Opposition Brief — Shurtleff v. Great American Insurance Co. (No. 06-861)

No. _.06-8615EC 15 208

Bn thor OE OF THE CLERK

Supreme Court of the United States

HULDA SHURTLEFF, Personal Representative of the

Estate of ROBERT SHURTLEFF, Deceased, and

Assignee of the Estate of CLAIRE G. JUNE, Deceased,

Petitioner,

Va

GREAT AMERICAN INSURANCE COMPANY,

a Foreign Corporation, and OHIO CASUALTY

INSURANCE COMPANY,

Respondents.

On Petition for a Writ of Certiorari to the

Supreme Court of the State of Iowa

PETITION FOR WRIT OF CERTIORARI

RICHARD M. GOODMAN MarK R. BENDURE

GOODMAN, KALAHAR Counsel of Record

1394 East JEFFERSON AVE. BENDURE & THOMAS

Detroir, MI 48207 645 Griswo_p, Surre 4100

(313) 567-6165 Derroit, MI 48226

(313) 961-1525

Counsel for Petitioner

Becker Gallagher + Cincinnati, OH - Washington, D.C. + 800.890.5001

I.

i

QUESTION PRESENTED

WHETHER THE FULL FAITH AND CREDIT

CLAUSE OF THE CONSTITUTION OF THE UNITED

STATES ALLOWS THE IOWA COURTS TO GRANT

JUDGMENT TO RESPONDENTS, IN THIS

INSURANCE COVERAGE DISPUTE, ON THE

GROUND THAT THE VEHICLE IN ISSUE WAS

HIRED BY THE NATIONAL FARMERS

ORGANIZATION (“NFO”), AFTER MICHIGAN

LITIGATION BETWEEN THE SAME PARTIES

CONCLUDED WITH A FINDING THAT THE

VEHICLE WAS NOT HIRED BY THE NFO?

il

PARTIES TO THE PROCEEDINGS

On May 13, 1985, Robert Shurtleff was killed when the

vehicle in which he was riding was struck by a milk truck

owned by Claire June. The fatal collision occurred in

Michigan. At the time, June’s milk truck was transporting

40,000 pounds of milk for the National Farmers’ Organization

(“NFO”). Shurtleff's widow, Petitioner, HULDA

SHURTLEFF, was appointed Personal Representative of the

Estate of her deceased husband. In earlier legal proceedings,

She obtained an assignment of any rights Claire June had

under applicable insurance policies. As Personal

Representative of the Estate of Robert Shurtleff and Assignee

of the Estate of Claire June, ‘Petitioner filed the suit which

gives rise to this Petition.

Respondent GREAT AMERICAN INSURANCE

COMPANY is an insurer which issued an excess insurance

policy to the NFO. Petitioner has asserted that the Great

American insurance policy covers June’s tort liability to the

Shurtleff Estate. Respondent OHIO CASUALTY

INSURANCE COMPANY is an insurer which, by re-

insurance treaty, has assumed a portion of Great American’s

liability (if any) under the excess policy. Respondents Great

American and Ohio Casualty were Defendants in the

underlying suit commenced by Petitioner.

ill

TABLE OF CONTENTS

QUESTIONS PRESENTED

PARTIES TO THE PROCEEDINGS

TABLE OF CONTENTS

TABLE OF AUTHORITIES

OPINIONS AND ORDER BELOW

SUPREME COURT JURISDICTION

STATUTES AND CONSTITUTIONAL PROVISIONS

INVOLVED

STATEMENT OF THE CASE

THE REASONS WHY CERTIORARI SHOULD BE

GRANTED 7

CONCLUSION

APPENDIX

~~ a

Appendix C: 6/8/04 Iowa District Court Ruling on

Defendants Great American Insurance Company’s and

Ohio Casualty Insurance Company’s Motion for

Summary Judgment, and Plaintiffs’ Cross-Motion for

Summary Judgment

Appendix D: 10/01/00 Order of Dismissal of

Michigan Circuit Court for the County of Wayne . 39a

Appendix E: 12/21/99 Jury Verdict Form

Vv

TABLE OF AUTHORITIES

CASES

Baker v. General Motors Corp.,

522 U.S. 222 (1998)

Kremer v. Chemical Construction Corp.,

456 U.S. 461 (1982)

Matsushita Electric Industrial Co. v. Epstein,

516 U.S. 367 (1996)

Monat v. State Farm Ins. Co., 469 Mich. 679; 677 N.W.2d

~ 843 (2004)

Nummer v. Michigan Department of Treasury,

448 Mich. 534, 533 N.W.2d 250 (1995)

Shurtleff v. Great American Ins. Co.

(No. 6-290/04-1093; opinion released 6/28/06)... . 1

STATUTES, COURT RULES AND

OTHER AUTHORITIES

28 U.S.C. § 1257(a)

28 U.S.C. § 1738

Full Faith and Credit Clause, United States Constitution, _

Article VI, Section | Passim

Restatement (2d) of Judgment, § 27 (1982)

l

OPINIONS AND ORDER BELOW

The summary judgment decision of the Iowa District

Court (App. C at 10a - 38a), dated June 8, 2004, is

unpublished. The Opinion of the lowa Court of Appeals

[Shurtleff v. Great American Ins. Co. (No. 6-290/04-1093;

opinion released 6/28/06)] (App. B at 2a - 9a) is available

on-line as 2006 Iowa App. LEXIS 643, but is otherwise

unpublished. The Order of the lowa Supreme Court denying

further review (App. A at 1a) is also unpublished.

Petitioner’s Full Faith and Credit argument is based on a

jury verdict (App. E at 42a) and Order of Dismissal (App. D

at 39a - 41a) issued in earlier litigation in Wayne County,

Michigan in October of 2000. Those documents are

unpublished.

SUPREME COURT JURISDICTION

In earlier Michigan proceedings, the Courts of that State ”

concluded that the milk truck was not hired by the NFO.

When the Iowa Court of Appeals reviewed this case, it

affirmed the decision on a ground not raised by the parties or

addressed by the trial judge - - that the milk truck was hire by

the NFO. That decision, issued on June 28, 2006, by the

Iowa Court of Appeals, gave rise to the Full Faith and Credit

question now presented.

On July 18, 2006, Petitioner filed a timely Application for

Further Review with the lowa Supreme Court, presenting the

Full Faith and Credit issue. The Application was denied by

the Iowa Supreme Court on September 19, 2006. Petitioner

invokes the certiorari jurisdiction conferred on this Court by

28 U.S.C. § 1257(a), which provides:

2

“Fini , .dgments or decrees rendered by the highest

court .. « State in which a decision could be had, may

be reviewed by the Supreme Court by writ of

certiorari where the validity_of a treaty or statute of

the United States is drawn in question or where the

validity of a statute of any State is drawn in question

on the ground of its being repugnant to the

Constitution, treaties, or laws of the United States, or

where any title, right, privilege, or immunity is

specially set up or claimed under the Constitution or

the treaties or statutes of, or any commission held or

authority exercised under, the United States.”

This Petition, filed within 90 days of the lowa Supreme

Court Order denying further review, is timely under this

Court’s Rule 13.1.

STATUTES AND CONSTITUTIONAL

PROVISIONS INVOLVED

This Petition for Certiorari involves the Full Faith and

Credit Clause of the United States Constitution. That Clause,

Article IV, Section 1, states:

“Full Faith and Credit shall be given in each State to

the public Acts, Records, and judicial Proceedings of

every other State. And the Congress may be general

Laws prescribe the Manner in which such Acts,

Records and Proceedings shall be proved, and the

Effect thereof.”

~ The case also involves 28 U.S.C. § 1738, the Full Faith

and Credit statute enacted by Congress:

-

“The Acts of legislature of any State, Territory, or

Possession of the United States, or copies thereof,

shall be authenticated by affixing the seal of such

State, Territory or Possession thereto.

The records and judicial proceedings of any court of

any such State, Territory or Possession, or copies

thereof, shall be proved or admitted in other courts

within the United States and its Territories and

Possessions by the attestation of the clerk and seal of

the court annexed, if a seal exists, together with a

certificate of a judge of the court that the said

attestation is in proper form.

Such Acts, records and judicial proceedings or copies

thereof, so authenticated, shall have the same full faith

_ and credit in every court within the United States and

its Territories and Possessions as they have by law or

usage in the courts of such State, Territory or

Possession from which they are taken.”

STATEMENT OF THE CASE

Claire June was a stockholder and member of the NFO

who operated a wholly-owned corporation, June's Trucking.

He owned a milk truck which was used to collect milk from

NFO farmers for delivery and sale to the dairy.

During the late afternoon of May 13, 1985, while hauling

about 40,000 pounds of milk for the NFO, the June tanker

careened across I-96 in Wayne County, Michigan. It collided

head-on with a car occupied by three employees of the United

States Department of Defense returning home from work,

including Plaintiff's decedent, Robert Shurtleff. All three

were killed.

4

In the resulting Michigan civil litigation, June admitted

liability.' The first damage trial was flawed by erroneous

damage instructions, and the Michigan Court of Appeals

reversed. On retrial, the jury assessed damages for the three

decedent Estates aggregating about $7,000,000. Judgment

was entered for the Shurtleff Estate in the principal amount of

$2,450,000.

By writs of garnishment filed in Michigan, the decedents’

Estates contended that the liability of June was covered by a

group of insurance policies in which the NFO was the

principal or named insured. Among these was the excess

policy sold by Respondent Great American. The Great

American policy defines several categories of persons other

than the NFO who are also insured. The definition of

“Insured” includes two pertinent classes [§ II (d)]: those

using a “hired” auto, and a “stockholder” using an auto not

owned by the NFO used in the NFO’s business:

“Il. Definition of Named Insured and Insured: .

