Medina v. GEICO Indem. Co.

• Decision Date: 08 February 2017
• Docket Number: F072548
• Citation: 213 Cal.Rptr.3d 502,8 Cal.App.5th 251
• Court: California Court of Appeals Court of Appeals
• Parties: Javier MEDINA, Plaintiff and Appellant, v. GEICO INDEMNITY COMPANY, Defendant and Respondent.

8 Cal.App.5th 251

213 Cal.Rptr.3d 502

Javier MEDINA, Plaintiff and Appellant,

v.GEICO INDEMNITY COMPANY, Defendant and Respondent.

F072548

Court of Appeal, Fifth District, California.

Filed February 8, 2017

Law Offices of Young Wooldridge and Thomas A. Brill, for Plaintiff and Appellant.

Tharpe & Howell, Charles D. May and Eric B. Kunkel, Sherman Oaks, for Defendant and Respondent.

OPINION

GOMES, J.

Leigh Anne Flores was involved in an accident while driving a van her employer, Pacific Bell, had furnished to her to perform her duties, but which she used for both business and personal purposes. At the time of the accident, Flores was running a personal errand during her work day. As a result of the accident, Javier Medina, the driver of the car she hit, sued Flores and Pacific Bell for damages. In that action, the trial court found Pacific Bell, who self-insured the van, was not vicariously liable for Flores's actions as she was not acting in the course and scope of her employment at the time of the accident. Since the parties stipulated Flores was a permissive user of the van, Pacific Bell was liable only for the $15,000 statutory limit. In a subsequent arbitration involving only Medina and Flores, the arbitrator awarded Medina over a half-million dollars in damages.

Flores had insurance for her personal car through GEICO Indemnity Company. The GEICO policy provided coverage for her use of a "non-owned" vehicle, but not if the non-owned vehicle was "furnished for [her] regular use." Flores tendered defense of the underlying action to GEICO, but GEICO refused to defend or indemnify her. Flores assigned any rights she had against GEICO to Medina in exchange for a covenant not to execute against her personal assets. After GEICO refused to pay the judgment Medina obtained based on the arbitrator's award, Medina filed this lawsuit against GEICO for breach of contract, bad faith, and declaratory relief.

GEICO brought a summary judgment motion based, in part, on the ground that there was no coverage under its policy because the van was furnished to Flores for her regular use. The trial court granted the motion, finding as a matter of law there was no coverage under the non-owned auto clause since Flores had nearly unlimited use of the van.

On appeal, Medina argues the van was not furnished for Flores's regular use at the time and place of the accident because it was furnished to her primarily for business use and she was on a personal mission at the time. We conclude that under the circumstances of this case, since Flores was able to use the van for both business and personal purposes, and her personal use of the van at the time of the accident was not a departure from its customary use, the van was furnished to Flores for her regular use and there is no coverage under the GEICO policy. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Flores worked for Pacific Bell as a facility specialist; at the time of the accident she had been a Pacific Bell employee for 18 years. Flores worked out of a Pacific Bell home office (home office), which was located first in Madera and later in Fresno, and traveled to AT&T and Pacific Bell "central offices" throughout the San Joaquin Valley and into the Mojave Desert, where she inventoried working and non-working equipment. Since Flores's job required her to transport company equipment and tools, and she was not allowed to use her personal vehicle to do so, she was assigned a 2000 GMC Safari (the van), which Pacific Bell owned. Flores had her own set of keys to the van, which was permanently assigned to her for her exclusive, regular use.

When Flores was working in Fresno, she drove her personal car to and from the Fresno home office, where she picked up the van and used it during her work day. When traveling out of town for work, Flores drove her personal car to the Fresno home office on Monday morning, where she switched vehicles, picked up her equipment, loaded the van, and drove to her destination. Once there, she checked into a motel room and went to work. On Friday, she drove back to the Fresno home office, either first thing in the morning or at lunchtime, and picked up her personal vehicle. ¹

Flores never took the van home overnight. When she was on out-of-town assignments, she always returned to the home office at the end of the week; it never occurred to her to keep the van over the weekend in whatever city she was working in, as she never stayed over the weekend.

