Falcon Ins. Co. v. Tidwell

• Decision Date: 05 March 2022
• Docket Number: Case No.: CIV-21-56-D
• Parties: FALCON INSURANCE COMPANY, LLC, an Illinois Limited Liability Corporation, Plaintiff, v. Anita TIDWELL, as the Personal Representative of the Estate of Gary Tidwell, Macy Drake, Individually; Tiffany Chambray, Individually; John Goering, Individually; and, EAN Holdings, LLC d/b/a Enterprise Rent-A-Car, a foreign liability company, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

598 F.Supp.3d 1213

FALCON INSURANCE COMPANY, LLC, an Illinois Limited Liability Corporation, Plaintiff,

v.Anita TIDWELL, as the Personal Representative of the Estate of Gary Tidwell, Macy Drake, Individually; Tiffany Chambray, Individually; John Goering, Individually; and, EAN Holdings, LLC d/b/a Enterprise Rent-A-Car, a foreign liability company, Defendants.

Case No.: CIV-21-56-D

United States District Court, W.D. Oklahoma.

Signed March 5, 2022

Filed April 5, 2022

Brenna N. Wiebe, David A. Russell, Rodolf & Todd, Tulsa, OK, for Plaintiff.

Kenyatta R. Bethea, Holloway Bethea & Osenbaugh PLLC, Oklahoma City, OK, for Defendants Anita Tidwell.

Bryan G. Garrett, Bryan Garrett PLLC, Oklahoma City, OK, for Defendant Tiffany Chambray.

Greg S. Keogh, Parrish DeVaughn Injury Lawyers, Oklahoma City, OK, for Defendant John Goering.

ORDER

TIMOTHY D. DeGIUSTI, Chief United States District Judge

In this declaratory judgment action, Plaintiff Falcon Insurance Company, LLC has submitted a Motion for Summary Judgment [Doc. No. 36] asserting that it owes no defense or indemnity obligations under an insurance policy issued to Gary Tidwell.¹ Mr. Tidwell, Ms. Chambray, and Mr. Goering have responded in opposition [Doc. Nos. 42, 43, 44] and Ms. Chambray and Mr. Goering have each submitted a Cross-Motion for Summary Judgment [Doc. Nos. 41, 45]. The matter is fully briefed [Doc. Nos. 46, 47, 48, 49, 50] and at issue.²

INTRODUCTION

Oklahoma's compulsory insurance statutes require motor vehicle insurance policies to provide "omnibus coverage." O'Neill v. Long , 54 P.3d 109, 113 (Okla. 2002) ; Okla. Stat. Ann. tit. 47, § 7-600, et seq. Omnibus coverage "extends liability coverage to the named insured and other persons using the insured vehicle with permission." Id. Ms. Chambray and Mr. Goering, who were involved in a collision with a vehicle rented by Mr. Tidwell and driven by Ms. Drake, rely on this statutorily required coverage in seeking to recover under an insurance policy issued by Falcon to Mr. Tidwell. Falcon denies coverage, claiming that Ms. Drake is not an insured person under the policy and was not driving an insured vehicle. The Court agrees with Defendants that, as a function of the statutorily required omnibus coverage, Falcon was required to extend coverage to Ms. Drake as a permissive user of a vehicle that would otherwise have been insured under the policy.

STANDARD OF DECISION

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A material fact is one that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine if the facts and evidence are such that a reasonable juror could return a verdict for either party. Id. All facts and reasonable inferences must be viewed in the light most favorable to the nonmovant. Id.

"Cross-motions for summary judgment are treated as two individual motions for summary judgment and held to the same standard, with each motion viewed in the light most favorable to its nonmoving party." Banner Bank v. First Am. Title Ins. Co. , 916 F.3d 1323, 1326 (10th Cir. 2019). When the parties file cross motions for summary judgment, the Court is entitled to assume " ‘no evidence needs to be considered other than that filed by the parties.’ " Atlantic Richfield Co. v. Farm Credit Bank of Wichita , 226 F.3d 1138, 1148 (10th Cir. 2000) (citation omitted).

UNDISPUTED MATERIAL FACTS

Tiffany Chambray and John Goering were injured when a Nissan Sentra being driven by Macy Drake collided with their vehicle. The Sentra had been rented by Gary Tidwell from Enterprise for seven days for use while his Chevrolet Equinox was undergoing repairs and maintenance work.³ At the time of the accident, Mr. Tidwell's Equinox had been returned to service and he was using it to drive to a doctor's appointment. Mr. Tidwell had given Ms. Drake permission to drive the Sentra, and she was using it to follow him to the doctor's appointment.