. . The unqualified word ‘Insured’ includes the named

insured and also: * * * (d) with respect to

automobiles, any person while using any automobile

owned by or hired for use by or on behalf of the

named insured, including any person or organization

' Petitioner also sought recovery against the NFO. The jury

found that the milk truck driver was an “independent contractor”

rather than an “agent” of the NFO. Accordingly, the NFO was

absolved of vicarious liability for the driver’s negligence.

* Hartford Insurance Company and Indiana Insurance Company

also issued insurance policies that might cover June’s liability.

Petitioner’s claims against Hartford and Indiana have been

resolved.

5

legally responsible for such use, provided the use is

within the scope of permission granted by the named

insured and any officer, director, stockholder or

partner, of the named insured while using any

automobile not owned by the named insured while

such automobile is being used in the business of the

named insured” (emphasis supplied).

In the Michigan insurance coverage litigation, Petitioner

asserted that June was an insured within the coverage afforded

by the clause, “any person while using any automobile . . .

hired for use by or on behalf of the named insured”. This

coverage dispute was delayed by another erroneous ruling

from the Michigan trial judge, who summarily dismissed the

“hired auto” contention on the ground that the verdict for the

NFO in the wrongful death suit was conclusive. The

Michigan Court of Appeals reversed, paving the way for trial

of the “hired auto” coverage question. At trial, the jury

found for the insurer on this point (App. E at 42a), and a

judgment for Great American was entered accordingly {Order

of Dismissal (App. D at 39a - 41a)].

Following the verdict, extensive negotiations took place.

The outgrowth was a stipulation which dismissed other

coverage claims, including those arising under the

“stockholder” clause, without prejudice to re-filing within one

year [Order of Dismissal (App. D at 40a - 41a), p. 2].

The NFO is organized under lowa law and is

headquartered in Iowa. As allowed by the stipulation,

Petitioner filed suit against Great American in Iowa on April

11, 2001. She alleged, in substance, that June was covered

under the “. . . stockholder . . . of the named insured while

using any automobile . . . in the business of the named

insured” clause of § III (d) of the insurance policy.

6.

On June 8, 2004, the Iowa District Court granted

summary judgment to Respondents (App. C at 10a - 38a). In

essence, the trial court concluded that the “stockholder”

clause was inapplicable for two reasons. In the court’s view,

the clause only covered suits against NFO stockholders in

their stockholder capacity, and the milk truck was being

“used” by June’s Trucking, not Claire June. (32a).

Petitioner appealed to the Iowa Court of Appeals, urging

that the district court erred on these two points. The appellate

court affirmed on a different ground not raised by the parties.

It held that Claire June was excluded from coverage under

§ Ill (e)(2), which excludes, “the owner or lessor of a hired

or non-owned automobile”. By its analysis, the milk truck

was “hired” or “not owned” by the NFO [Court of Appeals

Opinion (App. B at 2a - 9a)}:

“The language excludes from coverage as an,

‘insured’ under paragraph III(d) the ‘owner or lessor

of a hired or non-owned automobile.’ In context,

‘hired or non-owned’ can only refer to an automobile

the NFO hired or does not own. The truck involved

in the accident was owned by Claire June or June

Trucking, not the NFO. At the time of the accident,

it was being used to haul milk from the producers to

a dairy. The hauling was done under contact (‘hired’)

with the NFO. Therefore, whether we view the truck

as ‘not owned’ by the NFO or as ‘hired’ by the

organization, it falls within the exception from

coverage in paragraph III(e)(2)._ We agree with the

district court that June is not covered by the Great-

American policy at issue, but for a different reason

than the district court.”

7

Petitioner sought further review from the lowa Supreme

Court. She argued that the Full Faith and Credit Clause

required the Iowa courts to accept, and give preclusive effect

to, the Michigan adjudication that the milk truck was not

hired by the NFO. That Court denied further review by

Order of September 19, 2006 (App. A at 1a). ,

In short, the Michigan litigation ended favorably to Great

American due to the finding that the milk truck was not hired

by the NFO. The Iowa action was decided for the insurer on

the basis that the truck was hired by the NFO. Petitioner now

asks the Court to decide whether the Full Faith and Credit

Clause permits that result.

THE REASONS WHY CERTIORARI

SHOULD BE GRANTED

The Full Faith and Credit Clause (Art. IV, § 1) of the

Constitution provides that:

“Full Faith and Credit shall be given in each State to

the public Acts, Records, and judicial Proceedings of

every other State. And the Congress may be general

Laws prescribe the Manner in which such Acts,

Records and Proceedings shall be proved, and the

Effect thereof.”

As authorized by the Clause, Congress has enacted

supportive legislation. In pertinent part, the Full Faith and

Credit statute, 28 U.S.C. § 1738, accords a Michigan

judgment the same preclusive effect in lowa at it has in

Michigan where issued:

“Such Acts, records and judicial proceedings or copies

thereof, so authenticated, shall have the same full faith

8

and credit in every court within the United States and

its Territories and Possessions as they have by law or

usage in the courts of such State, Territory or

Possession from which they are taken.”

The decisions of this Court have repeatedly recognized

that the essence of the Cla’ se and statute is to give a state

court judgment the same res judicata or collateral estoppel

effect in a federal court or sister state court as it has under the

law of the State where rendered. Baker v. General Motors

Corp., 522 U.S. 222, 233 (1998); Matsushita Electric

Industrial Co. v. Epstein, 516 U.S. 367, 373 (1996); Kremer

v. Chemical Construction Corp., 456 U.S. 461, 481-482

(1982). This Court’s Full Faith and Credit jurisprudence

counsels that, if the Michigan jury’s “no hired auto” finding

has collateral estoppel effect under Michigan law, the Iowa

courts were obligated to accept and apply that finding, and to

refrain from later reaching the opposite conclusion.

The generally accepted principle of collateral estoppel was

described in Baker, 522 U.S. at 233, n. 5, citing

Restatement (2d) of Judgments, § 27 (1982). Under that

principle, “an issue of fact or law, actually litigated and

resolved by a valid final judgment, binds the parties in a

subsequent action, whether on the same or different claim”.

This is the standard embraced by Michigan law as well.

Monat v. State Farm Ins. Co., 469 Mich. 679; 677 N.W.2d

843 (2004); Nummer v. Michigan Department of Treasury,

448 Mich. 534, 542; 533 N.W.2d 250 (1995).

In the Michigan litigation, it was found that the milk truck

was not hired by the NFO (App. E at 42a). Under Michigan

principles of collateral estoppel, this finding precludes another

court from later finding to the contrary. In turn, the Full

Faith and Credit Clause and 28 U.S.C. § 1738 require the

9

lowa courts to give the same effect to the Michigan judgment

in Jowa. The lowa appellate court’s finding that the milk

truck was hired by the NFO can not be squared with the Full

Faith and Credit Clause or 28 U.S.C. § 1738.

With the way the federal issue arose in the lowa courts - -

a sua sponte “hired by NFO” finding by the Court of Appeals

and denial of review by the Supreme Court - - the record is

barren of any explanation why the Michigan “not hired by.

NFO” finding was disregarded. Nor is there any indication

that the Iowa Courts considered the Full Faith and Credit

implications of their rulings.

This Court has not recognized judicially created reasons

for disregarding the command of the Full Faith and Credit

provision of Art. IV, § 1 and 28 U.S.C. § 1738. The lowa

Courts articulated no rationale for doing so. This Court

should grant certiorari to consider whether there is any

plausible basis for the Iowa courts to reach a conclusion

diametrically opposed to that previously established by

Michigan judgment.

With the way the lowa decision unfolded, no lowa Court

has explained how, or why, the Michigan “not hired by

NFO” finding can be disregarded consistent with federal law.

In lieu of granting certiorari, this Court could justifiably

remand to the Iowa Supreme Court, with directions to

consider Petitioner’s arguments under Art. IV, § 1 and 28

U.S.C. § 1738.

CONCLUSION

In the final analysis, Petitioner has lost her imsurance

coverage cases on the basis of two inconsistent findings: the

Michigan “not hired by NFO” finding and the lowa “hired by

10

NFO” ruling. In the process, her invocation of rights arising

under the United States Constitution has fallen on deaf ears.

The guarantees of federal law and the principles they

vindicate are too precious to be ignored. The refusal of the

lowa Courts to respect the Michigan Judgment is

unprecedented and presents important questions of inter-state

comity. The rulings below fail to accord the Full Faith and

Credit Clause its constitutional due. The Court should grant

certiorari or remand for consideration of Petitioner’s federal

arguments.

Respectfully submitted,

GOODMAN KALAHAR

RICHARD M. GOODMAN (P14169)

- 1394 East Jefferson

Detroit, Michigan 48207

(313) 567-6165

BENDURE & THOMAS

MARK R. BENDURE (P23490)

Counsel of Record

645 Griswold, Suite 4100

Detroit, Michigan 48226

(313) 961-1525

Attorneys for Petitioner

Dated: December 15, 2006

APPENDIX

APPENDIX A

IN THE SUPREME COURT OF IOWA

No. 04-1093

Polk County No. CV 86059

[Filed September 19, 2006]

HULDA SHURTLEFF, Personal Representative

of the Estate of ROBERT SHURTLEFF,

Deceased, and Assignee of the Estate of

CLAIRE G. JUNE, Deceased,

Plaintiff-Appellant/Cross-Appellee,

GREAT AMERICAN INSURANCE COMPANY,

a Foreign Corporation, and OHIO CASUALTY

INSURANCE COMPANY,

Defendants-A ppellees/Cross-Appellants.

)

)

)

)

)

)

VS. )

)

)

)

)

)

)

After consideration by this court, further review of the

above captioned case is denied.

Dated this 19" day of September, 2006.

