Opinion ID: 411164
Heading Depth: 1
Heading Rank: 3

Heading: the interpretation of the insurance contract.

Text: 15 The controversy in this case centers on whether the insurance policy issued by Integrity to the owner of the disabled tractor covered the employee of the towing company while he was towing the disabled vehicle. There is no question that the policy issued to Davenport provided coverage. In interpreting the various provisions of the insurance contract at issue, we must resolve any ambiguity in the contract in favor of the insured. See Blue Ridge Insurance Co. v. Haun, 197 Tenn. 527, 276 S.W.2d 711, 713 (1953); Wilkinson v. United States Fidelity & Guaranty Co., 55 Tenn.App. 54, 396 S.W.2d 86 (1965). Thus, an omnibus clause extending coverage to other users of the insured vehicle must be liberally construed, while exclusions from coverage must be construed narrowly. 16 The Integrity policy contains a standard omnibus clause which extends coverage to any person using the insured vehicle with the insured's permission. The district court held that towing a vehicle is a use which would bring the wrecker's towing of the tractor within the coverage of the omnibus clause. While there is apparently no Tennessee case on point, the district court's interpretation of the meaning of the word use is in accord with case law in other jurisdictions, see e.g., State Automobile Mutual Insurance Co. v. State Farm Mutual Insurance Co., 456 F.2d 238 (6th Cir.1972); Industrial Indemnity Co. v. Continental Casualty Co., 375 F.2d 183 (10th Cir.1967); American Fire & Casualty Co. v. Allstate Insurance Co., 214 F.2d 523 (4th Cir.1954); Dairyland Insurance Co. v. Drum, 193 Colo. 519, 568 P.2d 459 (1977); Howard v. Ponthieux, 326 So.2d 911 (La.App.1976); Hartford Accident Indemnity Co. v. Travelers Insurance Co., 167 N.J.Super. 335, 400 A.2d 862 (1979). 17 The Integrity policy also contained a number of exceptions to the omnibus clause, two of which are at issue here. First of all, the policy excluded from coverage: (iv) any person while employed in or otherwise engaged in duties in connection with an automobile business, other than an automobile business operated by the named insured. Record at 102-03 (emphasis in original). An automobile business is defined elsewhere in the policy as the business or occupation of selling, repairing, servicing, storing or parking automobiles. Record at 103 (emphasis in original). The district court concluded that Davenport's wrecking service was an automobile business within the exclusionary clause and that, therefore, the Integrity policy did not extend coverage to Davenport where his employee was towing the insured vehicle. 18 The definition of automobile business in the policy does not specifically list towing as one of the activities covered by the clause. While the Tennessee courts have not specifically addressed the question of whether a towing service is covered under the towed vehicle's insurance policy, they have held that a truck repair service's exchange of a truck so that it could be repaired was within the exclusion for activities in connection with an automobile business. Terminal Transport v. Cliffside Co., 608 S.W.2d 850 (Tenn.App.1980). Similarly, a number of jurisdictions have held that the pick-up and delivery of an automobile by a service and repair station is within the exclusion. See Universal Underwriters Insurance Co. v. Pan American Insurance Co., 450 F.2d 1050 (5th Cir.1971) (construing Texas law); Deville v. United States Fidelity and Guaranty Co., 258 So.2d 694 (La.App.1972); Weston v. Great Central Insurance Co., 514 S.W.2d 17 (Mo.App.1974); but see Dumas v. Hartford Accident and Indemnity Co., 181 So.2d 841 (La.App.1965). 19 Both parties in this case stipulated, however, that Davenport was solely a wrecking service and that it did not repair vehicles for the public. Record at 157. The cases excluding from coverage accidents that occurred while the insured vehicle was being transported explicitly rely on the fact that the transportation was conducted in connection with an activity expressly mentioned in the definition of an automobile business. For example, Terminal, supra, involved a truck repair service. In Howard v. Ponthieux, supra, the Louisiana Court of Appeals held that a towing company fell within the exclusion because it also stored the vehicles it towed. Two jurisdictions that have construed similar exclusionary clauses have held that transportation of automobiles, without more, is not an automobile business, Demshar v. Aaacon Auto Transport, Inc., 337 So.2d 963 (Fla.1976); Allstate Insurance Co. v. Federal Insurance Co., 23 Md.App. 105, 326 A.2d 29 (1974), aff'd as modified, 275 Md. 460, 341 A.2d 399 (1975), and Integrity has not cited any decision to the contrary. 20 This review of the cases indicates that the district court's holding that Davenport was excluded from coverage under the Integrity policy as an automobile business was incorrect in light of the absence of evidence that the wrecking service engaged in any of the activities listed in the definition of such a business. 1 Since we must construe this exclusionary clause narrowly, see Midland Insurance Co. v. Home Indemnity Co., 619 S.W.2d 387 (Tenn.App.1981) (holding that an automobile business exclusion did not apply where repairs on the vehicle had been completed since the plain language of the policy applied only while the person was engaging in the listed activities ), we hold that Davenport's business was not an automobile business within the definition provided in the insurance policy, and that therefore the exclusion did not apply. 2 21 Integrity contends that a second provision in the policy excludes Davenport and his employee from coverage because the tractor was being used as a trailer at the time of the accident. The policy provides that it does not insure the following: 22 (iii) Any person or organization, other than the named insured, with respect to: 23