Bauer Ranch, Inc. v. Mountain West Farm Bureau Mut. Ins. Co.

• Decision Date: 26 February 1985
• Docket Number: No. 84-319,84-319
• Citation: 215 Mont. 153,695 P.2d 1307,42 St.Rep. 255
• Court: Montana Supreme Court
• Parties: BAUER RANCH, INC., and R.F. Bauer, Plaintiff and Respondent, v. MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant and Appellant.

Page 1307

695 P.2d 1307

215 Mont. 153

BAUER RANCH, INC., and R.F. Bauer, Plaintiff and Respondent, v.MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANYDefendant and Appellant.

No. 84-319.

Supreme Court of Montana.

Submitted on Briefs Jan. 31, 1985.

Decided Feb. 26, 1985.

Landoe, Brown, Planalp, Kommers & Johnstone, Bozeman, for defendantappellant.

Corette, Smith, Pohlman & Allen, Butte, for plaintiff and respondent.

SHEEHY, Justice.

Mountain West Farm Bureau Mutual Insurance Company appeals from a judgment entered against it in favor of Bauer Ranch, Inc. and R.F. Bauer in the District Court of the Second Judicial District, Silver Bow County.

We affirm the District Court judgment.

On December 8, 1982, a 1979 White Freightliner tractor owned by Bauer was totally destroyed by collision at a time when it was covered under an insurance policy issued by Mountain West to Bauer.Mountain West raises two issues in this appeal, first, that the White Freightliner tractor was at the time of its destruction leased or rented to Craig Britton and so excluded from coverage, and second, that Bauer may not raise the issue of estoppel against the insurance company when the defense of estoppel is not included in its pleadings.

This case was tried to the District Court sitting without a jury.The pertinent findings of fact are that Mountain West issued a policy of insurance providing collision and physical damage coverage for the 1979 White Freightliner tractor; that such policy was in force on December 8, 1980; that Bauer had purchased the 1979 White Freightliner tractor under an agreement with his son-in-law, Craig Britton, who was then in the trucking business; that according to the agreement Britton would care for the vehicle, provide for a driver, and use the vehicle, and in return, Britton would haul Bauer's hay and cattle at no charge; that prior to the agreement, Bauer had been expending approximately $30,000 per year in trucking charges for the hauling of his hay and cattle.

The policy coverage for the vehicle was subject to certain exclusions, but the exclusion did not apply to use of the truck on a share expense basis.

Mountain West contended that the arrangement with Britton constituted a lease of the tractor by Bauer and that Bauer was therefore not entitled to physical damage coverage for the accident under the exclusion.In connection with that issue, the District Court found that Bauer had purchased the vehicle in August 1980 for $56,000; that Britton maintained the vehicle through December 8, 1982; that Britton hauled Bauer's cattle and hay whenever Bauer wanted them hauled during that period; that at no time did Britton ever pay any lease or rental monies for the use of the vehicles; that Bauer at all times had the right to control the use of the vehicle, in that he could have demanded return of the vehicle from Britton at any time; that when the accident occurred on December 8, 1982, the vehicle was pulling a trailer loaded with cattle that belonged to Britton.The court further found that in August 1980, before the issuance of the policy, the insurance agent for Mountain West was advised how the vehicle was to be used under the arrangement between Bauer and Britton.

The District Court found and concluded that the use of the vehicle pursuant to the oral agreement between Bauer and Britton was on a share expense basis and as such was not excluded from coverage under the policy of insurance.

The findings of fact made by a district court in a case tried without a jury are not to be set aside by us unless they are clearly erroneous.Rule 52(a), M.R.Civ.P.We have sometimes said that findings of fact must be sustained if we determine that there is substantial credible evidence to support the findings of fact and conclusions of law.Cameron v. Cameron(1978), 179 Mont. 219, 587 P.2d 939.Regardless of how we may state the test, essentially it boils down to the language of Rule 52(a), that unless clearly erroneous, the findings of the District Court must be sustained.

In truth, there is little dispute between the parties as to the facts of this case.What is in dispute is the legal effect of the arrangement between Bauer and Britton, that is whether the arrangement constituted a lease as a matter of law, or an arrangement for shared expenses, as determined by the District Court.

An ambiguous provision in an insurance policy is construed against the insurance company.A clause...