THE SUPREME COURT OF IOWA

By /s/

Louis A. Lavorato, Chief Justice

APPENDIX B

COURT OF APPEALS OF IOWA

No. 6-290 / 04-1093

[Filed June 28, 2006]

HULDA SHURTLEFF, Personal Representative

of the Estate of ROBERT SHURTLEFF,

Deceased, and Assignee of the Estate of

CLAIRE G. JUNE, Deceased,

Plaintiff-A ppellant/Cross-Appellee,

GREAT AMERICAN INSURANCE COMPANY,

a Foreign Corporation, and MICHIGAN

MUTUAL INSURANCE COMPANY, a

Michigan Corporation,

Defendants-A ppellees/Cross-Appellants.

)

)

)

)

)

)

VS. - )

)

)

)

)

)

)

)

Appeal from the Iowa District Court for Polk County, Joel

D. Novak (motions for summary judgment) and D. J. Stovall

(motions to dismiss), Judges.

Plaintiff appeals from the district court’s grant of

defendants’ motion for summary judgment and denial of

plaintiff's motion for summary judgment. Defendants cross-

appeal from the district court’s denial of defendants’ motions

to dismiss. AFFIRMED.

3a

Roxanne Barton Conlin of Roxanne Conlin & Associates,

Des Moines, and Richard M. Goodman and Kathleen J.

Kalahar of Goodman, Lister & Peters, P.C., Detroit,

Michigan, for appellant.

Leonard B. Schwartz of Sommers, Schwartz, Silver &

Schwartz, P.C., Southfiled, Michigan, for appellee/cross-

appellant Great American Insurance Company.

Kent A. Gummert and Frank A. Comito of Gaudineer,

Comito & George, L.L.P., West Des Moines, for

appellees/cross-appellants Great American Insurance

Company and Ohio Casualty Insurance Company.

John R. Monnich of John R. Monnich, P.C., Royal Oak,

Minnesota, for appellee/cross-appellant Ohio Casualty

Insurance Company.

Brian A. Stowe of Finley, Alt, Smith, Scharnberg, Craig,

Hilmes & Gaffney, P.C., Des Moines, for appellee Michigan

Mutual Insurance Company.

Heard by Sackett, C.J., and Huitink and Miller, JJ.

OPINION

-SACKETT, C.J.

Plaintiff appeals from the district court’s order in June of

2004, granting defendants’ motion for summary judgment and

denying plaintiff's motion for summary judgment. The appeal

was transferred to our court in April of 2006. Defendants

cross-appeal from the district court’s denial of their motions

to dismiss and from part of the ruling granting their motion

for summary judgment. We affirm.

4a

I. BACKGROUND AND PROCEEDINGS.

Plaintiff's decedent, a Michigan resident, was killed in

Michigan in a 1985 motor vehicle accident with a truck

owned by Claire June, a Michigan resident. A wrongful death

suit in Michigan against Claire June, his company-June’s

Trucking, the truck driver Richard June, and the National

Farmers Organization’ (“NFO”) resulted in judgment against

Claire June and a jury verdict in favor of the NFO on the

claims of negligence and that it was the employer of June or

his company. Based on the judgment against Claire June,

plaintiff issued a writ of garnishment, which was served on

various insurance carriers. Plaintiff claimed Claire June was

covered under insurance policies issued to the NFO by

defendants.’ At the garnishment trial in 1999, the jury found

for defendant Great American Insurance Company (“Great

American”) on the claims of coverage of Claire June as user

of a vehicle “hired” by or “owned” by the NFO. By

Stipulation of the parties, in October of 2000 the court

dismissed without prejudice the claims that Claire June was

covered as a stockholder and that the organization was

estopped from denying coverage. In September of 2000 the

parties executed a “tolling agreement” that tolled the statute

of limitations for one year from the court’s order, “but only

' Claire June is a member of the National Farmers

Organization. His trucking company hauls bulk milk for the

organization. It was his milk truck that was involved in the

accident.

* Great American Insurance Company and Ohio Casualty

Insurance Company are Ohio corporations that conduct business in

lowa and Michigan. Great American issued a catastrophe liability

policy to the National Farmers Organization.

Sa

to the extent that the statute of limitations has not already

expired.”

In April of 2001 plaintiff filed suit in lowa against

defendants, claiming that Claire June was covered by Great

American’s policy issued to the NFO (1) as a stockholder,

and (2) as owner of the truck being used “in the business of”

the organization at the time of the accident. Great American

unsuccessfully moved to dismiss based on forum non

conveniens grounds. After discovery, Great American moved

for summary judgment in July of 2003. Plaintiff filed a cross-

motion for summary judgment in February of 2004. In June

of 2004, the district court granted defendants’ motion for

summary judgment and denied plaintiff's cross motion. This

appeal and cross-appeal ensued.

Il. SCOPE AND STANDARDS OF REVIEW.

Review of summary judgment rulings is for correction of

errors at law. Hlubek v. Pelecky, 701 N.W.2d 93, 95 (lowa

2005); see Iowa R. App. P. 6.4. Summary judgment is

appropriate where there is no genuine issue of material fact

and the moving party is entitled to judgment as a matter of

law. Iowa R. Civ. P. 1.981. It “is properly granted if the only

controversy concerns the legal consequences flowing from

undisputed facts.” Krause v. Krause, 589 N.W.2d 721, 724

(Iowa 1999). We must determine whether, based on the

undisputed material facts, the moving party is entitled to

judgment as a matter of law. Galbraith v. Allied Mut. Ins.

Co., 698 N.W.2d 325, 327 (lowa 2005). When the facts are

not in dispute, “[oJur role is simply to decide whether we

agree with the district court’s application of the law to the

undisputed facts before us.” Kennedy v. Zimmermann, 601

N.W.2d 61, 64 (lowa 1999) (quoting Goodell v. Humboldt

County, 575 N.W.24 486, 491 (lowa 1998)). Fact findings by

6a

the district court are binding on appeal if supported by

substantial evidence. lowa R. App. P. 6.14(6)(a).

Ill. Discussion.

Appeal. The “only issue” in plaintiff's appeal is whether

Claire June is an “insured” under the Great American

catastrophe liability policy issued to the NFO, so that the

policy provides coverage for liability imposed on him as a

result of the motor vehicle accident in which plaintiff's

decedent was killed. In its ruling on the motions for summary

judgment, the district court analyzed the policy language at

length, concluding Claire June was not an insured for

purposes of coverage for the accident. The pertinent policy

provisions of section III “Definition of Named Insured and

Insured” are as follows:

The unqualified word “Insured” includes the named

insured and also:

(a) any officer, director, employee or stockholder of

the named insured while acting within the scope of the

person’s duties as such;

(d) with respect to automobiles, any person while

using any automobile owned by or hired for use by or

on behalf of the named insured, including any person

of organization legally responsible for such use,

provided the use is within the scope of permission

granted by the named insured and any officer,

director, stockholder or partner of the named insured

while using an automobile not owned by the named

Ta

insured while such automobile is being used in the

business of the named insured;

(e) except as respects the named insured, none of the

following shall be an insured under paragraph (d)

(2) the owner or lessor of a hired or non-owned

automobile, or any agent or employee of such owner

or lessor. This subdivision (2) shall not apply if it

restricts the insurance under sub-division (i) below.

(i) any additional insured(s) included in the underlying

insurance listed in Schedule A, but only to the extent

that such insurance is provided for such additional

insured(s) thereunder.

The NFO is the “named insured” under the policy. The

policy definition of “automobile” includes “semi-trailer, ”

such as the type of vehicle owned by Claire June. The

“underlying insurance” listed in schedule A is a policy issued

by Hartford Insurance Company (“Hartford”) to the NFO.

Hartford was one of the insurance companies served with the

writ of garnishment. It settled with plaintiff for the limits of

its coverage before trial on the garnishment.

Paragraph Ill(d) expands coverage beyond the named

insured to include as “insured” certain classes of persons

“with respect to automobiles.” Paragraph III(c) restricts the

scope and application of HII(d). The applicability of

subdivision Ill(e)(2) is qualified by paragraph III(i).

8a

The district court found Claire June was not an insured in

the underlying Hartford policy because he was not included

explicitly as an “automatic insured” nor added via an

endorsement as an “additional insured,” either specifically or

as part of a class. The court concluded, therefore, the

reference to paragraph III(i) in subdivision III(e)(2) does not

preclude the potential application of subdivision III(e)(2) to

restrict paragraph III(d).

In analyzing subsection III(e)(2) the district court

determined that “the owner of a non-owned automobile” “is

enigmatic in effect because it expresses no clear and specific

meaning” and it “lends itself to a certain degree of

confusion.” The policy excludes from coverage as an insured

“the owner or lessor of a hired or non-owned automobile.”

We believe the problem with the district court’s conclusion

stems from the misquoting of the language to read “owner of

a non-owned automobile.” While we agree with the district

court that “owner of a non-owned automobile” is not clear,

the policy language “owner or lessor of a hired or non-owned

automobile” is not ambiguous or unclear as used in the

policy.

The language excludes from coverage as an “insured”

under paragraph III(d) the “owner or lessor of a hired or non-

owned automobile.” In context, “hired or non-owned” can

only refer to an automobile the NFO hired or does not own.

The truck involved in the accident was owned by Claire June

or June Trucking, not the NFO. At the time of the accident,

it was being used to haul milk from the producers to a dairy.

The hauling was done under contract (“hired”) with the NFO.

Therefore, whether we view the truck as “not owned” by the

NFO or as “hired” by the organization, it falls within the

exception from coverage in paragraph III(e)(2). We agree

with the district court that June is not covered by the Great

9a

American policy at issue, but for a different reason than the

district court.

Having concluded June is excluded from being an insured

by the language of subsection III(e)(2), we do not address the

parties’ arguments concerning coverage under paragraph

IIIl(d) as a “stockholder” or as a person “using” an

automobile. We also affirm the district court’s determination

paragraph III(i) does not preclude the application of

subsection IIl(e)(2) because June is not an insured in the

underlying insurance policy issued by Hartford.

