Great Am. Alliance Ins. Co. v. Anderson

• Decision Date: 08 February 2017
• Docket Number: No. 15-12540,15-12540
• Citation: 847 F.3d 1327
• Parties: GREAT AMERICAN ALLIANCE INSURANCE COMPANY, Plaintiff–Appellee, v. Ulysses ANDERSON, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

847 F.3d 1327

GREAT AMERICAN ALLIANCE INSURANCE COMPANY, Plaintiff–Appellee,

v.Ulysses ANDERSON, Defendant–Appellant.

No. 15-12540

United States Court of Appeals, Eleventh Circuit.

February 8, 2017

Michael J. Athans, Gilson Athans, PC, Atlanta, GA, Karen Rebecca Dunbar, Casey Gilson, PC, Atlanta, GA, for Plaintiff–Appellee.

James Darren Summerville, The Summerville Firm, LLC, Atlanta, GA, Joseph R. Neal, Sr., Joseph R. Neal, PC, Augusta, GA, Steven J. Newton, Law Office of Steven J. Newton, PC, Atlanta, GA, for Defendant–Appellant.

Before ED CARNES, Chief Judge, ANDERSON, Circuit Judge, and CHAPPELL,^*District Judge.

CHAPPELL, District Judge:

The appellant was involved in a car accident with an intoxicated driver who was driving a company vehicle with his employer's permission.After a jury found the driver liable and awarded the appellant one million dollars, the employer's insurance company, the appellee, filed this suit for a declaration that the driver was not a permissive user—and thus not covered under the applicable insurance policies—because he broke internal company policies.

Except where specifically excluded, the general purpose of an insurance policy is to provide coverage.The Georgia Supreme Court has held that inquiries into permissive use should extend only to whether a vehicle is used for an approved purpose.SeeStrickland v. Georgia Cas. & Sur. Co. , 224 Ga. 487, 162 S.E.2d 421(Ga.1968).A subsequent decision by the Georgia Court of Appeals, however, held that a company's internal rules can govern the scope of permissive use, and that violations thereof can negate an individual's status as an insured.SeeBarfield v. Royal Ins. Co. of Am.,228 Ga.App. 841, 492 S.E.2d 688(Ga. Ct. App.1997).Because the district court followed Barfield , and thereby narrowed the scope of permissive use beyond what was permitted by Strickland , we find that it erred.Therefore, we reverse and remand.

I.BACKGROUND

A.Factual Overview

In 1996, Looper Cabinet Co., Inc.("LCC"), a Georgia company, hired Brian Hensley to perform services auxiliary to cabinet installation.In the years that followed, LCC permitted Hensley to drive its 2008 Chevrolet Silverado (the "Looper Vehicle") for both work and personal purposes.In addition, LCC's owner admitted that under the general permission granted to Hensley, he was allowed to drive the Looper Vehicle to and from his father's lake house.Hensley exercised this privilege in early June of 2012, and stayed there for some time.

On June 10, 2012, Hensley drank four beers before driving the Looper Vehicle home from the lake house.While driving, he encountered Appellant–Ulysses Anderson, who approached the Looper Vehicle from behind on a motorcycle.The parties dispute the ensuing facts, but they agree that Anderson attempted to pass Hensley resulting in an accident that left Anderson severely injured.

Thereafter, Anderson sued Hensley and LCC, alleging that Hensley drove the Looper Vehicle while under the influence of alcohol and caused the accident.Although LCC was dropped as a defendant, a jury found Hensley liable and awarded Anderson approximately one million dollars in damages.

1.LCC Internal Policies

For two decades, LLC's internal policies have banned alcoholic beverages on company property and prohibited employees under the influence of alcohol from working in the shop on and off the clock.LLC has also had a substance abuse policy that states, in pertinent part,

[a]n employee reporting to work visibly impaired will be deemed unable to properly perform required duties and will not be allowed to work.If, in the opinion of the supervisor, the employee is considered impaired, the employee will be sent home or to a medical facility by taxi or other safe transportation alternative—depending on the determination of the observed impairment and accompanied by the supervisor or another employee if necessary.A drug and/or alcohol test may be in order.An impaired employee will not be allowed to drive.Violating these policies may result in termination of employment.

The parties agree that Hensley had acknowledged these policies during his employment.

2.GAAIC Insurance Policies

Appellee–Great American Insurance Company("GAAIC") issued two insurance policies that covered the Looper Vehicle.The primary policy covered LCC as a named insured, as well as "anyone else while using with [its] permission a covered auto...."The umbrella policy also listed LCC as the named insured and covered "[a]ny person ... with respect to any ‘auto’ owned by [LCC], loaned to [it], or hired by [it] or on [its] behalf, and used by that person or organization with [its] permission."Under the umbrella policy, GAAIC would pay obligations imposed by law or assumed by the insured that exceeded the limits of the primary policy in the event of " ‘bodily injury’ or ‘property damage’ that takes place[ ] or ‘personal injury’ ... arising from an offense committed."

