                  IN THE COURT OF APPEALS OF TENNESSEE
                               AT JACKSON
                                  September 19, 2006 Session

                    CARGO MASTER, INC.
                             v.
   ACE USA INSURANCE COMPANY, STEVEN W. HINES, D/B/A S & A
     TRUCKING, AND S & A TRANSPORTATION, INC. D/B/A S & A
                          TRUCKING

                    An Appeal from the Chancery Court for Shelby County
                     No. CH-02-2081-2    Arnold B. Goldin, Chancellor


                    No. W2005-02798-COA-R3-CV - Filed January 19, 2007


This is an insurance case. The plaintiff cargo company entered into a carrier agreement with an
independent trucking company to transport freight, in which the trucking company agreed to
indemnify the plaintiff for any loss or damage to the freight transported. The trucking company
obtained a motor truck cargo liability insurance policy, which insured property while in due course
of transit. In the process of transporting a shipment of tires for the plaintiff, the driver for the
trucking company parked the trailer portion of the tractor-trailer behind a shopping center and left
it overnight. During the night, the cargo was stolen. The trucking company submitted a claim
against its cargo insurance policy and the claim was denied. The plaintiff sued the trucking company
and the cargo insurance company for breach of contract, seeking to recover the value of the stolen
cargo. The plaintiff filed a motion for summary judgment against the defendant cargo insurance
company and, in response, the defendant insurance company filed a cross-motion for summary
judgment. The trial court granted summary judgment in favor of the cargo insurance company,
finding that the shipment of tires was not “in transit” when it was stolen and that, consequently, there
was no coverage under the policy. The plaintiff cargo company appeals. We reverse in part, affirm
in part, and remand the case for further proceedings.

  Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Reversed in
        part, Affirmed in part, and the case is Remanded for Further Proceedings.

HOLLY M. KIRBY , J., delivered the opinion of the Court, in which ALAN E. HIGHERS, J., and DAVID
R. FARMER , J., joined.

Christopher L. Nearn, Germantown, Tennessee, for Plaintiff/Appellant Cargo Master, Inc.

John D. Richardson, Memphis, Tennessee, and Wayne D. Taylor and Ruth M. Pawlak, Atlanta,
Georgia, for Defendant/Appellee Ace USA Insurance Company.
                                                OPINION

        On March 8, 2000, Plaintiff/Appellant Cargo Master, Inc. (“Cargo Master”), entered into a
contract carrier agreement as a broker with Defendant S & A Trucking,1 an independent trucking
company, for the transportation of freight. The agreement provided that S & A Trucking would be
liable for the loss, damage, or delay of any shipment while in its possession and control. S & A
Trucking also agreed to indemnify Cargo Master from liability for loss or damage to any freight
transported. Thereafter, S & A Trucking obtained a motor truck cargo insurance policy from
Defendant/Appellee ACE USA Insurance Company (“ACE”) and executed a premium finance
agreement with Transamerica Insurance Finance Corporation (“Transamerica”) to finance the
monthly premium payments. The cargo insurance policy ACE issued to S & A Trucking states, in
pertinent part:

        We will pay for loss to Covered Property from any one of the Covered Causes of
        Loss.

        1. COVERED PROPERTY
        Covered property means lawful goods and merchandise of others that you have
        accepted for transportation under a bill of lading, tariff, shipping receipt or contract
        of carriage as a common or contract motor carrier or when you trip lease to another
        motor carrier. Such property is covered while in due course of transit while either
        in your care, custody or control or in the custody of a connecting carrier.

        Subsequent to entering into all of these agreements, S & A Trucking assigned a driver to
transport a shipment of tires for Cargo Master. The tires belonged to Continental Tire, Inc. On
November 26, 2001, the driver parked the trailer containing the shipment of tires behind the
Southgate Shopping Center in Memphis, Tennessee. According to Cargo Master, the tractor portion
of the tractor-trailer had experienced some “mechanical difficulties” and needed to be repaired.
When the driver returned the next day, on November 27, 2001, the trailer and the shipment of tires
were gone; apparently the goods were stolen overnight.

