One of the operators of a leased food truck was burned inside the truck by oil from a deep fryer that splashed on her. The insurers for the lessor dispute with one another over coverage. The automobile insurer claims that the injury should be covered under the commercial general liability policy that, although excluding coverage for injuries arising out of the use of automobiles,
Royal Catering Company (Royal) owned a fleet of food trucks. It leased its trucks to operators who drove from site to site selling food. Royal leased one of these trucks to Esmeragdo Gomez, who, along with his wife Irais Gomez, operated the truck. The Gomezes' food truck had only two seats and two seatbelts. The truck was not equipped to transport persons other than a driver and a cook. Each day, Mr. Gomez returned the food truck to Royal. Royal washed and maintained the truck and repaired it as necessary.
The Gomezes' food truck was equipped with a specially designed deep fryer, grill, steam table, oven, refrigerator, and coffeemaker. That equipment was built into the truck and was not designed to be used apart from the truck. Royal provided the Gomezes with the food supplies, pots, pans, and cooking equipment they used to serve their customers. One side of the Gomezes' food truck was constructed so that a person inside the truck could serve food to customers outside the truck — that side of the truck opened, and there was a folding shelf attached to the outside of the truck.
On a typical day, Mr. Gomez would begin his route at 5:00 a.m. and complete it at 1:00 p.m., following the same route and making 12 or 13 stops. When the Gomezes' food truck was not "under way," it was parked while food was prepared or sold to customers. Most of the food was prepared before the Gomezes left the Royal parking lot.
On the day of the accident, Mr. Gomez was driving the Gomezes' food truck. A guest sat in the truck's passenger seat, and Mrs. Gomez stood in the rear of the truck. At an intersection, Mr. Gomez swerved to avoid an approaching truck. Mr. Gomez's evasive action failed to avoid a collision. Just prior to the collision, hot oil splashed on and burned Mrs. Gomez.
The Gomezes and the passenger in their truck brought an action (the Gomez action) against Royal and others for injuries sustained in connection with the accident. In their action, the Gomezes asserted causes of action against Royal for products liability (negligence), products liability (design
Royal tendered the Gomez action to American States Insurance Company (American States), which had issued automobile (American States Auto Policy) and excess automobile insurance policies to Royal. American States agreed to provide a defense under a reservation of rights. Royal and American States tendered the Gomez action to Travelers Property Casualty Company of America (Travelers), which had issued to Royal commercial general liability (Travelers Primary CGL Policy) and excess-umbrella general liability policies. Travelers declined to provide a defense. American States negotiated with the Gomezes to settle their claims against Royal in the Gomez action.
American States, Royal, and the Gomezes submitted the Gomez action to binding arbitration. The arbitration concerned only Royal's liability on a products liability theory — i.e., that Royal provided a defective deep fryer basket, which caused the hot oil to spill on Mrs. Gomez. Royal stipulated to liability on a products liability theory, but challenged the amount of damages and the apportionment of fault. The arbitration award stated, in part, "The burning oil spilled out of the deep fryer container because Defendant [(in that matter)] Royal ..., the commercial lessor, had supplied the subject truck with the improper fryer baskets, which blocked the latching mechanism from closing."
Regarding responsibility for the accident that caused Mrs. Gomez's burn injuries, the Arbitrator found: "1. That responsibility for the subject vehicular accident lies with Raul Carrillo's [(the driver of the truck that collided with the Gomezes' food truck)] failure to yield the right-of-way to Esmeragdo Gomez; [¶] 2. That with regard to Irais Gomez's burn injuries, there were several concurring causes, which proximately caused same. These included Mr. Carrillo's negligence; the admitted negligence of Royal Catering Truck, Inc. in failing to provide the proper fryer basket, which was the most direct cause of Ms. Gomez's unfortunate injuries; the negligence of Esmeragdo Gomez in allowing his wife, Irais Gomez to remain, unrestrained, in the
Based on the arbitrator's award, by stipulation, a judgment was entered against Royal on Mr. Gomez's loss of consortium claim and Mrs. Gomez's products liability claims in the total amount of $2,428,577.34, including costs. The Gomezes' remaining causes of action were dismissed.
American States brought an action against Travelers, and Travelers cross-complained against American States; both insurance companies sought to establish Royal's coverage under the other company's insurance policies.
American States brought an action against Travelers seeking a declaration that Travelers had a duty to defend Royal in the Gomez action under the Travelers's primary and excess-umbrella general liability policies and for equitable contribution and equitable subrogation/indemnity for American States's payment of the defense costs and settlement in the Gomez action. Travelers cross-complained against American States, the Gomezes, and Royal seeking declarations that Travelers had no duty to defend or indemnify Royal in the Gomez action under either the Travelers Primary CGL Policy or the Travelers excess-umbrella general liability policy, that America States had a duty to defend and indemnify Royal in the Gomez action under the American States Auto Policy, and that American States had a duty to indemnify Royal in the Gomez action under the American States excess auto policy before Travelers had any duty to do so under the Travelers excess-umbrella general liability policy.
