Motorists Commercial Mutual Insurance Company v. Hartwell ( 2022 )

United States Court of Appeals
For the First Circuit
No. 21-1603
MOTORISTS COMMERCIAL MUTUAL INSURANCE COMPANY,
Plaintiff, Appellee,
v.
ROGER HARTWELL; LYNNWAY AUTO AUCTION, INC.,
Defendants, Appellants,
SAFETY INSURANCE COMPANY; RUBEN D. ESPAILLAT, as Personal
Representative of the Estate of Ruben Dario Espaillat; TAMMY L.
BERIO, as Personal Representative of the Estate of Elliott
Rowlands, Jr.; GIOVANNI SANTIAGO; KENNETH VINCENT; MAUREEN
VINCENT; STEVEN SARKIS; SANDRA ORTIZ, as Personal Representative
of the Estate of Leezandra Aponte; BRESMIL ROBLES; FANNY
RAMIREZ; MARK LEE; SHIRLEY MEZA LOPEZ, as Personal
Representative of the Estate of Brenda Lopez; EMELLY COLON-
SANTOS; EDRIS M. SANTOS, as Personal Representative of the
Estate of Pantaleon Santos; FLAVIO JANUARIO,
Defendants.
No. 21-1636
MOTORISTS COMMERCIAL MUTUAL INSURANCE COMPANY,
Plaintiff, Appellee,
v.
RUBEN D. ESPAILLAT, as Personal Representative of the Estate of
Ruben Dario Espaillat; TAMMY L. BERIO, as Personal
Representative of the Estate of Elliott Rowlands, Jr.; GIOVANNI
SANTIAGO; KENNETH VINCENT; MAUREEN VINCENT; STEVEN SARKIS;
SANDRA ORTIZ, as Personal Representative of the Estate of
Leezandra Aponte; FLAVIO JANUARIO,
Defendants, Appellants,
ROGER HARTWELL; LYNNWAY AUTO AUCTION, INC.; SAFETY INSURANCE
COMPANY; BRESMIL ROBLES; FANNY RAMIREZ; SHIRLEY MEZA LOPEZ, as
Personal Representative of the Estate of Brenda Lopez; EMELLY
COLON-SANTOS; EDRIS M. SANTOS, as Personal Representative of the
Estate of Pantaleon Santos; MARK LEE,
Defendants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Kayatta, Thompson, and Gelpí, Circuit Judges.
Louis J. Muggeo, with whom Jared J. Muggeo and Muggeo &
Associates were on brief, for appellants Roger Hartwell and Lynnway
Auto Auction, Inc.
J. Michael Conley, with whom Kenney & Conley, P.C. was on
brief, for appellants Ruben D. Espaillat, Tammy L. Berio, Giovanni
Santiago, Kenneth Vincent, Maureen Vincent, Steven Sarkis, Sandra
Ortiz, and Flavio Januario.
Patrick F. Hofer, with whom Jared K. Clapper, Clyde & Co US
LLP, Ben N. Dunlap, and Freeman Mathis & Gary, LLP were on brief,
for appellee.
November 23, 2022
KAYATTA, Circuit Judge. This insurance-coverage dispute
arises from an auction at which a motor vehicle being displayed
for bidding suddenly accelerated into a group of attendees, killing
five and injuring many others. Motorists Commercial Mutual
Insurance Company ("Motorists"), which insured the dealership that
owned the vehicle, brought this action seeking a declaration that
its policies do not cover the auctioneer or its employee who was
behind the wheel of the vehicle when it struck the victims.
Defendants in this action include those who claim an interest in
Motorists' coverage: the victims, the auctioneer, and its
employee. Both sides moved for summary judgment, which the
district court granted in favor of Motorists. Motorists Com. Mut.
Ins. Co. v. Hartwell, 549 F. Supp. 3d 220, 231 (D. Mass. 2021).
After a fresh look at defendants' arguments spanning several
policies and provisions, we agree with the district court that
Motorists' policies do not cover this accident. Our reasoning
follows.
