Castillo v. Miller's Mut. Fire Ins. Co.
| Decision Date | 22 May 2001 |
| Docket Number | No. 1 CA-CV 00-0271.,1 CA-CV 00-0271. |
| Citation | 25 P.3d 13,200 Ariz. 211 |
| Parties | Petra CASTILLO, as a Guardian Ad Litem for Rosa Isela De Luna, Plaintiffs-Appellants, and Juan Francisco De Luna; Ramona De Luna; and Viridiana De Luna, Defendants-Appellants, v. MILLER'S MUTUAL FIRE INSURANCE COMPANY OF TEXAS, a Texas corporation, Defendant-Appellee. |
| Court | Arizona Court of Appeals |
Shultz & Rollins, by James E. Marner, Tucson, Attorneys for Plaintiffs-Appellants.
Mark E. Turley, Glendale, Attorney for Defendant-Appellant Juan Francisco De Luna.
Murphy, Lutey, Schmitt & Beck, by Robert E. Schmitt, Dan A. Wilson, Prescott, Attorneys for Defendants-Appellants, Ramona De Luna and Viridiana De Luna.
Beale & Micheaels, P.C., by K. Thomas Slack, Phoenix, Attorneys for Defendant-Appellee.
¶ 1 Ramundo De Luna was killed in a motor vehicle accident. His widow and children ("appellants") filed a declaratory action against defendant, Miller's Mutual Fire Insurance Company of Texas ("Miller's Mutual"), seeking underinsured motorist insurance ("UIM") coverage. The trial court granted summary judgment to Miller's Mutual. For the reasons discussed below, we reverse.
¶ 2 When reviewing motions for summary judgment, we view the facts in the light most favorable to the party opposing the motion. Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 191, 888 P.2d 1375, 1378 (App.1994).
¶ 3 On September 20, 1996, in the course of his employment for Agro Phosphate Company, Inc. ("Agro"), De Luna was killed when the truck/fertilizer spreader he was driving was hit by a car that swerved into his lane on a public roadway near Yuma. The car's driver was insured for the statutory minimum, and his insurer tendered the $15,000 limit for distribution among the appellants.
¶ 4 De Luna was driving a self-motorized, four wheel, heavy duty vehicle, known as a "Lor-al," that Agro used to deliver and spread fertilizer and herbicide for its customers. Components of the Lor-al included a 1989 International Harvester truck weighing over 26,000 pounds with a truck's cab, a windshield, side and rear-view mirrors, headlights and brake lights. It was designed to carry a driver and one passenger, with seatbelts for each. On highways, the Lor-al could reach speeds of over 55 miles per hour.
¶ 5 Agro was a Yuma-based business specializing in the sale, delivery and application of agricultural chemicals. Agro used the Lor-al to take fertilizer or herbicide to growers' fields where it was then applied by the Lor-al. Agro had customers as distant as 40 miles from its Yuma headquarters, and Agro employees drove the Lor-al an average of 16,400 miles per year in delivering and applying its products. Agro employees customarily drove the Lor-al on public roads, including Interstate 8.
¶ 6 At the time of the accident, Agro held a Miller's Mutual Agribusiness insurance policy that included, in part, commercial automobile liability ("automobile") coverage, commercial general liability ("general") coverage and inland marine coverage. The automobile coverage provided UIM coverage with a benefit limit of $1,000,000.
¶ 7 The automobile coverage defined an insured as "[a]nyone [ ] using with [Agro's] permission a covered `auto'" it owned, hired or borrowed. The UIM coverage identified a "covered auto" as any vehicle included on a list of "specifically described `autos.'" The UIM coverage also provided:
We will not pay for any element of "loss" for which an insured is entitled to receive payment under any workers' compensation, disability benefits or similar law, if an insured is injured while occupying a vehicle which is used as a public or livery conveyance; or which is rented to others or is used in a business primarily to transport property or equipment.
¶ 8 In addition to the list of autos, the automobile coverage defined "auto" as "a land motor vehicle, trailer or semi-trailer designed for travel on public roads but [not including] `mobile equipment.'" "Mobile equipment" included "[b]ulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads."
¶ 9 The automobile coverage portion of the policy did not include the Lor-al as one of the "specifically described `autos.'" Instead, for property damage purposes, the Lor-al was listed as equipment.
¶ 10 Following Miller's Mutual's denial of a claim for UIM coverage benefits, appellants brought a declaratory action asserting that Miller's Mutual's insurance policy affords them UIM benefits. The parties filed cross motions for summary judgment and the trial court granted summary judgment for Miller's Mutual. Appellants timely appealed.