Cross-appeal. Defendants’ contention the district court

erred in finding June did not come within the exception

language of subsection III(e)(2) is addressed in the previous

section of this opinion. Defendants raise two issues on cross

appeal, relating to the district court’s denial of a motion to

dismiss this action as barred by the statute of limitations and

its denial of a motion to dismiss based on forum non

conveniens grounds. Having affirmed the district court's grant

of summary judgment in favor of defendants, we need not

address their claims raised on cross-appeal.

AFFIRMED.

APPENDIX C

IN THE IOWA DISTRICT COURT

IN AND FOR POLK COUNTY

Law No. CL 86059

[Filed June 8, 2004]

HULDA SHURTLEFF, Personal Representative

of the Estate of ROBERT SHURTLEFF,

deceased, and Assignee of the Estate of

CLAIRE G. JUNE, deceased,

Plaintiff,

Ve

GREAT AMERICAN INSURANCE COMPANY,

a foreign corporation, OHIO CASUALTY

INSURANCE COMPANY, a foreign corporation,

and MICHIGAN MUTUAL INSURANCE

COMPANY, a Michigan corporation,

Defendants.

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RULING ON DEFENDANTS GREAT AMERICAN

INSURANCE COMPANY’S and OHIO

CASUALTY INSURANCE COMPANY’S

MOTION FOR SUMMARY JUDGMENT,

and PLAINTIFFS’ CROSS-MOTION

FOR SUMMARY JUDGMENT

lla

INTRODUCTION

The above-captioned matter came before the Court for

hearing on April 16, 2004. Attorneys Leonard B. Schwartz,

Frank A. Comito, and Kent A. Gummert represent the

defendant, Great American Insurance Company. Attorney

John R. Monnich represents the defendant, Ohio Casualty

Insurance Company. Plaintiffs are represented by attorneys

Roxanne B. Conlin, Richard M. Goodman, and Kathleen

Kalahar. Upon examining the file and considering the parties’

respective written and oral arguments, the Court now issues

the following ruling:

STATEMENT OF THE CASE

1. Statement of Facts

On May 13, 1985, Robert Shurtleff died in an automobile

accident in Michigan. At the time of the accident, Robert

Shurtleff and his spouse, Plaintiff Hulda Shurtleff, were

domiciled in Michigan. Plaintiff continues to reside in

Michigan. Plaintiff was appointed by the Probate Court for

Livingston County, Michigan, as the personal representative

of her deceased husband’s estate.

The accident which killed Robert Shurtleff involved the

collision of an automobile owned by Mr. Shurtleff and a

tractor-trailer driven by Richard June and owned by Claire

June, both of whom were Michigan residents. Richard June

was operating the tractor-trailer in his capacity as an

employee of June’s Trucking, Inc., which was a Michigan

corporation. Claire June-was the CEO and whole owner of

June’s Trucking, Inc.

12a

The tractor-trailer operated by Richard June and owned by

Claire June was used to haul bulk milk for the National

Farmers Organization (“NFO”), a national agricultural

cooperative headquartered in Iowa. Claire June had been

registered in the NFO’s national membership records as a

stockholder since 1981 and remained a stockholder as of the

date of the subject accident. (See Pl. Ex. 2 at pp. 5, 13.)

At the time of the accident, Claire June’s tractor-trailer

was being used to perform a written milk supply contract

formed between the NFO and the Guernsey Dairy. The

supply contract called for the delivery of 40,000 Ibs. of NFO

milk to Guernsey in fulfillment of that contract. (See Pl. Ex. -

2 at pp. 55, 120.) Walt Albers, an NFO National Officer and

former Membership Director, testified that it was the

“business obligation” of the NFO “to get the milk [to the

Guernsey Dairy)”. (/d. at pp. 120-21.) Under the terms and

provisions of that supply contract, the NFO was obligated to

supply Guernsey with its daily requirements of raw milk by

delivering the milk to their plant near Detroit. (/d. at p. 120.)

Claire June’s truck displayed the NFO trademark. (See Pl.

Ex. 6 at pp. 9-12.) The truck did not exhibit the name of

Claire June, June’s Trucking, or June’s Trucking, Inc. (See

Pl. Ex. 9.)

On May 13, 1985, Claire June instructed Richard June to

drive the tractor-trailer to the Guernsey Dairy. On the way to

the Guernsey Dairy, the left front tire of the truck blew out

and the truck crossed the center-line into the path of the car

occupied by Mr. Shurtleff, and two other passengers, Mr.

Koster and Ms. Munsell. All three passengers were killed.

Claire June’s truck was later found to have bald tires and

defective brakes. (See Pl. Ex. 8; Ex. 9 at p. 2.) Claire June

d/b/a June’s Trucking and Richard June were criminally

l3a

convicted of negligently “operating” an automobile causing

the death of Plaintiff's decedent. (See PI. Ex. 1; Ex. 10.)

2. Statement of Procedure

As a consequence of the accident which killed her

husband, Plaintiff Hulda Shurtleff, as the personal

representative of her late husband’s estate, brought a wrongful

death case against the following defendants: Claire June,

Richard June, June’s Trucking, Inc., and the NFO. Said

action was brought in the Wayne County Circuit Court in

Michigan in 1985. The NFO was included in the wrongful

death suit because it was surmised that the Junes were

operating their truck in the furtherance of NFO business at the

time the accident occurred.

In 1989, the NFO was awarded a jury verdict in its favor,

both as to its negligence and to the contention that it was not

the “employer” of Claire June or his companies. (See Pl. Ex.

11.) The Michigan Court of Appeals later affirmed this

judgment. Judgment was, however, entered against the Junes.

The judgment against Claire June was subsequently reversed

by the Michigan Court of Appeals in 1990 on the issue of

damages only. (See Pl. Ex. 11.) A retrial pertaining to the

damages issue ensued in 1992, and judgments against Claire

June were entered on January 15, 1993. The amounts of those

judgments were as follows: $3,121,167.77 in favor of the

Munsell estate: $5,411,736.29 in favor of the Koster estate,

and $4,708,058.07 in favor of the Shurtleff estate, plus

interest as allowed by M.C.L.A. § 600.6013. (See PI. Ex.

12.)

The defendants, Great American Insurance Company

(“Great American”) and Ohio Casualty Insurance Company

(“Ohio Casualty”) are Ohio corporations which conduct

l4a

business in Iowa and Michigan. Both Great American and

Ohio Casualty are wholly owned subsidiaries of the American

Financial Corporation, an Ohio based insurance holding

company. Great American issued an excess umbrella policy

to the NFO.

In August of 1992, priorto the December of 1992 retrial,

the plaintiffs provided to Great American written notice of

their contention that Great American’s policy issued to the

NFO covered Claire June individually. (See Pl. Ex. 3.) Also,

the plaintiffs offered to set aside the still existing finding of

liability to allow Great American to participate in the case

without having to assume the burden of adverse prior

judgment against the Junes. (See Pl. Ex. 13.) Following the

plaintiffs’ letter dated August 6, 1992, the law firm

representing Claire June on behalf of Defendant Michigan

Mutual wrote Great American and identified the Michigan

Mutual attorney representing Claire June at the upcoming

trial. (See Pl. Ex. 15.) Great American responded to these

communications after the January 15, 1993 final judgment

against Claire June on retrial.

As a result of the judgment against Claire June in Wayne

County, Michigan, the plaintiffs issued a writ of garnishment

in 1993. Said writ of garnishment was served on various

insurance carriers, including Great American. The plaintiffs

claimed coverage under the Great American Policy (policy

no. 6-27-84-59-01) as a user of a vehicle “hired” by the NFO

and/or a vehicle “owned” by the NFO. In addition, the

plaintiffs claimed coverage based on the premise that Claire

June was a stockholder/member of the NFO. Finally, the

plaintiffs claimed Great American was “estopped” from

denying-eoverage. Of course, Great American denied it was

obligated to Claire June individually or June’s Trucking, Inc.,

and therefore not subject to garnishment.

15a

The three plaintiffs’ garnishments were tried together in

November and December of 1999. The Hartford Insurance

Company, the underlying insurer, settled by paying its limits

of liability prior to trial. (See Pl. Ex. 16.) The court orally

granted Great American’s motion for summary judgment as

it concerned the “stockholder” claim. This issue was thus not

submitted to the jury. The “estoppel” issue was severed and

likewise not tried. The two issues which were presented to the

jury, whether Claire June was using a vehicle “hired” and/or

“owned” by the NFO, were decided in favor of Great

American.

‘ Subsequent to the garnishment trial, extensive negotiations

occurred between Great American’s counsel and counsel for

Plaintiff Shurtleff. Because the form of judgment could not be

agreed upon, the parties stipulated_a dismissal of all claims

with prejudice e¢xcept for the “estoppel” and

“member/stockholder” issues. These issues were dismissed

without prejudice. (See P!. Ex. 17.) The parties also executed

a separate, contemporaneous written agreement that provided

that the Plaintiff had one year from the date of entry of the

Order of Dismissal within which to re-file the action. (See PI.

Ex. 18.) On April 11, 2001, Plaintiff filed the instant action.

Any additional facts are recited below as they relate to the

issues presented.

STANDARD OF REVIEW

Summary judgment is appropriate only when there is no

genuine issue of material fact and the moving party is entitled

to judgment as a matter of law. Schoff v. Combined Ins. Co.,

604 N.W.2d 43, 45 (lowa 1999); see generally lowA R. Civ.

P. 1.981. An issue is “material” only when the dispute is over

facts that might affect the outcome of the suit, given the

l6a

applicable governing law. Baratta v. Polk Cty. Health Servs.,

588 N.W.2d 107, 109 (lowa 1999) (citing Fees v. Mutual Fire

& Auto Ins. Co., 490 N.W.2d 55, 57 (lowa 1992)).

The moving party has the burden to show the non-

existence of a material fact and the record must be viewed in

the light most favorable to the non-moving party. Schoff, 604

N.W.2d at 45. That determination is made by examining the

pleadings, depositions, answers to interrogatories, admissions,

and affidavits incorporated in the motion and any resistance.

