{
  "id": 11655158,
  "name": "MGM TRANSPORT CORPORATION and LIBERTY MUTUAL INSURANCE COMPANY, Plaintiffs v. ELSIE R. CAIN, TIMOTHY CLARK BUTTERFIELD, JAMES CLEVELAND HOLMES and NORTHLAND INSURANCE COMPANY, Defendants",
  "name_abbreviation": "MGM Transport Corp. v. Cain",
  "decision_date": "1998-01-20",
  "docket_number": "No. COA97-699",
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  "last_updated": "2023-07-14T19:05:25.972365+00:00",
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    "date_added": "2019-08-29",
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  "casebody": {
    "judges": [
      "Judges JOHN and SMITH concur."
    ],
    "parties": [
      "MGM TRANSPORT CORPORATION and LIBERTY MUTUAL INSURANCE COMPANY, Plaintiffs v. ELSIE R. CAIN, TIMOTHY CLARK BUTTERFIELD, JAMES CLEVELAND HOLMES and NORTHLAND INSURANCE COMPANY, Defendants"
    ],
    "opinions": [
      {
        "text": "MARTIN, John C., Judge.\nMGM Transportation Corporation (MGM) and Liberty Mutual Insurance Company (Liberty Mutual) filed this declaratory judgment action to determine the rights and obligations of the parties under policies of insurance issued by Liberty Mutual to MGM and by Northland Insurance Company (Northland) to defendant Holmes. The dispute arises out of a collision which occurred on 3 August 1994 when a tractor belonging to defendant Holmes and driven by defendant Butterfield collided with an automobile in which defendant Elsie Cain was a passenger. At the time of the collision, Holmes\u2019 tractor was leased to MGM under an \u201cIndependent Contractor Agreement.\u201d Cain subsequently brought an action for personal injuries naming Holmes, Butterfield and MGM as defendants.\nMGM maintained liability insurance coverage through a policy issued by Liberty Mutual; Holmes maintained liability insurance coverage through a policy issued by Northland. In their complaint, plaintiffs alleged that the Northland policy provided primary coverage and that Northland should be required to provide a defense to the Cain claim and pay any judgment resulting therefrom, up to its policy limits of $750,000. In its answer, Northland alleged that its policy contained a Non-Trucking Use Endorsement which excluded coverage for the tractor while it was being used \u201cin the business of anyone to whom the [tractor] is rented,\u201d and that at the time of the accident, the tractor was being used in the business of MGM. Northland alleged that Liberty Mutual\u2019s policy provided primary coverage for the Cain claim.\nPlaintiffs moved for summary judgment. The depositions, affidavits, and exhibits before the trial court showed that MGM, a trucking company engaged in shipping freight in interstate commerce, operates a terminal in High Point. In 1992, MGM entered into an \u201cIndependent Contractor Agreement\u201d with Holmes to lease his tractor; the agreement provided that MGM would have \u201cexclusive possession, control and use\u201d of the tractor during the term thereof and required Holmes to provide a driver. The agreement also required MGM to maintain liability insurance coverage on the tractor and required Holmes to maintain \u201cbobtail\u201d or non-trucking use insurance coverage.\nOn the date of the accident, defendant Butterfield was the driver employed by Holmes to operate the tractor. Pursuant to instructions received from MGM to bring the tractor to the terminal to pick up a shipment, Butterfield was \u201cbobtailing\u201d (driving the tractor without a trailer attached) from his home in Asheboro to MGM\u2019s terminal in High Point when the collision occurred which gave rise to Elsie Cain\u2019s claim.\nThe trial court denied plaintiffs\u2019 motion for summary judgment and entered summary judgment in favor of defendant Northland, declaring \u201cthat the tractor driven by [defendant] Butterfield was being used in the business of plaintiff MGM at the time of the accident . . . and that the Northland Insurance Company policy, with the non-trucking use endorsement, issued to [defendant] Holmes does not provide coverage . . . .\u201d Plaintiffs appeal.\nPlaintiffs assign error to the trial court\u2019s denial of their motion for summary judgment and to its entry of summary judgment in favor of defendant Northland. Summary judgment is appropriate in a declaratory judgment action where there is no genuine issue of material fact and either party is entitled to judgment as a matter of law, and may be rendered against the non-moving party. Blades v. City of Raleigh, 280 N.C. 531, 187 S.E.2d 35 (1972); N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (1967). In this case, the material facts are not in dispute; the only issue to be decided is a legal one, i.e., whether the exclusion contained in the Northland policy is applicable.\nThe Northland policy contained a \u201cTruckers - Insurance for Non-Trucking Use\u201d endorsement which excluded coverage for the tractor \u201cwhile used in the business of anyone to whom the [tractor] is rented\u201d and provided that \u201can insured does not include anyone engaged in the business of transporting property . . . .\u201d This type of policy is commonly known as a \u201cbobtail\u201d policy and provides liability insurance coverage for a leased tractor when the tractor is being used for the lessor\u2019s personal purposes. Reeves v. B & P Motor Lines, Inc., 82 N.C. App. 562, 346 S.E.2d 673 (1986). By the arguments in their briefs, the parties agree that the issue, therefore, is whether, as a matter of law, Butterfield was driving the tractor \u201cin the business of\u2019 MGM at the time of the accident. If Butterfield was driving \u201cin the business of\u2019 MGM, the exclusion in Northland\u2019s policy applies and Liberty Mutual\u2019s policy provides coverage; if he was not driving \u201cin the business of\u2019 MGM, Northland\u2019s policy provides coverage. We hold that Butterfield was driving \u201cin the business of\u2019 MGM at the time of the accident and affirm the entry of summary judgment in favor of defendant Northland.