National Farmers Union Property and Casualty Company v. Biesma et al

Filing 49

AMENDED MEMORANDUM OPINION AND ORDER granting 30 Motion for Summary Judgment. Signed by U. S. District Judge Lawrence L. Piersol on 7/11/13. (DJP)

FILED
UNITED STATES DISTRICT COURT

JUL 1 1 2013

DISTRICT OF SOUTH DAKOTA

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CLERK

SOUTHERN DIVISION

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CIV 12-4146
NATIONAL FARMERS UNION
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PROPERTY AND CASUALTY
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COMPANY,
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AMENDED
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MEMORANDUM OPINION AND
Plaintiff,
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ORDER RE: MOTION
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FOR SUMMARY JUDGMENT
vs.
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MARLO 1. BIESMA, individually, and in
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his capacity as an employee/agent for
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ERNEST R. NAMMINGA, d/b/a
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Namminga Farms or Ernmore Enterprises, *

CHRISTOPHER CLEVERINGA;
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LAURA CLEVERINGA; and
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FARM BUREAU PROPERTY AND
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CASUALTY INSURANCE COMPANY, *

an Iowa corporation,
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Defendants.
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Plaintiff, National Farmers Union Property and Casualty Company ("National Farmers
Union"), filed a motion for summary judgment on April 15, 2013, requesting that the Court grant
declaratory judgment in its favor. Docket 30. On May 13, 2013, Defendants Marlo J. Biesma and
Farm Bureau Property and Casualty Insurance Company ("Farm Bureau") filed separate briefs in
opposition to National Farmers Union's motion for summary judgment. 1 Dockets 37,40. Defendants
Ernest R. Namminga, Christopher Cleveringa , and Laura Cleveringa joined in Farm Bureau's
opposition brief, and Christopher and Laura Cleveringa also joined in Biesma's opposition brief.

Farm Bureau also filed a notice indicating that it joined in the arguments, reasonable
inferences, and conclusions set forth in Biesma's opposition brief. Docket 39.
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Dockets 43,44. For the reasons set forth herein, the Court grants National Fanners Union's motion
for summary judgment.

FACTUAL BACKGROUND
In the light most favorable to Defendants, the facts are as follows: On May 29, 2012,
defendants Christopher Cleveringa2 and Marlo Biesma3 collided in a motor vehicle accident on
Highway 46 in Bon Homme County.4 More specifically, Cleveringa was traveling east on Highway
46 when he was struck broadside by Biesma, who was traveling south. The police report for this
accident describes Cleveringa's vehicle as a truck pulling a large utility trailer, and it describes
Biesma's vehicle as a tractor/semi-trailer. Docket 33-3. For purposes ofthis Memorandum Opinion,
the court will refer to Biesma's vehicle as a tractor/semi-trailer. The semi/tractor-trailer that Biesma
was operating at the time of the accident belonged to Defendant Ernest Namminga, who had
purchased the 1999 Mack CH600 from Blooming Eggs in Bloomfield, Nebraska, for the purpose
of hauling chicken manure from Blooming Eggs to his farm near Springfield, South Dakota.
N arnminga had hired Biesma in 2009 to pick up the manure and haul it back to N arnminga' s
fann. Narnminga also purchased a hopper trailer to attach to the semi for purposes ofhauling grain
to market. At Narnminga's request, Biesma sometimes used the tractor/semi-trailer to haul
Namminga's grain to the grain elevator in Tripp, South Dakota or to the Poet ethanol plant in
Scotland, South Dakota. At the time of the accident, Biesma was returning to Narnminga's farm
after having dropped a load ofcom at the Poet ethanol plant. Narnminga paid Biesma $10 per hour
by personal check for the work Biesma performed.
National Fanners Union issued a Private Passenger Auto insurance policy ("Insurance
Policy") to defendant Biesma and his wife, Ruth Biesma. The Insurance Policy bears policy number

2

Christopher Cleveringa and his wife, Laura, are residents of Rock Valley, Iowa.

3

Marlo Biesma is a resident of Tyndall, South Dakota.

4 Separate from the case in question, defendants Christopher and Laura Cleveringa have
filed a federal action against defendants Biesma and Namminga, alleging that Biesma was
negligent in his operation of the tractor/semi-trailer at the time ofthe accident, and that such
negligence resulted in severe personal injuries and damages to the Cleveringas.

