Dakota, Minnesota & Eastern Railroad Corporation v. Heritage Mutual Insurance Company

Summary

The Supreme Court of South Dakota affirmed summary judgment for Heritage Mutual Insurance Company in a dispute over coverage and a duty to defend under a business automobile insurance policy. The court held that the policy's employee exclusion applied to injuries sustained by a railroad employee while acting within the scope of employment and that South Dakota law permitted the exclusion. The court declined to decide whether the policy's workers' compensation exclusion encompassed claims under the Federal Employers' Liability Act because that issue was not properly before it.

Holdings

1. The court did not decide this issue because Heritage did not file a notice of review and therefore could not seek reversal of the trial court's ruling favorable to DM&E.
2. The phrase "domestic employees" refers to household employees, not employees who are "of one's own country." An employee of a commercial railroad is not a domestic employee within the policy exception.
3. SDCL 32-35-73 permits an automobile-insurance company to exclude coverage for bodily injury to an employee while the employee is engaged in the insured's employment, including while operating a business vehicle within the scope of employment. The exclusion therefore did not violate South Dakota public policy.
4. Summary judgment was proper because the policy exclusion was unambiguous, and South Dakota had not adopted the doctrine of reasonable expectations. The doctrine therefore did not apply to the policy language at issue.

Questions Presented

1. Whether the phrase "any similar law" in the workers' compensation exclusion encompassed claims brought under FELA.
2. Whether "domestic employees" in the exception to the employee indemnification and employer's liability exclusion meant employees of the same country or household servants.
3. Whether SDCL 32-35-73 authorized an automobile-insurance policy to exclude liability coverage for bodily injury to an employee engaged in the insured's employment, including when the employee was not covered by workers' compensation.
4. Whether summary judgment was improper because a genuine issue existed concerning DM&E's reasonable expectation of coverage.

Disposition

affirmed