B.Procedural History

On May 5, 2014, GAAIC filed this action against Hensley and Anderson in the United States District Court for the Southern District of Georgia, seeking a declaration of its rights and responsibilities for the damages arising out of the car accident.Specifically, GAAIC sought a declaration that Hensley exceeded the scope of the permissive use granted by LCC at the time of the accident because he drove the Looper Vehicle while intoxicated.Alternatively, it sought a declaration that Hensley's conduct fell under a policy-coverage exclusion.Finally, GAAIC sought a declaration that the language in its policies prevented the assessment of punitive damages awarded in the underlying trial.

At the close of discovery, GAAIC and Anderson each moved for summary judgment.The district court granted GAAIC's motion, relying on Barfield to find that Hensley violated LCC's internal policies by driving the Looper Vehicle while intoxicated, and, therefore, exceeded the scope of his permissive use at the time of the accident.As a result, the district court found that Hensley was not an insured at the time of the accident, and that GAAIC owed no duty to cover the damages awarded at the trial of the underlying action.Anderson now appeals.

II.STANDARD OF REVIEW

We review de novoa district court's grant of summary judgment and draw "all reasonable inferences and review[ ] all evidence in light most favorable to the non-moving party."Moton v. Cowart , 631 F.3d 1337, 1341(11th Cir.2011).Summary judgment is appropriate only 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).An issue is genuine if there is sufficient evidence such that a reasonable jury could return a verdict for either party.SeeAnderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202(1986).Similarly, an issue is material if it may affect the outcome of the suit under governing law.Id.The moving party bears the burden of showing the absence of any genuine issue of material fact.SeeCelotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265(1986).

III.DISCUSSION

Anderson urges us to reverse the district court's decision to grant summary judgment in GAAIC's favor.He argues that the district court improperly deviated from the bright-line permissive use standard set forth by the Georgia Supreme Court in Strickland .GAAIC wants us to affirm the district court's decision because it maintains that Barfield , a decision from the Georgia Court of Appeals, controls the Eleventh Circuit's calculus and allows internal company rules to narrow the scope of an automobile's permissive use.We thus must decide the scope of a permissive use clause under Georgia law.

For the purposes of insurance coverage, an individual using an automobile with the express permission of an insured is a permissive user.In the event of an accident, the permissive user is generally covered under the named insured's insurance policy as a third-party beneficiary.Once permission is given, whether liability coverage is provided to the third-party hinges on whether the individual exceeded the scope of permission granted by the owner.

Where, as here, an action is based on diversity, Georgia's substantive law governs the interpretation of an insurance policy.SCI Liquidating Corp. v. Hartford Fire Ins. Co. , 181 F.3d 1210, 1214(11th Cir.1999), certified question answered sub nom. SCI Liquidating Corp. v. Hartford Ins. Co. , 272 Ga. 293, 526 S.E.2d 555(2000).In Georgia, insurance policies are interpreted by ordinary rules of contract construction.SeeBoardman Petroleum, Inc. v. Federated Mut. Ins. Co. , 269 Ga. 326, 327, 498 S.E.2d 492, 494(1998).Questions of contract construction are matters of law and are properly handled by the court.SeeClaussen v. Aetna Cas. & Sur. Co. , 259 Ga. 333, 334, 380 S.E.2d 686, 687(1989).

"To determine whether an insurer owes its insured a duty to defend a particular lawsuit, Georgia law directs us to compare the allegations of the complaint, as well as the facts supporting those allegations, against the provisions of the insurance contract."Elan Pharm. Research Corp. v. Employers Ins. of Wausau , 144 F.3d 1372, 1375(11th Cir.1998);see alsoGreat Am. Ins. Co. v. McKemie , 244 Ga. 84, 85–86, 259 S.E.2d 39, 41(1979).An insurance policy is "considered as a whole and each provision is to be given effect and interpreted so as to harmonize with the others."Boardman Petroleum , 269 Ga. at 328, 498 S.E.2d at 494.

Moreover, "[e]xclusions from coverage sought to be invoked must be strictly construed."SCI Liquidating , 181 F.3d at 1214–15(quotingTifton Mach. Works, Inc. v. Colony Ins. Co. , 224 Ga.App. 19, 20, 480 S.E.2d 37(1996) ).In this vein, all ambiguities as to policy exclusions are interpreted in favor of coverage because "the insurer, having affirmatively expressed coverage through broad promises, assumes a duty...