Mutual Creamery Ins. Co. v. Gaylord, 42292
|290 Minn. 47,186 N.W.2d 176
|02 April 1971
|MUTUAL CREAMERY INSURANCE COMPANY, Appellant, v. Gary GAYLORD et al., Respondents.
|Supreme Court of Minnesota (US)
Syllabus by the Court
1. Where a minor child of an insured participates in a family business for no set wages or salary, but in the expectation of owning the business in the future, that child is not an employee of the insured as that term is used in an automobile liability insurance policy covering a vehicle used in the business.
2. The word 'employee' as used in automobile liability policies should not be given a meaning inconsistent with its meaning for workmen's compensation purposes.
3. Where the business is a joint enterprise with the members of the family being copartners, the individual partners are not employees of the partnership within in the purview of the Workmen's Compensation Act.
Sullivan, Hanft, Hastings, Fride & O'Brien, Duluth, for appellant.
O'Leary, Trenti, Berger & Carey, Virginia, for respondents.
Heard before KNUTSON, C.J., and NELSON, OTIS, ROGOSHESKE, and KELLY, JJ.
The action involved in this appeal was commenced by plaintiff-appellant, Mutual Creamery Insurance Company, seeking a declaratory judgment determining that an insurance policy issued by plaintiff on a truck used in the business of defendant-respondent Milton Shafer did not afford coverage for injuries sustained by Shafer's daughter, defendant-respondent Patricia Shafer, in an accident involving said truck.
The matter was tried in the District Court of St. Louis County, and on October 17, 1969, the trial court filed findings of fact, conclusions of law, and order for judgment determining that at the time of Patricia's accident she was not an employee of her father, Milton Shafer, and that coverage existed under the policy in respect to her. Plaintiff appeals from the judgment thereafter entered.
The facts are not in dispute. In 1963 Milton Shafer purchased a franchise for the operation of a Mr. Softee ice cream business. He also purchased a truck which was the sole means of production and distribution of the ice cream products in his franchise territory. Plaintiff issued an automobile liability policy covering the truck to Shafer and his wife which specifically referred to the occupation of the insured in connection with the operation of the business. The policy contained, among others, the following provisions:
'COVERAGE A--Bodily Injury Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile.'
'III. DEFINITION OF INSURED: (a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either. The insurance with respect to any person or organization other than the named insured or such spouse does not apply:
'(2) to any employee with respect to injury to or sickness, disease or death of another employee of the same employer injured in the course of such employment in an accident arising out of the maintenance or use of the automobile in the business of such employer.'
'THIS POLICY DOES NOT APPLY:
'(d) under coverage A, to bodily injury to or sickness, disease or death of any employee of the insured arising out of and in the course of (1) domestic employment by the insured, if benefits therefor are in whole or in part either payable or required to be provided under any workmen's compensation law, or (2) other employment by the insured * * *.'
The arrangement of the business, conducted from 1963 to 1968, was that Mr. Shafer obtained the franchise and truck, and his daughters, Patricia and Marguerite, worked on the truck making and selling the product to the public as the truck covered its route, cleaning the back or production end of the truck, and accounting for the money and sales each day. The earnings from the business were to go toward paying for the truck. When the truck was paid for, it was to belong to the daughters for their use and to help them with their education. It was Mr. and Mrs. Shafer's intention to create a livelihood for the girls after school hours and during their vacations beginning with the late spring, through the summer, and ending in the fall contemporaneously with the football season. There was no regular schedule for either girl to work; whoever wanted to work helped on the truck on the particular day chosen.
In 1965 Gary Gaylord was hired to drive the truck and was paid regular wages. The girls, on the other hand, were not paid. From time to time, they were given money as needed, but the amounts did not depend on the receipts from the business. Patricia was not carried on the payroll as an employee, and no money given to the girls was carried on the business books as wages or otherwise. The business did not withhold any tax from money given to the girls by their parents. Also, the business paid no tax for unemployment...
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