BROWN et al v. PENN NATIONAL SECURITY INSURANCE COMPANY
Filing
28
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE JOE L. WEBSTER signed on 1/28/2014. For the foregoing reasons, this Court finds that there is genuine issue of material fact as to whether Defendant has a duty and obligation und er NCFRA to provide benefits and coverage for any injuries sustained by Plaintiff on 6/3/2012. The Court finds that there is no genuine issue of material fact as to whether coverage exists pursuant to Policy terms because Mrs. Ferguson was not an &qu ot;insured" as defined by the Policy. Accordingly, the Court RECOMMENDS that Defendant's motion for summary judgment (Docket Entry 19 ) be GRANTED IN PART as to coverage under the Policy, and DENIED IN PART as to claims under the NCFRA. (Daniel, J)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
DELORIS BROWN, et
al.,
Plaintiffs,
v.
PENN NÂTIONAL SE.CURITY
INSURÂNCE COMPANY d/b / a
PE,NN NATIONAL INSURANCE,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
"1.:1.2CY1.204
MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This matter is before the coutt on Defendant's Motion fot Summary Judgment
pursuant to Fedetal Rule of Civil Procedue 56. pocket Entry 1,9). Plaintiffs oppose the
motion. pocket F,ntry 24.) For the following
reâsons,
it will be recommended that
the
Court grant in pat and deny inpaft Defendant's Motion for SummaryJudgment.
I.
BACKGROUND
Plaintiffs Delods Brown, Jeremy Btown and Tiffany Wilmouth (collectively
"Plaintiffs') filed this declaratory judgment action against Defendant Penn National Secutity
Insutance Company ("Penn National")
on
September
27,
201,2 seeking
a
declaratory
judgment with respect to coverage afforded under a business auto insutance policy issued by
Penn National to KTS Cable Installations, Inc. ("KTS") for injuries sustained by Plaintiffs in
an automobile accident involving a vehicle owned by
KTS.
(Compl., Docket Entry
5.)
Angella Ferguson, the wife of KTS Cable employee Bria¡ Fetguson, was ddving the vehicle
when she collided with Plaintiffs' vehicle.
In its motion fot
summary judgment, Penn
National argues that its policy does not extend coverage to Mrs. Fetguson for Plaintiffs'
claims arising from the accident, nor should
it
be held liable under the Nonh Carohna
Financial Responsibility Act ("NCFRI\"¡. Plaintiffs oppose Defendant's motion, assetting
that thete is a genuine issue of matedalfact as to whethet the Penn National policy should
cover Plaintiffs' injuries.
II. STATEMENT
OF FACTS
Penn National issued a business auto policy, policy number AX9 066471.6, to KTS,
with effective dates from July 1, 2011 through July 1,
201,2,
atd a liability limit of $1,000,000
per accident (the "Penn National Policy" or "Policy.") @olicy at 6, Docket Entry 9-1.)
Under the Business Âuto Covetage Form section, the Policy indicates that "the words "you"
and "your" tefet to the Named Insuted shown in the Declarations. The words "we," "us"
and "our" refet
to the Company ptoviding this insurance." (d. at 22.) The Liability
Covetage section discusses the type of covetage and who is insured under the policy:
A.
Covetage
ìØe will pay aL sums an 'insuted' legally must pay as damages because
of 'bodily injury' or 'propetty darnage' to which this insutance applies,
caused by an 'accident' and resulting from the ownership, maintenance
of use of a covered 'auto'.
1,. Who Is An Insured
The following
^re'insuteds":
You fot any covered'auto';
^.
b. Anyone else while using with your petmission a coveted
'aùto'you own, hite, or bottow . . . .
Qd. at23.)
2
The "Named Insured" on the Policy is I(TS. The comp^îy eng
cable line installation, which tequires some
thtoughout the wotkday. @avis Aff.
