Opinion
C. A. 8:23-cv-3121-TMC-BM
04-16-2024
Allied Property and Casualty Insurance Company, Plaintiff, v. Christina M. Kirk, Austin T. Kirk, Hunter E. Lawrence, Defendants. Hunter E. Lawrence, Third-Party Plaintiff, v. Government Employees Insurance Company, Third-Party Defendant.
REPORT AND RECOMMENDATION
BRISTOW MARCHANT UNITED STATES MAGISTRATE JUDGE
This insurance dispute is before the Court on a motion for judgment on the pleadings filed by Third-Party Defendant Government Employees Insurance Company (“GEICO”). ECF No. 43. Plaintiff Allied Property and Casualty Insurance Company (“Allied”) brought this action (the “Federal Court Action”) seeking a declaratory judgment against Defendants Christina M. Kirk, Austin T. Kirk (together “the Kirks”), and Hunter E. Lawrence (“Lawrence”). ECF No. 1. The Kirks are self-represented. ECF No. 9. Accordingly, the case was automatically referred to the assigned magistrate judge for pretrial proceedings. See 28 U.S.C. § 636(b); Local Civil Rule 73.02(B)(2)(e), D.S.C. The briefing period for GEICO's motion for judgment on the pleadings is closed and the motion is ready for disposition. For the reasons set forth below, GIECO's motion should be granted.
Austin Kirk is an adult son of Christina Kirk. ECF No. 16-2 at 5-6 ¶¶ 9, 12. At the time relevant to this action, Christina Kirk owned a residential home in Anderson County located at 503 Old Anderson Road, and Austin Kirk resided at his mother's home. Id. at 6-7 ¶¶ 11-12.
BACKGROUND
The State Court Action
On April 14, 2023, Lawrence commenced an action in the Anderson County Court of Common Pleas (the “State Court Action”) against the Kirks and two other individuals-Cody S. Taylor (“Taylor”) and Marshall Levi Henderson (“Henderson”). ECF No. 1 at 6 ¶ 11; see also ECF No. 1-2. On August 1, 2023, after Allied commenced the present Federal Court Action, Lawrence filed an amended complaint in state court. ECF No. 16 at 13 ¶ 64; see also ECF No. 16-2. The State Court Action is stayed pending disposition of the present Federal Court Action for declaratory judgment.
See Hunter Lawrence v. Cody Taylor, Christina Kirk, Austin Kirk, and Marshall Levi Henderson, C/A No. 2023-CP-04-00822 (S.C. Ct. Common Pleas).
The Federal Court Action
Allied commenced this Federal Court Action on June 29, 2023, by filing a Complaint seeking a declaratory judgment against the Kirks and Lawrence. ECF No. 1. On July 25, 2023, the Kirks jointly filed a pro se Answer to the Complaint. ECF No. 9. On August 25, 2023, Lawrence, represented by counsel, filed an Answer to the Complaint, a Counterclaim against Allied, and a Third-Party Complaint for declaratory judgment against GEICO. ECF No. 16. Allied filed its Answer to Lawrence's Counterclaim on September 14, 2023. ECF No. 22. GEICO filed its Answer to Lawrence's Third-Party Complaint and a Counterclaim for declaratory judgment on September 25, 2023. ECF No. 27. Lawrence filed an Answer to GEICO's Counterclaim on October 3, 2023. ECF No. 31.
On December 19, 2023, GEICO filed a motion for judgment on the pleadings. ECF No. 43. Lawrence filed a response in opposition on January 3, 2024. ECF No. 46. GEICO filed a memorandum in support of its motion on January 4, 2024. ECF No. 47. By Order dated March 12, 2024, the Court provided the parties an opportunity to file responses to GEICO's memorandum. ECF No. 55. On March 26, 2024, Lawrence filed a response in opposition, ECF No. 59, and GEICO filed a reply to the response on March 29, 2024, ECF No. 62.
