Encompass Insurance Co. v. Coast National Insurance Co. , 764 F.3d 981 ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ENCOMPASS INSURANCE COMPANY, No. 12-55784
an Illinois Corporation; GLENS
FALLS INSURANCE COMPANY, an D.C. No.
Illinois Corporation, 2:10-cv-06421-
Plaintiffs-Appellants, GHK-PJW
v.
OPINION
COAST NATIONAL INSURANCE
COMPANY, a corporation; MID-
CENTURY INSURANCE COMPANY,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
George H. King, Chief District Judge, Presiding
Argued and Submitted
February 6, 2014—Pasadena, California
Filed August 13, 2014
2 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
Before: Harry Pregerson, Michael R. Murphy*,
and N. Randy Smith,** Circuit Judges.
Opinion by Judge Pregerson;
Dissent by Judge Murphy
SUMMARY***
California Insurance Law
The panel reversed the district court’s judgment in a
diversity insurance coverage action concerning coverage for
injuries sustained as part of an automobile accident.
The panel held that unloading an injured passenger from
a motor vehicle constituted “use” of that motor vehicle under
California law. Specifically, the panel held that as used in the
insurance policies at issue, the term “use” was defined by
California Insurance Code § 11580.06(g). The panel further
held that as defined by California Insurance Code
§ 11580.06(g), “use” of an automobile included unloading
*
The Honorable Michael R. Murphy, Senior Circuit Judge for the U.S.
Court of Appeals for the Tenth Circuit, sitting by designation.
**
Judge Berzon was originally a member of the panel, but recused
herself after oral argument. Judge N.R. Smith was drawn to replace her.
He has read the briefs, reviewed the record, and listened to the audio
recording of oral argument.
***
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 3
that automobile, and therefore, the car in this case was “used”
when the injured passenger was removed.
Tenth Circuit Judge Murphy dissented, and he would hold
that unloading the passenger did not constitute use of the
vehicle because the person unloading the passenger did not
avail herself of the vehicle simply by unloading it.
COUNSEL
Daniel P. Barer (argued), Girard Fisher, and Scott J. Vida,
Pollak, Vida & Fisher, Los Angeles, California, for Plaintiffs-
Appellants.
Limor Lehavi (argued) and Mariyetta A. Meyers-Lopez,
Archer Norris, APLC, Newport Beach, California, for
Defendants-Appellees.
OPINION
PREGERSON, Circuit Judge:
We must decide whether unloading an injured passenger
from a motor vehicle constitutes “use” of that motor vehicle,
under California law. We conclude that it does.
BACKGROUND
This case arises out of an automobile accident. Alexandra
Van Horn was a passenger in a car driven by a man named
Anthony Glen Watson. Watson lost control of his vehicle;
4 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
the car ran off the road and crashed into a light pole. A
second car, which was not involved in the crash, stopped at
the scene of the accident to render aid. A woman named Lisa
Torti was a passenger in the second car. Torti saw Van Horn
inside the wrecked car, and allegedly feared that Van Horn
might be in danger. (Torti later testified that Watson’s car
was smoking and leaking fluid, causing her to fear that the car
might catch fire or explode.) Torti grabbed Van Horn and
physically removed her from Watson’s car.
Van Horn suffered severe spinal injuries after the car
accident, and became a paraplegic. Van Horn sued Torti in
California state court, alleging that Torti caused Van Horn’s
injuries when she removed Van Horn from Watson’s car. See
Van Horn v. Watson, 197 P.3d 164, 166 (Cal. 2008).1
At the time of the accident, Torti was insured under a
“Package Policy” — including car insurance, homeowners
insurance, and personal excess liability insurance — issued
by Encompass Insurance Company.2 Torti tendered her
defense against Van Horn’s lawsuit to Encompass.
Encompass accepted the tender, and assumed responsibility
for Torti’s defense.
1
Our account of the car accident is drawn from the California Supreme
Court’s opinion in Van Horn.
2
Torti’s Package Policy was actually jointly issued by Encompass and
Glens Falls Insurance Company, also a Plaintiff in this action. Encompass
later assumed all of Glens Falls’s rights and responsibilities under Torti’s
Package Policy. For convenience, we — like the parties and the district
court — refer only to Encompass.
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 5
Torti also sought to tender her defense to two additional
insurance companies — Mid-Century Insurance Company
and Coast National Insurance Company.
Mid-Century had issued a car insurance policy to Torti.