2

1PA0023 720 and covers the policy period ofFebruary 15, 2012, to August 1, 2012. The Insurance
Policy specifically covers a 1999 Buick LeSabre Custom and a 1996 Ford Ranger Super, but more
generally covers "damages for which any insured person is legally liable because ofbodily injury and
property damage arising out ofthe ownership, maintenance or use ofa car or utility trailer." Docket
33-1 at 10. The Insurance Policy "provides liability limits in the amount of $1 00,000 per person I
$300,000 per occurrence."
With regard to definitions, provisions, coverages, and exclusions, the pertinent portions of
the Insurance Policy read as follows:
DEFINITIONS USED THROUGHOUT THIS POLICY
(1)
(2)
(3)
(4)
(5)

We, us, and our mean the Company pro viding this insurance.
You and your mean the named insured shown in the Declarations and spouse if
living in the same household...
Bodily injury means bodily harm to or sickness, disease or death of any person...
Property damage means damage to or destruction oftangible property, including
loss of its use.
Car means a four-wheel land motor vehicle, utility car or farm car designed for use
mainly on public roads. It does not include any vehicle while located for use as a
dwelling or other premises.

(10) Utility car means, if not used in any business other than farming, a motor vehicle
with a GVW less than 15,000 pounds ofthe pick-Up, panel or van body type, other
than a farm car.
(11) Farm car means a motor vehicle of a truck type not used for business purposes
other than farming. Farm car does not include a tractor-trailer truck.
Docket 33-1 at 9-10.As to liability coverage, the Insurance Policy provides as follows:
...We have no duty to defend any suit or settle any claim for bodily injury or property
damage not covered under this policy.
PART I - LIABILITY
COVERAGE A - LIABILITY COVERAGE
We will pay damages for which any insured person is legally liable because of bodily
injury and property damage arising out ofthe ownership, maintenance or use of a car or
utility trailer.
Docket 33-1 at 10.
The coverage pro vided under the Insurance Po licy contains fourteen exclusions. Docket 33-1
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at 10-11. At issue in this case are the following exclusions:
(1)

Bodily injury or property damage arising out of ownership, maintenance, or use
ofa vehicle when used to carry persons or property for a charge. This exclusion shall
not apply to shared-expense car pools or the occasional carrying of property for a
nominal charge.

(6)

Bodily injury or property damage arising out of the ownership, maintenance or
use of any vehicle, except your insured car, used in any business or occupation
other than car business. This exclusion does not apply to a private passenger car,
utility car, or farm car driven or occupied by you or your relatives or to a farm
car driven by your employee.

(9)

Bodily injury or property damage arising out of the ownership, maintenance or
use of any vehicle, other than your insured car, which is owned by or furnished or
available for regular use by you or a relative. This exclusion does not apply to you
while you are maintaining or occupying any vehicle which is owned by a family
member or furnished or available for the regular use of a family member.

Finally, under the PART 1- LIABILITY section, the Insurance Policy addresses the existence
of additional sources of auto liability insurance as affecting National Farmers Union's liability as
follows:
Ifthere is other applicable auto liability insurance on a loss covered by this Part, we will pay
our proportionate share as our limits of liability bear to the total of all applicable liability
limits. Any insurance afforded under this Part for a vehicle you do not own, however, is
excess over any other collectible auto liability insurance. In the event we provide coverage
for more than one vehicle, whether on one policy or on separate policies, the liability limits
available for a vehicle you do not own will be the highest limits applicable to anyone vehicle
we insure.

Docket 33-1 at 12.

SUMMARY JUDGMENT AND INTERPRETATION OF INSURANCE CONTRACTS
"Summary judgment is appropriate when the evidence,S viewed in a light most favorable to
the non-moving party, demonstrates that there is no genuine issue of material fact, and that the

5 Evidence includes pleadings, depositions, documents, electronically stored information,
stipulations, answers to interrogatories, admissions, and affidavits. Fed. R. Civ. P. 56(c).

