United States Court of Appeals 

For the Seventh Circuit

Chicago, Illinois 60604

Argued May 21, 2015

Decided July 29, 2015

Before

No. 14‐3699              

      

NATIONAL AMERICAN INSURANCE

COMPANY and STATE NATIONAL

INSURANCE COMPANY,

Plaintiffs‐Appellants,

v.

HARLEYSVILLE LAKE STATES

INSURANCE COMPANY,

Defendant‐Appellee.

Appeal from the United States District

Court for the Southern District of

Indiana, Indianapolis Division.

No. 13 CV 1297

William T. Lawrence,

Judge.

O R D E R

Robert Harden sued Venture Logistics, Inc. (“Venture”) and Trevell LaSha

Parker, a tractor‐trailer driver for Venture, for injuries he sustained when Parker

prematurely drove away from a dock with Harden inside the trailer. State National

Insurance Company, through National American Insurance Company (“NAICO”), and

Harleysville Lake State Insurance Company (“Harleysville”) insured Venture at the time

DIANE P. WOOD, Chief Judge

ILANA DIAMOND ROVNER, Circuit Judge

ANN CLAIRE WILLIAMS, Circuit Judge

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with FED. R. APP. P. 32.1
No. 14‐3699 Page 2

of the accident. After NAICO settled with Harden for $800,000, NAICO and State

National filed an action against Harleysville seeking a declaration that coverage for the

Harden suit was excluded under the State National policy and covered by the

Harleysville policy. The suit also sought subrogation or contribution from Harleysville.

Both parties moved for summary judgment. The district court denied NAICO and State

National’s motion for summary judgment and granted Harleysville’s motion, finding

that the State National policy provided coverage and that the Harleysville policy did not

provide coverage. We agree and, therefore, affirm.

I. BACKGROUND

Venture is a trucking company. Indy Powder Coating is a Venture customer. On

February 9, 2009, Parker, a Venture truck driver, went to Indy Powder to deliver goods.

Harden, a forklift operator for Indy Powder, unloaded the skids with a forklift from the

Venture tractor‐trailer. The job required Harden to drive a forklift into the tractor‐trailer

to unload the skids. Parker remained in the driver’s seat while Harden unloaded. After

Harden unloaded a few skids, Parker asked if Harden was finished. Harden said “no.”

Thereafter a forklift horn sounded, the signal indicating that unloading was complete,

and Parker began to drive away with Harden inside the trailer.

Worried that the forklift would slide out of the trailer, Harden took off his seat

belt, engaged the emergency brake, and jumped off the forklift. He ran to the end of the

trailer and waved his hand out of the back of the trailer to get Parker’s attention in the

side view mirror of the tractor‐trailer. The forklift slid down the trailer and pinned

Harden against the wall. He managed to get one leg free, but partially fell out of the

trailer. Another truck driver sounded his horn and was able to get Parker to stop her

forward motion. Harden sustained serious injuries from being pinned against the

tractor‐trailer wall by the forklift. Harden filed a lawsuit against Venture.

At the time of the accident, Harleysville and State National insured Venture. On

February 11, 2009, Venture reported the accident to NAICO, who was responsible for

handling State National’s claims. NAICO defended Venture without reservation under

the State National‐issued Commercial Truckers Coverage Policy until late 2012. At that

time, NAICO realized that an exclusion may apply to the claim because NAICO had

another claim involving a forklift that dealt with the same exclusion. On November 30,

2012, NAICO notified Harleysville that it may have liability for the accident.

Harleysville denied coverage for the accident pursuant to an exclusion in the

Commercial Lines Policy it issued to Venture. On May 25, 2013, NAICO settled the

Harden lawsuit on behalf of Venture for $800,000.   
No. 14‐3699 Page 3

On August 15, 2013, NAICO and State National filed the underlying suit against

Harleysville seeking two declarations: (1) that coverage for the Harden accident was

excluded under the State National policy, and (2) that stated that coverage for the suit

was covered under the Harleysville policy. In the remaining counts, NAICO and State

National sought subrogation as well as contribution.   

The parties filed cross‐motions for summary judgment. The district court granted

Harleysville’s motion and denied NAICO and State National’s motion finding that the

State National policy covered the accident, while the Harleysville policy did not cover

the accident. The district court also found that since Harleysville’s policy did not provide

coverage, Harleysville had no duty of subrogation or contribution. NAICO and State

National appeal.

II. ANALYSIS

We review the district court’s grant of summary judgment as well as its construction

of the insurance policy de novo. Auto‐Owners Ins. Co. v. Monroe, 614 F.3d 322, 324 (7th

Cir. 2010). The parties agree that Indiana law governs the interpretation of each policy’s

language. Under Indiana law, “if a contract is clear and unambiguous, the language

therein must be given its plain meaning.” Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528

(Ind. 2002). The court will find contract language ambiguous only if reasonable people

“could honestly differ as to the meaning of the policy language.” Fed. Ins. Co. v. Stroh

Brewing Co., 127 F.3d 563, 567 (7th Cir. 1997).

