Metropolitan v. Crook

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

METROPOLITAN CASUALTY INSURANCE COMPANY,
Plaintiff/Appellee,

v.

BRENDA CROOK, as the aunt of her minor niece, ALEXIS EVANS;
CAMEO CARROLL, Defendants/Appellants.

No. 1 CA-CV 18-0363
FILED 4-23-2019

Appeal from the Superior Court in Yavapai County
No. P1300CV201600094
The Honorable David L. Mackey, Judge

AFFIRMED

COUNSEL

Peshkin & Kotalik, PC, Phoenix
By E.J. Kotalik, Jr.
Counsel for Plaintiff/Appellee

Goldberg & Osborne LLP, Mesa
By Ryan Lamb
Counsel for Defendants/Appellants
 METROPOLITAN v. CROOK, et al.
Decision of the Court

MEMORANDUM DECISION

Judge Kenton D. Jones delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Maria Elena Cruz joined.

J O N E S, Judge:

¶1 Appellants challenge the trial court’s summary judgment
ruling finding Cameo Carroll was not covered under an automobile policy
issued to Laci Navarro by Metropolitan Casualty Insurance Company
(Metropolitan). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 In July 2010, Navarro loaned a 2005 Toyota Corolla to her
mother, Terri Martin, with specific instructions not to let anyone other than
herself and her then-husband drive it. Martin agreed to this condition.

¶3 After Martin damaged the Corolla, she had it towed to
Carroll’s father’s repair shop. When the repairs were complete in
September 2010, Martin asked Carroll, her employee and friend, to deliver
the Corolla to her. On the return trip, the Corolla was struck by another
vehicle as Carroll pulled out of a gas station parking lot. Carroll’s three-
year-old daughter, A.E., was seriously injured in the collision.

¶4 A.E., through her aunt, Brenda Crook, sought compensation
for her injuries from an insurance policy (the Policy) issued by Metropolitan
premised upon Carroll’s negligent operation of the Corolla. The Policy was
issued to Navarro and James London II and designated only Navarro and
London as named insureds. In February 2016, Metropolitan filed a
complaint seeking a declaration that Carroll was not an “insured” under
the Policy and therefore Metropolitan had no obligation to defend or
indemnify any claims against Carroll arising out of the September 2010
accident.

¶5 After considering the parties’ competing motions for
summary judgment, the trial court entered judgment in Metropolitan’s
favor. Appellants timely appealed the final judgment, and we have

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Decision of the Court

jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) §§ 12-
120.21(A)(1)1 and -2101(A)(1).

DISCUSSION

¶6 Appellants challenge the trial court’s order granting
summary judgment in Metropolitan’s favor on its complaint for declaratory
relief. The interpretation of insurance contracts presents a question of law
subject to de novo review. First Am. Title Ins. v. Johnson Bank, 239 Ariz. 348,
350, ¶ 8 (2016) (quoting First Am. Title Ins. v. Action Acquisitions, L.L.C., 218
Ariz. 394, 397, ¶ 8 (2008)). We interpret such contracts in accordance with
the plain and ordinary meaning of the words contained therein. Id. (citing
Sparks v. Republic Nat’l Life Ins., 132 Ariz. 529, 534 (1982)). In the course of
our review, “we determine de novo whether any genuine disputes of
material fact exist and whether the trial court correctly applied the law,
viewing the facts in the light most favorable to . . . the non-prevailing
party.” Robertson v. Alling, 237 Ariz. 345, 347, ¶ 8 (2015) (citing Ariz. R. Civ.
P. 56(a), and BMO Harris Bank N.A. v. Wildwood Creek Ranch, L.L.C., 236 Ariz.
363, 365, ¶ 7 (2015)).

¶7 The Policy’s insuring clause states:

We will pay damages for bodily injury and property damage
to others for which the law holds an insured responsible
because of an accident which results from the ownership,
maintenance or use of a covered automobile, a non-owned
automobile or trailer while being used with a covered
automobile or non-owned automobile. We will defend the
insured, at our expense with attorneys of our choice, against
any suit or claim seeking these damages. We may investigate,
negotiate or settle any such suit or claim.

An “insured” under the Policy is defined to include:

with respect to a covered automobile:

a. you;

b. any relative; or

1 Absent material changes from the relevant date, we cite the current
version of rules and statutes.

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c. any other person using it within the scope of
your permission.

