Associated Independent Dealers, Inc. v. Mutual Service Ins. Companies

Decision Date16 May 1975
Docket NumberNo. 45061,45061
Citation304 Minn. 179,229 N.W.2d 516
CourtMinnesota Supreme Court

Syllabus by the Court

1. In an action brought to determine whether coverage existed under an automobile insurance policy issued to plaintiffs by defendant providing coverage for claims against them 'arising out of the ownership, maintenance, or use' of insured vehicles, the fire giving rise to claims against plaintiffs was not sufficiently related to the 'use' of the insured vehicle so as to justify a holding that the policy provided coverage.

2. The term 'arising out of the * * * use' of the insured vehicle is not ambiguous and thus cannot be construed in favor of the insured.

3. When the meaning of an insurance policy is at issue, a court may consider the entire policy, including endorsements thereto, in order to determine whether the parties intended that a given risk be covered.

Douglass, Bell, Donlin, Shultz & Petersen and James M. Shultz, St. Paul, for appellant.

Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan, J. Richard Bland and O. C. Adamson II, Minneapolis, for respondents.

Heard before SHERAN, C.J., and PETERSON, KELLY, YETKA, and SCOTT, JJ., and considered and decided by the court en banc.

YETKA, Justice.

This is a declaratory judgment action brought in Ramsey County District Court to determine whether defendant insurer is liable under an automobile liability policy providing coverage to plaintiffs, Associated Independent Dealers, Inc. (AID) and Standard Storage Battery Company (Standard), 1 for losses 'arising out of the ownership, maintenance or use' of automobiles specified in the policy. The matter was tried before the court which ordered entry of judgment holding that coverage existed. Defendant has appealed from that judgment. We reverse.

A fire originated in a warehouse owned by AID. The fire spread to an adjoining building owned by St. Paul Linoleum and Carpet Company (St. Paul Linoleum). 2 Both structures were located in St. Paul Minnesota, and both were destroyed by the fire.

On that day AID employees and an independent contractor were remodeling an unloading dock in the AID warehouse. In order to accomplish that task it was necessary to remove several pieces of railroad track which served as a bumper for the unloading dock. An acetylene torch was used to cut these pieces of track away from the dock. Evidently, sparks from the acetylene torch ignited the fire.

The acetylene cutting equipment was borrowed by AID from Standard. Several AID employees had picked up that equipment from Standard in a 1969 Ford Econoline van, which was insured under the policy issued by defendant. The equipment consisted of two oxygen tanks connected to the cutting torch by a hose. Upon arrival at the AID warehouse, the employees parked the van near the unloading dock. Although the equipment including the portable oxygen tanks was easily removable from the van, the tanks were left in the van as a matter of convenience when the actual cutting took place. The hose was long enough to extend from the van to the pieces of track that were to be removed. It is uncontested that the acetylene equipment was not permanently attached to the van. The van was not required in order for that equipment to be used.

St. Paul Linoleum and Howard E. Commers filed suit against Standard and AID seeking to recover for the damages sustained as a result of the fire. That action was predicated upon allegations that the negligence of AID and Standard and their employees was the cause of the fire.

The excess liability insurer of AID and Standard tendered defense of that action to defendant, alleging that the latter was liable under the automobile policy. Defendant rejected that tender on grounds that the fire did not arise out of the ownership, maintenance, or use of the insured vehicle. Thereafter, this declaratory judgment action was initiated to resolve the issue of whether defendant's policy in fact covered claims against AID and Standard arising from the fire.

The sole issue to be resolved is whether the fire arose out of the ownership, maintenance, or use of the insured van.

1. The question of whether a loss is sufficiently related to the ownership, maintenance, or use of an insured vehicle has been the subject of frequent judicial interpretation. 3 In general terms, it has been established that such relationship need not be a proximate cause in the strict legal sense. Rather, it is sufficient to establish that the injury or loss 'was a natural and reasonable incident or consequence of the use of the (insured) vehicle.' 4 It has been said that the causal connection must be 'reasonably apparent.' 5 and that 'the mere fact that the use of the vehicle preceded the harm which was later sustained is not sufficient to bring such harm within the coverage of the policy.' 6 It has also been held that the policy term 'arising out of' means 'originating from,' or 'having its origin in,' 'growing out of,' or 'flowing from.' 7 In any event, each case presenting such a question must, to a great degree, turn on the particular facts presented. 8

We hold that, under the facts of this case, the trial court could not find the requisite causal link between the alleged 'use' of the insured vehicle and the fire. It is clear from the record that the fire was caused by the actual cutting of the rails or by improper maintenance of the warehouse. In any event, the fact that part of the acetylene cutting equipment was in the van when the fire began was a mere fortuity. The relationship between the use of the van and the ignition of the fire was Casual at best, and in our view that link was not sufficient to bring the fire within the coverage afforded by defendant's policy. The scope of coverage afforded terein must end at some point, and such is the case in this litigation.

Plaintiffs place strong reliance upon the case of United States Fidelity & Guaranty Co. v. Burris, 240 So.2d 408 (La.App.1970). In that case, several buildings were damaged by a fire which was ignited when the insured was using an acetylene torch to cut away a metal shroud from a paint booth which the insured intended to load onto his truck for removal to a different building. The oxygen-acetylene tanks were on the truck when the fire started. The trial court granted the insurer a summary judgment holding that the fire did not arise out of the 'use' of the insured's truck. In reversing that part of the summary judgment, the court stated:

'* * * By...

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