Progressive Am. Ins. Co. v. Jireh House, Inc.

608 F.Supp.3d 369

PROGRESSIVE AMERICAN INSURANCE COMPANY, Plaintiff,

v.JIREH HOUSE, INC., et al., Defendants.

Civil Action No. 3:21cv592-HEH

United States District Court, E.D. Virginia, Richmond Division.

Signed June 22, 2022

Steven Charles Bergeron, Charles E. Gallagher, Jr., DeCaro Doran Siciliano Gallagher & DeBlasis LLP, Fairfax, VA, for Plaintiff.

Craig Stewart Gill, Jr., Brain Injury Law Center Hampton, VA, Carter Darden Barrett, Jr., Smith Law Center, Hampton, VA, for Defendant Ashley Renee Stout.

Edward B. Ferrell, Carter & Shands, P.C., Richmond, VA, for Defendant State Farm Mutual Automobile Insurance Company.

Alan Barry Gnapp, Law Office of Alan B. Gnapp, PLC, Richmond, VA, for Defendants Virginia Association of Counties Group Self-Insurance Risk Pool.

Justin Saunders Gravatt, David L. Hauck, Duane, Hauck, Davis, Gravatt & Campbell, P.C., Richmond, VA, for Defendant GEICO Indemnity Company.

MEMORANDUM OPINION

(Granting Plaintiff's Motion for Summary Judgment)

Henry E. Hudson, Senior United States District Judge THIS MATTER is before the Court on Progressive American Insurance Company's ("Plaintiff" or "Progressive") Motion for Summary Judgment (the "Motion") filed on May 20, 2022. (ECF No. 38.) The Motion asks the Court to declare that Progressive has no duty to defend or indemnify Defendant Joyce Ann Wiggins or Defendant Jireh House, Inc. in the underlying action brought in the Circuit Court of the City of Petersburg, Virginia. (Mot. at 1–2.)¹ The parties have submitted memoranda supporting their respective positions on the Motion and it is now ripe for review. The Court heard oral argument on June I 6, 2022. For the reasons stated below and as stated at the hearing, the Court will grant the Motion.

I. STANDARD OF REVIEW

Pursuant to Rule 56, summary judgment is appropriate "if 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). The relevant inquiry is "whether the evidence presents a sufficient disagreement to require submission to a [trier of fact] or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine factual dispute exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 585–86, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson , 477 U.S. at 247–48, 106 S.Ct. 2505. A material fact is one that might affect the outcome of a party's case. Id. at 248, 106 S.Ct. 2505 ; Hogan v. Beaumont , 779 Fed. App'x 164, 166 (4th Cir. 2019). A genuine issue concerning a material fact only arises when the evidence, viewed in the light most favorable to the nonmoving party, is sufficient to allow a reasonable trier of fact to return a verdict in the party's favor. Anderson , 477 U.S. at 248, 106 S.Ct. 2505.

The existence of a mere scintilla of evidence in support of the nonmoving party as well as conclusory allegations or denials, without more, are insufficient to withstand a summary judgment motion. Tom v. Hosp. Ventures LLC , 980 F.3d 1027, 1037 (4th Cir. 2020). Accordingly, to deny a motion for summary judgment, "[t]he disputed facts must be material to an issue necessary for the proper resolution of the case, and the quality and quantity of the evidence offered to create a question of fact must be adequate." Thompson Everett, Inc. v. Nat'I Cable Advert. , 57 F.3d 1317, 1323 (4th Cir. 1995) (citing Anderson , 477 U.S. at 252, 106 S.Ct. 2505 ). When applying the summary judgment standard, courts must construe the facts in the light most favorable to the nonmoving party and may not make credibility determinations or weigh the evidence. Holland v. Wash. Homes, Inc. , 487 F.3d 208, 213 (4th Cir. 2007).

II. BACKGROUND

Applying this standard, the relevant facts are as follows: Defendant Jireh House, Inc. ("Jireh House"), is a group home that cares for adults with intellectual disabilities.² (Pl.’s Mem. Supp. at 2, ECF No. 38-1.) As part of caring for those adults, Jireh House had to transport them to and from medical appointments. (See id. at 5.) For this purpose, in 2019, Jireh House owned two vehicles and bought insurance coverage for those vehicles through a policy issued by Progressive (the "Policy"). (Stout's Mem. Opp'n at 2, ECF No. 40; Policy Decls. at 2, ECF No. 38-4.) Those vehicles were a Dodge Grand Caravan and a Plymouth Grand Voyager.³ (Policy Decls. at 2.)

