Transportation Executive Summary: Seventh Circuit Clarifies Scope of MCS-90 Endorsement


Recently, the United States Court of Appeals for the Seventh Circuit issued a unanimous 3-0 decision, Prime Insurance Company v. Wright, 57 F.4th 597 (7th Cir. 2023), that insurance coverage language modeled after sections 29 and 30 of the Motor Carrier Act of 1980, also known as an MCS-90 endorsement, requires insurance providers to make payments to injured parties, even if the insurance provider had no duty to defend or indemnify the policy holder, as long as the policy holder was engaged in interstate transportation at the time of the negligent conduct.


In November 2013, a driver for Riteway Trucking had dropped off freight at one site in Fort Wayne, Indiana and was driving to another worksite in Fort Wayne to pick up new freight to bring to Illinois when the driver collided with the car of Darnell Wright. In an Indiana state court, Wright sued Riteway Trucking for negligence. Because Riteway Trucking failed to appear in court, Wright received a default judgment of $400,000.

During the course of the litigation, Riteway Trucking failed to cooperate with its insurance provider, Prime Insurance Company (“Prime”). For failure to cooperate, Riteway Trucking lost the insurance coverage Prime had issued to it. However, part of Riteway Trucking’s insurance policy included language (“the Endorsement”) that guaranteed payments to parties injured by Riteway Trucking even if Prime had no duty to defend or indemnify Riteway Trucking.

A lower federal court agreed that Riteway Trucking’s failure to cooperate with Prime caused Riteway Trucking to lose the benefit of its insurance policy; however, that court did not address Wright’s right to recover under the Endorsement. Prime attempted to attack the default judgment of $400,000, but the Indiana Court of Appeals did not allow it to do so. As a result, Prime brought suit in the United States District Court for the Northern District of Indiana, seeking a declaratory judgment that Wright could not recover through the Endorsement. The district court found that Wright was entitled to payment under the Endorsement. Prime appealed the decision to the Seventh Circuit.


The Seventh Circuit addressed multiple interpretations of the Endorsement in its decision. Prime argued that the Seventh Circuit should adopt the “trip specific” test used by the Fifth Circuit. Under the “trip specific” test, the Endorsement would only apply to collisions that occurred while a truck was carrying freight and transporting that freight between states. Wright argued that the Seventh Circuit should adopt the “fixed intent” test used by the Eighth Circuit. Under the “fixed intent” test, the Endorsement would only apply to collisions that occurred when the truck driver had a fixed intent to cross state lines with freight in the near future. The district court used neither of these tests, instead using a “totality of the circumstances” test.

Although the Seventh Circuit saw merit to all of these tests, the circuit court ultimately chose a fourth approach. Analyzing the language of the Endorsement, the Seventh Circuit found that the Endorsement’s language provided payments to any parties injured by 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.”

Although Sections 29 and 30 had been repealed, all parties to the suit agreed that the language of Sections 29 and 30 now appeared in 49 U.S.C. § 31139(b)(1) and 49 C.F.R. § 387.7. The circuit court found that Section 31139 did not support the trip specific, fixed intent, or totality tests. Section 31139 does refer to 49 U.S.C. § 13102, which defines “transportation” as “services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.” In this definition, the circuit court saw no requirement that a truck be carrying freight for it to be in the process of “transporting.”

However, based on Section 13501, the circuit court did find that interstate or foreign travel at the time of the collision is a requirement for the Endorsement to apply to an injured party. Because the origin of the Riteway Trucking driver’s trip was South Holland, Illinois, he crossed state lines to deliver the freight to Fort Wayne, Indiana. In addition, the driver was on his way to pick up more freight in Fort Wayne to deliver back to Illinois when he collided with Wright’s vehicle. Although the truck was without freight at the time of the collision, the circuit court ruled that because the drive to the worksite to pick up the freight in Fort Wayne was a necessary movement for delivering freight across state lines, as the driver could only deliver freight across state lines if the driver first had the freight. Because the driver was driving to pick up freight that would be carried across state lines at the time of the collision, the driver’s activity fell under the definition of “transportation” as used in the Motor Carrier Act and, by extension, 49 U.S.C. § 31139(b)(1). For that reason, the injurious activity of the driver fell under the Endorsement, meaning that Wright could receive payment from Prime.


The Seventh Circuit’s analysis began and ended with the language of the Endorsement. Because the Endorsement directly referenced Sections 29 and 30 of the Motor Carrier Act of 1980, the Seventh Circuit looked to those statutes and their modern equivalents to determine the requirements of the Endorsement. Because there was no reference to carrying freight, driver intent, or a “totality of the circumstances” in the language of the statutes, the circuit court held that the Endorsement’s only requirement was that the transportation activity be in interstate commerce at the time of collision.

For more information

Contact John F. Fatino for more information about trucking and transportation matters at 515-288-6041. University of Iowa Law School, J.D. candidate, Holden C. Sinnard, assisted in the preparation of these materials.


Practice Areas


We use cookies and similar technologies to gather information about your use of our Website and to customize your experience using the Website. By continuing to use our website, you agree to our use of cookies. For more information, please see our Privacy Policy.