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J & S Oil Co., Inc. v. Hdi-Gerling America Insurance Co.

United States District Court, D. Maine

April 22, 2015

J & S OIL CO., INC., Plaintiff,
v.
HDI-GERLING AMERICA INSURANCE COMPANY, Defendant.

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

JON D. LEVY, District Judge.

This diversity action involves an insurance dispute between plaintiff J&S Oil Co., Inc. and defendant HDI-Gerling America Insurance Company. J&S Oil alleges that HDI-Gerling breached an insurance agreement between the parties by refusing to reimburse it for expenses related to an oil spill on its property. ECF No. 2 at 5. The parties have cross-motioned for summary judgment. ECF No. 17 at 1; ECF No. 19 at 1.[1] After careful consideration, I deny J&S Oil's motion and grant HDI-Gerling's motion.

I. FACTUAL BACKGROUND

On the issue of liability, few facts are in dispute.[2] In March of 2012, 1, 500 gallons of oil leaked out of an oil tanker at J&S Oil's headquarters in Manchester, Maine. ECF No. 18 at 2; ECF No. 20 at 1. The tanker from which the spill came was a "tanker trailer" that J&S Oil employed to store used motor oil. Id. When the spill occurred, the tanker trailer was stored in a parking lot on J&S Oil's property. ECF No. 21 at 2; ECF No. 23 at 4.

The tanker trailer was designed for use on public roads, but needed to be towed to move any distance. ECF No. 18 at 5; ECF No. 20 at 4. J&S Oil purchased the tanker trailer several years prior to the oil spill, intending to use it to transport oil from its headquarters in Manchester to its car wash in Waterville. ECF No. 21 at 2; ECF No. 23 at 3-4. However, J&S Oil never removed the trailer from its Manchester property. Id. Instead, the tanker trailer was used exclusively to store oil in Manchester and to transport oil within the confines of the Manchester facility. ECF No. 18 at 4; ECF No. 20 at 3.

The tanker trailer was moved around the Manchester facility by way of an access road. Id. The road is owned by John Babb, Sr., a part owner of J&S Oil. ECF No. 21 at 3; ECF No. 23 at 5-6. J&S Oil plows and maintains the access road, without state funds or assistance. Id.

During its ownership of the tanker trailer, J&S Oil never registered the tanker trailer with the state of Maine, or had the tanker trailer inspected. ECF No. 18 at 5; ECF No. 20 at 4.

At the time of the oil spill, the parties had entered into a commercial automobile insurance policy (the "Policy"). ECF No. 18 at 6; ECF No. 20 at 4. The Policy was issued by HDI-Gerling to J&S Oil through HDI-Gerling's insurance agent, Energi Insurance Services ("Energi"). Id. Prior to the oil spill, Energi had inspected the Manchester property and was aware of the tanker trailer's presence. ECF No. 21 at 5; ECF No. 23 at 10. A representative from J&S Oil claims that during this inspection he told the Energi agent how the tanker trailer was used. Id. Nothing in the record indicates that Energi and J&S Oil ever discussed whether or not the tanker trailer was covered under the Policy. See id.

The Policy provides that HDI-Gerling will pay all sums that an insured is obligated to pay as "covered pollution cost or expense" related to the "ownership, maintenance or use of covered autos.'" ECF No. 18 at 7; ECF No. 20 at 5. The meaning of "autos" is the crux of this dispute.

The Policy defines "auto" as follows:

1. A land motor vehicle, "trailer" or semitrailer designed for travel on public roads; or
2. Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged.
However, "auto" does not include "mobile ...

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