Petitioners Reply Brief — Grinnell Mutual Reinsurance Co. v. Empire Fire & Marine Insurance Co.

A

IN THE UNITED STATES n COURTERK

Office Supreme Court, U.S |

FILED

APR 14 1984

LEXANDER L STEVAS

SPRING TERM

CASE NO. 83-1586

GRINNELL MUTUAL REINSURANCE COMPANY,

AN IOWA CORPORATION,

PETITIONER,

vs.

EMPIRE FIRE & MARINE INSURANCE COMPANY,

A NEBRASKA CORPORATION, ET AL,

RESPONDENTS.

ON WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

— — — — — — — — — — — — — — — — — — — — —

— —— ——p— — — — D — ——— — ———̃ — — M— — —

Lowell A. O'Grady

O'GRADY, MORLEY & MORLEY, LTD.

P. O. Box 239

Grand Forks, ND 58206-0239

(701)772-7266

Attorneys for Petitioner

April 1984

i

TABLE OF CONTENTS

| Pages

Table of Authorities 11

Statement of Cages IL

Argument:

I. THE EIGHTH CIRCUIT'S

DECISION IS IN DIRECT

CONFLICT WITH THIS COURT'S

DECISION OF TRANSAMERICA

FREIGHT SYSTEMS, INC. V- 1 —5

SYSTEMS, INC., 423 U. s.

„ „„ „„ eee eee e eee 2

II. THE EIGHTH CIRCUIT'S

DECISION WITH THE

SUBSTANTIVE LAW OF. ILLINOIS

AND ONE OF ITS OWN PRIOR

DRCI SION. nc Ghar skcetcewess 3

3

111. THE EIGHTY CIRCUIT'S é

DECISION NEGATING THE 3

PETITIONER'S EXCLUSIONARY 4

CLAUSE IS IN DIRECT CONFLICT

WITH ILLINOIS LAW AND IN 3

CONFLICT WITH ERIE V „

. 1

J eri ey. = : 4

— ———— ——

;

- ~~

1

Sir ..... ce tN we weeds ; 5

ii

TABLE OF AUTHORITIES

Pages

United States Supreme Court Cases:

Erie R. Co. v Tompkins, 304

«We Bedees dees Pvecssce 5

Transamerica Freight Lines,

ct 229, 10 L. Ed 2d 169

CCG „„ 2

Other Federal Cases:

Wellmann v Liberty Mutual Ins.

Co., 496 F2d III TST Cir.

AS a 3

State Cases:

Krieder Truck Service, Inc.

St. Paul Fire & Marine Ins.

. * Tr + „

309, 370, NEZd 1058, 1061,

( eee ag bia GeO 4 0 6 6 5

Schedler v Rowl Interstate

Transp. Co., 5

A 3 f on

No. 83-1586

In The

SUPREME COURT OF THE UNITED STATES

Spring Term, 1984

Grinnell Mutual Reinsurance Company, an lowa

Corporation,

Petitioner,

Empire Fire & Marine Insurance Company, a

Nebraska Corporation, et al,

Respondents,

On Writ of Certiorari to the — 2 states 2

. Court of Appeals for the Eight H circuit 5

PETITIONERS REPLY BRIEF

fe

Be .

STATEMENT OF CASE

Respondents’ state that this Petitioner does not

eat eRe Sa etn at hey

language makes its coverage primary and Excelibur's

333 (Respondents’ brief, page 4). This statement i

“not correct. (See Petitioner's brief, page ii, issue II. aa

=i

2 7 +9 end 10). This is an important issue that is otly

snd has bean i depute throughout the na.

a

oe nid

*

. Be

y.

25

12 a | ota Se 8

a. 7 * en or, ae

ae ‘ . 1

5

ARGUMENT FOR ALLOWANCE OF THE WRIT

I.

THE EIGHTH CIRCUIT'S DECISION IS IN DIRECT

CONFLICT WITH THIS COURT'S DECISION OF

TRANSAMERICA FREIGHT SYSTEMS, INC. V BRADA

MILLER FREIGHT SYSTEMS, INC., 423 U.S. 2.

