Cite as 2022 Ark. App. 67 ARKANSAS COURT OF APPEALS DIVISION III No. CV-21-1
TRAVIS QUINN APPELLANT Opinion Delivered February 9, 2022
V. APPEAL FROM THE MONTGOMERY COUNTY CIRCUIT COURT [NO. 49CV-19-37] THE TRAVELERS INDEMNITY COMPANY AND TRAVELERS HONORABLE JERRY RYAN, JUDGE PROPERTY CASUALTY COMPANY OF AMERICA APPELLEES AFFIRMED
KENNETH S. HIXSON, Judge
Appellant Travis Quinn, who was injured in an accident involving a logging truck,
appeals from an order granting summary judgment in favor of appellees The Travelers
Indemnity Company and Travelers Property Casualty Company of America (Travelers). The
trial court found that a commercial liability insurance policy issued by Travelers providing
primary coverage to its named insured, Deltic Timber Corporation (Deltic), did not provide
coverage for an independent contractor or its truck driver. We affirm.
I. Facts and Procedural History
Travelers issued a commercial liability insurance policy to Deltic for a policy period
of December 31, 2015, to December 31, 2016. On November 7, 2016, Deltic entered into
a “Timber Cutting and Hauling Agreement” (sometimes referred to herein as “the Logging Agreement”) with J.W. Hendrix Logging (Hendrix Logging). Under the terms of the Logging
Agreement, Hendrix Logging agreed to cut and remove timber from land owned by Deltic
and deliver it to Deltic’s mill. Under the heading “Independent Contractor,” the Logging
Agreement provided, “Contractor [Hendrix Logging] agrees that it shall, at all times and for
all purposes, be an independent contractor under this Logging Agreement and Contractor’s
work, means, methods, hours, supplies, agents, employees and equipment shall not be
subject to the supervision or control of Deltic.”
On December 5, 2016, Kelly Alexander, a Hendrix Logging employee, was hauling
logs in a logging truck owned by Hendrix Logging pursuant to Hendrix Logging’s Logging
Agreement with Deltic when Alexander was involved in a multivehicle accident. Appellant
Travis Quinn was injured in the accident. Larry Ellis was killed in the accident. Donald
Trampp was also injured.1 The three men were in separate vehicles at the time of the
accident.
The estate of Larry Ellis filed a separate wrongful-death lawsuit against Kelly
Alexander, Hendrix Logging, and Deltic, alleging that Alexander was negligent and that his
negligence was chargeable to both Hendrix Logging and Deltic (“the Ellis lawsuit”). Hendrix
Logging and Deltic subsequently filed a third-party complaint against appellant Quinn,
alleging Quinn was negligent in the operation of his vehicle, which was a proximate cause of
the motor-vehicle accident. Appellant Quinn then filed a third-party complaint against
1 Neither Ellis’s estate nor Trampp are parties to the litigation herein.
2 Alexander, Hendrix Logging, and Deltic. Trampp was also made a party to the Ellis lawsuit.
The bottom line to this litigation is that all parties to the motor-vehicle accident accused
each other of negligence. After a jury trial, the jury found that Alexander and Hendrix
Logging were liable for damages to Ellis’s estate, Quinn, and Trampp. The jury found that
Deltic was not at fault and thus not liable for damages to any party. In the interrogatories
submitted to the jury, the jury found that Hendrix Logging was an independent contractor
of Deltic and that Alexander was not an independent contractor of Hendrix Logging.
In the Ellis lawsuit, the jury awarded appellant Quinn $500,000 in compensatory
damages, and also awarded damages to Ellis’s estate and to Trampp. The insurer for Hendrix
Logging paid the $1,000,000 limit of its insurance, which was inadequate to cover all the
damages. As his portion of the insurance proceeds in the Ellis lawsuit, appellant Quinn
received $181,323.92. No appeal was taken regarding the apportionment of the insurance
proceeds in that case.
That brings us to the litigation that is the subject of this appeal. On September 20,
2019, Quinn filed an amended complaint 2 against Travelers, seeking to recover the unpaid
portion of the Ellis-lawsuit judgment as well as statutory damages. In his complaint, Quinn
alleged that Alexander, the Hendrix Logging employee who drove the logging truck involved
in the accident, was an insured under the Travelers insurance policy issued to Deltic. Quinn
2 The amended complaint amended the original complaint only to the extent of substituting Travelers as the proper defendant.
