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State Farm Mutual Automobile Insurance Co. v. Feather

United States District Court, M.D. Pennsylvania

April 26, 2017

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff
v.
ELIZABETH H. FEATHER, ESQUIRE, ADMINISTRATRIX OF THE ESTATE OF BRYANT A. WHITE Defendant CHEYENNE HEGE and WILLIAM J. HESS, Intervening Defendants

          MEMORANDUM

          Christopher C Conner Chief Judge

         Plaintiff State Farm Mutual Automobile Insurance Company (“State Farm”) commenced this insurance coverage dispute against defendant Elizabeth H. Feather (“Feather”), administratrix of the estate of Bryant A. White (“White”). (Doc. 1). State Farm seeks a declaratory judgment that it has no duty to defend or indemnify White in two underlying civil actions. (See id.). Before the court is State Farm's motion (Doc. 35) for summary judgment pursuant to Federal Rule of Civil Procedure 56. Fed.R.Civ.P. 56. The court will deny State Farm's motion.

         I Factual Background & Procedural History[1]

         State Farm seeks to resolve a dispute regarding an automobile insurance policy issued to Lisa Gracey (“Gracey”) (Doc 38 ¶ 1; Doc 39 ¶ 1; Doc 44 ¶ 1; Doc 46 ¶ 1) Gracey has one daughter Morgen Sheffield (“Sheffield”) (Doc 38 ¶¶ 3-4; Doc 39 ¶¶ 3-4; Doc 44 ¶¶ 3-4; Doc 46 ¶¶ 3-4) On May 10 2012 Gracey and Sheffield co-signed a loan for an automobile (Doc 38 ¶ 24; Doc 39 ¶ 24; Doc 44 ¶ 24; Doc 46 ¶ 24) The vehicle was registered in Gracey's name but purchased for Sheffield's use (Doc 38 ¶ 25; Doc 39 ¶ 25; Doc 44 ¶ 25; Doc 46 ¶ 25) Sheffield made all loan and insurance payments for the vehicle (Doc 39 ¶ 25; Doc 44 ¶¶ 10 25; Doc 46 ¶¶ 10 25; Sheffield Dep 9:1-23)[2] The insurance policy at issue provided coverage to an “insured” defined as inter alia any person using the vehicle within the scope of Gracey's consent (Doc 38 ¶ 7; Doc 39 ¶ 7; Doc 44 ¶ 7; Doc 46 ¶ 7; see Doc 37-3)

         At the time of purchase Gracey instructed Sheffield that no one was allowed to drive the vehicle besides Sheffield[3] (Doc 38 ¶¶ 26 28; Doc 39 ¶¶ 26 28; Gracey Dep 30:16-19) Gracey reiterated this instruction to Sheffield and several of her friends including White on multiple occasions (Doc 38 ¶¶ 27 29 35-37; Doc 39 ¶¶ 27 35-37; Doc 44 ¶¶ 35-37; Doc 46 ¶¶ 35-37; Sheffield Dep 19:18-22) Gracey again repeated the restriction in early summer 2012 after learning that White had driven the vehicle into a sand mound (Doc 38 ¶¶ 27 31-37; Doc 39 ¶¶ 27 31-37; Doc 44 ¶¶ 31-37; Doc 46 ¶¶ 31-37; Gracey Dep 11:11-12:25 42:3-43:20; Joshua Hess Dep 13:15-15:25)

         On July 10 2012 White crashed the vehicle into a tree (Doc 38 at ¶¶ 10 19; Doc 39 ¶¶ 10 19; Doc 44 ¶¶ 10 19; Doc 46 ¶¶ 10 19) Intervening defendants Cheyenne Hege (“Hege”) and William Hess (“Hess”) were passengers in the vehicle as was Gracey's son Cody Gracey (Doc 38 at ¶ 12; Doc 39 ¶ 12; Doc 44 ¶ 12; Doc 46 ¶ 12) White and Cody Gracey died as a result of injuries sustained in the accident and Hege and Hess allege that they were grievously injured (Doc 38 ¶¶ 13 16; Doc 39 ¶¶ 13 16; Doc 44 ¶¶ 13 16; Doc 46 ¶¶ 13 16) Hege and Hess commenced actions against inter alia Feather and Gracey in Pennsylvania state court on July 3 2014 and July 8 2014 respectively (Doc 1-4 at 3 5; Doc 38 ¶¶ 17-18; Doc 39 ¶¶ 17-18; Doc 44 ¶¶ 17-18; Doc 46 ¶¶ 17-18; see Docs 38-4 38-5)