II3-4,
ges
in tesidential
of its employees to ttavel to various sites
Docket Entty 20.) As part of its business, I(TS
permits some employees to ddve company-owned vehicles fot work-related travel and I(TS
required such employees to sign a I{TS Vehicle.A.greement ("Agteement"). (Id.Ífl 4-6.) The
beginning
of the Agteement
reads: "Agteement between KTS Cable Installations, Inc.
hereinaftet referred to as the company, and the employee named below fot the assignment
of a Company-owned c^t fot business
Docket Entty 23-3 at
2.)
use
with cettain petsonal
use pdvileges." (Agteement,
Paragtaph 7 states, "Petsonal use of the Company vehicle is not
permitted under any circumstances."
(Id.) Paragraph 8
states, "The custodian
will
be
responsible for safe, over-night parking of the vehicle in a home g r^ge, private driveway, or
othet safe legal arcas off public highways." Qd.) KTS conducts a background check on
employees
ptiot to petmitting an employee to drive
^
compaîy-owned vehicle. flWeathers
,{.ff. T 9, Docket Entty 22.) KTS regulatly updates Penn National regarding ddvers who will
be opetating its vehicles. (Penn National's Resp. to Pls.' Fi-tst Req. for Production of Docs fl
9, Docket Etrtry 23-1. at 1,0.)
Btian Ferguson was fìrst employed with KTS Cable as a cable installer in November
201,0.
(8. Ferguson Dep. at 48, Docket E.rtty 25-5.) After ttarring, he signed the Agreement
with I{TS Cable on December 4,201,0 and was assigned
a
KTS van fot work. (Id. at 29-30.)
Mt. Ferguson is matded to Ângella Dixon Hayes Ferguson. Mt. Ferguson testified that Mrs.
Ferguson occasionally drove the KTS van to go to the stote or pick theit kids up after the
engine blew up in their vehicle. (Id. at
33-34.) Mrs. Ferguson dtove the van thtee to fout
.,)
times a week. (Â. Ferguson Dep. at30, Docket E.rtty 25-3.) Mrs. Fetguson knew that the
van belonged to
KTS.
Qd.
at27.) KTS never gve Mrs. Fetguson permission to ddve
v^Ír. @. Ferguson Dep. 37.) Mrs.
^t
the
Ferguson did believe, howevet, that I(TS petmitted
personal use of its company-owned vehicles. (,\. Ferguson Dep.
^t
27.) Mt. Ferguson
also
believed personal use of the KTS vans was permitted based upon past histolT with other
cable companies and what he knew about othet I(TS employees he observed with people in
their company-owned vehicles. @. Fetguson Dep.
^t38-39.)
On June 3, 201.2, Plaintiffs wete involved in an automobile accident with Mrs.
Ferguson. She was driving
to pick up het daughter in the KTS Van assþed to Mt.
Ferguson, with his permission, as she had done on numerous other occasions. (,\. Ferguson
Aff.
I
3, Docket E.rtty 25-2;8. Ferguson
urìaware that she was not supposed
Aff.
1[ 10,
Docket Entry 25-4.) Mts. Fetguson was
to drive the I{TS Van.
(,A..
Ferguson
Âff. I 4.) Mt.
Fetguson rìever discussed the Âgreement with Mrs. Fetguson and never told her that she
was not allowed to drive the vehicle. (Id.; A. Ferguson Dep. at
27;8. Fetguson Aff.
1[ 10.)
Mrs. Ferguson stated she was not aware that het drivet's license was suspendedl because she
did not receive the notification ftom the Depattment of Motor Vehicles. (,{. Fetguson Aff. fl
5; ,{.. Ferguson Dep. at 44-47.) Mr. Ferguson was not aware at the time of the accident that
Mrs. Ferguson's driver's license had been suspended. @. Fetguson Aff.
I
11; B. Fetguson
Dep. at 61; A. Ferguson Dep. at 51.)
t In her deposition,
Mrs. Ferguson testified that she leamed that her license was suspended aftet
receiving a ticket for imptoper equipment in October 2010. (,{.. Fetguson Dep. àt 45-46.) Mts.
