Taylor v. Pekin Ins. Co.
| Decision Date | 22 December 2010 |
| Docket Number | No. 0-821 / 10-0907,0-821 / 10-0907 |
| Parties | SHANE TAYLOR, Plaintiff-Appellant/Cross-Appellee, v. PEKIN INSURANCE COMPANY, Defendant-Appellee/Cross-Appellant. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Cerro Gordo County, Colleen D. Weiland, Judge.
In an action seeking the recovery of uninsured motorist benefits, Shane Taylor appeals an order granting summary judgment in favor of Pekin Insurance Company. AFFIRMED.
Thomas W. Lipps of Peterson & Lipps, Algona, for appellant.
Kermit B. Anderson of Finley, Alt, Smith, Scharnberg, Craig, Hilmes & Gaffney, P.C., Des Moines, for appellee.
Heard by Mansfield, P.J., and Danilson and Tabor, JJ.
This case tests the proposition of whether an individual who receives a demonstration vehicle from his employer on the express written condition that he will be the only driver, and who then allows a friend to drive him in that vehicle, is "using that vehicle without a reasonable belief that the person is entitled to do so." Because we agree with the district court that the quoted language applies in this case, and that it bars the plaintiff from any insurance recovery, we affirm the court's grant of summary judgment to the insurer.
The facts of this case may be simply stated. Plaintiff Shane Taylor worked at Clear Lake Ford, L.L.C., a car dealership, as its business manager. Clear Lake had assigned a 2005 Chevy Trailblazer to Taylor as a "demonstration" vehicle. Under Clear Lake's written policies, which Taylor admitted he had received and signed, the vehicle was not to be driven by anyone other than Taylor.
On the evening of November 25-26, 2005, Taylor and a co-employee, Ryan Didio, met at Taylor's apartment. With Taylor driving the 2005 Blazer, and Didio riding as passenger, they proceeded to several bars where they consumed alcoholic beverages to the point of intoxication. At some point, Taylor announced he could no longer drive because he was too intoxicated to do so. He then permitted Didio to drive his demonstrator vehicle. As they were returning to Taylor's apartment, Didio drove the vehicle off the road and into a retaining wall, resulting in injuries to Taylor. Didio was charged with and pled guilty to operating a vehicle while intoxicated.
Taylor sued Didio, Clear Lake, and Clear Lake's insurer, Pekin Insurance Company. Didio had no insurance. Clear Lake was granted summary judgment on the ground that the 2005 Blazer, at the time of the accident, was not being operated with the consent of the owner. See Iowa Code § 321.493 (2007) (). This left the question of Pekin's potential liability.
Pekin's insurance policy contained typical uninsured motorist coverage provisions, as follows:
Taylor argued that he was an "insured" because he was occupying the 2005 Blazer (see B.3 above), but that the Blazer was also an "uninsured motor vehicle" because Pekin had denied coverage for the vehicle as to the accident in question (see F.3.c above). In short, Taylor urged that the same vehicle could be both insured and uninsured for the purposes of the same policy.
Pekin responded that "uninsured motor vehicle" under an insurance policy cannot refer to a vehicle for which the same insurance policy provides coverage. It also maintained that, in any event, Taylor's uninsured motorist claim was barred by the exclusion in C.3, since on the night in question he had been "using" the car without a reasonable belief he was entitled to do so when he entered the car as a passenger and allowed Didio to drive.
The district court overruled Pekin's first contention, but ultimately granted summary judgment to Pekin on the ground that Taylor was "using a vehicle without a reasonable belief that [he was] entitled to do so." Taylor now appeals.
We review a ruling on a motion for summary judgment for the correction of errors at law. Nationwide Agri-Business Ins. Co. v. Goodwin, 782 N.W.2d 465, 469 (Iowa 2010). In doing so, we view the record in the light most favorable to the party against whom the summary judgment was granted. Hollingsworth v. Schminkey, 553 N.W.2d 591, 594 (Iowa 1996). "'To obtain a grant of summary judgment on some issue in an action, the moving party must affirmatively establish the existence of undisputed facts entitling that party to a particular result under controlling law.'" Goodwin, 782 N.W.2d at 469 (quoting Interstate Power Co. v. Ins. Co. of N. Am., 603 N.W.2d 751, 756 (Iowa 1999)).
