Nationwide Property and Casualty Insurance Company v. Evans
Filing
43
ORDER AND OPINION granting 22 Motion for Summary Judgment. Signed by Honorable J Michelle Childs on 11/9/2018.(asni, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ROCK HILL DIVISION
Nationwide Property and Casualty
Insurance Company,
)
)
)
Plaintiff,
)
)
v.
)
)
Thomas L. Evans, as attorney in fact for
)
Thomas W. Evans, an incapacitated adult, )
and Ambria Jones
)
)
Defendants.
)
___________________________________ )
Civil Action No.: 0:17-cv-01956-JMC
ORDER AND OPINION
Before the court for review in this declaratory judgment action is Plaintiff Nationwide
Property and Casualty Insurance Company’s (“Plaintiff”) Motion for Summary Judgment (ECF
No. 22). Plaintiff asserts it is entitled to summary judgment because an automobile policy issued
by Plaintiff to Defendant Ambria Jones’ mother does not provide liability coverage for a vehicular
accident involving Defendants. (Id. at 2.) For the reasons that follow, the court GRANTS
Plaintiff’s Motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
On February 22, 2017, Defendant Thomas L. Evans, attorney in fact for Thomas W. Evans,1
sued Defendant Jones for negligence in the Court of Common Pleas in York County, South Carolina.
(ECF No. 1-1 at 3 ¶ 14.) Approximately three (3) years earlier, on March 2, 2014, Defendant
Jones and Evans were involved in a vehicular accident that left Evans “mentally impaired and
physically incapacitated.” (Id. at 1–2.) In his Complaint, Defendant Evans alleged that on March
1
Thomas L. Evans is the son of Thomas W. Evans, who was injured in the car accident at issue in
this case. (ECF No. 7 at 5 ¶ 32.) Throughout this Order, Thomas L. Evans is referred to as
“Defendant Evans,” and Thomas W. Evans is referred to as “Evans.”
1
2, 2014, Evans was a passenger in a 1997 Dodge Dakota pickup truck traveling south on a highway
in York County. (ECF No. 1-1 at 5.) At the same time and on the same highway, Defendant Jones
was a passenger in a 2007 Honda traveling north and being driven by Jimesha McLendon. (Id.)
Defendant Evans alleges that, “As [McLendon] began to approach the car in which [Evans] was a
passenger, Defendant [Jones] was engaging in horseplay with [McLendon] and attempted to grab
the steering wheel of the car in which [Jones] was in the passenger seat.” (Id. at ¶ 8.) Defendant
Evans claims McLendon then lost control of the car, crossed the center line of the highway, and
collided head on with the car in which Evans was a passenger, causing Evans to be thrown from
the car. (Id. at ¶ 9, 11.) In her Answer to Defendant Evans’ Complaint,2 Defendant Jones denied
engaging in horseplay with McLendon and attempting to grab the steering wheel. (ECF No. 31-3
at 1 ¶ 8, 2 ¶ 10.)
Prior to the March 2, 2014 accident, Plaintiff issued a North Carolina automobile policy to
Defendant Jones’ mother, Antonja Brewton, on a 2009 Nissan Altima (the “Policy”), which was
effective at the time of the accident. (ECF No. 22-2 at 1.) The 2009 Nissan Altima was the only
car covered by the Policy. (Id. at 2.) The Policy insured “family member[s],” which, under the
terms of the Policy, are defined as “person[s] related to you by blood, marriage, or adoption who
[are] a resident of your household. This includes a ward or foster child.” (Id. at 6.) The Policy
further provides,
We will pay damages for bodily injury or property damage for which any insured
becomes legally responsible because of an auto accident. . . . We have no duty to
defend any suit or settle any claim for bodily injury or property damage not
covered under this policy.
For the remainder of this Order, the state court Complaint will be referred to as the “Underlying
Complaint.”
2
2
(Id. at 7.) The Policy also includes the following exclusion: “We do not provide Liability
Coverage for any insured . . . [u]sing a vehicle without a reasonable belief that that insured is
entitled to do so. This exclusion does not apply to a family member using your covered auto
which is owned by you.” (ECF No. 22-2 at 8.)
On July 24, 2017, Plaintiff filed this declaratory judgment action. (ECF No. 1 at 2). Plaintiff
seeks a declaration from the court that (1) “the interpretation of the insurance contract will be governed
by North Carolina law” (id. at 4 ¶ 16); (2) “the acts of Defendant Jones, as alleged in the Underlying
Complaint, do not trigger the liability of the . . . [P]olicy” (id. at 5 ¶ 21); and (3) “the . . . [P]olicy
excludes liability coverage for any damages sustained” in the March 2, 2014 accident (id. at 6 ¶ 26).