3 argued that Alexander was covered under the terms of the “Covered Autos Liability
Coverage” section of the policy, which provides in relevant part as follows:
A. Coverage
We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which the insurance applies, caused by an “accident” and resulting from ownership, maintenance or use of a covered auto.
....
1. Who is an Insured
The following are “insureds:”
a. You for any covered “auto.”
b. Anyone else while using with your permission a covered “auto” you own, hire or borrow except:
(1) The owner or anyone else from whom you hire or borrow a covered “auto.”
This exception does not apply if the covered “auto” is a “trailer” connected to a covered “auto” you own.
c. Anyone liable for the conduct of an “insured” described above but only to the extent of that liability.
(Emphasis added.) Quinn contended that Alexander was covered under subsection (A)(1)(b)
because, at the time of the accident, Alexander was driving a vehicle hired by Deltic with
Deltic’s permission. In making this claim, Quinn relied on the Logging Agreement between
Deltic and Alexander’s employer, Hendrix Logging. Travelers filed an answer to Quinn’s
complaint, denying that Quinn was entitled to any relief.
4 On February 10, 2020, Travelers filed a motion for summary judgment, asserting that
Travelers did not insure either Hendrix Logging or its employee, Alexander. Travelers
argued that, under the plain and unambiguous terms of the Travelers insurance policy, there
was no coverage for the judgment in the Ellis lawsuit as a matter of law. Travelers contended
that because Hendrix Logging and its employee driver Alexander were independent
contractors working for Deltic on the day of the accident, and because there was no separate
Logging Agreement between Deltic and Hendrix Logging in which Deltic hired or leased the
logging truck driven by Alexander, the logging truck was not a “hired auto” under the policy.
On March 24, 2020, Quinn filed a response to Travelers’ motion for summary
judgment, asking that it be denied. In his response, Quinn argued that the logging truck
driven by Alexander was a “covered auto” under the Travelers insurance policy and that
Alexander and Hendrix Logging were both insureds. On July 21, 2020, the trial court held
a hearing on Travelers’ motion for summary judgment wherein each party argued its
respective position.
The trial court issued a letter opinion on August 21, 2020. In the letter opinion, the
trial court found that under the Logging Agreement between Deltic and Hendrix Logging it
was not contemplated that any trucks, trailers, or equipment owned by Hendrix Logging
would constitute a “hired” vehicle under the terms of the insurance policy issued by
Travelers. The trial court stated:
After considering all of the evidence in support of and in opposition to the motion, the court finds that Deltic did not hire the vehicle that was involved in the accident. Hendrix Logging owned his own trucks, trailers and equipment, hired his own
5 drivers, provided his own insurance and controlled all operations of his business. Deltic did contract with Hendrix Logging to utilize the services of Hendrix Logging, which incidentally included the use of the truck which was involved in the accident. However, the cutting and hauling Logging Agreement between the parties gave no authority or control by Deltic as to which trucks or trailers or drivers that Hendrix Logging could use to haul the wood. No evidence supports a finding that Deltic leased any trucks, equipment or drivers owned by or under the control of Hendrix Logging. . . . Accordingly, Defendants are entitled to summary judgment.
On September 24, 2020, the trial court entered an order referencing its letter opinion
wherein it had found that Travelers was entitled to summary judgment, and formally entered
summary judgment and dismissed Quinn’s amended complaint with prejudice.
Quinn now appeals from the summary judgment entered in favor of Travelers.
Quinn argues that under the plain language in the Travelers insurance policy, Alexander was
an insured under the “hired auto” provision of the policy. Quinn further argues that
Hendrix Logging is also covered under the insurance policy because it is liable for the
conduct of its employee, Alexander, who is an insured. Finding no error, we affirm.
II. Standard of Review
Our supreme court has set forth the standard of review for summary-judgment cases
as follows:
Summary judgment should only be granted when it is clear that there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. The purpose of summary judgment is not to try the issues, but to determine whether there are any issues to be tried. We no longer refer to summary judgment as a drastic remedy and now simply regard it as one of the tools in a trial court’s efficiency arsenal. Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact
6 unanswered. We view the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties.