        S & A Trucking submitted an insurance claim to ACE, seeking to recover the value of the
stolen tires. ACE denied the claim, on the basis that, prior to the date of the theft, the cargo
insurance policy had expired for nonpayment of premium. Specifically, ACE asserted that S & A
Trucking’s premium finance agreement with Transamerica was in default, which resulted in the
cancellation of the cargo insurance policy, effective October 24, 2001. As a result, Cargo Master
paid Continental Tire, Inc. $35,700.61 for the stolen tires.




        1
         For ease of reference, we will refer to Defendants Steven W . Hines, d/b/a S & A Trucking, and S & A
Transportation, Inc., d/b/a S & A Trucking, collectively as “S & A Trucking” throughout this opinion.

                                                    -2-
       On October 30, 2002, Cargo Master filed a lawsuit against ACE and S & A Trucking2 for
breach of contract. In the complaint, Cargo Master alleged that ACE’s cancellation of the cargo
insurance policy was not effective and that, as a certificate holder, ACE was liable to Cargo Master
for $35,700.61, the value of the stolen tires. Cargo Master also sought “bad faith penalties” for
ACE’s refusal to pay the claim under Tennessee Code Annotated § 56-7-105, as well as treble
damages under the Tennessee Consumer Protection Act, see Tennessee Code Annotated §
47-18-109(a)(3).

        On January 13, 2003, ACE filed its answer, denying Cargo Master’s allegations and setting
forth eighteen defenses. Among these defenses, ACE asserted that the cargo insurance policy issued
to S & A Trucking was cancelled and not in effect at the time of the loss. ACE also claimed that
there was no coverage under the policy for the loss because the trailer was parked and thus not “in
the course of transit” within the meaning of the policy. Discovery ensued.

        Following discovery, Cargo Master filed a motion for summary judgment and ACE
responded with a cross-motion for summary judgment. The motions addressed (1) whether the cargo
insurance policy was in effect at the time of the loss and (2) whether the shipment of tires was “in
transit” within the meaning of the cargo insurance policy. The trial court held a hearing on the
motions on October 26, 2005. At the conclusion of the hearing, the trial court ruled from the bench
as follows:

        [I]n this case we have a situation where the trailer was simply left in a public parking
        lot and the tractor left the trailer.
                 . . . [T]he definition of in transit . . . means in [the] course of passing from
        point to point and ordinarily goods in transit would imply that goods would lawfully
        be picked up at [a] given place and hauled to [a] place designated by the owner or
        one with authority to so designate.
                 That would certainly indicate that the expectation is not that a load of cargo
        in a trailer is going to be left in a public parking lot. I believe . . . the expectation is
        almost like a bailment, that you are going to put [the goods] in a secured situation if
        you are going to leave it or it has to be in transit. In other words, between point A
        and point B without there being a stop off where you simply leave [the goods] and
        go about doing other business, which is apparently what occurred in this case, even
        though it may have been the business of the truck.
                 . . . [O]n that basis without getting into the insurance contract I am going to
        grant the summary judgment [of ACE].

Thus, the trial court found that the shipment of tires was not “in transit” and that, consequently, there
was no coverage under the cargo insurance policy issued to S & A Trucking. The trial court did not
make a ruling on whether the insurance policy was in effect at the time of the loss.


        2
            The litigation between Cargo Master and S & A Trucking remains pending and is not at issue on this appeal.



                                                          -3-
         On November 3, 2005, the trial court entered an order granting ACE’s cross-motion for
summary judgment and denying Cargo Master’s motion for summary judgment, in accordance with
its oral ruling. In addition, the trial court directed entry of final judgment in favor of ACE pursuant
to Rule 54.02 of the Tennessee Rules of Civil Procedure. From this order, Cargo Master now
appeals.

