Opinion ID: 1877968
Heading Depth: 1
Heading Rank: 3

Heading: apportionment among policies

Text: The trial court determined that the loss was not caused solely by the `use, maintenance or operation' of the trucks, but was also caused by the risk involved in failure to remove the mud from the road.... There was also a failure to warn. The general policy and the auto risk policies are `overlapping' and vehicle-related and nonvehicle-related acts have concurred to cause the damage found by the jury in this action. The trial court went on to conclude that the terms of the vehicle policies made Tri-State and Milbank primary insurers, but that Austin's liability policy provided coverage on an excess basis. Austin concedes that it is liable under the general farm coverage for the loss caused by the failure to remove the mud and the failure to warn. However, Austin asserts that the trial court was correct in determining that Austin's other insurance clause absolves it from any primary liability where the loss arose from use of a vehicle. Tri-State and Milbank assert that the loss should be apportioned between the vehicle-related acts and the nonvehicle-related acts, with Austin responsible for the nonvehicle-related acts and Tri-State and Milbank responsible for the vehicle-related acts. They seek a remand for further proceedings to determine this apportionment or a conclusion that each insurer pay a pro-rata share of the judgment. Allocation of losses for the same casualty between separate policies of the insured is largely a contract matter. Kiefer v. General Casualty Company of Wisconsin, 381 N.W.2d 205 (N.D.1986). Multiple coverages should be construed equitably in light of the particular facts of the case. P.L. Kanter Agency, Inc. v. Continental Casualty Company, 541 F.2d 519, 521 (6th Cir.1976). The other insurance clauses in the Tri-State and Milbank vehicle policies, differing only slightly in expression, each provide for contribution by limits, thereby agreeing to share in proportion that our limit of liability bears to the total of all applicable limits. The other insurance clause in the Austin farm liability policy also provides for contribution by limits, but with a proviso: If the insured has other insurance against a loss covered by this policy, the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss, provided that with respect to loss arising out of the ownership, maintenance, operation, use, loading or unloading of (1) any automobile or midget automobile at the premises or the ways immediately adjoining or (2) watercraft, this insurance shall not apply to the extent that any valid and collectible insurance, whether on a primary, excess or contingent basis, is available to the insured. (Our emphasis) The trial court concluded that because the loss arose from the use of automobiles (trucks depositing mud on the highway while hauling sugarbeets from a field), this proviso applied and Austin's coverage was excess. We might agree with that conclusion if the use of the vehicles were the sole cause of the accident [compare Milbank Mutual Insurance Company v. Dairyland Insurance Company, 373 N.W.2d 888 (N.D. 1985) ]. But, we cannot agree that the proviso applies when the loss was caused by concurrent negligent acts, some of which were clearly nonvehicle-related. Whenever such a non-auto risk is a proximate cause of an injury, liability attaches to the insured, and coverage for such liability should naturally follow. Coverage cannot be defeated simply because a separate excluded risk constitutes an additional cause of the injury. State Farm Mutual Automobile Insurance Company v. Patridge, 10 Cal.3d 94, 514 P.2d 123, 125, 109 Cal. Rptr. 811 (1973). See also Indemnity Insurance Company of North America v. Citizens Mutual Automobile Insurance Company, 41 Mich.App. 133, 199 N.W.2d 678 (1972). Minnesota holds that there is concurrent coverage under both an auto policy and a general liability policy where a vehicle-related act of negligence and a nonvehicle-related act of negligence are involved in the same accident. Jorgensen by Jorgensen v. Auto-Owners Insurance Company, 360 N.W.2d 397 (Minn.Ct.App.1985); North Star Mutual Insurance Company v. Johnson, 352 N.W.2d 791 (Minn.Ct.App. 1984); Waseca Mutual Insurance Company v. Noska, 331 N.W.2d 917 (Minn.1983). This concurrent primary coverage construction is consonant with our precedents. Kunze v. State Farm Mutual Automobile Ins. Co., 197 N.W.2d 685, 694-696 (N.D. 1972) and State Farm Mutual Automobile Insurance Co. v. American Casualty Co., 433 F.2d 1007 (8th Cir.1970). It's appropriate and equitable in this case because not all of the loss arose from use of vehicles. Therefore the whole loss does not fully and clearly fall within the language of the proviso. Therefore, we conclude that the trial court erred in construing the Austin other insurance clause to provide coverage only on an excess basis. Under the facts of this case, Austin is clearly the insurer for the nonvehicle-related acts and Tri-State and Milbank are the insurers for the vehicle-related acts. It is not practical to apportion the loss between these concurrent acts. Thus, each insurer's coverage is direct and primary for the same loss. Each policy recognizes contribution by limits for primary coverage with other insurances. Accordingly, we hold these insurance companies must share pro rata in paying the judgment against their common insureds in the proportion that the separate limits of their respective coverages bear to the total of the limits of all three policies. The judgments are affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. ERICKSTAD, C.J., GIERKE, J., and PEDERSON, Surrogate Justice, concur. PEDERSON, Surrogate Justice, sitting in place of LEVINE, J., disqualified.