[This decision has been published in Ohio Official Reports at
95 Ohio St.3d 441.]
LYNCH, ADMR., ET AL., APPELLANTS, v. YOB ET AL., APPELLEES.
[Cite as Lynch v. Yob, 2002-Ohio-2485.]
Insurance—Motor vehicle accident—Scope of tractor-trailer insurance coverage—
Coverage is available on trailer under a federally mandated MCS-90
endorsement to insurance policy even though operator of the rig was not an
insured under the terms of the trailer’s main policy and even though there
was no claim that the trailer owner was negligent.
(Nos. 2001-0120 and 2001-0121—Submitted January 9, 2002—Decided June 12,
2002.)
APPEALS from the Court of Appeals for Trumbull County, Nos. 99-T-0062 and
99-T-0065.
__________________
ALICE ROBIE RESNICK, J.
{¶1} These appeals concern the scope of insurance coverage relating to a
traffic accident, in which two automobile occupants died, that was caused by the
admitted negligence of the operator of a tractor-trailer rig. At this point, questions
pertaining to the coverage on the tractor involved in the accident have been
resolved. At issue is whether the policy of insurance covering the leased trailer
involved in the accident is a potential source of recovery for the personal
representatives of the accident victims and for their estates. The specific issue for
consideration is whether coverage is available on the trailer under a federally
mandated endorsement to the insurance policy, called an MCS-90 endorsement,
even though the operator of the rig was not an insured under the terms of the trailer’s
main policy, and even though there is no claim that the trailer owner was negligent.
{¶2} To resolve this issue, we adopt the reasoning of recent decisions of
two federal circuit courts of appeals and determine that coverage is available under
SUPREME COURT OF OHIO
the trailer policy’s MCS-90 endorsement in this situation. We reverse the
judgments of the court of appeals below and reinstate the judgment of the trial court.
I
Facts and Procedural History
{¶3} On October 11, 1996, an accident involving a tractor-trailer and an
automobile occurred on the Ohio Turnpike. The driver of the automobile, Justin L.
Reese, and his passenger, Stephen M. Wiley, were killed in the accident. The
tractor-trailer was driven by defendant-appellee Lawrence P. Yob, an employee of
the tractor’s owner, defendant-appellee Bath Transport, Inc. (“Bath”), which is
owned by defendant-appellee Express Companies of America, Ltd. Yob’s
negligence in causing the accident is not disputed. The tractor was insured by
defendants-appellees American International Group, Inc. and National Union Fire
Insurance Company of Pittsburgh (collectively “AIG”), with a policy limit of $1
million. It has now been established that this policy provides coverage for the
accident and that the policy will indemnify Yob and Bath for any judgment against
them up to the policy limit. It has further been established that the tractor’s policy
had a federally mandated MCS-90 endorsement with a coverage limit of $1 million,
which does not provide additional coverage beyond the $1 million provided by the
tractor’s liability policy.
{¶4} The parties agree that the trailer, owned by appellee GLS Leasco of
Michigan, Inc., or by appellees Central Transport, Inc., and Central Cartage
Company, was insured by AIG with a policy limit of $2.5 million.1 The parties
further agree that Bath and Yob are not included within the definition of “insureds”
under this policy (because the policy specifically states that any “trucker” who is
not an employee of the named insured is not an insured under its terms), so that
1. In an accident involving a tractor-trailer, the accident is considered to have arisen out of the use
of each, and insurance coverage on both the tractor and the trailer is potentially implicated. See
Blue Bird Body Co., Inc. v. Ryder Truck Rental, Inc. (C.A.5, 1978), 583 F.2d 717, 726-727.
2
January Term, 2002
coverage under the main policy is not available. Attached to this policy is an MCS-
90 endorsement with a coverage limit of $2.5 million. The significance of the
MCS-90 endorsement to the trailer policy is the subject of these appeals.
