ATTORNEYS FOR APPELLANT			ATTORNEY FOR APPELLEES

Stephen J. Peters				Vincent S. Taylor

Richard P. Winegardner			Bloomington, Indiana

Indianapolis, Indiana

Gerald Allega

Evansville, Indiana

IN THE

SUPREME COURT OF INDIANA

MERIDIAN MUTUAL INSURANCE CO.,	)

							)

	Appellant (Defendant below),	)  

							)

		v.					)  

							)  

AUTO-OWNERS INSURANCE COMPANY,	)

							)  14A01-9502-CV-41

	Appellee (Plaintiff below).	)  in the Court of Appeals

							)

		and					)  14S01-9605-CV-374

							)  in the Supreme Court

BENJAMIN C. MARKHAM,			)

Individually and as administrator	)

of the Estate of Sheila A. Markham,)

et.al.,						)

							)

	Appellee/Defendants.		)

APPEAL FROM THE DAVIESS CIRCUIT COURT

The Honorable Robert L. Arthur, Judge

Cause No. 14C01-9306-CP-150

August 31, 1998

SHEPARD, Chief Justice.

	The insurance policy in this case covers carpools but not

driving for hire.  We have accepted jurisdiction to explore the

difference.  

	This case arose from an automobile accident between a car

driven by Sheila Markham and a van owned by Gail Riggins but driven

on the day of the accident by Larry Ramsey.  The collision killed

Markham and Ramsey and injured the eight other passengers in the

van, some severely.  Auto-Owners Insurance Company, as primary

insurer of Riggins’ van, initiated this interpleader and

declaratory judgment action against Ramsey's insurer, Meridian

Mutual Insurance Co., and others, to resolve conflicting claims

against its limited liability.  

	Meridian’s policy provided coverage for liability arising out

of Ramsey's permitted use of another's automobile, but excluded

from coverage "[b]odily injury or property damage arising out of

the . . . use of a vehicle when used to carry persons or property

for a fee."  (R. at 47 (emphasis excluded).)  The exclusionary

clause further stated, "This exclusion does not apply to . . .

[s]hared-expense car pools . . . ."  (Id.)  The policy does not  define "shared-expense car pool" or what it means to "carry persons

or passengers for a fee."  Meridian’s potential coverage is

secondary to the coverage afforded by Riggins’ Auto-Owners policy;

therefore, Meridian defends against excess liability claims arising

from the accident.  See Ind. Code Ann. § 27-8-9-7 (West Supp. 1997).

	Meridian denied liability and filed a cross-claim against the

named defendants, averring that Ramsey was driving the van to carry

persons for a fee.  Defendants Yoder, Chestnut, Markham, and Craig

filed a cross-claim seeking a declaratory judgment against

Meridian, asserting that this incident fell within the "shared-

expense car pool" exception.

	On cross-motions for summary judgment, the trial court held

against Meridian.  A divided panel of the Court of Appeals

reversed.  Meridian Mutual Ins. v. Auto-Owners Ins., 659 N.E.2d 207 (Ind. Ct. App. 1995).  We grant transfer and affirm the decision of

the trial court.

I.  Facts

	Gail Riggins, Larry Ramsey, and the other participants in the commuting arrangement all lived in or near Odon, Indiana, and

worked for Thomson Consumer Electronics in Bloomington.  Each

workday morning Riggins met her co-workers at the Odon Christian

Church and they commuted together to Bloomington in her large van. 

Each passenger gave Riggins $17.00 per week for the eighty-four

mile daily round-trip.  On days when Riggins was working a

different shift or not going into work, she let the other commuters use her van, allowing an alternate driver (normally, Larry Ramsey)

to deduct $5.00 from that week's $17.00 contribution for each day

he drove in her place. 

	Riggins had been involved in such an arrangement for many

years.  She had originally been a passenger, paying the previous

owner/driver of the van $15.00 per week "for his expenses and

things."  (R. at 202.)  In 1973 that driver sold Riggins the van

and moved to Bloomington.  Riggins and the other commuters

continued the $15.00 per week arrangement until 1989, when Riggins' 

purchase of a new van and an increase in gasoline prices prompted

an increase to $17.00.  Riggins says she used the money for

"[g]asoline and tires, and the upkeep of the van, and insurance." 

