Wright v. American States Ins. Co.

• Decision Date: 02 April 2002
• Docket Number: No. 45A03-0103-CV-85.,45A03-0103-CV-85.
• Citation: 765 N.E.2d 690
• Parties: Reginald WRIGHT, Sr., and Teresa Jones, as parents of Reginald Wright, Jr., and Joseph Wright, Deceased, et al., Appellant-Defendant, v. AMERICAN STATES INSURANCE CO., Appellee-Plaintiff.
• Court: Indiana Appellate Court

765 N.E.2d 690

Reginald WRIGHT, Sr., and Teresa Jones, as parents of Reginald Wright, Jr., and Joseph Wright, Deceased, et al., Appellant-Defendant, v. AMERICAN STATES INSURANCE CO., Appellee-Plaintiff.

No. 45A03-0103-CV-85.

Court of Appeals of Indiana.

April 2, 2002.

William K. McVisk, Johnson & Bell, Ltd., Chicago, IL, Attorney for Appellant.

Kenneth J. Allen, Kenneth J. Allen & Associates, P.C., Valparaiso, IN, Attorney for Appellee.

OPINION

RATLIFF, Senior Judge.

STATEMENT OF THE CASE

Appellants-Defendants Reginald Wright, Sr. and Teresa Jones (collectively "Parents") appeal from the trial court's order granting summary judgment in favor of Appellee Plaintiff American States Insurance Co. ("ASI").

We affirm.

ISSUE

The following restated issue is presented in this appeal: whether the trial court properly held that the exclusion for claims resulting from vehicular accidents contained in ASI's policy with its insured, Nurseryland Foundation, Inc. ("Nurseryland"), removed any duty to defend or indemnify Nurseryland for liability alleged by Parents against Nurseryland.

FACTS AND PROCEDURAL HISTORY

On June 25, 1998, a van owned by Nurseryland, and operated by Nurseryland employee, Sherwood C. Harris ("Harris"), was involved in a collision. The Parents' two children, Reginald Wright, Jr. ("Reggie") and Joseph Wright ("Jo Jo"), were occupants of the van at the time of the collision. Reggie was injured in the accident, and Jo Jo died as a result of his injuries. The Parents sued Nurseryland and Harris, among others, alleging a breach on Nurseryland's part of its duty to the Parents, Reggie and Jo Jo, and detailing their allegations of negligence on Nurseryland and Harris' part.

Nurseryland had purchased a commercial general liability insurance policy from ASI. On March 24, 1999, ASI initiated the instant declaratory judgment action asking the trial court to determine whether ASI had a duty to indemnify or defend Nurseryland in the action brought by the Parents.¹ On December 23, 1999, ASI filed its motion for summary judgment. The Parents filed a cross-motion for summary judgment on January 24, 2000. On September 29, 2000, the trial court granted ASI's motion and denied the Parents' motion. On October 30, 2000, the Parents filed a Motion to Correct Error. On November 30, 2000, the trial court denied the Parents' motion. This appeal ensued.

DISCUSSION AND DECISION

STANDARD OF REVIEW

Upon review of an order entering summary judgment, this court applies the same standard as the trial court. Burkett v. American Family Ins. Group, 737 N.E.2d 447, 451 (Ind.Ct.App.2000). Summary judgment is appropriate where the evidentiary matter designated to the trial court shows both that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Id. at 451-52. We will affirm on appeal a trial court's order granting summary judgment if it is sustainable under any theory or basis found in the evidentiary matter designated to the trial court. Id. at 452. Additionally, when material facts are not in dispute, our review is limited to the determination of whether the trial court correctly applied the law to the undisputed facts.

When the material facts are undisputed with regard to a motion for summary judgment and the question presented is a pure question of law, we review the matter de novo. Id. Accordingly, because the interpretation of a contract is a matter of law, cases involving the interpretation of insurance contracts are particularly appropriate for summary judgment. Id.

Moreover, provisions of insurance contracts are subject to the same rules of construction as other contracts. Id. We interpret an insurance policy with the goal of ascertaining and enforcing the parties' intent as revealed by the insurance contract. Id. In accomplishing that goal we must construe the insurance policy as a whole, rather than considering individual words, phrases, or paragraphs. Id. If the contract language is clear and unambiguous, it should be given its plain and ordinary meaning. Id.

