Jae K. Yoon v GEICO Gen. Ins. Co.

[*1] Jae K. Yoon v GEICO Gen. Ins. Co. 2013 NY Slip Op 51671(U) Decided on September 26, 2013 Supreme Court, Kings County Schmidt, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 26, 2013
Supreme Court, Kings County

Jae K. Yoon, Plaintiff,

against

GEICO General Insurance Company and Demond Moore, Defendants.



504351/12



Plaintiff Attorney:

Edward S. Goodman, Esq.

Simonson Hess Leibowitz & Goodman, P.C.

15 Maiden Lane

New York, NY 10038

Defendant Attorney:

Montfort Healy McGuire & Salley

840 Franklin Avenue

P.O. Box 7677

Garden City, NY 11530

David I. Schmidt, J.

Upon the foregoing papers, defendant Demond Moore moves for an order, pursuant to CPLR 3212, granting summary judgment in his favor and declaring that defendant Geico General Insurance Company must defend and indemnify the plaintiff Jae K. Yoon in the "Moore Action". Plaintiff Yoon cross-moves for an order pursuant to CPLR 3212 granting summary judgment on his complaint, and directing a hearing on the amount due from Geico for attorneys fees incurred in the prosecution of this action.

Factual Background

The instant action arises out of a motor vehicle accident that occurred on February 12, 2011 at a car wash facility located at 220-02 Merrick Boulevard, Laurelton, New York. Defendant Demond Moore was a customer of the car wash on the date in question. The car wash and premises were owned by the Laurelton Car Wash, Inc., which was leased to Nereuss Corp. Plaintiff Jae K. Yoon was the principal and owner of Nereuss. Toya Holder, Annette Durham and Joseph Morant were the owners of the vehicles involved in the accident in which Moore was injured. On the date of the accident, Yoon was driving the Holder vehicle onto the car wash conveyor/track when it impacted with the rear of the unoccupied Durham vehicle, causing it to move forward on the car wash conveyor and in turn impact with the rear of the unoccupied Morant vehicle. This in turn caused the Morant vehicle to move off the car wash track and strike Moore. As a result, Moore was pinned between the rear of his own vehicle and the front of the Morant vehicle. Moore suffered multiple injuries including but not limited to the amputation of his left leg below the knee.

Moore subsequently commenced an action against Nereuss, among others, alleging, inter alia, that Yoon drove the Holder vehicle in a negligent manner (Moore v Nereuss Corp. et. al. [Index No. 5224/11] (the Moore Action). Yoon commenced the instant declaratory action against defendants Geico General Insurance Company and Moore seeking to have Geico defend and indemnify him in the underlying "Moore Action" pursuant to two insurance policies which were in effect at the time of the occurrence. On or about December 23, 2010, Geico issued a Family Automobile Policy (# 2000-39-85-90) to Yoon effective January 26, 2011 to July 26, 2011 (Auto Policy). On or about November 5, 2010, Geico also issued Yoon a Personal Umbrella Policy (# P-6133808) effective December 19, 2010 to December 19, 2011 (Umbrella Policy). The relevant sections of Geico's Auto Policy states, in pertinent part, as follows:

SECTION 1-LIABILITY COVERAGES-BODILY INJURY LIABILITY AND PROPERTY DAMAGE LIABILITY YOUR PROTECTION AGAINST CLAIMS FROM OTHERS.

DEFINITIONS

1. Auto Business means the business of selling, repairing, servicing, storing, transporting or parking of autos.

5. Non-owned auto means an auto or trailer not owned by or furnished for the regular use of either you or a relative other than a temporary substitute auto. Except for a temporary substitute auto, an auto rented or leased for more than 30 days will be considered as furnished for regular use. [*2]

LOSSES WE WILL PAY FOR YOU

Under Section I, we will pay damages which an insured becomes legally obligated to pay before of:

1. bodily injury sustained by a person; and

2. property damage arising out of the ownership, maintenance or use (including loading or unloading) of the owned auto or a non-owned auto. We will defend any suit for damages payable under the terms of this policy even if the claim or suit is groundless.

EXCLUSIONS

Section I does not apply:

9. to a non-owned auto while maintained or used by any person while the person is employed or otherwise engaged in

(1) any auto business if the accident arises out of or the non-owned auto is used while the person is engaged in that business.

