United States District Court, D. Kansas
THE ESTATE OF SHAWN LUCAS SCHELLENGER, by and through EXECUTOR JEFF SCHELLENGER, et al., Plaintiffs,
HARTFORD CASUALTY INSURANCE COMPANY, Defendant.
MEMORANDUM AND ORDER
THOMAS MARTEN, JUDGE.
diversity action stems from the aftermath of a tragic,
multiple-fatality automobile accident involving
plaintiffs' family members. Plaintiffs request a
declaratory judgment that coverage exists under
defendant's General Liability Policy for damages
resulting from the accident. Defendant contends that
plaintiffs cannot recover under the policy because specific
exclusions apply, and further because they have already
received the maximum payment under a separate Business Auto
Policy by defendant's affiliate. This matter is before
the court on the parties' cross-motions for summary
judgment (Dkts. 25, 27). For the reasons provided below, the
court grants defendant's motion for summary judgment, and
denies plaintiffs' motion for summary judgment.
court finds the following facts to be uncontroverted for
purposes of summary judgment.
August 16, 2014, William Howard Baker d/b/a HB Landscaping
(the “insured”) was driving a pickup truck
transporting a riding lawnmower on a trailer in the course
and scope of his employment. The trailer popped off its
hitch, and the momentum of the trailer carried it into
oncoming traffic. The trailer collided with a motorcycle
driven by Shawn Schellenger, along with Danielle Schellenger
as a passenger. Both died as a result of the accident.
insured was covered by two insurance policies: Business Auto
Policy No. 37 UEC AQ5579 SA (“BA Policy”) and
General Liability Policy No. 37 SBA AM1625 (“GL
Policy”). Plaintiffs recovered the full policy limits
under the BA Policy issued by defendant's affiliate,
Sentinel Insurance Company, Limited, for damages caused by
the accident. However, plaintiffs' claim was denied by
defendant under the GL Policy.
facts will be related, as necessary, in connection with the
court's analysis of defendant's motion.
Summary Judgment Standards
diversity cases, the substantive law of the forum state
(Kansas) governs the analysis of the underlying claims, but
the court applies federal law in determining whether summary
judgment is appropriate. Hill v. Allstate Ins. Co.,
479 F.3d 735, 739 (10th Cir. 2007). Summary judgment is
appropriate if the moving party demonstrates that there is no
genuine dispute as to any material fact, and the movant is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
A fact is “material” when it is essential to the
claim, and the issues of fact are “genuine” if
the proffered evidence permits a reasonable jury to decide
the issue in either party's favor. Haynes v. Level 3
Communs., 456 F.3d 1215, 1219 (10th Cir. 2006). The
movant bears the initial burden of proof and must show the
lack of evidence on an essential element of the claim.
Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851
(10th Cir. 2004) (citing Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986)). The nonmovant must then bring
forth specific facts showing a genuine issue for trial.
Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th
Cir. 2005). The court views all evidence and reasonable
inferences in the light most favorable to the non-moving
party. LifeWise Master Funding v. Telebank, 374 F.3d
917, 927 (10th Cir. 2004).
denial letter provided several grounds for denying coverage:
(1) the auto exclusion; (2) the mobile equipment exclusion;
and (3) exhaustion of the policy limit under the BA Policy
precluded overlapping coverage from the GL Policy. As the
insurer, defendant bears the burden to establish that the GL
Policy's auto and mobile equipment exclusions preclude
coverage of the accident. See Union Ins. Co. v.
Mendoza, 374 F. App'x 796, 800 (10th Cir. 2010)
(“Under Kansas law, an insurer bears the burden of
proving that coverage is excluded.”). “To be
enforced, policy exclusions must be specific and
unambiguous.” Cont'l Cas. Co. v. MultiService
Corp., No. CIV A 06-2256-CM, 2009 WL 1788422, at *2 (D.
Kan. June 23, 2009); City of Salina, Kan. v. Md. Cas.
Co., 856 F.Supp. 1467, 1476 (D. Kan. 1994) (“Under
Kansas law, the court narrowly construes restrictions or
limitations of coverage.”). But courts should not
strain to create an ambiguity where, in common sense, none
exists. Newton v. Nicholas, 887 P.2d 1158, 1164
Policy contains a Business Liability Coverage Form, which
states that defendant will “pay those sums that the
insured becomes legally obligated to pay as damages because
of ‘bodily injury', ‘property damage' or
‘personal and advertising injury' to which this
insurance applies.” (Dkt. 26, at 6). However, the
Business Liability Coverage Form also contains an auto
exclusion found in Section B. Specifically, Section B
excludes bodily injury or property damage arising out of the
ownership, maintenance, or use of an auto. “Use
includes operation and ‘loading or
unloading'.” Id. at 7. The term
“auto” is defined as “a land motor vehicle,
trailer or semi-trailer designed for travel on public roads,
including any attached machinery or equipment.”
B also contains a mobile equipment exclusion, and
specifically excludes coverage for injuries and/or damages
arising out of “[t]he transportation of ‘mobile
equipment' by an ‘auto' owned or operated by or
rented or loaned to any insured[ ] . . . .”
Id. at 8. “Mobile Equipment” includes
“vehicles designed for use principally off public
roads” as well ...