Canal Insurance Company v. Carpenter et al
Filing
38
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS MOTION FOR SUMMARY JUDGMENT 32 AND DENYING THE PLAINTIFFS MOTION FOR SUMMARY JUDGMENT 31 : The Court GRANTS Herrington and JRHs motion for summary judgment 32 , DENIES Canals motion for summar y judgment 31 , and DECLARES that Herrington and JRH are entitled to liability insurance coverage under the Canal policy because the flatbed truck qualifies as a temporary substitute vehicle. It SCHEDULES astatus conference on Thursday, June 16, 2016, at 10:00 A.M. to schedule the remaining claims in the case. Signed by District Judge Irene M. Keeley on 5/10/16. (jss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CANAL INSURANCE COMPANY,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:15CV127
(Judge Keeley)
DENZIL CARPENTER, RHONDA CARPENTER,
JOHN COCHRAN, MARSHA CARPENTER,
individually and as next friend
and parent of S.C., a minor,
CLARKSBURG MACK SALES & SERVICE,
INC., JAMES HERRINGTON, individually
doing business as JRH Trucking, LTD.,
Defendants.
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
Pending before the Court in this declaratory judgment action
are cross-motions for summary judgment.
The question presented is
whether a flatbed truck owned by the repair shop and driven by
James Herrington to retrieve his repaired coal truck qualifies as
a “temporary substitute auto” under the insurer’s policy.
The
plaintiff, Canal Insurance Company (“Canal”) seeks a declaration
that its commercial auto policy, issued to JRH Trucking, Ltd.
(“JRH”), does not cover a Mitsubishi flatbed truck loaned to James
Herrington (“Herrington”) by Clarksburg Mack Sales & Services, Inc.
(“Clarksburg Mack”).
For their part, Herrington and JRH seek a
declaration that the flatbed truck qualifies as a “temporary
substitute auto,” entitling them to liability coverage.
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
FACTUAL BACKGROUND
In late July 2013, Herrington, who owns JRH, called Clarksburg
Mack to request repairs on one of his Mack coal trucks (“the coal
truck”) (Dkt. No. 31-1 at 2).
On July 24, 2013, Dave Garrett
(“Garrett”), a mechanic employed by Clarksburg Mack, drove a
Mitsubishi flatbed truck (“the flatbed truck”) owned by Clarksburg
Mack to JRH’s facility in Morgantown, West Virginia.
Id.
Garrett
was unable to fix the coal truck on site, and determined that he
would need to transport the truck to Clarksburg Mack’s garage for
repairs.
Id.
Herrington asked Garrett to drive the coal truck
back to the garage, and Garrett received permission from Clarksburg
Mack to leave the flatbed truck at JRH’s facility.
Id.
Garrett
left the keys in the flatbed truck, but did not give Herrington
permission to use the vehicle.
Id.
Based on past practice,
Herrington understood that he was only authorized to use the
flatbed truck to drive to Clarksburg Mack to pick up his coal truck
once it was repaired.
Id.
On Friday, July 26, 2013, Tom Quinn (“Quinn”), Clarksburg
Mack’s Service Manager, called Herrington to report that the coal
truck was operative and ready to be picked up.
Id. at 3.
He gave
Herrington the option of waiting until Monday, when a Clarksburg
2
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
Mack employee would be available to return the coal truck, or
coming to Clarksburg to pick up the coal truck that day.
Id.
Herrington, who needed the coal truck early Monday morning, chose
to pick up the coal truck that day.
Quinn gave him permission
Id.
to drive the flatbed truck to Clarksburg Mack to retrieve the coal
truck.
Id.
On his way from Morgantown to Clarksburg, Herrington collided
with the rear of Denzil Carpenter’s vehicle, which was stopped at
a red light (Dkt. No. 1 at 2-3). Carpenter’s vehicle then collided
with that of Jillian Long (Dkt. No. 1-4 at 3).
Carpenter, along
with his wife, Rhonda Carpenter, and their minor niece, S.C.,
sustained serious injuries.
Id. at 3-4.
On March 23, 2015, the Carpenters and John and Marsha Cochran,
on behalf of S.C., filed suit in the Circuit Court of Monongalia
County,
West
Virginia,
alleging
Herrington and JRH (Dkt. No. 1 at 2).
