NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0229n.06
Case No. 14-5955 FILED
Mar 25, 2015
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
STATE FARM MUTUAL AUTOMOBILE )
INSURANCE COMPANY, )
)
Plaintiff-Appellee, ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
v. ) TENNESSEE
)
KANIKA DEMBLA, )
)
Intervening Defendant-Appellant. )
)
BEFORE: SILER, BATCHELDER, and ROGERS, Circuit Judges.
SILER, Circuit Judge. Intervening defendant Kanika Dembla (“Dembla”) appeals the
district court’s grant of summary judgment in favor of State Farm Mutual Automobile Insurance
Company (“State Farm”). The district court found no insurance coverage was available to Shaun
Dunlap (“Shaun”), the driver of the vehicle that injured Dembla, under the State Farm policy at
issue. For the following reasons, we AFFIRM the district court’s grant of summary judgment in
favor of State Farm.
I.
In 2012, Shaun lived with his parents, George and Judy Dunlap. State Farm issued an
automobile insurance policy (the “Policy”) to George Dunlap––the named insured––for his Ford
Case Nos. 14-5955, State Farm Mut. Auto. Ins. Co. v. Kanika Dembla
pickup truck for a six-month period, expiring on July 25, 2012. Shaun previously had insurance
for his Pontiac, but State Farm cancelled the coverage in January 2012 for non-payment.
Amanda Robertson (“Amanda”), Shaun’s friend, asked him to “house sit” at her parents’
house to feed the dogs during the first week of July 2012 while she and her parents were on
vacation. He previously had taken care of the Robertsons’ pets on numerous occasions when the
Robertsons were out of town.
Amanda’s automobile and Mr. Robertson’s pickup truck were at the Robertsons’ house
while they were out of town. The keys to Mr. Robertson’s truck were in a kitchen cabinet.
On July 3, 2012, while house sitting, Shaun texted Amanda, saying: “Btw [by the way] if
your car needs gas I’m happy to go fill it up lol [‘laughing out loud’].” Amanda responded by
saying, “Haha[]. It’s full. Thanks.:)” Shaun responded, “Ok. Just trying to be helpful.” Both
Amanda and Shaun testified that the suggestion that Shaun drive Amanda’s car in the July 3 text
exchange was a joke.
On July 7, 2012, at approximately 3:00 a.m., Shaun received a call from a friend who was
intoxicated and needed a ride. When Shaun tried to leave the Robertsons’ house to pick up his
friend, he had trouble with the transmission in his Pontiac. Because he could not get his vehicle
in reverse, he decided to drive Mr. Robertson’s truck.1 Shaun fell asleep at the wheel at
approximately 6:30 a.m., crossed the center line, and hit another vehicle. Dembla, a passenger in
the second vehicle, was seriously injured in the accident while the other three occupants were
killed.
State Farm filed a complaint for declaratory judgment in the Eastern District of
Tennessee against Shaun and his parents, requesting that the district court find “there is no
1
The registration for Mr. Robertson’s truck had expired at the time Shaun drove the
vehicle.
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Case Nos. 14-5955, State Farm Mut. Auto. Ins. Co. v. Kanika Dembla
coverage under the Policy in question to any of the Defendants and that therefore there is no duty
on the part of State Farm to defend” Shaun or his parents. Dembla intervened, claiming “an
interest relating to the property that is the subject of th[e] transaction.”
State Farm moved for summary judgment, claiming that Shaun was not covered under the
Policy because he was not in “lawful possession” of Mr. Robertson’s truck at the time of the
accident. Relying on State Farm Mut. Auto. Ins. Co. v. Wilson, 26 F. App’x 490 (6th Cir. 2002),
the district court granted summary judgment in favor of State Farm. The court found that Shaun
was not in “lawful possession” of Mr. Robertson’s truck because he: (1) committed the tort of
conversion; (2) committed the tort of trespass to chattel; (3) violated Tenn. Code. Ann. § 39-14-
106 when he used the truck without Mr. Robertson’s consent; and (4) violated Tenn. Code. Ann.
§ 55-4-101 when he drove Mr. Robertson’s truck with an expired registration.
II.
“We review a grant of summary judgment de novo, construing the evidence and drawing
all reasonable inferences in favor of the nonmoving party.” Hirsch v. CSX Transp., Inc., 656
F.3d 359, 362 (6th Cir. 2011).
