The Fifth Circuit, Applying Texas Law, Strikes Down Auto Exclusion

July 11, 2022 — Jeremy S. Macklin - Traub Lieberman Insurance Law Blog
Penn-America Ins. Co. v. Tarango Trucking, LLC, 30 F.4th 440 (5th Cir. 2022), involved a coverage dispute over Penn-America Insurance Company’s (“Penn-America”) duty to defend and indemnify third-party claims against Tarango Trucking, LLC (“Tarango”) for a fatal accident on its property. At the time of the accident, Penn-America insured Tarango under a commercial general liability policy, which included an “Auto Exclusion” and “Parking Exception” provision. The Auto Exclusion stated the policy did not apply to bodily injury or property damage arising out of the use of any automobile, including the operation and loading or unloading. The Parking Exception stated the Auto Exclusion did not apply to parking an auto on Tarango’s premises. The main issues on appeal were whether the Parking Exception restored coverage otherwise precluded by the Auto Exclusion, and whether the district court prematurely decided Penn-America’s duty to indemnify. The appellate court answered yes to both. On March 2, 2020, a truck driver employed by WS Excavation, LLC (“WS”), parked his tractor-trailer on Tarango’s property and proceeded to inspect and off-load heavy equipment. While operating the hydraulic lift, the tractor’s braking system disengaged. The tractor rolled back and struck the WS driver and his personal vehicle, resulting in his death and significant property damage. Notably, WS allegedly failed to properly maintain the tractor’s electronic and braking systems, and Tarango allegedly failed to maintain a level parking and loading facility compliant with industry standards and guidelines. Read the full story...
Reprinted courtesy of Jeremy S. Macklin, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com