State Farm Lloyds v. Richards
| Decision Date | 15 May 2018 |
| Docket Number | NO. 4:17-CV-753-A,4:17-CV-753-A |
| Parties | STATE FARM LLOYDS, Plaintiff, v. JANET RICHARDS, ET AL., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Came on for consideration the motion of plaintiff, State Farm Lloyds, and the cross-motions of defendants Janet Richards ("Janet") and Melvin Richards ("Melvin")(together, "Richards") and defendant Amanda Culver Meals ("Meals") for summary judgment. The court, having considered the motions, the responses, the replies, the record, including the summary judgment evidence, and applicable authorities, finds that plaintiff's motion should be granted and defendants' motions denied.
I.
This is a declaratory judgment action in which plaintiff seeks a declaration that it does not have a duty to defend or indemnify the Richards in a lawsuit filed against them by Meals arising out of the death of her minor son, Jayden Meals ("Jayden"). Plaintiff issued to the Richards a homeowners policy, Number 85-CC-J569-6 (the "policy"), effective March 20, 2017, through March 20, 2018. The operative pleading is plaintiff's first amended complaint filed January 25, 2018. Doc.1 32. In it, plaintiff alleges:
On or about June 11, 2017, Jayden, age 10, was operating a 2004 Polaris off-road all-terrain vehicle ("ATV") owned by Janet. Jayden was Meals's son and the Richards!s grandson. The Richards were responsible for Jayden on that day. Doc. 23, ¶ 8. The Richards allowed Jayden to operate the ATV without wearing a helmet or safety gear and without instruction or supervision. Id. ¶ 9. On Iriquois Trail in Parker County, a paved roadway, near the Richards's residence, Jayden flipped the ATV and died from injuries he sustained. Id. ¶ 10. On or about January 12, 2018, Meals filed her third amended petition in Cause No. CV17-0817 in the District Court of Parker County, Texas, 43rd Judicial District, against the Richards (the "underlying action"). Id. ¶ 11. Meals alleges that the Richards negligently caused Jayden's death. Id. ¶¶ 12-13. The Richards have made demand on plaintiff to defend them in the underlying action and to indemnify them for any liability. Id. ¶ 14.
Plaintiff alleges that certain exclusions of the policy apply to cause there to be no duty to defend or to indemnify theRichards in the underlying action. Specifically, plaintiff points to exclusion 1(e), which reads:
Doc. 32 at ¶ 16. And exclusion 1(h), which reads:
Doc. 32 at ¶ 17. Plaintiff says that these exclusions apply because Jayden's bodily injury arose out of the use of the ATV while off an insured location and because Jayden was an insured under the policy. Id. at ¶ 18.
Plaintiff says that the policy exclusions cause there to be no duty to defend or indemnify the Richards. The Richards, in turn, and Meals contend that the matter of duty to defend and duty to indemnify cannot be determined until the underlying action is concluded.
III.
Rule 56(a) of the Federal Rules of Civil Procedure provides that the court shall grant summary judgment on a claim or defense if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The movant bears the initial burden of pointing out to the court that there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325 (1986). The movant can discharge this burden by pointing out the absence of evidence supporting one or more essential elements of the nonmoving party's claim, "since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 323. Once the movant has carried its burden under Rule 56(a), the nonmoving party must identify evidence in the record that creates a genuine dispute as to each of the challenged elements of its case. Id. at 324; see also Fed. R. Civ. P. 56(c) (). If the evidence identified could not lead a rational trier of fact to find in favor of the nonmoving partyas to each essential element of the nonmoving party's case, there is no genuine dispute for trial and summary judgment is appropriate. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 597 (1986). In Mississippi Prot. & Advocacy Sys., Inc. v. Cotten, the Fifth Circuit explained:
929 F.2d 1054, 1058 (5th Cir. 1991).
The standard for granting a motion for summary judgment is the same as the standard for rendering judgment as a matter of law.2 Celotex Corp., 477 U.S. at 323. If the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial. Matsushita, 475 U.S. at 597; see also Mississippi Prot. & Advocacy Sys., 929 F.2d at 1058.
