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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. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

  2. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  3. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  4. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  5. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

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