                     United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 11-2933
                                    ___________

Auto Club Insurance Association,     *
                                     *
             Appellant,              *
                                     * Appeal from the United
      v.                             * States District Court for the
                                     * District of Minnesota.
Sentry Insurance, a Mutual Company, *
                                     *
             Appellee.               *
                                ___________

                              Submitted: May 16, 2012
                                 Filed: July 2, 2012
                                  ___________

Before RILEY, Chief Judge, MELLOY and SMITH, Circuit Judges.
                              ___________

RILEY, Chief Judge.

       Jason McCann was involved in an automobile accident with Jeffrey Kreml.
McCann’s insurer, Auto Club Insurance Association, defended McCann against
Kreml’s personal injury claim. After Kreml and McCann settled, Auto Club sought
contribution from Sentry Insurance, the insurer for McCann’s employer, claiming
Sentry was obligated to provide co-primary coverage for McCann. Auto Club sued
in federal district court,1 invoking the court’s diversity jurisdiction under 28 U.S.C.



      1
      The Honorable Patrick J. Schiltz, United States District Judge for the District
of Minnesota.
§ 1332. Auto Club appeals the district court’s grant of summary judgment to Sentry.
We affirm.

I.    BACKGROUND
      McCann was driving his personal vehicle when he rear-ended a vehicle driven
by Kreml. Kreml sued McCann and McCann’s employer, Life Time Fitness (Life
Time), for his injuries, claiming Life Time was vicariously liable because McCann
was acting within the scope of his employment when the collision occurred.2 Auto
Club paid $100,000, the policy limit, to settle Kreml’s claims. Auto Club agreed to
loan McCann the costs of defending Kreml’s lawsuit and seek reimbursement from
Life Time’s insurer, Sentry. Auto Club promised to forgive the “loan” if it could not
recover from Sentry.

       Auto Club sued Sentry, claiming Sentry provided co-primary insurance
coverage and seeking contribution for McCann’s defense and indemnity costs. The
district court granted Sentry’s motion for summary judgment and denied Auto Club’s
motion, finding the Sentry policy only obligated Sentry to provide excess liability
coverage, and McCann had no excess exposure because he settled within the limits of
the Auto Club policy.

II.    DISCUSSION
       “We review a district court’s grant of summary judgment de novo, viewing the
facts in the light most favorable to [Auto Club] and giving [Auto Club] the benefit of
all reasonable inferences.” Marlowe v. Fabian, 676 F.3d 743, 746 (8th Cir. 2012).
Sentry is entitled to summary judgment if “there is no genuine dispute as to any
material fact and [Sentry] is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a).




      2
       Kreml’s suit against Life Time is not at issue in this case.

                                         -2-
        Minnesota contract law governs our interpretation of the Sentry policy. See
Nat’l Union Fire Ins. Co. of Pittsburgh v. Terra Indus., Inc., 346 F.3d 1160, 1164 (8th
Cir. 2003) (“State law governs the interpretation of insurance policies.”); Lobeck v.
State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998) (“General
principles of contract interpretation apply to insurance policies.”). We construe the
policy’s terms “according to what a reasonable person in the position of the insured
would have understood the words to mean.” Canadian Univ. Ins. Co. v. Fire Watch,
Inc., 258 N.W.2d 570, 572 (Minn. 1977). Unambiguous language “must be given its
usual and accepted meaning,” and ambiguous language is interpreted against the
insurer. Bobich v. Oja, 104 N.W.2d 19, 24 (Minn. 1960). Language is ambiguous if
it “is reasonably subject to more than one interpretation,” Columbia Heights Motors,
Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 34 (Minn. 1979), when considered in the
context of the entire policy, see Bd. of Regents of the Univ. of Minn. v. Royal Ins. Co.
of Am., 517 N.W.2d 888, 892 (Minn. 1994). “A policy and endorsements should be
construed, if possible, so as to give effect to all provisions,” Bobich, 258 N.W.2d at
24, and “avoid an interpretation . . . that would render a provision meaningless,” see
Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 526 (Minn. 1990). Specific
provisions in a contract govern over more general provisions. See Burgi v. Eckes, 354
N.W.2d 514, 519 (Minn. App. 1984).

