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XL Specialty Insurance Co. v. Erie Insurance Exchange

United States District Court, D. Maryland, Southern Division

July 3, 2019




         This Declaratory Judgment action arises out of an insurance coverage dispute related to a significant automobile accident that occurred on January 14, 2016. Pending before the Court are the parties' cross Motions for Summary Judgment. ECF Nos. 18 & 20. No. hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Defendant/Counter-Plaintiff Erie Insurance Exchange's Cross Motion for Summary Judgment, ECF No. 18, will be granted, and Plaintiff/Counter-Defendant XL Specialty Insurance Company's Cross Motion for Summary Judgment, ECF No. 20, will be denied.


         Summary judgment is proper if there are no issues of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Francis v. Booz, Allen & Hamilton, Inc., 452 F.3d 299, 302 (4th Cir. 2006). A material fact is one that “might affect the outcome of the suit under the governing law.” Spriggs v. Diamond Auto Glass, 242 F.3d 179, 183 (4th Cir.2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, (1986)). A dispute of material fact is only “genuine” if sufficient evidence favoring the non-moving party exists for the trier of fact to return a verdict for that party. Anderson, 477 U.S. at 248-49. However, the nonmoving party “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir.1985). The Court may rely on only facts supported in the record, not simply assertions in the pleadings, to fulfill its “affirmative obligation . . . to prevent ‘factually unsupported claims or defenses' from proceeding to trial.” Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987). When ruling on a motion for summary judgment, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [her] favor.” Anderson, 477 U.S. at 255.

         Cross-motions for summary judgment require that the Court consider “each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law.” Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003). “The Court must deny both motions if it finds there is a genuine issue of material fact, ‘but if there is no genuine issue and one or the other party is entitled to prevail as a matter of law, the court will render judgment.'” Wallace v. Paulos, 2009 WL 3216622 at *4 (D. Md. Sept. 29, 2009) (citation omitted).


         On January 14, 2016, Juan Sanchez, an employee of R&R Contracting Utilities Inc. (R&R), ECF No. 18-11 at 3, was operating a 2006 Chevrolet Silverado (the Vehicle) when he ran through a red light and collided with a vehicle operated by Angela Jefferson. ECF No. 18-5. The accident involved a total of nine vehicles and resulted in fatal injuries to Jefferson and injuries to several drivers and occupants of other vehicles as well as property damage claims. Id. The Vehicle was owned by IPR Northeast, LLC (IPR). ECF No. 18-4 ¶ 11.

         R&R is a small business that provides labor to other companies in need of additional manpower to perform specific work. ECF No. 18-9 at 16:16-17:1, 28:14-29:21. IPR is one of the general contractors for whom R&R provides workers. ECF No. 18-6 at 2. At the time of the accident, Sanchez performed work on R&R's behalf exclusively for IPR. ECF No. 18-6 at 2; ECF No. 18-10 at 2; ECF No. 18-11 at 3.

         In February 2015, Sanchez became a “project engineer, ” a position that required him to travel between multiple IPR jobsites. ECF No. 18-6 at 2; ECF No. 18-13 at 12:5-14; ECF No. 18-8 at 40:11-18; id. at 194:8-11. As a result, he received authorization and began driving an IPR vehicle. ECF No. 18-7 at 41:1-5. Whenever he drove an IPR vehicle, he drove the 2006 Chevrolet Silverado-the Vehicle that he was driving at the time of the 2016 accident. ECF No. 18-8 at 196:2. Although the Vehicle was assigned to others as well, it was the only IPR vehicle that Sanchez drove. ECF No. 18-7 at 21:14-22:11, 34:5-15. There were two different pickup trucks, including the Vehicle, that were primarily used for the contract Sanchez managed, and if IPR needed to supply a crew foreman with a vehicle, then the Vehicle Sanchez used could be “reallocated to a different person as the operations manager saw fit.” Id. at 34:5-15. Sanchez did not use the Vehicle for “personal purposes” except that he could drive the Vehicle home as a convenience if he was required to work late; he would then return the Vehicle to the IPR office the next morning. ECF No. 18-8 at 61:1-18; 195:19-196:1. Sanchez drove the Vehicle home a “few days a week” and sometimes on the weekend. Id. at 233:6-16.

         On January 14, 2016, Sanchez was driving the Vehicle to an IPR jobsite when the accident occurred. Id. at 60:2-22. The Vehicle was insured under a policy issued to IPR by Plaintiff XL Specialty Insurance Company (XL Specialty). ECF No. 18-5 at 2. Separately, Defendant Erie Insurance Exchange (Erie) issued an insurance policy to Sanchez's employer, R&R. The Erie policy provides primary insurance for “any owned auto.” ECF No. 18-14 at 8. But it provides only excess insurance for autos it insures that are not owned. Id. at 12. Pursuant to the Erie Policy, owned autos include:

b. 2) any auto not owned by, furnished or available for the regular use* of, and while driven by:
a) you;
b) your active partner and spouse residing in the same household;
c) your active executive officer and spouse residing in the ...

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