May 2024

Pious Trans, Inc. v. Certain Underwriters at Lloyd’s London

Court of Appeals of Indiana.

PIOUS TRANS, INC., Gagandeep Singh, and Yadwinder Singh, Appellants-Plaintiffs

CERTAIN UNDERWRITERS AT LLOYD’S LONDON, Appellees-Defendants

Court of Appeals Case No. 23A-PL-3044

Filed April 22, 2024

Appeal from the Hancock Circuit Court, The Honorable Cody B. Coombs, Magistrate, Trial Court Cause No. 30C01-2206-PL-859

Attorneys and Law Firms

Attorneys for Appellants: Craig C. Siebe, Jonathan L. Albright, Jr., Nickloy, Albright & Gordon LLP, Noblesville, Indiana

Attorneys for Appellees Certain Underwriters at Lloyd’s, London: Edward M. O’Brien, Katherine E. Trapp, Wilson Elser Moskowitz Edelman & Dicker LLP, Louisville, Kentucky, Edward A. DeVries, Philip G. Rizzo, Wilson Elser Moskowitz Edelman & Dicker LLP, Merrillville, Indiana

Bradford, Judge.

Case Summary

*1 [1] In July of 2020, Pious Trans, Inc., which is owned and operated by Gagandeep Singh, hired Yadwinder Singh (“Singh”), who had been issued a New York Class A commercial driver’s license (“CDL”) approximately sixteen months previously. In December of 2020, Certain Underwriters at Lloyd’s, London (“Underwriters”), issued a physical-damage insurance policy to Pious (“the Policy”). In April of 2021, Pious added Singh and a tractor–trailer with a gross weight of over 26,001 pounds (“the Freightliner”) to their Policy coverage. In August of 2023, Singh was operating the Freightliner and was involved in a collision with another tractor–trailer. After Underwriters denied Pious’s claim arising from the collision, Pious, Gagandeep, and Singh (“Appellants”) sued the other driver for negligence and Underwriters and Pious’s insurance agent for breach of contract and bad-faith denial of their claim. Underwriters moved for summary judgment on the questions of coverage and bad faith, which motion the trial court granted. We affirm.

Facts and Procedural History

[2] On July 6, 2020, Pious hired Singh, who held a Class A CDL (issued to him by New York on February 22, 2019) as a driver. Singh’s Class A CDL permitted him to operate any motor vehicle or combination of vehicles, including tractor–trailers. On December 10, 2020, Underwriters issued the Policy to Pious, which included a “Driver Criteria Conditions Endorsement” that provides, in part, as follows:

This Insurance shall not indemnify the Insured for loss or damage to any Automobile as insured by and otherwise recoverable under this Policy unless the Automobile is driven or operated by or under the care, custody or control by a driver who at inception of this Policy or at the date of hire, whichever is the later, provides documented evidence of an MVR^[¹^] not more than 60 days old or not older than the date of loss if the driver is involved in a claim showing that they:

[….]

2. Have a minimum two (2) years (twenty-four (24) consecutive months) of Commercial Driver’s License experience, at the time of policy inception or date of hire, whichever is the later, driving similar equipment to that insured under this Policy.

Appellants’ App. Vol. II p. 53 (emphasis in original). On April 23, 2021, Pious added the Freightliner as a scheduled vehicle and Singh as a scheduled driver but incorrectly listed his hire date as April 1, 2021, instead of July 6, 2020.

[3] On August 3, 2021, Singh was stopped in traffic on Interstate 70 in Greenfield when he was struck by a tractor–trailer driven by Nigusie Melaku. After filing and withdrawing an initial claim with Underwriters, Pious reopened the matter and, on February 7, 2022, the Littleton Group (on behalf of Underwriters) issued a denial letter to Pious, which indicated that there was no coverage because Singh had not had the required two years of CDL experience at the time the Policy had been issued.²