{¶5} On January 24, 1997, plaintiffs-appellants Marie V. Lynch,
administrator of the estate of Stephen M. Wiley, and Susan Reese, administrator of
the estate of Justin L. Reese, filed a wrongful-death action in the Trumbull County
Court of Common Pleas against various defendants who allegedly were at fault in
the accident. In an amended complaint, appellants revised the list of defendants,
including the insurance companies as defendants, and added a claim for declaratory
judgment, seeking to establish the extent and amount of coverage available under
the tractor and trailer policies. Although appellants in their initial complaint had
included an allegation that negligent maintenance of the trailer contributed to the
accident, appellants in their amended complaint dropped any allegation of
wrongdoing by the trailer owner.
{¶6} All parties except Yob and Bath moved for summary judgment in the
declaratory judgment portion of the action. Regarding the only issue pertinent to
these appeals, appellants argued that coverage was available under the MCS-90
endorsement to the trailer policy. All appellees argued that coverage was
unavailable. On that question, the trial court granted summary judgment to
appellants, declaring that, although Bath and Yob were not insureds under the
trailer policy, the MCS-90 endorsement to that policy applied and that coverage
was available up to the $2.5 million policy limit. The trial court ordered the case
to proceed to trial to determine appellants’ damages and also determined under
Civ.R. 54(B) that there was no just reason for delay in its judgment entry
establishing the scope of insurance coverage.
{¶7} On appeal, the court of appeals reversed the judgment of the trial court
pertaining to the trailer’s MCS-90 endorsement, holding that there was no
obligation for AIG to indemnify Bath and Yob under the trailer’s MCS-90
3
SUPREME COURT OF OHIO
endorsement for any damages appellants might recover against Bath and Yob. The
court of appeals determined that “[b]y the plain language of the MCS-90
endorsement itself, there must be a final judgment against an ‘insured’ to trigger its
provisions.” The court of appeals went on to conclude that since neither Yob nor
Bath, the only parties potentially liable for wrongful death, qualified as insureds in
the underlying trailer policy, “the MCS-90 endorsement could not magically
transform them into ‘insureds’ under the endorsement.” The court of appeals found
that appellees should have been granted summary judgment based on their
argument that there was no coverage available to appellants under the MCS-90
endorsement to the trailer policy. The cause is now before this court pursuant to
the allowance of discretionary appeals.
II
The MCS-90 Endorsement
{¶8} Under the Motor Carrier Act of 1980, Sections 29 and 30, Public Law
No. 96-296, 94 Stat. 793, July 1, 1980, certain commercial motor carriers engaged
in interstate commerce must register with the United States Secretary of
Transportation and must comply with minimum financial responsibility
requirements established by the Secretary of Transportation. Sections 13902(a)(1)
and 31139, Title 49, U.S.Code. To that end, Section 13906(a)(1), Title 49,
U.S.Code provides:
{¶9} “The Secretary may register a motor carrier under section 13902 only
if the registrant files with the Secretary a bond, insurance policy, or other type of
security approved by the Secretary, in an amount not less than such amount as the
Secretary prescribes …. The security must be sufficient to pay, not more than
the amount of the security, for each final judgment against the registrant for bodily
injury to, or death of, an individual resulting from the negligent operation,
maintenance, or use of motor vehicles, or for loss or damage to property (except
property [being shipped] …), or both.”
4
January Term, 2002
{¶10} See, also, Section 387.301, Title 49, C.F.R., a regulation related to
the above authority, which provides that no motor carrier shall engage in interstate
commerce unless certificates of insurance or other securities or agreements are filed
with and accepted by the Federal Motor Carrier Safety Administration,
“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.”
