TransAm Trucking sues insurer for breach of contract after 2015 crash

By Mark Schremmer, Land Line associate editor | 12/18/2018

TransAm Trucking is suing its insurance company, claiming that the insurer committed breach of fiduciary duty, negligence and breach of contract stemming from a 2015 fatal crash.

The Olathe, Kan.-based trucking company filed the lawsuit against Starr Indemnity and Liability Co., on Dec. 14 in Kansas federal court. TransAm alleges that Starr committed breach of its fiduciary duties when it intervened in a previous lawsuit pertaining to a crash on April 23, 2015, in Texas.

“Starr insured TransAm for the damages alleged in the underlying lawsuit, including the damages it sought from TransAm in its subrogation claim,” TransAm’s complaint stated. “Throughout the underlying litigation, Starr actively subverted TransAm’s interests and undermined TransAm’s defenses. Starr’s conduct increased TransAm’s liability and exposure, increased its fees and expenses, and deprived TransAm of the rights and benefits to which it was entitled under the insurance policy issued by Starr.”

A tractor-trailer owned by TransAm collided with a tractor-trailer owned by JP Liquids on April 23, 2015, on U.S. Highway 62/82 near Brownfield, Texas. The JP Liquids tank trailer, which was filled with liquid propane, overturned and caused a thick, white cloud of propane gas to form on the highway.

According to the complaint, a third tractor-trailer drove to the edge of the propane cloud and caused an explosion when the “heat from the upper extremities of the tractor ignited the propane cloud.”

Robert C. Melvin, the driver of the JP Liquids tanker, died at the scene. According to court documents, it is unknown whether Melvin died from the crash or the propane explosion. Aaron Foshee, a driver of a passenger vehicle, suffered severe burns over most of his body. Raymond Neal, the TransAm driver, and Ricardo Perez, the driver of the third tractor-trailer, were able to exit their tractors without significant injury.

Foshee filed a lawsuit alleging negligence against TransAm, Neal, JP Liquids, Melvin’s estate, Perez, and the owner of Perez’s tractor-trailer. In January 2016, Melvin’s spouse and children intervened in the lawsuit, alleging negligence against TransAm and Neal.

“Discovery in the lawsuit also revealed that Starr had issued one or more liability insurance policies to JP Liquids that applied to indemnify JP Liquids from the losses claimed by Foshee,” the complaint stated. “Thus, Starr insured TransAm and Neal, on the one hand, and JP Liquids and the estate, on the other hand, for the losses claimed by Foshee.”

In December 2016, Starr intervened in the lawsuit, “seeking damages against its own insureds, TransAm and Neal, based on amounts it had paid to JP Liquids under policies of insurance covering workers compensation claims and claims for damage to JP Liquids’ business property and equipment.”

Starr’s intervention alleged that Neal caused Melvin’s death by “careless, illegal and unconscionable” conduct, the complaint stated. It also claimed that TransAm caused the death by failing to properly hire, supervise, retain and train Neal.

After mediation, TransAm and Neal entered confidential settlement agreements with Melvin’s estate. TransAm and Neal also agreed to settle Starr’s claims against them for $126,000.

TransAm contends that Starr “was a fiduciary that had the duty to act with good faith and loyalty to advance the interests of TransAm.”

The trucking company also claims that all of the damages sought by Starr in its petition were all covered losses under the policy.

TransAm is requesting a trial.

 

 

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