Full opinion text
ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT CHARLES S. MILLER, JR., United States Magistrate Judge. In this declaratory action initiated by plaintiff Great West Casualty Company (“Great West”), the court must decide whether defendant Steve Heinis should be afforded liability coverage by Great West, by co-defendant National Casualty Company (“National”), or by neither of said insurers, for an accident that occurred on June 18, 2011, which is the subject of a pending state court action. Before the court are cross-motions for summary judgment by Great West and National. Unless otherwise indicated, the facts are either undisputed or have been construed most favorably for National. I.INTRODUCTION A. Lease of equipment by Heinis to Avery Enterprises At the time of the June 18, 2011, accident, Heinis, a South Dakota resident, was working as a trucker in the oil fields of western North Dakota and eastern Montana, including the prolific Bakken field. Heinis owned a 2007 Volvo semi-tractor and a 1977 Trailmobile tanker-trailer that he leased to Avery Enterprises, Inc. (“Avery”), a local trucking firm headquartered in Powers Lake, North Dakota, pursuant to a written lease dated April 14, 2011. (Doc. Nos. 20-1, pp. 9-10; 20-2, pp. 4-9; 20-4). Pursuant to the lease, Heinis had agreed to make his equipment and a driver (which in this case was himself) available to Avery for use in its business of providing trucking services to oil and gas companies operating in western North Dakota and eastern Montana. Specifically, Avery used Heinis and his equipment to haul either fresh water to drill sites for use in drilling operations or to haul contaminated “flow-back” or “pit” water from the drill sites to authorized disposal facilities. (Doc. Nos. 20-1, pp. 19-20; 20-2, pp. 12, 21-22; 20-4). The salient terms of the lease between Heinis (the “lessor”) and Avery (the “lessee”) were that: • Heinis agreed to furnish the leased equipment “in good and safe operational condition” and a qualified driver for dispatch by Avery. In addition, the parties agreed the following would constitute a default by Heinis of these obligations: 1. Failure to remain in constant contact with Lessee’s dispatch personnel. 2. Failure to respond to a dispatched load within a reasonable amount of time. 3. Failure to maintain a safe working environment. 4. Failure to maintain the leased equipment in good working condition. • Heinis would be responsible for the cost of fuel and other consumables (e.g., oil, lubricants, and tires) as well as all repairs and maintenance to the equipment. • Heinis agreed to abide by all motor carrier safety regulations set forth by the USDOT and “all safety and operating procedures” set forth by Avery. • For each load hauled by Heinis, Avery agreed to pay Heinis a specified percentage of the amounts invoiced to its customers, provided that Heinis supplied the information required for billing as specified in the agreement. • Avery agreed to obtain and maintain any licensing and registration of the equipment required by law showing Heinis as the legal owner of the leased equipment. • Avery agreed to acquire and maintain both “property and casualty insurance” and “fleet cargo and liability insurance” for the leased equipment of at least one million dollars. Heinis agreed to maintain proper and needed insurance, except for that which Avery agreed to obtain. (Doc. No. 20-4). Notably, the lease did not authorize Heinis to use the equipment he leased to Avery to haul loads for himself or other carriers during the term of the lease—at least not explicitly. In fact, as noted above, Heinis was obligated to remain in “constant contact” with Avery’s dispatcher and respond to dispatched loads within a “reasonable” period of time. In addition, Avery’s name was on the tractor during the entire time it was leased to Avery— including the day of the accident. Not surprisingly, Heinis never attempted to use the equipment to haul loads for himself or others while it was under lease to Avery. (Doc. No. 20-1, pp. 10, 18-19, 24). B. Purchase of insurance by Avery and Heinis As required by the lease, Avery maintained a policy with National that included commercial liability motor carrier coverage for the equipment it leased from Heinis. And, to satisfy his obligations under the lease, Heinis obtained a “Commercial Lines Policy” from Great West that provided non-trucking liability coverage (sometimes referred to as “bobtail” insurance) for when the equipment was not being used in support of Avery’s business. (Doc. Nos. 20-2, p. 9; 25-4; 29-5; 29-6; 29-7). C. The underlying accident and ensuing state court action On June 16, 2011, Heinis was dispatched by Avery to transport a load of contaminated flowback water from a well site in North Dakota to a disposal facility in eastern Montana. Heinis started out from Williston, North Dakota, where he often stayed while awaiting his next dispatch because of its central location to where the work was located and the fact it had supporting services, e.g., truck stops and a variety of places to eat. He traveled to the well site where he loaded the flowback water and then to the disposal facility where he unloaded it. He then returned to Williston, arriving during the late evening hours of June 16 or the early morning hours of June 17, which was a Saturday. (Doc. Nos. 20-1, pp. 14-16; 20-2, p. 18-19). Sometime prior to hauling this load, Heinis noted that there was a small leak on his tanker-trailer during loading and unloading. As a temporary measure, he used a bucket to prevent the leaking material from spilling on the ground. On June 17, Heinis decided to get the leak fixed and called Avery’s principal, Kevin Avery, about having Avery’s shop fix the leak. After Avery agreed, Heinis pulled the tanker-trailer from Williston to Avery’s shop at Powers Lake the same day. (Doc. Nos. 20-1, pp. 21-22; 20-2, p. 13). There is no dispute over the fact that, when Heinis took his tanker-trailer to Avery’s shop for repair, he was not under dispatch from Avery. Also, there is no dispute that the repair was Heinis’s responsibility under the lease, that he was free to have the repair done elsewhere, and that the cost of having the leak repaired would ultimately be charged to his account. (Doc No. 20-1, pp. 7, 17, 22). Avery’s shop was not able to get to the repair immediately. After spending the evening, Heinis backed his tanker-trailer partway into Avery’s shop on the morning of Sunday, June 18, and, an employee of Avery, Jesse Miller, undertook to make the repair. When Miller applied his lit torch to the location of the leak to begin welding, there was an immediate explosion in which Miller was injured. It is undisputed that what exploded were residual petroleum fumes from the contaminated flowback water that Heinis had been hauling, presumably from his last load. (Doc. Nos. 20-1, p. 16; 20-2, pp. 14-15; 20-3, p. 6). The only factual dispute with respect to the accident, which potentially could be material for reasons discussed later, is whether Heinis had unhooked his trailer from the tractor before the repair was attempted. Heinis claimed he unhooked it because he was concerned the welding could damage the computer on the tractor and that he reconnected the tractor to the trailer following the accident to pull it out of the shop so the ambulance could get to Miller. (Doc. No. 20-1, p. 16). Kevin Avery, on the other hand, was adamant that the tractor was still hooked to the trailer when he ran into the shop following the explosion, recalling that all Heinis had to do to move the trailer was to get into the tractor and pull the trailer out of the shop. (Doc. No. 20-2, p. 15). Miller testified he too did not believe the trailer was unhooked, but could not be certain. (Doc. No. 20-3, pp. 6-7). There is currently pending in state court a personal injury action brought by Miller against Heinis. II. APPLICABLE LAW A. Summary judgment standard The standards for addressing motions for summary judgment are well known to the court and need not be repeated here. E.