United States Court of Appeals, Fifth Circuit.

WESCO INSURANCE COMPANY, Plaintiff—Appellee,

v.

Edward Eugene RICH, as wrongful death beneficiary of LaDonna C. Rich, Deceased; Edward Shayne Rich, as wrongful death beneficiary of LaDonna C. Rich, Deceased, Defendants—Appellants.

No. 22-60283

FILED January 12, 2023

Appeal from the United States District Court for the Southern District of Mississippi, USDC No. 1:20-CV-305, Louis Guirola, Jr., U.S. District Judge

Attorneys and Law Firms

Jonathan B. Womack, Taylor, Wellons, Politz & Duhe, A.P.L.C., New Orleans, LA, Benjamin Lyle Robinson, Esq., Taylor, Wellons, Politz & Duhe, A.P.L.C., Madison, MS, for Plaintiff—Appellee.

Ransom P. Jones, III, Leakesville, MS, for Defendants—Appellants.

Before Stewart, Willett, and Oldham, Circuit Judges.

Opinion

Per Curiam:^*

*1 The parties here—an insurer and tort claimants—dispute the insurer’s maximum theoretical liability under a surety agreement. By separate agreement, the insurer has committed that it “will pay” whatever amount we identify as the surety agreement’s upper limit. We conclude that the surety agreement caps liability at $750,000, and we therefore AFFIRM.

I

This appeal concerns an “MCS-90” surety endorsement that Wesco Insurance Company included with a liability-insurance policy that it issued to Sam Freight Solutions, LLC. The policy provides up to $1,000,000 in insurance coverage for a specific “covered auto,” a 2012 Volvo Tractor (and certain trailers attached thereto). The MCS-90 surety endorsement, on the other hand, is a policy endorsement by which Wesco assumed up to “$750,000” in liability for “any final judgment recovered against [Sam Freight] for public liability resulting from negligence in the operation” of any vehicle. The MCS-90 endorsement is not insurance. Instead, it “creates a suretyship, which obligates an insurer to pay certain judgments against the insured …, even though the insurance contract would have otherwise excluded coverage.” Canal Ins. Co. v. Coleman, 625 F.3d 244, 247 (5th Cir. 2010); see 49 C.F.R. §§ 387.3; 387.7.

On July 29, 2018, LaDonna Rich died in an automobile collision involving a 2010 Freightliner. The Defendants–Appellants are her beneficiaries, and they filed a wrongful-death suit against Sam Freight in Mississippi state court. The insurance policy (as distinct from the MCS-90 surety endorsement) that Sam Freight purchased from Wesco does not name the 2010 Freightliner as a covered auto. Therefore, that policy does not independently offer coverage for the collision.

While the state-court action was pending, Wesco filed this federal diversity suit seeking declaratory relief against the Beneficiaries (and others). The parties and issues in the federal proceeding narrowed until only Wesco and the Beneficiaries remained, with just one dispute between them: “the amount of coverage that the MCS-90 endorsement would provide in the event of a judgment against Sam Freight.” The Beneficiaries argued that the MCS-90 endorsement would provide up to $1,000,000 in coverage, while Wesco argued that $750,000 would be the maximum available amount. Both parties sought summary judgment on that sole remaining issue.

The district court granted summary judgment for Wesco, declaring that “[t]he MCS-90 endorsement unambiguously provides that Wesco shall not be liable for amounts in excess of $750,000.” The district court denied the Beneficiaries’ motions for reconsideration. This appeal timely followed. While this appeal was pending, the parties reached a settlement agreement under which Wesco agreed that it “will pay” whichever of the two amounts we determine the surety agreement to require.

II

A

As an initial matter, we have jurisdiction only if this case presents an actual “case or controversy.” U.S. Const. art. III; see DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 340 (2006). The “case or controversy” requirement prevents us from “advising what the law would be upon a hypothetical state of facts.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (internal quotation marks omitted). Ripeness is one aspect of this requirement. See generally Abbott Labs. v. Gardner, 387 U.S. 136 (1967). A declaratory action is ripe if “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, 549 U.S. at 127 (internal quotation marks omitted). “Whether particular facts are sufficiently immediate to establish an actual controversy is a question that must be addressed on a case-by-case basis.” Orix Credit All., Inc. v. Wolfe, 212 F.3d 891, 896 (5th Cir. 2000).