IV.
The policy contains personal liability limits of $300,000.00. Doc. 46 App. 0002. It provides that "[i]f a claim is made or a suit is brought against an insured for damages becauseof bodily injury . . . to which this coverage applies, caused by an occurrence, [plaintiff] will [] pay up to [its] policy limits of liability for the damages for which the insured is legally liable." Id., at App. 0046. And, plaintiff will "provide a defense at [its] expense by counsel of [its] choice." Id. Thus, for an obligation on the part of plaintiff to arise, there must be a claim made or suit brought because of bodily injury caused by an occurrence as defined in the policy.
In this respect, the policy at issue here is unlike those typically at issue in Texas cases where the duty to defend is defined more broadly than the duty to indemnify. Those cases, in which an insurance policy provides that the insurer must defend any suit brought against its insured "even if the allegations of the suit are groundless, false or fraudulent," rely upon the eight-corners or complaint-allegation rule to determine the duty to defend. See Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 528 (5th Cir. 2004); GuideOne Elite Ins. Co. v. Fielder Road Baptist Church, 197 S.W.3d 305, 308 (Tex. 2006). Pursuant to that rule, an insurer's duty to defend is determined by the allegations in the third-party plaintiff's pleadings and the language of the insurance policy at issue. Courts do not go outside the pleadings of the underlying suit except in narrow circumstances where the court is determining a pure coveragequestion that may be determined by facts that do not contradict the merits of the underlying claim. GuideOne, 197 S.W.3d at 310. See Doc. 45 at 7-8, n.36 (citing numerous cases).
In this case, the policy does not require plaintiff to defend all actions against its insured no matter if the allegations of the suit are groundless, false or fraudulent. Rather, the duty to defend arises only if suit is brought to which the coverage applies. Doc. 46 at App. 0046. Thus, the eight-corners rule is not applicable, B. Hall Contracting, Inc. v. Evanston Ins. Co., 447 F. Supp. 2d 634, 645 (N.D. Tex. 2006), rev'd on other grounds, 273 F. App'x 310 (5th Cir. 2008), and plaintiff contends that the court can consider evidence outside Meals's pleading to determine whether the Richards's policy provides coverage for Meals's claims. Plaintiff does not contest the facts pleaded by Meals; rather, it says that additional facts show that there is no coverage. Doc. 45 at 10.
The policy defines "bodily injury" as "physical harm to a person." Id. at 0032. "Occurrence" is defined as "an accident . . . which results in: [] bodily injury." Id. at 0021. As stated, supra, excepted from coverage is "bodily injury or property damage arising out of the ownership, maintenance, use, loading or unloading of: . . .a motor vehicle owned or operated by or rented or loaned to any insured." Id. at 0048. Also excepted is"bodily injury to you or any insured within the meaning of part a. or b. of the definition of insured." Id. at 0049.
With regard to the first exclusion at issue, the term "motor vehicle" is defined to include a recreational vehicle--a motorized vehicle designed for recreation principally off public roads, including all terrain vehicles--while off an insured location. Id. at 0021. "Insured location" means the "residence premises," which is defined as the "one, two, three or four-family dwelling, other structures and grounds . . . where [the insureds] reside and which is shown in the Declarations." Id. at 0033. The declarations show that the Richards are insureds and their residence premises is located at 7213 Horseshoe Bend Trail, Weatherford, Texas. Id. at 0002. Plaintiff contends that because Jayden was injured and died at a place "off an insured location," there is no coverage under the policy.
Here, there is no question that the ATV is a motor vehicle as defined in the policy. Further, the Richards's responses to requests for admission admit that Jayden was off the residence premises when he flipped the ATV and suffered injuries resulting in his death. Doc. 46 at App. 0116. The vehicle crash records of the Texas Department of Transportation also show that Jayden's death occurred off the insured premises. Id. at...
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