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National Sun Industries Inc. v. South Dakota Farm Bureau Insurance Co.5/26/1999
we disagree.
[ ] Farm Bureau issued two policies to L&O; a Country Squire liability policy and an umbrella policy. The relevant language in the Country Squire policy provides:
"We do not cover under: "1. Coverage L and Coverage M bodily injury or property damage: "... "b. arising out of business pursuits of any insured or the rental or holding for rental of any part of any premises by any insured. "The policy defines "business" as "a trade, profession or occupation, other than farming." In addition, it defines "farming" as "the process of investment, management or labor to produce agricultural products." "
[ ] The applicable language in the umbrella policy, as stated in the section titled "Exclusion Agreements," provides as follows:
This insurance does not apply to:
"... "e. Personal injury or property damage arising out of: "(1) any business pursuits or business property (other than farming) of yours[.] "The policy defines business as "a trade, profession or occupation, other than farming, and includes any activities likely or expected to produce an annualized gross income exceeding $1000."
[ ] As this Court has previously stated, " n insurance policy is ambiguous when it 'is fairly susceptible to two constructions.'" Economic Aero Club v. Avemco Ins. Co., 540 NW2d 644, 645 (SD 1995) (quoting American Family Mut. Ins. v. Elliot, 523 NW2d 100, 102 (SD 1994) (citations omitted)). "Ambiguity in an insurance policy is determined with reference to the policy as a whole and the plain meaning and effect of its words." Id. When determining ambiguity in an insurance policy, specific rules of construction apply:
"Where the provisions of an insurance policy are fairly susceptible of different interpretations, the interpretation most favorable to the insured should be adopted. This rule of liberal construction in favor of the insured and strictly against the insurer applies only where the language of the insurance contract is ambiguous and susceptible of more than one interpretation ... . This rule does not mean, however, that the court may seek out a strained or unusual meaning for the benefit of the insured." Alverson v. Northwestern Nat'l Cas. Co., 1997 SD 9, § 8, 559 NW2d 234, 235 (citations omitted).
[ ] Here, we find that the terms of the policies clearly exclude National's claimed loss. The policies' provisions and terms, when read as a whole, are not susceptible to two interpretations, but are unambiguous. Both policies clearly state that property damage arising out of business pursuits is excluded from coverage. When reading the business pursuits exclusion clauses with the definitions of business and farming, the plain meaning and effect of the words make it clear that L&O;s storage of National's seeds was a business pursuit and, therefore, was excluded from coverage. If we were to read the policies' terms and definitions in any other way, we would be providing the policies with a "strained or unusual meaning," which this Court is forbidden to do. Id.; see Rumpza v. Donalar, 1998 SD 79, § 12, 581 NW2d 517, 521 (citations omitted); Opperman, 1997 SD 85, § 4, 566 NW2d at 490. As this Court has stated, " he terms of an unambiguous insurance policy cannot be enlarged or diminished by judicial construction." Elliot, 523 NW2d at 102 (citation omitted); see also Opperman, 1997 SD 85, § 11, 566 NW2d at 491. To read the policy as National suggests would require such an enlargement.
[ ] Therefore, we conclude that the policies Farm Bureau issued to L&O;were unambiguous. As such, the business pursuits exclusion excluded coverage of National's loss. The trial court's granting of summary judgment in f
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