On the same day that GEICO filed its motion, this Court entered an Order pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), advising the Kirks of the summary judgment/dismissal procedures and the possible consequences if they failed to respond adequately. ECF No. 44. Neither Allied nor the Kirks have filed a response to GEICO's motion.
The Relevant Factual Allegations
The facts summarized herein are taken from the parties' pleadings filed in this Federal Court Action and from Lawrence's amended complaint filed in the State Court Action. Allied's Complaint filed in this Federal Court Action provides a summary of the allegations from Lawrence's original complaint filed in the State Court Action. ECF No. 1 at 68 ¶¶ 11-23. In his Answer to the Complaint filed in this Federal Court Action, Lawrence admits the allegations summarized by Allied. ECF No. 16 at 2-3 ¶¶ 2-15. Although some of the allegations from Lawrence's amended complaint differ from those in his original complaint in the State Court Action, any discrepancies of the factual averments between the pleadings are not relevant to the issues presently before the court, and the factual allegations noted herein are not in dispute for the purpose of evaluating GEICO's pending motion.
On September 12, 2020, the Kirks hosted a party, known as the “Beer Olympics,” for a large group of guests at their home at which some of the guests participated in competitive games that involved the consumption of alcohol. Lawrence, Taylor, and the Kirks were all adults over the age of twenty-one; Henderson was an adult under the legal drinking age. The Kirks are alleged to have known, or reasonably should have known, that some of the guests might become intoxicated from drinking too much alcohol at the party.
After attending the party for several hours, Lawrence, Taylor, and Henderson left together in a vehicle owned and driven by Taylor with Lawrence seated in the front passenger seat and Henderson seated in the rear passenger seat. The pleadings allege that Taylor operated the vehicle at a high rate of speed, lost control of the vehicle, crossed over the center line, drove off the roadway, and crashed into a tree. Henderson allegedly contributed to the crash by distracting Taylor. The pleadings allege that Lawrence is paralyzed from the chest down, has incurred medical expenses, and has lost wages due to injuries he sustained in the automobile accident. Lawrence commenced the State Court Action against the Kirks, Taylor, and Henderson seeking damages for his injuries.
The Insurance Policies
This Federal Court Action involves the parties' requests for declaratory relief related to two insurance policies relevant to the State Court Action. First, Allied issued a homeowners policy, at policy number 61 39 HR 063486, to Christina Kirk with effective dates of April 12, 2020, to April 12, 2021 (the “Allied Policy”). See ECF No. 1-1. “The Allied Policy provides coverage to persons qualifying as ‘insureds' for liability arising out of certain risks under the insuring agreement and excludes certain risks through the policy exclusions.” ECF No. 1 at 2 ¶ 9. Second, GEICO issued a motor vehicle liability policy, at policy number 601-570-0641, to Austin Kirk, which was in full force and effect from August 8, 2020, through February 1, 2021 (the “GEICO Policy”). See ECF No. 27-1. The GEICO Policy provided liability insurance coverage for a 2019 Ford Fiesta and identified only Austin Kirk as the named insured with no additional drivers listed. ECF Nos. 27 at 5; 47-2 at 2.
For the time relevant to this action, Christina Kirk was the owner of the residence subject to the Allied Policy. ECF No. 1-2 at 6 ¶ 11. As noted, Austin Kirk is the son of Christina Kirk and resided at his mother's home. Id.
For the time relevant to this action, Christina Kirk did not own an automobile with automobile liability insurance. ECF No. 16 at 13 ¶ 66.
The GEICO Policy contains the following relevant provision regarding covered losses:
LOSSES WE WILL PAY FOR YOU UNDER SECTION I:
Under Section I, we will pay for damages which an insured becomes legally obligated to pay because of:
1. bodily injury, sustained by a person; and
2. damage to or destruction of property;
arising out of the ownership, maintenance, or use of the owned auto or a non-owned auto.ECF Nos. 47 at 2; 47-2 at 7. This language mirrors that required by a state statute providing that “[a]n automobile insurance policy may not be issued . . . in this State . . . unless it contains a provision insuring the persons defined as insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of these motor vehicles.” S.C. Code Ann. § 38-77-140(A).
