Progressive Specialty Ins. Co. v. Murray
| Decision Date | 26 January 2007 |
| Docket Number | No. C/A 2:06-CV-00161-DC.,C/A 2:06-CV-00161-DC. |
| Parties | PROGRESSIVE SPECIALTY INSURANCE CO., Plaintiff, v. Abraham MURRAY; Mark A. Gadsden; and Perry Capers, Defendants. |
| Court | U.S. District Court — District of South Carolina |
Jeffrey C. Kull, John Robert Murphy, Murphy and Grantland, Columbia, SC, for Plaintiff.
Anne L. Peterson-Hutto, Anne L. Peterson-Hutto Law Office, Charleston, SC, for Defendants.
This matter is before the court on plaintiff's and defendant Perry Capers's cross-motions for summary judgment. Capers was injured while riding as a passenger in a vehicle insured by plaintiff. Plaintiff brought this declaratory judgment action to determine its coverage liability. The parties' motions raise issues of permissive use and uninsured motorist coverage.
I. FACTS
Plaintiff insured a pickup truck owned by Hill Eskew. Eskew was a self-employed general contractor, doing home remodeling and other construction-related work around Kiawah Island, South Carolina. Eskew used the truck as part of his business, but maintained a personal insurance policy on the vehicle. In running his business, Eskew frequently hired Murray as a sub-contractor. Eskew occasionally allowed Murray to use the truck.
Eskew testified that he placed a number of restrictions on Murray's use of the truck, which he orally explained to Murray. Eskew stated he told Murray that he could not have any passengers and that the truck could be used only for work-related activities. He also testified that on the "rare" occasions when Murray had the truck, Eskew instructed Murray to drive "straight home and not to use it for personal use." The instructions were not in writing, nor did Murray sign anything to indicate he understood them, but the evidence is uncontroverted that these restrictions were orally explained to Murray.
Murray's personal vehicle broke down the day before the accident. Eskew testified that Murray asked to borrow the truck for one night, and Eskew agreed to loan the truck to him. Eskew testified that he believed "Murray would drive home, return to work in the morning, use the truck for work on the date of the accident, and return it to Eskew's home after work that day." (Pl.Mot.Summ. J. 2.) Eskew also testified that Murray took the truck home that night without incident and used it for work the next day. At the end of the workday on the day of the accident, Murray drove back to Eskew's home and, as usual, Murray unloaded tools from the truck. Eskew stated he went inside the house, expecting Murray to park the vehicle and wait for a relative to pick him up. Instead, Murray left in the truck.
After Murray left, he went to his aunt's house on Johns Island, South Carolina. While there, Murray loaned the truck to Mark Gadsden, who used the truck to go to the store. Gadsden was not associated with Eskew's or Murray's business, and Eskew testified that he had never met him. Gadsden drove to the store and Capers rode with him as a passenger. There is some evidence that Murray consented to, or at least acquiesced in, Capers riding to the store as a passenger. (Capers Dep. Tr. 17.) At the store, Gadsden and Capers agreed to give one of Gadsden's friends a ride home. After dropping the friend off, Gadsden lost control of the truck and hit a tree, injuring Capers.
Gadsden fled the scene of the accident, leaving the injured Capers behind. Murray called Eskew later that night and told him that the truck had been stolen. However Capers told the police that Gadsden was the driver.
The record consists of the police accident report, the deposition testimony of Hill Eskew, and the deposition testimony of Perry Capers. Eskew's testimony therefore provides the record's only evidence as to the permission and conditions pertaining to Murray's use of the truck.
Plaintiff filed this action seeking a declaratory judgment on its liability to pay for Capers's injuries. Plaintiff has moved for summary judgment, arguing that Murray exceeded the scope of his permissive use. Capers has moved for summary judgment, arguing that Murray acted within the scope of the permission granted by Eskew or, in the alternative, that Capers is entitled to benefits under the truck's uninsured motorist (UM) coverage.
H. STANDARD OF REVIEW
Summary judgment is appropriate when, after considering the full evidentiary record, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). When the party moving for summary judgment does not bear the ultimate burden of persuasion at trial, the burden for summary judgment may be discharged by "pointing out to the court that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The non-movant must then "make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. 2548. Evidence should be viewed in the light most favorable to the nonmoving party and all inferences drawn in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). However, a mere "scintilla" of evidence will not preclude summary judgment. Id. at 252, 106 S.Ct. 2505. The court's inquiry is "not whether there is literally no evidence, but whether there is any [evidence] upon which a jury could properly ... find a verdict for the party" opposing summary judgment. Id. at 251, 106 S.Ct. 2505.
