Background
On April 20, 2022, Richard Marple, driving a dump truck owned by Nu Creek, LLC, struck and killed Larry R. Green on Route 20 in Buckhannon, West Virginia. Nu Creek was operating under an independent contractor agreement with J.F. Allen Company, Inc. (“Allen”), hauling cargo on public roads. The Green Estate’s wrongful death lawsuit alleged that Nu Creek was a “chameleon carrier” — a company formed by Marple to shed the safety record of his prior trucking company, Hackers Creek Enterprises, which had been involved in a fatal accident in 2016 — and that Allen negligently hired and retained Nu Creek without conducting an adequate background investigation.
Allen held two towers of insurance at the time of the accident. Relevant here were four policies: a Zurich commercial auto policy (Zurich Auto Policy), a Zurich commercial general liability policy, an Axis excess policy, and a Homesite excess policy that followed the Axis policy’s terms. After an unsuccessful first mediation, both Axis and Homesite sent Allen reservation-of-rights letters asserting that auto liability exclusions precluded coverage. The Green Estate’s claims were ultimately settled at a second mediation in March 2024, but Allen was forced to contribute its own funds because Homesite and Zurich (as to its auto policy) denied coverage. Allen then sought declaratory relief.
The Circuit Court of Upshur County denied summary judgment to Homesite and Zurich and granted summary judgment to Allen, finding that coverage existed under both the Zurich Auto Policy and the Homesite excess policy for the Green Estate’s negligent hiring/retention claims. Homesite and Zurich each appealed, and the Intermediate Court of Appeals consolidated the two appeals.
The Court’s Holding
The court affirmed on both coverage questions. As to the Zurich Auto Policy, the court held that the insuring agreement — which obligates Zurich to pay sums an insured “legally must pay as damages because of ‘bodily injury’ . . . caused by an ‘accident’ and resulting from . . . use of a covered ‘auto'” — focuses on the nature of the injury and its causal link to an auto accident, not on the specific theory of liability asserted against the insured. Because Allen’s liability to the Green Estate arose from bodily injury caused by the April 20, 2022, accident involving Nu Creek’s vehicle, the Zurich Auto Policy’s insuring agreement was satisfied, and coverage extended to the negligent hiring/retention claims.
As to the Homesite excess policy (which followed the Axis policy’s terms), the court held that the automobile liability exclusion — barring coverage for any “claim, suit, loss or any other cost or expense arising out of the ownership, maintenance, operation, use, entrustment to others or loading or unloading of any auto” — was not triggered. The exclusion’s operative term “claim” was undefined in the policy, and applying its plain and ordinary meaning from Black’s Law Dictionary, the court concluded that “claim” encompasses a cause of action or theory of liability. Because the Green Estate’s claim against Allen sounded in negligent hiring/retention — conduct that predated and was independent of the accident itself — it did not “arise out of” the use of an auto, and the exclusion did not apply.
The court also found harmless error in the circuit court’s alternative ruling that the policies were ambiguous solely because the parties offered competing interpretations, reaffirming that disagreement between parties does not itself create contractual ambiguity. Because the circuit court did not rely on the ambiguity finding in its substantive analysis, the error was inconsequential. The court further declined to adopt either a “theory of liability” or “cause of damages” framework as a generalized rule, emphasizing instead that coverage determinations must turn on the particular language of each policy provision.
Key Takeaways
- A commercial auto policy’s insuring agreement that keys coverage to “bodily injury caused by an accident resulting from use of a covered auto” can reach negligent hiring/retention claims against a motor carrier, because those claims produce liability for injury caused by an auto accident — the focus is on the injury and its cause, not the theory of liability.
- An auto liability exclusion that bars coverage for claims, suits, or losses “arising out of” the use of an auto does not automatically sweep in negligent hiring/retention claims; because “claim” in its plain meaning includes a cause of action, and the negligent hiring claim is premised on pre-accident conduct independent of the auto accident, the exclusion does not apply.
- Competing party interpretations of policy language do not, standing alone, render an insurance policy ambiguous — ambiguity is a question of law for the court.
- West Virginia courts must assess coverage based on the specific language of each policy provision rather than adopting categorical “theory of liability” or “cause of damages” approaches.
Why It Matters
This decision has significant practical implications for motor carriers, trucking companies, and their insurers in West Virginia. It establishes that when a contractor hiring company faces a negligent hiring/retention claim arising from a fatal accident caused by a contractor’s vehicle, both its commercial auto policy and following-form excess policies may respond — even if the insured was not operating the vehicle. Insurers that issue auto or excess policies to companies that regularly engage independent contractor carriers cannot rely on auto exclusions or narrow auto insuring agreements to sidestep coverage for the hiring company’s own negligence.
The decision also reinforces that coverage disputes must be resolved by careful attention to individual policy text rather than generalized doctrinal rules borrowed from other jurisdictions. For practitioners, the court’s treatment of the term “claim” — embracing the Black’s Law Dictionary definition that includes cause of action — signals that undefined terms in exclusions will be read in their full dictionary scope, which can cut against insurers seeking broad exclusions and in favor of policyholders seeking coverage for independent theories of liability.