WHITE PINE INSURANCE COMPANY v. CHASE'S AUTO SALVAGE LLC

• Court: District Court, W.D. Pennsylvania
• Decided: September 17, 2025
• Docket: 2:23-cv-01707
• Status: Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

WHITE PINE INSURANCE ) COMPANY, ) ) Plaintiff, ) 2:23-cv-01707-CB ) v. ) Judge Cathy Bissoon ) CHASE’S AUTO SALVAGE LLC, ) et al., ) ) Defendants. )

MEMORANDUM AND ORDER

I. MEMORANDUM White Pine Insurance Company and Joseph M. Cox, II (“Cox”) have cross-filed Motions for summary judgment. The insured is Chase’s Auto Salvage, LLC (“Chase Auto”), and Cox was a passenger of its principal. White Pine seeks a judicial declaration that its liability to Cox under the policy is $15,000. Doc. 38. Cox seeks a declaration that coverage extends to $100,000, or even $750,000. Doc. 37. (Chase Auto has not actively participated in this litigation.) White Pine is correct. Its Motion for summary judgment will be granted, and Cox’s Motion denied. The Court will enter a judicial declaration that coverage is limited to $15,000. The policy’s “Occupant Hazard” Endorsement applies. See Doc. 38-3 at ECF-header pg. 30 of 56. It is no more or less “hidden” in the policy than the relevant declarations page (id. at 20-21), which is sandwiched between other notices and endorsements. The declarations page noted the “Schedule of Forms and Endorsements.” Id. at 20. The endorsement is conspicuously titled and formatted: Case 2:23-cv-01707-CB Document38-3 Filed 12/30/24 Page 30 0f56 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

This endorsement modifies insurance provided under the following: AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM The following is added to SECTION IL, C. Limit of Insurance of the Business Auto Coverage Form and the Motor Carrier Coverage Form and SECTION |—-COVERED AUTOS COVERAGES, D. Covered Autos Liability Coverage, 5. Limits of Insurance —Covered Autos Liability and SECTION Il -GENERAL LIABILITY COVERAGES, F. Limits of Insurance — General Liability Coverages of the Auto Dealers Coverage Form: In the event of “bodily injury” sustained by any “passenger” while in, upon, entering, or alighting from an “auto” that is operated by an “insured”, the limit of insurance is amended to the compulsory or financial responsibility law limit where the “auto” is principally garaged. The following is added to SECTION V. DEFINITIONS ofthe Business Auto Coverage Form, Motor Carrier Coverage Form and Auto Dealers Coverage Form: “Passenger means any person that is not an “employee” who is occupying or attempting to occupy an “auto”. “Passenger does not include customers of the “insured”. Allother terms and conditions of the policy remain unchanged. Td. Cox’s status was that of a passenger. Although he was a customer of Chase Auto at other times, he was not on the day of the accident. Chase’s principal, Mr. Lazlo, and Cox were headed to a scrap dealer, with Cox intending to look at “quads” for sale. Doc. 37-1 at P 12 (ECF-header pg. 7 of 26). There is no suggestion that Chase Auto would purchase a quad and resell it to Cox; its business was separate. Id. (Mr. Lazlo was “look[ing] at some cages” for sale). Cox’s status at the time of the accident is what matters, not whether he was a customer at some other time. “Customer” is not an ambiguous term, nor is the policy’s definition of “passenger.” The endorsement applies, and “the limit of insurance is . . . the compulsory or financial responsibility law limit where the [vehicle was] principally garaged.” See Endorsement, supra. It was garaged in Pennsylvania, and the limit is $15,000.

Cox’s arguments under the “reasonable expectations” doctrine are unpersuasive. The insurance was secured through a broker, who has not been named as a defendant. If anyone had a duty to alert Chase Auto of the change in policy, it would have been the broker. “[A]n insurance broker has a duty to affirmatively notify an insured that the policy issued by the insurer does not contain the same coverage provisions that were requested by the insured.”

Alvord-Polk, Inc. v. Strickler Agency, Inc., 2025 WL 1202017, *3 (Pa. Super. Apr. 24, 2025) (citation to binding Pennsylvania and other authority omitted). Even had Cox sued the broker, he would fare no better. The duty relates to “coverage provisions . . . requested by the insured.” Id. Cox has introduced no evidence that passenger- coverage was requested by or important to Chase Auto. Only with the benefit of hindsight has the focus settled on this particular aspect. All of the cases applying the reasonable expectations doctrine are distinguishable—no reasonable expectation has been demonstrated here. Matcon Diamond, Inc. v. Penn Nat’l Ins. Co., 815 A.2d 1109, 1115 (Pa. Super. 2003) (declining to apply the doctrine where the insured “did not specifically request or bargain for any particular” coverage or exclusion and, “[t]hus[,] . . . did not have any particular expectation”).1

