Geico Indem. Co. v. Nathan Dodd, CVS Pharmacy, Inc.
| Decision Date | 14 September 2016 |
| Docket Number | Case No. 3:15-CV-01284-NJR-RJD |
| Parties | GEICO INDEMNITY COMPANY, Plaintiff, v. NATHAN DODD, CVS PHARMACY, INC., ANGELA STEVENS, MARY STEVENS, and C.T., a Minor, by Angela Stevens, her Mother and Next Friend, Defendants. |
| Court | U.S. District Court — Southern District of Illinois |
This insurance coverage dispute stems from an automobile collision involving Nathan Dodd ("Dodd") that occurred on August 1, 2014, while Dodd was delivering prescription drugs to customers of CVS Pharmacy, Inc. ("CVS") in his personal vehicle. Angela Stevens, Mary Stevens, and C.T., a minor, filed suit against Dodd for injuries allegedly sustained as a result of the accident. At the time of the accident, Dodd was insured through a policy issued by GEICO Indemnity Company ("GEICO") with bodily injury liability limits of $20,000 per person/$40,000 per accident. GEICO filed this lawsuit seeking a declaration that the policy issued to Dodd does not provide any coverage for the claims asserted in the underlying lawsuit, that it does not owe a duty to defend or indemnify Dodd in the underlying lawsuit, and that CVS has a duty to defend and indemnify Dodd and reimburse him/GEICO for defense costs.
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §1332. According to the complaint, Geico is a Maryland corporation with its principal place of business in Washington, D.C.; Defendants Nathan Dodd, Angela Stevens, Mary Stevens, and C.T. are citizens of Illinois; and Defendant CVS is a Rhode Island corporation with its principal place of business in Rhode Island. Thus, there is complete diversity of citizenship between the parties. Likewise, the complaint alleges that the amount in controversy exceeds $75,000, exclusive of interest and costs; Defendants have not contested this amount, and it does not appear to a "legal certainty" that the claim is really for less than the jurisdictional amount. See Anthony v. Security Pacific Fin. Servs., 75 F.3d 311, 315 (7th Cir. 1996).
This matter is currently before the Court on the motion for summary judgment filed by GEICO on February 10, 2016 (Docs. 22, 23). CVS filed its response on April 25, 2016 (Doc. 27),1 and GEICO filed a reply on May 9, 2016 (Doc. 29). The Court has carefully reviewed the briefs and exhibits submitted by the parties. For the reasons explained below, the motion for summary judgment is granted.
On August 1, 2014, Dodd was driving his 2005 Nissan Sentra when he collided with a car occupied by Angela Stevens, Mary Stevens, and C.T. At the time of the accident, Dodd was delivering prescriptions for his employer, CVS (Doc. 22-4, ¶ 7). Dodd was a part-time pharmacy technician at CVS working about twenty hours per week, spread out over five days (Doc. 27-1, p. 12). As a pharmacy technician, CVS paid Dodd approximately $9.50 per hour to deliver prescriptions, fill prescriptions, stockmedications, work the cash registers, answer and make phone calls, and handle basic customer service (Doc. 27-1, p. 9-10). At that point in time, however, Dodd spent most of his three- or four-hour shifts making prescription deliveries (Id.). CVS paid Dodd an additional $0.40 cents per mile while he was delivering prescriptions, which he would receive in cash at the end of his shift from one of the cash registers (Doc. 22-4, ¶ 5, Doc. 27-1, p. 23).
At the time of the accident, Dodd had an insurance policy with GEICO providing liability coverage with limits of $20,000 per person/$40,000 per accident subject to certain exclusions and provisions within the policy (Doc. 22-1, ¶¶ 12, 14). One such exclusion stated that liability coverage does not apply: "To any vehicle used to carry persons or property for compensation or a fee, including but not limited to the delivery of food or any other products . . . ." (Doc. 22-1, ¶ 15). CVS also had a policy of insurance through National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union") with a $2,000,000 limit of liability (Doc. 22-1, ¶¶8, 10). There is no dispute that the National Union policy would provide liability coverage to Dodd, who was acting in the course and scope of his employment with CVS, the named insured (Doc. 22-1, ¶ 9).
