GREGORY DARDEN v. PROGRESSIVE MOUNTAIN INSURANCE COMPANY ( 2022 )

THIRD DIVISION
DOYLE, P. J.,
REESE, J., and SENIOR APPELLATE JUDGE PHIPPS
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
June 29, 2022
In the Court of Appeals of Georgia
A22A0369. DARDEN v. PROGRESSIVE MOUNTAIN
INSURANCE COMPANY et al.
DOYLE, Presiding Judge.
Following a traffic accident involving Gregory Darden and German Fandino
Linares (“Fandino”), Darden filed a breach of contract suit against Progressive
Mountain Insurance Company (“Progressive”) and Ethio-American Insurance
Company (“Ethio-American”) (collectively, “the defendants”). The trial court granted
summary judgment to the defendants, and Darden now appeals, arguing that the trial
court erred by (1) finding that Ethio-American’s fleet taxi insurance policy and
Fandino’s Progressive policy for his personal vehicle both excluded coverage of the
vehicle at issue at the time of the wreck; and (2) failing to find that public policy
requires that liability insurance under one or both policies must be available to
Darden under the facts of this case. For the reasons that follow, we affirm in part and
reverse in part.
“Summary judgment is proper when there is no genuine issue of material fact
and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). We
apply a de novo standard of review and view the evidence in the light most favorable
to the nonmovant.”1
The record shows that at approximately 6:30 a.m., on September 19, 2017,
Darden, who did not have an uninsured motorist policy, was driving a rental car,2 and
he was injured in a wreck with a taxi driven by Fandino, who recently had ended his
over-night shift and was en route to pick up breakfast before going home. Fandino
deposed that he was turning left across a multi-lane road to a restaurant, and was hit
1
(Citations and punctuation omitted.) Hays v. Ga. Farm Bureau Mut. Ins. Co.,
314 Ga. App. 110, 111-112 (722 SE2d 923) (2012), quoting Matjoulis v. Integon
Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).
2
Specifically, Darden averred that he “was injured in a motor vehicle wreck
that occurred [in the] early morning of September 19th, 2017. The vehicle I was
operating was rented from Hertz and did not have uninsured motorist coverage. I did
not own a personal vehicle or reside with a resident relative that owned a vehicle with
uninsured motorist coverage. I am aware of no other insurance coverage that would
cover the loss I suffered on September 19th, 2017.”
2
by Darden, who was traveling through the right-most lane. At the time of the
accident, neither person exhibited outward signs of injury, but Darden later was
treated for injuries requiring several thousands of dollars of treatment. Pictures of
Fandino’s vehicle showed slight damage to the rear passenger-side door and quarter
panel.
At the time of the accident, Fandino was driving a 2011 Honda Civic, which
he had leased from Juan Phun for use as a taxi. The lease consisted of an oral
agreement between Fandino and Phun, which agreement began approximately four
weeks prior to the accident with Darden. Under the agreement, Fandino paid Phun
$200 a week to lease the Civic.3 Phun imposed no restrictions on the use of the Civic
by Fandino, who was allowed to use it 24 hours a day and to drive it for personal
tasks as well as transporting fares; Fandino deposed, however, that he used it only for
taxi services.
Phun also supplied insurance from Ethio-American on the Civic and other
vehicles he leased to other drivers. The policy listed specific vehicles as well as
specific drivers to whom the policy applied. Phun had drivers come and go
3
Fandino also paid OK Taxi $70-$85 each week for customers directed to him
via the company phone application, but that company was not leasing the Civic to
Fandino and is not a part of this litigation.
3
frequently, and in order to have them added to the policy when they leased a vehicle,
he simply sent a copy of their drivers licenses to Ethio-American, which had rarely
rejected a driver for insurance while he used the company. Usually Phun would go
to the Ethio-American office and add drivers to the policy immediately when they
began leasing a vehicle, but he deposed that he had an international trip scheduled
approximately ten days after Fandino leased the Civic, and he failed to take Fandino’s
license to the insurance office prior to going on the trip. Fandino deposed that he had
a Georgia drivers license and also had a personal vehicle (a Toyota Yaris) for which
he had insurance under Progressive. Despite not adding Fandino to the policy, Phun
gave Fandino a copy of an insurance card from Ethio-American for the Civic, and it
was Fandino’s understanding from Phun that he was covered by that insurance while
he was driving the Civic.