III. ANALYSIS
South Carolina law requires every automobile insurance policy to cover loss caused by an "insured." S.C.Code Ann. § 38-77-140 (2005). An "insured" includes the named insured, a resident spouse, resident relatives of either the named insured or spouse, permissive users, and guests in a vehicle to which the policy applies. Id. § 38-77-30(7). The party seeking to establish coverage through permissive use bears the burden of proving that the named insured gave permission. Liberty Mut. Ins. Co. v. Edwards, 294 S.C. 368, 371, 364 S.E.2d 750, 751 (1988) (citing Allstate Ins. Co. v. Federated Mut. Implement & Hardware Ins. Co., 251 S.C. 203, 161 S.E.2d 240 (1968)).
Permissive use can result from either the express or implied permission of the named insured. S.C.Code Ann. § 38-77-30(7); Catawba Ins. Co. v. Smith, 336 S.C. 33, 37, 518 S.E.2d 291, 293 (Ct.App. 1999). Regardless of whether permission is express or implied, "it must originate in the language or conduct of the named insured or of some one having authority to bind [him] in that respect." Rakestraw v. Allstate Ins. Co., 238 S.C. 217, 223, 119 S.E.2d 746, 748 (1961).
South Carolina adheres to the "conversion" or "strict construction" rule of permissive use, which mandates coverage only if the permittee acted strictly within the scope of the permission granted. State Farm Mut. Auto. Ins. Co. v. Logan, 444 F.Supp.2d 622, 626 (D.S.C.2006); U.S. Fire Ins. Co. v. Macloskie, 320 S.C. 459, 465, 465 S.E.2d 759, 763 (Ct.App.1995). The conversion rule is the most stringent of the three possible standards that courts use for determining coverage in permissive use cases. See U.S. Fire Ins., 320 S.C. at 465-66, 465 S.E.2d at 763. Even "minor deviations" from the scope of permission will result in no coverage under the conversion rule. Id.
"Express consent `must be of an affirmative character, directly and distinctly stated, clear and outspoken, and not merely implied or left to inference.'" Catawba Ins., 336 S.C. at 37, 518 S.E.2d at 293 (quoting 8 Lee R. Russ & Thomas F. Segalia, Couch on Insurance § 112:37 (3d ed.1997)). There is not a genuine issue as to whether Eskew gave express permission. The only evidence in the record pertaining to the relationship between Eskew, the named insured, and any of the alleged permissive users is Eskew's deposition testimony. Eskew's testimony is uncontradicted that he did not give express permission for Murray to take the vehicle on the night of the accident, to have passengers, or to use it for personal activities. (Eskew Dep. Tr. 19-21.) Further, the record shows that Eskew had no communications or contact with Gadsden or Capers whatsoever. (Eskew Dep. Tr. 27; Capers Dep. Tr. 14.) Thus, there was no express permission in this case that would trigger coverage for Capers's injuries.
Capers argues that Eskew's course of conduct during his relationship with Murray created a scope of permission wide enough to encompass the events that led to the accident. (Def.Mot.Summ. J. 6-7.) Plaintiff argues that Murray did not have implied permission to use the truck at the time and, even if he did, that the scope of the permission did not encompass the events that led to Capers's injury. (Pl. Mot.Summ. J. 6-9.)
"`Implied consent, as the term suggests, rests upon proof of circumstances from which an inference of actual permission or consent reasonably arises.'" Catawba Ins., 336 S.C. at 38, 518 S.E.2d at 293 (quoting Cooper v. Firemen's Fund Ins. Co., 252 S.C. 629, 633, 167 S.E.2d 745, 747 (1969)). "Implied consent involves an inference arising from a course of conduct or relationship between the parties, in which there is mutual acquiescence or lack of objection under circumstances signifying assent." Keeler v. Allstate Ins. Co., 261 S.C. 151, 155, 198 S.E.2d 793, 795 (1973). Implied consent does not arise simply because the named insured allowed another to use the vehicle on prior occasions. See Catawba, 336 S.C. at 38, 518 S.E.2d at 293-94. Permission to use a vehicle for a specific purpose does not imply permission to use the vehicle for all purposes. Crenshaw v. Harleysville Mut. Cas. Co., 246 S.C. 549, 552, 144 S.E.2d 810, 812 (1965). Finally, the consent required for implied permission "must flow...
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