American Star Insurance Co. v. Insurance Co. of the West

—This is a fight between two insurance companies over who should pay for the tragic results of an auto accident involving a water truck in January 1987. The matter boils down to the applicability of the auto exclusion in one insurer’s policy. The appeal requires us to decide whether a water truck equipped with permanently attached spraying equipment comes within the scope of the auto exclusion of the 1986 version of the standard commercial general liability (CGL) insurance policy. We conclude the policy unambiguously classifies such a truck as “mobile equipment” and therefore beyond the purview of the auto exclusion. Because the insuring clause provides coverage and the auto exclusion does not apply, the judgment must be affirmed.

Facts

The parties have agreed on certain essential facts. ABC Water Service (the policyholder) owned a GMC Brigadier 4000 water truck. The truck was used to spray down construction sites during grading operations. It had a 4000-gallon tank and permanently attached spraying equipment. Operation of the spraying equipment involved a pump which pumped water from the tank. The truck was normally used off road, not licensed for road use, and…