{¶11} Regulations prescribed by the Secretary of Transportation pursuant
to Section 31139(b), Title 49, U.S.Code require a base coverage amount of at least
$750,000, with more in some situations, to fulfill the financial responsibility
requirements. Sections 387.7(a) and 387.9, Title 49, C.F.R. The regulations
require that a specific endorsement form must be included in any insurance policy
to satisfy the registration and financial responsibility requirements. This form, the
MCS-90 endorsement, is set out at Section 387.15, Title 49, C.F.R., at Illustration
I, and is titled “Endorsement for Motor Carrier Policies of Insurance for Public
Liability Under Sections 29 and 30 of the Motor Carrier Act of 1980.”2
{¶12} The MCS-90 endorsement provides:
2. An MCS-90 endorsement is often referred to as an ICC endorsement because its form was
initially prescribed under statutes delegating some of the enforcement of their provisions to the
Interstate Commerce Commission. However, the ICC was abolished by the ICC Termination Act
of 1995, and its responsibilities were transferred to the Surface Transportation Board of the
Department of Transportation. Public Law No. 104-88, Section 201,
109 Stat. 803, 932-934,
December 1995. At that time, the registration and financial responsibility statutes at issue in this
case were revised and renumbered. (In particular, Section 13906, Title 49, U.S.Code is similar in
many respects to former Section 10927, Title 49, U.S.Code.) However, Congress provided that
regulations issued by the ICC would “continue in effect according to their terms until modified,
terminated, superseded, set aside, or revoked in accordance with law.”
Public Law No. 104-88,
Section 204(a),
109 Stat. 941. (See note following Section 701, Title 49, U.S. Code.) In 1996,
current Section 387.301, Title 49, C.F.R., was redesignated to its present location. See
61 F.R.
54,706, 54,709. For our purposes here, the pertinent regulations have remained the same in all
material terms since first prescribed pursuant to the Motor Carrier Act of 1980. For a discussion of
the effect of the ICC Termination Act of 1995 on the federal regulatory scheme covering interstate
motor carriers, see Empire Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co. (1997),
117 Md. App.
72, 91-95,
699 A.2d 482.
5
SUPREME COURT OF OHIO
{¶13} “In consideration 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 operation, maintenance or use of
motor vehicles subject to the financial responsibility requirements of Sections 29
and 30 of the Motor Carrier Act of 1980 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. … [N]o condition, provision, stipulation, or limitation contained in
the policy, this endorsement, or any other endorsement thereon, or violation thereof,
shall relieve the company from liability or from the payment of any final judgment,
within the limits of liability herein described, irrespective of the financial condition,
insolvency or bankruptcy of the insured. However, all terms, conditions, and
limitations in the policy to which the endorsement is attached shall remain in full
force and effect as binding between the insured and the company. The insured
agrees to reimburse the company for any payment made by the company on account
of any accident, claim, or suit involving a breach of the terms of the policy, and for
any payment that the company would not have been obligated to make under the
provisions of the policy except for the agreement contained in this endorsement.”
6
January Term, 2002
III
Applicability of the MCS-90 Endorsement
{¶14} Courts that consider the applicability of an MCS-90 endorsement, a
federally mandated endorsement to motor carrier insurance policies, construe its
operation and effect as a matter of federal law. See Canal Ins. Co. v. First Gen.
Ins. Co. (C.A.5, 1989), 889 F.2d 604, 610, modified on other grounds (C.A.5,
1990),
901 F.2d 45; Ford Motor Co. v. Transport Indemn. Co. (C.A.6, 1986),
795
F.2d 538, 545.
{¶15} In a recent decision, the United States Court of Appeals for the Ninth
Circuit considered the applicability of an MCS-90 endorsement in a situation that
was similar factually to the situation before us. In John Deere Ins. Co. v. Nueva
(C.A.9, 2000), 229 F.3d 853, certiorari denied (2002), ___ U.S. ___,
122 S.Ct.
1063,
151 L.Ed.2d 967, a tractor-trailer driver allegedly negligently caused an
accident. The tractor driver and its owner were uninsured. The trailer involved in
the accident was owned by an unrelated company, and was insured by John Deere
Insurance Company. Id., 229 F.3d at 854. There was no allegation that the trailer
owner was negligent.
{¶16} Pursuant to the terms of the main policy on the trailer at issue,
coverage was not provided for the driver and owner of the tractor involved in the
accident, but that policy included an MCS-90 endorsement. The insurer sought a
declaratory judgment that it had no duty to indemnify its insured (the trailer owner)
or the driver and owner of the tractor for any liability arising out of the accident.
