Court Opinion

ID: 9461869
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:26:19.836014+00
Date Added: 2024-06-11T17:31:56.726710
License: Public Domain

CELEBREZZE, Circuit Judge
(dissenting).
I respectfully dissent. I cannot agree with the majority’s conclusion that the Tennessee Supreme Court would not give effect to the exclusionary clause in Federated’s policy. The language of that clause expressly bars coverage when a tractor is used in the manner in which it was used here. The District Court’s interpretation subverts the plain meaning of the exclusionary clause.
That clause states,
“This policy does not apply:
“(c) under coverages A and B, while the automobile is used for the towing of any trailer owned or hired by the insured and not covered by like insurance in the company. . . .”
The District Court adopted INA’s view that the exclusionary clause applied only “to an additional insured who owned or hired the trailer,” so that the driver and Brazil Gin Company, neither of whom owned or hired the trailer, were not exempted from coverage.
The exclusionary clause plainly does not support this interpretation. It states that there is no coverage for anyone (“This policy does not apply”) when the tractor is used to tow a trailer which is owned or hired by any insured under the *107Omnibus Clause (“the insured”) and which is not also insured with Federated. Since the trailer was owned by Allen but was not insured with Federated, the exclusion applies against all insureds.
The courts which have confronted identical language are in accord with this view. In Yellow Transit Freight Lines, Inc. v. Houston Fire and Casualty Ins. Co., 254 S.W.2d 891 (Tex.Civ.App.1952), an identical exclusionary clause was under consideration. The tractor owner’s insurer contended that the driver was an additional insured under the policy covering the trailer and that, since the driver did not own or hire the tractor, he was not excluded from coverage. In rejecting this theory, the Yellow Transit Court stated:
[Ajppellants [argue] that since [the driver] was neither the owner nor the hirer of the tractor he was insured under Appellee’s policy although the owner of the tractor, Yellow Transit Freight Lines, Inc., was not so insured under the same policy by reason of the exclusion clause therein. However, appellants do not call attention to the fact that any settlement of the damage claims of the injured individuals as made on behalf [the driver] would likewise inure to the benefit of appellant, Yellow Transit Freight Lines, Inc., and absolve it from all further liability. Therefore, a final analysis of appellants’ theory in the cause reveals that Yellow Transit Freight Lines, Inc., owner of the tractor, though barred from recovery against appellee by the policy exclusion, could in effect extend the protection of Appellee’s written contract of insurance to cover any damage occasioned by its tractor merely by hiring [the driver] to drive the same.
It is not a sound legal proposition that protection as agreed upon in a written contract of insurance between two persons can be extended to a third person who is expressly excluded as an insured under the terms of such policy merely by the act of such third party in hiring a driver for its tractor.1
See also Transport Ins. Co. v. Employers Casualty Co., 470 S.W.2d 757 (Tex.Civ.App.1971); Canal Ins. Co. v. State Automobile Ins. Ass’n, 433 F.2d 373 (5th Cir. 1970).
The District Court stated that Hartford Accident and Indemnity Co. v. Shaw, 273 F.2d 133 (8th Cir. 1959), supported its interpretation of the exclusionary clause and that Hartford’s reasoning was preferable to that of Yellow Transit. The Hartford Court, however, made only passing reference to the interpretation of an identical exclusionary clause, stating:
It is essential in order to establish the exclusion that Hartford plead and prove that the trailer was owned or hired by the insured. There is some dispute as to whether the word “insured” in the trailer exclusion refers only to the named insured or whether it includes any person insured by the omnibus clause. For the purposes of this case we will assume without so deciding that the broader interpretation of the word “insured” is operative in the trailer exclusion. We find neither proof nor basis for inference that either Miller or Shaw owned or hired the trailer. The trial court expressly so held. It is clear that coverage as to Miller and Shaw is not barred by the trailer exclusion.2
The District Court erred in concluding that Hartford supported its decision to allow coverage to one insured when another insured clearly triggered the exclusionary clause. Since it did not reach the question of the coverage of the exclusionary clause, Hartford is not at variance with Yellow Transit and Canal.
The exclusionary clause plainly precludes coverage of Brazil because Allen owned the trailer and did not insure it with Federated.
The majority affirms the District Court on its alternative holding — that, *108assuming the exclusionary clause applies, Appellant is estopped from relying on it. The majority states,
If coverage is afforded only when a Hub City tractor is employed to tow a trailer not owned by Hub City but also insured by Federated, then the policy essentially affords no coverage for the premium collected.
Since Federated knew of the policyholder’s business and since its policy “fail[ed] to provide the coverage that might reasonably be expected” by the insured, Federated is barred from denying coverage, the majority holds.
I have no quarrel with the majority’s expression of Tennessee law. The finding that the policy provided nugatory protection to Hub City because it did not own or lease its own trailers is, however, clearly erroneous. The policy did afford coverage. First, it afforded coverage whenever the tractor was not towing a trailer, and there is no evidence in the record that this was not a significant amount of time the tractors were used. The majority merely assumes that “as a practical matter the tractors will not be used alone.” Second, the policy afforded coverage whenever the tractor was towing a trailer which was insured with Federated and which was owned or hired by any insured under Federated’s policy. Since an additional insured under the policy ordinarily owned or hired a trailer pulled by Hub City’s tractors, the policy applied whenever such a trailer was also insured with Federated. When it was insured by another carrier, Federated’s exclusionary clause meant that the other insurer bore the risk that the tractor and trailer would cause an accident. Third, coverage was provided whenever the tractor was used to tow a trailer not owned or hired by an insured. Again, there is no evidence that this situation did not arise in Hub City’s business, and the burden rested on the party asserting estoppel to prove that the contract afforded no coverage.
Thus, the policy protections were not nugatory, and the Tennessee estoppel doctrine is inapplicable.
We should apply the exclusionary clause according to its plain meaning and should not expand the coverage freely contracted between the parties. I would reverse the District Court’s Judgment and order entry of judgment for Appellant.

. 254 S.W.2d at 893.

. 273 F.2d at 139^0.