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moving party is entitled to judgment as a matter oflaw." Clarkv. Kellogg Co., 205 F.3d 1079, 1082
(8th Cir. 2000); see also Fed. R. Civ. P. 56(a). "Once the motion for summary jUdgment is made and
supported, it places an affirmative burden on the non-moving party to go beyond the pleadings and
by affidavit or otherwise designate specific facts showing that there is a genuine issue for trial."
Commercial Union Ins. Co. v. Schmidt, 967 F.2d 270, 271 (8th Cir. 1992) (internal quotations and
citations omitted). "Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry ofsummary judgment." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). Although "the court is required to ... give [the nonmoving] party
the benefit of all reasonable inferences to be drawn from the underlying facts," Vette Co. v. Aetna
Cas. & Sur. Co., 612 F.2d 1076, 1077 (8th Cir. 1980), the nonmoving party may not "rest upon
mere denials or allegations," Forrest v. Kraft Foods, Inc., 285 F.3d 688, 691 (8th Cir. 2002).
Instead, the nonmoving party must "set forth specific facts sufficient to raise a genuine issue for
trial." Id.
"Disputes involving the interpretation of unambiguous contracts are appropriate cases for
summary judgment." Parish v. Howard, 459 F.2d 616,618 (8th Cir. 1972) (citations omitted). In
accordance with South Dakota law,6 "the provisions ofan insurance contract 'are to be read and
understood according to the natural and obvious import ofthe language, without resorting to subtle
and forced construction for the purpose of either limiting or extending their operation.' " Prokop
v. North Star Mut. Ins. Co., 457 N.W.2d 862, 864 (S.D. 1990) (quoting Cheney v. Metropolitan
Life Ins. Co., 370 N.W.2d 569,573 (S.D. 1985)). Ifthe terms are ambiguous and "fairly susceptible
[to] different interpretation, the interpretation most favorable to the insured should be adopted."
Prokop, 457 N.W.2d at 864 (quoting Black Hills Kennel Club Inc. v. Fireman's Fund Indemnity
Co., 94 N.W.2d 90, 92 (1959)). Nonetheless, the court will not "seek out a strained or unusual
meaning for the benefit ofthe insured." Kennel Club, 94 N.W.2d at 92 (citation omitted). "Insurance
contracts warrant reasonable interpretation, and not one that amounts to an absurdity." Prokop, 457
N.W.2d at 864 (citation omitted).

6 "State law governs the interpretation of insurance policies." Nat 'I Union Fire Ins. Co. Of
Pittsburgh v. Terra Indus., Inc., 346 F.3d 1160, 1164 (8th Cir. 2003) (citation omitted).
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DISCUSSION

National Fanners Union asserts that it is entitled to summary judgment because the accident
in question is not covered under the Insurance Policy. More specifically, National Fanners Union
argues that there is no coverage because (I) the tractor/semi-trailer driven by Biesma on the day of
the accident does not meet the definition of "car," ''utility car," or "fann car" as described in the
Insurance Policy; (2) Biesma was using the tractor/semi-trailer to carry property for a charge; (3)
Biesma was using the tractor/semi-trailer in the course of a business; and (4) Biesma regularly and
frequently drove the tractor/semi-trailer. Defendants refute each ofthese assertions and contend that
the Insurance Policy covers the accident in question.

I.
WHETHER NATIONAL FARMERS UNION IS ENTITLED TO SUMMARY
JUDGMENT ON ITS CLAIM THAT THE TRACTORISEMI-TRAILER FAILS TO
MEET THE DEFINITION OF "CAR," "UTILITY CAR," OR "FARM CAR"?
National Fanners Union contends that Narnrninga's vehicle, which was driven by Biesma at
the time ofthe accident, was a semi tractor-trailer with an attached grain hopper, which is not a car
as defined in the Insurance Policy. National Fanners Union argues that it has no duty to defend or
indemnifY Biesma in the underlying action because Narnrninga's vehicle is not a four wheel land
motor vehicle, utility car or fann car and is therefor outside the policy's definition of "car."
Defendant Biesma concedes that the policy's definition of fann car ("Fann car does not
include a tractor-trailer truck") excludes tractor-trailer trucks from its definition, but that the
definition of utility car does not exclude tractor-trailer trucks. The Insurance Policy defines ''utility
car" as follows: "Utility car means, if not used in any business other than farming, a motor vehicle
with a GVW less than 15,000 pounds ofthe pick-up, panel or van body type, other than a fann car."
Although the record is unclear as to the GVW7the "natural and obvious import" of"pick-up, panel
or van body type" excludes the tractor/semi-trailer driven by Biesma from the definition ofutility car.
The Court rejects Defendant Biesma's argument that since the tractor/semi-trailer has an "enclosed

7"Gross vehicle weight rating or GVWR means the value specified by the manufacturer as
the loaded weight of a single vehicle." 49 C.F.R. § 571.3 (2012).

