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14-P-449                                                Appeals Court

    RITA BORDEN       vs.    PROGRESSIVE DIRECT INSURANCE COMPANY.


                                No. 14-P-449.

           Bristol.         November 10, 2014. - May 21, 2015.

              Present:      Rubin, Brown, & Maldonado, JJ.


Insurance, Business exclusion. Contract, Insurance. Motor
     Vehicle, Insurance. Practice, Civil, Summary judgment.



     Civil action commenced in the Superior Court Department on
October 9, 2012.

     The case was heard by Robert J. Kane, J., on motions for
summary judgment.


    Joseph A. Keough, Jr., for the plaintiff.
    Hillary J. Giles for the defendant.


    BROWN, J.    The single issue presented for review is whether

the "automobile business" exclusion contained in a standard

Rhode Island automobile policy applies in the circumstances of

this case as to preclude coverage.       Ruling on cross motions for

summary judgment, a judge of the Superior Court concluded that

it did, and ordered judgment to enter for the defendant,
                                                                      2


Progressive Direct Insurance Company (Progressive).    We agree

and, accordingly, affirm the judgment.1

     To prevail on appeal, the plaintiff must convince us that

there is a dispute of material fact which precludes summary

judgment or that the undisputed material facts entitle her to a

judgment as matter of law.     See Augat, Inc. v. Liberty Mut. Ins.

Co., 410 Mass. 117, 120 (1991).    Our review is de novo.   See

Miller v. Cotter, 448 Mass. 671, 676 (2007).

     1.   Facts.   The material facts necessary to decide the

legal issue before us are undisputed.     In 2008, Geraldina Melo

purchased a Dodge tow truck solely for the use of her boy

friend, Davidson Lues Bucco.    On behalf of automobile

dealerships, Bucco transported used automobiles by means of the

tow truck either (1) from dealer lots to sales auctions or (2)

from the auctions to dealer lots.    Bucco called his business

"David's Towing."    He hired Eduardo A. Silva to assist him with

the work.2   Whenever Silva's help was needed, someone from

David's Towing would notify Silva that he was needed on a




     1
       As confirmed at oral argument, for purposes of summary
judgment, the parties agree that Rhode Island law applies. We
cite to cases from other jurisdictions, as did the parties, for
their persuasive value.
     2
       At the time, Silva, the holder of a commercial driver's
license, also worked full-time as a driver for CMI of Canton
delivering doughnuts.
                                                                   3


designated day.   Silva performed services for David's Towing

once or twice per week, earning $100 per day.

     On the date of the accident, Silva arrived at the garage

used by David's Towing at 9 A.M. and parked his 2007 Nissan

Altima (the vehicle insured by Progressive).    After retrieving

the keys to the tow truck, the only one used in the business, he

inspected it to make sure everything was in order.    At 9:55

A.M., while Silva was en route to pick up a car for delivery to

a dealer, he struck a vehicle in which the plaintiff, Rita

Borden, was a passenger.    As a result of the accident, the

plaintiff sustained personal injuries.   Her medical bills

exceeded the amount of primary insurance available through

Melo's insurer.   Progressive denied the plaintiff's claim for

excess coverage under Silva's personal automobile policy on the

basis of its automobile business exclusion.3    This declaratory

judgment action followed.




     3
       The policy issued to Silva contained a broad insuring
agreement requiring Progressive to "pay damages for bodily
injury and property damage for which an insured person becomes
legally responsible because of an accident." The automobile
business exclusion provided, in relevant part, that coverage,
including the duty to defend, did not apply to "bodily injury
. . . arising out of an accident involving any vehicle while
being maintained or used by a person while employed or engaged
in any auto business." The policy defined "auto business" as
"the business of selling, leasing, repairing, parking, storing,
servicing, delivering, or testing vehicles" (emphasis supplied).
                                                                     4


     2.   Discussion.   As the plaintiff points out, the

automobile business exclusion has a long history.4   The majority

of published cases that have considered the exclusion involve

the surrender of the insured vehicle for use by some unknown

individual in the automobile business.   See, e.g., Transamerica

Ins. Group v. State Farm Mut. Auto. Ins. Co., 492 F. Supp. 283,

287 (D. Nev. 1980) (parking lot attendant); Universal

Underwriters Ins. Co. v. Travelers Ins. Co., 669 A.2d 45, 46

(Del. 1995) (car dealership employee).   The exclusion is based

on the assumption that the lack of control over the insured

vehicle increases the risk to the owner's insurer.   See Halley

v. State Farm Mut. Auto. Ins. Co., 130 Ga. App. 258, 260 (1973).

Courts have reasoned that once the automobile business assumed

control over the insured vehicle, that business should bear the

cost of insuring for such risks under its own liability policy.

