Progressive Hawaii Insurance Corporation v. Davis et al
Filing
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MEMORANDUM AND OPINION as set forth in following order. Signed by Chief District Judge Thomas A Varlan on 2/26/14. (ABF)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
PROGRESSIVE HAWAII INSURANCE
CORPORATION,
Plaintiff,
v.
GERALD GULLEY, Administrator Ad Litem
for the Estate of XAVIER C. BINGHAM,
RYAN WESTBROOK, JAMES A. RUSSELL,
ANGELIC HODGE, ALLSTATE
INSURANCE COMPANY, and
GEICO INSURANCE COMPANY,
Defendants.
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No.: 3:12-CV-574-TAV-HBG
MEMORANDUM OPINION
Pending before the Court in this declaratory judgment action is the Motion for
Summary Judgment [Doc. 37] filed by plaintiff Progressive Hawaii Insurance
Corporation (“Progressive”). This case arises from a motor vehicle accident on May 12,
2012, involving a 2012 red Nissan Maxima leased to defendant Nakia Davis. Although
Ms. Davis had an automobile insurance policy issued by Progressive for another vehicle,
Progressive argues that the Nissan Maxima was not an “insured vehicle” under the policy
and no one in the vehicle was a permissive driver under the policy. Accordingly,
Progressive contends that it has no duty of defense or indemnity to Ms. Davis in regard to
the accident.
Progressive’s summary judgment motion is supported by a memorandum of law
[Doc. 38] and a Statement of Undisputed Material Facts with the Affidavit of Suzanne
Hardy and other supporting documentation [Doc. 39]. Pursuant to the August 16, 2013
Order of Magistrate Judge Guyton [Doc. 51 at ¶ 2], Progressive was ordered to
supplement the motion for summary judgment with its position regarding any legal effect
the default judgment entered against Ms. Davis [Doc. 45] would have on the pending
motion. Progressive filed its supplement on August 30, 2013 [Doc. 52], arguing that a
default judgment against one defendant in a declaratory judgment action has no effect on
the remaining defendants’ ability to defend on the merits of the case. Also pursuant to
Judge Guyton’s August 16, 2013 Order [Doc. 51 at ¶ 5], the defendants were directed to
respond to the motion for summary judgment and plaintiff’s supplement by November 1,
2013. No response has been filed to the motion for summary judgment or Progressive’s
supplemental memorandum and the time for doing so has passed. E.D. Tenn. L.R. 7.2(a).
The Court has carefully reviewed the pending motion and related pleadings in
light of the entire record. For the reasons set forth herein, the plaintiff’s motion for
summary judgment [Doc. 37] will be GRANTED.
I.
Relevant Facts1
As the Court is obliged to do in reviewing a motion for summary judgment, the
facts of this case will be viewed in the light most favorable to the plaintiff. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
1
As set forth herein, the facts are primarily taken from the Statement of Undisputed
Material Facts [Doc. 39] filed by Progressive in support of its motion for summary judgment.
The facts are supported with citations to the Affidavit of Suzanne Hardy, and the Examinations
Under Oath of Nakia Davis and Xavier Bingham [Docs. 39-1 – 39-3].
2
Defendant Nakia Davis is the owner and resident of a single family home at 3732
Lilac Avenue, in Knoxville, Tennessee, where she has lived for the past six years [Doc.
39 at ¶¶ 1-2]. Ms. Davis lives with her 15-year old daughter, Alexandria Davis, her twoyear old grandson Jy’Zayiah Davis, and her friend Darryl Scott [Id. at ¶ 4]. Xavier
Bingham, deceased, was Ms. Davis’s son, but he did not live at the 3732 Lilac Avenue
residence at any time [Id. at ¶ 5]. At the time of the accident and for at least two years
prior, Xavier Bingham lived with his aunt, Maria Bingham, at 3042 Wilson Avenue, in
Knoxville [Id. at ¶ 6].
