Essex Ins. Co. v. Mcclellan-Vick Consulting, Inc.

ESSEX INSURANCE COMPANY, Plaintiff, v. MCCLELLAN-VICK CONSULTING, INC.,and THE ESTATE OF JUDSON VALDEZ, Defendants.

Civ. No. 15-289 GBW/SCY

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

August 25, 2016

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

This matter comes before the Court on Essex's Motion for Summary Judgment (doc. 30). Having reviewed the motion, the attendant briefing, and the relevant law, and being otherwise fully advised, the Court will GRANT Essex's motion.

I. BACKGROUND

This case stems from a dispute between the parties regarding whether Essex Insurance Company ("Essex") is required to defend McClellan-Vick Consulting, Inc. ("MVCI") and the Estate of Judson Valdez in connection with the New Mexico state court action entitled Tony F. Ortiz, as personal representative of the Estate of Pedro Mendoza, and Elda Mendoza-Ortega v. Energen Resources Corporation, et al, Case No. D-101-CV-2014-00831 (hereafter referred to as the "Underlying Litigation"). Doc. 30 at 2. In the Underlying Litigation, the plaintiffs assert various tort claims stemming from an August 6, 2013 motor vehicle accident. Id.

Essex had provided a general liability insurance policy to MVCI from August 1, 2013 to August 1, 2014. Doc. 30 at 2. On April 10, 2015, Essex filed this suit seeking a declaratory judgment that, under the terms of MVCI's insurance policy, Essex owes no obligations to either MVCI or the Estate of Valdez relating to the Underlying Litigation. Doc. 1.

II. STANDARD OF REVIEW

Summary judgment is appropriate where the moving party demonstrates 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). The movant bears the initial burden of "show[ing] 'that there is an absence of evidence to support the nonmoving party's case.'" Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). Once the movant meets this burden, the non-moving party is required to designate specific facts showing that "there are . . . genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Celotex, 477 U.S. at 324.

The court's role is not to weigh the evidence or determine credibility, but rather merely to assess whether a genuine issue exists as to material facts requiring a trial. See Anderson, 477 U.S. at 249, 255. "[T]o survive the . . . motion, [the nonmovant] need onlypresent evidence from which a jury might return a verdict in his favor." Id. at 257. Furthermore, the court must resolve reasonable inferences and doubts in favor of the non-moving party, and construe evidence in the light most favorable to the non-moving party. See Hunt v. Cromartie, 526 U.S. 541, 551-54 (1999). However, "viewing the evidence in the light most favorable to the nonmovant, it is not enough that the evidence be merely colorable or anything short of significantly probative." Hall v. Bellmon, 935 F.2d 1106, 1111 (10th Cir. 1991) (internal quotations omitted); see also Anaya v. CBS Broad. Inc., 626 F. Supp. 2d 1158, 1197 (D.N.M. 2009) ("The mere existence of a scintilla of evidence will not avoid summary judgment."). As with any fact asserted by a party in a summary judgment motion, the nonmovant must point the Court to such support by "citing to particular parts of materials in the record . . . ." Fed. R. Civ. P. 56(c) (1)(A). Further, all material facts set forth in the motion and response which are not specifically controverted are deemed undisputed. D.N.M.LR-Civ. 56.1(b).

III. UNDISPUTED FACTS

1. In the Underlying Litigation, the plaintiffs allege that, at all relevant times, MVCI was performing consulting services at the Energen Corporation ("Energen") oil well site and that an MVCI employee, Judson Valdez, was supervising the work and operations at the well site. Doc. 30 at 5; doc. 31 at 2.

2. In the Underlying Litigation, the plaintiffs allege that Pedro Mendoza was an employee of Professional Well Services ("PWS"). Doc. 30 at 5; doc. 31 at 3.

3. In the Underlying Litigation, the plaintiffs allege that Mr. Valdez instructed Mr. Mendoza to drive a vehicle owned by PWS from one well site to another. Doc. 30 at 5; doc. 31 at 3.

4. In the Underlying Litigation, the plaintiffs allege that the vehicle was being used by PWS to provide oil and gas well services. Doc. 30 at 5; doc. 31 at 3.

5. In the Underlying Litigation, the plaintiffs allege that, as Mr. Mendoza drove the vehicle southbound on NM State Road 537, the vehicle rolled over onto its side, causing an ensuing motor vehicle wreck that resulted in the death of Mr. Mendoza. Doc. 30 at 6; doc. 31 at 3.