(2) any other business or occupation of any insured if the accident arises out of or the non-owned auto is used while the person is engaged in that business or occupation . . . . (Emphasis in original)

The relevant section of the Umbrella Policy states that Geico "do[es] not cover damages resulting from "[b]usiness pursuits or business property of an insured unless covered by primary insurance described in the declarations" and that its "coverage is no broader than the primary insurance except for our liability limit."

Geico disclaimed coverage under the policies, based on the applicability of the automobile business exclusion contained in the Auto Policy. Moore now seeks summary judgment declaring that Geico must defend and indemnify Yoon in the Moore Action. Moore alleges that both Geico insurance policies cover Yoon's actions and that no exclusions apply. In this regard, Moore contends that the insurance policies cover the incident because bodily injury was sustained by a person (himself), and because said injuries arose from Yoon's use of a "non-owned auto."

Moore further contends that the auto business exclusion which states that Geico does not have to pay damages if Yoon was engaged in an "auto business" at the time his use of the vehicle caused the bodily injuries is not applicable herein. He argues that the term "auto business" pursuant to Geico's policy does not include a car wash or car cleaning facility. Pursuant to the terms of the Auto Policy, "Auto Business" is defined as "the business of selling, repairing, servicing, storing, transporting or parking of autos." Moore contends that a car wash clearly does not fall within the ambit of selling, repairing, storing, transporting or parking an auto. In support of this contention, Moore's counsel merely states that no reasonable person would consider going to a car wash as "servicing" the vehicle because "servicing" pertains to certain maintenance procedures that are carried out at a set time, such as checking and changing the oil and wiper fluid/or replacing the oil filter.

In opposition, Geico argues that the court should declare that the defendant has no duty to defend or indemnify the plaintiff under either the Auto Policy or Umbrella Policy. Defendant contends that the term "servicing" under the automobile business exclusion is [*3]an unambiguous term that refers to providing maintenance services and, therefore, includes the washing and cleaning of vehicles.

Discussion

The issue before the court is whether a car wash business is in the business of "servicing" automobiles as the term pertains to the auto business exclusion provision in Geico's Auto Policy. It is well settled that unless otherwise defined by the policy, words and phrases are to be understood in their plain, ordinary, and popularly understood sense (see Government Empls. Ins. Co. v Kligler, 42 NY2d 863 [1977]; Raino v Navigators Ins. Co., 268 AD2d 419, 420[2000] ["where the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement"]; Logan's Silo Sales & Serv., Inc. v Nationwide Mut. Fire Ins. Co., 185 AD2d 651 [1992 ][an unambiguous exclusionary clause must be given its plain and ordinary meaning]). "The construction of terms and conditions of an insurance policy that are clear and unambiguous presents a question of law to be determined by the court when the only issue is whether the terms as stated in the policy apply to the facts" (Raino v Navigators Ins. Co., 268 AD2d at 419—420; see also Briggs v Allstate Ins. Co., 1 AD3d 392 [2003]). However, any ambiguity in an insurance contract must be construed against the insurer and in favor of the policyholder (see Ace Wire & Cable Co. v. Aetna Cas. & Sur. Co., 60 NY2d 390, 398 [1983]; Hartol Prods. Corp. v Prudential Ins. Co., 290 NY 44, 49 [1943]).

The exclusion at issue excludes from coverage those using the automobile while that person is working in or engaged in any auto business. The Auto Policy defines the term "Auto Business" as "the business of selling, repairing, servicing, storing, transporting or parking of autos." For purposes of this particular policy, the operative term is "servicing," which is not defined in the policy. The question, therefore, is whether the term "servicing" in the policy is capable of a plain and ordinary meaning. This court believes it is.

"Servicing" is commonly defined as "perform[ing] routine maintenance or repair work on (a vehicle or machine)" (see Oxford English Dictionary Online, http:// www. oed.com [accessed September 17, 2013]; see also Merriam—Webster Online Dictionary, http:// www. Merriam- Webster. com [accessed September 17, 2013] [defining "servicing " as "to repair or provide maintenance for"]). Maintenance is commonly defined as "the act of maintaining" . . . "the upkeep of property or equipment"(see Merriam—Webster Online Dictionary, http:// www. Merriam-Webster. com [accessed September 17, 2013]) and "keep[ing] in . . . good condition or in working order" (see Oxford English Dictionary Online, http:// www. oed.com [accessed September 17, 2013]).

