National Union Fire Insurance Company v. Showa Shipping Co., Ltd.

INTRODUCTION

Showa Shipping Co., Ltd. (“Showa”) appeals the district court’s judgment after a bench trial requiring Showa to indemnify National Union Fire Insurance Co. (“National Union”) for funds National Union contributed to the settlement of a state wrongful death and injury action (“underlying action”). We REVERSE and REMAND.

BACKGROUND

On November 8, 1994, a truck tractor towing a flatbed semitrailer (chassis) driven by Roy Dale Hightower (“Hightower”), ran a stop sign and collided with a passenger vehicle causing the death of one passenger, Mary Luisa Campos, and seriously injuring her husband, Vincent Guerrero Campos (collectively “the Campos family”).

Don Roberts Enterprises/Trucking (“Don Roberts”) employed Hightower and owned the truck tractor. Flexi-Van Leasing, Inc. (“Flexi-Van”) owned the trailer towed by the tractor. Flexi-Van had leased the trailer to Norton Lilly Management Corp. (“Norton Lilly”), which subsequently subleased it in 1974 to Showa, a foreign steamship carrier, (collectively Flexi-Van, Norton Lilly and Showa are designated as the “trailer parties”). At the time of the accident, both the lease and the sublease had expired by their terms. Even…