A $25 million trucking accident judgment has ignited a fierce legal battle, with Trisura Specialty Insurance Company asking a federal court to declare it owes nothing to OM Transportation, Inc.
The insurer, based in Oklahoma City, has filed a declaratory judgment action in the US District Court for the Southern District of Texas, Corpus Christi Division, seeking to avoid responsibility for a $25,423,288 default judgment entered against OM Transportation, Inc. in Illinois. The judgment stems from a lawsuit after a fatal accident on May 30, 2024, that resulted in the death of Zachary Landry.
At the heart of the dispute is whether Trisura must defend or indemnify OM Transportation, Inc. for the Illinois judgment. According to the complaint, Trisura argues that its commercial auto policy does not provide coverage because neither the driver involved in the crash, Homero Molina, Jr., nor the vehicle itself were listed on the policy at the time of the accident.
The insurer points to a key endorsement in the policy, which it says limits coverage “only to those vehicles scheduled in the policy when said vehicles are driven by drivers listed in the policy.”
The underlying lawsuit, brought by Frank Landry as administrator of Zachary Landry’s estate, accused OM Transportation, Inc. of owning or operating the tractor-trailer involved and of being subject to federal and Illinois safety regulations. The Illinois court entered a default judgment of $25 million in compensatory damages and $423,288 in prejudgment interest against OM Transportation, Inc., El Transport, LLC, and Molina, Jr., jointly and severally. The court struck a claim for punitive damages for failure to comply with a particular Illinois statute.
Trisura’s complaint also highlights a breakdown in communication. The insurer claims OM Transportation, Inc. did not notify it of the lawsuit, as required by the policy’s notice clause. Instead, Trisura says it was the one to inform OM Transportation, Inc. of the default judgment - an omission the insurer argues constitutes a material breach of the policy.
Another sticking point is the policy’s “no action” clause, which, according to Trisura, bars any claim against the insurer unless the insured has fully complied with all policy terms and the obligation to pay has been determined by judgment after an actual trial. Trisura contends that a default judgment does not meet this threshold.
The insurer further invokes a punitive and exemplary damages exclusion, though the Illinois court had already struck the punitive damages claim. Still, Trisura seeks a declaration that such damages would not be covered under any circumstances.
A major wrinkle in the case is the MCS-90 Endorsement, a federally mandated provision for motor carriers. Trisura maintains that the endorsement is not triggered because OM Transportation, Inc. was not acting as a “motor carrier” of property under federal law and did not own or operate the vehicle involved. The complaint references statements from OM Transportation, Inc.’s owner, Orlando Mendoza, who asserts that the driver had no relationship with the company and that the truck did not belong to OM Transportation, Inc. Supporting documents, including a Bill of Lading and an Illinois Traffic Crash Report, identify other parties as the carrier and owner.
Trisura also notes that the default judgment is not final, as OM Transportation, Inc. has sought to vacate it, and the insurer argues that the MCS-90 Endorsement would only apply if there were a final judgment against the named insured.
For insurance professionals, especially those in commercial auto and transportation, the case underscores the importance of policy compliance, clear communication, and the nuances of federal endorsements. The outcome could shape how insurers approach coverage disputes involving large judgments, scheduled vehicle and driver requirements, and the application of the MCS-90 Endorsement.
As the case unfolds in federal court, the insurance industry will be watching closely. The stakes are high, the facts are complex, and the implications could ripple far beyond a single tragic accident.
