Estate of Lewis v. Concord Gen. Mut. Ins. Co.

• Decision Date: 04 March 2014
• Docket Number: Docket No. Han–13–265.
• Citation: 87 A.3d 732,2014 ME 34
• Parties: Estate of Michael LEWIS v. CONCORD GENERAL MUTUAL INSURANCE COMPANY et al.
• Court: Maine Supreme Court

87 A.3d 732

2014 ME 34

Estate of Michael LEWIS

v.CONCORD GENERAL MUTUAL INSURANCE COMPANY et al.

Docket No. Han–13–265.

Supreme Judicial Court of Maine.

Argued: Dec. 17, 2013.

Decided: March 4, 2014.

Charles E. Gilbert, III, Esq. (orally), and Julie D. Farr, Esq., Gilbert & Greif, P.A., Bangor, on the briefs, for appellant Estate of Michael Lewis.

David P. Very, Esq. (orally), and Darya I. Haag, Esq., Norman, Hanson & DeTroy, LLC, Portland, on the briefs, for appellee Property & Casualty Insurance Company of Hartford.

J. William Druary, Jr., Esq., and Gregory M. Patient, Esq. (orally), Marden, Dubord, Bernier & Stevens, PA, LLC, Waterville, on the briefs, for appellee Allstate Fire & Casualty Insurance Company.

Christopher C. Dinan, Esq., and Matthew K. Libby, Esq., Monaghan Leahy, LLP, Portland, on the briefs, for appellee Concord General Mutual Insurance Company.

Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, and JABAR, JJ.

Majority: SAUFLEY, C.J., and LEVY, SILVER, and JABAR, JJ.

Dissent: ALEXANDER, and MEAD, JJ.

SILVER, J.

[¶ 1] The Estate of Michael Lewis, by and through Michael's mother and personal representative, Angela Dorval, appeals from a summary judgment entered in the Superior Court (Hancock County, A. Murray, J.) in favor of defendants Concord General Mutual Insurance Company (Concord), Allstate Fire and Casualty Insurance Company (Allstate), and Property and Casualty Insurance Company of Hartford (Hartford). The Estate contends that there are genuine issues of material fact concerning whether Michael had completed the purchase of the truck he was driving when he was killed in a two-vehicle accident. The Estate also argues that, if a sale occurred, it was not complete because Michael was killed before he reached the age of majority and never had the opportunity to ratify the contract. Alternatively, the Estate urges us to find that the other-owned-vehicle exclusions in the Concord and Allstate policies are unenforceable. Because we conclude that genuine issues of material fact remain in dispute, we vacate the judgment.

I. BACKGROUND

[¶ 2] On August 8, 2009, Michael was sixteen years old. That day, while he was with his friend Blake Parsons, he saw William Dodge's 1990 Ford F150 pickup truck on the side of the road with a “for sale” sign. Michael called Dodge's telephone number, which was listed on the sign, and he and Dodge discussed Michael's interest in purchasing the truck. They agreed on a price of $900.

[¶ 3] Later that evening, Michael returned with Parsons and gave Dodge an envelope containing cash. On the envelope, Michael had written “Money 4 truck $900,” although Dodge later discovered that it contained only $800.¹ Dodge provided Michael with a signed bill of sale acknowledging receipt of $900. Dodge also gave Michael the keys, the truck's maintenance history, and the title. He did not sign the assignment of ownership section on the back of the title, nor did he fill out the odometer disclosure statement.² Dodge left his license plates on the truck and left his insurance card in the glove compartment. Parsons, who overheard part of the conversation between Michael and Dodge, testified that the agreement was that Michael would be “allowed to use the truck with the registration as it was[,] and [Dodge] would leave [the] insurance on it until Michael got his own.”

[¶ 4] Michael had no further contact with Dodge. Michael maintained possessionof the truck until the fatal accident, which occurred eleven days later. He had not registered or insured the truck. The truck still appeared to be registered in Dodge's name, and a Maine State Police Trooper found Dodge's insurance card in the truck while investigating the accident.

[¶ 5] Michael's aunt, Audrey Hanley, called Dodge and informed him of the accident. She told Dodge that she knew that “his plates and insurance were still on the vehicle,” which Dodge did not deny. At about this time—although it is unclear from the record whether it was before or after Dodge learned of the accident ³—Dodge contacted Hartford, his insurer, and removed the truck from his insurance policy retroactive to the date Michael took possession of the truck.

