Opinion ID: 172126
Heading Depth: 2
Heading Rank: 1

Heading: The Accident and Insurance Policy

Text: HRC is a New Mexico company that rents oil drilling equipment. HRC hired Nolan Brunson Incorporated (Brunson), an independent contractor specializing in moving heavy equipment, to transport a mud separator from an oil field to the HRC yard. While unloading the mud separator at HRC's yard, part of a Brunson truck touched an overhead power line, severely electrocuting a Brunson employee. The employee sued HRC in New Mexico state court for negligence. HRC placed its comprehensive general liability insurance carrierwhich covered claims for premises liabilityon notice of the lawsuit, and it initially defended HRC. As bad luck would have it, the carrier declared bankruptcy shortly after litigation began. As a fallback, HRC demanded defense and indemnification from its business automobile insurance carrier, Union Standard. Union Standard defended HRC in state court but reserved its right to dispute coverage, later filing this declaratory judgment action to ascertain its obligations and rights under the business auto policy. The Union Standard business automobile policy provides coverage for certain non-owned autos, defined by the policy as [T]hose autos you do not own, lease, hire, rent or borrow that are used in connection with your business. Appellant's App. at 70. To resolve the coverage issue, we must determine whether the Brunson truck was used in connection with HRC's business. The parties agree Brunson was an independent contractor exercising nearly complete control over the transport job. Brunson was an entirely separate company from HRC, and in transporting the mud separator it used its own employees and truck, expecting and receiving neither assistance nor supervision from HRC. Brunson employees themselves were also charged with holding on-site safety meetings before every job to determine the method and manner by which they would offload equipment. The only relevant factual dispute relates to whether an HRC employee directed Brunson to return the equipment to the location in the HRC yard where the accident occurred.