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cab" and an "open body" it has a pick-up body type. Since the tractor/semi-trailer driven by Biesma
possessed more than four wheels, it is not a car as that term is descnbed in the Insurance Policy.
National Farmers Union prevails on the issue ofthe tractor/semi-trailer driven by Biesma on the day
ofthe accident not meeting the definition of "car," "utility car," or "farm car" as described in the
Insurance Policy.

II.

WHETHER THE OTHER INSURANCE PROVISION OF THE INSURANCE POLICY

PROVIDES COVERAGE?

Defendant Farm Bureau argues that even ifthe tractor/semi-trailer driven by Biesma on the
day of the accident does not meet the definition of "car," "utility car," or "farm car,"the OTHER
INSURANCE provision of the Insurance Policy expands liability coverage in those circumstances
where there is other applicable automobile liability insurance for losses giving rise to legal liability of
Biesma when Biesma was operating a vehicle he does not own. The PART I - LIABILITY section
ofthe Insurance Policy contains an OTHER INSURANCE provision which states in part:

If there is other applicable auto liability insurance on a loss covered by this Part, we
will pay our proportionate share as our limits of liability bear to the total of all
applicable liability limits. Any insurance afforded under this Part for a vehicle you do
not own, however, is excess over any other collectible auto liability insurance.
Doc. 33-1 at 12 (emphasis added). Biesma argues that the reference to a "vehicle you do not own"
in the OTHER INSURANCE provision creates at least an ambiguity as to whether the tractor/semi­
trailer falls under the policy's coverage. Ambiguity in an insurance policy, however, is determined
with reference to the policy as a whole and the plain meaning and effect of its words. See Cornelius
v. National Cas. Co., 813 N.W.2d 167,169 (S.D. 2012). Since Part I ofthe Insurance Policy is the
liability coverage part and the "Other Insurance" provision is also under Part I, the "Other Insurance"
provision does not provide an independent basis for coverage when the provision specifically
references "other applicable auto liability insurance on a loss covered by this Part," and the loss is not

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otherwise covered by the liability coverage part ofthe Insurance Policy.

III.

WHETHER NATIONAL FARMERS UNION IS ENTITLED TO SUMMARY
JUDGMENT ON ITS CLAIM THAT NO INSURANCE COVERAGE EXISTS
BECAUSE BIESMA WAS USING THE TRACTORISEMI-TRAILER TO CARRY

PROPERTY FOR A CHARGE?

National Fanners Union contends that coverage is excluded under the Insurance Policy
because Biesma was using the tractor/semi-trailer to carry property for a charge. Exclusion (1) under
PART I - LIABILITY provides in relevant part: "Bodily injury or property damage arising out of
ownership, maintenance, or use of a vehicle when used to carry persons or property for a charge."
Doc 33-1 at 10. National Farmers Union cites to United States v. Milwaukee Guardian Insurance

Co., 966 F.2d 1246 (8th Cir. 1992), and Martin v. Colonial Insurance Co. o/California, 644 F.
Supp. 349 (D. Del. 1986), as support for its position. Neither ofthose cases is controlling under the
facts 0 f the case at hand.

In United States v. Milwaukee Guardian Insurance Co., 966 F.2d 1246 (8th Cir. 1992), the
Eighth Circuit upheld a denial of coverage under an automobile insurance policy exclusion for a
vehicle used to carry persons or property for a charge, when a postal service employee drove his
privately owned vehicle and delivered telephone books as an employee ofthe postal service, and the
postal service received a fee for this service. The Eighth Circuit declined to decide in the context of
the Milwaukee Guardian Insurance case whether the payment ofsalary and mileage reimbursement
to an insured, who is a government employee, would actuate the exclusion. 966 F.2d at1247.

