Auto-Owners Insurance Company v. Hancock

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Auto-Owners Ins. Co., No. CV-21-00903-PHX-DLR 10 Plaintiff/Counter-defendant, ORDER 11 v. 12 Andrew Hancock, 13 Defendant/Counter-claimant. [15] 16 Pending before the Court are fully briefed cross-motions for summary judgment. 17 (Docs. 62–68.) The Court grants summary judgment for Plaintiff/Counter-Defendant 18 Auto-Owners Insurance Company and denies summary judgment for Defendant/Counter19 Claimant Andrew Hancock. 20 I. Background 21 Hancock traveled to the Tonto National Forest in March 2021 to ride dirt bikes with 22 a friend. (Doc. 63-3 at 2.) The two met at the intersection of Beeline Highway 87 and 23 Forest Service Road 3456. (Doc. 62-3 at 8.) They then rode their dirt bikes on Road 3456 24 to Bartlett Lake. (Id. at 11.) On the return trip, Hancock collided with Robert Thurman, 25 who was driving a 2019 Can-Am Maverick. (Doc. 64-1 at 2.) Officers from the Maricopa 26 County Sheriff’s Office (“MCSO”) responded to the accident, utilizing a barge to cross 27 Bartlett Lake and an MCSO all-terrain vehicle (“ATV”) to arrive at the collision site. (Doc. 28 63-4 at 6.) Hancock appeared to be bleeding from the back of his head, had a deformity to 1 his left knee, and a laceration on his right arm, and was helicoptered to Scottsdale Osborn 2 Hospital. (Id.) 3 Because his medical expenses exceeded Thurman’s insurance coverage, Hancock 4 sought compensation from his automobile insurer, Auto-Owners, via the Underinsured 5 Motorist (“UIM”) provision in his insurance policy. (Doc. 63 at 2.) Nicholas Kracher, a 6 claims representative for Auto-Owners, exchanged emails with Hancock’s attorney and 7 stated the UIM coverage applied. (Doc. 63-13 at 3.) Kimberlee Hillock, attorney for Auto8 Owners, questioned Kracher’s decision, stating the road where the accident occurred 9 appears to be a “hiking trail through the Tonto National Forest.” (Doc. 63-14 at 2.) 10 Kracher’s emails and deposition reflect that he previously understood the crash site to be a 11 service road. (Docs. 63-14 at 2; 64-4 at 5–7.) 12 Subsequently, Auto-Owners brought this action seeking a declaratory judgment that 13 the UIM provision excludes Hancock’s claim. (Doc. 62 at 1.) Hancock counterclaimed 14 for breach of contract and bad faith. (Id. at 2.) Auto-Owners contends the UIM provision 15 is inapplicable for two reasons: (1) Thurman’s Can-Am Maverick was designed primarily 16 for off-highway use, and (2) the accident did not occur on a public road. (Doc. 62 at 7, 17 11.) Indeed, Hancock stated in his deposition that Thurman’s Can-Am Maverick was 18 marketed as a “recreational vehicle for off-road and adventure use.” (Doc. 62-3 at 26.) 19 Hancock, however, contends that “because [the site of the accident] is a roadway open for 20 public travel under the jurisdiction of the government, in this case, the National Forest 21 Service,” the accident happened on a public road and therefore the UIM provision covers 22 his claim. (Doc. 63-2 at 17.) 23 Both parties cross-moved for summary judgment on Auto-Owners’ declaratory 24 judgment claim and Hancock’s breach of contract counterclaim, which rise or fall together. 25 (Docs. 62–63.) No party has moved for judgment on Hancock’s bad faith counterclaim. 26 II. Standard 27 When parties submit cross-motions for summary judgment, the Court must consider 28 each motion on its own merits. Fair Hous. Council of Riverside Cnty., Inc. v. Riverside 1 Two, 249 F. 3d 1132 , 1136 (9th Cir. 2001). Summary judgment is appropriate when there 2 is no genuine dispute as to any material fact and, viewing those facts in a light most 3 favorable to the nonmoving party, the movant is entitled to judgment as a matter of law. 4 Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the case, and a 5 dispute is genuine if a reasonable jury could find for the nonmoving party based on the 6 competing evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Villiarimo 7 v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002). Summary judgment may 8 also be entered “against a party who fails to make a showing sufficient to establish the 9 existence of an element essential to that party’s case, and on which that party will bear the 10 burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 11 The party seeking summary judgment “bears the initial responsibility of informing the 12 district court of the basis for its motion and identifying those portions of [the record] which 13 it believes demonstrate the absence of a genuine issue of material fact.” Id. at 323 . The 14 burden then shifts to the non-movant to establish the existence of a genuine and material 15 factual dispute. Id. at 324 . The non-movant “must do more than simply show that there is 16 some metaphysical doubt as to the material facts[,]” and instead “come forward with 17 specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. 18 v. Zenith Radio Corp., 475 U.S. 574 , 586–87 (1986). Even where there are some factual 19 issues raised, summary judgment is appropriate if the totality of the undisputed facts is 20 such that reasonable minds could not differ on the resolution of the factual question. 21 Chesney v. United States, 632 F. Supp. 867, 869 (D. Ariz. 1985). 22 III. Analysis 23 The UIM provision in Hancock’s insurance contract states: “Underinsured 24 automobile does not include an automobile that is designed for use primarily off public 25 roads except while actually on public roads.” (Doc. 62-2 at 29.) The parties dispute 26 whether Thurman’s Can-Am Maverick falls within this exclusion. 