BERKLEY REGIONAL SPECIALTY INSURANCE COMPANY, Plaintiff and Appellee,
DOWLING SPRAY SERVICE; TROY DOWLING; SCOTT DOWLING; KELSEY SEED, AG SERVICE LLC, FARM BUREAU MUTUAL INSURANCE COMPANY, Defendants, and GREAT WEST CASUALTY COMPANY, Defendant and Appellee, and JAMES SEILER and KIMBERLY SEILER, Defendants and Appellants
Argued March 25, 2015.
APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT BEADLE COUNTY, SOUTH DAKOTA. THE HONORABLE JON R. ERICKSON, Judge.
MICHAEL J. SCHAFFER, PAUL H. LINDE of Schaffer Law Office, Prof., LLC, Sioux Falls, South Dakota, Attorneys for plaintiff and appellee Berkley Regional Specialty Insurance Company.
ROBERT B. ANDERSON of May, Adam, Gerdes & Thompson, Pierre, South Dakota, Attorneys for defendant and appellee Great West Casualty Company.
JOHN W. BURK of Thomas, Braun, Bernard & Burke, Rapid City, South Dakota and MATTHEW J. KINNEY of Kinney Law Office, Spearfish, South Dakota, Attorneys for defendants and appellants.
KONENKAMP, Retired Justice. GILBERTSON, Chief Justice, and ZINTER, SEVERSON, and KERN, Justices, concur. WILBUR, Justice, deeming herself disqualified, did not participate.
KONENKAMP, Retired Justice
[¶1] This appeal addresses the remaining insurance coverage questions arising from the intersection collision described in Berkley Regional Specialty Insurance Company v. Dowling Spray Service, 2015 S.D. 9, 860 N.W.2d 257. In that case, we ruled that the policy insuring the owner of the crop sprayer provided no coverage. Here, we determine whether coverage is afforded by either of the two
policies insuring the driver of the crop sprayer. The circuit court ruled that neither policy created a duty to defend and indemnify the driver.
[¶2] Troy Dowling operates Dowling Spray Service, a crop-spraying business and sole proprietorship in Beadle County, South Dakota. As part of his business, Troy owned a JD 4830 sprayer. This sprayer is a scheduled item on his commercial general liability insurance policy through Berkley Regional Insurance Company. Troy also had a commercial automobile insurance policy with Great West Casualty Company. On July 1, 2010, Troy lent his sprayer to his uncle, Scott Dowling. In return, Troy borrowed a John Deere 4720 self-propelled sprayer (Sprayer), owned by Scott's business, Dowling Brothers Partnership.
[¶3] On July 11, 2010, Troy was driving the John Deere 4720 Sprayer to one of his customer's fields. At the intersection of Highway 27 and 218th Street in Beadle County, the Sprayer collided with a motorcycle driven by James Seiler. Kimberly Seiler was a passenger. The Seilers were both seriously injured and sought damages.
[¶4] In circuit court, Berkley successfully obtained summary judgment declaring that it had no duty to defend or indemnify Troy. With regard to Great West's policy, the court conducted a trial. Sarah Hanson, Vice President of Great West's Midwestern Region Underwriting, testified that " We are not . . . in the business of insuring agricultural farm machinery. We insure over-the-road trucking equipment." The court found that the Sprayer " does not meet the definition of a 'motor vehicle' as defined by the policy" and neither " does it fit within the business scheme of Great West." Accordingly, Great West obtained a declaratory judgment that it had no duty to defend or indemnify Troy.
[¶5] In this appeal, the Seilers assert that the circuit court erred in granting declaratory judgements for Berkley and Great West.
1. Berkley's Policy
[¶6] The circuit court ruled that Berkley had no duty to defend or indemnify Troy for the July 11, 2010 accident because Troy's use of the John Deere 4720 Sprayer loaned to him by Dowling Brothers Partnership fell within Berkley's policy definition of an " auto," for which commercial general liability coverage is specifically excluded. But the Seilers argue that even if the Sprayer is an " auto," the exception to the exclusion applies. In their view, the Sprayer would have qualified as " mobile equipment" (which is not excluded from coverage) if the Sprayer were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law in South Dakota.
[¶7] In Section I -- Coverages (Insuring Agreement), the policy provides that Berkley " will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." Excluded from coverage, however, is " '[b]odily injury' or 'property damage' arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ' auto ' or watercraft owned or operated by or rented or loaned to any insured." Section I -- Coverages (Exclusions) (emphasis added). An " auto" is defined as
a. A land motor vehicle . . . designed for travel on public roads, including any attached machinery or equipment; or
b. Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance
law in the state where it is licensed or principally garaged.
However, " auto" does not include " mobile equipment" .
Section V -- Definitions. It cannot be disputed that the Sprayer is designed for travel on public roads. It has four wheels, is self-propelled, has headlights, taillights, turn signals, and other components similar to road-ready vehicles. Moreover, the circuit court found that the Sprayer is subject to a compulsory or financial responsibility law or other motor vehicle ...