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All Around Transport Inc. v. Continental Western Insurance Co12/12/1996
Opinion by JUDGE CRISWELL
In this dispute over a lost truckload of potatoes, defendant, Continental Western Insurance Company (Continental), appeals, and plaintiffs, All Around Transportation, Inc., (broker) and Sanderson Farms, Inc. (shipper), cross-appeal from a judgment in favor of the shipper, but which dismissed the broker's claim. We affirm in part and reverse in part.
The facts here are undisputed. The broker, acting as transportation broker on behalf of the shipper, contracted with a trucking company to ship a load of raw, unprocessed, potatoes, grown and packed in cartons by the shipper, from the shipper's farm in Colorado to a buyer in Florida. The trucking company picked up the potatoes, but they were eventually lost prior to the delivery.
At the time of this loss, the trucking company was covered by a cargo insurance policy issued by Continental, and the trucking company furnished the broker with a certificate evidencing that it was, in fact, so insured.
By this policy, Continental agreed to "cover" the trucking company's "legal liability as a common or contract carrier" for cargo described in a bill of lading or similar document and carried by the trucking company in one or more vehicles described in the policy. The limits for this coverage were $100,000 for a cargo loss in any one vehicle, with an aggregate limit of $300,000 in the event that two or more vehicles were involved in a single loss. However, this coverage was also subject to a $1,000 deductible for each loss.
The policy provided that, in the event of a loss, the trucking company was required to "notify Continental or its agent" promptly, and within 90 days after the loss, the trucking company was required to supply a "proof of loss" to it. Such proof of loss was to contain the circumstances of the loss, the nature of the cargo, the identity of all ownership and security interests in the cargo, and estimates of repair or replacement costs. However, the policy did not contain a specific requirement that the trucking company provide further notice to Continental in the event that litigation was later commenced.
Under the general terms of the policy, Continental reserved the right to defend the trucking company against any claim resulting from the loss of or damage to the property of others. In addition, the policy authorized Continental to "adjust the loss" either with the trucking company or directly with the owner of the cargo.
In addition to these insuring agreements, the policy had an endorsement that was required by regulations promulgated under the Interstate Commerce Act. See 49 C.F.R. § 1043.2(c) and § 1043.7(a)(3)(1995). This endorsement "amended" the policy to the extent that any cargo loss resulted "in connection with [the trucking company's] transportation service under certificate of public convenience and necessity issued to by the Interstate Commerce Commission, or otherwise in transportation in interstate or foreign commerce subject to Part II of the Interstate Commerce Act."
Under this endorsement, Continental agreed to pay directly to any shipper for cargo damage or loss to the extent that the trucking company "may be held legally liable therefor." The limit of Continental's liability under this endorsement was only $5,000 per loss, but without any deductible.
Upon the loss of the potatoes here, the broker's counsel gave written notice to Continental's agent of the loss, described the circumstances of the loss, identified the shipper as the owner of the potatoes, and estimated their value at some $10,000. Continental's agent acknowledged receipt of this writing, but for reasons not apparent from the re
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