Plaintiff argues it is entitled to these declarations because (1) “[t]he Nationwide [Auto] [P]olicy
was issued in North Carolina to a North Carolina Resident and insured a 2009 Altima registered
and principally garaged in North Carolina” (id. at 4 ¶ 15); (2) “[t]he . . . [P]olicy provides liability
coverage to insureds who become legally responsible for damages for their ‘ownership,
maintenance, or use of an auto’. . . . [and] [t]he conduct alleged in the Underlying Complaint to
have been committed by [Defendant] Jones does not constitute the ‘ownership, maintenance or
use’ of the 2007 Honda” (id. at 5 ¶ 19–20); and (3) “Defendant Jones did not have a reasonable
belief that she was entitled to grab the steering wheel of the 2007 Honda while she was riding as a
passenger in th[at] [car]” (id. at 5 ¶ 25).
On August 22, 2017, Defendant Evans filed an Answer to Plaintiff’s Complaint. (ECF No. 7.)
Defendant Evans asserts he is a citizen and resident of North Carolina, not South Carolina, as Plaintiff
alleges. (Id. at 2 ¶ 3.) Defendant Evans further argues that Defendant Jones’ mother, the named
insured on the Policy, is a necessary party “and resident of North Carolina. As such, properly brought,
this case would lack complete diversity and should be commenced in South Carolina [s]tate [c]ourt.”
(Id. at 2 ¶ 4.) (See also id. at 5 ¶ 31–33, 6 ¶ 34–35.)
3
Additionally, Defendant Evans asserts (1)
Plaintiff’s Complaint fails to state a claim upon which relief can be granted, and (2) Plaintiff incorrectly
interpreted the Nationwide Auto Policy and that a correct interpretation would entitle Defendant Evans
to payment for his father’s injuries. (Id. at 5 ¶ 29, 30.)
On September 14, 2017, Defendant Jones filed her Answer to Plaintiff’s Complaint. (ECF No.
12.) Defendant Jones “denies she was engaging in any type of horseplay” with McLendon, but admits
McLendon lost control of the car and crossed the center line, causing the March 2, 2014 accident.3 (Id.
at 12 ¶ 8–9.)
In her Answer, Defendant Jones also asserts McLendon, whom she refers to as “Plaintiff,” should
be barred from recovery because McLendon was
3
guilty of carelessness, negligence, gross negligence, and recklessness, which
conduct combined and concurred with any such conduct on the part of . . .
Defendant [Jones] in bringing about the [March 2, 2014 Accident] and in
proximately causing the injuries and/or damages complained of by [Evans], so as
to bar . . . [McLendon] from any recovery herein, or in the alternative to reduce
appropriately any recovery.
(ECF No. 12 at 2–3 ¶ 19.) The court assumes Defendant Jones is referring to McLendon as “the
Plaintiff” because in the same paragraph Defendant Jones states,
The conduct on the part of the Plaintiff is set forth in one or more of the following
particulars, to wit:
(a) in utilizing her cellular phone while driving the vehicle in
question;
(b) in engaging in ‘horseplay’ with [Defendant] Jones while driving
the vehicle in question;
(c) in failing to keep her vehicle under proper control;
(d) in failing to use that degree of care and caution that a reasonable
and prudent person would have used under the circumstances
then and there existing;
(e) in such other particulars as may be developed through further
discovery.
4
On May 8, 2018, the parties stipulated and agreed to the following facts:
1. The automobile accident occurred on March 2, 2014 at 3:50 p.m.
2. At the time of the accident, Thomas W. Evans was a passenger in a 1997
Dodge Dakota pick-up truck being driven by Harper McCoy in the southbound
lane of US Highway 21 in York County, South Carolina.
3. At the time of the accident, Ambria Jones was a passenger in a 2007 Honda
being driven by Jimesha McLendon in the northbound lane of US Highway
21 in York County, South Carolina.
4. Jimesha McClendon states that as the two vehicles approached one another
from opposite directions, Ambria Jones grabbed the steering wheel of the 2007
Honda from Jimesha McLendon.
5. Jimesha McClendon states as a result of Jones grabbing the steering wheel,
McLendon lost control of the Honda and crossed the center line of US
Highway 21 causing the 2007 Honda to strike the 1997 Dodge driven by
Harper McCoy in a head on collision.
6. Jones did not intend to cause the collision.
7. Ambria Jones was not asked to grab the steering wheel and Jimesha
McLendon did not give express or implied permission for Ambria Jones to
grab the steering wheel.
