September 9, 2015
from the United States District Court for the Southern
District of Indiana, Indianapolis Division. No. l:13-cv-00198
William T. Lawrence, Judge.
Easterbrook, Kanne, and Williams, Circuit Judges.
January 2011, Defendant Linda K. Phillips, an employee of
Hoker Trucking, LLC, was driving a semi-truck that struck a
vehicle driven by Mike Douglas Rob-bins in Indiana. Robbins
died as a result of the injuries he sustained in the
accident. At the time of the accident, the semi-truck driven
by Phillips was pulling a trailer Hoker borrowed from
Lakeville Motor Express, Inc. Lakeville had purchased an
insurance policy from Plaintiff Great West Casualty Company
to cover the trailer.
case is not about the liability of Phillips or Hoker for the
accident. That action was filed by Robbins's estate in an
Indiana state court, and Phillips and Hoker were indemnified
by Hoker's insurance policy. To preempt a possible claim
against Lakeville's insurance policy, Great West filed
this complaint for declaratory judgment against Hoker,
Phillips, and Defendant Pamela Robbins, as administratrix of
Mike Douglas Robbins's estate, amongst other defendants,
seeking an order stating that it did not have to indemnify
Hoker and Phillips for any liability in connection with the
accident. After Robbins and Great West filed cross-motions
for summary judgment, the district court granted summary
judgment in favor of Great West and denied Robbins's
motion. Finding no error with the district court's
decision, we affirm.
January 4, 2011, a tractor-trailer driven by Linda K.
Phillips struck a vehicle operated by Mike Robbins in
Richmond, Indiana. Robbins died from the injuries sustained
in the accident. At the time, Phillips was an employee of
Hoker Trucking, LLC, ("Hoker") and was driving the
tractor-trailer in the course and scope of her employment
when she struck Robbins's vehicle. Hoker is incorporated
and based in Iowa. Hoker owned the Peterbilt tractor driven
by Phillips, but the trailer pulled by that tractor was on
loan to Hoker from Lak-eville Motor Express, Inc.
("Lakeville"), a company incorporated and based in
however, was not the actual owner of the trailer. Defendant
Wren Equipment, LLC ("Wren") owned the trailer.
Like Lakeville, Wren is incorporated and based in Minnesota.
In July 2001, Wren leased Lakeville dozens of trailers,
including the trailer involved in the accident, for five
years. In exchange, Lakeville agreed to pay $22, 600 per
month and provide insurance coverage for the trailers. Upon
the expiration of the five-year term, the lease converted to
a month-to-month lease.
Vanney, Lakeville's Vice President of Finance, averred
that Lakeville continued leasing the trailer after the 2001
lease expired. In December 2009, Lakeville and Wren entered
into another written lease agreement whereby Wren agreed to
provide trailers to Lakeville, including the trailer involved
in the accident, for a one-year term. Lakeville agreed to
"provide insurance coverage, at its sole cost and
expense, for public liability [and] property damage ... with
a minimum aggregate coverage of $1, 000, 000.00 for bodily
injury and property damage per occurrence." Like the
earlier agreement, the lease converted to a month-to-month
lease after the expiration of the one-year term. According to
Vanney, Lakeville continued to lease that trailer until 2013.
satisfy its insurance-coverage obligations, Lakeville
purchased a Commercial Lines Insurance Policy from Great West
Casualty Company ("Great West") to provide
automobile coverage. Great West is incorporated and based in
Nebraska. Lakeville added Wren as an additional insured party
under the policy, which was in effect at the time of the
accident. Hoker and Phillips were not named as insured
parties under the Great West policy. Hoker was insured at the
time of the accident by Northland Insurance Company
("Northland"). Northland provided primary coverage
in connection with the accident.
Great West policy contains an endorsement providing that the
policy's coverage will conform "with the provisions
of the law or regulation to the extent of the coverage and
limits of insurance required by that law or regulation"
for the states in which Great West filed a "Motor
Carrier Certificate of Bodily Injury or Property Damage
Liability Insurance." Great West filed this certificate
in Iowa, Illinois, Minnesota, North Dakota, and Wisconsin.
December 2012, Pamela Robbins, as administratrix of the
Estate of Mike Douglas Robbins, ("Robbins"), filed
a complaint in Indiana state court against Hoker, Phillips,
and Lak-eville, alleging negligence. Lakeville has since been
dismissed from that lawsuit.
West filed this action in February 2013 seeking a declaratory
judgment that Great West was not liable to defend or
indemnify Hoker or Phillips in connection with the accident.
After obtaining default judgments in connection with several
other defendants to the first complaint, Great West
subsequently amended the complaint twice. The only relevant
remaining defendants to the current dispute are Robbins and
Wren. Wren, however, joined in Great West's arguments
both at the district court and before us.
