For everyone who owns or operates a food truck or wants to, an important decision came down recently from the Second Appellate District of California. In American States Insurance Company v. Travelers Property Casualty Insurance Company of America, ____ Cal. App. 4th ___ (2014) (Second Appellate District, filed 1/27/14), Justice Richard Mosk held that Travelers’ Commercial General Liability (“CGL”) policy covered the injury at issue in this case. Moreover, he said that American States should be indemnified for any award that they paid on behalf of their insured party.
Travelers had an exclusion from its “CGL” policy if the vehicle was an “auto,” except for when the “auto” could be defined as “mobile equipment.” One of the definitions for “mobile equipment” in Travelers “CGL” policy is “for vehicles used for other than for transport of persons or cargo.” American States had an exclusion for equipment in an “auto” if the user had “completed work.” In the arbitration and subsequent suit, Royal and American States admitted partial liability on a products liability theory due to the fryers being unable to latch because the fryers’ baskets did not allow for the latch to close properly. Travelers refused to defend the suit because they felt that it was outside of its coverage area. The trial court found in a summary judgment motion that American States covered the injury to Mrs. Gomez and that Travelers had no liability under its “CGL” policy due to the auto exclusion. The trial court held that a food truck is an “auto” because it found that the purpose of the food truck was to transport food, which it determined was cargo.said that American States should be indemnified for any award that they paid on behalf of their insured party.
In American States, Mr. Esmergado Gomez and his wife operated a food truck leased from Royal Catering Company. After they had finished cooking and selling food for the day, Mr. and Mrs. Gomez were driving back with another passenger to the Royal Catering parking lot where they stored the truck they leased after hours. Mr. Gomez and the passenger were in the only seats available in the truck, while Mrs. Gomez was standing in the back. When Mr. Gomez swerved to avoid a collision (a collision that occurred anyway), Mrs. Gomez was burned by an improperly latched fryer.
Thus, the question put before Justice Mosk and his colleagues was whether a food truck was used to transport food as cargo or was used to cook and distribute food. In Alpine Ins. Co. v. Planchon (1999) 72 Cal.App.4th 1316, the Court mentioned in dicta that while generally a determination of the use of a vehicle is a question of fact, when the purpose of a vehicle is apparent on its face then such a determination may become a matter of law. In this case, the Gomezes began their day with two hours of cooking food and then made 12 or 13 stops to reheat, cook and distribute food to customers. The Appellate Court therefore held that the food truck was not an “auto” under Travelers “CGL” policy, but was instead “mobile equipment.” Therefore, Travelers did cover the injury to Mrs. Gomez. Moreover, the Court held that Mrs. Gomez’s injury occurred after the Gomezes had “completed” their work for the day and therefore American States would be indemnified for any award they paid to the Gomezes.
Therefore, Justice Mosk has helped define something that is becoming more and more prevalent around the Southland. According to the Second Appellate District, a food truck is a restaurant and not just a truck.
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