Opinion ID: 172126
Heading Depth: 2
Heading Rank: 2

Heading: The In Connection With Policy Language

Text: Resolving the coverage issue requires defining the scope of the in connection with language in Union Standard's non-owned autos provision, which covers: [T]hose autos [HRC] do[es] not own, lease, hire, rent or borrow that are used in connection with [HRC's] business. This includes autos owned by [HRC] employees or partners or members of their households but only while used in [HRC] business or [HRC] personal affairs. Appellant's App. at 70. The parties do not contend the own, lease, hire, rent, or borrow language applies since such autos are covered by other provisions. This language thus excludes from the non-owned provision, for example, autos HRC rented or leased from a dealer or rental agency, limousines for hire, or other vehicles that HRC might borrow to ferry employees on company business. Given this exclusionary language, we turn to the non-owned autos included in the provision. We begin with context. While the policy does not formally define the in connection with language, the non-owned auto provision itself supplies the most obvious example of coverage in its second sentence: privately-owned vehicles driven by HRC employees (or members of their household) in the course of HRC business or HRC-related personal affairs. This second sentence indicates that the provision is intended to cover a more narrow and foreseeable set of circumstances involving HRC employees or members of their household. For example, an employee or family member's vehicle driven to a parts store on company business, or used to haul equipment for HRC, would be covered. Viewing the in connection with language in the context of the entire provision thus suggests that instead of covering all autos somehow related to HRC's business, the policy is intended to apply to HRC-affiliated persons operating privately-owned vehicles while performing company-related work. See, e.g., Bamber v. Lumbermens Mut. Cas. Co., 451 Pa.Super. 548, 680 A.2d 901, 903 (1996) (an employee's personal vehicle is a non-owned auto used in connection with [insured's] business when used in the course and scope of employee's employment with the insured). Presented with this language and context, HRC asks us to expand coverage to independent contractors who do business with it. We decline to do so for several reasons. First, HRC exercised no control over Brunson in unloading the mud separator. [1] Neither HRC nor any of its employees operated the Brunson truck involved in the accident. Instead, only Brunson employees operated the trucks that Brunson owned. The accident occurred without direct HRC supervision, and occurred during a job Brunson had been retained to perform in the ordinary course of business. Brunson and its workers were neither employees, agents, nor joint venturers of HRC's. Even if an HRC employee told Brunson where to place the equipment, it would not vitiate Brunson's control over the details of the work. See, e.g., Adams v. Thomason, 753 So.2d 416, 420-21 (La. Ct.App.2000) (finding that a vehicle is not a non-owned auto used in connection with an insured's business when the vehicle's operator was not the insured's employee and the insured lacked control over the vehicle). Second, extending this policy language to independent contractors such as Brunson would conflict with New Mexico's hypothetical reasonable insured standard. Under this standard, we ask what understanding a reasonably intelligent, non-lawyer lay person might glean from the policy, in light of the usual meaning of the words and the circumstances leading to purchase of the policy. Berry, 99 P.3d at 1183. A reasonable insured in this situation would consider several relevant facts in evaluating coverage, particularly Brunson's status as an independent contractor using its own employees and vehicle. A reasonable insured, moreover, would consider that Brunson did not expect HRC supervision of its employees and did not receive assistance from HRC in doing the job. Despite uncertainty about whether HRC instructed Brunson where exactly to return the mud separator, Brunson employees supervised the operation and exercised control of the truck at all times. Based on these facts, a reasonable insured would not view HRC's business automobile policy as extending coverage to independent contractors over which HRC did not exercise control. Such a broad interpretation of the provision would extend coverage to all businesses HRC hired to transport its equipment. In our view, no reasonable insured party would understand non-owned policy language to apply to such circumstances. [2] Indeed, such a reading would result in precisely the type of strained policy interpretation New Mexico law prohibits. See Battishill, 127 P.3d at 1115. Finally, our interpretation accords with the common purpose of non-owned policy provisions. In the business context such provisions ordinarily provide[] employers with protection from liability based on the doctrine of respondeat superior arising out of an employee's commission of a tort while using their own personal vehicles in the employer's business. Lee R. Russ & Thomas F. Segalla, 8A Couch on Insurance § 118.41 (3d ed.2008). While the use of personal vehicles by employees acting on the company's behalf might be covered, independent contractors are not. [3] In sum, the non-owned auto provision does not provide coverage for vehicles under the operation and control of third-party independent contractors.