The Mid-Century policy covered “damages for which an
insured person is legally liable because of bodily injury to any
person . . . arising out of the . . . use of a private passenger
car . . . .” Though Torti obtained the Mid-Century policy in
connection with her own car (which was not involved in the
accident), the policy also covered Torti’s “use” of “any other
private passenger car” — if such “use” was “with the
permission of the owner.” Thus, if Torti “used” Watson’s car
with Watson’s permission when she removed Van Horn from
Watson’s car, the Mid-Century policy covered Torti.
Coast National had issued a car insurance policy to
Watson, the driver of the car that crashed. The Coast
National policy covered liability for personal injuries “for
which any ‘insured’ becomes legally responsible because of
an accident.” The policy insured not only Watson, but also
“[a]ny person using ‘[Watson’s] covered auto’ with
[Watson’s] permission.” Thus, if Torti “used” Watson’s car
with Watson’s permission when she removed Van Horn from
Watson’s car, the Coast National policy also covered Torti.
Both Mid-Century and Coast National rejected Torti’s
tender, refusing to accept any responsibility for her legal
defense. Encompass continued to bear sole responsibility for
Torti’s defense, and ultimately settled Van Horn’s claims
against Torti for $4 million.
After settling Van Horn’s lawsuit against Torti,
Encompass brought this lawsuit against Mid-Century and
6 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
Coast National. In this lawsuit, Encompass seeks
contribution or subrogation for the expenses Encompass
incurred in its defense and indemnification of Torti.
Encompass argues that Mid-Century and Coast National had
their own duty to defend and indemnify Torti: according to
Encompass, the Mid-Century and Coast National insurance
policies covered Torti when Torti removed Van Horn from
Watson’s car, because that act constituted permissive “use”
of Watson’s car. Mid-Century and Coast National deny that
their insurance policies covered Torti, arguing that Torti did
not engage in permissive “use” of Watson’s car.
The district court entered judgment in favor of Mid-
Century and Coast National.3 The district court reasoned that
Torti did not “use” Watson’s car when she removed Van
Horn from that car. The district court did not reach the issue
of permission.
This appeal followed.
JURISDICTION
The district court had jurisdiction over this diversity
action under 28 U.S.C. § 1332. We have appellate
jurisdiction under 28 U.S.C. § 1291.
STANDARD OF REVIEW
“California’s substantive insurance law governs in this
diversity case.” West v. State Farm Fire & Cas. Co.,
3
The parties dispute the precise nature of the district court’s ruling. We
need not resolve this dispute, because we would reverse the district court’s
judgment in any event.
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 7
868 F.2d 348, 350 (9th Cir. 1989). Whether an issue is a
question of law or a question of fact is a substantive question,
to which state law applies. See Wilcox v. Arpaio, 753 F.3d
872, 875 (9th Cir. 2014). Once we determine whether an
issue is a question of law or a question of fact, however, “the
proper standard of review is a question of federal procedure
and is governed by federal law.” West, 868 F.2d at 350.
“[I]nterpretation of an insurance policy is a question of
law . . . .” Ameron Int’l Corp. v. Ins. Co. of State of Penn.,
242 P.3d 1020, 1024 (Cal. 2010). We review questions of
law de novo. Matter of McLinn, 739 F.2d 1395, 1403 (9th
Cir. 1984) (en banc).
DISCUSSION
We must decide whether Torti “used” Watson’s car when
she removed Van Horn from that car. The parties do not
dispute that Torti “unloaded” Van Horn from Watson’s car.
Thus, we must decide whether “unloading” an injured
passenger from an automobile constitutes “use” of that
automobile, within the meaning of Mid-Century’s and Coast
National’s insurance policies. We conclude that it does.
In this case, determining the meaning of the term “use” is
an exercise in statutory construction. The relevant language
in the Mid-Century and Coast National insurance policies is
required by the California Insurance Code: “With some
exceptions, Insurance Code section 11580.1, subdivision
(b)(4) requires every automobile liability insurer to provide
permissive user coverage to the same extent as that afforded
to the named insured.” Haynes v. Farmers Ins. Exch.,
89 P.3d 381, 391 (Cal. 2004); see Cal. Ins. Code
§ 11580.1(b)(4). Language required by the California
8 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
Insurance Code “must be construed to effect not the intent of
the parties, but the intent of the Legislature. Therefore, the
rules of statutory construction apply.” Galanty v. Paul
Revere Life Ins. Co., 1 P.3d 658, 662 (Cal. 2000). Thus, to
determine whether “unloading” a motor vehicle constitutes
“use” of that motor vehicle as defined in the insurance
policies at issue here, we must determine whether the
California Insurance Code defines “unloading” a motor
vehicle as “use” of that motor vehicle.
