In Gramercy Insurance Co. v. Expeditor’s Express, Inc., 2104 U.S. App. LEXIS 15262 (6th Cir. Aug. 5, 2014), a truck driver died after the truck he was driving suffered a flat tire, veered off the road, turned over and caught fire. As a result, the driver’s estate sued the trucking company, the owner of the truck and others in state court. The trucking company asked its insurance company to defend the lawsuit and indemnify it against any judgment. In response, the insurer filed a declaratory judgment action in federal court to determine whether it had any responsibility for coverage.

The insurance policy did not cover "bodily injury" to any of the trucking company’s employees arising out of and in the court of their employment with the trucking company or performing duties related to the conduct of the trucking company’s business. The policy defined the term "employee" to include a "leased worker" or a person leased to the trucking company by a labor leasing firm under an agreement between the trucking company and the labor leasing firm, but it did not include a "temporary worker," or a person furnished to the trucking company to substitute for a permanent employee on leave or to meet seasonal or short-term workload conditions.

The insurer moved for judgment on the pleadings which consisted of the complaint, the answer, and the insurance policy. The district court granted the insurer’s motion, finding that the insurance policy did not apply because the driver was an "employee" of the trucking company.

On appeal, the Sixth Circuit was asked to review the issue of whether the truck driver was actually an "employee" of the trucking company and, therefore, excluded from coverage under the policy issued by the insurer.

According to the pleadings, at the time of the accident, the truck driver was transporting magazines from the Tennessee to Georgia for the trucking company in a truck owned by a third party and leased to the trucking company. However, the pleadings did not answer the central question of whether the truck driver was an "employee" of the trucking company.

To overcome this issue, the insurer pointed to an endorsement which amended the policy to require the insured to comply with Sections 29 and 30 of the Motor Carrier Act of 1980 and its relevant rules and regulations. The insurer argued that by way of this endorsement, the truck driver was an "employee" because the Motor Carrier Act of 1980 includes a broader definition of "employee" that includes any "operator of a commercial motor vehicle" who "directly affects commercial motor vehicle safety in the court of employment" and who is not a government employee.

The Sixth Circuit disagreed, holding that the relevant language of the endorsement did not incorporate the Motor Carrier Act’s definition of "employee" into the policy. Rather, the endorsement, instead, acted as a form of extra insurance for the policy. Therefore, if the policy covered less that the Act required, the endorsement amended the policy to comply with the Act. However, here, the policy covered more than the Act required. This is because the policy used a narrower definition of employee than the Act permits. Therefore, the policy covered more people, or in other words, excluded fewer people from coverage. Accordingly, the Sixth Circuit reversed the judgment of the district court and remanded it for further proceedings.