EMCASCO Insurance Company et al v. Cartwright et al
OPINION AND ORDER: For the reasons stated, Plaintiffs' motion for summary judgment (ECF No. 64 ) is GRANTED and Defendants' cross-motion for summary judgment (ECF No. 68 ) is DENIED. DATED this 17th day of November, 2021, by United States Magistrate Judge John V. Acosta. (pjg)
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UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
EMCASCO INSURANCE COMPANY, an
Iowa corporation; EMPLOYERS MUTUAL
CASUALTY COMPANY, an Iowa
corporation; and GREAT AMERICAN
INSURANCE COMPANY, an Ohio
Case No.: 03:20-cv-00953-AC
OPINION AND ORDER
JAMES CARTWRIGHT, an individual and
as the appointed guardian ad litem for
MATTHEW BARBEE; SHERRIE UTLEYBARBEE, an individual; and DARBY
NATIONWIDE INSURANCE COMPANY,
an Ohio corporation,
ACOSTA, Magistrate Judge:1
1 The parties have consented to jurisdiction by magistrate judge, pursuant to 28 U.S.C. §
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EMCASCO Insurance Company, Employers Mutual Casualty Company (“EMC”), and
Great American Insurance Company (collectively “Plaintiffs”) bring this declaratory judgment
action against Defendants James Cartwright, Sherrie Utley-Barbee, Darby McBride (“McBride”),
and Nationwide Insurance Company (“Nationwide”) seeking a declaration that Plaintiffs have no
duty to defend or indemnify McBride in the underlying lawsuit.2 Currently before the court are
Plaintiffs’ motion for summary judgment and Defendants’ cross-motion for summary judgment.
Plaintiffs= motion is granted and Defendants= motion is denied.
The following facts are undisputed unless noted. At all relevant times McBride, a resident
of Banks, Oregon, was employed as a service technician by Russ Auto, Incorporated (“Russ Auto”)
in its Beaverton dealership. (JSAF at && 6-7.) At all relevant times Russ Auto had the following
liability insurance policies:
a Commercial Auto policy with EMCASCO Insurance Company (“EMCASCO”)
policy number 5R3-26-09-18 (“the EMCASCO Policy”);
a Commercial Umbrella policy with Employers Mutual Casualty Company
(AEMC¨), policy number 5J3-26-09-18 (“the EMC Policy”); and
an Excess Liability policy with Great American Insurance Company (“Great
American”), policy number TUE 4-29-74-17-02 (“the Great American Policy”).
(Id. at & 2.)
2 Nationwide is McBride’s personal automobile insurer and is providing a defense to
[McBride] in the underlying lawsuit. (Joint Statement of Agreed Facts, ECF No. 63 (“JSAF”), at
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On December 13, 2017, McBride worked from 7:00 a.m. to 4:30 p.m. at the Russ Auto
dealership in Beaverton, Oregon. (Id. at & 7.)
On December 13, 2017, Russ Auto hosted a holiday party at Big Al’s restaurant and bar in
Beaverton, Oregon from 8:00 p.m. to 11:00 p.m. (Id. at & 8.) Russ Auto did not require its
employees to attend the holiday party. (Id.) McBride, however, “viewed the holiday party at
Big Al’s as a work event and believed it was an opportunity to meet and network with other Russ
Auto employees.” (Id. at 11.) McBride, therefore, attended the holiday party, and he drove
himself and a co-worker to the party, arriving at approximately 8:00 p.m. (Id. at 10.) Russ Auto
provided party attendees with food, two drink tickets, and bonus checks. (Id. at & 13.)
McBride stated that “[t]owards the end of the party,” Russ Auto Human Resources Director
Tanya Hellerstedt told him that “[t]he party is continuing at the Brickyard Tavern. I hope to see
you there.” (Decl. of Vicki Smith, ECF No. 65 (“Smith Decl.”), Ex. 3 at 5.) He went to the
Brickyard Tavern where he saw “a couple dozen” Russ Auto employees. (Decl. of Travis Eiva,
ECF No. 69 (“Eiva Decl.”), Ex. 5 at 20.) Russ Auto, however, did not provide food or drinks at
Brickyard Tavern. (Id. at 29.) McBride purchased a drink and stayed “a couple of hours.” (Id.
at 20.) After he left the Brickyard Tavern, he stopped and purchased food at a Taco Bell at 12:57
a.m. on December 14, 2017. (Id., Ex. 8.) McBride ate the food and took a nap in his car before
he began driving home to Banks, Oregon.