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Barnhardt v. Open Harvest Co-op., 742 F.3d 365, 369 (8th Cir.2014). B. Governing law The court’s jurisdiction in this case arises out of the diversity of citizenship of the parties. Consequently, the court looks to state law to resolve the substantive questions. E.g., George K. Baum & Co. v. Twin City Fire Ins. Co., 760 F.3d 795, 799 (8th Cir.2014). The question of which state’s law applies is resolved by applying the choice-of-law rules of the forum state. Id.; Platte Valley Bank v. Tetra Financial Group, LLC, 682 F.3d 1078, 1082-83 (8th Cir.2012). III. WHETHER NATIONAL’S POLICY AFFORDS COVERAGE A. Introduction The complete copy of National’s policy contains a myriad of different coverages, endorsements, schedules, and . other changes. What has been submitted to the court is more than 1150 pages long and, even when copied double-sided, is Th inches thick. In deciding whether the policy provides coverage to Heinis, the court must necessarily limit its consideration to those portions of the policy the parties have identified as being relevant. Also, the court will apply North Dakota law in construing National’s policy given that: (1) National has not pointed to any policy provision purporting to dictate what law governs its interpretation; (2) the policy was issued to Avery as the “Named Insured” and Avery was headquartered and doing business in North Dakota; and (3) the policy is replete with special North Dakota endorsements. See Nodak Mut. Ins. Co. v. Wamsley, 2004 ND 174, ¶ 19, 687 N.W.2d 226. The North Dakota Supreme Court has summarized the standards for construing insurance contracts under North Dakota law as follows: Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. We look first to the language of the insurance contract, and if the policy language is clear on its face, there is no room for construction. If coverage hinges on an undefined term, we apply the plain, ordinary meaning of the term in interpreting the contract. While we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. We will not strain the definition of an undefined term to provide coverage for the insured. We construe insurance contracts as a whole to give meaning and effect to each clause, if possible. The whole of a contract is to be taken together to give effect to every part, and each clause is to help interpret the others. Farmers Union Mut. Ins. Co. v. Decker, 2005 ND 173, ¶ 4, 704 N.W.2d 857 (quoting Ziegelmann v. TMG Life Ins. Co., 2000 ND 55, ¶ 6, 607 N.W.2d 898). B. Section 11(A) of National’s “Motor Carrier Coverage Form ” affords coverage 1. The relevant policy language Great West contends that National owes Heinis coverage under that portion of its policy entitled “Motor Carrier Coverage Form.” The language that Great West relies upon includes: MOTOR CARRIER COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words “you ” and “your” refer the Named Insured shown in the Declarations. The words “we”, “us” and “our” refer to the company providing this insurance. SECTION II—LIABILITY COVERAGE 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 will have the right and duty to defend any “insured” against a “suit” asking for such damages----However, we have no duty to defend any “insured” against a “suit” seeking damages for “bodily injury” or “property damage” ... to which this insurance does not apply----Our duty to defend or settle ends when the Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements. 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 any “employee”, agent or driver of the owner, or anyone else from whom you hire or borrow a covered “auto”. (2) Your “employee” or agent if the covered “auto” is owned by that “employee” or agent or a member of his or her household. (3) Someone using a covered “auto” while he or she is working in a business of selling, servicing, repairing, parking or storing “autos” unless that business is yours. (4) Anyone other than your “employees”, partners (if you are a partnership), members (if you are a limited liability company), a lessee or borrower of a covered “auto” or any of their “employees”, while moving property to or from a covered “auto”. (5) A partner (if you are a partnership), or member (if you are a limited liability company) for a covered “auto” owned by him or her or a member of his or her household. c. The owner or anyone else from whom you hire or borrow a covered “auto ” that is a “trailer ” while the “trailer” is connected to another covered “auto” that is a power unit, or, if not connected, is being used exclusively in your business. d. The lessor of a “covered auto” that is not a “trailer” or any “employee”, agent or driver of the lessor while the “auto” is leased to you under a written agreement if the written agreement between the lessor and you does not require the lessor to hold you harmless and then only when the leased “auto” is used in your business as a “motor carrier” for hire. e. Anyone liable for the conduct of an “insured” described above but only to the extent of that liability. However, none of the following is an “insured”: * * * * SECTION VI—DEFINITIONS íjí # ‡ B. “Auto ” means: 1. A land motor vehicle, “trailer ” or semitrailer designed for travel on public roads; or * * * * (Doc. No. 29-5, pp. 96-98, 107) (italics added). In addition, the only “Named Insured” in the declarations for purposes of applying the words “you” or “your” is Avery. (Doc. No. 29-5, p. 7). 2. Contentions of the parties re National’s Motor Carrier Coverage Form Great West argues that Heinis is entitled to coverage for the accident in question under the italicized language of National’s Motor Carrier Coverage Form set forth above. In particular, Great West contends Heinis is an insured within the meaning of Section 11(A)(1)(c) because the leased tractor was connected to the trailer at the time of the accident, but, even if not, the trailer was used exclusively in Avery’s business. National’s response is threefold. First, it argues that, even if the language relied upon by Great West nominally affords coverage, there are exclusions that take away that coverage, which are discussed separately below. Second, National contends that whether the trailer was connected to the tractor at the time of the accident is a disputed question of fact. Third, National argues that the trailer was not being used in Avery’s business at the time of the accident, much less “exclusively” so. The court will begin with the last of National’s arguments. Before doing so, however, it is helpful first to discuss the fact that