State Farm v. Cheeper's Rent-A-Car
| Decision Date | 14 July 2000 |
| Docket Number | No. S-99-383.,S-99-383. |
| Citation | 259 Neb. 1003,614 N.W.2d 302 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, appellee, v. CHEEPER'S RENT-A-CAR, INC., a Nebraska corporation, appellant, and Heather Billings and Naomi Young, appellees. |
| Court | Nebraska Supreme Court |
John T. Rogers, Omaha, and M. Scott Vander Schaaf, for appellant.
Rex A. Rezac and Tracy J. Edgerton, of Fraser, Stryker, Vaughn, Meusey, Olson, Boyer & Bloch, P.C., Omaha, for appellee State Farm Mutual Automobile Insurance Company.
William M. Lamson, Frank J. Barrett, and Robert A. Mooney, of Lamson, Dugan & Murray, Omaha, for amicus curiae Car and Truck Rental and Leasing Association of Nebraska.
Roger R. Holthaus, Omaha, for appellee Heather Billings.
In this declaratory judgment action, Cheeper's Rent-A-Car, Inc. (Cheeper's), appeals the order of the district court for Douglas County denying its motion for summary judgment and granting the cross-motions for summary judgment of State Farm Mutual Automobile Insurance Company (State Farm) and Heather Billings. For the reasons set forth below, which differ from the rationale of the district court, we affirm.
In their briefs, the parties have set forth the relevant facts, and there are no material facts in dispute in this case. The facts may be summarized as follows: Cheeper's is a corporation, doing business as a rental car company in Nebraska. On January 15, 1998, Billings rented an automobile from Cheeper's and executed a Cheeper's rental agreement as part of the rental process. Paragraph 5 of the January 15 rental agreement, which Billings signed, provides, inter alia, as follows:
INSURANCE: Vehicle is covered by an automobile liability insurance policy, a copy of which is available for inspection at the main offices of CHEEPER'S RENT A CAR, INC. Said policy provides coverage and limits of liability at least equal to the liability coverage and limits of liability required of the operator to satisfy this State's financial responsibility motor vehicle laws. In all cases, CHEEPER'S automobile liability insurance is secondary to the Renter's liability insurance.
At the time Billings rented the car, she declined to purchase Cheeper's optional damage waiver, which consisted of collision and physical damage coverage.
The rental agreement which Billings executed on January 15, 1998, indicates that "State Farm Insurance Co.," policy No. XXXXXXXXX, covered Billings' rental costs to the following extent: "Rental authorized thru 01/21/98 $16.00 RENTER responsible for: ... Drop and pickup fees." The State Farm telephone number provided was 597-5500. Thus, at the time she rented the automobile, Cheeper's was aware of the fact that Billings was an insured on a State Farm automobile insurance policy, which policy, according to the evidence, provided, inter alia, that when Billings rented a vehicle, such liability coverage was excess to the rental company's "insurance or self-insurance."
On January 23, 1998, Billings was involved in an automobile accident at the intersection of 114th and Dodge Streets in Omaha. Billings was driving the Cheeper's rental car when she struck an automobile driven by Naomi Young. Under "Section I—Liability—Coverage A" of the State Farm policy covering Billings, Billings had liability coverage for damages resulting from Billings' use of a "temporary substitute car or a non-owned car," as those terms were used under the policy. None of the parties to the instant litigation has disputed that Billings' use of the Cheeper's rental car meets the State Farm insurance policy's definitions of either a temporary substitute car or a nonowned car. The State Farm policy further provided in an amendment to the liability coverage:
(Emphasis in original.)
Billings returned the rental car to Cheeper's on January 26, 1998. During the period of time when Billings had possession of the rental car, Cheeper's began using a different rental agreement form, and a copy of the new rental form, dated January 26, 1998, was given to Billings when she returned the rental car. Billings did not sign the new rental form. It is the new rental agreement form, dated January 26, 1998, upon which the district court based its ruling.
Paragraph 5 of the January 26, 1998, rental agreement form, which Billings did not sign, provides, inter alia, as follows:
RENTER IS HEREBY NOTIFIED THAT CHEEPER'S RENT-A-CAR, INC. IS CERTIFIED AS A SELF INSURED COMPANY under the laws of the State of Nebraska to fulfill its liability insurance obligations under the applicable financial responsibility motor vehicle laws. Renter agrees that Cheeper's self insurance and any other insurance owed by Cheeper's shall be secondary to Renter's liability insurance.
