                               RECOMMENDED FOR FULL-TEXT PUBLICATION
                                    Pursuant to Sixth Circuit Rule 206
                                            File Name: 06a0383p.06

                       UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________


 JOY KLINE, Personal Representative of the Estate of X
                                                        -
               Plaintiff/Counter-Defendant-Appellant, -
 Jeffrey Lyle Kline, Deceased,
                                                        -
                                                        -
                                                                        No. 05-2320

                                                        ,
            v.                                           >
                                                        -
                                                        -
                          Defendant/Counter-Plaintiff -
 GULF INSURANCE COMPANY,

                   and Third-Party Plaintiff-Appellee, -
                                                        -
                                                        -
                                                        -
 CECIL HAMLIN,
                     Third-Party Defendant-Appellee. -
                                                       N

                              Appeal from the United States District Court
                         for the Western District of Michigan at Grand Rapids.
                           No. 01-00213—Richard A. Enslen, District Judge.
                                        Argued: September 12, 2006
                                  Decided and Filed: October 18, 2006
            Before: ROGERS and COOK, Circuit Judges; BERTELSMAN, District Judge.*
                                            _________________
                                                 COUNSEL
ARGUED: David M. Dark, JAMES, DARK & BRILL, Kalamazoo, Michigan, for Appellant.
James R. Case, KERR, RUSSELL AND WEBER, Detroit, Michigan, for Appellees. ON BRIEF:
David M. Dark, JAMES, DARK & BRILL, Kalamazoo, Michigan, for Appellant. James R. Case,
Joanne Geha Swanson, KERR, RUSSELL AND WEBER, Detroit, Michigan, for Appellees.
                                            _________________
                                                OPINION
                                            _________________
        ROGERS, Circuit Judge. This case involves the legal question of whether a federally-
prescribed form endorsement attached to a trucking company’s insurance contract modifies the
attachment point of an umbrella policy when the endorsement was not legally required in the first

        *
           The Honorable William O. Bertelsman, United States District Judge for the Eastern District of Kentucky,
sitting by designation.


                                                        1
No. 05-2320                 Kline v. Gulf Insurance Co., et al.                                                 Page 2


place. The trucking company in this case purchased liability insurance beyond what was required
under federal regulations and allegedly attached to the policy an endorsement in the nature of a form
prescribed by the United States Department of Transportation for the purpose, not applicable in this
case, of meeting those federal requirements. The content of the filled-out form is ambiguous in the
context of the umbrella policy to which it was allegedly attached, and the form is best interpreted
in light of the policies for which it was created. So interpreted, the form did not require that the
defendant insurance company pay more than what was required under the original umbrella
insurance contract. We therefore affirm the judgment of the district court, which held that the
insurance company defendant was not liable beyond the terms of its original insurance contract.
        On November 3, 1997, Joy Kline’s husband, Jeffrey Lyle Kline, died as a result of injuries
that he sustained in a collision with a truck owned by Builders Transport Inc., an interstate trucking
business. See Kline v. Gulf Ins. Co., 98 F. App’x 471 (6th Cir. 2004). To ensure that members of
the public receive compensation for highway accidents such as the one involving Jeffrey Kline, the
Motor Carrier Act of 1980 requires interstate trucking companies to maintain a minimum level of
insurance coverage, Pub. L. No. 96-296, 94 Stat. 793 (1980); Harco Nat’l Ins. Co. v. Bobac
Trucking Inc., 107 F.3d 733, 736 (9th Cir. 1997), but allows companies to self-insure in certain
circumstances. 49 U.S.C. § 13906(d); 49 C.F.R. § 387.309. In this case, Builders Transport self-
insured up to the federally-required minimum of $1 million. It also obtained an excess insurance
policy from Reliance Insurance Company for claims over $1 million up to $3 million, and an
umbrella policy from Gulf Insurance Company for liability over $3 million. The Reliance policy
included a $1 million annual “loss corridor” deductible, such that Builders Transport would need
to pay the first $1 million of all excess claims against Reliance during a particular year.
       Joy Kline obtained a $3.2 million judgment against Builders Transport. Were it solvent,
Builders Transport would have had to pay Kline $2 million, including the $1 million that it self-
insured and the $1 million “loss corridor” deductible under the Reliance policy, there being no prior
claims against Reliance under the excess policy for that year. Reliance would then have had to pay
$1 million and Gulf would have had to pay the remaining $200,000. However, because Builders
Transport filed for bankruptcy in May 1998, Kline only received $1 million from Reliance and
$200,000 from Gulf. She recovered nothing from Builders Transport.
         This appeal arises because Gulf, for reasons unclear to this court, may have attached to its
insurance policy an “Endorsement for Motor Carrier Policies of Insurance for Public Liability under
Sections 29 and 30 of the Motor Carrier Act of 1990.” The endorsement form, called an MCS-90,
purports to amend Gulf’s original insurance policy 1and require Gulf to pay injured members of the
public up to the minimum that federal law required. As mentioned above, Builders Transport self-
insured up to the minimum coverage, and Gulf did not need2 to make such a promise. Gulf concedes
that, if it did attach the MCS-90, doing so was a mistake.
        Kline sued Gulf, arguing among other things that Gulf attached the MCS-90 and that the
MCS-90 increased Gulf’s liability by amending its Builders Transport insurance policy. The district
court initially held that no rational juror could find that Gulf attached an MCS-90 endorsement and
dismissed Kline’s claim. See Kline, 98 F. App’x at 474-75. This court, however, reversed that




