GEICO General Insurance Company v. Dowd et al
Filing
52
MEMORANDUM OPINION AND ORDER denying 43 Motion for Summary Judgment. Signed by Judge William K. Sessions III on 12/18/2012. (law)
UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
GEICO GENERAL INSURANCE COMPANY,
:
:
Plaintiff,
:
:
v.
:
:
TIMOTHY DOWD and MERRY KINDRED
:
as Administratrix of the Estate of :
KATHRYN BORNEMAN,
:
:
Defendants.
:
:
Case No. 2:12-cv-40
MEMORANDUM OPINION and ORDER
In this insurance coverage dispute, Plaintiff Government
Employees Insurance Company (“GEICO”) seeks a ruling that it is
not obligated to defend or indemnify its insured Defendant
Timothy Dowd in connection with any claim brought by the estate
of Kathryn Borneman (“Estate”) stemming from injuries Borneman
suffered as a result of a motor vehicle collision.
Defendant
Estate has counterclaimed for a declaration of coverage, for
breach of contract and breach of the implied covenant of good
faith and fair dealing.
GEICO has moved for summary judgment;
the motion, ECF No. 43, is denied.
Factual Background1
On the evening of December 26, 2010, Timothy Dowd drove
recklessly while attempting to elude the City of Burlington
1
The following facts are presented in the light most
favorable to Dowd and the Estate, as the nonmoving parties.
police.
In the course of this escape attempt he ran a red light
and collided with a vehicle driven by Kathryn Borneman, who was
killed on impact.
Dowd was driving a 2000 Jeep Grand Cherokee
that did not belong to him.
For several months before the collision, Dowd had an
intimate relationship with Sarah Yandow.
He described the
relationship as primarily sexual, but that they were also
friends.
They ran errands together and did favors for one
another.
They were frequent passengers in each others’ vehicles.
Yandow drove Dowd’s car on at least one occasion, but before
December 26 Dowd had never driven the Jeep.
Yandow referred to the Jeep as her car and told Dowd that
she was the owner.
it.
She testified at a deposition that she bought
She kept a considerable amount of her personal belongings in
the car, and had discussions with Dowd about its need for
repairs.
At one point she told him that her father had helped
her get a new starter for the car.
Dowd believed that Yandow
owned the car, and Yandow admitted that he had reason to believe
that she was the owner.
In fact the jeep was owned by Jeremy
Martin, Yandow’s live-in boyfriend, whom Dowd did not know.
On the evening of December 26, Dowd and Yandow had made
plans to spend time together.
Yandow came to Dowd’s home for
dinner, but before they sat down to eat Yandow announced that she
had to run an important errand to drop something off.
2
She
suggested Dowd accompany her.
He understood that they would be
back shortly, and left without his cell phone.
It was a cold
night, and he was not dressed for an outing, although he did put
on a jacket.
They drove from Hinesburg, Vermont, to Burlington,
Vermont, and Dowd came to realize that it would not be a short
trip.
When they reached Yandow’s destination, a place unfamiliar
to Dowd, Yandow did not park in front of her friend’s house, but
on another street.
She said that she’d be back in five minutes.
She expected him to wait, and Dowd waited in the car with the
engine running.
Dowd did not know which house belonged to
Yandow’s friend, and he did not notice which house she entered.
Inside, Yandow obtained a Percocet from one of her friends,
took it and socialized with her friends.
After waiting nearly
forty minutes, Dowd became annoyed, and decided to drive back to
Hinesburg and wait for Yandow to call him.
Although he struggled
with the decision to leave because he did not want to seem rude,
he believed that he had permission to drive her car.
He stated
that he would not have driven it had he thought he was doing it
without her permission.
Dowd thought that had their positions
been reversed, Yandow would have been justified in taking his
vehicle.
He believed that she would know that he had gone home,
and she would have been able to get in touch with him.
Yandow admits that she is not very good at estimating time,
frequently changes plans without warning and is usually late.
