American States Ins v. Est of Effie Nabors

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 96-60282
Summary Calendar
_______________
AMERICAN STATES INSURANCE COMPANY,
Plaintiff-
Counter-Defendant-
Appellee,
VERSUS
THE ESTATE OF EFFIE NABORS;
LESLIE LEATHERMAN, d/b/a Quick Tune, Inc.,
and
TULLY MCCRORY,
Defendants-
Counter-Claimants-
Appellants.
_________________________
Appeal from the United States District Court
for the Northern District of Mississippi
(3:94CV179-B)
_________________________
October 9, 1996
Before SMITH, DUHÉ, and BARKSDALE, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
set forth in 5TH CIR. R. 47.5.4.
1
The Estate of Effie Neighbors,1 Leslie Leatherman (d/b/a
“Quick Tune, Inc.”), and Tully McCrory (collectively, the “defen-
dants”) appeal a summary judgment in favor of American States
Insurance Company (“ASI”). Finding no error, we affirm.
I.
This action arises out of a wrongful death claim filed on
behalf of the heirs of Effie Neighbors against Tully McCrory,
individually and in his capacity as an employee of Quick Tune, Inc.
("Quick Tune"). It is undisputed that McCrory, while operating his
wife’s vehicle on the Quick Tune premises, negligently collided
with Neighbors as she walked across the Quick Tune parking lot,
from which collision Neighbors later died.
ASI, the underwriter of a garage operations liability policy
for Quick Tune, brought this declaratory action to determine
whether the accident is covered under the liability policy. The
district court granted summary judgment in favor of ASI, concluding
that Neighbors’s injury did not arise from McCrory’s use of an
automobile in the insured’s garage operations or from activities
necessary or incidental to the garage business.
II.
We review summary judgment de novo. See Hanks v. Transconti-
1
This case apparently was captioned with an incorrect spelling, "Nabors."
2
nental Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992).
Summary judgment is appropriate "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).
The gravamen of defendants’ theory of coverage is that because
McCrory was acting in the scope of employment at the time Neighbors
was struck, the ASI policy should attach. But whether McCrory was
acting in the scope of employment2 is inapposite to the question of
whether ASI is responsible for the injuries; we look to the garage
operations liability policy to determine the latter.
The ASI policy covers bodily injury caused by an accident and
resulting from “garage operations” involving the ownership,
maintenance, or use of a “covered automobile.” Under the policy
terms, a “covered automobile” is one owned by an employee or member
of his household while used in the garage business. “Garage
operations” include the ownership, maintenance, or use of a
“covered automobile” and all operations necessary or incidental to
a garage business. Hence, in order for coverage to attach to the
2
Defendants insist that, as a fringe benefit of employment, Quick Tune
permitted its employees to service their own vehicles without charge. McCrory
contends, in turn, that because he was proceeding to service the vehicle at the
time he struck Neighbors, he was acting within the scope of employment. Whether
such actions were undertaken within the scope of employment is indeed relevant
to Neighbors’s ability to seek damages from Quick Tune under the appropriate
Mississippi state law governing employer/employee responsibilities, but it does
not bear on the question of insurance coverage.
3
accident, McCrory’s wife’s car must have been “used in the garage
business” or “necessary or incidental to a garage business.”
Defendants posit that Quick Tune’s permitting its employees to
service their own cars free of charge, which McCrory alleges that
he was intending to do when he negligently backed over Neighbors,
is sufficient to show that the car was used or was necessary or
incidental to the garage business. Without any legal citation,
defendants proffer a rule that actions of Quick Tune employees from
which it receives benefitSShere, the purported employee recruitment
advantages and skill development opportunities attendant to the
policy of allowing employees to service their cars without
chargeSSevince use in, or necessary or incidental to, the garage
business.
Such a rule, however, would strain the plain and ordinary
meaning of the language of the policy, bringing within its ambit
activities that the parties did not, at the time of contracting,
contemplate or intend to include.3 In contrast, were the benefits
3
See Travelers Indem. Co. v. Nix, 644 F.2d 1130, 1132 (5th Cir. Unit B May
1981):
It is quite apparent that the parties in contracting for this insurance
policy did not contemplate anything other than what the policy plainly
intends: coverage for liability arising out of the conduct of the
business, or incidental to the business. . . . The policy does not
provide coverage for personal liability arising from personal matters
and cannot be extended to provide coverage for such liability.
It is also important to note that we do not intend, by our use of the term
“personal liability,” to hinge our decision on the contested fact issue of whether
McCrory was “on the clock” or on his personal time (intending to pick up some maps
for his impending hunting trip) when he hit Neighbors. Rather, we use the term
“personal” in contrast to activities that are incidental or necessary to the garage
business.
4
conferred upon Quick Tune a result of a condition of
employmentSSi.e., if Quick Tune required its employees to shore up
their mechanical skills by practicing on their own c-
arsSSdefendants’ proposed rule might be limited appropriately in
scope. Because we conclude that the district court properly
determined that as a matter of law McCrory’s use of his wife’s
automobile at the time he struck Neighbors was not a garage
business use or incidental or necessary to a garage business, we
affirm.4
III.
Defendants next contend that this action should be dismissed
as to all parties because the Estate of Neighbors did not receive
service of process within 120 days of ASI’s filing suit. See FED.
R. CIV. P. 4(j). ASI does not contest its failure to meet the 120-
day requirement but notes that the Estate filed an answer in
September 1995 in which it did not assert defect in service as a
defense. Under FED. R. CIV. P. 12(h)(1)(B), the defense of
insufficient service of process is waived unless made in a party’s
first responsive pleading or an amendment thereto allowed as a
matter of course. See Kersh v. Derozier, 851 F.2d 1509, 1511 (5th
Cir. 1988).
4
Because we affirm summary judgment after a de novo review of the record,
we need not reach defendants’ second issue on appeal, which is that the district
court abused its discretion in denying their motion for reconsideration of
summary judgment.
5
Finally, defendants challenge the grant of their own motion to
sever the Estate from these proceedings on the ground that the
Estate was not a necessary party. Defendants expressly requested
such action of the district court, and the court complied, so
defendants may not complain. See Tel-phonic Serv., Inc. v. TBS
Int’l, Inc., 975 F.2d 1134, 1137 (5th Cir. 1992).
AFFIRMED.
6