Kresse v. Home Ins. Co.

• Citation: 765 F.2d 753
• Decision Date: 28 June 1985
• Docket Number: No. 84-2609,84-2609
• Parties: Clarence A. KRESSE, John A. Rilling, Special Administrator for the Estate of Daniel Dean Wolf, deceased, and Renee Wolf, individually, Appellants, v. The HOME INSURANCE COMPANY, Appellee. Burlington Northern Railroad Company, Amicus curiae appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 753

765 F.2d 753

Clarence A. KRESSE, John A. Rilling, Special Administrator for the Estate of Daniel Dean Wolf, deceased, and Renee Wolf, individually, Appellants, v. The HOME INSURANCE COMPANY, Appellee.

Burlington Northern Railroad Company, Amicus curiae appellant.

No. 84-2609.

United States Court of Appeals,

Eighth Circuit.

Submitted May 15, 1985.

Decided June 28, 1985.

Mervin Nordeng, Fargo, N.D., for appellants.

Jeffrey R. Hannig, Moorhead, Minn., for appellee.

Before HEANEY, Circuit Judge, HENLEY, Senior Circuit Judge, and McMILLIAN, Circuit Judge.

HEANEY, Circuit Judge.

Clarence A. Kresse, John A. Rilling (Special Administrator for the Estate of Daniel Dean Wolf, deceased) and Renee Wolf, (collectively "Kresse"), brought a diversity action in the United States District Court for the District of North Dakota seeking a declaration of insurance coverage under the Business Auto Policy issued to Cass County, North Dakota, by the Home Insurance Company (hereinafter "Home"). Following cross motions for summary judgment, the district court granted Home's motion for summary judgment and ordered judgment on Home's behalf, finding that Kresse was not insured under the policy. For reversal, Kresse argues that the district court erred in its interpretation of the meaning of the term "hired auto" as used in Home's insurance policy. In addition, Kresse seeks reversal of the district court's refusal to permit discovery of information relating to premiums assessed to other similarily situated insureds. We reverse in part, affirm in part, and remand for trial.

FACTS:

At approximately 2:15 p.m. on July 17, 1981, at the intersection of Cass County No. 1 and Burlington Northern Railroad Company's (hereinafter "BN") trackage a collision occurred between a BN freight train and a truck operated by Daniel Dean Wolf, and owned by Clarence A. Kresse. At the time of the collision, the truck was hauling gravel for Cass County, North Dakota. As a result of the collision, Daniel Wolf died, Aloys Wawers (a train crewman) claims to have been injured, the BN train was derailed and extensively damaged, and the Kresse truck was destroyed. BN brought suit against Kresse, Cass County, the estate of Daniel Wolf and Renee Wolf (Daniel's mother) seeking $3,000,000 in damages. Aloys Wawers brought suit against BN, Kresse, Wolf's estate, and Cass County for injuries in the amount of $450,000.

DISCUSSION:

In reviewing the district court's denial of coverage by granting Home's motion for summary judgment, all facts and reasonable inferences drawn from the facts must be viewed in a light most favorable to Kresse. Mandel v. United States, 719 F.2d 963, 964 (8th Cir.1983); Portis v. Folk Construction Co., 694 F.2d 520, 522 (8th Cir.1982). Summary judgment may be granted only when there is no genuine issue of material fact and the moving party has proved he or she is entitled to judgment as a matter of law. Mandel, 719 F.2d at 965; Ralph's Distributing Co. v. AMF, Inc., 667 F.2d 670, 672 (8th Cir.1981); Fed.R.Civ.P. 56(c). After a careful review of the record, we find that Home is not entitled to summary judgment.

The issue before this Court is whether the Kresse truck was, as a matter of law, "hired" by Cass County within the meaning of the Home insurance policy. To reach a conclusion on this issue requires both analysis of the facts and interpretation of the legally operative meaning of the word "hire." Home's policy provides coverage for any permissive user of an automobile "hired" by the named insured, Cass County. Home chose not to define the term "hire" or "hired auto" within its policy, and under North Dakota law, words of a contract are to be understood in their ordinary and popular sense unless a special meaning is given to them by usage. N.D.Cent.Code Sec. 9-07-09. When an insurer fails to define a coverage term, it is not entitled to a strict or limited definition that differs from the ordinary definition in order to avoid providing coverage. Wall v. Pennsylvania Life Ins. Co., 274 N.W.2d 208, 217 (N.D.1979). Furthermore, when one interpretation of an insurance policy provision will impose liability on the insurer and another will not, the interpretation favorable to the insured will be adopted. Id., at 215; Williams v. Niesen, 261 N.W.2d 401, 404 (N.D.1977).

This Court has been presented with several definitions of the term "hired auto." Kresse urges adoption of the definition provided in 7 Am.Jur.2d, Automobile Insurance Sec. 245:

The term generally is used to mean a vehicle owned by someone other than the insured which is leased by the insured pursuant to a lease agreement which calls for the owner to provide not only the vehicle, but also a driver for that vehicle while it is being used in the insured's business.

Home claims the proper definition is contained in Webster's Third New International Dictionary (...