Opinion
—After settling an action for personal injury, appellant American Guarantee and Liability Insurance Company (American) and respondent American International Underwriters Insurance Company (AIU) sought indemnification from each other, and each moved for summary judgment. The trial court denied American’s motion, granted summary adjudication to AIU, and ultimately entered judgment for AIU. American appeals, contending that the parties responsible for the underlying plaintiff’s injuries were not insureds under its liability policy. We agree and therefore must reverse the judgment.
Background
A development project in San Jose required the excavation and removal of soil from the construction site, resulting in a series of subcontracting arrangements. O.C. Jones, the excavation contractor on the project, retained Allied Waste Management (Allied) to remove the soil and transport it to Allied’s disposal facility. Allied then orally contracted with Denbeste Transportation, Inc. (Denbeste), to perform the hauling. Denbeste, using a written subhaul agreement, subcontracted with Double D Transportation Company (Double D) to assist Denbeste in the job. Double D in turn entered into a separate subhaul agreement with James D. Camara, owner of MJC Trucking. It was undisputed that both Double D and Camara were acting as independent contractors pursuant to their respective agreements.
Under the Denbeste-Double D subhaul agreement, Double D had the right to refuse transportation assignments requested by Denbeste, and Double D was required to maintain its own liability insurance and to make Denbeste an additional insured. Double D was insured under an umbrella policy issued by respondent AIU, while Denbeste was the named insured on two American policies: a comprehensive general liability (CGL) policy (which is not at issue in this appeal) and a commercial auto policy which included a “Trucker Coverage Form” (Trucker policy).
Pursuant to his subcontract with Double D, Camara drove his own MJC tractor connected to a Double D trailer. On October 8, 1999, while Camara *620 was hauling soil from the project site to the disposal site, the traсtor-trailer ran over Christopher Torgerson, severely injuring him. In September 2000 Torgerson brought a negligence action against Camara, Denbeste, Double D, and the general contractor on the development project, among others. Double D and Camara tendered their defense to Denbeste’s insurer, American, but American rejected tender on the ground that neither was covered as an insured under the Trucker policy.
In November 2003, Torgerson settled with all defendants for $5.05 million. AIU (Double D’s carrier) and American (Denbeste’s carrier) each agreed to contribute $1.45 million “on behalf of all of its insureds involved in the Action,” while reserving their rights to pursue each other. American thereafter paid $1 million under Denbeste’s CGL policy and $450,000 under the Trucker policy. AIU likewise paid the promised amount pursuant to the settlement. 1
AIU then brought suit against American for equitable contribution, equitable subrogation, equitable indemnity, and declaratory relief. According to AIU, it was an excess insurer, while American was a primary insurer covering Camara and Double D as well as Denbeste. American denied these allegations and filed a cross-complaint, contending that neither Double D nor Camara was an insured under the American policy issued to Denbeste. American also called attention to an indemnity provision in Double D’s subhaul agreement with Denbeste. 2 Each party sought recovery of the $1.45 million it had contributed to the settlement.
In January 2008 the parties filed cross-motions for summary judgment or alternatively, summary adjudication with respect to AIU’s first amended complaint and American’s cross-complaint. American argued that neither Double D nor Camara was an insured under Denbeste’s Trucker policy. American maintained that the relationship between Denbeste and Double D was governed by the subhaul agreement and by the “routine contractual commercial relationship between themselves [sic].” That agreement, American noted, required Double D to name Denbeste as an additional insured in its liability policy.
*621 AIU, on the other hand, contended that it had no duty to contribute to the Torgerson sеttlement because its policy was excess only, and American’s primary policy, which had not been exhausted, covered Double D and Camara as well as Denbeste. In AIU’s view, the indemnity provision of the subhaul agreement between Denbeste and Double D was inapplicable to the parties’ dispute.
The superior court granted AIU’s motion as to the complaint and denied American’s motion in its entirety. As to American’s cross-complaint, the court granted AIU summary adjudication as to all causes of action except the first, for “Subrogation/Equitable Indemnity.” 3 At the request of American, the court subsequently clarified its order to articulate specifically its finding that Double D was an insured under the Amеrican Trucker policy “as the owner from whom Denbeste Transportation hired a covered ‘auto’ that is a ‘trailer.’ ” In a judgment entered May 29, 2008, the court awarded AIU $1.45 million plus prejudgment interest of $618,136.96 and costs.