8. As a result of the collision, Thomas W. Evans was ejected from McCoy’s
vehicle and suffered injuries.
(ECF No. 20 at 1–2.)
On May 8, 2018, Plaintiff moved for summary judgment. (ECF No. 22.) Defendant Jones
responded to Nationwide’s Motion on May 15, 2018. (ECF No. 25.) On May 21, 2018, Defendant
Evans filed a Memorandum of Law in Opposition (“Response in Opposition”) to Nationwide’s
(Id. at 3 ¶ 19.) However, the purpose of these allegations is unclear to the court, as McLendon is
not a party to this declaratory judgment action. Therefore, the court construes these assertions as
allegations that McLendon, and not Defendant Jones, caused, or contributed to causing, the March
2, 2014 accident.
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Motion. (ECF No. 28.) On May 29, 2018, Nationwide filed a Reply to Defendant Evans’
Response in Opposition. (ECF No. 31.)
II. JURISDICTION
The court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) based
on Plaintiff’s allegations that the action is between citizens of different states and/or countries and
the amount in controversy is in excess of $75,000.00, exclusive of interest and costs. (ECF No. 1
at 1 ¶ 1–3, 2 ¶ 4–6.) Specifically, Plaintiff alleges it is an Ohio corporation with its principal place
of business in Ohio, though it is authorized to sell insurance policies in North and South Carolina.
(Id. at 1 ¶ 1.) Defendants are citizens of North Carolina. (ECF No. 12 at 1 ¶ 2; ECF No. 7 at 2 ¶
3.) Plaintiff brings this action pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201,
and Federal Rule of Civil Procedure 57. (ECF No. 1 at 2 ¶ 5.) In this regard, the court is satisfied
complete diversity exists between the parties4 and the amount in controversy is sufficient to confer
Defendant Evans argues that Defendant Jones’ mother, who was not named by Nationwide as a
party to this suit, but is the named insured on the Policy, is a necessary party to this action. (ECF
No. 7 at 2 ¶ 4, 5.) Further, Defendant Evans asserts that because Defendant Jones’s mother is a
resident of North Carolina, complete diversity does not exist in this case and this action should be
commenced in South Carolina state court. (Id.)
“To determine whether a party should be joined, Rule 19 of the Federal Rules of Civil
Procedure sets forth a two-step inquiry, examining: (1) whether the party is ‘necessary’ to the
action under Rule 19(a); and (2) whether the party is ‘indispensable’ under Rule 19(b).” Am. Gen.
Life & Acc. Ins. Co. v. Wood, 429 F.3d 83, 92 (4th Cir. 2005). The party who raises the defense
bears the burden of proving “the person who was not joined is needed for a just adjudication.” Id.
(quoting 7 Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and
Procedure § 1609 (3d ed. 2001)).
First, the court notes Defendant Evans “has failed to offer any explanation as to why he
could not obtain complete relief” without the presence of Defendant Jones’ mother. Id. Second,
because, as Defendant Evans admits, joinder of Defendant Jones’ mother would defeat complete
diversity, thereby “depriv[ing] the court of subject-matter jurisdiction,” she is not necessary to this
action. Fed. R. Civ. P. 19(a)(1) (“A person who is subject to service of process and whose joinder
will not deprive the court of subject-matter jurisdiction must be joined as a party . . . .” (emphasis
added)). Therefore, the court concludes the absence of Ambria Jones’ mother in this action does
not deprive the court of jurisdiction.
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jurisdiction on this court.5
III. LEGAL STANDARD
Summary judgment is a drastic remedy and “should not be granted unless it is perfectly
clear that there are no genuine issues of material fact in the case.” Ballinger v. N. C. Agr. Extension
Serv., 815 F.2d 1001, 1004–05 (4th Cir. 1987). See also Fed. R. Civ. P. 56(a) (“The court shall
grant summary judgment if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.”). A fact is “material” if proof of
its existence or non-existence would affect the disposition of the case under the applicable law.
Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248–49 (1986). A genuine question of material fact
exists when, after reviewing the record as a whole, the court finds a reasonable jury could return a
verdict for the non-moving party. Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d
423, 434 (4th Cir. 2011).