202.
negligence
claims
against
See Civil Action No. 15-C-
Cincinnati Insurance Company, Clarksburg Mack’s insurer, is
defending Herrington and JRH in the state court lawsuit pursuant to
a reservation of rights (Dkt. No. 31-1 at 3; Dkt. No. 1 at 4).
JRH is a named insured under a commercial trucking policy
issued by Canal that was in effect from July 24, 2013, through July
3
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
23, 2014 (Dkt. No. 1 at 2).
The Canal policy provides up to
$1,000,000 of liability coverage. Id. On September 5, 2013, Canal
issued a declination of coverage letter to JRH, denying coverage
because the flatbed truck Herrington operated at the time of the
accident was neither a “covered auto” nor a “temporary substitute
auto.”
Id. at 4.
PROCEDURAL HISTORY
On July 31, 2015, Canal filed suit in this Court, seeking a
declaration that its policy does not cover the flatbed truck and
that it has no duty to defend or indemnify Herrington or JRH in the
state court action (Dkt. No. 1 at 5).
On August 26, 2015,
Herrington and JRH filed an answer; in addition, they filed a
counterclaim against Canal seeking a declaratory judgment that
coverage exists, and alleging
bad
faith
scheduling
(Dkt.
No.
conference
3).
in
statutory bad faith and common law
On
the
October
case,
the
21,
2015,
Court
following
bifurcated
a
the
coverage question from any extra-contractual issues (Dkt. No. 21).
On February 12, 2016, Canal filed its motion for summary
judgment, arguing that the flatbed truck is neither a “covered
auto” nor a “temporary substitute auto” because it was not used as
a replacement for the coal truck that was being repaired (Dkt. No.
4
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
31).
Three days later, Herrington and JRH moved for summary
judgment, contending that they are entitled to coverage because
Herrington was using the flatbed truck as a temporary replacement
for the coal truck (Dkt. No. 32-1 at 12).
The motions are now
fully briefed and ripe for disposition.
LEGAL STANDARD
Summary
documents,
judgment
is
electronically
declarations,
stipulations
appropriate
stored
.
.
where
the
information,
.,
admissions,
“depositions,
affidavits
or
interrogatory
answers, or other materials” show 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), (c)(1)(A).
When ruling on
a motion for summary judgment, the Court reviews all the evidence
“in the light most favorable” to the nonmoving party.
Providence
Square Assocs., L.L.C. v. G.D.F., Inc., 211 F.3d 846, 850 (4th Cir.
2000).
The Court must avoid weighing the evidence or determining
the truth, and limit its inquiry solely to a determination of
whether genuine issues of triable fact exist.
Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of informing the
Court
of
the
basis
for
the
motion
5
and
of
establishing
the
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
nonexistence of genuine issues of material fact.
Catrett, 477 U.S. 317, 323 (1986).
Celotex Corp. v.
Once the moving party has made
the necessary showing, the nonmoving party “must set forth specific
facts showing that there is a genuine issue for trial.”
Anderson,
477 U.S. at 256 (internal quotation marks and citation omitted).
The “mere existence of a scintilla of evidence” favoring the
nonmoving party will not prevent the entry of summary judgment; the
evidence
must
be
such
that
a
rational
reasonably find for the nonmoving party.
trier
of
fact
could
Id. at 248–52
ANALYSIS
The only disputed issue is whether the flatbed truck owned by
Clarksburg
Mack
and
operated
by
Herrington
qualifies
“temporary substitute auto” under the Canal policy.
as
a
The policy,
which provides $1,000,000 in commercial liability coverage to JRH
as a named insured and Herrington as an insured driver, covers
seven Mack trucks owned by JRH Trucking (Dkt. No. 22-2 at 3).
It
also provides additional liability coverage for vehicles that
qualify as “temporary substitute autos.”
in relevant part:
6
Id.
The policy states,
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
A. COVERAGE
Any “temporary substitute auto” that is loaned to the
named insured will be considered a covered “auto” only
for those coverages where an “X” is entered in the checkbox in the Schedule of Coverages.
Id. (emphasis added).
The policy’s Schedule of Coverages includes
an “X” in the check box for “Liability Coverage” (Dkt. No. 22-2 at
22).