27 To resolve this question, the Court first must interpret the policy language, which is 28 a question of law. Nat’l Fire Inc. Co. v. James River Ins., 162 F. Supp. 3d 898 , 903–04 1 (D. Ariz. 2016). The UIM policy does not define “public roads.” When a policy does not 2 define a term, the Court ascertains its meaning under the relevant state’s law. Country Mut. 3 Ins. Co. v. Leffler, 705 F. App’x 549, 550 (9th Cir. 2017). 4 In interpreting a similar UIM exclusion, the Arizona Court of Appeals adopted the 5 following definition: 6 A public road means those areas which a reasonable person using the highway, having cognizance of all pertinent road 7 signs and markings, would consider to be intended for vehicular travel, including the berm or shoulder of the highway 8 if the same is improved for vehicular travel. 9 Gittings v. Am. Fam. Ins. Co., 888 P.2d 1363, 1368 (Ariz. Ct. App. 1994). In turn, A.R.S. 10 § 28-1171(3) defines “highway” as: 11 the entire width between the boundary lines of every way publicly maintained by the federal government, the 12 department, a city, a town or a county if any part of the way is generally open to the use of the public for purposes of 13 conventional two-wheel drive vehicular travel. Highway does not include routes designated for off-highway vehicle use. [14] 15 And § 28-1171(6) defines “off-highway vehicle,” in relevant part, as “a motorized vehicle 16 that is operated primarily off of highways and that is designed, modified or purpose-built 17 primarily for recreational nonhighway all-terrain travel,” including “a tracked or wheeled 18 vehicle, utility vehicle, all-terrain vehicle, motorcycle, four-wheel drive vehicle, dune 19 buggy, sand rail, amphibious vehicle, ground effects or air cushion vehicle[.]” 20 The Court next must apply these definitions to the totality of undisputed facts and 21 determine whether the exclusion applies, either because Thurman’s Can-Am Maverick is 22 designed primarily for use off public roads or because the accident occurred off public 23 roads. 24 The totality of undisputed evidence establishes the Can-Am Maverick was designed 25 primarily for use off public roads. In their depositions, both Thurman and Hancock state 26 the Can-Am Maverick was used for off-road, recreational use. (Docs. 64-1 at 2; 63-2 at 27 26.) Thurman purchased a special insurance policy separate from his ordinary automobile 28 insurance for the Can-Am Maverick. (Doc. 62-3 at 70.) And the Can-Am Maverick was 1 marketed primarily for off-road use. (Docs. 64-1 at 2; 63-2 at 26.) Given this evidence, 2 no reasonable jury could conclude the Can-Am Maverick was designed primarily for 3 anything other than use off public roads. 4 The totality of undisputed evidence also establishes the accident occurred off public 5 roads. In looking at maps offered by both parties, Road 3456 is a dirt road with no 6 pavement or improvements, and clearly designated as a “road not maintained for passenger 7 cars.” (Docs. 62-5; 62-8; 62-9; 66-3.) Indeed, Auto-Owners retained licensed Arizona 8 investigators who were unable to reach the crash site due to large rocks and boulders on 9 the trail, despite traveling in a four-wheel drive Jeep Grand Cherokee. (Doc. 62-7 at 2–3.) 10 What’s more, MCSO officers reached the crash site by barge and ATV. (Doc. 63-4 at 6.) 11 No reasonable person untrained in the law or insurance could conclude from these facts 12 that the accident occurred on a public road. See Gittings, 888 P.2d at 1368 . 13 In arguing otherwise, Hancock notes both drivers were cited by MCSO under A.R.S. 14 § 28-701(A) for failure to control speed to avoid a collision on a highway. (Doc. 63 at 13.) 15 But the Arizona Court of Appeals has cautioned against defining “public roads” solely “by 16 reference to statutory definitions, especially those dealing with the Department of 17 Transportation and the highway system, as opposed to automobile insurance.” Gittings, [18] 888 P.2d at 1365 . Though these definitions help add dimension to the phrase “public 19 roads,” what ultimately matters is whether reasonable people would consider the road 20 intended for vehicular travel. For reasons already discussed, the answer to that question is 21 no.1 22 IV. Conclusion 23 Based on the totality of undisputed evidence, no reasonable juror could conclude 24 the accident occurred on a public road, or that Thurman’s Can-Am Maverick was primarily 25 designed for use on anything other than off public roads. The accident therefore did not 26 involve an underinsured automobile as that term is defined in Hancock’s insurance policy. 27 1 In any event, Thurman’s citation was dismissed because the state court determined he did not violate A.R.S. § 28-701(A). (Doc. 64-1 at 3.) The citation evidence does not 28 create a genuine factual dispute because no reasonable jury could find for Hancock on the basis of this evidence, given the totality of undisputed evidence favoring Auto-Owners. Accordingly, IT IS ORDERED as follows: 3 1. Auto-Owners’ motion for summary judgment (Doc. 62) is GRANTED and 4|| Hancock’s motion for summary judgment (Doc. 63) is DENIED. 5 2. The parties shall appear telephonically on August 24, 2023, at 11:00 a.m. before 6|| Judge Douglas L. Rayes to set a trial date for Hancock’s bad faith counterclaim. Call-in information will be provided to the parties via separate email. 8 Dated this 27th day of July, 2023. [10] ll {Z, 12 _—_- a 13 Upited States Dictic Judge [28] -6-