I.
A.
We draw the following facts primarily from the parties'
statements of material facts, the responses to each, and the
Motorists policies at issue.
Nashua Automotive, LLC is a New Hampshire car dealership
that sells new and used cars. It is owned by a dealership group
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called AutoFair, Inc. and operates under the name "AutoFair
Volkswagen of Nashua." We will refer to Nashua Automotive, LLC as
"Nashua."
While AutoFair dealerships, like Nashua, sell most of
their vehicles "retail" (to the public), about 8% or 9% of their
revenues come from vehicles sold "wholesale" (online or at an
auction). For its vehicles sold wholesale, Nashua primarily
engages with a company called Lynnway Auto Auction, Inc., which
operates an auction facility in Billerica, Massachusetts. Neither
AutoFair nor Nashua owns Lynnway, and Lynnway does not own Nashua
or AutoFair.
In April 2017, Nashua received a 2006 Jeep Grand Cherokee
as a trade-in for a new vehicle it sold. Nashua arranged for
Lynnway to auction the Jeep. On May 3, 2017, while that Jeep was
being put up for auction inside Lynnway's Billerica facility, it
accelerated into a crowd, causing multiple serious injuries and
five deaths. At the time of the accident, Lynnway employee Roger
Hartwell was seated in the driver's seat of the Jeep, though he
claims that the vehicle accelerated uncontrollably despite his
efforts to stop it. Hartwell was subject to a long series of
suspensions of his driver's license, although the parties dispute
whether Hartwell's license was suspended at the time of the
accident.
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In due course, the victims and their estates filed a
series of lawsuits in Massachusetts state court, alleging several
theories of liability against Lynnway, Hartwell, Nashua and
AutoFair, as well as other related individuals and entities.
B.
Of the various insurance companies whose policies may be
implicated by those underlying claims, this case concerns only
one: Motorists Commercial Mutual Insurance Company. Motorists
provided a liability policy (the "Primary Policy") that covered
AutoFair, Nashua, and other AutoFair-affiliated dealerships as
named insureds, but did not name Lynnway or Hartwell among the
insureds. Motorists also provided a so-called "Commercial
Umbrella" policy (the "Umbrella Policy"), which provided
supplemental insurance above the Primary Policy's limits to many
of the same named insureds, including Nashua and AutoFair.
The Primary Policy includes a "Garage Coverage Form"
that provides that Motorists "will pay all sums an 'insured'
legally must pay as damages because of 'bodily injury' or 'property
damage' to which this insurance applies, caused by an 'accident'
and resulting from 'garage operations' involving the ownership,
maintenance or use of covered 'autos.'" This form was modified by
a New Hampshire Changes in Policy endorsement (the "New Hampshire
Endorsement"). We train our attention on two provisions giving
rise to the parties' dispute. First, the New Hampshire Endorsement
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changed the definition of "Who Is An Insured" such that it includes
"[a]nyone else while using with your permission a covered 'auto'
you own . . . except . . . [s]omeone using a covered 'auto' while
he or she is working in a business of selling, servicing or
repairing 'autos' unless that business is yours." Following the
parties' lead, we refer to this provision as the "auto business
exclusion."1 Second, the New Hampshire Endorsement added an
exclusion that provides that the insurance does not apply to "[a]ny
'insured' for 'bodily injury' or 'property damage' arising out of
the operation of any vehicle by that 'insured' and while that
'insured's' driver's license is under suspension or revocation."
We call this the "suspended license exclusion."
The Umbrella Policy, in turn, provides further coverage
for bodily injuries, but contains an "Automobile Liability --
Following Form" endorsement, which provides:
Except as coverage is available to you in the
underlying policies as set forth in the
Schedule of Underlying Insurance, this policy
does not apply to the ownership, maintenance,
operation, [or] use . . . of any automobile
while away from premises owned by, rented to,
or controlled by you.2
1 Though styled as such by the parties and other courts, the
auto business exclusion appears in the policy here not as an
exclusion but as part of the definition of who is an insured. We
adopt the parties' use of the "exclusion" phrasing only for ease
of discussion.