Young has claimed that the January 23, 1998, automobile accident resulted from the negligence of Billings in the operation of the motor vehicle Billings was driving. On June 22, State Farm filed a declaratory judgment action against Cheeper's and Billings. In its petition, State Farm alleged that the terms of its insurance policy with Billings and the terms of Cheeper's rental agreement with Billings conflict as to which entity has the primary obligation to defend and indemnify Billings. For relief, State Farm asked the district court to "enter a declaratory judgment determining the rights and obligations of the parties with regard to the transactions and occurrences hereinbefore described."
On July 24, 1998, Cheeper's answered State Farm's petition and by way of a counterclaim, also sought a declaratory judgment from the court determining the parties' rights and responsibilities. On November 18, 1998, Cheeper's filed a cross-claim against Billings, seeking a declaratory judgment with regard to the parties' rights and responsibilities and further seeking a declaratory judgment that Billings was liable to Cheeper's for any amounts determined to be owed from Cheeper's as a result of Billings' accident with Young.
On December 2, 1998, Billings answered and filed her own counterclaim to Cheeper's cross-claim. Billings requested declaratory relief with regard to the parties' rights and obligations and denied personal liability to Cheeper's, claiming that she was insured under her State Farm policy as well as under Cheeper's rental agreement.
On December 10, 1998, State Farm moved for summary judgment against Cheeper's, alleging in its motion that Cheeper's had the primary obligation to defend and indemnify Billings with respect to any claim brought by Young. On January 15, 1999, Cheeper's filed separate motions for summary judgment against State Farm and Billings. In its motion against State Farm, Cheeper's sought a summary declaratory judgment that State Farm had the primary obligation to defend and indemnify Billings with respect to any claims brought by Young. In its motion against Billings, Cheeper's sought a summary declaratory judgment that Billings was responsible to Cheeper's for any amounts declared or adjudged to be owing from Cheeper's to Young arising out of any claim Young might bring as a result of the January 23, 1998, auto accident. On January 19, 1999, Billings filed motions for summary judgment against both State Farm and Cheeper's, seeking, inter alia, a summary declaratory judgment that either State Farm or Cheeper's had the duty and primary obligation to defend and indemnify her with respect to the claim of Young.
The parties' motions for summary judgment came on for hearing before the district court on January 28, 1999. The district court received evidence, including a stipulation of facts signed by State Farm and Cheeper's, to which was attached copies of Billings' automobile insurance policy with State Farm, the January 15, 1998, rental agreement, and the January 26 rental agreement form. State Farm and Cheeper's stipulated that Cheeper's has been self-insured since 1995 in accordance with Neb.Rev.Stat. § 60-562 (Reissue 1998). Also received in evidence was the affidavit of Richard R. Otten, president of Cheeper's, in which he testifies that "[o]n or about January 15, 1998, Cheeper's executed a written rental agreement with Defendant HEATHER BILLINGS ("Billings") for the rental of one Red 1994 Geo Prizm automobile." In addition to the evidence, the parties submitted written arguments.
On March 10, 1999, the district court granted State Farm's and Billings' motions for summary judgment against Cheeper's and entered judgment in favor of State Farm and Billings, determining that as between the State Farm insurance policy and the January 26, 1998, "rental agreement," Cheeper's had the primary responsibility of defending and indemnifying Billings from any claims filed by Young as a result of the January 23 accident. The district court denied all other summary judgment motions.
Cheeper's has appealed the district court's granting of State Farm's and Billings' motions for summary judgment and the denial of its motion for summary judgment. The Car and Truck Rental and Leasing Association of Nebraska joins in Cheeper's arguments on appeal as amicus curiae.
On appeal, Cheeper's has assigned 10 errors which combine to form 2. Cheeper's claims the district court erred (1) in granting State Farm's and Billings' motions for summary judgment against Cheeper's and denying Cheeper's motions for summary judgment against State Farm and Billings and (2) in failing to find Billings is responsible for indemnifying Cheeper's for any liability damages Cheeper's may have to pay to Young as a result of...
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