Allen v. Gov't Emps. Ins. Co.

663 F.Supp.3d 1175

Norman Scott ALLEN, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY,a Maryland corporation, and Does 1-20, inclusive, Defendants.

Case No.: 21cv569-LAB-DEB

United States District Court, S.D. California

Signed March 22, 2023

Brian P. Worthington, Worthington Law, San Diego, CA, for Plaintiff.

Suzanne Y. Badawi, Sheppard, Mullin, Richter & Hampton, LLP, Los Angeles, CA, Jeffrey Vincent Commisso, John T. Brooks, Sheppard, Mullin, Richter & Hampton LLP, San Diego, CA, for Defendant Government Employees Insurance Company.

ORDER:

(1) DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT OR PARTIAL SUMMARY JUDGMENT [Dkt. 20]; AND

(2) GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [Dkt. 21]

Larry Alan Burns, United States District Judge

Plaintiff Norman Scott Allen brings this insurance-coverage dispute against Defendant Government Employees Insurance Company ("GEICO") for claims stemming from GEICO's denial of coverage for an accident involving an insured vehicle under an active GEICO policy. Allen alleges claims of declaratory relief and breach of contract, arguing that he was listed as an "Active Driver" on the insurance policy in question and should therefore have been covered for the bodily injuries he sustained when he was struck by an underinsured motorist.

The parties each filed motions for summary judgment on the issue of whether Allen qualifies for insurance coverage. (Dkt. 20, 21). The Court has read all materials in support of and in opposition to the parties' respective motions for summary judgment, and rules as follows.

I. UNDISPUTED MATERIAL FACTS

In 2017, John Williams purchased a 2016 Toyota Corolla. (Dkt. 20-6, Joint Statement of Undisputed Facts ("JSUF"), ¶ 20). GEICO issued Williams, whose name is on the car title, a commercial auto insurance policy ("Policy") covering the Corolla. (Id. ¶ 1). Williams is listed as the "Named Insured" on the Policy, which provides "Uninsured Motorist" ("UM") and "Underinsured Motorist" ("UIM") coverage of $100,000 per person. (Id. ¶ 18). The Policy states that GEICO will pay all sums the "insured" is legally entitled to recover as compensatory damages from the owner or driver of an "uninsured motor vehicle." (Id. ¶¶ 1-2). It defines "insured" as the "Named Insured" on the Policy, any family members of the Named Insured residing in the same household, or anyone else "occupying a covered 'auto.' " (Id. ¶¶ 3-5). The term "occupying" is defined as "in, upon, getting in, on, out or off." (Id. ¶ 6).

Williams's sister, Jan Miller, would later make monthly payments to Williams to pay for the Corolla, with the idea that Williams would change the titled owner's name to Miller's once she had paid off the car. (Id. ¶ 20). At the time of the events in question, Miller lived with her then-fiancé, Plaintiff Norman Allen, (id. ¶ 21), who began to use the Corolla in the summer of 2018 because he was having trouble with his own car, (id. ¶ 22). In August 2018, Allen was added to the Policy as an "Active Driver" of the insured vehicle. (Id.). This was confirmed afterward when Miller received a mail package from GEICO containing Policy information, with a section within listing John Williams, Norman Allen, and Jan Miller as "Active Drivers" on the Policy. (Id. ¶ 23).

On December 11, 2018,¹ while the Policy was still in effect, Allen was driving the Corolla on Home Avenue in San Diego when he saw either (a) a person standing in the median drop a bag; or (b) a forgotten duffel bag fall from a car traveling in front of him. (Id. ¶¶ 9, 12). He pulled the car over, parked, got out of the car, and went into the roadway to retrieve the bag. (Id. ¶ 13). After he picked up the bag and was on his way to return it to the person who dropped it, Allen was struck by an underinsured motor vehicle driven by Lauro Martinez. (Id. ¶ 14). Allen was injured and sustained "bodily injury." (Id. ¶¶ 9, 24). Martinez's auto insurer later paid its full $15,000 liability limit to Allen to resolve all claims against Martinez for the accident. (Id. ¶ 24). Thereafter, Allen submitted a claim to GEICO for underinsured motorist benefits under the Policy. (Id. ¶ 25). GEICO denied it, claiming that for purposes of the incident in which he was injured, Allen is not an insured under the Policy. (Id.).

