Continental Ins. Co. v. Bodie

Citation682 F.2d 436
Decision Date28 June 1982
Docket Number81-1416,Nos. 81-1253,s. 81-1253
PartiesCONTINENTAL INSURANCE CO., Appellant, v. Kenneth BODIE, Appellee. /17.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Robert Zimmerman, Gamal & Zimmerman Associates, Christiansted, St. Croix, V. I., for appellant; Dante Mattioni (argued), Francis X. Kelly, Mattioni, Mattioni & Mattioni, Ltd., Philadelphia, Pa., of counsel.

Thomas Alkon (argued), Christiansted, St. Croix, V. I., for appellee.

Before HUNTER and HIGGINBOTHAM, Circuit Judges, and WEINER, District Judge. *

OPINION OF THE COURT

WEINER, District Judge.

This is an appeal from the denial of plaintiff-appellant's motion for summary judgment, grant of defendant-appellee's cross-motion for summary judgment, and entry of judgment in favor of defendant-appellee and declaring defendant-appellee an insured driver under plaintiff-appellant's liability insurance policy. Because we conclude that there are disputed issues of fact so that summary judgment was inappropriate in this matter, we shall remand for further proceedings.

I.

On August 8, 1975, Earl Drummond (Drummond) rented an automobile for a three day period from Preferred Rentals, Inc. (Preferred), a St. Croix, Virgin Islands car rental agency insured by Continental Insurance Co. (Continental). On the next day, August 9th, a daughter of Drummond was to be married, and while driving members of the wedding party to the ceremony, Kenneth Bodie, (Bodie), Drummond's 25 year old brother, lost control of the rented car, and Lester Pool (Pool), Drummond's nephew, was seriously injured. Drummond was not in the car at the time of the accident. Just how and why Bodie happened to be driving the vehicle is in essence the subject of this appeal. The district court said the following in its "Factual Background:" "Having the obligation of transporting members of the wedding party to the church, a few miles distant, Drummond turned over the rented car to his 25 year old brother, Kenneth Bodie, whom he had engaged to drive that group of ushers and bridesmaids." App. 506a.

On February 22, 1980, Pool brought a personal injury action against Bodie, who notified Continental, the insurer of the car. Continental disclaimed coverage and refused to defend, and subsequently filed this action for a declaratory judgment that Bodie was not insured under the policy issued by Continental to Preferred. In the interim, Pool recovered a $2,720,700.00 judgment against Bodie. This appeal followed grant of summary judgment in favor of Bodie and against Continental.

II.
A.

At issue in this case is the coverage, with regard to the use of the automobile by Bodie, of the insurance policy issued by Continental to Preferred. The decision of this court in Buntin v. Continental Insurance Co., 583 F.2d 1201 (3d Cir. 1978) makes clear that the relevant document for the court's consideration is the Continental insurance policy, issued to Preferred, not the rental agreement between Preferred and Bodie, for it is the former which governs the scope of Continental's coverage. Id. at 1205.

Buntin involved the very same policy of Continental providing insurance to Preferred, and a similar issue of coverage to one other than Preferred's permittee. We held there that where the insured vehicle was being used for the purposes and benefit of the named insured's permittee, and while the permittee was travelling in the car, the person actually driving the car was included within the omnibus clause and was an additional insured under the policy. Id.

The Buntin court then ruled that the so-called "omnibus clause" of the policy, rather than the conflicting Endorsement No. Two rider, was the controlling definition of "insured." The omnibus clause provides as follows:

"III Definition of Insured

(a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either. The insurance with respect to any person or organization other than the named insured or such spouse does not apply."

B.

In resolving the question of whether Bodie was an "insured" within the meaning of the policy, the district court stated that "Bodie was using the car for Drummond's purposes and benefit as he was transporting members of Drummond's daughter's wedding party when the accident occurred." App. 511a. That finding was apparently based upon the statement in the court's recital of the "Factual Background" that "Drummond turned over the rented car to his 25 year old brother, Kenneth Bodie, whom he had engaged to drive that group of ushers and bridesmaids." App. 506a. The court thus found that "(s)ince the vehicle was being utilized within the scope of the permitted use, that is by ... (Drummond), the person actually operating it would be included within the omnibus clause and would be an additional insured under the policy." App. 511a.

Following that conclusion, the court then rejected Continental's legal argument that permitted use under the omnibus clause extends only so far as to include coverage of one using the car while Preferred's original permittee (here, Drummond) is in the car at the same time, but not when that permittee is not in the car, as was the situation here. App. 511a. The district court also refused to deny coverage on the basis of Bodie being an unlicensed driver. App. 512a.

III.
A.

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be entered only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." This court has previously characterized summary judgment as a "drastic remedy," and made clear "that courts are to resolve any doubts as to the existence of genuine issues of fact against the moving parties." Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402, 405 (3d Cir. 1981); Ness v. Marshall, 660 F.2d 517, 519 (3d Cir. 1981); Tomalewski v. State Farm Life Ins. Co., 494 F.2d 882, 884 (3d Cir. 1974).

Furthermore, "inferences to be drawn from the underlying facts contained in the evidential sources submitted to the trial court must be viewed in the light most favorable to the party opposing the motion." Hollinger v. Wagner Mining Equipment Co., 667 F.2d at 405; Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). "Any reasonable inferences from the facts must be resolved in favor of the parties against whom the judgment is entered." Peterson v. Lehigh Valley District Council, United Brotherhood of Carpenters and Joiners, 676 F.2d 81, at 84 (3d Cir. 1982); Betz Laboratories, Inc. v. Hines, 647 F.2d 402, 404 (3d Cir. 1981).

In applying these principles, this court has noted that "(s)ummary judgment is a useful procedure when there is no dispute about the critical facts and it serves to eliminate the expense and delay of unnecessary trials." Peterson v. Lehigh Valley District Council, at 84. "However, when there is a disagreement about the facts or the proper inferences to be drawn from them, a trial is required to resolve the conflicting versions of the parties." Id.

B.

Since this is a case involving no more than legal interpretation of an insurance policy, and most of the questions raised are legal, rather than factual in nature, this matter might appear to be one for which summary judgment is particularly appropriate. However, the facts are simply not free from dispute as regards who, if anyone, handed over the car to Bodie, and for what purpose.

The question of how Bodie came into control of the car, and the exact nature of his use of the car are material issues of fact which go to whether that use was authorized by, or for the purposes and benefit of the insured's permittee, Earl Drummond, and thus whether as driver of the car Bodie is an additional insured under the omnibus clause.

As already noted, the district court's opinion states that "Drummond turned over the rented car to his 25 year old brother, Kenneth Bodie, whom he had engaged to drive" members of the wedding party. App. 506a. The district court then went on to say that "Bodie was using the car for Drummond's purposes and benefit as he was transporting members of Drummond's daughter's wedding party when the accident occurred." App. 511a.

The source of these "facts" relied on by the district court is not clear from the court's opinion, but appellant contends that the court improperly considered unsworn affidavits attached to and submitted in support of the cross motion for summary judgment of the defendant-appellee Bodie. According to appellant, it was Earl Drummond's son, Ernie Drummond, who turned the car over to Bodie. In his sworn deposition, Bodie has stated that it was Ernie who asked him to drive to pick up the bridesmaids. App. 48a. In addition, Bodie stated that no prior arrangements had been made with him to drive the car with the wedding party. App. 43a, 44a.

Since summary judgment is premised upon the prerequisite of an absence of issues of material fact, the factual basis upon which such a disposition may be achieved must be free from doubt. Here, the uncertainty concerning facts which could affect a determination of the scope of Continental's policy...

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