*2 Wesco and the Beneficiaries have adverse legal interests in a substantial controversy that amounts to $250,000 (the difference between $750,000 and $1,000,000). Resolving that controversy involves only the “purely legal” interpretation of the policy and the endorsement; no “further factual development is required.” New Orleans Pub. Serv., Inc. v. Council of New Orleans, 833 F.2d 583, 587 (5th Cir. 1987). The controversy is real and immediate because Wesco has agreed to pay whatever sum we determine that the surety endorsement requires. At present, then, this case is ripe. That being true, we need not consider whether the case was ripe when the district court issued its judgment. See DM Arbor Court, Ltd. v. City of Houston, 988 F.3d 215, 219–20 (5th Cir. 2021).

B

The MCS-90 is a “federally mandated” endorsement. Canal Ins. Co., 625 F.3d at 246. “The operation and effect of a federally mandated endorsement is a matter of federal law.” Lincoln Gen. Ins. Co. v. De La Luz Garcia, 501 F.3d 436, 439 (5th Cir. 2007); see Minter v. Great Am. Ins. Co. of New York, 423 F.3d 460, 470 (5th Cir. 2005) (“Interpretation of th[e MCS-90] endorsement is governed by federal law.”). Our analysis focuses on “the plain language of the endorsement.” Canal Ins. Co., 625 F.3d at 250. To the extent that Mississippi substantive law governs any residual questions, such as those regarding only the policy, “construction of an insurance policy [is] a question of law, which we review de novo.” State Farm Mut. Auto. Ins. Co. v. LogistiCare Sols., LLC, 751 F.3d 684, 688 (5th Cir. 2014) (emphasis omitted) (quoting Farmland Mut. Ins. Co. v. Scruggs, 886 So.2d 714, 717 (Miss. 2004)).

The insurance policy offers “coverage” of up to “$1,000,000 per accident,” but only for “covered autos.” The parties agree that the 2010 Freightliner is not a “covered auto” under the insurance policy’s definition of that term.

By contrast, the MCS-90 endorsement makes Wesco “liable,” as a surety, for up to “$750,000 for each accident.” The endorsement applies “regardless of whether or not each motor vehicle is specifically described in the policy.” The MCS-90 consists of a fill-in-the-blank form that provides spaces for the parties to identify, among other things: the insurer’s name, the insuree for whom the insurer is acting as surety, and the policy number that the endorsement supplements. There is also a blank space for filling in the insurer’s maximum suretyship liability. In this case, the following amount appears in that blank space: “[T]he company shall not be liable for amounts in excess of $750,000 for each accident.” Thus, according to the district court’s summary, Wesco agreed to provide $1 million in insurance coverage for Sam Freight’s covered autos, but only $750,000 in public liability coverage for all other vehicles.

The Beneficiaries disagree. According to them: “[T]he blank space is supposed to be filled in to reflect the amount of coverage that was purchased by the insured”—that is, $1,000,000, not $750,000. The Beneficiaries offer several overlapping arguments to establish that crucial premise. None succeed. The Beneficiaries begin by urging that “the $750,000.00 is a fiction that never existed” because “[t]he insurance company did not have the authority to unilaterally change the coverage.” This isn’t so much an argument as it is a restatement of the crucial premise. The number that appears in the blank space ($750,000) is a “change” only if the Beneficiaries are otherwise correct that the MCS-90 and the insurance policy must have identical coverage limits. The “unilateral[ ] change” argument might have force if that premise were correct, but the argument itself cannot prove the underlying premise.

