Opinion
IP 02-0936-C-M/S
August 13, 2003
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
This matter is before the Court on the motion for summary judgment of the plaintiff, Great West Casualty Company ("Great West"), on its Complaint for Declaratory Judgment, and on the cross-motion for summary judgment of defendant National Casualty Company ("National Casualty"). Great West asks the Court for an order that defendants Bogue Enterprise, Incorporated, Ray Bogue and Gabriel M. Bogue (collectively, the "Bogue Defendants") are not entitled to insurance coverage by Great West for potential claims of defendants Chris T. Cramer, and Cory, Joel and Kyle Cramer, by Their Parent and Next Friend, Elizabeth A. Cramer (collectively, the "Cramers"). National Casualty opposes Great West's motion, and has filed a cross-motion for summary judgment, which the Bogue Defendants have joined, requesting an order that Great West must provide primary coverage to the Bogue Defendants. For the reasons discussed herein, the Court GRANTS summary judgment in favor of Great West. Correspondingly, National Casualty's motion is DENIED.
I. FACTUAL BACKGROUND
The material facts essentially are undisputed. Bogue Enterprise is a trucking company engaged in providing for-hire transportation services. Sworn Statement of Ray Bogue ("Ray Bogue Statement") at 9-10. Ray Bogue is the owner of Bogue Enterprise and Gabriel Bogue, Ray's son, is an employee-driver of the company. Id. at 5, 11; Sworn Statement of Gabriel Bogue ("Gabriel Bogue Statement") at 4-6. Bogue Enterprise provides hauling services for both Lynn Elevator and Georgia Pacific. Ray Bogue Statement at 10. However, Lynn Elevator and Georgia Pacific do not have a business relationship of any kind and Lynn elevator has never dispatched Bogue Enterprise to haul for Georgia Pacific. Id. at 22, 32. Lynn Elevator also does not receive compensation from Georgia Pacific or from Bogue Enterprise related to Georgia Pacific loads. Id. at 34-35; Sworn Statement of Ruby M. Haney ("Haney Statement") at 9.On February 22, 2002, Gabriel Bogue was involved in a traffic accident (the "Accident") with the Cramers, and the parties expect the Cramers to assert liability claims against the Bogue Defendants. Gabriel Bogue was operating a 1995 Freightliner (the "Tractor"), and he was pulling a trailer owned by Bogue Enterprise. Ray Bogue Statement at 15, 28. Gabriel Bogue was hauling lumber on behalf of Georgia Pacific, and was dispatched by Ray Bogue. Gabriel Bogue Statement at 10, 20-21.
Bogue Enterprise had purchased the Tractor from Lynn Elevator. Ray Bogue Statement at 15. Bogue Enterprise and Lynn Elevator entered into their verbal purchase agreement on or about November 20, 2001. Affidavit of Ray Bogue ("Bogue Aff.") ¶ 12. The purchase price was $11,000, which Lynn Elevator withheld at a rate of $200 per week from the compensation it paid Bogue Enterprise for hauling loads for Lynn Elevator. Ray Bogue Statement at 15-17; Haney Statement at 10, 15. While in the process of paying for the Tractor, Bogue Enterprise was responsible for the Tractor's maintenance and repair. Haney Statement 16-17. Bogue Enterprise had exclusive possession of the Tractor and only Gabriel Bogue drove the Tractor after the time Bogue Enterprise took possession. Ray Bogue Statement at 16; Haney Statement at 10. While Bogue Enterprise was in the process of making payments, Lynn Elevator kept the title to the Tractor. Ray Bogue Statement at 15. Lynn Elevator also maintained the license plates and insurance on the Tractor. Id. Lynn Elevator charged Bogue Enterprise for the insurance premium. Id. at 17; Haney Statement at 13. However, Lynn Elevator did not tell Great West the Tractor had been sold. Haney Statement at 23.
National Casualty and the Bogue Defendants also assert that until such time as Bogue Enterprise had fully paid for the Tractor, the Tractor was to display only Lynn Elevator's placards and permits, Lynn elevator would have priority of dispatch, Lynn Elevator could control which Bogue Enterprise drivers could operate the Tractor, and Bogue Enterprise could not haul for a competitor of Lynn Elevator. Bogue Aff. ¶ 14. Once Bogue Enterprise paid in full for the Tractor, Bogue Enterprise would remove Lynn Elevator's signage and replace it with its own, and transfer the title, registration and insurance to Bogue Enterprise. Id.
At the time of the Accident, Great West had issued an insurance policy (the "Great West Policy") to non-party Lynn Elevator, to insure against liability claims arising out of vehicle accidents. At the same time, National Casualty had issued an insurance policy (the "National Casualty Policy") to Ray Bogue, to insure against liability claims arising out of vehicle accidents. The Great West Policy contains an "omnibus clause" that provides as follows:
1. WHO IS AN INSURED
The following are "insureds":
a. You for any covered "auto".
b. Anyone else while using with your permission a covered "auto" you own, hire or borrow.
Great West Policy at 000021.
Great West filed a complaint for declaratory judgment on June 18, 2002, requesting the Court find that Great West is not responsible for insurance coverage to the Bogue Defendants for any potential claims of the Cramers. Great West has now moved for summary judgment. National Casualty opposes Great West's motion and requests that summary judgment be awarded in its favor. The Bogue Defendants join in National Casualty's motion. The Cramers have not responded.