See Grisham v. Allstate Ins. Co., 128 N.M. 340, 342 (1999).     We

agree with the plaintiff that the facts of this case do not fit

into this entrustment line of cases.   However, the exclusion

also has been applied in cases such as the one before us

involving the insured's use of a nonowned vehicle in the course

of employment.   See, e.g., St. Paul Fire & Marine Ins. Co. v.


     4
       This common exclusionary clause has taken on many forms
and has generated a considerable amount of litigation. See
Transamerica Ins. Group v. State Farm Mut. Auto. Ins. Co., 492
F. Supp. 283, 285 (D. Nev. 1980).
                                                                   5


West Am. Ins. Co., 437 A.2d 165, 169-170 (Del. Super. Ct. 1981)

(no coverage under bank employee's personal automobile policy

where he was returning repossessed car offered for sale by bank

after showing it to potential buyer); Western Cas. & Sur. Co. v.

Verhulst, 471 S.W.2d 187, 188-190 (Mo. 1971) (no coverage under

personal automobile policy where insured was delivering vehicle

for car salesman between sales auction and used-car lot); Carney

v. Erie Ins. Co., 189 W. Va. 702, 707 (1993) (no coverage under

personal automobile policy of employee of automobile dealership

where she was returning vehicle after showing it to potential

buyer).

    The plaintiff recognizes that insurance coverage follows

the insured individual.   To the extent that she argues

Progressive had the ability to evaluate the risk presented by

Silva operating a vehicle not listed on the policy, we note

that, as a general rule, an insurer of a personal automobile is

only expected to provide coverage for an insured's occasional or

infrequent use of other vehicles.   See Western Cas. & Sur. Co.

v. Verhulst, supra at 190.   Here, the risk posed by Silva's use

of the tow truck in the course of his employment for David's

Towing, we think, falls outside the range of ordinary risks

contemplated by insurers of personal automobiles.   See Henderson

v. Nationwide Ins. Co., 35 A.3d 902, 908 (R.I. 2012) (insurance

company could not reasonably anticipate that personal automobile
                                                                   6


policy would cover losses incurred by professional limousine

driver using nonowned vehicle in course of employment).

     Noting that the definition of "auto business" in the

Progressive policy is unambiguous and does not list the business

of towing, the plaintiff contends that the exclusion is clearly

inapplicable.   Although we agree with the plaintiff that the

policy language is unambiguous, we disagree with her analysis.5

The words "business of . . . delivering . . . vehicles" are

readily understood by any ordinary purchaser of personal

automobile insurance.   Delivering vehicles means bringing them

from one location to another location.   As the Superior Court

judge noted, the delivery of a vehicle by a business may be

accomplished in several ways, including through the use of a

driver, a flatbed truck, a car carrier, or a tow truck.    The

method of transportation required for any delivery is

necessarily encompassed within the expressly excluded business

activity.   The plaintiff provides no record evidence or

authority to support her argument that for purposes of the



     5
       The Rhode Island Supreme Court has enforced previous
versions of the automobile business exclusion clause as "clear
and unambiguous and requir[ing] no construction." Murray v.
Remuck, 108 R.I. 179, 184 (1971) ("[The clause] excludes all
insurance coverage to an insured under the policy while employed
or engaged in an automobile business. . . . There is nothing in
such exclusion contrary to public policy"). See Mullins v.
Federal Dairy Co., 568 A.2d 759, 763 (R.I. 1990) (policy
language is "clear on its face").
                                                                     7


exclusion, a delivery is limited to an individual driving a

vehicle.

     The plaintiff further argues that the cases relied upon by

Progressive and the motion judge as authority for summary

judgment actually support her position in this litigation.     See

Maryland Cas. Co. v. Integrity Ins. Co., 693 F.2d 506 (5th Cir.

1982); Westfield Ins. Co. v. Aetna Life & Cas. Co., 153 Ariz.

564 (Ct. App. 1987); Mullins v. Federal Dairy Co., 568 A.2d 759

(R.I. 1990).   We disagree.   These cases, in which the courts

found the particular automobile business exclusions

inapplicable, are distinguishable on the facts or by policy

language.6   Moreover, the principles discussed in each case

support the conclusion reached by the judge.

     In the Mullins case, the policy definition of automobile

business did not include towing or delivering.    The Rhode Island

Supreme Court held that the "automobile-business exclusion

should only preclude coverage when the insured, at the time of

the accident, is engaged in an activity in connection with one

of the listed activities."    Id. at 763.   Where the owner of the

disabled vehicle had retained the towing company solely to haul


     6
       These cases arose in the traditional towing context in
which insured, disabled vehicles were involved in accidents
while under tow. The courts concluded that the towing companies
were not automobile businesses within the definitions of the
policies. As the plaintiff herself points out, none involved
the insured individual driving a nonowned tow truck.
                                                                    8


the vehicle and not to perform any of the activities listed in

the definition of automobile business (such as repairing,

servicing, or storing), the court concluded that the exclusion

did not apply.   Ibid.

