EMCASCO Ins. Co. v. Cartwright
| Decision Date | 17 November 2021 |
| Docket Number | Case No.: 03:20-cv-00953-AC |
| Parties | EMCASCO INSURANCE COMPANY, an Iowa corporation; Employers Mutual Casualty Company, an Iowa corporation; and Great American Insurance Company, an Ohio corporation, Plaintiffs, v. James CARTWRIGHT, an individual and as the appointed guardian ad litem for Matthew Barbee; Sherrie Utley-Barbee, an individual; and Darby McBride, an individual; and Nationwide Insurance Company, an Ohio corporation, Defendants. |
| Court | U.S. District Court — District of Oregon |
Jamison R. McCune, Vicki M. Smith, Bodyfelt Mount, LLP, Portland, OR, for Plaintiffs EMCASCO Insurance Company, Employers Mutual Casualty Company.
Nicholas L. Dazer, Nicholas L. Dazer PC, Portland, OR, Peter J. Whalen, Pro Hac Vice, Clyde & Co. US LLC, San Francisco, CA, for Plaintiff Great American Insurance Company.
Ted E. Runstein, Zachary B. Walker, Kell Alterman & Runstein LLP, Portland, OR, for Defendant James Cartwright.
Michael T. Wise, Michael Wise and Associates, P.C., Zachary B. Walker, Kell Alterman & Runstein LLP, Portland, OR, Travis Stephen Eiva, Eiva Law, Eugene, OR, for Defendant Sherrie Utley-Barbee.
Brent W. Barton, Barton & Strever, PC, Newport, OR, for Defendant Darby McBride.
Introduction
EMCASCO Insurance Company, Employers Mutual Casualty Company ("EMC"), and Great American Insurance Company (collectively "Plaintiffs") bring this declaratory judgment action against Defendants James Cartwright, Sherrie Utley-Barbee, Darby McBride ("McBride"), and Nationwide Insurance Company ("Nationwide") seeking a declaration that Plaintiffs have no duty to defend or indemnify McBride in the underlying lawsuit.2 Currently before the court are Plaintiffs’ motion for summary judgment and Defendants’ cross-motion for summary judgment. Plaintiffs’ motion is granted and Defendants’ motion is denied.
The following facts are undisputed unless noted. At all relevant times McBride, a resident of Banks, Oregon, was employed as a service technician by Russ Auto, Incorporated ("Russ Auto") in its Beaverton dealership. (JSAF at ¶¶ 6-7.) At all relevant times Russ Auto had the following liability insurance policies:
On December 13, 2017, McBride worked from 7:00 a.m. to 4:30 p.m. at the Russ Auto dealership in Beaverton, Oregon. (Id. at ¶ 7.)
On December 13, 2017, Russ Auto hosted a holiday party at Big Al's restaurant and bar in Beaverton, Oregon from 8:00 p.m. to 11:00 p.m. (Id. at ¶ 8.) Russ Auto did not require its employees to attend the holiday party. (Id. ) McBride, however, "viewed the holiday party at Big Al's as a work event and believed it was an opportunity to meet and network with other Russ Auto employees." (Id. at 11.) McBride, therefore, attended the holiday party, and he drove himself and a co-worker to the party, arriving at approximately 8:00 p.m. (Id. at 10.) Russ Auto provided party attendees with food, two drink tickets, and bonus checks. (Id. at ¶ 13.)
McBride stated that "[t]owards the end of the party," Russ Auto Human Resources Director Tanya Hellerstedt told him that (Decl. of Vicki Smith, ECF No. 65 ("Smith Decl."), Ex. 3 at 5.) He went to the Brickyard Tavern where he saw "a couple dozen" Russ Auto employees. (Decl. of Travis Eiva, ECF No. 69 ("Eiva Decl."), Ex. 5 at 20.) Russ Auto, however, did not provide food or drinks at Brickyard Tavern. (Id. at 29.) McBride purchased a drink and stayed "a couple of hours." (Id. at 20.) After he left the Brickyard Tavern, he stopped and purchased food at a Taco Bell at 12:57 a.m. on December 14, 2017. (Id. , Ex. 8.) McBride ate the food and took a nap in his car before he began driving home to Banks, Oregon.