*3 The Beneficiaries next posit a proof in our precedent. We have noted, for example, that the MCS-90 “accomplishes its purpose by reading out [of the insurance policy] only those clauses in the policy that would limit the ability of a third party victim to recover for his loss.” T.H.E. Ins. Co. v. Larsen Intermodal Servs., Inc., 242 F.3d 667, 673 (5th Cir. 2001). According to the Beneficiaries, this means that Wesco cannot “read[ ] out”—that is, replace—the policy limit with the surety limit. This argument, too, fails for circularity. If the surety endorsement is a separate agreement with a separate monetary limit, then both limits can coexist in separate amounts. The Beneficiaries’ offer a contrary premise—that the two limits must be in matching amounts. But once again, while the Beneficiaries’ argument does depend on that premise, it does not prove the premise.

At root, the Beneficiaries’ real argument is that the district court erred by “treat[ing] the insurance policy and the endorsement as if they were separate standalone documents.” We disagree. The MCS-90, for instance, contains the following language: “In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against [Sam Freight]….” This language sets up an unambiguous distinction between the policy (on one hand) and the endorsement (on the other). Likewise, the words “this endorsement” show that the liability limit described “herein” is the limit that appears in the endorsement, not the policy. Neither the policy nor the endorsement requires Wesco to provide suretyship liability in the exact same amount that it offers insurance coverage.

III

The MCS-90’s plain text limits Wesco’s suretyship liability to $750,000. We therefore AFFIRM.

All Citations

Not Reported in Fed. Rptr., 2023 WL 166418

End of Document

United States District Court, W.D. Missouri, Western Division.

BITCO GENERAL INSURANCE CORPORATION, Plaintiff and Counter-Defendant,

v.

Bruce SMITH, Defendant,

and

Clayton Hamlin and Chris White Construction, Defendants and Counter-Claimants.

No. 20-00961-CV-W-BP

|

Signed December 14, 2022

Attorneys and Law Firms

Adrian Phillip Sulser, Martin J. Buckley, Buckley & Buckley, St. Louis, MO, for Plaintiff and Counter-Defendant.

Andrew Jay Gelbach, Andrew J. Gelbach, P.C., Warrensburg, MO, for Defendant.

ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

BETH PHILLIPS, CHIEF JUDGE

*1 This case arises from a July 26, 2019, auto accident in which Clayton Hamlin, while driving a Peterbilt dump truck, (“the truck”), collided with a Freightliner truck driven by Bruce Smith. At the time, Hamlin was an independent contractor working for Chris White Construction, (“CWC”), which had been retained by KAT Excavation, (“KAT”), to haul rock. Smith filed suit against Hamlin in state court, and that suit is pending.

Plaintiff is an insurance company that had issued an insurance policy (“the Policy”) to KAT. In this separate case, Plaintiff seeks a declaration that it is not obligated to provide a defense or coverage to Hamlin or CWC for Smith’s injuries. (Doc. 18.) Hamlin and CWC have filed counterclaims seeking a declaration and damages, alleging the Policy provides them with coverage and a right to a defense. (Doc. 21; Doc. 22.)

In addition to providing coverage to KAT’s vehicles, the Policy extends coverage to “[a]nyone else while using with [KAT’s] permission a covered ‘auto’ you [KAT] hire or borrow.” (Emphasis supplied). Plaintiff seeks summary judgment, contending KAT did not hire or borrow the truck so it is not a covered auto under the Policy. It also argues that even if the truck is a covered auto under the Policy, KAT did not give Hamlin permission to use the truck, so Hamlin is not entitled to coverage. CWC and Hamlin oppose Plaintiff’s request for summary judgment and separately seek summary judgment, contending the terms “hire” and “permission” are both vague and broad enough to apply in these circumstances; Plaintiff opposes this motion. The Court has considered the parties’ arguments and concludes Plaintiff is entitled to summary judgment.