         1
             Under Gulf’s original insurance policy, Builders Transport’s bankruptcy did not increase Gulf’s liability.
         2
          Gulf argues that, as a factual matter, it did not attach the MCS-90. For purposes of resolving Gulf’s motion
for summary judgment, we will resolve this disputed fact in favor of Kline, the non-moving party. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986).
No. 05-2320                Kline v. Gulf Insurance Co., et al.                                                      Page 3


determination in our prior opinion on the ground that there was at least a genuine issue of fact in that
regard. See id.3
        On remand, the district court declined to hold a trial to determine whether Gulf in fact
attached an MCS-90 endorsement to its policy. See Kline v. Gulf Ins. Co., No. 1:01-cv-213, 2005
U.S. Dist. LEXIS 30809, at *13-16 (W.D. Mich. Sept. 12, 2005). Instead, the district court held that
an MCS-90 form, even if attached, did not require Gulf to pay Kline any more than the $200,000
that Gulf had already paid. See id. First, the district court reasoned that an MCS-90 form in this
case at most required Gulf to act as a surety for Builders Transport’s self-insurance scheme. See id.
at *10-13. Moreover, a surety’s MCS-90-based obligation to pay is triggered only when the
principal (here Builders Transport) denies coverage. See id. at *13. Because Builders Transport
“made no effort to deny coverage,” Gulf’s obligation to act as a surety was not triggered. Id. at *14.
Second, the district court reasoned that the public policy goals behind the MCS-90 form did not
require Gulf to pay the second $1 million of liability. See id. at *14-15. While acknowledging that
the MCS-90 form may negate limiting clauses in a policy that calls for denial of coverage to an
injured member of the public, the district court nevertheless held that an MCS-90 form’s “public
policy is not implicated when coverage is provided but not paid by a primary insurer.” Id. at *15-
16.4
         We affirm, although our reasoning is not entirely the same as that of the district court.5
        The language at issue in this case is not clear because the MCS-90 is a form ill-suited for the
parties to express a clear intention regarding how the issue in this case is to be resolved. The MCS-
90 is a form that the Department of Transportation developed and the Office of Management and
Budget approved. Gulf filled out the relevant section of the form as follows:
         The policy to which this endorsement is attached provides primary or excess
         insurance, as indicated by “X” for the limits shown:
         ___       This insurance is primary and the company shall not be liable for amounts in
                   excess of $___________ for each accident.




         3
           In its opinion, this court refrained from adopting Gulf’s argument that an MCS-90 form could not amend the
umbrella policy merely because the form in this case was “not filed with the Department of Transportation.” Kline, 98
F. App’x at 475. The court held that no authority supported the position that the failure of a party to “submit
endorsements to the government vitiates any coverage so provided.” Id. In addition, this court rejected as unsupported
by case law Gulf’s argument that the “MCS-90 endorsement is not triggered because both [Gulf] and Reliance provided
some, albeit inadequate, coverage.” Id. at 476. As to the issue of first impression involved in this appeal, this court held
that “the effect of the attachment of an MCS-90 endorsement to an umbrella policy is a difficult issue [that] we decline
to reach where the district court has not ruled on the issue.” Id.
         4
          The district court dismissed Kline’s related claims because the MCS-90 endorsement did not have an impact
on Gulf’s status as an umbrella insurer. Kline, 2005 U.S. Dist. LEXIS 30809, at *15-16.
         5
           It is not necessary for us to resolve whether federal or state law controls the issue presented in this case, as
we have been presented no basis for distinguishing between federal and Michigan law as to how the legal issue in this
case should be resolved. Several courts have held that an MCS-90 is to be interpreted under federal law. Minter v. Great
Am. Ins. Co., 423 F.3d 460, 470 (5th Cir. 2005); Carter v. Vangilder, 803 F.2d 189, 191 (5th Cir. 1986); Caroline Cas.
Ins. Co. v. Ins. Co. of N. Am., 595 F.2d 128, 135-39 (3d Cir. 1979). The need to interpret the MCS-90 under federal law
is, however, less apparent where, as in this case, the parties incorporated the language from the federal form into a private
contract for reasons other than compliance with federal regulations. See Carter, 803 F.2d at 191 (endorsement governed
by federal law because the endorsement was required by the Motor Carrier Act).
No. 05-2320           Kline v. Gulf Insurance Co., et al.                                        Page 4