*2 [4] On June 28, 2022, Appellants sued Melaku for negligence and Pious’s insurance agent and Underwriters for breach of contract and bad-faith denial of their claim. Underwriters moved for summary judgment on the coverage claim, arguing that the undisputed facts established that the loss was not covered because Singh had not met the Policy’s driver-qualification requirements. Appellants responded that Singh had satisfied the Policy’s experience requirement on the bases that (1) a New-York-issued Class E operator’s license, which he had held since 2002, was equivalent to a CDL and (2) Singh had operated vehicles similar to those insured by the Policy. Alternatively, Appellants argued the Policy’s terms (specifically, “Commercial Driver’s License” and “similar equipment”) were ambiguous and should be construed in favor of coverage. Appellants also alleged that the evidence established that Underwriters had acted in bad faith as a matter of law. On November 13, 2023, the trial court entered summary judgment in Underwriters’ favor.

Discussion

[5] When reviewing the grant or denial of a summary judgment motion, we apply the same standard as the trial court. Merchs. Nat’l Bank v. Simrell’s Sports Bar & Grill, Inc., 741 N.E.2d 383, 386 (Ind. Ct. App. 2000). Summary judgment is appropriate only where the evidence shows that there is no genuine issue of material fact, and the moving party is entitled to a judgment as a matter of law. Id.; Ind. Trial Rule 56(C). To prevail on a motion for summary judgment, a party must demonstrate that the undisputed material facts negate at least one element of the other party’s claim. Merchs. Nat’l Bank, 741 N.E.2d at 386. Once the moving party has met this burden with a prima facie showing, the burden shifts to the nonmoving party to establish that a genuine issue does in fact exist. Id. The party appealing the summary judgment bears the burden of persuading us that the trial court erred. Id. “In determining whether there is a genuine issue of material fact precluding summary judgment, all doubts must be resolved against the moving party and the facts set forth by the party opposing the motion must be accepted as true.” Lawlis v. Kightlinger & Gray, 562 N.E.2d 435, 438–39 (Ind. Ct. App. 1990), trans. denied.

I. Coverage

[6] Resolution of Appellants’ coverage claim requires us to examine the provisions of the Policy. Generally, insurance contract provisions are subject to the same rules of interpretation and construction as are other contract terms. Sharp v. Ind. Union Mut. Ins. Co., 526 N.E.2d 237, 239 (Ind. Ct. App. 1988) (internal citation omitted), trans. denied. If a contract is clear and unambiguous, the language of the contract must be given its plain meaning. Id. (internal citation omitted). Ambiguous terms in an insurance policy, however, will be construed against the insurer, particularly where a policy excludes coverage. Hoosier Ins. Co. v. Audiology Found. of Am., 745 N.E.2d 300, 307 (Ind. Ct. App. 2001), trans. denied. A contractual term is not rendered ambiguous by the mere fact that the parties differ as to its meaning, Haag v. Castro, 959 N.E.2d 819, 821–22 (Ind. 2012), and the fact “that a policy does not define a term does not necessarily make the term ambiguous.” Id. at 821. Rather, insurance policy provisions are ambiguous only if they are “susceptible to more than one reasonable interpretation.” Id. (quoting Holiday Hosp. Franchising, Inc. v. AMCO Ins. Co., 983 N.E.2d 574, 578 (Ind. 2013)) (emphasis added by Haag).

[7] As mentioned, in order for Singh’s accident to be covered by the Policy, it would have to be established that he had had “a minimum two (2) years […] of Commercial Driver’s License experience, at the time of policy inception or date of hire, whichever is the later, driving similar equipment to that insured under this Policy.” Appellants’ App. Vol. III p. 63. Appellants’ first argument is that the actual inception date of the Policy was April 23, 2021, or the date on which Singh was added by Endorsement 31. Consequently, the argument goes, Singh had more than two years of CDL experience at the inception of the Policy, as he had received his CDL in February of 2019. As Underwriters point out, however, Appellants are making this argument for the first time on appeal and have therefore waived it for appellate consideration. Issues not raised before the trial court on summary judgment cannot be argued for the first time on appeal and are waived. Huntington v. Riggs, 862 N.E.2d 1263, 1269 (Ind. Ct. App. 2007), trans. denied.

