Clashing claims: Must CGL pay for auto injury?
Naida and Brett Singleton owned and operated Pee Dee Heating and Cooling Specialists, Inc. On February 14, 2008, Auto-Owners Insurance Company issued Pee Dee an automobile policy that provided $300,000 in coverage for combined liability, uninsured, and underinsured motorists protection on five scheduled drivers and six scheduled vehicles, as well as comprehensive coverage, collision, and “road trouble service.”
On February 15, 2008, Auto-Owners issued Pee Dee a CGL policy that provided $2 million in coverage and an endorsement that provided $1 million in liability coverage for hired and non-owned autos.
Although the CGL policy generally excluded automobile accidents, Pee Dee purchased the endorsement, which in limited circumstances provided liability coverage under the CGL policy for bodily injury and property damage arising out of an automobile accident. The CGL policy, however, contained a clause that stated that the endorsement applied only “if you do not have any other insurance available to you which affords the same or similar coverage.” April 1, 2008, was the effective date for the CGL policy and its endorsement as well as the auto policy.
On April 7, 2008, a Pee Dee employee, Joshua Lee Cail, was involved in an automobile accident with Elouise Benjamin. At the time of the accident, Cail was driving a 2004 Toyota Tacoma pickup truck owned by Naida Singleton, used by Pee Dee for business purposes, and insured by the Auto-Owners auto policy. Elouise Benjamin’s medical expenses exceeded $500,000.
On May 15, 2008, the Benjamins filed suit against Naida Singleton, Cail, and Pee Dee for injuries and damages resulting from the automobile accident. Auto-Owners filed a declaratory judgment action on December 19, 2008, seeking a declaration that the auto policy did not provide coverage for Cail because at the time of the accident he was not a permissive driver as required by the policy. The court disagreed, determining that Cail was a permissive driver under the policy at the time of the accident.
On June 14, 2011, Auto-Owners and the Benjamins entered into a settlement agreement that provided that Auto-Owners would pay the Benjamins the auto policy limits of $300,000. In turn, the Benjamins released Cail and Auto-Owners under the auto policy and signed a covenant not to execute against Singleton and Pee Dee.
The settlement agreement further provided that Auto-Owners reserved the right to seek a declaratory judgment to determine whether the CGL policy provided coverage for the automobile accident. The Benjamins agreed that if the court determined that the CGL policy provided coverage for their claims, the total recovery available would be the aggregate amount of $300,000 from the auto policy and the applicable limits of the CGL policy.
Auto-Owners filed a declaratory judgment action on July 8, 2011. Both Auto-Owners and the Benjamins filed cross-motions for summary judgment as to whether the CGL policy provided coverage for the Benjamins’ claims.
In 2013, the court granted the Benjamins’ motion for summary judgment and denied Auto-Owners’ cross-motion. The court subsequently denied Auto-Owners’ motion to alter or amend. Auto-Owners appealed.
On appeal, Auto-Owners contended that the CGL policy’s endorsement provided no coverage for the automobile accident because of “the same or similar coverage” provided by the auto policy.
The court disagreed, finding that Pee Dee satisfied the requirements for CGL coverage as listed in the endorsement. Specifically, Pee Dee did not own the 2004 Toyota Tacoma pickup truck involved in the accident; the truck was not registered in Pee Dee’s name; the truck was not leased or rented to Pee Dee for more than 90 consecutive days; the truck was used in Pee Dee’s business; and the truck was one of the six vehicles described in the declarations section of the auto policy. Although the truck was covered by the auto policy, the court agreed with the trial court that the endorsement also provided coverage.
The court noted that the endorsement clause provided coverage under the CGL policy for bodily injury and property damage arising out of an automobile accident in limited circumstances, “but only if you do not have any other insurance available to you which affords the same or similar coverage.” Because the term “similar” was not defined in the CGL policy or its endorsement, the court said, the term was ambiguous, and the trial court properly construed the endorsement in favor of coverage. The trial court’s ruling was affirmed.