Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-03241/USCOURTS-ca8-05-03241-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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1

The Honorable Henry E. Autrey, United States District Judge for the Eastern

District of Missouri.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-3241

___________

Reeva Whitworth Lindsay, surviving *

spouse of John Whitworth, deceased; *

John Whitworth, Jr., surviving son of *

John Whitworth, deceased; *

*

Appellants, * Appeal From the United States

* District Court for the

v. * Eastern District of Missouri.

*

Safeco Insurance Company of *

America; OneBeacon Insurance *

Company, formerly known as *

Hawkeye Insurance Company; *

*

 Appellees.

___________

Submitted: March 15, 2006

Filed: May 17, 2006

___________

Before COLLOTON, HEANEY, and GRUENDER, Circuit Judges.

___________

HEANEY, Circuit Judge.

Reeva Whitworth Lindsay appeals the district court’s1

 summary judgment grant

in favor of Safeco Insurance Company and OneBeacon Insurance Company in this

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declaratory action. The district court concluded that coverage did not exist under the

liability policies issued by the insurers. We affirm.

BACKGROUND

On December 3, 1996, John Whitworth was killed while driving an all terrain

vehicle (ATV) he intended to purchase from Guy Westmoreland. Whitworth was

driving the ATV home to obtain the purchase money when the ATV’s brakes failed

and he was struck by a tractor trailer. Guy Westmoreland had displayed the ATV for

sale at his automobile repair shop, Guy Westmoreland’s Auto Service. Prior to her

husband’s death, Lindsay and Whitworth had purchased one vehicle and test driven

another that Guy Westmoreland had displayed for sale at his repair shop. The ATV

was not owned by the repair shop, but had been originally purchased by Guy

Westmoreland for personal use at his family farm. Bronnie Westmoreland was not

involved in the sale of the ATV and did not know it was for sale or how long it had

been at the repair shop. 

Whitworth’s widow, Reeva Lindsay, brought a wrongful death suit against Guy

and Bronnie Westmoreland, d/b/a Guy Westmoreland’s Auto Service, in Missouri

state court. On October 7, 2002, the state court entered a default judgment on

Lindsay’s behalf in the amount of $3 million. Lindsay subsequently filed this

declaratory judgment action to recover proceeds from liability policies issued by

Safeco and OneBeacon to Westmoreland Service, Inc. and Guy Westmoreland’s Auto

Service, respectively. 

Westmoreland Service, Inc. is controlled by Guy Westmoreland’s parents,

Louis and Joyce Westmoreland, and is a distinct and separate entity from Guy

Westmoreland’s Auto Service. Neither Guy Westmoreland’s Auto Service, nor Guy

or Bronnie Westmoreland, owned any interest in Westmoreland Service. At the time

of the accident, Westmoreland Service, Inc. owned real property located at 6018 and

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6020 North Broadway in St. Louis, Missouri. Westmoreland Service operated a

convenience store at 6018 and leased the 6020 property to Guy Westmoreland, where

he operated his automobile repair garage. 

Westmoreland Service was not a party to the wrongful death suit. The Safeco

policy listed “Westmoreland Auto Service” as the insured. It listed the type of

business covered as a grocery store and self-service station and listed the insured’s

address as 6018 North Broadway for the effective period that covered the date of the

accident. On October 22, 1996, commercial auto coverage was deleted from the

Safeco policy.

The OneBeacon policy listed the insured as Guy Westmoreland and the

insured’s address as 6020 N. Broadway. The type of business listed was noted as

“REPAIR SHOP-MAJOR.” The OneBeacon policy provided coverage for liability

resulting from the use of vehicles “specifically described” in the policy and nonowned vehicles used in the garage business. Safeco and OneBeacon separately moved

for summary judgment. Both insurers alleged that the policies issued to

Westmoreland Service and Guy Westmoreland’s Auto Service, respectively, did not

provide coverage for the damages awarded in the wrongful death suit. The district

court granted both motions, and Lindsay appeals.

DISCUSSION

“We review the district court’s grant of summary judgment de novo,” viewing

the facts in the light most favorable to the non-moving party. Grabovac v. Allstate

Ins. Co., 426 F.3d 951, 955 (8th Cir. 2005). Summary judgment is appropriate where

“there is no genuine issue as to any material fact and . . . the moving party is entitled

to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). We apply Missouri

substantive law in this diversity case and review the district court’s application of

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Missouri law and contract interpretation de novo. Freeman v. State Farm Mut. Auto.

