January 12, 2012
On January 10, 2012, a divided Indiana Supreme Court issued a decision in a coverage action against the insurer of the Indiana Youth Soccer Association (IYSA) that dealt with what precisely is the business of the IYSA in
Haag v. Castro, ___ N.E.2d ___ (Ind. 2012), Cause No. 29S04-1102-CT-118. The question was whether injuries to members of a soccer team associated with the IYSA suffered in an automobile accident in Colorado were covered by th IYSA's business auto coverage. The Court held that it was not.
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The plaintiffs in this case were players on a Carmel soccer team that traveled, with the IYSA's approval, to Colorado to participate in a youth soccer tournament. The team belonged to a soccer club that was an affiliated member in good standing with the IYSA. While in Colorado, the team decided to go white-water rafting as a "team-building" exercise. On the way to the rafting activity, the team was involved in an automobile accident, resulting in injuries to several players.
The players sued a variety of parties, among them the IYSA's insurance carrier. The trial court granted summary judgment to the carrier, finding that the policy did not provide coverage. A divided panel of the Court of Appeals affirmed, holding that the van the players were riding in was not being used "in the business of" the IYSA at the time of the accident. The Indiana Supreme Court granted transfer.
The only issue before the Court was whether the players were in a vehicle "being used in the business of" the IYSA at the time of the accident. Although the policy did not define that phrase, the Court did not find it to be ambiguous, thereby avoiding the doctrine that an ambiguous insurance policy be construed against the insurer. Rather, the Court looked to "the IYSA's organizational documents combined with widespread general familiarity with the business of sports governing bodies" to conclude that the phrase was "unambiguous here."
After reviewing the IYSA's articles of incorporation, the Court found that it engaged in 3 types of business: (1) "promoting" soccer; (2) "regulating" competition, leagues, teams, and players; and (3) "conducting" specific events. It found that these lines of business did not include "competing" and that this is consistent with the "widespread general familiarity" that the people of Indiana have with sports governing bodies. Thus, the fact that the IYSA encouraged the team to participate in the tournament did not mean that the team's actual participation was part of the business of the IYSA.
Justice Dickson dissented. He noted that the IYSA's articles of incorporation indicated that part of its business was to "develop and encourage sportsmanship and playing proficiency" and that the vehicle for achieving and evaluating this goal was competing on the field of play. He also concluded that "promoting soccer" embraces interstate travel to engage in competitive sport as an incentive to the youth of Indiana to participate in soccer under the IYSA. Thus, he found the majority's decision to be too narrow.
In the abstract, I find Justice Dickson's dissent to be more persuasive than the majority's decision (to which only Justices Sullivan and Shepard fully concurred). However, the plaintiffs had a difficult fact-pattern. They were traveling to a non-soccer related activity when the accident occurred, which makes it natural to question why the IYSA's insurer should pay for the injuries associated with the accident. This fact alone may explain why only 2 of 8 judges agreed with the plaintiff's argument.
Lessons:
- A sport's governing body is not in the business of competing in that sport.
- It can be difficult to overcome relatively unsympathetic facts
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