United States District Court, W.D. Tennessee, Western Division
PHILADELPHIA INDEMNITY INSURANCE COMPANY, Plaintiff/Counter-Defendant
FEDEX FREIGHT, INC., DAVID F. RICKMAN Defendants/Counter-Plaintiffs MAGGIE SHORTER, and DAVID SHORTER, Defendants.
ORDER GRANTING PHILADELPHIA INDEMNITY INSURANCE
COMPANY'S MOTION FOR SUMMARY JUDGMENT AND DENYING FEDEX
FREIGHT, INC. AND DAVID RICKMAN'S MOTION FOR SUMMARY
CHARMIANE G. CLAXTON UNITED STATES MAGISTRATE JUDGE
the Court are Plaintiff/Counter-Defendant Philadelphia
Indemnity Insurance Company's
(“Philadelphia”) Motion for Summary Judgment
(Docket Entry “D.E.” #34) and
Defendants/Counter-Plaintiffs FedEx Freight, Inc.
(“FedEx Freight”) and David F. Rickman's
(“Rickman”) Motion for Summary Judgment (D.E.
#36). The parties have consented to the jurisdiction of the
United States Magistrate Judge. (D.E. #33). For the reasons
set forth herein, Philadelphia's Motion for Summary
Judgment is GRANTED and FedEx Freight and Rickman's
Motion for Summary Judgment is DENIED.
Background and Findings of Fact
underlying action arises was filed by Defendants Maggie
Shorter and David Shorter in Tennessee state court against
FedEx Freight and Rickman (“State Complaint”).
(D.E. #1-1). The State Complaint alleges that, on or about
July 8, 2015, Mrs. Shorter was working as a security guard
for Universal Protection Service, LLC
(“Universal”) at a FedEx Freight facility located
at 461 Winchester Road in Memphis, Tennessee. (State Compl.
¶3) The State Complaint alleges that Mrs. Shorter
sustained severe and permanent injuries, including the
amputation of her right leg from the knee down and the
permanent disfigurement of her left leg, after being struck
by a FedEx Freight vehicle operated by Rickman. (State Compl.
¶¶ 6, 10). The State Complaint alleges that Ms.
Shorter's injuries were proximately caused by
Rickman's negligent operation of the FedEx Freight
vehicle. (State Compl. ¶ 10). The State Complaint
alleges that FedEx Freight is vicariously liable for
Rickman's negligence under the doctrine of respondent
superior. (State Compl. ¶ 6).
the State Complaint was filed, FedEx Freight and Rickman
tendered the Shorters' suit to Philadelphia and demanded
a defense and indemnification. Philadelphia refused asserting
that the Policy did not cover either. On July 20, 2016,
Philadelphia filed a Complaint for Declaratory Judgment
(“Complaint”) in this Court pursuant to 28 U.S.C.
§§ 2201-2202 and Rule 57 of the Federal Rules of
Civil Procedure (D.E. #1). FedEx Freight and Rickman then
filed a Counter-Complaint under 28 U.S.C. § 2201 and
Rule 57 for Declaratory Judgment (D.E. #22). The Complaint
alleges that, prior to the incident complained of in the
State Complaint, on or about November 2013, FedEx Freight and
Universal entered into a General Guard Security Agreement
(“Agreement”). (Agreement, filed at D.E. #1-2, at
1, 9). Under the Agreement, Universal agreed to provide
security services for FedEx Freight facilities throughout the
United States. (Agreement at 1). Section 9 of the Agreement,
entitled “Indemnification, ” provides as follows:
Section 9. Indemnification. [Universal] agrees to
indemnify, defend and hold harmless FedEx [Freight], its
directors, officers, and employees from any and all
liabilities, damages, losses, expenses, demands, claims,
suits, or judgments, including reasonable attorneys' fees
and expenses, to the extent resulting from [Universal]'s
negligence or willful misconduct in the performance of its
obligations under this Agreement, including, but not limited
to any claim for payment by a subcontractor, agent, or
employee of [Universal]. [Universal]'s obligation to so
indemnify, defend and hold harmless FedEx [Freight] shall
survive the expiration or earlier termination of this
(Agreement at 3-4).