*3 [8] Appellants also argue that (1) the Policy term “commercial” is ambiguous and should be construed in favor of coverage and (2) Singh’s experience with his New-York-issued Class E operator’s license qualifies as CDL experience pursuant to the Policy because it allowed him to operate a vehicle for commercial purposes. As an initial matter, we note that Appellants argued below that the phrase “commercial driver’s license” was ambiguous but argue on appeal only that the word “commercial” is. Appellants would have us take the word “commercial” out of its relevant context, but because the term “commercial driver’s license” is a term of art with a specific statutory definition, we decline the invitation.

[9] We conclude that the Policy term “commercial,” specifically as used in the term “commercial driver’s license,” is not ambiguous and that a New-York-issued Class E operator’s license is in no way equivalent to a CDL. While the Policy does not define the word “commercial” or the term “CDL,” “CDL” has a very specific meaning pursuant to New York and federal law. CDLs, far from authorizing an individual to operate any vehicle for any commercial purpose, do nothing more or less than authorize individuals to operate motor vehicles that belong to one of three classes: (1) combination vehicles weighing at least 26,001 pounds (e.g., tractor–trailers), (2) straight vehicles weighing at least 26,001 pounds, and (3) vehicles designed to transport sixteen or more passengers or hazardous materials. 49 C.F.R. § 383.5, see also N.Y. Veh. & Traf. Law § 501-a(1) (providing that a CDL is “valid to operate any motor vehicle or combination of vehicles” with the exception of certain motorcycles).³

[10] It stands to reason that a Class E operator’s license would also have to allow an individual to operate vehicles belonging to at least one of these classes—at the very least—if it is to be considered equivalent to a CDL. As it happens, however, New York’s Class E operator’s license specifically excludes all of these types of vehicles. See N.Y. Veh. & Traf. Law § 501(2)(a)(iv) & (v) (providing that a Class E operator’s license does not permit its holder to operate any vehicle (1) that weighs over 26,001 pounds, (2) is used to transport more than fourteen persons for hire, or (3) for which a hazardous materials endorsement is required). As used in the Policy term “CDL,” the word “commercial” is not ambiguous, and Appellants’ suggested interpretation that holding a Class E operator’s license qualifies as CDL experience pursuant to the Policy is not reasonable. The trial court correctly concluded that Singh had not satisfied the Policy’s experience requirements.⁴

II. Bad Faith

[11] Appellants also contend that Underwriters denied their claim in bad faith. Indiana law has long recognized a legal duty implied in all insurance contracts that the insurer deal in good faith with its insured. Erie Ins. Exch. v. Craighead, 192 N.E.3d 195, 204 (Ind. Ct. App. 2022) (citing Hoosier Ins., 745 N.E.2d at 310), trans. denied. The first essential element of any bad-faith claim against an insurer, however, is breach of the insurance contract. See Knight v. Ind. Ins. Co., 871 N.E.2d 357, 362 (Ind. Ct. App. 2007) (“The trial court properly concluded that the Insurer’s denial of coverage did not constitute a breach of the contract and thus there was no viable bad faith or punitive damages claim.”). Because we have concluded that Underwriters did not breach the Policy in denying coverage, Appellants’ bad-faith claim must also fail.

*4 [12] We affirm the judgment of the trial court.

Altice, C.J., and Felix, J., concur.

All Citations

— N.E.3d —-, 2024 WL 1710171

Footnotes

An MVR is a “motor vehicle record.”
While the claim was also denied on the basis that Pious had misrepresented Singh’s hire date in violation of the Policy, Underwriters did not raise this in the trial court as a ground for the entry of summary judgment.
Indeed, the statutory definitions of CDLs make no mention of commercial use at all, only the characteristics of the vehicles covered.
Because we have concluded that Singh had not had the required two years of CDL experience when Pious hired him, we need not address Appellants’ argument that alleged ambiguity in the phrase “driving similar equipment to that insured under this Policy” requires us to find coverage. Appellants’ App. Vol. III p. 63.

End of Document

Harco Nat’l Ins. Co. v. Knowles

Court of Appeals of Georgia.