2 The Primary Policy is included in the Schedule of
Underlying Insurance for the Umbrella Policy.
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Finally, as relevant here, the Umbrella Policy also defines
"who is an insured" for that policy, which specifically excludes
"[a]ny person employed by or engaged in the duties of an auto sales
agency . . . that you do not operate."
C.
Motorists initiated this federal action in the District
of Massachusetts on the basis of diversity jurisdiction, seeking
a declaratory judgment that its policies do not provide coverage
for the victims' claims against Lynnway and its employee.
Defendants include Lynnway and Hartwell (the "Lynnway defendants")
and the accident victims who brought the state-court suits (the
"victim defendants"). All defendants moved for summary judgment
below, prompting a cross-motion from Motorists. Motorists pointed
to both the auto business exclusion and the suspended license
exclusion described above, each of which Motorists contended
foreclosed coverage under the Primary Policy. It also argued that
its Umbrella Policy's Following Form Endorsement provides auto
coverage that is no broader than that provided for in the Primary
Policy.
The district court agreed with Motorists on all three
scores, granting summary judgment in its favor. Motorists, 549 F.
Supp. 3d at 229–31. Defendants took timely appeals that we
consolidated for briefing and argument.
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II.
We review de novo the district court's grant of summary
judgment. AJC Int'l, Inc. v. Triple-S Propiedad, 790 F.3d 1, 3
(1st Cir. 2015). A district court awards summary judgment when
"there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
For a factual dispute to be "genuine," there must be "sufficient
evidence favoring the nonmoving party for a jury to return a
verdict for that party." Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986). "[O]n an appeal from cross-motions for
summary judgment, the standard does not change; we view each motion
separately and draw all reasonable inferences in favor of the
respective non-moving party." Pac. Indem. Co. v. Deming, 828 F.3d
19, 23 (1st Cir. 2016) (quoting Roman Cath. Bishop of Springfield
v. City of Springfield, 724 F.3d 78, 89 (1st Cir. 2013)).
The parties agree that New Hampshire substantive law
governs the insurance contracts because the policies were issued
to New Hampshire insureds. We therefore look to that state's law
for the insurance-law principles that will guide our review. See
Merch. Ins. Co. of N.H. v. U.S. Fid. & Guar. Co., 143 F.3d 5, 8
(1st Cir. 1998) (forgoing independent choice-of-law analysis where
the parties agreed Massachusetts law applied and there was "at
least a 'reasonable relation' between the dispute and the forum
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whose law has been selected by the parties" (quoting Bird v.
Centennial Ins. Co., 11 F.3d 228, 231 n.5 (1st Cir. 1993))).
Among those principles is the familiar instruction that
"[i]nterpretation of an insurance policy is a question of law."
Todd v. Vt. Mut. Ins. Co., 137 A.3d 1115, 1120 (N.H. 2016). We
examine "the plain and ordinary meaning of the words in context"
to construe the policy's terms "as would a reasonable person in
the position of the insured based on more than a casual reading of
the policy as a whole." Id. (quoting Great Am. Dining, Inc. v.
Phila. Indem. Ins. Co., 62 A.3d 843, 846 (N.H. 2013)). Our inquiry
must be objective, so where the policy is "clear and unambiguous,"
we will "accord the language its natural and ordinary meaning."
Newell v. Markel Corp., 145 A.3d 127, 130 (N.H. 2016) (quoting
Colony Ins. Co. v. Dover Indoor Climbing Gym, 974 A.2d 399, 401
(N.H. 2009)). But, "[i]f more than one reasonable interpretation
is possible, and an interpretation provides coverage, the policy
contains an ambiguity and will be construed against the insurer."
Brickley v. Progressive N. Ins. Co., 7 A.3d 1215, 1217 (N.H. 2010)
(quoting Cath. Med. Ctr. v. Exec. Risk Indem., 867 A.2d 453, 456
(N.H. 2005)).