At some point before 1:24 a.m. on December 14, 2017, Matthew Barbee (“Barbee”) was
driving on Highway 26 and got a flat tire. (JSAF at & 16.) Barbee pulled off the road and waited
in his vehicle for a tow truck to arrive. (Id.) At 1:24 a.m., McBride was driving westbound on
highway 26 when his vehicle left the lane of travel and struck Barbee’s vehicle waiting on the side
of the road. (Id.) Barbee suffered “serious and permanent bodily injuries.” (Id.)
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On June 25, 2019, Barbee, through his appointed guardian at the time, Sherrie UtleyBarbee3 (“Utley-Barbee”) filed an action against Russ Auto and McBride in Washington County
Circuit Court (“the underlying lawsuit”).
Ultimately, McBride “admitted allegations of
negligence and partial allegations of partial damages in his Answer to the amended complaint.
The parties then stipulated to a judgment against [McBride] . . . for $33,000,000.” (JSAF at &
17.) Cartwright and Utley-Barbee have settled their claims against Russ Auto.
On June 9, 2020, McBride tendered the underlying lawsuit to EMCASCO and EMC4 and
“asked for defense and indemnity under the Auto Policy and the Umbrella Policy.” (Am. Compl.,
ECF No. 5, at & 14.)
On June 12, 2020, EMCASCO and EMC declined McBride’s tender on the basis that their
policies provide that Russ Auto’s employees are insureds only when the employees are “using a
covered ‘auto’ you do not own, hire or borrow in your business or personal affairs” and, according
to Plaintiffs, at the time of the accident McBride was not using his auto in the business or personal
affairs of Russ Auto. (Id. at & 15.)
On June 12, 2020, Plaintiffs filed a declaratory judgment action in this court seeking a
declaration that EMCASCO and EMC do not have a duty to defend or indemnify McBride in the
underlying lawsuit. On August 17, 2020, Plaintiffs filed an Amended Complaint in which they
add Great American Insurance Company as a plaintiff and seek a declaration that EMCASCO,
EMC, and Great American Insurance Company do not have a duty to defend or indemnity McBride
At some point James Cartwright (“Cartwright”) was substituted as Barbee’s guardian.
In their Amended Complaint, Plaintiffs note although “McBride never tendered the
Underlying Lawsuit to Great American, Great American has become aware of the action” and
asserts its umbrella policy does not afford coverage to McBride. (Am. Compl. at & 17.)
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in the underlying lawsuit.
Plaintiffs now move for summary judgment on the basis that McBride was not an insured
under any of their insurance policies at the time of the accident. Defendants move for summary
judgment on the basis that McBride was an insured under all of the policies at the time of the
Summary judgment is appropriate “if the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c). Summary judgment is
not proper if material factual issues exist for trial. Warren v. City of Carlsbad, 58 F.3d 439, 441
(9th Cir. 1995).
The moving party has the burden of establishing the absence of a genuine issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence
of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify
facts which show a genuine issue for trial. Id. at 324. A nonmoving party cannot defeat
summary judgment by relying on the allegations in the complaint, or with unsupported conjecture
or conclusory statements. Hernandez v. Spacelabs Med., Inc., 343 F.3d 1107, 1112 (9th Cir.
2003). Thus, summary judgment should be entered against Aa party who fails to make a showing
sufficient to establish the existence of an element essential to that party=s case, and on which that
party will bear the burden of proof at trial.@ Celotex, 477 U.S. at 322.
The court must view the evidence in the light most favorable to the nonmoving party. Bell
v. Cameron Meadows Land Co., 669 F.2d 1278, 1284 (9th Cir. 1982). All reasonable doubt as to
the existence of a genuine issue of fact should be resolved against the moving party. Hector v.
