Allen v. Government Employees Insurance Company

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 NORMAN SCOTT ALLEN, Case No.: 21cv569-LAB-DEB 12 Plaintiff, ORDER: 13 v. (1) DENYING DEFENDANT’S 14 GOVERNMENT EMPLOYEES MOTION FOR SUMMARY INSURANCE COMPANY, a 15 JUDGMENT OR PARTIAL Maryland corporation, and DOES SUMMARY JUDGMENT [Dkt. 20]; 16 1-20, inclusive, AND 17 Defendants. (2) GRANTING PLAINTIFF’S [18] MOTION FOR PARTIAL SUMMARY 19 JUDGMENT [Dkt. 21] [20] 21 Plaintiff Norman Scott Allen brings this insurance-coverage dispute against 22 Defendant Government Employees Insurance Company (“GEICO”) for claims 23 stemming from GEICO’s denial of coverage for an accident involving an insured 24 vehicle under an active GEICO policy. Allen alleges claims of declaratory relief and 25 breach of contract, arguing that he was listed as an “Active Driver” on the insurance 26 policy in question and should therefore have been covered for the bodily injuries 27 he sustained when he was struck by an underinsured motorist. 28 The parties each filed motions for summary judgment on the issue of whether 1 Allen qualifies for insurance coverage. (Dkt. 20, 21). The Court has read all 2 materials in support of and in opposition to the parties’ respective motions for 3 summary judgment, and rules as follows. 4 I. UNDISPUTED MATERIAL FACTS 5 In 2017, John Williams purchased a 2016 Toyota Corolla. (Dkt. 20-6, Joint 6 Statement of Undisputed Facts (“JSUF”), ¶ 20). GEICO issued Williams, whose 7 name is on the car title, a commercial auto insurance policy (“Policy”) covering the 8 Corolla. (Id. ¶ 1). Williams is listed as the “Named Insured” on the Policy, which 9 provides “Uninsured Motorist” (“UM”) and “Underinsured Motorist” (“UIM”) 10 coverage of $100,000 per person. (Id. ¶ 18). The Policy states that GEICO will pay 11 all sums the “insured” is legally entitled to recover as compensatory damages from 12 the owner or driver of an “uninsured motor vehicle.” (Id. ¶¶ 1–2). It defines “insured” 13 as the “Named Insured” on the Policy, any family members of the Named Insured 14 residing in the same household, or anyone else “occupying a covered ‘auto.’” 15 (Id. ¶¶ 3–5). The term “occupying” is defined as “in, upon, getting in, on, out or off.” 16 (Id. ¶ 6). 17 Williams’s sister, Jan Miller, would later make monthly payments to Williams 18 to pay for the Corolla, with the idea that Williams would change the titled owner’s 19 name to Miller’s once she had paid off the car. (Id. ¶ 20). At the time of the events 20 in question, Miller lived with her then-fiancé, Plaintiff Norman Allen, (id. ¶ 21), who 21 began to use the Corolla in the summer of 2018 because he was having trouble 22 with his own car, (id. ¶ 22). In August 2018, Allen was added to the Policy as an 23 “Active Driver” of the insured vehicle. (Id.). This was confirmed afterward when 24 Miller received a mail package from GEICO containing Policy information, with a 25 section within listing John Williams, Norman Allen, and Jan Miller as “Active 26 Drivers” on the Policy. (Id. ¶ 23). [28] 1 On December 11, 2018, while the Policy was still in effect, Allen was driving 2 the Corolla on Home Avenue in San Diego when he saw either (a) a person 3 standing in the median drop a bag; or (b) a forgotten duffel bag fall from a car 4 traveling in front of him. (Id. ¶¶ 9, 12). He pulled the car over, parked, got out of 5 the car, and went into the roadway to retrieve the bag. (Id. ¶ 13). After he picked 6 up the bag and was on his way to return it to the person who dropped it, Allen was 7 struck by an underinsured motor vehicle driven by Lauro Martinez. (Id. ¶ 14). Allen 8 was injured and sustained “bodily injury.” (Id. ¶¶ 9, 24). Martinez’s auto insurer 9 later paid its full $15,000 liability limit to Allen to resolve all claims against Martinez 10 for the accident. (Id. ¶ 24). Thereafter, Allen submitted a claim to GEICO for 11 underinsured motorist benefits under the Policy. (Id. ¶ 25). GEICO denied it, 12 claiming that for purposes of the incident in which he was injured, Allen is not an 13 insured under the Policy. (Id.). 