Ralph E. Stevens v. Fireman’s Fund Insurance Co.

1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0217P (6th Cir.)
File Name: 04a0217p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
RALPH E. STEVENS, et al.,
Plaintiffs,
v.
FIREMAN’S FUND INSURANCE
CO.,
Defendant-Appellee,
TRANSYSTEMS, INC., and
LITTLE BROWNIE PROPERTIES,
INC.,
Defendants-Appellants.
X
-
-
-
->
,
-
-
-
-
-
-
-
-
-
-
N
No. 03-3005
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 01-00275—Edmund A. Sargus, Jr., District Judge.
Argued: March 12, 2004
Decided and Filed: July 9, 2004
2 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
No. 03-3005
*The Honorable Daniel M. Friedman, Circuit Judge of the United
States Court of Appeals for the Federal Circuit, sitting by designation.
Before: MARTIN, NELSON, and FRIEDMAN, Circuit
Judges.*
_________________
COUNSEL
ARGUED: Michelle R. Dudley, SHAYNE &
GREENWALD, Columbus, Ohio, for Appellants. Janet A.
Kachoyeanos, CARON, CONSTANTS & WILSON,
Chicago, Illinois, for Appellee. ON BRIEF: Gary D.
Greenwald, SHAYNE & GREENWALD, Columbus, Ohio,
for Appellants. Janet A. Kachoyeanos, CARON,
CONSTANTS & WILSON, Chicago, Illinois, for Appellee.
_________________
OPINION
_________________
DAVID A. NELSON, Circuit Judge. This is a diversity
case that presents a question as to the applicability, under
Florida law, of an exclusionary clause in a liability insurance
policy. The appellants — two affiliated corporations engaged
in the trucking business — carried insurance under a single-
insurer package that included both a commercial motor
vehicle policy form (or “auto form”) and a commercial
general liability (CGL) policy form. The latter contained an
“auto exclusion” clause negating CGL coverage for “[b]odily
injury or property damage arising out of the ownership . . .
use or entrustment to others of any . . . [land motor vehicle,
trailer or semi-trailer . . .] owned or operated by or rented or
loaned to any insured.”

-- 1 of 4 --

No. 03-3005 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
3
A tractor-trailer owned by one of the appellants and leased
by it to the other appellant was involved in a collision with a
train. Several people were injured in the accident, and there
was significant property damage.
It was asserted in the ensuing litigation that the insurance
company was obligated to indemnify the appellants under
both the commercial general liability policy and the motor
vehicle policy, with the two policy limits being aggregated.
This assertion was based on the proposition that the auto
exclusion clause did not apply where, as here, there was a
claim that the accident resulted in part from negligence in the
dispatching of a truck driver who should not have been
permitted to drive because he had exceeded an hours-in-
service limitation.
The district court rejected this proposition, holding that the
auto exclusion clause meant what it said and effectively
barred coverage under the commercial general liability policy.
Upon de novo review we find ourselves in agreement with the
district court’s view; the judgment in favor of the insurance
company will therefore be affirmed.
I
Appellant Transystem, Inc., owned a tractor-trailer that was
leased to its affiliate, Appellant Little Brownie Properties,
Inc. In the spring of 1999, while the rig was being driven by
a Transystems employee who had been assigned to operate it
by Little Brownie, the tractor-trailer collided with a Norfolk
Southern freight train in Perry County, Ohio. The train was
derailed, and four members of the train crew were injured.
Transystems and Little Brownie were insured by Appellee
Fireman’s Fund Insurance Company. The contract of
insurance included a commercial general liability coverage
form and an auto coverage form. Each form had a policy
limit of $1 million.
4 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
No. 03-3005
In March of 2001 a declaratory judgment action was
commenced in the United States District Court for the
Southern District of Ohio by Norfolk Southern Railway
Company and others against Fireman’s Fund, Transystems,
Little Brownie, and the driver of the tractor-trailer. Count III
of the complaint sought a declaration that the general liability
form of the Fireman’s Fund policy covered damages resulting
from Little Brownie’s allegedly negligent dispatch of the
driver. (The plaintiffs in the declaratory judgment action had
previously sued Transystems and Little Brownie, among
others, for compensatory and punitive damages. One of the
claims asserted against Little Brownie was that it had
dispatched the driver of the tractor-trailer to a pickup location
at a time when he had exceeded the maximum hours in
service allowed under the Federal Motor Carriers Safety
Regulations; this purported violation was alleged to have been
a contributing cause of the collision.)
Transystems and Little Brownie filed cross-claims against
Fireman’s Fund, joining in the plaintiffs’ contention that
coverage was available under the general liability form.
Fireman’s Fund then filed a third-party complaint for a
declaratory judgment and interpleader, naming train crew
members as defendants. All parties moved for summary
judgment.
The district court granted Fireman’s Fund’s motion for
summary judgment and denied the other motions. Applying
Florida law — Florida being the state that had the most
significant relationship to the insurance contract — the court
held that the “auto exclusion” clause in the general liability
form barred coverage under that form. Final judgment was
entered in favor of Fireman’s Fund, whereupon Transystems
and Little Brownie filed a timely appeal.