Cox’s “Hail Mary” arguments that federal and state regulations required Chase Auto to carry $750,000 coverage are rejected. As explained by White Pine, the regulations address motor carriers that transport property “for compensation.” See Doc. 41 at ECF-header

1 Counsel should be aware that two of White Pine’s arguments in resisting the reasonable expectations doctrine have been rejected by the Court of Appeals for the Third Circuit, specifically: that the relevant policy provision(s) must be ambiguous; and that the doctrine applies only in non-commercial contexts. UPMC Health Sys. v. Met. Life Ins. Co., 391 F.3d 497, 502-504 (3d Cir. 2004) (“[w]e have recognized and applied this doctrine in cases where [reasonable] expectations were in direct conflict with the unambiguous terms of the policy,” and “have predicted that Pennsylvania courts would apply [the] doctrine even where the insured is a sophisticated purchaser of insurance—i.e. a large commercial enterprise”) (citations and internal quotations omitted, emphasis added). pgs. 23-26 of 29. Most commonly, they apply to trucking companies whose primary (or sole) function is the transportation of goods for remuneration. No amount of creative citation can defeat the central premise. 49 C.F.R. §§ 387.1, 387.3 (federal regulations govern “for-hire carriers operating motor vehicles transporting property in interstate . . . commerce”) (emphasis added, here and in subsequent parentheticals); 67 Pa. Code § 229.1 (regulating “the interstate

operation of commercial motor vehicles,” and those “involved in . . . the transportation of interstate commerce”); id. at § 229.2. (addressing “commercial motor vehicles engaged in interstate commerce,” including “common carriers, contract carriers or private carriers . . . involved in interstate commerce”) and id. at § 229.14(3). (incorporating 49 C.F.R. Part 387); 67 Pa. Code §§ 231.1, 231.2 (containing parallel, materially identical provisions for “the transportation of intrastate commerce”) (second emphasis added). Cox’s cherry-picking of a single definition, in 52 Pa. Code § 31.1, cannot alter this conclusion. In Pennsylvania, insurance requirements for intrastate carrier services are regulated by the Public Utility Commission (“PUC”). The PUC requires “common carriers” and “contract

carriers” of property engaging in “intrastate commerce” to carry $750,000 for a vehicle the size involved here. 52 Pa. Code § 32.12(a). Cox references the prior chapter ‒ Chapter 31 ‒ lasering in on the definition of a “[m]otor common carrier of property.” 52 Pa. Code § 31.1. A motor common carrier of property is “[a] motor common carrier who . . . transports property other than household goods in use.” Id. (cleaned up). Because this (sub) definition does not specify that the service is for “compensation,” Cox asserts, Chase Auto was required to have $750,000 in coverage (and, White Pine must supply such coverage, because it should have known it was required). Placing aside that the definition is limited to “this chapter, [31],” the remaining definitions reveal the position to be as outlandish as the proposed outcome. Section 31.1 also defines the phrases, “[c]ommon carrier[s] by motor vehicle” and “[c]ontract carrier[s] by motor vehicle,” and any reader anticipating that they contain the words, “for compensation,” may collect their prize. The only rational purpose for defining “[m]otor common carrier of

property” is to differentiate between the types of material delivered. “Common carriers” and “contract carriers” are defined as entities that “transport household goods in use or property.” Id. (emphasis added). By excluding “household goods in use” (a separately-defined term of art), “[m]otor common carrier[s] of property” ‒ unsurprisingly ‒ are ones who transport “property, other than household goods in use.” Id. (emphasis added). Cox’s argument also would require the Court, and the insurer, to view Chase Auto as a “common carrier.” Doc. 37-3 at 17 (ECF-header pg. 21 of 25). There is no reason to do so. The relevant cross-references in Title 52 point to the definition of “common carrier” in Title 66, Pennsylvania Statute Section 102. Under it, a common carrier is:

Any [entity] holding out, offering, or undertaking, directly or indirectly, service for compensation to the public for the transportation of . . . property.

Id. (separate emphases added). Chase Auto has not been shown to have offered transportation services “for compensation,” let alone to have held itself out publicly as a transportation provider. To make matters worse for Cox’s position, Section 102 expressly excludes from the definition “transportation of property by the owner to himself, or to purchasers directly from him, in [a] vehicle[] owned and operated by the owner of such property and not otherwise used in transportation of property for compensation for others,” id. at § 102(3)(v); and it exempts “transportation by towing of wrecked or disabled motor vehicles.” Id. at § 102(3)(viii).2 Cox’s counsel have pretzeled the law, causing them to trip on their own reading. The state and federal regulations regarding interstate transportation are inapplicable, because Cox has not shown Chase Auto to have left the Commonwealth on the day of the accident. That Chase Auto may have “broken the plane,” on some other occasion, is immaterial.

