* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-51294

GULF UNDERWRITERS INSURANCE COMPANY,

Plaintiff-Appellant,

v.

GREAT WEST CASUALTY COMPANY,

Defendant-Appellee,

v.

HAMMERBLOW CORPORATION,

Defendant-Appellant,

Appeal from the United States District Court 

for the Western District of Texas

USDC No. 04-CV-432

Before KING, STEWART, and PRADO, Circuit Judges.

PER CURIAM:*

This is a declaratory judgment case addressing coverage under an

automobile policy issued by Great West Casualty Co. (“Great West”) with

respect to an underlying state court tort suit brought by Arturo Garcia against

Hammerblow Corporation (“Hammerblow”). Gulf Underwriters Insurance Co.

United States Court of Appeals

Fifth Circuit

F I L E D

May 22, 2008

Charles R. Fulbruge III

Clerk
No. 06-51294

2

(“Gulf”), Hammerblow’s excess insurer, sought a declaration that the Great West

policy afforded coverage to Hammerblow for the claims within the tort suit. The

district court, relying on a mechanical device exclusion contained in the Great

West policy, granted summary judgment to Great West. Because we conclude

thatthe district court erred in upholding the exclusion, and therefore in granting

summary judgment to Great West, we vacate the judgment entered below and

remand for further proceedings.

I.

Hammerblow is a manufacturer and distributor of trailer jacks and

couplers, headquartered in Wisconsin. Roehl Transport, Inc. (“Roehl”) is a

transport company that is based in Wisconsin, but also does business in Texas.

In 1994, Hammerblow and Roehl reached an agreement authorizing

Hammerblow to use Roehl’s trailers. Under this arrangement, Roehl

transported raw materials from Wisconsin to Hammerblow’s El Paso facility.

Roehl would then drop the loaded trailer in El Paso and hookup to a trailer with

finished goods, which it would transport to other cities on its way back to

Wisconsin. After Roehl dropped off the loaded trailer of raw materials in El

Paso, Hammerblow would move the Roehl trailers to Hammerblow’s Juarez,

Mexico facility and then back to El Paso. It is undisputed that, under the

agreement between the parties, Hammerblow had permission to load and unload

the Roehl trailers with loads that would be transported by Roehl. However, the

parties dispute whether the agreement permitted Hammerblow to load and

unload the trailer with other materials, that would not be transported by Roehl,

for its own purpose and use.

On December 11, 2002, Arturo Garcia, an independent Mexican truck

driver, was injured at the El Paso Hammerblow facility when steel pipes fell
No. 06-51294

1 Royal is not a party to this declaratory judgment action and paid its $1 million policy

limits in the settlement of the Garcia tort suit.

3

onto him from the bed of a trailer owned Roehl. Prior to Garcia’s arrival at the

yard, Javier Rodriguez was utilizing a forklift to load the bundles of round steel

tubes onto the flat-bed trailer. Roehl had not been contracted to haul the steel

tubes that Rodriguez was loading on to the Roehl trailer. Rodriguez had not yet

completed loading the trailer when Garcia arrived to pick up the load and was

injured by the falling pipes. At the time of Garcia’s injury, Rodriguez was not

operating the forklift, but was walking back to the forklift to complete the

loading of the pipes. After the pipes fell, Rodriguez used the forklift to move the

pipes off Garcia. 

Hammerblow had several insurance policies in place at the time of the

accident. It had a primary commercial general liability policy issued by

Northfield Insurance Company (“Northfield”) and a primary auto policy issued

by Royal Insurance Company (“Royal”).1 Hammerblow also had a commercial

excess liability policy issued by Gulf. This policy limited Gulf’s indemnity

obligation to “ultimate net loss” in excess of the amount of insurance provided

by policies of“underlying insurance,” and expressly provided thatthe policy was

“excess over any other valid and collectible insurance whether such other

insurance stated to be primary, contributing, excess, contingent or otherwise.”

Atthe time of the accident, Roehl was covered by a commercial auto policy

issued by Great West. The Great West policy was issued in Wisconsin to Roehl,

a Wisconsin insured. Hammerblow is not named insured under this policy. The

Great West policy provided primary liability coverage to anyone who permissibly
No. 06-51294

2 The state tort suit settled shortly after the district court entered its final judgment in

this declaratory judgment action. The settlement was funded by Royal and Gulf; Great West

did not contribute.