Discussion
In moving for summary judgment AIU advanced the theory that it had no duty to contribute to the settlement with Torgerson because its umbrella policy was excess, and the coverage of Denbeste’s primary policy had not been exhausted. On appeal, American maintains that AIU “literally [.sic] puts the cart before the horse,” because it was obligated to pay only those amounts the insured was liable to pay as damages. Neither Double D nor Camara, American argues, was an insured under the Trucker policy. American further disputes the award of prejudgment interest to AIU. We need not address this second argument because we find merit in the first.
1. Standard of Review
Summary judgment “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c,
*622
subd. (c).) The primary issue before us is whether American’s policy provisions applied on largely undisputed facts. We independently review the trial court’s ruling on this question.
(Powerine Oil Co., Inc. v. Superior Court
(2005)
“Insurance contracts are contracts to which the ordinary rules of contract interpretation apply. [Citation.]”
(Allstate Ins. Co.
v.
Mercury Ins. Co.
(2007)
2. The Trucker Policy
American’s Trucker policy provided $5 million in coverage to Denbeste for liability arising out of property damage or bodily injury resulting from the use of a covered “auto.” The term “auto” extended to “ANY ‘AUTOS,’ ” “HIRED ‘AUTOS’ ONLY,” and “NONOWNED ‘AUTOS’ ONLY.” Hired autos were those “you lease, hire, rent or borrow,” while nonowned autos were those that the policyholder did not own, lease, hire, rent or borrow, but which “are used in connection with your business.” The term “auto” itself was defined to include trailers.
The liability section also identified “Who is an insured” in addition to the policyholder. Among those covered were the following: “b. Anyone else while using with your permission a covered ‘auto’ you own, hire or borrow ----[U c. The owner or anyone else from whom you hire or borrow a covered ‘auto’ that is a ‘trailer’ while the ‘trailer’ is connected to another covered ‘auto’ that is a power unit. . . . [f] e. Anyone hable for the conduct of an ‘insured’ described above but only to the extent of that liability.” The policy stated that coverage was primary “for any covered ‘auto’ while hired or borrowed by you and used exclusively in your business as a ‘trucker’ and pursuant to operating rights granted to you by a public authority.”
The point of dispute in this case is whether these provisions covered Camara and Double D on a primary basis, thereby releasing AIU of any obligation to contribute under the umbrella policy issued to Double D. The outcome turns on the meaning of “hired auto” and the intended scope of the phrase “anyone else while using with your permission” that hired auto. If *623 Denbeste can be said to have hired the tractor and trailer and then to have given Camara and Double D permission to use them, then Camara and Double D were insureds under the Trucker policy, and American was required to exhaust its policy limits before AIU’s excess provisions came into play.
Civil Code section 1925 defines “hiring” as synonymous with renting—that is, “a contract by which one gives to another the temporary possession and use of property, other than money, for reward, and the latter agrees to return the same to the former at a future time.” In
Entremont
v.
Whitsell
(1939)
The Third District followed
Entremont,
again citing Civil Code section 1925, in
Rice Bros., Inc. v. Glens Falls Indem. Co.
(1953)
As in
Entremont
and
Rice Brothers,
the contract before us provides for transportation of property by motor vehicle, not for the renting of trucks and trailers by Denbeste. The subhaul agreement identifies Double D as an independent contractor “that agrees to transport shipment for tools or equipment for Prime Carrier [Denbeste].” The subject of the contract was repeatedly referred to in the document as the “performance of Subhaul services,” not the provision of equipment for Denbeste’s usе. Double D, like Entremont and Holloway, was required to maintain the equipment at its own expense and to pay its drivers’ salaries and worker’s compensation insurance.
4
And while Denbeste could use any other subhauler’s services, it had “no power to discharge the drivers”; at best its principal could report the driver to the O.C. Jones superintendent for possible “release” from the job.
(Entremont, supra,
Another analogous situation was presented in
Northbrook Excess & Surplus Ins. Co. v. Coastal Rescue Systems Corp.
(1986)
As in Coastal Rescue, here Denbeste engaged the transport services of Double D without assuming possеssion or exercising control over Double D’s trailer or Camara’s tractor. Clearly, the relationship between Denbeste and Double D involved a relationship between a prime carrier and a subhauler acting as an independent contractor, which did not relinquish possession and control of its equipment to Denbeste. Camara likewise was operating his own tractor and a trailer leased from Double D, pursuant to his subhaul agreement with Double D.