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Wiens, 533 F.2d 429, 432 (9th Cir. 1976). Where different ultimate inferences may be drawn,
summary judgment is inappropriate. Sankovich v. Life Ins. Co. of N. Am., 638 F.2d 136, 140 (9th
However, deference to the nonmoving party has limits. The nonmoving party must set
forth “specific facts showing a genuine issue for trial.” FED. R. CIV. P. 56(e) (emphasis added).
The “mere existence of a scintilla of evidence in support of the plaintiff=s position [is] insufficient.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Therefore, where “the record taken
as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine
issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(internal quotation marks omitted).
Insurance Contract Interpretation
Under Oregon law the construction of a contract is a question of law for the court.
Holloway v. Republic Indem. Co. of Am., 341 Or. 642, 649 (2006)(citing Hoffman Const. Co. of
Alaska v. Fred S. James & Co. of Ore., 313 Or. 464, 470 (1992)).
the intention of the parties to the insurance policy.”
The court’s task is to “ascertain
Id. at 649-50 (citing Or. Rev. Stat. '
The court accomplishes this task “based on the terms and conditions of the insurance
Generally when “evaluating whether an insurer has a duty to defend[,] the court looks only
at the facts alleged in the complaint” and the terms of the policy. Ledford v. Gutoski, 319 Or.
397, 400 (1994).
See also Nat’l Union Fire Ins. Co. of Pittsburgh v. Starplex Corp., 220 Or. App.
560, 573 (2008)(“[w]hether an insurer has a duty to defend an action against its insured depends
on two documents:
the complaint and the insurance policy.”). A narrow exception to this rule
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exists, however, “‘in instances when courts are attempting to determine whether an organization
or individual was an insured under a policy’” and it is not possible to do so using only the complaint
in the underlying lawsuit and the policy.
State Farm Fire & Cas. Co. v. Evans Constr. & Siding
Corp., No. 3:19-CV-00972-BR, 2019 WL 4723783, at *3 (D. Or. Sept. 26, 2019)(quoting
Clarendon Am. Ins. Co. v. State Farm Fire & Cas. Co., No. 3:11-cv-01344-BR, 2013 WL 54032,
at *6 (D. Or. Jan. 3, 2013)).
The duty to indemnify “is independent of the duty to defend.” Ledford, 319 Or. at 403
(citation omitted). “Even when an insurer does not have a duty to defend based on the allegations
in the initial complaint, the facts proved at trial on which liability is established may give rise to a
duty to indemnify if the insured's conduct is covered.”
Id. (citation omitted).
“In order for
summary judgment to be appropriate on the duty to indemnify, there must be no genuine issue of
material fact, and the moving party must be entitled to judgment as a matter of law.” Id. (citations
Under Oregon law when “an insurance policy explicitly defines the phrase in question, [the
Court] appl[ies] that definition.” Holloway, 341 Or. at 650.
See also Joseph Educ. Ass’n v.
Joseph Sch. Dist. No. 6, 180 Or. App. 461, 467 (2002).
If the policy does not define the phrase in question, [the court] resort[s] to
various aids of interpretation to discern the parties’ intended meaning.
Under that interpretive framework, we first consider whether the phrase in
question has a plain meaning, i.e., whether it is susceptible to only one
plausible interpretation. If the phrase in question has a plain meaning, we
will apply that meaning and conduct no further analysis. If the phrase in
question has more than one plausible interpretation, we will proceed to the
second interpretive aid. That is, we examine the phrase in light of the
particular context in which that [phrase] is used in the policy and the broader
context of the policy as a whole. If the ambiguity remains after the court
has engaged in those analytical exercises, then any reasonable doubt as to
the intended meaning of such [a] term will be resolved against the
insurance company. However, . . . a term is ambiguous . . . only if two or
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more plausible interpretations of that term withstand scrutiny, i.e.,
continue to be reasonable despite our resort to the interpretive aids
Id. (quotation omitted).
II. Policy Language
EMCASCO policy provides:
Covered Autos Liability Coverage
We will pay all sums an “insured” legally must pay as
damages because of “bodily injury” or “property damage” to
which this insurance applies, caused by an “accident” and
resulting from the ownership, maintenance or use of covered
(Smith Decl., Ex. 1A, p. 22.)
The EMCASCO policy defines “covered auto” by reference to
“numerical symbols [that] describe the ‘autos’ that may be covered ‘autos.’”
