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AIR LIQUIDE MEXICO S. de R.L. de C.V. and AIR LIQUIDE PROCESS AND CONSTRUCTION, INC., Plaintiffs, v. TALLERES WILLIE, INC., BERNARDO AINSLIE, FELIX NINO LEIJA, TRAILBLAZER PILOT CAR SERVICES, LLC, CLAUDE JOSEPH KIMMEL d/b/a FREEDOM PILOT CAR SERVICES, CHARLES VAN KIRK d/b/a SLINGSHOT PILOT ESCORT SERVICES, WHEELING EQUIPMENT COMPANY, INC., GEORGE ORTIZ, and CONTRACTORS CARGO COMPANY

United States District Court,

S.D. Texas, Houston Division.

AIR LIQUIDE MEXICO S. de R.L. de C.V. and AIR LIQUIDE PROCESS AND CONSTRUCTION, INC., Plaintiffs,

v.

TALLERES WILLIE, INC., BERNARDO AINSLIE, FELIX NINO LEIJA, TRAILBLAZER PILOT CAR SERVICES, LLC, CLAUDE JOSEPH KIMMEL d/b/a FREEDOM PILOT CAR SERVICES, CHARLES VAN KIRK d/b/a SLINGSHOT PILOT ESCORT SERVICES, WHEELING EQUIPMENT COMPANY, INC., GEORGE ORTIZ, and CONTRACTORS CARGO COMPANY, Defendants.

CIVIL ACTION NO. H-14-211 | 12/15/2015

 

EWING WERLEIN, JR., UNITED STATES DISTRICT JUDGE

 

ENTERED December 15, 2015 David J. Bradley, Clerk

MEMORANDUM AND ORDER

*1 Pending is Defendants Charles Van Kirk d/b/a Slingshot Pilot Car Services and Claude Joseph Kimmel d/b/a Freedom Pilot Car’s Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) (Document No. 152). After carefully considering the motion, response, reply, and the applicable law, the Court concludes as follows.

 

 

  1. Background

The background for this action brought by Plaintiffs Air Liquide Mexico S. de R.L. de C.V. (“ALM”) and Air Liquide Process and Construction, Inc. (“ALPC”) (collectively “Plaintiffs”) is recited in the Court’s Orders signed February 18, 2015 (Document No. 75) and July 31, 2015 (Document No. 130), and need not be repeated here. Suffice it to say that after the Fifth Circuit issued its opinion in In re Wheeler, 612 Fed. App’x 763, 768 n.4 (5th Cir. 2015) (holding that a pilot car does not constitute a carrier under the Carmack Amendment), the Court vacated its prior orders that dismissed Plaintiffs’ state law claims against Defendants Charles Van Kirk d/b/a Slingshot Pilot Car Services (“Van Kirk”), Claude Joseph Kimmel d/b/a Freedom Pilot Car (“Kimmel”) (collectively “Pilot Car Defendants”), and granted leave for Plaintiffs to file a Third Amended Complaint (Order dated August 27, 2015, Document No. 148).

 

The Pilot Car Defendants now move for partial dismissal of Plaintiffs’ Third Amended Complaint with respect to (1) Plaintiffs’ claim that the Pilot Car Defendants violated a statutory duty under Chapter 545 of the Texas Transportation Code (Count III) and (2) Plaintiffs’ claim that Pilot Car Defendants engaged in a joint enterprise (Count VI).1

  1. Legal Standard Rule 12(b)(6) provides for dismissal of an action for “failure

to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). When a district court reviews the sufficiency of a complaint before it receives any evidence either by affidavit or admission, its task is inevitably a limited one. See Scheuer v. Rhodes, 94 S. Ct. 1683, 1686 (1974). The issue is not whether the plaintiff ultimately will prevail, but whether the plaintiff is entitled to offer evidence to support the claims. Id.

 

In considering a motion to dismiss under Rule 12(b)(6), the district court must construe the allegations in the complaint favorably to the pleader and must accept as true all well-pleaded facts in the complaint. See Lowrey v. Tex. A&M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997). To survive dismissal, a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While a complaint “does not need detailed factual allegations…[the] allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 127 S. Ct. at 1964-65.

 

 

III. Analysis

  1. Chapter 545 of the Texas Transportation Code

*2 Pilot Car Defendants move to dismiss Plaintiffs’ negligence claims premised on the allegation that “[Pilot Car] Defendants violated any statutory duty under Chapter 545 of the Texas Transportation Code.”2 “The primary rule in statutory interpretation is that a court must look to the intent of the legislature and must construe the statute so as to give effect to that intent.” CenterPoint Energy Hou. Elec. LLC v. Harris Cty. Toll Rd. Auth., 436 F.3d 541, 545 (5th Cir. 2006) (citing Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278, 280 (Tex. 1994)). “The Legislature’s intent is determined from the plain and common meaning of the words used.” St. Luke’s Episcopal Hosp. v. Agbor,

 

 

952 S.W.2d 503, 505 (Tex. 1997).

Chapter 545, which specifically defines the rules for the operation and movement of vehicles, is found in Subtitle C of Title 7 of the Transportation Code, which sets out the “Rules of the Road.” At the outset of Chapter 545, the term “Operator” is defined to mean, “as used in reference to a vehicle, a person who drives or has physical control of a vehicle.” TEX. TRANSP. CODE ANN. § 541.001 (emphasis added). Thus, the statute defines “operator” in the singular, implicitly recognizing that a vehicle has one operator at a time who “drives or has physical control” of the vehicle. Because they were driving or in physical control of their respective escort vehicles, each Pilot Car Defendant was an operator under this section. Concommitantly, neither Pilot Car Defendant was an operator of any vehicle other than his own or of the tractor pulling the trailer upon which the massive 60 feet long purification skid was being carried. In other words, neither Pilot Car Defendant was “driv[ing] or in physical control” of the tractor/trailer vehicle. Therefore, any statutory duty the Pilot Car Defendants owed by virtue of their status as operators under Chapter 545 arose and pertained only to the operation of their own escort vehicles.3

 

Plaintiffs allege that Pilot Car Defendants violated several sections under Chapter 545.4 In particular, Plaintiffs allege that the Pilot Car Defendants were statutorily obligated to notify the railroad because § 545.255 “requires one who transports ‘heavy equipment’ to notify the railroad prior to attempting to cross railroad tracks.”5 While Plaintiffs are correct that § 545.255(b) imposes a notice requirement on the operator of the vehicle– this requirement is only imposed on those who operate:

(1) a crawler-type tractor, steam shovel, derrick, or roller; and

 

*3 (2) any other equipment or structure with:

(A) a normal operating speed of 10 miles per hour or less; or

(B) a vertical body or load clearance of less than one-half inch per foot of the distance between two adjacent axles or less than nine inches measured above the level surface of a roadway.