The Policy also defines “you” as “the person(s) named in the Declaration of
this policy as named insured and the spouse of such person or persons if a
resident of the same household.” The Policy’s terms are consistent with
Arizona’s omnibus statute, which requires that all motor vehicle liability
policies issued in Arizona “insure the person named in the policy as the
insured and any other person, as insured, using the motor vehicle or motor
vehicles with the express or implied permission of the named insured.”
A.R.S. § 28-4009(A)(2). We construe the omnibus statute broadly in favor
of providing coverage for permissive drivers. Hille v. Safeco Ins. Co. of Am.,
25 Ariz. App. 353, 354 (1975). But it is Appellants’ burden to present facts
establishing that Carroll had the permission necessary to trigger coverage.
Home Ins. v. Keeley, 20 Ariz. App. 200, 202 (1973) (citing Hartford Accident &
Indem. Co. v. Shaw, 273 F.2d 133, 137 (8th Cir. 1959), and Allstate Ins. v. Smith,
471 S.W.2d 620, 624 (Tex. Civ. App. 1971)).

¶8 Permission may be express or implied. Id. (citing Jurd v. Pac.
Indem. Co., 371 P.3d 569, 572 (Cal. 1962)). However, both the Policy and the
omnibus statute direct that such permission come from a named insured.
See supra ¶ 7.

¶9 Appellants do not contend that either of the named insureds
— Navarro or London — gave Carroll express permission to drive the
Corolla, arguing instead that “there were two grants of authority to use the
[Corolla]” — one from Navarro to Martin and a second from Martin to
Carroll. Even assuming permission could be granted in a two-step manner,
the undisputed evidence indicates Navarro specifically instructed Martin
not to let anyone other than herself or her husband drive the Corolla.
Accordingly, Carroll did not have express permission from a named
insured to drive the Corolla.

¶10 Appellants also contend that Carroll had implied permission
to drive the Corolla. Permission to use a vehicle, without more, does not
authorize the permittee to allow another to use it. State Farm Mut. Auto Ins.
v. Williamson, 331 F.2d 517, 519 (9th Cir. 1964) (citation omitted). However:

If an owner reasonably should anticipate that, in view of the
scope and nature of the permission granted (even if less than
unfettered dominion), and because of the permittee’s
relationship to another, the permittee will allow that other

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Decision of the Court

[person] to use the car, the owner’s permission, without more,
can be found to encompass permission for that use.

Id. at 520. Thus “‘[i]mplied permission’ may be inferred where there is a
course of conduct or relationship between the parties indicative of mutual
acquiescence or a lack of objection under circumstances signifying assent.”
Keeley, 20 Ariz. App. at 202 (collecting cases).

¶11 No such course of conduct implying that Carroll received
permission from the named insureds exists here. There is no evidence that
Navarro or London knew who Carroll was before the accident, and Carroll
did not know who owned or insured the Corolla. Nor is there any
indication that Navarro or London knew or had reason to know that Martin
had permitted or would permit other persons to drive the Corolla against
Navarro’s instructions such that a fact question regarding implied
permission would prevent summary judgment. See Williamson, 331 F.2d at
520 (affirming the jury’s finding that the insureds’ twenty-year-old son had
implied permission to allow his friends to operate the insured vehicle
where evidence showed the son frequently disregarded the insureds’ rules
limiting his use of the vehicle without significant consequence). Therefore,
Carroll did not have implied permission to drive the Corolla.

¶12 Finally, Appellants argue Martin had apparent authority to
grant Carroll permission to drive the Corolla. Apparent authority arises
when a principal induces third persons to believe that a person was her
agent, even if she conveyed no actual or express authority to that person.
See Escareno v. Kindred Nursing Ctrs. W., L.L.C., 239 Ariz. 126, 130, ¶ 8 (App.
2016) (quoting Reed v. Gershweir, 160 Ariz. 203, 205 (App. 1989)). Again,
there is no evidence that Navarro or London, the persons capable of
extending the benefits of the Policy, ever knew of or communicated with
Carroll prior to the accident. There is no apparent authority.

¶13 Because the undisputed evidence establishes that Carroll was
not a named insured, was not a relative of a named insured, and did not
have express or implied permission from a named insured to drive the
Corolla, the trial court did not err in concluding as a matter of law that she
was not an “insured” under the Policy.2

2 Because we conclude Carroll was not an “insured” covered by the
Policy, we need not and do not address whether her decision to drive the
Corolla to a gas station before returning it to Martin removed her from
coverage.

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Decision of the Court

CONCLUSION

¶14 The trial court’s order is affirmed.

¶15 Both Appellants and Metropolitan request an award of
attorneys’ fees and costs incurred on appeal pursuant to A.R.S. § 12-
341.01(A). Appellants are not successful parties, and their request is denied.
As the successful party to a claim arising out of contract, Metropolitan is
awarded its reasonable attorneys’ fees and costs incurred on appeal upon
compliance with ARCAP 21(b). See Nationwide Mut. Ins. v. Granillo, 117
Ariz. 389, 395 (App. 1977) (awarding attorneys’ fees under A.R.S. § 12-
341.01(A) to the successful party in an action seeking a declaratory
judgment interpreting an insurance contract).

AMY M. WOOD • Clerk of the Court
FILED: JT

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