Title: Luneau v. Peerless Insurance Co.
Citation: 170 Vt. 442, 750 A.2d 1031
Docket Number: 
State: Vermont
Issuer: Vermont Supreme Court
Date: March 24, 2000

Luneau v. Peerless Insurance Co. Annotate this Case Luneau v. Peerless Insurance Co. (98-238); 170 Vt. 442; 750 A.2d 1031[Opinion Filed 24-Mar-2000] [Motion for Reargument Denied 14-Apr-2000] NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in order that corrections may be made before this opinion goes to press. No. 98-238Judy Luneau Supreme Court v. On Appeal from Franklin Superior Court Peerless Insurance Co., DLD Insurance LTD., d/b/a Landry Insurance and Mark April Term, 1999 Landry and Pamela LandryDavid A. Jenkins, J.A. Gregory Rainville of Rainville & Associates, P.C., and Michael Rose, St. Albans, for Plaintiff-Appellant.Douglas Le Brun of Dinse, Knapp & McAndrew, P.C., Burlington, for Defendant-Appellee.PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ. JOHNSON, J. Plaintiff Judy Luneau appeals a verdict of the superior court holding that defendant Peerless Insurance Company did not have a duty to indemnify policy holder Robert Wagner for his liability in negligently injuring plaintiff. We affirm. The trial court found the following facts. Wagner had a homeowner's insurance policy issued by defendant that included personal liability coverage. The policy included a business pursuits exclusion clause that read: Coverage E -- Personal liability and Coverage F -- Medical Payments to Others do not apply to "bodily injury". . . [a]rising out of "business" pursuits of an "insured." This exclusion does not apply to activities which are usual to non-"business" pursuits. On September 4, 1994, Wagner was employed as a disc jockey at a wedding reception at the Champlain Country Club in Swanton, Vermont. He was paid $300.00 for the service. At the time, Wagner was regularly employed with Green Mountain Coffee Roasters. For a number of years, however, he had been conducting his disc jockey business on the side. He had printed cards using the business name "Music Unlimited." On his tax returns, he had declared income from his disc jockey activities, including $7,175.00 for 1992, $6,000.00 for 1993 and $5,000.00 for 1994, and had deducted related expenses as business expenses. On the day of the reception, Wagner set up his own equipment, stacking his loudspeakers next to the dance floor. During the reception he drank several alcoholic beverages. At one point he became involved in a scuffle with an obstreperous and intoxicated guest who was upset because Wagner had forgotten to play a song he had requested. During the scuffle, one of Wagner's speakers became dislodged and struck plaintiff in the head, knocking her to the floor and causing bleeding, bruising, swelling and a concussion. After the incident, plaintiff suffered from neck, back and shoulder pain. She incurred medical expenses and also lost approximately $5,600.00 in wages for the work she missed due to her injuries. On February 9, 1995, plaintiff filed a complaint against Wagner alleging that, while Wagner had been "employed as a disc jockey" during the September 4th reception, he had been negligent (1) in "the placement, use and supervision of the stereo equipment," and (2) in his "physical conduct," resulting in injury to the plaintiff. Plaintiff and Wagner subsequently stipulated to a judgment that Wagner was liable to plaintiff in the amount of $60,000.00, which the court entered. As part of the settlement, Wagner assigned any claim to plaintiff he might have against defendant arising out of the matter. On February 7, 1997, plaintiff filed a complaint against defendant seeking indemnification for the judgment. Defendant filed a motion for summary judgment, arguing that the injury was excluded by the policy as a matter of law. The court denied the motion, held a bench trial and issued a decision in favor of defendant. It determined that Wagner had been negligent both in his placement of the speakers and in becoming involved in the shoving match, and that each act of negligence was a proximate cause of plaintiff's injuries. The court denied coverage, however, based on its conclusion that both acts of negligence fell within the business pursuits exclusion of Wagner's policy. The court stated that the issue was a question of fact. Because Wagner had been employed as a disc jockey for profit at the time, had engaged in the business of disc jockeying for several years, and had admitted to others that he needed additional insurance to cover any liability related to the business, the court concluded that both the placement of the loudspeakers and the shoving match were "entirely related to his business pursuit at that time." On appeal, plaintiff argues (1) that the exception for activities usual to non-business pursuits applies, and (2) that the doctrine of concurrent causation should apply so as to provide coverage for her injuries despite the existence of an excluded risk. (FN1) I. Upon reviewing a verdict from the bench, this Court will not set aside the trial court's factual findings unless they are clearly erroneous. See V.R.C.P. 