III.
On appeal, both the Lynnway defendants and the victim
defendants contend that the coverage provided by the broad insuring
clause of the Primary Policy survives that policy's auto business
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exclusion as well as its suspended license exclusion. They also
insist that the Umbrella Policy separately provides coverage.
A.
We consider first the Primary Policy. The parties agree
that Lynnway and Hartwell are covered under the Primary Policy
unless one of the two exclusions relied upon by Motorists applies.
Like the parties, we train our attention first on the auto business
exclusion. As modified by the New Hampshire Endorsement, that
exclusion excepts from the definition of insureds "[s]omeone using
a covered 'auto' while he or she is working in a business of
selling, servicing or repairing 'autos' unless that business is
yours." The "yours" in this language refers to a named insured -
- in this case, Nashua. Defendants argue, first, that Lynnway was
not "in a business of selling, servicing, or repairing autos."
Second, they argue that even if Lynnway was in such a business,
that business was Nashua's. We address these arguments in turn.
1.
Defendants' contention that Lynnway and its employee
were not in the business of selling autos warrants only a brief
discussion, as they were plainly engaged in that business.
Lynnway's Articles of Incorporation describe it as "a general
automobile auction business" whose purpose is "to auction, sell
and distribute automobiles" and "[t]o engage in the business of
purchasing, . . . [and] selling . . . all types of new and used
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automobiles." The Lynnway defendants principally argue that an
auctioneer who never takes title to the goods sold acts merely as
a broker, rather than the seller (or offeror) of the goods. But
under the plain language of the policy, we focus not on whether
Lynnway took title to the auto. We focus instead on whether
Hartwell and Lynnway were working in a business of selling autos.
Under New Hampshire law, we are bound to consider "the
plain and ordinary meaning" of the exclusion language "as would a
reasonable person in the position of the insured." Todd, 137 A.3d
at 1120 (quoting Great Am. Dining, 62 A.3d at 846). A reasonable
person understands that an auction is a sale, and thus that someone
engaged in an auction business is engaged in a selling business.
See Auction, Black's Law Dictionary (11th ed. 2019) (defining
"auction" as "[a] public sale of property to the highest bidder;
a sale by consecutive bidding, intended to reach the highest price
of the article through competition for it"); Auction, Merriam-
Webster Online Dictionary, https://www.merriam-webster.com/
dictionary/auction (last visited Nov. 22, 2022) (defining
"auction" as "a sale of property to the highest bidder"). Indeed,
the Lynnway defendants' own brief elsewhere appears to adopt this
commonsense understanding, referring to Lynnway's business as
"engaged in the activity of selling cars for AutoFair at the time
of the accident." In the absence of any authority holding that
only someone with title to goods can be engaged in a business of
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selling those goods, we decline to adopt defendants' strained
reading of the unambiguous policy language.3 See Russell v. NGM
Ins. Co., 176 A.3d 196, 200 (N.H. 2017) ("For an ambiguity to
exist, the disagreement must be reasonable. . . . [T]his court
will not perform amazing feats of linguistic gymnastics to find a
purported ambiguity simply to construe the policy against the
insurer and create coverage where it is clear that none was
intended." (quoting Bartlett v. Com. Ins. Co., 114 A.3d 724, 733
(N.H. 2015))).4
2.
As an alternative, defendants contend that any selling
business in which Lynnway and Hartwell were engaged at the time of
the accident was Nashua's business. This contention fares no
better than the first. As just established, Lynnway and Hartwell
3 The Lynnway defendants invoke several Massachusetts
statutes defining "dealer," "owner," and "seller" to support their
argument that they were not in the business of selling autos. See
Mass. Gen. Laws ch. 90, § 1; id. ch. 106, § 2-103(1)(a), (d). But
these statutes largely bear on irrelevant questions, such as
whether Lynnway was an auto "dealer," or what obligations Nashua
had as the owner of the auto being sold. At best, these statutes
clarify who is "the seller" of an auto in a given transaction.
