Appeals court says insurance policy does not preclude coverage in mobile home case

By Joe Forward, Legal Writer, State Bar of Wisconsin

Nov. 22, 2010 – An insurance policy that excluded coverage for certain property damage caused by mobile homes did not exclude coverage for property damage that resulted when a mobile home, towed by a tractor, rolled backwa rds into the plaintiff’s vehicle.

In Olson v. Farrar, 2009AP2385 (Nov. 18, 2010), Mt. Morris Mutual Insurance Co. argued that Robert Farrar’s policy excluded coverage because the tractor, not the mobile home, caused the damage. The policy covered damage caused by a mobile home trailer, but not property damage that resulted from a trailer, “carried on, towed by, or attached to” a motor vehicle.

Farrar used his tractor to move Olson’s mobile home to a different location. Olson followed in his truck. The tractor stalled on a hill, and caused the mobile home to roll backwards and crash into Olson’s truck, causing damage to both the truck and the mobile home. Mt. Morris contested coverage under the policy.

Farrar argued the mobile home caused the damage. Mt. Morris argued that since the mobile home was “both towed by and attached to the tractor,” the policy excluded coverage because the tractor is a motor vehicle. The policy defined “motor vehicle” as a trailer or semi-trailer subject to vehicle registration or “designed for use on public roads.”

Mt. Morris maintained that Farrar’s tractor was a designed for use on public roads. The appeals court disagreed, and reversed the circuit court order granting summary judgment to Mt. Morris. The appeals court concluded that Mt. Morris “did not point to undisputed evidence showing that any aspect of the particular tractor in this case was designed for highway use.”

Mt. Morris also argued that even if the tractor is not considered a motor vehicle, coverage is still excluded because of the policy’s “care, custody, and control” provision. Specifically, the policy excluded coverage for damage to property that is “occupied by, used by, or in the care of the insured.” Mt. Morris argued that the mobile home was in Farrar’s care.

Although “care, custody, and control” provisions are ambiguous under Wisconsin law, the appeals court explained, damaged property will be covered under Silverton Enters., Inc. v. General Cas. Co. of Wis., 143 Wis. 2d 661, 422 N.W.2d 154 (Ct. App. 1988), if “supervision is a necessary element of the work involved.”

Unlike Silverton, the appeals court noted, the “undisputed facts show that Olson’s mobile home had not been left in Farrar’s sole possession.” Thus, the “care, custody, and control” exclusion did not work to exclude coverage, the court held. The court reversed and remanded.