Employee Not in Course of Employment under CGL
In American Interstate Ins. Co. v. Smith, 2008 WL 268909, the U.S. District Court, S.D. Georgia, ruled on a case where plaintiff American Interstate had issued a CGL policy to Cooper Logging, and American sought declaratory judgment that the policy did not provide coverage to the defendants for any claims arising out of an accident involving the insured's logging truck, including the claims made in the underlying liability suit.
In the case, the employee's vehicle had collided with a logging truck owned by Cooper Logging, Inc. and driven by Marshall Jordan, Jr. As a result of the employee's death in that collision, his minor child, through her mother Kristina Smith, filed suit against Cooper Logging and Jordan in the lower court.
On the day of the collision, Jordan had made his final delivery of wood to the paper mill. After that delivery, Jordan took a co-worker who lived a few miles from Jordan , home. Mr. Cooper, the president of Cooper Logging, often directed Jordan to give Devoe a ride to and from work because Devoe did not have his own transportation and lived close to Jordan . After Jordan dropped off Devoe, he was pulling the Cooper Logging truck into his own driveway when the collision occurred.
Jordan testified that he did not make any other stops on his way home, and Jordan and Mr. Cooper testified that when Jordan was pulling into his driveway he was finished with his daily work requirements for Cooper Logging and had no other work-related obligations for the evening. Jordan was often permitted to take the Cooper Logging truck home because it saved fuel and allowed less miles to be put on the truck.
American contended that summary judgment should be granted for two reasons. First, American argued that the claims at issue were excluded by the policy's “Aircraft, Auto or Watercraft” exclusion. Second, and alternatively, American Interstate contended that Jordan was not entitled to coverage because he did not qualify as an “insured” under the policy
In regards to American's first contention, defendants did not argue that the “auto” exclusion was not applicable to the accident. Rather, they argued that Mr. Cooper's conduct somehow resulted in a waiver of the exclusion. Defendants' basis for this argument was that T.C. Logging, a broker through whom Cooper Logging obtained business, required Cooper Logging to supply it with a certificate of insurance documenting that certain policies were in place. The certificate of insurance was also used for Cooper Logging to gain access for its trucks into various paper mills, and the policy issued by American was one of the policies listed on the certificate of insurance. Thus, defendants' contended that by using the certificate of insurance to get into the mills, Cooper Logging had caused American to waive any right to rely on the “auto” exclusion.
The court disagreed, holding that the insured logging company's use of the certificate of insurance for that reason did not cause the CGL insurer to waive any right to rely on the “auto” exclusion in the policy to preclude coverage for a traffic accident, particularly where the certificate stated that it was issued for information only and did not amend or alter coverages.
Therefore, the truck involved in this accident was an “auto” under the policy exclusion. And, under the clear and unambiguous language of the policy the “auto” exclusion was applicable and barred coverage for all of defendants' claims in the underlying suit. American was granted summary judgment as a matter of law.
As for American's claim that Jordan did not qualify as an “insured” under the policy, as coverage afforded by the policy only inures to the benefit of those defined as an “insured,” the court agreed. The court explained that when an employee was involved in a collision while operating his employer's vehicle, a presumption arose that the employee was acting within the scope of his employment; however, the presumption could be overcome by uncontradicted evidence that the employee was not acting within the scope of his employment. The test was whether the employee was at that time serving the employer, not that the act was done by the employee during the existence of employment.
The court therefore determined that an employee driving his insured employer's truck home from work was not acting within the scope of his employment when involved in accident as he was pulling into the driveway of his residence. Thus he was not an insured under the CGL policy, notwithstanding that he had dropped off a coworker at his employer's request on his way home. Therefore, Jordan did not qualify as an “insured” under the policy, and no coverage was owed to him by American as a matter of law.