When ruling on a summary judgment motion, a court must view the evidence in the light
most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123–
Plaintiff’s Complaint alleges, “The amount in controversy exceeds Seventy-Five Thousand and
No/100 ($75,000.00) Dollars, exclusive of interests and costs, and there is complete diversity of
citizenship . . . .” (ECF No. 1 at 2 ¶ 6.) Defendant Evans generally denied this allegation in his
Answer. (ECF No. 7 at 2 ¶ 6.) However, Defendant Evans has put forth no evidence, nor has the
court observed any evidence, in the record to support his position. Moreover, the limit of the
Policy exceeds $75,000 (ECF No. 22-2 at 2), and in the Underlying Complaint, Defendant Evans
alleges his father suffered severe injuries as a result of the March 2, 2014 accident (ECF No. 1-1
at 1 ¶ 2, 2 ¶ 11–12). Accordingly, because it does not “appear to a legal certainty that the claim is
really for less than the jurisdictional amount,” the court is satisfied it has jurisdiction as far as the
amount in controversy is concerned. Nutter v. New Rents, Inc., 945 F.2d 398 (Table), 1991 WL
193490, at *4 (4th Cir. 1991) (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S.
283, 289 (1938)). See also Davis v. Kia Motors Am., Inc., 408 F. App’x 731, 732 (4th Cir. 2011)
(“In most [diversity] cases, the ‘sum claimed by the plaintiff controls’ the amount in controversy
determination.” (quoting St. Paul Mercury Indem. Co., 303 U.S. at 288)); Nutter, 945 F.2d at *4
(“When examining the amount in controversy in a declaratory judgment action, ‘[t]he amount in
controversy is the pecuniary result to either party which that judgment would produce.’” (quoting
Government Employees Insurance Co. v. Lally, 327 F.2d 568, 569 (4th Cir. 1964))).
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24 (4th Cir. 1990). The non-moving party may not oppose a summary judgment motion with mere
allegations or denial of the movant’s pleading, but instead must “set forth specific facts”
demonstrating a genuine issue for trial. See Fed. R. Civ. P. 56(e). See also Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986); Anderson, 477 U.S. at 252; Shealy v. Winston, 929 F.2d 1009,
1012 (4th Cir. 1991). All that is required to survive summary judgment is that “sufficient evidence
supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties’
differing versions of the truth at trial.” Anderson, 477 U.S. at 249.
IV. ANALYSIS
At the outset, the court finds—as Plaintiff argues and Defendants do not dispute—that
North Carolina law applies to the interpretation of the Nationwide Auto Policy. (See ECF No. 221 at 5, ECF No. 25, ECF No. 28.) Although the March 2, 2014 accident occurred in South Carolina,
North Carolina law applies because South Carolina follows the rule of lex loci contractus: the law
of the state where the contract was made governs the interpretation of the contracts. See Unisun
Ins. Co. v. Hertz Rental Corp., 436 S.E.2d 182, 184 (S.C. Ct. App. 1993) (“Unless the parties agree
to a different rule, the validity and interpretation of a contract is ordinarily to be determined by the
law of the state in which the contract was made. A contract of insurance is governed by the law
of the state in which application for insurance was made, the policy delivered, and the contract
formed.” (citation omitted)).6
6
The court acknowledges that
the traditional rule of lex loci contractus is modified by S.C. Code Ann. § 38–61–
10, . . . . [which] provides: “All contracts of insurance on property, lives, or
interests in this State are considered to be made in the state and all contracts of
insurance the applications for which are taken within the State are considered to
have been made within this State and are subject to the laws of this State.”
Heslin-Kim v. CIGNA Grp. Ins., 377 F. Supp. 2d 527, 530 (D.S.C. 2005) (quoting S.C. Code Ann.
§ 38–61–10). However, because the Policy does not insure “property, lives, or interests” in South
8
Under North Carolina law, “[I]t is well established . . . that as a matter of law the provisions
of the [Motor Vehicle Safety and] Financial Responsibility Act [N.C. Gen. Stat. Ann. §§ 20-279.1–
.39] are written into every automobile liability policy.” Integon Nat. Ins. Co. v. Ward ex rel. Perry,
646 S.E.2d 395, 397 (N.C. Ct. App. 2007) (quoting Nationwide Mut. Ins. Co. v. Webb, 512 S.E.2d
764, 765 (N.C. Ct. App. 1999)). The North Carolina Supreme Court has found that “[t]he avowed
purpose of the [Act] . . . is to compensate the innocent victims of financially irresponsible
motorists.” Hoffman v. Great Am. All. Ins. Co., 601 S.E.2d 908, 912 (N.C. 2004) (quoting Sutton
v. Aetna Cas. & Sur. Co., 382 S.E.2d 759, 763 (N.C. 1989)). “The Act is remedial in nature and
is ‘to be liberally construed so that the beneficial purpose intended by its enactment may be
accomplished.’” Id. (quoting Sutton, 382 S.E.2d at 763).