     On appeal, Cargo Master’s sole issue for review is whether the trial court erred in granting
summary judgment to ACE on the basis that the cargo was not “in transit” at the time of the loss.3

          Our review of a summary judgment decision is de novo upon the record; no presumption
of correctness is accorded the conclusions of the lower court. Bain v. Wells, 936 S.W.2d 618, 622
(Tenn. 1997). In reviewing the record, we must “view the evidence in the light most favorable to
the nonmoving party and must also draw all reasonable inferences in the nonmoving party’s favor.”
Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000). A motion for summary judgment
should be granted when the movant demonstrates that there are no genuine issues of material fact
and that the moving party is entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.04; Byrd
v. Hall, 847 S.W.2d 208, 215 (Tenn. 1993). Thus, summary judgment is only appropriate when the
facts and the legal conclusions drawn from the facts reasonably permit only one conclusion. Carvell
v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995). “When weighing such a motion, if the mind of the
court entertains any doubt whether or not a genuine issue exists as to any material fact it is its duty
to overrule the motion.” Poore v. Magnavox Co., 666 S.W.2d 48, 49 (Tenn. 1984).

        The issue raised on appeal requires this Court to interpret a written agreement, namely, the
cargo insurance policy. In construing an insurance policy, we employ the same rules of construction
that apply to contracts generally. McKimm v. Bell, 790 S.W.2d 526, 527 (Tenn. 1990).
Accordingly, the goal is “to give effect to the intention and express language of the [contracting]
parties.” Harrell v. Minnesota Mut. Life Ins., 937 S.W.2d 809, 814 (Tenn. 1996) (citing Tata v.
Nichols, 848 S.W.2d 649, 650 (Tenn. 1993)). The terms of an insurance policy are given their
common and ordinary meaning, and ambiguous language is construed against the insurer. Id.
Finally, issues relating to the scope of an insurance policy’s coverage are matters of law and not fact.
Victoria Ins. v. Hawkins, 31 S.W.3d 578 (Tenn. Ct. App. 2000). Thus, “when the relevant facts are
not in dispute, the legal issues regarding a policy's coverage may be resolved by summary judgment.”
Nat’l Ins. Ass’n v. Simpson, 155 S.W.3d 134, 137 (Tenn. Ct. App. 2004) (citing St. Paul Fire &
Marine Ins. Co. v. Torpoco, 879 S.W.2d 831, 834 (Tenn. 1994); Allstate Ins. Co. v. Jordan, 16
S.W.3d 777, 779 (Tenn. Ct. App. 1999)).




         3
            W hile not raised as a formal issue on appeal, Cargo M aster also briefly addresses the issue of whether the
insurance policy was in effect when the cargo was stolen. The trial court, however, did not rule on this issue, and we
decline to address it on appeal. “This court, being a court of errors, cannot review issues not presented and ruled upon
by the trial court.” Carver Plum bing Co. v. Beck, No. 01A01-9708-CV-00377, 1998 W L 161112, at *7 (Tenn. Ct. App.
Apr. 8, 1998) (quoting King v. Now Invs., Inc., 1987 W L 18891, at *2 (Tenn. Ct. App. Oct. 27, 1987), perm. app.
denied (Tenn. Feb. 1, 1988)). Accordingly, our review is limited to the “in transit” issue.

                                                          -4-
         The policy provision at issue states as follows:

         We will pay for loss to Covered Property from any one of the Covered Causes of
         Loss.
         1. COVERED PROPERTY
         Covered property means lawful goods and merchandise of others that you have
         accepted for transportation under a bill of lading, tariff, shipping receipt or contract
         of carriage as a common or contract motor carrier or when you trip lease to another
         motor carrier. Such property is covered while in due course of transit while either
         in your care, custody or control or in the custody of a connecting carrier.

Thus, there is coverage for the loss only if the loss occurred when the property was “in due course
of transit.”

