United States Court of Appeals

For the Eighth Circuit

___________________________

No. 20-2103

___________________________

Westfield Insurance Company,

lllllllllllllllllllllPlaintiff - Appellee

v.

Advanced Auto Transport, Inc.; Gregory Lester Hansen; Indian Harbor Insurance Company,

lllllllllllllllllllllDefendants,

Carolina Casualty Insurance Company,

lllllllllllllllllllllDefendant - Appellant.

 ____________

Appeal from United States District Court 

for the District of Minnesota

 ____________

 Submitted: March 17, 2021

Filed: August 30, 2021

____________

Before COLLOTON, GRUENDER, and GRASZ, Circuit Judges. 

____________
COLLOTON, Circuit Judge.

Gregory Hansen, a driver working for Advanced Auto Transport, Inc., was

involved in an accident with Brady Gartner. Hansen was driving a truck owned by

Worldwide Equipment, Inc. Gartner’s parents sued Hansen, Advanced Auto, and

Worldwide for personal injury damages. Advanced Auto and Hansen tendered the

suit to Worldwide’s insurer, Westfield Insurance Co., for defense and indemnity. 

Westfield Insurance denied the tender, and sought a declaratory judgment that it owed

no obligations to Advanced Auto, Hansen, or their insurer, Carolina Casualty

Insurance Co. The district court1 granted summary judgment to Westfield Insurance,

and Carolina Casualty appeals. Because we agree that neither Hansen nor Advanced

Auto was an “insured” under the policy that Westfield Insurance issued to

Worldwide, we affirm.

I.

In 2015, Rumpke Consolidated Companies ordered a garbage truck from

Worldwide, a Mack Trucks dealership. Worldwide purchased a power unit (a cab and

chassis) from Mack Trucks. Rumpke separately contracted with McNeilus Truck and

Manufacturing to convert the power unit into a garbage truck. Mack Trucks

manufactured the power unit and transferred ownership of the unit to Worldwide, but

Mack Trucks delivered the power unit directly to a McNeilus facility in Minnesota

for conversion into a garbage truck, a process known as “upfitting.”

McNeilus converted the truck in Minnesota, then contracted for Advanced

Auto to transport the truck to another McNeilus facility in Ohio for inspection. 

Pursuant to a “Master Drive-Away Service Agreement,” Advanced Auto provided a

1The Honorable Michael J. Davis, United States District Judge for the District

of Minnesota.

-2-
driver to transport the truck from the McNeilus facility in Minnesota to the McNeilus

facility in Ohio. McNeilus instructed Advanced Auto where to pick up and deliver

the truck. Advanced Auto gave the driver a bill of lading, which Advanced Auto

would then provide to McNeilus in Ohio as proof of delivery. If the truck had

reached the McNeilus facility in Ohio, McNeilus would have inspected the truck and

returned it to Worldwide. Worldwide would have performed a final inspection of the

power unit and then delivered the truck to the end purchaser, Rumpke.

The Master Drive-Away Service Agreement gave McNeilus certain rights to

direct the performances of Hansen and Advanced Auto. Hansen was required to

deliver the truck with a full tank of fuel, and was forbidden to smoke, transport

passengers, or use tire chains on the truck. Advanced Auto was required to accept or

deny McNeilus’s delivery requests within two hours, and to pick up vehicles within

one day of tender. Advanced Auto also was required to identify the truck with its

Department of Transportation number, and to “maintain in effect commercial

insurances,” including “[b]usiness auto liability insurance, covering all . . . nonowned autos” against bodily injury claims.

The agreement also specified that the “relationship of [McNeilus] and

[Advanced Auto] is that of an independent contractor.” The parties did not “intend

to clothe [McNeilus] with joint control over [Advanced Auto]’s performance of” its

services, and explained that “[u]nder no circumstances shall employees or agents of

[Advanced Auto] be deemed employees or agents of [McNeilus].”

