When a motor carrier is named in a lawsuit by its own insurance company based on the MCS-90 endorsement, the legal and financial stakes are high. These cases often arise after an insurer pays out damages to a third party and then seeks reimbursement from the motor carrier under the MCS-90’s reimbursement provisions. For carriers operating in Florida, defending such claims requires a strategic understanding of federal motor carrier regulations, the scope of the MCS-90 endorsement, and applicable Florida contract and insurance law.
Understanding the MCS-90 Endorsement
The MCS-90 endorsement is a federally mandated form attached to motor carrier liability insurance policies. It is required by the Federal Motor Carrier Act for certain motor carriers operating in interstate commerce. The endorsement ensures that an insurance company will pay certain judgments against a motor carrier—even if the underlying policy would not otherwise cover the loss—for public protection.
However, this endorsement also gives the insurer the right to seek reimbursement from the insured motor carrier if it pays out a claim that would not have been covered under the terms of the policy but for the MCS-90.
Common Legal Theories in MCS-90 Lawsuits by Insurers
In Florida, insurers may file reimbursement actions against motor carriers using the MCS-90 endorsement under the following circumstances:
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A third party obtains a judgment for bodily injury, death, or property damage.
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The judgment is not covered under the policy’s regular terms (e.g., because the vehicle was not listed on the policy, or the driver was not authorized).
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The insurer pays the judgment pursuant to the MCS-90.
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The insurer then sues the motor carrier for reimbursement under the reimbursement clause of the MCS-90.
Defending the Motor Carrier: Key Legal Strategies
1. Challenge the Applicability of the MCS-90
The MCS-90 only applies when the vehicle involved is being used in interstate commerce at the time of the accident. A key defense is proving that the accident occurred during intrastate commerce, thereby exempting the claim from MCS-90 coverage.
Florida courts, like others, follow the federal definition of “interstate commerce,” which includes trips that are part of a continuous journey across state lines. Demonstrating that the transport was purely intrastate can defeat the insurer's reimbursement claim.
2. Analyze the Nature of the Judgment
The MCS-90 only covers public liability for bodily injury, death, or property damage. If the judgment includes amounts not related to these types of damages (e.g., punitive damages, contractual indemnity, or cargo claims), those amounts may not be recoverable under the MCS-90, limiting the insurer’s right to reimbursement.
3. Invoke Equitable Defenses
Motor carriers may argue equitable defenses such as:
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Waiver and Estoppel: If the insurer acted in a way that induced reliance or failed to assert coverage defenses timely.
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Unclean Hands: If the insurer failed to conduct a proper investigation or contributed to the loss.
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Laches: If there was an unreasonable delay in bringing the reimbursement claim, prejudicing the motor carrier.
4. Scrutinize the Underlying Judgment
Insurers can only seek reimbursement if they paid a “final judgment” under the MCS-90. If the payment was voluntary (such as a settlement without judgment), or if the judgment is under appeal or was not rendered on the merits, the carrier may argue that reimbursement is improper.
5. Contractual Limitations and Policy Language
Florida law recognizes that the insurer’s right to reimbursement under MCS-90 is contractual. Courts may closely interpret the language in both the MCS-90 and the underlying insurance policy to determine whether reimbursement is allowed.
If the policy or endorsement contains ambiguities, Florida courts often construe such ambiguities against the insurer as the drafter.
Recent Case Developments
Recent federal decisions in the Eleventh Circuit and Florida’s Middle and Southern Districts continue to reinforce the limited scope of the MCS-90. For example, courts have held that:
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The endorsement does not provide a basis for insurer reimbursement if the accident occurred outside of the scope of federal motor carrier safety regulations.
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Insurers bear the burden of proving entitlement to reimbursement under the MCS-90, and that burden is not easily met.
Conclusion
Defending a motor carrier in a Florida lawsuit brought by its insurer under the MCS-90 endorsement demands a comprehensive understanding of both federal regulations and Florida insurance law. These lawsuits are not open-and-shut cases in favor of insurers—there are several potent defenses that can limit or bar the reimbursement claim altogether.
Motor carriers facing such litigation should seek counsel experienced in federal transportation law, motor carrier liability, and complex insurance disputes. With the right strategy, carriers can often significantly mitigate or eliminate their exposure under these claims.
Need Legal Help Defending an MCS-90 Reimbursement Claim in Florida?
Contact an experienced transportation litigation attorney to discuss your defense options and protect your business from unjust claims.
Have you been sued under an MCS-90 endorsement? Contact Florida Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Miami Attorney Gonzalez-Sirgo directly at [email protected] or by text at (305) 929-8935.