(R. at 203.)  Although she did not keep any records  to determine

whether she received enough to cover her expenses, (id.), she did believe that the amount she received was completely spent on

expenses related to the commute.  She saw no need to report any of

the receipts as income on her taxes, take business expense

deductions, or even discuss the matter with her accountant.  She

stated that the group approached the payments as a sharing of the

expenses of the trip, and that she was not involved in the

arrangement as a business or for profit.

	Although there were some changes in riders over the fifteen-

year period, most of the commuters had been riding with Riggins

under this arrangement for many years with little fluctuation in participation.  When she began the driving the van, only five or

six riders commuted with her.

	Riggins knew she would be working a late shift on February 18,

1992, so she made arrangements with Ramsey to drive the van.  While

returning from Bloomington that afternoon the van collided with

Sheila Markham's car, killing Ramsey and Markham and injuring the

van’s other eight passengers.1

II.  Summary Judgment

	Reviewing a trial court’s entry of summary judgment, we

examine the same issue as the trial court does, upholding the grant only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.  Havens v. Ritchey, 582 N.E.2d 792 (Ind. 1991); see also Ind.Trial Rule 56(c).  While cross motions for summary judgment on the same issues do not,

in and of themselves, prove the absence of a genuine issue of

material fact, Whitcomb v. Young, 258 Ind. 127, 279 N.E.2d 566 (1972), where both parties in their cross-motions assert that a

policy term is unambiguous, "construction of a contract under such

a situation is a judicial function."  B & R Farm Serv., Inc. v. Farm Bureau Mutual Ins. Co.., 483 N.E.2d 1076, 1077 (Ind. 1985).

III.  Principles of Insurance Policy Interpretation

	Ambiguous provisions in insurance policies are construed in

favor of the insured.  American States Ins. Co. v. Kiger, 662 N.E.2d 945 (Ind. 1996).  This is particularly true with unclear

provisions that limit or exclude coverage.  Id.  Where provisions limiting coverage are not clearly and plainly expressed, the policy

will be construed most favorably to the insured, to further the

policy's basic purpose of indemnity. Masonic Accident Ins. Co. v. Jackson, 200 Ind. 472, 164 N.E. 628 (1929).  "This strict construal against the insurer is driven by the fact that the insurer drafts

the policy and foists its terms upon the customer.  ‘The insurance

companies write the policies; we buy their forms or we do not buy

insurance.’"  American States Ins. Co., 662 N.E.2d at 947 (quoting American Economy Ins. Co. v. Liggett, 426 N.E.2d 136, 142 (Ind. Ct. App. 1981)). 

	When insurance policy language is clear and unambiguous, however, it should be given its plain and ordinary meaning.  Tate v. Secura Ins., 587 N.E.2d 665, 668 (Ind. 1992).  Under Indiana law, an insurance policy is unambiguous if reasonable persons

cannot honestly differ as to the meaning of the policy language.  Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind. 1985), cert. denied, 479 U.S. 1060 (1987).  One way of determining whether reasonable persons might differ is to see if the policy language is susceptible to more than one interpretation.  Id. 

	We conclude that the ordinary meaning of the exclusionary

clause at issue here is such that the trial court was correct to

hold that the driving arrangements in this case constituted a

"shared-expense car pool."

IV.  "Shared-expense Car Pool"

	The Court of Appeals determined that a "shared-expense car

pool" is an arrangement where the expenses are "shared on a ratable

basis."  Meridian Mutual Ins., 659 N.E.2d at 213.  The court further elaborated:

	For the "shared expense" car pool exception to serve

its purpose within the policy, the passengers must not

merely contribute but must contribute in proportion to

the expenses actually incurred.  Absent a proportionate

allocation of expenses among the passengers, the owner is

merely carrying passengers for a fee.  Here, there is no

evidence of expenses and, hence, no correlation between

expenses and the amount paid by the passengers.  There is

no factual basis in the record to support a conclusion

that the expenses were actually shared.  The most that

can be said is that the fee collected was simply used to

defray the expenses of operating the van.  That is not

enough to invoke the exception.