TEX. TRANSP. CODE ANN. § 545.255(a).

 

Here, Plaintiffs allege that Felix Nino Leija was operating the vehicle transporting the skid, and Pilot Car Defendants were separately operating individual “escort vehicles” that proceeded in front of and behind the vehicle transporting the skid.6 Plaintiffs have not alleged that either Pilot Car Defendant was operating a vehicle described in § 545.255(a), and by its own terms § 545.255 “applies only” to those specified vehicles. Thus, the Pilot Car Defendants did not have or violate a statutory duty under § 545.255, and Plaintiffs have failed to state a claim upon which relief can be granted under § 545.255(b).7

 

Plaintiffs’ Third Amended Complaint also alleges negligence per se against the Pilot Car Defendants for violations of § 545.051(a), which requires an operator to “drive on the right half of the roadway”; § 545.056(a), which prohibits an operator from driving on the left side of the roadway “within 100 feet of an intersection or railroad grade crossing in a municipality”; and § 545.302(a)(8) and (9), which prohibit an operator from stopping, standing, or parking “on a railroad track” or “where an official sign prohibits stopping.” Plaintiffs allege that the “load” on the lowboy trailer was stopped on the tracks and driven on the wrong side of the road in violation of these statutes,8 but Plaintiffs do not allege that either of the Pilot Car Defendants violated any of these statutes in the operation of its own escort vehicle. Again, Plaintiffs fail to state a claim upon which relief can be granted against the Pilot Car Defendants for any statutory violation under Chapter 545. The Pilot Car Defendants therefore are entitled to dismissal with prejudice of Count III of Plaintiffs’ Third Amended Complaint, alleging negligence per se based on statutory violations.

 

 

  1. Joint Enterprise

Plaintiffs in Count VI of their Third Amended Complaint plead a joint enterprise theory against the Pilot Car Defendants and others to seek imposition of liability upon all. Pilot Car Defendants argue that Plaintiffs fail to allege facts necessary to support their joint enterprise claim.9 Plaintiffs respond that “analysis of whether a joint enterprise exists here is premature” because it is generally a question for the jury, and in any event they adequately pled their claim.10

 

*4 “The theory of joint enterprise is to make each party thereto the agent of the other and thereby to hold each responsible for the negligent act of the other.” Shoemaker v. Estate of Whistler, 513 S.W.2d 10, 14 (Tex. 1974). Texas courts adopted the definition of joint enterprise as stated in the Restatement (2d) of Torts:

(1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.

Id. at 16-17 (quoting RESTATEMENT (2D) OF TORTS § 491, cmt. c (1965)).

 

In their motion to dismiss, the Pilot Car Defendants challenge only the third element, arguing that Plaintiffs “have not–and cannot–allege the facts necessary to support the ‘community of pecuniary interest’ element.”11 The Texas Supreme Court explained

[t]he ordinary meaning of “pecuniary” is “of or pertaining to money.” Thus, to satisfy the third element of the Restatement definition an interest must first be monetary in nature. And again, that monetary interest must be common among the members of the group–it must be one “shared without special or distinguishing characteristics.”

St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 531 (Tex. 2002) (quoting WEBSTER’S NEW UNIVERSAL UNABRIDGED DICTIONARY 1428 (1996); Ely v. Gen. Motors Corp., 927 S.W.2d 774, 779 (Tex. App.–Texarkana 1996, writ denied)). “Indirect potential financial interests do not satisfy the test.” Omega Contracting, Inc. v. Torres, 191 S.W.3d 828, 850 (Tex. App.–Ft. Worth 2006, no pet.); Blackburn v. Columbia Med. Ctr. of Arlington Subsidiary, L.P., 58 S.W.3d 263, 276 (Tex. App.–Ft. Worth 2001, pet. denied) (“evidence of such general benefits does not establish a community of pecuniary interest in the common purpose to be carried out by the group”).

 

Plaintiffs allege that “[a]ll members of the transportation crew…had agreements to work together and engaged in a common, single, concerted effort to transport the APU skid for profit,” and “[t]he entire transportation crew had a ‘community of pecuniary interest’ in that they were all sharing in the monetary benefit from the transport of the APU skid.”12 Merely sharing in the monetary benefit from the transport, however, is insufficient to establish the community of pecuniary interest element as declared in Texas law. See Wolff, 94 S.W.3d at 532 (finding that “the existence of monetary benefits flowing from the program does not by itself satisfy the third element of a joint enterprise”).

 

Plaintiffs argue in their response that “[t]he entire crew had a ‘community of pecuniary interest’ in that they all pooled their resources, equipment and purported skill to accomplish their common goal of safely transporting the APU skid,” and that “they all stood to benefit monetarily from the collective and joint efforts ….”13 Plaintiffs’ conclusory characterization of Defendants’ joint efforts with their resources and equipment to transport the APU skid as a “community of pecuniary interest” is a misapplication of that phrase. The case cited by Plaintiffs to support their argument does not go so far. In Tex. Dep’t of Transp. v. Able, the Supreme Court of Texas found a community of pecuniary interest where the two entities had a “Master Agreement,” which “plainly recognize[d] that the Transitways project involved substantial sums of money and contemplated a sharing of resources in order to make better use of this money.” 35 S.W.3d 608, 614 (Tex. 2000). The Court observed that federal, state, and local funds were employed in the project and that the pooling of resources may well have produced substantial monetary and personnel savings. Id.