I. BACKGROUND

The Record establishes the following uncontroverted facts:¹ KAT was the general contractor on a project at the Skyhaven Airport (the “Airport”). The project included reconstructing a taxiway and runway, which required a significant amount of rock. KAT arranged for the rock to be supplied by E&S Quarry (“E&S”). KAT transported some of the rock from E&S to the Airport with its own trucks, driven by its own employees, but it did not have enough trucks to meet its needs. As it had in prior similar circumstances, KAT retained the services of trucking companies to augment its own transportation capabilities. Mike Long was KAT’s trucking supervisor, or “truck boss,” and he was responsible for contacting trucking companies on KAT’s behalf. One of several companies he contacted with respect to the Airport project was CWC.

*2 When Long contacted CWC, he spoke with Tanner White and asked if CWC had any available trucks. Tanner² advised a dump truck was available and agreed to have the truck haul rock from E&S to the Airport. There is no written agreement between KAT and CWC; the parties’ oral agreement called for CWC to be paid based on the amount of rock transported. CWC’s driver was to take the truck to E&S and indicate he was there to pick up rock for KAT’s Airport project, and E&S loaded the truck. The driver would then take the rock to the Airport where KAT employees (or subcontractors) would tell the driver where to dump the rock. The driver’s involvement in offloading the rock consisted of pushing a button to raise the bed of the truck, thereby dumping the rock in a location where it could be moved by a bulldozer operated by a KAT employee or subcontractor. Once the dump truck was unloaded, the driver could return to E&S and pick up another load of rock. The driver received a ticket from E&S for each load picked up; a copy of the ticket was used by E&S so it could invoice KAT for the rock, and another copy was used to document the tonnage transported so KAT could pay CWC.

Tanner arranged for Hamlin to drive CWC’s truck and conveyed Long’s/KAT’s instructions to him. KAT did not pay Hamlin, nor did it pay for fuel, maintenance, licensing, or insurance; these costs were paid by CWC. The oral agreement did not provide KAT with the right to approve the driver or inspect the truck; these subjects were simply not addressed in Tanner’s and Long’s conversations. The oral agreement did not call for CWC to provide the truck at specific times or for a certain number of trips, nor did it promise a certain amount of tonnage CWC could transport or otherwise guarantee a minimum payment. Generally, it was in both parties’ interest that CWC transport as much rock as possible: KAT needed the rock for the Airport project, and CWC’s compensation increased as the amount it transported increased. Similarly, no particular route was specified by KAT; CWC was motivated to utilize the most efficient route in order to maximize the amount of rock transported. Long only relayed to Tanner the hours E&S was open and where the rock was to be transported and did not specify the route the driver should take to travel between E&S and the Airport.

CWC was not the only trucking company Long retained. At various times there may have been as many as fifteen trucks from seven different companies involved in transporting rock from E&S to the Airport. All operated under the same arrangement described above: the trucking companies were paid based on the amount of rock they transported, and none were required to work a certain amount of time or transport a certain amount of rock.

The accident involving Hamlin and Smith occurred when Hamlin was returning to E&S from the Airport to pick up a third load of rock. The parties have provided some details about the accident, but they do not appear relevant to the issues before the Court. As indicated earlier, the Court must determine if there are undisputed facts in the Record establishing (1) whether KAT “hired” the truck and, if it did, (2) whether it gave Hamlin permission to drive it. These determinations depend on the meaning of the terms “hired” and “permission.” The Court resolves the parties’ arguments below.

II. DISCUSSION

A moving party is entitled to summary judgment on a claim only upon a showing that “there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” See generally Williams v. City of St. Louis, 783 F.2d 114, 115 (8th Cir. 1986). “[W]hile the materiality determination rests on the substantive law, it is the substantive law’s identification of which facts are critical and which facts are irrelevant that governs.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Wierman v. Casey’s Gen. Stores, 638 F.3d 984, 993 (8th Cir. 2011) (quotation omitted). In applying this standard, the Court must view the evidence in the light most favorable to the non-moving party, giving that party the benefit of all inferences that may be reasonably drawn from the evidence. E.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). A party opposing a motion for summary judgment may not simply deny the allegations but must point to evidence in the Record demonstrating the existence of a factual dispute. Fed. R. Civ. P. 56(c)(1); Conseco Life Ins. Co. v. Williams, 620 F.3d 902, 909-10 (8th Cir. 2010).