Id. at 213.  Determining that Riggins’ arrangement was not a "shared-expense car pool," the Court of Appeals found that

Meridian’s "carrying for a fee" exclusion applied to deny  coverage

for injuries and damage arising out of this accident.  

	The Seventh Circuit recently addressed this exact issue in

General Accident Ins. Co. v. Gonzales, 86 F.3d 673 (7th Cir. 1996), a case with facts very much like the case at hand.2  Gonzales worked at a factory in Michigan City, which was about forty miles

from his home in Merrillville.  He used his mini-van to drive four

of his co-employees who lived in Merrillville from a local parking

lot to their workplace, receiving $5.00 per day from each passenger

for the eighty-mile round trip.  Gonzales roughly calculated his

weekly gas expense to be at least forty dollars, but never made any

calculations as to his other expenses such as wear and tear or

depreciation, nor did he attempt to amortize and allocate fixed

costs such as tires, oil, and maintenance.  He did not show how the

amount he received related to the cost of the commute.  Deposition

testimony revealed that the employees considered the arrangement a

car pool.  Id. at 674.

	In assessing the meaning of the term "shared-expense car

pool," the Seventh Circuit observed that requiring formal expense

accounting and allocation made little sense in light of the

informal nature of most car pool arrangements.   Id. at 677-78.  Instead, the court adduced its own "rough estimates" of Gonzales’

costs, compared them to what he received weekly from his

passengers, and concluded that his expenses more than outweighed his revenue.  Id. at 678.  Buttressing its calculations with passenger statements testifying that $5.00 a day was "fair" and "a

good deal," which to the court further proved that the expenses

were fairly proportioned, id. at 679, the Seventh Circuit concluded that this arrangement indeed constituted a "shared-expense car

pool."  

	We agree with the Seventh Circuit's analysis and conclusions

regarding "shared-expense" car pooling arrangements.  

	First, car pools are predominantly informal arrangements

typically based on "ball-park" figures and "reasonable guesses"

about the expenses incurred in the daily trip.  See Gonzales, 86 F.3d at 678 n.6.  Unlike a single check arriving at the table of a

group of friends out for lunch, the costs of commuting are not

readily discernable or easily divisible.  The expense per person 

can fluctuate daily with changes in the price of fuel, the number

of riders on a given day, or the route taken, and it could be

further complicated if the driver picks up each passenger at his or

her home instead of at a central location.  

	Moreover, true expensing would require accounting for vehicle

depreciation, and  amortization and allocation of fixed costs like

repairs and tune-ups.  Such complicated accounting operations are

made even more difficult if the driver must further distinguish

between personal and car pool use of the vehicle.  How often must the driver recalculate the amount she requests from each passenger:

once a year? once a month? every time the price of gas changes? 

each time a different number of people ride?  The Court of Appeals

recognized the accounting morass that would result from true

expensing, but concluded that without it "the owner is merely

carrying passengers for a fee."  Meridian Mutual, 659 N.E.2d at 213.3  

	Our society encourages ride-sharing as a good way of

decreasing engine emissions, alleviating congested roadways and

highway wear and tear, and decreasing fuel consumption and expense. 

See, e.g., Gonzales, 86 F.3d at 679.  Requiring car pool drivers to maintain standard accounting and expense allocation in order to

qualify for protection under their insurance policies would

presumably prompt some people to abandon car pooling altogether, a

result disadvantageous to commuters as individuals and society as

a whole.

	Second, evidence of detailed accounting does not necessarily

indicate "sharing of expenses."  A high degree of expense tracking

is actually more suggestive of a commercial enterprise than of a "proportional" sharing of expenses in a car pooling situation.  The

Seventh Circuit stated:

	It seems inapposite that the policy exception for

car pools, an essentially informal arrangement, requires

such a level of formality in the calculation of expenses. 

If Gonzales had indeed operated his private vehicle as a

business, keeping precise track of daily expenses,

reflecting it in his tax returns and possibly even

reporting it as a business endeavor with its benefits,

and accounting for the fluctuating price of fuel, that

seems to us the type of formal arrangement that was not

intended by the policy exception for car pools.  To the

contrary, a precise formulation of expenses reflects a

commercial endeavor and not a car pool arrangement

initiated for convenience, efficiency, cost reduction and

camaraderie.

Id. at 677. 	

	Third, we do not see how the level of underwriting risk

incurred by the carrier would change if Riggins had performed detailed expense calculations and allocations.  How is the risk of

accident increased, such that Meridian would not wish to insure

Riggins' car-pooling arrangement, simply because she failed to link

the amount she asked the others to contribute with her actual

expenses?  As the Seventh Circuit noted:

	It makes little sense to focus so intently on the

precise calculation of expenses. . . .  The risk incurred

by Gonzales in traveling with his co-employees remains

the same whether the calculations of gas and mileage are

made to the penny or whether each passenger chips in five

bucks for the ride to and from work; either way a group

of co-employees are sharing part of the expenses and

enjoying the convenience, fun, and camaraderie of

traveling together to and from their place of employment.

Gonzales, 86 F.3d at 678.

	Rather than reading "shared-expense" to mean that expenses

must "actually [be] shared on a ratable basis," Meridian Mutual Ins., 659 N.E.2d at 213, we read it to address situations where the parties intend to share the burden of car pooling expenses,

regardless of whether they perform exact calculations regarding 

the proportionate sharing of that burden.  

	The inquiry should be whether a reasonable person, after

reviewing the totality of the circumstances surrounding the

transportation arrangement, would conclude that the commuting

participants were involved in a car pool4 in which the non-driving participants contributed money to share the commuting burdens born

by the driving participant.  

	The correlation of expenses to the amount contributed by each

passenger may be one item to consider in reviewing this issue, but

there are many other questions a reasonable person might ask in determining whether a commuting arrangement is a shared-expense car

pool.  One might be:  "What appears to be the driver's primary

motivation to participate (i.e. is the driver doing this to make

money)?"  Objective evidence which might help answer this question

would be:  whether the driver merely has an operator’s license, or

a more specialized form of driver’s license;5 whether the driver declares the money she receives from her passengers as income or

lists her expenses as business deductions on her tax returns;

whether the vehicle is owned by the driver or by a commercial

entity; whether the driver holds herself out as providing

transportation to the general public or a large group of people, or

only to a small group that generally does not vary in

participation; whether there is significant formality in the

relationship between the driver and passengers, such as a written

agreement; whether the driver has a purpose besides the travel

itself for going from the point of departure to the point of

arrival; and whether the driver uses the vehicle at other times for

her own personal use.  Evidence on these and other points will tend

to establish whether the arrangement is a joint venture of shared

burden or an enterprise existing for the profit of the driver.  

	In the present case, the evidence shows that Riggins did not

participate in the commuting arrangement for a commercial purpose. 

She positively testified that she was not involved in this arrangement to make a profit.  She did not declare the amount she

received as income or list her expenses as business deductions on

her taxes.6  She stated that she believed the money she received was used entirely to cover the cost of the commute.  There was no

evidence that she had any form of specialized driver’s license, nor

any indication that the arrangement’s level of formality rose above

the weekly payment of $17.00 to Riggins on either Friday or Monday, 

(i.e., there were no signed contracts, no tickets, no invoices or

bills distributed or mailed to the passengers, etc).  The van

involved in the accident was titled in her name, and not that of a

corporation or transportation company.  While the arrangement had

gone on for many years, there was relatively low fluctuation in

participation.  Moreover, the opportunity to ride was extended only

to Thomson co-workers living in and around Odon, all of whom the

driver knew personally.  Finally, because she herself worked at

Thomson, she was not making a trip that she otherwise would not

have made but for the transportation arrangement with the other

passengers.

	The only evidence that could indicate that Riggins had a

commercial motivation is her statement that she might have

purchased her van with the transportation of her co-workers in

mind:

	Q.	[W]hat was your reason for buying the van [in 1989]?

	A.	Well, uh, I needed a way to work, and some other people needed a way to work; so we just decided

that--I decided that, uh--I had had a van before this,

and we all just kind of pitched in and paid our--my

expenses, really.  And so when I got a new van, we just

continued to do so.

(R. at 194).  One could legitimately purchase a van in anticipation

of transporting people as part of a car pool, however, instead of

in anticipation of transporting people as part of a commuter

service.  In light of the other evidence from the record, we 

interpret her statement as indicating that she purchased the van in

anticipation of continuing the group’s shared-expense car pool.

	Another legitimate question one might ask to determine the

existence of a shared-expense car pool is how the passengers view

the arrangement (i.e., do they think they are "paying for" their

ride, rather than sharing the expenses of one)?  For example, in

Gonzales "[t]he deposition testimony clearly reflect[ed] that the employees considered themselves car pooling."  Gonzales, 86 F.3d at 674.  Although no passenger depositions appear in this record,

Riggins said she believed they viewed the arrangement as a

collective effort to share expenses, and not as payment for

transportation services.  Notwithstanding the self-serving nature

of this declaration, it is the only evidence about the passengers’

viewpoint. 

	Of course, whether the amount of money contributed by the

passengers reasonably reflects the cost of the trip is highly pertinent.  Meridian argues that the money Riggins received from 

passengers greatly exceeded the cost of the trip, implying that the

parties really must not have intended to conduct a shared expense

car pool.  We disagree.  Meridian bases its argument on federal 

"per mile" business expense deduction, which, when used to

calculate Riggins’ expenses, indicates that the 1992 commuting

expenses would have been about $3500 less than what she would have

received from her co-workers.  We believe the rough estimates

performed by the Seventh Circuit in Gonzales7 are more appropriate, see Gonzales, 86 F.3d at 678 n.6, reflecting both the fact that calculating expenses in a car pool is not an exact science andnor is

notit intended to be, and that certain rates and figures from one area

of the law, like federal income tax, are not always appropriately

applied in other areas of the law, such as insurance policy

interpretation.  

	Of the $187 she received each week, only $79 remained after

subtracting fuel and depreciation expenses alone.  Further

subtractions for upkeep (tires, brakes, oil, regular maintenance,

repairs, etc.) cause the $79 surplus to diminish even further.   

	Besides upkeep expenses, the remaining $79 must also cover

other costs born by Riggins which the other commuters did not bear. 

When a person makes an eighty-mile-per-day commute consisting of

city streets, county roads and state highways, she gives up 90-120 minutes each day (not counting traffic jams and road construction)

that she could have spent doing something other than driving.8  This "opportunity cost" is part of the cost of commuting.  Just as

the passengers help bear the more obvious costs of the commute by

contributing money, so they might also reasonably help bear the

opportunity costs of driving which, like the other costs involvedthat, the driver bears alone but for

the monetary contributions of the others.9  

	Another cost born exclusively by the driving car pool member

is the cleaning of the vehicle.  Because of the daily travel, its

exterior will get dirtier faster than if it remained parked and

relatively unused, like the passengers’ cars.  Moreover, the

interior is more prone to coffee stains, dirt from shoes, smudged

windows, wrappers on the floor, etc., than the passengers’ unused

cars.  Thus, the burden on the passengers to clean their vehicles

regularly is lessened by the car pooling arrangement, while the

driver’s cleaning responsibilities remain, and may even increase,

because of it.

	We conclude that a reasonable person, after viewing the

totality of the circumstances, would find Riggins, Ramsey, and the other commuters to have been involved in a shared-expense car pool. 

Our review has considered several questions reasonable people might

ask in making such a determination.  While these questions are

helpful and probative, they do not herald a new "x-part test" for

determining the existence of a "shared-expense car pool."  The

paramount consideration is whether a reasonable person, after

reviewing the totality of the circumstances surrounding the

transportation arrangement, would conclude that the commuting

participants were involved in a car pool in which the non-driving

participants contributed money to share the commuting burdens born

by the driving participant.  Any evidence reasonably probative to

that issue is relevant.

V.  Conclusion

	Because Ramsey’s policy with Meridian did not exclude coverage

for bodily injury or property damage arising out of the use of a

vehicle as part of a shared-expense car pool, the trial court was

correct in awarding summary judgment to the appellees. 

Accordingly, we affirm the trial court.

Dickson, and Selby, JJ., concur.

Boehm, J., dissents with separate opinion in which Sullivan, J.,

joins.