14 II. LEGAL STANDARD 15 Summary judgment is appropriate under Federal Rule of Civil Procedure 16 56(a) where the movant “shows that there is no genuine dispute as to any material 17 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 18 56(a). In order to prevail, a party moving for summary judgment must show the 19 absence of a genuine issue of material fact with respect to an essential element 20 of the non-moving party’s claim, or to a defense on which the non-moving party 21 will bear the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 22 317, 323 (1986). Once the movant has made this showing, the burden then shifts 23 to the party opposing summary judgment to identify “specific facts showing there [25] 1 Curiously, the parties stipulate to both December 11, 2018, and October 15, [26] 2018, as the date of the accident in question. (JSUF ¶¶ 9, 24). However, the Court 27 notes that the evidence in the record repeatedly notes the date of injury as December 11, 2018. (See Dkt. 20-5 at 144, 158, 220). For purposes of this Order, [28] 1 is a genuine issue for trial.” Id. at 324. The party opposing summary judgment 2 must then present affirmative evidence from which a jury could return a verdict in 3 that party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). 4 On summary judgment, the Court draws all reasonable factual inferences in 5 favor of the non-movant. Id. at 255 . “Credibility determinations, the weighing of 6 the evidence, and the drawing of legitimate inferences from the facts are jury 7 functions, not those of a judge.” Id. (citation omitted). “The mere existence of a 8 scintilla of evidence in support of the plaintiff’s position will be insufficient; there 9 must be evidence on which the jury could reasonably find for the plaintiff.” Id. at 10 242. The Court does not make credibility determinations or weigh conflicting 11 evidence. Id. at 255 . Rather, the Court determines whether the record “presents 12 a sufficient disagreement to require submission to a jury or whether it is so one13 sided that one party must prevail as a matter of law.” Id. at 251–52. 14 “[W]hen parties submit cross-motions for summary judgment, each motion 15 must be considered on its own merits.” Fair Hous. Council of Riverside County, 16 Inc. v. Riverside Two, 249 F.3d 1132 , 1136 (9th Cir. 2001) (internal quotation 17 marks and brackets omitted). In doing so, the Court must consider the evidence 18 submitted in support of both motions before ruling on each of them. Id. 19 III. ANALYSIS 20 The crux of the parties’ dispute concerns whether Allen’s designation as an 21 “Active Driver” entitles him to the same coverage as an “insured” driver under the 22 Policy. Allen argues that “[t]here is no other possible purpose of identifying 23 someone as an active driver on an auto policy if not to include him or her as an 24 insured on the policy.” (Dkt. 21-1 at 6). He contends that “all parties to the 25 insurance policy—including GEICO—had the reasonable expectation that Allen is 26 an insured.” (Id.). GEICO, on the other hand, maintains that the “Active Driver” 27 designation, while it “may be relevant to how much GEICO will charge for providing 28 automobile insurance, [ ] is immaterial to status as an insured for purposes of 1 underinsured motorist coverage.” (Dkt. 20-1 at 9). 2 Here, the Policy in effect on the date of the accident states that, “[i]f the 3 Named Insured is designated in the Declarations as” an individual, then the 4 following “insureds” are entitled to coverage for bodily injury caused by uninsured 5 and underinsured motorists: 6 a. The Named Insured and any “family members.” b. Anyone else “occupying” a covered “auto” or a [7] temporary substitute for a covered “auto.” The covered 8 “auto” must be out of service because of its breakdown, repair, servicing, “loss” or destruction. [9] c. Anyone for damages he or she is entitled to recover 10 because of “bodily injury” sustained by another “insured.” 