At the time of the accident, Nakia Davis was the owner of a 1995 Chevrolet Astro
van [Id. at ¶ 7]. Ms. Davis states that the van broke down and became inoperable in
January or February 2012 [Id. at ¶ 9]. Thus, beginning in the spring of 2012 until the
time of the accident, Ms. Davis occasionally rented vehicles from Budget Rental Cars on
Clinton Highway when she needed a vehicle for personal use [Id. at ¶¶ 10-12]. It is
undisputed that during the occasions that Ms. Davis rented vehicles prior to the accident,
she never allowed anyone else to drive the rental vehicle, including her son, Xavier
Bingham [Id. at ¶ 13]. Ms. Davis had told Mr. Bingham in the past that he did not have
permission to drive her rental vehicles because he was not listed as an authorized driver
on the rental agreements and he was too young [Id. at ¶ 14].
Several days prior to the accident, Ms. Davis rented a 2012 red Nissan Maxima in
anticipation of a family trip to Florida [Id. at ¶ 16]. The rental agreement specified that
Ms. Davis was the only authorized driver [Id. at ¶ 19]. Ms. Davis did not discuss this
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particular rental vehicle with Mr. Bingham, but she had advised him on several prior
occasions that he did not have permission to drive her rental vehicles [Id. at ¶ 20-21]. It
is undisputed that Ms. Davis did not give Mr. Bingham permission to drive the 2012
Nissan Maxima on the day of the accident [Id. at ¶ 22].
In the afternoon of May 12, 2012, Ms. Davis attended a family gathering for her
mother at the Turn Key Center in east Knoxville [Id. at ¶ 23]. Ms. Davis had driven the
2012 Nissan Maxima rental car to the gathering, but her sister had driven a black
Chevrolet Impala to the event, a vehicle that Ms. Davis sometimes borrowed [Id. at ¶ 26].
During the event, Mr. Bingham approached Ms. Davis and asked for permission to use
“the car” [Id. at ¶ 25]. Both Ms. Davis and Mr. Bingham believed they were referring to
the Chevrolet Impala when they discussed “the car” [Id. at ¶ 28-29]. Ms. Davis gave her
son permission to drive “the car” to the store with his friends, intending only to give him
permission to drive the Chevrolet Impala and not the Nissan Maxima rental car [Id. at ¶
27-28].
Outside the facility, another relative told Mr. Bingham that the new red Nissan
Maxima parked outside was his mother’s rental car [Id. at ¶ 30-32]. Mr. Bingham got
into the Nissan Maxima and noticed that the key fob was lying in a cup holder [Id. at ¶
32]. Because this vehicle has a keyless start button for the ignition, Mr. Bingham was
able to start the car [Id. at ¶ 33-34]. Without further consultation with Ms. Davis, Mr.
Bingham, defendant Ryan Westbrook, and Justin Walker, deceased, got in the Nissan
Maxima and left [Id. at ¶ 35-36]. Mr. Bingham admitted that he did not have his
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mother’s permission to drive her rental cars and that if he had gone inside and asked her,
she would not have given him permission to drive the Nissan Maxima [Id. at ¶ 37-38].
After driving around, playing video games, drinking alcohol, and picking up
someone known only as “Deon,” Mr. Bingham, Mr. Walker, and Mr. Westbrook intended
to go to a nightclub called Rumors [Id. at ¶¶ 40-41, 43, 46]. Mr. Bingham announced
that he was “buzzed,” and asked, “Who wants to drive?” [Id. at ¶ 47]. Mr. Bingham
claims that “Deon” volunteered to drive and that he was driving at the time of the
accident [Id. at ¶ 48]. On the evening of May 12, 2012, the Nissan Maxima was involved
in a collision on Castle Street with a vehicle occupied by defendants James Russell and
Angelic Hodge [Doc. 17 at ¶ 13].
The collision resulted in bodily injuries to the
occupants of both vehicles and the death of Mr. Walker [Id.].
At the time of the accident, Progressive had issued a Tennessee Auto Insurance
policy to Ms. Davis under policy number 16788352 for the period of February 18, 2012
to August 18, 2012, insuring the 1995 Chevrolet Astro van (“the policy”) [Doc. 39 at ¶
49]. The Auto Insurance Coverage Summary was issued to Ms. Davis at 3732 Lilac
Street, Knoxville, Tennessee, 37914 [Id. at ¶ 50].
