Title: Rose Constr. Co. v. Gravatt
Citation: 231 Kan. 196, 642 P.2d 569
Docket Number: 53,566
State: Kansas
Issuer: Kansas Supreme Court
Date: April 3, 1982

231 Kan. 196 (1982)
642 P.2d 569
ROSE CONSTRUCTION COMPANY, INC. Appellant,
v.
SAM GRAVATT, Appellee, and FARMERS INSURANCE COMPANY, INC., Garnishee-Appellee.
No. 53,566

Supreme Court of Kansas.
Opinion filed April 3, 1982.
Paul Hasty, Jr., of Wallace, Saunders, Austin, Brown &amp; Enochs, Chartered, of Overland Park, argued the cause and was on the brief for appellant.
L. Franklin Taylor, of Payne &amp; Jones, Chartered, of Olathe, argued the cause and was on the brief for garnishee-appellee.
The opinion of the court was delivered by
McFARLAND, J.:
This is an appeal by plaintiff, Rose Construction Company, Inc., from an order dismissing its garnishment proceeding against the garnishee, Farmers Insurance Company, Inc. The issue is whether or not a certain automobile insurance policy provides coverage for plaintiff's property damage.
The facts, simply stated, are as follows. The plaintiff owns a commercial building which it rents to Art Smelser, d/b/a Autumn Heating and Air Conditioning. Defendant Sam Gravatt is an employee of Smelser, and, while operating his employer's motor vehicle in the course of his employment, backed into and did damage to said building. The motor vehicle was insured by Farmers Insurance Company, Inc. Plaintiff brought this action against Sam Gravatt and Art Smelser and subsequently obtained judgments in the amount of $1,015.82 against each defendant. Plaintiff then garnished Farmers Insurance Company, Inc., to collect the Gravatt judgment. Farmers denied coverage under a policy exclusion and the trial court agreed therewith. Plaintiff appeals from the order dismissing its garnishment.
The issue raised is one of first impression in Kansas. In determining *197 whether coverage was afforded, it is appropriate to work our way through applicable policy provisions.
The policy was purchased by Smelser to insure the motor vehicle in question. The policy provides:
"(1) the named insured or a relative, and
Clearly Gravatt is an "insured" under such definition, although not the named insured.
The policy contains an exclusionary clause providing that liability coverage does not apply:
The damaged property was rented to Smelser who was in charge and control thereof. The exclusion would clearly apply to Smelser had the garnishment been sought to satisfy the Smelser judgment. However, this is not the question before us.
Gravatt neither rented, was in charge of, nor controlled the damaged building. Does the exclusion bar Gravatt under such circumstances by virtue of the employer-employee relationship between the named insured and Gravatt?
Pertinent to this question is the following policy provision:
This type of provision is commonly referred to as a "severability of interests" clause.
There is no unanimity among other jurisdictions construing such clauses. Many of these cases have arisen under such distinguishable factual situations as to have little relevance to the matter before us. A good discussion of background of "severability of interests" clauses is found in Pennsylvania Nat. Mut. v. *198 Bierman, 266 Md. 420, 292 A.2d 674 (1972). The factual situation involved in Bierman is a good example of how complex such litigation may become  one injured insured suing another insured, with both being employees of the named insured.
Fortunately, the matter before us is considerably simpler to resolve. The exclusion before us excludes damages to property "rented to or in charge of the insured." Use of the term "the insured" is significant. It obviously is not the same as "named insured" or "any insured." Even in the absence of a severability of interests clause, a strong argument could be made that the exclusions do not apply to Gravatt inasmuch as he is the insured for exclusionary purposes, and he neither rents, has charge of, nor controls the damaged property. The severability of interests clause can only buttress the argument that coverage as to each insured must be determined separately based on the facts applicable to each such insured.
We conclude that the severability of interests clause requires a finding that the exclusions are to be applied only against the insured for whom coverage is sought. Under the undisputed facts herein, defendant Gravatt was clearly not excluded from coverage, and the trial court erred in holding otherwise.
By virtue of this result, other issues raised need not be determined.
The judgment is reversed and the case is remanded with directions to enter judgment in favor of plaintiff on the garnishment herein.