Additionally, we must accept an interpretation of the contract language that harmonizes the provision rather than one which supports a conflicting version of the provisions. Id. Policy terms are interpreted from the perspective of an ordinary policyholder of average intelligence. Id. If reasonably intelligent persons honestly may differ as to the meaning of the policy language, the policy is ambiguous. Id. However, an ambiguity does not exist merely because the parties proffer differing interpretations of the policy language. Id.

In her order granting ASI's motion for summary judgment and denying the Parents' cross-motion for summary judgment, the trial judge construed the insurance policy at issue from a neutral stance. (Appellant's App. at 307-08). The Parents argue that the trial court erred and should have construed the policy from a stance favoring coverage. ASI contends that the trial court used the correct standard.

We previously have held that the rule requiring a court to construe a policy in favor of coverage applied only in disputes between the insurer and the insured. See id. at 453. The factor distinguishing cases in which courts apply a neutral stance from cases in which courts construe the policy language strictly against the insurer appears to be that the party that was seeking to benefit from a particular interpretation of the insurance contract was not a party to the contract. Id.

This matter clearly involves a dispute between an insurer and the Parents, who were not party to the insurance contract. Therefore, the trial court was correct in choosing to interpret the policy language from a neutral stance.

ASI'S AUTO-USE EXCLUSION

At issue in the present case is the language contained in the policy Nurseryland purchased from ASI. Those provisions read as follows:

SECTION I—COVERAGES

COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIMIT

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any suit seeking damages for "bodily injury" or "property damage" to which this insurance does not apply ...

* * *

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; and

(2) The "bodily injury" or "property damage" occurs during the policy period.

c. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury".

2. 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 or unloading".

* * *

(Appellant's App. 250-52).

SECTION V—DEFINITIONS

* * *

4. "Coverage territory" means:

a. The United States of America (including its territories and possessions), Puerto Rico and Canada;

* * *

12. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

(Appellant's App. 260-262).

In New Hampshire Insurance Company v. Jefferson Insurance Company of New York, 213 A.D.2d 325, 327, 624 N.Y.S.2d 392 (N.Y.App.Div.1995), the supreme court of New York found that an exclusion clause nearly identical to the exclusion clause in the case at bar was clear and unambiguous. Likewise, the supreme court of Colorado, in a negligent entrustment case, found that an exclusion clause using similar language was not ambiguous and construed the clause according to its ordinary meaning to exclude coverage. See Northern Insurance Company of New York v. Ekstrom, 784 P.2d 320, 324 (Colo. 1989)

. In Southern Adjustment Services, Inc. v. American Bankers Insurance Company of Florida, 723 So.2d 285, 286-86 (Fla.Dist.Ct.App.1999), the Florida district court of appeal examined an exclusion clause similarly worded to the clause in the case at bar and found that the policy clearly excluded coverage for accidents arising out of the operation of an automobile.

We are persuaded by these cases and hold that the exclusion clause in question is not ambiguous. Since the exclusion is unambiguous it should be given its plain and ordinary meaning. Meridian Mutual Ins. Co. v. Auto-Owners Ins. Co., 698 N.E.2d 770, 773 (Ind.1998). Therefore, it is unnecessary to invoke other rules of insurance contract construction. Pennington v. American Family Ins. Group, 626 N.E.2d 461, 463-64 (Ind.App.1993). The only issue for review is the application of the insurance contract terms to the undisputed facts. Id. at 465. Further, an unambiguous exclusionary clause is ordinarily entitled to enforcement. See American Family Life Assur. Co. v. Russell, 700 N.E.2d 1174, 1177 (Ind.Ct.App.1998)

.

The majority of the allegations in the Parents' complaint clearly focus on the use of Nurseryland's van and the injuries Reggie and Jo Jo sustained from the accident. In fact, the Parents appear to concede that many of their claims, as they relate to the use of an automobile, are excluded by Nurseryland's policy with ASI. (Appellant's Br. at 7). In Franz v. State Farm Fire & Cas., Co., 754 N.E.2d 978, 980-81(Ind.Ct.App.2001), a panel of this court determined that an identically worded clause excluded coverage for bodily injury sustained during a bus pulling contest because the bus was being "used" for purposes of the insurance policy's exclusion. We hold that exclusion clause 2g of ASI's policy excludes...