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State Farm Ins. Co. v. Travelers Indem. Co.

November 17, 2009

STATE FARM INS. CO., PLAINTIFF,
v.
TRAVELERS INDEM. CO.; ST. PAUL TRAVELERS; HERTZ CORP.; HERTZ VEHICLES, LLC; GEICO GEN. INS. CO.; SEAN GOODEVE; ERICA LOVETTE; AND LEONARD J. MYLES; DEFENDANTS.*FN1



The opinion of the court was delivered by: Hon. Glenn. T. Suddaby, United States District Judge

MEMORANDUM DECISION AND ORDER

The above-captioned action is an insurance-coverage dispute arising out of personal injuries sustained by a Syracuse police officer when he was struck and dragged by a vehicle driven by a suspect attempting to flee the scene of arrest. The action was brought by State Farm Insurance Company ("Plaintiff") against Travelers Indemnity Company and St. Paul Travelers ("Travelers Defendants"), Hertz Corporation and Hertz Vehicles LLP ("Hertz Defendants"), Geico General Insurance Company ("Defendant Geico"), Sean Goodeve ("Defendant Goodeve"), Erica Lovette ("Defendant Lovette"), and Leonard J. Myles ("Defendant Myles").

Currently before the Court are the following four motions: (1) the Travelers Defendants' motion for summary judgment (Dkt. Nos. 34-35); (2) Defendant Geico's motion for summary judgment (Dkt. No. 39); (3) the Hertz Defendants' motion for summary judgment (Dkt. No. 40); and (4) Plaintiff's motion for summary judgment (Dkt. No. 56). For the reasons set forth below, the Travelers Defendants' motion for summary judgment is denied; Defendant Geico's motion for summary judgment is granted; the Hertz Defendants' motion for summary judgment is granted; and Plaintiff's motion for summary judgment is denied.

I. RELEVANT BACKGROUND

A. Parties' Claims in this Action

On October 27, 2006, Plaintiff filed this action seeking a judgment declaring the obligations of several insurance companies regarding the personal injuries sustained by Syracuse Police Officer Defendant Goodeve in the course of his employment. (See generally Dkt. Nos. 1, 24 [Compl. and Am. Compl.].) More specifically, Plaintiff alleges that Defendant Goodeve's injuries were sustained on February 12, 2005, when a suspect whom he was about to arrest, Defendant Myles, placed his vehicle in reverse and accelerated in an attempt to flee the scene, striking and/or dragging Defendant Goodeve. (See generally Dkt. No. 24 [Am. Compl.].) Plaintiff further alleges that the incident is not covered by the uninsured motorists coverage provision of Defendant Goodeve's policy with Plaintiff because that provision covers only accidents, and the incident was caused not by an accident but by an intentional act. (Id.)

In addition to bringing the action against Defendants Goodeve and Myles, Plaintiff brings the action against the following persons or entities: Defendant Myles' girlfriend, Defendant Lovette, who rented the vehicle in question from Hertz before the incident; the Hertz Defendants, which insured the rental vehicle in question, and which denied coverage of the incident in question; the Travelers Defendants, which insured Defendant Myles' personal vehicle, and which denied coverage of the incident in question; and Defendant Geico, which insured Defendant Lovette's personal vehicle, and which denied coverage of the incident in question. (Id.)

Defendants have asserted numerous cross claims and counter claims against each other and Plaintiff. (See Dkt. Nos. 28, 29, 30, 32, 33.) Familiarity with the parties' cross claims and counter claims, as well as the factual allegations supporting each of the claims in this action, is assumed in this Decision and Order, which is intended primarily for review by the parties.

B. Related Proceedings in State Court

On or about October 17, 2006, Leonard Myles plead guilty, before Judge Anthony F. Aloi in Onondaga County Court, to an intentional assault of Officer Goodeve. See People v. Myles, Indictment No. 2006-0691-1, Index No. 06-0808, Transcript of Proceeding on 10/17/06 (Onondaga County Ct.).