II.
Standard of Review
Summary judgment under Rule 56 of the Federal Rules of Civil Procedure is
proper “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.” Fed. R. Civ. P. 56(a). The
moving party bears the burden of establishing that no genuine issues of material fact
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exist. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Moore v. Phillip Morris Cos.,
8 F.3d 335, 339 (6th Cir. 1993). All facts and all inferences to be drawn therefrom must
be viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 310 F.3d
937, 942 (6th Cir. 2002). “Once the moving party presents evidence sufficient to support
a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis
of allegations.” Curtis Through Curtis v. Universal Match Corp., 778 F. Supp. 1421,
1423 (E.D. Tenn. 1991) (citing Celotex, 477 U.S. 317). To establish a genuine issue as to
the existence of a particular element, the non-moving party must point to evidence in the
record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it
must involve facts that might affect the outcome of the suit under the governing law. Id.
The Court’s function at the point of summary judgment is limited to determining
whether sufficient evidence has been presented to make the issue of fact a proper
question for the factfinder. Anderson, 477 U.S. at 250. The Court does not weigh the
evidence or determine the truth of the matter. Id. at 249. Nor does the Court search the
record “to establish that it is bereft of a genuine issue of material fact.” Street v. J.C.
Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989). Thus, “the inquiry performed
is the threshold inquiry of determining whether there is a need for a trial—whether, in
other words, there are any genuine factual issues that properly can be resolved only by a
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finder of fact because they may reasonably be resolved in favor of either party.”
Anderson, 477 U.S. at 250.
III.
Analysis
A federal court sitting in diversity applies the substantive law of the forum state.
Pennington v. State Farm Mut. Auto. Ins. Co., 553 F.3d 447, 450 (6th Cir. 2009) (citing
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). Tennessee applies the same rules of
construction to the interpretation of insurance policies as other types of contracts.
McKimm v. Bell, 790 S.W.2d 526, 527 (Tenn. 1990). An insurance policy must be
interpreted fairly and reasonably, giving the language its usual and ordinary meaning.
Naifeh v. Valley Forge Life Ins. Co., 204 S.W.3d 758, 768 (Tenn. 2006) (citing Parker v.
Provident Life & Acc. Ins. Co., 582 S.W.2d 380, 383 (Tenn. 1979)). Additionally,
“insurance policies should be construed as a whole in a reasonable and logical manner.”
Travelers Indem. Co. of Am. v. Moore & Assoc., Inc., 216 S.W.3d 302, 305-06 (Tenn.
2007) (quoting Standard Fire Ins. Co. v. Chester-O’Donley & Assoc., Inc., 972 S.W.2d 1,
7 (Tenn. Ct. App. 1998)).
The Court will apply these rules of interpretation to Progressive’s two arguments
in support of its motion as to why it does not have an obligation to defend or indemnify
Ms. Davis as the lessee of the 2012 Nissan Maxima.2
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In addition to the policy interpretation arguments discussed infra, Progressive has also
argued that it has no duty to defend or indemnify Ms. Davis in the underlying tort action under
the theories of joint venture, family purpose doctrine, and negligent entrustment [Doc. 38 at pp.
10-13]. The Court need not address these arguments as they are beyond the scope of the issues
presented in the Amended Complaint [Doc. 17] in this case.
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A. Whether the Nissan Maxima Was a Covered Auto Under the Policy
Progressive first argues that the Nissan Maxima was not a “covered auto” as
defined by the terms of the policy and therefore Progressive owes no duty to defend or
indemnify for the May 12, 2012 accident. The policy obligates Progressive to “pay
damages for bodily injury and property damage for which an insured person becomes
legally responsible because of an accident.” [Doc. 39-1 at p. 6]. The policy defines an
“insured person” to include:
(a) you or a relative with respect to an accident arising out of the
ownership, maintenance, or use of an auto or trailer;
(b) any person with respect to an accident arising out of that person’s
use of a covered auto with the permission of you or a relative; . . .