         State Farm filed the instant action for declaratory judgment on January 27, 2015. (Doc. 1). In its complaint, State Farm seeks a determination that Gracey's policy did not cover White at the time of the accident and that State Farm maintains no duty to defend or indemnify White's estate in the state court lawsuits. (Id. at 5-6). Hege and Hess moved to intervene as defendants on May 4, 2015 and May 6, 2015 respectively, and the court granted their motions. (Docs. 8-10, 12). State Farm filed its motion (Doc. 35) for summary judgment on July 11, 2016. The motion is fully briefed (Docs. 37, 40, 43, 47, 49, 50) and ripe for disposition.

         II. Legal Standard

         Through summary adjudication, the court may dispose of those claims that do not present a “genuine dispute as to any material fact” and for which a jury trial would be an empty and unnecessary formality. Fed.R.Civ.P. 56(a). The burden of proof tasks the non-moving party to come forth with “affirmative evidence, beyond the allegations of the pleadings, ” in support of its right to relief. Pappas v. City of Lebanon, 331 F.Supp.2d 311, 315 (M.D. Pa. 2004); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89 (1986). Only if this threshold is met may the cause of action proceed. See Pappas, 331 F.Supp.2d at 315.

         III. Discussion

         State Farm argues that White did not have Gracey's permission to drive the vehicle and Gracey's insurance policy therefore does not cover White. (Doc. 37 at 10-16) Feather Hege and Hess rejoin that White had Sheffield's permission and consequently Gracey's implied permission to drive the vehicle (Doc 40 at 10-12; Doc 43 at 8-12; Doc 47 at 8-15) State Farm's declaratory judgment claim thus rises and falls on a narrow inquiry: whether White was a permissive user of the vehicle Gracey's automobile insurance policy contains an omnibus clause which extends coverage to anyone using the vehicle with Gracey's permission (Doc 37-3 at 7) Stated differently any user of the vehicle may be covered by the policy if Gracey consented to such use (Id.); see State Farm Mut Ins Co v Judge, 592 A.2d 712 714-15 (Pa Super Ct 1991); Fed Kemper Ins Co v Neary, 530 A.2d 929 931 (Pa Super Ct 1987) Consent may be express or implied Adamski v Miller, 681 A.2d 171174 (Pa 1996) (quoting Brower v Emp'rs' Liab Assurance Co 177 A 826 828 (Pa 1935)) It is undisputed that Gracey never gave White express permission to drive the vehicle (See Doc 38 ¶¶ 26 28; Doc 39 ¶¶ 26 28; Gracey Dep., 30:16-19)

         Implied consent per contra arises from the parties' course of conduct Motorists Mut Ins Cos v Great Lakes Labs Inc, 687 F.Supp. 198 200 (WD Pa 1988) (citing Fed Kemper Ins 520 A.3d at 931) The Pennsylvania Superior Court has defined the implied consent test as follows:

“[T]he critical question will always be whether the named insured said or did something that warranted the belief that the ensuing use was with his consent There must be 'a connection made' with the named insured's own conduct; proof of 'acts circumstances and facts such as the continued use of the car ' will be insufficient 'unless they attach themselves in some way to the acts' of the named insured” Belas v Melanovich, 371 A.2d 478 483 (Pa Super Ct 1977) (quoting

Beatty v Hoff, 114 A.2d 173 174 (Pa 1955)); see Allstate Ins Co. v. Davis,977 F.Supp. 705 709 (ED Pa 1997); Judge 592 A.2d at 714-15 Implied consent cannot arise from possession or use of a vehicle without the named insured's knowledge Nationwide Mut Ins Co. v. Cummings,652 A.2d 1338 1344 (Pa Super Ct 1994) ...


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