Martinez v. Empire Fire & Marine Ins. Co. , 322 Conn. 47 ( 2016 )

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MARTINEZ v. EMPIRE FIRE & MARINE INS. CO.—DISSENT
EVELEIGH, J., dissenting. I respectfully dissent. Spe-
cifically, I disagree with the majority’s decision to affirm
the judgment of the Appellate Court and to apply a
‘‘trip-specific’’ approach to the question of liability cov-
erage in this matter. In my view, both the plain language
of the federally mandated MCS-90 endorsement form
(MCS-90), which requires liability coverage ‘‘regardless
of whether or not [the] 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; and the
policy underlying the enactment of the Motor Carrier
Act of 1980 (act), Pub. L. 96-296, § 30, 94 Stat. 793,
which is to promote safety and to provide compensation
for those who are injured by the negligence of those
engaged in a business that is required to have liability
coverage under the MCS-90, counsel against such an
approach. Furthermore, because the minimum levels
of financial responsibility required under the act apply
to for-hire motor carriers; see 49 C.F.R. §§ 387.1 and
387.3 (a);1 I understand the regulatory definition of
‘‘[f]or-hire carriage’’ to be fundamental to an analysis
of liability coverage under the MCS-90. See id., § 387.5.
The federal regulations define ‘‘[f]or-hire carriage’’ as
the ‘‘business of transporting [property], for compensa-
tion’’ rather than the mere act of transporting property
for compensation. (Emphasis added.) Id. Therefore,
because Tony’s Long Wharf Transport, LLC (Tony’s
Transport) was engaged in the business of transporting
property in interstate commerce for compensation, I
would conclude that the MCS-90 requires the defendant,
Empire Fire and Marine Insurance Company (Empire),
to provide liability coverage for the accident that injured
the plaintiff, Renee Martinez.
Before addressing the merits of the majority’s princi-
pal assertion in the present case, I begin by setting forth
the history and public policy underlying the act. Prior to
the abolition of the Interstate Commerce Commission
(commission), ‘‘Congress ha[d] mandated that the
[commission] issue operating permits to motor carriers
only if the motor carrier ha[d] filed with the [commis-
sion] an adequate bond, insurance policy, or other type
of security . . . in an amount not less than . . . the
Secretary of Transportation prescribe[d] . . . .’’ (Inter-
nal quotation marks omitted.) Canal Ins. Co. v. First
General Ins. Co., 889 F.2d 604, 610 (5th Cir. 1989).
Pursuant to this congressional mandate, in order to
receive the authorization necessary to operate in inter-
state commerce, a motor carrier had to file with the
commission proof of adequate security ‘‘conditioned to
pay any final judgment recovered against such motor
carrier for bodily injuries to or the death of any person
resulting from the negligent operation, maintenance or
use of motor vehicles subject to [the commission’s]
regulation.’’ (Emphasis in original; internal quotation
marks omitted.) Id., 610–11. ‘‘To assure compliance with
the latter regulation and the underlying congressional
mandate . . . the [commission] . . . prescribed a
form endorsement, [the predecessor to the MCS-90]
. . . .’’ (Citations omitted.) Id., 611.
Although, upon its abolition, the commission’s
‘‘authority to regulate carriers was transferred to the
Department of Transportation,’’ the regulations promul-
gated by the commission, including the requirement
that the MCS-90 be attached to each insurance policy
of the motor carrier, ‘‘remain[ed] in effect until new
[regulations could be] promulgated.’’ T.H.E. Ins. Co. v.
Larsen Intermodal Services, Inc., 242 F.3d 667, 672
(5th Cir. 2001); see also 49 C.F.R. § 387.7. ‘‘[T]he policy
embodied in the [commission’s] regulations was to
assure that injured members of the public would be
able to obtain judgments collectible against negligent
authorized carriers. . . . Thus, the insurer’s obliga-
tions under the MCS-90 are triggered when the policy
to which it is attached provides no coverage to the
insured.’’ (Citation omitted; internal quotation marks
omitted.) T.H.E. Ins. Co. v. Larsen Intermodal Ser-
vices, Inc., supra, 672. The MCS-90 is ‘‘in effect, surety-
ship by the insurance carrier to protect the public’’ or,
in other words, a ‘‘safety net’’ that ‘‘simply covers the
public when other coverage is lacking.’’ (Internal quota-
tion marks omitted.) Id.