IOWA R. Civ, P. 1.981(c); Clinton Nat’l Bank v. Saucier, 580

N.W.2d 717, 719 (lowa 1998). A ‘fact issue is generated if

reasonable minds can differ on how the issue can be resolved.

Schlueter v. Grinell Mut. Reinsurance, 553 N.W.2d 614, 616

(lowa App. 1996). When the facts are undisputed and the only

issue is what consequences flow from the facts, summary

judgment is appropriate. Kennedy vy. Zimmerman, 601

N.W.2d 61, 63 (lowa 1999).

ANALYSIS

Whether potential coverage provided to Claire June

under section III(d) of the Great American

insurance policy is expunged by section II1(e)(2) of

said policy.

The principal issue of contention in the present case is

whether Claire June was insured under Great American’s

policy issued to the named insured, the NFO. Plaintiff

submits that Claire June was clearly an insured under said

policy pursuant specifically to section III(d). Obviously,

Defendants refute Plaintiff’s position.

l7a

Section III(d) provides coverage as follows:

(d) With respect to automobiles, any person while

using any automobile owned by or hired by or on

behalf of the named insured including any person or

organization legally responsible for such use, provided

the use is within the scope of permission granted by

the named insured and any officer, director,

stockholder or partner of the named insured while

using an automobile not owned by the named insured

while such automobile is being used in the business

of the named insured.

Section III(d) may be divided into four sub-parts: (1) whether

Claire June is entitled to coverage based on being “any

stockholder” of the NFO; (2) whether Claire June’s truck was

“not owned by” the NFO; (3) whether the accident occurred

“while” Claire June was “using” the truck; and (4) whether

the truck was “being used in the business of” the NFO when

the accident transpired.

The scope and application of section III(d), however, is

restricted by section III(e)(2). Indeed, section III(e)(2)

provides:

(e) except as respects the named insured, none of the

following shall be an insured under paragraph (d)

(2) the owner or lessor of a hired or non-owned

automobile or any agent or employee of such owner

or lessor. This subdivision (2) shall not apply if it

restricts the insurance under subdivision (i) below

(emphasis added). This language illustrates that any coverage

granted under subsection (d) is eliminated in the event

18a

subsection (e) applies. However, subsection (e)(2) additionally

indicates that this exclusion from coverage under subsection

(d) is offset if it infringes upon section III(i) of the policy. The

Court will recite section III(i) below.

When construing whether Claire June was insured under

the Great American policy issued to the NFO, the Court must

abide by general rules of contract interpretation/construction.

See Farmers Ins. Exchange v. Kurzmann, 668 N.W.2d 199,

203 (Mich. App. 2003). As previously ruled by this Court,

Michigan law applies.

In Michigan, as is ubiquitously held elsewhere, the

interpretation of a contract is a question of law. The Court

must first look to the policy’s plain language in deciphering

the intent of the contracting parties. Indeed, “[a]n insurance

policy is enforced in accordance with its terms.” Twichel v.

MIC General Ins. Corp., 676 N.W.2d 616, 621 (Mich.

2003); see also Wilkie v. Auto-Owners Ins. Co., 664 N.W.2d

776, 782 (Mich. 2003) (“The parties are free to contact as

they see fit, and the courts are to enforce the agreement as

written absent some highiy unusual circumstances...”); Farm

Bureau Mut. Ins. Co. of Michigan v. Nikkel, 596 N.W.2d 915

(Mich. 1999) (When a clause in an insurance policy is clear

and does not contravene public policy, then it must be

enforced as written). Terms undefined by the insurance policy

are afforded their commonly ascertained meanings. Allstate

Ins. Co. v. McCarn, 645 N.W.2d 20, 22 (Mich. 2002). An

insurance policy shall be read as a whole, and construed so as

to provide a harmonious effect to every word or phrase as far

as practicable. Klapp v. United Ins. Group Agency, Inc., 663

N.W.2d 447, 453 (Mich. 2003) (citations omitted); Singer v.

Goff, 54 N.W.2d 290, 292 (Mich. 1952). Therefore, “[a]

word is not ambiguous merely because different dictionary

definitions exist.” Twichel, 676 N.W.2d at 621. As a general

19a

rule, an insurance policy is clear and unambiguous when its

language leads to only one reasonable interpretation. Wilkie,

664 N.W.2d at 787 (citing Singer v. American States Ins.,

631 N.W.2d 34 (Mich. 2001)).

It logically follows then that an insurance contract is

considered ambiguous in the event its language is subject to

more than one reasonable interpretation. Farmers Ins.

Exchange, 668 N.W.2d at 203 (citation omitted). The

interpretation of an ambiguous contract generally presents a

question of fact for the jury to decide, ordinarily via the

contemplation of extrinsic evidence. Klapp, 663 N.W.2d at

453-54. “The law is clear that where the language of the

contract is ambiguous, the court/[jury] can look to such

extrinsic evidence as the parties’ conduct, the statements of its

representatives, and past practice to aid in interpretation.” /d.

at 454. (quoting Penzien v. Dielectric Products Engineering

Co., Inc., 132 N.W.2d 130 (Mich. 1965)).

Also at play in Michigan is the rule of contra proferentem,

which stands for the proposition that any ambiguities in

insurance contracts should be construed against the insurer.

However, it is important to note that in Klapp the Michigan

Supreme Court recently clarified generally that the rule of

contra proferentem constitutes a rule of “last resort” and “is

only to be applied if all conventional means of contract

interpretation, including consideration of relevant extrinsic

evidence, have left the jury unable to determine what the

parties intended for their contract to mean” (emphasis added).

Id. at 455. Klapp certainly does not undo the long-standing

principle that ambiguous policy language is to be construed

against the insurer; rather, it simply establishes that extrinsic

evidence, if extant, must be considered beforehand.

20a

Because section III(e)(2) may exclude any potential

coverage provided by section III(d), the Court will commence

its analysis with section III(e)(2) and section II(i). If section

III(e)(2) is determined to apply, then Claire June was not

insured by the Great American policy and the Court’s journey

ends there. Recall, however, that operation of section II(e)(2)

is qualified by section III(i). In the event Claire June was

covered under section III(i) of the Great American Policy, the

exclusion set forth in section Ifl(e)(2) becomes void.

Therefore, the Court will first examine whether Claire June

was insured pursuant to section III(i).

A. Section TIiI(i)

Section III(i) of the Great American policy issued to the

NFO expresses an “insured” shall include:

Any additional insured(s) included in the underlying

insurance listed in Schedule A, but only to the extent

that such insurance is provided for such additional

insured(s) thereunder.

The underlying insurance policy listed in Schedule A is the

Hartford policy. (See Pl. Ex. 1; Def. Ex. C.)

Defendants posit that Claire June was not an “insured”

under the Hartford policy given that he was not included as an

“automatic insured” as explicitly defined in the policy; nor

was he added to the policy as an “additional insured” via an

endorsement, i.e. amendment to the policy. Plaintiff, on the

other hand, asserts that Claire June was clearly afforded

coverage by the underlying Hartford policy because Hartford

settled with Plaintiff during the prior garnishment action. (See

Pl. Ex. 16.) Via this settlement, Hartford paid its_policy

limits.

21a

The Court finds that Claire June was not an “insured”

under the Hartford policy. Therefore, the possible

applicability of section III(e)(2) is not thwarted by section

III(i). Before commencing analysis, it is crucial to sort out the

meanings of the varying terms: “named insured”, “insured”,

and “additional insured”. A “named insured” refers solely to

those persons who are named specifically in the policy; it is

a restricted meaning. See 7 COUCH ON INSURANCE

§ 110:1 (3% ed. 2003). The term “named insured” is not

synonymous with “insured”. /d. For instance, the term

“insured” is not limited to the “named insured”, but applies

to anyone who is insured under the policy. /d. Therefore, an

“insured” encompasses the “named insured”, as well as any

“additional insureds” that may also be covered. /d. The term

“additional insured” in an insurance policy means any person

who is an “insured” under the policy in addition to the

“named insured”, even if not named or specified in the

policy.’ 8 COUCH ON INSURANCE § 115:3 (3 ed. 2003).

' For example, a policy may provide coverage to an_ “additional

insured” in the following manners: “anyone for whom the insured

is working”, or “any person or organization to whom the named

insured is obligated by virtue of a written contract to provide

insurance such as is afforded by the policy”, or “any

organization. ..to whom or to which [mine operator] is obligated by

virtue of written contract to provide insurance such as is afforded

by this policy, but only with respect to operations by or on behalf

of [mine operator], or to facilities of or used by [mine operator].”

See 9 COUCH ON INSURANCE § 126.7 (3 ed. 2003). See also

St. Paul Fire & Marine Ins. Co. v. Quintana, 419 N.W.2d 60, 62

(Mich. App., 1988), wherein the following endorsements were used:

(1) “It is understood and agreed that the Professional Liability

Insurance Coverage Form is applicable only to professional

employees of the named insured while acting in their capacity as

employees of the Epilepsy Center of Michigan. It is further agreed

22a

In other words, those “[pJersons falling within one of the

groups or classes specifically referred to in the policy are

additional insureds as distinguished from the named insured

whose name is specifically mentioned as an insured.” Jd.

Claire June was not a “named insured” in the Hartford

policy. Moreover, Claire June was not covered as an

“additional insured” because the Hartford policy fails to

include him as an “additional insured”. “Coverage for such

additional insureds must be accomplished by specific

endorsement to the policy.” 9 COUCH ON INSURANCE

§ 126.7 (3 ed. 2003). As explicated above, this does not

mean that an “additional insured” must be specifically

“named” in the policy, but merely that the generic category

or class of “additional insured” must be concisely delineated.