the Agreement provides that Universal shall “maintain
Commercial General Liability insurance for bodily injury, and
property damage, including contractual liability, products
and completed operations; Broad Form Property Damage; Workers
Compensation at statutory limits; Employers Liability
Insurance; Personal Injury insurance, and Commercial
Liability insurance if operating automotive vehicles as set
out in attached Exhibit C.” (Agreement at 4, §
A to the Agreement provides the Security Guard
Responsibilities. (Agreement at 13). Of central importance to
the instant case, the Agreement provides in Paragraph 19 as
follows: “For Safety reasons do not walk between double
trailers unless Tractor is “shut off and parking brake
is applied. ALL units exiting service center will
stop to allow Security Officer to verify equipment
information, record the tractor, trailer(s) and dolly numbers
for units exiting truck gate on truck registration
log.” (Exh. A. at 13). Exhibit C to the Agreement
further provides, in pertinent part, as follows:
INSURANCE CERTIFICATE AND POLICIES
. . . .
(c) Commercial Automobile Liability Insurance covering
[Universal]'s owned, and non-owned and hire vehicles,
naming FedEx [Freight] and affiliated companies, and their
respective officers, directors, and employees as additional
insured, as their interests may appear under the terms of
this Agreement, including bodily injury and property damage
endorsements, with a combined single limit of not less than
$1, 000, 000.00.
(Agreement at Exh. C).
in order to comply with their requirements under the
Agreement, Universal procured a policy of insurance from
Philadelphia bearing the policy number PHPK1224836
(“Policy”), which provided commercial auto
insurance coverage for a policy period of September 1, 2014
to September 1, 2015. (D.E. #1-3). There is no dispute that
the Policy was in full force on or about July 8, 2015 when
Mrs. Shorter sustained injuries after being struck by the
FedEx Freight truck. (Id.) The Policy issued by
Philadelphia to Universal consists of the Business Auto
Declarations and the Business Auto Coverage Form.
(Id.). The Policy states, in pertinent part:
SECTION II - LIABILITY COVERAGE
We will pay all sums an "insured" legally must pay
as damages because of "bodily injury" or
"property damage" to which this insurance applies,
caused by an "accident" and resulting from the
ownership, maintenance or use of a covered "auto".
. . . .
We have the right and duty to defend any "insured"
against a "suit" asking for such damages or a
"covered pollution cost or expense". However, we
have no duty to defend any "insured" against a
"suit" seeking damages for "bodily
injury" or "property damage" or a
"covered pollution cost or expense" to which this
insurance does not apply. We may investigate and settle any
claim or "suit" as we consider appropriate. Our
duty to defend or settle ends when the Liability Coverage
Limit of Insurance has been exhausted by payment of judgments
1. Who Is An Insured
The following are "insureds":
a. You for any covered "auto".
b. Anyone else while using with your permission a covered
"auto" you own, hire or borrow except:
(1) The owner or anyone else from whom you hire or borrow a
This exception does not apply if the covered "auto"
is a "trailer" connected to a covered
"auto" you own.
(2) Your "employee" if the covered "auto"
is owned by that "employee" or a member of his or
(3) Someone using a covered "auto" while he or she
is working in a business of selling, servicing, repairing,
parking or storing "autos" unless that business is
(4) Anyone other than your "employees", partners
(if you are a partnership), members (if you are a limited
liability company) or a lessee or borrower or any of their
"employees", while moving property to or from a
(5) A partner (if you are a partnership) or a member (if you
are a limited liability company) for a covered
"auto" owned by him or her or a member of his or
c. Anyone liable for the conduct of an "insured"
described above but only to the extent of that liability.
. . . .
The insurance does not apply to any of the ...