Wilshire Ins. Co. v. Yager
| Decision Date | 05 November 2018 |
| Docket Number | No. CV-16-00192-TUC-JAS,CV-16-00192-TUC-JAS |
| Citation | 348 F.Supp.3d 931 |
| Parties | WILSHIRE INSURANCE COMPANY, Plaintiff, v. Patrick YAGER and Javier Lopez, Defendants. Patrick Yager and Javier Lopez, Defendants/Counter-Plaintiffs, v. Wilshire Insurance Company, Plaintiffs/Counter-Defendants. Patrick Yager, Third-Party Plaintiff, v. Girard Insurance Services, Inc.; Ira Lee Girard and Mary Ann Girard, Third-Party Defendants. |
| Court | U.S. District Court — District of Arizona |
Gena LoPresto Sluga, Lon Haley Johnson, Christian Dichter & Sluga PC, Phoenix, AZ, for Plaintiff/Counter-Defendants.
Kevin E. Miniat, Jerald Robert Wilson, Miniat & Wilson PC, Tucson, AZ, for Defendants/Third-Party Plaintiff.
Robert Bryan Zelms, Nishan Joseph Wilde, Manning & Kass Ellrod Ramirez Trester LLP, Phoenix, AZ, for Third-Party Defendants.
Pending before the Court are motions for summary judgment filed by Wilshire Insurance Company ("Wilshire"), Girard Insurance Services, Ira Girard and Mary Ann Girard (collectively referred to as "Girard"), and Patrick Yager and Javier Lopez (collectively referred to as "Yager"1 ). Upon review of the parties' motions, responses, replies, statements of fact, opposing statements of fact and supplemental facts, evidence submitted in support of the filings,2 and pertinent authority, Wilshire's motion for summary judgment is granted, and Yager's and Girard's motions for summary judgment are denied.3
Summary judgment is appropriate where "there is no genuine dispute as to any material fact." Fed. R. Civ. P. 56(a). A genuine issue exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," and material facts are those "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).4 A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Id. An issue of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Id. Thus, the "mere scintilla of evidence" in support of the nonmoving party's claim is insufficient to defeat summary judgment. Id. at 252, 106 S.Ct. 2505. However, in evaluating a motion for summary judgment, "the evidence of the nonmoving party is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255, 106 S.Ct. 2505.
This case involves an insurance dispute that arises from an automobile accident in Tucson, Arizona. On November 12, 2014, Javier Lopez was driving his 2004 Econoline Van ("Van"). The Van was involved in an accident with a motorcycle driven by Patrick Yager. Yager suffered various physical injuries in the accident. It is disputed as to who was at fault in the accident. Yager argues that Lopez made an unsafe lane change and collided with Yager. Wilshire argues that Yager had been in three other accidents, had been required to go to driving school twice for speeding, that he has driven his motorcycles at speeds of 190 miles an hour, that Yager lacks any memory of the accident, and that the three eye witnesses to the accident indicated that Yager caused the accident.
After the accident, Yager filed a lawsuit in Pima County Superior Court against Lopez alleging that he was at fault in the accident; in addition, Alonso Pastor was also named in the lawsuit ("State Lawsuit"). Pastor was named in the State Lawsuit as he was the named insured under a commercial auto liability policy with Wilshire; the Van that Lopez owned was added as a covered auto under Pastor's previously existing policy with Wilshire, but Lopez was not listed as a named insured under that policy (the "Policy").5 There is no evidence reflecting that Wilshire was aware of Lopez's existence prior to the accident in question; Wilshire was only informed of Lopez's existence after the accident had already occurred.6
Lopez tendered his defense to Wilshire pursuant to the Policy issued to Pastor. In March of 2015, Wilshire retained counsel to defend Lopez in the State Lawsuit. However, by August of 2015, Wilshire sent Lopez a reservation of rights letter informing him that while Wilshire would continue to provide counsel to Lopez in the State Lawsuit, it was doing so under a reservation of rights because although Lopez's Van was listed as a covered auto under Pastor's Policy, Lopez was not an insured under the Policy (i.e., one has to be both an "insured" driving a "covered auto" for liability coverage to apply).
