                                                                              F I L E D
                                                                       United States Court of Appeals
                                                                               Tenth Circuit
                         UNITED STATES COURT OF APPEALS
                                                                               JUN 11 2002
                                       TENTH CIRCUIT
                                                                           PATRICK FISHER
                                                                                   Clerk

 JAVIER AVALOS, SR., and ROSALBA
 AVALOS-PORRAS, individually and as
 next friends of their minor children Javier
 Avalos, Jr. and Alejandro Avalos,

           Plaintiffs,

 and

 LIBERTY MUTUAL FIRE
 INSURANCE COMPANY,

           Plaintiff - Intervenor - Appellant,
 v.                                                          No. 00-2419
 EDMUNDO DURON, JR.; EDMUNDO                          (D.C. No. CIV-97-521-JP)
 H. DURON, SR.; UNITED PARCEL                             (D. New Mexico)
 SERVICE,

           Defendants,

 and

 WILSHIRE INSURANCE COMPANY,

           Defendant - Appellee.




                                 ORDER AND JUDGMENT*

       *
          This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
Before BRISCOE, Circuit Judge, BRORBY, Senior Circuit Judge, and LUCERO,
Circuit Judge.


       Liberty Mutual Fire Insurance Company (Liberty Mutual) appeals the district

court's entry of summary judgment in favor of Wilshire Insurance Company (Wilshire).

We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

                                             I.

       On July 26, 1996, Rosalba Avalos-Porras was driving her van north on Interstate

25 in Sierra County, New Mexico. A tractor-trailer rig collided with the van, injuring

Avalos-Porras and her passengers (her husband and two children). Avalos-Porras and her

family filed the underlying diversity action against (1) Edmundo Duron, Sr., d/b/a ED

Trucking (EDT), the owner of the tractor, (2) Edmundo Duron, Jr., the driver of the

tractor, (3) United Parcel Service of America, Inc. (UPS), the owner of the trailer, and (4)

Citywide Carriers (Citywide), the entity that arranged for EDT to haul the UPS trailer.

       At the time of the accident, Citywide had a contract with UPS whereby Citywide

agreed to “provide drivers with equipment for the movement of UPS cargo between UPS

locations.” App. at 157. Under the contract, UPS agreed to pay Citywide $1.10 per mile

for its services. Citywide also had a “Common Carrier/Contract Agent Contract” with

EDT. Id. at 165. The purpose of the EDT agreement was for EDT to transport UPS

shipments for Citywide “in situations where Citywide did not have enough tractors or

drivers of its own to transport all UPS . . . loads.” Id. at 260. Under the agreement,

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Citywide was required to offer to EDT “a minimum quantity of five (5) shipments per

year,” and EDT in turn was required “to transport those shipments tendered.” Id. at 167.

In exchange for EDT’s services, Citywide agreed to pay EDT a “basic transportation rate”

of “$.95/mile between all points in the continental United States.” Id. As a result of

these two contracts, EDT was transporting the UPS trailer involved in the accident.

       Each of the three business entities named as defendants in the underlying action

was covered by a commercial insurance policy at the time of the accident. EDT was

covered by a policy issued through Progressive County Mutual Insurance Company

(Progressive) that provided approximately $750,000 in liability coverage for EDT’s

tractor. Citywide was covered by a policy issued through Wilshire that provided

$1,000,000 in liability coverage. UPS was covered by a policy issued through Liberty

Mutual that provided $5,000,000 in liability coverage.

       During the pendency of the underlying action, Liberty Mutual filed this action-in-

intervention for declaratory judgment, naming Progressive and Wilshire as defendants.

The purpose of Liberty Mutual’s action-in-intervention was to obtain a determination of

each insurance company’s obligation, if any, to the plaintiffs in the underlying action for

loss sustained in the accident. It was undisputed that Progressive, the company that

provided liability coverage to EDT, owed the first level of coverage. Accordingly,

Progressive tendered its policy limits, leaving the district court to decide what coverage, if

any, was owed by Liberty Mutual and Wilshire.