 

*5 In this case, however, Plaintiff has not pled that the parties pooled any funds or that by the parties’ working together successfully they would have shared any monetary savings or enhanced benefit. A more recent Texas Supreme Court case emphasizes that the third element of a joint enterprise requires more than the mere existence of monetary benefits following from the enterprise: “the monetary benefits [must be] shared among the members without special or distinguishing characteristics.” Wolff, 94 S.W.3d at 532. Plaintiffs’ Third Amended Complaint makes no such allegation. To the contrary, Plaintiffs plead that Contractors Cargo Company contracted with Defendant Talleres Willie for the transport and “did not include the provision of escort vehicles or escort services.”14 The latter services, according to Plaintiffs’ pleading, were arranged by Defendant Bernardo Ainslie,

 

who in doing so “act[ed] outside of the scope of the services Talleres Willie provided as the carrier for the transport because Defendant Talleres Willie was not contracted to and was not supposed to supply an escort vehicle or escort services as part of its contract with Contractors Cargo for this transport.”15 Plaintiffs’ pleading of these several contracts and separate arrangements among several parties obviously excludes any allegations of a true joint enterprise with a sharing of the monetary benefits by all members “without special or distinguishing characteristics.” See also Omega Contracting, Inc., 191 S.W.3d at 851 (explaining that there was no community of pecuniary interest when revenue would be divided based on each parties’ work).

Taking the facts as alleged by Plaintiffs as true, there is nothing to indicate a community of pecuniary interest such as is required for a joint enterprise. Accordingly, Plaintiffs fail to allege sufficient facts to sustain their theory that the Pilot Car Defendants were engaged in a joint enterprise, and the Pilot Car Defendants are entitled to dismissal of Count VI, alleging a joint enterprise.

 

 

  1. Leave to Amend

Plaintiffs have not filed a motion for leave to amend, but summarily request “the opportunity to amend their pleading to eliminate any pleading deficiencies and/or conduct discovery to more clearly state Plaintiffs’ claims and allege additional facts, if necessary.”16 There is no proposed amendment or other proffer as to what additional facts, if any, Plaintiff could plead to “eliminate” the defects that are fatal to Plaintiffs’ amended complaint. “ ‘[A] bare request in an opposition to a motion to dismiss–without any indication of the particular grounds on which the amendment is sought, cf. FED. R. CIV. P. 7(b)–does not constitute a motion within the contemplation of Rule 15(a).’ ” U.S. ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 387 (5th Cir. 2003) (quoting Confederate Mem’l Ass’n, Inc. v. Hines, 995 F.2d 295, 299 (D.C. Cir. 1993)). Especially here, where the parties’ pretrial discovery has been ongoing for well more than a year, there is no reason to believe that further discovery or additional pleading will cure the defects identified above. Accordingly, Plaintiff’s request to replead is denied as futile. Foman v. Davis, 83 S. Ct. 227, 230 (1962).

 

 

  1. Order

For the foregoing reasons, it is

 

ORDERED that Defendants Charles Van Kirk d/b/a Slingshot Pilot Car Services and Claude Joseph Kimmel d/b/a Freedom Pilot Car’s Motion to Dismiss (Document No. 152) is GRANTED IN PART, and Counts III and VI of Plaintiffs Air Liquide Mexico S. de R.L. de C.V. and Air Liquide Process and Construction, Inc.’s Third Amended Complaint against Defendants Van Kirk and Kimmel are DISMISSED WITH PREJUDICE for failure to state claims upon which relief can be granted. To the extent, if any, that Defendants’ motion seeks dismissal of any other of Plaintiffs’ claims, the motion is DENIED.

 

*6 The Clerk will enter this Order, providing a correct copy to all counsel of record.

 

SIGNED in Houston, Texas, this 15th day of December, 2015.

 

 

EWING WERLEIN, JR.

UNITED STATES DISTRICT JUDGE

All Citations

Slip Copy, 2015 WL 8763961

 

 

Footnotes

1

Document Nos. 152, 162. Although the motion asks for dismissal of the Third Amended Complaint, Pilot Car Defendants later clarified that they seek dismissal of only the two claims stated. Document No. 162 at 1 of 12.

2

Document No. 162 at 1 of 12.

3

 

The parties dispute whether the duties arising under Texas Transportation Code are delegable.Document No. 150 ¶ 52; Document No. 152 at 4 of 9. “As a general rule, when a duty is imposed by law on the basis of concerns for public safety, the party bearing the duty cannot escape it by delegating it to an independent contractor.” MBank El Paso, N.A. v. Sanchez, 836 S.W.2d 151, 153 (Tex. 1992)); see also RESTATEMENT (2D) OF TORTS § 424, cmt. a (1965) (“whenever a statute or administrative regulation imposes a duty upon one doing particular work to provide safeguards or precautions for the safety of others…the employer cannot delegate his duty to provide such safeguards or precautions to an independent contractor.”). Here, the rules governing the operation of a motor vehicle were imposed “on the basis of concerns for public safety,” and the statutory duties imposed under the Texas Transportation Code are non-delegable.

4

Document No. 150 ¶ 52.

5

Document No. 150 ¶ 52. Under § 545.255(b), “[a]n operator of a vehicle or equipment may not move on or across a track at a railroad grade crossing unless the operator has given notice to a station agent of the railroad and given the railroad reasonable time to provide proper protection at the crossing.”

6

Document No. 150 ¶¶ 15-17.

7

Section 545.255 also contains a penal sanction,

see § 545.255(e), an additional reason that forecloses Plaintiffs’

argument that the Pilot Car Defendants can be held liable for the

tractor/trailer operator’s statutory violations. “It is a common-

law ‘maxim that penal statutes should be strictly construed.”

Nautilus Ins. Co. v. Int’l House of Pancakes, Inc., 622 F. Supp.2d

470, 478 (S.D. Tex. 2009) (quoting United States v. Cook, 86 S. Ct.

