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Global Hawk Insurance Company v. Century-National Insurance Company

February 29, 2012

GLOBAL HAWK INSURANCE COMPANY, PLAINTIFF AND APPELLANT,
v.
CENTURY-NATIONAL INSURANCE COMPANY, DEFENDANT AND RESPONDENT.



(Alameda County Super. Ct. No. VG08-418718) TRIAL COURT: Alameda County Superior Court TRIAL JUDGE: Honorable Evelio Grillo

The opinion of the court was delivered by: Marchiano, P.J.

CERTIFIED FOR PUBLICATION

INTRODUCTION

This is an appeal from a judgment entered after the trial court granted summary adjudication in favor of cross-complainant and respondent Century-National Insurance Company (Century-National) against cross-defendant and appellant Global Hawk Insurance Company (Global Hawk). The lawsuit arises from a freeway collision when a truck driven by an employee of an interstate trucking company (Global Hawk's insured) rear ended a garbage truck owned by a sanitation company (Century-National's insured) and injured its employee driver. When the interstate trucker's insurance carrier, Global Hawk, refused to pay the injured driver's claim for damages, the injured driver obtained uninsured motorist benefits under his employer's insurance policy, issued by Century-National. Century-National then sought reimbursement from Global Hawk.

The question presented in this appeal is whether the interstate trucker's insurer, Global Hawk, must reimburse the sanitation company's insurer, Century-National, for the uninsured motorist benefits it paid to its insured's employee. The trial court answered that question in the affirmative, and granted Century-National's motion for summary judgment on its cross-complaint against Global Hawk. Because Global Hawk was liable for the collision under the terms of the MCS-90 endorsement that it provided to its insured, the interstate trucker, we will affirm the judgment.

HISTORICAL AND PROCEDURAL FACTS

Sebastian Padilla, an employee of Bluewater Environmental Services, Inc. (Bluewater), was injured when the sanitation truck he was driving for his employer was rear ended by a 2000 Freightliner truck driven by Sarkis Zardaryan , an employee and business partner of Zepyur Shamamyan, doing business as E & Z Express Trucking. (E & Z or E & Z Trucking). Padilla made a claim for his bodily injuries against E & Z's insurer, Global Hawk, which denied the claim, because Zardaryan's truck was not listed in Global Hawk's policy.

However, because E & Z Trucking is a motor carrier engaged in interstate trucking, Global Hawk's policy carried a financial responsibility endorsement, (MCS-90 endorsement), required by federal law. The endorsement stated, in relevant part: "In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy . . . . It is understood and agreed that no condition, provision, stipulation, or limitations contained in the policy, this endorsement, or any other endorsement thereon, or violation thereof, shall relieve the company from liability or from the payment of any final judgment, within the limits of liability herein described, irrespective of the financial condition, insolvency or bankruptcy of [the] insured. However, all terms, conditions, and limitations in the policy to which the endorsement is attached shall remain in full force and effect as binding between the insured and the company. The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of the policy, and for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement." (Italics added). The Federal Motor Carrier Safety Administration issued motor carrier permit No. 1243942 to Zepyur Shamamyan doing business as E & Z Express Trucking. The MCS-90 endorsement obligated Global Hawk to provide coverage under certain conditions for all of its insureds' vehicles including the truck not described in the policy.

Because Global Hawk denied Padilla coverage, he submitted a claim for uninsured motorist (UM) benefits under his employer's insurance, issued by Century-National. After verifying that Global Hawk denied coverage, Century-National paid Padilla's claim up to its policy limit of $100,000 for uninsured motorist benefits, and Padilla executed an uninsured motorist subrogation agreement. Global Hawk subsequently submitted a notice of cancellation of E & Z's policy to the U.S. Department of Transportation.

Global Hawk then sued its insureds, E & Z Trucking and Shamamyan, as well as Zardaryan, Padilla, Bluewater, Century-National, the State Compensation Insurance Fund and 100 Does in Alameda County Superior Court, for rescission of the contract and declaratory relief , on the ground that E & Z's owner, Shamamyan, and employee/partner Zardaryan, "misrepresented and/or concealed material facts from Global Hawk" in the insurance application. Global Hawk sought a judicial declaration that the policy it issued to Shamamyan was "void by reason of such defendants' breach of the 'Concealment, Misrepresentation or Fraud' General Condition of the policy, or alternatively that the . . . policy by its terms affords no coverage whatsoever for the underlying claims."

Century-National filed a cross-complaint for reimbursement of the $100,000 it paid out in UM benefits to Padilla, alleging causes of action for subrogation, equitable indemnity, contribution and declaratory relief. Century-National named Global Hawk, Shamamyan, E & Z Trucking, Zardaryan, and Does 1-10 as cross-defendants.

Shamamyan and Zardaryan defaulted on Century-National's cross-complaint, and default judgments were entered against them. Century-National filed a motion for summary adjudication, which the trial court granted in part and denied in part. Specifically, the trial court denied the motion as to Global Hawk's cause of action for rescission, "because it does not affect Century-National's rights under the MCS-90 endorsement . . . ." The trial court granted Century-National's motion as to its right to reimbursement. The trial court found: "There is no triable issue of material fact as to Global Hawk's duty under the MCS-90 endorsement to its insurance contract to reimburse uninsured motorist benefits paid by Century-National for a June 13, 2006 truck accident involving Global Hawk's insured. [¶ 3.] Century-National offered uncontroverted, admissible evidence that . . . . [a.] Global Hawk truckers liability policy no. C-1004-575 attached an MCS-90 endorsement that would have provided coverage for a trucking accident that occurred on June 13, 2006, in which Century-National's insured, Sebastian Padilla, was injured by Sarkis Zardaryan, who was operating a vehicle while employed by Global Hawk's named insured, Zepyur Shamamyan dba EZ Express. . . . [b.] the MCS-90 endorsement was in effect on June 13, 2006 and that the [MCS]-90 had not been cancelled by Global Hawk in accordance with 49 C.F.R. § 387.313 as of . . . the June 13, 2006 accident. [¶ 4.] . . . that [Century-National] paid $100,000 in uninsured motorist benefits to Padilla and that it is subrogated to the rights of Padilla under the Century-National policy against any person legally liable for the injuries to Padilla. . . . [c.] that it sued Zepyur Shamamyan ('Shamamyan') and Sarkis Zardaryan ('Zardaryan') in this action as the persons responsible for Padilla's injuries and that a default was entered against Shamamyan and Zardaryan. [¶ 5.] Summary judgment is appropriate because the parties do not dispute the underlying facts, only the legal effect of those facts when applied to the terms of the Century-National insurance policy." (Original italics.)

Judgment was entered against Shamamyan, Zardaryan, and Global Hawk in favor of Century-National on the latter's cross-complaint in the amount of $100,000 ...


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