Cf. Doc. 37-3 at 20 (ECF-header pg. 24 of 25). Cox’s “50 mile radius” theory is speculative, and, in any event unhelpful, because the analysis hinges on the circumstances of the specific accident/loss. Canal Ins. Co. v. Coleman, 625 F.3d 244, 251, 253-54 (5th Cir. 2010) (collecting decisions, including those from three other circuit courts and many trial-courts, including ones from the M.D. Pa.); accord Progressive Cas. Ins. Co. v. Hoover, 809 A.2d 353, 357-68 (Pa. 2002) (the applicability of an MCS-90 endorsement, which commonly addresses the $750,000 coverage required under 49 C.F.R. § 387.9, is determined by “the totality of the circumstances surrounding the shipment”) (emphasis added). And, finally, even had Cox prevailed on every point above, his request to hold White

Pine liable for $750,000 is unsupported in the law. The proposed ruling would result in windfall of coverage, and a shocking level of exposure for White Pine, who did not receive premiums in exchange for the additional coverage. The queasiness resulting from this proposal surely informed Cox’s decision to primarily urge for $100,000 in coverage—the policy limit absent the

2 In a stroke of cosmically (comically?) bad luck, towing may include hauling a vehicle on a flatbed truck. Compare Doc. 37-1 at ⁋ 1 (Cox “was a passenger in a flatbed tow truck, a 2000 Freightliner FL 70”) with 75 Pa. Cons. Stat. § 4572.1(b)(3) (regulating use of lights for a tow “securely positioned on the flatbed of the tow truck”). And, to close the loop, Pennsylvania’s exclusion of the coincidental transportation of owned property is reiterated in the federal regulations. See 49 C.F.R. § 390.3T(f)(3) (excepting from regulation “[t]he occasional transportation of personal property by individuals not for compensation nor in the furtherance of a commercial enterprise”). occupant hazard endorsement. Counsel’s intuition was well-founded, and reformation to the tune of $750,000 in additional coverage is not an outcome recognized under the law. Illinois Cent. R. Co. v. Dupont, 326 F.3d 665, 668-69 (5th Cir. 2003) (even if the insured was required to have an MCS–90 endorsement, its failure to obtain one did not make the insurer liable; “[t]he regulations . . . are directed at the motor carrier, not its insurer,” and the regulations

did not “impos[e] a duty on the insurer to make sure that [the] non-exempt motor carrier[] secure the required insurance”); accord Phila. Indem. Ins. Co. v. Transit U, Inc., 550 F.Supp.3d 140, 151 (D. Del. 2021).3 Cox’s attempted evasion of the occupant hazard endorsement, and his alternative request for $750,000 in coverage, lack merit. The Court, therefore, enters the following:

II. ORDER

White Pine’s Motion (Doc. 38) for summary judgment is GRANTED, Cox’s Motion (Doc. 37) is DENIED and the Court issues the following judicial DECLARATION: the limit of liability applicable under White Pine commercial auto insurance policy number WPCS002989 to Cox’s claims against Chase Auto for the accident, and all attendant

3 Cox’s citation to Metro Transp. Co. v. North Star Reinsurance Co. is unavailing. Id., 912 F.2d 672 (3d Cir. 1990). That case involved a taxi company in Chapter 11 bankruptcy, and the issue was whether liability for third-party claims should be borne by the company or by its automobile insurers. The Third Circuit Court concluded that the insurers were liable, highlighting that a taxi company could not operate in Pennsylvania unless its insurer filed with the PUC a “Form E,” “certif[ying] that [the company’s] taxi operations had adequate automobile insurance coverage conforming [with] PUC’s requirements.” Id. at 678-79. Obviously, this case has nothing to do with bankruptcy, and Cox makes no mention of White Pine filing a Form E, or any other document, with the PUC. No subsequent decision, in any court, has extended the holding in Metro v. North Star to reform an insurance policy to include an an MCS-90-type endorsement, resulting in an additional $735,000 (or $650,000) in coverage. Such a ruling would reverberate through the insurance industry and bar, and the Court declines counsel’s invitation to garner such unwarranted attention. pleadings, claims and positions in Cox v. Cemex, Inc., et al., No. 10132-2020 (Ct. Comm. Pls. of Lawrence County, Pennsylvania), is $15,000. IT IS SO ORDERED.

September 17, 2025 s/Cathy Bissoon Cathy Bissoon United States District Judge

cc (via ECF email notification):

All Counsel of Record