Mehlbrech et al v. Acuity

Filing 33

ORDER denying 19 Motion for Summary Judgment. Signed by Chief Judge Karen E. Schreier on 10/3/2012. (KC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
DUSTIN MEHLBRECH and
LINDSEY MEHLBRECH,
Plaintiffs,
vs.
ACUITY, a Mutual Insurance
Company,
Defendant.

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CIV. 11-4102-KES

ORDER DENYING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT

Plaintiffs, Dustin and Lindsey Mehlbrech, brought this claim for
uninsured motorist benefits against Acuity, a mutual insurance company,
following an accident that caused injuries to Dustin Melhbrech. Acuity moves
for summary judgment, arguing that Mehlbrech is not an insured under the
policy in question. Mehlbrech resists the motion. For the following reasons,
Acuity’s motion for summary judgment is denied.
BACKGROUND
Mehlbrech worked as a farmhand for Randall Farms. Docket 21 at 1. On
December 30, 2009, Mehlbrech, in the scope of his employment, was driving a
station wagon that was owned by Randall Farms and was insured by Acuity, a
Wisconsin corporation. Id.; Docket 13 at 1. Mehlbrech was transporting other
employees who were driving semi trucks to a bin site. Docket 24-3 at 2. During

this process, Mehlbrech was following one of the semi trucks1 while traveling
west, and he noticed that the brakes on the truck were frozen, causing the
truck to leave black marks on the road. Id. After the semi truck stopped,
Mehlbrech parked the station wagon approximately 20-30 feet in front of the
semi truck and turned the flashers on before exiting the vehicle. Id.; Docket 27
at 3.
After exiting the station wagon, Mehlbrech retrieved a hammer from the
driver of the semi truck so that he could remove the ice from the brakes.
Docket 24-3 at 2. Once the brakes were fixed, Mehlbrech came out from
underneath the back wheels of the semi truck and was struck by an uninsured
motorist who was traveling east.2 Docket 21 at 1. Mehlbrech was severely
injured and was airlifted to the Sanford Medical Center. Docket 27 at 3.
Mehlbrech is currently seeking uninsured motorist benefits from Acuity
pursuant to the insurance contract entered into between Acuity and Randall
Farms. The uninsured motorists coverage provision of the Acuity policy reads
as follows:
We will pay all sums the insured is legally entitled to recover as
compensatory damages from the owner or driver of an uninsured

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The parties agree that the semi truck and trailer were not owned by
Randall Farms or Mehlbrech. The parties also agree that the Acuity insurance
policy does not provide uninsured or underinsured motorist coverage for the
semi truck or trailer. Docket 27 at 3.
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The uninsured motorist drove by the station wagon, which had its
lights flashing, prior to hitting Mehlbrech. Docket 24-1 at 3.
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motor vehicle. The damages must result from bodily injury
sustained by the insured caused by an accident.
Docket 23-5. The policy defines an “insured” as “[a]nyone occupying a covered
auto or a temporary substitute for a covered auto.” Id. Later, the policy defines
“occupying” as “in, upon or getting in, on, out or off.” Docket 23-6.
The parties agree that the station wagon that Mehlbrech was driving is a
covered auto under the uninsured motorist provision. Docket 24-4 at 4.
Following Acuity’s denial of Mehlbrech’s claim under the policy,
Mehlbrech brought this claim on July 19, 2011, seeking damages pursuant to
the uninsured motorists coverage provision in the policy. Docket 1.
STANDARD OF REVIEW
Summary judgment is appropriate “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986) (“[A] party seeking summary judgment always bears the initial
responsibility of . . . demonstrat[ing] the absence of a genuine issue of material
fact.” (internal quotations omitted)). The moving party must inform the court of
the basis for its motion and also identify the portion of the record that shows
that there is no genuine issue in dispute. Hartnagel v. Norman, 953 F.2d 394,
395 (8th Cir. 1992). Once the moving party has met its initial burden, the
“nonmoving party may not ‘rest on mere allegations or denials, but must
demonstrate on the record the existence of specific facts which create a