Section I of the GEICO Policy also includes the following relevant definitions:
• An “insured” means a person described under the “PERSONS INSURED” section.
• An “owned auto” means a vehicle listed on the policy for which a premium is paid or a temporary substitute auto.
• A “non-owned auto” means an automobile or trailer not owned or furnished for the regular use of an insured other than a temporary substitute auto.
• A “temporary substitute auto” means an automobile or trailer not owned by an insured, temporarily used with the permission of the owner.ECF Nos. 47 at 2-3; 47-2 at 6. The “PERSONS INSURED” section provides the following as to “Who Is Covered”:
Section I applies to the following as insureds with regard to an owned auto:
1. you and your relatives;
2. any other person driving the auto with your permission and within the actual scop of your permission;
3. any other person or organization for his or its liability because of the acts or omissions of an insured under 1. or 2. above.
Section I applies to the following with regard to a non-owned auto:
1. (a) you;
(b) your relatives when driving a private passenger auto, farm auto or utility auto or towing a trailer.
Such operation by you or your relatives must be with the permission, or reasonably believed to be with the permission, of the owner and within the scope of that permission;
2. Any other person or organization, not owning or hiring the auto, regarding his or its liability because of acts or omissions of an insured under 1. above.ECF No. 47-2 at 8.
The Parties' Requests for Declaratory Relief
Allied is defending the Kirks in the State Court Action under a reservation of rights. ECF No. 1 at 8 ¶ 24. Allied brought this Federal Court Action seeking a declaratory judgment from this Court to find that the Allied Policy does not provide liability coverage for the September 12, 2020, automobile accident and that Allied has no obligation to pay, indemnify, defend, or otherwise perform under the Allied Policy. Id. at 11. Specifically, Allied seeks the following declarations:
• That the Allied Policy does not provide liability coverage for the September 12, 2020, automobile accident because the motor vehicle liability exclusion applies. Id. at 8-9 ¶¶ 25-31.
• That the Allied Policy does not provide liability coverage for the September 12, 2020, automobile accident because the criminal acts exclusion applies. Id. at 9 ¶¶ 32-37.
• That the Allied Policy does not provide personal liability coverage because the controlled substance exclusion applies. Id. at 10 ¶¶ 38-40.
• That the Allied Policy does not provide liability coverage for the September 12, 2020, automobile accident because intentional acts of an “insured” cannot give rise to an “occurrence” under the Allied Policy. Id. at 10-11 ¶¶ 41-45.
• That the Allied Policy does not provide personal liability coverage for punitive damages demanded in the complaint in the State Court Action. Id. at 11 ¶¶ 46-48.
In his Counterclaim against Allied, Lawrence seeks a declaration that the Allied Policy provides liability insurance coverage for the allegations in the amended complaint filed in the State Court Action. ECF No. 16 at 9-11 ¶¶ 43-54.
In his Third-Party Complaint against GEICO, Lawrence seeks a declaration that the GEICO Policy provides coverage for alleged motor vehicle liability. Id. at 11-14 ¶¶ 55-70.)
In its Counterclaim to the Third-Party Complaint, GEICO seeks a declaratory judgment and requests the following declarations from the Court:
• That the GEICO Policy does not provide coverage for the September 12, 2020, incident/accident. ECF No. 27 at 6-7 ¶¶ 34-43.
• That the intentional acts alleged in the underlying State Court Action are excluded under the GEICO Policy, which does not provide coverage for the September 12, 2020, incident/accident. Id. at 7 ¶¶ 44-45.