         The policy at issue does not define the phrase “in due course of transit.” As noted by both
parties, however, this Court has previously had occasion to discuss the term “in transit” within the
meaning of a similar cargo insurance policy. See Williams v. Berube & Assocs., 26 S.W.3d 640
(Tenn. Ct. App. 2000). In Williams, the plaintiff operated a business in Dalton, Georgia, which
involved the transportation of merchandise to tradeshows by truck and trailer. Id. at 641-42. After
a tradeshow, the plaintiff’s truck driver, instead of transporting the merchandise back to the Dalton
location where it was usually stored, parked the trailer containing the merchandise in a lot in
Rossville, Georgia. Id. at 642. The lot was used for the plaintiff’s other, unrelated business. Id.
After more than a week, including a three-day Christmas holiday, the plaintiff discovered that the
trailer and cargo had been stolen from the lot. Id. The plaintiff’s insurance company denied
coverage for the loss of the cargo and the plaintiff sued. Id. After a bench trial, the trial court found
that the cargo was not “in transit” at the time of the loss and that consequently there was no
insurance coverage. The plaintiff appealed. Id. at 642-43.

        On appeal, the plaintiff in Williams argued that this Court should reach the same result
reached by a Texas court in the case of Pennsylvania National Mutual Casualty Insurance Co. v.
Murphy, 579 S.W.2d 58 (Tex. Civ. App. 1979). In Pennsylvania National, the Texas court stated
that “goods were in transit ‘so long as the property [goods] was in the course of being delivered to
the place to which it was being shipped.’ ” Williams, 26 S.W.3d at 644 (quoting Pennsylvania, 579
S.W.2d at 62)) (alteration in original).4 The Williams Court declined to reach the same result
reached in Pennsylvania National, stating:

         We are unpersuaded by Plaintiff's argument that the Pennsylvania case is analogous
         to the case at issue. . . . Plaintiff's cargo was not in the process of being shipped, and


         4
          In Pennsylvania National, the plaintiff parked a truck containing cargo in a motel parking lot before retiring
to his motel room for the night. Pennsylvania National, 579 S.W .2d at 59. The truck was broken into overnight and
the goods were stolen. Id. at 60. The Texas court found that the goods were “in transit” within the meaning of the
insurance policy at issue there. Id. at 62.

                                                          -5-
         it was not parked overnight in the course of delivery. . . . [I]t was left on a lot, where
         it was not discovered missing until more than a week later. Even if this Court
         adopted the definition of in transit provided in Pennsylvania, Plaintiff's cargo would
         not fall within its meaning.

Id. Instead, Williams consulted the definitions of “in transit” and “transit” set forth in Black’s Law
Dictionary5 in order to use the common and ordinary meaning of the words—“that ‘in transit’ is
limited to the time that cargo is actually in route from one place to the next.” Id. at 643-44. Based
on the particular facts in Williams, this Court affirmed the decision of the trial court, ruling that the
plaintiff’s cargo was not “in transit” at the time of the loss. Id. at 644.

        Both parties make an argument based on Williams. Cargo Master contrasts the facts in this
case to those in Williams, arguing that an overnight stop, as opposed to a stop of a week or more,
does not constitute a sufficient deviation from the delivery course so as to render the cargo no longer
in transit for purposes of coverage. ACE argues, however, that the crux of the Williams case is not
the length of time involved in the stop, but rather the question of whether the cargo was “in the
process of shipment” at the time of the loss. According to ACE, the cargo in the instant case was
not actually en route, and thus not in transit, because the driver effectively abandoned the freight
when he left the trailer containing the cargo behind the shopping center.

        In Williams, we were presented with a fact situation in which the cargo “was left on a lot,
where it was not discovered missing for more than a week later.” Williams, 26 S.W.3d at 644.
Under these circumstances, the cargo was clearly not “in the process of being shipped, and it was not
parked overnight in the course of delivery.” Id. Instead, the trailer sat idle for a substantial period
of time and for reasons apparently unrelated to its carriage. Under those circumstances, it was not
necessary for this Court to set forth a comprehensive definition of the term “in transit” for purposes
of insurance coverage. See id. The facts in the instant case, however, are less clear—a shipment of
tires was parked behind a shopping center overnight and discovered missing the next day. Presented
with these facts, we find it necessary to research further to find a more complete definition of the
term “in transit” or “in due course of transit.”

