Florists' Ins. Service v. Great River Ins. Co., Civil Action No. 3:00CV565LN.
| Citation | 138 F.Supp.2d 767 |
| Decision Date | 15 March 2001 |
| Docket Number | Civil Action No. 3:00CV565LN. |
| Parties | FLORISTS' INSURANCE SERVICE, INC. and Evergreen, Inc., Plaintiffs, v. GREAT RIVER INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Mississippi |
Edward A. Moss, Angela Spivey Carter, Holcomb Dunbar, P.A., Oxford, MS, for Plaintiffs.
Finisse Ewin Henson, III, Upshaw, Williams, Biggers, Beckham & Riddick, Greenwood, MS, for Defendant.
This cause is before the court on the motion of defendant Great River Insurance Company (Great River) for summary judgment and the cross-motion of plaintiffs Florists' Insurance Service, Inc. (Florists) and Evergreen, Inc. for summary judgment. The parties have fully briefed the motions and the court, having considered the parties' memoranda of authorities, together with attachments, concludes that Great River's motion is well taken and should be granted and that the motion of Florists and Evergreen should be denied.
The case involves a question of insurance coverage, and in particular, whether a certain policy of personal automobile liability insurance issued by Great River to Dr. John W. Cook and his wife, Leah, extends coverage to Evergreen as an omnibus insured for liability in connection with an accident that occurred during the effective dates of the policy. The incident at issue occurred on November 28, 1997, when Leah Cook and a friend went together to the Christmas Tree Sales Lot operated by Evergreen at the Mississippi State fairgrounds in Jackson to purchase Christmas trees for their respective homes.1 After selecting and paying for their Christmas trees, an employee or employees of Evergreen loaded the trees onto the top of the Cook vehicle, following which Mrs. Cook and her friend left the premises headed home. Soon after leaving the lot, while on the entrance ramp to Interstate 55, one of the Christmas trees fell off the vehicle and rolled into the traveled portion of the interstate. Mrs. Cook and her companion decided that they could not safely remove the tree from the highway, so they returned to the sales lot for help. While they were gone, another vehicle came upon the tree in the roadway and, when the driver took an evasive maneuver to avoid the tree, the vehicle overturned, injuring the driver, Walter Hudson, and killing the passenger, Chet Cole.
Following the accident, Hudson and representatives of the Cole family made a claim against Leah Cook and Evergreen for their alleged negligence in causing the accident and resulting losses. Upon receiving notice of this claim, Evergreen and its liability insurer, Florists,2 demanded that Great River provide coverage for Evergreen and that it provide Evergreen with a defense in the event suit were to be filed against Evergreen by Hudson and/or the Cole family. Great River declined, taking the position that Evergreen was not an "insured" under its policy.
Eventually, after suit was filed by Hudson and the Cole family in state court, Great River settled the Hudson and Cole family's claim against Leah Cook for $475,000 ($250,000 less than the policy limits), after which Evergreen removed the case to this court. Following removal, Evergreen agreed to pay $1.4 million to settle the case. Just prior to the settlement, however, Florists and Evergreen filed the present action against Great River,3 seeking a declaratory judgment that Evergreen was an "insured" under Dr. Cook's automobile liability insurance policy for the accident, and alleging bad faith denial of coverage.
The issue presented by the parties' cross-motions is whether Evergreen is an omnibus insured under the Great River policy. The parties agree that because this case is before this court pursuant to the court's diversity jurisdiction, then this court is bound to apply Mississippi law. They also agree, however, that there are no Mississippi cases that answer the question presented and that the court must therefore venture an Erie-guess as to what the Mississippi Supreme Court would conclude if presented with this issue. They obviously disagree, however, as to the conclusion that court would reach, as each submits that the Mississippi Supreme Court would resolve the issue in its favor. This court has considered the parties' arguments, and after due deliberation, concludes for reasons which follow that the Mississippi Supreme Court would not likely find Evergreen to be an "insured" within the contemplation of the policy for the accident giving rise to Evergreen's putative liability.
Great River's policy, in addition to identifying Dr. Cook and Leah Cook as named insureds, defines "insured" to include "[a]ny person using `your covered auto.'" Florists and Evergreen contend that in loading the Christmas trees onto the Cook vehicle, Evergreen's employees were "using" the vehicle, with the insured's consent, and that Evergreen is thus clearly an insured for purposes of the liability coverages provided under the Great River policy in connection with the subject accident. In this regard, Evergreen and Florists point out that the term "use" is not defined in Great River's policy, and they thus contend that coverage should be found to extend to Evergreen by reference to well-established rules of insurance contract construction, and in particular, the rules of construing provisions of an insurance contract against the drafter, see Nationwide Mutual Ins. Co. v. Garriga, 636 So.2d 658, 662 (Miss.1994), of broadly construing insuring clauses in order to effect coverage, see Liberty Mutual Fire Ins. Co. v. Canal Ins. Co., 177 F.3d 326, 331 (5th Cir.1999), and construing ambiguous provisions in favor of coverage, see Dennis v. Searle, 457 So.2d 941, 945 (Miss.1984). In further support of their position, plaintiffs have identified a number of cases which have recognized that the term "use" is not confined to movement on the highway but "extends to any activity involved in the utilization of the covered vehicle in the manner intended or contemplated by the insured." Mullins v. Federal Dairy Co., 568 A.2d 759 (R.I.1990) (); Aetna Life & Cas. Co. v. Bulaong, 218 Conn. 51, 588 A.2d 138 (1991) (). They have also cited cases in which coverage for "use" of insured vehicles has been held to extend to activities involved in the loading and unloading of insured vehicles. See Fireman's Fund Ins. Co. v. Canal Ins. Co., 411 F.2d 265 (5th Cir.1969); Red Ball Motor Freight, Inc. v. Employer's Mutual Liab. Ins. Co., 189 F.2d 374 (5th Cir.1951); Crowley's Milk Co. v. American Mut. Liability Ins. Cas. Co., 426 F.2d 752 (2d Cir.1970); American Oil Co. v. Hardware Mut. Cas. Co., 408 F.2d 1365 (1st Cir.1969); Mission Ins. Co. v. Aid Ins. Servs., 120 Ariz. 220, 222, 585 P.2d 240, 242 (Ariz.1978). However, as Great River points out, all of those cases involved commercial automobile policies, and all but one of those policies had a specific clause that included "loading and unloading" within the definition of "use."4 In the one case in which that was not so, American Oil Co. v. Hardware Mutual Casualty Co., 408 F.2d 1365 (1st Cir.1969), the court at first recognized that "`[i]t is generally acknowledged that the "loading and unloading" provision extends liability coverage under a policy beyond the limits circumscribed by the words "maintenance or use,"'" id. (quoting Allstate Ins. Co. v. Valdez, 190 F.Supp. 893 (E.D.Mich.1961)), but it went on to conclude that because loading and unloading were essential to the use of the oil transport truck in question, then "use" would be broadly construed to include "loading and unloading." id. at 1367-68.5
Moreover, in Fireman's Fund Insurance Co. v. Canal Insurance Co., 411 F.2d 265 (5th Cir.1969), the Fifth Circuit indicated that "loading" and "unloading" would not be encompassed by the word "use" in the absence of a policy provision so defining the term. The court stated, Id. at 268.
Consistent with this principle of striving to give effect to the intent of the parties, Great River maintains that whether "use" may reasonably be construed to encompass the activities of "loading" and/or "unloading" depends on the status of the insured and the expectations and intentions of the contracting parties in view of that status. More to the point, it contends that "use" may reasonably be defined to include "loading" and "unloading" in a commercial setting in...
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