It is important to note that the genesis of the MCS-
90 was to ensure compliance with the regulation that
applied to all motor carriers that were engaged in inter-
state commerce and subject to the regulation. See
Canal Ins. Co. v. First General Ins. Co., supra, 889 F.2d
611. Indeed, the motor carriers could not receive a
permit to engage in interstate commerce without proof
of such compliance. See id., 610.
The MCS-90 provides coverage for ‘‘any final judg-
ment recovered against the insured for public liability
resulting from negligence in the operation, maintenance
or use of motor vehicles subject to the financial respon-
sibility requirements of [§§] 29 and 30 of the [act] regard-
less of whether or not each motor vehicle is specifically
described in the policy and whether or not such negli-
gence 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. ‘‘Section 30 of the [a]ct man-
date[s] that motor carriers transporting persons or
property in interstate commerce with a gross weight
rating of 10,000 pounds or more were required to obtain
minimum levels of financial responsibility to cover pub-
lic liability or property damage.’’ (Internal quotation
marks omitted.) Travelers Indemnity Co. v. Western
American Specialized Transportation Services, Inc.,
235 F. Supp. 2d 522, 526 (W.D. La. 2002); see Motor
Carrier Act of 1980, Pub. L. No. 96-296, § 30, 94 Stat
793; see also 49 U.S.C. § 31139 (b).2
Furthermore, the Secretary of Transportation is
empowered to promulgate regulations ‘‘to require mini-
mum levels of financial responsibility . . . covering
public liability, property damage, and environmental
restoration for the transportation of property by motor
carrier’’ in interstate and foreign commerce. 49 U.S.C.
§ 31139 (b) (1). These regulations are set forth in 49
C.F.R. § 387.1 et seq., and apply to ‘‘for-hire motor carri-
ers operating motor vehicles transporting property in
interstate or foreign commerce.’’ Id., § 387.3 (a). ‘‘The
purpose of these regulations is to create additional
incentives to motor carriers3 to maintain and operate
their vehicles in a safe manner and to assure that motor
carriers maintain an appropriate level of financial
responsibility for motor vehicles operated on public
highways.’’ (Footnote added.) Id., § 387.1.
The majority concludes that the trial court properly
applied a ‘‘trip-specific analysis’’ and properly deter-
mined that the vehicle owned by Tony’s Transport was
not operating in interstate commerce at the time of the
accident. Accordingly, the majority affirms the Appel-
late Court’s judgment that Empire was not liable for
the unpaid judgment on that basis. As a result, the
majority does not address the issue of whether the
Appellate Court properly concluded that the vehicle
owned by Tony’s Transport was not operating ‘‘ ‘for-
hire’ ’’ within the meaning of the federal regulations.
Martinez v. Empire Fire & Marine Ins. Co., 151 Conn.
App. 213, 215–16, 94 A.3d 711 (2014). In my view, how-
ever, the trip-specific approach creates an artificial wall
to liability coverage, which is neither mandated by the
relevant federal regulations nor justified under the act.
Therefore, for the following reasons, I respectfully dis-
agree with the reasoning set forth in the majority
opinion.
First, in my view, the plain language of the MCS-
90 counsels against the application of a trip-specific
approach to determine liability coverage in a particular
case. The MCS-90 provides in relevant part: ‘‘In consid-
eration of the premium stated in the policy to which
this endorsement is attached, the insurer (the company)
agrees to pay, within the limits of liability described
herein, any final judgment recovered against the insured
for public liability resulting from negligence in the oper-
ation, maintenance or use of motor vehicles subject to
the financial responsibility requirements of [§§] 29 and
30 of the [act] regardless of . . . whether or not such
negligence occurs on any route or in any territory
authorized to be served by the insured or elsewhere.
