Opinion ID: 896050
Heading Depth: 2
Heading Rank: 3

Heading: Interpretation of Borrow

Text: [¶ 26] In its Amended Memorandum Decision, the district court recognized the essential question in this case is the meaning of the word borrow. The district court concluded: Lease, hire, rent, and borrow are synonymous when used as used in this policy.... The term borrow may be used to express the idea of receiving something from another for one's own use. [Citing Black's Law Dictionary].       Kurry did not lease, hire, rent, or borrow the car for his own use at all, much less as contemplated by Continental in its insuring agreement. He was, as argued by Continental, a `designated driver.' [Dawn] Hanneman retained possession and control of the vehicle. [¶ 27] Thus, the dispositive issue in this appeal is the interpretation of the contract term borrow. When interpreting an insurance policy, we look first to the insurance contract itself. Martin, 1998 ND 8, ¶ 9, 573 N.W.2d 823; Northwest G.F. Mut. Ins. Co. v. Norgard, 518 N.W.2d 179, 183 (N.D.1994) (concluding the policy clearly and specifically reflects the intention of the parties with regard to the scope of coverage). If the contract is self-explanatory and subject to only one meaning, our inquiry is at an end. Martin, 1998 ND 8, ¶ 9, 573 N.W.2d 823. See N.D.C.C. § 9-07-02 (stating [t]he language of a contract is to govern its interpretation if the language is clear and explicit and does not involve an absurdity). [¶ 28] On the other hand, the presence of an undefined term allows a court to look at other sources to provide the meaning. Although an ambiguity occurs when a term has two alternative meanings, Martin, 1998 ND 8, ¶ 10, 573 N.W.2d 823, merely because a contract term is undefined, disputable, or vague does not mean the issue is automatically resolved in favor of the insured. Id. (noting a party jumps the gun on contract interpretation by suggesting there is an ambiguity without first looking to the plain meaning). Rather, we principally look to the plain, ordinary meaning of the undefined term to guide our interpretation. Martin, 1998 ND 8, ¶ 9, 573 N.W.2d 823 (citing Aid Ins. Servs., Inc. v. Geiger, 294 N.W.2d 411, 414-15 (N.D.1980)); N.D.C.C. § 9-07-09 (stating in part contract terms are to be understood in their ordinary sense). The plain meaning of a term is essential to our interpretation because we consider whether a person not trained in the law or in the insurance business can clearly understand the language. Kief Farmers, 534 N.W.2d at 32. But we also look to other relevant rules of contract interpretation to determine the intent of the parties. Continental Cas. Co. v. Kinsey, 499 N.W.2d 574, 578 (N.D.1993). See N.D.C.C. Ch. 9-07. [¶ 29] We look to principles of insurance law to see whether or not the undefined term has a technical meaning. Martin, 1998 ND 8, ¶ 12, 573 N.W.2d 823 (citing Walle Mut. Ins. Co. v. Sweeney, 419 N.W.2d 176, 181 (N.D.1988) (Vande Walle, J., concurring specially) for the proposition that complex insurance contracts are not viewed as simply as other contracts); N.D.C.C. § 9-07-09 (stating contract terms are to be understood in their ordinary sense unless used by the parties in a technical sense, or unless a special meaning is given to them by usage); N.D.C.C. § 9-07-10 (stating technical words are to be understood as they would be by persons in the business). And in rare cases, parol evidence may be used to decipher the intention of the parties. Sellie, 494 N.W.2d at 157 (noting when words have an ordinary meaning, extrinsic evidence should not be used to show that the words were used in some other sense). [¶ 30] If the relevant rules of statutory contract interpretation fail to remove an ambiguity in an insurance contract, only then is the ambiguity resolved in favor of the insured. Martin, 1998 ND 8, ¶ 10, 573 N.W.2d 823 (citing Sweeney, as requiring other statutory rules of interpretation to fail before ambiguities are held against the drafter under N.D.C.C. § 9-07-19); Norgard, 518 N.W.2d at 183 (conceding if ambiguity is not resolved by application of rules of contract interpretation ambiguous portion is construed against insurer). But see Kinsey, 499 N.W.2d at 579 (concluding the Doctrine of Contract of Adhesion, unlike the strict construction rule of Section 9-07-19, N.D.C.C., is not a last resort guideline for contract interpretation). [¶ 31] Borrow is not defined in the Continental policy. And the term is not a technical insurance term with a strict legal meaning. State Farm Fire & Casualty Co. v. American Hardware Mutual Ins. Co., 224 Ga.App.789, 482 S.E.2d 714, 717 (1997) (noting the word `borrow' is not used as a technical word, word of art or with a unique or peculiar meaning such as may be employed in a particular trade or business). Absent a contractual definition or a strict technical usage, we apply the plain, ordinary meaning of an undefined term to the insurance policy. Martin, 1998 ND 8, ¶¶ 9, 12, 573 N.W.2d 823. The dictionary is a good source to determine the plain, ordinary definition of an undefined term. Martin, 1998 ND 