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Transport Insurance Co. v. Lee Way Motor Freight, Inc.

487 F. Supp. 1325 (1980)

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Transport Insurance Co. v. Lee Way Motor Freight, Inc.

United States District Court for the Northern District of Texas
487 F. Supp. 1325 (1980)

  • Written by Noah Lewis, JD

Facts

Lee Way Motor Freight, Inc. (Lee Way) (defendant) operated four trucking terminals. Lee Way was ordered to pay damages in a pattern-and-practice race-discrimination lawsuit. The federal government’s evidence included Lee Way’s discriminatory reputation, statistical evidence, and individual examples. The trial court found Lee Way engaged in systemic discrimination through corporate hiring, promotion, and transfer policies and practices that operated to restrict Black employees to the poorest paying, least desirable jobs. Lee Way was ordered to pay damages for 47 individual back-pay awards ranging from $3,000 to $138,000, totaling $1.8 million. Lee Way had five excess-liability-umbrella-insurance policies with Transport Insurance Company (Transport) (plaintiff). The policies covered occurrences, defined to include continuous or repeated exposures resulting in discrimination, and specifically that exposures from the same general conditions were deemed one occurrence, even if across multiple locations. Under the per-occurrence deductible, if the discrimination was one occurrence, Lee Way owed $25,000, but if each individual act was considered discrimination, Lee Way owed up to $25,000 for each back-pay award. Transport brought a declaratory-judgment action to determine Lee Way’s deductible.

Rule of Law

Issue

Holding and Reasoning (Sanders, J.)

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