Pacific Bell did not place any restrictions on Flores's use of the van during the work day. Flores's supervisor, Greek, did not specifically discuss any limitations regarding the van's use when he initially obtained it for Flores, including its use while on out-of-town work assignments. When she worked in Fresno, Flores used the van to drive home for lunch and to run errands, such as to the bank and shopping. No one told her she had to use her personal car if she wanted to go home for lunch, or that she was not allowed to use the van to go to the bank or shopping; she also was not told there was a limit on how far from the home office she could travel in the van. She always used the van for personal errands if she was working in Fresno, and was never told she could not do so. Greek knew she used the van for personal purposes.

With respect to out-of-town assignments requiring an overnight stay, Pacific Bell imposed no restrictions on her use of the van outside of work hours. When Flores was stationed in Bakersfield, Pacific Bell authorized her to use the van for personal errands to destinations away from Bakersfield. No one from Pacific Bell told Flores she could use the van to only go from the hotel to the office, or that she could not use the van to go to a movie, restaurant or bar. Flores understood there were no limitations on where she could take the van during her non-working hours while on an overnight trip.

According to Greek, employees were instructed that during a week's stay at an out-of-town location, a company vehicle could be used to get food, and to travel between their work and lodging, but employees were not specifically told whether they were allowed to use the vehicle for other purposes. While Greek testified employees could drive to the supermarket or a movie if it was within the local area, he did not personally tell Flores her use of the van was so limited, he did not tell employees before the accident what would constitute local versus non-local driving areas, and he did not know whether his employees were aware of this distinction; instead, he believed it was a matter of "common sense." No one discussed with Flores whether she was allowed to run errands, go to the movies, or do something on her off hours while working out of town, and she was not told there was a limit on how far she could travel in the van after concluding her work day.

During the two years Greek supervised Flores, Flores traveled to some 40 to 50 central offices outside of Fresno to perform inventory work. On these trips, the van was her only means of transportation. Flores estimated that during the last six months of her employment, she spent 80 percent of her time on overnight trips.

In August 2009, Flores was assigned to work out of the Bakersfield office. She drove the van to Bakersfield on a Monday and worked there through Thursday of that week. On Thursday, August 13, 2009, Flores received a call from her daughter, who had a problem with a pet and needed money to address it. Since Flores was in Bakersfield and her daughter lived in Fresno, they arranged to meet somewhere between the two cities so Flores could give her daughter money. While Flores was traveling on State Route 99, she was involved in an accident with Medina, who was injured. Pacific Bell later concluded that Flores had left to meet her daughter before 3:30 p.m., during work hours. Flores, who had a couple of glasses of wine with her lunch that day, was intoxicated at the time of the accident.

Flores did not speak to anyone at Pacific Bell before she left to meet her daughter and did not think she needed to do so, since she planned to return to Bakersfield to work. Moreover, no one from Pacific Bell told her she was not allowed to take the van to go home if she had a personal emergency. Flores, who ultimately lost her job, believed she would have kept it had she not been drinking, as she had Pacific Bell's implicit permission to take the van and the van had been assigned to her for her regular use.

The Underlying Action

Medina filed a personal injury action against Pacific Bell and Flores in July 2011. Pacific Bell, which self-insured its company cars, including the van, refused to defend or indemnify Flores. While Pacific Bell conceded Flores was operating the van with its permission within the meaning of the financial responsibility laws, it asserted she was not acting in the course and scope of her employment at the time of the accident, and therefore it did not have enterprise liability for Medina's injuries under respondeat superior principles. Accordingly, Pacific Bell offered Medina $15,000, which was its statutory liability for permissive use of its vehicle.²

Flores had insured her personal vehicle through GEICO, but she did not initially notify GEICO of the accident because she believed Pacific Bell would cover the losses as she was driving the van on an out-of-town work assignment.³ Flores' attorney tendered defense of the underlying action to GEICO in September 2012.

The policy GEICO issued for Flores's personal vehicle does not identify the van as an insured automobile. The GEICO policy, however, provides coverage for bodily injury or property damage arising out of the use of a "non-owned auto[,]" which the policy defines, in pertinent part, as "an automobile ... not owned by or furnished for the regular use of either you or a relative ..." The GEICO policy excludes from coverage accidents involving the use of a non-owned auto while the...