The Sixth Circuit Court of Appeals recently issued an opinion clarifying the impact of logo liability on insurance coverage under Ohio law. The case, Carolina Cas. Ins. Co. v. Panther II Transp., Inc., No. 09-4166, involved a coverage dispute between a carrier’s auto liability insurer (Zurich) and the driver’s bobtail liability insurer (Carolina Casualty). At issue was the applicability of Wyckoff Trucking, Inc. v. Marsh Bros. Trucking Serv., Inc., 569 N.E.2d 1049, 1054 (Ohio 1991), which established logo liability in Ohio.
Carolina Casualty argued that Wyckoff not only fixes liability on the carrier in cases of logo liability, but also obligates the carrier’s auto insurer to assume liability for defending and indemnifying any losses resulting from the accident. The Sixth Circuit court rejected this contention, holding that, at least for purposes of Ohio law, logo liability does not decide the respective obligations of the competing insurers. In other words, even if the carrier is liable to the public as a matter of law, it can still seek indemnity under the bobtail policy. Other courts (both in Ohio and elsewhere) had reached the opposite conclusion; namely, that logo liability fixes liability on the carrier and ipso facto binds the carrier’s insurer to providing coverage. The Sixth Circuit declined to follow those cases and noted that, in doing so, it was weighing in on an unresolved issue of Ohio law (and one that remains open in several other states).
The Panther II decision affords carriers an argument that, even in cases where logo liability operates to render the carrier liable to an injured motorist as a matter of law, an applicable bobtail policy may still provide primary coverage for the accident. Thus, at least in Ohio (and arguably other states in the Sixth Circuit, including Michigan, Tennessee, and Kentucky), before a carrier’s auto liability insurer throws in the towel on coverage where logo liability is involved, it is important to review the terms of any applicable bobtail policy and determine whether the carrier and auto liability insurer have an argument that the bobtail policy should provide primary coverage, logo liability notwithstanding.
The Sixth Circuit’s opinion is available at 2010 U.S. App. LEXIS 22929.