It is no surprise that CGL policies exclude coverage for bodily injuries caused by the operation of cars or trucks. Automobile risks and business premises risks are vastly different. Absent a concurrent and covered cause, if an insured’s use of a car is the proximate cause of an injury, liability coverage under a CGL Policy is likely not in play.
However, not every injury in which a car is somehow involved will enable the insurer to invoke an automobile exclusion. The Superior Court of Pennsylvania recently discussed such a situation.
Chris Eldredge Containers, LLC v. Crum & Foster Specialty Insurance Company
2025 WL 1186423 (PA Super. Ct. Apr. 24, 2023)
Eldridge arises from an incident in which an Eldredge Containers employee backed an Ottawa Terminal Tractor into a stationary service truck owned by Safety Kleen Systems, Inc. Craig Logan, a Safety Kleen employee, was occupying the truck at the time and suffered bodily injuries. There was no dispute that Ottawa Terminal Tractor was owned by Eldredge Containers and that an Eldredge Containers employee was operating the Terminal Tractor.
Eldredge’s Insurance Coverage
At the time of Logan’s injuries, Eldredge Containers carried a CGL policy issued by Crum & Foster Specialty Insurance (C&F) and a follow-form excess policy issued by National Union. The C&F policy contained an Absolute Auto Exclusion. That exclusion precluded coverage for “’bodily injury” arising out of or resulting from the ownership, maintenance, use or entrustment to others of any…‘auto’”.
Logan filed a lawsuit against Eldridge Containers for his injuries. Eldridge Containers tendered the lawsuit to C&F and National Unition with a request for a defense and indemnity. Both carriers rejected any obligation to defend or indemnify Eldredge Containers.
Declaratory Judgment
After receiving the denials, Eldredge Containers filed a declaratory judgment action against C&F and National Union. Eldredge Containers sought a declaration that C&F and National Union were obligated to defend and indemnify Eldredge Containers for Logan’s claims. C&F and National Union continued to disagree.
C&F made the first move and filed a motion for judgment on the pleadings. In support of the motion, C&F cited the Absolute Auto Exclusion. C&F argued that Logan was in the Safety Kleen truck when he was injured and the Safety Kleen truck was considered an “auto”. C&F believed this was enough to trigger the Absolute Auto Exclusion even though Logan was not an insured under the C&F Policy, there was no evidence Logan’s actions somehow contributed to the incident and there was no argument that the Ottawa Terminal Tractor owned by Eldredge Containers was an auto.
National Union soon filed its own motion for judgment on the pleadings. National Union’s argument was simple. Its follow-form excess policy would not provide coverage to Eldredge Containers if the C&F policy did not provide coverage. Since C&F denied coverage, National Union argued it had no obligation to provide coverage for Logan’s lawsuit.
Despite the protests of Eldredge Containers, the trial court agreed. C&F and National Union’s motions for judgment on the pleadings were granted and the trial court ordered that C&F and National Union owed no defense or indemnity obligations to Eldredge Containers.
Appeal
Eldredge Containers believed the Absolute Auto Exclusion had been too broadly interpreted and applied and pursued an appeal to the Pennsylvania Superior Court. The Appellate Court agreed and determined C&F and National Union did owe coverage including a defense and indemnity.
In doing so, the Appellate Court first determined that the Absolute Auto Exclusion was ambiguous as it lacked a clear causation standard. The exclusion provided only that there was no coverage for bodily injury arising out of the use of an auto and precedent required that the phrase “arising out of” would be strictly constructed and only apply to if the injuries were proximately caused by an automobile. Here the only allegations of negligence focused on the use of the Ottawa Terminal Tractor (a non-auto) causing Logan’s injuries. The only auto involved was the Safety Kleen truck and it was stationary. Therefore, the Court found the Safety Kleen truck could not have caused Logan’s injury, and its tangential involvement would not trigger the Absolute Auto Exclusion.
Additionally, the Court determined that the Absolute Auto Exclusion was ambiguous as it did not set out whose ownership or use of an auto triggered the exclusion. The exclusion noted there was no coverage for the “ownership, maintenance or use” of an auto but the exclusion did not say who had to own, maintain or be using the auto to trigger the exclusion. The court took issue with applying the clause when an insured was not the one who owned or was operating the auto at issue. There were no allegations that Eldredge Containers, or its employees, were using an automobile, and the only auto involved, the Safety Kleen truck, was definitely not owned by Eldredge Containers. Given these facts, the Appellate Court refused to believe the Absolute Auto Exclusion was meant to preclude coverage.
The Appellate Court’s decision seemed to be a relatively easy call. While based on a finding that the Absolute Auto Exclusion was ambiguous, the decision is probably simpler than making a showing of ambiguity. Instead, an automobile being the mere situs of an injury does not necessarily mean that an automobile was the cause of the injury. This principle has long been used in uninsured motorist cases and should be equally applicable when evaluating claims under CGL policies.
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