The text of the California Insurance Code makes clear
that “unloading” a motor vehicle constitutes “use” of that
motor vehicle. The California Insurance Code provides, in
relevant part: “The term ‘use’ when applied to a motor
vehicle shall only mean operating, maintaining, loading, or
unloading a motor vehicle.” Cal. Ins. Code § 11580.06(g)
(emphasis added). Section 11580.06(g) unambiguously
equates the “unloading” of a motor vehicle with the “use” of
a motor vehicle, and our inquiry should end there. See
Kavanaugh v. W. Sonoma Cnty. Union High Sch. Dist.,
62 P.3d 54, 59 (Cal. 2003) (“If the language of the statute is
not ambiguous, the plain meaning controls . . . .”).
As one would expect from the text of section
11580.06(g), California courts consistently define “use” of a
vehicle to include “unloading.” See Scottsdale Ins. Co. v.
State Farm Mut. Auto. Ins. Co., 30 Cal. Rptr. 3d 606, 613
(Cal. Ct. App. 2005) (“As a matter of law, [an injured person]
was using the insured truck if he was ‘operating, maintaining,
loading, or unloading’ it.”) (citing Cal. Ins. Code
§ 11580.06(g)); City of Los Angeles v. Allianz Ins. Co.,
22 Cal. Rptr. 3d 716, 719–20 (Cal. Ct. App. 2004) (“The City
contends it was a ‘user’ of the truck under the controlling
case law, which holds that ‘use’ of a vehicle includes its
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 9
loading and unloading. From this principle, which is
correct . . . .”) (internal citation omitted); Nat’l Am. Ins. Co.
v. Coburn, 257 Cal. Rptr. 591, 596 n.2 (Cal. Ct. App. 1989)
(“[T]he ‘use’ of a vehicle includes its loading (and
unloading).”). We can find no case adopting the dissent’s
theory that, under section 11580.06(g), “the unloading of a
vehicle constitutes use of the vehicle only when the unloading
is part of the user’s act of availing herself of the vehicle.”
Dissenting Opinion at 14. On the contrary, California courts
have consistently said that “unloading” a vehicle — without
more — constitutes “use.”
Mid-Century and Coast National, for their part, argue that
“unloading” a motor vehicle only constitutes “use” of that
motor vehicle if the unloading is “integral to the function of
the vehicle as a means of transport,” so that the person doing
the unloading “gain[s] a benefit” from the vehicle. Mid-
Century and Coast National point to Travelers Insurance Co.
v. Northwestern Mutual Insurance Co., which held that
performing maintenance on a motor vehicle (without more)
was not necessarily “use” of the motor vehicle. 104 Cal.
Rptr. 283, 288 (Cal. Ct. App. 1972). This argument fails, for
two reasons.
First, Travelers can tell us nothing about the definition of
“use” under section 11580.06(g): Travelers was decided in
1972, and section 11580.06(g) was not enacted until 1984.
See 1984 Cal. Stat. ch. 341, § 3. To the extent that Travelers
is inconsistent with section 11580.06(g), we are bound by
section 11580.06(g), and not by Travelers.
Second, and more fundamentally, there is no conflict
between Travelers and the idea that “unloading” a vehicle
constitutes “use” of that vehicle. Even if Travelers does limit
10 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
the circumstances under which “maintaining” a vehicle
constitutes “use” of that vehicle, Travelers imposes no such
limitations on “unloading.” On the contrary, Travelers itself
accepted the observation that “‘use’ has also been defined to
mean loading and unloading of a motor vehicle.” Travelers,
194 Cal. Rptr. at 286 (quoting Yandle v. Hardware Mut. Ins.
Co., 314 F.2d 425, 437 (9th Cir. 1963)). Indeed, even before
the enactment of section 11580.06(g), California courts
understood unloading a motor vehicle to constitute “use” of
that motor vehicle. See Argonaut Ins. Co. v. Transp. Indem.
Co., 492 P.2d 673, 678 (Cal. 1972) (in bank) (“the ‘use’ of a
vehicle includes its loading and unloading”).
Defendants’ attempt to distinguish Argonaut falls short.