*3 The parties appear to agree that Missouri law governs this dispute, so the Court will apply Missouri law.³ “Under Missouri law, general rules of contract interpretation govern the interpretation of insurance policies. Policy terms are given the meaning which would be attached by an ordinary person of average understanding if purchasing insurance.” Westchester Surplus Lines Co. v. Interstate Underground Warehouse & Storage, Inc., 946 F.3d 1008, 1010 (8th Cir. 2020) (citations and quotations omitted). The Court’s task is to “determine[e] whether any ambiguity exists, which occurs when there is duplicity, indistinctness, or uncertainty in the meaning of the words used in the contract.” Vogt v. State Farm Life Ins. Co., 963 F.3d 753, 763 (8th Cir. 2020) (cleaned up). If there is no ambiguity, the policy will be enforced as it is written; if there is an ambiguity, it is construed against the insurer. Id.

The parties previously filed cross-motions for summary judgment, all of which were denied. In denying the motions, the Court identified the governing legal framework and held the parties had not addressed all the facts made relevant by that framework. (Doc. 56.) The parties then engaged in additional discovery, which has not only provided additional information but has also revealed that some of the facts previously believed to be true were incorrect. Much of the legal analysis set forth below repeats the Court’s prior discussion without attribution.

Missouri cases addressing the pertinent language do not provide any guidance in this case.⁴ However, in applying North Dakota law the Eighth Circuit has held that the word “hire” or “hired,” when used to modify the word “vehicle” or “auto,” is susceptible to several definitions. Kresse v. Home Ins. Co., 765 F.2d 753, 755 (8th Cir. 1985). In that case, Cass County, North Dakota had retained Clarence Kresse to haul gravel. Kresse then retained Daniel Wolf to drive Kresse’s truck to transport the gravel for Cass County. Wolf was involved in an accident and claims were submitted to Cass County’s insurer. “The issue before [the] Court is whether the Kresse truck was, as a matter of law, ‘hired’ by Cass County within the meaning of the … insurance policy.” Id. The Eighth Circuit reversed the grant of summary judgment to the insurance company and observed several facts might lead a jury to conclude Cass County “hired” Kresse’s truck:

Cass County determined the route to be used and had the right to dismiss any driver that deviated from it. The trucks had specified hours of operation determined by the [C]ounty. The County loaded the trucks and supervised the unloading. All truck owners were required to maintain a good credit rating and to provide proof of insurance coverage for the vehicles.

Id.

*4 The facts identified by the Eighth Circuit all relate to the insured’s degree of control, which is consistent with the analysis employed by other courts. As another District Court (applying Minnesota law) explained when discussing Kresse, “[c]ourts generally consider the level of control an entity exerts over a truck for purposes of determining whether that truck was ‘hired’ by the entity.” Canal Ins. Co. v. Great W. Cas. Co., 2013 WL 5275789, at *8 (D. Minn. Sept. 18, 2013) (citing Kresse and other cases); see also Selective Way Ins. v. Travelers Prop. Cas. Co of Am., 724 F. Supp. 2d 520, 526 (E.D. Pa. 2010) (citing cases). The requirement of control is also necessary “lest a ‘hired auto’ clause be construed to cover every auto involved, however tangentially, in the provision of a service.” Earth Tech, Inc. v. U.S. Fire Ins. Co., 407 F. Supp. 2d 763, 771 (E.D. Va. 2006). For instance, “numerous courts have held that hiring an independent contractor will not create insurance coverage under a ‘hired auto’ clause.” Toops v. Gulf Coast Marine Inc., 72 F.3d 483, 488 (5th Cir. 1996) (citing cases). Similarly, a person purchasing an appliance from a retail store is not regarded as “hiring” the retailer’s delivery truck, and a person ordering groceries to be delivered has not “hired” the delivery vehicle. In short, not every contract calling for transportation services involves “hiring” the vehicle, and the control component differentiates those that do from those that do not. The Court believes Missouri would adopt the majority rule reflected in these cases.