Ferguson testified that she thought issues with her license were tesolved aftet she paid the ticket
issued in Oklahom^. (Id.)
4
III.
DISCUSSION
A.
Standard of Review
Pursuant to Rule 56 of the Federal Rules of Civil Procedute, sununary judgment shall
be gtanted
'If
the movant shows that there is no genuine dispute as to any matenal fact and
the movant is entitled to judgment as a matter of
Int'l
Bøs. Machs. Corþ., 135
law." Fed. R. Civ. P. 56(a);
see
Zahodnick
u.
F.3d 911,, 91,3 (4th Cir. 1,997). "Facts are'matenal' when they
might affect the outcome of the
case, and a 'genuine issue' exists when the evidence
would
allow a reasonabl. i"ry to return a verdict for the nonmoving party." News dv Ob:erver Pab/g
Co. u. Raleiþ-Dørhan Airport Aatb., 597 F.3d 570, 576 (4th
Cit. 2010) (citing
Anderson
a.
Libe@ I-nbþ¡ Inc., 477 U.S. 242,248 (1,986)). The parry seeking sunìmary judgment bears the
initial butden of coming forward and demonstrating the absence of a genuine issue of
matenal fact. Temkin a. Frederick Counfl Cnmm'rs, 945 F.2d 716,71.8 (4th Cir. 1,991) (citing
Celotex u. Catrett, 477 U.S.
317,323 (1986). Once the movingp^rq has met its burden, the
non-moving patty must then affirrrrattvely demonstate that thete is a genuine issue of
material fact which requires tnal. Matsashita Elec. Indus. Co. Ltd. u. Zenith Radio CorP.,475 U.S.
574, 587 (1986). Thete is no issue for trial unless thete is sufficient evidence favodng the
non-movingpàtty for a fact findet to teturn a vetdict for thatp^nry. Anderson,477 U.S. at
250; Slluia Deu. Corp. u. Calaert Counfii, Md.,48 F.3d 810, 817 (4th Cir. 1995). When making
the summary judgment determination, the court must view the evidence, and all justifiable
infetences from the evidence,
in the light most favotable to the non-moving p^tq.
Zahodnick,135 F.3d at9'1.3;Haþerin
u.
AbacusTech. C0rp.,1,28F.3d19"1,,L96 (4th Cir. 1,997).
5
Moreover, "once the moving party has met his butden, the nonmoving party must
come forward with some evidence beyond the mere allegations contained in the pleadings to
show thete is a genuine issue for
ttial." Baber
C1t. 1,992). "Permissible inferences
87 4-7
5 (4th
must still be within the tange of reasonable ptobability,
necessalT inference is so tenuous that
u.
F.2d 872,
it is the duty of the court to withdtaw the case from the jury when the
however, and
Motor Co.
u. Hosp. Corp. of An.,977
it rests merely upon speculation and conjectue." Ford
MtDauid,259 tr.2d 261,,266 (4th Cir. 1958). Moteover, the non-movant's proof
must meet the substantive evidenttary standatd of proof that would apply at a tnal on the
merits. Mitchell
u.
Data Gen. Corp., 12 F.3d 1,31,0, 1,31,6 (4th C1t. 1,993), nodfied ou other groands,
Stokes u. IØestinþoase Sauannah Nuer
C0.,420,429-30 (4th Cir. 2000); Del-¿on u. St. JosEh Ho{P.,
lnc.,877F.2d1229,1233 n.7 (4th Cir. 19S9). Unsupported heatsay evidence is insufficient to
overcome a motion fot summary judgment. Euans a. Techs. Applications dv Serv. C¿., 80 F.3d
954,959 (4th Cir. 1996).