American States moved for summary judgment, arguing that Travelers had a duty to defend and indemnify Royal in the Gomez action because the
At oral argument on their respective summary judgment and summary adjudication motions, American States and Travelers agreed that there were no facts in dispute and that the only issue for the trial court to decide was the proper interpretation of the relevant insurance policies. American States and Travelers also stipulated in writing that certain facts in their respective separate statements of undisputed facts were true. Counsel for the Gomezes and Royal signed the stipulation concerning the facts in Travelers's separate statement, but did not sign the stipulation concerning the facts in American States's separate statement. The Gomezes and Royal unsuccessfully attempted to join in American States's summary judgment motion.
The trial court granted Travelers's motion for summary adjudication and denied American States's motion for summary judgment. It held that the Gomezes' food truck was an "auto" and not "mobile equipment," reasoning that "the whole point ... of this endeavor is to move food and other items to places where people are waiting to buy them" and that food was the "cargo" the Gomezes' food truck transported. The trial court dismissed Travelers's
Section I of the Travelers Primary CGL Policy contained coverage for bodily injury and property damage liability in pertinent part as follows:
"1. Insuring Agreement
"a. We will pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury' or `property damage' to which this insurance applies. We will have the right and duty to defend the insured against any `suit' seeking those damages.... [¶] ... [¶]
"b. This insurance applies to `bodily injury' and `property damage' only if:
"(1) The `bodily injury' or `property damage' is caused by an `occurrence' that takes place in the `coverage territory';
"(2) The `bodily injury' or `property damage' occurs during the policy period.... [¶] ... [¶]
"2. Exclusions
"This insurance does not apply to: [¶] ... [¶]
"g. Aircraft, Auto Or Watercraft
"`Bodily injury' or `property damage' arising out of the ownership, maintenance, use or entrustment to others of any aircraft, `auto' or watercraft
"This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the `occurrence' which caused the `bodily injury' or `property damage' involved the ownership, maintenance, use or entrustment to others of any aircraft, `auto' or watercraft that is owned or operated by or rented or loaned to any insured."
"Section V — Definitions" of the Travelers Primary Insurance Policy contained the following definitions:
"2. `Auto' means a land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment. But `auto' does not include `mobile equipment.' [¶] ... [¶]
"12. `Mobile equipment' means any of the following types of land vehicles, including any attached machinery or equipment:
"a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads;
"b. Vehicles maintained for use solely on or next to premises you own or rent;
"c. Vehicles that travel on crawler treads;
"d. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:
"(1) Power cranes, shovels, loaders, diggers or drills; or
"(2) Road construction or resurfacing equipment such as graders, scrapers or rollers;
"e. Vehicles not described in a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:
"(1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or
"f. Vehicles not described in a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo.
"However, self-propelled vehicles with the following types of permanently attached equipment are not `mobile equipment' but will be considered `autos':
"(1) Equipment designed primarily for:
"(a) Snow removal;
"(b) Road maintenance, but not construction or resurfacing; or
"(c) Street cleaning;
"(2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and
"(3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment."
Section II of the American States Auto Policy contained liability coverage in pertinent 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 this insurance applies, caused by an `accident' and resulting from the ownership, maintenance or use of a covered `auto.' [¶] ... [¶]
"We have the right and duty to defend any `insured' against a `suit' asking for such damages...."
Under the American States Auto Policy, "auto" was defined as:
"a. Any land motor vehicle, `trailer' or semitrailer designed for travel on public roads; or
"However, `auto' does not include `mobile equipment.'"
The American States Auto Policy contained the following exclusion:
"Completed Operations
"`Bodily injury' or `property damage' arising out of your work after that work has been completed or abandoned.
"In this exclusion, your work means:
"a. Work or operations performed by you or on your behalf; and
"b. Materials, parts or equipment furnished in connection with such work or operations.
"Your work includes warranties or representations made at any time with respect to the fitness, quality, durability or performance of any of the items included in paragraphs a. or b. above.
"Your work will be deemed completed at the earliest of the following times:
"(1) When all of the work called for in your contract has been completed.
"(2) When all of the work to be done at the site has been completed if your contract calls for work at more than one site.
"(3) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project.
"Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed."
American States argues that the trial court erred in holding that the Gomezes' food truck was an "auto" and not "mobile equipment" under the Travelers Primary CGL Policy. Because the primary purpose of the Gomezes' food truck was to serve as a mobile kitchen and not to transport persons or cargo, the trial court erred.
The Travelers Primary CGL Policy had an "auto" exclusion. The definition of an "auto" under the policy, and thus the auto exclusion, contained an exception for "mobile equipment." The policy defines "mobile equipment" as including vehicles "maintained primarily for purposes other than the transportation of persons or cargo." Thus, if a vehicle was maintained primarily for purposes other than the transportation of persons or cargo, that vehicle was mobile equipment and not subject to the auto exception in the Travelers Primary CGL Policy.
