Pender v. US

Decision Date20 October 1994
Docket NumberNo. 4:93-cv-66RP.,4:93-cv-66RP.
Citation866 F. Supp. 1129
PartiesCatherine L. PENDER, et al., Plaintiffs, v. UNITED STATES of America, Defendant and Third-Party Plaintiff, v. INDIANA INSURANCE COMPANY and Consolidated Insurance Company, Third-Party Defendant.
CourtU.S. District Court — Northern District of Indiana

Marcel Katz, Lafayette, IN, for plaintiffs.

Clifford D. Johnson, Office of the U.S. Atty., South Bend, IN, for Lynn M. Martin and U.S.

Robert T. Sanders, III, Matthew A. Yeakey, Daniels Sanders Pianowski Hamilton

and Todd, Elkhart, IN, for Indiana Ins. Co., Consolidated Ins. Co.


PIERCE, United States Magistrate Judge.

Plaintiffs, Catherine, Sammy, and Mary Pender, ("Pender") brought this action pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680, alleging that the defendant, Lynn Martin ("Martin"), a United States Postal Service ("U.S.P.S.") employee, negligently caused personal injuries arising out of an automobile accident. Pender also named the United States as a defendant. In turn, the government, by a third-party complaint, sought indemnity under an insurance policy issued by third-party defendant Consolidated Insurance Company ("Consolidated") to Martin. Consolidated denied coverage under a provision of the insurance policy which excludes coverage when a vehicle is used as a "public or livery conveyance." This cause is now before the court on cross-motions for summary judgment on the third-party suit between the government and Consolidated. For the reasons discussed below, the United States' motion will be granted and Consolidated's motion will be denied.

Procedural Background

Pender initiated this action with a complaint against Martin and the government for personal injuries pursuant to the Federal Tort Claims Act, on September 21, 1993. On December 23, 1993, the government filed an answer to Pender's complaint along with a third-party complaint against the Indiana Insurance Company ("Indiana") and Consolidated, alleging breach of contract and negligence. The government claimed that because it was an insured under the policy issued to Martin, the third-party defendants were obligated to defend and indemnify it for any claims brought against Martin as the result of the accident. In addition, the government filed a motion asking that it be substituted in place of Martin, pursuant to 28 U.S.C. § 2679. Consolidated and Indiana responded with an answer and counter-claim against the government on January 31, 1993. In their answer, they claimed that Indiana had not issued an auto liability insurance policy to Martin, but admitted that Consolidated had. They conceded that the policy was in effect at the time of the accident. However, they alleged that Martin was not covered by Consolidated's liability policy at the time of the accident because she was using her vehicle as a "public or livery conveyance." The policy excluded coverage for such use. The third-party defendants moved for dismissal and requested an award of costs. Consolidated's counter-claim consisted of a request for declaratory judgment as to the meaning and effect of the policy, and, in particular, the public and livery conveyance exclusion. On March 21, 1994, the government and Consolidated filed a stipulation of facts.

On April 1, 1994, the government filed a motion to dismiss Indiana because Consolidated had acknowledged in its answer that it had issued the automobile insurance policy upon which the government made its third-party claim. The government also filed a motion for summary judgment against Consolidated. On April 11, 1994, Indiana was dismissed from the litigation. On May 2, 1994, Consolidated filed a motion for summary judgment against the government and on May 10, 1994, the government was substituted as the sole defendant in the case.

Summary Judgment Standard

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A party seeking summary judgment bears the initial responsibility of informing the court of the basis for the motion, and identifying "those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.'" Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). However, once a properly supported motion for summary judgment is made, the party that bears the burden of proof on a particular issue at trial cannot resist the motion by merely resting on its pleadings. United States v. Lair, 854 F.2d 233, 235 (7th Cir.1988). Rather, the party opposing the motion must "affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial." Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir.1988); Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 659 (7th Cir. 1987), cert. denied, 484 U.S. 977, 108 S.Ct. 488, 98 L.Ed.2d 486 (1987). "A genuine issue for trial only exists when there is sufficient evidence favoring the nonmovant for a jury to return a verdict for that party." Celotex, 477 U.S. at 2552-53, 106 S.Ct. at 2553.

"Summary judgment is properly entered in favor of a party when the opposing party is unable to make a showing sufficient to prove an essential element of a case on which the opposing party bears the burden of proof." Common v. Williams, 859 F.2d 467 (7th Cir.1988). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Flip Side Productions, Inc. v. Jam Productions, Ltd., 843 F.2d 1024, 1032 (7th Cir.1988), cert. denied 488 U.S. 909, 109 S.Ct. 261, 102 L.Ed.2d 249 (1988). The inquiry involved in ruling on a motion for summary judgment implicates the substantive evidentiary standard of proof, for example, preponderance of the evidence, that would apply at trial. Anderson, 477 U.S. at 251-53, 106 S.Ct. at 2512. All factual inferences must be drawn in favor of the non-moving party. Valley Liquors, 822 F.2d at 659.


The following facts have been established by stipulation: (Joint Stipulation of Facts filed Mar. 22, 1994). On or about April 27, 1992, Consolidated issued Martin and her husband a personal auto policy. The policy, drafted by Consolidated's agents and/or employees, was in effect from April 27, 1992 to July 27, 1992. It provided liability coverage for bodily injury and property damage subject to the policy terms and provisions. The relevant portions of the policy provided as follows:

Insuring Agreement A. We will pay damages for `bodily injury' or `property damage' for which any `insured' becomes legally responsible because of an auto accident. Damages include prejudgment interest awarded against the `insured.' We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted. We have no duty to defend any suit or settle any claim for `bodily injury' or `property damage' not covered under this policy.
* * * * * *
Exclusions A. We do not provide Liability Coverage for any person:
* * * * * *
5. For that person's liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This exclusion (A.5) does not apply to a share-the-expense car pool.

Although the policy contains a "Definitions" section, no definition of the phrase "public or livery conveyance" is provided in that section or in any part of the policy.

At the time of the accident Martin was employed as a rural route carrier for the U.S.P.S. As an employee of the U.S.P.S., she was paid wages and was reimbursed for mileage travelled on her assigned route and depreciation of her car while used within the scope of her duties. Martin's duties included the delivery and pick-up of mailable materials from mailboxes along her assigned route. Although the U.S.P.S. can be used by anyone who wants mail delivered, provided that postage or a fee is paid, Martin was only authorized to take mail for delivery from her assigned duty station and bring any mail to be delivered through the system to that station. While travelling along her assigned route on June 29, 1992, Martin was involved in an automobile accident with Pender in Benton County, Indiana. At the time of the accident, Martin was performing her duties as a rural route mail carrier for the U.S.P.S. Pender filed a complaint against Martin and the government. The government requested that Consolidated defend and indemnify it for this occurrence in accordance with its obligations under Martin's policy.1 Consolidated denied that its policy covers the accident because it excludes vehicles used as a "public or livery conveyance." But for its belief that the "public or livery conveyance" exclusion applies, Consolidated conceded that its policy would require it to defend and indemnify the government for the accident, subject to the other policy terms and provisions.

Evidentiary Submissions

The government has submitted an affidavit by Martin in support of its motion for summary judgment. Consolidated argues that two statements in the affidavit should not be considered because they "constitute inadmissible hearsay, speculation, conclusions of fact and law of the affiant." (Consolidated Insurance Company's Motion to Strike Portions of the Affidavit of Lynn M. Martin, at 1).

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