the same question of whether the trailer was being used in Avery’s business at the time of the accident also arises in deciding whether Great West’s policy affords coverage. As noted above, Section 11(A)(1)(c) of National’s Motor Carrier Coverage Form provides coverage if the covered auto, which is a trailer, “is being used exclusively in your [ie., Avery’s] business.” And, as discussed in more detail later, Great West’s policy does not extend coverage to an auto, which includes a trailer, that is “used in the business of anyone to whom the ‘auto’ is rented, leased or loaned.” Putting aside the use of the modifier “exclusively” in National’s policy, there appears to be no material difference between the “being used ... in your business” language of National’s policy and the “in the business of’ language of Great West’s policy in terms of the meaning of the word “business,” as well as more generally, the intended application of the policy language. National’s policy refers to Avery’s business as a motor carrier, and Great West’s policy refers to the business of anyone to whom the equipment is leased, which, in this case, would also be Avery. Hence, the operative question for both policies is whether the trailer involved in the explosion was being used in Avery’s business at the time of the accident and, more particularly, “exclusively” so for National’s policy. In addressing the question of whether the trailer was being used in Avery’s business at the time of the accident, the discussion that follows will sometimes use “in the business of’ as a shorthand reference to the operative language from both policies when discussing cases applying similar policy language. 3. Whether the trailer was being used exclusively in Avery’s business at the time of the accident a. The clear and unambiguous meaning of “in the business of’ While there are a number of accepted usages of “business” (including, for example, a verbal abuse or scolding, i.e., giving someone the “business”), the common and ordinary usage in this context is that a “business” is a commercial enterprise or activity. E.g., McGriff By and Through Norwest Capital Management & Trust Co. v. United States Fire Ins. Co., 436 N.W.2d 859, 862 (S.D.1989) (“McGriff”) (“Whether we go to Webster or to Black’s Law Dictionary, both of which present various definitions [of ‘business’], it is clear that they generally refer to a commercial enterprise or activity.”); see generally Oxford English Dictionary (Online 3d ed. entry updated March 2012); Black’s Law Dictionary 211 (8th ed.2004). A few courts have concluded “in the business of,” or comparable policy language, is ambiguous because courts have reached different conclusions about how it should be applied in the trucking context. E.g., Engle v. Zurich-American Ins. Group, 216 Mich.App. 482, 549 N.W.2d 589, 591 (1996); McLean Trucking Co. v. Occidental Fire & Casualty Co. of North Carolina, 72 N.C.App. 285, 324 S.E.2d 633, 636 (1985); cf. Great West Cas. Co. v. Carolina Cas. Ins. Co., Nos. A05-1619, A05-1773, A05-1804, 2006 WL 1704125, at *7 (Minn.Ct.App. June 20, 2006) (unpublished opinion) (concluding there may be a latent ambiguity after the disputed facts are resolved because the phrase as applied could refer to when a load is being hauled for the lessee or more generally to any activities that benefit the lessee). An often-cited case taking the opposite view in light of the generally understood meaning of “business” is Hartford Ins. Co. of Southeast v. Occidental Fire & Cas. Co. of North Carolina, 908 F.2d 235, 239 (7th Cir.1990) (“Hartford ”) where the Seventh Circuit stated: The fact that contractual language may, on occasion, pose difficult factual applications does not make that language ambiguous. [citation omitted]. The phrase “in the business of an ... organization to whom the automobile is rented” clearly refers to occasions when the truck is being used to further the commercial interests of the lessee. Id. at 239. The weight of authority appears to be with the Seventh Circuit both in terms of the meaning ascribed to “in the business of,” or comparable language, as well as the conclusion, explicitly or implicitly, that the language is not ambiguous. See, e.g., Empire Fire and Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681-82 (5th Cir.2000) (“Empire Fire ”)(quoting Hartford); National Continental Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 612 (8th Cir.1998) (“National Continental ”)(relying upon the Seventh Circuit’s definition in Hartford); Forkwar v. Empire Fire & Marine Ins. Co., No. WGC-09-1543, 2010 WL 3733930, at *14 (D.Md. Sept. 20, 2010) (applying Maryland law); Wenkosky v. Protective Ins. Co., 698 F.Supp. 1227, 1230-31 (M.D.Pa.1988) (concluding that comparable language in an exclusion was clearly worded and unambiguous and citing cases from other jurisdictions); Casey v. Smith, 353 Wis.2d 354, 846 N.W.2d 791, 797 (2014) (adopting the interpretation set forth in Hartford, stating “it presents a clear rule that is consistent with the plain language of the exclusion” and citing other cases). While there are no North Dakota cases directly on point, the North Dakota Supreme Court has stated it will give undefined terms their plain meaning and will not strain to find an ambiguity simply to find coverage. E.g., Farmers Union Mut. Ins. Co. v. Decker, 2005 ND 173 at ¶ 4, 704 N.W.2d 857. And, in at least one auto insurance case, the court has concluded that “commercial” (a synonym for “business”) and the similarly broad term of “occupation” were not ambiguous and should be accorded their commonly understood meanings. See Bauerle v. State Farm Mutual Automobile Ins. Co. of Bloomington, Ill., 153 N.W.2d 92 (N.D. 1967). In addition, the North Dakota Supreme Court has essentially accorded the same meaning to the term “business” in other contexts. Grand Forks Herald, Inc. v. Lyons, 101 N.W.2d 543, 547 (N.D.1960) (relying upon a Webster’s dictionary definition for the term in construing a statute); Green v. Frazier, 44 N.D. 395, 176 N.W. 11, 17 (1920) (the term “private business” is readily defined as a “business or enterprise” conducted for the purpose of private gain, enjoyment, or profit). This court predicts that, if the North Dakota Supreme Court is called upon to decide the meaning of “in the business of,” or similar language, in commercial trucking policies, it will likely follow the decisions of the Fifth, Seventh, and Eighth Circuits in Empire Fire, Hartford, and National Continental, respectively, and conclude the language means occasions when the equipment is being used to further the commercial interests of the lessee, given not only how the court has previously construed the term “business,” but also because these are the more persuasive decisions. b. National’s arguments for why the trailer was not being used “in the business of Avery” at the time of the accident In this case, Avery did more than simply contact Heinis every time it wanted a load hauled and engage him to do so. Rather, for whatever reasons, Avery leased his tractor and trailer for use in its business for an indefinite term and, when the accident giving rise to the subject suit occurred, the tractor and trailer remained under lease to Avery. In view of this, the court will address, in turn, National’s arguments for why the trailer was