(Id. at 21.)
Specifically, “[t]he symbols entered next to a coverage on the Declarations [page] designate the
only ‘autos’ that are covered ‘autos.’”
(Id.) On the Declarations page of Ross Auto’s policy
“covered autos” are designated under symbol 21.
(Id. at 2) The policy describes symbol 21 as
“any auto.” (Id. at 21.) “Insured” is defined in relevant part as: “Your ‘employee’ while using
a covered ‘auto’ you do not own, hire or borrow in your business or your personal affairs.” (Id.
at 23.) The EMC and Great American policies provide excess coverage that relies on the same
definition of “insured” as the EMCASCO policy. The parties agree there are not any existing
disputes of material fact and that the question at issue is purely legal:
insured under Plaintiffs’ policies at the time of the accident.
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whether McBride was an
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The parties agree that for McBride to qualify as an insured under the policies he must
1) he was an employee of Russ Auto at the time of the accident; 2) he was driving an
automobile; 3) Russ Auto did not own, hire, or borrow the automobile; and 4) McBride was
“using” the automobile “in” the “business or [ ] personal affairs” of Russ Auto.
For purposes of
the parties’ motions for summary judgment Plaintiffs do not dispute that McBride has established
the first three items.
The parties also agree that it is not possible to determine from the policies
and the complaint in the underlying lawsuit whether McBride is an insured under Plaintiffs’
policies and, therefore, it is appropriate for the court to consider extrinsic evidence.
Because the policies do not define the terms “business” or “personal affairs”, the Court
must determine whether that term has a plain meaning., “i.e., whether it is susceptible to only one
Holloway, 341 Or. at 650.
defined as “to put into action or service:
purpose or action by means of.”
Plaintiffs assert the word “using” is
to have recourse to or enjoyment of” or “to carry out a
(Pls.’ Mot. for Summ. J., ECF No. 64, at 9 (quoting Webster’s
Third New Int’l Dictionary at 2523-24 (1976 ed.))
Plaintiffs assert “in” is “a function word to
indicate location or position in space or in some materially bounded object.”
Webster’s Third New Int’l Dictionary at 1139.))
According to Plaintiffs, therefore, the phrase
“using a covered auto . . . in [Russ Auto’s] business or . . . personal affairs” means an employee is
driving an automobile to carry out a purpose of Russ Auto at the time of the incident.
contend the policies do not cover an employee using an automobile for his own purposes at the
time of the accident.
Plaintiffs note there is not any Ninth Circuit case on point and few cases that discuss who
is an insured under the policy provision at issue here, but assert their position is supported by the
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unpublished decision in Jeffries v. Aetna Casualty and Surety Company, No. CA-98-608-5-F
(E.D.N.C. Aug. 25, 1999), aff’d 211 F.3d 1265 (4th Cir. 2000).
(Smith Decl., Ex. 4.) In Jeffries
Aetna Casualty and Surety Company (“Aetna”) issued a business auto insurance policy to the
News and Observer Publishing Company (“NOPC”) that included the following:
employee of yours is an ‘insured’ while using a covered ‘auto’ you don’t own, hire, or borrow in
your business or personal affairs.”
(Smith Decl., Ex. 4 at 2.) Jeffries was employed as a reporter
by NOPC, which held a retirement party planned by NOPC’s president.
NOPC’s Board of
Directors sent the party invitations to guests “almost all of whom were employed by or otherwise
associated with” NOPC. Id. The party was held at the home of NOPC’s president and NOPC
paid all of the party expenses including food, wine, beer, liquor, and decorations.
received an invitation to the party but was not required to attend, was not compensated for the time
he spent at the party, and did not perform any of his usual job functions while at the party.
consumed “three or four” alcoholic beverages “in the span of a few hours” while he was at the
Id. at 3.
Jeffries left the party around 10:00 p.m., and began driving home in his vehicle.
Jeffries did not stop anywhere after he left the party.
On his drive home Jeffries collided with an
automobile driven by Caleb Camalier, causing Camalier to sustain serious injuries.
Jeffries was charged with driving while impaired and failing to stop for a red light, and he
entered a guilty plea to both charges.