Both parties recognize the relevance of a related term, “borrow,” to the interpretation of “hire.” In
Home Indemnity Co.
v.
King
(1983)
Two other appellate decisions are instructive in the circumstances presented here. In
Fireman’s Fund Ins. Co. v. Allstate Ins. Co.
(1991)
The appellate court agreed with the trial court’s finding that Richardson Trucking was not an insured under the carrier’s Allstate policy, which covered the carrier (as the named insured) and “[a]nyone else . . . while using with
your
permission a covered
auto you
own, hire or borrow.”
(Fireman’s Fund, supra,
The provision in the Trucker policy likewise offered coverage for Denbeste or “[a]nyone else while using with your рermission a covered ‘auto’ you own, hire or borrow.” As in Fireman’s Fund, it would be unreasonable to infer that *627 this provision contemplated Denbeste’s granting permission to Double D and Camara to use their own vehicles in their business with Denbeste.
City of Los Angeles v. Allianz Ins. Co.
(2005)
The court upheld the trial court’s factual finding that dominion and control were insufficiently established to constitute a borrowing of the truck. It agreed with the trial court that borrowing entails temporary possession, which in turn “ ‘connotes the right to exercise dominion and control.’ ”
(Allianz, supra,
AIU maintains that even if dominion and control are required in order to be denominated an insured hirer or borrower of a covered auto, that element was established by Denbeste’s control over the route. AIU specifically calls attention to Joseph Denbeste’s oral warnings to drivers to stay on the prescribed route and his presence at thе exit gate, “where he stopped and logged each truck, directed each driver to complete the trip manifests and confirmed tarping.”
AIU overstates Joseph Denbeste’s control. He explained in his deposition that it was the project superintendent, an employee of the excavation contractor, who designated the route and even directed Joseph Denbeste in his duties, including that of taking a position at the exit gate. As noted earlier, Joseph Denbeste did not have the authority to fire Camara; he could only warn Camara that if he learned that Camara had left the designated route a second time, he would “turn him over” to the project superintendent.
*628 Allianz is again noteworthy on this point. There the city unsuccessfully argued that its supervision over the loading process was sufficient to establish its role as a borrower of the truck. The city had maintained the pickup site, provided the loading procedures, directed the hauler along the required route, instructed the hauler on the proper positioning of the tractor-trailer rig to receive and weigh the load, supervised the weighing of the trailer before and after loading, and inspected the load for cleanliness and adequate tarping before the truck left. The driver, while following those instructions, nevertheless “maintained control over his truck at all times during the loading opеration” and was only performing his duties under his hauling contract in furtherance of his company’s commercial purposes. (Allianz, supra, 125 Cal.App.4th at pp. 291, 293.) Thus, as in King, the requisite dominion and control by the city over the subhauler’s truck did not exist.
In the court below and on appeal, AIU has relied on a definition of “hired auto” derived from cases such as
Monolith Portland Cement Co. v. American Home Assur. Co.
(1969)
In
Travelers Indemnity Co. v. Swearinger
(1985)
In dictum, the
Swearinger
court noted the term “hire,” with which “borrow” had a “natural affinity,” and which differed from “borrow” only in that it involved monetary compensation.
(Swearinger, supra,
In our view, the
Swearinger
decision is based on an inadequate definition of “borrow,” and thus misdirected the trial court here in its application of the related term “hired auto.” While citing the rule that terms must be used in their ordinary and popular sense, the court deviated from that principle and appeared to invoke another rule, that uncertainties in insurance contracts are resolved against the insurer. This was an incomplete statement of the law. The purpose of the resolution of uncertainty in favor of the insured is to protect his or her
reasonable
expectation of coverage.