1412, 1415 (1966)); see also Schwab v. Schlumberger Well Surveying

Corp., 145 Tex. 379, 382, 198 S.W.2d 79, 81 (1946) (explaining that

statutes that are “penal in nature…must be strictly construed

and cannot be extended beyond the clear import of their

language.”).

8

Document No. 150 ¶¶ 28-29.

9

Document No. 152 at 5 of 9.

10

Document No. 158 at 10 of 27.

11

Document No. 152 at 4 of 9.

12

Document No. 150 ¶ 65.

13

Document No. 158 at 11 of 27.

14

Document No. 150 ¶ 14.

15

Id. ¶ 15.

16

Document No. 158 at 24 of 27.

Kelley A. JACKELEN and Peter Jackelen, Plaintiffs, Progressive Casualty Insurance Company, Involuntary Plaintiff, v. Hope L. RUSSELL, Defendant–Co–Appellant, The Hertz Corporation, Defendant–Appellant, Allstate Insurance Company, Defendant–Respondent, Artisan and Truckers Casualty Company, Defendant. Kelley A. Jackelen and Peter Jackelen, Plaintiffs, Progressive Casualty Insurance Company, Involuntary Plaintiff, v. Hope L. Russell and The Hertz Corporation, Defendants, Allstate Insurance Company, Defendant–Respondent, Artisan and Truckers Casualty Company

Court of Appeals of Wisconsin.

Kelley A. JACKELEN and Peter Jackelen, Plaintiffs,

Progressive Casualty Insurance Company, Involuntary Plaintiff,

v.

Hope L. RUSSELL, Defendant–Co–Appellant,

The Hertz Corporation, Defendant–Appellant,

Allstate Insurance Company, Defendant–Respondent,

Artisan and Truckers Casualty Company, Defendant.

Kelley A. Jackelen and Peter Jackelen, Plaintiffs,

Progressive Casualty Insurance Company, Involuntary Plaintiff,

v.

Hope L. Russell and The Hertz Corporation, Defendants,

Allstate Insurance Company, Defendant–Respondent,

Artisan and Truckers Casualty Company, Defendant–Appellant.

Nos. 2014AP1883, 2014AP2109. | Nov. 24, 2015.

Appeals from a judgment of the circuit court for Milwaukee County: Mary M. Kuhnmuench, Judge. Reversed and cause remanded.

Before CURLEY, P.J., BRENNAN, J., and DANIEL L. LAROCQUE, Reserve Judge.

Opinion

¶ 1 CURLEY, P.J.

 

The Hertz Corporation (Hertz), Hope L. Russell, and Artisan and Truckers Casualty Company (Artisan) (collectively, “the appealing parties”) appeal the trial court’s ruling and entry of final judgment in favor of Allstate Insurance Company (Allstate) on Allstate’s motion for declaratory and summary judgment seeking a determination that there is no insurance coverage under its policy because the non-owned vehicle involved in the accident was regularly available for the Russells’ use.1 The appealing parties argue that: (1) the trial court incorrectly concluded that the non-owned vehicle was regularly available for Hope Russell’s use, therefore precluding coverage under the Allstate policy; and (2) the Allstate “drive other car” exclusion is not a valid exclusion because it does not comply with WIS. STAT. § 632.32(5)(j) (2009–10).2 We conclude that the exclusion does not preclude coverage, and we therefore reverse.

 

 

BACKGROUND

¶ 2 These appeals involve a dispute over insurance coverage related to an automobile accident involving vehicles driven by plaintiff Kelley A. Jackelen and defendant Hope Russell. Per the second amended complaint, on or about November 14, 2010, Russell and Jackelen were involved in a motor vehicle accident near 84th Street and Layton Avenue in Greenfield, Wisconsin.3 Jackelen alleges that Russell was negligent in operating her vehicle and that as a result of Russell’s negligence, Jackelen sustained significant damages and injuries.4 The complaint additionally alleges that Allstate had issued a policy of liability insurance to Russell and her husband, Marion (Ryan) Russell, which was in full force and effect on November 14, 2010.5

 

¶ 3 At the time of the accident, Russell was driving home to Madison from General Mitchell International Airport in Milwaukee after a weekend trip to visit family in Kansas City. The vehicle she was driving at the time of the accident, a Chevy Traverse, was owned by Hertz, Ryan Russell’s employer. Hope Russell was not renting the Hertz-owned vehicle at the time of the accident; rather, she was driving it pursuant to Hertz’s employee vehicle use privilege policy, which allowed certain Hertz employees, including Ryan Russell, to drive Hertz vehicles home in the evenings and on weekends. Pursuant to the Hertz policy, an employee’s spouse was authorized to drive the Hertz-owned vehicle on the employee’s days off or while on vacation or on holidays, but the spouse’s use was limited during the work week.

 

¶ 4 Russell testified at her deposition that she drove the Hertz vehicle to the airport so that she could park in the Hertz rental lot for free, so that she could save money on gas, and so that her husband would have use of the family’s van for transporting their four children. Russell also testified that prior to the accident, the only other time she had actually driven the Chevy Traverse was on her way to the airport prior to her trip.

 

¶ 5 It is undisputed that Allstate had issued an automobile insurance policy to the Russells, which included coverage for certain non-owned vehicles, that was in effect on the date of the alleged accident. It is also undisputed that Hope Russell was an authorized user at the time of the accident, as the accident occurred on a Sunday and the Hertz policy specifically stated that an employee’s spouse was authorized to drive Hertz-owned vehicles on the weekend. However, Allstate argues that there is no coverage under its policy because vehicles in Hertz’s fleet were regularly available for the Russells’ use.

 

¶ 2 The particular provision at issue identifies a non-owned auto that is insured under the Allstate policy as: “A non-owned auto used with the permission of the owner. This auto must not be available or furnished for the regular use of a person insured.” The parties primarily dispute the meaning of the second sentence of that provision, particularly whether “[t]his auto” refers to the specific vehicle involved in the accident or rather to any non-owned vehicle, as well as whether “a person insured” refers to the insured person involved in the accident (Hope Russell) or to all persons insured under the policy (Hope and Ryan Russell).

