Johnson v. AMERICAN CASUALTY COMPANY OF READING PA, Case No. 09-2125 SC.
| Decision Date | 05 January 2010 |
| Docket Number | Case No. 09-2125 SC. |
| Citation | 679 F. Supp.2d 1074 |
| Court | U.S. District Court — Northern District of California |
| Parties | Philip Rudolph JOHNSON, Plaintiff, v. AMERICAN CASUALTY COMPANY OF READING PA, a Pennsylvania Corporation, Does 1-100, Defendants. |
Thomas Gerad Lewellyn, Thomas G. Lewellyn, Alameda, CA, Thomas P. Burke, II, Burke Panzarella Rich, Phoenix, AZ, for Plaintiff.
Jon Peter Kardassakis, Lewis Brisbois Bisgaard & Smith, Los Angeles, CA, for Defendants.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on the Motion for Summary Judgment ("Motion") filed by Defendant American Casualty Company of Reading PA ("Defendant" or "American Casualty"). Docket No. 25. Plaintiff Philip Rudolph Johnson ("Plaintiff" or "Johnson") filed an Opposition. Docket No. 28. Defendant submitted a Reply. Docket No. 30. For the reasons stated herein, the Motion is GRANTED.
The following facts are not in dispute. On April 8, 2005, Plaintiff was involved in a motor vehicle accident that caused him injuries. Am. Compl. ¶ 7. The accident occurred on Highway 50 in El Dorado County in California, when John Ryan ("Ryan") lost control of the 2002 GMC Sierra he was driving, and collided head-on with Plaintiff's vehicle. Id. ¶ 8.
On March 17, 2007, Johnson sued Ryan seeking damages as a result of the accident in the Superior Court for the County of El Dorado. Id. ¶ 13 (the "tort action"). Ryan tendered his defense to American Casualty, but the insurance company refused to defend or indemnify Ryan. Kardassakis Decl.1 Ex. 5 ("May 11, 2007 Letter"); Larkin Decl.2 ¶ 12. American Casualty made a payment in connection with property damage to the 2002 GMC Sierra. Docket No. 24 ("Answer to Am. Compl.") ¶ 10. Johnson and Ryan stipulated to the entry of judgment in favor of Johnson and against Ryan in the amount of $750,000. Kardassakis Decl. Ex. 2 ("Settlement Agreement"). Ryan assigned to Johnson all rights, claims, and causes of action that Ryan had against American Casualty relating to the insurance policy or American Casualty's refusal to defend Ryan. Id. ¶ 2. Ryan carried an automobile liability policy with California State Automobile Association ("CSAA"), with a policy limit of $100,000, which CSAA agreed to pay to Plaintiff following a finding that the settlement was made in good faith. Id. ¶ 3.
On April 7, 2009, Johnson filed suit against American Casualty in the Superior Court for the County of Alameda. See Docket No. 1 ("Notice of Removal") ¶ 1. American Casualty removed the case to this Court. See Notice of Removal. On September 11, 2009, Plaintiff filed an Amended Complaint, which consists of four causes of action: (1) breach of contract; (2) bad faith; (3) direct action against insurance carrier pursuant to Insurance Code section 11580; (4) estoppel, reasonable expectations and waiver. Docket No. 22 ("Am. Compl.") ¶¶ 19-39. Defendant filed an Answer on October 9, 2009. See Answer to Am. Compl. Defendant now moves for summary judgment in its favor as to all causes of action. Mot. at 1.
Entry of summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court must not weigh the evidence. Id. at 255, 106 S.Ct. 2505. Rather, the nonmoving party's evidence must be believed and "all justifiable inferences are to be drawn in the nonmovant's favor." United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.1989) (en banc) (quoting Anderson, 477 U.S. at 255, 106 S.Ct. 2505). Where the party opposing summary judgment bears the burden of proof on a dispositive issue, it must offer specific evidence demonstrating a factual basis on which it is entitled to relief. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. The nonmoving party must set forth specific facts, through affidavits or other materials, that demonstrate disputed material facts. Id.
Defendant issued a Business Auto insurance policy, policy number C2074694981 to V & C Construction, Inc. ("V & C Construction"), with a policy period from 8/24/2004 to 8/24/2005. Kardassakis Decl. Ex. 1 ("Policy") at 1. V & C Construction is a Nevada company with an address in Minden, Nevada. Id.; Ohlwiler Decl.3 ¶ 2. The section entitled "Business Auto Coverage Form" provides that "we will pay all sums an `insured' legally must pay as damages because of `bodily injury' or `property damage' to which this insurance applies, caused by an `accident' and resulting from the ownership, maintenance or use of a covered `auto'." Policy at 18. The relevant policy provisions define an insured as "you for any covered `auto,'", or "anyone else while using with your permission a covered `auto' you own, hire or borrow." Id. The words "you" and "your" refer to the Named Insured. Id. at 17. V & C Construction is the named insured. Id. at 1. An endorsement adds as additional insureds "any Lessor of a covered `auto' for which we are providing any coverage for that covered `auto'" and "Cascade Water Trucks, Inc." Id. at 15.