Relevant to this action, the Act mandates that a vehicle owner’s liability insurance policy,
Shall insure the person named therein and any other person, as insured, using any
such motor vehicle or motor vehicles with the express or implied permission of such
named insured, or any other persons in lawful possession, against loss from the
liability imposed by law for damages arising out of the ownership, maintenance or
use of such motor vehicle or motor vehicles . . . .
N.C. Gen. Stat. Ann. § 20-279.21(b)(2). The North Carolina courts have read a good faith
requirement into this provision:
“[A] person is in lawful possession of a vehicle . . . if he is given possession of the
automobile by the automobile’s owner or owner’s permittee under a good faith
belief that giving possession of the vehicle to the third party would not be in
violation of any law or contractual obligation.” Belasco v. Nationwide Mut. Ins.
Co., . . . 326 S.E.2d 109, 113, ([N.C.] 1985). “This implies not only that the owner
or the owner's permittee must give possession to a third party in good faith, but also
that the third party must take in good faith and without any notice of restrictions on
his use.” Nationwide Mut. Ins. Co. v. Baer, . . . 439 S.E.2d 202, 205 (N.C. 1994).
Carolina—the car insured by the Nationwide Auto Policy is “registered and principally garaged in
North Carolina” (ECF No. 1 at 4 ¶ 15)—the court finds S.C. Code Ann. § 38–61–10 does not
govern this action. See Unisun, 436 S.E.2d at 184 n.1 (“[W]e do not conceive S.C. Code Ann. §
38–61–10 . . . to require a different result, since, at the time the contract was made, the property
and interests insured were in the State of New York.”).
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N. C. Farm Bureau Ins. Co. v. Nationwide Mut. Ins. Co., 608 S.E.2d 112, 113 (2005) (emphasis
added). In Nationwide Mut. Ins. Co. v. Baer, the North Carolina Court of Appeals found that a
Nationwide automobile insurance policy incorporated this good faith requirement in an “exclusion
requiring a covered person to have a reasonable belief that he is entitled to use the vehicle.” 439
S.E.2d at 204 (holding the exclusion was consistent with section 20-279.21(b)(2) of the Act). The
Baer court noted that “such language ‘broadens the coverage which [the policy] provides beyond
those who use the covered vehicle with permission. It now covers persons who have a subjective,
reasonable belief that they are entitled to use the vehicle.’” Id. (emphasis added) (quoting Aetna
Cas. & Sur. Co. v. Nationwide Mut. Ins. Co. (Aetna I), 381 S.E.2d 874, 875 (N.C. Ct. App. 1989)).
Thus, the good faith requirement has both a subjective and reasonableness element. See id. See
also Toole By & Through Welch v. State Farm Mut. Auto. Ins. Co., 488 S.E.2d 833, 835–36 (N.C.
Ct. App. 1997) (finding “the standard to be subjective in nature—i.e., whether that person had a
‘subjective, reasonable belief that they are entitled to use the vehicle.’” (quoting Aetna I, 381
S.E.2d at 875));7 Aetna Cas. & Sur. Co. v. Nationwide Mut. Ins. Co. (Aetna II), 392 S.E.2d 377,
379 (N.C. 1990) (“The question under the policy is not one of legality-whether the operator had
legal permission of the owner, or legal permission from the state in the form of a valid driver’s
license; rather, it is a question of fact-did the operator have a reasonable belief that, at the time of
the accident, he was entitled to drive the vehicle? In such cases, the ultimate question is one of
7
In Toole, the court went on to find that
in light of the personal relationship between plaintiff Toole and Randall Galloway;
Randall Galloway’s representation that he had an ownership interest in the truck;
plaintiff Toole’s prior use of the vehicle; and the failure of either Randall Galloway
or Ernest Galloway to forbid plaintiff Toole’s use of the vehicle, we find no genuine
issue of material fact as to whether plaintiff Toole had a “subjective, reasonable
belief” that she was entitled to use the Galloway vehicle on 30 April 1994.
Toole, 488 S.E.2d at 835–36.
10
the state of mind of the operator, a factual question for the jury.”).8
Plaintiff contends Defendant Jones’ liability9 arises solely from her grabbing the steering
wheel, making the question in this case “whether [Defendant] Jones had a reasonable belief she
was entitled to grab the steering wheel at the time of the accident or whether she became a person
‘in lawful possession’ of the vehicle by grabbing the steering wheel.” (ECF No. 22 at 7.) Relying
on North Carolina Farm Bureau Ins. Co. v. Nationwide Mut. Ins. Co., 608 S.E.2d 112 (N.C. Ct.