 

¶ 6 Based on this “drive other car” exclusion, see Westphal v. Farmers Ins. Exch., 2003 WI App 170, ¶ 11, 266 Wis.2d 569, 669 N.W.2d 166 (“the purpose of the drive other cars exclusion is to … exclude coverage of a vehicle that the insured owns or frequently uses for which no premium has been paid”), Allstate filed a motion for declaratory and summary judgment on January 14, 2014, seeking an order that no coverage exists for the motor vehicle accident involving the Chevy Traverse because the Russells’ insurance policy excluded coverage for non-owned vehicles that were available for the Russells’ regular use. Specifically, Allstate argued that no coverage exists because the vehicles in the Hertz fleet were available for the Russells’ regular use as a result of Ryan Russell’s employee use privileges.

 

¶ 7 The trial court heard oral argument on Allstate’s motion and thereafter issued its written decision on June 9, 2014. In its written decision, the trial court granted Allstate’s motion for declaratory and summary judgment, agreeing that there is no coverage under the Allstate policy.6 In reaching its conclusion, the trial court explained that the purpose of the language at issue was “to exclude coverage when an insured can regularly use other vehicles,” and the trial court emphasized that the vehicle Hope Russell was driving at the time of the accident “was part of a Hertz fleet from which vehicles were made available to their employee, Mr. Russell, and his spouse for their regular use pursuant to a Vehicle Use Privilege Agreement.” (Emphasis omitted.) Final judgment dismissing any and all claims against Allstate was entered in the circuit court on July 29, 2014, and we now address whether the trial court properly applied the “drive other car” exclusion in concluding that there is no coverage under the Allstate policy.

 

 

ANALYSIS

  1. Standard of Review

¶ 8 The appealing parties ask us to reverse the trial court’s grant of declaratory and summary judgment in favor of Allstate, which disposed of all claims against Allstate. The appealing parties alternatively argue that the “drive other car” exclusion is invalid under Wisconsin law as a result of our supreme court’s relatively recent decision in Belding v. Demoulin, 2014 WI 8, 352 Wis.2d 359, 843 N.W.2d 373. We will address these issues in turn, and we begin by first addressing whether the “drive other car” exclusion in the Allstate policy applies to preclude coverage for Hope Russell as a matter of law.

 

¶ 9 We review the trial court’s grant of summary judgment de novo, and we apply the same methodology as the trial court. See Young v. West Bend Mut. Ins. Co., 2008 WI App 147, ¶ 6, 314 Wis.2d 246, 758 N.W.2d 196. Summary judgment is proper “if the pleadings and evidentiary submissions of the parties ‘show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ “ Id. (citation omitted); WIS. STAT. § 802.08(2). A question of statutory construction is likewise a question of law we review de novo. State v. Cole, 2000 WI App 52, ¶ 3, 233 Wis.2d 577, 608 N.W.2d 432.

 

¶ 10 This case also involves the construction of an insurance contract, which we review de novo. See Farmers Auto. Ins. Ass’n v. Union Pac. Ry. Co., 2009 WI 73, ¶ 30, 319 Wis.2d 52, 768 N.W.2d 596. “The same rules of construction that govern general contracts are applied to the language in insurance policies.” Folkman v. Quamme, 2003 WI 116, ¶ 12, 264 Wis.2d 617, 665 N.W.2d 857. We construe insurance policies “to give effect to the intent of the parties as expressed in the language of the policy.” Id. We do this by giving the words in an insurance policy “their common and ordinary meaning, that is, the meaning a reasonable person in the position of the insured would have understood the words to mean.” State Farm Mut. Auto. Ins. Co. v. Langridge, 2004 WI 113, ¶ 14, 275 Wis.2d 35, 683 N.W.2d 75. A policy that is ambiguous concerning coverage is construed in favor of the insured. Id., ¶ 15. “Language in an insurance policy is ambiguous ‘if it is susceptible to more than one reasonable interpretation.’ “ Id . (citation omitted). “Courts will interpret the words of an insurance contract against the insured when the insurer’s interpretation conforms to what a reasonable person in the position of the insured would have understood the words to mean.” Id.

 

¶ 11 Additionally, “[t]here is an established framework for determining whether coverage is provided under the terms of an insurance policy.” Olson v. Farrar, 2012 WI 3, ¶ 40, 338 Wis.2d 215, 809 N.W.2d 1. We first examine whether the policy makes an initial grant of coverage. See id., ¶ 41. If the initial grant of coverage is triggered by the claim, we next examine the various exclusions to determine whether they preclude coverage. See id. “If so, the court then determines whether there is an exception to the exclusion which reinstates coverage.” Id.

“Of primary importance is that the language of an insurance policy should be interpreted to mean what a reasonable person in the position of the insured would have understood the words to mean.” If a word or phrase is susceptible to more than one reasonable interpretation, it is ambiguous. “[B]ecause the insurer is in a position to write its insurance contracts with the exact language it chooses—so long as the language conforms to statutory and administrative law—ambiguity in that language is construed in favor of an insured seeking coverage.”

Id., ¶ 42 (citations omitted; brackets in Olson ). Furthermore, while “we must read insurance policies from the standpoint of a reasonable insured,” see Sobieski v. Farmers Ins. Exch., 181 Wis.2d 324, 331, 510 N.W.2d 796 (Ct.App.1993), “[w]e will not interpret a policy ‘to provide coverage for risks that the insurer did not contemplate or underwrite and for which it has not received a premium,’ “ see Langridge, 275 Wis.2d 35, ¶ 15 (citation omitted).

 

 

  1. The Allstate Policy

¶ 12 It is undisputed that Allstate issued a policy of liability insurance to the Russells and that the policy was in effect on the date of the accident. It is also undisputed that the only vehicle listed on the Allstate insurance policy was the Russells’ mini-van, a 2000 Oldsmobile Silhouette. This was the only vehicle the Russells owned, and the Russells never obtained private insurance coverage for the Hertz vehicles that Ryan Russell had access to as a result of his employment.

