Stonehocker v. Gulf Insur. Co.

Stonehocker v. Gulf Insur. Co., 2016 MT 78 (March 29, 2016) (Cotter, J.) (6-0, aff’d & rev’d)

Issue: (1) Whether the district court erred in granting summary judgment to Travelers on the basis that Stonehocker was not a named insured under the uninsured provision of the policy, and (2) whether the district court erred in granting summary judgment to Travelers because at the time of Stonehocker’s injury her personal pickup was not a “temporary substitute auto” under the policy.

Short Answer: (1) No, and (2) yes.

Affirmed (issue #1) & reversed (issue #2), and remanded for entry of judgment for Stonehocker on coverage 

Facts: Marilyn Stonehocker was a camp cook for Bear Creek Outfitters, a guest ranch near East Glacier. Stonehocker owned a pickup that she used to pull an 18-foot trailer, which her husband had modified to include a mobile kitchen and sleeping quaretrs. Stonehocker would drive her pickup and trailer to each new campsite, and the guests’ luggage would be transported by a Suburban owned and insured by the ranch.

In June 2000, Stonehocker used her truck to transport guests, as the Suburban was in the shop, and to transport the guests’ luggage. On the last night of the drive, Stonehocker fell asleep in her trailer with the pickup doors unlocked and the key still in the ignition. She awoke around 5:00 am to the sound of her pickup being started. She saw a man she did not recognize in the driver’s seat. The stranger drove the pickup and attached trailer away from the campsite. When Stonehocker realized that her pickup and trailer were being stolen, she called 911. At some point, she either jumped or was thrown from the trailer and sustained a head injury that has prevented her from recalling other details of the incident.

Stonehocker’s pickup was insured by State Farm, which paid uninsured motorist benefits to her, but denied liability coverage because the man who stole the truck was not a permitted driver under the policy. Stonehocker than made a claim against Bear Creek’s corporate auto policy, issued by Travelers, which denied UM coverage.

Procedural Posture & Holding: In 2012, the parties filed cross-motions for summary judgment, and the district court granted Travelers’ motion, holding that Stonehocker was not a named insured. In 2015, the first court held that Stonehocker’s vehicle was not covered by the Traveler’s policy and granted Travelers’ second motion for summary judgment. Stonehocker appeals, and the Supreme Court affirmed the 2012 summary judgment and reverses the 2015 summary judgment.

Reasoning: (1) Montana law allows an insurer to limit coverage to a corporation or other business entity. The district court concluded that a reasonable person of average intelligence would understand the insured party under the Travelers policy to be the business entity Bear Creek, and the Supreme Court agrees.

(2) If Stonehocker’s pickup was being used as a temporary substitute for the Suburban at the time of her injury, it is a covered vehicle. “[T]he proper test for identifying a temporary substitute vehicle is whether it is put to the same use to which the covered vehicle would have been put but for its withdrawal from service.” ¶ 21. It is not necessary that a claimant first prove that he or she and no one else would have been occupying the covered auto. Stonehocker’s undisputed testimony that she was using her pickup to perform a task that the ranch Suburban normally would have performed satisfies the “same use” test, entitling her to summary judgment on her coverage claim.