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Nationwide Property & Casualty Co. v. Dorsey

United States District Court, D. Maryland

March 23, 2017

NATIONWIDE PROPERTY & CASUALTY INS. CO., Plaintiff
v.
ERIC DORSEY, Defendant.

          MEMORANDUM OPINION

          Mark Coulson United States Magistrate Judge

         Plaintiff, Nationwide Property & Casualty Ins. Co. (“Nationwide”), filed a complaint against Defendants, Washrite, Inc. (“Washrite”), Mr. Kevin Gaines, and Mr. Eric Dorsey, seeking a declaratory judgment as to Nationwide's liability insurance coverage obligations following an on-the-job accident that occurred involving Mr. Dorsey and Mr. Gaines. (ECF No. 1). Since that filing, this Court entered an Order of Default Judgement in favor of Nationwide, against Washrite and Mr. Gaines. (ECF No. 12).[1] Thereafter, Defendants Washrite and Mr. Gaines were terminated from this litigation, leaving Nationwide and Mr. Dorsey as the remaining parties to this action. (ECF No. 12-13).

         The remaining parties, Nationwide and Mr. Dorsey, have consented to proceed before a magistrate judge pursuant to 28 U.S.C. § 636(c) and Local Rule 301.4. (ECF Nos. 23, 24). Now pending before the Court are their cross-motions for summary judgment. (ECF Nos. 15, 16). In deciding these motions, the Court has also considered both Mr. Dorsey's and Nationwide's Opposition/Reply, (ECF Nos. 17, 18), and a motions hearing was held on March 21, 2017. (ECF Nos. 26, 27). For the reasons that follow, Plaintiff's motion for summary judgment is GRANTED, and Defendant's motion for summary judgment is DENIED.

         I. Background

         This case involves an insurance coverage dispute arising from a motor vehicle incident involving Mr. Dorsey and Mr. Gaines, who were operating a truck that was owned by Washrite and insured by Nationwide. The cross-motions for summary judgment concern not only the underlying accident, but the relationship between the parties in this action and the insurance coverage obligations that are owed in light of those relationships.

         A. The Parties

         Washrite is a “mobile vehicle washing company, ” located in Upper Marlboro, Maryland, that is owned and operated by Mrs. Julie Walters and her husband, Mr. Edward Walters.[2] (ECF Nos. 15-3, 16-4; J. Walters Depo. at 7-8). Washrite sends out teams of workers, using Washrite-owned trucks equipped with “mounted washing equipment, ” to power wash commercial vehicles[3] at its customers' facilities. (ECF Nos. 15-4; E. Walters Depo. at 9) (J. Walters Depo. at 9-10).

         Nationwide is an insurance carrier that issued a “Business Auto Coverage” Policy (the “Policy”) to Washrite covering “bodily injury” and “property damages” to “employees” and “autos” of Washrite. (ECF No. 1-4) (ECF No. 15-9). The exact scope of this policy-to whom applies and the limits of liability-is the subject of the present dispute and is discussed in greater detail below.

         Mr. Dorsey and Mr. Gaines are both “workers” associated with Washrite. Both parties agree that, at the time of the accident in this case, Mr. Dorsey was an employee of Washrite. (J. Walters Depo. at 23). Mr. Gaines's status, however, is disputed. As outlined below, Nationwide contends that Mr. Gaines was an employee of Washrite and not, as Mr. Dorsey contends, an independent contractor..

         Though not parties to this action, Mrs. Casandra Gaines and Appearance Auto Detailing and Power Washing (“Appearance Auto”) are both relevant to the present dispute. Mrs. Gaines is the sole owner of Appearance Auto, which, as the name implies, handles detailing and power washing of automobiles. (ECF Nos. 15-6, 16-6; C. Gaines Depo. at 9). Her husband, Mr. Gaines, runs the day-to-day operations of that business. (C. Gaines Depo. at 9-10). His precise involvement in those operations, discussed more thoroughly below, is relevant to the present dispute as the parties disagree whether, at the time of the accident, Mr. Gaines was acting as an employee of Washrite or Appearance Auto.

         B. The Accident

         On July 30, 2012, Washrite sent Mr. Gaines and Mr. Dorsey to wash trucks and trailers at a Fed-Ex facility in Halethorpe, Maryland. (J. Walters Depo. at 15-16, 41-42). Mr. Gaines was paired with Mr. Dorsey so that Gaines could “retrain” Dorsey in power washing and related procedures. (ECF Nos. 15-5, 16-5; K. Gaines Depo. at 40-43). After washing the vehicles, Mr. Gaines told Mr. Dorsey that he was going to move their Washrite flat-bed truck. (K. Gaines Depo. at 40-54). As Mr. Gaines began to do so, Mr. Dorsey fell off the rear of the truck and sustained injuries. (K. Gaines Depo. at 64).

         C. Procedural Background

         On February 27, 2015, Mr. Dorsey filed a complaint (the “Dorsey Complaint” or “Dorsey Action”), against Mr. Gaines in the Circuit Court for Prince George's County, Maryland, alleging that Mr. Gaines negligently caused him severe personal injuries. (ECF No. 15-7). That complaint was later amended on August 4, 2015, adding Mrs. Gaines and Appearance Auto as Defendants. That amended complaint, again, asserted that Mr. Gaines negligently caused severe personal injuries to Mr. Dorsey, but added that Mr. Gaines was acting within the scope of his employment for Mrs. Gaines and Appearance Auto, and thus they were vicariously liable for his negligent actions. On April 12, 2016, Nationwide filed the instant action in this Court, seeking a declaratory judgment “to resolve the dispute and end the uncertainties among the parties concerning their rights, duties, and obligations” as set forth under the Policy. (ECF No. 1).

         D. The Policy

         The parties agree that the Policy was in effect at the time this accident occurred and provided coverage for Mr. Dorsey's injuries. (ECF No. 1-4). The parties disagree about the applicable limits of that coverage. The Policy contains the following terms that are relevant to the present dispute:

SECTION V - DEFINITIONS1
* * *
E. "Employee" includes a "leased worker". "Employee" does not include a "temporary worker".

         The Policy contains the following exclusion from liability:

5. Fellow Employee
* * *
"Bodily injury" to any fellow "employee" of the "insured" arising out of and in the course of the fellow "employee's" employment or while performing duties related to the conduct of your business.

         Finally, the Policy is modified by a “Maryland Changes” form, (ECF No. 15-10), which provides in pertinent part:

A. Changes In Liability Coverage
1. Except with respect to the Business Auto Physical Damage Coverage Form, the Fellow Employee Exclusion is replaced by the following:

         This insurance does not apply to "bodily injury" to any fellow "employee" of the "insured" arising out of and in the course of the fellow "employee's" employment or while performing duties related to the conduct of your business. However, this exclusion does not apply for coverage up to the minimum limit specified by the Maryland Vehicle Law.

         II. ...


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