       Auto Club’s policy provides that if the covered vehicle “is also covered by
other liability insurance, [Auto Club] will pay the ratio of [its] Limit of Liability to the
total applicable Liability Limit.” Auto Club claims Sentry must indemnify Auto Club
because Sentry also provided primary coverage to McCann at the time of the accident.
Auto Club’s liability limit is $100,000, which Auto Club claims should be combined
with Sentry’s $1,000,000 liability limit, for a total liability limit of $1,100,000. Auto
Club concludes it is responsible for only 9% of McCann’s indemnity and defense
costs, and Sentry must pay the remaining 91%.




                                            -3-
       Sentry’s policy provides primary coverage to Life Time for “any covered ‘auto’
you own,”3 but only excess coverage “[f]or any covered ‘auto’ you don’t own.” The
Sentry policy explains “you” and “your” refer to the named insured. As the district
court determined, “the Sentry policy provides primary coverage only for vehicles that
are owned by a ‘named insured’—and, at most, excess coverage for vehicles that are
not owned by a ‘named insured.’” The dispositive question is whether McCann
qualifies as a “named insured.”

      The following “persons or organizations” are named insureds under the Sentry
policy’s “controlled-entities endorsement”:

      Life Time Fitness, Inc and its subsidiaries [list of subsidiary business
      entities omitted]

      and any other divisions, subsidiaries and persons and organizations
      under the control of the named insured, and any business entity
      incorporated or organized under the laws of the United States of America
      . . . [in which] the organization named maintains, during the policy
      period, an ownership or majority interest.

(emphasis added). Auto Club claims McCann was a named insured because, as an
employee, McCann was a “person[] . . . under the control of the named insured,” Life
Time.

       The district court rejected Auto Club’s interpretation of the Sentry policy
controlled-entities endorsement, explaining such an interpretation was unreasonable
when read in the context of two policy provisions that specifically address coverage
of employees. The “who-is-an-insured” provision states “[t]he following are
‘insureds’:”



      3
       Sentry does not dispute McCann’s vehicle was a “covered auto.”

                                         -4-
      a.     You [i.e., the named insured,] for any covered “auto”.
      b.     Anyone else while using with your permission a covered “auto”
             you own, hire, or borrow except:
             ....
             (2) Your “employee” if the covered “auto” is owned by that
                   “employee” or a member of his or her household.

And the “employees-as-insureds” endorsement, which modifies the who-is-an-insured
provision, makes “[a]ny ‘employee’ of yours . . . an ‘insured’ while using a covered
‘auto’ you don’t own, hire or borrow in your business or your personal affairs.”
Applying Minnesota law, the district court found the most reasonable interpretation
of the Sentry policy under the facts of this case indicates the controlled-entities
endorsement only applies to entities Life Time controls, and not to employees. Under
this interpretation, when employees such as McCann “drive their own automobile
within the scope of their employment by Life Time, they are ‘insureds’ who receive
excess coverage under the Sentry policy, not ‘named insureds’ who receive primary
coverage under the Sentry policy.” Auto Club argues the district court erred in this
determination. We disagree.

       The parties identify two possible interpretations of the phrase “persons and
organizations under the control of [Life Time]” in the controlled-entities endorsement:
Auto Club’s interpretation includes employees, while Sentry’s interpretation is limited
to business entities Life Time owns or controls financially. Though this phrase,
standing alone, may have more than one reasonable meaning, it is not ambiguous in
context because it is “reasonably subject to” only one interpretation—Sentry’s—when
viewed with the rest of the policy. See Columbia Heights Motors, Inc., 275 N.W.2d
at 34; Bobich, 258 N.W.2d at 24.

      Auto Club’s interpretation of the controlled-entities endorsement is
unreasonable in the context of the entire policy due to how it affects the employees-as-
insureds endorsement, which states “[a]ny ‘employee’ of yours is an ‘insured’ while
using a covered ‘auto’ you don’t own, hire or borrow in your business or your

                                          -5-
personal affairs.” The most natural reading of employees-as-insureds endorsement
makes only some employees insureds—employees using in the scope of their
employment their own vehicles, which Life Time has not hired or borrowed. Such
employees are entitled to excess, but not primary, coverage. Those employees driving
vehicles they own, which Life Time has not rented or hired, remain excluded from the
definition of insureds under the who-is-an-insured provision.