Under a plain reading of the Travelers Primary CGL Policy, the Gomezes' food truck was "mobile equipment" and not an "auto." The primary purpose of the Gomezes' food truck was to serve as a mobile kitchen and not to transport persons or cargo. (See Employers Mutual Casualty Company v. Bonilla (5th Cir. 2010) 613 F.3d 512, 518 ["The `inherent purpose' of a mobile catering truck certainly could be seen as including the use and maintenance of its kitchen facilities...."].) For the first two hours of the day, the Gomezes cooked food in their food truck while parked in the Royal parking lot. During the next eight hours, the Gomezes made 12 to 13 stops to cook, or at least heat, and sell food. During those stops, the food truck was not "transporting" anything, but was immobile. The food truck had only two seats and only two seatbelts, and the truck was not equipped to transport persons other than a driver and a cook.
In Alpine Ins. Co. v. Planchon (1999) 72 Cal.App.4th 1316 [85 Cal.Rptr.2d 777], the court held that substantial evidence supported a trial court's finding that a standard pickup truck that had been modified with a hydraulic scissors lift, a device used to raise and lower a certain container, was maintained primarily for purposes other than the transportation of persons or cargo. (Id. at
Apart from the specific inclusion of vehicles "maintained primarily for purposes other than the transportation of persons or cargo" within the Travelers Primary CGL Policy's definition of "mobile equipment," other language in the definition supports the conclusion that the Gomezes' food truck was "mobile equipment" and not an "auto." The definition specifically identified the following special use vehicles with certain types of permanently attached equipment, when self-propelled, it "considered" as "autos": "(1) Equipment designed primarily for: [¶] (a) Snow removal; [¶] (b) Road maintenance, but not construction or resurfacing; or [¶] (c) Street cleaning; [¶] (2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and [¶] (3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment." Even though the Gomezes' food truck, like the identified special use vehicles, had permanently attached equipment that permitted it to perform a specialized task — i.e., cook food — Travelers did not include food trucks among the vehicles identified as "autos" and thus not subject to the "mobile equipment" exception to the auto exclusion. If Travelers had intended to exclude food trucks from coverage as
American States acknowledges that the food truck that Mr. Gomez leased from Royal met the policy definition of an "auto" under the American States Auto Policy. It further recognizes that its auto policy specifically listed the Gomezes' food truck as an insured auto. American States argues, however, that the trial court erred in holding that it, and not Travelers, had a duty to defend and indemnify Royal in the Gomez action because the Gomez action was a products liability action — Royal stipulated at the arbitration to liability based on a products liability theory — and the Travelers Primary CGL Policy provided coverage for products claims while the American States Auto Policy excluded from coverage claims arising out of equipment furnished in connection with Royal's work. American States asserts that the liability in issue arose from equipment furnished in connection with Royal's "completed operations," which the American States Auto Policy excluded from coverage. We agree with American States's arguments.
At the arbitration, Royal stipulated to liability based on a products liability theory. The Travelers Primary CGL Policy provided coverage for "Products — Completed Operations." Travelers does not contend that its policy did not cover products liability claims.
"Completed Operations
"`Bodily injury' or `property damage' arising out of your work after that work has been completed or abandoned.
"In this exclusion, your work means:
"a. Work or operations performed by you or on your behalf; and
"b. Materials, parts or equipment furnished in connection with such work or operations.
"Your work includes warranties or representations made at any time with respect to the fitness, quality, durability or performance of any of the items included in paragraphs a. or b. above.
"Your work will be deemed completed at the earliest of the following times:
"(1) When all of the work called for in your contract has been completed.
"(2) When all of the work to be done at the site has been completed if your contract calls for work at more than one site.
"(3) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project.
"Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed."
The "completed operations" exclusion in the American States Auto Policy excluded coverage in the Gomez action because that action claimed bodily injury arising out of Royal's work — leasing the food truck to Mr. Gomez — which work included equipment (the deep fryer basket) furnished in connection with Royal's work, and which work was, under the policy, "deemed completed" when the work was put to its intended use — i.e., when the Gomezes leased and operated the food truck equipped with the deep fryer and basket.
The judgment in favor of Travelers is reversed. The matter is remanded to the trial court to enter judgment in favor of American States, the Gomezes, and Royal on Travelers's cross-complaint against them, and in favor of American States on its complaint. American States, the Gomezes, and Royal are awarded their costs on appeal.
Turner, P. J., and Mink, J.,
"`Products-completed operations hazard':
"a. Includes all `bodily injury' and `property damage' occurring away from premises you own or rent and arising out of `your product' or `your work' except:
"(1) Products that are still in your physical possession; or
"(2) Work that has not yet been completed or abandoned. However, `your work' will be deemed completed at the earliest of the following times:
"(a) When all of the work called for in your contract has been completed.
"(b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site.
"(c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project.
"Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed."
