Gary Atkinson v. Nancy Snodgrass and Texas Farm Bureau Insurance

Opinion filed March 16, 2006 Opinion filed March 16, 2006 In The Eleventh Court of Appeals __________ No. 11-05-00011-CV __________ GARY ATKINSON, Appellant V. NANCY SNODGRASS AND TEXAS FARM BUREAU INSURANCE, Appellees On Appeal from the 35th District Court Brown County, Texas Trial Court Cause No. 02-06-355 M E M O R A N D U M  O P I N I O N Gary Atkinson sued Nancy Snodgrass and Texas Farm Bureau Insurance to recover damages he sustained in a motor vehicle accident with Ted Horn. Atkinson alleged that Snodgrass negligently entrusted a vehicle to Horn and that Farm Bureau was responsible for a default judgment that he had taken against Horn. The parties filed cross-motions for summary judgment. The trial court granted Snodgrass and Farm Bureau=s motion for summary judgment and dismissed Atkinson=s claims against them. We affirm. Background Facts Snodgrass asked Horn to repair her pickup=s transmission. She drove the pickup to Horn=s residence and left it with the keys. Horn eventually returned the pickup to Snodgrass and represented that the transmission had been repaired. Snodgrass test-drove the pickup and discovered that it still did not shift properly. She told Horn that this was unacceptable and that she wanted her pickup repaired. Horn drove the pickup back to his house. Two days later, Horn and his daughter drove the pickup to Lake Brownwood C approximately forty-five miles from his house C and were involved in an accident with Atkinson. Atkinson sued Horn and Snodgrass. Horn defaulted, and Atkinson recovered a default judgment. Atkinson then added Farm Bureau (Snodgrass=s insurer) as a party to enforce his default judgment. The parties filed cross-motions for summary judgment. The trial court denied Atkinson=s motion and granted Snodgrass and Farm Bureau=s motion. Issues Atkinson challenges the trial court=s ruling with two issues. Atkinson contends that the trial court erred when it granted Snodgrass and Farm Bureau=s motion for summary judgment because there was sufficient evidence to raise fact questions whether Horn was a permissive user and whether Snodgrass failed to investigate Horn=s competence as a driver. Standard of Review Farm Bureau and Snodgrass=s motion contained both a traditional and a no-evidence motion for summary judgment. Traditional motions are governed by Tex. R. Civ. P. 166a(c) which provides that a summary judgment shall be rendered if the evidence properly before the court indicates that Athere is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.@ When a defendant files a traditional motion for summary judgment, it must either conclusively negate at least one of the essential elements of a plaintiff=s cause of action or conclusively establish each element of an affirmative defense. Randall=s Food Mkts., Inc. v. Davis, 891 S.W.2d 640, 644 (Tex. 1995). If a defendant negates an element of the plaintiff=s claim, the burden shifts to the plaintiff who must produce evidence creating a genuine issue of material fact on that disputed element. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). The trial court must assume that all evidence favorable to the nonmovant is true and must view the evidence in the light most favorable to the nonmovant. Specialty Retailers, Inc. v. DeMoranville, 933 S.W.2d 490, 491 (Tex. 1996). The trial court must indulge every reasonable inference and resolve all doubts in favor of the nonmovant. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). We review the trial court=s decision as a question of law and, therefore, utilize a de novo review applying the same presumptions as are applicable to the trial court. Elson Thermoplastics v. Dynamic Sys., Inc., 49 S.W.3d 891, 896 (Tex. App.CAustin 2001, no pet.). No-evidence motions are governed by Tex. R. Civ. P. 166a(i). The party without the burden of proof may file a no-evidence motion after an adequate time for discovery has passed. The movant asks for summary judgment on the ground that the nonmoving party lacks supporting evidence for one or more essential elements of its claim. Id. The trial court must sustain the motion unless the nonmovant produces sufficient evidence to create a genuine issue of material fact. Id. A no-evidence motion for summary judgment is essentially a directed verdict granted before trial, to which we apply a legal sufficiency standard of review. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). A no-evidence summary judgment will be sustained when (1) there is a complete absence of evidence of a vital fact, (2) the court is barred by rules of law from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a scintilla, or (4) the evidence conclusively establishes the opposite of a vital fact. Id. at 751. Did The Trial Court Correctly Grant Snodgrass=s Motion For Summary Judgment? Atkinson sued Snodgrass for negligent entrustment. To establish negligent entrustment, one must prove that there was (1) entrustment of a vehicle by the owner (2) to an unlicensed, incompetent, or reckless driver (3) that the owner knew or should have known to be unlicensed, incompetent, or reckless, (4) that the driver was negligent on the occasion in question, and (5) that this negligence proximately caused the accident. Rosell v. Cent. W. Motor Stages, Inc., 89 S.W.3d 643, 655 (Tex. App.CDallas 2002, pet. denied). Snodgrass does not dispute that Horn was driving her pickup or that his negligence proximately caused the accident. She contends that there was no evidence: that he had her permission to drive the pickup to the lake; that he was unlicensed, reckless or incompetent; or that she