Yager's claims in the State Lawsuit against Pastor were dismissed at summary judgment, and that dismissal was affirmed on appeal. The State Lawsuit against Lopez ended when Lopez entered into a Morris agreement with Yager whereby Lopez assigned all of his rights against Wilshire and Girard to Yager; pursuant to the Morris agreement, the parties stipulated to a judgment of $1.5 million, and Yager agreed not to seek recovery of the judgment, or any other form of damages, against Lopez. Thereafter, Wilshire filed the instant declaratory judgment action against Yager and Lopez in this Court seeking a declaration that Wilshire owed no duty to indemnify. Thereafter, Yager asserted claims for breach of contract and bad faith against Wilshire, and claims against Girard stemming from its failure to properly procure insurance coverage for Lopez.
Wilshire and Yager have both moved for summary judgment as to the issue of whether Lopez was covered by the Policy. The Court agrees with Wilshire's position that the Policy is unambiguous and does not cover Lopez.
Contract interpretation is a matter of law, and whether the terms of the contract are ambiguous is also a matter of law. United States v. King Features Entm't, Inc. , 843 F.2d 394, 398 (9th Cir. 1988) ; Liristis v. Am. Family Mut. Ins. Co. , 204 Ariz. 140, 61 P.3d 22, 26 (App. 2002) ; Keggi v. Northbrook Prop. & Cas. Ins. Co. , 199 Ariz. 43, 13 P.3d 785, 788 (App. 2000). Insurance policies "must be read as a whole, so as to give a reasonable and harmonious effect to all of its provisions." Nat'l Fire Ins. Co. of Hartford v. James River Ins. , 162 F.Supp.3d 898, 903-04 (D. Ariz. 2016), clarified on denial of reconsideration , No. 14-CV-00765-PHX-JAT, 2016 WL 2606984 (D. Ariz. May 6, 2016) (quoting Charbonneau v. Blue Cross , 130 Ariz. 160, 634 P.2d 972, 975 (App. 1981) ). If the language is still "reasonably susceptible to differing interpretations" then it is ambiguous. Premier Physicians Grp., PLLC v. Navarro , 240 Ariz. 193, 377 P.3d 988, 990 (2016). The policy should be interpreted from the viewpoint of "the average layman, who is untrained in the law or the field of insurance." Nat'l Fire Ins. Co. of Hartford , 162 F.Supp.3d at 904 (quoting Liristis , 61 P.3d at 25-26 ). When the policy language is clear, it shall be afforded its "plain and ordinary meaning" and applied as written. Nat'l Fire Ins. Co. of Hartford , 162 F.Supp.3d at 904 (quoting Liberty Ins. Underwriters, Inc. v. Weitz Co. , 215 Ariz. 80, 158 P.3d 209, 212 (App. 2007) ; Sparks v. Republic Nat. Life Ins. Co. , 132 Ariz. 529, 647 P.2d 1127, 1132 (1982) ; see Holder v. Mercury Cas. Co. , 2010 WL 431234, at *2. Courts should use common sense and not create ambiguity where none exists. Employers Mut. Cas. Co. v. DGG & CAR, Inc. , 218 Ariz. 262, 183 P.3d 513, 515 (2008) (en banc) (quoting State Farm Mut. Auto. Ins. Co. v. Wilson , 162 Ariz. 251, 782 P.2d 727, 733 (1989) ). As the insuring clause (as opposed to an exclusion) is at issue, Yager has the burden of proving that Lopez was an insured under the Policy. See Keggi v. Northbrook Property and Cas. Ins. Co. , 199 Ariz. 43, 46, 13 P.3d 785, 788 (Ct. App. 2000) (); see also Salerno v. Atlantic Mutual Ins. Co. , 198 Ariz. 54, 58, 6 P.3d 758, 762 (App. 2000) ().
As pertinent to the dispute at bar, the Policy states in relevant part:
See Doc. 178-17 at p. 37.8
Yager primarily argues that Lopez was covered by the Policy because Lopez's Van (which was involved in the accident in this case) was specifically listed as a covered auto under the Policy. While the Van was indeed...
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...there is a strong argument that Imperial's expectations are the only expectations that matter. See, e.g. , Wilshire Ins. Co. v. Yager , 348 F. Supp. 3d 931, 938 (D. Ariz. 2018) ("Lopez was not a named insured under the Policy. Pastor was the named insured under the Policy and had the contra......