not being used in Avery’s business within the meaning of National’s policy at the time of the accident despite it being under lease. i. National’s argument that the trailer was not under dispatch National’s primary argument for why the trailer was not being used in Avery’s business at the time of the accident is because it was not then under dispatch—a fact which is not disputed. National cites cases that it claims overwhelmingly establish that whether or not the lessor-trucker is under dispatch is the decisive factor in terms of whether the equipment is being used “in the business of’ the lessee-carrier. Upon examining these cases, however, it is clear that most do not stand for the broad proposition that National asserts. In some of the cases, there were other facts that were controlling (e.g., the lessor-operator was using the equipment for personal travel or hauling loads for others) or the lease agreements were different than the one at issue in this case. Also, most of the cases did not address the specific situation presented here, where the equipment was. being repaired at the time of the accident, the repairs were required by the lease, and the repairs clearly advanced the commercial interests of the lessee-carrier. In this case, it is clear from the record that Avery’s business of providing trucking service to the oil and gas industry required not only the actual hauling of loads but also the ability to haul loads on a timely basis. This, in turn, required having the necessary operators and equipment available—both in the sense of being reasonably close (that is, the drivers not using the equipment to haul loads for other companies to distant points) and the equipment being in shape to haul the loads in a manner that would comply with any requirements of the lease agreements as well as those imposed by law. Artificially limiting what is the business of Avery to only when the equipment was actually under dispatch ignores not only the fact the equipment remained under lease to it and subject to its call while not under dispatch, but more broadly the economic reality of Avery’s business being dependent upon having operators and equipment readily available. While there is no North Dakota case on point, the court concludes the North Dakota Supreme Court would not apply “in the business of’ or similar policy language to only when the leased equipment was under dispatch. Rather, the North Dakota Supreme Court would conclude the trailer was being used in the lessee-carrier’s business so long as it was under lease, except, perhaps, if it was clearly being used for a purpose other than the lessee-carrier’s business (e.g., hauling loads for another carrier or for an obviously personal purpose of the lessor), which National has failed to demonstrate occurred here. But, even if there is some doubt about this as a general matter, the North Dakota Supreme Court would conclude that the trailer was being used in Avery’s business at the time of the accident in this case in view of the particular facts and circumstances, including: • The fact the trailer was under lease to Avery at the time of the accident. • The obligation imposed upon Heinis of keeping the equipment in “good working condition” while it was leased to Avery (and being subject to default if he did not) coupled with the fact the repair in question was necessary to keep the trailer in good working condition, despite National’s argument to the contrary, as discussed in more detail below. • The fact that, aside from the particular obligation of the lease of keeping the equipment in good working condition, the repair furthered the commercial interests of Avery in that it insured the equipment could be operated in a manner so as not to expose Avery and its customers to potential liability for the consequences of the trailer leaking—particularly if the leak got worse. • The lease requirement that Heinis remain in “constant contact” with Avery’s dispatcher and respond to dispatched loads within a reasonable period of time, which is more demanding than that set forth in most, if not all, of the leases in the cases National claims are inapposite. • The fact that Heinis’s tractor, which was used exclusively to pull the trailer, bore Avery’s name throughout the term of the lease, including at the time of the accident. • The fact that Heinis never used the trailer for another business purpose, such as hauling loads for himself or for other carriers—which is not surprising given the lease requirements as outlined earlier and the lack of any specific provision authorizing him to use the equipment under lease to Avery for anything other than Avery’s business. • The fact that Avery made its shop facilities and personnel available to repair the trailer, albeit at Heinis’s expense. See, e.g., Empire Fire, 220 F.3d at 682 (driver while en route to pick up a load after having the tractor serviced was “in the business of’ the lessee-carrier, citing other repair and maintenance cases); National Continental, 157 F.3d at 612-13 (driver en route to have a front end alignment on a leased tractor between dispatches was “in the business of’ the lessee-carrier because he was fulfilling contractual duties to keep the leased equipment in compliance with all laws and regulations); Hartford, 908 F.2d at 239-240 (driver while en route with the leased tractor to pick up a refrigeration trailer being repaired for a freon leak was “in the business of’ the lessee because the repair furthered the lessee’s commercial interests, noting the lease requirements to keep the equipment ready for lessee’s services and to “exercise diligent efforts to assure continuing customer satisfaction”); Freed v. Travelers, 300 F.2d 395, 396-98 (7th Cir.1962) {“Freed”) (repairs to back end of trailer were “exclusively” within the business of the lessee-carrier, given the obligation under the lease requiring the lessor to keep the equipment “in good running order and condition,” even though the lessor was responsible for the cost of the repairs and the repairs took place after the lessor had completed hauling his last load); cf. Occidental Fire & Cas. Co. of North Carolina v. Soczynski, Civil No. 11-2412, 2013 WL 101877, at **12-15 (D.Minn. Jan. 8, 2013) (acknowledging that repairs may be in the commercial interests of the lessee-carrier but concluding that they were not in that case); Casey v. Smith, 353 Wis.2d 354, 846 N.W.2d 791 (2014) (same). The only thing that gives the court pause is the North Dakota Supreme Court’s decision in Zimprich v. Broekel, 519 N.W.2d 588 (N.D.1994). In that case, the court was not called upon to decide the meaning of the language “in the business of’ a lessee-carrier within the meaning of a commercial trucking policy. Rather, the issue in Zimprich was whether, under state law, the lessor-operator was acting as an employee of the lessee-carrier at the time he was attempting to make repairs to the air-conditioning unit of the leased tractor that caused a fire resulting in suit against the lessee-carrier for damage to the surrounding property. The parties in the case who argued the lessor-operator was an employee relied in part upon a federal motor carrier regulation that made an independent contractor who “operated” a licensed motor vehicle for a lessee-carrier a “statutory employee” of the