"A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff." Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal.App.4th 1375, 1391 n. 6, 11 Cal.Rptr.3d 412 (2004).4 Johnson contends that American Casualty breached the Policy by refusing to defend and indemnify "permissive driver John Ryan" in the tort action brought by Johnson against Ryan. Am. Compl. ¶¶ 19-22. American Casualty contends it is entitled to summary judgment on Plaintiff's breach-of-contract claim because Ryan was not an insured under the Policy. Mot. at 8-14.
The Court agrees with American Casualty. The Policy provides that American Casualty "will pay all sums an `insured' legally must pay as damages . . . ." Policy at 18. V & C Construction is the named insured, and insurance coverage extends to "anyone else while using with your permission a covered `auto' you own, hire or borrow." Id. at 1, 18. Here, the Court finds that V & C Construction did not own the 2002 GMC Sierra at the time of the accident, and even if it did, V & C Construction did not give Ryan permission to drive the truck.
At one point in time, V & C Construction owned the 2002 GMC Sierra. Kardassakis Decl. Ex. 6 ("Raymond Van Winkle Dep.") at 9:19-21. American Casualty contends that by the time of the accident on April 9, 2005, Claudia Van Winkle owned the 2002 GMC Sierra. Mot. at 11-13. Plaintiff does not explicitly dispute that ownership of the truck transferred to Claudia Van Winkle, but instead contends that V & C Construction's insurance coverage did not terminate with the change in ownership. See Opp'n at 11-15.
The evidence supports American Casualty's contention that Claudia Van Winkle owned the truck at the time of the accident on April 9, 2005. On June 9, 2004, a Nevada court approved the Marital Settlement Agreement between Raymond Van Winkle and Claudia Van Winkle, dated May 12, 2004 and May 20, 2004. Kardassakis Decl. Ex. 3 () at 77. As part of the settlement agreement, the 2002 GMC Sierra was assigned to Claudia Van Winkle. Id. at 97; Raymond Van Winkle Dep. at 9:4-24. When the loan for the truck was paid off by January 5, 2005, and when GMAC sent title to Raymond Van Winkle, he immediately signed title over to Claudia Van Winkle. Raymond Van Winkle Dep. at 13:1-13; Kardassakis Decl. Ex. 7 ("Claudia Van Winkle Dep.") at 12:17-21, 35:3-23. He mailed the executed Certificate of Title to his ex-wife, who received it around January 20, 2005. Raymond Van Winkle Dep. at 13:1-13; Claudia Van Winkle Dep. at 35:1-7. When she received the Certificate of Title, she did not immediately register it with the Nevada Department of Motor Vehicles, see Claudia Van Winkle Dep. at 12:17-13:5, but she was in possession of the truck at that time, see Claudia Van Winkle Dep. at 42:22-24.
Under Nevada law, "`owner' means a person who holds the legal title of a vehicle and whose name appears on the certificate of title . . . ." N.R.S. 482.085. In Bly v. Mid-Century Insurance Company, the Supreme Court of Nevada held that a motorcycle buyer, who received physical possession and control of the motorcycle was the owner of the motorcycle, even though the seller did not execute the certificate of title. 101 Nev. 216, 698 P.2d 877, 879 (Nev. 1985). Here, the case for finding that Claudia Van Winkle is the owner of the 2002 GMC Sierra is even stronger because Claudia Van Winkle received the executed Certificate of Title in January 2005. See Raymond Van Winkle Dep. at 13:1-13; Claudia Van Winkle Dep. at 35:1-7. Based on her receipt of the Certificate of Title, the terms of the 2004 marital settlement agreement, and her physical possession of the truck, the Court finds that Claudia Van Winkle owned the 2002 GMC Sierra at the time of the accident on April 8, 2005.
Even if ownership had not transferred to Claudia Van Winkle, the Court would still find that there has been no breach of contract. The Policy defines as an insured "anyone else while using with your permission a covered `auto' you own, hire or borrow." Policy at 18. Here, there is no evidence that Ryan had the permission of the named insured to drive the truck. It was Claudia Van Winkle who gave Ryan permission to use the vehicle. Claudia Van...
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