 

¶ 13 Per the terms of the Allstate policy, Allstate insured the vehicle named in the policy (the 2000 Oldsmobile Silhouette), and the policy also provided coverage for liabilities incurred while the Russells were driving certain non-owned vehicles as described in the policy. As previously explained, the Allstate policy defines “Insured Autos,” in relevant part, as including: “A non-owned auto used with the permission of the owner. This auto must not be available or furnished for the regular use of a person insured.” The parties do not dispute that Hertz owned the vehicle Hope Russell was driving at the time of the accident or that Hope Russell had permission to drive the Hertz vehicle at the time of the accident. Because there is no dispute that Russell was driving a non-owned vehicle with permission at the time of the accident, the coverage dispute centers on the second sentence of the policy language at issue, which excludes certain non-owned autos driven with the owner’s permission from coverage: “[t]his auto must not be available or furnished for the regular use of a person insured.”

 

¶ 14 The appealing parties argue that the trial court’s decision must be reversed because the “drive other car” exclusion does not apply and therefore coverage exists under the Allstate policy because the Chevy Traverse falls within the definition of “Autos Insured.” According to the appealing parties, the “drive other car” exclusion does not preclude coverage because the vehicle Hope Russell was driving at the time of the accident—the Chevy Traverse—was not a vehicle that was regularly made available for her use. Allstate, to the contrary, argues that all Hertz vehicles must be considered in determining whether the “drive other car” exclusion applies and that the analysis must also include whether the Hertz vehicles were made available for Ryan Russell’s regular use because he is also an insured under the Allstate policy.

 

¶ 15 We conclude that the proper analysis under the “drive other car” exclusion focuses on the specific vehicle for which coverage is being determined and that the “regular use” analysis looks to whether the specific vehicle was “available or furnished for the … regular use” of the insured driving that vehicle when the accident occurred.

 

 

  1. The “drive other car” exclusion requires a vehicle specific analysis.

¶ 16 In construing the second sentence of the “drive other car” exclusion, the parties dispute whether the coverage analysis must focus on the Chevy Traverse or on the availability of the Hertz fleet of vehicles as a whole. We give insurance contract language its common, ordinary meaning from the viewpoint of a reasonable insured, Langridge, 275 Wis.2d 35, ¶ 14, and the specific sentence at issue states that “[t]his auto must not be available or furnished for the regular use of a person insured.” We begin our discussion with the question of whether the coverage analysis is vehicle specific because in this case, the Chevy Traverse was one of many vehicles in the Hertz fleet. If the coverage analysis is vehicle specific, it is necessary to consider only whether the Chevy Traverse was “available or furnished for the regular use of a person insured.” If the coverage analysis is not vehicle specific, however, the availability of the entire Hertz fleet must be considered.

 

¶ 17 We conclude that the “drive other car” exclusion clearly and unambiguously provides that the coverage analysis is specific to the vehicle for which coverage is sought, particularly as to the question of whether the Chevy Traverse was “available or furnished for the regular use of a person insured.”7 The phrase beginning with “[t]his auto” unquestionably modifies the clause’s first sentence, which states that an auto insured under the Allstate policy includes “[a] non-owned auto used with the owner’s permission.” The only reasonable reading of the first sentence is that the auto referred to is the specific auto for which coverage is sought. Because “[t]his auto” refers to the specific vehicle identified in the first sentence, it necessarily follows that the phrase “[t]his auto must not be available or furnished for … regular use” refers to the specific, non-owned vehicle used with the owner’s permission—here, the Chevy Traverse.

 

¶ 18 Allstate appears to recognize that the vehicle referred to in the first sentence of the “drive other car” exclusion is the specific vehicle being considered for coverage, as it states that “[w]hen this [vehicle specific] analysis is performed for the particular Chevy Traverse involved in the … accident, the Chevy Traverse satisfies the first sentence … because it was used with the owner Hertz’s permission.” Nevertheless, Allstate inexplicably argues that coverage is precluded because “as a particular, individual member of the Hertz fleet—it [the Chevy Traverse] had always been available for Ryan Russell’s use.” (Emphasis omitted.)

 

¶ 19 Allstate’s argument is unavailing, as Allstate fails to account for the actual policy language at issue. As explained, the first sentence of the “drive other car” exclusion—which Allstate drafted—clearly identifies a specific vehicle: the non-owned automobile the insured drove with permission. The second sentence narrows the circumstances in which the vehicle identified in the first sentence is insured under the Allstate policy: when it is not “available or furnished for the regular use of a person insured.” This language clearly and unambiguously indicates that the “regular use” analysis is specific to the vehicle for which coverage is sought, and Allstate fails to point to any language in its policy that suggests otherwise. Had Allstate intended the “regular use” analysis to apply to an entire fleet of vehicles rather than to a specific non-owned vehicle, it could have done so by drafting a more restrictive “drive other car” exclusion. It did not, and we will not do so on Allstate’s behalf.

 

¶ 20 The cases discussing “regular use” also generally apply the regular use analysis to the specific vehicle for which coverage is sought, further bolstering our conclusion. For example, in Hochgurtel v. San Felippo, 78 Wis.2d 70, 253 N.W.2d 526 (1977), the insured was driving a Ford truck that he did not own when he was involved in an accident, and the insurer argued that the trial court had erred in concluding that the Ford truck had not been “ ‘furnished or available’ for [the insured’s] ‘regular use.’ “ Id. at 77, 81–82. Similarly, in Westphal, the court applied the “regular use” analysis to the specific vehicle involved in an accident and for which insurance coverage was thereafter sought. See id., 266 Wis.2d 569, ¶¶ 15–18.

 

¶ 21 Nothing in these cases suggests that the “regular use” analysis applies to any vehicle other than the specific vehicle for which coverage is sought. Accordingly, although Ryan Russell may have had access to any given number of non-owned vehicles as a result of his Hertz employment, we see no reason to depart from the vehicle specific analysis applied in a long line of cases applying the “regular use” analysis, particularly where, as here, the policy language clearly and unambiguously indicates that the “regular use” analysis is applied to the specific non-owned vehicle for which coverage is sought.