APPLICABLE LAW
Motion for Judgment on the Pleadings Standard
Pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, a party may move for judgment on the pleadings after the pleadings are closed. Fed.R.Civ.P. 12(c) (“After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.”) A motion for judgment on the pleadings should be granted when, viewing the facts in the light most favorable to the non-moving party, there remain no genuine issues of material fact, and the case can be decided as a matter of law. See Tollison v. B & J Machinery Co., 812 F.Supp. 618, 619 (D.S.C. 1993); see also Lewis v. ExcelMech, LLC, No. 2:13-cv-281-PMD, 2013 WL 4585873 at *2 (D.S.C. Aug. 28, 2013) (explaining a judgment on the pleadings is only warranted if “the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law”). In considering a motion for judgment on the pleadings, the court applies the same standard as for motions made pursuant to Rule 12(b)(6). Independence News, Inc. v. City of Charlotte, 568 F.3d 148, 154 (4th Cir. 2009).
The Rule 12(b)(6) standard, in turn, examines the legal sufficiency of the facts alleged on the face of the plaintiff's complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a Rule 12(b)(6) motion, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A claim is facially plausible when the factual content allows the court to reasonably infer that the defendant is liable for the misconduct alleged. Id. When considering a motion to dismiss, the court must accept as true all the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
The court's review of this motion is therefore limited to the pleadings, Abell Co. v. Bait. Typographical Union No. 12, 338 F.2d 190, 193 (4th Cir. 1964), and to “any documents and exhibits attached to and incorporated into the pleadings,” Lewis, 2013 WL 4585873 at *1. Because the pleadings on a Rule 12(c) motion should be construed in the light most favorable to the nonmovants, Burbach Broad. Co. v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002), the “court must accept all well pleaded factual allegations in the non-moving party's pleadings as true and reject all contravening assertions in the moving party's pleadings as false,” Lewis, 2013 WL 4585873, at *2 (internal quotations omitted).
Declaratory Judgment Standard
Under the Declaratory Judgment Act, a district court, in a case or controversy otherwise within its jurisdiction, “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). The United States Supreme Court has “repeatedly characterized the Declaratory Judgment Act as ‘an enabling Act, which confers discretion on the courts rather than an absolute right upon the litigant.'” Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995) (quoting Pub. Serv. Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 241 (1952)). Courts have long interpreted the Act's permissive language “to provide discretionary authority to district courts to hear declaratory judgment cases.” United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493 (4th Cir. 1998). “[A] declaratory judgment action is appropriate ‘when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.'” Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996) (quoting Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)).
Insurance Contract Construction
Under South Carolina law, insurance policies are subject to the general rules of contract interpretation. M& MCorp. of S.C. v. Auto-Owners Ins. Co., 701 S.E.2d 33, 35 (S.C. 2010). An insurer's duties and obligations under a policy of insurance are defined by the terms and provisions of the policy itself and cannot be enlarged by judicial construction. Nationwide Mutual Ins. Co. v. Commercial Bank, 479 S.E.2d 524 (S.C. Ct. App. 1996). In interpreting the policy, the court must afford policy language its plain, ordinary, and popular meaning. Diamond State Ins. Co. v. Homestead Indus., Inc., 456 S.E.2d 912, 915 (S.C. 1995). Where the intent of the parties is clear, courts do not have the authority to torture the meaning of policy language to extend or defeat coverage that was never intended by the parties. Id. Insurers have the right to limit their liability and to impose conditions on their obligations provided they are not in contravention of public policy or a statutory prohibition. B.L.G. Enters., Inc. v. First Fin. Ins. Co., 514 S.E.2d 529, 535536 (S.C. 1999). Insurance policy exclusions are construed most strongly against the insurance company, which also bears the burden of establishing the exclusion's applicability. Owners Ins. Co. v. Clayton, 614 S.E.2d 611, 614 (S.C. 2005) (citation omitted). The interpretation of an insurance contract is a question of law for the court. Bennett & Bennett Constr., Inc. v. Auto Owners Ins. Co., 747 S.E.2d 426, 427 (S.C. 2013).
DISCUSSION
GEICO contends it is entitled to judgment on the pleadings as a matter of law because the GEICO Policy does not provide coverage for the incident alleged in the underlying State Court Action. ECF No. 43 at 2. Based on the GEICO Policy language, the undersigned agrees.