Ins. Co., 436 F.3d 1033, 1034-35 (8th Cir. 2006). 

Unambiguous insurance contract terms are given their plain meaning and

enforced as written, while ambiguous terms are construed against the insurer. Rice

v. Fire Ins. Exch., 946 S.W.2d 40, 42 (Mo. Ct. App. 1997). Determination of whether

insurance contract language is ambiguous is a question of law. Id. A term is

ambiguous if it is subject to “duplicity, indistinctness or uncertainty.” Mo. Employers

Mut. Ins. Co. v. Nichols, 149 S.W.3d 617, 625 (Mo. App. Ct. 2004). Mere

disagreement by the parties regarding a contract term’s interpretation does not render

the term ambiguous. Id. “A court may not create an ambiguity in order to distort the

language of an unambiguous policy, or in order to enforce a particular construction

which it might feel is more appropriate.” Rice, 946 S.W.2d at 44. In order to prove

that coverage exists, Lindsay must establish “issuance and delivery of the policy of

insurance, payment of the premium, a loss caused by a peril insured against, notice of

loss and proof of the loss to the insurer as required by the terms of the policy.”

Kauble v. MFA Mut. Ins. Co., 637 S.W.2d 831, 832-33 (Mo. Ct. App. 1982). 

The Safeco Policy

The Safeco policy listed the insured as “Westmoreland Auto Service,” and the

insured’s address as 6018 N. Broadway, Saint Louis, Missouri (J.A. Vol. II at 172,

174.) Safeco moved for summary judgment on the basis that it issued the policy to

the property owner, Westmoreland Service, Inc., not to Guy or Bronnie

Westmoreland, or Guy Westmoreland’s Auto Service. Lindsay presented no evidence

that Guy Westmoreland’s Auto Service was the actual insured or paid the premiums

on the policy. Rather, Lindsay argues that the similarity in the name of the insured

and Guy Westmoreland’s Auto Service creates an ambiguity in the insurance contract

that should be construed against the insurer according to the rules of construction. 

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As the district court correctly noted, the policy, considered in its entirety,

illustrates that the insured was a convenience store, operated by Westmoreland

Service at 6018 N. Broadway, not the repair shop operated by Guy Westmoreland at

6020 N. Broadway. See Rice, 946 S.W.2d at 42 (contract interpretation requires

consideration of the contract as a whole.). Accordingly, the Safeco policy is

unambiguous and we enforce it as written. Guy Westmoreland’s Auto Service was

not the insured, and therefore is not entitled to liability coverage under the policy.

Additionally, at the time of the accident, no commercial auto coverage existed

under the Safeco policy. Thus, even if we construed the policy to list Guy

Westmoreland’s Auto Service as the insured, the policy did not provide coverage for

injuries related to vehicles owned by the insured. The district court correctly

concluded that Safeco was entitled to summary judgment as a matter of law, because

the Safeco policy did not provide coverage for the type of loss sustained.

The OneBeacon Policy

Guy Westmoreland was the named insured in the OneBeacon policy.

Nonetheless, in order to recover the proceeds under the OneBeacon policy, Lindsay

must show that policy provided coverage for the loss sustained. See Kauble, 637

S.W.2d at 832-33. The OneBeacon policy provided liability coverage for bodily

injury or property damage “resulting from ‘garage operations’ other than ownership,

maintenance or use of ‘covered autos.’” (J.A. Vol. I at 129.) The policy defined

“garage operations” as:

the ownership, maintenance or use of locations for garage business and

that portion of the roads or other accesses that adjoin these locations.

“Garage operations” includes the ownership, maintenance or use of

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“autos” indicated in SECTION I of this Coverage Form as covered

“autos.” “Garage operations” also include all operations necessary or

incidental to a garage business.

(Id. at 155 (emphasis added).)

Lindsay argues that since Guy Westmoreland allegedly sold vehicles from the

repair shop on a regular basis, the sale of those vehicles was necessary or incidental

to the garage operations. Determining whether this accident arose out of garage

operations requires consideration of the circumstances of the case “and whether it can

be said to be a natural and necessary incident or consequence of the operation of the

service station even though not a foreseen or expected consequence of that operation.”

State Farm Mut. Auto. Ins. Co. v. Mid-Continent Cas. Co. of Tulsa, OK, 378 S.W.2d

232, 236 (Mo. Ct. App. 1964) (considering coverage exclusion in a personal

automobile policy for accidents “arising out of the operation of a service station”).