4

used a covered auto owned by Roehl. The policy contains the following

mechanical device exclusion:

B. EXCLUSIONS

This insurance does not apply to any of the following:

. . . .

8. MOVEMENT OF PROPERTY B Y

MECHANICAL DEVICE

“Bodily injury” . . . 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 policy states that: “‘Auto’ means a land motor vehicle, ‘trailer’ or semitrailer

designed for travel on public roads but does notinclude ‘mobile equipment.’” The

Great West policy issued to Roehl contains an endorsement stating that “[a]ny

provision of this Coverage Part that is in conflict with a Wisconsin statute or

rule is hereby amended to conform to that statute or rule.”

On February 10, 2003, Garcia and his family filed a tort suit against

Hammerblow and others in state court in El Paso.2 After Garcia filed suit,

Hammerblow tendered the claim to several insurers, including Gulf and Great

West, for defense and coverage. Initially, Great West denied Hammerblow’s

request for coverage and defense, but subsequently, pursuant to a reservation

of rights, Great West agreed to defend Hammerblow in the underlying tort suit

in conjunction with Royal.

Gulfthen filed this declaratory judgment action seeking a declaration that

Hammerblow qualifies as an additional insured under the Great West policy;

that the Gulf Policy is the “excess policy;” and that the Great West policy is an
No. 06-51294

5

“underlying insurance” policy affording coverage to Hammerblow. At Great

West’s request, Hammerblow was added to the suit as a defendant.

Hammerblow then filed a cross-claim against Great West seeking a declaration

that Great West has a duty to defend and indemnify Hammerblow in the

underlying lawsuit. 

Gulf and Great West filed cross-motions for summary judgment. The

district court granted the motion of Great West on the basis that the mechanical

device exclusion in the Great West policy is valid under Wisconsin law and

precludes the damages sought. The court then denied all other pending motions

as moot, including Gulf’s motion for summary judgment. Gulf subsequently

sought reconsideration and leave to file a second amended complaint, but the

district court denied both requests. Hammerblow and Gulf filed a timely notice

of appeal from the district court’s grant of Great West’s motion for summary

judgment and denial of Gulf’s motions.

II.

This court reviews de novo a district court’s grant of summary judgment,

applying the same legal standards as the district court. Allstate Ins. Co. v.

Disability Servs. of the Sw. Inc., 400 F.3d 260, 262-63 (5th Cir. 2005). Under

Federal Rule of Civil Procedure 56, summary judgment is appropriate when the

record discloses that there is no genuine issue of material fact and that the

movant is entitled to judgment as a matter of law. FED R. CIV. P. 56(c); Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986). In addition, we review de novo a

district court’s determination of a state law question. Folks v. Kirby Forest

Indus., Inc., 10 F.3d 1173, 1182 (5th Cir. 1994).
No. 06-51294

3 The parties agree that, under Texas choice of law rules, Wisconsin law governs the

issue of coverage under the Great West policy. See, e.g., St. Paul Mercury Ins. Co. v. Lexington

Ins. Co., 78 F. 3d 202 (5th Cir. 1996). 

6

Coverage under an insurance policy is generally a question of law,

Kremers-Urban Co. v. Am. Employers Ins. Co., 351 N.W.2d 156, 163 (Wis. 1984),

although occasionally insurance coverage is the subject of factual disputes that

make summary judgmentinappropriate. See, e.g., Atl. Mut. Ins. Cos. v.Lotz, 384

F. Supp. 2d 1292 (E.D. Wis. 2005). 

III.

It is undisputed that the Great West policy contains a clear and

unambiguous mechanical device exclusion. However, on appeal, Gulf contends

that the mechanical device exclusion contained in the Great West policy is

invalid under Wisconsin law3 because Wisconsin law mandates that coverage

under an automobile policy extend to a third party who is unloading or loading

an insured vehicle. Therefore, Gulf argues, the mechanical device exclusion is

unenforceable, and the district court’s grant of summary judgment to Great West

was in error.

Under Wisconsin law, when an exclusion in an insurance policy is in

reference to some risk of coverage not required by statute, such exclusion is

valid. See Schneider v. Depies, 62 N.W.2d 431, 434 (Wis. 1954). Conversely,

Wisconsin courts have invalidated exclusions contrary to the provisions of the

Wisconsin insurance statutes or public policy. See, e.g., Rocker v. USAA Cas.