8, ¶ 12, 573 N.W.2d 823 (noting the ordinary meaning is the definition a non law-trained person would attach to the term). See, e.g., Kim-Go v. J.P. Furlong Enters., Inc., 460 N.W.2d 694, 696 (N.D.1990) (relying on a dictionary to define proportion); Hofco, Inc. v. National Union Fire Ins., 482 N.W.2d 397, 401 (Iowa 1992) (remarking a court will commonly refer to dictionaries in searching for the ordinary meaning of an undefined term). [¶ 32] But, before we consider the dictionary definition of borrow, we note there are a few cases interpreting the term borrow in an insurance policy. See State Farm v. AHM, 224 Ga.App. 789, 482 S.E.2d 714 (defining borrow as to receive temporarily from another); American Family Mut. v. Allied Mut. Ins., 562 N.W.2d 159, 165 (Iowa 1997) (stating borrow means to take or receive (something) with the understanding that one will return it or an equivalent); Davis v. Continental Ins. Co., 102 Ohio App.3d 82, 656 N.E.2d 1005, 1008 (1995) (stating some element of substantial control is generally understood to be included within the prevailing meaning of the act of borrowing); Gore v. State Farm Mut. Ins. Co., 649 So.2d 162, 165 (La.App. 2 Cir.1995) (defining borrow as requiring the borrower acquire substantial possession, dominion, control, or the right to direct the use of the vehicle, and not merely that the use ... was for the benefit of a purported borrower). Although none of the cases involve similar factual situations to the instant case, the analysis and interpretation is still instructive: The majority of other courts that have interpreted similar borrowed automobile provisions have also concluded that the term borrow connotes much more than merely receiving some benefit from another's use of a third person's vehicle. They have determined that borrowing a car requires possession reflecting dominion and control over the vehicle. Schroeder v. Board of Supervisors of Louisiana State Univ., 591 So.2d 342, 347 (La.1991) (citations omitted; emphasis retained). [¶ 33] Requiring substantial possession and control over the vehicle is consistent with the plain, ordinary definition of borrow. The American Heritage College Dictionary defines borrow as a verb meaning [t]o obtain or receive (something) on loan with the promise or understanding of returning it or its equivalent .... [t]o adopt or use as one's own. The American Heritage College Dictionary 162 (3d ed.1997). The district court was correct in concluding [t]he term borrow may be used to express the idea of receiving something from another for one's own use.  (Emphasis added). [¶ 34] Kurry's status as a designated driver does not fit within the ordinary meaning of the contract term, borrow. In this case, Dawn Hanneman asked Kurry to drive her car from Granville. She directed him on how to get to the Buffalo Lodge Lake party. Dawn Hanneman was the passenger, and Kurry was her driver. Even with Kurry behind the wheel, however, Dawn Hanneman remained in possession and control of the vehicle. The district court correctly concluded Kurry did not borrow Dawn Hanneman's car for his own use. [¶ 35] The Hannemans argue Kurry received the benefit of getting a ride to the Buffalo Lodge Lake party and exercised control by speeding and installing his own fuzz buster. Borrowing requires more than an incidental benefit to the purported borrower, more than the existence of imprudent decisions, and more than unsafe driving. [T]he prevailing meaning of the term borrow in the context of automobile lending requires that the borrower acquire substantial possession, dominion, control, or the right to direct the use of the vehicle, and not merely that the use of the vehicle by another person redound by chance to the benefit of a purported borrower. Schroeder, 591 So.2d at 347 (emphasis retained). Dawn Hanneman directed the control of the vehicle. She determined Kurry would be the driver. Dawn Hanneman never surrendered possession of the vehicle to Kurry; she was a passenger in the car throughout the trip. Dawn Hanneman remained in possession and control of the vehicle. [¶ 36] Finally, we note Kurry did not select coverage under Symbol 1 for any `auto.' Had Kurry selected Symbol 1 coverage, he would have been covered in the present case. Unlike Symbol 1, Symbol 8's coverage is limited to situations such as when an insured borrows a vehicle for his business or personal use. To interpret the term borrow on the basis of any sort of benefit to Kurry, would eliminate any difference between Symbols 1 and 8. Similarly, to have the control needed to drive a car determine whether someone borrowed the car would provide coverage in every situation where Kurry got behind the wheel of another's car. We will not interpret the term borrow so broadly the contract language becomes meaningless. [¶ 37] We agree with the district court's interpretation of the Continental Western policy. The term borrow expresses the idea of receiving something from another for one's own use. The district court correctly concluded Kurry did not borrow Hanneman's car for his own use at all; he was a designated driver.