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genuine issue for trial.’ ” Mosley v. City of Northwoods, Mo., 415 F.3d 908, 910
(8th Cir. 2005) (quoting Krenik v. Cnty. of Le Sueur, 47 F.3d 953, 957 (8th Cir.
1995)). For purposes of summary judgment, the facts, and inferences drawn
from those facts, are “viewed in the light most favorable to the party opposing
the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).
Construction of a contract is a question of law that may be determined in
a motion for summary judgment. 10B Charles Alan Wright, Arthur R. Miller &
Mary Kay Kane, Federal Practice and Procedure § 2730.1 at 61-63 (3d ed.
1998). Thus, when the meaning of the contract is clear, “the construction of
certain provisions in an insurance policy that does not require an inquiry into
the parties’ intentions or the consideration of outside and conflicting evidence
properly may be resolved by summary judgment.” Id. at 90.
Both parties relied on South Dakota law in their briefs in support of
their motions for summary judgment. Because the parties do not dispute that
South Dakota substantive law applies to this cause of action, the court will
apply South Dakota law.
DISCUSSION
The sole issue in dispute is whether Mehlbrech is considered an insured
under the insurance policy in question. Under the policy, an insured is
“[a]nyone occupying a covered auto[.]” Docket 23-5. The parties agree that the
station wagon Mehlbrech was driving prior to the accident is a covered auto
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under the policy. Docket 24-4 at 4. Additionally, the parties agree that the semi
truck and trailer that Mehlbrech was working on prior to the accident are not
covered under the uninsured motorist provisions of the policy. Docket 27 at 6
(“The Acuity business auto policy does provide for liability coverage for both
non-owned autos and hired autos, but not for uninsured or underinsured
coverage.”). Therefore, whether Mehlbrech is an insured under the uninsured
motorists coverage provision in the policy rests entirely on whether he was
“occupying” the station wagon at the time of the accident. As noted above, the
policy defines “occupying” as “in, upon or getting in, on, out or off.” Docket 236.
“State law governs the interpretation of insurance policies.” Nat’l Union
Fire Ins. Co. of Pittsburgh v. Terra Indus., Inc., 346 F.3d 1160, 1164 (8th Cir.
2003) (citing Capitol Indem. Corp. v. Haverfield, 218 F.3d 872, 875 (8th Cir.
2000)). Therefore, South Dakota law governs here, and under South Dakota
law, contract construction is a question of law that is determined by the court.
LaMore Rest. Grp., LLC v. Akers, 748 N.W.2d 756, 761 (S.D. 2008).
The South Dakota Supreme Court has stated:
Where the provisions of an insurance policy are fairly susceptible
of different interpretations, the interpretation most favorable to the
insured should be adopted. This rule of liberal construction in
favor of the insured and strictly against the insurer applies only
where the language of the insurance contract is ambiguous and
susceptible of more than one interpretation . . . . This rule does not
mean, however, that the court may seek out a strained or unusual
meaning for the benefit of the insured.
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Alverson v. Northwestern Nat’l Cas. Co., 559 N.W.2d 234, 235 (S.D. 1997)
(citations omitted). Specifically, the South Dakota Supreme Court has held that
the term “occupying,” as used in an insurance contract that defined occupying
as “in, on, upon, getting in, on, out, off,” is “ambiguous and subject to differing
interpretations.” Roden v. Gen. Cas. Co. of Wisconsin, 671 N.W.2d 622, 626
(S.D. 2003). Because the language used to define “occupying” in the case at
hand is nearly identical to the language used in Roden, the term “occupying” as
used in Acuity’s insurance policy is ambiguous and requires a “factually
intensive” analysis to determine whether Mehlbrech was occupying the station
wagon. Id.
To determine whether Mehlbrech was occupying the station wagon, the
court “must determine whether or not [Mehlbrech] was engaged in a
transaction that was vehicle orientated and related to occupying the vehicle.”
Id. at 628. In making this determination, the court considers four factors:
(1) whether there is a causal relation or connection between the injury and the
use of the insured vehicle; (2) whether the person asserting coverage is in a
reasonably close geographic proximity to the insured vehicle; (3) whether the
person is vehicle oriented rather than highway or sidewalk oriented at the time
of the accident; and (4) whether the person is engaged in a transaction
essential to the use of the vehicle at the time. Id. at 628-29.