Several courts have considered what is “necessary and incidental” to a garage

business. See, e.g., Rhinehart v. Anderson, 985 S.W.2d 363, 370 (Mo. Ct. App. 1998)

(concluding that evidence that the vehicle involved in the accident was being used for

garage-related trips was sufficient to survive summary judgment); Am. Econ. Ins. Co.

v. Otte, 869 S.W.2d 179, 181 (Mo. Ct. App. 1993) (holding that garage owner’s sale

of vehicle involved in accident was insufficient to show that it was necessary and

incidental to garage operations, especially in light of the fact that the garage owner

declined to purchase coverage that specifically covered vehicles held out for sale); see

also United Fire & Cas. Co. v. N.H. Ins. Co., 684 F. Supp. 1030, 1032-33 (W.D. Mo.

1988) (finding that delivery of vehicle, by detailing company employee, to car

dealership was necessary and incidental to detailing company’s business, not to the

garage operations of the dealership); Farmers Alliance Mut. Ins. Co. v. Reeves, 775

P.2d 84, 86 (Col. Ct. App. 1989) (holding that accident was covered because the

vehicle involved in the accident was at the garage to be repaired); Lonergan v.

Nationwide Mut. Ins. Co., 663 A.2d 480, 484 (Del. Super. Ct. 1995) (finding that

where vehicle was used for garage business use and personal use, coverage did not

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extend to accident that occurred during personal use); Am. Hardware Mut. Ins. Co.

v. Darv’s Motor Sport’s, Inc., 427 N.W.2d 715, 717-18 (Minn. Ct. App. 1998)

(concluding that promotional use of insured-owned motorcycle was necessary or

incidental to motorcycle sales and repair business). 

Lindsay cites Rhinehart in support of her claim that the OneBeacon policy

provided coverage under the garage operations exception. Rhinehart also involved a

wrongful death suit plaintiff attempting to collect damages from a garage

owner/defendant’s insurance company under the “garage operations” clause of the

insurance contract. 985 S.W.2d at 365. The similarities to this case, however, end

there. In Rhinehart, the garage owner was driving the vehicle at the time of the

accident and using the vehicle for garage-related tasks. Id. at 370. Here, the vehicle

was a personal vehicle displayed for sale on the repair shop premises, and Lindsay

presented no evidence that Westmoreland used the ATV for garage business.

We find the Otte case from Missouri directly on point. In Otte, an individual

was injured while test driving a dune buggy owned by a repair shop owner. 869

S.W.2d at 180. The dune buggy was not used for garage-related purposes. Id. The

garage owner claimed that the injuries were covered under the garage operations

clause in his liability insurance policy, because modifications made to the dune buggy

by the garage owner were “necessary or incidental” to his garage operations. Id. The

garage owner alleged that “necessary or incidental” language was ambiguous and

should be construed in favor of coverage. The Otte court rejected the garage owner’s

argument because he declined to purchase available coverage that would have covered

the accident. Id. “We recognize that the established rule is to construe in favor of

coverage, however, . . . that rule is inapplicable where the policy form clearly provides

the insured an opportunity to obtain the specific coverage claimed for an additional

premium.” Id. at 181.

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The OneBeacon policy includes an option to purchase coverage of liabilities

related to “DEALERS ‘AUTOS’ AND ‘AUTOS’ HELD FOR SALE BY NONDEALERS.” (J.A. Vol. I at 128.) The corresponding number for that type of

coverage, “31,” is not listed on the declarations page of the policy. (Id. at 121-22.)

Accordingly, though available, this coverage was not part of the policy at the time of

the accident.

Finally, there is nothing in the record connecting the ATV in question to the

vehicle repair operations performed by Guy Westmoreland’s Auto Service. The

evidence presented by Lindsay illustrates, at most, that Guy Westmoreland was

attempting to expand his auto repair service to also deal in used vehicles. If this is the

case, the “dealer” insurance coverage offered by OneBeacon would have covered the

accident. Unfortunately, Westmoreland chose to not purchase this coverage.

Accordingly, the district court correctly concluded that the OneBeacon policy did not

provide coverage for the losses here. 

CONCLUSION

For the above stated reasons, the grant of summary judgment in favor of Safeco

and OneBeacon is affirmed.

______________________________

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