Ins. Co., 711 N.W.2d 634, 645 (Wis. 2006). Finally, “[c]overages omitted from an

insurance contract may nevertheless be compelled and enforced as though a part

thereof where the inclusion of such coverage is required by a properly enacted
No. 06-51294

7

statute.” Id. at 646 (quoting Progressive N. Ins. Co. v. Romanshek, 697 N.W.2d

417 (Wis. 2005)). 

Wisconsin Statute § 194.41(1) requires, in part, that a motor carrier be

covered by an insurance policy providing:

thatthe insurer shall be directly liable for and shall pay

all damages for injuries to or for the death of persons or

for injuries to or destruction of property that may be

recovered against the owner or operator of any such

motor vehicles by reason of the negligent operation

thereof in such amount as the department may require.

WIS. STAT. § 194.41 (2006). The statute does not define “operation,” but in

Mullenberg v. Kilgust Mech., Inc., 612 N.W.2d 327 (Wis. 2000), the Wisconsin

Supreme Court examined “[w]hether Wis. Stat. § 194.41 because of its use ofthe

term ‘negligent operation’ requires insurers to cover the loading activities of

third-parties.” Id. at 328. The court answered in the affirmative, stating that

the words “operation” and “operator” in § 194.41 “must be read in the context in

which they are used in order to promote the legislature’s objective in enacting

the statute.” Id. Further, under Wisconsin Statute § 194.02, the words must be

given “‘the most liberal construction to achieve the aim of a safe, competitive

transportation industry.’” Id. (citing WISC. STAT. § 194.02). Applying this

principle, the court concluded that “the word ‘operation’ is not to be restricted to

only a moving vehicle” and held that “‘negligent operation’ encompasses loading

and unloading” and that “‘operator’ includes a third party permissively

unloading the vehicle.” Id. at 330-331.

Under Mullenberg, it is clear that § 194.41 mandates that Great West

provide coverage for injuries occurring during the loading and unloading of a

vehicle by a permissive user. 612 N.W.2d at 328; see also Lukaszewicz v.
No. 06-51294

4 Great West attempts to distinguish Mullenberg on the grounds that its holding rested

on whether the exclusion applied equally to all insureds under Wis. Stat. § 632.32. This

argument is meritless. Because the court reached its holding based on the language of §

194.41, the Mullenberg court explicitly declined to consider whether § 632.32 would invalidate

the exclusion at hand. See Mullenberg, 612 N.W.2d at 329 n.4. Rather, the court clearly held

that: “We conclude that the word ‘operation’ in Wis. Stat. § 194.41(1) includes loading and

unloading and an individual permissively unloading the vehicle is covered by the motor

carrier’s policy.” Id. at 328-29. 

8

Concrete Research, Inc., 168 N.W.2d 581, 586 (Wis. 1969) (interpreting “operate”

to include the loading and unloading of a vehicle); Bauer v. Century Sur. Co.,

718 N.W.2d 163, 165 (Wis. Ct. App. 2006) (“It is undisputed that if Johnston was

loading or unloading the flatbed truck when the power line incident occurred,

Great West must provide insurance coverage to Johnston under the policy.”

(citing Mullenberg, 612 N.W.2d at 327)).4 Therefore, to the extent that the

mechanical device exclusion omits coverage for loading and unloading, the

exclusion is void under Wisconsin law, and Great West is obligated to provide

such coverage under the policy.

Great West attempts to distinguish Mullenberg on the basis thatit did not

expressly consider the issue of whether § 194.41 requires coverage for loading

and unloading conducted using motorized equipment not attached to the covered

vehicle and not insured by the insurer. Great West further contends that the

mechanical device exclusion at issue here is “widely used in insurance policies”

and “routinely upheld.” It argues that adopting Gulf’s construction of the statute

would require Great Westto provide coverage for a separate risk, the mechanical

device, which Great West has not elected to insure and for which it has not

received a premium. In support, Great West points us to a number of cases from

other jurisdictions upholding similar exclusions, including Travelers Indemnity
No. 06-51294

9

Co. v. General Star Indemnity Co., 157 F. Supp. 2d 1273 (S.D. Ala. 2001); Excel

Logistics, Inc. v. Maryland Casualty Co., No. CV-93-0046415-S, 1995 Conn.