The Parties' Arguments
GEICO argues that, under South Carolina law, there is no coverage for Lawrence's “dram shop type of claim” under the GEICO Policy, even assuming all the factual allegations from the pleadings in the underlying State Court Action are accepted as true. ECF No. 47 at 1. GEICO contends that, as a matter of law, automobile liability policies do not cover dram shop claims or social host claims arising from the service of alcohol at a private residence. Id. GEICO argues that the incident giving rise to this action is not covered under the GEICO Policy because serving alcohol at a private residence does not arise out of the normal use of an automobile. Id. at 3. GEICO further argues that the GEICO Policy does not provide coverage for Taylor or his vehicle. ECF No. 62 at 5.
Lawrence advances three arguments in his opposition to GEICO's motion. ECF No. 46. First, Lawrence argues that GEICO's motion fails to comply with Local Civil Rules 7.04 and 7.05 D.S.C. Id. at 4-7. Second, Lawrence argues that there is a genuine dispute as to material facts that preclude summary judgment. Id. at 14-16. Third, Lawrence argues that his declaratory judgment action is properly pled and that GEICO's motion is futile. Id. at 16-19.
In his initial response to the motion, Lawrence contends that he “cannot determine if [GEICO's] motion is a motion for summary judgment or a motion for judgment on the pleadings.” ECF No. 46 at 5-6. In his second response to the motion, Lawrence again argues that GEICO's “motion is really a motion for summary judgment” because it does not quote the language in Rule 12(c) or cite any case law discussing a motion for judgment on the pleadings. ECF No. 59 at 3. Lawrence's arguments are unpersuasive. GEICO is clearly moving for judgment on the pleadings, and any procedural arguments regarding summary judgment by Lawrence are irrelevant to the issues presently before the court. See ECF No. 43 at 1 (GEICO's motion captioned as a “Notice of Motion and Motion for Judgement on the Pleadings” and requesting relief “pursuant to Rule 12(c)”).
GEICO's failure to comply with the Local Civil Rules
As an initial procedural matter, Lawrence argues that GEICO's motion fails to comply with Local Civil Rules 7.04 and 7.05 (D.S.C.) because it was not accompanied by a supporting memorandum. ECF No. 46 at 4. It is well settled in this District that the court has the discretion to deny a motion that fails to comply with Local Civil Rules 7.04 and 7.05. See, e.g., Reg'lMed. Ctr. of Orangeburg v. Salem Servs. Grp., LLC, No. 5:19-cv-00287-JMC, 2020 WL 1956515, at *2 (D.S.C. Apr. 23, 2020) (“Under this ground alone, the court should deny the motion. However, for thoroughness and clarity, the court will address the merits as well.”); Williams v. Clement, No. 0:18-cv-00437-JMC, 2019 WL 1146682, at *6 (D.S.C. Mar. 13, 2019) (“A party's failure to comply with the Local Civil Rules is sufficient to deny his or her motion.”).
Local Civil Rule 7.04 provides as follows:
All motions made other than in a hearing or trial or to compel discovery shall be timely filed with an accompanying supporting memorandum that shall be filed and made part of the public record. However, unless otherwise directed by the court, a supporting memorandum is not required if a full explanation of the motion as set forth in Local Civ. Rule 7.05 (D.S.C.) is contained within the motion and a memorandum would serve no useful purpose. Where appropriate, motions shall be accompanied by affidavits or other supporting documents.
Local Civ. Rule 7.04 (D.S.C.). Additionally, Local Civil Rule 7.05 (D.S.C.) provides as follows:
Form and Content of Memoranda.
(A) A memorandum shall contain the following:
(1) A concise summary of the nature of the case.
(2) A concise statement of the facts that pertain to the matter before the court for ruling with reference to the location in the record.
(3) The argument (brevity is expected) relating to the matter before the court for ruling with appropriate citations.Local Civ. Rule 7.05 (D.S.C.
