Recently, the trial court in Ector County analyzed coverage issues in a truck / train collision case and held that there was no coverage available for the accident under a policy issued by Unitrin County Mutual Insurance Company. Although the court’s order granting summary judgment was brief without stating specific reasoning, Unitrin’s motion was based on various policy exclusions discussed below.

In Union Pacific Railroad Co. v. Jaime Flores Farra et al., No. D-130-001, in the 358th District Court, Ector County, Texas, Union Pacific Railroad Company filed a lawsuit against various defendants after a tractor-trailer owned or operated by the defendants collided with a train operated by Union Pacific. The lawsuit alleged that one of the defendants, A.S. Manriquez Trucking, Inc., negligently hired another defendant to drive the tractor-trailer involved in the collision. Manriquez’s insurer, Unitrin County Mutual Insurance Company, filed a motion for summary judgment seeking a declaration that it had no duty to defend or indemnify Manriquez.

Unitrin’s motion was based on various exclusions in the policy. Unitrin first argued that the automobile in question was not a “covered auto” under the policy because the vehicle was not expressly mentioned in the schedule of covered vehicles. The vehicle also did not fall under the definition of a “hired” vehicle because it was operated by an independent contractor and not exclusively controlled by a named insured under the policy.

Unitrin also argued that the driver of the vehicle was not a covered insured under the policy because he was not driving a covered automobile, even though Union Pacific alleged that Manriquez negligently entrusted the driver with the automobile. Unitrin cited to the Fifth Circuit’s decision in Lincoln General Ins. v. De la Luz Garcia, 501 F.3d 436 (5th Cir. 2007),involving similar negligent-entrustment allegations.  In Lincoln, the Court rejected the plaintiffs’ claim that even though an accident occurred outside of covered territory, the claim was covered because the negligent hiring occurred within covered territory. Similarly, Unitrin argued that because the underlying claim that formed the basis of the negligent entrustment was not covered, i.e. no covered vehicle, there was no coverage for the negligent hiring and entrustment. Without stating the specific exclusion(s) that the trial court relied on, it granted summary judgment in favor of Unitrin on October 14, 2014.

Editor’s Note: Christopher W. Martin and Todd M. Lonergan of Martin, Disiere, Jefferson & Wisdom, L.L.P. Martin Disiere represented Unitrin in this case and congratulates Unitrin on this significant victory.

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