The Policy in this case defines “insured,” in relevant part, as “you and resident relatives
for: . . . the maintenance or use of: (1) a non-owned car; or (2) a temporary substitute car.” The
“Definitions” section of the Policy defines “non-owned car” and “temporary substitute car.”
“Non-Owned Car” means “a car that is in the lawful possession of you or any resident relative . .
. .” “Temporary Substitute Car” means:
A car that is in the lawful possession of the person operating it and that:
1. replaces your car for a short time while your car is out of use due to its:
a. breakdown;
b. repair;
c. servicing;
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d. damage;
e. or theft; and
2. neither you nor the person operating it own or have registered.
If a car qualifies as both a non-owned car and a temporary substitute car, then it
is considered a temporary substitute car only.
The phrase “lawful possession,” however, is not defined in the Policy.
Dembla claims that the district court improperly granted State Farm’s motion for
summary judgment because there is a genuine dispute whether Shaun was in “lawful possession”
of the truck at the time of the accident. State Farm does not dispute that Shaun qualifies as a
“resident relative” under the terms of the Policy. Furthermore, State Farm acknowledges that
Mr. Robertson’s truck qualifies as a “non-owed car” for which Shaun would be an “insured”
under the Policy if Shaun was “in the lawful possession of” Mr. Robertson’s truck at the time of
the accident. And State Farm does not dispute that Shaun was in “possession” of the truck at the
time of the collision.
Accordingly, the sole issue on appeal is whether there is a genuine issue of material fact
as to whether Shaun’s possession of Mr. Robertson’s truck was “lawful.” Based on the
following, the district court correctly determined that no reasonable factfinder could find Shaun
was in lawful possession of Mr. Robertson’s truck at the time of the accident.
In diversity cases, we are bound to apply the same law as would be applied by the state
courts. Kurczi v. Eli Lilly & Co., 113 F.3d 1426, 1429 (6th Cir. 1997). Dembla makes two
primary arguments on appeal. First, she argues that the term “lawful possession” is ambiguous
under Tennessee law. Second, she argues that Shaun was in “lawful possession” of the truck
under Tennessee law, citing Leverette v. Tennessee Farmers Mut. Ins. Co., No. M2011-00264-
COA-R3-CV, 2013 WL 817230 (Tenn. Ct. App. Mar. 4, 2013), and State Farm Mut. Auto. Ins.
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Co. v. Hafley, No. 1388, 1991 WL 46696 (Tenn. Ct. App. Apr. 8, 1991), to support her
positions.2
As a threshold matter, Dembla states that the court in Leverette held that the term “lawful
possession” was ambiguous. Interpretation of a written contract and whether a term within the
contract is ambiguous is a question of law––not fact. Leverette, 2013 WL 817230 at *14 (citing
Pitt v. Tyree Org. Ltd., 90 S.W.3d 244, 252 (Tenn. Ct. App. 2002)). However, Dembla is
arguing for a definition of “lawful possession” that falls outside the zone of reasonable
interpretation under Tennessee case law.
Cases relied on by Dembla suggest that, at a minimum, the owner must have provided
express or implied consent to the person who claims to be in lawful possession of the vehicle.
See, e.g., Leverette, 2013 WL 817230 at *14-15; Hafley, 1991 WL 46696 at *3-4. Some states
have suggested that there is an additional requirement that the user of the vehicle be in
compliance with other statutory requirements placed on drivers. See Leverette, 2013 WL 817230
at *13 (citing cases). Tennessee case law suggests that these additional requirements are not a
factor in determining whether an individual is in lawful possession of the vehicle.3 Leverette,
2013 WL 817230 at *12-14. Nonetheless, Tennessee case law supports the general consensus
that absent legal title or consent––express or implied––there can be no lawful possession.
Hafley, 1991 WL 46696 at *3.
2
Dembla also argues that the district court’s reliance on Wilson was improper. We agree
that Wilson is inapposite because in that case we were tasked with determining whether the
driver of the vehicle was in “lawful possession” under Kentucky law rather than Tennessee law.
26 F. App’x at 492.
3
Consequently, the fact that Shaun drove the truck with expired tags in violation of Tenn.