52(a)(2). Those finding are viewed in a light most favorable to the prevailing party. See Mullin v. Phelps, 162 Vt. 250, 260, 647 A.2d 714 , 720 (1994). Conclusions of law, however, will be upheld only when the trial court has applied the correct legal standard and the conclusions are reasonably supported by the factual findings. See Schnabel v. Nordic Toyota, Inc., 168 Vt. 354,357, 721 A.2d 114 , 118 (1998). A. As a preliminary matter, the parties dispute the degree of deference that this Court should give the trial court's decision that the scuffle was entirely related to Wagner's business pursuits. Defendant claims that this is a finding of fact, to which the clearly erroneous standard applies. Plaintiff, on the other hand, claims that it is really a conclusion of law, to which this court owes no deference. The court's opinion is not separated into findings of fact and conclusions of law, but states that whether or not a particular activity falls within the business pursuits exclusion is a question of fact to be decided on a case-by-case basis. However, the conclusion that Wagner's conduct falls within the business pursuits exclusion requires both a factual determination as to the precise nature of Wagner's conduct and a legal determination as to whether the language of the business pursuits exclusion describes that conduct. As such, it is a mixed question of fact and law, permitting de novo review of the legal determination involved. (FN2) B. We turn now to the interpretation of the business pursuits exclusion clause of Wagner's insurance policy. An insurance policy is a contract to indemnify. See Moultroup v. Gorham, 113 Vt. 317, 320, 34 A.2d 96, 98 (1943). The interpretation of a contract is a question of law unless the meaning of the contract is ambiguous. See Housing Vermont v. Goldsmith & Morris, 165 Vt. 428, 430, 685 A.2d 1086 , 1088 (1996). Any ambiguity in an insurance policy is resolved in favor of coverage. See Coop. Fire Ins. Ass'n. v. Bizon, 166 Vt. 326, 333, 693 A.2d 722 , 727 (1997). The business pursuits exclusion in the policy provides: Coverage E -- Personal liability and Coverage F -- Medical Payments to Others do not apply to "bodily injury". . . [a]rising out of "business" pursuits of an "insured." This exclusion does not apply to activities which are usual to non-"business" pursuits. The trial court found that the negligent conduct arose out of Wagner's business pursuit and therefore concluded that defendant was not obligated to indemnify plaintiffs. As noted above, Wagner was paid $300 for his services on the night of September 4; he used business cards for "Music Unlimited"; and he declared income from his disc jockey work on his tax returns. Wagner was plainly engaged in the business of being a disc jockey at the wedding. Judy Luneau was injured by one of his speakers, which the court found had been negligently stacked. All of these facts indicate that Wagner's activities fall into the business-pursuits exclusion. We must therefore, decide whether Wagner's activities at the wedding were "usual to non-business pursuits." C. The distinction between the business pursuits exclusion and the exception for activities usual to non-business pursuits is best addressed in the cases in which the tortfeasor is a day-care provider. The early leading case finding coverage is Gulf Ins. Co. v. Tilley, 280 F. Supp. 60 (N.D. Ind. 1967), aff'd, 393 F.2d 119 (7th Cir. 1968), a case cited in Vermont Mutual Ins. Co. v. Gambell, 166 Vt. 595, 596, 689 A.2d 453 , 454 (1997) (mem.). In Tilley, the plaintiff, a child, was injured when she pulled a coffee pot down on herself, and she sued the home day-care provider, who had used the pot to prepare coffee for herself and a friend. Defendant's homeowner's insurance carrier denied coverage under the business pursuits exclusion, but the court found the case fit within the exception for activities that are usual to non-business pursuits. The court reasoned that "preparation of hot coffee is an activity that is not ordinarily associated with a babysitter's functions." Tilley, 280 F. Supp. at 65. Most later cases involving day-care providers have rejected the analysis of Tilley. The leading case is Stanley v. American Fire & Cas. Co., 361 So. 2d 1030 (Ala. 1978), in which the child was injured when she fell into the day-care home's fireplace while the provider was preparing lunch for herself, her child and other children in day care. In reaching its conclusion that the case fell within the business pursuits exclusion of the homeowner policy, but not within the exception for activities that are usual to non-business pursuits, the Court rejected the Tilley analysis: In Tilley, the exclusionary clause was held inoperative where baby care was furnished for consideration, and the baby sustained burns when she overturned a coffee percolator. The district trial court assumed that the child care was a business pursuit, but characterized insured's coffee brewing for herself and a guest as an activity not connected with baby care, thus ordinarily incident to non-business pursuits. This analysis is questionable. The baby was burned