IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF MISSISSIPPI
BIG BINDER EXPRESS, LLC AND RAYMOND GOODLIN,
V. NO: 3:19CV22-M-P LIBERTY MUTUAL FIRE INSURANCE COMPANY; KEITH GLOVER; AND DAVIAN LEE, INDIVIDUALLY, AND PERSONAL REPRESENTATIVE OF GERALD GLOVER, DECEASED AND ON BEHALF OF ALL THOSE ENTITLED TO RECOVER UNDER THE WRONGFUL DEATH AND SURVIVAL STATUTE
DARLING INGREDIENTS, INC. INTERVENOR
MEMORANDUM OPINION AND ORDER This cause comes before the Court on Defendant Liberty Mutual Fire Insurance Company 55]. The Court, having considered the memoranda
and submissions of the parties, along with relevant case law and evidence, is now prepared to rule.
Factual Background This case hinges on the interpretation of an endorsement to insurance policy number AS2- 681-025265-017 ( p issued by Liberty Mutual Fire Insurance Company to June 1, 2018. The Liberty Mutual policy at issue provides liability policy limits of $2,000,000.
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2014, wherein Big Binder agreed to provide trucking services for Darling as an independent
contractor. To satisfy their contract, Big Binder carried primary insurance through Northland Insurance Company on which it was the named insured, with a liability limit of $1,000,000 per p utual policy.
While providing trucking services for Darling, on May 14, 2018, Plaintiff Raymond Goodlin, an employee of Big Binder, was involved in a motor vehicle accident with a car carrying five occupants. The accident resulted in the death of one and the bodily injury of the four others. Two occupants of the car brought suit against Goodlin and Big Binder, which led to the discovery of a dispute regarding the interplay between the Northland policy, the Liberty Mutual policy and the deductible endorsement of the Liberty Mutual policy. It should be noted however, it is undisputed between the parties that the Northland policy is the primary layer of coverage in this matter.
As a result of this dispute, on February 5, 2019, Big Binder and Goodlin filed a declaratory judgment action. Darling then intervened on March 28, 2019 based upon its status as the named insured on the policy at issue. Shortly thereafter, the Plaintiffs, Liberty Mutual and Darling all filed separate motions for summary judgment. As none of the parties contested the application of Texas law to the interpretation of the insurance policy, this Court will apply Texas law to determine the substantive issues at hand 1
. There are three overarching questions raised in the motions, which when answered, will resolve all of the ancillary issues:
1 This is based upon the fact that the policy was negotiated in Texas, through a Texas broker, and was delivered to a
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I. Is the Liberty Mutual deductible endorsement enforceable as written? II. Is Liberty Mutual entitled to repayment for any payments it makes on behalf of Big
Binder, Goodlin or Darling? III. Is Big Binder required to indemnify Darling stemming from this action under its Contractor Agreement?
Discussion I. Is the Liberty Mutual deductible endorsement enforceable as written?
Texas courts clearly view insurance policies and indemnity agreements as contracts and general rules of contract interpretation apply. Travelers Lloyds Inc. Co. v. Pacific Employers Ins. Co, 602 F.3d 677, 681 (5 th
. Cir. 2010). Further, the terms of an insurance policy are unambiguous as a matter of law if they have definite or certain legal meaning . Id, citing Union Fire Ins. Co. of Pittsburgh, PA v. CBI Industries, Inc., 907 S.W.2d 217, 520 (Tex. 1995). If the court finds no ambiguity in the terms, the court's duty is to enforce the policy according to its plain meaning. Travelers Lloyds Inc. Co. v. Pacific Employers Ins. Co, 602 F.3d 677, 681 (5 th
. Cir. 2010); citing Puckett v. United States Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984).
The Court attaches herein Doc. 55 Exhibit D, being the deductible endorsement to the Liberty Mutual policy.
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The analysis of two elements of the deductible endorsement determine the outcome. First, section of the endorsement, which was left blank by Liberty Mutual. The second item, numbered as states:
You are responsible, up to the Deductible Amount shown in the Schedule, for the total of:
provided by a policy listed under Applicable Policies in the Schedule; plus b. All Supplementary Payments under such policy. There is no ambiguity in this policy endorsement as written. Thus, a review of extrinsic evidence is not necessary. A plain reading of the document, as drafted by Liberty Mutual, states that the insured is only responsible up to the deductible amount shown for any coverage explicitly The Court then looks to the Applicable Policies heading on the endorsement page and finds an absence of any specifically named policy. Again, since the policy, on its face, is not ambiguous, the Court finds that review of extrinsic evidence is unnecessary.