Camalier’s family filed suit against Jeffries, NOPC, and
NOPC’s president related to the accident.
Jeffries requested that Aetna provide him with a
defense in the underlying lawsuit and Aetna filed a declaratory-judgment action seeking a
declaration that Jeffries was not an insured under the policy, because he was not using his vehicle
“in [NOPC’s] business or . . . personal affairs” at the time of the accident. Id. at 6.
The court noted as an initial matter that the phrase “course and scope of employment” did
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not appear in the policy provision at issue and, therefore, that the “language [of the provision]
means something more or different than whether Jeffries was acting within the course and scope
of his employment as that phrase is used in respondeat superior law.” Id. at 8.
court concluded the provision was not ambiguous.
Specifically, the court found the phrase “using
. . . [an auto] in [an employer’s] business . . . or personal affairs” means using the auto to further
or pursue the employer’s business or personal affairs.” Id. at 9 (emphasis in original).
words, the ordinary language of the [provision] means that in order to be an insured under the
[provision], an employee of the [NOPC] must be using an auto to further or pursue the [NOPC’s]
The court concluded the phrase “‘using . . . in’ is much narrower than the two
phrases ‘using in connection with’ or ‘arising out of’ an employer’s business or personal affairs
which both connote merely a broad causal connection.” Id. The court offered the following
examples of furthering or pursuing NOPC’s business under this narrower meaning as “activities
that aid or benefit the N&O in some fashion”:
[A]n employee-reporter . . . driv[es] to and from a town council meeting in order to
report on it. An employee-reporter . . . driv[es] to get ice for guests at an [NOPC]
social function the expense of which [NOPC] is deducting from its corporate taxes
because the function was an “ordinary and necessary” business expense. . . . [A]n
employee-reporter . . . shuttl[es] guests in his personal automobile to and from the
parking lot and site of such a party.
Id. at 9. Applying the interpretation of the provision at issue the court concluded Jeffries was not
an insured under the Aetna policy because he was not “‘using’ his automobile ‘in’ [NOPC’s]
personal affairs.” Id. at 10 (emphasis in original). Specifically,
the undisputed facts in this matter demonstrate that Jeffries was “using” his
automobile in his own personal affairs. Jeffries was a guest at a party which he
voluntarily chose to attend. He voluntarily chose to consume alcohol, eat and
socialize with friends at that party. He was not acting in his capacity as a reporter
at the party. He was not furthering or pursuing [NOPC’s] efforts to hold the
party - e.g., he was not driving to get ice for the party or driving to bring other
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guests to and from the party. Furthermore, he voluntarily chose to drive home
after attending the party and was not furthering or pursuing [NOPC’s] personal
affairs in so doing. Simply stated, Jeffries was driving on a personal mission to
attend a social function and return home therefrom, and was not doing so “in”
[NOPC’s] personal affairs.
Similarly, in Burke v. Thibodeaux, the court found an endorsement that read “[a]ny
employee of yours is an ‘insured’ while using a covered ‘auto’ you don’t own, hire, or borrow in
your business or your personal affairs” was unambiguous. 726 So. 2d 65, 67 (5th Cir. Dec. 16,
1998). The court concluded that endorsement meant “that the employee is covered by the . . .
policy when he/she is driving a non-owned (hired or borrowed) auto while in the pursuit of [the
company’s] business or personal affairs.”
Here, the court concludes Plaintiffs have
established that their proposed interpretation of the phrase, that an insured is an employee driving
an automobile to carry out a purpose of Russ Auto at the time of the incident, is a plausible
definition of the phrase.
Defendants, however, assert that their proposed interpretation is the only plausible
interpretation or, in the alternative, that their proposed interpretation is also plausible and,
therefore, the phrase does not have a “plain meaning”, and thus the court must examine the phrase
in light of the broader context of the policy as a whole.
Defendants assert “personal” is defined
to include “of or relating to a particular person; affecting one individual or each of many
individuals; peculiar or proper to private concerns; not public or general.” Webster’s Third New
Int’l Dictionary at 302.
“Affairs” is defined to mean “matter [or] concern.”
Id. at 35.