None shed light on the separate inquiry of why the "business of
selling autos" under New Hampshire law must be construed to
encompass only the title-holding seller and to exclude
auctioneers.
4 Because we find that Lynnway and Hartwell were working in
a business of selling autos, we need not consider Motorists'
alternative argument that they were working in a business of
"servicing" autos, on account of Lynnway's washing and refueling
the cars it auctioned.
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were at that time engaged in a particular method of selling: They
were auctioning the Jeep. And it is undisputed that Nashua was
not itself an auction house -- it engaged with other entities,
like Lynnway, for this purpose. So while Nashua can fairly be
said to have retained Lynnway to sell its vehicle, we see nothing
in that relationship to suggest that Lynnway's independent auction
business had been converted into an arm of Nashua's business. Cf.
Carney v. Erie Ins. Co., 434 S.E.2d 374, 377, 379 (W. Va. 1993)
(holding that the "unless the business is yours" exception in a
nearly identical auto business exclusion did not apply because the
policyholder "did not own the automobile business" that she was
working for when the accident occurred).
Defendants resist this conclusion, arguing that we
should read "business" to mean the "activity" of selling the car.
So construed, one might then say, as defendants do, that Lynnway
and Hartwell were engaged in Nashua's "business" because they "were
using Nashua's vehicle in support of Nashua's efforts to sell its
vehicle." At the least, defendants maintain that it is ambiguous
whether the exclusion refers to a business entity or a business
activity, and thus that the ambiguity should be construed against
the insurer.5
5 Defendants also urge us to consider the import of Nautilus
Insurance Co. v. Ferreira, No. 1:20-cv-1053-JL, 2021 WL 3677713(D.N.H. Aug. 19, 2021), for the question whether Lynnway was
working in Nashua's business. But that case examined materially
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We are unpersuaded. In reading language in an insurance
policy, we consider the context, see Great Am. Dining, 62 A.3d at
846 ("We look to the plain and ordinary meaning of the policy's
words in context."), the reasonable expectations of the insured,
see Contoocook Valley Sch. Dist. v. Graphic Arts Mut. Ins. Co.,
788 A.2d 259, 261 (N.H. 2001), and the purpose of the language in
question, Tech-Built 153, Inc. v. Va. Sur. Co., 898 A.2d 1007,
1009 (N.H. 2006) ("The fundamental goal of interpreting an
insurance policy, as in all contracts, is to carry out the intent
of the contracting parties. To discern the parties' intent, we
first examine the language of the contract itself." (citations
omitted)).
Here, the language at issue plainly aims at making sure
that coverage does not extend in general to persons or entities
working in any business of selling autos, while at the same time
carving out an exception. The issue posed here is the reach of
that exception. Clearly it preserves coverage for Nashua and its
employees. Construing the "business" that is "yours" to mean
Nashua's business enterprise -- i.e., its dealership that sells
different policy language that excluded coverage for certain
workers "[d]irectly or indirectly performing duties related to the
conduct of any insured's business." Id. at *3, *6. Plainly,
whether someone's work duties are "[d]irectly or indirectly . . .
related to the conduct of any insured's business" is a
substantially broader inquiry than whether that person is working
in the insured's business.
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autos -- fully accomplishes this aim. Defendants, though, urge a
broader reading of business to mean "business activity," which
they construe to mean the activity of auctioning the Jeep. They
then assume that that activity is a part of Nashua's activity of
selling the Jeep.
We see no reason to adopt such a broad reading. No
reasonable insured that procured the policy would ordinarily have
any interest in paying for a policy that provided coverage for
another person who works for another unrelated seller of autos.
Presumably, this is likely why neither Nashua -- which obtained
the policy -- nor the insurer voices any support for construing
the policy as deeming Hartwell or Lynnway to be an insured.
Rather, the auto business that assumes control of the vehicle
should turn to its own insurer to cover any losses. See Borden v.
