Opinion ID: 4510133
Heading Depth: 1
Heading Rank: 4

Heading: the “auto business” exclusion

Text: Because we concluded that there are serious questions as to the ripeness of, and subject-matter jurisdiction in, this case, we do not reach the merits of whether the “auto business” exclusion, or its exception, properly applies to either Leslie Middlebrooks’s policy or Luther’s policy. In the interest of judicial economy, however, we make note of several observations with respect to the merits that occurred to us during our study of this case. As the district court noted, both Luther’s and Leslie Middlebrooks’s insurance policies with Progressive Mountain contained an “auto business exclusion.” The policies specifically exclude “bodily injury or property damage arising out of an accident involving any vehicle while being maintained or used by a person while employed or engaged in any auto business.” The policy defines “Auto business” as “the business of selling, leasing, repairing, parking, storing, servicing, delivering or testing vehicles.” However, the exclusion has an exception—it does not “apply to you, a relative, or a rated resident, or an agent or employee of you, a relative, or a rated resident, when using a covered auto.” The district court properly applied Georgia laws. Georgia courts have recognized for more than 50 years that “[t]here are two main types of ‘automobile 16 Case: 19-11439 Date Filed: 02/25/2020 Page: 17 of 18 business’ exclusions. The ‘older’ type, providing a narrower exclusion and correspondingly greater insurance coverage, focuses on the use to which the automobile is being put at collision-time and is phrased in terms of excluding coverage for automobiles ‘used’ in the automobile business.” Haley v. State Farm Mut. Auto. Ins. Co., 130 Ga. App. 258, 260 (Ga. Ct. App. 1973). The “newer” exclusion, on the other hand, “focuses on the person in whose charge the automobile is at collision-time.” Id. Although the district court did not explicitly note the distinction between the “older” and “newer” types, the district court did implicitly construe the “auto business” exclusion in this case as being of the “newer” type. We agree. The policy specifically excludes coverage to any bodily injury “arising out of an accident involving a vehicle while being maintained or used by a person while employed or engaged in any auto business.” Accordingly, the district court properly focused on “the person in whose charge the automobile is at collision-time.” Haley, 130 Ga. App. at 260. However, we do have some concerns about the district court’s conclusions in its focus on the role of Luther, who was the person in charge of the automobile at collision-time, and thus we do have some concerns about the viability of the district court’s conclusions regarding the applicability of the “auto business” exclusion in this case. Our review of the relevant caselaw suggests to us that the summary 17 Case: 19-11439 Date Filed: 02/25/2020 Page: 18 of 18 judgment record in this case may support a determination that there were genuine issues of material fact with respect to whether the “auto business” exclusion should apply. With respect to both policies, there may be genuine issues of material fact as to whether Luther was engaged in any “auto business” at the time of the wreck because he was merely doing a favor for his friend, Tom Middlebrooks. And even if it is properly determined that Luther was engaged in any “auto business” at the time of the wreck, with respect to Leslie Middlebrooks’s policy, Luther was driving a “covered auto” at the time of the wreck, and therefore the summary judgment record may support a determination that genuine issues of material fact existed as to whether Luther was acting as an agent of Leslie or Tom such that the exception to the “auto business” exclusion would apply. Accordingly, on remand, if the district court does conclude that the case is ripe and that there is diversity jurisdiction to hear it, we invite the district court to re-examine its merits conclusions.