Case Name: RPM PIZZA, INC. and National Union Insurance Company v. AUTOMOTIVE CASUALTY INSURANCE COMPANY
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1992-06-26
Citations: 601 So. 2d 1366
Docket Number: No. 92-C-0086
Parties: RPM PIZZA, INC. and National Union Insurance Company v. AUTOMOTIVE CASUALTY INSURANCE COMPANY.
Judges: WATSON, J., concurs in the result and assigns reasons.
Reporter: Southern Reporter, Second Series
Volume: 601
Pages: 1366–1374

Head Matter:
RPM PIZZA, INC. and National Union Insurance Company v. AUTOMOTIVE CASUALTY INSURANCE COMPANY.
No. 92-C-0086.
Supreme Court of Louisiana.
June 26, 1992.
Rehearing Denied Sept. 3, 1992.
Steven John Koehler, Leefe, Gibbs & Koehler, Metairie, for applicant.
George J. Nalley, Jr., New Orleans, for respondent.

Opinion:
DENNIS, Justice.
The issue genuinely raised by this case is whether an automobile liability policy clause excluding coverage "while [the auto] is being used to carry [ ] property for a fee" eliminates coverage while the vehicle owner is using the car to deliver pizza as a wage-earner employed by a pizza company. We conclude that the policy exclusion clause does not preclude coverage under these circumstances and affirm the judgments of the trial and appellate courts which reached this correct result below. 590 So.2d 1349 (La.App. 5th Cir.1991). Although we granted a writ to review the decisions below that the insurance policy exclusion clause was contrary to public policy, that question is pretermitted as having been prematurely reached by the trial and appellate courts.
The parties stipulated to findings of fact as a basis for the judgment of the trial court. Thor Schmidt ("Schmidt") and Ricky Daigle ("Daigle") were employees of RPM Pizza, Inc. ("RPM"). They were hired as pizza delivery persons and required to furnish their own transportation. The stipulated findings of fact do not state precisely how the employees were paid. However, the totality of circumstances agreed to by the parties clearly indicates that a master-servant, rather than a principal-independent contractor, relationship existed between RPM and the delivery persons. Furthermore, there is no indication that a delivery charge was levied by RPM or the individual drivers upon the customer for delivery of pizza. Consequently, the most reasonable conclusion that may be derived from the stipulated facts is that the employees were compensated by wages for their hours or time employed and not by fees on a piecemeal or per delivery basis.
Schmidt and Daigle were operating their own vehicles when they were involved in separate accidents, while delivering pizza for RPM. There seems to be little dispute as to the negligence and liability of the pizza deliverers. As part of each employee's employment agreement with RPM, he was required to carry automobile liability insurance with at least the minimum statutory limits. At the time of the accident each employee maintained such a policy with Automotive Casualty Insurance Company ("Automotive Casualty").
Automotive Casualty denied coverage in both accidents arguing that commercial or business use of vehicles is not covered under the policies. The policies issued herein by Automotive Casualty are standardized personal liability policies. They provide coverage for personal liability of an insured unless otherwise prevented by law or contractual exclusion. The exclusions relative to business or commercial use in the policies at issue are:
"A. We do not provide liability coverage for any person covered under the policy .
(5) For that person's liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee. This exclusion does not apply to a share-the-expense car pool.
(6) While employed or otherwise engaged in the business or occupation of: a) selling, b) repairing, c) servicing, d) storing, or e) parking, vehicles designed for use on many public highways. This includes road testing and delivery. This exclusion does not apply to the ownership, maintenance or use of your covered auto by: a) you, b) any family member, or c) any partner, agent or employee of you or any family member.
(7) Maintaining or using any vehicle while that person is employed or otherwise engaged in any business or occupation not described in Exclusion 6. This exclusion does not apply to the maintenance or use of: a) private passenger auto, b) pickup, panel truck or van that you own, or c) trailer used with a vehicle described in a) or b) above."
As a result of denying coverage, RPM and its at-risk excess carrier, National Union Fire Insurance Company of Pittsburgh ("National Union"), paid the sum of $14,-204.49 for the physical and property damage sustained as a result of the accident involving Schmidt, and the sum of $9,413.00 for the physical and property damage sustained as a result of the accident involving Daigle. RPM and National Union now seek to recover those sums under the personal liability policies issued by Automotive Casualty to Schmidt and Dai-gle.
The lower courts concluded, without articulating reasons, that the policy provision excluding coverage for use in carrying persons or property for a fee would preclude coverage in the instances presented here, if it were not contrary to public policy. We disagree with this basic conclusion that the policy exclusion clause eliminates coverage for the accidents involved.