                                              3
      Liberty Mutual filed a motion for summary judgment arguing that Wilshire owed

the second level of coverage and that Liberty Mutual owed the third and final level of

coverage. Wilshire filed a counter-motion for summary judgment arguing that it was not

obligated to provide any coverage. The district court denied Liberty Mutual’s motion and

granted Wilshire’s motion, concluding that EDT was an “insured” under the policy issued

by Liberty Mutual to UPS, but was not an “insured” under the policy issued by Wilshire

to Citywide.

                                             II.

      Liberty Mutual contends the district court erred in concluding that EDT was not an

“insured” under the policy issued by Wilshire to Citywide. We review the district court’s

ruling de novo. See Old Republic Ins. Co. v. Durango Air Serv., Inc., 283 F.3d 1222,

1225 (10th Cir. 2002) (applying de novo standard of review to district court’s

interpretation of insurance policies); VBF, Inc. v. Chubb Group of Ins. Co., 263 F.3d

1226, 1230 (10th Cir. 2001) (applying de novo standard of review to district court’s

summary judgment ruling).

      To resolve this appeal, we begin by reviewing the relevant provisions of the

Wilshire policy. The Wilshire policy defined “WHO IS INSURED” as follows:

      1.       You [Citywide] are an insured for any covered auto.
      2.       Anyone else is an insured while using with your permission a
               covered auto you own, hire or borrow . . . .
      3.       Anyone liable for the conduct of an insured described above is an
               insured but only to the extent of that liability. However, the owner
               or anyone else from whom you hire or borrow a covered auto is an

                                              4
              insured only if that auto is a trailer connected to a covered auto you
              own.

App. at 149. The Wilshire policy further defined the term “auto” to include “a land motor

vehicle, trailer or semi-trailer designed for travel on public roads.” Id. at 148.

       Notwithstanding the above-quoted language of the policy referring to autos

“own[ed], hire[d] or borrow[ed]” by Citywide, Citywide purchased coverage only for

autos specifically described in a schedule attached to the policy. Id. at 143 (referring to

the type of autos covered under the policy), 145 (describing the “COVERED AUTO

DESIGNATION SYMBOLS” used in the policy), 147 (schedule of covered autos which

lists only two items). Thus, Citywide did not purchase coverage for “hired autos.” See

id. at 146 (indicating that no “Hired Auto” coverage was purchased).

       The Wilshire policy also included a Form MCS-90 endorsement mandated by the

Interstate Commerce Commission (ICC) pursuant to 49 C.F.R. §§ 387.3(a) and 387.15.

The MCS-90 “endorsement was required to ensure that all ICC-certified carriers maintain

certain minimum coverage to protect the public in the event of accident or injury.”

Adams v. Royal Indem. Co., 99 F.3d 964, 966 (10th Cir. 1996). The MCS-90

endorsement read, in pertinent part, as follows:

               In consideration of the premium stated in the policy to which this
       endorsement is attached, the insurer . . . agrees to pay, within the limits of
       liability described herein, any final judgment recovered against the insured
       for public liability resulting from negligence in the operation, maintenance
       or use of motor vehicles subject to the financial responsibility requirements
       of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of
       whether or not each motor vehicle is specifically described in the policy

                                              5
       and whether or not such negligence occurs on any route or in any territory
       authorized to be served by the insured or elsewhere. * * * It is understood
       and agreed that no condition, provision, stipulation, or limitation contained
       in the policy, this endorsement, or any other endorsement thereon, or
       violation thereof, shall relieve the company from liability or from the
       payment of any final judgment, within the limits of liability herein
       described . . . . However, all terms, conditions, and limitations in the policy
       to which the endorsement is attached shall remain in full force and effect as
       binding between the insured and the company. The insured agrees to
       reimburse the company for any payment made by the company on account
       of any accident, claim, or suit involving a breach of the terms of the policy,
       and for any payment that the company would not have been obligated to
       make under the provisions of the policy except for the agreement contained
       in this endorsement.