knew or should have known that he was unlicensed, reckless or incompetent. Atkinson contends that his summary judgment response sufficiently raised a fact question on each of these elements. Atkinson produced evidence that Horn did not have a regular shop but worked out of his house. Snodgrass had known Horn for only one month. He returned her pickup to her once, incorrectly contending it had been repaired. She insisted that he take the pickup back to his house and complete the repair. Horn called Snodgrass the day after the accident and told her that he had taken her pickup to Lake Brownwood to eat supper and that he had been involved in an accident on the way back. She told him to return her pickup. The fact that Horn worked out of his house rather than at a regular commercial facility and that his first attempt to repair the transmission was unsuccessful is no evidence that he was an unlicensed, reckless, or incompetent driver. It may reflect on his mechanical skills but not his driving skills. Atkinson contends that, when Snodgrass learned about the accident, she was angry C not because Horn took her pickup to Lake Brownwood C but because he wrecked it. Atkinson also makes much of the fact that, after the accident, Snodgrass still told Horn to drive her pickup back. Even if Atkinson=s description of Snodgrass=s reaction is accurate, neither that nor the fact that she asked Horn to drive the pickup after the accident are material because the act of entrusting the vehicle necessarily takes place before the accident and, therefore, subsequent events have no bearing. See Williams v. Steves Indus., Inc., 678 S.W.2d 205, 211 (Tex. App.CAustin 1984), aff=d, 699 S.W.2d 570 (Tex. 1985)(evidence indicating that defendant allowed the driver to operate its vehicles without a license for several months after the accident had no bearing on the nature of the negligent entrustment on the day of the accident); and Huynh v. R. Warehousing & Port Servs., Inc., 973 S.W.2d 375, 378 (Tex. App.CTyler 1998, no pet.)(driver=s post-accident refusal to take drug test was not relevant to negligent entrustment action). During oral argument, Atkinson contended that Snodgrass had a duty to investigate Horn and that her failure to do so satisfied the Aknew or should have known@ element. Atkinson has cited no authority requiring someone in Snodgrass=s position to investigate Horn=s driving record, and we have found none either. Moreover, the record is absent as to any indication what a pre-accident investigation would have revealed. Without some evidence that an investigation would have shown that Horn should not be entrusted with a vehicle, we cannot say that Snodgrass=s failure to investigate his driving record was the proximate cause of Atkinson=s accident. See Provident Am. Ins. Co. v. Castañeda, 988 S.W.2d 189, 198 (Tex. 1998)(inadequate investigation must be the cause of plaintiff=s harm to constitute an independent ground of recovery). Because Atkinson failed to produce any evidence of Horn=s prior driving record, he failed to create a material question of fact. The trial court correctly granted Snodgrass=s no-evidence motion for summary judgment. It is unnecessary for us to address Snodgrass=s traditional motion for summary judgment. Atkinson=s second issue is overruled. Did The Trial Court Correctly Grant Farm Bureau=s Motion For Summary Judgment? Atkinson=s First Amended Petition alleged the following cause of action against Farm Bureau: On January 28, 2003, a Default Judgment was entered against Defendant TED HORN. Please see Final Judgment attached hereto as Exhibit A. Plaintiff brings suit against Defendant TEXAS FARM BUREAU INSURANCE in order to enforce this default judgment. Farm Bureau specially excepted to Atkinson=s allegation. It also specifically denied in its answer that Horn was a permissive user at the time of the accident or that Horn had stated a cause of action. Atkinson filed a motion for summary judgment which contained both a traditional and a no-evidence motion for summary judgment. The traditional motion asserted that, as a matter of law, Horn was a permissive user and that Atkinson=s default judgment against Horn was fully enforceable against both Snodgrass and Farm Bureau. Atkinson=s no-evidence motion alleged that there was no evidence showing that Horn was not a permissive user. Farm Bureau moved for summary judgment on its affirmative defense that Atkinson had failed to state a cause of action for which relief could be granted. Farm Bureau alleged generally that it had no liability for Atkinson=s injuries or the actions of any other party.[1] The parties= pleadings place this case in an awkward procedural position. Atkinson=s plain allegation that he had a default judgment which could be enforced against Farm Bureau does not state a cause of action. Texas is not a direct action state. Consequently, one normally may not sue the insurer directly. See State Farm County Mut. Ins. Co. of Texas v. Ollis, 768 S.W.2d 722, 723 (Tex. 1989). Atkinson=s First Amended Petition provides no explanation for why the general rule would not apply in this case. Farm Bureau added to the difficulty when it essentially asserted a general demurrer in a motion for summary judgment. The Federal Rules of Civil Procedure allow a motion to dismiss based upon deficiencies in a plaintiff=s complaint. Fed. R. Civ. P. 12(b)(6). Texas has no analogous provision. See Fort Bend County v. Wilson, 825 S.W.2d 251, 253 (Tex. App.CHouston [14th Dist.] 1992, no writ)(motion to dismiss based upon plaintiff=s alleged failure to state facts which would support a cause of action is an impermissible general