App. 2005), Plaintiff argues “it does not have a duty under the policy to defend or indemnify
[Defendant] Jones” and is “entitled to a declaration that its policy does not provide coverage for
[the] March 2, 2014 accident” because (1) Jones did not have permission to grab the wheel; (2)
Jones was a passenger in the 2007 Honda being operated by McClendon; (3) the Nationwide Auto
Policy does not cover “an insured’s use of a vehicle without a reasonable belief that the insured is
entitled to do so”; and (4) being “a passenger does not include implied permission to grab the
steering wheel.” (Id.) Accordingly, Plaintiff argues Defendant Jones is not covered by the Policy
because she did not have express or implied permission to grab the steering wheel, and she did not
grab the steering wheel “in an effort to avoid a sudden emergency.” (Id. at 9.) Thus, Plaintiff
contends “there can be no good faith, reasonable belief that [Defendant] Jones was entitled to use
the vehicle as an operator by grabbing the steering wheel from the driver.” (Id. at 9.)
In North Carolina Farm Bureau, the passenger grabbed the steering wheel and attempted
to steer the car into a weigh station as part of a prank. 608 S.E.2d at 113. The driver, attempting
to regain control of the car, swerved and collided with another car, killing the other driver. Id.
8
This does not exclude decision of this ultimate question on summary judgment. See supra note
9.
9
Plaintiff acknowledges that “the [Policy] provides liability coverage for a family member’s ‘use
of any auto’ which results in that family member being legally responsible to pay damages.” (Id.
at 3.)
11
Farm Bureau insured the driver; Nationwide insured the passenger. Id. After settling with their
insureds, the insurance companies commenced a declaratory judgment action to determine their
respective obligations. Id. Farm Bureau argued Nationwide was primarily liable for the damages
arising from the wreck. Id. The companies stipulated that “[the passenger] was not a permissive
user of [the driver]’s car and that the sole issue before the court was whether [the passenger] was
in lawful possession of the car.” Id. The trial court found the passenger was not in lawful
possession of the car and granted Nationwide’s summary judgment motion. Id.
The North Carolina Court of Appeals affirmed. Id. at 114. First, the court stated it was
“persuaded by the reasoning of those states which hold that a passenger who grabs the steering
wheel is actually interfering with the vehicle’s operation.” Id. at 114. As a result, the court found
the passenger “was not in lawful possession of the car when she grabbed the steering wheel.” Id.
Further, the court reasoned that “even if [the passenger] were in possession of the car, the
possession would not have been lawful” because of the good faith requirement under the Act. Id.
Therefore, because “the evidence indicate[d] that [the passenger] grabbed the wheel while joking
around,”10 the court found “[c]ommon sense dictates that a reasonable passenger cannot in good
faith believe that she may lawfully possess a car by suddenly grabbing the steering wheel of a
moving car in this manner.” Id.
Here, the Policy includes the same exclusion approved by the Baer court (and considered
in North Carolina Farm Bureau): “We do not provide Liability coverage for any insured: . . . .
Using a vehicle without a reasonable belief that that insured is entitled to do so. This exclusion
does not apply to a family member using your covered auto which is owned by you.” (ECF No.
The court commented that, “If a driver suffered a medical emergency and lost control of a car,
perhaps a passenger could have a good faith belief that she could take possession of the car by
grabbing the steering wheel.” N.C. Farm Bureau, 608 S.E.2d at 114.
10
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31-3 at 5.) Thus, for the Nationwide Auto Policy to provide coverage for Defendant Jones’ actions,
she must either (1) have been a permissive user of McLendon’s car or (2) have been in lawful
possession of McLendon’s car when Defendant Jones grabbed the steering wheel. See N.C. Farm
Bureau, 608 S.E.2d at 113 (“Here, the parties stipulated that [the passenger] was not a permissive
user of [the driver]’s car, limiting the issue before the court to whether [the passenger] was in
lawful possession of the car when she grabbed the steering wheel . . . .”) The parties stipulated
that “[Defendant] Jones was not asked to grab the steering wheel and Jimesha McLendon did not
give express or implied permission for [Defendant] Jones to grab the steering wheel.” (ECF No.
22-3 at 2.) Thus, the court finds the issue before the court is limited to “whether [Defendant Jones]
was in lawful possession of the car when she grabbed the steering wheel . . . .” N.C. Farm Bureau,
608 S.E.2d at 113.11
In Defendant Jones’ Answer to the Underlying Complaint, she denied engaging in horseplay
with McLendon and attempting to grab the steering wheel. (ECF No. 31-3 at 1 ¶ 8, 2 ¶ 10.) At
the summary judgment hearing, Defendant Jones reiterated this denial, noting that the Stipulation
of Undisputed Facts does not provide that Defendant Jones admits to grabbing the steering wheel.