Neither the policy, nor the exclusion, prescribes the exact meaning of the term "fee" in the policy exclusion clause. Standing alone, the word "fee" is capable of being understood in two or more possible senses. For example, Webster's Ninth New Collegiate Dictionary (1988) defines the term "fee" as "a fixed charge . a charge for a professional service." Black's Law Dictionary defines "fee" as
"A recompense for an official or professional service or a charge or emolument or compensation for a particular act or service. A fixed charge or perquisite charged as recompense for labor; reward, compensation, or wage given to a person for performance of services or something done or to be done."
Thus the meaning of "fee" may be construed narrowly to encompass only specific contracts of carriage such as when a person makes a definite payment to another to carry a specific piece of property, such as hauling trash or moving furniture, or when a passenger pays a taxi fare to carry him from one point to another. On the other hand, the meaning sometimes might contemplate that a "fee" could be compensation for labor.
Interpretation of the policy provisions in light of each other so that each is given the meaning suggested by the insurance contract as a whole reveals that the term "fee" in exclusion A(5) refers to a fixed charge rather than to wages or compensation generally. La.C.C. art. 2050; Central Louisiana Electric Company, Inc. v. Westinghouse Electric Corp., 579 So.2d 981, 985 (La.1991). The exception to exclusion A(7) insures that coverage is extended to vehicles owned by the insured, regardless of their use in commercial or business situations. See generally W. McKenzie & H. Johnson, Insurance Law and Practice, 15 La. Civil Law Treatise § 81, at 206-208 (1986 & Supp.1991). Under this provision a travelling salesperson, a floating employee, or any other employee required to use his own vehicle in the course of his employ would be covered under exclusion A(7) of the policy. Therefore, to interpret "fee" in exclusion A(5) so broadly as to include any compensation paid to the owner of the vehicle by his employer would impermissibly destroy coverage for all such uses of the vehicle in direct conflict with the saving provision of exclusion A(7). See La.C.C. art. 2046. The exclusion from coverage for certain vehicle uses contemplated by exclusion A(5) is properly characterized as prohibiting coverage for activities similar to those involving livery conveyances or common carriers, i.e., contracts for carriage or hire where a per trip or per excursion charge is paid for the carriage of property or persons. Compare McKenzie & Johnson, supra, § 76, at 191-198. Therefore, we conclude that exclusion A(5) is not implicated merely by the paying of any form of compensation, such as wages. La.C.C. art. 2049; Garcia v. St. Bernard Parish School Board, 576 So.2d 975, 976 (La.1991); Carney v. American Fire & Indemnity Co., 371 So.2d 815 (La.1979); W. McKenzie & H. Johnson, Insurance Law and Practice, 15 La. Civil Law Treatise § 4, at 7 (1986 & Supp.1991).
Alternatively, even if the exclusion is deemed ambiguous, insurance policies must be liberally construed in favor of coverage, and provisions susceptible of different meanings must be interpreted with a meaning that renders coverage effective and not with one that renders it ineffective. La.C.C. art. 2049; Capital Bank & Trust Co. v. The Equitable Life Assurance Society, 542 So.2d 494, 496 (La.1989). See also Breland v. Schilling, 550 So.2d 609, 610 (La.1989). Consequently, even if our interpretation is not the only reasonable view of the exclusion proviso, any ambiguity must be construed against the insurance company and in favor of the reasonable construction that affords coverage.
Further, our interpretation is in accord with that of the majority of other jurisdictions which have considered this exclusion. In United Services Automobile Association v. Couch, 643 S.W.2d 668 (Tenn.App.1982), the Court of Appeals of Tennessee found that the exclusion ("a vehicle while it is being used to carry persons or property for a fee") is not applicable to use by an hourly wage earning pizza delivery driver. In Couch, a delivery charge was added to the cost of the pizza when an order was placed. The court of appeal found, however, that this was not germane to the issue of exclusion under the policy because any charge for delivery inured only to the benefit of the employer and not to the insured. Thus, the court found that the delivery driver was not being paid a "fee", merely wages. This rationale of course extends with equal force to this case where the record suggests that delivery of the pizza was without extra charge to the customer, and thus there was no delivery fee which could inure to the benefit of the driver.
Similarly, the Arkansas Court of Appeal in Pizza Hut of America, Inc. v. West General Insurance Co., 36 Ark.App. 16, 816 S.W.2d 638 (1991), found that the exclusion was ambiguous when applied to a pizza delivery person. The court of appeal vacated a determination by the trial court that the policy exclusion was clear and unambiguous and remanded the matter for a new trial. But see Dhillon v. General Accident Insurance Co., 789 S.W.2d 293 (Tex.App. — Houston [14th Dist.] 1990) (assuming without discussion that delivery of pizza is carrying property for a fee); Krauss v. Derocili, Civil No. 86C-NO-60, 1988 WL 90532 1988 Del.Super. Lexis 276 (Del.Super. August 2, 1988) (exception is clear and excludes coverage for pizza delivery).
