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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. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

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