(Power Fabricating, Inc. v. State Comp. Ins. Fund
(2008)
*630
Further, the
Swearinger
opinion selectively illustrates “hire” with the taxicab scenario, without recognizing the more common situation in which one hires—i.e., rents—a vehicle for his or her own use by taking temporary
possession
of the vehicle in exchange for money. The inductive inference that a hiring necessarily “excludes physical possession altogether when remuneration is involved” is contrary to logic and the reality of everyday transactions involving vehicles. Also overlooked is the inclusion of the words “temporary possession” in the Civil Code definition of “hired.” (See also
Coastal Rescue, supra,
Moreover, we believe that the Swearinger court inadequately distinguished the facts in King and mischaracterized the Supreme Court’s holding in that case: “The Supreme Court held that Martin had not borrowed the tractor [wc] because there was no evidence he moved it or had express or implied authority to do so. . . . Martin made no use of the tractor [wc] nor was such use part of his agreement with King. By contrast Fall River did use the Gallion automobile for its purpose in transporting guest students.” (Swearinger, supra, 169 Cal.App.3d at pp. 787-788, citation omitted.) Missing from this account of King is the Supreme Court’s emphasis on the absence of evidence “that Martin exercised the requisite dominion and control over the truck and trailer to be a ‘borrower’ under the terms of the policy.” (King, supra, 34 Cal.3d at pp. 813-814.) The Swearinger court did not even mention either Rice Brothers, a decision from that district, or the Supreme Court’s opinion in Entremont.
We therefore decline to adopt the
Swearinger
view of “borrow” and the related term “hire.” As explained by the high court of a sister state, “The idea of
borrowing
in general, and of
borrowing a motor vehicle
in particular, simply does not encompass, within the generally prevailing meaning of the term, every instance in which a policy holder may have received a benefit from the use of an auto by another. [][]... [f] The majority of other courts . . . have also concluded that the term
borrow
connotes much more than merely receiving some benefit from another’s use of a third person’s vehicle. They have determined that borrowing a car requires possession reflecting dominion and control over the vehicle.”
(Schroeder v. Board of Supervisors of Louisiana State University
(La. 1991)
We thus conclude that the trial court erred in ruling that as a matter of law the Trucker policy issued to Denbeste covered Double D “as the owner from whom Denbeste
hired
a covered ‘auto’ that is a ‘trailer.’ ” AIU produced no facts indicating Denbeste’s assumption of possession or control of the tractor or the trailer; nor can we endorse AIU’s corollary theory that Camara was “using” his own tractor and Double D’s trailer with the permission of Denbeste as the hirer or borrower of those vehicles. (Cf.
Fireman’s Fund, supra,
Our conclusion further affects American’s motion for summary judgment, which the trial court denied on the ground that Double D and Camara were insured by American. By demonstrating that Double D was not covered under the Trucker policy issued to Denbeste, American met its initial burden to show that it was entitled to judgment as a matter of law. In accordance with summary judgment procedure, the burden then shifted to AIU to make a prima facie showing that there existed a triable issue of material fact. AIU, hоwever, made only a brief suggestion in the conclusion to its opposing brief below that “whether Denbeste exercised sufficient control over the vehicles is a question of fact.” The focus of its argument was that the Trucker policy offered coverage as a matter of law, whether or not dominion and control were necessary to meet the definition of “hired.” On appeal, AIU adheres to this position without renewing its suggestion that a disputed question of fact existed on the extent of its control over the tractor and trailer. Even if this argument had been presented to us, we would nonetheless determine that in light of the authorities discussed, no triable issue of material fact was manifested by AIU’s opposition to American’s motion, because the undisputed facts established Denbeste’s lack of possession and control.
*632 Disposition
The judgment is reversed. The trial court is directed to vacate its order granting summary adjudication to AIU and denying summary judgment to American, and to enter a new order granting American’s motion and denying that of AIU. American is entitled to its costs on appeal.
Rushing, R 1, and Premo, L, concurred.
A petition for a rehearing was denied February 25, 2010, and respondent’s petition for review by the Supreme Court was denied April 14, 2010, SI80865. George, C. J., and Corrigan, J., did not participate therein.
Notes
Additional contributions were made by the insurers for Allied, the general contractor, O.C. Jones, and Camara.
In this subhaul agreement Double D agrеed “to indemnify and hold [Denbeste] free and harmless from all claims, loss and damage on account of injury to or death of persons, or damage to property, caused or alleged to be caused by or in connection with the operation of equipment belonging to or used by Subhauler or drivers engaged or employed by Subhauler, including all claims, loss, pilferage, or damage to equipment and cargo that is in Subhauler’s possession or under its dominion or control.”
In denying summary adjudication to both parties, the trial court recognized that the parties had improperly requested summary adjudication of issues, which would have been unauthorized as it would not have disposed of “one оr more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).) This statutory provision clearly states that “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1); cf.
Bagley
v.
TRW, Inc.
(1999)
Likewise, Camara was responsible for maintaining his own vehicle.