In the case, Scottsdale Indemnity Co. v. National Continental Ins. Co., 229 Cal. App. 4th 1166 (2014), a truck driver had contracted with a company to drive goods that the company arranged for him. However, the driver remained self employed, as the owner of both his truck, and a separate California trucking company, for which he carried a $1 million insurance liability policy (with Scottsdale), covering his truck. As a condition of his employment as an independent contractor with the company, he agreed to maintain his own insurance for liability purposes. The company (Western Transport) also secured an additional policy (with National Continental Inc. (NCI)), for excess liability purposes.
Then, during the time when both policies had already taken effect, the truck driver was involved in a fatal accident while hauling goods. The family of the individual killed in the accident brought a wrongful death action. The truck driver’s insurance assumed liability for defending the case, and handling the claim overall. The truck driver’s insurance company further stated that, “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.” It thus exclusively handled the defense case, representing both the truck driver and the company for whom he worked.
Two years later, Scottsdale changed course, claiming that NCI was required to indemnify it for its pro rata share of the defense costs, pursuant to its responsibility as a coprimary insurer. NCI refused.
Thereafter, NCI participated in mediation, during which the wrongful death claims were settled. NCI ultimately contributed to the settlement, but reserved the right to seek reimbursement for its payment from Scottsdale, and Scottsdale reserved its right to seek contribution from NCI for the costs of defense, and for part of its settlement payment. Following various cross motions, a trial court ruled in favor of NCI, and this appeal resulted.
Under California statutory law, the court of appeals stated, a policy that specifically describes a vehicle involved in an accident is primary to a policy that does not describe any vehicle. There was a dispute as to the applicability of the two policies since they appeared to potentially cover either only the rig itself or the trailer it was hauling, but the court of appeals found that the two policies applied to both.
However, the court was not willing to rule that both policies should apply equally here, as outlined in a separate subdivision of the same law, since there was a clear priority issue, which this fact pattern fit squarely within.
Furthermore, the second insurance policy explicitly stated that its policy was meant to apply solely in the case of excess liability, and that the driver had been responsible for insuring his rig, that he was operating under his own authority as the owner of his business.
Regarding the primary insurance’s argument that the secondary insurance had taken a different position regarding coverage on a similar issue in an unrelated lawsuit, the court held that inconsistent legal positions could not be used as dispositive evidence, as the position could be right or wrong, in one of the two instances.
Thus, the court ruled that “subdivision (d) specifically applies where, as here, there are two policies “affording valid and collectible liability insurance… to the same motor vehicle or vehicles in an occurrence out of which a liability loss [arose].” Therefore, the judgment assigning the coverage liability to Scottsdale was affirmed.
As this case demonstrates, trucking accidents are usually very serious and can be debilitating. Federal law regulates truck drivers in an attempt to ensure the safety of both the drivers and others on the road. Sometimes, however, employers may attempt to circumvent these safety laws by providing incentives for drivers who deliver their loads in a shorter amount of time. If you have been involved in a truck accident in the state of California, contact Sharifi Firm, PLC to discuss the potential of gaining financial restitution. Contact us today by calling 1-866-422-7222 or through this website.
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