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The word “detention” may remind you of your years in school. If I say “detention” does it remind you of the movie “The Breakfast Club” where a group of crazy teens were sentenced to detention together?
When it comes to truck drivers, detention is something completely different. And truck drivers hate detention as much if not more than students do. In the transportation industry, detention is the time that a truck driver spends waiting around for the trailer to be loaded or unloaded.
Grocer Food Lion offered truckers a solution to detention issues that were being experienced at its yard adjacent to the Food Lion’s Distribution Center. For $30.00 per trailer, Food Lion allowed suppliers to drop their trailers in its yard. Food Lion agreed to move the trailer up to the dock when that trailer’s turn arrived. That freed up the drivers to continue down the road.
Trucking company Bonded Carriers took Food Lion up on its offer and dropped a trailer at the Distribution Center two days early. When Food Lion got around to unloading the Bonded Carrier trailer, the cargo was gone.
Bonded Carriers filed a cargo loss claim with its Inland Marine Insurance Company Hartford Fire Ins. Co. Bonded Carriers said that the cargo was worth $96,826.
Hartford denied the cargo claim. In the case of Bonded Carriers v. Hartford Fire Ins. Co., 2009 U.S. Dist. LEXIS 144752, the Court explained the dispute. The cargo policy said:
Section A(1) of the “Carrier for Hire — Cargo Coverage Form”, as attached to the Policy specifically provides:
We will pay those sums that you become legally obligated to pay as a transportation carrier, under your tariff, written contracts of carriage, or any bill of lading or shipping receipt issued by you, for direct physical “loss” to “Covered Property”, owned by others in your care or control, while in the “due course of transit“, caused by a Covered Cause of Loss.
(emphasis added).
The relevant definition states:
- “Due Course of Transit” is defined as the transportation of property that begins when property is delivered for transportation until it is delivered to any site or to its intended destination; and includes temporary stops which are incidental to the main purpose of delivery.
The coverage issue was whether the goods were still in the due course of transit.
The motor carrier argued that the goods were still in the due course of transit until Food Lion signed the bill of lading in the distribution center. Food Lion responded that the motor carrier had dropped the bill of lading in a drop box created for that purpose when a trailer was dropped in the yard.
The court cited with approval the case of Lariviere v. New Hampshire Fire Ins. Co., 105 N.H. 73, 193 A.2d 13 (Sup. Ct.1963) where it said:
Property is considered in transit when it is moving from one location to another. This does not exclude temporary stops, incidental delays, or some deviation from the planned route of travel. (Citation omitted) However when the property to be transported has reached its destination it is generally no longer considered in transit. (193 A.2d at 15)
The goods here had arrived at their destination and were merely being stored prior to unloading. Transit had ceased. There are several cases illustrating application of the general rule under divergent fact patterns.
Id at 11.
The Court also struck down the motor carrier’s argument that the language of the policy was ambiguous. The Court sent a message to the motor carrier that it should look to an insurance policy other than the cargo policy to seek its recovery. The Court said:
We recognize that insurance policies are to be construed so as to comport with the reasonable coverage expectations of the insured. Gerhardt v. Continental Ins. Cos., 48 N.J. 291, 296-297, 225 A.2d 328 (1966); Bryan Const. Co., Inc. v. Employers’ Surplus Lines Ins. Co., 60 N.J. 375, 290 A.2d 138 (1972). Under the circumstances present here a reasonable insured would not look to an ‘in transit’ policy for recompense for this loss, but rather would reasonably expect to be compensated under a policy insuring against loss by theft from premises. Thus, in the context here the policy is not ambiguous. We cannot rewrite the policy or create a better contract than that which the insured purchased. American Mercury Ins. Co. v. Bifulco, 74 N.J.Super. 191, 181 A.2d 20 (App.Div.1962), aff’d o.b. 38 N.J. 530, 186 A.2d 112 (1962).
Id. at 12
If you have trucking law or coverage law questions, please contact Mike Mills at 702.240.6060×114 or email him at mmills@blwmlawfirm.com.