In First Georgia Insurance Co. v. Goodrum, 187 Ga.App. 314, 370 S.E.2d 162 (1988), the Court of Appeals of Georgia held that the insured's use of her vehicle for an hourly wage to transport two of her co-employees from their home to their jobs and back did not constitute use of the vehicle for carrying people or property for a fee. In particular the Georgia court found that "[i]n the case at hand it is ambiguous whether the exclusion for carriage of persons 'for a fee' covers only the situation where passengers pay an amount for their own transport or whether the exclusion also covers the situation where . an employee is being paid by his employer to carry other employees and receives only an hourly rate plus mileage reimbursement." Finding the policy language to be ambiguous, the court of appeal construed the policy language in favor of coverage.
In Nationwide Insurance Co. v. Thorley, Civil No. 14,658, 1991 WL 6137 1991 Ohio App. Lexis 210 (Ohio.App. January 16, 1991), the Ohio Court of Appeal found that the exclusion was ambiguous. It recognized that the insurers' reading of the exclusion to prohibit coverage whenever any fee or payment to the insured is involved was reasonable. However, it also noted that the exclusion could also be reasonably interpreted to exclude from coverage only the use of a vehicle to carry property for a fee; the distinction being only if the vehicle was used for the specific purpose of obtaining a fee, as opposed to ordinary wages, for carrying goods. In Thorley, the court of appeal specifically found that there was no evidence in the record that a fee, other than ordinary wages, was paid to Thorley. Accord Johnson v. Allstate Insurance Co., 505 So.2d 362 (Ala.1987) (van used to transport children from home to school for $1 per day constituted use of vehicle for a fee); Kurz v. Balboa Insurance Co., Civil No. 88-6246, 1990 WL 20219 1990 U.S. Dist. Lexis 2301 (E.D.Penn. March 1, 1990) (a taxi cab is clearly contemplated as coming within exclusion of vehicles used to carry persons or property for a fee).
Other courts have found coverage by determining that the provision was void for public policy reasons while assuming coverage would be prohibited. See, e.g., Atlanta Casualty Company v. Salyer, No. 17,-251, 1991 WL 216277, 1991 Mo.App. Lexis 1610 (Mo.App. October 25, 1991); Nationwide Mutual Ins. Co. v. Swisher, 731 F.Supp. 691 (E.D.Penn.1989) (exclusion of carrying property for a fee is void as in conflict with the public policy behind the Pennsylvania Uninsured Motorist Act). But see Kurz v. Balboa Insurance Co., Civil No. 88-6246, 1990 WL 20219 1990 U.S. Dist. Lexis 2301 (E.D.Penn. March 1, 1990) (exclusion does not violate public policy of Pennsylvania Financial Responsibility Law). Because any decision on the issue of whether the exclusion would violate public policy would be merely advisory at this point, we express no opinion as to whether or not the exclusion asserted herein in a case appropriate for its application would violate the public policy of this State. St. Charles Parish School Board v. GAF Corporation, 512 So.2d 1165, 1171 (La.1987) (on rehearing). We leave that question for another day.
Finally, Automotive Casualty argues that we should not review the lower court's interpretation of the contract exclusion because the argument now asserted was not expressly passed on by the trial and appellate courts. It is well established that a party who is satisfied with a judgment, even if he does not file a notice of appeal or an application for review, may present in support of the judgment in his favor any argument supported by the record, whether it was overlooked or flatly rejected by the court below. La.C.C.P. art. 2133(B). Roger v. Estate of Moulton, 513 So.2d 1126, 1136 (La.1987) (on rehearing); Caldwell v. Second Judicial District Indigent Defender Board, 475 So.2d 96, 100 (La.App. 2d Cir.1985). See also United States v. American Railway Express Co., 265 U.S. 425, 44 S.Ct. 560, 68 L.Ed. 1087 (1924).
CONCLUSION
For the reasons assigned, we affirm the judgments of the trial and appellate courts because we conclude that the policy exclusion clause does not preclude coverage under the circumstances of the present case. We pretermit as having been prematurely reached by the trial and appellate courts the question of whether the insurance policy exclusion clause is in derogation of laws enacted for the protection of the public interest.
AFFIRMED.
WATSON, J., concurs in the result and assigns reasons.
COLE, J., dissents and will assign reasons.