. . .’’ (Emphasis added.) 49 C.F.R. § 387.15, illustration
I. If the Secretary of Transportation had intended that
liability coverage under the MCS-90 to apply only to
interstate trips, language to that effect could have been
inserted in 49 C.F.R. § 387.15. Rather than include such
language, however, the MCS-90 contains broad lan-
guage providing that it applies regardless of the route
on which negligence occurs, which reasonably encom-
passes an accident that occurs during an intrastate trip.
In Heron v. Transportation Casualty Ins. Co., 274
Va. 534, 537, S.E.2d 699 (2007), the Virginia Supreme
Court was faced with a similar issue and answered in the
affirmative the question of ‘‘whether MCS-90 coverage
extends to judgments recovered against a registered
interstate motor carrier arising from negligence in the
operation of a vehicle engaged in a purely intrastate
haul.’’ In Heron, the tractor trailer owned by the insured,
an entity registered with the Federal Motor Carrier
Safety Administration as an interstate motor carrier,
was involved in an accident during the course of an
intrastate trip to transport mulch within the state of
Virginia. Id. The court reasoned that ‘‘[r]egardless of
the forces that have motivated the insurance industry
to adopt the language of the MCS-90 . . . the question
presented to us is a simple one of interpreting the plain
language of a written contract. The MCS–90 is a part
of a contract between insurer and insured.’’ Id., 539.
The court further explained as follows: ‘‘The language
of the MCS-90 . . . insofar as it sets forth the coverage
therein provided, is clear, plain and unambiguous. In
consideration of the premium, the insurer agrees to pay
‘any final judgment recovered against the insured for
public liability resulting from negligence in the opera-
tion, maintenance or use of motor vehicles subject to
the financial responsibility requirements of [§§] 29 and
30 of the [act], 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.’ ’’ Id., 539–40.
The court concluded that because the insured ‘‘was
the owner of a vehicle that was subject to the financial
responsibility requirements of the [act]’’ and ‘‘was sub-
ject to a claim and a potential judgment for damages
resulting from negligence in the operation of that vehi-
cle,’’ the insurer ‘‘was obligated to pay any such judg-
ment arising from negligence in the operation of that
vehicle anywhere.’’ (Emphasis added.) Id., 540. The
court emphasized that ‘‘[t]he contract language con-
tain[ed] no terms limiting the coverage to the use or
operation of the vehicle in interstate commerce’’ and
declined to read such absent terms into the contract. Id.
I agree with the reasoning of the Supreme Court of
Virginia. Contrary to the majority’s contention, I do not
read the court’s decision in Heron to be solely based
upon state insurance law principles. Prior to its applica-
tion of such principles, the court determined that, pur-
suant to federal law, the named insured was subject to
the financial responsibility requirements of §§ 29 and
30 of the act. Id. The court then limited its analysis to
the plain language contained within the four corners
of the MCS-90, which is dictated by federal law. Id.,
539. At no point did the court depart from the precise
language set forth in the federal regulations. See 49
C.F.R. § 387.15, illustration I. In addition, I would add
that the phrase ‘‘regardless of . . . whether or not such
negligence occurs on any route or in any territory
authorized to be served by the insured or elsewhere’’
in the MCS-90 must be read to enlarge insurance cover-
age, not restrict it. Id. Certainly, there is nothing in this
language that would lead a court to mandate a trip-
specific approach when determining the existence of
coverage under the MCS-90. Accordingly, I would con-
clude that the MCS-90 applies to all vehicles operated
by a registered interstate motor carrier on all trips in the
course of its trucking business, including trips within a
single state.
