpreted subdivision (h) to render the insurer of the operator of the tractor-trailer primary. But Scottsdale insists subdivision (h) does not state that the policy for the operator is primary; rather, it states that the trucker‘s policy is primary. And here, Scottsdale concludes, there are two truckers, both of whom should be primary.
But we need not address the nuances and ambiguities of subdivision (h) despite Scottsdale‘s protestations to the contrary. The language of subdivision (h) does not address a situation where, as here, there are two trucker policies covering both the tractor and the trailer. Rather, the statute differentiates between the operation of the power unit and the operation of the trailer. “If at the time of loss, the power unit is being operated by any person in the business of a trucker, the insurance afforded by the policy to the person engaged in the business of a trucker shall be primary for both power unit and
Scottsdale concedes as much but draws a different conclusion. In Scottsdale‘s view, if the Legislature failed to foresee that two or more insurers might provide truckers’ insurance, it is up to the Legislature to amend the statute. Since the statute does not preclude the application of its terms to more than one insurance policy, Scottsdale urges us to apply it to both businesses engaged in the business of a trucker, i.e., to both Scottsdale and NCI.
We disagree where, as here, a second conclusive presumption specifically applies and resolves the coverage dispute. We reject Scottsdale‘s invitation to apply subdivision (h) to circumstances the statute was not designed to reach simply because a tractor and trailer are involved, when subdivision (d) clearly applies to two insurance policies covering the same motor vehicle—in this case, the tractor-trailer rig. Under these circumstances, it is subdivision (d), not subdivision (h), that is the more specific statute, and subdivision (d)‘s conclusive presumption should be applied to resolve the coverage dispute.
NCI catalogues a number of purported undisputed facts to support its claim that it offered only excess coverage. Lainez, the driver, was driving his own truck that he had insured by Scottsdale, operating his own business under his own California authority, and he was operating the power unit “at the time of loss.” (Subd. (h).) Western Transport had required him to purchase his own insurance, and although it secured an additional policy, the policy itself identified the coverage as excess and the cost was rated as an excess policy. NCI notes that Scottsdale accepted the tender and defended the wrongful death actions, and its representative acknowledged that its policy was primary.
Scottsdale maintains that all of these facts are irrelevant and urges us to construe the language of the statute as a matter of law. It does, however, also urge us to take judicial notice of a reply brief NCI filed in another lawsuit in which NCI purportedly took a different position on the meaning of subdivision (h). The request is denied. “The fact a party takes inconsistent legal positions in different actions proves nothing more than that it may have been right or wrong—in one of them. (See People v. Webb (1986) 186 Cal.App.3d 401, 413 [230 Cal.Rptr. 755] (conc. opn. of Sims, J.) . . .)” (People ex rel. Dept. of Fish & Game v. Attransco, Inc. (1996) 50 Cal.App.4th 1926, 1929-1930, fn. 5 [58 Cal.Rptr.2d 661].) We agree, however, that we need not consider the equities between the insurers or interject a panoply of facts into a solely legal analysis of the applicability of the two subdivisions of
DISPOSITION
The judgment is affirmed.
Blease, J., and Hoch, J., concurred.