Super. LEXIS 373 (Conn. Super. Ct. Feb. 1, 1995); and Hanover Insurance Co.

v. Canal Insurance Co., No. 05-1591(SDW), 2007 U.S. Dist. LEXIS 39635 (D.N.J.

April 3, 2007). However, as the Wisconsin Supreme Court has noted: “Cases

from outside of this state are of little help in deciding a construction of our

statute.” Lukaszewicz, 168 N.W.2d at 586. 

As a federal court sitting in diversity, in the absence of a final decision by

the state’s highest court on the issue at hand, it is our duty to determine, in our

best judgment, how the highest court of the state would resolve the issue if

presented with the same case. Transcon. Gas Pipe Line Corp. v. Transp. Ins.

Co., 953 F.2d 985, 988 (5th Cir. 1992). In Mullenberg, the Wisconsin Supreme

Court stated that:

A motor carrier by definition undertakes to transport

passengers and property. Wis. Stat. § 194.01(1).

Inherent in this task is that the carrier will be loaded

and unloaded. Loading and unloading involves

repeated, frequent contact with the motor carrier.

Within this framework and considering the subject

matter of Wis. Stat. ch. 194, as well as the legislature

directive to construe ch. 194 liberally to protect the

shipping public as well as the traveling public, we

conclude that “negligent operation” encompasses

loading and unloading.

612 N.W.2d at 330-31. In light of these broad policy concerns, we conclude that

the Wisconsin Supreme Court would interpret the word “operation” in § 194.41

to encompass all loading and unloading, including that done by use of a

mechanical device. See Bauer, 718 N.W.2d at 165 (holding that § 194.41

mandated that the insurer provide coverage for an injury occurring during
No. 06-51294

10

unloading of the covered vehicle and involving the use of a mechanical device).

Our conclusion furthers Wisconsin’s goal of interpreting § 194 “liberally” to

“protectthe shipping public as well as the traveling public.” See Mullenberg, 612

N.W.2d at 331. Although Great West advances some persuasive policy

arguments in support of its position, it has not pointed us to any caselaw

indicating that Wisconsin would adopt these arguments and exclude loading and

unloading by way of mechanical devices from the scope of § 194.41. 

Therefore, because we conclude that the word “operation” in § 194.41

includes loading and unloading through the use of a mechanical device, an injury

occurring during the permissive unloading of the vehicle must be covered by the

motor carrier’s policy, even if such loading or unloading is accomplished through

the use of a mechanical device. To the extent that the Great West policy

excludes such coverage, the exclusion is invalidated and coverage is compelled

as though a part of the policy. Rocker, 711 N.W.2d at 646. Therefore, the

application of the mechanical device exclusion contained in the Great West

policy can not support a grant of summary judgment in its favor.

IV.

This is not, however, the end of our inquiry. As the Wisconsin Supreme

Court has held, coverage under § 194 is only mandated if the individual was

permissively loading or unloading the vehicle. See Mullenberg, 612 N.W.2d at

330-31 (defining the word “operator” in § 194.41 to include “a third party

permissively unloading the vehicle”). Therefore, Great West is only required to

provide coverage for Garcia’s injury if Hammerblow’s loading of the pipes onto

the trailer was a permissive use. The burden of proving requisite permission

rests with the party seeking to establish coverage. Derusha v. Iowa Nat’l Mut.
No. 06-51294

5

It is at this point that the district court erred. Rather than permit a showing of a

dispute of materialfact over the issue of permission to defeat Great West’s motion for summary

judgment, the district court appears to have required Gulf to show that Hammerblow had

permission as a matter of law. This was incorrect, as a showing that the issue of permission

was squarely in dispute would be sufficient to defeat Great West’s motion.

11

Ins. Co., 181 N.W.2d 481, 482 (Wis. 1970). Each party argues that the evidence

regarding permissive use entitles it to summary judgment. 

The district court’s opinion evidences some confusion over the proper

allocation of the burdens of proof with regard to summary judgment on this

issue. “[T]he party moving for summary judgment must demonstrate the

absence of a genuine issue of material fact, but need not negate the elements of

the nonmovant’s case.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.