3
When Yandow found her car gone she was shocked.
She thought she
had been inside only twenty-five minutes, and she couldn’t
understand why he hadn’t waited.
Had it been forty minutes she
felt he would have gotten annoyed and left her there.
She did
not call the police because she thought he had simply gone home
mad.
She started calling Dowd at his home after she thought he’d
had time to get there because she knew that he didn’t have his
cell phone with him.
She called Jeremy Martin that night, but
she did not say that her car had been taken without her
permission.
She did not tell the friend with whom she stayed
that night or anyone else that her car had been taken without her
permission.
She intended to have a friend drive her to Hinesburg
in the morning so that she could retrieve her car.
During Dowd’s attempt to drive back to Hinesburg he struck
and killed Kathryn Borneman.
The automobile insurance policy issued to Dowd by GEICO
provides for liability coverage to Dowd while operating a “nonowned auto” “with the permission, or reasonably believed to be
with the permission of the owner and within the scope of that
permission.”
GEICO Policy No. 4202940575 (“Policy”) at 4, ECF
No. 43-8.
Discussion
Summary judgment is appropriate where the moving party
“shows that there is no genuine dispute as to any material fact
4
and the movant is entitled to judgment as a matter of law.”
R. Civ. P. 56(a).
Fed.
The record evidence must be viewed in the
light most favorable to the nonmoving party, and all reasonable
inferences drawn in his or her favor.
E.g., Weinstock v.
Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000).
A fact is
material if it “might affect the outcome of the suit under the
governing law.”
247 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
A dispute concerning “a material fact is genuine ‘if
the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.’”
Weinstock, 224 F.3d at 41
(quoting Anderson, 477 U.S. at 248).
Under Vermont law,2 courts “construe insurance contracts to
give effect to the parties’ intent by looking at the plain
language of the contract.”
14 A.3d 968, 973.
Hathaway v. Tucker, 2010 VT 114, ¶14,
Disputed terms receive their “‘plain, ordinary
and popular meaning.’”
Id. (quoting Northern Sec. Ins. Co. v.
Doherty, 2009 VT 27, ¶ 8, 987 A.2d 253, 256 (entry order)).
Any
ambiguity in the contract’s language will be resolved in the
insured’s favor, but the insurer is entitled to the benefit of
unambiguous provisions that limit or exclude coverage.
2
See
Subject matter jurisdiction in this case is based on
diversity of citizenship under 28 U.S.C. § 1332(a), and the
parties do not dispute that the substantive law of Vermont
applies. See also Policy Amendment Vermont 2, § V(15) (providing
that the policy and any amendments and endorsements are to be
interpreted according to the laws of the state of Vermont).
5
Fireman’s Fund Ins. Co. v. CNA Ins. Co., 2004 VT 93, ¶ 9, 862
A.2d 251, 256; Norman v. King, 659 A.2d 1123, 1124 (Vt. 1995);
Am. Fid. Co. v. Elkins, 215 A.2d 516, 518 (Vt. 1965).
There is
no suggestion that the contract language is ambiguous, and
therefore the Court’s sole task at this point is to determine
whether GEICO has sustained its burden of demonstrating an
absence of genuinely disputed material facts.
It is undisputed that the Jeep Grand Cherokee fits the
Policy’s definition of a “non-owned auto,” and that Dowd was
operating a non-owned auto at the time of the accident.
At issue
is whether Dowd’s policy affords him coverage based on its
limitation that his use “must be with the permission or
reasonably believed to be with the permission, of the owner and
within the scope of that permission.”
Policy at 4.
There is likewise no dispute that Dowd did not have
permission of the title holder to the Jeep, Jeremy Martin, to use
the car, that Dowd reasonably believed Yandow to be the owner of
the car, and that he did not have the express permission of
Yandow to use the car.