       X       This insurance is excess and the company shall not be liable for amounts in
               excess of $ 1,000,000 for each accident in excess of the underlying limit of
               $ 1,000,000 for each accident.
The form also contained the following language:
       The insurance policy to which this endorsement is attached provides automobile
       liability insurance and is amended to assure compliance by the insured within the
       limits stated herein. . . .
       In consideration of the premium stated in the policy to which this endorsement is
       attached, the insurer (the company) agrees to pay within the limits of liability
       described herein any final judgment recovered against the insured for public liability.
       ...
(Emphasis added.)
        At first glance, it appears from the terms of the MCS-90 that Gulf must pay up to $1 million
for “each accident in excess of the underlying limit of $1,000,000 for each accident” because Gulf
wrote “$1,000,000” instead of “$3,000,000” into the form. See 62 Fed. Reg. 16370, 16403 (Apr. 4,
1997) (describing how a company in Gulf’s position might have completed the MCS-90). In this
case, Kline received a judgment for $3.2 million but only recovered $1 million from Reliance. The
terms of the MCS-90 can be read to provide that Kline should receive $1 million from Gulf, not
$200,000. Kline’s appeal hinges on this construction of the MSC-90.
        The language of MCS-90 as a whole, interpreted in light of the surrounding circumstances,
however, leads to the conclusion that Gulf did not change its coverage when filling out the
government-prepared form. Two aspects of the very language upon which Kline relies caution
against Kline’s interpretation. First, the check-marked part of the form—upon which Kline’s brief
places primary reliance—is by its terms a limit on Gulf’s obligation rather than an expansion of
Gulf’s obligation. Cf. Weston v. McWilliams & Assocs., Inc., 716 N.W.2d 634, 638 (Minn. 2006)
(holding that interpreting a negative statement as a positive one “goes beyond interpretation and
actually modifies the words of the statute”). It is only the affirmative, obligation-creating language
of the MCS-90 (“within the limits stated herein” and “limits of liability described herein”) that
plausibly obligates Gulf beyond the terms of the original excess policy. That language is dealt with
below.
         Second, the phrase “underlying limit of $1,000,000” is ambiguous in light of the complex
insurance scheme that Builders Transport, Reliance, and Gulf created. As discussed above, Gulf
provided an umbrella policy to cover liability above Reliance’s policy, which, in turn, covered
liability above Builders Transport’s self-insurance. The reference to “the underlying limit of
$1,000,000,” therefore, could have referred to any accident resulting in liability over $1 million (as
Kline argues) or any accident that resulted in liability exceeding Reliance’s “underlying limit of
$1,000,000.” Under the latter reading, Gulf would not be liable because, as we previously held,
Reliance’s policy attached at $2 million and “excess of the underlying limit” would be the $200,000
in liability above $3 million. Kline, 98 F. App’x at 473. The broader context creates uncertainty
as to the form’s meaning.
         The ambiguity arises in large part because the MCS-90 form does not really permit Gulf to
reflect the limits contained in the original excess insurance contract. As discussed above, Builders
Transport’s policy with Reliance included an annual “loss corridor” deductible. For this reason,
Reliance’s attachment point could have varied from $2,000,000 (if Builders Transport paid the
deductible) to $1,000,000 (if Builders Transport had exhausted its annual deductible earlier that year
on other claims). Because Reliance’s attachment point was a moving target and Gulf’s attachment
No. 05-2320               Kline v. Gulf Insurance Co., et al.                                                  Page 5