Hansen of Advanced Auto picked up the truck from McNeilus in Minnesota

on February 18, 2016. Later that day, he was involved in an accident with Gartner

in Olmstead County, Minnesota. Gartner’s parents were appointed as his

conservators. They sued Worldwide, Advanced Auto, and Hansen to recover

damages on Gartner’s behalf.

-3-
Advanced Auto tendered the suit to Westfield Insurance, asserting that

Westfield Insurance was responsible for defending and indemnifying Advanced Auto

and Hansen. Because Westfield Insurance covered vehicles owned by Worldwide,

and Advanced Auto and Hansen were permissive users of a vehicle owned by

Worldwide, Advanced Auto maintained that Westfield Insurance should provide

defense and coverage. Westfield Insurance denied the tender and sued for a

declaration that it owed no obligations to Advanced Auto, Hansen, or Carolina

Casualty (the insurer of Advanced Auto) under the Westfield Insurance policy issued

to Worldwide.

Worldwide’s insurance policy with Westfield Insurance provided liability

coverage for “garage operations,” which “includes the ownership, maintenance or

use” of “covered ‘autos.’” Worldwide owned the truck involved in the accident, so

it was a covered auto. The policy provides that anyone using a vehicle owned by

Worldwide with permission is an “insured,” with certain exceptions.

The dispute centers on an exception: the policy excludes from the definition

of “insured” someone “using a covered ‘auto’ while he or she is working in a business

of selling, servicing or repairing ‘autos’ unless that business is [Worldwide’s] ‘garage

operations.’” The district court concluded that McNeilus was “in the business of

‘selling, servicing or repairing autos.’” Because Advanced Auto was delivering the

truck on behalf of McNeilus when the accident occurred, the court ruled that

Advanced Auto was “working in a business of selling, servicing or repairing ‘autos.’” 

Therefore, the exception in Worldwide’s policy applied, and Westfield Insurance had

no duty to defend or indemnify Advanced Auto or Hansen. The court granted

Westfield Insurance’s motion for summary judgment, and we review the decision de

novo. Wolfley v. Solectron USA, Inc., 541 F.3d 819, 823 (8th Cir. 2008).

-4-
II.

On appeal, Carolina Casualty (the insurance carrier for Advanced Auto) argues

that Westfield Insurance (the insurance carrier for Worldwide) owes a duty to defend

and indemnify Advanced Auto and Hansen because they were using a covered auto

owned by Worldwide at the time of the accident. Carolina Casualty maintains that

the disputed exception to the definition of “insured” in Worldwide’s policy does not

apply, because Advanced Auto and Hansen were not “working in a business of

selling, servicing or repairing ‘autos.’” 

The parties agree that Minnesota law applies. See Babinski v. Am. Fam. Ins.

Grp., 569 F.3d 349, 351-52 (8th Cir. 2009). Although the disputed exception appears

in the “Coverage” section of the policy, the parties appear to agree that it functions

as an “exclusion.” In Minnesota, a party claiming insurance coverage bears the

burden of establishing that coverage applies; the insurer bears the burden of proving

the applicability of exclusions. Travelers Indem. Co. v. Bloomington Steel & Supply

Co., 718 N.W.2d 888, 894 (Minn. 2006). Even so, exclusions in a policy “are as

much a part of the contract as other parts thereof and must be given the same

consideration in determining what is the coverage.” Lobeck v. State Farm Mut. Auto.

Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998) (quoting Bobich v. Oja, 104 N.W.2d 19,

24-25 (Minn. 1960)). Exclusions are “construed narrowly and strictly against the

insurer,” Bloomington Steel, 718 N.W.2d at 894, but at the same time, “the court has

no right to read an ambiguity into the plain language of an insurance policy.” State

Farm Ins. Cos. v. Seefeld, 481 N.W.2d 62, 64 (Minn. 1992).