lessee-carrier. In deciding whether or not the lessor-operator was “operating” the equipment at the time of the repair as an “employee,” the North Dakota Supreme Court stated: However, the “statutory employee” doctrine does not render the employer/carrier strictly liable for all torts committed by its drivers. White v. Excalibur Insurance Co., supra, 599 F.2d [50] at 53 [ (5th Cir.1979) ]; C.C. v. Roadrunner Trucking, Inc., 823 F.Supp. 913, 919 (D.Utah 1993). Rather, the federal scheme merely creates a fictional employment relationship, and liability is then determined under applicable state law, including respondeat superior. See White v. Excalibur Insurance Co., supra, 599 F.2d at 53; C.C. v. Roadrunner Trucking, Inc., supra, 823 F.Supp. at 919-920; Paul v. Bogle, supra [193 Mich.App. 479], 484 N.W.2d [728] at 733 [ (1992) ]. Liability in the present case thus turns upon respondeat superior, and, specifically, whether Broekel was acting within the scope of his “employment” when he performed repairs on the tractor in the warehouse. Much of the confusion in this case stems from the fact that Broekel, in effect, wore two hats in his relationship with Hi-Tech. Although under federal law and the parties agreement, Broekel was an “employee” when operating the tractor for Hi-Tech’s benefit, he also had separate responsibilities as the lessor/owner of the tractor. Several provisions in the parties’ agreement unambiguously specify that Broekel was solely responsible for maintenance and repair of the tractor: “5. Responsibility for Charges. The Contractor shall furnish and pay all costs of operation, including, but not limited to, the following: s}: % iH “B. All maintenance costs and repairs. ^ ^ ‡ ‡ ‡ “10. Insurance. * # * * * “B. Contractor agrees to carry bobtail and deadhead insurance coverage with respect to public liability and property damage ... as concerns all equipment hereunder, when used in any way by the Contractor or his employees for any personal use or private or unauthorized transportation such as but not limited to ... traveling to and from maintenance and repair sites.... ij: % % % “17. Contract-Owner. Contractor represents that he is the lawful owner or has lawful possession of the equipment described in this Agreement, which shall at all times during the term for this Lease, be maintained by the Contractor in good operating con-dition____” Broekel’s deposition testimony also established that Hi-Tech exercised no control over the maintenance and repair of the tractor. Broekel testified that he was not reimbursed for maintenance time or expense; he deducted maintenance and repair costs on his tax returns; time spent repairing the tractor was recorded as off-duty time in his log book; Hi-Tech did not control where or by whom repairs were performed; and Broekel, in fact, performed much of the maintenance and repair work himself. Hi-Tech’s lack of control is further demonstrated by Broekel’s decision to proceed to Bismarck when repairs could not be made quickly in Fargo, and then to perform the work himself in warehouse space he leased personally for that purpose. * * * * We also note that the property owners have not argued that the repairs performed here were in the nature of emergency roadside repairs, immediately necessary to keep the vehicle operational. Broekel was able to continue from Fargo to Bismarck without the repairs. Once in Bismarck, he unhitched Hi-Tech’s trailer and parked the tractor in his leased warehouse space. He then went about personal business, returning late the next day to work on the vehicle. Under these circumstances, Broekel clearly was performing his independent contractual duty to repair the vehicle, and was not at that time an employee “operating” the tractor on Hi-Tech’s business. 519 N.W.2d at 591-92. While there are things in the court’s discussion that both sides here could claim as supporting their arguments, e.g., the court’s characterization of Broekel being off-duty and the repair being Broekel’s-obligation (potentially favoring National’s arguments) or the court’s caveat that the repair was not required to keep the equipment operational in the sense of being able to carry loads for Hi-Tech (potentially favoring Great West’s argument), the court’s discussion is too focused on the question of whether Broekel was “operating” his equipment as an “employee” (which, in turn, focused on whether or not he was subject to the lessee-carrier’s direction) when he attempted the repairs to be of significant help to either side with respect to whether, in this case, the trailer was being used “in the business of’ Avery at the time of the accident in the sense of whether it advanced Avery’s commercial interests. Zimprieh, however, is relevant to another issue presented in this case and will be returned to later. ii. National’s arguments for why the repair was not in Avery’s business National argues the repair was not in Avery’s business because it was not needed to keep the equipment operating for Avery’s purposes. National points to the lack of evidence that the tanker leaked when it was being hauled down the road, ie., it leaked only during loading and unloading, and that Heinis was able to capture the leaked material in a bucket. National then proceeds to take issue with Great West’s contention that the repair was required to avoid Avery, as the federally-certificated carrier, being exposed to a violation of 49 C.F.R. 393.100(b), which is a federal motor carrier regulation requiring that cargos be secured to prevent, among other things, spilling or leaking. National contends the regulation only applies when the cargo is being transported on public roads and that the evidence here is that the trailer only leaked when it was being loaded or unloaded on what National presumes to be private property. National is probably correct about the inapplicability of 49 C.F.R. 393.100(b) to the facts of this case. The problem with its argument more generally, however, is that Avery’s business extended to the loading and unloading of the material to be hauled—not just its physical transportation, and repairs that would insure that the loading and unloading were done properly would obviously be in its commercial interest notwithstanding Heinis’s use of the band-aid of the bucket to capture the leaking material. Moreover, National ignores the fact that Heinis was obligated under the lease to do more than meet minimum federal regulatory requirements with respect to the condition of the equipment. The lease specifically required he keep the equipment “in good working condition,” and it is common sense that a leaking trailer would be a breach of that obligation. National also contends that the fact Heinis was obligated under the lease to pay for the repairs made it his business and not Avery’s. The same can be said, however, for other things, including the fuel that Heinis was obligated to pay for. And, following this logic, there would be no coverage under National’s policy if while hauling a load for Avery, Heinis pulled his rig into a truck stop for fuel and was involved in an accident. In short, the North Dakota Supreme Court would likely conclude, as other courts have, that the fact Heinis was financially obligated to pay for the repairs is insufficient to negate the fact the trailer was leased to Avery and the