Second, contrary to the majority’s conclusion, the
trip-specific approach yields illogical results when
applied to the inquiry of whether a particular motor
carrier is ‘‘transporting property in interstate . . .
commerce.’’ Id., § 387.3 (a). The courts that have
adopted a trip-specific approach to determine the appli-
cability of liability coverage under the MCS-90 have
done so by reasoning that the MCS-90 does not apply if
the accident at issue occurred during a wholly intrastate
trip. See, e.g., 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); Canal Ins. Co. v.
Coleman, 625 F.3d 244, 251 (5th Cir. 2010). The applica-
tion of such an approach would result in an analysis
of liability coverage dependent upon whether a motor
carrier in the business of transporting property in inter-
state commerce was actually transporting goods in
interstate commerce at the time the accident occurred.
Indeed, the danger to the public is neither increased
nor decreased by a driver’s happenstance decision to
travel within a single state on a particular day.
Third, contrary to the Appellate Court’s conclusion,
the plain language of 49 C.F.R. § 387.3 (a) indicates that
the Secretary of Transportation did not intend that a
trip-specific approach be applied to determine whether
a motor carrier was operating ‘‘ ‘for-hire’ ’’ within the
meaning of the federal regulations. Martinez v. Empire
Fire & Marine Ins. Co., supra, 151 Conn. App. 222.
That regulation provides that the minimum levels of
financial responsibility required under the act apply
‘‘to for-hire motor carriers operating motor vehicles
transporting property in interstate or foreign com-
merce.’’ (Emphasis added.) 49 C.F.R. § 387.3 (a). As
previously explained, 49 C.F.R. § 387.5 defines the term
‘‘[f]or-hire carriage’’ as ‘‘the business of transporting,
for compensation, the goods or property of another.’’
(Emphasis added.) Notably, the term ‘‘for-hire’’ in
§ 387.3 (a) modifies the term ‘‘motor carriers,’’ rather
than the term ‘‘property.’’4 I understand the language
of § 387.3 (a) to indicate that the minimum levels of
financial responsibility required under the act apply to
motor carriers that are in the business of transporting,
for compensation, goods in interstate commerce. If the
nature of the trip determined whether a motor carrier
was ‘‘for-hire’’ as contemplated by § 387.3 (a), the defini-
tion of ‘‘[f]or-hire carriage’’ set forth in § 387.5 would
have used the term ‘‘act’’ rather than the term ‘‘busi-
ness.’’ Therefore, I would conclude that the nature of
the motor carrier’s business, rather than the nature of
the trip determines whether the ‘‘for-hire’’ element of
§ 387.3 (a) is satisfied in a particular case.5
Finally, the policy underlying the enactment of the
act fortifies my understanding of the MCS-90. The public
policy of the act is to promote safety on the roads. See
49 C.F.R. § 387.1 (‘‘[t]he purpose of these regulations
is to create additional incentives to motor carriers to
maintain and operate their vehicles in a safe manner’’);
see also Royal Indemnity Co. v. Jacobsen, 863 F. Supp.
1537, 1541–42 (D. Utah 1994) (‘‘the purpose of the [MCS-
90] was to provide financial protection to members of
the public and to shippers’’ [emphasis omitted; internal
quotation marks omitted]). ‘‘Congress enacted the [act]
to deregulate the trucking industry, increase competi-
tion, reduce entry barriers, and improve quality of ser-
vice. . . . Importantly, enactment of the [act] sought,
in part, to address abuses that had arisen in the inter-
state trucking industry which threatened public safety,
including the use by motor carriers of leased or bor-
rowed vehicles to avoid financial responsibility for acci-
dents that occurred while goods were being transported
in interstate commerce.’’ (Citation omitted; internal
quotation marks omitted.) Herrod v. Wilshire Ins. Co.,
499 Fed. Appx. 753, 754 (10th Cir. 2012). In my view,
the majority’s application of a trip-specific approach to
determine liability coverage under the MCS-90 is at
odds with the express policy underlying the act and the
purpose of the MCS-90. It would be contrary to the
remedial purpose of the act to apply a trip-specific
approach, which decreases rather than increases the
instances when coverage under the MCS-90 is triggered.