 

 

  1. The Chevy Traverse was not available or furnished for Hope Russell’s regular use.

¶ 22 Having concluded that the “drive other car” exclusion coverage analysis is vehicle specific, we look next to whether the specific vehicle—the Chevy Traverse—was “available or furnished for the regular use of a person insured.” “The definition of ‘regular use’ has been considered by the Wisconsin courts in a number of cases and ‘[n]o absolute definition has been or can be established.’ Rather, the interpretation and application of the regular use provision depends on the particular facts and circumstances of each case.” Id., ¶ 16 (internal citation omitted; brackets in Westphal ).

 

¶ 23 The facts underlying the cases interpreting the phrase “regular use” fall on a spectrum.

“On each end of the spectrum are the easy cases. If the use of the auto is sporadic and rigidly restricted, there is coverage under the policy. At the other end of the spectrum are those cases in which the use is unqualified and continuous; in these cases the denial of coverage is obvious. The doubtful cases are those in the middle.”

Some of the “signposts” of “regular use” as set out in the cases are continuous use rather than sporadic use; frequent use rather than infrequent or merely casual use; unqualified use rather than restricted use; use for an indefinite period rather than a definite period; usual use rather than unusual use. Regularity of use is not diminished by the fact the vehicle is available for business use and not for personal use. If the employee’s driving on the employer’s business is a primary duty of the employee, the use is more apt to be considered “regular use[.]”

Hochgurtel, 78 Wis.2d at 82 (internal citation omitted).

 

¶ 24 The facts of this case are somewhat unique given Ryan Russell’s ability to use any number of cars from the Hertz vehicle fleet, and his access to the Hertz vehicles is at the center of the “regular use” analysis dispute. Allstate argues that the Chevy Traverse was available for the regular use of “a person insured” because the Hertz vehicles as a whole were available or furnished for Ryan Russell’s regular use-in other words, all of the Hertz vehicles are interchangeable and should therefore be treated as one for the purpose of determining coverage. As we have already explained, however, the “regular use” analysis is vehicle specific, and as we explain, the “regular use” analysis is applied as to the insured driving the vehicle at the time of the motor vehicle accident.

 

¶ 25 Actual use of a vehicle is an important consideration in determining whether coverage exists where a “drive other car” exclusion based on “regular use” is at issue; however, the “regular use” analysis is not limited only to consideration of the insured’s actual use of the vehicle where the relevant policy language—like the Allstate policy at issue here—states that a non-owned auto used with permission is not insured under the policy if it is “available or furnished for … regular use.” (Emphasis added.) In Hochgurtel, the insurer argued that the trial court had erred in “holding that the truck was not ‘furnished or available’ for [the insured’s] ‘regular use.’ “ Id. at 81. In considering the insurer’s argument, the court noted that:

The purpose of this policy provision is to provide coverage to the insured while he or she has only infrequent or merely causal use of a vehicle other than one described in the policy, but not to cover the insured … against personal liability with respect to the use of a vehicle which the insured frequently uses or has the opportunity to do so as that increases the risk to an insurance company without a corresponding increase in premium. The greatly added risk which insurers are unwilling to incur for a single premium is the multiplicity of potential liability situations where a non-owned vehicle is regularly used or available for regular use .

Id. (footnote omitted; emphasis added). Accordingly, a “regular use” analysis requires consideration of both availability for regular use and actual use.

 

¶ 26 We also conclude that the “regular use” analysis must be applied to the insured who was using the non-owned auto with the owner’s permission at the time of the accident because the phrase “a person insured” as used in the Allstate policy is ambiguous. We reach this conclusion because “a person insured” is drafted in the singular and could therefore be reasonably interpreted to mean a single, specific insured, as the appealing parties suggest. However, because there are multiple named insureds under the Allstate policy, the phrase could also be reasonably interpreted as referring to any of the individuals insured under the policy, as Allstate suggests. Ambiguous policy language is interpreted in favor of the insured, see Langridge, 275 Wis.2d 35, ¶ 15, and therefore “regular use” in this case must be analyzed as to Hope Russell alone.

 

¶ 27 Whether any given Hertz vehicle was ever available for Hope Russell’s use, let alone actually used by Hope Russell, was entirely dependent upon which Hertz vehicle her husband brought home—if Ryan Russell did not bring a vehicle home, it was not available for Hope Russell’s use. The parties do not dispute Ryan Russell’s deposition testimony that he randomly selected a Hertz vehicle off the lot at the end of the day, that he usually selected a different vehicle each day, that he may have occasionally kept the same vehicle for a few days, and that if he ever took a vehicle home that he had previously driven, it was purely happenstance. The parties also do not dispute that the Hertz user policy required Ryan Russell to select a different vehicle at least once every five days, meaning that the number of times Ryan Russell could even bring any given Hertz vehicle home was limited, and the parties do not dispute that the Hertz vehicles from which Ryan Russell could choose were limited to those vehicle not already rented out to customers. Thus, whether a vehicle was available for Hope Russell’s use was further limited by what vehicles were available to Ryan Russell in the first place, which is a factor that was not foreseeable and was entirely out of the Russells’ control.

 

¶ 28 The only reasonable inference that can be drawn from Ryan Russell’s undisputed testimony is that prior to the weekend of the accident, Ryan Russell had, at most, brought the Chevy Traverse home on a few different nights. Because the Chevy Traverse could only be available to Hope Russell if Ryan Russell brought the Chevy Traverse home, no reasonable fact-finder could conclude that the Chevy Traverse was available for Hope Russell’s regular use given that it had only been at the Russells’ home, at most, no more than a few nights.

 

¶ 29 Likewise, no reasonable fact-finder could conclude that Hope Russell’s actual use of the Chevy Traverse rose to the level of “regular use,” as the parties do not dispute Hope Russell’s deposition testimony that the only two times that she drove the Chevy Traverse were on the weekend of the accident. Moreover, applying the Hochgurtel “signposts” of “regular use” to Hope Russell’s actual use of the Chevy Traverse clearly establishes that Hope Russell did not have “regular use” of the Chevy Traverse because: (1) Hope Russell could only use the Chevy Traverse if her husband brought the Chevy Traverse home, which occurred no more than a few nights total based on the undisputed deposition testimony; (2) Hope Russell only actually used the Chevy Traverse to drive to and from the airport on the weekend of the accident; (3) Hope Russell’s actual use of the Chevy Traverse was limited by the Hertz user agreement, which allowed her to use the Chevy Traverse only on weekends, holidays, and vacations; and (4) Hope Russell’s actual use of the Chevy Traverse was further limited by her husband’s discretion. Accordingly, Hope Russell’s actual use of the vehicle cannot establish “regular use” within the meaning of Allstate’s “drive other car” exception.

