This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-374

 

Dunn Enterprises, Inc., et al.,

Respondents,

 

vs.

 

Insurance Company of the West,

Appellant.

 

Filed December 20, 2005

Affirmed

Peterson, Judge

 

Hennepin County District Court

File No. CT-04-2498

 

Leon R. Erstad, Erstad & Riemer, P.A., 200 Riverview Office Tower, 8009 34th Avenue South, Minneapolis, MN  55425 (for respondents)

 

Thomas P. Kane, Duana J. Grage, Holly J. Tchida, 3100 Campbell Mithun Tower, 222 South Ninth Street, Minneapolis, MN  55402 (for appellant)

 

            Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Dietzen, Judge.

U N P U B L I S H E D    O P I N I O N

PETERSON, Judge

In this appeal from summary judgment, appellant insurer argues that the business-automobile coverage under its policy does not apply to a collision that did not involve an auto covered by the policy.  By notice of review, respondents argue that (1) the garage-operations coverage under appellant’s policy applies to damages awarded for failing to control an intersection while escorting a funeral procession; and (2) the district court erred when it determined that because the business-automobile coverage applies to the collision, respondent’s claim that the insurer is estopped from denying coverage because it withdrew from the defense of its insured is moot.  We affirm.

FACTS

            Respondents Dunn Enterprises, Inc. and Dunn Livery, L.P. (collectively Dunn) are affiliated businesses.  Dunn provides motorcycle escort services for funerals.  On December 6, 1999, a Dunn employee was escorting a funeral driving a motorcycle owned by Dunn.  Thomas O’Shaughnessy was driving in the funeral procession when he allegedly ran a red light and collided with a car operated by Karen Garcia.  When the collision occurred, the motorcycle escort was at the next intersection accompanying the lead vehicles in the procession and securing that intersection.  In 2001, Garcia sued O’Shaughnessy for negligence, alleging that he failed to maintain his close formation with the other funeral-procession vehicles and did not have his headlights on as required under Minn. Stat. § 169.20, subd. 6 (2004).[1]  Garcia also sued Dunn and its employee, alleging negligent supervision of the funeral procession.  O’Shaughnessy brought a third-party complaint against Dunn, contending that negligent supervision of the funeral procession was the direct cause of Garcia’s injury.

            When the collision occurred, Dunn had two kinds of insurance:  a commercial general-liability (CGL) policy with Indiana Insurance Company (Indiana) and a commercial automobile policy, consisting of business-automobile coverage and garage-operations coverage, with appellant Insurance Company of the West (ICW).  Dunn tendered defense of Garcia’s lawsuit to ICW in April 2001, which accepted with no reservation of rights.  ICW forwarded the lawsuit to defense counsel to represent Dunn.  In a November 19, 2001 letter, ICW informed Indiana that the allegations against Dunn were not covered under ICW’s policy and tendered the suit to Indiana and requested that Indiana assume defense and indemnification.  At that time, several depositions had been taken, and a trial was scheduled for February or March 2002. 

            In a December 28, 2001 letter, ICW informed Dunn that it had forwarded the suit to Indiana and that it intended to withdraw its defense within 30 days because there was no potential for coverage under its policy.  On February 7, 2002, ICW formally withdrew its defense during the prehearing settlement conference.  Indiana apparently assumed the defense, and Dunn settled the suit by paying $110,000.  Dunn entered into an agreement with Indiana under which Indiana loaned Dunn $110,000 and Dunn agreed that it would proceed with a lawsuit to recover this sum from ICW.

In October 2003, Dunn brought suit against ICW for indemnification.  The parties brought cross-motions for summary judgment, and the district court found that there is coverage under the ICW business-automobile coverage and granted summary judgment to Dunn.  The district court also (1) determined that there is not coverage under the ICW garage-operations coverage; and (2) ruled that Dunn’s estoppel claim is moot.  This appeal followed.

D E C I S I O N

            An appellate court reviews a grant of summary judgment to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law.  Wanzek Constr., Inc. v. Employers Ins. of Wausau, 679 N.W.2d 322, 324 (Minn. 2004).  On appeal from summary judgment, this court will conduct a de novo review.  Christensen v. Milbank Ins. Co., 658 N.W.2d 580, 584 (Minn. 2003).  The interpretation of an insurance policy and the application of the policy to the facts are legal questions reviewed de novo by an appellate court.  Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001). 