GEICO contends that, assuming Yandow was
the apparent owner of the Jeep, no reasonable juror could
conclude that Dowd reasonably believed he had her permission to
use the Jeep or that his conduct in driving away without her that
night was within the scope of that permission.
The Estate
contends that this issue requires a factual evaluation, and must
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be submitted to a jury.
Permission or consent for another to use a vehicle may be
express or implied.
See Norman, 659 A.2d at 1124-25; Cutler v.
Travelers Ins. Co., 412 A.2d 284, 285 (Vt. 1980); cf. Shulins v.
New England Ins. Co., 360 F.2d 781, 786 (2d Cir. 1966) (noting
that “Vermont has adopted a reasonably broad view of the word
‘permission’ in the omnibus clause of insurance policies”).
Dowd
must be able to show that a reasonable juror could conclude that
he had permission to use the vehicle, or a reasonable belief that
he had permission.
See Am. Fid. Co. v. N. British & Mercantile
Ins. Co., 204 A.2d 110, 113 (Vt. 1964).
If he can make this
showing, then he receives the benefit of a presumption that his
use was within the scope of that consent.
Id.
To overcome the
presumption, GEICO would have to show that no reasonable juror
could conclude that Dowd’s actual use of the car was within the
scope of Yandow’s permission.
See id.; accord Ins. Co. of N. Am.
v. Millers’ Mut. Ins. Ass’n of Ill., 427 A.2d 354, 355 (Vt. 1981)
(“To overcome this presumption a party must show . . . that the
operation of the car involved a major deviation from the consent
given.”).
The Estate argues that “reasonable belief” denotes a
subjective standard of determining permission, and that the
Policy supplies coverage because Dowd subjectively believed that
7
Yandow would have been willing to permit him to drive the Jeep
back to Hinesburg under the circumstances.
For the most part the
cases the Estate cites, however, more accurately describe a mixed
subjective/objective standard:
the reasonableness of a user’s
subjective belief that he or she had permission from the owner to
use the vehicle.
See Empire Indem. Ins. Co. v. Allstate Cnty.
Mut. Ins. Co., 617 F. Supp. 2d 456, 465 (N.D. Tex. 2008) (citing
cases holding that the analysis includes both a subjective and
objective inquiry); State Farm Mut. Auto. Ins. Co. v. Zurich Am.
Ins. Co., 299 A.2d 704, 712 (N.J. 1973) (holding that “reasonably
believed” required a fact-finder to ascertain whether the user
“believe[d], with reason, that the owner was . . . willing”);
Blount v. Kennard, 612 N.E.2d 1268, 1270 (Ohio Ct. App. 1992)
(holding that trial court appropriately considered subjective and
objective factors in determining whether a driver had a
reasonable belief under the policy language).
But see Brumfield
v. United Servs. Auto. Ass’n, 616 So. 2d 876, 877 (La. Ct. App.
1993) (holding that “reasonable belief” in a non-owned automobile
clause “indicates a subjective standard of determining
permission, so that a permittee could be covered if he reasonably
believed that he had permission of the owner”).
The plain language of the Policy indicates that the standard
is not a strictly subjective one.
Had the Policy stated that use
of a non-owned auto was covered when the insured believed he had
8
permission, the Estate would have a stronger argument.
The
inclusion of the word “reasonably” places a reasonableness
requirement on the insured’s belief, however.
Although the
Vermont Supreme Court has not had occasion to consider the
appropriate standard in the context of non-owned auto insurance
coverage, it has construed reasonable belief in another context
to require that a belief be subjectively reasonable.
In State v.
Boglioli, 2011 VT 60, ¶ 15, 26 A.3d 44, 52, a defendant convicted
of voluntary manslaughter objected to the jury’s instruction on
self defense, which charged that “every person has the right to
use a reasonable amount of force to defend himself if he actually
reasonably believes two things:
(1) that he is in immediate
danger of bodily harm; and (s) that the use of such force was
necessary to avoid the danger.”
