Allstate Insurance Company v. Saph et al
OPINION AND ORDER granting in part and denying in part 22 Motion for Summary Judgment. Signed by District Judge Sean F. Cox. (JMcC)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Allstate Insurance Company,
Case No. 13-13112
Laurence Byron Saph, Jon Charles
Maston, Jr., Nicholas Edward Maston,
and Jimmy John’s GPW, Inc.,
Honorable Sean F. Cox
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT
This is an insurance coverage case. Plaintiff Allstate Insurance Company (“Plaintiff” or
“Allstate”) has filed a Complaint for Declaratory Relief, seeking an order from this Court declaring
that Allstate is not required to indemnify Defendants Nicholas Edward Maston (“Nicholas Maston”)
or Jon Charles Maston, Jr. (“Jon Maston”) (collectively, “the Maston Defendants”) for any judgment
they face as a result of a state court lawsuit arising out of a motor vehicle accident. Defendant
Laurence Saph (“Saph”) alleges, in the state court action, that Defendant Nicholas rear-ended his
vehicle while Nicholas was making a delivery in the scope of his employment by Defendant Jimmy
John’s GPW, Inc. (“Jimmy John’s”).
The Clerk of the Court has entered Default as to Defendants Nicholas Maston and Jon
Maston. Defendant Jimmy John’s filed an Answer to the Plaintiff’s Complaint (Doc. #10) but failed
to timely file a response to Plaintiff’s Motion for Summary Judgment. On March 10, 2014, this
Court ordered Defendant Jimmy John’s to file a response, no later than March 17, 2014, if it opposes
Allstate’s motion. (Doc. #25). To date, Jimmy John’s has not filed a response to Plaintiff’s motion.
Defendant Saph has filed a concurrence with Plaintiff’s motion. (Doc. #24).
The Court finds that the issues have been adequately presented in the parties’ briefs and that
oral argument would not significantly aid in the decisional process. See Local Rule 7.1(f)(2),
U.S.D.C., E.D. MI. Therefore, the Court orders that the motion will be decided upon the briefs. For
the reasons set forth below, this Court shall GRANT in part and DENY in part Plaintiff’s motion.
On November 22, 2011, in Macomb County, Michigan, Defendant Nicholas Maston was
involved in a motor vehicle accident with Defendant Saph. (State of Michigan Traffic Crash Report,
attached to Pl. Mo. at Ex. F). At the time of the accident, Defendant Nicholas Maston was in the
process of making a delivery within the scope of his employment as a Delivery Driver for Defendant
Jimmy John’s. (Aff. Of Nicholas Maston, attached to Pl. Mo. at Ex. C, ¶ 3). Nicholas Maston was
driving his family’s 1993 Eagle Vision that is insured by Allstate Insurance Company. (AllstateMaston Insurance Policy, Pl. Mo. at A p. 8). The relevant insurance policy contains the following
Exclusions—What is not Covered
Allstate will not pay for any damages an insured person is legally obligated to pay
Bodily injury or property damage arising out of the use of your insured auto
while used to carry persons or property for a charge, or any auto you are
driving while available for hire by the public. This exclusion does not apply
shared-expense car pools,
the occasional rental of your insured motor home or travel trailer to
others for personal use if a rental premium is shown on the Policy
Declarations for this coverage.
(Pl. Mo. at Ex. A, p. 7).
Saph claims that he was injured as a result of the collision. (Saph’s State Court Second
Amended Complaint, attached to Pl. Mo. at Ex. B, ¶ 9). Saph filed suit in Macomb County Circuit
Court against 1) Nicholas Maston, the driver of the vehicle, 2) Jon Maston, the Allstate insurance
policy owner, 3) Patricia Ann Maston, the Allstate insurance policy co-owner, and 4) Jimmy John’s.
(Pl. Mo. at Ex. B).
Allstate then filed its Complaint for Declaratory Relief (Doc. #1) with this Court on July 19,
2013. Plaintiff Allstate seeks this Court’s order declaring that, based on the business use exclusion,
the insurance policy does not provide coverage for, and does not require Allstate to indemnify the
Mastons for, liability asserted against them in the underlying state court case. (Compl. at 6).