This Court finds that the deductible enforcement as written in Liberty Mutual policy number AS2-681-025265-017 does not require a payment of a deductible by its insured Darling, or its additional insureds, Big Binder and Goodlin. As a result, this finding by the Court renders moot whether:
2 , Liberty Mutual is entitled to repayment for any portion of the deductible it pays 3
, The deductible obligation only applies to damage awards and not voluntary
settlement payments 4
2 Relief sought in  and . 3 Relief sought in . 4 Relief sought in .
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The deductible is enforceable when an insurance company tenders the alleged
deductible without consent of the insured 5
, and Big Binder is contractually obligated to indemnify Darling for the payment of the
. It should be noted that the enforceability of the deductible endorsement does not alter the plain reading of the amount of liability coverage provided to the insureds on the Liberty Mutual
policy declarations page. As a result, this Court finds that the insured and additional insureds are entitled to the full $2,000,000 in liability coverage as explicitly provided for in the Liberty Mutual policy.
II. Is Liberty Mutual entitled to repayment for any payments it makes on behalf of Big
Binder, Goodlin or Darling?
or recoupment of any amounts it pays on behalf of i Liberty Mutual argues that its policy language explicitly provides for the recoupment of any
deductible advanced by it 7
and notes in its footnote that the expanded argument by Plaintiffs regarding indemnity for a paid loss that Liberty Mutual considers uncovered is outside of the scope of the facts before us in this matter. Therefore, the Court finds that any determination regarding recoupment of a deductible payment advanced by Liberty Mutual, within this set of facts, is moot the insured or additional insureds to pay a deductible. Further, any indemnity obligation for
payment of an uncovered loss is not ripe at this time.
5 Relief sought in . 6 Relief sought in . 7 [33, pg. 20-21].
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III. Is Big Binder required to indemnify Darling stemming from this action?
This question regarding indemnity obligations by Big Binder is governed by the Contractor Agreement between Darling and Big Binder. The Contractor Agreement states that the agreement is governed by the laws of the Commonwealth of Kentucky. As such, this Court will apply Kentucky substantive law to the legal question before it regarding the contract between the Plaintiff and Intervenor.
the interpretation of a contract . . . is a question of law for the courts[, Neighborhood Investments, LLC v. Kentucky Farm Bureau Mutual Insurance Company, 430 S.W.3d 248, 250 (Ky. App. 2014) written instrument will be enforced strictly according to its term Middleton v. PNC Bank N.A.,
2019 WL 1224621, *7 (Ky. Ct. App. 2019); citing Hazard Coal Corp. v. Knight, 325 S.W.3d 290, 298 (Ky. 2010) (quoting Frear v. P.T.A. Industries, Inc., 103 S.W.3d 99, 106 (Ky. 2003)). Further,
[G]eneral principles of contract construction apply equally to of the indemnitor under a contract of indemnity according to the terms of such a contract is well recognized. Such a contract is not against public policy and will be enforced if the indemnitee has
United States Fidelity & Guaranty Co. v. Napier Elec. & Constr. Co., 571 S.W.2d 644, 646 (Ky. App. 1978) (quoting National Surety Corp. v. Peoples Milling Co., 57 F.Supp. 281, 282 (W.D. Ky. 1944) ); Thompson v. The Budd Co., 199 F.3d 799, 807 (6th Cir. 1999) (holding that an indemn
any award of an attorney fee is subject to a determination Capitol Cadillac Olds, Inc., 813 S.W.2d 287, 293 (Ky. 1991). This is true even when the contract language itself does not inc Case: 3:19-cv-00022-MPM-RP Doc #: 90 Filed: 02/10/20 7 of 9 PageID #: 1587 Middleton v. PNC Bank N.A., 2019 WL 1224621, *8 (Ky. Ct. App. 2019). As such, under
amount sought is not excessive and accurately reflects the reasonable value of bona fide legal Id, citing A & A Mech., Inc., 998 S.W.2d 505, 514 (Ky. Ct. App. 1999).
Here, the Contractor Agreement between Big Binder and Darling provides:
[Big Binder] shall protect, defend, hold harmless and indemnify Darling . . .from and against all actions, claims, liability, damages, the extent relating to or resulting from performance of the Work, caused in whole or in part by acts or omissions of Big Binder [or] . . . anyone directly or indirectly employed by them. . ..
ent which ultimately caused this
insurance dispute. Big Binder disagrees in its response, arguing that because Darling intervened in the action, and was not a named defendant in the suit when it was filed, Darling is not entitled to
Applying Kentucky law to the contract provision as written, Darling is entitled to expenses ted, Darling would not have incurred these legal fees had Big Binder not injured several people in the 2018 accident. Big any claim to indemnity is misguided. Darling is the named insured to the policy at issue in this
case it is likely that they should have been named as a party from the outset. As a result, the in the
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resolution of this declaratory judgment action, subject to a finding that they are reasonable as required under Kentucky law.
IT IS HEREBY ORDERED that  GRANTED IN PART and DENIED IN PART.
IT IS HEREBY ORDERED that  Defendant Liberty Mutual Fire Insurance GRANTED IN PART and DENIED IN PART.
AND IT IS HEREBY ORDERED is GRANTED IN PART and DENIED IN PART.
This the 10 th
day of February, 2020.
/s/ Michael P. Mills UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF MISSISSIPPI Case: 3:19-cv-00022-MPM-RP Doc #: 90 Filed: 02/10/20 9 of 9 PageID #: 1589