The defendant argued that the
instruction improperly introduced an objective element into what
should have been a subjective inquiry into the honesty of his
belief that he was in imminent peril.
The Supreme Court
disagreed, holding that “requiring that a belief be subjectively
reasonable is possible and in fact, required” when ascertaining
whether an individual claiming self defense had an honest belief
of imminent peril.
Id.
This Court believes that the Vermont Supreme Court, if faced
with the issue in an insurance coverage dispute concerning
whether an insured had a reasonable belief, would join the
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majority of state courts that have employed a subjectiveobjective standard, and hold that the user’s subjective belief
that he had permission to use a non-owned automobile must be
“grounded in reason.”
Boglioli, 2011 VT 60, ¶ 15 (quoting State
v. Wheelock, 609 A.2d 972, 976 (Vt. 1992)); see, e.g., Gov’t
Emps. Ins. Co. v. Kinyon, 173 Cal. Rptr. 805, 811 (Cal. Ct. App.
1981); Hugenberg v. W. Am. Ins. Co./Ohio Cas. Group, 249 S.W.3d
174, 189-90 (Ky. Ct. App. 2006); Armstrong v. Thrifty Car Rental,
933 So. 2d 235, 240 (La. Ct. App. 2006); Am. Motorists Ins. Co.
v. LaCourse, 314 A.2d 813, 817-18 (Me. 1974); State Farm, 299
A.2d at 712.
Employing this standard calls for an inquiry into Dowd’s
state of mind:
did he in fact believe, with reason, that Yandow
was willing for him to use her car?
An individual’s state of
mind is ordinarily an issue for the trier of fact to determine.
See In re Fink, 2011 VT 42, ¶ 38, 22 A.3d 461, 474; Doe v.
Forrest, 2004 VT 37, ¶ 56, 853 A.2d 48, 69 (“We have cautioned
about granting summary judgment ‘in any cases in which the
resolution of the dispositive issue requires determination of
state of mind, as the fact finder normally should be given the
opportunity to make a determination of the credibility of
witnesses, and the demeanor of the witness whose state of mind is
at issue.’”) (quoting Barbagallo v. Gregory, 553 A.2d 151, 151
(Vt. 1988) (entry order)); see also Aetna Cas. & Sur. Co. v.
10
Nationwide Mut. Ins. Co., 392 S.E.2d 377, 380 (N.C. 1990)
(holding that summary judgment was improper on the issue of
coverage because “reasonable belief is a question of fact to be
determined by a jury”).
Here there are facts from which a jury could conclude that
Dowd had a subjective belief grounded in reason that Yandow was
willing for him to use her car:
an intimate relationship that
included giving each other rides; Dowd’s having given explicit
permission on at least one occasion for Yandow to use his car;
and Yandow’s never having expressed an unwillingness for him to
use her car.
There are facts from which a jury could conclude
that Dowd’s use of the Jeep on the night in question was within
the scope of that permission:
among them Yandow’s own testimony
that if she had kept him waiting forty minutes she thought that
he would have gotten angry and left her, and Dowd’s testimony
that she was gone approximately forty minutes.
To be sure, upon hearing the facts at trial a jury could
conclude that Dowd did not have a reasonable belief that he had
Yandow’s permission to use the Jeep and/or that the scope of any
permission did not include stranding her at her friend’s house.
At summary judgment however, the Court rules only that, drawing
all reasonable inference in the Estate’s favor, GEICO has not
demonstrated that no jury could conclude that Dowd had a
reasonable belief that he had permission, nor has it demonstrated
11
that no jury could conclude that Dowd’s use of the Jeep was
within the scope of that permission.
Consequently GEICO has not
shown as a matter of law that there is no coverage under the
Policy.
GEICO’s Motion for Summary Judgment, ECF No. 43, is denied.
Dated at Burlington, Vermont this 18th day of December,
2012.
/s/ William K. Sessions III
William K. Sessions III
District Judge
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