In this
case, the interpretation
of the Policy is critical to the determination of liability
on the part of Penn National. "[A]s with all contracts, the goal of consttuction is to anive at
the intent of the parties when the policy was issued." Il/oods u. Insurance C0.,295 N.C. 500,
505,246, S.E.2d 773,777 (1978). Thus, "where a policy defines ù term, that definition is to
be used." C.D. Spangler Const Co. u. Indas. Cran/esltaft dz Engþ Co., lnc.,326 N.C. 1.33,1.42,
388 S.E.2d 557, 563 (1990) (quotations omitted). "fN]ontechnical wotds, not defined in the
policy, are to be given the same meaning they usually receive in otdinary speech, unless the
context requites otherwise." Grant u. Insarance Co., 295 N.C. 39, 42, 243 S.E.2d 894, 897
(1978).
,A.s
noted by Notth Carohna courts:
6
coverage issues, "[t]he interpretation of langtage used in an
insurance policy is a question of law, governed by well-established rules of
. [f]h. policy is subiect to judicial consttuction only where
construction .
the language used in the policy is ambiguous and teasonably susceptible to
more than one interpretation. In such cases, the policy must be construed in
favor of coverage and against the insutet; howevet, if the language of the
policy is cleat and unambiguous, the coutt must enforce the conttact of
insurance as it is written."
In determining
ErieIns. Exch.,153 N.C. App. at 71,1,-1.2,570 S.E.2d at765 (altetations in otiginal) (quoting
Allstate Ins. Co. a. Chatterton,1.35 N.C. Âpp. 92,94-95,518 S.E.2d 81.4,876 (1,999). Moreover,
the Founh Circuit previously stated:
,{. court faces a conceptually difficult task in deciding whethet to gr^ît
surnmary judgment ori a matter of contract interptetation. Only arr
unambiguous wtiting justifies summaq¡ judgment without resort to extrinsic
evidence, and no writing is unambiguous if susceptible to two teasonable
intetpretations. The ftst step for a court asked to grant summary judgment
based on a contract's interpretation is, thetefore, to detetmine whether, as a
matter of law, the contract is ambiguous or unambþous on its face. If a tvørt
proþerþ detennines that the nnlract is anømbiguzus 0n the dispositiue issae, it ma1 then
Proþtrb interpret the contract as a malter of law and grant sammary jadgnent becaase no
interþretiue fac't: are in genuine issae. Even whete a court, however, detetmines as a
mattet of law that the contlact is ambiguous, it may yet examine evidence
extrinsic to the contract that is included in the summary iudgment matedals,
m^ttet of law, dispositive of the interpretative
and, if the evidence is,
^s ^
issue, gtant summarT judgment on that basis. If, however, resort to extrinsic
evidence in the surnmary judgment materials leaves genuine issues of fact
respecting the contract's ptoper inte¡ptetation, sufiìmary judgment must of
course be tefused and interpretation left to the triet of fact.
Il/ashingÍon MeÍro.
Area Transit Aatlt.
u. Potomac Inu. Propeøie¡ Inc., 47
6
F
.3d 231 , 235 (4th Ck.
2007) (internal quotation omitted) (emphasis added).
North Caroltna law places the butden on the parq seeking coverage undet an
insurance policy to prove that covetage exists. Penn Am. Ins. Co. u. Va/ade,28 F. App'x 253,
259 (4thCu.2002);Fortaneln¡. Co. u. Oweas,351 N.C. 424,430,5265.8.2d463,461 (2000).
Thus, the butden here is on Plaintiffs to show that coverage under the Policy exists.
7
B.
Analvsis
Penn National first argues that terms
Ferguson as an insured individual.
of the Policy itself do not include Mrs.
It is clear that I(TS was insured, and thete appeats to be
no dispute that Mr. Ferguson was given petmission to dtive KTS vehicles and was thetefore
"insured" under the Policy. @. Ferguson Dep. at 50-51; Davis Aff.
'1,0-1,1,,13,
Docket Entry 21,;'Weathers Âff.
T1[
I
8;Fitzgerald Aff.
