Opinion ID: 1841367
Heading Depth: 1
Heading Rank: 6

Heading: Applicability of Exclusion.

Text: We first consider Cornhusker's argument that the district court erred in determining that the exclusion in the Cornhusker policy for damages resulting from the ownership, maintenance, or use of vehicles over 30 years old did not exclude coverage for Haag's claims against the Estate. Our resolution of this argument controls the outcome of this appeal. Contrary to the district court's order, we conclude as a matter of law that the exclusion applied to Haag's claims. Accordingly, we determine that the district court erred in holding in Farmers' favor on both Cornhusker's claim and on Farmers' counterclaim. On appeal, Farmers contends that the exclusion at issue applied only to certain types of coverage under the Cornhusker policy and that it did not apply to the garage operations coverage. We reject this contention. The exclusion at issue was contained in an endorsement to the policy and expressly stated that it modified the insurance provided under the garage coverage form. The heading on the exclusion alerted the insured to its scope by stating in a banner across the top of the page: THIS ENDORSEMENT CHANGES THE POLICY. The endorsement was located on a separate page following the descriptions of all the various types of coverage provided under the policy. There is no language in the exclusion which would indicate that it might apply to only certain types of coverage. We further note that there is policy language within the descriptions of specific types of coverage which provides for certain types of exclusions which are unique to those specific coverages. The placement of the exclusion at issue in the policy and the language of the exclusion indicate that the exclusion applied to the coverage provided under the entire garage policy. In interpreting limitations and exclusions in an insurance policy, this court has stated: An insurance policy is a contract between the insurance company and the insured. As such, the insurance company has the right to limit its liability by including those limitations in the policy definitions. If those definitions are clearly stated and unambiguous, the insurance company is entitled to have those terms enforced. Safeco Ins. Co. of America v. Husker Aviation, Inc., 211 Neb. 21, 27, 317 N.W.2d 745, 749 (1982). In Safeco Ins. Co. of America, we recognized that an insurance contract will be construed against the insurer when the policy is indefinite or ambiguous because the insurer drafted the contract; however, we also recognized that [w]e are not permitted to create an ambiguity simply to afford coverage where a clear reading of the policy would otherwise deny coverage. 211 Neb. at 26, 317 N.W.2d at 749. The Cornhusker policy in this case excludes coverage for damages resulting from the ownership, maintenance, or use of[, inter alia,] vehicles over 30 years old. This exclusion is not indefinite or ambiguous. We find the exclusion to be applicable to Haag's claims. Haag's injuries were caused when a faulty ball hitch came loose while the hitch was being used to tow a vehicle which was owned by the Estate and was over 30 years old. The court specifically found that the cause of the accident was the faulty ball hitch. In its order, the district court also noted that the injuries sustained by Haag occurred as the tractor towing the Studebaker with the rope caused the ball hitch to come loose. The district court concluded that the exclusion did not apply and entered orders in favor of Farmers. Given the facts and the Cornhusker policy language, the district court's orders are in error. In this case, the district court's finding that the faulty ball hitch caused the accident cannot be separated from the additional finding that the accident occurred while the ball hitch was being used to tow the 1950 Studebaker truck, a vehicle over 30 years old which was owned by the Estate. Even though the faulty ball hitch was the specific cause, the fact remains that the damages resulted from the towing of the 1950 Studebaker truck. A faulty ball hitch without an application is unlikely to cause harm. In this case, the towing was an incident of the Estate's ownership of the vehicle, and therefore, any liability the Estate had for the damages to Haag resulted from the Estate's ownership of a vehicle over 30 years old. Although it is possible that the faulty ball hitch could have been used to tow a vehicle that was not over 30 years old, in this particular accident, the Estate's liability resulted from its ownership of a vehicle that was in fact over 30 years old. In its policy, Cornhusker specifically excluded coverage for any damages resulting from the Estate's ownership of vehicles over 30 years old, and therefore the particular injuries to Haag in this case were within a set of risks that the policy excluded from coverage, and the district court's decision to the contrary was error. We note that because we conclude that the exclusion applied, we need not consider whether Haag's claim would have been covered under the garage policy absent the exclusion. Farmers argues that the present case should be analyzed pursuant to the concurrent cause doctrine used in other jurisdictions. This court has not specifically adopted the concurrent cause doctrine in this type of case. In cases where insurance policies cover losses caused by one risk while excluding losses caused by another risk, courts in other jurisdictions have alternatively used a concurrent cause rule or an efficient proximate cause rule to resolve coverage issues. See 7 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d §§ 101:55 to 101:57 at 101-148 to 101-153 (1997). The concurrent cause rule provides that coverage should be allowed whenever two or more causes do appreciably contribute to the loss, and at least one of the causes is an included risk under the policy, while the efficient proximate cause rule allows recovery for a loss caused by a combination of a covered and an excluded risk only if the covered risk was the efficient proximate cause of the loss, meaning that the covered risk set the other causes in motion which, in an unbroken sequence, produced the result for which recovery is sought. Id., § 101:57 at 101-152 to 101-153. We note that when applying both the concurrent cause rule and the efficient proximate cause rule, it is essential to recognize that [t]he initial task ... is determining whether there really are two causes, or merely one cause being given different labels. Id., § 101:55 at 101-149. Although the concurrent cause rule or the efficient proximate cause rule may be applicable where two or more distinct actions, events or forces combined to create the damage, such analysis has no application when the evidence shows the loss was in fact occasioned by only a single cause, albeit one susceptible to various characterizations. Chadwick v. Fire Ins. Exchange, 17 Cal.App.4th 1112, 1117, 21 Cal.Rptr.2d 871, 874 (1993). The court in Chadwick stated, An insured may not avoid a contractual exclusion merely by affixing an additional label or separate characterization to the act or event causing the loss. Id. See, also, Austin Mut. Ins. Co. v. Klande, 563 N.W.2d 282 (Minn.App. 1997) (for concurrent cause rule to apply, there must be divisible concurrent causes and question is whether causes could have operated independently of one another to bring about loss). Given the district court's finding of fact that the cause of Haag's injuries was the faulty ball hitch and in light of the fact that the use of the ball hitch was an inseparable part of the accident that resulted from the towing of the Estate's 1950 Studebaker truck, we determine that Haag's injuries occurred as the result of an accident that was one distinct action, event, or force rather than as a result of separate concurrent causes which could have operated independently of one another to bring about the loss. Because neither rule would apply, we need not consider in this case whether either the concurrent cause rule or the efficient proximate cause rule should be adopted in this state. We conclude that the exclusion in the Cornhusker policy relating to the ownership of vehicles over 30 years old applied to Haag's claim against the Estate and that therefore Cornhusker was not liable under its garage policy. The district court erred in concluding that the exclusion did not apply and in entering judgment against Cornhusker on both its claim and on Farmers' counterclaim. Because Cornhusker was not liable under its policy, judgment should have been entered against Farmers in the amount of the $166,741.71 payment Cornhusker made toward Haag's judgment, and Farmers' counterclaim should have been dismissed.