        In doing so, we note that courts in other jurisdictions have discussed the meaning of the term
“in transit” for purposes of determining insurance coverage. For example, in Dealers Dairy
Products Co. v. Royal Ins. Co., 164 N.E.2d 745 (Ohio 1960), the plaintiff’s driver, while en route,
was instructed to unload a shipment of machinery and equipment at a warehouse in order to make
an emergency pick-up and delivery to another customer. Dealers Dairy, 164 N.E.2d at 746-47.


         5
             As noted in footnote 2 of the William s opinion, the fifth edition of Black's Law Dictionary defined “in transit”
as “on the way or passage; while passing from one person or place to another; in the course of transportation.” William s,
26 S.W .3d at 644 n.2 (quoting Black’s Law Dictionary 738 (5th ed. 1979)). Black’s further defined the term “transit”
as: “[W ]ithin [a] policy covering goods in transit, [the] term has significance of activity and of motion and direction;
literally it means in [the course] of passing from point to point, and ordinarily goods in transit would imply that goods
will lawfully be picked up at given place and hauled to place designated by owner or one with authority to so designate.”
Id. (quoting Black’s Law Dictionary 1343 (5th ed. 1979)).

                                                             -6-
When he returned to the warehouse two days later, the driver discovered that the original shipment
was missing. Id. at 747. In finding that the shipment was not “in transit” within the meaning of the
plaintiff’s insurance policy, the Supreme Court of Ohio stated:

       The words, ‘in transit’ and ‘transportation,’ . . . comprehend the carriage of goods
       from one point to another and ordinarily mean the movement of the goods on a
       transporting conveyance from the starting point to the point of delivery, including
       stops along the way incidental to the carriage. Of course, minor deviations from the
       customary route and temporary stops, even overnight, for the convenience of the
       operator of the conveyance and for other purposes connected with the carriage, will
       not remove the goods from the transportation.

Id. (emphasis added); see also Stein-McMurray Ins. Inc. v. Highlands Ins. Co., 520 P.2d 865, 868
(Idaho 1974) (defining “in transit” as “the time from when the [property] left its point of departure
until it arrived at its point of destination, including any reasonable delays along the way that related
to the transportation”); Koshland v. Columbia Ins. Co., 130 N.E. 41, 43 (Mass. 1921) (noting that
“delays commonly incident to a movement of merchandise across the continent would not ordinarily
be thought to suspend transportation or transit”); Brown v. Am. Cas. Co., 34 Pa. D. & C.2d 204, 208
(C.P. 1964) (recognizing that “the kind of interruption which will take cargo out of transit must be
an interruption of such duration and nature as not to be incidental to the transit itself”).

         Courts in New York have defined the term in a similar fashion. In Franklin v. Washington
General Ins., 310 N.Y.S.2d 648 (Sup. Ct. 1970), for instance, the plaintiff was going to travel to an
exhibit for rare documents. He loaded antiquated documents into the trunk of his car and drove the
car to his home, intending to drive to the airport the next morning. He left the documents in his
locked trunk overnight. Franklin, 310 N.Y.S.2d at 649. The next morning, the documents were
discovered stolen. Id. The New York court held that the goods were “in transit” at the time of the
loss, stating:

       Once the transportation of the goods has started, the property remains under the
       protection of the policy during the ordinary delays in transshipments incident to such
       movements . . . and (coverage) is not confined to periods of actual movement, but
       includes periods of rest during the progress of the continuous undertaking. Whether
       an interruption in actual transit is sufficient to remove the goods from coverage,
       depends on the extent and purpose of the interruption in the context of the risk
       contemplated. A temporary interruption for a purpose related to the carriage itself
       does not remove the property from transportation.

