Am. Nat'l Prop. & Cas. Co. v. Sorensen

• Decision Date: 12 December 2013
• Docket Number: No. 20110221–CA.,20110221–CA.
• Citation: 362 P.3d 909
• Court: Utah Court of Appeals
• Parties: AMERICAN NATIONAL PROPERTY & CASUALTY COMPANY, Plaintiff and Appellant, v. Cory SORENSEN and Stephen Dane Olsen, Defendants and Appellee.

362 P.3d 909

AMERICAN NATIONAL PROPERTY & CASUALTY COMPANY, Plaintiff and Appellant,

v.Cory SORENSEN and Stephen Dane Olsen, Defendants and Appellee.

No. 20110221–CA.

Court of Appeals of Utah.

Dec. 12, 2013.

Rehearing Denied Jan. 31, 2014.

Stuart H. Schultz, Peter H. Barlow, and Sadé A. Turner, Salt Lake City, for Appellant.

D. David Lambert, Leslie W. Slaugh, and Jacob S. Gunter, Provo, for Appellee.

Judge MICHELE M. CHRISTIANSEN authored this Opinion, in which Judge J. FREDERIC VOROS JR. concurred, with opinion. Judge WILLIAM A. THORNE JR. dissented, with opinion.¹

Opinion

CHRISTIANSEN, Judge:

¶ 1 This case involves a dispute over whether a homeowner's insurance policy excludes coverage for an all-terrain vehicle (ATV) accident that occurred in a residential subdivision. American National Property and Casualty Company (American National) appeals the district court's award of summary judgment in favor of the passenger in the ATV accident, Stephen Dane Olsen. We affirm.

BACKGROUND

¶ 2 The ATV accident giving rise to this action occurred in Highland, Utah on November 17, 2006. Karen Simmons had just purchased the ATV on the date of the accident. Simmons's seventeen-year-old son, Corey Sorensen, was driving the new ATV with two passengers, one of whom was Olsen, when it tipped over and landed on Olsen, injuring his leg.

¶ 3 Sorensen was driving the ATV near Simmons's residence in a residential subdivision known as "the Highlands." The Highlands is a "planned unit development" and includes a park located to the east of Simmons's property. The park is defined in the Highlands homeowners association's covenants, conditions, and restrictions (CC & Rs) as a "common area." Specifically, the CC & Rs define "common area" as "all the real property and improvements, including without limitation, any recreation facilities, landscaped areas and private roadways and walkways, which are owned by the Association for the common use and enjoyment of all of the Owners." For purposes of summary judgment only, the parties agreed that the accident occurred in the Highlands' common area.

¶ 4 At the time of the ATV accident, Simmons's residence was covered by a homeowner's insurance policy issued to her by American National. Simmons's homeowner's policy provided coverage up to the limits of liability for any claim for damages brought against her as an insured because of bodily injuries. The policy also covered medical expenses incurred by others injured "on the insured location" or injured "off the insured location, if the bodily injury ... [was] caused by the activities of any insured." Section II of Simmons's insurance policy also contained the following exclusions:

1. Coverage E—Personal Liability and Coverage F—Medical Payments to Others do not apply to bodily injury or property damage:

...

h. arising out of the ownership, maintenance, use, loading, or unloading of motor vehicles or all other motorized land conveyances, including any trailers, owned or operated by or rented or loaned to any insured.

This exclusion does not apply to a motorized land conveyance designed for assisting the handicapped or for the maintenance of an insured location ...:

...

k. arising out of the entrustment by any insured to any person any of the following:

...

(3) a motor vehicle or any other motorized land conveyance;

l. arising out of statutorily imposed vicarious parental liability for the actions of a child or minor using:

...

(3) a motor vehicle or any other motorized land conveyance.... ^[2]

Additionally, in subsection 8(c) of the insurance policy definitions, "motor vehicle" is defined, in relevant part, as "a motorized golf cart, snowmobile, or other motorized land vehicle owned by any insured and designed for recreational use off public roads, while off an insured location. " (Emphasis added.)

¶ 5 In 2007, as a result of the injuries he sustained in the ATV accident, Olsen sued Simmons, Sorensen, and American National in a personal injury action separate from the present action. After Olsen filed the personal injury action, Simmons filed a claim against her homeowner's policy with American National. Following an investigation into the accident, American National denied Simmons's claim for coverage. Then, in May 2008, American National filed the present action against Sorensen and Simmons and filed an amended complaint in March 2009 adding Olsen as a defendant. American National sought a declaratory judgment that it did not have a duty to defend Simmons and Sorensen and that the insurance policy excluded coverage for Olsen's injuries resulting from the ATV accident.