point depended on Reliance’s attachment point, there was no single value that Gulf could have
entered into the blanks of the MCS-90 to reflect accurately Gulf’s attachment point. Were Gulf the
drafter of the MSC-90 language, we would construe the language against it. See Old Life Ins. Co.
of Am. v. Garcia, 411 F.3d 605, 613 (6th Cir. 2005) (applying Michigan law). However, because
Gulf did not author the form, we will not, in light of the other evidence, construe the MSC-90
against Gulf in this context. See Midwest Triangle Paint Works, Inc. v. Firemen’s Ins. Co., 183
N.E.2d 562, 564 (Ill. App. Ct. 1962); Goldman v. Piedmont Fire Ins. Co., 198 F.2d 712, 715 (3d Cir.
1952).
        The only language that can be read on its face to provide the additional coverage that Kline
claims is ambiguous. Both the “within the limits stated herein” and “limits of liability described
herein” language could refer to the MCS-90, which, Kline argues, changed the limits of liability.
On the other hand, the “herein” language could also refer to the original policy to which Gulf
attached the MCS-90. If the latter, the MCS-90 did not adjust the terms contained in the original
policy.
        Read as a whole, the MCS-90 incorporated the limits of liability in the original insurance
policy; it did not replace them. Language surrounding the “herein” clause suggests that the form
did not change Gulf’s liability. The form provides, “The insurance policy to which this endorsement
is attached . . . is amended to assure compliance by the insured, within the limits stated herein, as
a motor carrier of property within Sections 29 and 30 of the Motor Carrier Act of 1980 and the rules
and regulations of the Federal Highway Administration (FHWA) and the Interstate Commerce
Commission (ICC).” The disputed language, when read in light of this purpose, suggests that Gulf
intended to offer $1 million in coverage only if the law required such coverage. Indeed, the purpose
of the MCS-90 is to verify to the federal government and the public that a given motor carrier meets
minimum security requirements. See 65 Fed. Reg. 25020, 25021 (Apr. 28, 2000). In this case,
Builders Transport self-insured to the minimum regulatory amount, and the federal regulations did
not require coverage. However, had additional coverage been necessary (e.g., had Builders
Transport stopped self-insuring), the MCS-90 would have required Gulf to increase its coverage.
Thus, language regarding the purpose of the MCS-90 suggests that Gulf is not liable in this case
because Builders Transport did not fail to insure up to the minimum.
         Moreover, public policy considerations do not warrant additional compensation, as Kline
already received $200,000 more than the minimum federal requirement. The “purpose of the [MCS-
90] endorsement is to give full security for the protection of the public up to the limits prescribed.”
46 Fed. Reg. 30974 (emphasis added). In this case, Kline’s recovery exceeded the $1 million limit6
prescribed, a fact that every court to have considered the scope of MCS-90 forms found important.
In Wells v. Gulf Insurance Co. and in McGirt v. Royal Insurance Co. of America, the district courts
for the Eastern District of Texas and the District of Maryland, respectively, distinguished the facts
of this case from the facts before them. 2006 WL 887402 (E.D. Tex. March 28, 2006); 399 F. Supp.
2d 655 (D. Md. 2005). In both cases, the victims’ families received no compensation, and both
courts held that the public policy required the insurance company to provide some compensation.
See also Kline, 2005 U.S. Dist. LEXIS 30809 (noting how public policy did not apply). Because
Kline received $1.2 million, the public policy implications in Wells and McGirt are not before us.



         6
          Kline’s reliance on Lynch v. Yob, 768 N.E.2d 1158 (Ohio 2002), is misplaced because the Ohio Supreme Court
in Lynch never held that an MCS-90 form promising coverage above the federally-required minimum mandated that an
insurance company pay above that limit. In Lynch, the MCS-90 endorsement guaranteed $2.5 million of primary
coverage for injured members of the public. 768 N.E.2d at 1165. The court, however, never stated the minimum
coverage that federal law required. If the minimum were $5 million, the $2.5 million that the victim received would have
been below the federally-required minimum.
No. 05-2320           Kline v. Gulf Insurance Co., et al.                                     Page 6


        Finally, it is worth noting that interpreting the MCS-90 as Kline suggests raises other public
policy concerns. The federal government balanced the need to compensate victims with the needs
of industry and determined the appropriate minimum compensation for members of the public. In
essence, Kline is asking us to rewrite the minimum compensation provisions, something we are
unwilling to do given the language of the MCS-90 and the public policy directives already in place.
In addition, Kline’s interpretation of the MCS-90 would force insurance companies to evaluate the
insured’s financial well-being before issuing secondary policies. Doing so generates additional
costs. See Cont’l Marble & Granite Co., Inc. v. Canal Ins. Co., 785 F.2d 1258, 1259 (5th Cir.
1986).
       As all of Kline’s claims are dependent on her interpretation of the MCS-90, the district court
properly dismissed those claims. The judgment below is AFFIRMED.