Even if the alleged tortfeasor in Argonaut did “gain[] a
benefit” from the use of the vehicle as a means of
transportation, that fact played no role in the California
Supreme Court’s decision. Nor was the court concerned with
whether a nexus existed between the unloading and the
individual’s operation of the vehicle. Dissenting Opinion at
17. Instead, Argonaut examined only whether the person
unloading the vehicle “was actually doing the unloading” —
whether he was “actively engaged in either loading or
unloading.” Argonaut, 492 P.2d at 678–79.
The dissent seeks to draw a distinction between
commercial vehicles (for example, the truck in Argonaut) and
other kinds of vehicles — suggesting that unloading the
former is “use,” but that unloading the latter may not be. See
Dissenting Opinion at 15. We are not convinced. The text of
section 11580.06(g) does not distinguish between commercial
and non-commercial vehicles: “[t]he term ‘use’ when applied
to a motor vehicle shall only mean operating, maintaining,
loading, or unloading a motor vehicle.” Cal. Ins. Code
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 11
§ 11580.06(g) (emphasis added). And the same section of the
California Insurance Code defines “motor vehicle” as “any
vehicle designed for use principally upon streets and
highways and subject to motor vehicle registration under the
law of this state.” Id. § 11580.06(a) (emphasis added).
Nor do the California courts seem to have adopted the
dissent’s distinction between commercial and non-
commercial vehicles, in the context of unloading. In at least
two cases, California courts have held that unloading non-
commercial vehicles constituted “use” of those vehicles. In
one case, a dog “unloading itself” from a “fourdoor sedan”
constituted “use” of that sedan. Hartford Accident & Indem.
Co. v. Civil Serv. Emps. Ins. Co., 108 Cal. Rptr. 737, 739, 742
(Cal. Ct. App. 1973). In another case, “the process of
unloading a child” from a two-door sedan likewise
constituted “use.” Nat’l Indem. Co. v. Farmers Home Mut.
Ins. Co., 157 Cal. Rptr. 98, 99–101 (Cal. Ct. App. 1979).
In short, the plain text of section 11580.06(g) equates
“unloading” a vehicle with “use” of that vehicle. Today, after
the enactment of section 11580.06(g), California courts
consistently define “use” of a vehicle to include “unloading”
that vehicle. Even before the enactment of section
11580.06(g), California courts defined “use” of a vehicle to
include “unloading” that vehicle — suggesting that Travelers
can be reconciled with this definition, to whatever extent
Travelers remains controlling after the enactment of section
11580.06(g). And unlike the dissent, we see no basis for
confining this definition of “use” to commercial vehicles.
Thus, we conclude that unloading a vehicle constitutes “use”
of that vehicle, under California law.
12 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
There is no merit to the suggestion that this definition of
“use” produces absurd results. Mid-Century and Coast
National warn that, if “unloading” a vehicle constitutes “use”
of that vehicle, “a person breaking a car window and stealing
a purse would be ‘using’ the car . . . .” As an initial matter,
it does not seem absurd to suggest that a burglar has “used”
the car he burgles: the burglar has certainly “availed
[him]self of” the car, or “exploit[ed]” the car. Use, Merriam-
Webster, http://www.merriam-webster.com/dictionary/use
(last visited August 5, 2014). More to the point, the mere fact
that a burglar might be said to “use” the car he burgles does
not mean that the burglar would be covered by a California
car insurance policy. Even if the insurance policy did not
otherwise limit its “unloading” coverage to certain persons
(which it would be free to do under California law, see Cal.
Ins. Code § 11580.1(b)(4)(A)), that coverage need apply only
to people who unload the car with the permission of the
named insured, and within the scope of that permission. See
Cal. Ins. Code § 11580.1(b)(4).
To be sure, the idea that Torti “used” Watson’s car is
counterintuitive: unloading an injured passenger is not the
way most people “use” a car. But we are not asked to decide
what “use” of a car means to most people: we are asked to
decide what “use” of a car means in the insurance policies at
issue here. Insurance policies are free to define words in
idiosyncratic ways. See, e.g., Bennett v. State Farm Mut.
Auto. Ins. Co., 731 F.3d 584, 585 (6th Cir. 2013) (pedestrian
was an “occupant” of a vehicle, within the meaning of the
relevant insurance policy, when a traffic collision threw her
onto the vehicle’s hood). This remains true when the words
used in an insurance policy are defined by statute, rather than
by private parties. “[L]egislatures, too, are free to be
unorthodox.” Lopez v. Gonzales, 549 U.S. 47, 54 (2006).
