Encompass Indep. Ins. Co. v. Dombrosky
| Decision Date | 10 February 2017 |
| Docket Number | Civil Action No. 7:16CV00272 |
| Citation | 234 F.Supp.3d 785 |
| Parties | ENCOMPASS INDEPENDENT INSURANCE COMPANY, Plaintiff/Counterdefendant, v. Tanya N. DOMBROSKY, Defendant/Crossdefendant, v. Matthew T. Green, Defendant/Crossclaimant/Counterclaimant. |
| Court | U.S. District Court — Western District of Virginia |
Carter Taliaferro Keeney, Henry Stokes Carter, Carter & Shands PC, Richmond, VA, for Plaintiff/Counterdefendant.
Melissa Walker Robinson, Risa Sarah Katz, Glenn Robinson & Cathey PLC, Roanoke, VA, for Defendant/Crossdefendant.
In this insurance coverage dispute, Encompass Independent Insurance Company ("Encompass") seeks a declaratory judgment that it has no obligation to defend or indemnify Tanya Dombrosky ("Dombrosky") in connection with a personal injury action that Matthew Green ("Green") filed against Dombrosky in Virginia state court. The case is presently before the court on cross-motions for partial summary judgment filed by Encompass, Dombrosky, and Green. For the reasons set forth below, each motion will be granted in part and denied in part.
The facts in this case are not heavily disputed. In 2007, Dombrosky and her mother, Jo Ann Dunn ("Jo Ann"), moved in with Dombrosky's grandparents, Betty Dunn ("Betty") and Joe Dunn ("Joe"). At that time, Joe, who had a career in insurance, emailed a representative from Encompass inquiring about their existing policies. Jo Ann Dep. 45:15–46:23. Joe received an email stating, "According to Policy definitions the daughter/granddaughter are considered family members/resident relatives and therefore coverage will extend to them as long as they are residing in the household at the time of a loss." Email from RMC–East to Peggy Pettrey, Wed. Oct. 31, 2007, Docket No. 17–5. Joe gave the email chain to Jo Ann, told Jo Ann that she and Dombrosky were covered, and told Jo Ann that she should keep the email exchange for her records. See Jo Ann Dep. 45:15–46:23. Joe passed away prior to the events giving rise to the instant dispute.
On June 5, 2015, Dombrosky and Betty visited First Team Hyundai in Roanoke, Virginia, where Betty purchased a 2013 Hyundai Veloster (the "Veloster") for Dombrosky. Betty paid the full purchase price, which included the vehicle's first oil change and a limited warranty. See Harstock Dep., Ex. 1, p. 0000069, Docket 21–4. Jo Ann picked up the Veloster from First Team Hyundai three days later, on June 8, 2015.
Over the next nine days, Betty drove the vehicle two, possibly three times. Each time she used the Veloster, she drove it to the grocery store, which was about four or five miles away. See Betty Dunn Dep. 9:3–10:2, Docket No. 21–6. Betty also paid to put gas in the car once or twice. See id. 8:9–9:2. Jo Ann put gas in the vehicle once. See Jo Ann Dep. 26:19–20, Docket No. 21–3. At some point, Jo Ann drove the Veloster to West Virginia. Betty paid for the gas used on that trip. See id. 58:6–19. When not in use, the vehicle was kept in the garage, and the keys were kept in the car. See id. 21:21–22:20.
No one felt that Betty needed permission to drive to Veloster, but Betty did inform Dombrosky of any planned use. See Jo Ann Dunn Dep. 54:2–6; Betty Dunn Dep. 29:6–8; Dombrosky Dep. 31:14–19. Despite Betty purchasing the Veloster for Dombrosky's use, and Betty considering the Veloster to be Dombrosky's vehicle, Dombrosky needed permission to drive the Veloster. See Betty Dunn Dep. 16:4–6; Jo Ann Dep. 54:13–15. Dombrosky drove the vehicle at least three times prior to the accident. See Dombrosky Dep. 19:8–22:24. In addition to the Veloster, a Toyota RAV4 titled in Jo Ann's name and a Toyota Avalon titled in Betty's name were kept in the garage. See Jo Ann Dunn Dep. 13:16–22. The family considered the RAV4 to be Jo Ann's vehicle and the Avalon to be Betty's vehicle. See Betty Dunn Dep. 15:22–16:3.