According to Defendants, these definitions, when taken together, “support an interpretation of the
term ‘personal affairs’ to mean matters or concerns of or relating to” Russ Auto. (Defs.’ Mot. for
Summ. J., ECF No. 68, at 13.)
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Defendants further assert that the term “personal affairs” used in the disjunctive with the
term “business” indicates “these matters and concerns should not be limited to, and in fact may be
necessarily exclusive of matters that further the company’s ‘business.’” (Id.) Defendants assert
the holiday party was both a business and a personal affair of Russ Auto; therefore, they contend,
coverage turns on whether McBride was using the vehicle “‘in’ the above affairs.”5 (Id. at 14.)
Defendants disagree with Plaintiffs’ assertion that the dictionary definition of “in” must “indicate
location or position in space or in some materially bounded object.” Webster’s Third New Int’l
Dictionary at 1139.
Defendants point out that in Powell v. Bunn, 198 Or. App. 21 (2005), rev’d
on other grounds 341 Or. 306 (2006), the court interpreted the meaning of the word “in” as used
in ORS ' 659.850(2)6 more broadly than the definition urged by Plaintiffs here. Specifically, the
court noted the definition of “in” found in Webster’s Third New International Dictionary provides
“in” can also be used “to ‘indicate close connection by way of implication or active participation.’”
Powell, 198 Or. App. at 41 (quoting Webster’s Third New Int’l Dictionary at 1139.)
Defendants conclude that applying the definition of “in” set out in Powell indicates
coverage “turns on whether [McBride] was using the vehicle to transport persons or things in
connection with or due to the course of the affair.” (Defs.’s Mot. for Summ. J. at 16.) The
definition of “in” set out in and applied by the court in Powell, however, does not suggest a “but
for” or “due to” level of connection is sufficient. As noted, the Powell court defined “in” to
indicate a close connection. Thus, even pursuant to the definition used in Powell, coverage here
The indeterminate phrasing makes it not entirely clear, but it appears “the above affairs”
refers to Russ Auto’s holiday party.
Oregon Revised Statute ' 659.850(2)(2005) provided in pertinent part: “No person in
Oregon shall be subjected to discrimination in any . . . school . . . activity.”
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would turn on whether McBride was using his vehicle in close connection with Russ Auto’s
holiday party at the time of the accident.
Defendants also rely on Ureta v. Thompson, 892 F.2d 426 (5th Cir. 1990), to support their
interpretation of the phrase at issue. In Ureta, Segismundo Ureta (“Ureta”) was driving his own
vehicle to a birthday party that he was attending in order to “develop patient referrals” when
Matthew Browne’s vehicle struck Ureta’s vehicle and killed him. Ureta’s wife (“the plaintiff”)
brought a wrongful death action against a number of parties including United States Fidelity &
Guaranty Company (“USFG”). The plaintiff alleged Ureta was covered by an insurance policy
issued to the Browne-Hardy Clinic, a partnership of medical professionals. Ureta was not an
individual partner of Browne-Hardy, but “Segismundo Z. Ureta A Professional Medical
Corporation” (“UAPMC”) was a partner in Browne-Hardy and Ureta was an employee of
UAPMC. The plaintiff asserted, among other things, that at the time of the accident Ureta was
covered under the “non-owned autos section” of the USFG policy that provided coverage for
“those autos [BrowneBMcHardy] do[es] not own, lease, hire, or borrow which are used in
[BrowneBMcHardy] employees or members of their households but only while used in
[BrowneBMcHardy’s] business or personal affairs.” Id. at 429. The court concluded the nonowned autos provision meant that if Ureta “was to attend the party in connection with
BrowneBMcHardy business, then the car would be a covered vehicle at the time of the accident.”
Ureta, however, is distinguishable because the language of the policy in Ureta specifically
included the statement that the auto was used “in connection with” the company’s business,
whereas the policy provision here does not include the phrase “in connection with.” The policy
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here requires the auto to be used “in [Russ Auto’s] business or . . . personal affairs.” In addition,
in Ureta, unlike in this case, Ureta did not proceed from the party that he arguably was going to
attend for “a purpose in connection with the company’s business”, to an entirely different gathering
that was indisputably not sponsored by the company nor did he then proceed to a third location –
buying and eating food, then sleeping in his car before venturing out – for a purpose that was
entirely personal before he was involved in the accident. At most Ureta suggests an individual
who uses his own vehicle to attend a party in close connection with a company’s business purpose
might be covered under a policy that contains language different from that at issue here.
