BAUER RANCH INC v MOUNTAIN WEST
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NO. 84-319 I N THE SUPREME COURT O F THE STATE O F MONTANA 1985 BAUER RANCH, INC., and R . F . BAUER, P l a i n t i f f and R . e s p o n d e n t . MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, D e f e n d a n t and A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e Second J u d i c i a l D i s t r i c t I n and f o r t h e C o u n t y of S i l v e r B o w T h e H o n o r a b l e A r n o l d O l s e n , Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Landoe, Brown, Montana P l a n a l p , Kornrners & J o h n s t o n e , B o z e m a n , F o r Respondent: Corette, Smith, Pohlman & A l l e n , B u t t e , Montana S u b m i t t e d on B r i e f s : Decided: Filed: Clerk Jan. 31, 1 9 8 5 February 26, 1985 ,711stice John C. Court. 1 . Mountain West Sheehy delivered the Opinion of the Farm Bureau Mutual Insurance Company appeals from a judgment entered against it in favor of Bauer Ranch, Inc. and R. F. Rauer in the District Court of the Second ,Tudicial District, Silver Row County. We affirm the District Court judgment. On December 8, 1982, a 1979 White Freightliner tractor owned by Eauer was totally destroyed by collisjon at a time when it was covered under an insurance policy Mountain West to Bauer. issued by Mountain West raises two issues in this appeal, first, that the White Freightliner tractor was a t the time of its destruction leased or rented to Craig Britton and so excluded from coverage, and second, that Bauer may not raise the issue of estoppel against the insurance company when the defense of estoppel is not included in its pleadings. This case was West to the District Court sitting The pertinent findi.r!gs of fact are that without a jurv. Mountain tried issued a policy of insurance providing collision and physical damage coverage for the 1979 White Freightliner tractor; that such policy was in force on December 8, 1980; thzt Bauer had purchased the 1979 White Freightliner tractor under an agreement with his son-in-law, Craig Britton, who was then in the trucking business; that according to the agreement Britton would care for the vehicle, provide for a driver, and use the vehicle, and in return, Rritton would haul Rauer's hay and cattle at no charge; that prior to the agreement, Bauer had been expendinu approximately $30,000 per year in trucking charges for the hauling of his hav and cattle. The policy coverage for the vehicle was subject to certain exclusions, but the exclusion did not apply to use of the truck on a share expense basis. Mountain West contended that the arrangement with Britton constituted a lease of the tractor by Bauer and that Sauer was therefore not entitled to physical damage coverage for the accident under the exclusion. In connection with that issue, the District Court found that Bauer had purchased the vehicle in August 1980 for $56,000; that Britton maintained the vehicle through December 8, 1982; that Britton hauled Rauer's cattle and hay whenever Bauer wanted them hauled during that period; that at no time did Britton ever pay any lease or rental monies for the use of the vehicles; that Bauer at all times had the riqht to control the use of the vehicle, in that he could have demanded return of the vehicle from Britton at any time; that when the accident occurred on December 8, 1982, the vehicle was pulling a trailer loaded with cattle that belonged to Britton. The court further found that in August 1980, before the issuance of the policy, t.he insurance agent for Mountain West was advised how the vehicle was to be used under the arrangement between Rauer and Britton. The District Court found and concluded that the use of the vehicle pursuant to the oral agreement between Rauer and Britton was on a share eypense basis and as such was not excluded from coverage under the policy of insurance. The findinqs of fact made by a district court in a case tried without a jury are not to be set aside by us unless they are clearly erroneous. Ru1.e 52 (a), M. R.Civ.P. We have sometimes said that findings of fact must be sustained if we determine that there is substantial credible evidence to support the findings of fact and conclusions of law. .1. v. Cameron (19781, 179 Mont. 219, 587 P 3 1 939. Cameron Regardless of how we may state the test, essentially it boils down to the language of Rule 52 (a), that unless clearly erroneous, the findings of the District Court must he sustained. In truth, there is little 8ispute between the parties as to the facts of this czse. What is in dispute is the legal effect of the