 

¶ 30 Consistent with the foregoing, we conclude that the trial court impermissibly broadened the scope of the “drive other car” exclusion by concluding that the “regular use” analysis must be applied to the entire Hertz vehicle fleet and that the “regular use” analysis must include Ryan Russell’s access to the Hertz vehicles. Because we conclude that the “drive other car” exclusion does not apply to preclude coverage, summary judgment in favor of Allstate was not proper and we therefore reverse.

 

 

III. Having concluded that the “drive other car” exclusion does not preclude coverage, we do not decide whether Belding renders the “drive other car ” exclusion in the Allstate Policy invalid.

¶ 31 Hertz and Russell alternatively argue that Russell is entitled to coverage because the “drive other car” exclusion in the Allstate policy is invalid under Wisconsin law.8 Hertz and Russell rely on our supreme court’s recent decision in Belding, in which the court sought to harmonize the “drive other car” exclusion permitted by WIS. STAT. § 632.32(5)(j) (2009–10) with the statutory prohibition on anti-stacking clauses in § 632.32(6)(d) (2009–10). In the context of that case, which involved an insured seeking to stack uninsured motorist coverage, the court stated that “[t]he drive-other-car exclusion permitted by WIS. STAT. § 632.32(5)(j) applies to ‘any coverage.’ “ See Belding, 352 Wis.2d 359, ¶ 40.

 

¶ 32 Hertz and Russell argue that the court’s statement that WIS. STAT. § 632.32(5)(j) (2009–10) applies to “any coverage” renders the Allstate “drive other car” exclusion invalid because it does not comply with the statutory requirements. However, because we have already concluded that the exclusion at issue does not apply to bar coverage to Hope Russell in this case, we do not reach Hertz and Russell’s alternative argument. See CED Props., LLC v. City of Oshkosh, 2014 WI 10, ¶ 18, 352 Wis.2d 613, 843 N.W.2d 382.

 

Judgment reversed and cause remanded.

 

Recommended for publication in the official reports.

 

All Citations

Slip Copy, 2015 WL 7432311

 

 

Footnotes

1

In this case, we use the terms “summary judgment” and “declaratory judgment” interchangeably. The trial court’s written decision and order states that it “GRANTS Allstate’s motion for declaratory and summary judgment.”

Hertz and Hope L. Russell appealed in case number 2014AP1883, and Artisan appealed in case number 2014AP2109. We entered an order dated April 20, 2015, consolidating these appellate cases for disposition pursuant to WIS. STAT. RULE 809.10(3) because they involve the same circuit court case and the same judgment is at issue in each appeal.

2

All references to the Wisconsin Statutes are to the 2013–14 version unless otherwise noted.

3

We describe the facts as alleged in the seconded amended complaint filed in the circuit court on January 15, 2013. Unless otherwise indicated, all references to the “complaint” refer to the seconded amended complaint, which was the operative complaint at the time of the trial court’s order that is at issue in this appeal.

4

To the extent the parties dispute the facts as to the underlying accident itself, those facts are not at issue on this appeal. We therefore consider only those facts relevant to the determination of insurance coverage pursuant to the terms of Allstate’s policy.

5

Mr. Russell’s given name is Marion, although he goes by the name Ryan. We will refer to Hope Russell as either “Russell” or “Hope Russell,” we will refer to Marion (Ryan) Russell as “Ryan Russell,” and we will refer to Hope Russell and Ryan Russell collectively as “the Russells.” Ryan Russell is not a party to the underlying action.

6

The trial court’s written decision also addressed Hertz’s motion for declaratory judgment, which the trial court denied. Hertz’s notice of appeal in 2014AP1883, filed on August 11, 2014, stated that Hertz was appealing both the trial court’s final judgment as to Allstate and the trial court’s non-final order denying Hertz’s motion for declaratory judgment. Hertz’s notice of appeal listed the Jackelens as respondents, and in an order dated December 3, 2014, we questioned whether the Jackelens were properly named as respondents because litigation between Hertz and the Jackelens was continuing in the trial court. We thereafter ordered Hertz to file a memorandum addressing that issue, and after considering the parties’ submissions, we concluded in an order dated January 22, 2015, that the Jackelens were not respondents to Hertz’s appeal and that Hertz’s appeal of the trial court’s non-final order denying Hertz’s motion for declaratory judgment was therefore not properly before this court. Therefore, we address only the appealing parties’ appeal of the final judgment entered as to Allstate at this time.

7

Hertz argues that the language is unambiguous, whereas the other appealing parties suggest that the language may be ambiguous. We agree with Hertz.

8

Artisan does not raise this issue in its appeal. In its response to the Hertz and Russell briefs, Allstate argues that this issue is not properly before the court because it was not raised before the trial court. Hertz concedes that it did not raise this issue at the trial court; however, Russell asserts that Artisan raised this issue before the trial court and that this issue is therefore properly before the court. Both Hertz and Russell also argue that regardless of whether this issue was raised before the trial court, it is properly before this court because it is purely a question of law, the relevant facts are not in dispute, the issue has been thoroughly briefed, and the question is one of sufficient public interest to merit a decision. See City News & Novelty, Inc. v. City of Waukesha, 170 Wis.2d 14, 20–21, 487 N.W.2d 316 (Ct.App.1992). We have reviewed the record, and counsel for Artisan did raise the applicability of WIS. STAT. § 632.32(5)(j) (2009–10) at oral argument before the trial court. We note, however, that the trial court did not address § 632.32(5)(j) (2009–10) in its written decision granting Allstate’s motion.

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