T1[
11, 13.) Plaintiffs argue that Mts. Fetguson
was also given express permission to ddve the I(TS van by vittue
of the language in
Agreement between Mr. Ferguson and I(TS which allowed personal use
the
of the KTS van.
Plaintiffs further argue that the Agreement itself is ambþous on the issue of personal
use
and should be construed against KTS.
The undetsigned believes that an ambiguity exists. The beginning of the .,{.greement
indicates that there may be certain petsonal use privileges, while pangraph 7 states that
"Personal use
Agreement
^t
of the
Company vehicle is not permitted undet any circumstances."
(See
2.) The Agreement also indicates that employees were at minimum permitted
to have the vehicles parked at theit home. (Id.ll9.) There is nothing in the Policy defining
petsonal use pdvileges, which are susceptible to more than one meaning. However, this
ambiguity is not petinent
to the dispositive issue relating to the Policy:
whethet Mts.
Ferguson was given express permission to ddve the I{TS van, and was therefore, insued by
definition in the Policy.
See
Bailelt u. Gen. Ins. Co. of Am.,265
N.C. 675,678,1'44 S.E.2d 898,
900 (1965) ('lWhere express permission is telied upon it must be of an afîlrmative charactet,
directly [and] distinctly stated, cleat and outspoken, and not merely implied or left to
inference."). Personal use privileges,
if
any, telate to Mr. Fetguson's use
8
of the vehicle, not
Mrs. Ferguson's. Therefote, the undersigned finds that Mrs. Fetguson did not have express
permission to drive the KTS van.
Defendant also argues that Mts. Fetguson did not have implied petmission to ddve
the I(TS van. North Carolina case law has held that "one permittee does not have authodty
to select another permittee without specific authorizaion from the named insured." Qd.) In
our
case,
it is clear that Mr. Ferguson is the "original permittee" with
ftom I(TS to drive the I(TS van. (8. Ferguson Dep. at 50-51.; Davis Aff.
lTI 10-11, 13, Docket Entry 21.;'Weathers Aff.
T1T
11, 13.)
exptess permission
I
8;Fitzgenld Âff.
It is also cleat that I(TS did not
give authonzaTton to Mr. Fetguson to select anothet permittee to ddve the I{TS van. (Davis
Aff.
1[
10.) Thus, Mr. Ferguson could not, on his own, designate Mrs. Ferguson
as a second
permittee without ditect authorizaion from KTS. Nationwide Møt. Ins. Co. u. Chanrar, 25 N.C.
App. 482,486,21,4 S.E.2d 438,442 (1,975) ("[A] person, driving only with the permission
of
a permittee, is not consideted as using the automobile with either the express or implied
permission of the ownet. . . .")
Plaintiffs funher argue that Mrs. Ferguson had implied permission
employees toutinely used I{TS vans
because
fot petsonal use with I(TS's knowledge. The North
Carolina Court has previously stated that "implied petmission involves arì infetence atising
from a course of conduct ot relationship between the parties, in which there is mutual
acquiescence ot lack of objection under circumstances signi$'ing assent." Bailey 265 N.C. at
678, 1.44 S.E.2d at 900 (intetnal quotation omitted).
Mr. Ferguson submitted deposition
testimony regarding both I(TS's knowledge of other employees' petsonal use of the vans,
and Mr. Ferguson's witnessing
of a non-employee in the drivet's
9
seats
of a I{TS van. As
such, Plaintiffs argue that implied petmission was grven
to Mrs. Fetguson because
the
culture of I(TS fostered a belief that non-employee spouses could drive the van. Plaintiffs
cite Nationwide Mut. Ins. Co. u. L¿nd where the
North Caroltna Supteme court stated, "It may
be found that the insuted has given implied permission whete the named insured
has
knowledge of a violation of insttuctions and fails to make a significant ptotest." 318 N.C.
551.,563,350 S.E.2d 500, 506-07 (1,986) (internal quotation omitted).
