Ga. court mulls UM coverage in case over farm policy interpretation
Duty to read, dual agency and interpretation of case law converge in an auto tort where a tractor was rear ended by an uninsured car.
Should tractor classification in farmers’ insurance policies be taken from the language of the policy itself or existing case law/? That is the question Freeman Mathis & Gary attorney Philip Savrin brought to the Georgia Court of Appeals in oral arguments on Thursday on behalf of Nationwide Agribusiness Insurance.
The plaintiff-appellee, a farming company, originally sued Nationwide, seeking a declaration that their insurance policy provided uninsured motorist (UM) coverage for an accident involving one of their tractors, which they contend was insured for liability under the policy and because they never rejected such coverage in writing.
The defendant-appellants dispute the trial court’s decision to apply uninsured motorist coverage to the tractor, which was rear-ended on a public road. because they don’t count tractors as “autos” under their policy. Robert Persons of Lindsey & Lacy on behalf of plaintiff-appellee, The Onionman Co., however, argued that the tractor was driving on a public road and therefore case law dictates it counts as an “auto” with uninsured motorist coverage.
Savrin opened up his argument by explaining the categories, or symbols, insured items are divided into under the disputed policy. He contended that tractors are in a separate category from “autos,” which are land vehicles designed for travel on public roads.
Judge Christopher McFadden asked several questions to establish how these types of insurance policies work and drill down to the root issue of the case.
“This tractor is not scheduled on the policy,” Savrin said. “I don’t think there’s much dispute about that. I think the question is whether there was liability insurance coverage for the tractor, so that then, according to the plaintiff in this case, the uninsured motorist coverage would be intuited to Nationwide under a Georgia Supreme Court case called Hinton v. Interstate Guaranty Insurance.”
However, there’s a caveat. Savrin said this does not include “mobile equipment,” which the defendant-appellees argue is the tractor’s rightful category. This is because tractors don’t require car insurance. “I will concede if a tractor was required to have liability insurance, it would be considered an auto, but it’s not,” Savrin said, and it would need that requirement for an analysis under Hinten to apply. He further argued that nothing in statute or case law says policyholders can pick and choose which vehicles they want to insure.
“It seems to me that, if the rule under our case law is that the tractor is covered by the UM policy [and] is incumbent on the insurer in setting out the offer of UM to be accepted or rejected, but must be included,” McFadden said. “So this pick and choose argument seems to be [working] against you if I understand this case correctly.”
“It’s a minor point,” Savrin said. But the main issue with construing the Hinton case in favor of the plaintiff-appellees is that it involved someone who had UM coverage getting hit by a tractor (not the other way around), and the question was whether the tractor was an uninsured motor vehicle.
To this point, Persons argued “The Hinton court said tractors are not subject to mandatory liability insurance because they don’t have to be registered or tagged. That doesn’t mean, however, that you can’t get liability insurance coverage for tractors when you operate them on public roads. And what the Supreme Court of Georgia said in the handling case was that a tractor, if it’s operated on public roads is subject to the UM statute”
As Persons took the stand, he said “There’s a lot of history that has not been presented in the argument,” namely, that his client was under the impression the package of policies he applied for included the coverage at issue.
“[Your] theory really comes down to the duty to read and your dual agency argument?” McFadden said.
“Yes, your honor,” Persons replied. While tractors under the policy aren’t initially covered, “when you go through the [policy] definitions of mobile equipment and autos, it turns out that a tractor is an auto. It’s mobile equipment, but it’s an auto by virtue of a series of definitional terms in the Nationwide policy.”
“There is a difference in [the Hinton case] and that tortfeasor was on the tractor and the policyholder was in the car, so wouldn’t that make this case distinguishable?” Judge Trenton Brown asked.
Persons said it would, though he contends there should be coverage because the declaration on his client’s policy did not match the original proposal, which provided coverage for all owned automobiles.
“Lo and behold, coverage for all owned automobiles had disappeared,” Persons said. “The point we’re making is I believe the policy could and should have been reformed, because there were no further applications. The policy kept rolling over year after year with these same symbols being shown on the declarations page, totally inconsistent with what was shown in the proposal in the beginning and in the application. But, assuming I’m stuck, or my client is stuck with symbol 19 liability coverage, that includes tractors.”
The case was Nationwide Agribusiness Insurance v. The Onionman Company, No. A23A1161, in the Georgia Court of Appeals.
Read the defendant-appellants’ brief below.
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