In Landmark American Insurance Co. v. VO Remarketing Corp, No. 13-1386 (D. Colo. June 13, 2014), [enhanced version available to lexis.com subscribers], a Colorado federal court interpreted the terms “finally delivered” as used in the “auto exclusion” in ISO’s standard CGL policy. More specifically, “finally delivered” is part of the policy’s definition of “loading or unloading,” which is considered “use of an auto” for purposes of the exclusion. Before the court was coverage for bodily injuries sustained when a Stairmaster, while being delivered to a second story loft, cascaded down, ironically, a flight of steps. The issue was this. If the Stairmaster had been “finally delivered,” then it was no longer in the process of “loading or unloading,” so the delivery was no longer considered “use of an auto,” thereby taking it outside of the auto exclusion.
The competing coverage arguments were as follows: The insurer argued that “finally delivered” means the specific location within a home where the item is placed in its final position. “[S]ince the Stairmaster had not yet been placed in Tibbe’s second story loft as directed, the unloading of the Stairmaster had not yet ceased at the time of the Accident, and thus delivery was not complete.” The delivery company-insured argued that “finally delivered” “could reasonably be understood to mean arrival at the home or commercial address where the item is to be turned over to the customer.” The delivery company also argued that “delivery had been completed because the employees ‘had crested the stairs’ to the second story loft at the time of the Accident.” Applying the “complete operation doctrine,” the Colorado federal court held that the auto exclusion applied because the accident occurred before the conclusion of the loading and unloading of the insured vehicle. The insured’s employees still had control of the Stairmaster when the accident occurred.
“Loading or unloading”-related “auto exclusion” cases arise with some regularity under CGL policies. Such cases often involve disputes between CGL and auto insurers over which is liable for a claim. Given that VO Remarketing involves the interpretation of specific language contained in the industry’s bread and butter CGL policy, it has the potential to serve as future guidance. That makes it worthy of note.
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Randy Maniloff is Counsel at White and Williams, LLP in Philadelphia. He previously served as a firm Partner for seven years and transitioned to a Counsel position to pursue certain writing projects including Coverage Opinions . Nonetheless he still maintains a full-time practice at the firm. Randy concentrates his practice in the representation of insurers in coverage disputes over primary and excess obligations under a host of policies, including commercial general liability and various professional liability policies, such as public official’s, law enforcement, educator’s, media, computer technology, architects and engineers, lawyers, real estate agents, community associations, environmental contractors, Indian tribes and several others. Randy has significant experience in coverage for environmental damage and toxic torts, liquor liability and construction defect, including additional insured and contractual indemnity issues. Randy is co-author of “General Liability Insurance Coverage - Key Issues In Every State” (Oxford University Press, 2nd Edition, 2012). For the past twelve years Randy has published a year-end article that addresses the ten most significant insurance coverage decisions of the year completed.
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