1. What type of insurance policies did Royal Catering Co. purchase from American State Insurance Co. and Travelers Property Casualty Co.?

2. After reviewing the language of both policies applied to the facts of record before the court, how did the court decide this case?

Royal Catering Company (Royal) owned a fleet of food trucks. It leased its trucks to operators who drove from site to site selling food. Royal leased one of these trucks to Esmeragdo Gomez, who, along with his wife Irais Gomez, operated the truck. The Gomezes’ food truck had two seats and two seatbelts, for a driver and a cook. The food truck was equipped with a specially designed deep fryer, grill, steam table, oven, refrigerator, and coffee maker. That equipment was built into the truck and was not designed to be used apart from the truck. On the day of the accident, Mr. Gomez was driving the food truck. A guest sat in the truck’s passenger seat, and Mrs. Gomez stood in the rear of the truck. At an intersection, Mr. Gomez swerved to avoid an approaching truck. Mr. Gomez’s evasive action failed to avoid a collision. Just prior to the collision, hot oil splashed on and burned Mrs. Gomez. The Gomezes and the passenger in their truck brought an action against Royal Catering for injuries sustained in connection with the accident, including a product liability claim for a defective deep fryer basket. American States Insurance Company issued automobile insurance policies to Royal. Travelers Insurance provided commercial general liability coverage (CGL) to Royal. The automobile insurer, American States, claims that the injuries should be covered under the Traveler CGL policy that, although excluding coverage for injuries arising out of the use of automobiles, covers “mobile equipment,” defined as vehicles used for a primary purpose other than transporting persons or cargo. Travelers asserts that the primary purpose of the food truck was to transport “persons and cargo” so that it is not within the “mobile equipment” exception to the Travelers’ CGL auto exclusion. From a decision by the trial court that the food truck was an “auto” obligating American States to cover the claims for injury, American States appealed.

JUDICIAL OPINION

MOSK, J.… Under a plain reading of the Travelers Primary CGL Policy, the Gomezes’ food truck was “mobile equipment” and not an “auto.” The primary purpose of the Gomezes’ food truck was to serve as a mobile kitchen and not to transport persons or cargo. (See Employers Mutual Casualty Company v. Bonilla (5th Cir.2010) 613 F.3d 512, 518 [“The ‘inherent purpose’ of a mobile catering truck certainly could be seen as including the use and maintenance of its kitchen facilities ...”].) For the first two hours of the day, the Gomezes cooked food in their food truck while parked in the Royal parking lot. During the next eight hours, the Gomezes made 12 to 13 stops to cook, or at least heat, and sell food. During those stops, the food truck was not “transporting” anything, but was immobile. The food truck had only two seats and only two seatbelts, and the truck was not equipped to transport persons other than a driver and a cook. … … “The point is easily illustrated by fire trucks. Because they have the power of self-propulsion and are designed for