Typically, uninsured motorist coverage comes into play when another vehicle is involved in an accident with the insured's vehicle. Citing several cases from other jurisdictions, Pekin argues that when a single-vehicle accident occurs, a passenger in that vehicle cannot use the vehicle's uninsured motorist coverage as a way of getting around the limits on liability coverage within the same policy. Otherwise stated, the same vehicle cannot be a "covered 'auto'" and an "uninsured motor vehicle"—or both insured and uninsured—at the same time.
A number of out-of-state cases adumbrate this principle. See, e.g., Jacobs v. Gulf Ins. Co., 156 S.W.3d 737, 740 (Ark. Ct. App. 2004) (); Seymour v. Lakewood Hills Ass'n, 927 S.W.2d 405, 408 (Mo. Ct. App. 1996) ); see generally 9 Steven Plitt et al., Couch on Insurance § 123:30, at 123-86 to-87 (3d ed. 2005) ("[I]nsured[s] involved in a one-car accident generally do not merit [uninsured motorist] coverage.") (citing cases) (hereafter Couch).
However, in Iowa, we believe the supreme court has rejected this point of view. In Rodman v. State Farm Mutual Automobile Insurance Co., 208 N.W.2d 903 (Iowa 1973), an individual who had been injured while riding as a passengerin his own automobile due to his driver's negligence sought recovery under the uninsured motorist provisions of his policy. Rodman, 208 N.W.2d at 904. The supreme court held that a policy purporting to deny coverage in that situation violated Iowa Code section 516A.1, which requires motor vehicle insurers in Iowa to offer uninsured motorist coverage and does not exclude the vehicle covered by the policy from the statutory definition of "uninsured motor vehicle." Id. at 90910 (); see also Jones v. State Farm Mut. Auto. Ins. Co., 760 N.W.2d 186, 187 (Iowa 2008) (); Classic Ins. Co. v. Reiger, 497 S.E.2d 20, 20-21 (Ga. Ct. App. 1998) (applying Iowa law) (in a one-car accident case, holding that an individual who was a passenger in her own vehicle could recover on her uninsured motorist coverage based on the permissive driver's negligence). Thus, we do not find Taylor's claim barred by the "abstract" proposition that a vehicle cannot be both "insured and uninsured" at the same time.
We turn now to Pekin's second contention, which was the basis for the district court's grant of summary judgment. Pekin argued, and the district court found, that uninsured motorist coverage was unavailable due to the policyexclusion in C.3 because Taylor was "using a vehicle without a reasonable belief that [he was] entitled to do so." As the district court put it, "Taylor had been expressly notified that he could not permit others to drive the vehicle."
Taylor believes this ruling was incorrect, because his own "use" of the vehicle (i.e., as a passenger) was not improper or, at most, there was a combination of proper and improper uses. We disagree. Riding in a vehicle as a passenger can constitute "using" it for purposes of this exclusion. Lee v. Grinnell Mut. Reins. Co., 646 N.W.2d 403, 409 (Iowa 2002) (); see also American Family Mut. Ins. Co. v. Peterson, 679 N.W.2d 571, 582-83 (Iowa 2004) (); Hawkeye-Sec. Ins. Co. v. Bunch, ___ F. Supp. 2d ___, 2010 WL 3721491 (E.D. Mo. 2010) (); Aetna Life & Cas. v. Bulaong, 588 A.2d 138, 144-45 (Conn. 1991) (listing supporting authority); Phillips v. S.W. Mech. Contractors, Inc., 561 S.E.2d 471, 475 (Ga. Ct. App. 2002); Whitcomb v....
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