Here, GEICO's motion for judgment on the pleadings filed on December 19, 2023, was not accompanied by a memorandum in support at that time. However, GEICO did file a memorandum in support of the motion on January 4, 2024, the day after Lawrence filed his response to the motion. ECF No. 47. Further, the Court provided the parties with an opportunity to provide additional briefing as to the motion. ECF Nos. 55; 59; 62. Because the parties have had a full and fair opportunity to fully brief the issues raised in GEICO's motion, the undersigned concludes that GEICO's motion should not be denied based on a failure to comply with the Local Rules, and the Court should instead evaluate the merits of the parties' arguments.
GEICO is entitled to judgment on the pleadings.
As noted, GEICO argues it is entitled to judgment on the pleadings as a matter of law because the incident pled in the underlying State Court Action is not covered by the GEICO Policy. The undersigned agrees.
Relying on the test established by the South Carolina Supreme Court in State Farm Fire & Casualty Co. v. Aytes, 503 S.E.2d 744, 745 (S.C. 1998), and discussed and applied by that court in State Farm Mut. Auto. Ins. Co. v. Bookert, 523 S.E.2d 181, 182 (S.C. 1999), GEICO argues that liability coverage is not available under the GEICO Policy because the incident alleged does not arise out of the ownership, maintenance, or use of an insured vehicle. ECF No. 47 at 3-4. The Aytes test has been routinely applied in this District to determine whether liability coverage under an automobile insurance policy is warranted. See, e.g., Nationwide Prop. & Cas. Co. v. Lain, 402 F.Supp.2d 644, 648-50 (D.S.C. 2005) (discussing and applying Aytes); Nationwide Affinity Ins. Co. of Am. v. Logan, 580 F.Supp.3d 199, 202 (D.S.C. 2022) (discussing and applying Aytes and Bookert). Under the Aytes test, “an insured is entitled to recover damages ‘arising out of the ownership, maintenance, or use' of the vehicle if (1) there is a causal connection between the vehicle and the injury, (2) no act of independent significance breaks the causal link, and (3) the vehicle was being used for transportation at the time of the incident.” Gov't Emps. Ins. Co. v. Bland, No. 2:19-cv-0820-RMG, 2019 WL 6463792, at *1 (D.S.C. Dec. 2, 2019) (citing Aytes, 503 S.E.2d at 745). As to the first prong of the Aytes test, a “causal connection is established where it can be shown the vehicle was an ‘active accessory' to the [event causing injury].” Aytes, 503 S.E.2d at 745 (citation omitted).
Although Aytes, Bookert, and many of the cases following them evaluated shooting injuries that involved a vehicle, the critical facts and analysis from those cases are analogous to the facts of the present case and applicable to the Court's reasoning here. See Logan, 580 F.Supp.3d at 202-06 (discussing the applicability of Aytes and Bookert). The lesson from those cases applicable here is that coverage under the GEICO Policy is proper only if “a causal connection existed between the use of the [Kirks' insured] vehicle and [Lawrence's] injuries.” Holmes v. Allstate Ins. Co., 786 F.Supp.2d 1022, 1027 (D.S.C. 2009); see also Pound v. Gov't Emps. Ins. Co., No. 3:21-cv-02335-DCC, 2023 WL 1420024, at *6 (D.S.C. Jan. 31, 2023) (“[T]he Court finds the gunshot injuries do not arise from Plaintiffs' use of the vehicle because there is no causal connection between the vehicle and the injury.”). “The focus is on the extent of the role, if any, the vehicle played in causing the injuries or damage, or whether a particular activity is a covered use as required by statute or a policy provision.” Peagler v. USAA Ins. Co., 628 S.E.2d 475, 479 (S.C. 2006).