The district court granted the insurer’s motion for summary judgment, finding that
the MCS-90 endorsement did not create coverage for the driver and owner of the
tractor. Id., 229 F.3d at 854-855.
{¶17} On appeal, the parties seeking recovery for injury and damages
caused by the accident contended that the insurer could not rely on the limiting
provisions of the underlying policy to avoid indemnifying permissive users of
7
SUPREME COURT OF OHIO
noncovered vehicles because the MCS-90 endorsement modified the definition of
“insured” in the underlying policy. Id., 229 F.3d at 859. The Ninth Circuit reversed
the judgment of the district court and found that the MCS-90 endorsement to the
trailer’s policy obligated the insurer to indemnify the driver and owner of the
tractor. Id. at 860.
{¶18} The court stressed that “the primary purpose of the MCS-90 is to
assure that injured members of the public are able to obtain judgment from
negligent authorized interstate carriers.” Id., 229 F.3d at 857. The court proceeded
to follow the analysis of the Tenth Circuit Court of Appeals in Adams v. Royal
Indemn. Co. (C.A.10, 1996), 99 F.3d 964, which it stated involved “nearly identical
facts.” Id. at 858. In Adams, the Tenth Circuit found that in this situation the MCS-
90 endorsement indirectly modifies the insurer’s policy definition of “insured” to
expand coverage to include any permissive users of insured vehicles. See
99 F.3d
at 970.
{¶19} The MCS-90 endorsement explicitly overrides any “condition,
provision, stipulation, or limitation” in the policy that would relieve the insurer
from its duty to pay, to the limits of the endorsement, a judgment against the insured
for negligent operation. But appellees argue that this case does not involve any
“condition, provision, stipulation, or limitation,” and instead involves the more
fundamental question of who is an insured under an insurance policy. Appellees
contend that the MCS-90 endorsement operates to negate exclusions from coverage
but cannot transform noninsured parties into insureds. In addition, appellees argue
that there can be no recovery under the trailer owners’ MCS-90 endorsement
because there can never be a final judgment against the trailer owners, since
appellants have dropped any allegations of the trailer owners’ own negligence.
{¶20} Furthermore, appellees argue that John Deere Ins. Co. v. Nueva and
Adams are distinguishable from this case because those cases involved underlying
policies that limited coverage to specifically described vehicles, while this case
8
January Term, 2002
involves a fundamentally different underlying policy limitation, that “truckers”
other than employees of the named insured are not covered while using the trailer.
However, appellees’ readings of John Deere Ins. Co. v. Nueva and Adams are much
too restrictive. The end result of both those cases is that, on these facts, “an MCS-
90 endorsement requires an insurer to indemnify a permissive user of a noncovered” vehicle. John Deere Ins. Co. v. Nueva, 229 F.3d at 858; Adams, 99 F.3d
at 971. The case sub judice involves a permissive user of a noncovered vehicle, the
leased trailer at issue, and so the rule of John Deere Ins. Co. v. Nueva and Adams
is fully applicable. That rule that emerges from those cases is that the MCS-90
endorsement should be read to eliminate any limiting clauses in the underlying
policy restricting the scope of coverage. See Adams,
99 F.3d at 971; John Deere
Ins. Co. v. Nueva, 229 F.3d at 859.
{¶21} We find that although there may be some factual differences between
the case sub judice and the two federal appellate decisions (for example, that there
is coverage available on the tractor in this case while there was not in John Deere
Ins. Co. v. Nueva and Adams), the reasoning of those two cases fully applies to our
determination. Furthermore, while appellees argue that the weight of authority
favors a finding of no obligation to indemnify in this situation, for various reasons
none of appellees’ cases has the precedential value of those two decisions.
