Absolute Auto Exclusion Upheld
On January 31, 2018, Marion Wright (Wright) was driving his vehicle to a logging site. On his way to the logging site, he collided with a metal gate owned by V & B International Inc (V&B). The gate had swung open and was across the road. Wright passed away from the injuries he sustained in the collision.
V&B had a General Liability policy with Colony Insurance Company (Colony), which provided coverage for bodily injury and property damage that occurred on V&B's premises. However, the policy had an absolute auto exclusion that excluded bodily injury or property damage directly or indirectly from the ownership, maintenance, use or entrustment of others of any aircraft, auto or watercraft.
Colony denied coverage under the absolute auto exclusion. Wright's wrongful-death beneficiaries (Wright's beneficiaries) sued. The state court entered a final judgment that V&B settled with Wright's beneficiaries for $900,000 and that it was to be collected from any applicable insurance proceeds. Colony filed action in the district court requesting a declaration that it had no liability under the policy for Wright's death.
In turn, Wright's beneficiaries sued Colony. The district court granted summary judgment to Colony. It stated the policy was unambiguous and excluded coverage for any injury arising from an auto accident, regardless of the vehicle ownership.
Colony and Wright's beneficiaries did not dispute that Wright's death was an occurrence under the policy that would be covered unless there was an applicable exclusion. The only issue brought to the court was whether a valid exclusion applied.
The appeals court reviewed the case, Section 2.g auto exclusion, and the absolute auto exclusion endorsement. It stated that the policy was without ambiguity and must be interpreted as written. The absolute auto exclusion excluded coverage regardless of any relationship or lack thereof between the insured and the auto.
This original Section 2.g auto exclusion was replaced by the absolute auto exclusion, which deleted and replaced the original text with this:
This insurance does not apply to "bodily injury" or "property damage" arising directly or indirectly out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft. Use includes operation and "loading or unloading."
This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft.
In light of this policy language, the appeals court stated there was no ambiguity, affirming the state court.
Colony Insurance Company, Plaintiff—Appellee, v. Brandon Keon Wright, on behalf of the wrongful death beneficiaries of Marion Earl Wright; V & B International, Incorporated, Defendants—Appellants, and Colony Insurance Company, Defendant—Third Party Plaintiff -Appellee, versus V & B International, Incorporated, Third-Party Defendant—Appellant. United States Court of Appeals Fifth Circuit Appeal from the United States District Court for the Southern District of Mississippi USDC No. 5:19-CV-88 USDC, No. 5:20-CV-43, October 28, 2021
https://law.justia.com/cases/federal/appellate-courts/ca5/20-61139/20-61139-2021-10-28.html.
