Raintree Trucking Co. Inc. v. First Am. Ins. Co.

A Form E certificate of insurance filed pursuant to a fronting agreement between two insurers did not create an insurance contract between one of the insurers and motor common carrier.

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The issue on appeal is the effect of a “Form E” certificate of insurance filed with the Texas Railroad Commission. The certificate represented that First American Insurance Company insured Raintree Trucking Company for damages caused by Raintree’s trucks; in fact, Raintree had no insurance from First American, but only from Commonwealth General Insurance Company, which has since been placed in receivership. First American refused to pay a Texas judgment entered against Raintree for property damages caused by one of its trucks, and so Raintree filed the present Georgia action against First American to recover for having satisfied the judgment. We hold that representations contained in Form E certificates are not intended to benefit the motor carrier but to benefit those injured by the carrier i.e., the traveling public, and therefore in a dispute with the insured, an insurance company is not estopped from denying coverage where no insurance contract exists.

As of June 1992 Commonwealth insured Raintree and filed the requisite federal certificate with the then Interstate Commerce Commission to reflect that coverage. Commonwealth experienced problems regarding its qualifications to file the correlating state certificate Form E with the Texas Railroad Commission, and so in March 1993 Commonwealth entered into an indemnity or “fronting agreement” with First American, which agreement allowed Commonwealth to file Form E certificates in the name of First American as of February 1, 1993. Under this arrangement, the Form E certificates showed that First American insured Commonwealth clients, when in fact Commonwealth did. Commonwealth indemnified First American for any liability First American incurred as a result of filing the Form E certificates. Based on this agreement, Commonwealth filed a Form E with the Texas Railroad Commission in April 1993 amended in May 1993, certifying that as of June 1992 First American was the liability insurer of Raintree.

Raintree Trucking Co. Inc. v. First Am. Ins. Co.

A Form E certificate of insurance filed pursuant to a fronting agreement between two insurers did not create an insurance contract between one of the insurers and motor common carrier.

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