Id. at 650 (emphasis added) (citations omitted).

        Likewise, in Ben Pulitzer Creations, Inc. v. Phoenix Ins. Co., 263 N.Y.S.2d 373, (Civ. Ct.
1965), the plaintiff’s contracted driver was delivering to the plaintiff a shipment of neckties ready
for sale. Ben Pulitzer Creations, 263 N.Y.S.2d at 374. The driver, however, did not reach the


                                                  -7-
plaintiff’s place of business until late Friday afternoon, after the plaintiff had already closed for the
weekend. Id. The driver parked the delivery wagon in a rented garage, with the intent to deliver the
shipment to the plaintiff’s store the following week. Id. On Monday morning, however, the driver
discovered that the neckties had been stolen from the wagon. Id. The New York court held that the
goods were “in transit” under the insurance policy, explaining that:

        The true test . . . appears to be not whether movement was interrupted overnight, or
        over a week end, but whether the goods, even though temporarily at rest, were still
        on their way, with any stoppage merely incidental to the main purpose of delivery.
        Here the goods had arrived at the point of destination, but there being no one there
        to receive the goods, the storage of the station wagon in the contractor's parking
        space . . . was consistent with the continuing transit, and was not a deviation or
        by-pass for the contractor’s own convenience.

Id. at 376 (emphasis added).

         Additional cases from other jurisdictions likewise recognize that a temporary stop for reasons
related to the carriage process itself generally does not mean that the cargo is not in transit for
purposes of coverage. See Aetna Cas. & Surety Co. v. Burbank Generators, Inc., 175 Cal. Rptr.
568 (Ct. App. 1981) (holding that cargo contained in trailers, which were parked and left for eight
hours to facilitate a later pick-up, were in transit); Home Ins. Co. v. F & F Clothing Co., 243 A.2d
572 (Md. 1968) (finding no abandonment of the shipment process where driver parked a loaded
delivery wagon in front of home overnight so that he could start early the next morning). We are
persuaded that these cases set forth more complete definitions of the terms “in transit” or “in due
course of transit” and are consistent with our previous decision in Williams v. Berube & Associates,
26 S.W.3d 640 (Tenn. Ct. App. 2000). Accordingly, we find that the common and ordinary meaning
of the terms “in transit” or “in due course of transit,” while limited to cargo that is actually en route
from one place to the next, contemplates temporary stops which are incidental to the course of
transportation. Whether an interruption in the actual movement of the cargo is incidental to the
course of transportation depends upon the purpose and extent of the stop.

         Thus, we note that the issue of whether cargo remains “in transit” during temporary
cessations in actual movement must be decided on a case-by-case basis, considering the particular
circumstances presented. In the instant case, the parties do not dispute that the driver disconnected
the trailer containing a shipment of tires from the truck and left it in a parking lot behind a shopping
center overnight, during which time the trailer and its cargo were stolen. From these limited facts,
however, we cannot determine as a matter of law whether this delay constitutes such a deviation
from the course of delivery so as to render the shipment of tires no longer “in transit” or “in due
course of transit.” Although Cargo Master asserts that the trailer was parked due to mechanical
difficulties, the record is unclear on the circumstances surrounding the incident. From our review
of the record, therefore, we find that genuine issues of material fact remain as to whether the
overnight stop was incidental to the process of transporting the shipment for purposes of determining
coverage under the cargo insurance policy. Therefore, we must reverse the trial court’s grant of


                                                  -8-
summary judgment in favor of ACE. The trial court’s denial of Cargo Master’s motion for summary
judgment is affirmed, and the case is remanded to the trial court for further proceedings consistent
with this Opinion.

       The decision of the trial court is reversed in part and affirmed in part, as set forth above, and
the case is remanded for further proceedings. Cost of this appeal are to be taxed to
Defendant/Appellee ACE, for which execution may issue, if necessary.




                                               ___________________________________
                                                     HOLLY M. KIRBY, JUDGE




                                                  -9-
