230 F.3d 331 (7th Cir. 2000), 00-1157, United States Fidelity v Heritage Mutual Insurance

Docket Nº:00-1157
Citation:230 F.3d 331
Party Name:UNITED STATES FIDELITY & GUARANTY COMPANY, Plaintiff-Appellee, v. HERITAGE MUTUAL INSURANCE COMPANY, Defendant-Appellant.
Case Date:October 16, 2000
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 331

230 F.3d 331 (7th Cir. 2000)

UNITED STATES FIDELITY & GUARANTY COMPANY, Plaintiff-Appellee,

v.

HERITAGE MUTUAL INSURANCE COMPANY, Defendant-Appellant.

No. 00-1157

In the United States Court of Appeals, For the Seventh Circuit

October 16, 2000

Argued September 14, 2000

Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 96-C-0523--Richard L. Young, Judge.

Page 332

Before BAUER, DIANE P. WOOD, and EVANS, Circuit Judges.

Evans, Circuit Judge.

Two insurance companies are battling here over coverage growing out of a serious accident involving a dump truck and two automobiles. The accident caused the death of the driver of one of the cars and injuries to the other. Heritage Mutual Insurance Company appeals from a decision finding that it, not United States Fidelity and Guaranty Company, must provide coverage for the damages.

The driver of the dump truck, Charles Oldham, was an employee of V&S Transport, Inc. Heritage insured V&S with both a primary and umbrella policy. V&S had an oral contract under which it did hauling for Irving Materials, Inc. (IMI), the owner of concrete manufacturing plants and sand and gravel pits. IMI was insured by USF&G.

After the collision, the estate of John Reeves, who was killed in the accident, filed a lawsuit, which Heritage settled. The injured man, John Grabowski, filed a separate suit. Contending that its primary policy will be exhausted by claims other than the one Grabowski was pursuing, Heritage looked to USF&G to step in and cover the Grabowski suit. Heritage argues that USF&G's policy should be paid out before it is forced to dip into its umbrella policy. Not surprisingly, USF&G maintains that its policy simply does not provide coverage for Oldham or V&S--none at all. The parties presented their positions on cross- motions for summary judgment. Judge Richard L. Young in the district court granted USF&G's motion, and we review that decision de novo. Kincaid v. Vail, 969 F.2d 594 (7th Cir. 1992).

The USF&G policy states

Page 333

A. COVERAGE

* * * * * *

1. WHO IS AN INSURED

a. You for any covered "auto."

b. Anyone else while using with your permission a covered "auto" you own, hire or borrow except

(1) The owner or anyone else from whom you hire or borrow a covered "auto."

A basic issue, then, is whether IMI "hired" or "borrowed" the dump truck. If it did not, there is no coverage under the policy. Heritage thinks it is clear that the truck was "hired"; USF&G thinks it is just as clear that it was not hired. Instead, USF&G says that V&S was an independent contractor providing services to IMI.

The USF&G policy does not define what "hire" means, but that is not...

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