Code Ann. § 55-4-101 has no bearing on whether he was in “lawful possession” of the truck.
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Case Nos. 14-5955, State Farm Mut. Auto. Ins. Co. v. Kanika Dembla
Here, Shaun did have not consent to use the vehicle. Shaun could not recall a single
instance when Mr. Robertson or his wife allowed him to use one of their vehicles. Moreover,
Shaun had never driven any vehicle owned by a member of the Robertson family. Finally,
testimony about the July 3, 2012 text message exchange between Shaun and Amanda––which
occurred just days prior to his taking Mr. Robertson’s truck––reveals that the idea of Shaun’s
using one of the Robertsons’ vehicles was a “joke.”
The earliest articulation of the rule for implied permission in Tennessee is found in a
Tennessee Court of Appeals case from 1936:
[I]mplied permission must be the act or conduct of the [owner]. It must amount to
an intended selection of the person to operate the car. No implied permission can
arise merely because a man obtained possession of the car, without the knowledge
of the [owner], regardless of what permission was given by other persons. Of
course, the [owner] could transmit his permission through an agent or in any other
manner. The essential point is whether the [owner] exercises his personal
discretion and grants his own permission to the particular person.
Card v. Commercial Cas. Ins. Co., 95 S.W.2d 1281, 1285 (Tenn Ct. App. 1936). The Tennessee
Supreme Court later adopted this rule and clarified its application in Teague v. Tate, 375 S.W.2d
840 (Tenn. 1964), and in Schultz v. Tennessee Farmers Mutual Insurance Company, 404 S.W.2d
480 (Tenn. 1966). Although these cases addressed somewhat different factual scenarios, the
basic principles are the same. Implied permission does not exist where the owner of the vehicle
had no knowledge of the defendant’s use and could not have reasonably foreseen that such use
would occur.
Moreover, it is worthwhile to note that the Tennessee Supreme Court analyzes the
question of limited versus general permission in the same way that it analyzes the question of
implied permission:
[W]here one has only limited permission of the owner to use the car in a specified
area for a limited time and particular purpose and does not have general discretion
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as to the use of the car, then the coverage of the omnibus clause is not extended to
his use of the car any place or for a purpose not consented to nor reasonably
contemplated by the owner in giving the initial permission.
Moore v. Liberty Mut. Ins. Co., 246 S.W.2d 960, 961 (Tenn. 1952). These Tennessee cases have
not been reversed and continue to represent the standards for determining the existence and
scope of implied permission.
The only evidence of implied consent is Shaun’s “belief” that he had permission to use
Mr. Robertson’s truck based on his friendship with Amanda and her family. But in Hafley, the
Tennessee Court of Appeals held that a driver’s subjective belief that he had consent to use the
vehicle is irrelevant to the question of lawful possession. 1991 WL 46696 at *1. The driver may
only introduce evidence of objective underlying facts that could support a finding of consent. Id.
Therefore, the only admissible evidence that Mr. Robertson consented to Shaun’s use of the
truck is Shaun’s pre-existing friendship with Amanda and her parents.
Dembla improperly relies on Hafley for the position that Shaun was in “lawful
possession” of the truck. The analogous individual in Hafley received a broad mandate from the
homeowner to protect the premises and the homeowner’s personal property during the
homeowner’s absence. 1991 WL 46696 at *1-3. Furthermore, in Hafley, the court reasoned that
the lawful possession of the vehicles only existed insofar as it facilitated the protection of the
homeowner’s premises or the vehicles themselves. Id. at *3.
Here, Shaun was at the Robertsons’ home for a much narrower purpose than that of the
analogous individual in Hafley. His assignment was to take care of the Robertsons’ dogs––not to
protect the premises in the Robertsons’ absence. Shaun testified that at no point during the
occasions he cared for the Robertsons’ dogs was he responsible for the care of the vehicles.
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Even if Shaun’s duties mirrored the broad mandate in Hafley, which they did not, his use
of the truck would have exceeded that scope. He used the truck solely for his benefit and not that
of the Robertsons. Shaun admitted that his use of the car bore no relation to his agreed-upon
duties at the Robertsons. Thus, no reasonable factfinder could find that Shaun was in lawful
possession of Mr. Robertson’s truck when he commandeered the vehicle to assist an intoxicated
friend.
AFFIRMED.
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