After being notified of the accident, Progressive denied coverage to Fandino,
stating that it would not cover the claim against him because the vehicle was being
used as a taxi at the time of the incident. Ethio-American also denied coverage on the
basis that Fandino was not a covered driver under its policy.
Darden sued both Phun and Fandino, and after both defaulted, Darden received
a judgment of approximately $220,000 against them. After Phun and Fandino
4
assigned their rights to him, Darden sued Ethio-American and Progressive for breach
of contract, attorney fees, and for bad faith litigation under OCGA § 13-6-11.
Applicable to the claims against Ethio-American, its policy included coverage for ten
listed automobiles, including the Civic at issue. Seven drivers were listed as well, but
Fandino was not one of them. The policy stated that
[t]he motor vehicle(s) listed on your Declaration page are NOT covered
motor vehicle(s) under this Policy against liability for bodily injury or
property damage if you allow someone to drive or operate the motor
vehicle(s) other than: . . . another person [who] has been approved by
Ethio-American and the State of Georgia or local taxi cab regulatory
commission as an approved and licensed taxi cab driver with a valid
permit. Unless such other person is listed on the Declaration Page as a
named insured driver or on another policy with your named taxicab
company on the Declaration Page for the relevant period of coverage,
such other person has NOT been approved by Ethio-American as a
driver to operate the motor vehicle(s) listed on your Declaration Page.
It also stated that Ethio-American would
not pay for bodily injury or property damage claims that are caused by
an otherwise covered accident or loss that occurs when the motor
vehicle(s) listed on your Declaration Page are being used for personal
purposes by you, any approved drivers, or any other person. For
purposes of this Policy, a motor vehicle is being used for “personal
purposes” when it is being driven, parked, or stored in any manner for
5
any purpose other than the pick-up and transport of passengers for hire
by an approved driver. If you use the motor vehicle(s) listed on your
Declaration Page for personal purposes, you must obtain separate
insurance for such uses that are not part of this Policy for commercial
use only.
This exclusion of coverage was repeated in a section titled, “Exclusions to Coverage
for Property Damage and Bodily Injury,” which stated that the policy did
not provide you with liability coverage for bodily injury damages,
property damages, or any other claims of any kind that are caused by or
arise out of the following: . . . Drivers and motor vehicles not listed on
the Declaration Page. This Policy does not apply to accidents or losses
of any kind that do not involve covered drivers and covered motor
vehicle(s) listed on your Declaration Page[; or . . . ] Vehicle(s) used for
personal use. This Policy does not provide insurance protection to you
or any of the drivers listed on the Declaration page when the vehicles
listed on the Declaration are used for personal purposes.
Pursuant to his personal Progressive policy, Fandino was a covered driver and
his personal Toyota Yaris was listed as a covered automobile4. The policy also
defined “Additional Auto” as “an auto you become the owner of during the policy
4
The policy defined “Covered auto” as “any auto or trailer shown on the
declarations page for the coverages applicable to that auto or trailer; [or] . . . any
additional auto[.]”
6
period that does not permanently replace an auto shown on the declarations page,”
and Progressive agreed to cover an additional auto
if: [A] we insure all other autos you own; [B] the additional auto is not
covered by any other insurance policy; [C] you notify us within 30 days
of becoming the owner of the additional auto; and [D] you pay any
additional premium due. An additional auto will have the broadest
coverage we provide for any auto shown on the declarations page. If you
ask us to insure an additional auto more than 30 days after you become
the owner, any coverage we provide will begin at the time you request
coverage.
The policy specifically excluded coverage for “bodily injury or property damage
arising out of the ownership, maintenance or use of any vehicle or trailer while being
used: [A] to carry persons or property for compensation, fee, salary, or wages; [B] for
retail or wholesale delivery; or [C] for ride-sharing activity.”5 It also excluded “bodily
5
The policy defined “ride sharing activity” as
the use of any vehicle to provide transportation of persons or property
in connection with a transportation network company from the time a
user logs on to, or signs in to, any online-enabled application, software,
website or system until the time the user logs out of, or signs off of, any
such online-enabled application, software, website or system, whether
or not the user has accepted any passenger(s) or delivery assignment,
including the time the user is on the way to pick up any passenger(s) or
7
injury or property damage arising out of the ownership, maintenance or use of any
vehicle owned by you or furnished or available for your regular use, other than a
covered auto for which this coverage has been purchased.”
