3 min. read

Progressive Southeastern Ins. Co. v. B&T Bulk, LLC 2021 WL 1747897 (Ind. Ct. App. 2021)

Interpretation and application of an MCS-90 Endorsement is an ever evolving line of judicial decisions.  In this case, the Indiana Court of Appeals addressed and offered two important rulings.  First, the Court determined that the MCS-90 Endorsement, in Indiana, applies to intrastate motor carrier travel.  Secondly, the Court also concluded that the MCS-90 Endorsement applies when a truck is empty and on its way to pick up a load.

B&T Bulk was a motor carrier that hauls cement in Indiana and Michigan.  It was also a registered interstate motor carrier operating under United States DOT regulations.  It possessed a commercial automobile liability policy with Progressive Southeastern that included an MCS-90 Endorsement.  This endorsement is required by the Federal Motor Carrier Act of 1980 to be part of an insurance policy for motor carriers operating under US DOT regulations.  49 U.S.C. §31139.  The purpose of an MCS-90 Endorsement is to ensure that “motor carriers maintain an appropriate level of financial responsibility for motor vehicles operated on public highways.”  49 C.F.R. §387.1.

The B&T driver was involved in an accident with another vehicle resulting in the death of the other vehicle’s driver.  The B&T driver was on his way to pick up cargo that would be hauled intrastate (only within Indiana).  When a liability claim was presented by the driver’s estate, B&T submitted it to Progressive Southeastern.  Even though the B&T truck was not listed on the Progressive policy, if the MCS-90 Endorsement applies, coverage to the statutory limits would still be found to exist by operation of the endorsement.

Progressive contended that the MCS-90 Endorsement did not apply because under the express application of the endorsement, it only applies to interstate (between two states) travel.  The trial court granted summary judgment and determined that the MCS-90 Endorsement applied even though the B&T driver was on an intrastate trip.

On appeal, the appellate court noted that there is a split of authority around the country as to whether an MCS-90 Endorsement applies to intrastate travel accidents.  The Indiana court noted that most courts, including federal circuits, have held that it does not apply to purely intrastate travel accidents.  However, the estate argued that Indiana’s general assembly has enacted legislation that requires the minimum levels of insurance coverage provided by an MCS-90 Endorsement to apply to intrastate travel.  Specifically, the estate referred to an Indiana Code section that provides “49 CFR parts 40, 375, 380, 382-387 [this section includes the minimum financial responsibilities of an MCS-90] . . . are incorporated into Indiana law by reference and . . . must be complied with by an interstate and intrastate motor carrier for persons or property throughout Indiana.”  I.C. § 8-2.1-24-18(a) (emphasis added).

As a result, and despite the federal provisions saying that it only applies to interstate travel, because the Indiana General Assembly has made it apply to intrastate travel, the court enforced the Indiana statutory requirement and held that the MCS-90 Endorsement applied to intrastate travel.

The second issue addressed was Progressive’s contention that the MCS-90 Endorsement did not apply because B&T was not transporting property at the time of the accident.  Progressive relied upon the definition of “transportation” within the federal regulations concerning the MCS-90 Endorsement which says that it only applied when a motor carrier is involved in “services related to that movement, including arranging for, receipt, delivery, . . . of passengers and property.”  49 U.S.C. § 13102(23).  Progressive argued that because B&T was not transporting property at the time of the accident, the MCS-90 Endorsement did not apply.

In affirming the trial court’s decision that the MCS-90 Endorsement applied, the court found that a truck driver’s travel to a site to pick up a load, even though it was empty at the time, constituted a “service related to” the transportation of property to meet the requirements necessary for the MCS-90 Endorsement to apply.

This decision is an interesting one and may lead to a more expansive application of MCS-90 Endorsements providing minimum levels of insurance coverage ($750,000 for non-hazardous travel).  The expansion to require the MCS-90 Endorsement to apply occurs even if coverage may not exist under other policy language.  For instance, if a policy includes the MCS-90 Endorsement but either the truck or driver may not be covered under the policy, the MCS-90 Endorsement will apply and require a coverage obligation up to the statutorily defined limits.  This case expands the MCS-90 Endorsement application to not only interstate travel but intrastate travel.