Continental Casualty Company v. Guzman

[7] 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA [10] 11 | Continental Casualty Company, No. 2:19-ev-01975-KJM-CKD 12 Plaintiff, ORDER 13 v. 14 Lethesia Guzman et al., 1S Defendants. [16] 17 In this insurance coverage dispute, Continental Casualty Company (CCC) seeks 18 | declaratory judgment under 28 U.S.C. §§ 2201 and 2202 that its auto liability policy for Sprint, 19 | now known as T-Mobile, does not cover third-party claims against defendant Lethesia Guzman. 20 | David Miranda, a Sprint employee, asked Ms. Guzman, who is his partner, to drive his company 21 | car on the day ofa fatal accident, which 1s at the center of the third-party claims against her. 22 | Whether these claims fall within the scope of coverage depends on whether Sprint, through Mr. 23 | Miranda, permitted Ms. Guzman to use the car at the time of the accident under its policy and 24 | California law. See Cal. Ins. Code § 11580.1 (b)(4); Sandoval v. Mercury Ins. Grp., 229 Cal. App. 25 | 3d 1, 6-12 (1991). CCC argues Sprint did not grant permission and moves for summary 26 | judgment. The motion is denied. As explained in this order, the court cannot on the present 27 | record determine as a matter of law that Ms. Guzman’s use was not permissive. 28 | ///// 1 A court may grant summary judgment only if “no genuine dispute as to any material fact” 2 remains unresolved and “the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 3 56(a). The “threshold inquiry” is whether “there are any genuine factual issues that properly can 4 be resolved only by a finder of fact because they may reasonably be resolved in favor of either 5 party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). 6 CCC argues first that Ms. Guzman was not permitted to drive the car because Mr. 7 Miranda agreed “Company vehicles may not be lent to anyone unless there is a valid Sprint 8 business purpose and the driver to whom the vehicle is lent has signed” a certain agreement, 9 among other conditions. See Mem. at 2, ECF No. 33-1. The parties dispute whether CCC could 10 prove at trial that Mr. Miranda actually agreed to these terms, see, e.g., Guzman Opp’n at 7–10, 11 ECF No. 35, but it is not necessary to resolve that dispute now. Even if Mr. Miranda had so 12 agreed, CCC has not shown beyond dispute that Mr. Miranda “lent” the car to Ms. Guzman on 13 the night of the accident. It is undisputed Ms. Guzman did not borrow the car. Undisputed Fact 14 (UDF) No. 5, ECF No. 44. Mr. Miranda asked her to drive while he rode in the passenger seat. [15] Id. No. 50. If Sprint had intended for only Mr. Miranda to drive the car, then it could have 16 expressly required him to agree, for example, that only he as an employee could “use” or “drive” 17 or “operate” any company car, following the approach of the car owner in Baker v. Liberty 18 Mutual Insurance Co., 143 F.3d 1260, 1262, 1265 (9th Cir. 1998) (reviewing restrictions in car 19 rental agreement; also reviewing history of Insurance Code and importance of “owner’s 20 expectations” recognized through amendments to code). See also Sandoval, 229 Cal. App. 3d at 21 9, 12 (noting “statute underscores the importance of the owner’s expectations by limiting 22 coverage to cases where use is ‘within the scope of [the owner’s] permission’” (brackets in 23 original)). 24 Nor has CCC proven beyond dispute that in practice, Sprint expected only its employees 25 would drive its cars, such that Ms. Guzman’s use was not “permissive” under California law. In 26 California, automobile liability insurance policies must cover permissive users of insured vehicles 27 “to the same extent that insurance is afforded to the named insured.” Cal. Ins. Code 28 §11580.1(b)(4). A “permissive user” is any person who uses an insured vehicle with the express 1 or implied permission of the named insured, provided the use is within the scope of the 2 permission. See id. “[P]ermission is implied where the circumstances permit a finding the third 3 party’s use was or should have been within the contemplation of the owner.” Sandoval, 229 Cal. 4 App. 3d at 9. Implied permission is a question of fact that “may be established from direct 5 evidence, pertinent surrounding circumstances, and proper inferences to be drawn therefrom.” 