To recapitulate the key provisions of the policy, Westfield Insurance provides

coverage to Worldwide for “damages because of ‘bodily injury’ . . . caused by an

‘accident’ and resulting from ‘garage operations’ involving the ownership,

maintenance or use of covered ‘autos.’” “Insureds” include “[a]nyone . . . while using

with [Worldwide’s] permission a covered ‘auto’” owned by Worldwide, with certain

-5-
exceptions. One exception is “[s]omeone using a covered ‘auto’ while he or she is

working in a business of selling, servicing or repairing ‘autos’ unless that business

is [Worldwide’s] ‘garage operations.’”

The exception at issue is a form of “business use exclusion.” “Policies often

exclude coverage if the vehicle is being used in the course of a business activity

because injuries involving business related activities involve greater risks to the

insurer.” 24 Appleman on Insurance Law & Practice § 148.4[J] (2d ed. 2011). The

exception here is grounded “in the assumption that when an insured automobile is

turned over to an independent automobile business for servicing . . . , it is likely to be

driven by an agent of that business over whom the insured has no control.” Grisham

v. Allstate Ins. Co., 992 P.2d 891, 893 (N.M. Ct. App. 1999). As the Minnesota

Supreme Court put it: “The owner does not grant permission to these individuals. 

Individually they are usually unknown to him. They are in quite a distinct group from

persons to whom an ordinary assured usually gives permission to drive his car.” 

Wendt v. Wallace, 240 N.W. 470, 471 (Minn. 1932). In other words, as applied to the

facts of this case, when Worldwide turned over the truck to McNeilus, Worldwide

had no control over who was driving the truck until McNeilus finished its work and

returned the truck to Worldwide.

Carolina Casualty argues, however, that Advanced Auto and Hansen were not

“working in a business of selling [or] servicing” autos, because they were

independent contractors who were in a separate business of transporting autos. 

McNeilus was indisputably working in a business of selling or servicing vehicles. 

But Carolina Casualty contends that the exception is inapplicable here because

although Hansen and Advanced Auto were enlisted by McNeilus to transport the

truck, they were not employed by or subject to the control of McNeilus. On that

view, Hansen and Advanced Auto are insured under Westfield Insurance’s policy as

permissive users of Worldwide’s vehicle, and not subject to the exception that would

-6-
apply to McNeilus if McNeilus’s own employee had transported the truck from

Minnesota to Ohio.

Several courts that have considered similarly worded provisions have applied

a functional approach that examines whether the party operating the vehicle is acting

in the commercial interest of a business that services or repairs autos. The New

Mexico appellate court in Grisham determined that “‘[w]orking in the business’ for

the purpose of an automobile business exclusion includes activities that are an

integral and necessary part of the automobile business.” 992 P.2d at 895. Therefore,

a “driver need not be an employee of the automobile business to fall within the

exclusion as long as the driver is acting on behalf of the automobile business.” Id.

The Fifth Circuit in Mahaffey v. General Security Insurance Co., 543 F.3d 738

(5th Cir. 2008) (per curiam), similarly reasoned that a vehicle was “used in the

business” of a lessee when the vehicle’s stand-by driver was involved in accident on

the way to a motel for the night. The court concluded that the driver was “furthering

[the lessee’s] commercial interests to have a driver on standby,” so the driver was

“acting in the business” of the lessee. Id. at 742-43. Mahaffey cited the “commercial

interest” test from Empire Fire & Marine Insurance Co. v. Brantley Trucking, Inc.,

220 F.3d 679 (5th Cir. 2000), where a vehicle was “used in the business” of a lessee

when the driver took a truck for servicing while waiting for the lessee to load cargo. 

