December 17, 2012
In a published opinion, the Michigan Court of Appeals has held that the Business Use Exclusion on a trucking auto policy operated to exclude coverage under a Non-Trucking Use policy where the semi-tractor was being driven to the trucking company’s yard without a trailer or cargo. In Hunt v Drielick, (Docket Numbers 299405, 299406, 299407, rel’d 11/20/12), Empire Fire and Marine Insurance Company had issued a Non-Trucking Use, or Bobtail, insurance policy to Drielick Trucking. The policy contained a Business Use Exclusion which stated that Empire was not liable for “bodily injury or property damage while a covered auto is used to carry property in any business or while a covered auto is used in the business of anyone to whom the auto is leased or rented.”
On the day of the accident, the truck was being driven by Corey Drielick when he was involved in a fatal accident with another vehicle. Although Corey was on his way to the trucking company’s yard, he was not transporting any property at the time. He had not yet picked up a trailer, was not under orders to be at the yard at a particular time, was free to complete personal business before arriving at the yard, and there was an oral agreement that Corey would not be paid until after the tractor was coupled with the trailer.
The Court concluded that the Business Use Exclusion applied, and operated to preclude coverage under Empire’s policy. The Court relied upon the first part of the Business Use Exclusion which stated that coverage did not apply when bodily injury or property damage occurred “while a covered auto is used to carry property in any business.”
Relying on a Federal District Court case from the Western District of Pennsylvania, Carriers Ins. Co. v Griffie, 357 F. Supp 441, 442 (WD Pa 1973), the Court noted that “the mere fact that no cargo was being handled at the particular moment when the accident occurred, does not mean that the truck was not being ‘used to carry property in any business’.” The Griffie Court stated that the truck had been regularly used to carry property in the carrier’s business as a trucker, and if the actual intent under the policy had been to extend coverage, except when the truck was actually hauling a load, it would not have been difficult to express such an intention clearly.
Although the driver was not required to be at the yard at a specific time, he was en route there and was not driving aimlessly. There was no dispute that he was on his way to pick up the loaded trailer for delivery. Given that the accident occurred while the truck was being driven to the yard for the purpose of transporting property, during an interval of time when the truck was employed by the trucking company for the purpose of carrying property in the trucking company’s business, the Court held that the Business Use Exclusion applied, and that there was no coverage under Empire’s policy. The fact that the truck was not yet hauling cargo did not mean that it was not being used in the trucking company’s business.
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A HAPPY, HEALTHY NEW YEAR
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GARAN LUCOW MILLER, P.C.