With regard to liability coverage, the policy provides:
Section II – Liability Coverage
A. Coverage
We will pay all sums an “insured” legally must pay as
damages because of “bodily injury” or “property damage”
to which the insurance applies, caused by an “accident”
and resulting from the ownership, maintenance, or use of
a covered “auto.”
(Dkt. No. 22-2 at 12) (emphasis added).
coverage
applies
equally
to
“temporary substitute auto.”
any
The policy’s liability
“covered
auto,”
including
a
In other words, the policy extends
the same liability coverage to “temporary substitute autos” as it
does
to
Herrington’s
own
coal
trucks.
Under
“temporary substitute auto” is defined to include,
7
the
policy,
a
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
[A]ny “auto” you do not own while used with the
permission of its owner, who is engaged in the business
of selling, leasing, repairing, or servicing “autos”
while such “auto” is used as a temporary replacement for
a covered “auto” you own that is out of service because
of its:
1.
Breakdown,
2.
Repair, or
3.
Servicing
(Dkt. No. 22-2 at 23) (emphasis added). Accordingly, the temporary
substitute auto provision gives rise to five requirements: (1) the
“temporary substitute auto” must be owned by someone other than the
insured; (2) the owner of the “temporary substitute auto” must be
engaged
in
the
business
of
selling,
leasing,
repairing,
or
servicing autos; (3) the “temporary substitute auto” must be used
with the permission of its owner; (4) the “temporary substitute
auto” must have been used as a “temporary replacement” for the
insured’s own vehicle; and (5) the insured’s own vehicle must be
out of service due to a breakdown, repair, or servicing.
See id.
The parties agree that four out of the five requirements
enumerated in the policy are satisfied:
(1) Clarksburg Mack owned
the flatbed truck operated by Herrington on July 26, 2013; (2)
Clarksburg Mack is engaged in the business of “selling, leasing,
repairing, or servicing” autos; (3) Clarksburg Mack gave Herrington
permission to drive the flatbed truck; and (4) Herrington’s coal
8
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
truck was “out of service because of its breakdown, service, or
repair.”
See
Dkt.
No.
32-1
at
6-12;
Dkt.
No.
31-1
at
6.
Accordingly, the only requirement in dispute is whether Herrington
used Clarksburg Mack’s flatbed truck as a “temporary replacement”
for his coal truck.
Herrington and JRH argue that at the time of the accident,
Herrington was using the flatbed truck as a “temporary replacement”
for his disabled coal truck (Dkt. No. 32-1).
Specifically, they
contend that Herrington was driving the flatbed truck to Clarksburg
Mack “in place of” his own vehicle in order to complete the repair
cycle on his coal truck.
that
the
flatbed
truck
Id. at 14-16.
was
not
being
Canal argues, however,
used
as
a
“temporary
replacement” for the coal truck because Herrington’s coal truck was
primarily used for hauling coal (Dkt. No. 31-1 at 6-7).
In other
words, Canal essentially contends that the flatbed truck cannot be
considered a temporary substitute auto because it “was not being
used to haul coal.”
The
Supreme
Id.
Court
of
Appeals
of
West
Virginia
has
not
specifically addressed what constitutes a “temporary replacement”
for
an
insured’s
own
vehicle
in
9
the
context
of
a
temporary
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
substitute automobile provision.
The United States Court of
Appeals for the Fourth Circuit, however, has commented that
[i]t is obviously the purpose of the ordinary substitute
[auto] clause to cover an automobile temporarily used to
the same extent as the automobile described in the policy
but not to give the substitute vehicle a wider coverage.
Lumbermens Mut. Cas. Co. v. Harleysville Mut. Cas. Co., 367 F.2d
250, 254 (4th Cir. 1966) (emphasis added).
After
careful
consideration,
the
Court
rejects
Canal’s
argument that the flatbed truck was not being used as a “temporary
replacement” for Herrington’s own vehicle merely because “had the
coal truck not been out of commission for repairs, [Herrington]
would have had no reason to be driving to Clarksburg Mack.” (Dkt.
No. 31-1 at 8).