In Martin v. Colonial Insurance Co. o/California, 644 F. Supp. 349,351 (D. Del. 1986),
the carrying property for a fee exclusion was found applicable when the insured was an independent
contractor who leased the truck he was to drive and signed a contract for the delivery of each truck
load 0 f goods that he hauled, and was paid based on the number 0 f truckloads 0 f good he hauled each
week. The insured was in an accident after unhooking a malfunctioning truck from its trailer and
attempting to drive to a tow truck. Id.
In the case at hand, Biesma was an hourly -wage employee who drove Namminga's truck to

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haul chicken manure, haul grain to the elevator, and haul corn to Poet and Iowa. Biesma also did
some switching 0 f tires and cultivating on N amminga' s farm. Altho ugh B iesma was paid for his work,
which involved driving the tractor/semi-trailer, neither he nor Namminga was paid based on the
delivery ofproducts. Since "charge" does not include this situation where the truck owner had a paid
employer haul product for the truck owner, National Farmers Union is not entitled to summary
judgment based on the exclusion for the use of a vehicle to carry persons or property for a charge.

IV.

WHETHER NATIONAL FARMERS UNION IS ENTITLED TO SUMMARY

JUDGMENT ON ITS CLAIM THAT COVERAGE IS EXCLUDED BECAUSE BIESMA
WAS USING THE TRACTOR/SEMI-TRAILER IN THE COURSE OF A BUSINESS?
National Farmers Union contends that coverage is excluded because Biesma was using the
tractor/semi-trailer in the course of a business. It is undisputed that Biesma was returning from
hauling corn to Poet at the time of the accident. The course of a business exclusion does not apply
to a private passenger car, utility car, or farm car. However, this Court has already held that the
tractor/semi-trailer does not fit any ofthese categories. National Farmers Union is therefore entitled
to summary judgment on its claim for the course ofbusiness exclusion.

V.
WHETHER NATIONAL FARMERS UNION IS ENTITLED TO SUMMARY
JUDGMENT ON ITS CLAIM THAT COVERAGE IS EXCLUDED BECAUSE BIESMA
HAD REGULAR USE OF THE TRACTOR/SEMI-TRAILER?
National Farmers Union contends that coverage is excluded based on the po licy exclusion for
use of any vehicle, other than an insured car, which is owned by or furnished or available for regular
use by the insured. The Insurance Policy does not define the term "regular use." This Court agrees
with the Court of Appeals of Arizona, which has observed that the term "denotes continuous use;
uninterrupted normal use for all purposes; without limitation as to use; and customary use as opposed
to occasional use or special use." Travelers Indem. Co. v. Hudson, 15 Ariz.App. 371,375,488 P.2d
1008, 1012 (1971). The Supreme Court of South Carolina has held that in evaluating an individual
case to determine whether the conduct falls within the "regular use" exclusion, coverage depends on

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the availability 0 f and frequency 0 f the use 0 fthe vehicle by the non-owner. Whaley v. Great A m. Ins.

Co., 259 N.C. 545, 554, 131 S.E.2d 491,498 (1963).
Namminga characterized the frequency and regularity ofwhen Biesma took the tractor/semi­
trailer to the Poet plant in Scotland as "if we had time we probably did it or if he had time."
Namminga also testified that Biesma delivered the com "at our convenience." Biesma testified that
he drove the tractor/semi-trailer to the Poet plant in Scotland or to Nebraska when Namminga called
him, usually the night before, and told him what he wanted done.

In this case, the tractor/semi-trailer was available to Biesma only when Namminga directed

him to drive the vehicle. There was no continuous use of the tractor/semi-trailer, but merely
occasional or special use ofthe vehicle. As such, the "regular use" exclusion does not apply in this
case.

CONCLUSION
T4is Court has concluded that the tractor/semi-trailer driven by Biesma on the day of the
accident does not meet the definition of "car," ''utility car," or "farm car" as described in the
Insurance Policy and that the Other Insurance provision in the Insurance Policy does not expand
coverage under the policy. This Court has also concluded that Biesma was using the tractor/semi­
trailer in the course ofa business and the course ofbusiness exclusion is applicable. For these reasons
Plaintiff National Farmers Union Property and Casualty Company is entitled to summary judgment
on its declaratory judgment action regarding insurance coverage. Accordingly,
IT IS ORDERED that Plaintiffs motion for summary judgment (Docket 30) is granted.
Dated this

l~Y ofJuly,

2013.
BY THE COURT:

a
ATTEST:
JOSEPH HAAS, CLERK
BY:

ence L. Piersol
ed States District Judge

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DEPUTY

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