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Commercial Auto |
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Intrastate/Interstate
Commerce |
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MCS-90 Endorsement |
ER Transport Services, Inc.
(ER), a Florida corporation, was registered with the Federal Motor Carrier Safety
Administration as an interstate motor carrier. As such, it was required to
maintain federally mandated liability insurance with an "MCS-90"
endorsement. Accordingly, it had an insurance policy that included the MCS-90
endorsement, issued by Transportation Casualty Insurance Company
(Transportation).
On February 23, 2004, ER
employee Arturo Rosello was driving a tractor-trailer owned by ER Transport
when he was involved in an accident. While en route from Virginia Beach,
Virginia, to Suffolk, Virginia, Rosello collided with an automobile driven by
Craig Heron. Heron and his wife were killed, and their daughter was seriously
injured.
To ascertain its obligation
under the policy, Transportation filed a motion asking the court for a finding
that the policy did not provide coverage for the accident because it occurred
during intrastate commerce, not interstate commerce. The court found that the
MCS-90 endorsement applied only when an insured vehicle transported property in
interstate commerce (from one state to another). Because Rosello was driving
from one Virginia location to another Virginia location, he was driving in
intrastate commerce, not interstate, commerce. As a result, the court found
that the MCS-90 endorsement did not apply. The estates of Mr. and Mrs. Heron
and the guardian for their daughter appealed.
On appeal, the Supreme Court
of Virginia noted that the lower court concluded that the language of the
endorsement should be interpreted in light of the federal statutes and
regulations that mandated its use. Accordingly, the MCS-90 endorsement should
apply only to interstate commerce because the Federal Motor Carrier Safety Act
applied only to interstate commerce.
The Supreme Court of
Virginia disagreed with the lower court's rationale. It chose instead to
emphasize the plain language of the insurance policy. Pursuant to its language,
and in consideration of the premium, the insurer agreed to pay "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." The policy
language did not limit the coverage in terms of interstate or intrastate
commerce. The court found that the language was clear and that the endorsement
applied to the accident.
The judgment of the lower
court was reversed, and the case remanded with directions to enter declaratory
judgment consistent with the Supreme Court's decision.
Heron vs. Transportation
Casualty Insurance Company-Record No. 061813-Supreme Court of
Virginia-September 14, 2007-650 South Eastern Reporter 2d 699