other factors previously discussed. See, e.g., Freed, 300 F.2d at 398 (repair was in furtherance of the lessee-carrier’s business notwithstanding the lessor-operator being responsible for the cost of the repair); National Continental, 157 F.3d at 612-13 (same). iii. National’s argument that the repair was not “exclusively” in Avery’s business National argues that, even if the repair was within Avery’s business, it was not “exclusively” so. However, there is no evidence that Heinis was using the trailer to haul loads for others while it was under lease to Avery. Further, there is nothing to indicate he had the right (much less the practical ability) to do so, given the facts already mentioned, ie., the equipment was under lease to Avery with Avery’s name affixed to the tractor, the lease did not specifically authorize Heinis to use the trailer for the business purposes of others while under lease to Avery, and the lease requirements that Heinis remain in “constant contact” with Avery’s dispatcher and respond to dispatches within a reasonable period of time. See Freed, 300 F.2d at 398 (repairs to back end of truck were “exclusively” within the business of the lessee-carrier for equipment used only for the lessee-carrier’s business). National also contends that the repair was not exclusively in Avery’s business because it also benefitted Heinis in the .sense it allowed him to continue leasing the equipment to Avery—an argument which, by the way, acknowledges the eom-monsense notion’that a lessee would consider unacceptable a leaking piece of equipment. The North Dakota Supreme Court would also reject this argument. As already noted, the relevant language making a lessor of a trailer in certain circumstances an insured here reads: anyone else from whom you hire or borrow a covered “auto” that is a “trailer” while the “trailer” is connected to another covered “auto” that is a power unit, or, if not connected, is being used exclusively in your business. (Doc. No. 29-5, p. 98). To include the leasing business of the person from whom the trailer is hired or borrowed as part of the determination of whether it is being used exclusively in the named insured’s business would render the coverage a nullity since there would never be a situation where a leased trailer would be used exclusively in the named insured’s business. Rather, the policy’s use of the word “exclusively” was obviously intended to make clear there would be no coverage when the trailer, even though under lease to the named insured, was being used for purposes inconsistent with the named insured’s business, e.g., hauling loads for third parties or the lessor-operator using it for a clearly personal purpose. iv. National’s argument based on the deposition testimony of Heinis and Kevin Avery Finally, National points to the fact that both Heinis and Kevin Avery testified in their depositions that Heinis was not acting in Avery’s business at the time of the accident. To the extent this opinion testimony of a layperson is relevant-much less entitled any weight (which the court doubts), it is insufficient to trump the clear meaning of “in the business of’ in the policies in question, the lease requirements, and the actual conduct of the parties, either in creating a fact issue warranting a trial or altering the court’s conclusions about the application of the policy language to the facts. Cf. Northland, Ins. Co. v. Rhodes, No. 09-cv-01691, 2010 WL 5110107, at *10 (D.Colo. Dec. 9, 2010) (rejecting layperson opinion testimony that the truckers in the case were not employees because they had not focused upon the correct factors and, in any event, because “neither ... were competent to opine as they did”). 4. Conclusions re coverage under National’s Motor Carrier Coverage Form In summary, the court concludes that the trailer was being used exclusively in Avery’s business at the time of the accident, with the result being that Section II of National’s Motor Carrier Coverage Form affords coverage to Heinis for any liability he may owe Miller absent an applicable exclusion. And, since the court has reached this conclusion, a trial is not necessary to resolve the disputed question of whether the tractor was connected to the trailer at the time of the accident. For if it was, it appears this would also afford coverage under National’s policy—a point that National appears not to dispute if neither of the policy exclusions it relies upon foreclose coverage. However, before addressing the exclusions, the court will first address Great West’s alternative argument that National’s policy also affords Heinis coverage under a “Hired Autos Specified as Covered Autos You Own” endorsement. C. “Hired Autos Specified as Covered Autos You Own ” Endorsement 1.Introduction National’s policy contains an endorsement entitled “Hired Autos Specified as Covered Autos You Own,” which, among other things, modifies the coverage under the Motor Carrier Coverage Form. The endorsement reads in pertinent part as follows: THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. HIRED AUTOS SPECIFIED AS COVERED AUTOS YOU OWN This endorsement modifies insurance provided under the following: BUSINESS AUTO COVERAGE FORM BUSINESS AUTO PHYSICAL DAMAGE COVERAGE FORM GARAGE COVERAGE FORM MOTOR CARRIER COVERAGE FORM TRUCKERS COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement. This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below. Named Insured: Endorsement Effective Date: SCHEDULE Description of Auto: ND—126 1977 Trail_VIN# S41021_ Information required to complete this Schedule, if not shown above, will be shown in the Declarations_ A. Any “auto” described in the Schedule will be considered a covered “auto” you own and not a covered “auto” you hire, borrow or lease. B. Changes in Liability Coverage For an “auto” designated or described in the Schedule, Who is An Insured is changed to include as an “insured” the owner or lessor named in the Schedule. However, the owner or lessor is an “insured” only for “bodily injury” or “property damage” resulting from the acts or omissions by: 1. You; 2. Any of your “employees” or agents; or 3. Any person, except the owner or lessor or any “employee” or agent of the owner or lessor, operating an “auto” with the permission of any of B.l and/or B.2 above. (Doc. No. 29-6, p. 167). In this case, it is undisputed that the “auto” identified in the “Schedule” of the endorsement is the trailer involved in the accident. 