Baxley v. Colonial Ins. Co.

• Decision Date: 05 July 1990
• Docket Number: No. CA,CA
• Citation: 31 Ark.App. 235,792 S.W.2d 355
• Parties: Terry BAXLEY and Nancy Davis, Appellants, v. COLONIAL INSURANCE CO., Appellee. 89-72.
• Court: Arkansas Court of Appeals

Page 355

792 S.W.2d 355

31 Ark.App. 235

Terry BAXLEY and Nancy Davis, Appellants, v. COLONIAL INSURANCE CO., Appellee.

No. CA 89-72.

Court of Appeals of Arkansas,

Division II.

July 5, 1990.

Floyd M. Thomas, Jr., James B. Bennett, El Dorado, for appellants.

Marshall H. Moore, Texarkana, for appellee.

MAYFIELD, Judge.

This is an appeal from a summary judgment granted the appellee insurance company in its suit for a declaratory judgment against the appellants. The pleadings, exhibits, affidavits, deposition, and statements of counsel reveal the facts and circumstances out of which the crucial issue arises.

In May of 1986, Terry Baxley was a passenger in an automobile which was owned and being driven by Joel Hall. They were traveling south on State Highway 57 near Stephens, Arkansas, when the vehicle crossed the center line of the highway and collided with an oncoming vehicle being driven by Nancy Davis. Joel Hall had no liability insurance but Terry Baxley had a liability policy issued by the appellee on another car.

Ms. Davis sued Hall and Baxley in the Circuit Court of Columbia County, Arkansas, seeking damages alleged to have been sustained in the collision, and by amended complaint alleged both defendants were negligent. She specifically alleged that at the time of the accident, Baxley "joined in the operation and control of the vehicle" in that he "grabbed the person of Defendant Hall and/or the steering wheel of the vehicle just prior to and/or during the occurrence of said accident and thereby contributed to the accident."

After the complaint and amended complaint were filed by Ms. Davis, the insurance company filed a petition for declaratory judgment against Davis, Hall, and Baxley alleging that the policy Baxley had in force at the time of the collision did not obligate it to defend the suit brought by Ms. Davis or to satisfy any judgment rendered against Hall or Baxley in that suit; the petition stated the insurance company was presently affording a defense to the suit under a "reservation of rights" arrangement; and it prayed for a declaratory judgment setting out the rights and obligations of the parties under the policy in force at the time of the collision.

Davis and Baxley answered the petition for declaratory judgment and alleged the company was obligated to both defend the Davis lawsuit and satisfy any judgment for damages entered as a result of the suit. No answer was filed by Hall. The insurance company subsequently filed its motion for summary judgment, and after responses and other matters were filed, and other proceedings were had, the circuit court granted the motion for summary judgment and entered a declaratory judgment holding the company had no obligation to defend the suit filed by Ms. Davis or to pay any judgment resulting therefrom. Davis and Baxley have appealed.

The liability coverage provided by the policy issued by the appellee to appellant Baxley provided:

We will pay damages which any insured person is legally liable because of bodily injury and property damage arising out of the ownership, maintenance or use of your insured car.

We will defend any suit or settle any claim for those damages as we think appropriate, but we shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of liability has been paid.

The definitions applicable to the liability coverage involved in this case, defined an insured car as follows:

(d) any car or utility trailer you use, that is not owned by you or any resident of your household, if such use is with the permission of the owner.

In the judgment granting appellee's petition for declaratory judgment, the trial court reasoned as follows:

[T]he term "use" as contained in the subject insurance policy should and must be interpreted in a common sense and practical way as expressed in Hardware Mutual Casualty Company vs. Crafton , 350 SW 2d 506. Further, the Court finds that the term implies use with "care, custody or control," and "with permission." From the facts of the case at bar, none of the foregoing requirements has been met.

We pause here to point out that the "Declaratory Judgment" entered by the trial court was entered as a result of the court's granting the appellee's motion for summary judgment. Summary judgment is authorized by Ark.R.Civ.P. 56(c) when "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact." In Township Builders, Inc. v. Kraus Construction Co., 286 Ark. 487, 696 S.W.2d 308 (1985), the court said:

"It is well-settled that summary judgment should be granted only when a review of the pleadings, depositions and other filings reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Cummings, Inc. v. Check Inn, 271 Ark. 596, 609 S.W.2d 66 (1980); Ark.R.Civ.P. 56. Summary judgment is an extreme remedy and any proof submitted must be viewed most favorably to the party resisting the motion and any doubts and inferences must be resolved against the moving party. Leigh Winham, Inc. v. Reynolds Ins. Agency, 279 Ark. 317, 651 S.W.2d 74 (1983). In order to be entitled to a summary judgment, the moving party has to show there is no issue of fact. Hurst v. Feild, 281 Ark. 106, 661 S.W.2d 393 (1983).