II. LEGAL STANDARD

Summary judgment is appropriate under Federal Rule of Civil Procedure 56(a) where the movant "shows 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). In order to prevail, a party moving for summary judgment must show the absence of a genuine issue of material fact with respect to an essential element of the non-moving party's claim, or to a defense on which the non-moving party will bear the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant has made this showing, the burden then shifts to the party opposing summary judgment to identify "specific facts showing there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548. The party opposing summary judgment must then present affirmative evidence from which a jury could return a verdict in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

On summary judgment, the Court draws all reasonable factual inferences in favor of the non-movant. Id. at 255, 106 S.Ct. 2505. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Id. (citation omitted). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Id. at 242, 106 S.Ct. 2505. The Court does not make credibility determinations or weigh conflicting evidence. Id. at 255, 106 S.Ct. 2505. Rather, the Court determines whether the record "presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. 2505.

"[W]hen parties submit cross-motions for summary judgment, each motion must be considered on its own merits." Fair Hous. Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (internal quotation marks and brackets omitted). In doing so, the Court must consider the evidence submitted in support of both motions before ruling on each of them. Id.

III. ANALYSIS

The crux of the parties' dispute concerns whether Allen's designation as an "Active Driver" entitles him to the same coverage as an "insured" driver under the Policy. Allen argues that "[t]here is no other possible purpose of identifying someone as an active driver on an auto policy if not to include him or her as an insured on the policy." (Dkt. 21-1 at 6). He contends that "all parties to the insurance policy—including GEICO—had the reasonable expectation that Allen is an insured." (Id.). GEICO, on the other hand, maintains that the "Active Driver" designation, while it "may be relevant to how much GEICO will charge for providing automobile insurance, [ ] is immaterial to status as an insured for purposes of underinsured motorist coverage." (Dkt. 20-1 at 9).

Here, the Policy in effect on the date of the accident states that, "[i]f the Named Insured is designated in the Declarations as" an individual, then the following "insureds" are entitled to coverage for bodily injury caused by uninsured and underinsured motorists:

a. The Named Insured and any "family members."

b. Anyone else "occupying" a covered "auto" or a temporary substitute for a covered "auto." The covered "auto" must be out of service because of its breakdown, repair, servicing, "loss" or destruction.

c. Anyone for damages he or she is entitled to recover because of "bodily injury" sustained by another "insured."

(Dkt. 20-5, Ex. 1 at 119, ¶ B(1)). It defines "family member" as the Named Insured's spouse, and any other person related to the Named Insured by "blood, adoption, marriage or registered partnership" and "who is a resident of such Named Insured's household." (Id. at 122, ¶ F). The Policy lists John Williams as the "Named Insured." (Dkt. 20-5, Ex. 1 at 115). In a subsequent Declaration to the Policy, John Williams, Norman Allen, and Jan Miller are listed as "Active Drivers" of the only listed "Active Vehicle," the 2016 Toyota Corolla involved in the accident. (Dkt. 21-3 at 1). Nowhere in the Policy, however, is the term "Active Driver" defined, nor does the Policy explain coverage limitations applied to individuals designated as "Active Drivers." Likewise, the Policy never defines "Named Insured."

The interpretation of an insurance policy is a question of law. Hartford Cas. Ins. Co. v. Swift Distribution, Inc., 59 Cal. 4th 277, 288, 172 Cal.Rptr.3d 653, 326 P.3d 253 (2014). Generally, ordinary rules of contract interpretation apply to insurance contracts. Bank of the West v. Superior Court, 2 Cal.4th 1254, 1264, 10 Cal. Rptr.2d 538, 833 P.2d 545 (1992). The fundamental goal of contractual interpretation is to give effect to "the mutual intention of the parties at the time the contract is formed." Waller v. Truck Ins. Exch., Inc., 11 Cal. 4th 1, 18, 44 Cal.Rptr.2d 370, 900 P.2d 619 (1995). To determine the intent of the parties behind an insurance contract, the Court "look[s] first to the language of the contract in order to ascertain its plain meaning," reading the language in its "ordinary and popular sense, unless used by the parties in a technical sense or a special meaning is given to them by usage." Id. (internal citations and quotation marks omitted). Language in an insurance contract "must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract." Id. If the parties' intent cannot be determined by...