2. The likelihood that Heinis also has coverage under the “Hired Autos Specified as Covered Autos You Own” Endorsement Great West contends that paragraph B of the endorsement modifies the ‘Who is An Insured” portion of National’s Motor Carrier Coverage Form at Section 11(A)(1), such that it expands the available coverage by “including” an owner or lessor named in the “schedule” as an “insured” for coverage for acts or omissions that would include those of Avery and its employees. Great West argues that the accident in this case arose, at least in part, as result of the acts of Miller, who was Avery’s employee. National does not dispute that the endorsement adds to those who are considered an insured under Section 11(A)(1) of the Motor Carrier Form. Rather, it contends that the language of the endorsement does not apply for two reasons. First, National contends that the language of paragraph B “Changes in Liability Coverage” does not apply because Miller cannot recover for any percentage of fault that may be assigned to him in his suit against Heinis under North Dakota’s comparative fault law. And, since Heinis can never be held liable to Miller .for Miller’s acts or omissions, the language relied upon by Great West does not apply, according to National. The court disagrees. Section II of the Motor Carrier Coverage Form extends coverage for damages that the insured is required to pay arising out of “bodily injury,” and the “bodily injury” covered in the endorsement is that resulting from “acts or omissions” of the Named Insured or its employees or agents. There is no mention in the language of the endorsement that the acts or omissions must be “negligent” or “intentional.” In other words, fault is not an element. All the language requires is a casual connection between an act or omission of the Named Insured or its employees or agents and the resulting injury for there to be coverage. And here, since it is undisputed that the explosion took place when Miller put his put his welding torch to the trailer and ignited the residual petroleum-based fumes contained within it, a reasonable factfinder could only conclude that the accident was in substantial part the result of an act of Miller. National also argues that the language in paragraph B of the endorsement does not apply because Heinis was not named in the schedule. While there is language in paragraph B which suggests that it only applies to owners or lessors “named in the Schedule,” there is also language that references the auto designated or described in the “Schedule,” and the box in the endorsement for setting forth the “Schedule” could be read as requiring only a description of the auto. In addition, Avery’s policy includes a number of items of equipment of other lessors that have been added using the same form endorsement and in no case was the lessor identified by name. Finally, in the case of the trailer at issue here, as well as most of the other pieces of equipment for other lessors, the vehicle identification number (“VIN”) was listed. Given the foregoing, the court suspects that, even if the endorsement nominally provides for the listing of the name of the owner or lessor of the auto, it was an overlooked requirement by the person who put the policy together for National (possibly due to the lack of clarity of the form) or that the VIN was used as a proxy for the name of the owner or lessor. At best, National has created a fact issue with respect to whether Heinis had to specifically be identified in the “Schedule” for paragraph B of the endorsement to apply, and Great West has created a fact issue with respect to whether any such requirement was waived. In summary, if the court is wrong about there being coverage under the Motor Carrier Coverage Form of National’s policy because the trailer was being used exclusively in Avery’s business at the time of the accident, a trial would be required to consider the disputed facts relevant to whether the “Hired Autos Specified as Covered Autos You Own” endorsement provides coverage, in addition to the disputed fact referenced earlier as to whether the trailer was connected to the tractor at the time of the accident, so as to afford coverage under the National Carrier Coverage Form irrespective of the endorsement. D. National’s claim of exclusions from coverage 1. Relevant policy language National claims that the “employer’s liability” and “fellow employee” exclusions set forth in Section II(B)(4-5) of its Motor Carrier Coverage Form apply and preclude any coverage to Heinis. The exclusions read as follows: B. Exclusions This insurance does not apply to any of the following: * * * * 4. Employee Indemnification And Employer’s Liability “Bodily injury” to: a. An “employee” of the “insured” arising out of and in the course of: (1) Employment by the “insured”; or (2) Performing the duties related to the conduct of the “insured’s” business; or b. The spouse, child, parent, brother or sister of that “employee” as a consequence of Paragraph a. above. This exclusion applies: (1) Whether the “insured” may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with .or repay someone else who must pay damages because of the injury. # íjí 5. Fellow Employee “Bodily injury” to: a. Any fellow “employee” of the “insured” arising out of and in the course of the fellow “employee’s” employment or while performing duties related to the conduct of your business; or b. The spouse, child, parent, brother or sister of that fellow “employee” as a consequence of Paragraph a. above. (Doc. No. 29-5, pp. 99-100). Also relevant to the court’s consideration of the two exclusions are the definitions of “employee,” “insured,” and “leased worker” under Section VI of the Motor Carrier Coverage Form, which read as follows: SECTION VI—DEFINITIONS * * * * F. “Employee” includes a “leased worker”. “Employee” does not include a “temporary worker”. G. “Insured” means any person or organization qualifying as an insured in the Who is An Insured provision of the applicable coverage. Except with respect to the Limit .of Insurance, the coverage afforded applies separately to each insured who is seeking coverage or against whom a claim or “suit” is brought. •H H» •!» I. “Leased worker” means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm to perform duties related to the conduct of your business. “Leased worker” does not include a “temporary worker.” (Doc. No. 29-5, p. 108). 2. The “employer’s liability” exclusion National argues that the “employer’s liability” exclusion set forth above (¿a, Section 11(B)(4) of the Motor Carrier Coverage Form) excludes coverage, in this case because Avery is an “insured” and the injury happened to Miller, one of its employees. Great West disagrees, arguing that the operative language only applies to the insured against whom a claim of liability is being made and not all insureds. Great West contends this is particularly so when the second sentence in the definition of “insured” under Section VT(G) of the Motor Carrier Coverage Form is considered, which is that coverage applies separately to each insured who is seeking coverage, which is commonly referred to in the industry as the “severability clause.” a. The Eighth Circuit’s 1966 decision in Farmers Elevator Mutual National argues this court is bound by the Eighth Circuit’s decision in Farmers Elevator Mut. Ins. Co. v. Carl J. Austad & Sons, Inc., 366 F.2d 555 (8th Cir.1966) (“Farmers Elevator Mutual ”), which is a case that arose out of this district. In Farmers Elevator Mutual, the injured party was a driver employed by a trucking company that had leased its equipment to another trucking company with an ICC permit. The trucker was injured during the process of unloading propane from his truck into tanks at a local elevator. The trucker sued the elevator. In Farmers Elevator Mutual, which was an action for declaratory judgment, the elevator’s insurer claimed that the insurance company for the trucking company employing the injured trucker was obligated to provide a defense and indemnity to the elevator by virtue of a provision of its policy that included as an insured a person using the truck with the permission of the named insured. The