Prime Ins. Co. v. Wright

Prime Ins. Co. v. Wright

Opinion

 [*597]  Easterbrook, Circuit Judge. Decardo Humphrey was a driver for Riteway Trucking. All of his trips began in South Holland, Illinois. Riteway would send him to a destination, often in another state; after unloading his truck, Humphrey would receive instructions about where to pick up his next load, which he would take to South Holland or another destination. He always ended up in Illinois to start another trip.

In November 2013 Humphrey drove a truck to Fort Wayne, Indiana. After he dropped off the freight, Riteway directed him to another site in Fort Wayne, where he was to pick up a load. While en route to the pickup site, Humphrey's truck collided with a car driven by Darnell Wright. After cooperating [**2]  with Wright and the police, Humphrey picked up his new load and delivered it in Illinois.

Wright, who accused Humphrey of negligence, eventually sued Riteway in a state court of Indiana. Riteway did not appear, and a default judgment for $400,000 was entered against it. Riteway also did not cooperate with Prime Insurance Co. and thus forfeited the benefit of the policy that Prime had issued.

 [*598]  Although Riteway lost its insurance coverage, the policy contained an endorsement known as the MCS-90 ("the Endorsement"), which provides payments to an injured party even when the insurer need not defend or indemnify its client. A federal court determined that Riteway's obduracy had cost it the benefit of Prime's policy but reserved all questions about whether Wright could recover under the Endorsement. The state's judiciary declined to allow Prime to attack the default judgment. Prime Insurance Co. v. Wright, 133 N.E. 3d 749 (Ind. App. 2019). This led Prime to file a second suit in federal court, seeking a declaratory judgment that the Endorsement does not entitle Wright to any money. The district court held that the Endorsement applies and ordered Prime to pay up. 2021 U.S. Dist. Lexis, 599 F. Supp. 3d 733, 2021 U.S. Dist. Lexis 228400 (N.D. Ind. Nov. 30, 2021).

Prime contends that we should follow the "trip specific" approach adopted by Canal Insurance Co. v. Coleman, 625 F.3d 244 (5th Cir. 2010). Under this approach, [**3]  the Endorsement applies only when a truck is loaded with freight and moving from one state to another at the moment of the collision. Wright urges us to follow the "fixed intent" approach used in Century Indemnity Co. v. Carlson, 133 F.3d 591 (8th Cir. 1998). Under that approach, the Endorsement applies when the driver has a fixed intent to transport freight across state lines in the near future. The district court instead used what it called a "totality of the circumstances" approach. Decisions by district courts across the country support all three possibilities.

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