Progressive Direct Ins. Co., 30 N.E.3d 856, 858 (Mass. App. Ct.
2015). And that is the precise situation here: Lynnway retained
its own insurance policies, the providers of which have conceded
the availability of coverage. It also strikes us as contrived to
say that Hartwell was working in Nashua's business. Certainly, if
asked at the time of the accident to name which business he worked
in, he would not have said Nashua's.
The fact that Hartwell was employed by and subject to
the control of Lynnway reinforces our conclusion that he was not
working in Nashua's business. Courts across the country recognize
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that the exclusion at issue here is "based on the assumption that
the lack of control over the insured vehicle increases the risk to
the owner's insurer." Borden, 30 N.E.3d at 857–58 (citing Haley
v. State Farm Mut. Auto. Ins. Co., 202 S.E.2d 838, 840 (Ga. Ct.
App. 1973)); see also Grisham v. Allstate Ins. Co., 992 P.2d 891,
893 (N.M. Ct. App. 1999) ("Lack of control increases risk to the
owner's insurer, a risk that is neither included in the policy nor
calculated in the premium charged to the owner."); Carney, 434
S.E.2d at 378 (W. Va. 1993) (discussing same explanation supplied
by 7 Am. Jur. 2d Automobile Insurance § 90 (1990)). If we were to
conclude that the relevant business was a unitary "activity" of
selling Nashua's cars, and that that "business" was Nashua's, then
the auto business exclusion would appear to be inapplicable in
most of the circumstances for when its purpose would seem to make
it applicable, at least when included in a garage coverage policy
for auto dealers. One who uses with permission an insured dealer's
vehicle in a "selling, servicing[,] or repairing" business would
seemingly always be able to argue that their use also necessarily
supported Nashua's business activity of selling autos. We
specifically asked counsel for each set of defendants at oral
argument to identify some situation in which, under their reading
of this policy's auto business exclusion and its exception, it
would actually exclude coverage. Neither could do so.
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The Lynnway defendants respond that AutoFair or Nashua
exerted some de facto control over the Jeep while it was being
auctioned by Lynnway, due to certain features of the businesses'
extensive commercial relationship, including that AutoFair had use
of an office at Lynnway's premises and could make certain decisions
about how its cars were sold. But nothing in the policy suggests
that this type of control is equivalent to making the auction
business Nashua's or AutoFair's business. On all occasions when
a dealership permits another business to sell, service, or repair
one of its vehicles, the dealer presumably always retains some
control over the transaction. Exerting some influence over a
business's operations through mutually beneficial commercial
arrangements does not make that business "yours." Hence, we are
still left with the conclusion that defendants' reading is wrong.6
To be sure, defendants dispute the precise degree of
"control" Nashua relinquished or retained over the disposition of
the vehicle at auction, and by extension dispute whether the
exclusion's normative underpinnings apply here. But this misses
the forest for the trees. Regardless of whether Nashua had some
input on whether and how its vehicle would be sold, defendants do
not contest that Nashua surrendered the Jeep's keys to Lynnway so
6 We hasten to add that nothing in this opinion bears on the
entirely different question of whether the actions of the named
insured Nashua render it liable to any defendants.
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that Lynnway's employee could drive the vehicle for its independent
business of selling autos by auction.7 A reasonable entity in
either party's position would not expect its own garage policy to
cover another auto-selling business.
Defendants marshal the same set of business-relationship
facts in support of an argument concerning Nashua's "garage
operations." The Primary Policy defines "garage operations" to
include "all operations necessary or incidental to a garage
business." Defendants argue that Lynnway's auction was "necessary
and incidental" to Nashua's ability to sell its cars and thus part
of its garage operations. This argument may have had some
relevance were we considering the language of the exclusion before
the New Hampshire Endorsement, as the original exclusion's
exception read "unless that business is your 'garage operations.'"