See 8 COUCH ON INSURANCE § 115:3 (3 ed. 2003)

(“When drafting the terms of an additional insured

endorsement, the parties should be certain that the identifying

language is in plain English and precisely drafted to include

the particular class or group.”).

Section D WHO IS INSURED of the Hartford Policy

extends coverage to the named insured and any “additional

insureds” as set forth herein:

1. YOU are an INSURED for any covered AUTO.

that coverage is not provided for any medical doctors”; (2) “It is

understood and agreed that the Board of Directors and employees

other than medical doctors are included as additional insured but

only as respects their liability in connection with professional

services rendered or which [should] have been rendered.”

(Emphasis added.)

23a

2. Anyone else is an INSURED while using with

YOUR permission a covered AUTO YOU own, hire

or borrow except:

3. Anyone liable for the conduct of an INSURED

described above is an INSURED but only to the extent

of that liability. However, the owner or anyone else

from YOU hire or borrow a covered AUTO is an

INSURED only if that AUTO is a TRAILER

connected to a covered AUTO YOU own.

The Hartford policy defines “you” as the person or

organization shown as the “named insured in number | of the

declarations”. The “named insured”, of course, was the

NFO. Accordingly, it was the NFO alone that was insured

under paragraph “1” of the Hartford policy as the “named

insured”. Nor is Claire June granted coverage under

paragraphs “2” or “3”. As it concerns paragraph “2”, the

Junes were not using an automobile owned, hired or

borrowed by the NFO. Rather, Claire June owned the

automobile invoived in the accident and the truck was being

used in furtherance of the business of Junes’ Trucking, Inc.

Furthermore, Claire June certainly did not require permission

from the NFO in order to put his truck into service. Finally,

Claire June was not insured under paragraph “3” because

even assuming for the sake of argument that the NFO hired or

borrowed Claire June’s truck, he was not entitled to coverage

since the NFO did not own the truck, or the trailer attached

thereto. Also, Claire June was not otherwise included as an

“additional insured” via any other endorsement.

Plaintiff's assertions in refute are unconvincing. First,

Plaintiff cites a plethora of precedence standing for the

proposition that an “additional insured” need not be

specifically named in the policy in order to be insured. This

24a

is quite true. However, there obviously must be a clause or

endorsement explicitly defining the class or group insured as

“additional insureds”. There is no such endorsement in the

Hartford policy including Claire June. Secondly, Plaintiff

cites Federal Kemper Ins. Co. v. American Bankers Ins. Co..,

357 N.W.2d 834, 839 (Mich. App. 1984) as support for the

premise that an insurer’s settlement alone establishes that the

claimant was insured under the insurer’s policy. This

argument is unpersuasive, as Plaintiff failed to mention in its

brief that there were several other, far more important

factors, at play in Federal Kemper. The crucial issue in

Federal Kemper was whether the potential insured was

driving his own automobile while using said automobile in the

business of the named insured. Jd. The most influential

evidence presented showing that the potential insured was

indeed using his vehicle in the course of the named insured’s

business was an affidavit affirming such. Jd. There is absent

any evidence of the like here and, in fact, the settlement

expresses that Hartford has “consistently denied that the

policy of insurance issued to the National Farmers

Organization ...provides coverage or indemnification to

Claire G. June.” (See Pl. Ex. 16.) In Federal Kemper, The

Michigan Court of Appeals did by no means hold that

evidence of a prior settlement alone proved that the person

was insured by the policy.

Accordingly, because Claire June was not an “insured”

under the Hartford policy, section III(i) does not preclude the

potential applicability of section Il(e)(2). Therefore, the

Court will now discuss section III(e)(2).

B. Section III(e)(2)

Section III(e)(2) denies any coverage given under section

Iil(d) if Claire June was the “owner” of a “non-owned”

25a

automobile. Section III(e)(2) is essentially an “exclusionary

clause”. Exclusionary clauses in insurance policies must be

given effect if clear and specific, but are to be strictly

construed in favor of the insured. Zurich-American Ins. Co.

v. Amerisure Ins. Co., 547 N.W.2d 52, 55 (Mich. App.

1996); McKusick v. Travelers Indem. Co., 632 N.W.2d 525,

528 (Mich. App. 2001). The burden is upon the insurance

company to clearly express the limitations of coverage. U.S.

Fidelity & Guar. Co. v. Group Health Plan of Southeast

Michigan, 345 N.W.2d 683, 686 (Mich. App. 1983).

Plaintiff asseverates that even if Claire June was not an

“additional insured” under the Hartford policy and thus not

insured under section III(i) of Defendant Great American’s

policy, section III(e)(2) still does not exclude Claire June from

coverage. The following four premises underpin Plaintiff's

stance: (1) the language “owner of a non-owned automobile”

is so ambiguous as to make section IH(e)(2) invalid; (2)

Defendants’ interpretation of section III(e)(2) fails because it:

(a) does not give effect to important policy terms, (b) renders

illusory the coverage provided by section III(d), and (c) shows

that Great American did not intend for “non-owned auto” to

mean an “auto not owned by the named insured”; (3) even if

section HI(e)(2) were not hopelessly ambiguous, and even if

there were a reasonable interpretation of section II(e)(2) that

excluded Claire June, other reasonable interpretations of the

provision exist that do not exclude him; and (4) when

harmonized with plain language of the policy, the ambiguous

terminology “the owner of a non-owned automobile” must be

interpreted to mean “an automobile not owned by Claire

June.”

In contravention, Defendants contend the term “non-

owned auto” unambiguously refers to an automobile not

owned by the named insured, the NFO. Under this

26a

interpretation, Claire June would be excluded from coverage

under section III(e)(2) because he, and not the NFO, owned

the truck involved in the accident. Defendants avow that this

interpretation comports with the commonly understood

meaning of “non-owned automobile” and harmonizes with

section III(d).

The Court finds that section IlI(e)(2) does not restrict

Claire June from alleged coverage due him under section

III(d). In concluding such, the Court need not address each of

Plaintiff's arguments. The Court is in agreement with

Plaintiff's position that the language encompassed within

section III(e)(2) is enigmatic in effect because it expresses no

clear and specific meaning, and must therefore be construed

in favor of Plaintiff.

First and foremost, the verbiage “owner of a non-owned

automobile” lends itself to a certain degree of confusion. In

order for the reader of section III(e)(2) to establish who is

excluded from coverage, the reader must decipher which

party the automobile is not owned by. The Great American

policy, however, fails to define the parameters of “non-owned

automobile” , leaving the reader of the policy to ponder as will

be discussed infra. Although undefined terminology does not

necessarily mean an insurance policy is ambiguous in effect,

the insurer is responsible for clearly expressing the limitations

on coverage, and therefore “bears the burden of any

confusion which arises as a result of its failure to state clearly

the limitations of coverage purchased.” Norgan v. American

Way Life Ins. Co., 469 N.W.2d 23, 26 (Mich. App. 1991);

see also Automobile Club Ins. Assoc. v. Page, 413 N.W.2d

472, 474 (Mich. 1987) (“Owned vehicle exclusion clauses are

valid so long as they are clear and unambiguous, employing

easily understood terms and plain language.”).

27a

The exclusionary language “owner of a non-owned

automobile” found in section III(e)(2) is primarily ambiguous

because it fails to mesh with the plain language set forth in the

rest of the provision. For instance, section III(e)(2) begins by

stating that “except as respects the named insured” (NFO),

before ultimately stipulating that an “owner of a non-owned

automobile” is not covered by section III(d) of the policy.

This preliminary “except for the named insured” language

becomes irreconcilable and superfluous when Defendants’

propounded interpretation that “non-owned automobile”

means “an automobile not owned by the NFO” is applied.

Indeed, it is gratuitous for the clause to ostensibly convey that

the NFO is insured even if it is the “owner of a non-owned

auto”, when under Defendants’ interpretation, it is impossible

for the NFO to be the owner of an automobile the NFO does

not own. Furthermore, the existence of the “except as

respects the named insured” language appears even more

strange when one contemplates that section III(e)(2) could not

possibly “exclude” the NFO from coverage under section

III(d) in any event given that the NFO is the “named insured”

under the policy, meaning that the NFO’s insured status is not

contingent on section II1(d) applicability, which merely grants

coverage to other “insureds” above and beyond the “named

insured”. (See Pl. Ex. 1.) In other words, the “except as

respects the named insured” language is seemingly

unnecessary. No matter, it is well known that contracts must

be “construed so as to give effect to every word or phrase as

far as practicable” , and “courts cannot simply ignore portions

of a contract in order to avoid a finding of ambiguity or in

order to declare an ambiguity” (emphasis added). Klapp, 663

N.W.2d at 453.

Moreover, section [II(e)(2) is also ambiguous for the more

subtle reason that it is prone to more than one interpretation.

Plaintiff espouses that in addition to any interpretation offered

28a

by Defendants, “owner of non-owned auto” may be

reasonably read to mean “the owner of an automobile not

owned by the insured claiming coverage under section III(d)”,

i.e., Claire June. The Court agrees that section III(e){2) could

be reasonably construed in this manner. In fact, unlike

Defendants’ proffered interpretation, this interpretation does

not conflict with the “except as respects the named insured”

phraseology discussed above. Quite simply, the phrase

“owner of a non-owned automobile”, without being defined,

is not capable of a common meaning given the surrounding

context. See Pennsylvania National Mutual Cas. Co. v.

Travelers Ins. Co., 592 A.2d 51 (Pa. App. 1991).

Defendants’ cited authority adverse to Plaintiff's position

is unimpressive. First, Defendants rely upon a statement made

by Justice Levin in State Farm Mutual Auto. Ins. Co. v.