Saph and Jimmy John’s answered the Complaint. (Docs. #16 and #10). Neither of the
Maston Defendants have appeared before the Court. The Clerk of the Court filed an Entry of
Default against the Maston Defendants on October 30, 2013. (Doc. #20 and #21).
Plaintiff filed its Motion for Summary Judgment shortly thereafter. (Doc. #22). Defendant
Saph concurs in the relief Plaintiff seeks. (Doc. #24). On March 10, 2014, this Court ordered
Defendant Jimmy John’s to file a response no later than March 17, 2014 if it opposes Allstate’s
motion. To date, Jimmy John’s has not filed a response to Plaintiff’s motion. The Maston
Defendants have failed to respond or appear in this matter whatsoever.
STANDARD OF DECISION
Under Fed. R. Civ. P. 56(c), summary judgment is proper “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1984), quoting FED. R. CIV. P.
“The party that moves for summary judgment has the burden of showing that there are no
genuine issues of material fact in the case.” LaPointe v. United Autoworkers Local 600, 8 F.3d 376,
378 (6th Cir. 1993). “The moving party may meet its burden by showing that the nonmoving party
lacks evidence to support an essential element of its case.” Barnhart v. Pickrel, Schaeffer & Ebeling
Co., 12 F.3d 1382, 1389 (6th Cir. 1993). The plaintiff must come forth with more than a “mere
scintilla of evidence” in support of his or her position in order to survive summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). “The court must view the evidence, all
facts, and any inferences that may permissibly be drawn from the facts in the light most favorable
to the nonmoving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
This Court Shall Deny Plaintiff’s Motion For Summary Judgment Against The Maston
Defendants Because Plaintiff Has Not Filed A Motion For Default Judgment As To The
Defendants Jon and Nicholas Maston have “failed to plead or otherwise defend” in this
action. Fed. R. Civ. P. 55(a). As such, the Clerk of the Court entered default against Jon Maston
and Nicholas Maston on October 30, 2013. (Doc. #20 and Doc. #21).
Federal Rule of Civil Procedure 55(a) sets forth the process for obtaining judgment against
a defaulted party. The rule states, in pertinent part:
Entering a Default Judgment
(1) By the Clerk: If the plaintiff’s claim is for a sum certain or a sum that can
be made certain by computation, the clerk—on the plaintiff’s request, with an
affidavit showing the amount due— must enter judgment for that amount and costs
against a defendant who has been defaulted for not appearing and who is neither a
minor nor an incompetent person.
(2) By the Court. In all other cases, the party must apply to the court for a
default judgment. A default judgment may be entered against a minor or
incompetent person only if represented by a general guardian, conservator, or other
like fiduciary who has appeared. If the party against whom a default judgment is
sought has appeared personally or by a representative, that party or its representative
must be served with written notice of the application at least 7 days before the
hearing . . . .
Fed. R. Civ. P. 55(b) (emphasis added). Thus, the rule clearly states that once the Clerk of Court
has defaulted a party, the plaintiff must request judgment from the Clerk of Court or file a Motion
for Default Judgment with the Court, whichever is appropriate under the rule.
Here, Plaintiff has done neither. The Court finds that, if Plaintiff believes it is entitled to
judgment against the defaulted Maston Defendants, the proper course of action is to file a Motion
for Default Judgment Pursuant to Federal Rule of Civil Procedure 55. Declaratory relief may be
granted through a default judgment. See Mason v. Genisco Technology Corp., 960 F.2d 849, 850
(9th Cir. 1992). Where, as here, Plaintiff “seeks declaratory relief rather than monetary damages,
default judgment is appropriate if the well-pleaded allegations of the complaint establish the
plaintiff’s right to such relief.” Nautilus Ins. Co. v. Remac America, Inc., 956 F. Supp. 2d 674, 679
(D. Md. July 9, 2013).