Plaintiffs' argument fails for two reasons. Fitst, Mt. Ferguson admits that he never
actually sâw a non-employee physically move ot drive a I{TS van, and that pottions of his
testimony were purely speculative. (B. Fetguson Dep.
^t
40-41,.) Secondly, even
if
such
culture exists, such acquiescence by KTS is irrelevant to Mrs. Ferguson's personal use of the
KTS van because I{TS was unaware of such specifìc use.
See
In¡. Co. of N. Arn.
u.
Aetna Ufe
dy Cas. Co., 88 N.C. ,A,pp. 236, 241.,362 S.E.2d 836,839 (1987) ("Thete [was] no evidence
that femployer] had ever seen [third-paty drivet] ot that [employer] had any knowledge of
fthird-party driver's] operation
of its car until aftet the collision giving rise to
this
litigation."); Bailey 265 N.C. at 678,1.44 S.E.2d at 900 (no implied petmission whete named
insured lacked knowledge of driver's use of the vehicle); Osmanqada u. Eldridge Conrete Const.,
Inc., Case No. 3:10-CV-1., 2011 WT, 926235 at *3 CX/.D. Va. Mar. '15, 201'1)
("[,\]
showing
that the owner never met the ddver is genetally fatal to an implied permission claim.").
Since KTS was unaware of Mts. Ferguson's use of the vehicle prior to and on the day of the
incident, Plaintiffs'implied permission claim fails. Thetefore, the underslgned concludes
^
as
m^tter of law that thete is no genuine issue of rrraterial fact as to whether Mrs. Fetguson
had exptess or implied permission to ddve the I{TS van on the day of the incident.
10
Couerage under the
North Carolina Finanùal
Responsibili4t
Act
Lastly, Defendant argues that coverage does not lie undet the NCtrRÂ because Mts.
Ferguson was not in lawful possession
of the KTS van at the time of the incident. The
NCFR-,\ tequires automobile insuters
to provide
$30,000.00 per person and $60,000.00 per accident
coverage
if
of a minimum
coverage
of
the individual dtiving the vehicle at the
time of the accident was eithet in "lawful possession" of the vehicle, ot driving with the
express or implied permission
of the named insured. .1¿¿ N.C. Gen. Stat. S 20-279.21þX2).
"IJnder North Carohna law, limited covetage for drivers in 'lawfui possession' of a vehicle
must be 'written into every motor vehicle liability policy as a matter of law."' Osmanlada,
201,1,
WL 926235 at x2 (quoting North
Carolina Farm Bareau
Mat
Ins. Co. u. Simþi¿ø 198 N.C.
,A.pp. 190, 192,678 S.E.2d 753,755 (2009).
ìØith tegard
to "lawful
possession," the
Notth
Carohna court has held that
"permission exptessly granted by the original permittee is sufficient for purposes of the
statute to place the second permittee
in 'lawful
possession"' under N.C. Gen. Stat. S 20-
279.21þ)Q). Chantos,25 N.C.,\pp. at 487,2"1.4 S.E.2d
possession of a vehicle . . .
if
^t442.
"[.{] person is in lawful
he is given possession of the automobile by the automobile's
owner or ownerrs permittee undet a good faith belief that giving possession of the vehicle to
the third p^tq would not be in violation
Bareaa Ins. Co. a. Nationwide
of
any law
ot conttactual obligation." N.C.
Farnt
Mat. In¡. Co.,1.68 N.C. Âpp. 585, 587, 608 S.E.2d 1.12,1,1,3 (2005)
(internal quotation omitted). The third pârty must also take possession in good faith belief
l1
and"withoutnotice of
App. 517,
any
521., 439 S.E.2d
restrictionsonhisuse." NationwideMøt Ins.Co.u.Baer,113N.C.
202,205 (1,994).,
Defendant argues that the present case is similar to the Broøþton case. In lowa Nat.
Mat. In¡. Co. u. Broaþîon,Btdget Rent A Car rented
a
vehicle to Cana:way pursuant to written
agreement and on condition that no one under the age
of trventy-one would ddve the car.
