North Pacific Insurance v. Kelley

MEMORANDUM * The district court properly granted summary judgment to Michael and Dixie Kelley. The “unloading provision” within the farm liability insurance policy issued by North Pacific Insurance Company (“North Pacific”) is ambiguous because the phrase, “place where it is finally delivered,” can reasonably mean two different things. See McDonald Indus, v. Rollins Leasing Corp., 95 Wash.2d 909, 631 P.2d 947, 949 (1981) (“Coverage is considered ambiguous when, on its face, it is fairly susceptible to two different interpretations, both of which are reasonable.” (internal quotation marks omitted)). The phrase can be interpreted as meaning that the cattle were not finally delivered until they reached “a location where they were safely contained,” or alternatively it can be interpreted to mean that “delivery was complete when the cows’ hooves hit the pavement.” Having determined that the phrase, “the place where it is finally delivered,” is ambiguous, we must assign it the meaning more favorable to the Kelleys, as the insured. See id. (“It is fundamental that ambiguities in the policy must be construed against the insurer and in favor of the insured. This rule applies with added force in the case of exceptions and limitations to the policy’s coverage.”). North Pacific also argues that the accident is excluded from coverage because of the more general “use exclusion.” This exclusion provides that the insurance does not apply to bodily injury “arising out of the ... use ... of any ... ‘auto’ ... owned or operated by ... any ‘insured.’ ” However, “[i]n Washington, an accident arises out of the use of a vehicle if the vehicle itself or permanent attachments to the vehicle causally contributed in some way to produce the injury.” Mutual of Enumclaw Ins. Co. v. Jerome, 122 Wash.2d 157, 856 P.2d 1095, 1097 (1993) (en banc) (internal quotation marks omitted). Therefore, this exclusion does not apply because the “use” of the trailer was too indirectly linked to the incident causing bodily injury. North Pacific’s appeal of attorney’s fees is contingent on its appeal of the district court’s grant of summary judgment. Therefore, because we affirm the district [598] court’s grant of summary judgment, we also affirm the award of attorney’s fees. AFFIRMED. Footnotes [*] This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir. R. 36-3.