A temporary substitute auto provision is in fact
designed for that very purpose:
to provide an insured with
continuity of liability coverage where an automobile described in
the insured’s policy becomes unavailable for use due to “its
breakdown, repair, or servicing,” and, therefore, another vehicle
must be temporarily used in its place.
See 8A Steven Plitt et al.,
Couch on Insurance § 117.62 (3d ed.).
To adopt Canal’s circular
reasoning would defeat the purpose of the temporary substitute auto
10
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
provision in providing continued protection to the insured while
his own auto is being repaired or serviced.
The cases Canal cites from other jurisdictions do not lead the
Court to a contrary conclusion.
For example, in Spillers v. ABH
Trucking Co., Inc., a Louisiana case, the court noted that a
temporary substitute automobile "must be used for a limited time
and in the same capacity as the vehicles insured by [the insurer]
under the policy in question." 713 So.2d 505, 512 (La. App. 1998).
The defendant, ABH, used its vehicles to transport lumber and
sawdust.
Id.
Jason Slane, an ABH employee, drove his personal
vehicle to repair one of ABH’s stranded trucks.
Id.
He was making
the second of three trips for the purpose of repairing the stranded
truck when he was involved in an accident.
Id.
The court found
that Slane’s personal vehicle was not a “temporary substitute auto”
within the meaning of the policy because it was not a substitute or
replacement for the eighteen-wheel truck that was stranded. Id. at
513. The court did not indicate whether Slane ever used his pickup
truck to travel to repair ABH vehicles.
Here, Canal’s conclusion that Herrington must have used the
flatbed
truck
to
haul
coal
to
be
entitled
to
coverage
is
unpersuasive because it presumes that he only used his coal trucks
11
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
to haul coal.
See Dkt. No. 31-1 at 7.
The record reflects that
Herrington sometimes drove his coal trucks to Clarksburg Mack
himself to obtain service, undercutting Canal’s assumption that
those trucks were used exclusively to haul coal (Dkt. No. 32-6 at
3; Dkt. No. 32-3 at 2).
Here,
Herrington
See Dkt. No. 36 at 3.
was
driving
the
Mitsubishi
truck
to
Clarksburg Mack in order to obtain a necessary repair to his
vehicle, precisely the same purpose for which Herrington would have
driven any of his own vehicles, including the disabled coal truck,
to Clarksburg Mack. It is immaterial that the coal truck driven to
Clarksburg Mack was not the vehicle (or the same type of vehicle)
that actually required repair.
Plitt, supra, § 117.90.
It also
does not matter that the purpose for which Herrington utilized the
flatbed truck (i.e., completing a vehicle repair cycle) is not the
only purpose for which he could have used a temporary substitute
auto.
What does matter is whether Mr. Herrington’s actual use of
the substitute vehicle (the flatbed truck) was to the same extent
as his use of the automobile described in the policy (the coal
truck).
See Lumbermens, 367 F.2d at 254-55; Plitt, supra, §
117.89.
Because Herrington used the flatbed truck to the same
extent as he used his own vehicle (i.e., driving to a repair shop
12
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
in order to complete an auto repair cycle), the Court concludes
that the flatbed truck was used as a “temporary replacement” for
Herrington’s coal truck.
Because the Court finds that the policy language is clear, it
need not address Herrington’s alternative argument that the policy
language is ambiguous.
In conclusion, for the reasons discussed, the Court GRANTS
Herrington and JRH’s motion for summary judgment (Dkt. No. 32),
DENIES Canal’s motion for summary judgment (Dkt. No. 31), and
DECLARES
that
Herrington
and
JRH
are
entitled
to
liability
insurance coverage under the Canal policy because the flatbed truck
qualifies as a “temporary substitute vehicle.”
It SCHEDULES a
status conference on Thursday, June 16, 2016, at 10:00 A.M. to
schedule the remaining claims in the case.
It is so ORDERED.
13
CANAL INS. CO. V. CARPENTER, ET AL.
1:15CV127
MEMORANDUM OPINION AND ORDER GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT [DKT. NO. 32] AND DENYING
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DKT. NO. 31]
The Court
DIRECTS
the Clerk to transmit copies of this
Memorandum Opinion and Order to counsel of record and to enter a
separate judgment order.
DATED: May 10, 2016.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
14
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