But seeing as that language has been modified by the endorsement
to eliminate the reference to garage operations, and that
defendants concede the endorsement applies, whether Lynnway's
7For the same reason, defendants' invocation of a
Massachusetts statutory presumption that a vehicle's owner is
legally responsible, in the event of an accident, for the conduct
of the vehicle's driver, see Mass. Gen. Laws ch. 231, §§ 85A–B --
a presumption that can be rebutted by evidence to the contrary,
see Cheek v. Econo-Car Rental Sys. of Bos., Inc., 473 N.E.2d 659,
660–61 (Mass. 1985) -- also misses the mark even assuming New
Hampshire law also recognized such a presumption.
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auction was part of Nashua's "garage operations" simply has no
bearing on the case now before us.8
Finally, the Lynnway defendants assert that our reading
would create surplusage in the policy, specifically by reading out
the different coverage treatment that the Primary Policy provides
for "employees" and "anyone else" using a covered auto. Not so.
"Employees" are simply a subset of "anyone else," a category that
includes everyone other than "[y]ou, your executives and . . .
members (if you are a limited liability company)." While employees
are subject to certain special provisions under the policy, Nashua
employees driving Nashua vehicles are covered under the general
provision that grants coverage to "[a]nyone else while using with
your permission a covered 'auto' you own" -- and such employees
are not subject to the auto business exclusion because the business
they are working in is Nashua's.
In sum, we find that the Primary Policy's auto business
exclusion defines the policy's insureds so as to exclude Lynnway
and Hartwell from coverage for the underlying claims here. We
therefore need not take up the parties' alternative arguments
concerning the Primary Policy's suspended license exclusion.
8 For the same reason, we need not discuss defendants'
argument that we ought reach the same outcome as Blue Ridge Auto
Auction v. Acceptance Indemnity Insurance Co., which considered a
version of the exclusion that retained the "unless that business
is your 'garage operations'" formulation. 807 S.E.2d 51, 54 (Ga.
Ct. App. 2017).
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B.
Defendants next contend that the Umbrella Policy
provides coverage for the underlying claims. This policy
separately defines the insureds for its own purposes and excludes
from that definition those employed by an "auto sales agency."
Both groups of appellants argue this is an ambiguous term and so
should be construed narrowly to exclude only auto dealerships,
which would presumptively leave Lynnway within the definition of
insureds. Motorists points out that this particular argument was
raised to but not addressed by the district court below. Rather,
the district court agreed with Motorists' contention that the
Umbrella Policy provides no coverage for the underlying claims
because it is limited by its Following Form Endorsement, which
provides that the Umbrella Policy "does not apply" to auto coverage
"[e]xcept as coverage is available to you in the underlying
policies." See Motorists, 549 F. Supp. 3d at 230–31. Neither set
of appellants discusses, much less contests, Motorists' contention
or the grounds on which the district court decided the issue below.
In the absence of any preserved challenge, we have no reason not
to assume that the district court was correct that the Umbrella
Policy applies only to the extent auto coverage is provided in the
Primary Policy. Id. at 230. Certainly the caselaw seems to
provide comfort in making this assumption. See Jalbert ex rel. F2
Liquidating Tr. v. Zurich Servs. Corp., 953 F.3d 143, 148 (1st
- 20 -
Cir. 2020) (applying Massachusetts law in finding that the disputed
policy was "a 'follow-form' policy . . . , meaning that coverage
is subject to the terms and conditions of the primary policy");
Insituform Techs., Inc. v. Am. Home Assurance Co., 566 F.3d 274,
278 (1st Cir. 2009) ("The phrase 'follow form' refers to the
practice, common in excess policies, of having the second-layer
coverage follow substantively the primary layer provided by the
main insurer." (citing 2 Ostrager & Newman, Handbook on Insurance
Coverage Disputes § 13.01 (11th ed. 2002))). Given that the
underlying Primary Policy does not cover the claimed liabilities,
we need linger no longer on the Umbrella Policy.
IV.
For the foregoing reasons, the judgment of the district
court is affirmed.
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