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James E. Cornelius v. National Casualty Company

April 18, 2012

JAMES E. CORNELIUS, PLAINTIFF AND APPELLANT,
v.
NATIONAL CASUALTY COMPANY,
DEFENDANT AND APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT MEADE COUNTY, SOUTH DAKOTA THE HONORABLE JEROME A. ECKRICH, III Judge

The opinion of the court was delivered by: Severson, Justice

#26076-r-GAS

CONSIDERED ON BRIEFS ON FEBRUARY 14, 2012

[¶1.] James E. Cornelius initiated a declaratory judgment action against National Casualty Company (National Casualty) to determine whether a policy of insurance issued by National Casualty to Cornelius's employer, Live Line Maintenance, provided uninsured motorist coverage to Cornelius for injuries he sustained while occupying a vehicle owned by Live Line Maintenance. National Casualty moved for summary judgment. The circuit court granted the motion, finding that Cornelius could not recover uninsured motorist benefits. Cornelius appeals. We reverse.

Background

[¶2.] Harold Baldwin was the sole proprietor of Live Line Maintenance, a business that provided construction and maintenance services to rural electric cooperatives in South Dakota, Nebraska, and Wyoming. Cornelius worked as a lineman for the business. On March 11, 2002, Cornelius was performing maintenance work on elevated electrical power lines and systems. Cornelius used a 1963 International bucket truck to perform his duties. Mounted on the truck was a boom with an open bucket that Cornelius used to lift himself to the top of the elevated power lines. As Cornelius was standing in the bucket of the truck performing his duties, he came in contact with one of the live lines. The electric current passed through his body to the bucket, and then to the ground through the boom of the truck. Cornelius sustained serious injuries as a result of this incident.

[¶3.] The bucket truck that Cornelius used in his employment with Live Line Maintenance was insured by National Casualty. The insurance policy provided separate coverage for liability and uninsured motorist insurance. The liability coverage contained an exclusion for bodily injury sustained by an employee. National Casualty relied on this exclusion to deny liability coverage to Live Line Maintenance for the injuries Cornelius sustained.

[¶4.] In March 2008, Cornelius filed a complaint against National Casualty.*fn1 In his complaint, Cornelius asserted that the injuries he sustained were the result of Live Line Maintenance and Baldwin's negligent maintenance of the bucket truck. Specifically, Cornelius alleged that Live Line Maintenance and Baldwin failed to properly insulate the bucket and boom from the electrical charge. Cornelius sought a declaratory judgment that he was entitled to recover uninsured motorist benefits under the insurance policy issued by National Casualty to Live Line Maintenance.

[¶5.] National Casualty filed a motion for summary judgment in September 2010. The circuit court found that Cornelius was unable to recover uninsured motorist benefits under the insurance policy between Live Line Maintenance and National Casualty. The circuit court reasoned that uninsured motorist coverage only extends to accidents arising out of the "normal use" of a vehicle, which consists of "transportation to and from destinations." Thus, the circuit court concluded, "Cornelius does not have [uninsured motorist] coverage for injuries that allegedly arose out of the negligent maintenance of a vehicle when the negligent maintenance was not connected with the transportation purpose of the vehicle."

Standard of Review

[¶6.] "Insurance contract interpretation is a question of law reviewed de novo." Batiz v. Fire Ins. Exch., 2011 S.D. 35, ¶ 10, 800 N.W.2d 726, 728-29 (quoting W. Nat'l Mut. Ins. Co. v. Decker, 2010 S.D. 93, ¶ 10, 791 N.W.2d 799, 802). "We have developed special rules of construction that apply when interpreting an insurance policy." Zoo Props., LLP v. Midwest Family Mut. Ins. Co., 2011 S.D. 11, ¶ 5, 797 N.W.2d 779, 780 (quoting Chord v. Reynolds, 1999 S.D. 1, ¶ 14, 587 N.W.2d 729, 732). "If the 'rules of interpretation leave a genuine uncertainty as to which of two or more meanings is correct,' the policy is ambiguous." Id. (quoting Alverson v. Nw. Nat'l Cas. Co., 1997 S.D. 9, ¶ 8, 559 N.W.2d 234, 235). "Ambiguity in an insurance policy is determined with reference to the policy as a whole and the plain meaning and effect of its words." Batiz, 2011 S.D. 35, ¶ 10, 800 N.W.2d at 729 (quoting Decker, 2010 S.D. 93, ¶ 11, 791 N.W.2d at 802)). If the provisions of an insurance policy are ambiguous, "we apply the 'rule of liberal construction in favor of the insured and strictly against the insurer.'" Zoo Props., 2011 S.D. 11, ¶ 5, 797 N.W.2d at 780 (quoting Reynolds, 1999 S.D. 1, ¶ 14, 587 N.W.2d at 732). "This rule does not mean, however, that the court may seek out a strained or unusual meaning for the benefit of the insured." Reynolds, 1999 S.D. 1, ¶ 14, 587 N.W.2d at 732 (quoting Olson v. U.S. Fidelity and Guar. Co., 1996 S.D. 66, ¶ 6, 549 N.W.2d 199, 200).

Decision

[¶7.] The specific policy language that applies to Cornelius's claim for uninsured motorist benefits reads as follows:

We will pay all sums the "insured" is legally entitled to recover as compensatory damages from the owner or driver of an "uninsured" or "underinsured motor vehicle". The damages must result from "bodily injury" sustained by the "insured" caused by an "accident". The owner's or driver's liability for these damages must result from ...


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