[¶ 6] The driver of the other vehicle involved in the accident was insured by Hanover Insurance Company, which paid the Estate its $100,000 policy limit for liability. Michael's mother, Angela Dorval, was insured by Concord at the time of the accident. Michael's father, David Lewis, was insured by Allstate.⁴ The Concord and Allstate policies each provide for benefits in the amount of $100,000 per person for accidents involving uninsured or underinsured motorists.⁵ Michael was not a named insured under either policy, but he was covered as a resident family member for purposes of uninsured-motorist coverage under each policy. The Concord and Allstate policies each contain other-owned-vehicle exclusions, which preclude coverage for bodily injury to an insured person injured or killed while driving or riding in a car that an insured person owns, but which is not insured. ⁶ Dodge's Hartford policy provides for uninsured-motorist coverage in the amount of $500,000. Dorval, on behalf of the Estate, sought uninsured-motorist coverage from all three insurance companies.⁷ All three denied coverage, and the Estate filed suit against each company for breach of the terms of their respective policies.

[¶ 7] Concord, Hartford, and Allstate each moved for summary judgment. The court denied all three defendants' motions, reasoning that there was “a demonstrated need for fact-finding on the ownership issue,” and that “[t]he essential question [was] whether Mr. Dodge agreed to allow Michael Lewis to use Dodge's truck with Dodge's registration and insurance or whether Mr. Dodge agreed to allow Michael Lewis to use Dodge's registration and insurance on Lewis' truck.” The court noted that the only evidence on this issue was Parsons' deposition testimony, which was “less than clear,” and that there was “sufficient evidence for a fact-finder to conclude that Michael Lewis had two weeks (or some other time) before he would own the truck.”

[¶ 8] Hartford filed a second motion for summary judgment, along with an affidavit from Dodge. According to the affidavit, the sale was final once Michael took possession of the truck, and Dodge specifically informed him that his insurance was not transferable and would not cover Michael. The Estate deposed Dodge about the circumstances surrounding the transfer of the truck and the agreement between the parties.

[¶ 9] Allstate and Concord each adopted Hartford's motion for summary judgment by reference. The court granted the motion as to all three defendants, concluding that “ownership passed to [Michael] Lewis as a matter of law on August 8, 2009.” The Estate filed this appeal.

II. DISCUSSION

A. Summary Judgment

[¶ 10] “The existence of a dispute of material facts and entry of summary judgment are questions of law which we review de novo, considering the evidence in the light most favorable to the party against whom judgment has been entered[.]” Botka v. S.C. Noyes & Co., Inc., 2003 ME 128, ¶ 18, 834 A.2d 947. A fact is material “if it has the potential to affect the outcome of the suit.” Deutsche Bank Nat'l Trust Co. v. Raggiani, 2009 ME 120, ¶ 5, 985 A.2d 1 (quotation marks omitted). “A genuine issue of material fact exists when the [fact-finder] must choose between competing versions of the truth.” Dyer v. Dep't of Transp., 2008 ME 106, ¶ 14, 951 A.2d 821 (quotation marks omitted). Even when one party's version of the facts appears more credible and persuasive to the court, any genuine factual dispute must be resolved through fact-finding, regardless of the nonmoving party's likelihood of success. Cookson v. Brewer Sch. Dep't, 2009 ME 57, ¶ 12, 974 A.2d 276. “When facts, though undisputed, are capable of supporting conflicting yet plausible inferences—inferences that are capable of leading a rational fact-finder to different outcomes in a litigated matter depending on which of them the fact-finder draws—then the choice between those inferences is not for the court on summary judgment.” Lougee Conservancy v. CitiMortgage, Inc., 2012 ME 103, ¶ 11, 48 A.3d 774 (quotation marks omitted).

[¶ 11] A binding contract comes into existence only when the parties have mutually assented to be bound by all its material terms and such assent has been manifested either expressly or impliedly. Smile, Inc. v. Moosehead Sanitary Dist., 649 A.2d 1103, 1105 (Me.1994.) Preliminary negotiations are not sufficient to create a contract. Id. The terms of an oral agreement, as well as the intent of the parties in entering into a contract, are questions of fact. See Fitzgerald v. Hutchins, 2009 ME 115, ¶ ¶ 14–15, 983 A.2d 382. “It is the duty of the fact-finder to determine the existence of the parol contract, its extent and limitations, [and] to find not only what language was used, but its purport and meaning.” VanVoorhees v. Dodge, 679 A.2d 1077, 1080 (Me.1996) (quotation marks omitted).

[¶ 12] The Estate argues that there is a genuine dispute as to the terms of the agreement between Dodge and Michael. Specifically, the Estate argues that it is unclear whether the parties intended for the sale of the truck to be final immediately, or whether they agreed that it would become final only when Michael obtained his own insurance for the vehicle and registered it in his own name.⁸ Michael's non-ownership of the truck is key to the Estate's claims against each of the three defendants. If he did own the truck at the time of the accident, then the other-owned-vehicle exclusions in the Concord and Allstate policies would apply, and the Estate would be unable to recover.⁹ Similarly, if Dodge effectively transferred ownership to Michael before the accident, Hartford will not provide coverage, because Dodge's coverage was not transferable and would have terminated automatically upon his sale of the vehicle. Thus,...