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The first factor requires a causal relation or connection between
Mehlbrech’s injury and the use of the station wagon. In Roden, the court found
that a causal connection existed between the injury and the insured vehicle. Id.
at 628-29. There, the injured party approached the insured vehicle and was
leaning up against it discussing business with his employer, who was an
occupant of the vehicle at the time of the accident. Id.
Roden relies on cases from other jurisdictions in establishing the fourpart test, including Utica Mut. Ins. Co. v. Contrisciane, 473 A.2d 1005 (Pa.
1984).3 In Contrisciane, the injured party was in a separate accident that
involved the insured vehicle. Id. at 1006. The injured party was asked by a
police officer to collect information and to bring it to the police cruiser, which
was parked approximately 97 feet from the insured vehicle. Id. at 1007. While
standing next to the police cruiser, the injured party was struck by an
uninsured motorist. Id. The Supreme Court of Pennsylvania held that a causal
connection existed because “the use of the [insured] vehicle . . . precipitated the
whole unfortunate series of events.” Id. at 1009.
Simpson v. U.S. Fid. & Guar. Co., 562 N.W.2d 627 (Iowa 1997), is an Iowa
case that Roden also cited. There, the injured party was struck by an

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Roden is the only South Dakota case that analyzes the term
“occupying” in the uninsured coverage context that has been identified by
either the parties or the court. Cases from other jurisdictions that used the
four-part test described in Roden are helpful when applying the test,
particularly the cases cited within Roden.
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uninsured motorist after he had parked his employer’s truck, the insured
vehicle. Id. at 628. While in the course of his employment, the injured party
was repairing a water valve and was required to retrieve tools from the insured
vehicle to repair the valve. Id. at 630 (“The truck was the valve inspector’s
‘toolbox on wheels.’ ”). He was struck by the uninsured motorist when he was
on his way to the truck to get another tool. Id. Because the “[insured] vehicle
was not merely a means of transporting persons, but was designed and
equipped to aid with water valve inspection, cleanup, and repair,” the court
found that the insured vehicle had a causal connection to the injury. See id. at
631.
A third case cited in Roden was Downing v. Harleysville Ins. Co., 602 A.2d
871 (Pa. 1992). In Downing, the injured party had been traveling in the insured
vehicle before it stopped along the side of the road to render assistance to a
person whose car was disabled due to a flat tire. Id. at 872. While changing the
tire, the injured party was standing next to the disabled vehicle and was struck
by an uninsured motorist. Id. The Superior Court of Pennsylvania held that the
injured party’s injuries “were not causally connected to the use of the [insured]
vehicle, rather they occurred when he was struck by some third party while
aiding another motorist with her disabled vehicle.” Id. at 874.
The case here aligns more closely to Roden, Contrisciane, and Simpson
than to Downing. In Roden, the injured party was leaning against the insured

