North Star Mutual Insurance appealed from a declaratory ruling claiming that a commercial general liability policy it issued to Jayme Ackerman, who did business as Ackerman Homes, provides coverage for Ackerman's potential liability as a result of an accident with Kyle Lantz and that the North Star has an obligation to defend Ackerman. North Star claims that the district court erred in finding coverage because the policy excludes accidents that occur through the use of a car. In North Star Mutual Insurance v. Jayme Ackerman d / b / a Ackerman Homes, Levi Chase, Progressive Insurance Company and State Farm Mutual, and Kyle Lantz No. 20190135, 940 NW2d 857, Supreme Court of North Dakota. (25 March 2020) The Supreme Court was asked to repent due to a clear and unambiguous exception.
North Star sued Ackerman, Lantz, Levi Chase, Progressive Insurance Company and State Farm Mutual for a declaration of the parties' rights and responsibilities under the Commercial General Liability Policy (CGL) issued by North Star to Ackerman. North Star claimed that on July 13, 2017, Ackerman was driving east on Interstate 94; a wheelbarrow allegedly fell from Ackerman's pickup and landed on the highway. Chase was traveling on the highway behind Ackerman and lost control of his vehicle after encountering an object on the road; and Chase's vehicle went through the median and struck Lantz, who suffered serious injuries.
Lantz and North Star moved for a summary judgment. North Star claimed that the policy did not cover claims due to exemptions for the use of motor vehicles and the loading and unloading of equipment. Lantz agreed that the policy includes an exemption from motor vehicles but argued that it also covered non-vehicle-related negligent acts and the concurrent reason is applicable to provide coverage.
The district court granted Lantz a request for a summary judgment. The court declared that the primary question was whether the doctrine of simultaneous cause applies; that Lantz claimed that many forms of negligence occurred, including Ackerman's failure to remove the wheelbarrow from the highway after it fell from the vehicle and Ackerman's failure to notify the public of the wheelbarrow on the highway; and that Lantz claimed that these causes are not excluded by North Star & # 39 ;s policy.
The Court concluded that the policy generally provides coverage for portable tools and equipment, including the wheelbarrow, and the policy excludes vehicle-related documents. The court concluded that the policy does not exclude acts without vehicles, including the failure to remove the wheelbarrow from the motorway and failure to inform the public about the wheelbarrow on the motorway. and a person who causes or permits an object, which creates an unreasonable risk of injury, to be placed on the motorway has an obligation to remove the object and an obligation to notify the presence of that object. The court concluded that both included and excluded risks contributed to the accident, the simultaneous cause is applicable and the policy covers Ackerman's potential liability and North Star has an obligation to defend Ackerman.
The interpretation of an insurance is a matter of law. The court must first look at the language of the insurance contract, and if the language of the insurance is clear in the face, there is no room for construction. If the coverage is dependent on an undefined term, the court applies the usual meaning of the term in interpreting the agreement. A court will not make an effort to define an undefined term to provide the insured. The whole contract must be taken together to give effect to each part, and each clause is to help interpret the others. Exemptions from coverage must be clear and explicit and interpreted strictly against the insurer.
CGL insurances are intended to protect an insured against certain losses that arise due to business activities. The insurance states: "We will pay the sums that the insured will be legally obligated to pay as damages due to" bodily injury "or" property damage "to which this insurance applies." The insurance excludes: "" Body damage "or" damage to property "that occurs as a result of ownership, maintenance, use or transfer to other of all aircraft," cars "or personal watercraft owned or operated by or leased or lent to any insured . ” The district court concluded that there were at least two possible negligences that contributed to the accident, including loading and securing the wheelbarrow, failure to remove the wheelbarrow from the highway after it fell from the pickup, and failure to notify the public of the wheelbarrow on the highway.
The transport of the wheelbarrow and its falls from the vehicle on the interstate are vehicle-related activities, which constitute the "use" of a car. The policy excludes coverage for damages that arise as a result of that use. The wheelbarrow was also left on the road for a while before the accident, and Ackerman did not remove it or warn other drivers of its presence. These were independent, non-vehicle-related acts that did not arise through the use of the car. The exception for damages resulting from the use of a car does not apply to these documents.
The Supreme Court of North Dakota noted that there are several potential negligent acts in this case: loading and securing the wheelbarrow of the vehicle. and the failure to remove the wheelbarrow from the highway and the failure to warn. These excluded and covered risks according to the policy were alleged to have contributed to the accident.
North Dakota adopted the contemporary causal theory which concludes that coverage exists when both a covered risk and an excluded risk contribute to an accident. According to the doctrine, coverage will be found if there is a "causal link" between the insured risk and the damage, the damage can not be disconnected from the covered risk and the potential to create an unreasonable risk of damage arose as much from the insured risk as it did from the excluded the risk.
The Supreme Court concluded that the GCL policy provides coverage in this case according to the simultaneous cause. The failure to remove the wheelbarrow from the road and the failure to warn were independent acts that are alleged to be the cause of the damage. The damage occurred potentially as much from not removing the wheelbarrow and warning other drivers, who are covered by risks, as it occurred from the transport of the wheelbarrow.
The simultaneous cause of the doctrine applies in third party liability policy to solve the obvious problem when more than one incident causes damage to third parties. Although the wheelbarrow fell off a vehicle and the wheelbarrow was the cause of the loss, the fact was that it was not removed from the road for many hours so that the damage that caused the accident could occur much later, was negligible, not connected to a car, and thus a covered Thing.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to employment as an insurance consultant specializing in insurance coverage, insurance management, insurance fraud and insurance fraud almost equally for insurers and insurers. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and email@example.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.
For the past 52 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their staff to become insurance claims staff.
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