I.

            The business-automobile-coverage portion of the ICW policy provides that ICW “will pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto’.”  There is no dispute that Dunn is an insured under the policy and the motorcycle driven by the Dunn employee on December 6, 1999, is an auto covered by the policy.  But ICW contends that because the motorcycle was not involved in the collision that occurred during the funeral procession, the policy does not apply to Garcia’s suit against Dunn.  ICW argues that the damages sought in Garcia’s suit were damages for negligence in overseeing a funeral procession, not damages arising out of the use of a covered auto.

            “Whether an injury arises out of the maintenance or use of a motor vehicle is a question of law, which we review de novo.”  Dougherty v. State Farm Mut. Ins. Co., 699 N.W.2d 741, 743 (Minn. 2005).  The supreme court has identified three factors to consider when determining whether an accident arose out of the maintenance or use of a motor vehicle:

1.         the extent of causation between the automobile and the injury;

2.         whether an act of independent significance occurred, breaking the causal link between “use” of the vehicle and the injuries inflicted; and

3.         whether the automobile was being used for transportation purposes.

            A causal connection between the injury and the maintenance or use of a motor vehicle is established if the injury is a natural and reasonable incident or consequence of the vehicle’s use.  That is to say, the vehicle must have been an active accessory in causing the injury.  This causation standard requires something less than proximate cause in the tort sense and something more than the vehicle being the mere situs of the injury.

 

Id. (citations and quotations omitted).  In the tort sense, “[p]roximate cause exists if the negligent conduct was a substantial factor in bringing about the injury.”  Flom v. Flom, 291 N.W.2d 914, 917 (Minn. 1980).

Extent of causation

            Reading Dougherty and Flom together, we conclude that there is a causal connection between the damages sought in Garcia’s suit and the use of Dunn’s motorcycle.  Under these two opinions, if the use of the motorcycle is an active accessory in causing the damages, there is a causal connection between the damages and the use of the motorcycle even if the use of the motorcycle was something less than a substantial factor in bringing about the damages.  Because the Dunn employee could not have moved on to another intersection and left the intersection where the collision occurred unattended without using the motorcycle, the use of the motorcycle was an active accessory in causing the damages suffered as a result of the collision at the unattended intersection.  See Meric v. Mid-Century Ins. Co., 343 N.W.2d 688, 690 (Minn. App. 1984) (holding that van was active accessory in death of driver shot by robber stealing van when assault would not have occurred if driver had been on foot).  The Dunn employee could not have provided escort services for a procession of automobiles, which involved moving from one intersection to another, without using the motorcycle.  See Waseca Mut. Ins. Co. v. Noska, 331 N.W.2d 917, 920 (Minn. 1983) (when extensive fires would not have happened but for use of vehicle to transport barrels containing live embers, fires arose from use and operation of vehicle).

Act of independent significance

            ICW contends that O’Shaughnessy’s driving negligence and the funeral home’s negligence in failing to control the intersection are acts of independent significance that broke the causal link between the use of the motorcycle and the collision of O’Shaughnessy’s and Garcia’s automobiles.

            For an intervening cause to be considered a superseding cause, the intervening cause must satisfy four elements:  1) its harmful effects must have occurred after the original negligence; 2) it must not have been brought about by the original negligence; 3) it must have actively worked to bring about a result which would not otherwise have followed from the original negligence; and 4) it must not have been reasonably foreseeable by the original wrongdoer.  Unless all four elements are satisfied, an intervening cause cannot be considered superseding.

 

Canada by and through Landy v. McCarthy, 567 N.W.2d 496, 507 (Minn. 1997) (citations omitted).

            O’Shaughnessy’s driving negligence fails to satisfy at least one of the elements of a superseding cause because it was reasonably foreseeable by Dunn’s employee that a driver in a funeral procession would fail to turn on his headlights and maintain a close formation with other vehicles in the procession and enter an intersection on the procession route against a red light. 

            ICW has not identified any specific act of the funeral home that it contends was negligence in failing to control the intersection or provided any analysis or argument explaining how the funeral home’s negligence broke the causal link between the use of the motorcycle and the collision.  “An assignment of error based on mere assertion and not supported by any argument or authorities in appellant’s brief is waived and will not be considered on appeal unless prejudicial error is obvious on mere inspection.”  Schoepke v. Alexander Smith & Sons Carpet Co., 290 Minn. 518, 519-20, 187 N.W.2d 133, 135 (1971).  Because prejudicial error is not obvious, this assignment of error is waived.

