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Gulmire v. St. Paul Fire and Marine Insurance Co.12/23/2003
yee and not the employer. Id. at 642. In that case, PBC obtained business automobile insurance under a policy issued by USF&G; PBC gave permission to Larson to drive this vehicle. Wittliff was a passenger in the vehicle and was injured when it collided with another. Both Wittliff and Larson were PBC employees, and both were acting within the course of their employment when the accident occurred. Larson was an "insured" under the policy since he was driving PBC's van at the time of the accident with PBC's permission. Id. at 640. Wittliff sued USF&G;for Larson's negligence.
. USF&G;denied coverage on the grounds that an employee exclusion barred coverage. Id. at 641-42. The employee exclusion stated:
C. WE WILL NOT COVER - EXCLUSIONS
This insurance does not apply to:
....
5. Bodily injury to any employee of the insured arising out of and in the course of his or her employment by the insured.
Id.
. The issue on appeal concerned who "the insured" was. We observed that if the insured meant Larson, the tortfeasor co-employee, the exclusion would not apply (and thus there would be coverage) because Larson did not employ Wittliff. Id. at 642. The exclusion would apply (thereby denying coverage), however, if the insured referred to the employer, PBC. Id.
. The case did not involve a separation clause. Even in the absence of a separation clause, we still construed the insured to mean Larson, the tortfeasor co-employee. We stated:
It is settled law in this state that when an employee seeks to recover for damages sustained as the result of a co-employee's negligence, and the co-employee is an insured under the employer's policy, the word "insured" in the exclusions at issue here refers to the co-employee tortfeasor, and not to the employer.
Id. at 642 (emphasis in original; citations omitted). Accordingly, the exclusion did not apply because Larson did not employ Wittliff.
. USF&G;stands for the proposition that an additional insured may receive greater coverage under a policy than the named insured. If Wittliff sued PBC, his employer and the named insured, for the accident, the exclusion clearly would have barred coverage. However, Wittliff sued USF&G;for Larson's negligence. We nevertheless construed the "the insured" language in the exclusion to mean Larson, the co-employee and additional insured, and not PBC, the employer and named insured. The effect of this construction was to grant greater coverage to an additional insured than would have been afforded to the named insured. In view of USF&G; construing the separation provision in the case at hand in a manner that allows an additional insured to receive greater coverage than the named insured does not produce an absurd result.
IV. Conclusion
. State Farm is entitled to summary judgment. The non-owned vehicle exclusion does not violate the omnibus statute, and because the underlying automobile insurance does not apply, the umbrella policy similarly does not afford coverage. With regard to St. Paul, the trial court's order granting declaratory judgment to St. Paul is based on an error of law. The separation provision treats Klister individually, as if he was the only named insured; therefore, none of the exclusions bars coverage. The declaratory judgment is consequently reversed.
By the Court. -- Judgments affirmed in part; reversed in part and cause remanded. No costs on appeal.
Recommended for publication in the official reports.
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