Cincinnati Insurance had issued a fire policy to the Aid Company, and Allstate had issued an auto policy on an Audi automobile owned by Kelly Bose. Bose and Rick Shaw were both employed by the Aid Company. Shaw was a mechanic for the company. When Bose smelled gas emanating from the Audi, Shaw was asked to check the car. Shaw had done repair work for other employees. He agreed to examine the Audi, and an agreement as to payment was reached.

On March 29, 1991, Shaw moved the car into the mechanic's bay at Aid's and placed it on the hoist. While the car was on the hoist, gas dripped onto a trouble light on the floor and burst into flames. The ensuing fire resulted in damage to the property amounting to $21,425.38.

Cincinnati paid the fire loss, filed a complaint for damages against Shaw, and obtained a default judgment. This was set aside, however, after it was determined that Shaw had not been properly served. On September 29, 1992, Cincinnati commenced subrogation proceedings against Allstate in an attempt to recover its loss under the auto policy. The trial court entered judgment against Allstate, and Allstate appealed.

It was Allstate's argument that Shaw's activities did not constitute "use" of Bose's car so as to provide him with coverage as an additional insured under Allstate's policy. Since Shaw did not own the Audi and did not live with Bose, the loss would be covered only if Shaw was using the car with the insured's permission.

On appeal, the court concluded that the Audi was not being "used" within the meaning of the policy when it was unoccupied, on a lift, and undergoing repairs for which a charge would be made. Accordingly, Shaw was not an "additional insured" under the policy issued by Allstate to Bose, and Allstate was not liable for damages caused by Shaw's negligence.

The court noted that the policy involved here did not define "using" to include any activity connected with maintenance of the insured vehicle. The judgment entered in the lower court against Allstate was reversed.

Allstate Insurance Company, Appellant, v. Cincinnati Insurance , Rick Shaw--No. 48A02-9510-CV-619--Court of Appeals of Indiana--Sept. 18, 1996---670 North Eastern Reporter 2d 119.