Harvest Rice, Inc. v. Fritz & Mertice Lehman Elevator & Dryer, Inc., 365 Ark. 573, 575–76, 231
S.W.3d 720, 723 (2006) (internal citations omitted).
III. Discussion and Analysis
We begin our discussion with the standards set forth by our supreme court when
reviewing insurance contracts. Insurance terms must be expressed in clear and unambiguous
language. Castaneda v. Progressive Classic Ins. Co., 357 Ark. 345, 166 S.W.3d 556 (2004). If
the language of the policy is unambiguous, we will give effect to the plain language of the
policy without resorting to the rules of construction. Id. On the other hand, if the language
is ambiguous, we will construe the policy liberally in favor of the insured and strictly against
the insurer. Corn v. Farmers Ins. Co., 2013 Ark. 444, 430 S.W.3d 655. Language is ambiguous
if there is doubt or uncertainty as to its meaning and it is fairly susceptible to more than one
reasonable interpretation. Id. Whether the language of the policy is ambiguous is a question
of law to be resolved by the court. Id. The terms of an insurance contract are not to be
rewritten under the rule of strict construction against the company issuing it so as to bind
the insurer to a risk that is plainly excluded and for which it was not paid. Id.
In determining whether the Travelers insurance policy covered the motor-vehicle
accident with respect to Quinn’s damages, it is necessary to review the relevant provisions of
the Logging Agreement between Deltic and Hendrix Logging. Under the Logging
7 Agreement, Hendrix Logging agreed to cut and remove timber from land owned by Deltic
and deliver it to Deltic’s mill. The Logging Agreement provides that Hendrix Logging “agrees
that it shall, at all times and for all purposes, be an independent contractor under this
Logging Agreement and Contractor’s work, means, methods, hours, supplies, agents,
employees and equipment shall not be subject to the supervision or control of Deltic.” It
further provides that Hendrix Logging “agrees, at its sole cost, risk and expense, it shall
provide all equipment, supplies, methods and labor necessary or desirable so that Contractor
can comply with the terms of this Logging Agreement.” The Logging Agreement states that
Hendrix Logging “agrees that it shall provide a sufficient number of safe and operationally
sound tractors, trailers, and other equipment of sufficient utility and capacity, and shall
employ only licensed, insured, safe, and competent drivers to operate said equipment.” The
Logging Agreement required Hendrix Logging to obtain liability insurance, including
commercial auto liability insurance, to protect Deltic from bodily-injury or property-damage
claims that could arise from Hendrix Logging’s operations. And finally, the Logging
Agreement also contained an indemnity provision requiring Hendrix Logging to hold Deltic
harmless against all claims and injuries resulting from Hendrix Logging’s negligence.
In this appeal, Quinn does not dispute that Hendrix Logging was an independent
contractor for Deltic at the time of the accident. Nevertheless, Quinn argues that this is not
dispositive of the issue of coverage under the Travelers policy. The issue is whether the truck
involved in the accident was “hired” by Deltic. The policy provides that an insured includes
“[a]nyone else while using with your permission a covered ‘auto’ you . . . hire.” Quinn
8 contends that under this plain language in the policy, Deltic “hired” the truck driven by
Alexander as part of the Logging Agreement between Deltic and Hendrix Logging. Quinn
asserts that the Logging Agreement literally contains the word “Hauling” in its title. Quinn
notes that the term “hire” is not defined in the policy and urges us to turn to the ordinary
meaning of the word. According to the Merriam-Webster online dictionary, “hire” means
“payment for the temporary use of something.” Hire, Merriam-Wester.com,
https://www.merriam-webster.com/dictionary/hire (last visited Feb. 3, 2022), archived at
https://perma.cc/3NNB-RERP. Quinn contends that this definition is broad enough to
cover Deltic’s Logging Agreement with Hendrix Logging for Hendrix Logging’s services and
the use of its equipment. Quinn further asserts that the policy could have contained an
exclusion for independent contractors, but it did not.