In both Aytes and Bookert, the South Carolina Supreme Court held that injuries arising from a shooting that involved a vehicle did not trigger automobile insurance coverage. See Progressive Direct Ins. Co. v. Groves, 882 S.E.2d 464, 468 (S.C. 2022) (discussing and affirming Aytes and Bookert), reh'g denied (Jan. 12, 2023). Although the present case does not involve a shooting, the Aytes and Bookert line of cases provides the appropriate framework to determine whether the alleged conduct in this case arises from the ownership, maintenance, or use of an automobile under South Carolina law. See, e.g., State Farm Mut. Auto. Ins. Co. v. Goyeneche, 837 S.E.2d 910, 919 (S.C. Ct. App. 2019) (applying Aytes and finding that a father's act of leaving his child “in his truck for over seven hours was an act of independent significance breaking any causal link between the use of the truck and her tragic death” and concluding the allegations failed to establish the vehicle was being used for transportation during the time the child was left in the truck); Doe v. S.C. State Budget and ControlBd., 523 S.E.2d 457, 458 (S.C. 1999) (applying Aytes and concluding that injuries suffered by sexual assault victims were not covered by the police department's automobile policy because the injuries did not arise out of “use” of the officer's patrol car within the meaning of the auto policy).
Here, Lawrence alleges that he sustained injuries from an accident wherein the driver (Taylor) crashed the vehicle he was driving after being provided alcohol by the Kirks at their home. The crux of Lawrence's claim is that the Kirks are liable because they furnished alcohol to Taylor, which he contends was a direct and proximate cause of the crash that caused his injuries. See, e.g., ECF No. 16-2 at 29 ¶ 120 (“[The Kirks] are adult social hosts who knowingly and intentionally served, or caused to be served, an alcoholic beverage to [Taylor] and the [Kirks] knew or should have known he was intoxicated, and as such, the [Kirks] are liable to [Lawrence] for damages proximately caused by the host's service of alcohol.”).
Thus, the issue this court must decide is whether the GEICO Policy, under South Carolina law, provides liability coverage where a social host (the Kirks) furnishes alcohol to a driver (Taylor) and his passengers (Lawrence and Henderson), and where the driver then crashes his own vehicle while intoxicated causing injury to his passengers. Construing the pleadings in the light most favorable to Lawrence, the court cannot find that Lawrence's injuries were ones “arising out of the ownership, maintenance, or use” of the insured vehicle under the GEICO Policy. While Lawrence's injuries were caused by an automobile accident, the sole vehicle involved was not an insured vehicle under the GEICO Policy, and none of the occupants of the vehicle were insureds under the Policy. This fact pattern fits squarely within Aytes and Bookert because the alleged act (i.e., the Kirks' furnishing of alcohol to Taylor, Henderson, and Lawrence) did not involve the use of an insured vehicle covered by the GEICO Policy. Therefore, applying Aytes, the Kirks' act of furnishing alcohol to Taylor, Henderson, and Lawrence does not trigger liability coverage under the GEICO Policy.
Lawrence's amended complaint filed in the State Court Action includes no allegations whatsoever regarding Austin Kirk's vehicle. Further, as to Taylor's vehicle, Lawrence alleges that it was “owned” and “operated” by Taylor, ECF No. 16-2 at 8 ¶¶ 21-22, and “was not owned by either defendant Christina M. Kirk or defendant Austin T. Kirk,” id. ¶ 34. And, critically, Lawrence expressly avers that he “does not allege that [the Kirks] owned, operated, or used a motor vehicle” regarding their service of alcohol. Id. ¶114. Indeed, for each of the six causes of action asserted against the Kirks, Lawrence avers that he does not allege that the Kirks owned, operated, or used a motor vehicle as part of their actions or inactions. Id. ¶ 44 (negligence claim against Christina Kirk), ¶ 74 (negligence claim against Austin Kirk), ¶ 98 (third-party social host liability claim against both Kirks), ¶ 114 (third-party social host liability claim against both Kirks), ¶ 130 (third-party social host liability claim against both Kirks), ¶ 146 (third-party social host liability claim against both Kirks)).