{¶22} First, appellees’ basic argument is that the MCS-90 endorsement, the
regulations giving rise to it, and the federal statutes authorizing the regulations all
mandate by their explicit terms that there is no duty to indemnify a permissive user
not covered by the underlying policy. However, this argument was specifically
rejected by the holdings of John Deere Ins. Co. v. Nueva and Adams. Therefore,
appellees’ citation of cases such as Del Real v. United States Fire Ins. Crum &
Forster (E.D.Cal.1998), 64 F.Supp.2d 958, affirmed without published opinion
(C.A.9, 1999),
188 F.3d 512,
1999 WL 626619, are not as authoritative as the two
federal appellate court decisions we follow. Furthermore, the district court in Del
9
SUPREME COURT OF OHIO
Real held that the MCS-90 endorsement did not even apply because the trailer at
issue in that case was not a motor vehicle licensed to carry property in interstate
commerce. 64 F.Supp.2d at 964-965. Therefore, any consideration of the specifics
of the MCS-90’s provisions was surely dictum. See Pierre v. Providence
Washington Ins. Co. (2001),
286 A.D.2d 139, 144,
730 N.Y.S.2d 550.
{¶23} Second, cases involving disputes between two insurance companies,
unlike those involving an injured member of the public seeking recovery under a
MCS-90 endorsement, do not implicate the key rationale behind the MCS-90
endorsement, which is the protection of the public. Therefore, any statements cited
by appellees within decisions such as Natl. Mut. Ins. Co. of the Dist. of Columbia
v. Liberty Mut. Ins. Co. (C.A.D.C. 1952), 196 F.2d 597, and John Deere Ins. Co. v.
Truckin’ U.S.A. (C.A.5, 1997),
122 F.3d 270 (both of which were principally
disputes between insurance companies), for the point that only the named insured
can be covered by an MCS-90 endorsement are of limited value to our
consideration. For a compilation of cases concerning the allocation of losses when
an MCS-90 endorsement is involved, see Annotation, Effect of Motor Carrier Act
Provisions on Insurance and Indemnity Agreements (
49 U.S.C.A. §§ 13906, 14102)
in Allocating Losses Involving Interstate Motor Carriers (1999), 157 A.L.R.Fed.
549.
{¶24} Third, some of appellees’ cited cases predate the present MCS-90
endorsement and its accompanying regulations and statutes. Although there are
similarities between the current regulatory system and that in place prior to 1980,
the Motor Carrier Act of 1980 also worked some significant changes to the
regulatory scheme. Therefore, cases such as Wellman v. Liberty Mut. Ins. Co.
(C.A.8, 1974), 496 F.2d 131, can be distinguished from the situation we consider.
{¶25} Fourth, state court decisions (particularly those of intermediate state
appellate courts) interpreting the MCS-90 endorsement, which is mandated by
federal law, do not have the persuasive value of decisions by federal circuit courts.
10
January Term, 2002
Therefore, cases such as Powers v. Meyers (1995), 101 Ohio App.3d 504,
655
N.E.2d 1358, and Progressive Cty. Mut. Ins. Co. v. Carway (Tex.App.1997),
951
S.W.2d 108, cited by appellees, are not as authoritative as the two federal circuit
court decisions we follow.
{¶26} Finally, appellees argue that the reimbursement provision of the
MCS-90 endorsement, which requires the insured to reimburse the insurer “for any
payment that the company would not have been obligated to make under the
provisions of the policy except for” the MCS-90 endorsement, is at odds with a
holding that an insurer must indemnify a permissive user of a noncovered vehicle.
They argue that because the insurer has no contractual relationship with such a user,
the insurer would be unable to obtain reimbursement from that user. Thus the
insurer would have to forgo reimbursement or seek reimbursement from its
innocent insured. However, just as in the situation involving a dispute between two
insurance companies discussed above, questions involving disputes between the
insurer and the insured do not implicate the key purpose of the MCS-90, which is
to protect members of the public, and, therefore, such questions are peripheral to
our inquiry. These arguments based on the reimbursement provision were
implicitly rejected in the two federal circuit court decisions we follow, particularly
in Adams, 99 F.3d at 972, where the court stated, “In situations where the policy
absent the endorsement did not insure the vehicle which caused the injuries, the
endorsement explicitly requires that the insured reimburse the insurer because the
insurer’s payment to the injured motorist is a ‘payment the company would not
have been obligated to make under the provisions of the policy except for the
agreement contained in this endorsement.’ See
49 C.F.R. § 387.15. Thus, the
public is protected by insurance and ultimate responsibility rests on the truckers, all
as mandated by Congress ….” For a case interpreting the reimbursement
provisions of the MCS-90 in the context of an insurer seeking reimbursement from
11
SUPREME COURT OF OHIO
its insured, see T.H.E. Ins. Co. v. Larsen Intermodal Serv., Inc. (C.A.5, 2001), 242
F.3d 667.