arrangement between Bauer and Britton, that is whether the arrangement constituted a lease as a matter of !w a, or an arrangement for shared expenses, as determined by the District Court. An ambiguous provision in an insurance construed against the insurance company. policy is A clause in an insurance policy is ambiguous when different persons looking a t it in the light of its purpose cannot agree upon its meaning. Mont. Walker v. 1967), 268 Fireman's Fund Insurance Company F.Supp. If 899. the language (D. is unambiguous, and subject to only one meaning, there is no basis for the interpretation of policy coverage under the guise of ambiguity. Nelson v. Combined Ins. Co. of America (1970), 155 Mont. 1.05, 467 P. 2d 707. applying technical insurance usage contracts, meaning and policies should be used. Insp. and Ins. Co. the of In interpreting and common rather definitional terms than and Riefflin v. Hartford Steam Boiler (1974), 1.64 Mont. 387, 521 P.2d 675. Regardless of ambiquity, however, exclusions and words of ].imitation jn a policy must be strictly construed against the insurer. Aetna Ins. Co. v. Cameron (Mont. 3981), 633 P . 2 d 1-212, 38 St.Rep. 1530. If the policy language is ambiguous as applied to the facts of a case, the construction most favorable to the insured should be adopted. Such construction applies particularly to exclusionary clauses. Lindell v. Ruthford (1979), 183 Mont. 135, 598 P.2d 616. With the foregoing background of applicable law on the construction of insurance contracts, we look at the exclusionary clause relied on by Mountain West: "We don't insure your [truck] while it. is rented or leased to others or used to ca.rry persons for a charge. This does not apply to the use of your [truck] on a share expense basis." Under ?.he facts of this case, the truck was not being used to carry persons for a charge, and that exclusion does . not apply. Without quibble we can say the exclusion does not apply to the use of the truck on a "share expense basis." The exclusion does apply if the truck is rented or leased to others, but it is arguable under the language used that the exclusi.on would not apply if it were rented or leased on s, share expense basis. We are unable to say that the arrangement. between Bauer a.nd Britton here was a lease or rental as a matter of law. Although it was a contract by which Bauer gave to Britton the temporary use of his property for a reward, and it was to be returned to him at a future time, S 70-1-601, MCA, and . Britton had the duty of keeping the tractor i n repair, 9 70-1-605, MCA; yet the agreement did not contemplate that Bauer would have to put the tractor in the condition fit for the purpose for which it was delivered to Fritton or to repair all deteriorations thereof not occasioned by the fault of Britton, S 70-8-101, MCA. In an ordinary rental of personal property, the hirer must bear all the expenses concerning it as might naturally be forseen to attend it d u r i n g i t s u s e by him, S 70-8-102, t h e c o s t of MCA. I t would seem that i n s u r a n c e a g a i n s t p h y s i c a l damage i s a n e x p e n s e t h a t m i g h t n a t u r a l l y be f o r e s e e n , a n d a n e x p e n s e t h a t must b e 5 o r n e by B r i t t o n , if t h e arrangement w e r e a l e a s e under $ 70-8-102. We are convinced in this case that the arrangement between Bauer and B r i t t o n was o n e f o r s h a r i n g o f e x p e n s e s . Rauer a s owner b o r e t h e e x p e n s e o f t h e p u r c h a s e o f t h e t r u c k and p r o v i d i n g i t s i n s u r a n c e . In return f o r its use, Britton h a u l e d B a u e r ' s c a t t l e a n d b a y f o r no c h a r g e whenever it w a s demanded. o f him. Thus B r i t t o n b o r e t h e e x p e n s e t h a t would o r d i n a r i l y be b o r n e by Bauer therefore that the arrangement w h a t e v e r e l s e it was, that were for incidental between It Bauer is clear and B r i t t o n , was one f o r t h e s h a r i n g o f e x p e n s e s to the operation of tractor. I n t h a t circurrstance, exclusion to the that item. policy t h e use of the t h e use w a s not within t h e coverage relating to leased and rented vehicles. Our c o n c l u s i o n t h a t t h e a r r a n g e m e n t between Bauer a n d S r i t t o n was on a s h a r e e x p e n s e h a s i s f o r t h e u s e o f t h e t r u c k disposes of a l l o t h e r i s s u e s i n t h e case. T h e r e i s no n e e d t o d i s c u s s t h e second i s s u e r a i s e d by Mountain W e s t . Affirmed. We Concur:
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