II. STANDARD
Summary judgment is granted "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). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the opposing party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed fact is material only if it might affect the outcome of the suit in light of the substantive law. Id.
The moving party has the initial burden to show the absence of genuine issues of material fact. See Schroeder v. Barth, 969 F.2d 421, 423 (7th Cir. 1992). In considering a summary judgment motion, a court must draw all reasonable inferences "in the light most favorable" to the opposing party. Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992). If a reasonable fact finder could find for the opposing party, then summary judgment is inappropriate. Shields Enters., Inc. v. First Chi. Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Id. The fact that both parties have filed motions for summary judgment does not affect the standard. The Court must deny both motions if there is a genuine issue of material fact. See, e.g., Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993). The Court must examine each motion on its merits, drawing all reasonable inferences against the party whose motion is under consideration. Id.
III. DISCUSSION
The question for the Court is whether Great West is obligated under the Great West Policy to provide liability coverage for the Bogue Defendants. Because the Court concludes that Great West is not under such obligation, its motion for summary judgment must be granted.
In its cross-motion for summary judgment, National Casualty hints that the Court is to decide whether the Great West Policy or the National Casualty Policy is responsible for primary coverage of the Bogue Defendants. However, issues of interpretation of the National Casualty Policy are not before the Court. National Casualty has not filed a declaratory action, and the Bogue Defendants have not filed an action against National Casualty for coverage.
The parties agree that Indiana law applies to this case. Indiana courts have long held that where a buyer takes possession of a vehicle pursuant to a conditional sales contract, the seller's possession and control of the vehicle ceases, and the buyer's use of the vehicle is by virtue of his ownership. See Weger v. Lawrence, 575 N.E.2d 659, 662 (Ind.Ct.App. 1991); Farm Bureau Mut. Ins. Co. of Ind. v. Emmons, 104 N.E.2d 413, 445 (Ind.App. 1952). The Indiana Court of Appeals explained, in Weger v. Lawrence, that the buyer cannot be an "insured" under the seller's policy that insures those using the vehicle with the seller's permission, because the buyer no longer uses the vehicle "with permission." Weger, 575 N.E.2d at 662. The Indiana Court of Appeals also has found that the definition of "owner" in Indiana's financial responsibility statute for the operation of motor vehicles applies. O'Donnell v. American Employers Ins. Co., 622 N.E.2d 570, 574 (Ind.Ct.App. 1993). That statute provides that an "owner" includes a vendee under a conditional sale agreement. See id. (citing Ind. Code § 9-13-2-121(b)).
The most important factor to consider is whether the evidence indicates a completed sale. See Royal Indem. Ins. Co. v. Shue, 182 N.E.2d 796, 799 (Ind.App. 1962). The buyer becomes the owner at the time the sale is consummated. Emmons, 104 N.E.2d at 446. Evidence of a completed sale includes that the buyer has made a down payment. See, e.g., O'Donnell, 622 N.E.2d at 573-74; Shue, 182 N.E.2d at 799-800. Once the buyer takes possession and control of the vehicle, the seller has just a lien on the vehicle, in the amount still owed. Emmons, 104 N.E.2d at 445-46.
Here, Bogue Enterprise and Lynn Elevator had agreed on the terms of the sale and Bogue Enterprise was making payments on the Tractor. Bogue Aff. ¶ 12; Ray Bogue Statement at 15-17. Bogue Enterprise also had exclusive possession of the Tractor from the date of the first payment. Ray Bogue Statement at 16; Haney Statement at 10. The Bogue Defendants argue that Lynn Elevator retained enough control over Bogue Enterprise's use of the Tractor as to have effectively retained ownership. But the Bogue Defendants' argument is contrary to the Indiana case law. The courts have held that the seller's provision of a license plate on the vehicle does not indicate ownership. See Shue, 182 N.E.2d at 799. Likewise, the fact that certificate of title had not yet been transferred is not proof of ownership, if there is other evidence of a completed sale. Id.; accord O'Donnell, 622 N.E.2d at 575 (holding that, where vehicle was sold pursuant to conditional sales agreement, seller's retention of the certificate of title maintained only a security interest in the vehicle). Bogue Enterprise also retained Lynn Elevator's placards and signage on the Tractor. Bogue Aff. ¶ 14. Bogue Enterprise promised not to haul for a competitor of Lynn Elevator, and Lynn Elevator's load had priority over those of Bogue Enterprise's other customers. Id. While these facts may show the sale agreement was favorable to Lynn Elevator, they are not enough to establish Lynn Elevator still owned the Tractor.
The Great West Policy insured only Lynn Elevator or someone using a vehicle owned by Lynn Elevator with Lynn Elevator's permission. Great West Policy at 000021. The Bogue Defendants could not have been using the Tractor with Lynn Elevator's permission at the time of the Accident, because Bogue Enterprise was already the owner of the Tractor.
Great West argues that, in the alternative, even if Bogue Enterprise were not the owner of the Tractor at the time of the Accident, the Great West Policy still does not provide coverage to the Bogue Defendants. The Great West Policy will only insure a trucker who hires a Lynn Elevator vehicle, if that trucker's own insurance provides reciprocal coverage to Lynn Elevator. Great West Policy at 000021-22. National Casualty agrees that the Bogue Defendants did not "hire" the Tractor and that the reciprocal coverage clause is not relevant.
IV. CONCLUSION
For the reasons set forth above, Great West's motion for summary judgment is GRANTED.Accordingly, National Casualty's motion for summary judgment is DENIED.