Appellate court finds garage insurance policy doesn’t cover injuries

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For only the second time, the Indiana Court of Appeals has addressed the language in a garage insurance policy, and upheld partial summary judgment in favor of the insurer.

Judge Edward Najam wrote in Patrice Cotton v. Auto-Owners Insurance Company, No. 49A02-1005-CT-575, that only once before has the Court of Appeals considered language similar to that found in the garage policy issued by Auto-Owners Insurance Co. held by dealer Jim Bailey. Bailey had given his grandson a temporary license plate from his dealership to use on his car, but the car was not connected in any other way to the dealership. While Patrice Cotton was riding in the car, the grandson hit a bridge embankment and Cotton was injured.

She sued the grandson, Auto-Owners, Jim Bailey Auto Sales, and Jim Bailey. She believed Bailey’s garage policy provided coverage for her injuries because Bailey provided the dealership’s temporary license plate. The trial court granted partial summary judgment to Auto-Owners and also denied Cotton’s motion to strike Bailey’s affidavit. He died during the discovery process.

The garage policy provides coverage for “automobile dealer, repair shop, service station, storage garage, or public parking place, and all operations which are necessary or incidental thereto, including (1) the ownership, maintenance or use of any automobile in connection with the foregoing.” In Automobile Underwriters Inc. v. Hitch, 169 Ind. App. 453, 349 N.E.2d 271 (1976), the Court of Appeals considered similar language in a suit filed after someone was injured by using reloaded shotgun shells Hitch sold out of his garage storefront.

The Hitch court held that Hitch’s insurance policy language wasn’t ambiguous and the only reasonable interpretation of the policy is that the sale of shotgun shells isn’t necessary or incidental to the use of the premises for operating a garage. The appellate judges found Hitch to apply to the instant case, and also cited a very similar case to Cotton’s from North Carolina, McLeod v. Nationwide Mutual Insurance Co., 444 S.E.2d 487 (N.C. Ct. App. 1994). That court concluded that a third party’s use of a dealer license tag on his personal vehicle wasn’t considered necessary or incidental to a garage business.

“The mere fact that the Dealer provided a temporary license plate for a vehicle does not bring that vehicle within the coverage of the garage policy,” wrote Judge Najam on Cotton’s suit. “Generally speaking, to provide a temporary license plate may well be incidental to a licensed auto dealer’s business, but Auto-Owners’ garage policy provides coverage only if the plate is used ‘in connection with’ the business operations.”

The appellate court also upheld the denial of Cotton’s motion to strike Bailey’s affidavit.

“To the extent the statements in the affidavit regard the operations of the Dealer, including its inventory, sales, and employees, the Dealer’s business records or the testimony of a Dealer employee would be admissible proof of such matters. Thus, the trial court did not abuse its discretion when it refused to strike those portions of the Bailey Affidavit,” he wrote.


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  1. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  3. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.

  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues