IN THE COURT OF APPEALS

STATE OF ARIZONA

DIVISION TWO

ANTHONY JACKSON and LETICIA ) 2 CA-CV 2011-0001

JACKSON, a married couple, ) DEPARTMENT B

)

Plaintiffs/Appellants, ) O P I N I O N

)

v. )

)

NATIONWIDE MUTUAL INSURANCE )

COMPANY, a foreign insurance )

company; AMCO INSURANCE )

COMPANY, a foreign insurance company, )

)

Defendants/Appellees. )

)

APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY

Cause No. C20086091

Honorable Paul E. Tang, Judge

AFFIRMED

Goldberg & Osborne

 By David J. Diamond and D. Greg Sakall Tucson

 Attorneys for Plaintiffs/Appellants

Goering, Roberts, Rubin, Brogna, Enos

& Treadwell-Rubin, P.C.

 By William L. Rubin and Elizabeth L. Warner Tucson

 Attorneys for Defendant/Appellee

Nationwide Mutual Insurance Company

K E L L Y, Judge.

FILED BY CLERK

COURT OF APPEALS

DIVISION TWO

SEP 30 2011
2

¶1 Anthony and Leticia Jackson appeal from the trial court‟s grant of Appellee 

Nationwide Mutual Insurance Company‟s motion for summary judgment and the denial 

of the Jacksons‟ motion for new trial in this declaratory action against Nationwide and its 

subsidiary AMCO Insurance Company (collectively “Nationwide”).

1

The Jacksons argue

the court erred in concluding that A.R.S. § 20-259.01, Arizona‟s Uninsured Motorist Act

(UMA), did not require Nationwide to offer uninsured motorist coverage under the 

Businessowner‟s Policy it had provided to an automobile service and repair station. They 

contend that because Nationwide failed to offer such coverage, it must be imputed to the 

policy, providing uninsured motorist coverage for injuries Anthony Jackson sustained 

while riding as a passenger in his own vehicle, when it was being driven by a service 

station employee and was struck by another vehicle. For the following reasons, we 

affirm. 

Background

¶2 Although we view the facts in the light most favorable to the party against 

whom summary judgment was granted, Andrews v. Blake, 205 Ariz. 236, ¶ 12, 69 P.3d 7, 

11 (2003), here the parties filed a joint stipulated statement of facts in connection with 

their separate motions for summary judgment. The facts set forth below are taken from 

that stipulation. In January 2005, Anthony Jackson had mechanical problems with his 

automobile and stopped at a Chevron repair station. Jackson had planned to leave his 

 

1Consistent with the parties‟ arguments, we treat the two policies at issue in this 

case as having been issued by Nationwide.
3

vehicle at the station, but, as the parties stipulated, a Chevron employee “offered to show 

Jackson how to drive the [vehicle] with its mechanical problems.” Jackson accepted, and 

the employee drove Jackson‟s vehicle with Jackson in the passenger seat. After 

Jackson‟s vehicle entered a roadway adjacent to the Chevron station, it was struck by 

another vehicle driven by Eduardo Martinez and Jackson was injured. Neither Martinez, 

who was at fault, nor his vehicle was insured.

¶3 Chevron carried two insurance policies, a Business Auto Policy (BAP) 

issued by Nationwide and a Businessowner‟s Policy (BOP) issued by AMCO. The 

policies were issued by the same agent at the same time as part of the same transaction, 

and were effective for the same time period.

¶4 The BAP provided coverage for a wide range of risks for motor vehicles 

used in Chevron‟s business. Under the policy, Nationwide provided liability coverage for 

bodily injury or property damage caused by an accident involving a “covered „auto.‟”

2

 

The policy also contained an uninsured motorist (UM) endorsement under which 

Nationwide agreed to “pay all sums the „insured‟ is legally entitled to recover as 

compensatory damages from the owner or driver of an „uninsured motor vehicle.‟”

¶5 The BOP is a commercial general liability (CGL) policy. It provides 

coverage for losses such as damage to Chevron‟s building and premises, loss of property,

and equipment breakdown. It also provides liability and medical payment coverage,

 

2Chevron was a named insured “for any covered „auto.‟” “Covered auto” includes 

automobiles Chevron did not “own, lease, hire, rent or borrow that are used in connection 

with [the] business.”
4

subject to a general exclusion for losses arising out of the use of automobiles. Section 

2(g) of the BOP specifies that the policy does not apply to “„[b]odily injury‟ or „property 

damage‟ arising out of the ownership, maintenance, use or entrustment to others of any 

. . . „auto‟ . . . owned or operated by or rented or loaned to any insured.” But, this 

exclusion is replaced by a garage liability endorsement that extends limited automobile

coverage for Chevron‟s garage operations.3 Specifically, it provides that the bodily 

injury and property damage liability coverages in the BOP would apply to “[t]he 

operation by an insured of your „customer‟s auto‟ in the course of your „garage 

operations.‟” The BOP did not contain a UM endorsement, and Nationwide did not offer 

UM coverage to Chevron for the BOP.

¶6 After the Jacksons recovered damages under the UM endorsement to 

Chevron‟s BAP,

4

they filed a complaint for declaratory judgment seeking a judicial 

determination that UM coverage should be imputed to the BOP. As previously noted, the 

Jacksons and Nationwide filed motions for summary judgment and stipulated that the 

only issue to be decided was “whether [Nationwide] was required to offer UM coverage 

to [Chevron] on the BOP.” After a hearing, the trial court granted Nationwide‟s motion 

for summary judgment and denied the Jacksons‟ motion. The Jacksons filed a motion for 

 

3

“„Garage operations‟ means the ownership, maintenance or use of premises for 

the purpose of a business of servicing, repairing, parking or storing „customer‟s autos.‟” 

“Customer‟s auto” means a customer‟s motor vehicle left with the garage business for 

“service, repair, storage or safekeeping.” “„Garage operations‟ also includes all 

operations necessary or incidental to the performance of garage operations.”

4Nationwide concedes that Jackson‟s vehicle was covered under the BAP as a nonowned auto. Uninsured motorist benefits were paid in accordance with the policy.
5

new trial, in which they argued the court erred in finding Nationwide was not required to 

offer UM coverage on the BOP and essentially reurged the arguments they had made on 

summary judgment. The court denied the motion and this appeal followed.

Discussion

¶7 In its lengthy minute entry granting Nationwide‟s motion for summary 

judgment, the trial court concluded Nationwide was not required to offer Chevron UM 

coverage when it issued the BOP, relying, in part, on § 20-259.01(L) and case law 

interpreting that provision. See, e.g., Petrusek v. Farmers Ins. Co. of Ariz., 193 Ariz. 

552, 975 P.2d 142 (App. 1998) (interpreting former § 20-259.01(K), now renumbered as 

subsection (L)). The court concluded the BOP was a general commercial liability policy 

that provided excess5liability coverage and was not a primary automobile liability 

insurance policy. On appeal, the Jacksons contend the court erred, arguing the BOP was 

a primary motor vehicle insurance policy subject to the requirements of § 20-259.01(A).

¶8 “We review the denial of a motion for new trial . . . for an abuse of 

discretion.” Mullin v. Brown, 210 Ariz. 545, ¶ 2, 115 P.3d 139, 141 (App. 2005). We 

review de novo a grant of summary judgment and must decide whether the trial court 

correctly applied the law. See Valder Law Offices v. Keenan Law Firm, 212 Ariz. 244, 

¶ 14, 129 P.3d 966, 971 (App. 2006). We likewise review the interpretation of a statute 

de novo. State v. Wilson, 200 Ariz. 390, ¶ 4, 26 P.3d 1161, 1164 (App. 2001). Similarly, 

 

5Although the BOP had a clause indicating its coverage was excess, the parties 

agreed at oral argument that because the BAP had a similar clause, the two clauses 

invalidated each other and should not be considered.
6

interpretation of an insurance contract is a question of law we review de novo. First Am. 

Title Ins. Co. v. Action Acquisitions, LLC, 218 Ariz. 394, ¶ 8, 187 P.3d 1107, 1110 

(2008).

¶9 We begin with the UMA. Section 20-259.01(A) provides, in relevant part, 

as follows:

Every insurer writing automobile liability or motor vehicle 

liability policies shall make available to the named insured 

thereunder and by written notice offer the insured and at the 

request of the insured shall include within the policy 

uninsured motorist coverage which extends to and covers all 

persons insured under the policy, in limits not less than the 

liability limits for bodily injury or death contained within the 

policy. The selection of limits or rejection of coverage by a 

named insured or applicant on a form approved by the 

director is valid for all insureds under the policy. . . .

“[T]he purpose of the [UMA] is „to guarantee that responsible drivers will have an 

opportunity to protect themselves and their loved ones as they would others.‟” Estate of 

Ball v. Am. Motorists Ins. Co., 181 Ariz. 124, 127, 888 P.2d 1311, 1314 (1995), quoting 

Ormsbee v. Allstate Ins. Co., 176 Ariz. 109, 112, 859 P.2d 732, 735 (1993). To carry out 

this purpose, § 20-259.01(A) mandates that insurers offer UM coverage to their insureds 

in the form of “written notice.” 

¶10 Because the UMA mandates that an insurer offer UM coverage for every 

automobile liability policy issued to an Arizona insured, the proper remedy for failing to 

do so is “to include the coverage in the policy by operation of law.” Ins. Co. of N. Am. v. 

Superior Court, 166 Ariz. 82, 85-86, 800 P.2d 585, 588-89 (1990). However, the 

legislature has excepted from this provision “any general commercial liability policy, 
7

excess policy, umbrella policy or other policy that does not provide primary motor 

vehicle insurance.” § 20-259.01(L).

¶11 “When interpreting statutes, our primary goal is to give effect to” the 

legislature‟s intent in enacting the provisions. Bither v. Country Mut. Ins. Co., 226 Ariz. 

198, ¶ 8, 245 P.3d 883, 885 (App. 2010). And, “[t]he best indication of legislative intent 

is the plain language of the statute.” Id. Here the language of § 20-259.01 is clear; it 

requires the insurer issuing automobile or motor vehicle liability policies to offer UM 

coverage unless certain exceptions apply.

¶12 Nationwide contends the BOP policy falls within the exception set forth in 

§ 20-259.01(L), and it was not, therefore, required to offer UM coverage to Chevron

when it issued that policy. The Jacksons concede the BAP provided primary auto 

insurance for Chevron and they agree the BOP is a general commercial policy, or CGL 

policy. But, they argue, “by virtue of the [garage liability] endorsement, the BOP is not a 

standard CGL policy” as contemplated by § 20-259.01(L). Rather, they contend the 

endorsement converted the BOP to a second policy providing “primary automobile 

liability coverage for [Chevron]‟s garage operations.” They insist the BOP “was written 

and intended . . . as a primary automobile liability policy when an employee is driving a 

customer‟s automobile.” Thus, the Jacksons maintain, “under A.R.S. § 20-259.01(A) and 

(L), Nationwide was obligated to offer UM coverage under both primary policies,” and,

because no such offer was made under the BOP, coverage should be imputed by law. 

See id.
8

¶13 The Jacksons rely on St. Paul Fire and Marine Insurance Co. v. Gilmore, 

168 Ariz. 159, 812 P.2d 977 (1991), in support of their argument that the BOP provided 

primary automobile insurance. In Gilmore, an employee driving in the course of her 

employment was injured by a negligent motorist. Id. at 161, 812 P.2d at 979. After she 

exhausted her own insurance, she sought to recover from her employer‟s CGL policy. Id. 

The CGL policy contained automobile insurance but uninsured motorists coverage had 

not been offered on the policy. Id. Our supreme court held that because the policy 

provided automobile liability insurance, § 20-259.01(A) required the insurer to offer UM 

coverage. Id. at 167, 812 P.2d at 985.

¶14 Following Gilmore, the legislature amended § 20-259.01 to include the 

exception now contained in § 20-259.01(L).6See 1993 Ariz. Sess. Laws, ch. 207, § 1. 

Division One of our court concluded in Petrusek, 193 Ariz. 552, ¶ 17, 975 P.2d at 146, 

that the legislature intended the exception to overrule Gilmore‟s requirement that insurers 

offer UM coverage when general commercial liability policies include automobile 

liability coverage. In Petrusek, an employee was injured while driving during the course 

of business. Id. ¶ 2. Her employer carried a BAP as well as a CGL policy. Id. ¶ 3. The 

employee sought to recover from the CGL policy, which provided auto coverage only as 

excess insurance. Id. ¶¶ 3-5, 12. She argued that because her personal insurance 

 

6At the time it was enacted the exception was contained in § 20-259.01(I). See

1993 Ariz. Sess. Laws, ch. 207, § 1. We refer to the exception by its current designation 

as § 20-259.01(L).
9

coverage had lapsed,7her employer‟s CGL policy became primary insurance. Id. ¶ 13. 

We rejected this argument, noting that the legislative history of § 20-259.01(L)

“indicates that the legislature intended to overrule Gilmore‟s holding that required 

insurers to offer UIM coverage in connection with general commercial liability policies 

providing automobile liability insurance.”8 Id. ¶ 17. We reasoned that

[t]he plain language of the statute shows an intent to eliminate 

the requirement that insurers offer [underinsured motorist] 

coverage when selling automobile liability coverage provided 

„in connection with‟ a broad range of „non-primary‟ type 

policies, including but not limited to commercial general 

liability, excess, and umbrella policies. Thus, the exception 

applies as long as the policy is not intended to be the first or 

only source of insurance coverage.

Id. ¶ 15.

¶15 Here the BOP issued to Chevron provides typical commercial general 

liability coverage. The BAP, issued at the same time, provides the type of coverage 

typically found in a motor vehicle liability policy, including UM coverage. The BAP was 

issued to Chevron at the same time as the BOP, it covered the same policy period and the 

insured was offered UM coverage in connection with the transaction. Under these 

circumstances, we conclude the BOP was not “intended to be the first or only source of 

[automobile liability] insurance coverage” and the UMA does not apply to it.

9

 Id.

 

7We agree with the Jacksons that Petrusek‟s argument differs from their own. But, 

as discussed below, we find the reasoning of Petrusek equally applicable here. 

8

The Jacksons agree the legislature intended to overrule Gilmore by enacting the 

language contained in § 20-259.01(L). 

9Although Petrusek addressed underinsured motorist (“UIM”) coverage, its 

reasoning is equally applicable to UM coverage. See § 20-259.01 (exception contained in 
10

¶16 The Jacksons also argue that, “consistent with . . . [A.R.S.] § 28-4010, the 

[garage liability] endorsement set forth that the [BOP] provides primary automobile 

liability coverage in situations such as when an employee is driving a customer‟s 

vehicle.” Section 28-4010(A) sets forth the following presumption:

If two or more policies affording valid and collectible motor 

vehicle liability insurance apply to the same motor vehicle 

that is involved in an occurrence out of which a liability loss 

arises and one of the policies affords coverage to a named 

insured engaged in the business of selling, repairing, 

servicing, delivering, testing, road testing, parking or storing 

motor vehicles, both of the following are conclusively 

presumed:

1. If at the time of loss the motor vehicle is being operated 

by a person engaged in one of the businesses or by the 

person‟s employee or agent, the insurance afforded by the 

policy issued to the person engaged in the business is primary 

and the insurance afforded by any other policy is excess.

¶17 In support of their argument that § 28-4010 establishes the BOP provided 

primary automobile insurance in this situation, the Jacksons rely on Nationwide Mutual

Insurance v. CNA Insurance Co., 159 Ariz. 368, 767 P.2d 716 (App. 1988), and State 

Farm Mutual Automobile Insurance Co. v. Fireman’s Fund Insurance Co., 149 Ariz. 

179, 717 P.2d 858 (1986).

10 But neither case addresses a situation involving a 

determination of priority between two policies held by the same garage owner. To the 

 

subsection L applies to both UM and UIM coverage). And, although the Jacksons are 

correct that Petrusek did not involve a garage liability endorsement, its statement of what 

the statute requires is equally applicable in this context. 

10These decisions refer to A.R.S. § 28-1170.01, the predecessor to § 28-4010. See

1997 Ariz. Sess. Laws, ch. 87 § 12 (renumbering as § 28-4010); 1995 Ariz. Sess. Laws, 

ch. 132, § 3; 1978 Ariz. Sess. Laws, ch. 183, § 2.
11

contrary, in Nationwide, we held that § 28-4010 is intended to apply “where there are 

multiple carriers” to “requir[e] that the insurer for the negligent driver will usually be the 

primary carrier.” 159 Ariz. at 370, 767 P.2d at 718. 

¶18 The trial court concluded, and we agree, that “the statutory dictates of 

[§ 28-4010] are inapposite” here. We find nothing in the plain language of § 28-4010 

that suggests the legislature intended the provision to apply to determine priority between 

two policies issued to the same garage owner. See City of Tucson v. Clear Channel 

Outdoor, Inc., 209 Ariz. 544, ¶ 71, 105 P.3d 1163, 1178 (2005) (in interpreting statutes, 

we look first to language of statute and give words used their plain meaning). Rather, the 

conclusive presumptions of § 28-4010 were intended to “plac[e] primary liability on the 

party who is most responsible for the loss and thus encourag[e] the negligent party to use 

due care.” John Deere Ins. Co. v. W. Am. Ins. Group, 175 Ariz. 215, 218, 854 P.2d 1201, 

1204 (App. 1993). These considerations would not be served where both policies are 

issued to the same party “engaged in the business of . . . repairing . . . motor vehicles.”

§ 28-4010. And, as Nationwide pointed out at oral argument, because § 28-4010 

addresses only priority of payment for a motor vehicle accident when an insured is 

involved in certain automobile businesses, it is not relevant to our determination of 

whether the BOP offered primary automobile insurance. 

¶19 In sum, because the BOP is a CGL policy “not intended to be the first or 

only source of insurance coverage,” Petrusek, 193 Ariz. 552, ¶ 15, 975 P.2d at 146, it 

“does not provide primary motor vehicle insurance,” and falls within the exception 

created by § 20-259.01(L). Accordingly, the policy is not subject to the written notice
12

requirement of § 20-259.01(A), and UM coverage is not imputed based on Nationwide‟s 

not having offered it. As previously noted, the Jacksons‟ motion for new trial essentially 

repeated the arguments that had been made on summary judgment. For the reasons stated 

above, the court did not abuse its discretion in denying either that motion or the Jacksons‟ 

motion for summary judgment.

Disposition

¶20 We affirm the trial court‟s grant of Nationwide‟s motion for summary 

judgment and its denial of the Jacksons‟ motions for summary judgment and new trial.

/s/ Virginia C. Kelly 

VIRGINIA C. KELLY, Judge

CONCURRING:

/s/ Garye L. Vásquez 

GARYE L. VÁSQUEZ, Presiding Judge

/s/ Philip G. Espinosa 

PHILIP G. ESPINOSA, Judge