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vehicle speaking with someone inside. The insured vehicle actually played a
role in the events that took place; it served as a meeting place. In Contrisciane,
the insured vehicle was involved in the accident that led to the injured party
being required to retrieve documents and stand alongside the police cruiser.
Again, the insured vehicle actually played a role in the events that took place.
Similarly, in Simpson the insured vehicle served as a “toolbox” for the injured
party while he was attempting to fix the water valve. Here, the insured vehicle
served as a warning device while Mehlbrech worked on the semi truck’s brakes.
Mehlbrech pulled the station wagon ahead of the semi truck and turned the
flashers on to warn approaching travelers. Ideally, approaching travelers would
see the flashing lights of the station wagon and be on alert for hazardous
activity, thus being able to avoid the type of accident that occurred here.
Unfortunately for Mehlbrech, the warning device, i.e., the station wagon, did
not prevent this accident even though the uninsured motorist encountered the
station wagon prior to hitting Mehlbrech.
Furthermore, the facts here are distinguishable from the facts in
Downing. In Downing, the injured party had no connection to the other vehicle
on the road. As discussed in detail below, Mehlbrech only exited the station
wagon and fixed the brakes so he could continue his use of the station wagon.
Additionally, the insured vehicle in Downing did not play a role in the accident,
whereas here the station wagon served as a warning device.

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The station wagon played an important role in the events leading up to
the accident. In fact, the failure of the station wagon’s flashing lights to warn
the uninsured motorist may be the very reason that Mehlbrech was injured.
Thus, there is a causal connection or relation between the station wagon and
Mehlbrech’s injury.
The second factor requires Mehlbrech to have been in a reasonably close
geographic proximity to the station wagon at the time of the accident. Courts
generally find that this factor is easily satisfied. See, e.g., Contrisciane, 473
A.2d at 1007-09 (finding that the injured party was occupying the insured
vehicle when he was approximately 97 feet away from it). The parties agree that
the station wagon was approximately 20-30 feet in front of the semi truck. As a
result, the court finds that Mehlbrech satisfies this factor.
The third factor requires that Mehlbrech was vehicle oriented rather than
highway oriented at the time of the accident. In Roden, the South Dakota
Supreme Court found that this factor was met because the injured party was
an employee talking about business with his supervisor, who was sitting in the
insured vehicle. 671 N.W.2d at 629 (“That was his sole orientation rather than
any connection with what was going on behind or to the side of him with a
work project or otherwise.”).
A case cited by Roden stated that when considering the third factor the
court should consider “the nature of the act engaged in at the time of the injury

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and the intent of the person injured.” Gorham v. Guidant Mut. Ins. Co., 80 F.
Supp. 2d 540, 548 (D. Md. 2000). In Gorham, the injured party had waved
down the insured vehicle, which was driven by the insured party’s husband, so
that she could replace her husband as the driver of the insured vehicle. Id. at
542. While moving items from one vehicle to the other, the injured party was
struck by an underinsured motorist. Id. The court found that the injured party
was vehicle oriented because she was in the “course of retrieving her eyeglasses
for the purpose of driving the [insured vehicle].” Id. at 548 (emphasis added).
In Contrisciane, the injured party’s purpose for talking to the police officer
was to properly handle the prior accident that involved the insured vehicle so
he could continue on with his journey. 473 A.2d at 1009. In Simpson, the
injured party’s purpose was to fix the water valve. 562 N.W.2d at 631. He was
vehicle oriented because he was required to use the insured vehicle to fix the
valve because it served as his “toolbox” throughout the process. See id. at 631.
Contrastingly, the court in Downing found that the injured party “became
highway-oriented when he left the [insured vehicle] for the purpose of helping
the stranded motorist with her disabled vehicle.” 602 A.2d at 874 (quotations
omitted).
Again, the facts in this case require reasoning in line with Roden,
Gorham, Contrisciane, and Simpson. As noted above, Mehlbrech’s employment
task was to use the station wagon to transport the semi drivers back to the