In concluding that the concept of “hiring” a vehicle involves an element of control over it, the Court rejects Defendants’ contrary arguments. Defendants argue that the Court should prefer a dictionary definition that does not include a requirement of control, (e.g., Doc. 42, pp. 27-28; Doc. 48, p. 24), and invite the Court to hold that CWC’s truck was hired simply because KAT and CWC had a contract that called for the use of a vehicle. However, they cite no Missouri cases that follow their approach, and the Court agrees with other courts – including courts from states that, like Missouri, construe ambiguous policy terms in favor of coverage –that have held the absence of the word “control” from a dictionary definition is not important because the concept of “hiring” inherently includes an element of control. E.g., Old Republic Ins. Co. v. Whitaker, 2011 WL 13234133, at *3 (W.D. Mo. Nov. 23, 2011); Selective Way, 724 F. Supp. 2d at 526; Jeffries v. Jack Ahrold Agency, Inc., 2012 WL 3026350, at *4 (Iowa. Ct. App. 2012); but see Pawtucket Mut. Ins. Co v. Hartford Ins. Co., 787 A.2d 870, 873 (N.H. 2001) (“The common definition of ‘hire’ does not require an element of control, and we decline to add this additional restrictive requirement to the policy.”). In summary: while ambiguous terms must be construed against the insurer, the interpretation ultimately selected must be reasonable (because a provision is ambiguous only if it is susceptible to multiple reasonable interpretations), and a definition of “hiring” that does not include an element of control makes the term overly broad and unreasonable.⁵

*5 Applying these concepts to the undisputed facts in this case demonstrates KAT did not hire the truck. The contract between KAT and CWC called for CWC to transport as much as rock as it could and desired, for which it would be paid based on the amount transported. However, KAT could not drive or operate the truck, or dictate the truck’s route, speed, or any other aspect of its operation (other than specifying the rock was to be picked up at E&S and was to be unloaded at a specific spot at the Airport). KAT did not select the truck CWC supplied, did not select Hamlin to be the driver, and had no right to reject either.⁶ It had no responsibility to pay Hamlin or any expenses related to the truck’s operation or maintenance. KAT also did not extract any obligations from CWC: CWC was not obligated to haul any rock, or any specific quantity of rock, and was free to “leave the job” at any time it desired; at the same time, KAT did not guarantee CWC would receive a minimum payment. CWC was not required to maintain a good credit rating or provide proof of insurance. Courts faced with similar facts have uniformly held the vehicle in question was not hired. See, e.g., Selective Ins. Co. of Am. v. Williams, 2017 WL 8785714, at *8 (M.D. Ga. July 24, 2017); Selective Way, 724 F. Supp. 2d at 528; Quinn v. Travelers Indem. Co., 641 S.W.3d 14, 16-18, 21-22 (Ark. Ct. App. 2022); Jeffries, 2012 WL 3026350, at *5; American Int’l Underwriters Ins. Co. v. American Guarantee & Liab. Ins. Co., 181 Cal. App. 4th 616, 623-25, 105 Cal. Rptr. 3d 64, 68-70 (2010).

KAT hired CWC to perform a task, and in performing that task CWC used a truck. KAT did not hire the truck. Therefore, the Policy does not provide coverage for accidents involving the truck.⁷

III. CONCLUSION

For the reasons stated above, CWC’s and Hamlin’s Motion for Summary Judgment, (Doc. 130), is DENIED and Plaintiff’s Motion for Summary Judgment, (Doc. 131), is GRANTED. Summary judgment is entered in favor of Plaintiff against all Defendants.

IT IS SO ORDERED.

All Citations

1 The parties have effectively agreed to the relevant facts. In some instances, a party has (1) disputed a fact based on a disagreement with word choice but has agreed with the essence of the proffered fact, (2) restated a fact, indicated agreement, and further stated the fact is disputed in “all other respects,” even though there are no “other respects” remaining, (3) disputed a fact, then elsewhere offered essentially the same fact as uncontroverted, or (4) disputed a fact by citing something in the Record that does not address (or dispute) the fact. In all such instances, the fact in question is not really controverted.