[Id. at p. 6]. The policy defines “covered auto” to include:
(a) any auto or trailer shown on the declarations page for the
coverages applicable to that auto or trailer;
(b) any additional auto;
(c) any replacement auto; . . .
[Id. at p. 5].
The policy defines “you” as “a person shown as a named insured on the
declarations page” [Id. at p. 6] and Ms. Davis is the only person listed on the declarations
page. It is undisputed that the 1995 Chevrolet Astro van is the only vehicle listed on the
declarations page [Id. at p. 20] and therefore the Nissan Maxima is not a “covered auto”
under the first definition. The Nissan Maxima is also not an “additional auto” which is
defined by the policy as “an auto you become the owner of during the policy period that
does not permanently replace an auto shown on the declarations page” [Id. at p. 5]. It is
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undisputed that Ms. Davis was a lessee and not an owner of the Nissan Maxima; thus, the
Nissan Maxima is not a “covered auto” under the second definition.
Finally, a
“replacement auto” is defined by the policy as “an auto that permanently replaces an auto
shown on the declarations page” [Id. at p. 6]. Again, the Nissan Maxima was leased to
Ms. Davis and did not permanently replace the Chevrolet Astro van. Accordingly, based
on the undisputed facts and the plain language of the policy terms, the Nissan Maxima
was not a “covered auto” under the policy.
B. Whether Xavier Bingham or “Deon” Were Permissive Drivers Under the
Policy
Progressive next argues that neither Xavier Bingham nor “Deon” were permissive
drivers under the terms of the policy and therefore Progressive has no duty to defend or
indemnify Ms. Davis for the accident. As noted above, the policy defines an “insured
person” to include:
(a) you or a relative with respect to an accident arising out of the
ownership, maintenance, or use of an auto or trailer;
(b) any person with respect to an accident arising out of that person’s
use of a covered auto with the permission of you or a relative; …
[Id. at p. 6]. Again, the policy defines “you” as “a person shown as a named insured on
the declarations page” [Id. at p. 6] and Ms. Davis is the only person listed on the
declarations page. Further, Ms. Davis did not own the Nissan Maxima, and was not
maintaining or using it at the time of the accident. Although Mr. Bingham was Ms.
Davis’s son and therefore her “relative” as that term is commonly understood, the policy
defines “relative” as “a person residing in the same household as you, and related to you
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by blood, marriage, or adoption.” [Id. at p. 6]. Because Mr. Bingham did not live and
had never lived at the Lilac Street residence, he was not a “relative” under the policy.
Therefore, the first definition of “insured person” does not apply.
Even assuming that the Nissan Maxima was a “covered auto,” the second
definition of “insured person” does not apply because Ms. Davis did not give permission
to Mr. Bingham or “Deon” to drive the Nissan Maxima. When he asked for permission
to borrow “the car”, both Mr. Bingham and Ms. Davis assumed and understood that they
were referring to the Chevrolet Impala that Ms. Davis occasionally borrowed. Mr.
Bingham did not even know that Ms. Davis had driven the Nissan Maxima until after
their conversation when he was so informed by another relative. Mr. Bingham admits
that he took the Nissan Maxima without permission. Further, there is no evidence that
Ms. Davis knew “Deon” was in the Nissan Maxima or that he had her permission to drive
it. Accordingly, based on the undisputed facts and the plain language of the policy,
neither Mr. Bingham nor “Deon” were permissive drivers under the policy. Therefore,
no “insured person” as defined by the policy could be legally responsible for the damages
of the May 12, 2012 accident.
IV.
Conclusion
For the reasons set forth herein, the Court finds that Progressive is entitled to
declaratory judgment and owes no duty of defense or indemnity in regard to the motor
vehicle accident of May 12, 2012 and the civil actions arising therefrom. Accordingly,
Progressive’s motion for summary judgment [Doc. 37] will be GRANTED. This case
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will be DISMISSED and the Clerk of Court will be DIRECTED to close this case. An
appropriate order will be entered.
ORDER ACCORDINGLY.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
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