11 (Dkt. 20-5, Ex. 1 at 119, ¶ B(1)). It defines “family member” as the Named Insured’s 12 spouse, and any other person related to the Named Insured by “blood, adoption, 13 marriage or registered partnership” and “who is a resident of such Named 14 Insured’s household.” (Id. at 122, ¶ F). The Policy lists John Williams as the 15 “Named Insured.” (Dkt. 20-5, Ex. 1 at 115). In a subsequent Declaration to the 16 Policy, John Williams, Norman Allen, and Jan Miller are listed as “Active Drivers” 17 of the only listed “Active Vehicle,” the 2016 Toyota Corolla involved in the accident. 18 (Dkt. 21-3 at 1). Nowhere in the Policy, however, is the term “Active Driver” defined, 19 nor does the Policy explain coverage limitations applied to individuals designated 20 as “Active Drivers.” Likewise, the Policy never defines “Named Insured.” 21 The interpretation of an insurance policy is a question of law. Hartford Cas. 22 Ins. Co. v. Swift Distribution, Inc., 59 Cal. 4th 277, 288 (2014). Generally, ordinary 23 rules of contract interpretation apply to insurance contracts. Bank of the West v. 24 Superior Court, 2 Cal.4th 1254, 1264 (1992). The fundamental goal of contractual 25 interpretation is to give effect to “the mutual intention of the parties at the time the 26 contract is formed.” Waller v. Truck Ins. Exch., Inc., 11 Cal. 4th 1, 18 (1995). To 27 determine the intent of the parties behind an insurance contract, the Court “look[s] 28 first to the language of the contract in order to ascertain its plain meaning,” reading 1 the language in its “ordinary and popular sense, unless used by the parties in a 2 technical sense or a special meaning is given to them by usage.” Id. (internal 3 citations and quotation marks omitted). Language in an insurance contract “must 4 be interpreted as a whole, and in the circumstances of the case, and cannot be 5 found to be ambiguous in the abstract.” Id. If the parties’ intent cannot be 6 determined by the plain meaning of disputed terms and the structure and context 7 of the policy, the policy will be construed against the insurer, because “any 8 reasonable doubt as to the intended meaning of [an ambiguous] term will be 9 resolved against the insurance company and in favor of extending coverage to the 10 insured.” Anderson Bros. v. St. Paul Fire & Marine Ins. Co., 729 F.3d 923, 931 (9th 11 Cir. 2013); see E.M.M.I. Inc. v. Zurich Am. Ins. Co., 32 Cal. 4th 465, 471 (2004) 12 (“Any ambiguous terms are resolved in the insureds’ favor, consistent with the 13 insureds’ reasonable expectations.”) (internal citation and quotation marks 14 omitted). 15 Considering the principles of contract interpretation, the Court finds that Allen 16 qualifies for UM/UIM coverage. Here, the Policy is entirely silent as to the definition 17 of both “Named Insured” and “Active Drivers,” rendering those terms ambiguous 18 as to what rights the insurer intended to ascribe to the additional drivers by listing 19 them on the Declaration page. Instead, the Policy merely states that, “[i]f the 20 Named Insured is designated in the Declarations as” an individual, then the 21 “Named Insured” is entitled to UM/UIM coverage. (Dkt. 20-5, Ex. 1 at 119, ¶ B(1)). 22 Although Williams is listed as a Named Insured, Allen is also a listed individual in 23 a Declaration to the Policy. And while the Policy repeatedly refers to the term, 24 “Named Insured,” the term is not defined and the Policy doesn’t distinguish 25 between “Named Insured” and “Active Drivers.” Given this ambiguity and because 26 Allen is an individual designated in the Declaration, the Court construes the policy 27 against the insurer and finds that Allen must reasonably be considered an insured. 28 See Minkler v. Safeco Ins. Co. of Am., 49 Cal. 4th 315, 321 (2010) (“Only if the[] 1 rules [of general contract interpretation] do not resolve a claimed ambiguity do we 2 resort to the rule that ambiguities are to be resolved against the insurer.”); see also 3 Shaw v. GEICO Gen. Ins. Co., 813 F. App’x 343 , 344 (9th Cir. 2020) (unpublished) 4 (“The policy’s failure to explicitly define the rights of Additional Drivers compounds 5 this ambiguity. A reasonable person in [Plaintiff]’s position could expect to qualify 6 as an insured; we must interpret the policy to protect that expectation.”). 