We must first review the policy language. The State National Policy provides, in

pertinent part:   

SECTION II – LIABILITY COVERAGE

A. Coverage

We will pay all sums an “insured” legally must pay as damages because of

“bodily injury” or “property damage” to which this insurance applies,

caused by an “accident” and resulting from the ownership, maintenance or

use of a covered “auto.”   

....

We have the right and duty to defend any “insured” against a “suit”

asking for damages.

....
No. 14‐3699 Page 4

B. Exclusions

This insurance does not apply to any of the following.   

....

8.   The Movement Of Property By Mechanical Device

“Bodily injury” or “property damage” resulting from the movement of

property by a mechanical device (other than a hand truck) unless the

device is attached to the covered “auto.”

The Harleysville policy provides, in pertinent part:

COVERAGE A BODILY INJURY AND PROPERTY DAMAGE

LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated

to pay as damages because of “bodily injury” or “property damage”

to which this insurance applies.

....

2. Exclusions

This insurance does not apply to:   

....

g.   Aircraft, Auto, Or Watercraft

“Bodily injury” or “property damage” arising out of the ownership,

maintenance, use or entrustment to others of any aircraft, “auto” or

watercraft owned or operated by or rented or loaned to any insured.

Use includes operation and “loading and unloading.”

The Harleysville policy provides the following definition:

“Loading or unloading” means the handling of property:   

....   

[L]oading or unloading does not include the movement of property by

means of a mechanical device, other than a hand truck, that is not attached

to the aircraft, watercraft or “auto.”
No. 14‐3699 Page 5

NAICO and State National argue that the Harleysville policy excludes coverage

for bodily injury that arises out of the use of a tractor‐trailer, unless the injury occurs

while an individual loads and unloads property from the tractor‐trailer by a mechanical

device, like a forklift, not attached to the tractor‐trailer. They assert that the State

National policy excludes coverage for bodily injury that arises from the use of a forklift

while loading or unloading a tractor‐trailer. They contend that Harden’s injuries arose

from his use of the forklift while loading and unloading skids from the tractor‐trailer. So,

they conclude, the Harleysville policy, not the State National policy, provides coverage

for Harden’s accident. Alternatively, they argue that the relevant Harleysville policy

language is ambiguous and there is a genuine dispute of material fact regarding the

cause of the accident.

The relevant policy language is not ambiguous. The State National policy

provides coverage if bodily injury arises from an individual using, i.e. driving, a covered

auto and excludes coverage if bodily injury was caused by moving property from the

covered auto by a device such as a forklift. The Harleysville policy provides coverage for

damages for bodily injury to which the insurance applies and excludes coverage if

bodily injury arises from the operation or the loading and unloading of a covered auto.

However, there is an exception to this exclusion, and the Harleysville policy provides

coverage if bodily injury was caused by moving property from the covered auto by a

device such as a forklift. Therefore, as the district court noted, the case comes down to

whether Harden’s injuries were caused by his use of the forklift or by Parker driving

away from the dock.   

The “arising out of” language in an insurance contract is construed as a causation

requirement. See Westfield Ins. Co. v. Herbert, 110 F.3d 24, 26 (7th Cir. 1997). To determine

the cause of a party’s injuries in an insurance case, Indiana looks at the efficient and

predominating cause. Id. The efficient and predominating cause is that which sets in

motion the chain of circumstances leading up to the injury. Id.

The underlying facts are not in dispute. The forklift horn signals the driver of the

tractor‐trailer to pull away from the dock. A forklift horn rang, and Parker began to

drive away from the dock. (Harleysville neither asserts nor disputes these facts.) Then,

Harden honked his horn after he felt the trailer move. Next, Harden got off the forklift

and ran to the back of the trailer. He began waving his hands to get Parker’s attention.

The forklift subsequently slid to the back of the trailer pinning Harden against the trailer

wall. Harden managed to get one leg free, but he partially fell out of the tractor‐trailer.

Parker eventually stopped, but Harden was already seriously injured.
No. 14‐3699 Page 6

The undisputed facts show that Parker’s action of pulling the tractor‐trailer away

from the dock caused Harden’s injuries. There would be no injury if Parker had not

driven off with Harden still on the tractor‐trailer. There are no facts to indicate that the

injury occurred when property was being moved. Both parties acknowledged that

Harden was no longer unloading when he was injured. Therefore, the Harleysville

policy excludes coverage for the accident. Despite NAICO and State National’s

arguments, Harden’s use of the forklift before the accident is not the proper reference

point for determining the cause of the accident. See Franz v. State Farm Fire & Cas. Co., 754

N.E.2d 978, 981 (Ind. Ct. App. 2001) (holding plaintiff’s son’s injury was caused by the

bus driver’s failure to steer away from him or engage breaks, not the injured boy’s

efforts to pull the bus with a rope as part of an annual “bus pull” competition); Sharp v.

Ind. Union Mut. Ins. Co., 526 N.E.2d 237, 240 (Ind. Ct. App. 1988) (finding the driver’s

operation of a motor vehicle, not the driver’s two‐day alcohol binge prior to driving, was

the cause of the accident).

NAICO and State National’s remaining arguments warrant little discussion, as there

is no genuine dispute of material fact, and as stated above, we find that the policy

language is not ambiguous.

III. CONCLUSION

The judgment of the district court is AFFIRMED.