Court Opinion

ID: 2965596
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:42:27.237604+00
Date Added: 2024-06-11T11:43:07.409066
License: Public Domain

USCA1 Opinion

	

       [NOT FOR PUBLICATION   NOT TO BE CITED AS PRECEDENT]

                 United States Court of Appeals
                     For the First Circuit

No. 98-1451

                   PEERLESS INSURANCE COMPANY,

                       Plaintiff, Appellee,

                                v.

            ANNIE'S, INC., GARY C. KRYSTA, ANN KRYSTA
                        and DAVID RIVERA,

                     Defendants, Appellants.

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF RHODE ISLAND

             [Hon. Mary M. Lisi, U.S. District Judge]

                              Before

                      Selya, Circuit Judge,
                                
           Aldrich and Coffin, Senior Circuit Judges.
                                
                                

     Jeffrey S. Michaelson with whom Michaelson, Michaelson &
Zurier, Thomas R. Bender and Hanson, Curran, Parks & Whitman were
on brief for appellant.
     Gerald C. DeMaria with whom Stephen B. Lang, Patrick B.
Landers and Higgins, Cavanagh & Cooney were on brief for appellee.

December 1, 1998

                                
            Per Curiam.  In this case Annie's, Inc., a small dry
    cleaning business, obtained a so-called Business Protector
    Policy from Peerless Insurance Company (Peerless).  In June of
    1994, while the policy was in effect, Derek Gagnon, an Annie's
    employee, was driving a step-van on Annie's business when he
    collided with another vehicle.  David Rivera, a pedestrian,
    was injured as a result of the collision and sued Annie's. 
    Gary Krysta, an owner and employee of Annie's, owned the van,
    but Annie's used, maintained, and stored the van and paid the
    expenses of keeping it on the road.  Krysta had acted on
    behalf of Annie's when he instructed Gagnon to drive the van
    on Annie's pickup route. 
              Naming Annie's, Krysta, and Gagnon as defendants,Peerless sought a declaratory judgment that it owed no duty to
    defend or indemnify Annie's for claims arising out of the
    collision.  The district court ruled in its favor, and we
    affirm.
              The court's rulings related to two parts of the
    policy:  the general liability provisions as diminished by an
    exclusion clause, and an endorsement providing special
    additional coverage.  As to the first, the district court, in
    an extensive memorandum, addressed defendants' contention that
    a provision excluding from coverage bodily injury and property
    damage arising out of the entrustment of an auto to others did
    not apply when the injury or damage was due to the negligent
    selection, training, or supervision of the driver.  The
    exclusion clause makes no such exception.  The district
    court's memorandum fully demonstrated the unsoundness of
    defendants' contention.
              The court's ruling on the second claim was equally
    correct, but might be supplemented.  The endorsement provided
    coverage for damage caused by use, in the insured's business,
    of a "non-owned auto," which it defined as an auto not owned,
    leased, hired, or borrowed by the insured.  Defendants'
    contention that Gagnon, rather than Annie's, was the borrower
    is totally unrealistic.  Annie's maintained and stored  the
    van and controlled its use.  Gagnon had no control other than
    to do what Krysta, as Annie's agent, instructed him.  Clearly
    Gagnon was not the borrower.  Any claim of ambiguity, whether
    in the policy or in the circumstances, is untenable.
              Even more unpersuasive is defendants' claim that
    Peerless' construction makes the endorsement meaningless.  Use
    of an employee's personal car might at least raise a duty to
    defend.  How much coverage does an insured expect if it
    chooses an endorsement with a $41 annual premium?
              Affirmed.