-- 2 of 4 --

No. 03-3005 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
5
II
The parties agree that the auto form provides coverage of
$1 million in respect of the collision. Our task is to decide
whether the general liability form provides additional
coverage.
The auto exclusion clause of the general liability form
certainly seems to preclude coverage. As noted at the outset
of this opinion, the clause excludes from coverage all
“[b]odily injury or property damage arising out of the
ownership . . . use or entrustment to others of any . . . [land
motor vehicle, trailer or semi trailer . . .] owned or operated
by or rented or loaned to any insured.” The bodily injuries
and property damage sustained in the collision undoubtedly
arose out of the use of such a vehicle, whether or not they also
arose out of negligence in the dispatch of the driver.
Transystems and Little Brownie contend that the dispatch
was somehow independent of the use of the tractor-trailer.
Acceptance of this contention would mean that the companies
could claim the benefit of at least two Florida appellate
decisions.
Florida’s Fourth District Court of Appeal has held that
damages arising from an auto accident may be covered by a
general liability policy with an auto exclusion clause if at
least one alleged cause of the accident did not involve the use
of an auto. In a case involving a child’s fall from a truck-
pulled “playground ride,” the Fourth District held that a
general liability policy covered the child’s injuries because
negligent supervision of the child – which the court viewed as
“independent of, and unrelated to,” use of the truck – was
alleged as a cause of the accident. Frontier Insurance Co. v.
Pinecrest Preparatory School Inc., 658 So.2d 601, 603 (Fla.
App.), review denied, 664 So.2d 248 (Fla. 1995); see also
Westmoreland v. Lumbermens Mutual Casualty Co., 704
So.2d 176, 187 (Fla. App. 1997), review dismissed, 717 So.2d
6 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
No. 03-3005
534 (Fla. 1998), where the same court held that a
homeowner’s insurance policy covered carbon monoxide
injuries alleged to have been caused “not by the running
engine of the motor vehicle but instead by . . . the negligent
placement of the air conditioning equipment in the garage, or
by the failure to open the garage door or to ventilate the
garage, or by the failure to locate carbon monoxide detection
devices throughout the house.”
The majority of Florida’s district courts of appeal that have
considered such a question, however, have held that general
liability policies with auto exclusion clauses provide no
coverage for injuries that would not have occurred but for the
use of an auto. Thus where a van was used to pull a roll of
carpet out of a truck and a man was struck and injured by the
carpet, the Fifth District Court of Appeal declined to hold that
“fail[ure] to have proper equipment (such as a forklift) for the
unloading of carpet” was an independent cause of the accident
that could support general liability coverage. Hagen v. Aetna
Casualty & Surety Co., 675 So.2d 963, 965 (Fla. App.),
review denied, 683 So.2d 483 (Fla. 1996). As the court
explained,
“appellants . . . urge that the negligence was in not
having a forklift; others might say the ‘plan’ to unload
the carpet was unnecessarily dangerous and would justify
liability; and still others might find liability simply
because there was ‘negligence in the way the carpet was
unloaded.’
* * *
But whether we consider . . . ‘the failure to have a
forklift,’ the‘plan’ or the ‘negligent unloading,’ each
necessarily involves the use of the vehicle in the act
which caused the injury.” Id. at 967.