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 13
As used in Mid-Century’s and Coast National’s insurance
policies, the term “use” is defined by California Insurance
Code § 11580.06(g). As defined by California Insurance
Code § 11580.06(g), “use” of an automobile includes
unloading that automobile. Thus, Torti “used” Watson’s car
when she unloaded Van Horn from that car.
CONCLUSION
We conclude that unloading an injured passenger from an
automobile constitutes “use” of that automobile, under
California law. Thus, we reverse the judgment of the district
court, and remand for further proceedings consistent with this
opinion.
REVERSED and REMANDED.
MURPHY, Circuit Judge, dissenting:
I respectfully dissent from the majority’s conclusion that
Torti was using Watson’s vehicle when she unloaded Van
Horn.
The insurance policies at issue do not define the term
“use.” Merriam-Webster defines “use,” in relevant part, as
“to put into action or service,” to “avail onself of,” “to carry
out a purpose or action by means of.” Use Definition,
Merriam-Webster.com, http://www.merriam-webster.com/
dictionary/use (last visited August 5, 2014). This definition
suggests that an individual does not use a motor vehicle
unless she employs it as a vehicle. See Waller v. Truck Ins.
14 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
Exch., Inc., 900 P.2d 619, 627 (Cal. 1995) (holding the
interpretation of an insurance contract is a question of law
which requires a court to “look first to the language of the
contract in order to ascertain its plain meaning”). In the
context of statutorily mandated permissive use coverage, the
California Insurance Code defines use to “only mean
operating, maintaining, loading, or unloading a motor
vehicle.” Cal. Ins. Code § 11580.06(g) (emphasis added).
The majority believes the statute is clear on its face and
unambiguously states that any act of unloading a motor
vehicle is a use which must be covered. But the statutory
provision (which actually restricts the types of activities
considered to be uses of a vehicle) when read in concert with
the dictionary definition of use and California case law,
supports the conclusion that the unloading of a vehicle
constitutes use of the vehicle only when the unloading is part
of the user’s act of availing herself of the vehicle. Thus,
while loading or unloading a vehicle may constitute a use of
the vehicle, it must be a component of some broader
employment of the vehicle.
The requirement of some further association with the
vehicle beyond mere loading or unloading is supported by the
pre-§11580.06(g) case of Travelers Insurance Co. v.
Northwestern Mutual Insurance Co., 104 Cal. Rptr. 283 (Cal.
Ct. App. 1972). In the process of changing a customer’s tire
at the customer’s home, the owner of a service station caused
a fire that damaged the customer’s real and personal property.
Id. at 284. The contention was made by Travelers that the
mechanic was “using” the customer’s vehicle, thereby
making him an additional insured under the customer’s
policy. Id. Similar to the arguments made by Encompass in
this matter, Travelers argued that changing the tire was
maintenance and “use” expressly includes maintenance. Id.
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 15
at 285. Although California law, at the time, expressly
required coverage for vehicle maintenance, id., the California
Court of Appeals held there was no coverage under the
customer’s policy because the mechanic’s actions in changing
the tire did not constitute a use of the vehicle. Id. at 288. In
reaching this conclusion, the court distinguished California
cases in which there was no coverage because the
maintenance of the customer’s vehicle was disassociated
from the actual operation of the vehicle, from cases in which
service station employees were covered under a vehicle
owner’s policy because the employees drove the vehicle as an
incident of the maintenance work. Id. at 285–86. It also
referenced California decisions counseling against extending
coverage under “use” clauses in cases “involving claims by
an insurer of a negligent party that its insured is covered
under the extended coverage provisions of the policy of a
non-negligent person.” Id. at 288.
As the majority states, the Travelers court observed that
“‘use’ has been defined to mean loading and unloading of a
motor vehicle.” Id. at 286. But the majority fails to
acknowledge that the cases cited by the Travelers court
involved commercial vehicles. Id. Travelers specifically
noted that “[t]he reasoning in those cases points to the
function of the insured vehicle as a means of transporting
goods and arrives at the conclusion that loading and
unloading of a truck is integral to the mission of
transporting.” Id. Torti was not engaged in the transportation
of goods and her unloading of Van Horn was not integral to
such transportation. Thus, the brief reference to loading and
16 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
unloading in Travelers provides no support for the majority’s
conclusion.1
The cases on which the majority relies for the proposition
that California courts have “consistently” equated unloading
of a non-commercial vehicle, “without more” to be a “use” of
the vehicle have not so held. None, in fact, even addressed
the question of whether a non-commercial vehicle can be
unloaded by a individual who is not also employing it as a
vehicle. In Scottsdale Insurance Co. v. State Farm Mutual
Automobile Insurance Co., the California Court of Appeals
specifically refused to address the “unloading” argument,
concluding it was not raised below. 30 Cal. Rptr. 3d 606,
614–15 (Cal. Ct. App. 2005) (interpreting the term “operated
by” in a matter involving an individual who was injured when
the bucket of a cherry picker fell). In City of Los Angeles v.
