The 7th Circuit Court of Appeals on Tuesday affirmed a district court ruling that held the insurer of a trailer borrowed by a trucking company in which an employee was involved in a fatal accident does not have to indemnify the company or the driver in a negligence lawsuit.
A tractor-trailer driven by Linda Phillips, who worked for Hoker Trucking LLC, struck Mike Robbins’ vehicle in Richmond, Indiana, in January 2011. He died from his injuries. Phillips was driving the tractor-trailer in the scope of her employment. Hoker owned the tractor she was driving, but it had borrowed the trailer from Lakeville Motor Express Inc., a Minnesota company.
Lakeville leased the trailer from Wren Equipment LLC; Lakeville had insurance on the trailer from Great West Casualty Co., which is based in Nebraska.
Great West filed an action in federal court seeking a declaratory judgment that it was not liable to defend or indemnify Hoker or Phillips in connection with the action. Robbins and Great West both moved for summary judgment on the issue, which the district court granted to Great West. It determined the insurance policy unambiguously excluded Hoker and Phillips as insured parties.
The 7th Circuit affirmed, applying Minnesota law to government the contract dispute.
Robbins raised three arguments on appeal: that Great West’s policy is ambiguous as to whether Hoker and Phillips were excluded from coverage, so the court should find it does cover the two; even if the court finds the exclusions under the policy are not ambiguous, the policy exclusions nevertheless do not exclude Hoker and Phillips from coverage; and regardless, such exclusions are invalid under Wisconsin law, where the trailer is registered.
The 7th Circuit found no ambiguity in the policy to construe against Great West based on reading them together like a layperson, and not a lawyer, based on Minnesota caselaw. The endorsement merely adds two more enumerated exclusions under a section. They agreed with the company that reading the policy and an endorsement together does not provide coverage for Hoker and Phillips. The judges noted Robinson’s interpretation would “force us to abandon that position and read the policy language and endorsement only as a lawyer construing a contract would – in the most hyper-technical, over-analyzed sense. We refuse to adopt such a reading,” Judge Michael Kanne wrote.
The policy endorsement excludes Hoker and Philips as “[a]nyone who has leased … rented, or borrowed an ‘auto’ from you that is used in a business other than yours.” There’s no disputing the trailer is an auto under the policy or that Hoker and Phillips “rented” or “borrowed” the trailer. There is no evidence that on the day of the accident, the trailer was being driven in connection with Lakeville’s freight-moving operations.
The judges also disagreed with Robbins that Hoker and Phillips are covered under the policy because Wisconsin law invalidates the 2010 endorsement to the extent those provisions exclude permissive users, citing Danielson v. Gasper, 623 N.W.2d 182 (Wis. Ct. App. 2000). The court also found Section 194.41 does not apply to the policy.
The case is Great West Casualty Co. v. Pamela K. Robbins, as administratrix of the estate of Mike Douglas Robbins, deceased, and Wren Equipment LLC,