30 N.E.3d 856
Mass. App. Ct.2015Background
- 2008: Melo purchased a Dodge tow truck for use by her boyfriend, Bucco, who operated David's Towing to move used cars between dealer lots and auctions.
- Bucco employed Silva to assist; Silva was paid about $100 per day and worked once or twice weekly.
- On the date of the accident, Silva arrived at 9:00 A.M., inspected the tow truck, and at 9:55 A.M. struck a vehicle in which Borden was a passenger while en route to pick up a car for delivery.
- Progressive denied excess coverage under Silva's personal auto policy based on its automobile business exclusion; plaintiff filed a declaratory judgment action.
- The Superior Court granted summary judgment for Progressive; the issue is whether the auto business exclusion applies to Silva's use of the tow truck in the course of employment with David's Towing.
- Rhode Island law applies, and the court reviews de novo; the court held the exclusion precluded coverage as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the automobile business exclusion preclude excess coverage here? | Borden argues exclusion is inapplicable because the policy’s language is unambiguous but not tailored to towing. | Progressive contends Silva was engaged in an auto business (delivery/towing) at the time, triggering the exclusion. | Yes; exclusion precludes coverage as a matter of law. |
Key Cases Cited
- Mullins v. Federal Dairy Co., 568 A.2d 759 (R.I. 1990) (exclusion applies only when insured is engaged in a listed activity at the time of the accident)
- Maryland Cas. Co. v. Integrity Ins. Co., 693 F.2d 506 (5th Cir. 1982) (towing/delivery context; exclusion may apply where listed activities are implicated)
- Westfield Ins. Co. v. Aetna Life & Cas. Co., 153 Ariz. 564 (Ariz. Ct. App. 1987) (language differed; towing not within listed business absent connection to listed activities)
- Henderson v. Nationwide Ins. Co., 35 A.3d 902 (R.I. 2012) (reasonable expectations doctrine supports denial of coverage for employment-related use)
- Transamerica Ins. Group v. State Farm Mut. Auto. Ins. Co., 492 F. Supp. 283 (D. Nev. 1980) (autobus. exclusion history; analysis of entrustment/coverage scope)