Darden v. Progressive Mountain Ins. Co., A22A0369

CourtUnited States Court of Appeals (Georgia)
Writing for the CourtDoyle, Presiding Judge
Decision Date29 June 2022
Docket NumberA22A0369



No. A22A0369

Court of Appeals of Georgia, Third Division

June 29, 2022


Doyle, Presiding Judge

Following a traffic accident involving Gregory Darden and German Fandino Linares ("Fandino"), Darden filed a breach of contract suit against Progressive Mountain Insurance Company ("Progressive") and Ethio-American Insurance Company ("Ethio-American") (collectively, "the defendants"). The trial court granted summary judgment to the defendants, and Darden now appeals, arguing that the trial court erred by (1) finding that Ethio-American's fleet taxi insurance policy and Fandino's Progressive policy for his personal vehicle both excluded coverage of the vehicle at issue at the time of the wreck; and (2) failing to find that public policy requires that liability insurance under one or both policies must be available to


Darden under the facts of this case. For the reasons that follow, we affirm in part and reverse in part.

"Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). We apply a de novo standard of review and view the evidence in the light most favorable to the nonmovant."[1]

The record shows that at approximately 6:30 a.m., on September 19, 2017, Darden, who did not have an uninsured motorist policy, was driving a rental car,[2] and he was injured in a wreck with a taxi driven by Fandino, who recently had ended his over-night shift and was en route to pick up breakfast before going home. Fandino deposed that he was turning left across a multi-lane road to a restaurant, and was hit


by Darden, who was traveling through the right-most lane. At the time of the accident, neither person exhibited outward signs of injury, but Darden later was treated for injuries requiring several thousands of dollars of treatment. Pictures of Fandino's vehicle showed slight damage to the rear passenger-side door and quarter panel.

At the time of the accident, Fandino was driving a 2011 Honda Civic, which he had leased from Juan Phun for use as a taxi. The lease consisted of an oral agreement between Fandino and Phun, which agreement began approximately four weeks prior to the accident with Darden. Under the agreement, Fandino paid Phun $200 a week to lease the Civic.[3] Phun imposed no restrictions on the use of the Civic by Fandino, who was allowed to use it 24 hours a day and to drive it for personal tasks as well as transporting fares; Fandino deposed, however, that he used it only for taxi services.

Phun also supplied insurance from Ethio-American on the Civic and other vehicles he leased to other drivers. The policy listed specific vehicles as well as specific drivers to whom the policy applied. Phun had drivers come and go


frequently, and in order to have them added to the policy when they leased a vehicle, he simply sent a copy of their drivers licenses to Ethio-American, which had rarely rejected a driver for insurance while he used the company. Usually Phun would go to the Ethio-American office and add drivers to the policy immediately when they began leasing a vehicle, but he deposed that he had an international trip scheduled approximately ten days after Fandino leased the Civic, and he failed to take Fandino's license to the insurance office prior to going on the trip. Fandino deposed that he had a Georgia drivers license and also had a personal vehicle (a Toyota Yaris) for which he had insurance under Progressive. Despite not adding Fandino to the policy, Phun gave Fandino a copy of an insurance card from Ethio-American for the Civic, and it was Fandino's understanding from Phun that he was covered by that insurance while he was driving the Civic.

After being notified of the accident, Progressive denied coverage to Fandino, stating that it would not cover the claim against him because the vehicle was being used as a taxi at the time of the incident. Ethio-American also denied coverage on the basis that Fandino was not a covered driver under its policy.

Darden sued both Phun and Fandino, and after both defaulted, Darden received a judgment of approximately $220,000 against them. After Phun and Fandino


assigned their rights to him, Darden sued Ethio-American and Progressive for breach of contract, attorney fees, and for bad faith litigation under OCGA § 13-6-11. Applicable to the claims against Ethio-American, its policy included coverage for ten listed automobiles, including the Civic at issue. Seven drivers were listed as well, but Fandino was not one of them. The policy stated that

[t]he motor vehicle(s) listed on your Declaration page are NOT covered motor vehicle(s) under this Policy against liability for bodily injury or property damage if you allow someone to drive or operate the motor vehicle(s) other than: . . . another person [who] has been approved by Ethio-American and the State of Georgia or local taxi cab regulatory commission as an approved and licensed taxi cab driver with a valid permit. Unless such other person is listed on the Declaration Page as a named insured driver or on another policy with your named taxicab company on the Declaration Page for the relevant period of coverage, such other person has NOT been approved by Ethio-American as a driver to operate the motor vehicle(s) listed on your Declaration Page.

It also stated that Ethio-American would

not pay for bodily injury or property damage claims that are caused by an otherwise covered accident or loss that occurs when the motor vehicle(s) listed on your Declaration Page are being used for personal purposes by you, any approved drivers, or any other person. For purposes of this Policy, a motor vehicle is being used for "personal purposes" when it is being driven, parked, or stored in any manner for
any purpose other than the pick-up and transport of passengers for hire by an approved driver. If you use the motor vehicle(s) listed on your Declaration Page for personal purposes, you must obtain separate insurance for such uses that are not part of this Policy for commercial use only.

This exclusion of coverage was repeated in a section titled, "Exclusions to Coverage for Property Damage and Bodily Injury," which stated that the policy did

not provide you with liability coverage for bodily injury damages, property damages, or any other claims of any kind that are caused by or arise out of the following: . . . Drivers and motor vehicles not listed on the Declaration Page. This Policy does not apply to accidents or losses of any kind that do not involve covered drivers and covered motor vehicle(s) listed on your Declaration Page[; or . . . ] Vehicle(s) used for personal use. This Policy does not provide insurance protection to you or any of the drivers listed on the Declaration page when the vehicles listed on the Declaration are used for personal purposes.

Pursuant to his personal Progressive policy, Fandino was a covered driver and his personal Toyota Yaris was listed as a covered automobile[4]. The policy also defined "Additional Auto" as "an auto you become the owner of during the policy


period that does not permanently replace an auto shown on the declarations page," and Progressive agreed to cover an additional auto

if: [A] we insure all other autos you own; [B] the additional auto is not covered by any other insurance policy; [C] you notify us within 30 days of becoming the owner of the additional auto; and [D] you pay any additional premium

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