Quinn concedes that Hendrix Logging is not an insured under the “hired auto”
section of the policy because that section contains an exception for the owner from whom
the auto was hired, and Hendrix Logging owned the truck involved in the accident. Quinn,
however, argues that Hendrix Logging’s employee, Alexander, is an insured under the “hired
auto” section because he did not own the truck and there are no exceptions under that
section that apply to him. Quinn then concludes that Hendrix Logging is an insured under
the next section of the policy, which provides that an insured includes “[a]nyone liable for
the conduct of an “insured” described above.”3
3 We note that because the trial court concluded that the truck was not a “hired auto” under the policy, it made no ruling on whether the “owner” exception would have applied
9 Travelers, conversely, argues that Deltic did not “hire” the Hendrix Logging truck as
a matter of law. Travelers cites Nichols v. Farmers Insurance Co., 83 Ark. App. 324, 128 S.W.3d
1 (2003), where we held that the fact that a term is not defined in a policy does not
automatically render it ambiguous. Travelers correctly states that the issue in this case has
not been squarely addressed by the Arkansas appellate courts. Travelers, however, asserts
that other jurisdictions that have addressed a “hired auto” provision similar to this one have
held that a vehicle is “hired” only if there is a separate contract by which the vehicle is hired
or leased to the insured for the insured’s exclusive use or control. Travelers argues that
because there was no separate equipment-lease agreement in this case, and all the
equipment—including the truck involved in the accident—was owned and under the exclusive
control of Hendrix Logging and not Deltic per the terms of their Logging Agreement, there
was no insurance coverage under the policy, and Travelers was properly granted summary
judgment. We agree with Travelers’ argument.
We find the Fifth Circuit Court of Appeals case, Toops v. Gulf Coast Marine Inc., 72
F.3d 483 (5th Cir.), persuasive. In Toops, Dayton-Scott Equipment Company, an industrial
crane-rental company, entered into an agreement with an interstate common carrier, Rig
Runner, to transport a crane from Louisiana to Texas. Rig Runner hired two truck drivers,
who were both independent contractors, to transport the crane parts. While the crane was
in transport, one of the trucks was involved in an accident and fatally injured Richard Toops.
to either Hendrix Logging or Alexander. Because we are affirming the trial court’s ruling that the truck was not a “hired auto,” we need not discuss this either.
10 In a wrongful-death suit, the jury found no liability on Dayton-Scott’s part but found Rig
Runner and the truck driver negligent and awarded $12 million in damages.
The Toops plaintiffs then filed suit against Dayton-Scott’s insurer, seeking a
declaratory judgment that Rig Runner was covered under an insurance policy issued to
Dayton-Scott on the theory that the truck involved in the accident was a “hired auto.” The
policy language in Toops was similar to the language in the case at bar, and it provided:
(a) You for any covered “auto.”
(b) Anyone else while using with your permission a covered auto you own, hire or borrow except:
(c) Anyone liable for the conduct of an insured described above but only to the extent of that liability. However, the owner or anyone else from whom you hire or borrow a covered auto is an insured only if that auto is a trailer connected to a covered auto you own.
The federal district court found that there was coverage under the policy, but the Fifth
Circuit Court of Appeals disagreed. The court of appeals stated that Toops was required to
not only show that Dayton-Scott hired a “covered auto” but also show that the driver of the
hired auto was under the control of Dayton-Scott. The court stated further:
The facts show that Dayton-Scott hired a licensed common carrier to provide transportation services and relied on the carrier to select and arrange for vehicles and drivers. Thus, Toops never made the connection between Rig Runner (the entity “hired”) and Williams/Davidson (the drivers who drove the “auto”). Without such
11 connection, the policy cannot be enforced and USF & G cannot be held liable for coverage.
Toops, 72 F.3d at 487. The Toops court held that for a vehicle to constitute a hired auto,
there must be a separate contract by which the vehicle is hired or leased to the named insured
for his exclusive use or control. Citing numerous cases, the Toops court stated that numerous
courts have held that hiring an independent contractor will not create insurance coverage
under a “hired auto” clause. Therefore, in Toops, the court of appeals reversed and rendered
summary judgment in favor of the insurance company.
