Hallett v. Gov't Emp. Ins. Co., C.A. No. 9:19-2319-RMG

• Decision Date: 10 November 2020
• Docket Number: C.A. No. 9:19-2319-RMG
• Citation: 500 F.Supp.3d 464
• Parties: Miriam HALLETT, Robert Hallett, Gregory Hall, Carrie Hall, and Kerin Jose Estrada-Aguilar, Plaintiffs, v. GOVERNMENT EMPLOYEE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of South Carolina

500 F.Supp.3d 464

Miriam HALLETT, Robert Hallett, Gregory Hall, Carrie Hall, and Kerin Jose Estrada-Aguilar, Plaintiffs,

v.GOVERNMENT EMPLOYEE INSURANCE COMPANY, Defendant.

C.A. No. 9:19-2319-RMG

United States District Court, D. South Carolina, Beaufort Division.

Signed November 10, 2020

Julie Jeffords Moose, Keely M. McCoy, McAngus Goudelock and Courie LLC, Columbia, SC, for Plaintiffs Miriam Hallett, Robert Hallett.

Mark S. Berglind, Roberts Vaux, Bluffton, SC, for Plaintiff Kerin Jose Estrada-Aguilar.

Christopher W. Nickels, Clawson and Staubes, Charleston, SC, for Plaintiffs Carrie Hall, Gregory Hall.

G. Murrell Smith, Jr., Smith Robinson Holler DuBose and Morgan LLC, Sumter, SC, Jonathan M. Robinson, Shanon Nicole Peake, Smith Robinson LLC, Columbia, SC, for Defendant.

ORDER

Richard Mark Gergel, United States District Judge

This declaratory judgment action was tried by the Court without a jury on November 6, 2020.¹ The Court now makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).

Findings of Fact

1. This case involves the question of whether Plaintiff Miriam Hallett ("Ms. Hallett"), an insured of Defendant Government Employee Insurance Company ("GEICO"), was covered under GEICO Policy No. 4080-90-19-47 (the "Policy") for a February 20, 2017 motor vehicle accident in which she was driving a 2014 Land Rover ("Land Rover") that was owned by her son in law, Gregory Hall ("Dr. Greg Hall") and her daughter, Dr. Carrie Hall (referred to collectively as the "Drs. Hall"). Ms. Hallett acknowledges that she ran a red light that resulted in the accident. Plaintiff Kerin Jose Estrada-Aguilar ("Estrada-Aguilar") suffered significant injuries as a result of the accident. Estrada-Aguilar brought an action in state court, which is pending in the Beaufort County Court of Common Pleas, against Ms. Hallett and the Halls for injuries suffered in the accident. GEICO has been providing Ms. Hallett a defense in the state court action under a reservation of rights.

2. The parties dispute the application of the coverage under the Policy for a "non-owned" vehicle. The Policy provides that an insured is covered while operating a non-owned vehicle so long as the insured (a) was using the non-owned vehicle with the permission of the owner; (b) the non-owned vehicle was not "furnished for the regular use" of the insured by the owner; and (c) the non-owned vehicle was not owned by a "relative," which is defined under the Policy as "a person who continuously lives in your household" and is related by blood or marriage. Plaintiffs’ Exhibit 1-A at 5, 6.

3. Ms. Hallett was involved in a motor vehicle accident late on the evening of February 20, 2017, while operating the Land Rover owned by the Drs. Hall. Ms. Hallett was driving the Land Rover to pick up a granddaughter, Elizabeth Hall ("Elizabeth"), who was on her high school's lacrosse team and who had returned from an out of town game to her high school. Ms. Hallett volunteered to pick up her Elizabeth late in the evening because her son in law, Dr. Greg Hall, a radiologist, went on duty at 4:00 a.m. and her daughter, Dr. Carrie Hall, a dermatologist, had medical appointments scheduled early the next morning. Ms. Hallett was 79 years old at the time of the accident.

4. Ms. Hallett had her own personal vehicle, a two-seater Pontiac Solstice, that she regularly used and which had been insured for a decade by GEICO. She testified she obtained permission to use the Land Rover from Dr. Greg Hall that evening because the granddaughter had lacrosse equipment and personal items that would be difficult to fit into her small automobile.

5. The parties dispute how frequently and under what circumstances Ms. Hallett used the Halls’ Land Rover. In an interview with a GEICO adjustor on February 24, 2014, four days after the accident, Ms. Hallett stated she used the Land Rover to pick up a grandchild "from an activity or something that they do at school" when their parents were at work. She was asked how often she used the Land Rover and she answered "maybe once a week or so." Ms. Hallett subsequently provided sworn testimony in an affidavit, by deposition, and at trial. Ms. Hallett's testimony seemingly varied on each telling, stating at different times that she never used the Land Rover before the day of the accident, used it only occasionally, or "maybe once a week."