Ruuska, 314 N.W.2d 184 (Mich. 1982). In Ruuska, Justice

Levin opined in his concurring opinion that “[t}he term ‘non-

owned automobile’ has an obvious and clear meaning...it

means simply a vehicle is not owned by the insured”

(emphasis added). Ruuska, however, does not sufficiently

yield itself to Defendants’ side. In Ruuska, the term “non-

owned automobile” was actually defined by the insurance

policy, so the Michigan Supreme Court’s interpretation of

“non-owned automobile” was not even the determinative

issue.” More importantly, Justice Levin expressed that “non-

owned automobile” means an “automobile not owned by the

insured”, as opposed to a vehicle “not owned by the named

? Instead, the Michigan Supreme Court held that State Farm’s

“non-owned automobile” exclusionary clause was unenforceable

because it was repugnant to Michigan’s No-Fault Act. Therefore,

the majority opinion declined to address whether the clause was

ambiguous. Ruuska, 314 N.W.2d at 189.

29a

insured” as championed by Defendants. This is significant for

the reason that if indeed Claire June is an “insured” under

section III(d), then according to Justice Levin’s definition,

section III(e)(2) could be properly defined as an “automobile

not owned by the insured, i.e. Claire June.

Defendants also more generically argue that any other

interpretation of “owner of a non-owned auto” besides the

one presented by them is untenable. As already addressed,

this is not the case. Furthermore, Defendants submit that their

interpretation reconciles and harmonizes with section III(d).

Defendants postulate that because section III(d) explicitly

specifies that “non-owned” automobile refers to an

automobile not owned by the NFO, then the “non-owned

automobile” language found in section III(e)(2) must provide

analogous meaning. According to steadfast legal principles,

the Court should strive to harmonize varying insurance policy

clauses within reason. Notwithstanding, the Court does not

deem that the terminology “non-owned automobile” in section

IlI(e)(2) must necessarily constitute an automobile not owned

by the NFO for the sole reason that section III(d) does so.

This is because if construed in such a manner, then section

III(e)(2) considered on the whole becomes ambiguous, as

discussed prior. Additionally, in light of section III(d),

wherein Defendant Great American specified that a “non-

owned automobile” meant an auto not owned by the NFO, it

is apparent that Great American “could have easily inserted

clearer language” in section HI(e)(2). See Norgan, 469

N.W.2d at 26. }

Because section I[l(e)(2), an exclusionary clause, is

ambiguous, it must be strictly construed in favor of the

insured, Claire June. To reiterate, exclusionary clauses in

Michigan are strictly construed in favor of the insured and

against the insurer. See McKusick, 632 N.W.2d at 528.“[I]t

30a

is the insurer’s responsibility to clearly express limits on

coverage.” Norgan, 469 N.W.2d at 26. As shown previously,

section III(e)(2) is clearly ambiguous and must therefore be

construed against Defendants.* Therefore, Claire

> Defendants contend that any ambiguities found in section

I1l(e)(2) cannot be construed against them on the basis that Claire

June is a non-party to the Great American policy issued to the

NFO: See Travelers Indemnity Co. v. Unites States, 543 F.2d 71,

74 (90" Cir. 1976) (“Another maxim of interpretation applicable

here is that a third party who is not a party to the contract is not

usually entitled to strict construction in his favor in determining

whether the contract was made for his benefit.”); McBroome-

Bennett Plumbing, Inc. v. Villa France, Inc., 515 S.W.2d 32, 37

(Tex. Civ. App. 1974) (“a third person who is not a party to a

contract of insurance usually is not entitled to a strict construction

in his favor in determining whether the contract was made for his

benefit.”), but cf Toops v. Gulf Coast Marine, Inc., 72 F.3d

483,486 (S" Cir. 1996).

Defendants’ contention is devoid of merit. Under Michigan

law, the rules of construction apply irrespective of whether the

person seeking coverage is a “party” to the insurance contract. See,

e.g. Engle, 583 N.W.2d at 485-86 (affirmatively answering the

question of whether the plaintiff satisfied the definition of a “person

insured” under a policy issued to another, and rejecting insurer’s

“strained interpretation” of provision, based on rule that

“exclusionary clauses in insurance contracts are to be strictly

construed against the insurer.); Zurich-American Ins. Co. Vv.

Amerisure Ins. Co., 547 N.W.2d 52, 55 (Mich. App. 1996) (same);

Federal Mut. Ins. Co. v. Casey, 167 N.W.2d 905,905-906 (Mich.

App. 1969) (applying rule that ambiguity in an insurance policy is

construed against the insured who wrote it, and holding that the

driver was entitled to recover as a “permissive user” under the

omnibus clause of the policy).

Also, the rule provided in Klapp that ambiguous contractual

language is to be construed against the insurer only after extrinsic

evidence is considered does not seemingly disrupt the general rule

3la

June is not barred from coverage under section II(d) pursuant

to section III(e)(2).

Il. Whether Claire June was insured under section

I1l(d) of the Great American policy.

Because the Court found that section III(e)(2) does not

exclude Claire June from coverage, the Court must now

examine whether section III(d) provided Claire June

coverage. Plaintiff submits that Claire June was clearly an

insured under said provision. Obviously, Defendants refute

Plaintiff's position.

To reiterate, section III(d) reads as follows:

(d) With respect to automobiles, any person while

using any automobile owned or hired by or on behalf

of the named insured including any person or

organization legally responsible for such use, provided

the use is within the scope of permission granted by

the named insured and any officer, director,

stockholder or partner of the named insured while

that exclusionary clauses are to be strictly construed in favor of the

insured. Klapp did not involve insurance contract exclusionary

clauses. Therefore, the Court does not feel that extrinsic evidence

as it concerns section II!(e)(2) need be considered.

Even if Klapp were applicable to exclusionary clauses

specifically, Defendants proffer no pertinent extrinsic evidence

addressing the meaning of section I[(e)(2). The affidavits of John

Jensen and Benjamin Yale speak to the intent of section III(d), but

not to section III(e)(2) in particular. This being so, it is proper to

construe section IIl(e)(2) against Defendants. See Klapp, 663

N.W.2d at 457-58; Wilkie, 664 N.W.2d at 787.

32a

using an automobile not owned by the named insured

while such automobile is being used in the business

of the named insured.

As provided earlier, section III(d) may be divided into four

components: (1) whether Claire June was entitled to coverage

based on being “any stockholder” of the NFO; (2) whether

Claire June’s truck was “not owned by” the NFO; (3)

~whether the accident occurred “while” Claire June was

“using” his truck; and (4) whether the truck was “being used

in the business of” the NFO at the time the accident occurred.

The Court previously noted that Michigan’s general rules of

contract interpretation/construction are applicable to the

present case.

The Court finds that Claire June was net provided

coverage pursuant to section III(d) of the Great American

policy as a matter of law based on two of the requirements not

being met. First, the Court concludes that although Claire

June was a “stockholder” of the NFO, liability was not sought

against him as a “stockholder”, and therefore Defendant

Great American was not required to indemnify Claire June as

“any stockholder” of the NFO. Secondly, the Court deduces

that Junes’ Trucking, Inc. was “using” the automobile

involved in the accident, as opposed to Claire June

personally. Said findings are discussed below.

A. Whether Claire June was entitled to coverage based

on being “any stockholder” of the NFO.

Section III(d) grants coverage to “any...stockholder...” of

the NFO. While conceding that Claire June was a stockholder

of the NFO at the time of the accident, Defendants argue that

Claire June’s liability did not arise out of his “stockholder”

status. Defendants expound that “Plaintiff seeks to gain

33a

coverage for Claire June in a capacity other than the one in

which he was sued.” (See Def. G.A. Brief, p. 17.)

Conversely, Plaintiff contends that section IIi(d) does not

contain any such “scope of duties” requirement. Plaintiff

points out that section III(d) merely says

“any...stockholder...” , which connotes a broad scope without

limitation.

The Court concurs with Defendants’ position that “[iJt is

the claims made against the putative insured that determines

whether or not that person comes within the definition of

‘insured’ and obtains coverage.” (See Def. Brief, p. 15.) See

North River Ins. Co. v. Endicott, 391 N.W.2d 454, 457

(Mich. App. 1986) (“plaintiff was not obligated to indemnify

or defend Endicott because the allegations in the underlying

lawsuit involved a claim arising from defendant's activities as

a trustee, they did not involve defendant’s performance of

‘professional accounting services’ as defined in the policy

....); Continental Ins. Co. v. Bones, 596 N.W.2d 552, 56]

(lowa 1999) (“We start with the observation that coverage is

controlled by the actual claim asserted against the insured, not

the label the claimant chooses to put in his or her claim.”).

This is problematic for Plaintiff, as there was no underlying

claim challenging Claire June’s liability as “any stockholder”

of the NFO. Rather, the unamended complaint filed in 1985

in the Wayne County Court (Def. Ex. A), upon which Claire

June was found liable, alleges that Claire June owned the

truck involved in the accident. (/d., ¢ 10.) In addition, the

underlying petition alleges that Claire June personally

conducted the business of June’s Trucking, Inc, including

repair and maintenance of the trucks owned and operated by

June’s Trucking, Inc., and that the repairs were negligently

performed. (/d., 44 29, 31.)

34a

Plaintiff contests Defendants’ argument on the basis that

nowhere in section III(d) does it state that “any stockholder”

claiming coverage must have been acting within their scope

as an NFO stockholder in order to enjoy coverage. Plaintiff

draws attention to those cases cited by Defendants and

clarifies that each of those cases involved specific language

requiring that the insureds act “within the scope of their

duties” as stockholders, etcetera, in order to be provided

coverage. See, e.g., Hack v. Standard Accident Ins. Co., 88

N.W.2d 424, 425 (Mich. 1958) (“...any.. stockholder. ..while

acting within the scope of his duties as such”); Bowie v.

Home Ins. Co., 923 F.2d 705, 707 (9" Cir. 1991) (any...

stockholder...while acting within the scope of their duties as

such”); North River, 391 N.W.2d at 456 (accountant’s policy

covered liability “caused by acts, errors, Or omissions in the

insured’s performance of professional accounting services for

others”). Phrased aphoristically , Plaintiff espouses that Claire

June was an NFO stockholder and is included under Section

111(d), irrespective of whether he was sued in his capacity as

an NFO stockholder.

