Opinion
Civil Action 01-2929, Section "T"(4)
June 12, 2002
Presently before the Court is a Motion for Summary Judgment, filed on behalf of the plaintiff, New Hampshire Insurance Company ("New Hampshire"). The Court, having considered the Court's record, the memoranda filed, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
On January 25, 2001, defendant, Kenneth Barrett ("Barrett"), a car salesman with Crescent City Nissan, checked out a key for a black 2001 Nissan Sentra XE ("Sentra"). (See Exhibit "MF-SJ-1 JPSO"). On January 26, 2001, Crescent City Nissan conducted a random new vehicle inventory and discovered that a black Nissan Sentra XE was missing; a printout of the "Key Out Report" for January 25, 2001, confirmed the vehicle was missing and that Barrett had checked out the key for the Sentra on January 25, 2001.
Barrett was scheduled to work on January 26, 2001; however, he did not appear. He did not call or inform his managers that he was not coming in. (See Exhibit "MF-SJ-2"). After Crescent City Nissan became aware that Barrett checked out the Sentra, the dealership sent a security officer to locate Barrett at his reported residence. The security officer did not observe Barrett or the missing vehicle.
Effective Friday, January 26, 2001, Crescent City Nissan terminated Barrett from its employ. (See Exhibit "MF-SJ-2"). On Saturday, January 27, 2001, Crescent City Nissan reported the Sentra stolen to the Jefferson Parish Sheriffs Office. (See Exhibit "MF-SJ-1"). On Sunday, January 28, 2001, at approximately 10:40 p.m., Barrett was involved in the subject vehicular accident while he was driving the Sentra. Barrett was then arrested and charged with Illegal Possession of Stolen Things. (See Exhibit "MF-SJ-3").
Additionally, on February 2, 2001, Barrett applied for unemployment benefits, which were denied. On March 12, 2001, Barrett filed an appeal, which was heard on June 7, 2001, before Administrative Law Judge Alvin Timothy of the Louisiana Department of Labor. In his application for benefits, Barrett gave two written statements to the agency explaining the reasons for his discharge from Crescent City Nissan. In both statements signed by Barrett, he admittedly left work at lunchtime on January 25, 2001. There was no job-related or business reason for his departure from work during that time; Barrett indicated his reason for leaving was to go to lunch. He admitted in both statements that he did not return after lunch on January 25, 2001, because he encountered personal problems. Barrett further noted that on January 25, 2001, he did not notify his manager, nor did he call his supervisor to explain his absences on January 26-, or January 27, 2001, even though he was scheduled to work. The decision of Judge Timothy disqualified Barrett from unemployment benefits, because the latter admitted he left work early without permission and continued to be absent without notice. (See Exhibit "MF-SJ-2").
Moreover, on or about March 9, 2001, the lawsuit Tom Brown v. Crescent City Nissan and Kenneth Barrett, Civil Docket No. 2001-40132, Division "J," was filed in the Civil District Court for the Parish of Orleans, State of Louisiana. (See Exhibit "MF-SJ-4"). At issue in Brown, is the automobile accident that occurred on the 1-10 westbound Twin Span in St. Tammany Parish, Louisiana, on Sunday, January 28, 2001, at approximately 10:40 p.m. Barrett was driving the Sentra owned by Crescent City Nissan, when it ran off the roadway and onto the shoulder, striking a vehicle on the shoulder. The vehicle on the shoulder then collided with four pedestrians who were involved in repairing their disabled vehicle.
In Brown, there were allegations that Barrett was in the course and scope of his employment at Crescent City Nissan at the time of the alleged accident. New Hampshire then notified Barrett that a defense would be provided to him subject to a reservation of rights to withdraw from that defense and to decline to further defend and/or indemnify Barrett in the event it was determined that he and/or the vehicular accident at the issue in Brown, was not covered under the clear and unambiguous provisions of New Hampshire's policy. (See Exhibit "MF-SJ-5").
On March 29, 2001, Walter Reed, the District Attorney for the 22nd Judicial District, filed a felony Bill of Information for Unauthorized Use of a Motor Vehicle charging Barrett with Illegal Possession of Stolen Things. On June 15, 2001, Barrett entered a plea of guilty to the amended Bill of Information and was sentenced to three years of hard labor with the Department of Public Safety and Corrections, which was suspended; Barrett was instead placed on three years probation. (See Exhibit "MF-SJ-6").
Since Barrett did not have the insured's permission to operate the vehicle, New Hampshire stipulates its insurance policy with Crescent City Nissan does not extend coverage to Barrett. New Hampshire has filed the present Motion for Summary Judgment.
II. PLAINTIFF'S ARGUMENT:
New Hampshire submits that Barrett was not a "permissive user" of the black 2001 Nissan Sentra driven in the alleged accident, as defined in the omnibus clause of the insurance policy issued to Crescent City Nissan. (See Exhibit "MF-SJ-7"). Since Barrett is not covered under New Hampshire's insurance policy, the latter asserts it has no duty to defend or indemnify the defendant in connection with any judgment rendered against him or settlement agreed upon.
III. LAW AND ANALYSIS:
A. The Law on Summary Judgment
The Federal Rules of Civil Procedure provide that a court should grant a motion for summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Stults v. Conoco, Inc., 76 F.3d 651, 655-56 (5th Cir. 1996) (citingSkotak v. Tenneco Resins, Inc., 953 F.2d 909, 912-13 (5th Cir. 1992) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)), cert. denied, 506 U.S. 832 (1992)). When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. The nonmoving party must come forward with "specific facts showing that there is agenuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis added); Tubacex, Inc. v. M/V RISAN, 45 F.3d 951, 954 (5th Cir. 1995).
