By Vienna Bottomly, Notre Dame Law School; Ryan Leagre, Plews Shadley Racher & Braun LLP
In Erie Indem. Co. v. Estate of Harris, 99 N.E.3d 625 (Ind. 2018), the Indiana Supreme Court concluded that the phrase “others we protect” in an employer’s commercial auto policy was unambiguous and did not afford coverage to an employee struck by an uninsured motorist while that employee was mowing his lawn on a riding lawnmower. It was on this point—whether the phrase “others we protect” was ambiguous—that the Supreme Court disagreed with the Court of Appeals. However, the Supreme Court did not reach a separate issue addressed by the Court of Appeals, which involved using limiting language in an exclusion to determine the scope of the policy’s insuring agreement. While the Court of Appeals’ opinion is now vacated, it still highlights a valuable tool policyholders should use to construe insurance policies.
Estate of Harris began with a tragic accident. On August 6, 2010, Brian Harris was cutting grass on a riding lawnmower outside his Goshen, Indiana, home when he was struck and killed by a motorist operating under the influence of illegal drugs. Even though the motorist was driving a borrowed 1974 Chevy truck with its owner’s permission, he was deemed uninsured because he was unlicensed.
Lacking an obvious avenue for recovery, Harris’s estate filed a claim for bodily injury damages with Erie, his employer’s commercial auto insurer. Since 1993, Harris worked for Formco, a plastics design and manufacturing company in Elkhart County, Indiana. At the time of the accident, he drove a company-owned 2004 Toyota pickup truck as his primary vehicle for business and personal use. Erie insured Formco’s company-owned vehicles, including the pickup truck, under a commercial auto policy that included an endorsement for uninsured motorist coverage.
Even though Harris was not listed as an insured on the policy and he was not using or occupying the company truck at the time of the accident, the estate claimed coverage under the phrase “others we protect” in the policy endorsement’s “OUR PROMISE” section. This section provided coverage for damages resulting from accidents arising from the use of an uninsured motor vehicle involving “bodily injury to you or others we protect.” The estate filed suit after its claim was denied. On appeal, in Erie Indemnity Company v. Estate of Harris, 80 N.E.3d 923 (Ind. Ct. App. 2017), the Court of Appeals affirmed the trial court’s grant of summary judgment for the estate, concluding that, because the policy failed to define the phrase “others we protect,” Harris fell within that coverage category. In an opinion authored by Justice Goff, the Supreme Court vacated and reversed.
Although the court acknowledged that the policy did not define “others we protect,” the court determined that the insurer presented the only reasonable interpretation of the phrase in light of language contained within the policy endorsement’s “OTHERS WE PROTECT” section. This section, located directly beneath the “OUR PROMISE” section, contained a list of categories including anyone occupying an insured, policyholder-owned vehicle. Because Harris was operating a riding lawnmower, not a company-owned vehicle, he could not qualify for coverage under this category. The court held that the insurer’s interpretation, which gave “others we protect” the same meaning as the identically named section was “eminently reasonable,” even though the section was “not a ‘definition’ per se.” Id. at 631.
The Supreme Court next concluded that the estate’s interpretation of “others we protect,” which differed from the listed categories in the “OTHERS WE PROTECT,” section was unreasonable for two reasons. First, an ordinary policyholder would not read outside information into the policy to conclude that Harris should be covered because of his status as a scheduled company driver. Neither the Declarations pages, nor the Policy, nor the Endorsement expressly listed Harris as an insured or even a protected or covered driver. Second, differentiating “others we protect” from “OTHERS WE PROTECT” would produce two different, yet identically named coverage categories. Finding the insurer’s interpretation to be the only reasonable interpretation, the court held that the unambiguous phrase could not be strictly construed against the insurer.
While the Supreme Court’s reversal is disappointing for the Harris estate, the court did not address the Court of Appeals’ use of a limitation in an exclusion to determine the scope of coverage provided to “others we protect.” After concluding that Harris fell within the category of “others we protect,” the Court of Appeals discussed whether the policy’s uninsured motorist endorsement could cover Harris as a pedestrian. The court analyzed an exclusion barring coverage for any “injury sustained by anyone we protect while occupying or struck as a pedestrian by an uninsured or underinsured motor vehicle which is owned by you or a relative” to conclude that “Erie would not have included this exclusion unless it was necessary to set forth an exception to its general rule that the [Uninsured Motorist] Endorsement covers ‘others we protect’ when they are pedestrians.” 80 N.E.3d at 931 (emphasis added). While this decision is now vacated, it illustrates how a policyholder can use the terms and limitations of policy exclusions to demonstrate the broad scope of coverage provided by an insurance policy.
See the full opinion here.
If you would like to submit content or write an article for the Insurance Coverage Section, please email Kara Sikorski at firstname.lastname@example.org.