283 N.C. 309,313,196 S.E.2d 243,246 (1973). Cauaway permitted a nineteen year old to
drive the vehicle and he was subsequently involved in an accident. Id. The coutt ín Broøgltton
held that "[t]he owner obligated itself to be responsible
Carcaway could not,
for
Carcaway's negligence but
in violation of his own âgreement, make the owner tesponsible fot [the
nineteen yeat old's] negligence." Id. at31.4,1,96 S.E.2d at247.
The undersigned finds that
in
Brougbton,
Broaghton
is distinguishable ftom the present case in that
itwas cleat that the written rental agreement was unambiguous. Here, however,
the ambþous terms in the Âgreement and Mt. Ferguson's knowledge of other employees'
petsonal use of the I{TS vans create a question
of
fact as to whether Mr. Ferguson believed
he was in violation of any contractual obligation when he permitted Mrs. Fetguson to drive
the van. Futthermore, Mr. Ferguson was rìot knowledgeable of Mrs. Ferguson's suspended
license at the time of the incident. These facts create a genuine issue of matedal fact as to
whether Mr. Ferguson had a good faith belief that Mrs. Ferguson was permitted to dtive the
I(TS van. The coutt notes that I(TS appears extremely cautious as it telates to employee
2 In
District of Virginia discussed the North Carolina dings in Baer and
regarding whethet it is sufficient to show only the good faith belief of the third party ddvet,
or whetlret it is necess^ry to also show the good faith belief of the original permittee. Osmanqada,
201,1, WL 926235 at *5. The patties in the present case do not address this issue. Because the Coutt
finds a genuine issue of matettal fact exists as to both Mt. and Mts. Ferguson's good faith belief, it
will not frrrther addtess this issue.
Osmanqada, the Westetn
Belasco
12
ddvers by having them sign a vehicle agreement, conducting motor vehicle backgtound
checks, and keeping Defendant abreast of the employees authodzed to ddve. Flowever, Mt.
Ferguson's belief regarding othet employees' petsonal use
ambiguity
in the Agreement
bears upon the outcome
of the KTS vans and the
of this case as it telates to "lawful
possession." With regard to Mrs. Ferguson's good faith belief, based upon her deposition
testimony and afftdavít, sufficient evidence of a genuine issue
of
matenal fact exists as to
whether she had a good faith belief that she took possession of the van without notice that
it
violated "any law or contractual obligatiorì." N.C. Farrn Bureau Ins. Co., 168 N.C. App. at
587, 608 S.E.2d at1,'1,3. Moreover, Mrs. Ferguson did not need KTS'permission to ddve the
KTS van to be in "lawful possession." Caison u. Nationwide Ins, Co.,36 N.C. App. 1'73,178,
243 S.F^2d 429, 432 (1973). Because the Court finds a genuine issue exists âs to Mt. and
Mts. Ferguson's good faith belief of Mrs. Ferguson's lawful possession, surrunary judgment
should not be granted in favor of Defend^ntas to covetage undet the NCtrRÂ.
IV. CONCLUSION
For the foregoing reasons, this Coutt finds that thete is a genuine issue of matedal
fact
^s
to whether Defendant has a duty and obligation under the NCFRA to ptovide
benefits and coverage for any injuries sustained by Plaintiffs on June 3,201'2. The Coutt
finds that there is no genuine issue of material fact as to whether coverage exits pursuant to
Policy terms because Mts. Fetguson was not an "insured" as defined by the Policy.
Accordingly, the Court RECOMMENDS that Defendant's motion for summary judgment
pocket Er,try 19) be GRANTED IN PART as ro
DENIED IN PART
as
to claims under the NCFR
1,3
{..
coverage undet the Policy, and
L\T'dxrer
Strtr s hlrtgi strrte Jucþ
January 28,201.4
Dutham, Notth Carohna
t4
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