Mountain Laurel Assurance Co. v. Salinas

994 F.Supp.2d 914

MOUNTAIN LAUREL ASSURANCE COMPANY, Plaintiff,

v.Jesse Daniel Scott SALINAS, Wilda Perkins and James Perkins, Defendants.

No. 13–1059.

United States District Court,

W.D. Tennessee,

Western Division.

Jan. 17, 2014.

James Vernon Thompson, Bradford D. Box, Rainey Kizer Reviere & Bell, Jackson, TN, for Plaintiff.

Jay G. Bush, Clayton–Little, PLLC, Jackson, TN, for Defendants.

MEMORANDUM OPINION

J. DANIEL BREEN, Chief Judge.

INTRODUCTION

This action for declaratory judgment, filed February 15, 2013, relates to a dispute over insurance liability coverage for Defendant, Jesse Daniel Scott Salinas, who was involved in an April 2011 automobile collision with Defendant, Wilda Perkins. Mrs. Perkins sustained personal injuries and property damage to the vehicle she was operating and owned by her and her husband, James Perkins, who is also a Defendant. The Court tried this civil action without a jury on January 13, 2014. Rule 52 of the Federal Rules of Civil Procedure requires that, “[i]n an action tried on the facts without a jury ..., the court must find the facts specially and state its conclusions of law separately.” Fed.R.Civ.P. 52(a)(1). In accordance with the Rule, the Court incorporates herein the findings and conclusions that it stated at the trial and further finds and states the following.

FINDINGS OF FACT

On April 26, 2011, while operating a 2008 Chevy Cobalt owned by his then-girlfriend Jennifer Holcomb and insured by the Plaintiff, Mountain Laurel Assurance Company (“Mt. Laurel”), Salinas had a collision with Mrs. Perkins. The insurance policy (policy 900056831) that Mt. Laurel issued to Holcomb provided liability insurance coverage “for bodily injury and property damage for which an insured person becomes legally responsible because of an accident.” The policy defined an “insured person” as (1) the named insured; (2) the named insured's spouse residing in the same household; (3) a relative of the named insured residing in the same household and related to the named insured by blood, marriage, or adoption; or (4) a person using the vehicle with the named insured's permission. It listed only Holcomb as a named insured on the applicable declarations page. On the date of the underlying accident, Salinas and Holcomb were not married and not related. Salinas's only connection to Holcomb at the time of the accident was as the father of her minor children, which is insufficient to establish Salinas's status as Holcomb's spouse or as a relative to Holcomb by blood, marriage, or adoption. Therefore, the Court finds Salinas was neither a relative nor spouse of Holcomb under the language of the policy.

As of and on the date of the subject accident, Holcomb and Salinas, along with their minor children, shared a residence. Holcomb was the primary breadwinner for the household through her job working an 11 p.m. to 7 a.m. shift as a licensed practical nurse (LPN). Salinas stayed at home with the children while Holcomb worked, and watched the children while she slept during the day after returning from work. Salinas owned approximately twenty roosters and chickens, which he kept at the home he shared with Holcomb. On occasion, he traded the roosters and chickens for other items.

Salinas did not own a car and did not have a valid driver's license. Before the accident date, Holcomb had specifically told Salinas that he did not have permission, then or in the future, to drive her car because he did not have a driver's license and therefore could not legally operate a vehicle. Holcomb gave this admonition upon discovering that Salinas had driven her car on one occasion to a gas station near their home without her knowledge. At no time between this incident and the accident date did Salinas's license become reinstated.

On the morning of April 26th, Holcomb returned home from her work and went to sleep in the bedroom she shared with Salinas, who was at that time still asleep from the night before. Before getting into bed, she put earplugs in her ears and placed her purse, which contained her car keys, on the night stand next to the bed. According to Salinas, he initiated a conversation with her, either as she was falling asleep or sometime later, after she had fallen asleep, concerning his desire to meet up with a friend that afternoon for the purpose of trading chickens. He apparently wanted Holcomb to drive him there. Not receiving the answer he wanted, Salinas declared that he was going to take her car while she was asleep and drive himself. Holcomb did not respond or otherwise acknowledge what Salinas had said. She never gave him permission to drive her car.

At approximately 2 p.m. that day, while Holcomb was still asleep, Salinas took the keys to the Cobalt from Holcomb's purse and drove to meet his friend. The collision involving Mrs. Perkins occurred at approximately 5 p.m. Afterward, Salinas called Holcomb to tell her what had happened. Apparently, she was still asleep but awakened by the phone ringing.

CONCLUSIONS OF LAW

In this action, the Plaintiff seeks a declaration that it was not obligated to indemnify Salinas and provided no liability coverage under the insurance policy to him for the claims made by the Perkinses in a separate suit pending against Holcomb and Salinas in state court, Perkins v. Salinas, No. C–12–114 (Madison County, Tenn. Cir. Ct., filed Apr. 25, 2012). Mt. Laurel contends that because Salinas was not an “insured person” under the policy at the time of the subject collision, it was not obligated to pay any damages arising from the accident.

The disputed issues concerning the insurance policy in question, which was issued and delivered to Holcomb in Tennessee, are governed by Tennessee substantive law. See Standard Fire Ins. Co. v. Chester O'Donley & Assocs., Inc., 972 S.W.2d 1, 5 (Tenn.Ct.App.1998) (“In the absence of an enforceable choice of law clause, Tennessee courts apply the substantive law of the state in which the policy was issued and delivered.”); accord Hartford Cas. Ins. Co. v. Ewan, 890 F.Supp.2d 886, 891–92 (W.D.Tenn.2012).

The burden of proof regarding a condition of insurance, as opposed to an exclusion from insurance coverage, falls on the party claiming insurance coverage and not on the insurer. See Farmers Bank & Trust Co. v. Transamerica Ins. Co., 674 F.2d 548, 550 (6th Cir.1982), cert. denied,459 U.S. 943, 103 S.Ct. 257, 74 L.Ed.2d 200 (1982); McDonough v. State...