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farm. Mehlbrech had been assigned use of the station wagon and was in fact
using the station wagon to complete the task. See Roden, 671 N.W.2d at 63132 (Amundson, J., dissenting) (noting that being assigned use of the insured
vehicle and actually using the insured vehicle suggest that one is vehicle
oriented). Mehlbrech only exited the station wagon and fixed the semi truck’s
brakes so that he could continue using the station wagon to transport the semi
drivers. Indeed, without fixing the brakes, there would not have been a driver
to transport. Put differently, Mehlbrech’s purpose for fixing the brakes was to
make it possible for the semi truck to reach its destination so that Mehlbrech
could then use the station wagon to transport the driver back to the farm. At
all times, Mehlbrech was focused on using the station wagon to transport the
semi drivers to the farm.
From a narrower perspective, Mehlbrech was in the process of returning
to the station wagon at the time of the accident. Mehlbrech had just finished
removing the ice from the brakes and was returning to the station wagon when
he was hit. Because Mehlbrech’s overarching purpose for fixing the brakes on
the semi truck was so that he could continue using the station wagon to
transport the semi driver and Mehlbrech’s immediate purpose just prior to the
accident was to return to the station wagon, the court finds that Mehlbrech
was vehicle oriented at the time of the accident.

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The fourth and final factor is that Mehlbrech must have been engaged in
a transaction essential to the use of the station wagon. In Roden, the insured
vehicle was serving as an office at the time of the accident. 671 N.W.2d at 629.
“There was no other alternative office for [the] meeting to take place.” Id. As a
result, the South Dakota Supreme Court held that the injured party was
engaged in a transaction essential to the use of the covered vehicle. Id.
The court in Contrisciane also found that the injured party was engaged
in a transaction essential to the use of the station wagon. 473 A.2d at 1009.
“At all times [the injured party] was engaged in transactions essential to his
continued use of the vehicle, and it was only because of the mandated
requirements of the statute and the police officer that [the injured party] found
himself physically out of contact with his vehicle.” Id. Similarly, the court in
Simpson concluded that the injured party was “clearly engaged in an activity
relating to the use of the specialized truck.” 562 N.W.2d at 631.
In Downing, the court found that the injured party failed to satisfy the
fourth factor. 602 A.2d at 874-75. The injured party “was not engaging in a
transaction essential to the use of the [insured] vehicle at the time of the
accident. In fact, [the injured party’s] actions prior to the accident did not in
any manner involve the [insured] vehicle.” Id.
The facts here point to a determination that Mehlbrech was engaged in
activities essential to the use of the station wagon. Similar to Contrisciane,

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fixing the brakes was essential to Mehlbrech’s continued use of the station
wagon. Mehlbrech would not have been able to complete his task of
transporting the semi driver in the station wagon if the brakes on the semi
truck had not been fixed. Thus, fixing the brakes on the semi truck was
essential to the continued use of the station wagon. Moreover, the station
wagon assisted Mehlbrech in fixing the brakes because it served as a warning
device, making the facts here analogous to the facts in Roden and Simpson.
Mehlbrech’s actions at the time of the accident were interrelated to the use of
the station wagon, and, therefore, the fourth factor is satisfied.
After applying the four-factor test established in Roden, the court finds
that under South Dakota law Mehlbrech was occupying the station wagon at
the time of the accident. This determination is further supported by the South
Dakota Supreme Court’s strict rules of construction that require an
interpretation most favorable to the insured when the provisions of an
insurance policy are fairly susceptible to different interpretations. See Alverson,
559 N.W.2d at 235. Additionally, as the South Dakota Supreme Court pointed
out, “notwithstanding the extensive litigation over the contradictory
interpretations of [occupancy], the policy definition of ‘occupancy’ remains
essentially unchanged today. In light of this history, it is not unreasonable to
require insurers to specifically exclude this type of nexus with an auto if they

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claim it excluded from coverage.” Roden, 671 N.W.2d at 630 (Zinter, J.,
concurring).
CONCLUSION
As a matter of law, Mehlbrech was “occupying” the station wagon at the
time of the accident as defined by the South Dakota Supreme Court. Because
he was occupying the station wagon, Mehlbrech is an insured under Acuity’s
uninsured motorist coverage policy. Accordingly, it is
ORDERED that defendant’s motion for summary judgment is denied.
Dated October 3, 2012.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
CHIEF JUDGE

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