Allianz Insurance Co., the California Court of Appeals
addressed whether the City of Los Angeles was the
“borrower” of a commercial truck, describing the issue as
“[t]he sole question in this case.” 22 Cal. Rptr. 3d 716, 719
(Cal. Ct. App. 2004). National American Insurance Co. v.
Coburn, involved the use of a van by the person who was also
operating it. 257 Cal. Rptr. 591, 595 (Cal. Ct. App. 1989)
(“All the alleged negligence arose from the . . . auto-related
conduct [of the operator of the vehicle], i.e., the use and
loading of the van for the camping trip. It cannot be seriously
argued that the parking, leaving open and braking of a vehicle
1
Contrary to the majority’s interpretation of the dissent, it does not draw
a distinction between commercial vehicles and other types of vehicles.
Nor does it suggest the unloading of a non-commercial vehicle can never
constitute the use of that vehicle. The dissent merely notes that the dicta
describing unloading in Travelers relied on California cases in which the
unloading involved commercial vehicles that had also transported the
unloaded goods.
ENCOMPASS INS. CO. V. COAST NAT’L INS. CO. 17
are anything other than aspects of the ‘use’ of the vehicle.”).
The California Court of Appeals specifically stated that the
unloading issue was “of no particular significance in” the
case. Id. at 596 n.2.
Similarly, the majority’s statement that California courts
have twice “held that unloading non-commercial vehicles
constituted ‘use’ of those vehicles,” Majority Opinion at 11,
paints only half the picture. One case involved a passenger
who was bitten by a dog as both exited a vehicle driven by
the insured. Hartford Accident & Indem. Co. v. Civil Serv.
Emps. Ins. Co., 108 Cal. Rptr. 737, 739 (Cal. Ct. App. 1973).
The California Court of Appeals held that the transportation
of the dog by the driver of the vehicle, was a use of the
vehicle. Id. at 741–42. Coverage was also found in a
situation where the insured, who was the driver of the vehicle,
unloaded a child from the vehicle. Nat’l Indem. Co. v.
Farmers Home Mut. Ins. Co., 157 Cal. Rptr. 98, 99–101 (Cal.
Ct. App. 1979). Thus, in both cases upon which the Majority
relies, it was concluded the unloading of the vehicle
constituted a use of that vehicle by the person operating it.
The majority has not identified a single California case not
involving the commercial transportation of goods in which an
individual who was neither the driver of, nor a passenger in,
a vehicle was ruled to be using the vehicle by unloading it.
Although Travelers addressed the issue of maintenance as
a use, its reasoning is equally applicable to the unloading of
a vehicle and it supports the conclusion that an individual is
not “using” a vehicle for coverage purposes simply by
unloading it unless there is a nexus between the unloading
and the individual’s operation of the vehicle. When the
California legislature enacted §11580.06(g) limiting use to
“operating, maintaining, loading or unloading a motor
18 ENCOMPASS INS. CO. V. COAST NAT’L INS. CO.
vehicle” it was deemed “to have been aware of statutes
already in effect and of judicial decisions interpreting them
and to have enacted the statute in light of them.” Scottsdale
Ins. Co., 30 Cal. Rptr. 3d at 613. Thus, the most reasonable
interpretation of § 11580.06(g) is that mere unloading does
not constitute use.
The policy provisions at issue in this matter, given their
ordinary meaning and construed in the context of the
contracts as a whole and the applicable statute and case law,
are unambiguous and do not cover Torti’s removal of Van
Horn from Watson’s vehicle. Torti’s actions in unloading
Van Horn do not constitute a use of Watson’s vehicle because
Torti did not avail herself of the vehicle simply by unloading
it. Because Torti was not operating Watson’s vehicle, or
connected to the vehicle or the transportation of Van Horn in
any way, she was not using Watson’s vehicle in a manner
contemplated by the policies when she unloaded Van Horn.
Thus, Torti was not an insured under Watson’s policy or her
own motor vehicle policy.
Because Torti was not using Watson’s vehicle,
Encompass cannot show a potential for coverage under the
Coast National and Mid-Century policies and the district
court should be affirmed.