2 The Court will refer to Tanner White and Chris White by their first names to avoid confusion.

3 CWC’s and Hamlin’s argument includes a section contending coverage exists under federal law. (Doc. 132, pp. 37-42.) While federal cases are cited, they all rely on state law; there is no federal law applicable to the substantive issues in this case.

4 The language arises in the context of several standard insurance provisions and in a variety of contexts (such as disputes between insurers as to which policy is primary and which is secondary), but Missouri courts’ prior discussions do not provide guidance here. For instance, in National Indemnity Co. v. Liberty Mutual Insurance Co., 513 S.W.2d 461, 470-71 (Mo. 1974), a panel of the Missouri Supreme Court held that an employer who pays an employee a set travel allowance does not “hire” the employee’s car when the employee uses it for business purposes because a reimbursement of travel expenses does not constitute “hiring” a vehicle. And in Equity Mutual Insurance Co v. Insurance Co. of North America, 602 S.W.2d 904, 909 (Mo. Ct. App. 1980) and Rinehart v. Anderson, 985 S.W.2d 363, 367 (Mo. Ct. App. 1998) the Missouri Court of Appeals suggested that the owner of a vehicle could not also “hire” the same vehicle. To the extent these cases are useful, they (particularly National Indemnity Co.) suggest CWC’s and Hamlin’s extremely broad interpretation of the word “hired” would not be accepted. (Excluded from this discussion are cases involving policies that defined the phrase “hired vehicle,” such as Equity Mutual Insurance Co. v. Insurance Company of North America, 602 S.W.2d 904, 907 (Mo. Ct. App. 1980) and City of Palmyra v. Western Casualty & Surety Co., 477 S.W.2d 428, 430 (Mo. App. 1972).)

5 CWC and Hamlin argue Missouri is different from other states because it construes ambiguous terms against the insurer and employs dictionaries to ascertain the common meaning of terms. However, these rules for interpreting insurance policies (in addition to the ultimate requirement that the interpretation be reasonable, e.g., Burns v. Smith, 303 S.W.3d 505, 509 (Mo. 2010) (en banc)) are universal, so they do not distinguish Missouri law. At a minimum, the law of the states mentioned herein as requiring an element of control employ the same general legal principles as Missouri when construing an insurance contract. See, e.g., Wakonda Club v. Selective Ins. Co. of Am., 973 N.W.2d 545, 549 (Iowa 2022); Kurach v. Truck Ins. Exch., 235 A.3d 1106, 1116 (Pa. 2020); Borsheim Builders Supply, Inc. v. Manger Ins., Inc., 917 N.W.2d 504, 509 (N.D. 2018); Midwest Fam. Mut. Ins. Co. v. Wolters, 831 N.W.2d 628, 636 (Minn. 2013); State Farm Mut. Auto. Ins. Co. v. Staton, 685 S.E.2d 263, 266 (Ga. 2009); Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746 (Tex. 2006); Transcon. Ins. Co. v. RBMW, Inc., 551 S.E.2d 313, 318 (Va. 2001). Simply put, the law does not require (or permit) an ambiguous term to be interpreted unreasonably in order to broaden the scope of coverage.

6 CWC and Hamlin point out KAT could have excluded Hamlin from the site if he was acting unsafely or dangerously. However, this would be true of any person acting unsafely or dangerously and only proves KAT’s control over the site and its power to exclude any person from the premises and does not demonstrate control over the truck.

7 In light of this holding, there is no need to address whether KAT gave Hamlin permission to drive the truck. The Court is inclined to think it did not: KAT did not select Hamlin or even communicate with him; in fact, it did not matter to KAT if the driver was Hamlin, Tanner, or someone else selected by CWC. Moreover, KAT lacked the authority to give someone else permission to drive the truck, which demonstrates KAT’s limited power to authorize anyone to drive the truck. However, as stated, the Court sees no need to delve into this issue.

End of Document