{¶27} In conclusion, we agree with the court in John Deere Ins. Co. v.
Nueva, 229 F.3d at 860, which stated that finding the driver and owner of the tractor
in this type of situation to be insureds under the MCS-90 endorsement allows the
MCS-90 endorsement to serve “the purpose it was expressly designed to serve,
modifying a policy to insure the availability of insurance for negligently injured
members of the public.” As in that case, interpreting the endorsement in the way
advocated by appellees “would frustrate this express Congressional goal.” Id.
{¶28} Accordingly, the judgments of the court of appeals are reversed, and
the trial court’s declaratory judgment that coverage is available pursuant to the
trailer’s MCS-90 endorsement up to the endorsement’s coverage limit of $2.5
million is reinstated.
Judgments reversed.
Douglas, F.E. Sweeney and Pfeifer, JJ., concur.
MOYER, C.J., T. BRYANT and LUNDBERG STRATTON, JJ., dissent.
THOMAS F. BRYANT, J., of the Third Appellate District, sitting for COOK, J.
__________________
LUNDBERG STRATTON, J., dissenting.
{¶29} I respectfully dissent from the majority’s expansive interpretation of
the MCS-90 endorsement. I believe that federal legislation, the language of the
endorsement, and the intent of the parties support the opposite conclusion.
{¶30} The federal government’s Motor Carrier Act of 1980 established
minimum financial responsibility requirements for motor vehicles used in interstate
commerce. Sections 13902(a)(1) and 31139, Title 49, U.S.Code. The Act requires
that a motor carrier have sufficient insurance to pay a final judgment against it.
Section 13906(a)(1), Title 49, U.S.Code. The MCS-90 endorsement, required by
the 1980 MCA, is required to be attached to a liability insurance policy issued to
12
January Term, 2002
an interstate motor carrier. Section 387.15, Title 49, C.F.R. Its primary purpose is
to protect the public by ensuring that a carrier has independent financial
responsibility for the losses that arise out of that carrier’s trucking operations.
{¶31} This is evident from the standard language the government placed in
the MCS-90. It provides that the insurer agrees to pay any final judgment recovered
against the insured from public liability resulting from negligence in the operation,
maintenance, or use of motor vehicles that are subject to the Motor Carrier Act of
1980. The MCS-90 also provides that the insured agrees to reimburse the insurer
for any payment made under the MCS-90 on account of an accident, claim, or suit
that the insurer would not have had to make but for the MCS-90. Therefore, the
MCS-90 protects the injured person who has obtained a judgment against the
insured by ensuring that the judgment will be paid. For example, when an injured
person obtains a judgment against an insured yet the insured’s primary policy is not
obligated to cover the loss, the insurer will pay the judgment against the insured
under the MCS-90 regardless of any coverage defenses or issues involving other
insurance allocation. Under the MCS-90, the insurer may then recoup its losses
from its insured.
{¶32} The majority follows John Deere Ins. Co. v. Nueva (C.A.9, 2000),
229 F.3d 853, certiorari denied (2002) ____U.S.___,
122 S.Ct. 1063,
151 L.Ed.2d
967, and Adams v. Royal Indemn. Co. (C.A.10, 1996),
99 F.3d 964, but
acknowledges that both are factually different from this case. In Adams, the injured
party was unable to collect the judgment he had obtained against the tortfeasor; in
John Deere, the alleged tortfeasor did not have insurance and presumably would be
unable to pay a judgment.. The Adams court acknowledged that the tortfeasor was
not insured under the trailer’s primary insurance policy, but expansively construed
the MCS-90 to cover the unpaid judgment. The Adams court reasoned that the
policy behind the MCS-90 was to protect against uninsured regulated vehicles.
