Court Opinion

ID: 3017746
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:18:00.778359+00
Date Added: 2024-06-11T15:03:50.765464
License: Public Domain

___________

                              No. 96-1081
                              ___________

Nationwide Mutual Insurance     *
Company,                        *
                                *
          Appellee,             *
                                * Appeal from the United States
     v.                         * District Court for the
                                * District of Nebraska.
Great West Casualty Company,    *
                                *
          Appellant.            *
                           ___________

                  Submitted:    September 11, 1996

                       Filed: December 19, 1996
                            ___________

Before BEAM, HEANEY, and MURPHY, Circuit Judges.
                           ___________

BEAM, Circuit Judge.

     Great West Casualty Company (Great West) appeals the district
court's1 grant of summary judgment in favor of Nationwide Mutual
Insurance Company (Nationwide). We affirm.

I.   BACKGROUND

     In this case, two insurance companies dispute their respective
status as primary or excess insurers. The underlying facts involve
an automobile accident in which James Peterson was killed. LeRoy
Shotkoski, a semi-tractor driver, had been delivering farm
equipment manufactured by Behlen Manufacturing, Inc. (Behlen).
Between deliveries, two stock tanks fell off the trailer and landed
on the road. Shotkoski did not notice the missing tanks until his

     1
      The Honorable Lyle E. Strom, United States District Judge
for the District of Nebraska.
next stop.   Meanwhile, Peterson, a local farmer, came upon the
tanks in his own vehicle. Peterson struck the tanks, rolled his
vehicle, and died in the accident.

     The trailer involved was owned by Behlen2 and was loaded with
Behlen equipment, by Behlen employees. The trailer was attached to
a semi-tractor owned by BMC Transportation Company (BMC).      The
semi-tractor was then leased to Shotkoski under the business name
of K&L Enterprises. Under that agreement, Shotkoski was considered
the owner/operator of the semi-tractor. Great West insured the
semi-tractor and BMC under its business auto policy. Nationwide
insured the trailer and Behlen under its business auto policy and
its commercial general liability policy.

     Shotkoski, the semi-tractor driver, was under contract with
BMC to deliver Behlen equipment throughout Montana and the Dakotas.
Shotkoski had picked up the trailer at the Behlen plant yard in
Nebraska. After leaving the yard, Shotkoski secured the load of
equipment to the trailer. He also resecured the load several times
prior to the Peterson accident, after each delivery on his route.

     Peterson's estate sued Behlen, BMC, and Shotkoski for wrongful
death. The complaint alleged that BMC and Behlen had negligently
loaded and supervised the loading of the trailer and that Shotkoski
negligently secured the load. Great West defended BMC and, because
of his contract with BMC, defended Shotkoski as well. Nationwide
subsequently requested that Great West also defend Behlen, arguing
that: (1) Behlen became a Great West insured when the trailer was
attached to the semi-tractor; (2) Nationwide's coverage of the

     2
      Behlen actually leased the trailer from G.E. Capital Fleet
Services under a lease/purchase agreement. Behlen then charged
BMC Transportation Company (BMC) a monthly fee, equal to its
lease/purchase payment, for the use of the trailer. This
interrelationship between the two companies was likely due to the
fact that both Behlen and BMC were subsidiaries of Behlen
Marketing, Inc.

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trailer was excess when the trailer was attached to the semi-
tractor; and (3) therefore, Nationwide's coverage was only
implicated to the extent that Great West's coverage was
insufficient to pay the judgment. Great West refused to defend
Behlen so Nationwide defended Behlen under a reservation of rights
agreement.   Nationwide then filed a declaratory judgment action
seeking a ruling that Great West had primary coverage for the
Peterson lawsuit.

     The declaratory judgment action was removed to federal
district court in Ohio and later transferred to the District of
Nebraska.    Meanwhile, the Peterson lawsuit was settled for
$400,000, with Great West paying $280,000 and Nationwide
contributing $120,000. After the settlement, Nationwide requested
reimbursement of its $120,000 contribution and the expenses
incurred in defending Behlen. Great West countered that Nationwide
had properly paid its part of the settlement because a Behlen
employee caused the accident by supplying a faulty stake to secure
the load.   Great West also alleged that Behlen could not be an
"insured" under its business auto policy because the policy
excludes coverage for the loading and unloading of a covered auto
by non-employees. Therefore, Great West argued that Behlen was
only covered under the Nationwide policy.

     The parties filed cross-motions for summary judgment. The
district court ruled in favor of Nationwide. After first assuming
that the negligence at issue occurred during the loading of the
trailer, the district court found that the carrier, insured by
Great West, had assumed the risk of improper loading. The court
then found that Nationwide's coverage was excess and that Great
West's policy provided primary coverage for the accident. Because
the settlement was within Great West's policy limits, the court
held that Nationwide should be reimbursed its $120,000 and the
costs incurred in defending Behlen. Great West appeals.