Thus, when the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita Elec. Indus. Co., 475 U.S. at 588. Finally, the Court notes that substantive law determines the materiality of facts, and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
In some instances, as in the case at hand, a motion for summary judgment is unopposed. However, the Federal Rules of Civil Procedure require the Court to examine a motion for summary judgment on its merits, and to grant an unopposed motion only "if appropriate." FED. R. Civ. P. 56(e).
B. Insurance Policy Interpretation
The interpretation of an insurance policy is a matter of state law. See Canal Ins. Co. v. First General Ins. Co., 889 F.2d 604, 608 (5th Cir. 1989). Accordingly, the substantive law of Louisiana must be applied to resolve the coverage issue here. See id.
"An insurance policy is an agreement between the parties and should be interpreted by using ordinary contract principles." Smith v. Matthews, 611 So.2d 1377, 1379 (La. 1993). The extent of coverage is determined from the intent of the parties as reflected by the words of the insurance policy. La. Civ. Code art. 2045; See Ledbetter v. Concord General Corp., 665 So.2d 1166, 1169. "Such intent is to be determined in accordance with the general, ordinary, plain and popular meaning of the words used in the policy, unless the words have acquired a technical meaning." La. Civ. Code art. 2047; Louisiana Ins. Guaranty Assoc. v. Interstate Fire Causalty Co., 630 So.2d 759, 763.
"An insurance policy should not be interpreted in an unreasonable or a strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion." Louisiana Ins., 630 So.2d at 763. When the words of an insurance contract are clear and explicit and lead to no absurd consequences, courts must enforce the contract as written and may make no further interpretation in search of the parties intent. La. Civ. Code art. 2046; See Pareti v. Sentry Indemnity Co., 536 So.2d 417, 420 (La. 1988). Thus, courts lack the authority to alter the terms of insurance contracts under the guise of contractual interpretation when the policy's provisions are couched in unambiguous terms. See Peterson v. Schimek, 729 So.2d 1024, 1029 (citing Louisiana Ins., 630 So.2d at 764).
Although the duty of an insurer to defend its insured is broader than the liability of that insurer to pay a damage claim under its policy, it is well recognized in Louisiana jurisprudence that when an exclusion is applicable as a matter of law (i.e., no coverage), the insurer owes no duty to defend and thus, no duty to indemnify, its insured. See Pylant v. Lofton, 626 So.2d 83, 86-88 (La.Ct.App. 1993); Crabtree v. Haves Dockside, Inc., 612 So.2d 249, 251 (La.Ct.App. 1992); Usner v. Strobach, 591 So.2d 713, 727-29 (La.Ct.App. 1991); Siat v. Fauria, 494 So.2d 1224, 1226 (La.Ct.App. 1986). "A clear and unambiguous provision in an insurance policy which limits liability must be given effect." Tracy v. Travelers Ins. Co., 594 So.2d 541, 545 (La.Ct.App. 1992) (citation omitted).
Furthermore, insurers are afforded the same right in Louisiana as individuals to limit their liability, impose conditions on their obligations and to have such coverage limitations enforced. See Spain v. Travelers Ins. Co., 332 So.2d 827, 830-31 (La. 1976); Livingston Par. Sch. Bd. v. Fireman's Fund Am. Ins. Co., 282 So.2d 478, 481 (La. 1973);Sherwood v. Stein, 259 So.2d 876, 878 (La. 1972).
C. The Court's Analysis
It is the finding of this Court that the plaintiff, New Hampshire Insurance Company, has adequately come forward with sufficient evidence to support its contention that it is not liable for the plaintiffs injuries in this case.
Barrett took the Sentra on January 25, 2001, with neither express nor implied consent from Cresent City Nissan. On June 15, 2001, Barrett entered a plea of guilty to unauthorized use of a motor vehicle. The very nature of Barrett's guilty plea is an admission that he did not have the permission and/or authorization to use the Sentra not only on January 28, 2001, the day of the accident, but on January 25, 2001, the day he first took the vehicle. (See Exhibit "MF-SJ-4"). Furthermore, Crescent City's actions demonstrate that prior to the date of the alleged accident, Barrett lacked express or implied permission to drive the vehicle. Once the dealership determined on January 26, 2001, that the Sentra was missing and that Barrett was the last person to check out the key for the missing vehicle, several attempts were made to find Barrett and the Sentra. When Crescent City could neither locate Barrett nor the missing Sentra, it terminated Barrett's employ two days before the alleged accident, on January 26, 2001. Additionally, Crescent City reported the Sentra stolen to the Jefferson Parish Sherriff's Office on January 27, 2001.
Based on the foregoing, New Hampshire is entitled to summary judgment in this matter. Barrett was not a "permissive user" as required for coverage under the insurance policy issued to Crescent City Nissan. As a matter of law, coverage under the omnibus clause of New Hampshire's policy does not extend to Barrett. There is no genuine issue of fact; the defendant cannot establish that he obtained permission, either express or implied, to operate the vehicle and thus, cannot meet his burden.
Accordingly,
IT IS ORDERED that the Motion for Summary Judgment filed on behalf of the plaintiff, New Hampshire Insurance Company, be and the hereby GRANTED.