\nOur Court has previously construed insurance contract language such as that used in the exclusionary clause contained in Northland\u2019s \u201cTruckers \u2014 Insurance for Non-Trucking Use\u201d endorsement using respondeat superior principles. McLean Trucking Co. v. Occidental Fire & Casualty Co., 72 N.C. App. 285, 324 S.E.2d 633, disc. review denied, 313 N.C. 603, 330 S.E.2d 611 (1985). Thus, the question is whether the driver is acting within the scope of the business of the lessee, MGM, at the time of the accident. \u201cIt is axiomatic that in order to predicate liability under this doctrine the employee would have to be within the scope of employment, furthering the business of the employer at the time of the accident, therefore, \u2018in the business of\u2019 the lessee.\u201d Id. at 291, 324 S.E.2d at 636; see also Reeves, 82 N.C. App. 562, 346 S.E.2d 673 (bob-tail coverage not applicable when tractor is used \u201cin the business of lessee\u201d).\nThe primary inquiry in determining vicarious liability under the doctrine of respondeat superior is whether the principal retains the right to control and direct the details of the work. Vaughn v. Department of Human Resources, 296 N.C. 683, 252 S.E.2d 792 (1979). Where an employer retains the right to control and direct the details of the work, the employee\u2019s acts done in furtherance of the employer\u2019s business may be said to have been done in the scope of employment, or in the context of this case, \u201cin the business of\u201d the employer. It is a general rule that an employee is not engaged \u201cin the business of\u2019 the employer while driving to and from the place of employment. McLean, supra. However, where the employee is acting at the direction of, or in the performance of some duty owed to, the employer when making the trip, the employee may be said to be acting in the scope of employment. See Powers v. Lady\u2019s Funeral Home, 306 N.C. 728, 295 S.E.2d 473 (1982) (worker\u2019s compensation case where employee injured while returning to his home while on-call; held injury compensable as occurring within course and scope of employment); Evington v. Forbes, 742 F.2d 834 (4th Cir. 1984) (applying North Carolina law and holding employee returning to work while on \u201ccall-back\u201d status was acting within scope of employment).\nIn the present case, the undisputed facts are that Butterfield, as the driver of the truck, was required by MGM to keep the leased tractor at his home, rather than at MGM\u2019s terminal. When he was on-call, he was required to be in readiness to go to the terminal to pick up a load. Before proceeding to the terminal, he was required to perform pre-trip inspections and maintenance on the tractor. When the tractor was not needed for MGM\u2019s purposes, Butterfield was permitted to use it for personal errands. On the date of the accident, Butterfield was on-call and had received instructions from MGM to bring the tractor into the terminal to pick up a shipment. Unlike the driver in McLean, who was en route to his home at his own election rather than at the instruction of his dispatcher, Butterfield was, at the time of the accident, acting upon instructions from MGM in driving the tractor to the terminal. These facts, even viewed in the light most favorable to plaintiffs, establish as a matter of law that Butterfield was acting in furtherance of the business of MGM. Therefore, we hold the tractor was being used \u201cin the business of\u2019 MGM at the time of the accident, and Northland\u2019s policy provides no coverage for the accident of 3 August 1994. Summary judgment for defendant Northland is affirmed.\nAffirmed.\nJudges JOHN and SMITH concur.",
        "type": "majority",
        "author": "MARTIN, John C., Judge."
      }
    ],
    "attorneys": [
      "Brinkley, Walser, McGirt, Miller, Smith & Coles, P.L.L.C., by G. Thompson Miller, for plaintiff-appellants.",
      "Bell, Davis & Pitt, P.A., by Stephen M. Russell, for defendant-appellee Northland Insurance Company."
    ],
    "corrections": "",
    "head_matter": "MGM TRANSPORT CORPORATION and LIBERTY MUTUAL INSURANCE COMPANY, Plaintiffs v. ELSIE R. CAIN, TIMOTHY CLARK BUTTERFIELD, JAMES CLEVELAND HOLMES and NORTHLAND INSURANCE COMPANY, Defendants\nNo. COA97-699\n(Filed 20 January 1998)\nInsurance \u00a7 1182 (NCI4th)\u2014 leased tractor \u2014 liability insurance \u2014 non-trucking use endorsement \u2014 use in business of lessee \u2014 exclusion of coverage under lessor\u2019s policy\nA bobtailing tractor was being used \u201cin the business of\u201d the lessee at the time of an accident so that a non-trucking use endorsement in the lessee\u2019s liability policy, which excluded coverage for the tractor while it was being used \u201cin the business of anyone to whom the [tractor] is rented,\u201d applied to exclude coverage under that policy where the driver was required by the lessee to keep the tractor at his home, and at the time of the accident the driver was acting under the lessee\u2019s instructions to drive the tractor to its terminal to pick up a shipment.\nAppeal by plaintiffs from order entered 20 March 1997 by Judge Julius A. Rousseau, Jr., in Davidson County Superior Court. Heard in the Court of Appeals 4 December 1997.\nBrinkley, Walser, McGirt, Miller, Smith & Coles, P.L.L.C., by G. Thompson Miller, for plaintiff-appellants.\nBell, Davis & Pitt, P.A., by Stephen M. Russell, for defendant-appellee Northland Insurance Company."
  },
  "file_name": "0428-01",
  "first_page_order": 464,
  "last_page_order": 468
}