National American Ins. Co. v. W & G, Inc., 05-3037.

• Decision Date: 10 March 2006
• Docket Number: No. 05-3037.,05-3037.
• Citation: 439 F.3d 943
• Parties: NATIONAL AMERICAN INSURANCE COMPANY, an Oklahoma corporation, Appellee, v. W & G, INC., a Nebraska corporation, Defendant, Republic Western Insurance Company, an Arizona corporation; Colberg Harvesting, Inc., a Kansas corporation; Colberg Transportation, Inc., a Kansas corporation, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

439 F.3d 943

NATIONAL AMERICAN INSURANCE COMPANY, an Oklahoma corporation, Appellee, v. W & G, INC., a Nebraska corporation, Defendant Republic Western Insurance Company, an Arizona corporation; Colberg Harvesting, Inc., a Kansas corporation; Colberg Transportation, Inc., a Kansas corporation, Appellants.

No. 05-3037.

United States Court of Appeals, Eighth Circuit.

Submitted: February 13, 2006.

Filed: March 10, 2006.

Douglas W. Krenzer, Omaha, NE (Richard C. Foster and Benny C. Priest, Marietta, GA, on the brief), for appellant.

William M. Lamson, Jr. and Michele E. Young of Omaha, NE (R. Patrick Gilmore of Chandler, OK appeared on the brief), for appellee.

Before RILEY, MELLOY, and BENTON, Circuit Judges.

RILEY, Circuit Judge.

This appeal involves a dispute between two insurance companies over the amount each must pay in the joint settlement of a personal injury action. National American Insurance Company (National American) contends it is an excess insurer and entitled to equitable subrogation from Republic Western Insurance Company (Republic Western) for attorney fees, costs, and amounts contributed to the settlement of the underlying personal injury action. The district court¹ entered an amended summary judgment order, holding Republic Western's coverage is primary and National American is entitled to equitable subrogation from Republic Western. Republic Western appeals. For the following reasons, we affirm.

I. BACKGROUND

On August 13, 2001, Jonathan Howard (Howard), an employee of W & G, Inc. (W & G), was operating a three-axle, tandem grain truck owned by Colberg Transportation, Inc. (Colberg). While carrying harvested grain from a field to a grain elevator, Howard failed to stop at a stop sign at a public roadway intersection near Linton, North Dakota, and hit a car driven by Chelsea Quellhorst (Quellhorst), seriously injuring Quellhorst.

On October 18, 2001, Quellhorst brought a personal injury action against Howard, Colberg, and W & G. Republic Western insured Colberg through a commercial auto policy, and Republic Western provided Colberg and Howard's defense in the Quellhorst personal injury action. National American insured W & G through a two-part policy including commercial general liability (CGL) coverage and business auto coverage. National American defended W & G in the Quellhorst personal injury action without a reservation of rights. On April 14, 2003, National American tendered W & G's defense to Republic Western. Republic Western declined to defend W & G.

In October 2003, the parties settled the Quellhorst personal injury action by agreeing to pay Quellhorst $600,000, with National American contributing $25,000 and Republic Western contributing the balance.

National American brought this declaratory judgment action, asking the district court to determine which insurance policy provides primary coverage and whether National American has a right to equitable contribution from Republic Western for amounts expended on behalf of W & G. Upon review of the parties' cross-motions for summary judgment, the district court held Republic Western's coverage is primary, but National American failed to reserve its right to equitable subrogation from Republic Western by participating in settlement of the Quellhorst personal injury action. National American then filed a motion to alter or amend, asking the district court to consider the language of the settlement agreement stating none of the parties waived their rights by participating in the agreement. The district court amended its judgment by holding National American is entitled to equitable subrogation from Republic Western for the amounts it expended on behalf of W & G.

Republic Western appeals the district court's amended summary judgment order, arguing (1) National American owes primary coverage under the CGL policy, (2) National American owes primary coverage under the business auto policy, and (3) National American is estopped from seeking equitable subrogation.

II. DISCUSSION

We review de novo a grant of summary judgment, considering the facts in the light most favorable to the nonmoving party. Dowdle v. Nat'l Life Ins. Co., 407 F.3d 967, 970 (8th Cir.2005). Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Dowdle, 407 F.3d at 970. In insurance coverage actions involving diversity of citizenship, state law controls our analysis of the insurance policy. See Home Ins. Co. v. Aetna Ins. Co., 236 F.3d 927, 929 (8th Cir.2001). Thus, as the parties agree, we apply Nebraska law in this case. See id.

A. Coverage Under the CGL Policy

Republic Western first contends the district court erred in deciding National American's CGL policy provides excess, rather than primary, coverage. The National American CGL policy states, in relevant part:

Exclusions

This insurance does not apply to:

. . . .

g. Aircraft, Auto Or Watercraft

"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading and unloading".

Application of this provision's plain language excludes primary coverage. Quellhorst suffered "bodily injury" in the accident, which arose out of the "use" of an "auto" "operated by" Howard, an "insured." Accordingly, the district court correctly held the National American CGL policy does not provide primary coverage.

Republic Western attempts to create a fact issue by arguing the grain truck driven by Howard was not an "auto," but instead was "farm machinery," which is not excluded under the National American CGL policy. This argument fails. Republic Western does not point to any testimony or evidence showing the grain truck was designed for off-road use or solely as "farm machinery." Cf. Rodgers v. City of Des Moines, 435 F.3d 904, 908 (8th Cir. 2006) ("Without some guidance, we will not mine a summary judgment record searching for nuggets of factual disputes to gild a party's arguments."). To the contrary, the evidence of record supports the conclusion the grain truck was an "auto" for purposes of the National American CGL policy: Howard testified he drove the truck to haul grain from the edge of a field being harvested to a grain elevator, and the accident occurred on a public roadway. The use of the vehicle at the time of the collision, hauling grain on a public road leading to a grain elevator, is strong evidence demonstrating the vehicle was being used as an "auto...