On or about June 7, 2007, Officer Goodeve and his wife filed an action against Hertz, Erica Lovette and Leonard Myles in New York State Supreme Court, Onondaga County, to recover for Officer Goodeve's personal injuries. See Goodeve v. Hertz Corp., Index No. 2007-3458, RJI No. 33-08-2503, Complaint (N.Y.S. Sup. Ct., Onondaga County). Generally, in that action, the Goodeves alleged that Hertz and Lovette were vicariously liable for Myles' negligent actions. See Goodeve v. Hertz Corp., Index No. 2007-3458, RJI No. 33-08-2503, Decision at 2 (N.Y.S. Sup. Ct., Onondaga County, filed March 11, 2009) (Murphy, J.S.C.).

C. Parties' Current Motions

On December 31, 2007, the Travelers Defendants moved for summary judgment essentially on the ground that Defendant Myles' use of the rental vehicle was not covered by their insurance policy with him regarding his personal vehicle under the circumstances. (Dkt. Nos. 34-35.) More specifically, the Travelers Defendants assert two alternative arguments in support of their motion: (1) the incident is not covered by Defendant Myles' insurance policy with the Travelers Defendants because the relevant provision of the policy covers only accidents, and the incident was caused not by an accident but by an intentional act; and (2) Defendant Myles failed, as a matter of law, to provide the Travelers Defendants with timely notice of the incident, the loss, and the claim. (Id.)

On January 11, 2008, Defendant Geico moved for summary judgment essentially on the ground that Defendant Myles' use of the rental vehicle was not covered by Defendant Geico's insurance policy with Defendant Lovette regarding her personal vehicle under the circumstances. (Dkt. No. 39.) More specifically, Defendant Geico asserts four alternative arguments in support of its motion: (1) the incident is not covered by Defendant Lovette's insurance policy with Defendant Geico because the relevant provision of the policy covers only an "owned auto" or "non-owned auto," and the rental vehicle was neither of those things; (2) the incident is not covered by Defendant Lovette's insurance policy with Defendant Geico because the relevant provision of the policy covers only accidents, and the incident was caused not by an accident but by an intentional act; (3) the incident is not covered by Defendant Lovette's insurance policy with Defendant Geico because the relevant provision of the policy covers only "any other person using the auto with your (the named insured) permission" provided that "[t]he actual use . . . [was] within the scope of that permission," and Defendant Myles' use of the rental vehicle was outside the scope of Defendant Lovette's permission in that it was part of the commission of a crime; and (4) as a matter of law, Defendant Geico was not provided with timely notice of the incident, the loss, and the claim. (Id.)

On January 15, 2008, the Hertz Defendants moved for summary judgment essentially on the ground that Defendant Myles' use of the rental vehicle was not covered by its insurance policy with Defendant Lovette under the circumstances. (Dkt. No. 40.) More specifically, the Hertz Defendants assert three arguments in support of their motion: (1) the rental agreement was violated because Defendant Myles was an unauthorized operator, within the meaning of the rental agreement; (2) even if Defendant Myles was an authorized operator within the meaning of the rental agreement, the rental agreement was violated because Defendant Myles engaged in reckless conduct (a fact that Defendant Myles is collaterally estopped from denying) and conduct that was properly charged as a crime, within the meaning of the rental agreement, which was clear and unambiguous; and (3) Plaintiff's claim under Vehicle and Traffic Law Section 388 is barred by the Graves Amendment to the Transportation Equity Act of 2005, 49 U.S.C. § 30106(a), which preempts Section 388. (Id.)

On March 11, 2008, Plaintiff moved for summary judgment. (Dkt. No. 56.) In support of its motion, Plaintiff asserts two alternative arguments: (1) the incident is not covered by Defendant Goodeve's insurance policy with Plaintiff because the relevant provision of the policy covers only accidents, and the incident was caused not by an accident but by an intentional act; and (2) as a matter of law, Plaintiff was not provided with timely notice of the incident, the loss, and the claim. (Id.)

Each of the motions has been fully briefed. It is worth adding only that, on April 8, 2009, Defendant Lovette filed, for the Court's "review and consideration," a Decision and Order issued by Justice James P. Murphy on March 11, 2009, and April 3, 2009, in the action of Goodeve v. Hertz Corp., Index No. 2007-3458, RJI No. 33-08-2503 (N.Y.S. Sup. Ct., Onondaga County). (Dkt. No. 71.)*fn2 Subsequently, the parties were permitted to file letter briefs in this action regarding how ...


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