demurrer). The correct approach is to challenge the pleading defect with a special exception. Lewis v. Skippy=s Mistake Bar, 944 S.W.2d 1, 5 (Tex. App.CFort Worth 1996), rev=d on other grounds sub nom. Southland Corp. v. Lewis, 940 S.W.2d 83 (Tex. 1997). Texas courts have held that, when there is no action by the trial court sustaining special exceptions, an order granting a dismissal for failure to state a cause of action must be reversed. See Centennial Ins. Co. v. Commercial Union Ins. Cos., 803 S.W.2d 479, 483 (Tex. App.CHouston [14th Dist.] 1991, no writ). The supreme court, however, has held that this issue can be waived. San Jacinto River Auth. v. Duke, 783 S.W.2d 209 (Tex. 1990). Atkinson did not object to the form of Farm Bureau=s motion. Thus, the trial court did not commit reversible error when it considered that motion. Furthermore, despite the language used by the parties in their motions, it appears that the real dispute was whether Horn was covered by Snodgrass=s liability policy. Because Snodgrass was insured by Farm Bureau, if Horn was a permissive user at the time of the accident, he had coverage under her policy. Tull v. Chubb Group of Ins. Cos., 146 S.W.3d 689, 695 (Tex. App.CAmarillo 2004, no pet.). Horn had express permission to drive the pickup to and from Snodgrass=s home or business and his residence. There is no direct evidence that he had express permission to drive the pickup to Lake Brownwood. In Coronado v. Employers= Nat=l Ins. Co., 596 S.W.2d 502, 505 (Tex. 1979), the supreme court adopted the minor deviation rule to determine whether use not expressly authorized may still be permissive use under an automobile policy. This rule recognizes three categories of deviations. First are deviations so slight that a fact issue is not raised on whether permission was revoked. Second are deviations of more significance which raise a fact question. Third are deviations that are so gross as to destroy the initial permission as a matter of law. Id. at 506. The supreme court has instructed courts that the determination of whether a deviation is material requires consideration of the extent of the deviation in terms of actual distance, time, or purpose. Id. at 505. Horn=s trip to Lake Brownwood deviated from Snodgrass=s actual permission in two of these three respects. Snodgrass gave Horn her pickup so that he could repair it. Activities such as traveling from his residence to hers or test-driving it to verify the repair would fit this purpose C taking the pickup to Lake Brownwood to eat supper with his daughter does not. The record contains evidence of other deviations. Horn=s residence was approximately ten miles from Snodgrass=s residence. Lake Brownwood, however, was forty-five miles away. The police report shows that Horn had been drinking and that, in the opinion of the investigating officer, alcohol played a role in the accident. Merely because Horn=s actions were outside Snodgrass=s express permission is insufficient to make him a nonpermissive user as a matter of law. For example, Texas courts have refused to adopt a rule that any use of a company vehicle in violation of company policy is automatically nonpermissive use. Coronado, 596 S.W.2d at 506; Tull, 146 S.W.3d at 696. But, violation of company policy or express instructions is a relevant inquiry; and, in factual situations similar to this, courts have held that nonpermissive use was established as a matter of law. For example, in Tull, the driver used a company vehicle after work to take her boyfriend to a friend=s house. The driver was involved in an accident and was eventually convicted of DWI. Driving after hours, on a personal mission, while drinking, and with a nonemployee passenger were all violations of company policy. The Amarillo Court of Appeals held that as a matter of law these deviations made the driver a nonpermissive user. Id. at 696-97. See also Royal Indem. Co. v. H. E. Abbott & Sons, Inc., 399 S.W.2d 343, 347 (Tex. 1966)(employee who took ranch pickup on personal errand to San Angelo, which was thirty miles from the ranch, was not a permissive user). We hold that, as a matter of law, Horn was not a permissive user when he took a pickup that had been entrusted to him for a transmission repair to Lake Brownwood on a personal mission. Atkinson=s first issue is overruled. Conclusion The trial court correctly granted Snodgrass and Farm Bureau=s Motion for Summary Judgment. There was no evidence that Snodgrass violated any duty to Atkinson when she gave Horn her pickup so that he could repair the transmission. Snodgrass had no duty to investigate Horn=s driving record, nor was any evidence given to the trial court establishing that Horn was an unlicensed, incompetent, or reckless driver. Finally, the evidence established that, as a matter of law, Horn was not a permissive user at the time of the accident and, therefore, that he had no coverage under Snodgrass=s liability policy. The judgment of the trial court is affirmed. RICK STRANGE JUSTICE March 16, 2006 Panel consists of: Wright, C.J., and McCall, J., and Strange, J. [1]We note that the same counsel represented both Snodgrass and Farm Bureau. Care should be exercised in such a situation because, by disclaiming any responsibility for the actions of any other party which would necessarily include the insured, a potential conflict of interest was created. See Farmers Texas County Mut. Ins. Co. v. Wilkinson, 601 S.W.2d 520, 522 (Tex. Civ. App.CAustin 1980, writ ref=d n.r.e.)(noting apparent conflict of interest when an insurer represents the insured while simultaneously formulating its defense against the insured for noncoverage).