       Auto Club’s interpretation of the controlled-entities endorsement makes all
employees acting in the scope of their duties “named insureds” and renders
meaningless the distinction the who-is-an-insured provision and the employees-as-
insureds endorsement draw between categories of employees. If all employees acting
in the scope of their employment are named insureds entitled to primary coverage,
Sentry must indemnify such employees regardless of whether another policy also
applies. In such a situation, there would be no need for the policy to address excess
coverage for these employees—as the who-is-an-insured provision and the employees-
as-insureds endorsement do. As the district court noted, the fact the employees-as-
insureds endorsement “unambiguously provides that [certain] employees are
‘insureds’ (and not ‘named insureds’)” makes it unlikely the parties intended to make
the same employees “named insureds” under the more general controlled-entities
endorsement. Specific contractual terms should govern over more general ones. See
Burgi, 354 N.W.2d at 519. For these reasons, Auto Club’s interpretation of the
controlled-entities endorsement is unreasonable. See Chergosky, 463 N.W.2d at 526;
Bobich, 104 N.W.2d at 24.

       The district court also rejected as unreasonable Auto Club’s proposed
alternative interpretation of the employees-as-insureds endorsement, under which “in
your business or personal affairs” modifies “own, hire, or borrow” rather than “using.”
This interpretation, which Auto Club advances to show the endorsement is not made
superfluous by Auto Club’s understanding of the controlled-entities endorsement,
makes an employee an insured when using a car Life Time does not own, hire, or


                                         -6-
borrow, regardless of whether the employee is acting in the scope of his or her
employment. The district court reasoned that Auto Club’s interpretation would result
in the unidiomatic “phrase ‘own in your business or your personal affairs,’” as
opposed to the “entirely idiomatic” “phrase ‘us[e] . . . in your business or your
personal affairs.’” The district court observed the words “own, hire, or borrow” also
appear in subsection (b) of the who-is-an-insured provision, where they reference “a
covered ‘auto’ you [, the named insured,] own, hire, or borrow.” By contrast, the
employees-as-insureds provision concerns “a covered ‘auto you don’t own, hire, or
borrow in your business or your personal affairs.” (emphasis added). The district
court explained,

      Auto Club’s reading of the policy language . . . contrasts two groups of
      autos: (1) all [covered] autos a “named insured” owns, hires, or borrows,
      and (2) only some [covered] autos a “named insured” does not own, hire,
      or borrow—namely, autos the “named insured” does not own, hire, or
      borrow for (or “in”) its business or personal affairs.

The district court determined the more sensible reading of the employees-as-insureds
endorsement—with “in your business or personal affairs” modifying
“using”—contrasts “two mutually exclusive and collectively exhaustive sets of autos”:
those a named insured “owns, hires, or borrows,” and those it does not. The district
court’s determination is quite reasonable, and we adopt it.

      The district court also noted the second interpretation of the employees-as-
insureds endorsement “would lead to an absurd result” of an employee driving his
family car on vacation being an insured by virtue of driving a car Life Time does not
“own, hire or borrow in [Life Time’s] business or [its] personal affairs.” That
employee absurdly would be entitled to excess coverage under Auto Club’s reading.

       Finally, Auto Club asserts Sentry’s interpretation of the controlled-entities
endorsement, adopted by the district court, is problematic because the controlled-
entities endorsement refers to “persons” under Life Time’s control, which Auto Club

                                         -7-
argues could not simply refer to business entities, but also must refer to employees.
However, the word “person” can encompass both individuals and organizations. Cf.
Mohamad v. Palestinian Auth., 566 U.S. __, __, 132 S. Ct. 1702, 1707 (2012)
(explaining the word “person” often includes corporations, and Congress and the
Supreme Court often use the word “individual” “to distinguish between a natural
person and a corporation”). The controlled-entities endorsement may still refer to
individuals under Life Time’s control, just not to employees because employees are
excluded by the specific who-is-an-insured provision and employees-as-insureds
endorsement. As the district court concluded, “Sentry’s interpretation of its policy is
not perfect, but it is reasonable—and it is infinitely more reasonable than Auto Club’s
interpretation.” We agree.

III.   CONCLUSION
       We affirm the thorough and well-reasoned opinion and the judgment of the
district court.
                       ______________________________




                                         -8-