     Similarly, in a case called "particularly instructive" by

the Rhode Island Supreme Court, ibid., the United States Court

of Appeals for the Fifth Circuit, construing the same definition

of automobile business as that at issue in Mullins, concluded

that since there was no evidence that the wrecking service

retained by the insured had engaged in any of the listed

activities, the exclusion did not apply.   See Maryland Cas. Co.

v. Integrity Ins. Co., supra at 509-510.      The Fifth Circuit

reasoned that while the pickup and delivery of a vehicle in

connection with a listed activity would fall within the

exclusion, in the case before it, the service provided was

limited solely to towing.   See id. at 509.

     The third case, Westfield Ins. Co. v. Aetna Life & Cas.

Co., supra, also does not assist the plaintiff.      Although the

policy in Westfield Ins. Co. contained an automobile business

exclusion referencing "delivery," the language of the clause

differed, in material respect, from the Progressive policy.7


     7
       The exclusion at issue in Westfield Ins. Co. v. Aetna Life
& Cas. Co., supra at 569, stated that liability coverage would
not be provided "[f]or any person while employed or otherwise
engaged in the business or occupation of selling, repairing,
                                                                   9


Applying similar reasoning as the courts in Mullins and Maryland

Cas. Co., the Court of Appeals of Arizona concluded that where

towing was neither a specifically listed business or occupation,

nor incidental to the towing company's intention to engage in

one of the listed businesses or occupations with respect to the

insured vehicle, the exclusion did not apply.   See Westfield

Ins. Co. v. Aetna Life & Cas. Co., 153 Ariz. at 569.

     Here, the specific language of the exclusion at issue, as

applied to the facts, barred coverage as matter of law.      The

plaintiff correctly points out that the parties disputed whether

Silva was engaged in a towing or an automobile delivery business

at the time of the accident.   If David's Towing were to be

deemed a delivery business, a specifically excluded activity,

see note 3, supra, coverage was precluded.   Even assuming

David's Towing was merely a towing company, as the plaintiff

contended, under Rhode Island law, Silva was engaged in an

activity (towing) in connection with the listed activity of

delivering a vehicle.8   See Mullins v. Federal Dairy Co., 568



servicing, storing or parking of vehicles designed for use
mainly on public highways, including road testing and delivery"
(emphasis supplied). In contrast, the Progressive policy more
broadly excludes vehicle delivery businesses, see note 3, supra.
     8
       The plaintiff's argument that Silva was not engaged in any
of the excluded activities (i.e., towing or delivering) at the
time of the accident is based on a distorted view of the facts.
At the time of the accident, Silva was in the tow truck on his
way to pick up a vehicle for delivery to a dealer; that no
                                                                    10


A.2d at 763.   Coverage was thus precluded whether David's Towing

was a delivery or towing business.9

     The reasonable expectations doctrine followed by Rhode

Island courts supports the result we reach.   In Henderson v.

Nationwide Ins. Co., 35 A.3d at 903-904, a limousine driver, who

had been seriously injured while dropping off passengers at the

airport for his employer, sought underinsurance benefits under

his personal automobile insurance policy.   The Rhode Island

Supreme Court upheld the denial of coverage, ruling that the

"for a fee" exclusion in that policy was clear and unambiguous,

applied to the facts of the case, and did not violate State law

or public policy.   See id. at 906-907.   The court reasoned that

"the purchaser of a personal automobile insurance policy cannot

reasonably anticipate coverage for losses that occur in the

course of his employment as a professional limousine driver;



vehicle was under tow is immaterial as matter of law. Contrast
Universal Underwriters Ins. Co. v. Farmers Ins. Co. of Idaho,
108 Idaho 249, 252 (1985) (holding, as matter of law, exclusion
inapplicable where at time of accident, salesperson was driving
borrowed demonstrator vehicle to grocery store).
     9
       The exclusion applies to the use of any vehicle "by a
person while employed or engaged in any auto business." See
note 3, supra. Although the issue was not raised by the
parties, Silva was arguably employed or engaged in a second
automobile business, i.e., the business of the car dealerships
that retained David's Towing to transport vehicles between the
auctions and their sales lots. In any event, we think it could
be fairly determined as matter of law that Silva was engaged in
the excluded business of selling vehicles. See Western Cas. &
Sur. Co. v. Verhulst, 471 S.W.2d at 190.
                                                                 11


neither could an insurance company reasonably anticipate

insuring that risk in a personal automobile insurance policy."

Id. at 908.

    This reasoning applies with equal force here.   No

individual employed as a tow truck driver could reasonably

expect coverage under his personal automobile insurance policy

for a loss occurring in the course of his employment.

    The judgment declaring that coverage was precluded under

the Progressive policy is affirmed.

                                      So ordered.