Although it is a close question, the court concludes that to the extent Defendants urge a
definition of the provision at issue that requires Defendants to show that McBride was using his
“vehicle in close connection with” Russ Auto’s holiday party, that definition is a second plausible
interpretation of the provision.
B. Policy Context
Because the court has concluded the provision at issue does not have a clear “plain
meaning,” the court must examine the provision in the broader context of the policy as a whole to
determine its meaning. See Bighorn Logging Corp. v. Truck Ins. Exch., 295 Or. App. 819, 829
(2019)(“If there is more than one plausible interpretation, we examine the word or phrase in the
context in which it is used in the policy and the broader context of the policy as a whole.”).
Plaintiffs point out that the provision at issue specifies an employee must be using his auto
“in [Russ Auto’s] business or . . . personal affairs.” The provision does not include the phrase
“arising out of” or “in connection with.” Plaintiffs assert if they had intended the provision at
issue to apply in connection with or arising out of an employee’s use of a covered automobile, they
would have included that language in the provision, as they did in other areas of their insurance
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policies. For example, the EMCASCO policy uses the phrase “in connection with” several times
in provisions other than the one at issue. (See, e.g., Smith Decl., Ex. 1A at Section I &&
D(4)(d)(2)(b), D(4)(m); Section II && A(2)(f)(1)(c)(ii), A(2)(f)(1)(d), A(2)(i); Section V && B(1)(4), N(3)-(5)) The EMC policy also uses the phrase “in connection with” several times in
provisions other than the one at issue. (See,.e.g., Smith Decl., Ex. 1B at Section I && A(2)(g)(2),
A(2)(s)(8), B(15)(h); Supplementary Payments & 3(f)(1)(b); Section IV & 3(c)(1); Section 5 &&
9(c)-(d), (g), 27(a)(2), 28(a)(2). In addition, the EMCASCO policy uses the phrase “arising out
of” numerous times in provisions other than the one at issue. (See, e.g., Smith Decl., Ex. 1A at
Section I && D(4)(d)(1), D(4)(e)(1), D(4)(h), D(4)(p), D(4)(q); Section II && A(2)(d)(1),
A(2)(d)(3), A(2)(f)(1)-(2), A(2)(g), A(2)(l), A(2)(m), A(2)(n), B(1), B(2)(b)-(d), B(2)(f)-(q),
D(5)(a)(4), D(6)(b)(2), F(1)(a)(1)(b), F(1)(b)(2); Section III && A, B(1), B(3), B(6)-(9); Section
B(5)(e)(2), B(7)(c); Section V && B(1)-(2), B(4), G, N(7)(a), N(7)(e), R.) These
examples indicate that both EMCASCO and EMC explicitly use the terms “in connection with”
and “arising from” when they intend those terms to be applicable, and that individuals purchasing
EMCASCO and EMC policies also understand those terms explicitly apply only when they are
used and do not apply when they are not used.
In addition, EMCASCO offers different non-owned auto coverage depending on how the
term “covered auto” is defined in the policy a company purchases. For example, as noted, the
EMCASCO policy purchased by Russ Auto defines a “covered auto” for purposes of the policy as
“any auto.” (Smith Decl., Ex. 1A at 2, 21.) EMCASCO, however, also offers coverage for “nonowned ‘autos’” that is defined as:
Any “auto” you do not own, lease, hire, rent or borrow used in connection with your
“auto” dealership described in the Declarations. This includes “autos” owned by
your “employees” or partners (if you are a partnership), members (if you are a
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limited liability company) or members of their households while used in your
Id. at 2 (emphasis added.) That EMCASCO defined one category of covered autos as “any auto”
and another as autos “used in connection with” the company purchasing the policy indicates the
intended coverage was different under those different provisions. These differences suggest the
phrase “in connection with” is not what EMCASCO intended to cover nor is it the coverage Russ
Auto intended to purchase. See Holloway, 341 Or. 649-50 (the court’s task is to “ascertain the
intention of the parties to the insurance policy”)(citation omitted).