elevator’s insurer claimed the elevator was using the truck during the process of unloading. Id. at 556-57. This court held the elevator was not an insured under the trucking company’s policy, concluding the elevator had not used the truck since the unloading was done exclusively by the injured trucker. This court also held that, even if the elevator was using the truck during unloading within the meaning of the policy, coverage was excluded by an employer’s liability exclusion which the court concluded applied since the injured trucker was an employee of the trucking company (the named insured) even though it was the elevator (an additional insured) that was claiming coverage and the injured party was not one of its employees. Id. at 557-59. On appeal, the Eighth Circuit upheld this court’s decision that the policy language did not extend coverage to the elevator in the first instance. Id. at 558. However, the court did not stop there and proceeded to address this court’s alternative holding with respect to the application of the employer’s liability exclusion. The Eighth Circuit noted that “[wjhether this exclusion applies to suits against an omnibus insured by an employee of the named insured is a question that has produced a wide split of opinions among the courts.” Id. at 559. The court went on to conclude that this court had not clearly erred in holding the exclusion applied given the lack of any North Dakota decision on point and the lack of any ambiguity in the policy. Id. Great West argues that Farmers Elevator Mutual is not binding here because there is no mention in the decision of there being a severability clause, much less an argument that it would have changed the calculus with respect to application of the “employer’s liability” exclusion in that case. Great West’s argument is well taken. However, before discussing why, it is necessary first to consider the North Dakota Supreme Court’s decision in Northwest G.F. Mut. Ins. Co. v. Norgard, 518 N.W.2d 179 (N.D.1994) (“Norgard”), which came after the Eighth Circuit’s decision in Farmers Elevator Mutual. b. The North Dakota Supreme Court’s 1994 decision in Norgard Apparently, the only case where the North Dakota Supreme Court has addressed the interplay between a severability clause and a policy exclusion is its 1994 decision in Norgard. In that case, a husband and wife had purchased a homeowner’s policy that included an endorsement for coverage for a day care being operated out of their home by the wife. The husband was later convicted of gross sexual imposition for having engaged in sexual contact with one of the children attending the day care. When the parents of the child sued, the insurance carrier providing the “day care” coverage brought a declaratory action against the husband and wife contending the coverage was excluded under a sexual-molestation exclusion in the endorsement that read as follows: [T]he bodily injury and property damage coverage provided under this endorsement does not apply: a. to bodily injury or property damage arising out of sexual molestation, corporal punishment or physical or mental abuse inflicted upon any person by or at the direction of an insured, an insured’s employee or any other person involved in any capacity in the day care enterprise .... The wife disagreed. She argued (1) the language of the exclusion did not apply to her because, unlike her husband who was sued for his intentional conduct, she was sued only for negligence, and (2) she was entitled to be treated separately for coverage purposes because of the severability clause in the policy, which read as follows: Severability of Insurance. This insurance applies separately to each insured except with respect to the Limit of Liability. Therefore, this condition will not increase the Annual Aggregate Limit of Liability regardless of the number of insureds. Norgard, 518 N.W.2d at 180-81. In considering the wife’s argument, the North Dakota Supreme Court observed that “the jurisdictions that have attempted to reconcile severability clauses and exclusionary clauses have not done so uniformly.” Id. at 182. The court discussed the divergent views taken in several cases by other courts and went on to conclude that the presence of the severability clause created an ambiguity with respect to whether the exclusion applied to the wife’s claim of coverage. Id. at 182-83. The court stated: We have considered the varying views regarding the interplay of severability clauses and exclusionary clauses, and we find them instructive. Relying on Worcester [Mut. Ins. Co. v. Marnell, 398 Mass. 240, 496 N.E.2d 158 (1986)], many courts have found severability clauses to create ambiguities and have construed the policies against insurance companies; we believe Northwest rolls the dice by insisting that the policy is clear on its face and by not attempting in the policy itself to more carefully reconcile the severability clause and the exclusions. Id. at 183. The court then proceeded in a footnote to reject the insurer’s argument that the uncertainty created by the presence of the severability clause was removed by the choice of articles used to describe the insured in the exclusion. The insurance carrier had argued that the exclusion’s reference to “an insured” unambiguously referred to both an insured claiming coverage and all other insureds as opposed to what would have been the case had the policy used the words “the insured,” which the insurance carrier contended would have referred only to the insured seeking coverage. Id. at 183 n. 2. After concluding the presence of the severability clause created an ambiguity, the North Dakota Supreme Court proceeded to resolve the ambiguity by applying statutory rules of contract construction. The court stated: However, the ambiguity here is resolved by applying the rules for interpreting contracts, contained in NDCC Chapter 9-07. Determinative is the unique language of this exclusion; the exclusion does not pertain only to the acts of an insured, but also to the acts of “an insured’s employee or any other person involved in any capacity in the day care enterprise.... ” Under sections 9-07-03 and 9-07-04, NDCC, we attempt to give effect to the mutual intention of the parties as expressed by the language of the contract. The sexual molestation clause is clear on its face: no coverage is provided where anyone connected with the operation of the day care commits an act of sexual molestation on one of the children. The policy clearly and specifically reflects the parties’ intention to place these risks outside the scope of coverage. Section 9-07-12 directs that a contract may be explained by reference to the circumstances under which it was made and the matter to which it relates. The circumstances under which the policy was ’made is clear. The increase in legal actions involving sexual abuse of children by adults who are not strangers to the children, i.e., parents, relatives or caretakers, is dramatic. The policy clearly and specifically places these risks outside the scope of coverage. As between the two clauses, the sexual molestation exclusion is a particularly tailored provision that excludes any coverage for specific actions of specific individuals, whereas the severability clause is a more general provision concerned with who is covered. The rules of con