7 Even were the Court were to look beyond the plain language of the Policy, 8 the statutory language of California Labor Code section 11580.2 supports the 9 same interpretation. Section 11580.2, which governs UM/UIM coverage, defines 10 “insured” persons as: (1) “the named insured and the spouse of the named insured 11 and, while residents of the same household, relatives of either while occupants of 12 a motor vehicle or otherwise,” and (2) “any other person while in or upon or entering 13 into or alighting from an insured motor vehicle.” Cal. Lab. Code § 11580.2 (b). The 14 statute goes on to define “named insured” as “the individual or organization named 15 in the declarations of the policy of motor vehicle bodily injury liability insurance.” [16] Id. In other words, an “insured” includes someone “named in the declarations.” 17 The reasoning in Lewis v. Gov’t Emps. Ins. Co., 458 F. Supp. 3d 1214 18 (S.D. Cal. 2020) is instructive. There, the Court held that a pedestrian who was 19 struck by a motorist qualified for coverage under the UM/UIM provisions of her 20 parents’ insurance policy regardless of whether she was a resident of her parents’ 21 household because she was listed as an “additional driver” in the policy’s 22 declaration page next to her parents’ names. Id. at 1218–20. The court concluded 23 that the California Labor Code defines “named insured” as one “named in the 24 declarations” to the policy, and that neither California law nor the policy language 25 required exclusion of additional drivers from UM/UIM coverage. Id. As in Lewis, 26 the Court concludes here that, given the statute’s definition of a “named insured” 27 as someone “named in the declarations,” Allen’s designation on the declarations 28 page signifies he is an insured and qualifies for coverage. See id. at 1218 (“Here, 1 the Policy makes no reference to ‘Additional Drivers’ other than when it names 2 them in the declarations. . . . Plaintiff is someone ‘named in the declarations,’ and 3 § 11580.2 provides no language that contradicts this conclusion.”). 4 GEICO’s citation to Mercury Ins. Co. v. Pearson, 169 Cal. App. 4th 1064 5 (2008), is inapt. (See Dkt. 24 at 4). In Mercury, the insurer issued an auto insurance 6 policy naming Susan Hyung as the “named insured,” while her fiancé, David 7 Pearson, received coverage from the policy through a “Designated Person 8 Endorsement,” which listed Pearson as a “designated person.” 169 Cal. App. 4th 9 1064, 1066–67 (2008). The policy provided third party coverage for the named 10 insured and the designated individuals. Id. at 1067–69. However, subject to a 11 number of exceptions, it provided UM coverage only for the named insured and 12 the Endorsement language expressly limited the policy’s coverage of the 13 designated person, stating: “It is agreed the designated person(s) is a resident of 14 the same household as the Named Insured, is not a relative, and is only provided 15 coverage when operating or occupying a motor vehicle listed in the policy 16 declarations.” Id. at 1069. As the court recognized in Lewis, “Mercury involved a 17 policy that expressly limited the plaintiff’s coverage to when the plaintiff was 18 operating or occupying a motor vehicle. In contrast, the Policy here does not 19 involve any provision that expressly limits the coverage received by the ‘Additional 20 Drivers.’” Lewis, 458 F. Supp. 3d at 1220. 21 Because Allen qualifies for insurance coverage under the Policy, the Court 22 doesn’t reach the issue of whether he qualifies for coverage under an estoppel 23 theory. 24 // 25 // 26 // 27 // 28 // 1 IV. CONCLUSION 2 The Court GRANTS Allen judgment as a matter of law. (Dkt. 21). He is an 3 insured under the Policy and entitled to coverage in relation to the subject action. 4 GEICO’s motion for summary judgment is DENIED. (Dkt. 20). A pre-trial 5 scheduling order will follow. 6 IT IS SO ORDERED. 7 Dated: March 22, 2023 8 Honorable Larry Alan Burns United States District Judge