At some point before 1:24 a.m. on December 14, 2017, Matthew Barbee ("Barbee") was driving on Highway 26 and got a flat tire. (JSAF at ¶ 16.) Barbee pulled off the road and waited in his vehicle for a tow truck to arrive. (Id. ) At 1:24 a.m., McBride was driving westbound on highway 26 when his vehicle left the lane of travel and struck Barbee's vehicle waiting on the side of the road. (Id. ) Barbee suffered "serious and permanent bodily injuries." (Id. )
On June 25, 2019, Barbee, through his appointed guardian at the time, Sherrie Utley-Barbee3 ("Utley-Barbee") filed an action against Russ Auto and McBride in Washington County Circuit Court ("the underlying lawsuit"). Ultimately, McBride (JSAF at ¶ 17.) Cartwright and Utley-Barbee have settled their claims against Russ Auto.
On June 9, 2020, McBride tendered the underlying lawsuit to EMCASCO and EMC4 and "asked for defense and indemnity under the Auto Policy and the Umbrella Policy." (Am. Compl., ECF No. 5, at ¶ 14.)
On June 12, 2020, EMCASCO and EMC declined McBride's tender on the basis that their policies provide that Russ Auto's employees are insureds only when the employees are "using a covered ‘auto’ you do not own, hire or borrow in your business or personal affairs" and, according to Plaintiffs, at the time of the accident McBride was not using his auto in the business or personal affairs of Russ Auto. (Id. at ¶ 15.)
On June 12, 2020, Plaintiffs filed a declaratory judgment action in this court seeking a declaration that EMCASCO and EMC do not have a duty to defend or indemnify McBride in the underlying lawsuit. On August 17, 2020, Plaintiffs filed an Amended Complaint in which they add Great American Insurance Company as a plaintiff and seek a declaration that EMCASCO, EMC, and Great American Insurance Company do not have a duty to defend or indemnity McBride in the underlying lawsuit.
Plaintiffs now move for summary judgment on the basis that McBride was not an insured under any of their insurance policies at the time of the accident. Defendants move for summary judgment on the basis that McBride was an insured under all of the policies at the time of the accident.
Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). Summary judgment is not proper if material factual issues exist for trial. Warren v. City of Carlsbad , 58 F.3d 439, 441 (9th Cir. 1995).
The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324, 106 S.Ct. 2548. A nonmoving party cannot defeat summary judgment by relying on the allegations in the complaint, or with unsupported conjecture or conclusory statements. Hernandez v. Spacelabs Med., Inc. , 343 F.3d 1107, 1112 (9th Cir. 2003). Thus, summary judgment should be entered against "a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex , 477 U.S. at 322, 106 S.Ct. 2548.
The court must view the evidence in the light most favorable to the nonmoving party. Bell v. Cameron Meadows Land Co. , 669 F.2d 1278, 1284 (9th Cir. 1982). All reasonable doubt as to the existence of a genuine issue of fact should be resolved against the moving party. Hector v. Wiens , 533 F.2d 429, 432 (9th Cir. 1976). Where different ultimate inferences may be drawn, summary judgment is inappropriate. Sankovich v. Life Ins. Co. of N. Am. , 638 F.2d 136, 140 (9th Cir. 1981).
However, deference to the nonmoving party has limits. The nonmoving party must set forth "specific facts showing a genuine issue for trial." FED. R. CIV. P. 56(e) (emphasis added). The "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Therefore, where "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal quotation marks omitted).
Under Oregon law the construction of a contract is a question of law for the court. Holloway v. Republic Indem. Co. of Am. , 341 Or. 642, 649, 147 P.3d 329 (2006) (citing Hoffman Const. Co. of Alaska v. Fred S. James & Co. of Ore. , 313 Or. 464, 470, 836 P.2d 703 (1992) ). The court's task is to "ascertain the intention of the parties to the insurance policy." Id. at 649-50, 147 P.3d 329 (citing Or. Rev. Stat. § 742.016). The court accomplishes this task "based on the terms and conditions of the insurance policy." Id.
Generally when "evaluating whether an insurer has a duty to defend[,] the court looks only at the facts alleged in the complaint" and the terms of the policy. Ledford v. Gutoski , 319 Or. 397, 400, 877 P.2d 80 (1994). See also Nat'l Union Fire Ins. Co. of Pittsburgh v. Starplex Corp. , 220 Or. App. 560, 573, 188 P.3d 332 (2008) (...
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