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Certain Underwriters At Lloyd's London Subscribing to Certificate No. 2178324-004APD v. Deol Transport, Inc.

United States District Court, E.D. Virginia, Alexandria Division

October 24, 2019



          Leonie M. Brinkema United States District Judge.

         This Memorandum Opinion constitutes the Court's factual findings and conclusions of law following a bench trial of this declaratory judgment action brought by plaintiffs Certain Underwriters at Lloyd's, London Subscribing to Certificate No. Z178324-004APD and Amlin Underwriting, Ltd. (collectively, "Certain Underwriters" or "plaintiffs") against defendant Deol Transport, Inc. ("Deol Transport" or "defendant"), in which plaintiffs seek a judgment stating that an insurance policy they issued to defendant does not cover defendant's claim for damage to its vehicles because the employee driving the vehicles was not a covered driver under the policy. For the reasons that follow, the Court finds that the policy does not cover defendant's claim.


         A. Uncontested Facts[1]

         The parties do not dispute the following facts, which the Court finds have been established. Plaintiffs are an insurance syndicate. Complaint ¶ 1, 3 Defendant is an interstate trucking company. Id. ¶ 2. On February 21, 2018, defendant, through its owner Gian Singh Deol ("Deol"), applied for insurance coverage for four of its vehicles and two of its drivers, Deol and Rajesh Kumar ("Kumar"). DTX 3, at I.[2] The application, which was signed by Deol, indicated that he had five years of driving experience and that Kumar had three years of driving experience. Id. As a result of this application, plaintiffs issued an insurance policy for automotive property damage to defendant ("the policy"). DTX 1, at 1. Defendant obtained the policy as a member of Continental Trucking Association ("Continental Trucking"), [3] and with the assistance of National Insurance Agency, Inc. ("National Insurance").[4] Id. PTX 2, at 1.

         The policy provided, in relevant part, that "[i]n consideration for the premium paid hereon ... the Underwriters hereby agree to indemnify the Assured against direct and accidental loss or damage to the Automobiles specified in the schedule herein, during the Period of Insurance specified in the schedule." PTX 4, at 8. Among other automobiles owned by defendant, the policy schedule included a 2017 tractor with the Vehicle Identification Number 3AKJGLDR7HSHD9415 ("the 2017 tractor") and a 2016 trailer with the Vehicle Identification Number 1UYVS2531GU688819 ("the 2016 trailer").[5] DTX 1, at 2. The 2017 tractor was insured up to $135, 000, and the 2016 trailer was insured up to $55, 000. Id. The policy also provided that "strict compliance with the conditions and/or warranties contained in the contract of insurance is required," and that "if [the insured] do[es] not strictly comply with the conditions and/or warranties contained within the contract of insurance, then the insurer, Certain Underwriters at Lloyd's, may deny or limit coverage for any claim." PTX 4, at 7.

         Although not contained within the section labeled "Exclusions," the policy contained a provision entitled "Driver Criteria'" ("the Driver Criteria provision"), which stated:

Every driver must have his/her Motor Vehicle Report (MVR) approved by Continental Insurance Agency within 7 days of their employment with the subject trucking firm. They must comply with the following Driver Criteria, and have a Single Valid Full Commercial Driving License, endorsed for the specific type of equipment operated at the time of loss or damage. If any of the Driver Criteria, including the following, is not fully complied with, then the driver is not acceptable or approved and will result in any claim or loss involving such unacceptable or unapproved driver as being not covered for any and all coverage's [sic] that might otherwise have been applicable....

Id. at 14 (emphasis added). Among the specific criteria listed in the Driver Criteria provision was a requirement that a "Driver must have a Minimum of two years [sic] Commercial Truck Driving Experience." Id.

         The policy issued to defendant also contained a "Declarations Page" ("the Declarations Page")[6] and an endorsement, which repeated the requirement that drivers must satisfy the policy's driver criteria to be eligible for coverage:[7]

         E. Drivers

All drivers must meet minimum policy requirements as set forth by your policy (see attached minimum driver criteria) before they are hired. All qualified drivers must be reported immediately upon hiring. Unreported drivers could cause cancellation of policies or result in an unpaid claim....

DTX 1, at 5 (emphasis added). The policy, including both the Driver Criteria provision and the Declarations Page, was in effect throughout March 2018. PTX 4, at 4.

         In addition to these policy documents, Deol signed two documents that he received from his broker, National Insurance. The first document, entitled "Agreement to Report All Drivers and Vehicles to Policies," stated:

This is a guideline of all commercial vehicle insurance carriers and a condition for all insured's [sic] to abide by....
Your commercial insurance policy (Liability, Cargo and Physical Damage) requires:
All drivers must be reported upon date of hire. Failure to report all drivers may Jeopardize Coverage if a claim should occur. Your policy contains an Unreported-Driver endorsement that limits your policy. Please read your policy very carefully. . .. Unreported drivers or previously Excluded Drivers shall be subject to exclusion from the coverage. Therefore, no coverage will apply. A current and acceptable MVR must be submitted for approval for all drivers. I understand this condition and will report all drivers upon hiring and adding vehicles. Failure to do so may result in denial of claims.

PTX 2, at 2 (emphasis added). The second document, entitled "Driver Guidelines," stated:

All new drivers must be reported when hired. Please send MVR to us and we will provide quick help with acceptability. Accidents involving unreported drivers may be cause for adverse underwriting action.

Id. at 3 (emphasis added).

         On March 12, 2018, National Insurance sent an email to plaintiffs entitled "Policy Change Request - Deol Transport, Inc." DTX 4, at 1. This email requested, among other policy changes, that Sukhwinder Singh ("Sukhwinder") be added to the policy as a covered driver, and stated that Sukhwinder had a valid Commercial Driver's License issued in New Jersey in 2015. Id. The email also included the notation "MVR attached."[8] Id.

         On the same day, defendant hired Tirath Singh ("Singh") as a driver. PTX 15, at 1. Singh's application for employment required that he "[l]ist the nature and extent of [his] experience operating different types of motor vehicles (e.g. buses, trucks, & trailers)." Id. Singh listed "5 years" of experience driving a "car." Id. Singh's application also required that he provide an "employment record" in the form of certain information "on all employers during the previous three years" and "for all employers [he] ha[d] driven a commercial vehicle for the last seven years prior 10 [sic] the initial three years (total often years employment record)." Id. at 2. Singh provided only "N/A" in response to this question, which the Court interprets as meaning that he had no employment history during the previous three years, and no employment history driving commercial vehicles during the previous ten years. Id. Singh's application was dated March 11, 2018, one day before he was hired. Id. at 3. Singh had a valid Commercial Driver's License issued in New Jersey on February 9, 2018, less than six weeks before he was hired. PTX 6, at 1. In the letter ...

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