HARCO NATIONAL INSURANCE COMPANY

ERIC KNOWLES, INC. et al. (two cases).

A23A1263, A23A1264

March 7, 2024

Review Denied March 26, 2024

Synopsis

Background: Insurer filed suit against insured, insured’s workers’ compensation carrier, insured’s employee and employee’s supervisor, seeking declaratory judgment that there was no coverage for employee’s injuries under automobile and commercial general liability (CGL) policies. In Case No. A23A1263, the Superior Court, Charlton County, Andrew C. Spivey, J., denied insurer’s motion for summary judgment on coverage issue, and in Case No. A23A1264, the Superior Court, Spivey, J., declined to enforce settlement agreement that employee’s injuries were compensable under Workers’ Compensation Act. Insurer’s applications for interlocutory appeal from both orders were granted.

Holdings: The Court of Appeals, Doyle, P.J., held that:

injuries sustained by employee arose out of employment, and thus were compensable under Workers’ Compensation Act, and

injuries fell within exclusions from coverage, under CGL and automobile policies, for bodily injury to employee of insured “arising out of and in course of employment” and for bodily injury compensable under workers’ compensation law.

Judgment in No. A23A1263 reversed; appeal from judgment No. A23A1264 dismissed as moot.

Attorneys and Law Firms

Kenan G. Loomis, Atlanta, for Appellant.

Hillary Ann Shawkat, for Appellee.

Opinion

Doyle, Presiding Judge.

*1 These related appeals arise out of a declaratory judgment action filed by Harco National Insurance Company against Eric Knowles, Inc. (“EKI”), Forestry Mutual Insurance Company (EKI’s workers’ compensation insurance carrier), Walter Knowles, and Robert Popwell. Harco brought the action seeking a judgment declaring that commercial general liability and auto insurance policies it issued to EKI did not cover liability for injuries suffered by Popwell at a job site while he was working for EKI in 2018. In Case No. A23A1263, Harco contends that the trial court erred by denying its motion for summary judgment (as amended) based on policy language excluding coverage for injuries to EKI employees “arising out of and in the course of [their] employment”with EKI. In Case No. A23A1264, Harco contends that the trial court erred by failing to enforce an alleged settlement agreement in which EKI, Forestry, and Popwell purportedly agreed that Popwell’s injuries arose out of and in the course of his employment with EKI. Because we conclude that the trial court erred by denying Harco’s summary judgment motion in Case No. A23A1263, we reverse the judgment in that case; Case No. A23A1264 is dismissed as moot.

Case No. A23A1263

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.¹

The undisputed record shows that in the spring of 2018, Popwell began working for EKI as a “cut down man” in a commercial logging operation. His job was to operate a machine called a feller buncher to cut trees in a controlled manner so that they could be loaded onto trucks. He reported to work when and where directed by EKI, and he was paid every week based on the weight of the wood he cut. Walter Knowles was Popwell’s supervisor.

With respect to the details of the accident, Popwell deposed that on May 3, 2018, he was working at a wooded job site along with Knowles and other personnel. Knowles determined the hours Popwell worked, which fluctuated depending on when they finished loading trailers with logs. According to Popwell’s deposition, around mid-day, he stopped work to eat lunch. He got in his personal vehicle to drive to a nearby store that sold fried chicken, and as he was leaving the logging area on a dirt road, he soon noticed that Knowles was operating a skidder and pushing a loaded truck that needed extra traction to navigate the unpaved road. Popwell put his vehicle in park (facing the skidder) to wait for the operation to finish; when Knowles got the loaded truck moving sufficiently, he turned the skidder around and headed in Popwell’s direction. As Popwell remained stationary in his vehicle, Knowles accidentally drove the skidder into and onto Popwell’s vehicle, causing multiple injuries to him.

*2 Popwell initially received workers’ compensation payments from Forestry (EKI’s carrier) for a few weeks, but thereafter, a dispute arose regarding workers’ compensation coverage, and Popwell sued EKI and Walter Knowles. To get clarity as to its coverage obligations, Harco filed the present action seeking: a declaration that Popwell was acting within the scope of his employment at the time he was injured, that his injuries are compensable under the Workers’ Compensation Act (“the WCA”),² and that Harco’s WCA exclusions in the policies issued to EKI preclude coverage.