As to the first prong of the Aytes test, the pleadings are devoid of any allegations showing a causal connection between an insured vehicle, the Kirks' furnishing of alcohol to their guests, and Lawrence's alleged injuries sustained in Taylor's car, driven by Taylor, and never used in any way by Austin Kirk. Likewise, the second prong of the Aytes test cannot be satisfied because, even assuming a causal connection between the Kirks' furnishing of alcohol and Lawrence's injuries, the actions of Taylor, Henderson, and Lawrence leaving the party in a vehicle that did not belong to the Kirks constitutes an intervening act of independent significance to break any causal link with a vehicle covered under the GEICO Policy. Lawrence sustained his injuries when Taylor, who was not an insured driver under the GEICO Policy, wrecked the vehicle he was driving, which was not an insured vehicle under the GEICO Policy. Further, the third prong of the Aytes test cannot be satisfied as the pleadings are completely devoid of any factual allegations suggesting that any vehicle insured under the GEICO Policy or belonging to Austin Kirk was involved in the accident or was being used for transportation at the time of any of the underlying acts by the parties. Here, the only vehicle being used for transportation was Taylor's. That vehicle did not belong to the Kirks and was not insured by the GEICO Policy.
As noted, Lawrence expressly avers that he “does not allege that [the Kirks] owned, operated, or used a motor vehicle” as to their service of alcohol. ECF No. 16-2 at 31; see also ECF No. 59 at 4 (explaining “Lawrence does not allege that Austin Kirk's liability arises out of motor vehicle liability”).
The undersigned finds that the facts of the present case are similar to those in Hite v. Hartford Accident and Indemnity Co., 344 S.E.2d 173 (S.C. Ct. App. 1986). Although Hite predates Aytes, the South Carolina Court of Appeals applied a similar test to find no causal connection between a vehicle and the alleged injury where the insured, an automobile dealership employee, left his idling vehicle and walked fifty feet to instruct another motorist to remain at the dealership because the motorist had backed into a new truck, and the motorist's car struck the plaintiff as it left the scene. Id. at 176-77. Critically, the court noted that the insured's vehicle played no role in the incident. Id. at 177 (“In this case there was no . . . involvement of the vehicle in the production of the injury[] that would put the fact situation within the parameters of ‘use' as defined in South Carolina.”). Here, like in Hites, the pleadings show that no insured vehicle was involved in the accident or in the conduct of the Kirks in furnishing their guests with alcohol. See Am. Serv. Ins. Co. v. OnTime Transp., LLC, No. 5:17-cv-01120-JMC, 2019 WL 3972820, at *9 (D.S.C. Aug. 22, 2019) (applying Aytes and finding the plaintiff's allegations did not bring the underlying action within the auto policy's coverage because the plaintiff did not allege the victim's death was caused by an accident resulting from the ownership, maintenance, or use of a covered auto); Peter v. Allstate Ins. Co., No. 3:16-cv-00025-CMC, 2016 WL 5899019, at *4 (D.S.C. Oct. 11, 2016) (granting judgment on the pleadings and finding the insurer was not obligated to provide coverage where the plaintiff was not insured under the automobile policy and no insured vehicle was involved in the accident that caused injuries).
Because the Aytes test is not satisfied, the Court finds that Lawrence's injuries did not “arise from the ownership, maintenance, or use” of a vehicle insured by the GEICO Policy. The GEICO Policy, which provides coverage for bodily injury arising out of the ownership, maintenance, or use of a vehicle, does not provide for liability under a social host theory. Thus, even construing the pleadings in the light most favorable to Lawrence, the GEICO Policy does not provide coverage for the incident in the underlying State Court Action, and GEICO is therefore entitled to judgment as a matter of law.
RECOMMENDATION
Based on the foregoing, it is recommended that GEICO's motion for judgment on the pleadings be GRANTED, that Lawrence's Third-Party Complaint against GEICO be DISMISSED, and that GEICO be DISMISSED from this action.
If this recommendation is adopted, Allied's request for a declaratory judgment and Lawrence's counterclaim against Allied seeking a declaratory judgment would remain pending.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed.R.Civ.P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk United States District Court 250 East North Street, Suite 2300 Greenville, South Carolina 29601
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).