Cases in other jurisdictions have reached similar results. In American International
Underwriters Insurance Co. v. American Guarantee and Liability Insurance Co., 105 Cal. Rptr. 3d
64 (2010), the insured trucking company entered into an agreement engaging an
independent contractor for soil-hauling services, who, in turn, entered into a separate
subhaul agreement with a truck driver. After an accident occurred involving the truck, a
dispute arose with respect to whether there was insurance coverage under the insured
trucking company’s policy, which provided that an “insured” was “[a]nyone else while using
with your permission a covered ‘auto’ you own, hire or borrow.” The California appeals
court held that there was no coverage and that the insurer was entitled to summary judgment.
In concluding that the truck involved in the accident was not a “hired” vehicle under the
policy, the appeals court stated that there were no facts indicating the trucking company’s
assumption of possession or control of the truck and stated that the trucking company
cannot be said to have “hired” the truck merely by retaining an independent contractor to
12 transport the soil. See also Lewis v. Progressive Gulf Ins. Co., Inc., 7 So.3d 955 (Miss. App. 2009)
(holding that the truck that was hauling timber for a logging company that was involved in
an accident was not a “hired auto” under the logging company’s insurance policy where the
logging company did not hire the truck but rather hired the services of an independent-
contractor hauler to haul the company’s timber, which incidentally included the use of the
truck); Canal Ins. Co. v. Liberty Mut. Ins., 395 F. Supp. 962 (N. D. Ga. 1975) (holding that
the logging truck was not a “hired automobile” under the insurance policy because there was
no separate hiring contract, and the pulpwood harvesting and hauling logging agreement
between the insured and the independent-contractor truck driver was a service contract
requiring the driver to provide his own truck); Huddleston v. Luther, 897 So. 2d 887 (La. Ct.
App. 2005) (holding that the logging truck was not a “hired auto” where the logging company
had no control over the truck itself, and the logging agreement did not involve the lease of
a specific thing, i.e., the truck).
We observe that the holdings in the aforementioned cases are entirely consistent with
a discussion of the issue in the legal treatise Couch on Insurance:
Many automobile insurance policies expressly provide coverage for use of automobiles which are hired, leased, or rented by the insured. Such provisions usually appear in the policy itself or in a separate “hired automobiles” endorsement. If the term “hired automobile” is defined by the policy, it will typically be defined as a vehicle used under contract in behalf of the named insured provided that the vehicle is not owned by, or registered in the name of, the insured or of an employee of the named insured. Pursuant to this definition, a vehicle owned by the insured, a coinsured, or an employee of the named insured will typically not be considered a “hired vehicle” for purposes of coverage under the “hired automobile” clause. In those situations in which there is no policy definition of this term, in order for a vehicle to constitute a “hired” automobile
13 under this provision, there must be a separate contract by which the vehicle is hired or leased to the insured for the insured’s exclusive use or control.
6 Steven Plitt et al., Couch on Insurance § 118:48 (3rd ed. 2021) (emphasis added).
In the instant case, it is undisputed that Hendrix Logging was an independent
contractor4 that was hired to perform a service for Deltic, i.e., cutting and delivering wood,
pursuant to the terms of the Logging Agreement. The Logging Agreement contained no
provisions for the use of any specific trucks or other equipment nor was there any separate
equipment agreement to that effect. As found by the trial court, Hendrix Logging owned
and selected all the trucks and other equipment used to perform the contracted work;
Hendrix Logging hired its own drivers and provided its own insurance; and Hendrix Logging
controlled all operations necessary to complete the work. Deltic, on the other hand, had no
control or right to control any of the operations, including the trucks that were used or the
drivers who drove them. The undisputed material facts compel the conclusion that the
logging truck involved in the accident was not a “hired auto” under the Travelers insurance
policy. Having concluded that there was no insurance coverage based on the unambiguous
terms in the insurance contract as applied to the facts, we affirm the summary judgment
entered in favor of Travelers.
Affirmed.
HARRISON, C.J., and KLAPPENBACH, J., agree.
4 An independent contractor is one who contracts to do a job according to his own method and without being subject to the control of the other party, except as to the results of the work. ConAgra Foods, Inc. v. Draper, 372 Ark. 361, 276 S.W.3d 244 (2008).
14 Minton Law Firm, by: M. Justin Minton; and Baker Schulze & Murphy, by: J.G. “Gerry”
Schulze, for appellant.
Watts, Donovan, Tilley & Carlson, P.A., by: David M. Donovan and Taylor N. Williams,
for appellees.