Here, it is undisputed that the Nereuss facility was in the business of washing and vacuuming vehicles. During his deposition, Yoon testified that he was the president of the Nereuss car wash which would vacuum the vehicles first if requested by the customer, before washing the exterior of the vehicle. It is further undisputed that the accident occurred as a result of Yoon driving the Holder vehicle, a non-owned auto, onto the car wash conveyor/track, which ultimately led to Moore's injuries. In this court's view, the term "servicing," as used in the automobile policy exclusion provision herein, reasonably could be construed to the include services performed by Nereuss, such as cleaning, waxing, and vacuuming. Indeed, providing upkeep of the exterior of a vehicle by washing it clearly falls within the ambit of necessary maintenance for the vehicle.

Under similar language in an automobile business exclusion, it has been held that "servicing" reasonably can be construed to include the cleaning, washing and vacuuming [*4]of automobiles (see Fuller's Car Wash, Inc. v Liberty Mut. Ins. Co., 298 Ill.App.3d 167 [Ill.App. 2 Dist. 1998]). In Fuller, it was alleged that a Fuller Car Wash employee (Lamkin) negligently drove a Fuller customer's vehicle which struck and injured another Fuller customer. At the time of the incident, Lamkin was covered by Liberty Mutual, which disclaimed coverage pursuant to an automobile business exclusion similar to the one herein. The Fuller court concluded that the services provided by Fuller's business (i.e., washing and vacuuming cars) were provided for the purpose of maintenance for the vehicle, and therefore, the auto business exclusion applied (Id. at 171).

Similarly, the Georgia court in Metropolitan Property & Liability Ins. Co. v. Mr. Pride of Atlanta, Inc. (258 Ga. 770 [1988]) held that the car wash was in the business of "servicing" automobiles and, therefore, the employee was excluded from coverage (Id. at 770). The Supreme Court of Georgia found the term "servicing" in the exclusion provision reasonably could be construed to include the services which were being performed on the insured automobile, namely: cleaning, waxing, vacuuming, and filling with gasoline." (Id. at 770; see also Smith v State Farm Mutual Automobile Insurance Co., 193 Ga. App. 347 [1989][Court of Appeals of Georgia held that the automobile business exclusion applied to a car wash]).

Likewise, in an Ohio Court, the term "servicing" in an exclusionary clause has been held to include washing the exterior of a vehicle, "just as if [the vehicle] were being rustproofed, oiled or painted." (Sutton v Spencer, 56 Ohio App.3d 147 [1989]). In Sutton v Spencer, the court was asked to consider whether an automobile insurance policy that excluded coverage for vehicles being "serviced," excluded coverage for damages to a vehicle that had undergone an exterior cleaning (Id. at 147-149). In concluding that coverage was excluded under the terms of the insurance policy, the Sutton court stated:

The terms "servicing" vehicles or vehicles being "serviced" are not ambiguous and clearly include the exterior maintenance of the automobile as well as maintenance of the internal operations. When a vehicle is being cleaned it is being serviced, just as if it were being rustproofed, oiled or painted. It would indeed be unreasonable to interpret the word "servicing" as including only one type of maintenance and not another.

It therefore follows that washing an automobile constitutes "servicing" the vehicle.

This interpretation is consistent with other cases which have found that the term "service" within an insurance policy also included the washing of vehicles (see Rocker v USAA Cas. Ins. Co., 289 Wis.2d 294, 711 N.W.2d 634 [2006] [court held that the car wash facility that routinely performed services: washing, vacuuming, waxing, tire dressing, window cleaning, towel drying, and additional detailing was a "service station"]); Pennsylvania Nat. Ins. Co. v Morasco-Knee-Soxman, Ltd., 702 A2d 867, 869 [Pa. Super.,1997] ["a car wash is of the same general character as a service station, and, therefore, that the term "service" includes the washing and waxing of cars"]).

Thus, applying the plain and ordinary meaning of Geico's automobile exclusion, especially the term "servicing," the court holds that the auto business exclusion applies to the case at bar and, therefore, precludes coverage under the Geico policies at issue. Based upon the foregoing, Moore's motion for summary judgment directing Geico to defend and indemnify the plaintiff Yoon in the "Moore Action" is hereby denied and the court hereby declares that Geico has no duty to defend or indemnify Yoon pursuant to the Auto and Umbrella insurance policies with respect to the underlying Moore Action. Yoon's cross motion is also denied.

The foregoing constitutes the decision and order of the court. [*5]

E N T E R

J. S. C.