                               -3-
II.   DISCUSSION

     We review the entry of summary judgment de novo. Reich v.
ConAgra, Inc., 987 F.2d 1357, 1359 (8th Cir. 1993).         Summary
judgment is proper only when no genuine issue of material fact is
present and judgment should be awarded to the movant as a matter of
law. Commercial Union Ins. Co. v. Schmidt, 967 F.2d 270, 271 (8th
Cir. 1992).   Applying these standards, we find no error in the
district court's grant of summary judgment for Nationwide.

     An insurance contract should be interpreted in the same way as
any other contract. Enterprise Tools, Inc. v. Export-Import Bank,
799 F.2d 437, 439 (8th Cir. 1986). If the words are unambiguous,
then they should be given their ordinary meaning.         Id.   The
district court found that Nationwide's comprehensive general
liability policy clearly excluded coverage for loading activities.
The district court then found that the business auto policies
issued by both Nationwide and Great West provided coverage for the
risk at issue.

     Nationwide's comprehensive general liability (CGL) policy
contains the following exclusion:

      This insurance does not apply to:

      . . .

      g. "Bodily injury" or "property damage" arising out of
      the ownership, maintenance, use or entrustment to others
      of any aircraft, "auto" or watercraft owned or operated
      by or rented or loaned to any insured.     Use includes
      operation and "loading or unloading."

Appellant's Appendix at 84 (emphasis added). We agree with the
district court that this language excludes coverage for activities
involving the use and loading of the trailer. Therefore, by its

                                -4-
terms, Nationwide's CGL policy did not cover the accident at issue
here.

     The district court also found, however, that both the
Nationwide and Great West business auto policies provided coverage
for the risk involved in this accident.         Its finding that
Nationwide's policy covered the risk was based on Behlen's
ownership of the trailer. Its finding that Great West covered the
risk was due to its conclusion that Shotkoski had assumed the risk
of improper loading. See, e.g., Franklin Stainless Corp. v. Marlo
Transport Corp., 748 F.2d 865, 868 (4th Cir. 1984).

     In finding that Shotkoski assumed the responsibility of safely
securing the load, thereby sharing the risk with his employer, BMC,
the district court relied on various facts. These facts showed
that although the trailer was loaded by Behlen employees, they did
so only to allow the trailer to be moved out of the Behlen lot.
Although the Behlen employees supplied the allegedly faulty stake,
there is no evidence that such stake caused the tanks to fall off
the trailer, except for Shotkoski's affidavit stating that he
believed the stake caused the tanks to fall.       In other words,
despite Behlen's initial help in securing the load, Shotkoski still
assumed the risk of improper loading and maintained the duty to
secure the load.3 Furthermore, Behlen was properly treated as an
insured under the Great West policy because the policy expressly
provides coverage for owners of a borrowed trailer while the
trailer is connected to a covered semi-tractor.      Appellant's
Appendix at 135.

     3
      Great West seems to argue that because the Peterson
complaint alleged improper loading on the part of Behlen,
Nationwide's insured, Nationwide must pay its share of the
Peterson settlement. This argument ignores the district court's
finding that at all relevant times, Shotkoski had assumed the
responsibility for the loading of the trailer.

                               -5-
     We must next determine which of the two insurance policies
provided primary coverage for the accident. Great West's policy
provided as follows:

       This Coverage Form's Liability Coverage is primary for
       any covered "auto" while hired or borrowed by you and
       used exclusively in your business as a "trucker" . . . .
       [W]hile a covered "auto" which is a "trailer" is
       connected to a power unit, this Coverage Form's Liability
       Coverage is:

       (1) On the same basis, primary or excess, as for the
       power unit if the power unit is a covered "auto."

       (2)   Excess if the power unit is not a covered "auto."

Appellant's Appendix at 141.     The Nationwide policy contains a
similar provision.    Id. at 119.     Because Great West provided
primary coverage for the power unit here, Great West carried the
primary insurance coverage for this accident. Because the $400,000
Peterson settlement was within Great West's policy limits, see id.
at 126, Great West should have paid the entire settlement amount.
Therefore, Nationwide should be reimbursed for its $120,000
contribution.

     Finally, despite Great West's claims to the contrary, the
district court properly awarded Nationwide its costs, expenses and
attorney fees for defending the Peterson lawsuit, following a
proper analysis of the reasonableness of those amounts. We have
considered the remainder of Great West's arguments and find them to
be without merit.

III.    CONCLUSION

     Because the district court correctly granted summary judgment
in favor of Nationwide, we affirm the judgment of the district
court.

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A true copy.

     Attest:

          CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

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