7 3 „ . |

Respondents Riechmann and Excalibur argue the Eighth

Circuit's Decision that a public carrier's statutory duty to

the public, under ICC regulations, is secondary to a

primary duty that can be superimposed by the law of a

state is correct. By implication they argue the Eighth

Circuit was correct when it used Illinois common law to find |

that driver Culver was the employee of Hamel, the owner, _

and Hamel were primarily responsible to the public, not

Riechmann, the common carrier and lessee of the transport

driver Culver was operating. (See Respondents' brief at 6

and the Eighth Circuit's Decision 722 F2d 1400, 1405). |

. The Eighth Circuit's Decision is in direct conflict m

this court's decision of Transamerica Freight Lines, Ine,

3 v. 8. 28. Justice Blackmun in his opinion at pp. 36

dates that while leasing is permitted, the primary ontrol

e the leased transport under ioc regulations is with —

_ Common carrier lessee, not the owner. 777

23 4

i a try 5

3 i 5 4 3 .

* 1 3 N

7 ee

at a i) Se

. ia.

3 It can be readily seen that if the Eighth Circuit's

decision is allowed to stand, it does in effect overrule this

court's Brada Miller decision. It would return the entire 3

interstate trucking industry to the many problems prior to

_ Brada Miller, supra, as outlined by Justice Blackmun at 423

U. 8. 37 of his opinion. Indeed, this case assumes national :

importance and the need for a writ can readily be seen. |

, Il.

THE EIGHTH CIRCUIT'S DECISION IS IN DIRECT

CONFLICT WITH THE SUBSTANTIVE LAW OF ILLINOIS

AND ONE OF ITS OWN n DECISIONS.

Respondents Riechmann and Excalibur argue that we

asserted in our petition that the Eighth Circuit's Decision 5

was in conflict with Decisions of other circuits. (See :

Respondents’ brief at page 6). a

Respondents are in error. We argued that the Eighth 4

Circuit's Decision was in conflict with this court's ths 3

Miller decision, supra, and two Illinois cases: yo

Rowley In „

and Krieger Truck Service, Inc. v Augestine, 304 Bese: 7

un em. 1919) and the Bighth Circuit's own prior decision —

ee? +

1

Psy

See is

Cir. 1974). = haere “i 2

2 40 oF n. eT. * ig. ag

4

r

*

—

1

om

In Krieder, supra, the Supreme Court of Illinois held

in compliance with Brada Miller that so long as the ICC

lease was in effect (as was true in our case), it would

follow Schedler, supra, and trovblesome agency and

independent contractor questions need not be determined

and that court held the interstate carrier liable to the

public because the ICC lease was in effect. The Eighth

‘Circuit, in its Decision, entirely either overlooked or

ignored this Decision. The Circuit applied Illinois common

law despite these two Illinois Decisions.

Agein, this case assumes national importance in the

sense that it returns the interstate trucking industry to all

the difficulties that it encountered prior to Brada Miller,

supra.

III.

THE EIGHTH CIRCUIT'S DECISION NEGATING TAB

j

3

;

;

é

*

*

PETITIONER'S EXCLUSIONARY CLAUSE IS IN DIRECT

CONFLICT WITH ILLINOIS LAW AND IN CONFLICT

WITH ERIE V_TOMPE! :

Riechmann and Excelibur argue the Bighth Circuit's

177. f

n is correct and cites two Decisions: « 1971

«ee

Federel District Court and ¢ 1917 |

Court decision.

a

.

*

i ay

| In an almost identical fact question to this case in St. ‘

Paul Fire & Marine Ins. Co. » Frankurt, 69 Ill. 2d 209,

No, NE2d 1058, 1061, 1062, that court held where an ICC ~

lease existed that a rental exclusion very similar to the

exclusion in the Petitioner's policy was valid even though

the transport was empty and driven by the owner on the

owner's business when the accident occurred.

Again, this case is in direct conflict with this court's

Erie R. Co. wv Tompkins, 304 U.S. 64 (1937). If the

Eighth Circuit's Decision is allowed to stand, it will impose —

federal common-law where the law of Illinois should prevail, a

It will create confusion and uncertainty throughout the _

insurance industry.

CONCLUSION

This case is one of national importance because:

First, the Eighth Circuit's Decision is in conflict with

; this court's Transamerica Freight Systems, Inc., supra, on

te basic and vital issue of control over a transport used 3

*

1

commerce ; ~/

+

Second, the Decision is in direct chte with

1

7 * *

D

a 299.

aa nee, | a

Third, the Decision is in direct conflict with the

_ Substantive law of Illinois on the rental exclusion contained

in the petitioner's policy and, hence, violates this court's

Erie R. Co. v Tompkins Decision.

pect fully submitted,

c ;

11 A. O'Gra

212 South 4th Street

P.O. Box 239

Grand Forks, ND 58206

Counsel for Grinnell