480_C003

INSURER DISPUTES "DEAD STORAGE" CLAIM

Mobilehome	Vehicle exclusion
Uninsured Motorist

In February 2002, Josh Rogers purchased a 1978 Chevy Sierra pickup truck. He secured a temporary license plate and automobile insurance coverage for the vehicle. Soon after the purchase, the electric choke stopped working, but the truck was still operable. Josh continued to drive it until March, when the transmission failed. At this point, Josh cancelled his insurance coverage. His plan was to buy a new transmission and repair the truck himself with the help of a friend, John Burns.

Josh lived with his mother and stepfather, Betty and David Rogers. He parked the truck behind their residence, then later moved it to their barn. In order to move it, he had to start the truck so that he could use the power steering and brakes.

In April, Josh and John were working on the truck. Josh poured some gasoline into the carburetor to prime it. When the truck didn't start, John poured more gasoline into the carburetor and Josh again attempted to start the truck. At this point, flames ignited and John was severely burned.

The Rogerses owned a Deluxe Mobilehome Policy issued by Allstate Insurance Company. The Burnses were insured under an uninsured motorist policy issued by American Family Insurance Company. The Burnses filed a complaint against Josh, Allstate and American Family, seeking damages for John's injuries. Allstate denied coverage, claiming that the truck fell under the motor vehicle exclusion set forth in the policy. The Burnses and American Family argued that Josh's truck fell within an exception to the motor vehicle exclusion because the vehicle had been placed in "dead storage." The trial court found that Allstate had a duty to defend and indemnify Josh Rogers. Allstate appealed.

The insurance provisions at issue were in the Family Liability Protection portion of the Allstate policy. As a resident relative under the care of the Rogerses, Josh was an "insured person." The motor vehicle exclusion read: "We do not cover bodily injury or property damage arising out of the ownership, operation, maintenance, use, occupancy, renting, loaning , entrusting, loading or unloading of any motorized land vehicle or trailer." The "dead storage" exception to the exclusion read: "This exclusion does not apply to: a) a motorized land vehicle in dead storage or used exclusively on the residence premises." The policy did not define "dead storage" or "maintenance."

The Allstate policy also contained a section titled "Guest Medical Protection Coverage" that provided a limit of liability of $1,000 per person for injuries sustained when the person was "on the insured premises with the permission of an insured person." This coverage was subject to the same motor vehicle exclusion and exception to the exclusion.

On appeal, Allstate argued that Josh's truck was not in "dead storage" at the time of the accident within the meaning of the policy, and that therefore the motor vehicle exclusion applied. The Court of Appeals of Indiana disagreed. It found that the facts supported a finding that the truck was indeed in "dead storage." It was no longer operable, licensed, registered, or insured. When it stopped working, Josh removed the truck from any "active daily use," and it remained "virtually untouched" for almost two months. When it was moved, it was moved only on the Rogerses' property. Thus, the truck was in "dead storage."

Allstate also argued that the exclusion should apply because the evidence established that Josh was "maintaining" the truck within the meaning of the policy. In light of the court's finding that the "dead storage" exception applied, this was a moot point. Nevertheless, the court found that Josh and John were not "maintaining" the vehicle because they were not trying to "preserve or keep (it) in an existing state or condition," or acting "to prevent a decline, lapse, or cessation from that state or condition."

Finally, Allstate argued that the exception to the exclusion did not apply because the truck was not "used exclusively on the residence premises" within the meaning of the policy. According to Allstate, the term "exclusively" meant that the vehicle had to be used on the residence premises throughout the entire duration of the policy period. The court found that the policy language was not that restrictive, and that the truck's status of particular use could fluctuate over the policy period.

The court concluded that the trial court properly found that at the time of the accident Josh's truck was in dead storage within the meaning of the policy and that the vehicle was exclusively used on the premises. Accordingly, the exception to the motor vehicle exclusion applied, and Allstate had a duty to defend and indemnify Josh.

The judgment of the trial court was affirmed.

Allstate Insurance Company vs. Burns-No. 88A01-0502-CV-58-Court of Appeals of Indiana-November 29, 2005-837 North Eastern Reporter 2d 645