During the pendency of Harco’s suit, EKI and Forestry initially agreed that Popwell’s injuries were compensable under the WCA and controlling precedent.³ Harco moved for summary judgment as to this question, and EKI and Forestry did not initially oppose it.⁴ But after an affidavit from Knowles emerged in related litigation, EKI and Forestry changed course and opposed Harco’s motion for summary judgment, relying on that affidavit. Knowles’s August 2020 affidavit averred as follows:

On May 8, 2018, I was employed as a crew leader by Eric Knowles, Inc. Robert Popwell was assigned to my crew and was under my supervision.

On May 8, 2018, around noon, Robert Popwell and I ate lunch together in a service truck as I drove around the property where we were clearing timber.

The drive lasted at least 15 minutes. During the drive, I instructed Robert Popwell on his assignment for the day. We looked at a GPS map together and discussed the location where he was to be working.

I drove to the location where Robert Popwell was to be working and showed him exactly where he was to be.

I then returned Robert Popwell to where his feller buncher was parked. He got out of my truck at that location. I instructed Robert Popwell to return to the area shown to him [and] to get that brow cut out because the other crew members would be completing their assigned tasks and would come to his area to gather the trees he was to cut.

I next saw Robert Popwell a few minutes later, after the skidder I was driving was in a collision with the vehicle he was driving.

Robert Popwell had abandoned his assigned task without my permission. Such an abandonment would normally result in termination of employment.

Following a hearing, the trial court denied Harco’s amended summary judgment motion and granted a certificate of immediate review. This Court then granted Harco’s application for interlocutory review.

1. Harco contends that the trial court should have granted its summary judgment motion because the record shows that Popwell’s injury arose out of and in the course of his employment with EKI, so any liability was precluded by policy language excluding coverage for workplace injuries. We agree.

Harco’s commercial general liability and automobile policies contain nearly identical language: “This insurance does not apply to: … ‘bodily injury’ to … [a]n ‘employee’ of the insured arising out of and in the course of … employment by the insured.”⁵ The policies further explicitly exclude coverage for any obligation under workers’ compensation law.

*3 In the workplace injury context, Georgia case law is clear that general liability insurance contracts may, as was done here, exclude coverage for injuries sustained on the job that are covered by the WCA.⁶ The question before us is whether there is a genuine issue of fact as to whether Popwell’s injury was such an injury.

The Supreme Court of Georgia has clarified that even though eating lunch is not the actual work an employee is hired to do, an ordinary mid-day lunch break on the employer’s premises is still considered to be “in the course of” employment for purposes of the WCA.⁷ This is because eating lunch at the workplace is an activity incidental to work and “reasonably necessary to sustain [an employee’s] comfort at work.”⁸

Furthermore, eating lunch during a break on the premises, or traversing to and from the work area for lunch, is considered to be “arising out of” employment when

the causative danger [is] incidental to the character of the employment, and not independent of the relation of master and servant. The accident must be one resulting from a risk reasonably incident to the employment. And a risk is incident to the employment when it belongs to, or is connected with, what a workman has to do in fulfilling his contract of service.⁹

Therefore, if an employee slips and falls on a wet surface, for example, when traversing into or out of an employee break room, “[i]t logically follows that her injury was causally connected to the conditions under which she worked, and her injury, therefore, ‘arose out of’ her employment.”¹⁰

Here, Popwell deposed that he was sitting in his vehicle in the process of leaving the job site to go to lunch when he was hit by the skidder driven by his supervisor during logging operations. Popwell had not yet left the logging area but was stopped and waiting for a stuck logging truck to be pushed along the roadway by the skidder. Thus, it is undisputed that Popwell’s injury was caused by heavy equipment returning from a task that was part of the timber harvest operation. Further, on the date of the accident, the officer at the scene noted that Knowles stated he was unsure why Popwell was driving his private vehicle at the time of the collision. Knowles’s subsequent affidavit does not dispute Popwell’s assertions that he was in his truck at the job site as part of his lunch break, regardless of whether he had eaten something with Knowles already. Therefore, Knowles’s assertion that Popwell had “abandoned” his assigned task at most shows that he did not immediately perform the task when assigned. It does not change Popwell’s legal status with respect to whether he had abandoned the course of his employment at the time of the accident.¹¹ He had not.¹²