6 U.S. Fire Ins. Co. v. Williamsburg Nat. Ins. Co., No. 07-00718, 2008 WL 5054107 , at *4 (E.D. 7 Cal. Nov. 19, 2008) (citing Nw. Sec. Ins. Co. v. Monarch Ins. Co. of Ohio, 256 Cal. App. 2d 63 , 8 65 (1967)). 9 Ms. Guzman and the other defendants have cited evidence that, if credible and not 10 excluded, could show Sprint contemplated—or at least should have contemplated—that people 11 other than its employees would drive its cars. For example, Mr. Miranda’s managers would 12 testify that the car was for his personal use, that supervisors did not tell other employees or Mr. 13 Miranda about driver restrictions, and that employees understood there were “no limitations” on 14 permitted personal use, including that others could drive in emergencies. See, e.g., Calimlim 15 Dep. at 6:9–25, 8:16–23, 10:1–17, 11:22–12:1, 13:16–20, 14:17–23, 15:13–16, 16:16–22, 17:15– 16 22, ECF No. 38-1; Price Dep. at 8:14–17, 9:14–10:8, 11:8–10, 13:22–14:3, 15:10–16:13, 18:15– 17 19, 19:10–21, 20:4–9, 21:6–18. California courts have relied on similar evidence to conclude that 18 certain uses were permissive. See, e.g., Baker, 143 F.3d at 1263–64 (under California law, use 19 might be permissive in practice despite contrary contract terms (citing Financial Indemnity Co. v. 20 Hertz Corp., 226 Cal. App. 2d 689 (1964))); Taylor v. Roseville Toyota, Inc., 138 Cal. App. 4th 21 994 , 1001–04 (2006) (Cantil-Sakauye, J.) (summarizing factors that can prove permissive use, 22 including “custom and practice” and “failure to monitor or supervise”); cf. Sandoval, 229 Cal. 23 App. 3d at 9, 12 (where undisputed that landscape business owner did not expect employee to 24 drive truck, owner cannot show employee drove with “implied permission”). 25 Moreover, this court must consider CCC’s motion against the backdrop of California’s 26 preference for coverage in auto insurance coverage disputes. The California Supreme Court has 27 “uniformly held that ‘the entire automobile financial responsibility law must be liberally 28 construed to foster its main objective of giving monetary protection to that ever changing and 1 tragically large group of persons who while lawfully using the highways themselves suffer grave 2 injury through the negligent use of those highways by others.’” Sandoval, 229 Cal. App. 3d at 7 3 (quoting Metz v. Universal Underwriters Ins. Co., 10 Cal. 3d 45, 53 (1973)). When, as here, a 4 question of coverage is raised on summary judgment, this court has discretion and authority to 5 exercise “caution” and “deny summary judgment” if “there is reason to believe the better course 6 would be to proceed to a full trial.” Anderson, 477 U.S. at 255 ; Gen. Signal Corp. v. MCI 7 Telecommunications Corp., 66 F.3d 1500, 1507 (9th Cir. 1995) (citation omitted). 8 Here, the case should proceed to trial given the disputed factual matters related to the 9 proper interpretation of CCC’s policy and whether Ms. Guzman’s driving Sprint’s company car 10 was a permissive use. The motion for summary judgment is denied. A final pretrial conference 11 is set for January 31, 2022. The parties shall meet and confer and file a joint pretrial statement 12 no less than 14 days prior to the final pretrial conference. 13 The provisions of Local Rule 281 shall apply with respect to the matters to be included in 14 the joint pretrial statement. At least one of the attorneys who will conduct the trial for each of the 15 parties shall attend the final pretrial conference. All motions in limine must be filed in 16 conjunction with the joint pretrial statement. In most cases, motions in limine are addressed and 17 resolved on the morning of the first day of trial. The parties may alert the court at the final 18 pretrial conference and in their final joint pretrial statement that a particular motion or motions 19 should be resolved earlier. At the final pretrial conference, the court will set a briefing and 20 hearing schedule on the motions in limine as necessary. The parties are reminded that a motion in 21 limine is a pretrial procedural device designed to address the admissibility of evidence. The court 22 looks with disfavor upon dispositional motions presented at the final pretrial conference or at trial 23 in the guise of motions in limine. 24 This order resolves ECF No. 33. 25 IT IS SO ORDERED. 26 DATED: December 21, 2021.