[NOT FOR PUBLICATION   NOT TO BE CITED AS PRECEDENT]



                 United States Court of Appeals

                     For the First Circuit











No. 98-1451



                   PEERLESS INSURANCE COMPANY,



                       Plaintiff, Appellee,



                                v.



            ANNIE'S, INC., GARY C. KRYSTA, ANN KRYSTA

                        and DAVID RIVERA,



                     Defendants, Appellants.







           APPEAL FROM THE UNITED STATES DISTRICT COURT



                 FOR THE DISTRICT OF RHODE ISLAND



             [Hon. Mary M. Lisi, U.S. District Judge]









                              Before



                      Selya, Circuit Judge,

                                

           Aldrich and Coffin, Senior Circuit Judges.

                                

                                





     Jeffrey S. Michaelson with whom Michaelson, Michaelson &

Zurier, Thomas R. Bender and Hanson, Curran, Parks & Whitman were

on brief for appellant.

     Gerald C. DeMaria with whom Stephen B. Lang, Patrick B.

Landers and Higgins, Cavanagh & Cooney were on brief for appellee.











December 1, 1998







                                

            Per Curiam.  In this case Annie's, Inc., a small dry

    cleaning business, obtained a so-called Business Protector

    Policy from Peerless Insurance Company (Peerless).  In June of

    1994, while the policy was in effect, Derek Gagnon, an Annie's

    employee, was driving a step-van on Annie's business when he

    collided with another vehicle.  David Rivera, a pedestrian,

    was injured as a result of the collision and sued Annie's. 

    Gary Krysta, an owner and employee of Annie's, owned the van,

    but Annie's used, maintained, and stored the van and paid the

    expenses of keeping it on the road.  Krysta had acted on

    behalf of Annie's when he instructed Gagnon to drive the van

    on Annie's pickup route. 

              Naming Annie's, Krysta, and Gagnon as defendants,Peerless sought a declaratory judgment that it owed no duty to

    defend or indemnify Annie's for claims arising out of the

    collision.  The district court ruled in its favor, and we

    affirm.

              The court's rulings related to two parts of the

    policy:  the general liability provisions as diminished by an

    exclusion clause, and an endorsement providing special

    additional coverage.  As to the first, the district court, in

    an extensive memorandum, addressed defendants' contention that

    a provision excluding from coverage bodily injury and property

    damage arising out of the entrustment of an auto to others did

    not apply when the injury or damage was due to the negligent

    selection, training, or supervision of the driver.  The

    exclusion clause makes no such exception.  The district

    court's memorandum fully demonstrated the unsoundness of

    defendants' contention.

              The court's ruling on the second claim was equally

    correct, but might be supplemented.  The endorsement provided

    coverage for damage caused by use, in the insured's business,

    of a "non-owned auto," which it defined as an auto not owned,

    leased, hired, or borrowed by the insured.  Defendants'

    contention that Gagnon, rather than Annie's, was the borrower

    is totally unrealistic.  Annie's maintained and stored  the

    van and controlled its use.  Gagnon had no control other than

    to do what Krysta, as Annie's agent, instructed him.  Clearly

    Gagnon was not the borrower.  Any claim of ambiguity, whether

    in the policy or in the circumstances, is untenable.

              Even more unpersuasive is defendants' claim that

    Peerless' construction makes the endorsement meaningless.  Use

    of an employee's personal car might at least raise a duty to

    defend.  How much coverage does an insured expect if it

    chooses an endorsement with a $41 annual premium?

              Affirmed.