*4 Based on this record, even considering Knowles’s affidavit, the undisputed evidence shows that at the time Knowles ran into Popwell’s vehicle, Popwell was still in the logging area on his lunch break and was not otherwise engaged in a personal activity outside the course of his employment. The collision with a logging skidder at that time and in that location was a risk “reasonably incident” to Popwell’s employment in the logging operation. Therefore, the injuries sustained by Popwell fell within the Harco policy exclusion for “ ‘bodily injury’ to … [a]n ‘employee’ of the insured arising out of and in the course of … employment by the insured,” and the trial court erred by denying Harco’s amended summary judgment motion.

2. Harco’s remaining enumeration — challenging whether the Knowles affidavit is properly considered — is moot.

Case No. A23A1264

3. Harco also challenges the trial court’s denial of its motion to enforce an alleged agreement that Popwell’s injury arose out of and in the course of his employment with EKI. In light of our holding in Case No. A23A1263, this case is dismissed as moot.

Judgment reversed in Case No. A23A1263; Case No. A23A1264 dismissed.

Gobeil, J., and Senior Judge C. Andrew Fuller concur.

All Citations

— S.E.2d —-, 2024 WL 979231

Footnotes

(Citation omitted.) Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1), 486 S.E.2d 684 (1997).
OCGA § 34-9-1 et seq.
See generally Frett v. State Farm Employee Workers’ Compensation, 309 Ga. 44, 844 S.E.2d 749 (2020) (overruling Ocean Acc. & Guarantee Corp. v. Farr, 180 Ga. 266, 178 S.E. 728 (1935) and holding that an injury occurred “in the course of” and arose “out of” employment when an employee slipped and fell in the break room during her lunch break).
During this process, Harco amended its motion for summary judgment to remove any request for a declaration specifically ruling on Forestry’s coverage obligations to Popwell. It maintained its request for rulings declaring that the WCA was Popwell’s exclusive remedy, Harco had no duty to defend underlying claims brought by Popwell, and Harco’s WCA policy exclusions precluded coverage for Popwell’s claims against the insured.
On appeal, there is no genuine dispute that Popwell was an “employee” and that he suffered “bodily injury.”
See generally Saxon v. Starr Indem. & Liability Co., 339 Ga. App. 495, 498 (2), 793 S.E.2d 659 (2016).
See Frett, 309 Ga. at 48-49 (2) (a), 844 S.E.2d 749 (“When analyzing the ‘in the course of’ prerequisite, courts generally focus on the nature of the employee’s activity at the time of the injury, not whether she was paid for it or was free to do something else.”), disapproving of language in Ocean Accident & Guarantee Corp., 180 Ga. at 270-271, 178 S.E. 728, stating that an employee’s “preparation for lunch and his eating lunch was his individual affair. It was not a part of his employer’s work.”
Frett, 309 Ga. at 48 (2) (a), 844 S.E.2d 749.
(Punctuation omitted.) Frett, 309 Ga. at 50, 844 S.E.2d 749, quoting Thornton v. Hartford Acc. & Indem. Co., 198 Ga. 786, 792-793, 32 S.E.2d 816 (1945).
Frett, 309 Ga. at 50, 844 S.E.2d 749.
See Odom v. Franklin, 368 Ga. App. 246, 249, 889 S.E.2d 405 (2023) (holding that an employee was still in the course of his employment and not on a personal detour even though he was violating company policy by being late to work). See also Frett, 309 Ga. at 49 (2) (a), 844 S.E.2d 749 (deciding that an employee on her lunch break in the break room was “in the course of” her employment was “not … a close case”).
There is no evidence, for example, that Popwell had been terminated or that he had quit his job.

End of Document