Atain Specialty Insurance Co. v. Watson
Words & Phrases
Exclusions: Motor VehicleTrial Judge
J. Phil GilbertAppellate Judge
Per CuriamHolding
Motor vehicle exclusion applied to loss oss arising from machinery that was attached to a vehicle but was not in operation.Fact Summary
In August 2020, Ms. Watson was severely injured by Hodge's truck with an attached woodchipper. Ms. Watson "was a pedestrian walking near [Hodge's] vehicle when [his] truck and/or wood chipper struck her, knocked her to the ground, and traversed over her body."
At the time of the accident, Hodge, doing business as Riverbend, held two insurance policies with Atain: an errors and omissions policy and a commercial general liability policy. Hodge's errors and omissions policy excluded coverage for "bodily injury" arising out of the use of an "auto," which the policy defined as "a land motor vehicle . . . designated for travel on public roads, including any attached machinery or equipment." His commercial general liability policy also excluded coverage for bodily injury arising out of the use of any auto. But unlike the errors and omissions policy, the commercial general liability policy contained an operation "exception" to the auto "exclusion." That operation exception provided coverage for bodily injury arising out of "[t]he operation of machinery or equipment that was attached to, or part of, a land vehicle that would qualify under the definition of 'mobile equipment' if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged."
In her state tort action, Ms. Watson ultimately obtained a default judgment against Hodge when he failed to appear. She then filed a garnishment proceeding against Atain. The parties filed cross-motions for summary judgment.
The district court granted Atain's motion and denied Ms. Watson's. In determining whether Atain had a duty to defend Hodge in the underlying lawsuit, the district court viewed the "central question" as whether the woodchipper was in operation when Ms. Watson was injured. Because "[t]he woodchipper was not being actively used, running, or otherwise turned on during the instant accident," the district court concluded that "[t]he undisputed facts indicate[d] the woodchipper was not in operation."