Therefore, the Court shall DENY Plaintiff’s Motion for Summary Judgment as to Defendant
Jon Maston Charles Maston, Jr. and Defendant Nicholas Edward Maston. If Plaintiff wishes to
obtain judgment against these two defaulted Defendants, Plaintiff must file a Motion for Default
Judgment in compliance with Federal Rule of Civil Procedure 55.
The Court Shall Grant Plaintiff’s Motion For Summary Judgment As To Defendant
Jimmy John’s and Defendant Lawrence Saph.
Plaintiff claims that there is no genuine issue of material fact as to whether Allstate has a
duty to indemnify the Maston Defendants for liability asserted against them in the underlying
automobile accident case. Plaintiff asserts that the business use exclusion relieves Allstate from any
An insurance policy is a contract—an agreement between two parties. McGuirk Sand &
Gravel, Inc. v. Meridian Mut. Ins. Co., 220 Mich. App. 347, 353 (Mich. App. 1996), quoting AutoOwners Ins. Co. v. Churchman, 440 Mich. 560, 566-67 (1992). “The court must look at the contract
as a whole and give meaning to all its terms.” Id. A clause in an insurance contract is valid if it is
clear, unambiguous, and not against public policy. Id.
Typically, exclusions in an insurance policy should be construed strictly in favor of the
insured. Id., citing Union Mutual Fire Ins. Co. v. Hatch, 385 F. Supp. 59, 63-64 (D.N.H. 1993).
However, “[c]lear and specific exclusions” must be given effect so as to avoid holding an insurance
company liable for a risk it did not assume. McGuire Sand, 220 Mich. App. at 353.
Here, the Allstate-Maston insurance contract contained a clear and specific “business use”
exclusion clause. This clause excludes from coverage any liability incurred while the insured was
using the covered vehicle “to carry . . . property for a charge.” (Pl. Mo. at Ex. A, p. 7). It is
undisputed that this clause is unambiguous.
Further, it is undisputed that, at the time Nicholas Maston rear-ended Saph, he was using the
covered vehicle to carry property, namely Jimmy John’s sandwiches, for a delivery charge. This
fact clearly triggers the business use exception, and no other party has given this Court a reason to
Another court in this District has considered Allstate’s business use exclusion (an identical
clause as the one at issue here) and held that Allstate was not required to indemnify an insured for
damages resulting from a collision while the covered vehicle was being used to deliver pizzas.
Allstate Ins. Co. v. Raines, 2013 WL 827699 (E.D. Mich. 2013) (Borman, J.). The Raines court held
the purpose for [defendant’s] use of the car at the time of the accident was to return
it to Defendant Hungry Howie’s store so that she could collect additional pizzas for
additional deliveries. The accident therefore occurred while [defendant] was using
the car to carry property for a charge, and the business use exception is applicable.
Id. at *5, citing Hunt v. Drielick, 298 Mich. App. 548 (Mich. Ct. App. 2012).
Raines is directly on point with the present case and, thus, highly persuasive. Based on the
unambiguous contract clause and the applicable case law, the Court finds that Plaintiff has
demonstrated that no genuine issue of material fact as to its duties under the insurance contract. No
other party in this case has argued otherwise. Thus, this Court shall GRANT Plaintiff’s Motion for
Summary Judgment Pursuant to Federal Rule of Civil Procedure 56 as to Defendant Jimmy John’s
GPW, Inc. and Defendant Lawrence Byron Saph.
CONCLUSION & ORDER
For the reasons set forth above, Plaintiff’s Motion for Summary Judgment Pursuant to
Rule 56 (Doc. #22) as to Defendant Jimmy John’s GPW, Inc. and Defendant Lawrence Byron
Saph is GRANTED, but Plaintiff’s Motion as to Defendant Jon Charles Maston Jr. and Nicholas
Edward Maston is DENIED.
IT IS SO ORDERED.
S/Sean F. Cox
Sean F. Cox
United States District Judge
Dated: April 17, 2014
I hereby certify that a copy of the foregoing document was served upon counsel of record on
April 17, 2014, by electronic and/or ordinary mail.
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