The Court concludes that because there is no reference to

Claire June as “any stockholder” of the NFO in the

underlying claim, then Defendant Great American has no

obligation to indemnify Claire June. While section II1(d) does

not possess “scope of duties” language, it does conspicuously

depict that coverage is extended to “any...stockholders” .

Quite simply, Claire June was not sued as an NFO

stockholder, and therefore does not come within the coverage

provided under section III(d). Instead, liability was sought

against Claire June as the sole shareholder of June’s

Trucking, Inc., owner of the truck involved in the accident,

and as the performer of faulty maintenance. Said contentions

do not fall under the coverage provided by section III(d) to

“any stockholder” of the NFO. Claire June was an NFO

35a

stockholder, but there are no claims raised against Claire June

as an NFO “stockholder” in the underlying petition. As subtly

phrased by Defendants, “[t]o permit Plaintiff to invoke II(d)

is to permit Plaintiff to go beyond the claims that were made

against Mr. June upon which his liability was bottomed and

which claims determined whether or not coverage was

afforded to Mr. June.” (Def. Brief, p. 18.)

B. Whether the accident occurred “while” Claire June

was “using” his truck.

Section III(d) provides coverage to “any

stockholder. ..using an automobile...while such automobile is

being used....” Defendants opine that Claire June was not

“using” his truck; instead, the truck was being “used” by

June's Trucking, Inc. Defendants also more basically contend

Claire June was not “using” the truck at the time of the

accident because he was not exercising any dominion or

control over the truck. In juxtaposition, Plaintiff elicits the

following four bases: (1) Claire June was “using” the truck

when the accident occurred because he was “operating” the

truck; (2) Claire June was “using” the truck because he put

the truck into service and the accident occurred while that

service was being performed; (3) Claire June was “using” the

truck because a corporate manager/principal who directs an

employee to use an automobile is “using” the automobile: and

(4) Claire June was “using” the truck since a vehicle is

“used” by both its owner and those driving it with the

owner's permission.

The Court finds that Claire June could not have been

“using” the automobile in his personal capacity, as it was

being “used” in furtherance of Junes Trucking, Inc. “As a

general proposition, the law treats a corporation as an entirely

separate entity from its stockholders, even where one person

36a

owns all the corporation’s stock” (emphasis added). Foodland

Distributors v. Al-Naimi, 559 N.W.2d 379, 381 (Mich. App.

1997) (citing Kline v. Kline, 305 N.W.2d 297 (Mich. 1981)).

Claire June owned the truck giving rise to the accident

causing the pending litigation; however, the truck was “used”

in furtherance of his corporation, June’s Trucking, Inc. as

opposed to being “used” by Claire June in his personal

capacity. (See Def. Ex. K.) The truck was hauling NFO milk,

which constituted part of the business of June’s Trucking, Inc.

Accordingly, the invoices were from June’s Trucking, Inc.,

and the checks were made payable to June’s Trucking, Inc.

(See Def. Exs. L; M.) These facts indicate that the truck was

“used” by the corporate entity and not by Claire June

personally. In fact, the underlying suit alleged it was June’s

Trucking, Inc. that was liable in allowing a negligent

employee to operate the truck in the course of its business.

(See Def. Ex. A, {4 18-24.) The only claim against Claire

June in his individual capacity involved maintenance and

repair he performed on the truck, but it was never asserted

that Claire June was personally “using” the truck. (/d., 4§ 25-

31.)

The Court finds no evidence that June’s Trucking was a

“mere instrumentality” of Claire June’s or that Claire June

abused the corporate form to facilitate engaging in fraudulent

or wrongful conduct. See Soloman v. Western Hills

Development Co., 312 N.W.2d 428, 431 (Mich. 1981)

(discussing “piercing the corporate veil”). Therefore, there

are absent any justifications to disregard the “use” of the

truck by the corporate entity. The Court thus does not deem

that Claire June was personally “using” the automobile.

involved in the accident.

The authority cited by Plaintiff does not disavow the

above conclusion. Plaintiff proffers numerous cases

37a

propounding that Claire June was “using” the truck on

grounds that he “put the truck into service”. However, these

cases to not involve the utilization of automobiles by

corporate entities. See Bowman vy. Preferred Risk Mut. Ins.

Co., 83 N.W.2d 434, 437 (Mich. 1957); Michigan Mutual

Ins. Co. v. Dowell, 514 N.W.2d 185 (Mich. App. 1994):

Samuels v. American Auto Ins. Co., 150 F.2d 221 (10" Cir.

1945); Budget Rent-A-Car Systems, Inc. v. State Farm Mutual

ins. Co., 727 So.2d 287 (Fla. App. 1999); Rogers v. MFA

Mutual Ins. Co., 554 §.W.2d 327 (Ark. 1977). Moreover, the

Court does not deem Atlantic Mutual Ins. Co. v. Palisades

Safety & Ins. Assoc., 837 A.2d 1096 (N.J. Super. Ct. App.

Div. 2003) analogous to the present case. Plaintiff cited

Atlantic Mutual Ins. Co. to establish that a corporate manager

is “using” an automobile when allowing and instructing an

employee to utilize said automobile. Atlantic Mutual Ins. Co..

however, is dissimilar to the present scenario, in that the

fighting issue in establishing coverage was not whether it was

the corporate entity or the manager/supervisor that was

“using” the automobile. In fact, the entire purpose of the

insurance policy at issue in Atlantic Mutual Ins. Co. was to

provide coverage to anyone, managers and employees

included, found to be “using” the automobile with the

permission of the corporate entity. Id. at 1099. Due to the

disparate circumstances, this precedence is unpersuasive.

Accordingly, Claire June was not covered under section

III(d) because (1) although an NFO “stockholder”, he was not

sued as “any stockholder” of the NEO, ar’ (2) he was not

“using” the truck in his individual capacity. k ther, the truck

was being “used” by Junes’ Trucking, Inc.

38a

ORDER

IT IS THEREBY ORDERED, ADJUDGED, AND

DECREED that Plaintiff's Motion for Summary Judgment is

hereby DENIED, and Defendants’ Motion for Summary

Judgment is hereby GRANTED.

Any costs associated with this action are therefore taxed

to Plaintiff.

IT IS SO ODERED this 8 day of June, 2004.

/s/

JOEL D. NOVAK, JUDGE

Fifth Judicial District of lowa

APPENDIX D

STATE OF MICHIGAN

IN THE CIRCUIT COURT

FOR THE COUNTY OF WAYNE

Case No. 85-527157-NI

[Filed October 1, 2000]

HULDA N. SHURTLEFF, Personal

Representative of the Estate of

ROBERT C. SHURTLEFF, Deceased,

Plaintiff,

Ve

GREAT AMERICAN INSURANCE

COMPANY,

Garnishee/Defendant.

)

)

)

)

)

)

)

)

)

)

)

ORDER OF DISMISSAL

At a session of said Court, held in the

City-County Building, Detroit, Michigan,

on Oct 1, 2000

PRESENT: THE HONORABLE _ Paul S. Teranes

Circuit Court Judge

40a

This matter having regularly come before the Court for

trial, and the Court having precluded certain claims under the

pleadings, and the Court having granted directed verdicts as

to certain of the claims, and the jury having returned a verdict

in favor of garnishee/defendant as to other claims, and the

claim for equitable estoppel having been severed;

IT IS HEREBY ORDERED that all claims of plaintiff,

Hulda N. Shurtleff, Personal Representative of the Estate of

Robert C. Shurtleff, deceased, as against garnishee/defendant,

which were alleged in the above-captioned cause, except as to

those referred to in the next paragraph hereof, are dismissed

with prejudice and without costs.

IT IS FURTHER ORDERED that pursuant to the

Stipulation of the parties, the claim of equitable estoppel

(defendant should be estopped from denying coverage) and

the claim that the primary defendant, Claire June, was entitled

to coverage under Great American Insurance Company

excess/umbrella policy (no. PRO6-27-84-59-01 issued to the

NFO) under the theory of “stockholder/member” may be and

are hereby dismissed, pursuant to the Stipulation of the

parties, and said dismissal is voluntary, without prejudice and

without costs, pursuant to MCR 2.504(a).

IT IS FURTHER ORDERED that pursuant to the parties’

stipulation, plaintiff waives any right of post-judgment

proceedings and/or appeal with regard to those claims

dismissed with prejudice.

IT IS FURTHER ORDERED that nothing herein shall be

deemed to impair plaintiff's Judgment against the primary

defendants, which Judgment shall remain in full force and

effect except with reference to any partial satisfactions and/or

setoffs as a result of settkements with any other parties or

4la

garnishee/defendants or any credits which

garnishee/defendant Great American is entitled to, if any, by

reason of plaintiff’s settling with primary carriers for less than

their full obligation.

/s/ Paul S. Teranes

Circuit Court Judge

I HEREBY STIPULATE TO ENTRY

OF THE ABOVE ORDER:

/s/

RICHARD M. GOODMAN (P14169)

Attorney for Plaintiff

/s/

LEONARD B. SCHWARTZ(P20132)

Attorney for Garnishee/Defendant

APPENDIX E

STATE OF MICHIGAN

IN THE CIRCUIT COURT

FOR THE COUNTY OF WAYNE

[Filed December 21, 1999]

VERDICT FORM

We, the Jury, make the following answers to the questions

submitted by the Court:

Question No. 1: Was the truck or trailer a hired auto as

used in the insurance policies in question

under the facts and the law applicable in

this case?

Answer: No J¥

Question No. 2: Was the truck and trailer an owned auto as

used in the insurance policies in question

under the facts and the law applicable in

this case?

Answer: No 4

Date: Dec. 21, 1999

Foreperson Signature: /s/ Shelly McKenzie Wilson