683 F.3d 889
8th Cir.2012Background
- McCann collided with Kreml while driving his personal vehicle; Kreml sued McCann and Life Time Fitness for vicarious liability; Auto Club Insurance Association paid the policy limit to settle Kreml’s claims and sought reimbursement from Sentry; Auto Club alleged Sentry provided co-primary coverage for McCann based on a Sentry policy; district court granted Sentry summary judgment, holding Sentry provided excess coverage only and that McCann was not a named insured under Sentry.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sentry provides primary or excess coverage for McCann | Auto Club contends McCann is a named insured under Sentry. | Sentry argues McCann is not a named insured, so Sentry provides excess coverage. | Sentry provides excess coverage; McCann is not a named insured under Sentry. |
| Scope of the controlled-entities endorsement | Auto Club argues it includes employees under Life Time’s control. | Sentry restricts the endorsement to entities Life Time controls. | Controlled-entities endorsement applies to entities Life Time controls, not employees. |
| Effect of employees-as-insureds endorsement | Endorsement should not be rendered surplus by interpretation. | Endorsement creates insured status for employees using non-owned vehicles only in certain contexts. | Employees-as-insureds endorsement creates insureds for use of non-owned vehicles within Life Time’s scope; supports excess coverage for McCann. |
Key Cases Cited
- National Union Fire Ins. Co. of Pittsburgh v. Terra Indus., Inc., 346 F.3d 1160 (8th Cir. 2003) (state-law contract interpretation governs insurance contracts)
- Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246 (Minn. 1998) (general principles of contract interpretation apply to insurance policies)
- Bobich v. Oja, 104 N.W.2d 19 (Minn. 1960) (ambiguous terms construed against the insurer; context matters)
- Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32 (Minn. 1979) (ambiguity assessed in policy context)
- Burgi v. Eckes, 354 N.W.2d 514 (Minn. App. 1984) (specific provisions govern over general provisions)
- Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522 (Minn. 1990) (interpret policy language to avoid meaningless provisions)