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Old Republic Ins. Co. v. Stratford Ins.Co.

United States District Court, District of New Hampshire

January 27, 2014

Old Republic Insurance Company
Stratford Insurance Company Opinion No. 2014 DNH 016

Philip A. Bramson, Esq. Naomi L. Getman, Esq. Richard C. Nelson, Esq. Laurence J. Rabinovich, Esq.


Landya McCaffrty, District Judge

In a case that has been removed from the New Hampshire Superior Court, Old Republic Insurance Company ("Old Republic") petitions for a declaratory judgment concerning: (1) its coverage obligations with respect to a motor-vehicle accident involving its insureds; and (2) the scope of its duty to defend its insureds in an underlying action that resulted from the accident. In the alternative, Old Republic seeks various forms of equitable relief. Stratford Insurance Company ("Stratford"), which also provides coverage for some of Old Republic's insureds, has filed a counterclaim for declaratory judgment. Before the court are cross motions for summary judgment. For the reasons that follow, each motion is granted in part and denied in part.

Summary Judgment Standard

"Summary judgment is warranted where 'there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" McGair v. Am. Bankers Ins. Co. of Fla., 693 F.3d 94, 99 (1st Cir. 2012) (quoting Fed.R.Civ.P. 56(a); citing Rosciti v. Ins. Co. of Penn., 659 F.3d 92, 96 (1st Cir. 2011)). "The object of summary judgment is to 'pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'" Davila v. Corp. de P.R. para la Diffusion Pub., 498 F.3d 9, 12 (1st Cir. 2007) (quoting Acosta v. Ames Dep't Stores, Inc., 386 F.3d 5, 7 (1st Cir. 2004)).


This action arises out of litigation stemming from a motor-vehicle accident. Specifically, in the United States District Court for the District of Connecticut, Daniel and Karla Bendor filed a complaint alleging that Antoine Girginoff jackknifed the tractor-trailer he was operating, struck their vehicle, and injured them. The tractor Girginoff was driving was owned by Ryder Transportation Services ("Ryder"), and leased by Ryder to Gary Merrill d/b/a DAM Express Delivery Service ("DAM"). DAM, in turn, employed Girginoff. The trailer he was hauling was owned by Coca-Cola Bottling Company of Northern New England, Inc. ("Coca-Cola NE"). The Bendors are suing Girginoff (for negligence, loss of consortium, and bystander emotional distress), DAM (for negligent entrustment, hiring, training, supervision, and retention), Ryder (for negligent entrustment, hiring, training, supervision, and retention), and Coca-Cola NE (for negligence, loss of consortium, bystander emotional distress, and negligent hiring, training, supervision, and retention). Old Republic is currently providing a defense to Girginoff, DAM, and Coca-Cola NE in the underlying action.

The lease agreement between DAM and Ryder contains a set of provisions regarding liability insurance, including the following:

The party designated on Schedule A (the "Insuring Party") [i.e., Ryder] agrees to furnish and maintain, at its sole cost, a policy of automobile liability insurance . . . covering both you [i.e., DAM] and Ryder as insureds for the ownership, maintenance, use, and operation of each Vehicle ("Liability Insurance"). If you [i.e., DAM] are the Insuring Party, the terms of the policy and the insurer must be acceptable to Ryder. The Liability Insurance must provide that its coverage is primary and not additional or excess coverage over insurance otherwise available to either party .... The Insuring Party [i.e., Ryder] agrees to designate the other party [i.e., DAM] as an additional insured on the Liability Insurance ....

Pet'r's Mem. of Law, Ex. L. (doc. no. 26-14), at 3. The lease agreement further provides:

Party Responsible for Liability Insurance: Ryder. Combined Single Limits $1, 000, 000 per occurrence. Customer Deductable: $1, 500 per occurrence. You [i.e., DAM] agree that Ryder shall have the sole right to conduct accident investigations and administer claims handling and settlements and you shall adhere to and accept Ryder's conclusions and decisions.

Id. at 7.

To satisfy its obligation as the Insuring Party under the lease agreement, Ryder relied upon a Commercial Package Policy issued to it by Old Republic. With regard to liability coverage, that policy obligates Old Republic to: (1) "pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto', " Pet'r's Mem. of Law, Ex. I (doc. no. 26-11), at 23; and (2) "defend any 'insured' against a 'suit' asking for such damages, " id.

In a section headed "Other Insurance, " the policy Old Republic issued to Ryder provides, in pertinent part:

When this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering on the same basis.

Pet'r's Mem. of Law, Ex. I (doc. no. 26-11), at 29. The parties agree that with respect to the tractor DAM leased from Ryder, Old Republic's coverage is primary. Their dispute concerns whether a policy Stratford issued to DAM, described below, also covers any potential losses on a primary basis, which would trigger Old Republic's right to pay only its proportional share of any losses suffered by any insureds covered by both the policy it issued and the policy Stratford issued (hereinafter "mutual insureds").

At the time of the Bendor accident, DAM was covered by a Commercial Lines Policy it had obtained from Stratford. That policy provided liability coverage for three categories of motor vehicles: (1) specifically described autos; (2) hired autos; and (3) non-owned autos. The policy describes "hired autos" as "[o]nly those 'autos' you lease, hire, rent, or borrow." Pet'r's Mem. of Law, Ex. J. (doc. no. 26-12), at 9. For its hired-auto coverage, DAM paid a premium of $400. See id. at 6. That premium was based upon DAM's report to Stratford that it spent approximately $5, 000 per year on hired autos. Stratford has produced undisputed evidence that the figure DAM gave for its estimated cost of hire was based upon its projected rental of vans to augment the two-vehicle fleet of vans it owned and used for local deliveries. It is also ...

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