1. Was the Lor-al insured as an auto under the terms of the policy's automobile coverage?
2. If the Lor-al was not an auto under the policy's automobile coverage, does Arizona law require UIM coverage to be imputed to the policy's general coverage?
3. Do provisions of the insurance policy providing for non-duplication of workers' compensation benefits exclude De Luna from coverage?
¶ 11 "In reviewing an order granting summary judgment, we must determine whether there is a genuine issue of disputed material fact, and, if not, whether the trial court correctly applied the substantive law." Matter of Estate of Johnson, 168 Ariz. 108, 109, 811 P.2d 360, 361 (App.1991). We will affirm summary judgment where the nonmoving party has presented so little evidence in support of the claim or defense advanced that reasonable people could not agree with the conclusion advanced by that party. Orme School v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). Also, we review the legal interpretation of an insurance contract de novo. Tobel v. Travelers Ins. Co., 195 Ariz. 363, 366, ¶ 13, 988 P.2d 148, 151 (App.1999).
¶ 12 Appellants first argue that the Lor-al was an "auto" under the terms of the policy's automobile coverage and therefore entitled De Luna to UIM coverage because Arizona requires any person who is insured for motor vehicle liability to be insured for UIM liability. See Arizona Revised Statutes ("A.R.S.") section 20-259.01(B) (1996). Miller's Mutual counters that the Lor-al was insured as "mobile equipment," not as an "auto."
¶ 13 In interpreting the terms of an insurance policy, the court must determine and enforce the intent of the parties to the insurance contract at the time it was made. Darner Motor Sales v. Universal Underwriters Ins. Co., 140 Ariz. 383, 393, 682 P.2d 388, 398 (1984). Here, the intent of the parties is illuminated by the structure of the policy. The policy does not include the Lor-al as a scheduled vehicle under automobile coverage but, for purposes of property coverage, lists it as "equipment" under the Inland Marine coverage. "Mobile equipment" is excluded from automobile coverage but is included under general coverage. The labeling of the Lor-al as equipment demonstrates the intent of the parties that the Lor-al be considered "mobile equipment" and not an "auto" for purposes of liability coverage. See Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 152, 854 P.2d 1134, 1138 (1993) ().
¶ 14 Clearly, the parties' intent was to insure the operators of the Lor-al and other "mobile equipment" under the policy's general coverage, rather than under the automobile coverage. The Lor-al, therefore, was not an "auto" under the terms of the policy's automobile coverage. Consequently, because the policy included UIM coverage only in connection with its automobile coverage, UIM coverage was not provided here for De Luna.
¶ 15 Notwithstanding the parties' intent, appellants argue that, even if De Luna were not covered by the automobile coverage, he still had UIM coverage because Miller's Mutual was required to offer UIM coverage for the Lor-al. Because it was not offered, they reason, UIM coverage must be imputed.
¶ 16 UIM will not be imputed into a policy unless the insurer was required to offer it to the insured. See Petrusek v. Farmers Ins. Co., 193 Ariz. 552, 554, ¶ 9, 975 P.2d 142, 144 (App.1998). At the time the general coverage was issued, A.R.S. section 20-259.01(B) provided in relevant part:
Every insurer writing automobile liability or motor vehicle liability policies shall also make available to the named insured thereunder and shall by written notice offer the insured and at the request of the insured shall include within the policy underinsured motorist coverage which extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy.
Therefore, in determining whether UIM coverage must be imputed to the general coverage, we must first determine whether the general coverage constituted either a "motor vehicle liability policy" or "automobile liability policy" for which an insurer must make UIM coverage available. See St. Paul Fire & Marine Ins. Co. v. Gilmore, 168 Ariz. 159, 164-67, 812 P.2d 977, 982-85 (1991).
¶ 17 Under A.R.S. section 20-259.01, "motor vehicle liability policy" and "automobile liability policy" refer, in part, to liability policies mandated by the Arizona transportation statutes. Id.; see A.R.S. § 28-1251(A)(1996). Therefore, we must consider whether the Lor-al was a "motor vehicle" for which a motor vehicle liability policy was required.
¶ 18 At the time the policy was issued, A.R.S. section 28-1251(A) required that "[e]very motor vehicle operated on any highway in this state" be covered by a motor vehicle or automobile liability policy. Under this statute, a "motor vehicle" meant "any self-propelled vehicle that is registered or required to be registered under the laws of this state." A.R.S. § 28-1251(G). For the purposes of registration, "motor vehicle" included "any self-propelled vehicle." A.R.S. § 28-101(32)(1996).
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