ATTORNEYS FOR APPELLANTS

Stephen J. Peters

Richard P. Winegardner

Indianapolis, Indiana 

Gerald Allega

Evansville, Indiana

ATTORNEY FOR APPELLEE

Vincent S. Taylor

Bloomington, Indiana       

	IN THE

	SUPREME COURT OF INDIANA

							)

MERIDIAN MUTUAL INSURANCE 		)

COMPANY,						)

	Appellant (Defendant below),		)	Supreme Court

							)	Cause No.  14S01-9605-CV-374

	v.						)	

							)	Court of Appeals

AUTO-OWNERS INSURANCE COMPANY, 	)	Cause No. 14A01-9502-CV-41    	Appellee (Plaintiff below),			)

							)

	and						)

BENJAMIN C. MARKHAM,			)

Individually and as administrator of the 		)

Estate of Sheila A. Markham, et. al.,		)

	Appellee/Defendant.			) 

							)

	APPEAL FROM THE DAVIESS CIRCUIT COURT

	The Honorable Robert L. Arthur, Judge

	Cause No. 14C01-9306-CP-150

	ON PETITION TO TRANSFER

August 31, 1998

BOEHM, Justice, dissenting.

	We are interpreting an insurance policy that both the insured and the insurer agree

was intended to provide coverage for ordinary use of an automobile, not use as a commercial

carrier.  The specific provisions involved are the exclusion for “carrying persons or property

for a fee” and the recognized exception to that exclusion of a “shared-expense car pool.” 

	I agree that it is not necessary for a car pool to maintain anything approaching detailed

accounting in order to meet the standard for a “shared-expense car pool,” and that informal

arrangements to share commuting transportation are to be encouraged.  For that reason I

would indulge a presumption that informal arrangements among people who commute to a

common destination are within the car pool exception to the policy exclusion.  However, the

factors identified by the majority seem to me to go too far in permitting and even

encouraging an enterprise in the underground economy.  In particular, the fact that the

operator of a bootleg commercial carrier chooses neither to pay taxes nor obtain a

commercial driver’s license does not seem relevant to the car pool inquiry to me.  Identifying

these as factors favoring insurance coverage at the lower cost afforded to everyday drivers

instead of the higher premium charged commercial carriers only encourages skirting the tax

and motor vehicle laws. 

	I also think that “expense” means only depreciation and out of pocket costs, not

compensation for driving that the driver would do in any event to get herself to work.   The

“opportunity cost” as described by the majority would be incurred by Riggins regardless of whether eleven others or no one rode with her.  Slip op. at 17.  The fact that Riggins was paid to drive while others slept or read would be called compensation for services by the tax

authorities and most ordinary citizens.  Reduction of the passenger charge by $5.00 per day

for any of the passengers who drive confirms that this arrangement included a compensation

component to Riggins as the usual driver.  As such, this looks to me like any other service

business that also furnishes the equipment needed to provide the service.  As the majority

notes, the Internal Revenue Service mileage allowances may or may not be controlling in

other contexts, but they give us some idea of whether this was a profitable enterprise or not. 

And the idea they give me is that it was indeed profitable in the range of $2,000 to $4,000

per year.10

	It seems to me the test of a shared-expense car pool where the passengers furnish something other than their own driving and vehicles from time to time (in this case $17.00 in cash per week)

should be no more and no less than 1) do the participants think they are sharing expenses or

something more and 2) is the consideration within a reasonable ballpark estimate of the actual costs

of providing the transport including depreciation.  Here the factors identified, in particular the fact

that the arrangement contemplates compensation to Riggins as the driver, overcome the presumption

that an informal arrangement is a “shared-expense car pool.”  It seems to me that the Court of

Appeals for the Seventh Circuit correctly decided Gen. Accident Ins. Co. of Am. v. Gonzales, 86 F.3d 673 (7th Cir. 1996) on the facts of that case, and in doing so pointed to several factors that distinguish it from this case.  These include 1) Gonzales offered “rough estimations” and

“passenger testimony” that the five dollars per day from passengers at best covered only a

portion of his expenses, 2) if Gonzales did not go to work the passengers took the bus or

drove themselves in a vehicle other than the one owned by Gonzales, and 3) four to six

people were transported by Gonzales in a vehicle that he used for his personal transportation

as opposed to the eleven passengers transported by Riggins in a vehicle purchased

specifically to engage in this commuter service.  Id. at 679.

	SULLIVAN, J. concurs.