Furthermore, although I agree with the majority that
it is a well settled principle of our court that the ‘‘[d]eci-
sions of the [United States Court of Appeals for the
Second Circuit], [though] not binding on us, are particu-
larly persuasive’’ when resolving issues of federal law;
Turner v. Frowein, 253 Conn. 312, 341, 752 A.2d 955
(2000); I must disagree with the Second Circuit in this
instance. Ordinarily, I would follow the reasoning of
the Second Circuit; however, it is my strong opinion that
my interpretation of the relevant federal regulations in
the present case furthers the purpose of the act.
In my view, the trip-specific approach creates uncer-
tainty with respect to the applicability of the MCS-90
and, thus, increases costs for both the court and the
litigants by requiring that each case be decided upon
its own specific facts. The majority, however, endorses
this approach and explains that ‘‘a trip within only one
state may nevertheless be considered interstate in
nature if the trip is one leg of a continuous interstate
movement of goods.’’ The majority further states that
‘‘a brief pause in the movement of goods . . . will not
mark the beginning of a new trip for the purposes of
motor carrier regulations . . . .’’ It is my opinion that,
because the trip-specific approach focuses on each spe-
cific trip made by a motor carrier, its resolution leads
to an unworkable case-by-case analysis, which often
involves a fact intensive analysis of whether the shipper
intended to travel interstate. See, e.g., Bilyou v. Dut-
chess Beer Distributors, Inc., 300 F.3d 217, 223–24 (2d
Cir. 2002); Roberts v. Levine, 921 F.2d 804, 812 (8th Cir.
1990). Its application raises numerous questions about
when liability coverage under the MCS-90 is triggered.
For example, would there be liability coverage under
the MCS-90 if the shipper intended to travel interstate,
but was involved in an accident on his way to a stop
that entailed several hours of loading, before ever leav-
ing the state? What if it were required to wait overnight
for the vehicle to be loaded? Such artificial dichotomies
should not be favored, especially when there is nothing
in the act suggesting that Congress would have
endorsed such an approach.
My interpretation of the definition of ‘‘[f]or-hire car-
riage’’ in 49 C.F.R. § 387.5 in this dissent, however, pre-
cludes such a fact specific examination. In my view,
assuming the weight of the motor vehicle is over 10,000
pounds; see 49 C.F.R. § 387.3 (c) (1); there are only
two inquiries that must be answered in the affirmative
before the MCS-90 applies. First, was the entity or indi-
vidual in the business of transporting property in inter-
state commerce? Second, did the accident at issue
occur during a time that the authorized agent of the
named insured was acting within the scope of his
employment? If the answers to these two inquiries are
in the affirmative, then I would conclude that the MCS-
90 provides coverage for the accident at issue. This
conclusion is supported by the requirement that a motor
carrier be ‘‘for-hire’’ in order for it to be subject to
the financial responsibility requirements of the act; id.,
§ 387.3 (a); and the definition of ‘‘[f]or-hire carriage’’
set forth in the federal regulations. Id., § 387.5.
Contrary to the majority’s conclusion, in my view,
the vehicle operated by Tony’s Transport was ‘‘subject
to the financial responsibility requirements’’ of the act
as required by the MCS-90; id., § 387.15, illustration I;
and, therefore, the MCS-90 provides coverage for the
accident at issue in the present case. First, there is no
question that Tony’s Transport engaged in the business
of transporting vehicles in interstate commerce. Thus,
Tony’s Transport was the owner of a vehicle that was
subject to the financial responsibility requirements of
the act and was required to obtain and have in effect
the minimum levels of coverage set forth in the federal
regulations. Id., §§ 387.3 (a) and 387.7 (a). Second,
repairing tow trucks is a required part of operating a
towing business. Accordingly, the employee of Tony’s
Transport was acting within the scope of his employ-
ment when he drove the vehicle to Hamden in order
to retrieve motor vehicle parts to repair vehicles owned
by Tony’s Transport. Therefore, I would conclude that
the vehicle that was involved in the accident in the
present case was operating ‘‘for-hire’’ within the mean-
ing of § 387.3, and that, therefore, the MCS-90 provided
coverage for the accident. Accordingly, I would reverse
the judgment of the Appellate Court.