2014, Robbins moved for summary judgment against Great
West. Great West responded by opposing summary
judgment and cross-moving for summary judgment itself. The
district court granted Great West's motion for summary
judgment and denied Robbins's motion. In doing so, the
district court determined that Great West's policy
unambiguously excluded Hoker and Phillips as insured parties
under the policy. This appeal followed.
advances three arguments on appeal: (1) because Great
West's policy is ambiguous as to whether Hoker and
Phillips were excluded from coverage, we should construe the
policy against Great West and find it covers Hoker and
Phillips; (2) even if we find the exclusions under the Great
West policy are not ambiguous, the policy exclusions
nevertheless do not exclude Hoker and Phillips from coverage;
and (3) regardless of whether the exclusions apply to Hoker
and Phillips or not, such exclusions are invalid under
Wisconsin law, the state where the trailer is registered.
review de novo a district court's decision on
cross-motions for summary judgment. Hess v. Reg-Ellen
Mach. Tool Corp., 423 F.3d 653, 658 (7th Cir. 2005). In
conducting this review, we construe all facts as well as all
reasonable inferences derived from those facts "in favor
of the party against whom the motion under consideration was
made." Clarendon Nat. Ins. Co. v. Medina, 645
F.3d 928, 933 (7th Cir. 2011). Summary judgment is
appropriate where, after that review, we determine that the
movant has demonstrated "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).
jurisdiction over this dispute is based on diversity of
citizenship, 28 U.S.C. § 1332, which means that a
federal court must apply the substantive law of the forum
state-here, Indiana. ErieR.R. Co. v. Tompkins, 304
U.S. 64, 78 (1938). A state's substantive law includes
its conflict-of-law or choice-of-law rules. Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
Although Indiana choice-of-law rules apply, the parties posit
that Minnesota law governs interpretation of the insurance
contract, which was issued and delivered to a Minnesota-based
company. Because Indiana's choice-of-law rules give broad
discretion to parties to choose the applicable substantive
law, see, e.g., Barrow v. ATCO Mfg. Co., 524 N.E.2d
1313, 1314-15 (Ind.Ct.App. 1988), and we see no reason why
Minnesota law should not govern this contract dispute, we
apply Minnesota law in interpreting Great West's policy.
Ambiguity of Great West's Policy Exclusions
start with Robbins's argument that Great West's
policy is ambiguous as to whether Hoker and Phillips are
excluded from its coverage. Minnesota courts analyze
insurance policies under general contract law principles.
Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d
246, 249 (Minn. 1998). Whether an insurance policy or
particular provision is ambiguous is a question of law.
Lott v. State Farm Fire & Cas. Co., 541 N.W.2d
304, 307 (Minn. 1995). "Language in a policy is
ambiguous if it is susceptible to two or more reasonable
interpretations." Carlson v. Allstate Ins. Co.,
749 N.W.2d 41, 45 (Minn. 2008). In making that determination,
Minnesota law directs us "not [to rely] upon words or
phrases read in isolation, but rather upon the meaning
assigned to the words or phrases in accordance with the
apparent purpose of the contract as a whole." Art
Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d
511, 515 (Minn. 1997). If language is susceptible to two
reasonable interpretations, then "it must be interpreted
in favor of coverage." Wanzek Constr., Inc. v.
Emp'rs Ins. of Wausau, 679 N.W.2d 322, 325 (Minn.
2004). Language, however, that is unambiguous "must be
given its plain and ordinary meaning, " Hubred v.
Control Data Corp., 442 N.W.2d 308, 310-11 (Minn. 1989)
(internal quotation marks omitted), as Minnesota law does not
permit a court to "read an ambiguity into the plain
language of a policy in order to provide coverage, "
]enoff, Inc. v. N.H. Ins. Co., 558 N.W.2d 260, 262
(Minn. 1997) (internal quotation marks omitted). If, however,
an exclusion would omit coverage required by applicable law,
it will not be enforced. Am. Family Mut. Ins. Co. v.
Ryan, 330 N.W.2d 113, 115 (Minn. 1983).
dispute here centers on a disagreement over the effect of a
September 2010 endorsement, which modified the policy's
"Coverage" section of "WHO IS AN
INSURED." Without the endorsement, the section read, in
relevant part, as follows:
WHO IS AN INSURED
following are "insureds":
a. You for any covered "auto".
b. Anyone else while using with your permission a covered
"auto" you own, hire or borrow except:
(1) The owner or anyone else from whom you hire or borrow a
covered "private passenger type" "auto."
(2)Your "employee" or agent if the covered
"auto" is a "private passenger type"
"auto" and is owned by that "employee" or
agent or a member of his or her household.
(3)Someone using a covered "auto" while he or she
is working in a business of selling, servicing, repairing,
parking or storing "autos" unless that ...