Westfield Insurance Company v. Advanced Auto Transport, Inc.
- Michael Davis
- 0:18-cv-02596
- U.S. District Court · District of Minnesota
- 17
In Westfield v. Advance Auto, Judge Davis held an automobile-business exclusion barred coverage and granted Westfield summary judgment while denying defendants’ motion.
Westfield Insurance Company, Advance Auto Transport, Inc., Gregory Lester Hansen, Carolina Casualty Insurance Company, and Indian Harbor Insurance Company. The ruling resolved whether Westfield owed coverage, defense, indemnity, reimbursement, or contribution in connection with the underlying accident litigation.
What happened
Westfield Insurance Company asked the court to declare that it did not have to cover Advance Auto Transport, Inc. or Gregory Lester Hansen, or reimburse their insurer, for costs from a separate accident lawsuit. The dispute arose after Hansen, driving a completed garbage truck for Advance Auto Transport, collided with another vehicle while transporting the truck from Minnesota to Ohio.
The insurance policy covered certain vehicles and permissive users but excluded people using a covered vehicle while working in another business that sells, services, or repairs vehicles. Westfield argued that Advance Auto Transport was transporting the truck as part of McNeilus’s vehicle-servicing business. The defendants argued that the exclusion was unclear, that the driver had to work in the automobile business, and that McNeilus was not engaged in the type of business described by the exclusion.
Judge Michael J. Davis ruled that Advance Auto Transport was delivering the truck on McNeilus’s behalf and was therefore working in McNeilus’s vehicle-servicing business when the accident occurred. The court held that the exclusion applied, granted Westfield’s motion for summary judgment, and denied the defendants’ motion.
The detailed version
- Westfield Insurance Company v. Advanced Auto Transport, Inc. · No. 0:18-cv-02596
- Michael Davis
- May 5, 2020
Background
Westfield Insurance Company insured Worldwide Equipment, Inc. under a garage coverage policy and an umbrella policy. Westfield brought this action seeking a declaration that it had no coverage obligation to Advance Auto Transport, Inc. and Gregory Lester Hansen, and no obligation to reimburse, contribute to, or indemnify Carolina Casualty Insurance Company for settlement and defense costs from an underlying personal-injury lawsuit.
Rumpke ordered approximately 50 Mack power units through Worldwide. Mack manufactured the cab and chassis, and McNeilus Truck and Manufacturing installed packer units on the chassis, converting them into garbage trucks. Rumpke separately contracted with McNeilus for the installation work. After completing the trucks, McNeilus arranged for Advance Auto Transport, a motor carrier it regularly used, to transport one finished garbage truck from McNeilus’s facility in Dodge Center, Minnesota, to a McNeilus facility in Ohio.
Advance Auto Transport accepted the job under a master drive-away agreement. Gregory Hansen, its employee, received routing information and a bill of lading, inspected the truck, and drove it from Minnesota toward Ohio. While turning toward Interstate 90, Hansen’s truck collided with a vehicle driven by Brady Gartner. The accident led to an injury lawsuit against Worldwide, Advance Auto Transport, and Hansen. Advance Auto Transport tendered that lawsuit to Westfield for defense and indemnity, but Westfield denied coverage and filed this case.
Policy and Parties’ Arguments
The Westfield policy provided liability coverage for damages caused by an accident resulting from garage operations involving covered autos. It generally included anyone using a covered auto with the owner’s permission, but excluded someone using a covered auto while working in a business of selling, servicing, or repairing autos, unless that business was the insured’s own garage operation. The policy defined “garage operations” to include operations necessary or incidental to a garage business.
For purposes of the motions, Westfield did not dispute that the garbage truck was a covered auto or that Advance Auto Transport was a permissive user under Minnesota law. Westfield argued instead that the automobile-business exclusion applied because Advance Auto Transport was transporting the finished truck as part of McNeilus’s business.
The defendants argued that the phrase “working in” was ambiguous and that the exclusion should require the driver to be employed in a business that sells, services, or repairs autos. They also argued that McNeilus was not engaged in such a business.
Court’s Analysis
The court applied Minnesota law, under which insurance policies are interpreted as contracts and read as a whole. Clear policy language receives its ordinary meaning, while an ambiguity is construed in favor of the insured. The court also stated that the insurer bears the burden of proving an exclusion when it denies coverage based on that exclusion.
The court concluded that “working in” was not limited to employment by an automobile business. Relying on decisions addressing similar exclusions, the court explained that the relevant question was whether the driver was acting on behalf of another organization’s automobile business. Activities that are an integral and necessary part of that business may fall within the exclusion, even when the driver is not an employee of the business.
The court found that McNeilus was servicing the trucks by making them fit for use as garbage trucks. It also found that McNeilus, not Worldwide, separately hired Advance Auto Transport to move the completed truck to McNeilus’s Ohio facility. Worldwide had no contract with either McNeilus or Advance Auto Transport and had no contact or control over the transportation. Based on those facts, the court determined that Advance Auto Transport was transporting the truck on McNeilus’s behalf and was working in McNeilus’s vehicle-servicing business when the accident occurred.
Ruling
The court held that the automobile-business exclusion in the Westfield policy applied. It therefore ruled that Westfield was entitled to summary judgment.
The court ordered:
- Westfield Insurance Company’s motion for summary judgment was granted. - The defendants’ motion for summary judgment was denied.
The opinion states that judgment was to be entered accordingly.
Read the full 17-page opinion on CourtListener, the free public archive maintained by the Free Law Project.