Travis Quinn v. the Travelers Indemnity Company and Travelers Property Casualty Company of America

Cite as 2022 Ark. App. 67
Elizabeth Perry ARKANSAS COURT OF APPEALS
I attest to the accuracy and
integrity of this document
2023.08.22 12:02:10 -05'00'
DIVISION III
No. CV-21-1
2023.003.20269
TRAVIS QUINN
Opinion Delivered February 9, 2022
APPELLANT

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 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

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Neither Ellis’s estate nor Trampp are parties to the litigation herein.

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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 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.
2
The amended complaint amended the original complaint only to the extent of
substituting Travelers as the proper defendant.

3
....

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.

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

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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
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.

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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
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).

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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

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

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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 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”

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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

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

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
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.

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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.

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:

1. WHO IS AN INSURED

The following are “insureds:”

10
(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
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

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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 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

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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 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

contractor 4 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

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).

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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.

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.

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