In 2019, Defendant Joyce Ann Wiggins ("Wiggins") worked for Jireh House. (Underlying Compl. ¶ 14, ECF No. 38-9.) As part of her job, Wiggins transported Jireh House residents to and from medical appointments. (Pl.’s Mem. Supp. at 5.) On May 13, 2019, Wiggins had to drive one of Jireh House's residents back from a medical appointment, but other employees were already using Jireh House's two vehicles. (Stout's Mem. Opp'n at 2–3.) Thus, Wiggins drove her own car, a Nissan Altima, to pick up the Jireh House resident. (Pl.’s Mem. Supp. at 5; Underlying Compl. ¶ 5.) While driving the Nissan Altima to pick up the resident, Wiggins collided with another vehicle driven by Defendant Ashley Stout ("Stout"). (Underlying Compl. ¶¶ 6–7.) Stout sustained various injuries from the collison. (Id. ¶ 12.) Stout sued Wiggins and Jireh House for negligence arising out of the accident in state court. (Id. )

Later, Progressive filed this lawsuit seeking a declaration from this Court that Progressive does not have any duty to defend or indemnify Wiggins or Jireh House in the underlying action.⁴ (Am. Compl. at 10–11, ECF No. 22.) As stated above, Plaintiff has now filed the Motion asking the court to resolve this case on summary judgment.

III. ANALYSIS

As a preliminary matter, when hearing a case arising out of diversity jurisdiction, a federal court must apply the choice of law rules of the forum state. CACI Int'l, Inc. v. St. Paul Fire and Marine Ins. , 566 F.3d 150, 154 (4th Cir. 2009) (citing Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496–97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ). In this case, the forum state is Virginia. In Virginia, "the law of the place where an insurance contract is written and delivered" applies. Buchanan v. Doe , 246 Va. 67, 431 S.E.2d 289, 291 (1993) ; Penn. Nat‘l Mut. Cas. Ins. Co. v. Block Roofing Corp. , 754 F. Supp. 2d 819, 822 (E.D. Va. 2010). The Policy in this case was delivered to Jireh House in Virginia and written in Virginia. (Policy, ECF No. 38-5.) Thus, Virginia law applies.

The Court will first consider Progressive's duty to defend Wiggins or Jireh House. In Virginia, a court deciding whether an insurer has a duty to defend a lawsuit must only consider the allegations in the underlying complaint and the insurance policy itself. AES Corp. v. Steadfast Ins. , 283 Va. 609, 725 S.E.2d 532, 535 (2012) ; Penn. Nat'l , 754 F. Supp. 2d at 822-23 ; see St. Paul Fire , 566 F.3d at 153. This so-called Eight Corners Rule is strictly enforced. AES Corp. , 725 S.E.2d at 535. Thus, in considering the Motion, the Court may only consider the Underlying Complaint and Progressive's Policy.

"[A]n insurer's duty to defend is triggered if there is any possibility that a judgment against the insured will be covered under the insurance policy." St. Paul Fire , 566 F.3d at 155 (quoting Bohreer v. Erie Ins. Grp. , 475 F. Supp. 2d 578, 584 (E.D. Va. 2007) ) (referring to this principle as the potentiality rule). Put another way, if the insurance policy would not cover any of the allegations in the complaint, the insurer has no duty to defend. Penn. Nat'l , 754 F. Supp. 2d at 823 ; AES Corp. , 725 S.E.2d at 535–36.

Here, the Underlying Complaint's allegations implicate Jireh House and Wiggins. It alleges that Wiggins negligently drove her vehicle and caused the accident. (Underlying Compl. ¶¶ 4–10.) It further alleges that Jireh House is vicariously liable for Wiggins’ negligence because she was acting within the scope of her employment. (Id. ) Thus, Jireh House or Wiggins could potentially have to pay a judgment in the Underlying Action.

The next question, however, is whether the terms of the Policy could possibly cover that judgment. Under Virginia law, a court must follow contract terms as written and as the parties intended; a court may not conjure up new terms that the parties did not agree to. Atl. Cas. Ins. Co. v. Connection Auto Sales, Inc. , 508 F.Supp.3d 10, 15 (E.D. Va. 2020) (citing Pilot Life Ins. Co. v. Crosswhite , 206 Va. 558, 145 S.E.2d 143, 146 (1965) ). Normally, the words of a contract are given their ordinary and customary meaning. Graphic Arts Mut. Ins. Co. v. C. W. Warthen Co. , 240 Va. 457, 397 S.E.2d 876, 877 (1990). "Where an agreement is complete on its face [and] is plain and unambiguous in its terms, the [C]ourt is not at liberty to search for its meaning beyond the instrument itself." Id. (quoting Globe Iron Constr. Co. v. First Nat'l Bank of Boston , 140 S.E.2d 629, 633 (Va. 1965)).

In this case, the Policy binds Progressive to pay "all sums an insured legally must pay as damages because of bodily injury or property damage ... caused by an accident and resulting from the ownership, maintenance or use of a covered auto." (Policy at 5 (emphasis removed).) The Policy further defines who is an "insured" and what is a "covered auto." An insured includes Jireh House for any covered auto and, with some exceptions, anyone else driving a covered auto with Jireh House's permission. (Id. at 6.)

To define what a "covered auto" is, the Policy lists 10 different coverage options called "symbols." (Id. at 4–5.) Each symbol is numbered and contains a paragraph...