Whether insured motor vehicle was being used for transportation purposes

            The final issue is whether the insured motor vehicle was being used for transportation purposes.  Coverage should exist only for injuries resulting from use of a motor vehicle for transportation purposes.  Cont’l W. Ins. Co. v. Klug, 415 N.W.2d 876, 878 (Minn. 1987).  The Dunn employee was using the motorcycle as a means of transportation along the procession route.

II.

            By notice of review, Dunn challenges the district court’s decision that the garage-operations coverage under ICW’s policy does not apply to damages awarded for failing to control an intersection while escorting a funeral procession. 

            The garage-operations-coverage portion of the ICW policy provides that ICW “will pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies caused by an ‘accident’ and resulting from ‘garage operations’ other than the ownership, maintenance or use of the covered ‘autos’.”  Under the policy,

                                    “Garage operations” means the ownership, maintenance or use of locations for garage business and that portion of the roads or other accesses that adjoin these locations.  “Garage operations” includes the ownership, maintenance or use of the “autos” indicated in SECTION 1 of this Coverage Form as covered “autos”.  “Garage operations” also include all operations necessary or incidental to a garage business.

 

            The district court determined that the damages are not covered by the garage-operations coverage because “[t]he accident took place away from the site of the garage operations and there is no causal relationship between the garage operations and the use of the Dunn Livery vehicle.”

            In interpreting insurance contracts under Minnesota law, we must give effect to the intentions of the parties as it appears from the terms used in the contract.  If the terms of an insurance policy are not specifically defined, they must be given their plain, ordinary and popular meaning.  Ambiguous terms in an insurance policy are to be resolved against the insurer and in accordance with the reasonable expectations of the insured.  Ambiguity exists if the language of the policy is reasonably subject to more than one interpretation.

 

Minn. Mining & Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 179 (Minn. 1990) (citations omitted).

            The ICW policy does not define “garage business.”  The ordinary meaning of “garage” is, “[a] building or indoor space in which to park or keep a motor vehicle,” or “[a] commercial establishment where cars are repaired, serviced, or parked.”  The American Heritage Dictionary of the English Language 747 (3d ed. 1992).  ICW contends that any garage-operations coverage must be linked to Dunn’s business of repairing, servicing, or parking automobiles, not escorting a funeral procession.  Dunn contends that its employee’s use of the motorcycle to escort a funeral procession was a necessary part of its business, which the ICW policy was purchased to insure.  Dunn argues that if ICW’s definition of garage business is accepted, Dunn had no garage business, and it purchased garage-operations coverage to protect against nonexistent risks. 

            The record is not sufficient to demonstrate the nature of Dunn’s business activities.  But it is not necessary for us to determine the nature of Dunn’s business in order to determine whether the garage-operations coverage applies to Garcia’s and O’Shaughnessy’s damages because our conclusion that those damages resulted from the use of the motorcycle compels the conclusion that the garage-operations coverage does not apply.  Under the plain language of the policy, garage-operations coverage applies to damages “resulting from ‘garage operations’ other than the ownership, maintenance or use of the covered ‘autos’.”  (Emphasis added.)  Consequently, even if using the motorcycle to escort a funeral is necessary or incidental to a garage business, and, therefore, is within the definition of “garage operations,” the garage-operations coverage does not apply because the motorcycle was a covered auto, and the damages resulted from the use of a covered auto.[2]     

III.

            In the district court, Dunn asserted that ICW is estopped from denying coverage because it accepted coverage without reservation of rights and then withdrew shortly before trial, to Dunn’s prejudice.  Because it had decided that the business-automobile coverage applied, the district court denied Dunn’s estoppel claim as moot and did not address the merits of the claim.  Because the district court did not address the merits of the estoppel claim and because we are affirming the district court’s decision that the business-automobile coverage applies, we decline to consider Dunn’s estoppel claim.  See N. Star State Bank of Roseville v. N. Star Bank Minn., 365 N.W.2d 788, 790 (Minn. App. 1985) (because temporary injunction was affirmed on common-law grounds and continued in effect, appellate court did not consider additional claim for injunction based on federal statute).

            Affirmed.