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Nichols v. Certain Underwriters at Lloyd's London

June 7, 2002

KENNETH NICHOLS, D/B/A K.R. NICHOLS & SON TRUCKING, PLAINTIFF-APPELLEE,
v.
CERTAIN UNDERWRITERS AT LLOYD'S LONDON AND OWNER OPERATOR SERVICES, INC. DEFENDANTS-APPELLANTS.



Appeal from Circuit Court of Vermilion County No. 99MR92 Honorable Claudia S. Anderson, Judge Presiding.

The opinion of the court was delivered by: Justice Myerscough

Released for publication.

KENNETH NICHOLS, D/B/A K.R. NICHOLS & SON TRUCKING, PLAINTIFF-APPELLEE,
v.
CERTAIN UNDERWRITERS AT LLOYD'S LONDON AND OWNER OPERATOR SERVICES, INC. DEFENDANTS-APPELLANTS.

Appeal from Circuit Court of Vermilion County No. 99MR92 Honorable Claudia S. Anderson, Judge Presiding.

The opinion of the court was delivered by: Justice Myerscough

Plaintiff filed a claim for loss under its cargo insurance policy after the theft of a detached trailer and its cargo from an unsecured parking lot. Plaintiff and defendants filed cross-motions for summary judgment. On March 20, 2001, the trial court entered summary judgment in favor of plaintiff. Defendants filed a motion for reconsideration, which the trial court denied on July 20, 2001. Defendants appeal, arguing the trial court erred in granting summary judgment inasmuch as the insurance policy in question clearly and unambiguously did not provide insurance for the loss. We disagree and affirm the trial court.

I. BACKGROUND

Defendants issued plaintiff, a transportation business, a cargo insurance policy, certificate No. NA40020N, which was in effect between September 23, 1998, and September 23, 1999. The certificate of insurance identified the insured goods as "motor truck cargo."

On or about October 16, 1998, plaintiff's employee, Donald Baird, was transporting a shipment of liquid cooking oil products from Danville, Illinois, to Seaboard Tampa Terminal in Tampa, Florida. Baird was driving a tractor attached to a utility refrigeration trailer. On October 16, 1998, Baird detached the trailer and parked it on a lot at the Dixie Boy Truck Stop in San Antonio, Florida. The truck stop did not provide any fencing, guards, security, or surveillance for trailers left on the lot. On October 19, 1998, Baird returned to the parking lot and found the trailer with its cargo had been stolen. Plaintiff submitted a claim for loss to defendants in the amount of $45,104.04.

In three letters dated November 3, 1998, March 23, 1999, and July 9, 1999, defendants denied the claim based on their interpretation of the policy language. Specifically, defendants asserted that the detached trailer parked in an unsecured lot with no security was not an insured "truck" as that term is defined by the clear and unambiguous language of the policy. According to the letters, leaving the trailer and load on an unsecured lot did not comply with the terms of the policy and, therefore, no coverage existed for the loss. Moreover, the July 9, 1999, letter explained that the unattended truck endorsement affords coverage to "trucks" not in a building or fully enclosed yard as long as there is either constant surveillance or a guard. The letter stated that under the instant facts, there was no coverage as the detached trailer did not meet the definition of "truck."

According to the policy, coverage was for "all risks of physical loss or damage from an external cause to lawful cargo in and/or on a truck whilst in [the insured's] care, custody[,] or control in the ordinary course of transit, including loading and unloading." Under the policy, the term "truck" is defined as follows:

"a) The word 'truck' shall mean a truck or truck-trailer designed for travel on public roads. 'Truck' includes trailers and semi[]trailers, dollies or auxiliary wheels combined, or any combination of them, or any unidentified trailer, BUT ONLY

i) whilst attached to a covered truck or trailer OR

ii) whilst temporarily detached for a period not exceeding 72 consecutive hours (Sundays and holidays excluded) from a covered truck or tractor AND whilst garaged in a building or parked in a fully enclosed yard which is securely closed and locked, or under constant surveillance, or on a guarded lot AND the trailer ...


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