1994). If the moving party meets the initial burden of showing that there is no

genuine issue, the burden shifts to the nonmovant to set forth specific facts

showing the existence of a genuine issue for trial. FED. R. CIV. P. 56(e). The

nonmovant cannot satisfy his summary judgment burden with conclusional

allegations, unsubstantiated assertions, or only a scintilla of evidence. Little, 37

F.3d at 1075.

Applying this framework to the case at hand, with regard to Great West’s

motion for summary judgment, Great West was required to “demonstrate the

absence of genuine issue of material fact” that Hammerblow did not have

permission to load the trailer. Id. If Great West did so, the burden would then

shift to Gulf to “go beyond the pleadings and designate specific facts showing

that there is a genuine issue for trial” regarding whether Hammerblow had

permission.5Id. If Gulf failed to meet this burden, Great West’s motion would

be granted. Conversely, to succeed on its motion for summary judgment, Gulf
No. 06-51294

12

was required to demonstrate an “absence of a genuine issue of material fact”that

Hammerblow had permission to load the trailer. Therefore, if a genuine

question of fact exists as to whether Hammerblow had permission to load and

unload the trailer with the pipes, it would not be appropriate to grant either

parties’ motion for summary judgment. 

Gulf argues that it is entitled to summary judgment because the

undisputed evidence demonstrates that, as a matter of law, Hammerblow was

permitted to load and unload the trailers for its own purposes. Great West

argues that § 194.41 does not mandate coverage for Hammerblow because the

evidence shows that, as a matter of law, Hammerblow was not a permissive user

at the time of the accident. Our review indicates that the following evidence

was submitted by the parties on the issue of permission: April 4, 1994 letter

written by Michael Gross, a sales representative of Roehl; affidavit signed by

Gross; deposition excerpts of Gross; the deposition testimony of Tom Liebl, a

former Hammerblow employee responsible for scheduling the delivery of raw

materials from Wisconsin to the El Paso plant; and the affidavit of Ted Christie,

the general manager of the Hammerblow El Paso plant at the time of the

incident. 

A review ofthis evidence indicates thatthe issue of permission is squarely

in dispute. Both parties produced testimony supporting their view of the

permission issue. Great West produced an affidavit from Gross that “under the

agreement,the trailer was not supposed to be used for any loads that Roehl itself

was not going to pick up and was not to be used at Hammerblow’s will and

convenience.” The affidavit also states that Rodriguez’s loading of the pipes onto

the trailer was outside of the agreement with Roehl. His affidavit also indicates

his belief that Hammerblow was never permitted, in the history of the
No. 06-51294

13

agreement, to use the trailers for its own purposes. In his deposition testimony,

Gross discusses the unloading and loading permitted under the arrangement.

He stated that with respect to the trailers surrendered to Roehl, “he expected it

to be unloaded in Mexico and reloaded in Mexico with freight that Roehl was

going to haul.” However, as Gulf points out, Gross’s testimony is directly

contradicted by that of Liebl and Christie. Liebl testified that his

understanding of the agreement was that “whatever trucking outfit there was

that [sic] going down there that they’d have to allow their trailer to be

transported across the border and unloaded and reloaded if needed.” In his

affidavit Christie states that the business arrangement “included Roehl’s

agreement to keep a Roehl trailer at the Hammerblow facility in El Paso/Juarez

so that it would be unloaded and loaded by Hammerblow at Hammerblow’s

convenience. He concluded that “[u]nder the business arrangement in place

prior to and during December 2002, Hammerblow was permitted by Roehl to

load and unload Roehl trailers with material at the Hammerblow facility in El

Paso.”

Given the conflicting testimony, neither party is entitled to summary

judgment because there is a genuine issue for trial regarding permission. At

summary judgment, “[t]he inquiry performed is the threshold inquiry of

determining whether there is the need for a trial – whether, in other words,

there are any genuine factual issues that properly can be resolved only by a

finder of fact because they may reasonably be resolved in favor of either party.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Here, each party

provided evidence sufficient to support a jury verdict in its favor regarding

permission. Resolution of this issue comes down to a credibility determination,

which is a genuine issue for trial.
No. 06-51294

14

V.

For the reasons stated above, we VACATE the district court’s grant of

summary judgmentin favor of Great West and its dismissal of Gulf’s motions for

summary judgment and for leave to file a second amended complaint and

REMAND this case to the district court for further proceedings not inconsistent

with this opinion.