After the parties filed cross-motions for summary judgment, the trial court
determined that the facts surrounding the accident excluded the accident from
coverage under both policies and granted summary judgment to Progressive and
Ethio-American. This appeal followed.
1. Darden argues that the trial court erred by determining that the Ethio-
American policy did not cover the accident. We disagree.
[I]n Georgia, insurance is a matter of contract, and the parties to
an insurance policy are bound by its plain and unambiguous terms.
Thus, when faced with a conflict over coverage, a trial court must first
determine, as a matter of law, whether the relevant policy language is
ambiguous. A policy which is susceptible to two reasonable meanings
is not ambiguous if the trial court can resolve the conflicting
interpretations by applying the rules of contract construction. Where a
term of a policy of insurance is susceptible to two or more reasonable
constructions, and the resulting ambiguity cannot be resolved, the term
property, or is transporting any passenger(s) or property.
8
will be strictly construed against the insurer as the drafter and in favor
of the insured. If a policy exclusion is unambiguous, however, it must
be given effect even if beneficial to the insurer and detrimental to the
insured. We will not strain to extend coverage where none was
contracted or intended.6
In response to the proliferation of non-taxi based ride-share companies, the
Georgia Legislature updated legislation related to taxis and other ride-share services,
including OCGA § 40-1-193.1, which required taxi services operating in Georgia to,
among other things, “[o]btain and maintain personal injury and property damage
liability insurance, which shall provide for the protection of passengers and property
carried and of the public against injury in the coverage amounts as required by law.”7
In this case, Phun obtained and maintained liability insurance for his drivers and
vehicles, but he failed to have Fandino added as a driver as required by the plain
language of the policy.8 The requirement of having drivers approved by Ethio-
6
(Citations and punctuation omitted.) Hays, 314 Ga. App. at 111-112 (1).
7
OCGA § 40-1-193.1 (c) (4). See also Ga. L. 2016, p. 767, § 2/SB 320.
8
See Southeastern Security Ins. Co. v. Empire Banking Co., 230 Ga. App. 755,
757 (3) (498 SE2d 282) (1998) (holding that coverage was excluded because insured
failed to notify insurance company of all operators and household members as
required).
9
American is clear and unambiguous, and thus, the trial court correctly granted
summary judgment regarding Darden’s claims against Ethio-American.9
2. Darden also argues that the trial court erred by granting summary judgment
to Progressive. We agree.
(a) As an initial matter, the ride-sharing exclusion does not apply in this
instance because Fandino was not engaged in ride-sharing activity at the time of the
accident. He deposed that he had finished working for the day and was going to get
breakfast before going home. Progressive’s argument that he could have picked up
another fare after breakfast is purely speculative, and it is undisputed that Fandino
had no fare at that time. Thus, the accident did not occur “while being used: [A] to
carry persons or property for compensation, fee, salary, or wages, . . . or [C] for ride-
sharing activity”10 and thus, this exclusion did not apply to exclude coverage in this
incident.
9
Cf. Ison v. State Farm Fire & Cas. Co., 230 Ga. App. 554, 555 (496 SE2d
478) (1998) (holding that driver exclusions, “which are clear, unambiguous[,] and
supported by consideration[,] are enforceable” and do not violate public policy or
compulsory insurance laws).
10
(Emphasis supplied.)
10
(b) The trial court also found (and Progressive also argues) that the Civic was
not a covered automobile because the accident fell within the “regular use” exclusion
— the exclusion of coverage for “bodily injury or property damage arising out of the
ownership, maintenance[,] or use of any vehicle owned by you or furnished or
available for your regular use, other than a covered auto for which this coverage has
been purchased.”11 On the other hand, Darden argues that because Fandino’s rental
of the Civic from Phun began fewer than 30 days prior to the accident, the Civic was
covered as an “additional auto”12 under the policy and therefore was not excluded by
the “regular use” exclusion. We agree.
The purpose of such a regular use provision is to allow for “occasional or
incidental use of other cars without the payment of an additional premium, but to
exclude the habitual use of other cars, which would increase the risk on the insurance
11
See Hays, 314 Ga. App. at 111-112 (1); Nghiem v. Allstate Ins. Co., 292 Ga.