Rather, the Stipulation states “McLendon states that as the two vehicles approached one another
from opposite directions, [Defendant Jones] grabbed the steering wheel . . . .” (ECF No. 22-3 at 2
(emphasis added).) Thus, at the summary judgment hearing, Defendant Jones maintained that the
Stipulation is only an agreement as to McLendon’s statements about the March 2, 2014 accident,
not an agreement that Defendant Jones actually grabbed the steering wheel. However, whether or
not Defendant Jones’ actually grabbed the steering wheel is irrelevant to this declaratory judgment
action, as Plaintiff seeks a declaration that “the acts of Defendant Jones, as alleged in the
Underlying Complaint, do not trigger the liability of the Nationwide [Auto] [P]olicy” (ECF No. 1
at 5 ¶ 21 (emphasis added).) In the Underlying Complaint, Defendant Evans alleged that “[a]s
[McLendon] began to approach the car in which [Evans] was a passenger, Defendant [Jones] was
engaging in horseplay with [McLendon] and attempted to grab the steering wheel of the car in
which [Jones] was in the passenger seat.” (Id. at ¶ 8 (emphasis added).) Moreover, if Defendant
Jones did not grab the steering wheel of McLendon’s car, she was merely a passenger in
McLendon’s car. In that situation, there would be no question that the Policy does not apply, as it
would not cover McLendon’s actions because she is not the name insured on the Policy or a family
member of the name insured. (See ECF No. 22-2 at 1, 6–7.) Accordingly, for the purposes of this
declaratory judgment action, the court analyzes the questions presented based on Defendant Evans’
allegation that Defendant Jones grabbed the steering wheel of McLendon’s vehicle.
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As previously stated, to be in lawful possession of McLendon’s car at the time of the
accident, Defendant Jones had to have “a subjective, reasonable belief that [she was] entitled to
use the vehicle.” Aetna I, 381 S.E.2d at 875. Defendant Evans argues the reasonable belief
exclusion “depends entirely on the subjective beliefs of McClendon and [Defendant] Jones, neither
of whom have been deposed in this case.” (ECF No. 28 at 3.) Further, Defendant Evans asserts
“evidence gathered by police during an investigation of the [March 2, 2014 accident] support[s] a
reasonable inference that [Defendant] Jones’ conduct was part of McClendon and [Defendant]
Jones’ mutual horseplay.” (Id.) Defendant Evans admits “the [S]tipulation [of Facts] states
[Defendant] Jones grabbed the steering wheel of McClendon’s car of [Defendant Jones’] own
motivation and without McClendon’s foreknowledge.” (Id. at 4.) However, Defendant Evans
contends “other available evidence indicates a different atmosphere within McClendon’s car in the
crucial moments before the collision.” (Id.) Defendant Evans points out that marijuana was found
in McClendon’s car after the accident, arguing
[t]his evidence suggests [Defendant] Jones’ bizarre act of directing the car into
oncoming traffic was undertaken while under the influence of marijuana. Since
marijuana use is not easily concealed in this setting, this evidence also supports
the conclusion that McClendon was on notice of marijuana use in her vehicle or
may have even been an active participant.
(Id.) Defendant Evans notes the key individuals involved in the collision have not been deposed
and argues “a reasonable factfinder could conclude based on this evidence that McLendon
expressly or implicitly consented12 to [Defendant] Jones’ act and that, as a result, the exclusion
[Plaintiff] cites does not apply.” (Id. at 4–5.)
The Stipulation of Facts agreed to by the parties states, “[Defendant] Jones was not asked to grab
the steering wheel and Jimesha McLendon did not give express or implied permission for [Defendant]
Jones to grab the steering wheel.” (ECF No. 22-3 at 2 ¶ 7.) This stipulation is “binding and
conclusive.” Christian Legal Soc. Chapter of the Univ. of Cal., Hastings Coll. of the Law v.
Martinez, 561 U.S. 661, 677 (2010) (quoting 83 C.J.S., Stipulations § 93 (2000)). See also Vander
Linden v. Hodges, 193 F.3d 268, 279–80 (4th Cir. 1999) (“But a stipulation, by definition,
12
14
Even if, viewing the evidence in the light most favorable to Defendant Evans,13 a jury could
find Defendant Jones had a subjective belief that she was entitled to use McLendon’s vehicle by
grabbing the steering wheel, the court finds Defendant Evans has failed to put forth sufficient
evidence that Defendant Jones had a reasonable belief she was entitled to grab the steering wheel.