In summary, I find nothing in the language of the
act, the relevant federal regulations, or the MCS-90 to
support a trip-specific analysis. The language of the
MCS-90 and the relevant federal regulations is intention-
ally broad and should be read to support coverage. The
decisions reached by the majority and the Appellate
Court, in my view, frustrate the policy behind both the
act and the MCS-90. Indeed, if an insured is engaged
in the business of interstate shipping, such that compli-
ance with the minimum levels of financial responsibility
set forth in the federal regulations is required, it should
not matter if the accident occurs during an intrastate
trip.
Therefore, I respectfully dissent.
1
Pursuant to the federal regulations, all motor carriers that operate vehi-
cles transporting hazardous materials are subject to the financial responsibil-
ity requirements of the act, regardless of whether the motor carrier is for-
hire. See 49 C.F.R. § 387.3 (b). Neither party, however, contends that Tony’s
Long Wharf Transport, LLC (Tony’s Transport), was transporting hazardous
materials at the time of the accident in the present case, or that it was in
the business of transporting such materials. Therefore, in order for the MCS-
90 to provide coverage for the accident at issue, Tony’s Transport must be
a ‘‘for-hire motor [carrier]’’ within the meaning of the federal regulations.
See id., § 387.3 (a).
2
Although Section 29 of the act is also referenced in the MCS-90, it is not
relevant for purposes of this appeal. See Canal Ins. Co. v. Coleman, 625
F.3d 244, 248 n.5 (2010) (noting that § 29 of act was technical in nature).
3
‘‘Motor carrier’’ is defined by regulation as follows: ‘‘a for-hire motor
carrier or a private motor carrier. The term includes, but is not limited to,
a motor carrier’s agent, officer, or representative; an employee responsible
for hiring, supervising, training, assigning, or dispatching a driver; or an
employee concerned with the installation, inspection, and maintenance of
motor vehicle equipment and/or accessories.’’ 49 C.F.R. § 387.5.
4
I further note that 49 C.F.R. § 387.3 (a) applies to ‘‘for-hire motor carriers
operating motor vehicles transporting property’’ in general and does not
limit its application to the transportation of the property of another or for
compensation, as the Appellate Court suggests. Martinez v. Empire Fire &
Marine Ins. Co., supra, 151 Conn. App. 224.
5
I respectfully disagree with the majority’s position that the text of 49
C.F.R. § 387.3 (b) supports the trial court’s conclusion that the MCS-90
applies only when the motor carrier’s vehicle is engaging in interstate com-
merce at the time of the accident. The majority reads § 387.3 (b) as limiting
the application of the financial security requirements of the act ‘‘to the
intrastate transportation of property only when the transported property
is hazardous in nature . . . .’’ (Emphasis in original.)
That regulation provides that the act’s financial responsibility require-
ments apply ‘‘to motor carriers operating motor vehicles transporting hazard-
ous materials, hazardous substances, or hazardous wastes in interstate,
foreign, or intrastate commerce.’’ 49 C.F.R. § 387.3 (b). It is noteworthy that,
although § 387.3 (a) applies only to ‘‘for-hire motor carriers,’’ § 387.3 (b)
omits this term. Therefore, I read § 387.3 (b) as providing that all motor
carriers that operate vehicles transporting hazardous materials are subject
to the minimum levels of financial responsibility required under the act,
regardless of whether the motor carrier is ‘‘for-hire . . . .’’ See footnote 1
of this dissent. In light of this distinction and my interpretation of the
definition of ‘‘[f]or-hire carriage’’ set forth in 49 C.F.R. § 387.5, I am not
persuaded by the majority’s analysis.