Mr. Tidwell had an automobile liability insurance policy issued by Falcon in force at the time of the accident. As consideration for the premium, Falcon agreed to pay compensatory damages arising from an auto accident "for which an insured person is legally liable[.]" See Policy at 9, Pl.’s Br., Ex. 1 (emphasis in original). The policy includes the following relevant definitions:

"Insured person ", in this Part I, means:

1. You , a family member , or an insured driver⁴ for the ownership or use of a:

a. Covered auto covered by this Part I;

b. Non-owned auto or temporary substitute auto; or

c. Trailer while being towed by a covered auto , a nonowned auto , or a temporary substitute auto .

However, if a person described in this clause #1 has not been disclosed to us , then that person will be an insured person under this Part I only for the portion of the damages due to bodily injury or property damage that is less than or equal to the minimum limits , and we have no duty to defend that person .

2. Any other person who is using a:

a. Covered auto ; or

b. Trailer while being towed by a covered auto; with the express or implied permission from the named insured .

However, if a person described in this clause #2 is using a covered auto either:

a. Without a driver's license in effect; or

b. Outside the scope of permission allowed by the named insured ;

then that person will be an insured person under this Part I only for the portion of damages due to bodily injury or property damage that is less than or equal to the minimum limits , and we have no duty to defend that person.

7. "Covered auto " means:

a. A motor vehicle that:

(1) Is owned by you ;

(2) You have asked us to insure; and

(3) Is shown on the declarations page ;

but only for the coverage(s) that have been bought for it.

b. An additional acquired auto.

c. A replacement auto .⁵

d. A temporary substitute .

An auto or motor vehicle ceases to be a covered auto when it is sold, assigned, gifted, titled transferred, or possession permanently transferred, to anyone other than you or an insured driver .

20. "Non-owned auto " means an auto , if it is:

a. Used with the express permission of the owner of the auto and within the scope of that permission;

b. Not owned by, registered to or available for regular or frequent use by you , a family member , an insured driver , or any person who resides in your household ;

c. Not owned by, leased to or rented to your employer or the employer of any family member, insured driver , or any person who resides in your household ;

d. Not used for business purposes;

e. Not an auto rented for more than 7 consecutive days by you , a family member , an insured driver , or any person who resides in your household ; or

a. Not an auto in possession, for more than 7 consecutive days, by you , a family member , an insured driver , or any person who resides in your household .

A non-owned auto does not include a temporary substitute auto .

18. "Temporary substitute auto " means an auto that is a substitute for a covered auto while that covered auto is not in use due to breakdown, servicing, repair, loss or destruction if the substitute auto is:

a. Rented by you or an insured driver under a written contract from a business engaged in renting motor vehicles ;

b. Used with the express permission of the owner of that auto and within the scope of that permission; and

c. Not owned by you , a family member or any insured driver .

An auto ceases to be a temporary substitute auto the earlier of when:

a. The covered auto it was replacing is repaired, restored to service or replaced; b. The auto being rented is returned; or

c. 30 days.

Id. at 5-8, 10. The policy also provides that "[l]iability insurance is provided in this policy in accordance with coverage required by the Compulsory Insurance Law of Oklahoma." Id. at 9.

DISCUSSION

Falcon argues that Ms. Chambray and Mr. Goering are not entitled to benefits under the policy because the Sentra does not meet the definition of a temporary substitute auto and Ms. Drake does not meet the definition of an insured person. Defendants counter that the vehicle qualifies as either a temporary substitute auto or a non-owned auto under the policy, and that Oklahoma law mandates coverage for a permissive user of an insured vehicle. To resolve this dispute, both the terms of the policy and the coverage required by Oklahoma law must be considered.

A. The Policy

Under Oklahoma law, "unambiguous insurance contracts are construed, as are other contracts, according to their terms." Max True Plastering Co. v. U.S. Fid. & Guar. Co. , 912 P.2d 861, 869 (Okla. 1996). "However, because of their adhesive nature, these contracts are liberally construed to give reasonable effect to all their provisions." Id. at 868.

Here, the terms of the policy unambiguously⁶ exclude permissive users from liability coverage when they are operating non-owned autos. The policy provides coverage for an "insured person," which includes Mr. Tidwell or a resident family member when using a covered auto, a temporary substitute auto, or a non-owned auto. An "insured person" also includes any other person using a covered auto or a temporary substitute auto. Construed together, these policy provisions provide liability coverage whenever Mr. Tidwell or a resident family member drives the Equinox, a temporary substitute auto, or a non-owned auto, but only extends coverage to other drivers if they are operating the Equinox or a temporary substitute auto. Thus, for Ms. Drake to qualify as an insured person under the policy, the Sentra would need to satisfy the definition of a temporary substitute auto.

Amongst other requirements, the policy defines a temporary substitute auto as "a substitute for a covered auto while that covered auto is not in use due to breakdown, servicing, repair, loss or destruction." Policy at 8. The policy further provides...