¶ 6 American National and Olsen filed cross-motions for summary judgment. In its motion for summary judgment, American National asserted that the insurance policy unambiguously excluded coverage pursuant to the motor vehicle exclusions contained in the policy because an ATV falls within the policy's definition of a motor vehicle and the bodily injury suffered by Olsen resulted from a motor vehicle accident. In his combined cross-motion for summary judgment and opposition memorandum, Olsen argued that the motor vehicle exclusions did not apply to the ATV accident, because the accident occurred on an "insured location." Thus, Olsen argued that the policy's exclusions were not triggered because the ATV did not fall within the policy's definition of a motor vehicle, which only defined an ATV as a vehicle "while off an insured location."

¶ 7 The district court denied American National's motion for summary judgment, determining that the injuries suffered by Olsen in the ATV accident were not excluded from coverage.³ The district court concluded that the undisputed material facts

establish that the common area where the accident occurred is an "insured location" under Simmons'[s] homeowner's insurance policy. Even though the vehicle was a motorized land vehicle designed [for] recreational use off public roads, it was operated on an insured location. Coverage is therefore not excluded under the policy.

On January 27, 2011, the court entered a declaratory judgment denying American National's motion for summary judgment, explaining, in relevant part,

1. The material facts pertaining to the issues raised in the pleadings are undisputed, and based on those facts, the Court concludes that the accident occurred at an "insured location."

2. The insurance policy's exclusions from coverage asserted by the plaintiff do not apply....

....

4. Because the accident occurred at an "insured location," the policy of insurance issued by [American National] to ... Simmons provides coverage for the accident in question, and [American National] has a duty to defend Sorensen and Simmons and to cover losses sustained by them as a result of the accident in question to the extent of the policy limits.

American National appeals.

ISSUE AND STANDARD OF REVIEW

¶ 8 American National argues that the district court erred in denying its motion for summary judgment and in ruling that the insurance policy unambiguously provides coverage for the ATV accident. "A grant of summary judgment is proper when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law." American Nat'l Fire Ins. Co. v. Farmers Ins. Exch., 927 P.2d 186, 188 (Utah 1996) (citing Utah R. Civ. P. 56(c) ). With respect to the district court's interpretation of the insurance policy, "[a]n insurance policy is merely a contract between the insured and the insurer and is construed pursuant to the same rules applied to ordinary contracts." Alf v. State Farm Fire & Cas. Co., 850 P.2d 1272, 1274 (Utah 1993). "The district court's construction of contract language is given no particular weight and is reviewed for correctness as a matter of law." Doctors' Co. v. Drezga, 2009 UT 60, ¶ 9, 218 P.3d 598.

ANALYSIS

¶ 9 American National's central argument is that the district court erroneously determined that it had a duty to defend Sorensen and Simmons and to provide coverage under the policy. Because the accident occurred on the common area of the Highlands development, rather than on Simmons's property, American National contends that the ATV accident did not occur on an "insured location." And if the accident did not occur on an "insured location," the ATV falls within subsection 8(c)'s definition of "motor vehicle" and Simmons's claim is consequently barred by the motor vehicle exclusions. American National argues, therefore, that the district court erred in ruling that the accident occurred on an "insured location" as defined under the homeowner's policy.

¶ 10 In the alternative, American National argues that even if we determine that the common area of Simmons's residential subdivision is an "insured location" under the policy, no coverage exists pursuant to the motor vehicle exclusions because the ATV is also a "motorized land conveyance" within the meaning of the policy. American National contends that although the policy does not define "motorized land conveyance," according to a common-sense definition, an ATV is clearly a motorized land conveyance. And because the "while off an insured location" language appears only in the definition of a "motor vehicle," that limitation does not apply to motorized land conveyances. Thus, American National argues that the motor vehicle exclusions apply regardless of whether the accident occurred on or off an insured location.⁴

¶ 11 Resolution of both arguments requires our interpretation of the policy language. Although no Utah court has specifically analyzed the policy language at issue, we have the benefit of several longstanding principles of law from which to analyze the pertinent policy language. First, "[i]nsurance policies are generally interpreted according to rules of contract interpretation." Utah Farm Bureau Ins. Co. v. Crook, 1999 UT 47, ¶ 5, 980 P.2d 685. As we would for contract language, we "interpret words in insurance policies according to their usually accepted meanings and in light of the...