On June 17, 2015, nine days after her mother picked up the Veloster from First Team Hyundai, Dombrosky was involved in a motor vehicle accident while driving the Veloster. The accident left Green permanently paralyzed from the chest down. He subsequently commenced a personal injury suit in Virginia state court, claiming $7.5 million in damages. At the time of the accident, the Veloster was titled in Jo Ann's name and insured by an USAA auto policy. When USAA paid for the totaled Veloster, Jo Ann specified that the check be paid to Betty. Id. 64:1–2.
At all times relevant, Betty maintained a $2.5 million personal umbrella policy (the "Umbrella Policy") and a $250,000 auto policy (the "Auto Policy"), which included an "Extended Non–Owned Coverage" endorsement (the "Endorsement"). The Umbrella Policy obligates Encompass to "pay damages for which a covered person becomes legally liable due to an occurrence resulting in personal injury, bodily injury, or property damage, up to the limit of liability shown in the Coverage Summary...." Encompass Umbrella Policy Insuring Agreement 3, Docket No. 1–1 (emphasis omitted). The Umbrella Policy enumerated certain losses that the policy does not cover. In pertinent part, the Umbrella Policy does not cover:
Encompass Umbrella Policy Insuring Agreement 6 (emphasis denotes defined terms). There is no debate that Dombrosky is a "family member" or that the Veloster is a "motor vehicle" as defined by the policy.
The Auto Policy states, in relevant part:
Personal Auto Policy 2–4, Docket No. 1–1 (). "You" and "Your" means the "named insured." Id. at 1. Betty is listed as the named insured in the Coverage Summary. See Coverage Summary 1, Docket No. 1–2.
The Endorsement to the Auto Policy provides, "The Extended Non–Owned Coverage provided by this endorsement does not afford coverage ... for any accident involving ... a vehicle owned by a member of the same household." Extended Non–Owned Coverage Endorsement, Docket No. 1–2. The Endorsement also provides, "We will provide Liability Coverage for any vehicle, other than your covered auto , which is furnished or available for the regular use of the named individual." Id. Finally, the endorsement states that the Auto Policy's "B.2.b. Exclusion," which excludes coverage for any vehicle furnished or available for the insured's regular use, does not preclude coverage by the Endorsement. Id.
After Green commenced the underlying personal injury suit, Encompass brought the instant action seeking a declaration that neither the Umbrella Policy nor the Auto Policy requires Encompass to defend or indemnify Dombrosky with respect to any claims asserted against her as a result of the accident. The declaratory judgment action is now before the court on cross-motions for summary judgment filed by Dombrosky, Green, and Encompass. Green and Dombrosky urge the court to conclude that Dombrosky is entitled to liability coverage under both policies. Encompass asks the court to declare that coverage is not owed to Dombrosky. The motions have been fully briefed and are ripe for review.
Summary judgment is appropriate when "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(a). For a party's evidence to raise a genuine issue of material fact, it must be "such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When deciding whether to grant a motion for summary judgment, the court must view the record in the light most favorable to the non-moving party and draw all reasonable inferences in his favor. Id. at 255, 106 S.Ct. 2505 ; see also Terry's Floor Fashions, Inc. v. Burlington Indus., Inc. , 763 F.2d 604, 610 (4th Cir. 1985).
"In a declaratory judgment action, an insurance carrier may appropriately move for summary judgment to determine whether it is obligated to provide coverage to an insured, where ... there are no material ambiguities in the policy." St. Paul Reinsurance Co. Ltd. v. Ollie's Seafood Grille and Bar, LLC , 242 F.R.D. 348, 352 (D.S.C. 2007) (citing Highlands Ins. Co. v. Gerber Prods, Co. , 702 F.Supp. 109, 110 (D. Md. 1988) ). In fact, "[s]ummary judgment is particularly well-suited for the resolution of insurance coverage disputes because the construction of insurance contracts is a legal question." Nationwide Mut. Ins. Co. v. Overlook, LLC , 785 F.Supp.2d 502, 512 (E.D. Va. 2011) ; see also Transcontinental Ins. Co. v. RBMW, Inc. , 262 Va. 502, 551 S.E.2d 313, 317 (2001) (...
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