The Empire Fire court concluded that the exclusion applied because the truck was

“used to further the commercial interests of the lessee,” and the driver’s actions were

“in furtherance of [the lessee]’s business.” Id. at 682. The Seventh Circuit likewise

concluded that a provision excluding coverage while a truck “is being used in the

business of an . . . organization to whom the automobile is rented” is one that “clearly

refers to occasions when the truck is being used to further the commercial interests

of the lessee.” Hartford Ins. Co. of Se. v. Occidental Fire & Cas. Co. of N.C., 908

F.2d 235, 239 (7th Cir. 1990); see also Forkwar v. Empire Fire & Marine Ins. Co.,

487 F. App’x 775, 780 (4th Cir. 2012) (holding that business use exception for an

-7-
auto “used in the business” of a lessee applied where independent contractor’s

conduct at the time of the accident “furthered the commercial interest” of the lessee). 

We think these cases illustrate the better approach to this type of provision, and

that the Minnesota courts likely would adopt it. The phrase “working in a business”

of servicing autos does not necessarily mean that the driver of a vehicle is employed

by the auto servicing business. Where the driver is acting in furtherance of the

commercial interests of the auto servicing business, and performing a function that

is an integral part of the auto servicing business, then the vehicle is used in the

business, and the driver is “working in” that business. Advanced Auto and Hansen

were unknown to the owner of the vehicle, Worldwide. They were performing an

essential function for McNeilus in the auto servicing business by transporting the

truck from one McNeilus facility to another. Under those circumstances, we agree

with the district court that Advanced Auto and Hansen were working in McNeilus’s

business of auto servicing within the meaning of the policy.

Carolina Casualty says this conclusion cannot be right because it would mean

that a courier like FedEx would be “working in a business” of servicing autos if the

courier transported an auto part from one McNeilus facility to another. The insurance

policy, however, is concerned only with persons who use vehicles owned by the party

to whom the policy is issued, and it must be interpreted in that light. Unlike a FedEx

courier, Hansen was not driving a truck owned by his employer, but operating a truck

owned by Worldwide that McNeilus was in the process of “servicing.” The

transportation was conducted in connection with, and in furtherance of, a business

expressly mentioned in the exception. Cf. Md. Cas. Co. v. Integrity Ins. Co., 693 F.2d

506, 509 (5th Cir. 1982) (per curiam). By moving the truck between McNeilus

locations, Hansen and Advanced Auto were using the truck to conduct an integral

part of McNeilus’s servicing operation, and they were thus “working in a business of

. . . servicing . . . ‘autos.’”

-8-
Carolina Casualty argues that if Advanced Auto and Hansen were “working in”

McNeilus’s business, then they also were working in Worldwide’s garage operations,

so there would be an exception to the exception. A driver is not insured if he is

working in a business of servicing autos, “unless that business is [the insured party’s]

‘garage operations.’” “Garage operations” include “the ownership, maintenance or

use of . . . covered ‘autos,’” and “all operations necessary or incidental to a garage

business.” Carolina Casualty contends that delivery of the truck to Ohio was a

“necessary and essential part” of Worldwide’s garage operations, because McNeilus

would have transferred the truck from its Ohio facility to Worldwide for a final

inspection before Worldwide delivered it to Rumpke.

We reject this contention because the “business of . . . servicing” in which

Hansen and Advanced Auto were working was McNeilus’s servicing business, not

Worldwide’s “garage operations.” Worldwide’s business was to deliver a Mack

“power unit”—a cab and chassis—to Rumpke. Rumpke contracted separately with

McNeilus to convert that power unit into a garbage truck; Worldwide played no part

in that contract or in McNeilus’s choice of Advanced Auto to transport the truck

within McNeilus’s operations. Hansen and Advanced Auto were delivering a vehicle

to McNeilus for a final inspection of a garbage packer unit, a matter that was integral

to McNeilus’s business. That inspection, and the rest of McNeilus’s upfitting

operations, were not integral to Worldwide’s business, so Hansen and Advanced Auto

were not working in Worldwide’s “garage operations.”

* * *

The judgment of the district court is affirmed.

______________________________

-9-