Id.
at 968. John Deere followed the reasoning in Adams because the driver of the
13
SUPREME COURT OF OHIO
tractor in John Deere was uninsured and coverage under the MCS-90 was deemed
necessary to achieve its purpose of making any judgment against him collectible.
John Deere, 229 F.3d at 859-860.
{¶33} However, just one year earlier, the same court reached the opposite
result when presented with circumstances more similar to the case before us. In
Del Real v. United States Fire Ins. Crum &; Forster (C.A.9, 1999), 188 F.3d 512,
1999 WL 626619, the Ninth Circuit affirmed without a published opinion the
district court’s decision to deny coverage under the MCS-90 to an injured party
who had collected the insurance proceeds from the tractor’s insurer. Del Real v.
United States Fire Ins. Crum & Forster (E.D.Cal.1998),
64 F.Supp.2d 958. Del
Real obtained a judgment against the driver and owner of the tractor, who had
admitted liability for the accident. The judgment was paid in part by the owner’s
insurer. Del Real attempted to collect the remainder of the judgment from the
insurance covering the trailer after its owner had been dismissed from the
underlying tort case. The district court held that the plaintiff was not entitled to
recover under MCS-90 because neither the driver nor the owner of the tractor was
an insured under the MCS-90 endorsement covering the trailer, and the
endorsement obligates the trailer’s insurer only to pay “any final judgment
recovered against the insured.”
Id. at 964. I believe that the facts of Del Real are
more closely aligned with the situation before us.
{¶34} I also believe that the majority’s decision to expand the MCS-90’s
coverage to reach permissive users defies both logic and common sense. In this
case, the negligence of the driver of the tractor was undisputed and the tractor’s
liability insurance policy will indemnify him and the tractor owner up to the policy
limits. Allegations of negligence made against the trailer’s owner have been
dropped. The driver and owner were merely permissive users of the trailer and not
considered insureds for purposes of the trailer’s liability insurance or MCS-90
endorsement. There is no final judgment against the trailer’s insured.
14
January Term, 2002
{¶35} Nevertheless, as a result of today’s opinion, the trailer’s insurer will
have to pay a judgment against a party other than its own insured. Furthermore, the
insurer now has a right under the MCS-90 to recoup the payment from its insured
for another person’s negligence. The majority acknowledges this problem as a
peripheral issue that it need not consider. It is, however, an example of the
majority’s overreaching interpretation and the illogical results it yields.
{¶36} The word “insured” in the MCS-90 refers to the insured identified in
the body of the primary liability policy. Campbell v. Bartlett (C.A.10, 1992), 975
F.2d 1569; Natl. Mut. Ins. Co. of D.C. v. Liberty Mut. Ins. Co. (C.A.D.C.1952),
196
F.2d 597; Del Real,
64 F.Supp.2d 958. I do not agree that the meaning of “insured”
may be expanded to include permissive users who are not insured under the policy.
The purpose of the MCS-90, as the majority stresses, is the protection of the public.
However, it must be within the confines of the contractual relationship established
by the MCS-90. Therefore, for the foregoing reasons, I respectfully dissent and
would affirm the judgments of the court of appeals.
MOYER, C.J., and T. BRYANT, J., concur in the foregoing dissenting opinion.
__________________
Clair M. Carlin, for appellants.
Reminger & Reminger Co., L.P.A., James J. Turek and Brian D. Sullivan,
for appellees Lawrence P. Yob, Bath Transport, Inc., Express Companies of
America, Inc., Central Transport, Inc., Centra, Inc., and GLS Leasco of Michigan,
Inc.
Eastman & Smith, Ltd., David F. Cooper and Matthew D. Harper, for
appellees American International Group, Inc., and National Union Fire Insurance
Company of Pittsburgh, Pa.
Robert W. Kerpsack Co., L.P.A., and Robert W. Kerpsack, urging reversal
for amicus curiae Ohio Academy of Trial Lawyers.
__________________
15
