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Holmes v. Brethren Mutual Insurance Co.

February 17, 2005


Appeal from the Superior Court of the District of Columbia. (CA-9439-01). (Hon. A. Franklin Burgess, Jr., Trial Judge).

Before Terry, Farrell, and Reid, Associate Judges.

The opinion of the court was delivered by: Farrell, Associate Judge

Argued January 6, 2005

This appeal from a grant of summary judgment to appellee Brethren Mutual Insurance Company (Brethren) asks us to decide whether an insurance policy provision extending coverage to "hired autos" applies to the motor vehicle at issue in this case. The parties agree that the question is one of Maryland law. We conclude, as did the trial judge, that the vehicle was not a hired auto within the meaning of the policy, because to meet that definition Maryland would require the exercise of control over the vehicle by the named insured that is absent in this case. We therefore affirm.*fn1


Ronald Harris owned an unincorporated District of Columbia-based business known as Harris Transportation, which regularly transported players to bingo parlors such as Bingo World, located in Maryland and owned by Arundel Amusements, Inc. Earl Johnson was a driver for Harris; he was paid in cash for each night's work. The parties agree that Harris' relationship to Bingo World was that of an independent contractor. By oral agreement of the parties, Bingo World paid Harris fifteen dollars per person for each bingo player he brought to Bingo World. The trial judge's description of the relationship is undisputed:

Arundel [Bingo World] did not know, on any given day, whether or not Harris, or his driver, would appear with customers, or how many customers would be in the van when Harris' van did appear. Arundel exercised no control over what vehicle Harris chose to use, when he would use it, how he would use it and maintain it, what routes he would take, who his drivers would be, and whether he picked up customers or not.

On the night of July 23, 1998, Johnson was transporting Marie Washington and others home from Bingo World when the van was struck broadside by another vehicle driven by Delonta St. John in the District of Columbia. Washington ultimately died from injuries received in the accident. Appellant Delois Holmes, the personal representative of her estate, subsequently was awarded damages following a personal injury suit against Harris, Johnson, and St. John, but a sizeable portion of the award remained unpaid because of limitations in the insurance coverage of those defendants. At the time of the accident, Bingo World was insured under a commercial policy underwritten and issued by appellee Brethren, a company licensed to write insurance in Maryland. Holmes and others therefore filed the present complaint in Superior Court for a declaratory judgment, asking the court to "determine insurance coverage and the rights, duties, and obligations of Brethren under the terms and conditions of [its] Policy [with Bingo World]," specifically whether the "hired autos" provision of the policy extended coverage to the van operated by Harris' driver. From the trial court's adverse answer to that question, Holmes noted this appeal.


"Hired auto" provisions appear in many commercial insurance policies. Some define the term "hired auto" expressly, often as an automobile (or similar vehicle) "used under contract in behalf of" the named insured. See, e.g., Sprow v. Hartford Ins. Co., 594 F.2d 418, 422 (5th Cir. 1979); Kelly v. Phoenix Assurance Co. of N.Y., 225 F. Supp. 562, 565 (D. Md. 1964). Other policies, such as the one at issue in this case, do not define the term. The policy issued by Brethren required it to pay, among other things, all sums that Bingo World was obligated to pay as damages "caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto.'" "Covered autos," in turn, embraced (as relevant here) "hired autos only," in particular "those 'autos' you [the named insured] lease, hire, rent or borrow." In answer to the question "Who is an Insured?," the term "hire" appears once more in the policy. An "insured" includes, as relevant here, the named insured or "[a]nyone else while using with your permission a covered 'auto' you own, hire, or borrow."

The parties have cited, and our research has found, only one relevant Maryland decision interpreting a "hired auto" provision.*fn2

In Fisher v. Tyler, 394 A.2d 1199 (Md. 1978), the issue before the court was the application of a coverage provision regarding "any hired automobile," which the policy defined as a motor vehicle "used under contract in behalf of, or loaned to, the named insured." Id. at 1201. Significantly, however, the court took as its starting point the distinction between the policy in a case on which the trial court had relied primarily, Pennsylvania Threshermen & Farmers' Mut. Cas. Ins. Co. v. Hartford Accident & Indem. Co., 310 F.2d 618 (4th Cir. 1962), where "the term 'hired' was not further defined in the contract of insurance," and the policy at issue in Fisher where "'hired automobile' is specifically defined":

The term "hired," not being otherwise defined within the policy in Pennsylvania Threshermen, conveyed the normal meaning of that word. In that context, a "hired" automobile is one whose temporary use has been engaged for a fixed sum. See WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 1072 (unabr. ed. 1976)[;] 12 G. Couch, Cyclopedia of Insurance Law § 45:263, at 289 (2d ed. 1964).

Fisher, 394 A.2d at 1202 (internal citations partly omitted). By contrast, the court continued, "the . . . policy [at issue in Fisher] spells out a more expansive interpretation of that term for it includes within its definition the phrase 'used under contract in behalf of, or loaned to' [the named insured], thereby ...

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