-- 3 of 4 --

No. 03-3005 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
7
The court concluded that the negligent use of an auto was the
sole legal cause of the accident. See id. at 968.
In American Surety & Casualty Co. v. Lake Jackson Pizza,
Inc., 788 So.2d 1096, 1099-1100 (Fla. App. 2001), review
denied, 814 So.2d 439 (Fla. 2002), Florida’s First District
Court of Appeal held that a general liability policy did not
cover claims of negligent hiring, training, and supervision of
a pizza delivery man “because the injuries [resulting from an
automobile accident caused by the delivery man] arose out of
the ownership, maintenance, or use of an auto owned or
operated by an insured.” The employer’s policies and
practices did not, in the court’s view, constitute unrelated or
independent causes of the accident. See id. at 1100.
Absent any contrary indication from the Supreme Court of
Florida, we are inclined to think that Hagen and Lake Jackson
Pizza, rather than Frontier Insurance and Westmoreland,
represent the better view. The former cases are more faithful,
it seems to us, to the language of the typical auto exclusion
clause – language that asks whether an injury arose from the
use of an auto and not whether every contributing cause
involved the use of an auto. Hagen and Lake Jackson Pizza
also draw support from the principle that automobile policies
and general liability policies are usually “deemed [to be]
complementary” rather than overlapping. Frontier Insurance,
658 So.2d at 603; see Muzzio v. Auto-Owners Insurance Co.,
799 So.2d 272, 274 (Fla. App. 2001) (“Florida law has
generally recognized that duplicate coverage for an
automobile accident injury covered by an automobile policy
is not ordinarily available . . . .”), review denied, 817 So.2d
848 (2002).
In the circumstances of the case at bar, however, it is
probably unnecessary for us to opine on how we think the
conflict among Florida’s district courts of appeal should be
resolved. It seems to us that dispatch of a truck driver –
unlike supervision of a child, for instance – cannot be
8 Stevens, et al. v. Fireman’s
Fund Ins. Co., et al.
No. 03-3005
considered “independent of, and unrelated to” use of a truck.
Frontier Insurance, 658 So.2d at 603. The dispatch has no
purpose, after all, other than to get the truck moving.
Dispatch, in this respect, is comparable to hiring, supervision,
or retention of a driver – acts that Florida law regards as
“inextricably intertwined” with the use of an auto. Muzzio,
799 So.2d at 274-75.
Transystems and Little Brownie rely on Manuel v. Luckett,
577 So.2d 203, 208 (La. App.), writ denied, 580 So.2d 378
(La. 1991), where a Louisiana court held that one form of
dispatch – a sheriff’s deputy’s coding of a radio call – “did
not constitute a use of [an] automobile.” But in Manuel the
court not only heard evidence that “the coding system had a
use beyond conveying information on how to use an
automobile,” it also heard evidence that deputies frequently
responded to coded calls without using an auto. Id. at 206.
Against that background the court concluded that “[t]he duty
to properly code a call exists independently of the
automobile.” Id. at 208. In the case at bar, by contrast, there
is no suggestion that Little Brownie’s dispatch of the tractor-
trailer driver had any function independent of the use of a
motor vehicle. Little Brownie owed no duty of care to the
plaintiffs, we believe, except insofar as the dispatch resulted
in such use.
Because the dispatch of a driver is “inextricably
intertwined” with the use of a motor vehicle, there is no view
of Florida law under which the appellants’ general liability
form can reasonably be thought to cover the damages in this
case. The auto exclusion clause precludes such coverage, and
the judgment entered in favor of Fireman’s Fund is
AFFIRMED.

-- 4 of 4 --