6. The vehicle was a 4-axle 1970 SKYT (Skytop carrier) with a Wyoming license plate (Number 19-422) and carried a large pump and 100-barrel water tank, both of which were permanently attached¹ to the vehicle. Doc. 30 at 6, 14; doc. 31 at 3.

7. In the Underlying Litigation, Ramon Desotto testified in his deposition that a Skytop brand carrier, like other carriers, is the driving mechanism on which one can transport equipment, such as a water tank and a pump. Doc. 30 at 6; doc. 31 at 3.

8. In the Underlying Litigation, Mr. Desotto testified that the Skytop carrier wasoperated on roads when it did not have water in the tank. Doc. 30 at 6; doc. 31 at 3-4.

9. In the Underlying Litigation, the plaintiffs allege that operation of the Skytop Carrier required a driver to have appropriate commercial motor vehicle credentials (CDL license). Doc. 30 at 6; doc. 31 at 4.

10. NMSA § 66-5-54 states in part that a commercial motor vehicle "means a motor vehicle or combination of motor vehicles used in commerce . . . ." Doc. 30 at 6; doc. 31 at 4.

11. NMSA § 66-1-4.11 defines a motor vehicle as "every vehicle that is self-propelled and every vehicle that is propelled by electric power obtained from batteries or from overhead trolley wires, but not operated upon rails . . . ." Doc. 30 at 7; doc. 31 at 4-5.

12. Essex issued a policy of primary liability insurance to MVCI that was in effect for the period of August 1, 2013 to August 1, 2014. Specifically, Essex Policy No. BEP00043 provides Comprehensive General Liability ("CGL") coverage to MVCI and its employees, subject to various terms and conditions (the "Essex Policy"). Doc. 30 at 7; doc. 31 at 5.

13. Pursuant to an endorsement² to the Essex Policy entitled "Exclusion - Aircraft, Auto or Watercraft," the standard "auto" exclusion in the CGL Coverage Formwas deleted and replaced by the following "auto" exclusion:

This insurance does not apply to "Bodily injury" . . . arising out of any . . . "auto" . . . [w]hether or not owned, maintained, used, rented, leased, or borrowed by any insured and whether or not hired, contracted, loaned or entrusted to others by any insured. This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, contracting, screening, training or monitoring of others by any insured."

Doc. 30 at 7; doc. 31 at 5.

14. The Essex Policy's definition of an "auto," in material part, is a land motor vehicle that is (1) designed for travel on public roads, including any attached machinery or equipment; or (2) subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged; but not (3) "mobile equipment." Doc. 30 at 7-8; doc. 31 at 5.

15. The Essex Policy's definition of "mobile equipment" includes (1) vehicles designed for use principally off public roads, unless (2) they are subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged. Doc. 30 at 8; doc. 31 at 5.

16. The Essex Policy's definition of "mobile equipment" also states:

However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos": . . . [a]ir compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. However, "mobile equipment" does not include any land vehicles that are subject to compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensedor principally garaged. Land vehicles subject to a compulsory or financial responsibility law or other motor vehicle insurance law are considered "autos."

Doc. 30 at 8; doc. 31 at 5.

17. Pursuant to another endorsement to the Essex Policy entitled "Hired and Non-Owned Automobile Liability Coverage," the CGL coverage form is modified to provide "Hired" automobile liability coverage and "Non-Owned" automobile liability coverage. The grants of coverage in the Essex Policy for "Hired" and "Non-Owned" automobile liability, respectively, read as follows:

A. HIRED AUTO LIABILITY

The insurance provided under COVERAGE A - BODILY INJURY AND PROPERTY DAMAGE LIABILITY (Section I - Coverages) applies to "bodily injury" or "property damage" arising out of the maintenance or use of a "hired auto" by you or your "employees" in the course of your business.

B. NON-OWNED AUTO LIABILITY

The insurance provided under COVERAGE A - BODILY INJURY AND PROPERTY DAMAGE LIABILITY (Section I - Coverages) applies to "bodily injury" or "property damage" arising out of the use of a "non-owned auto" by any person in the course of your business.

Doc. 30 at 8-9; doc. 31 at 5.

18. The Essex Policy's definitions of "hired auto" and "non-owned auto," in turn, are as follows:

"Hired auto" means any "auto" you lease, hire, rent or borrow. This does not include any "auto" you lease, hire, rent or borrow from any of your "employees," your partners or your "executive officers," or members of their households.

"Non-owned auto"

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