6. Dr. Greg Hall testified at the trial that the Land Rover was his primary personal vehicle. He also owned a Porsche, which he testified he tried to avoid using routinely to avoid excess mileage. He explained he performed his work as a radiologist primarily from home and that he used the Land Rover for personal tasks, such as going to the grocery store. Dr. Greg Hall testified that Ms. Hallett did not have a key to the Land Rover and needed to come to him to use the vehicle. He testified Ms. Hallett used the Land Rover only occasionally. On the night of the accident, Dr. Carrie Hall had intended to pick up the daughter from school when she returned from an out of town lacrosse team trip. When it was reported the bus was delayed, Dr. Greg Hall testified that Ms. Hallett volunteered to pick up Elizabeth because the late hour presented a problem since both Drs. Hall had early morning duties.

7. The Court carefully observed the testimony of Ms. Hallett, both what she stated as well as her mental acumen and capacity to process and articulate. Ms. Hallett is now 82 years old and plainly has some limitations that became apparent when responding to rapid fire questioning. After observing her testimony, the Court finds that the inconsistencies in Ms. Hallett's testimony were not an effort to deceive or misrepresent the facts but a reflection of limitations in memory, articulation and processing. In the medical setting, physicians would call such a person a "poor historian."

8. Dr. Greg Hall, on the other hand, provided highly consistent, logical and straightforward testimony. Dr. Greg Hall testified that Ms. Hallett had no access to the Land Rover without his permission and delivery of the keys, and that she used the Land Rover only occasionally. The Court finds Dr. Greg Hall's testimony highly credible. Based on all the evidence available in the record and weighing carefully the credibility of the witnesses, the Court finds that Ms. Hallett used the Land Rover only occasionally.

9. The parties further dispute whether Mr. and Ms. Hallett live in the same "household" as the Drs. Hall. The Halletts and the Halls both reside under the same roof in a large home on Hilton Head Island at 6 Millwright Drive in Hilton Head, South Carolina. The home has three levels. The Drs. Hall had four children residing then at the home, who were middle school and high school age. The Halletts occupy the ground floor of the home, which has approximately 1,000 square feet. The Halletts have their own entrance, living room, bedroom, full bath, storage area, refrigerator, hot plate, coffee maker, and garage. The Halletts are self-supporting, have their own financial resources, and pay their own bills, including automobile liability insurance with GEICO on two vehicles they personally own, Ms. Hallett's Solstice and her husband's pickup truck. The Halletts file their own tax returns and are not listed as dependents on the Halls’ tax returns.

10. The Drs. Halls live on the upper two levels of the home with their children. The Halls manage their own affairs and have their own financial resources, with neither family supporting the other. Neither do the Halls and the Halletts merge financial resources. The Halletts share, as needed, the upstairs kitchen and laundry room with the Halls. The Halls and the Halletts do not regularly dine together, with the Halletts generally fixing their own food, getting takeout, or going out to dinner. The residence is zoned as single family and the Halletts and Halls receive their mail at the same address.

Conclusions of Law

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a). The amount in controversy exceeds $75,000 and there is complete diversity of citizenship among the parties.² As a diversity action, the Court is obligated to apply the law of the forum state, South Carolina. Ragan v. Merchants Transfer and Warehouse Co. , 337 U.S. 530, 532, 69 S.Ct. 1233, 93 L.Ed. 1520 (1949).

2. It is well settled under South Carolina law that an insurance contract is subject to the general rules of contract construction. "The cardinal rule of contract interpretation is to ascertain and give legal effect to the parties’ intentions as determined by the contract language. Courts must enforce, not write, contracts of insurance, and their language must be given its plain, ordinary, and popular meaning." Pres. Capital Consultants, LLC v. First Am. Title Ins. Co. , 406 S.C. 309, 316, 751 S.E.2d 256, 259 (2013) (quoting Whitlock v. Stewart Title Guar. Co. , 399 S.C. 610, 614, 732 S.E.2d 626, 628 (2012) ). "Policies are construed in favor of coverage, and exclusions in an insurance policy are construed against the insurer." M and M Corp. of South Carolina v. Auto-Owners Ins. Co. , 390 S.C. 255, 701 S.E.2d 33, 35 (2010). Ambiguous terms in an insurance contract "must be construed liberally in favor of the insured and strictly against the insurer. However, if the intention of the parties is clear, courts have no authority to torture the meaning of policy language to extend or defeat coverage that was never intended by the parties." Diamond State Ins. Co. v. Homestead Industries , 318 S.C. 231, 456 S.E.2d 912, 915 (1995).

Meaning of "Household" Under the GEICO Policy

3. The term "household" is commonly used in a variety of insurance policies, sometimes to provide coverage to persons living within the same household and sometimes to exclude persons who live in the same household but are not listed as insureds. South Carolina cases have arisen in a variety of settings and addressed whether...