286 Ark. at 490, 696 S.W.2d 308. In Wolner v. Bogaev, 290 Ark. 299, 718 S.W.2d 942 (1986), the court said:

It is an extreme remedy. Dodrill v. Arkansas Democrat Co., 265 Ark. 628, 590 S.W.2d 840 (1979). The object of a summary judgment is not to try the issue but to determine if there are issues to be tried. Ashley v. Eisele, 247 Ark. 281, 445 S.W.2d 76 (1969). If there is any doubt whatever, it should be denied. Southland Insurance v. Northwestern National Insurance Co., 255 Ark. 802, 502 S.W.2d 474 (1973).

290 Ark. at 302, 718 S.W.2d 942. And in Walker v. Stephens, 3 Ark.App. 205, 626 S.W.2d 200 (1981), the court said: "Summary judgment is not proper where evidence, although in no material dispute as to actuality, reveals aspects from which inconsistent hypotheses might reasonably be drawn and reasonable men might differ." 3 Ark.App. at 210, 626 S.W.2d 200.

Before discussing the applicable law, we should also note that the record clearly shows that there is one disputed question of fact in this case. It is alleged in an amendment to the complaint of Ms. Davis, in her suit for damages, that Terry Baxley joined in the operation of the vehicle in which he was a passenger by grabbing "the person" of the driver, Joel Hall "and/or the steering wheel of the vehicle just prior to and/or during the occurrence of said accident." Although Mr. Baxley testified in a deposition that he took no action to try to help Hall get the car back on the road, the appellants, in response to the motion for summary judgment, filed an affidavit by Ms. Davis' brother who said that Baxley told him that he (Baxley) "grabbed the wheel, but it was too late." This certainly shows that there is a disputed question of fact in this case.

Moreover, we think this affidavit can be considered on the motion for summary judgment. In 10A Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2738 at 483-84 (1983), the authors quote from a case that reversed a grant of summary judgment. Corley v. Life and Casualty Ins. Co., 296 F.2d 449 (D.C.Cir.1961). The court relied upon a hearsay statement in an affidavit, presented by the nonmoving party, which could constitute a declaration against interest. The opinion stated that it was possible that the alleged admission would be admissible and this was sufficient to defeat the motion for summary judgment. This view is approved by the treatise on the basis that "because the burden of proving that there is no genuine issue of material fact rests on the moving party, the opposing party is entitled to all of the favorable inferences that reasonably may be drawn from the papers before the court." So, while we are not able at this point to know whether this evidence will be admissible at trial, we think the affidavit must be considered in ruling upon the motion for summary judgment.

Under the procedure governing motions for summary judgment, one moving for summary judgment has the burden of establishing that there is no genuine issue of fact to be decided. The appellee points to the policy language that provides coverage for "any car ... you use ... if such use is with the permission of the owner," and cites Maryland Casualty Co. v. Turner, 235 Ark. 718, 361 S.W.2d 646 (1962), where it is stated that "the word 'used ' is, to some extent, employed by insurance companies as a substitute for the phrase 'care, custody, and control,' in exemption clauses in liability policies." However, the issue in Turner was whether the appellee, who had a contract to furnish rock for certain revetment work on the Arkansas River, was "using" a truck which fell into the river. The appellee had made subcontracts with truck owners to haul the rock, and this particular truck was being lowered over the river bank to enable the dropping of its load at the designated point when the appellee's bulldozer, to which the truck was connected by a cable, slipped and let the truck fall. The appellee's liability coverage did not apply to damage to "tools or equipment being used by the insured in performing his operations," but the supreme court affirmed the trial court's holding that the insurance company had to defend the appellee in the truck owner's suit for damages. Immediately after making the statement about the word "used," the court in Turner quoted from Hardware Mutual Casualty Co. v. Crafton, 233 Ark. 1020, 350 S.W.2d 506 (1961), as follows:

The care, custody and control clause in liability policies, so far as our research has extended, appears to be almost universally used but its construction is, to...