The court concludes on this record that within the broader context of the policies as a
whole, the meaning of the phrase “using a covered ‘auto’ . . . in your business or your personal
affairs” is that urged by Plaintiffs: using a covered automobile to carry out a purpose of Russ
Auto or while in the pursuit of Russ Auto’s business or personal affairs. The court also finds that
even if this interpretation encompassed McBride’s attendance and departure from the holiday party
(which is debatable, given the voluntary nature of the holiday party), it does not encompass
McBride’s trip to the Brickyard Tavern or to Taco Bell. The record supports this interpretation.
McBride testified at deposition that he was not “on the clock” or “required to do anything for [Russ
Auto]” at the time he went to Taco Bell. (Smith Decl., Ex. 3 at 11.) McBride “could have gone
anywhere [he] wanted” after he left the Brickyard Tavern.”
McBride went to Taco Bell
because “he was hungry,” and because “it was near the Brickyard Tavern and it was on [his] way
home.” (Id. at 11-12.) McBride did not engage in any functions of his job or assist Russ Auto
in any way when he went to the Brickyard Tavern, or when he left the Brickyard Tavern to go to
Taco Bell, buy and eat food, and then sleep in its parking lot. On this record, the court concludes
McBride was not an insured under the policies at issue at the time of the accident because he was
PAGE 17 - OPINION AND ORDER
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not using his automobile in the business or personal affairs of Russ Auto at that time.
The court notes even under Defendants’ suggested interpretation of the provision at issue
McBride would not have been an insured at the time of the accident. Defendants assert employees
were required to use their own vehicles to go to the holiday party, and at the time of the collision
McBride was driving himself home. (Defs.’ Mot. for Summ. J. at 17.) As noted, however, the
party was voluntary as was McBride’s decision to attend the party and to drive himself.
Defendants also contend the fact that McBride went to the Brickyard Tavern after the holiday party
does not affect coverage because the Brickyard Tavern get-together was “in a close connection to
and part of the course of” the holiday party. (Id. at 25.) Defendants also assert the fact that
McBride went to Taco Bell after the Brickyard Tavern does not mean McBride was not using his
vehicle in connection with his attendance at the holiday party because “his presence at Taco Bell
for a bite to eat , and a brief . . . nap, . . . was wholly due to the course of events of the company
affair.” (Id. at 26.)
Defendants’ argument particularly as to McBride=s stop at Taco Bell, however, ignores the
Powell court’s use of the word “close” to modify “connection.” Powell, 198 Or. App. at 41 (“in”
can also be used to “‘indicate[s] close connection by way of implication or active participation.’”
(quoting Webster’s Third New Int’l Dictionary at 1139)(emphasis added.)).
McBride went to
Taco Bell nearly two hours after Russ Auto’s party ended and, as noted, he testified at deposition
that when he did so he was not “on the clock” or “required to do anything for [Russ Auto]” at the
time he went to Taco Bell.
(Smith Decl., Ex. 3 at 11.)
McBride “could have gone anywhere
[he] wanted after he left the Brickyard Tavern.@ (Id.) McBride went to Taco Bell because “he
was hungry,” and “it was near the Brickyard Tavern and it was on [his] way home.” (Id. at 11-
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12.) The record does not support an inference that McBride’s trip to Taco Bell was closely
connected to Russ Auto’s business or personal affairs. Defendants’ argument that McBride’s trip
to Taco Bell was “wholly due to the course of events of the company affair” does not apply the
standard Defendants urge the court to adopt, but instead is closer to a “but for” standard which is
not supported by any of the authorities cited by Defendants or the policies as a whole.
Accordingly, the court adopts Plaintiffs’ proposed interpretation of the provision at
issue and concludes McBride was not an insured within the meaning of the policies at the time of
the accident. The court therefore grants Plaintiffs’ motion for summary judgment and denies
Defendants’ motion for summary judgment.
For the reasons stated above, Plaintiffs’ motion for summary judgment (ECF No. 64) is
GRANTED and Defendants’ cross-motion for summary judgment (ECF No. 68) is DENIED.
DATED this 17th day of November, 2021.
JOHN V. ACOSTA
United States Magistrate Judge
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