App. at 155 (emphasis added); see 49 C.F.R. § 387.15. The endorsement defined the

term “motor vehicle” as “a land vehicle, machine, truck, tractor, trailer, or semitrailer

propelled or drawn by mechanical power and used on a highway for transporting

property, or any combination thereof.” App. at 155.

       It is undisputed that if we were applying the Wilshire policy without an MCS-90

endorsement, EDT would not be an “insured.” As set forth above, the terms of the policy

define an “insured” in terms of specifically described vehicles. Because the tractor

owned and operated by EDT at the time of the accident was not a vehicle specifically

described in the Wilshire policy, EDT itself was not an insured under the policy when

read without the MCS-90 endorsement.

       As the Wilshire policy had an MCS-90 endorsement, the question for us is whether

the MCS-90 endorsement modifies the policy in such a manner as to result in EDT being



                                              6
an “insured” for purposes of the accident at issue.1 In Adams, we addressed a

substantially similar insurance policy and described the effect of the MCS-90

endorsement on that policy:

       [T]he ICC endorsement does not explicitly define “insured,” [but] indirectly
       modifies “insured” as defined in the basic policies by providing that the
       insurer must pay any final judgment against the insured for public liability
       resulting from operation of a regulated motor vehicle “regardless of
       whether or not each motor vehicle is specifically described in the policy.”
       That is, this endorsement precludes a policy from limiting the definition of
       an insured to one who owns, hires or borrows only specifically described
       motor vehicles because such a limited definition would subvert the purpose
       of the ICC endorsement of requiring coverage on all regulated vehicles
       regardless of whether or not they are listed in the policy specifically. A
       policy with this ICC endorsement cannot explicitly limit liability to those
       vehicles specifically described therein, nor can it indirectly so limit
       coverage by attempting to define who is insured in terms of specifically
       described vehicles.

99 F.3d at 970. We therefore held in Adams that the MCS-90 endorsement “must be read



       1
           Some courts have held the MCS-90 endorsement is not triggered if there are no
gaps in coverage, i.e., when there is no risk that the injured party will be unable to recover
for injuries. E.g., T.H.E. Insurance Co. v. Larsen Intermodal Serv., Inc., 242 F.3d 667,
673 (5th Cir. 2001) (concluding that “when the protection of injured members of the
public is not at stake, the MCS-90 and the relevant federal regulations do not address
coverage for the purpose of disputes between the insured and the insurer”); John Deere
Ins. Co. v. Nueva, 229 F.3d 853, 858 (9th Cir. 2000) (concluding “that the integral
purpose of the MCS-90, to protect third party members of the public, is not implicated in
a dispute between two insurers”), cert. denied, 122 S. Ct. 1063 (2002); John Deere Ins.
Co. v. Truckin’ USA, 122 F.3d 270, 275 (5th Cir. 1997) (“Where an insurance policy
does not provide coverage for non-listed vehicles except to third-party members of the
public through operation of the endorsement, the policy provides no coverage for
purposes of disputes among insurers over ultimate liability.”). We find it unnecessary to
reach this issue because we conclude that even if the MCS-90 endorsement was triggered
in this situation, it did not result in EDT becoming an “insured” under the Wilshire policy.

                                              7
to eliminate the limiting clause that coverage applie[d] only to covered autos described”

in the policy, and thus effectively modified the policy to read: “‘Anyone else is an insured

while using with your permission an auto you own, hire or borrow.’” Id. at 971.

Applying the same reasoning here, the Wilshire policy is effectively modified by the

MCS-90 endorsement in the same manner. In other words, the Wilshire policy no longer

defines an “insured” in terms of autos specifically listed in the schedule attached to the

policy, but instead is modified to read: “Anyone else is an insured while using with your

permission an auto you own, hire or borrow.”

       The more narrow question presented is whether, at the time of the accident, EDT

was using with Citywide’s permission an auto (i.e., the tractor involved in the accident)

that Citywide had “hired” (since it is undisputed that the tractor involved in the accident

was neither owned nor borrowed by Citywide). Because the Wilshire policy does not

define the term “hire,” the term must be “given [its] plain and ordinary meaning if that

can reasonably be ascertained.”2 Grisham v. Allstate Ins. Co., 992 P.2d 891, 893 (N.M.




