As this blog has previously reported, accidents with guns are not likely to become less common any time soon. With home- and business-owners striving to find increasingly original ways to get shot, they will put increasing strain on the traditional language of the coverage exclusions in insurance policies. In Gear Automotive v. Acceptance Indemnity Insurance Company, No. 12-2446 (8th Cir. Mar. 18, 2013), the U.S. Court of Appeals for the Eighth Circuit recently resisted an attempt to place unusual facts outside the scope of a conventional employee exclusion in a liability policy.

Gear Automotive hired Joe X (we’re guessing he’d rather we not use his name) for just one night, for $100, but he still managed to fail to prevent a burglary while shooting his employer in the leg. His accidental victim was Robert Gear, sole owner of the eponymous auto dealership. In October 2008, Gear Automotive was vandalized and robbed, and police told Mr. Gear the perpetrators would probably return. They suggested he monitor the premises, and Mr. Gear enlisted his brother Darrell and Joe X to help him. That night, the trio flushed a number of suspected wrongdoers (none of whom appears to have been apprehended) out of the dealership. While pursuing one of them, Joe X fired a gunshot that struck Robert Gear in the leg.

Robert made a demand under the dealership’s commercial garage liability policy. When that claim was denied, Robert brought a lawsuit in Missouri state court against Gear Automotive–his own dealership—in which he alleged, among other things, that he was an employee of the dealership, and that the dealership had negligently failed to provide its employees with a reasonably safe working environment.

The negotiations must have been tough, but Gear Automotive and Mr. Gear somehow managed to settle the case. The parties’ stipulation provided that Mr. Gear was not an employee of the company, that the dealership was liable for $350,000, and that Robert would not seek to execute his judgment against the dealership, except to the extent it was entitled to insurance proceeds.

The dealership then sued its insurer in Missouri state court, alleging bad faith refusal to settle, breach of contract and vexatious refusal to settle. The insurer removed the case to the Western District of Missouri. That court granted the insurer’s motion for summary judgment, on the ground that the policy excluded coverage for any obligation for which the dealership might be held liable under workers’ compensation law. (Gear Automotive had no workers compensation insurance at the time of the shooting.)

The Eighth Circuit affirmed, but on different grounds. The dealership’s policy excluded coverage for injury to “[a]n ‘employee’ of the ‘insured’ arising out of and in the course of . . . [e]mployment . . . .” The court rejected Mr. Gear’s contention that, as sole owner of Gear Automotive, L.L.C., he was not an “employee” at the time of the shooting. It noted that, at the time of the accident, Robert was engaged in the exact same activity as the dealership’s only other employees—Joe and Darrell. The court also found that the shooting arose out of, and in the course of, his employment: Although it was not usual for employees of Gear Automotive to stake out the dealership at night, that is what they did on this occasion, and Robert was shot “as a direct result of his monitoring duties.”

The court’s opinion concluded by recognizing it was “very unfortunate that Robert suffered a grievous injury that has resulted in substantial medical and disability losses.” But Gear Automotive was not entitled to coverage.