After the underlying lawsuit was filed against Dodd, GEICO filed this declaratory judgment action seeking a declaration that it has no duty to provide coverage or a defense to Dodd under the terms of its policy (Doc. 1). CVS filed a counterclaim for declaratory judgment seeking a declaration that GEICO has the duty to defend and indemnify Dodd (Doc. 15). CVS argued in its counterclaim, and again in its response to GEICO's motion for summary judgment, that the GEICO policy provides primarycoverage to Dodd for the underlying litigation, and any coverage provided by the CVS policy is excess to the coverage provided by GEICO (Doc. 15, Doc. 27).
Summary judgment is appropriate "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." Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014) (quoting FED. R. CIV. P. 56(a)). Once the moving party has set forth the basis for summary judgment, the burden then shifts to the nonmoving party who must go beyond mere allegations and offer specific facts showing that there is a genuine issue of fact for trial. FED. R. CIV. P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 232-24 (1986). The nonmoving party must offer more than "[c]onclusory allegations, unsupported by specific facts," to establish a genuine issue of material fact. Payne v. Pauley, 337 F.3d 767, 773 (7th Cir. 2003) (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).
In determining whether a genuine issue of fact exists, the Court must view the evidence and draw all reasonable inferences in favor of the party opposing the motion. Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A "court may not assess the credibility of witnesses, choose between competing inferences or balance the relative weight of conflicting evidence . . . ." Reid v. Neighborhood Assistance Corp. of America, 749 F.3d 581, 586 (7th Cir. 2014) (quoting Abdullahi v. City of Madison, 423 F.3d 763, 769 (7th Cir. 2005)). No issue remains for trial Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (citations omitted).
Further, the construction of an insurance policy is a question of law to be decided by the court. DeBord v. United States, 870 F.Supp. 250, 252 (C.D. Ill. 1994); American States Ins. Co. v. Koloms, 687 N.E.2d 72, 75 (Ill. 1997). Therefore, the "interpretation of an insurance policy is a question of law that is an appropriate subject for disposition by way of summary judgment." Cincinnati Ins. Co. v. W. Am. Ins. Co., 112 F. Supp. 2d 718, 720 (C.D. Ill. 2000) (quoting Jupiter Aluminum Corp. v. Home Ins. Co., 225 F.3d 868, 873 (7th Cir. 2000)).
In diversity cases such as this one, matters of insurance policy interpretation are matters of state law. See Nation Athletics Sportswear, Inc. v. Westfield Ins. Co., 528 F.3d 508, 512 (7th Cir. 2008); Allstate Ins. Co. v. Keca, 368 F.3d 793, 796 (7th Cir. 2004). Here, the applicable law is the law of the State of Illinois. In Illinois, insurance policies are contracts; therefore, "the general rules governing the interpretation and construction of contracts govern the interpretation and construction of insurance policies." Clarendon Nat. Ins. Co. v. Medina, 645 F.3d 928, 933 (7th Cir. 2011) (citing Hobbs v. Hartford Ins. Co. of the Midwest, 823 N.E.2d 561, 564 (Ill. 2005)). In interpreting an insurance policy, a court must "ascertain and give effect to the intention of the parties, as expressed in the policy language . . ." Id. In doing so, a court must "read the policy as a whole and consider the type of insurance purchased, the risks involved, and the overall purpose of the contract. Id. (citing State Farm Mut. Auto. Ins. Co. v. Villicana, 692 N.E.2d 1196, 1199 (Ill. 1998). If the policy terms are unambiguous, they must be given their plain and ordinary meaning.Benedict v. Fed. Kemper Life Assur. Co., 759 N.E.2d 23, 27 (Ill. Ct. App. 2001) "Policy terms that limit an insurer's liability are liberally construed in favor of coverage, but only when they are ambiguous, or susceptible to more than one reasonable interpretation. Medina, 645 F.3d at 933. Where an exclusion is unambiguous, courts should apply it as written. Id.
In this case, GEICO first argues that its motion for summary judgment should be granted because it is undisputed that, at the time of the accident, Dodd was delivering prescription drugs for his employer, CVS, and was being paid an hourly wage as well as a "mileage fee." Therefore, the facts fall squarely within the GEICO policy exclusion stating that liability coverage does not apply to "any vehicle used to carry persons or property for compensation or a fee." CVS disagrees, asserting that the $0.40 cents mileage fee was actually "mileage reimbursement." Furthermore, CVS argues, Dodd's hourly wage was not tied to his deliveries; he made the same amount regardless of the task he was performing while on the clock. Therefore, because Dodd did not receive any specific fee or compensation for the delivery he was making at the time of the accident, the GEICO policy exclusion does not apply, and GEICO owes Dodd a duty to defend.
The insurance policy states, in relevant part:
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