       2
         Liberty Mutual argues that “the federal legislation which mandates inclusion of
the MCS-90 endorsement in every insurance policy issued to a motor carrier itself sets
forth a definition [of] ‘for hire,’” Aplt. Br. at 15, but fails to cite any authority that would
authorize us to interpret the Wilshire policy in light of that federal legislation. Even if we
were to refer to the federal regulations cited by Liberty Mutual in its appellate brief, the
result would be the same since those regulations define the phrase “[f]or hire carriage” as
“the business of transporting, for compensation, the goods or property of another.” 49
C.F.R. § 387.5.

                                               8
Ct. App. 1999).3 The Oxford English Dictionary defines the term in the following

manner: “[t]o procure the temporary use of (any thing) for stipulated payment.” Oxford

English Dictionary (2d ed. 1989) (on-line version, http://dictionary.oed.com). Webster’s

similarly defines the term: “to engage the temporary use of for a fixed sum.” Webster’s

Third New Int’l Dictionary 1072 (1993). Likewise, Black’s Law Dictionary defines the

term to mean: “[t]o purchase the temporary use of a thing.” Black’s Law Dictionary 729

(6th ed. 1990). Given the agreement of these sources, we conclude that the term “hire” is

“capable of a plain and ordinary meaning.” Grisham, 992 P.2d at 893.

       Applying this plain and ordinary meaning to the circumstances here, we conclude

that Citywide did not “hire” EDT’s tractor. More specifically, Citywide did not procure,

engage or purchase the temporary use of EDT’s tractor. See Liberty Mut. Fire Ins. Co. v.

Canal Ins. Co., 177 F.3d 326, 333-34 (5th Cir. 1999) (construing policy term “contract of

hire” as referring to a contract or agreement relating to a particular vehicle, and not



       3
          Although “[f]ederal law applies to the operation and effect of ICC-mandated
endorsements,” Harco Nat’l Ins. Co. v. Bobac Trucking, Inc., 107 F.3d 733, 735 (9th Cir.
1997), the term “hire” derives from the Wilshire policy and presumably must be
construed in accordance with New Mexico law (i.e., the law of the forum state). See
generally Cooper v. Central & Southwest Serv., 271 F.3d 1247, 1251 (10th Cir. 2001)
(holding that, in diversity action, court must ascertain and apply the law of the forum
state). Even if federal law were controlling as to the meaning of the term “hire,” it
appears to be consistent with New Mexico law and would produce the same result. E.g.,
Santaella v. Metropolitan Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997) (holding that,
under federal common law, the terms of an insurance policy must be interpreted “in an
ordinary and popular sense, as would a person of average intelligence and experience”)
(internal quotations omitted).

                                              9
including contract for performance of a specific service which encompassed the use of

such a vehicle). Rather, Citywide effectively subcontracted with EDT to perform work

that it had contracted with UPS to perform. In other words, Citywide engaged EDT to

perform a service, i.e., “the transportation of the commodities” from one location to

another. App. at 167 (quoting from terms of contract between Citywide and EDT).

Significantly, Citywide had no right under its contract with EDT to specify the use of a

particular vehicle, nor did it have the right to specify a particular driver or route (even

though the start and destination were obviously controlled by UPS). In fulfilling its

contractual obligation to Citywide, EDT had complete control over the vehicle, driver,

and route chosen to complete the task. Moreover, EDT had the right under the contract to

“decline any load with or without giving reason to” Citywide. Id. at 166. Thus, the EDT

tractor was not “hired” by Citywide (and, in turn, EDT did not need or receive

“permission” from Citywide to use the tractor).

       We conclude the district court properly granted summary judgment in favor of

Wilshire and against Liberty Mutual. The judgment of the district court is AFFIRMED.

                                                   Entered for the Court

                                                   Mary Beck Briscoe
                                                   Circuit Judge




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