See Aetna II, 381 S.E.2d at 875–76 (“Moreover, plaintiff incorrectly relies on the position that an
absence of a driver’s license demonstrates that Slater could not have reasonably believed that he
was entitled to drive. While such an absence may demonstrate that he knew he had no legal right
to drive, that is distinguishable from the dispositive question of Slater’s reasonable belief of being
constitutes ‘[a]n express waiver made . . . preparatory to trial by the party or his attorney conceding
for the purposes of trial the truth of some alleged fact . . . the fact is thereafter to be taken for
granted; so that the one party need offer no evidence to prove it and the other is not allowed to
disprove it . . . . It is, in truth, a substitute for evidence, in that it does away with the need for
evidence.’ 9 Wigmore, Evidence § 2588, at 821 (Chadburn 1981) (emphasis added). See 2
McCormack on Evidence § 254 (West 1992) (stipulations ‘have the effect of withdrawing a fact
from issue and dispensing wholly with the need for proof of the fact’).”). Therefore, in accordance
with the parties’ stipulations, the court finds a jury could not conclude McLendon implicitly
consented to Defendant Jones grabbing the steering wheel. See id. (“This Court has . . . refused to
consider a party's argument that contradicted a joint ‘stipulation [entered] at the outset of th[e]
litigation.’” (alterations in original) (quoting Board of Regents of Univ. of Wis. System v.
Southworth, 529 U.S. 217, 226, (2000))); Moore v. Humphrey, 101 S.E.2d 460, 466–67 (N.C.
1958) (“Where facts are stipulated, they are deemed established as fully as if determined by the
verdict of a jury.”)
13
In Defendant Jones’ Response to Plaintiff’s Motion for Summary Judgment, Defendant Jones
does not make any arguments or address the arguments in Plaintiff’s Motion; she requests only
that
the court inquire fully into the record in this matter and that it issue its appropriate
Order which fairly and accurately declares the relevant rights and obligations of
the parties in this matter with regard to the insurance policy which is presently
under consideration and any other potential insurance coverage which may be
related and properly brought to the attention of the court in connection with this
action.
(ECF No. 25 at 3.) Thus, the court’s analysis concerns only Defendant Evans’ arguments in
opposition to Plaintiff’s summary judgment motion.
15
‘entitled’ to drive the car based upon the permission of the person possessing the car.” (emphasis
added)).
As explained above, the North Carolina Court of Appeals already addressed the
reasonableness of grabbing the steering wheel in a similar situation in North Carolina Farm
Bureau, in which the passenger grabbed the steering wheel while “joking around.” 608 S.E.2d at
114. The North Carolina Court of Appeals stated, “[T]he evidence dictates that [the passenger]
grabbed the wheel while joking around. Common sense dictates that a reasonable passenger
cannot in good faith believe that she may lawfully possess a car by suddenly grabbing the steering
wheel of a moving car in this manner.” Id.
Defendant Jones, as alleged by Defendant Evans in the Underlying Complaint, grabbed the
steering wheel of McLendon’s car while engaging in horseplay. (ECF No. 1-1 at 5 ¶ 10.) Based
on the North Carolina Court of Appeals’ decision in North Carolina Farm Bureau, this court finds
that even if, at the time of the March 2, 2014 accident, Defendant Jones believed she was entitled
to grab the steering wheel of McLendon’s car, this belief was unreasonable because Defendant
Jones could not in good faith have believed she could lawfully possess McClendon’s car by
grabbing the steering wheel. See N.C. Farm Bureau, 608 S.E.2d at 114 (“Common sense dictates
that a reasonable passenger cannot in good faith believe that she may lawfully possess a car by
suddenly grabbing the steering wheel of a moving car in this manner.”). Accordingly, the court
grants Plaintiff’s Motion for Summary Judgment (ECF No. 22).
V. CONCLUSION
Upon careful consideration of the entire record, the court GRANTS Plaintiff Nationwide
Property and Casualty Insurance Company’s Motion for Summary Judgement (ECF No. 22) and
DECLARES that
the Nationwide [Auto] [P]olicy issued to Antonja Brewton[, Defendant Jones’
mother,] does not provide liability coverage for any injury or damages sought
16
against [Defendant’ Jones arising out of the [March 2, 2014 accident], and that
Nationwide does not owe any duty to defend or indemnify Defendant Ambria Jones
with regards to any suit and damages arising out of the [March 2, 2014 accident],
together with Nationwide’s costs and disbursements incurred.
(ECF No. 1 at 6 ¶ 26.)
IT IS SO ORDERED.
United States District Judge
November 09, 2018
Columbia, South Carolina
17
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