HO Policy, Motor Vehicle Exclusion, and Trailer-not-Towed Exception

The insurer brought a declaratory judgment action against the insured asserting that there was no liability coverage under the homeowners policy for an auto accident involving a trailer that was not being towed at the time of the accident. This case is Pioneer State Mutual Insurance Company v. Dells, 836 N.W.2d 257 (2013).

 

Hall was killed when a trailer towed by a van driven by Dells separated from the van and crashed into a vehicle driven by Hall. Dells and his vehicles were covered by a motor vehicle insurance policy issued by Auto Owners Insurance Company. Dells also had a homeowners policy issued by Pioneer State.

 

The estate of Hall filed a lawsuit and a settlement agreement was reached whereby the auto policy would pay its liability limit and the rest of the settlement amount would be sought from the homeowners policy. Pioneer filed a declaratory judgment action asserting that there was no available coverage under the Pioneer policy given its exclusion for bodily injury arising out of the use of a motor vehicle.

 

The trial court noted that the homeowners policy had an exception to the motor vehicle exclusion so that the exclusion did not apply to a trailer not towed by or carried on a motorized land conveyance. However, the court went on, the exclusion in this instance applied since the only reason the trailer ended up striking Hall's car was that it had been in tow up to the moment of separation. The court said that the exception was intended to address only those circumstances in which a trailer was stationary, in dead storage, or otherwise not in the process of being towed. Hall's estate appealed.

 

The Court of Appeals of Michigan said that while it is certainly accurate to state that Hall's death arose out of the use of a trailer, it is equally accurate to state that her death arose out of the use of a motor vehicle whether the use was driving the van with the trailer in tow or the act of connecting the van to the trailer in the first place. Absent the use of the van to connect to and tow the trailer, there would have been no bodily injury. The only reason that the trailer ended up striking Hall's vehicle and causing her death was that it separated from Dell's van while in the process of being towed by the van. The court could not logically dismiss the van's use as playing an indispensable and integral role in giving rise to Hall's bodily injury. The court said that while it was the trailer itself that directly struck Hall, the use of the trailer simply cannot stand on its own, independent of the van's use, as having been the cause of Hall's injuries because it was the use of the trailer in unison with the use and operation of the van that gave rise to Hall's death.

 

The appeals court also noted that the act of towing the trailer was a necessary ingredient in producing the crash because the act had a direct causal connection to the accident, setting into motion a series of events ultimately resulting in bodily injury. The policy language effectively provides that the personal liability coverage is not applicable with respect to injury arising out of the use of a trailer being towed. The court found that the estate's position is not consistent with the policy language.

 

The ruling of the trial court was affirmed.

 

Editor's Note: The trial court and the appeals court both noted that courts in other jurisdictions addressing comparable language and similar facts had held, without exception, that the motor vehicle exclusion in the homeowners policy forecloses coverage when damages were incurred as the result of collisions with trailers that had broken free from the vehicles that had been towing them. The trailer-not-towed exception to the motor vehicle exclusion would apply only in those circumstances in which a trailer was stationary, in dead storage, or otherwise not in the process of being towed.