App. 588, 590 (664 SE2d 925) (2008) (discussing a regular-use exclusion).
12
“Auto,” is defined as “a land motor vehicle: a. of the private passenger,
pickup body, or cargo van type; b. designed for operation principally upon public
roads; c. with at least four wheels; and d. with a gross vehicle weight rating of 12,000
pounds or less, according to the manufacturer’s specifications. However, ‘auto’ does
not include golf carts, step-vans, parcel delivery vans, or cargo cutaway vans or other
vans with cabs separate from the cargo area.” There is no dispute that the Civic is an
“auto.”
11
company without a corresponding increase of the premium.”13 Thus, Fandino’s use
of the Civic normally would be excluded if he had daily use of the vehicle without
also adding it to the policy. But in this case, the plain language of the “additional
auto” clause of the policy allows for a 30-day time period during which the policy
holder may acquire another automobile that would otherwise be excluded under the
regular-use provision and have it insured to the same extent of the explicitly listed
automobiles.
Progressive argues and the trial court found that the Civic did not qualify as an
additional auto because Fandino did not “own” the Civic. “Own” is not defined in the
Progressive policy.14 The definition of owner is defined by Black’s Law Dictionary
as “[o]ne who has the right to possess, use, and convey something. . . .”15 Under the
13
(Punctuation omitted.) Nghiem, 292 Ga. App. at 590, quoting Mattox v.
Cotton States Mut. Ins. Co., 156 Ga. App. 655, 657 (275 SE2d 667) (1980).
14
Part IV of the policy, which addresses “DAMAGE TO A VEHICLE,” and
addresses collision and comprehensive coverages, defines “Non-owned auto” as “an
auto that is not owned by or furnished or available for the regular use of you, a
relative, or a rated resident while in the custody of or being operated by you, a
relative, or a rated resident with the permission of the owner of the auto or the person
in lawful possession of the auto.” Fandino’s declaration page listed his coverage as
“Liability to others.”
15
See Black’s Law Dictionary, p. 508 (2nd pocket ed. 1996).
12
limited terms of the oral agreement between Phun and Fandino, Fandino paid Phun
weekly for exclusive use and possession of the Civic. He could use it for personal and
job related driving, and there is no evidence that another taxi driver could take the
Civic from Fandino during the time period. Additionally, there is nothing in the
limited terms of the oral agreement that prohibited Fandino from subleasing the Civic
to another individual during the time period that he rented it from Phun. If “a term of
a policy of insurance is susceptible to two or more reasonable constructions, and the
resulting ambiguity cannot be resolved, the term will be strictly construed against the
insurer as the drafter and in favor of the insured.”16 Although obviously limited,
Fandino had at least some ownership interest in the Civic, which would have made
the vehicle insurable by Fandino under the additional auto provision.17 Thus, the
Civic was not excluded by the regular-use exclusion because fewer than 30 days had
elapsed since Fandino leased the Civic from Phun, and the trial court erred by finding
16
Hays, 314 Ga. App. at 112 (1).
17
See id. See also James v. Penn. Gen. Ins. Co., 167 Ga. App. 427, 430-431 (2)
(306 SE2d 422) (1983) (discussing the definition of owner under a policy).
13
otherwise.18 Accordingly, we reverse the trial court’s order granting summary
judgment as to Progressive.
3. Based on the forgoing, we need not address Darden’s arguments that the
exclusions in either of the policies offend public policy as explained in Federated
Mut. Ins. Co. v. Dunton.19
Judgment affirmed in part and reversed in part. Reese, J., and Senior Appellate
Judge Herbert E. Phipps concur.
18
Compare State Automobile Mut. Ins. Co. v. Todd, 309 Ga. App. 213, 214-215
(1) (709 SE2d 565) (2011) (driver was excluded under the regular use provision
because she had regularly used the owner’s car for almost a year but was not added
to the policy as an insured).
19
213 Ga. App. 148 (444 SE2d 123) (1994). See also Cotton States Mut. Ins.
Co. v. Neese, 254 Ga. 335, 341-342 (2) (329 SE2d 136) (1985) (“[limiting] exclusion
in issue is unenforceable as against public policy only to the extent of insurance
required by our compulsory insurance law at the time of the collision”).
14