AUTO-OWNERS INSURANCE COMPANY v. SMITH Et Al.

THIRD DIVISION
MILLER, P. J.,
MCFADDEN, P. J., and MCMILLIAN, J.

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.
http://www.gaappeals.us/rules

March 8, 2017

In the Court of Appeals of Georgia
A16A2036. AUTO-OWNERS INSURANCE COMPANY v. SMITH
et al.

MCFADDEN, Presiding Judge.

This appeal is from a trial court order denying summary judgment to an insurer

in its declaratory judgment action. The insurer claims that various defendants were

not covered by an insurance policy. As to the named insured, the sole owner of the

named insured, and an additional insured named in an endorsement to the policy,

there are genuine issues of material fact; so the trial court correctly denied summary

judgment. But because the other defendants were not insureds under the policy or

endorsement, and those defendants failed to point to specific evidence otherwise

creating genuine issues of material fact, the trial court erred in denying summary

judgment to the insurer as to them. So 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.
A de novo standard of review applies to an appeal from a denial of
summary judgment, and we view the evidence, and all reasonable
conclusions and inferences drawn from it, in the light most favorable to
the nonmovant.

GEICO Gen. Ins. Co. v. Wright, 299 Ga. App. 280, 281 (682 SE2d 369) (2009)

(citations omitted).

So viewed, the evidence shows that CSYG, Inc., operated an Avis car rental lot

in downtown Atlanta. CSYG hired Byron Perry to clean cars at the location. On the

night of August 23, 2013, after the Avis lot had closed, Perry stole (or, according to

his deposition testimony, helped a mysterious and elusive homeless person steal) a

Ford Edge sport utility vehicle from the lot. Shortly before midnight, the driver of the

vehicle was fleeing from police when the vehicle crashed into a brick wall. Adrienne

Smith was sitting on the wall at the time of the collision and was injured. Perry, who

was in the vehicle, fled from the scene and later pled guilty to multiple crimes arising

from the incident, including theft by taking, failure to maintain a lane, attempting to

elude police, reckless driving, and hit and run.

Smith subsequently filed a complaint against Avis Rent A Car System, LLC;

Avis Budget Group, Inc.; PV Holding Corp., which owned the vehicle; CSYG and

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its sole owner, Yonas Gebremichael; Peter Duca, a regional security manager for

Avis; and Perry. The complaint alleged that Perry was the driver of the vehicle, set

forth various claims of negligence against the defendants, and sought damages for the

injuries sustained by Smith in the collision.

Thereafter, Auto-Owners Insurance Company, which had issued a commercial

general liability insurance policy to CSYG, filed a declaratory judgment action

against Smith and all of the defendants named in her tort suit, claiming that the policy

did not cover the causes of action brought by Smith against those defendants. Auto-

Owners moved for summary judgment, asserting that the defendants in Smith’s action

were not insureds under the policy or, alternatively, that the policy expressly excluded

claims arising out of automobile accidents from coverage. The trial court denied the

motion, and this appeal followed.

1. Byron Perry.

Auto-Owners contends that the trial court erred in failing to grant it summary

judgment as to defendant Perry on the ground that Perry was not insured under the

policy at the time of the accident. We agree.

It is undisputed that Perry was not a named insured under the policy, which

identified only CSYG as the primary insured. The policy provided that CSYG

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employees were insured, “but only for acts within the scope of their employment by

[CSYG] or while performing duties related to the conduct of [CSYG’s] business[.]”

Although Perry was a CSYG employee, he unquestionably was not within the scope

of his employment or performing duties related to the conduct of CSYG’s business

when, after business hours, he allegedly stole a vehicle from CSYG’s lot and later

drove it into a brick wall. Indeed, Perry himself deposed that when he was in the Ford

Edge on the night in question he was not on the job and the incident was “[n]ot in any

way” connected with his employment with CSYG. See Hankerson v. Hammett, 285

Ga. App. 610, 613 (1) (647 SE2d 319) (2007) (employee’s operation of employer’s

truck for personal trip had no connection whatsoever with his employment).

We note that although Perry admitted in his deposition that he had pled guilty

to multiple criminal offenses arising from the vehicle theft and collision, he also

claimed in his deposition that a homeless man he knew as N. O. had actually stolen

the vehicle; that he and N. O. planned to sell the stolen vehicle; and that N. O. was

driving the vehicle, while Perry was a passenger in the vehicle, at the time of the

collision. While Perry’s self-serving deposition testimony, which contradicted his

guilty pleas, may create a question of fact as to whether he was actually driving the

vehicle as alleged in Smith’s complaint, it does not create a genuine issue of material

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fact that alters the analysis or outcome of Auto-Owners’ motion for summary

judgment. Regardless of whether Perry was driving the stolen vehicle or was a

passenger in it at the time of the collision, it is still undisputed that he was not in the

scope of his employment or performing duties for CSYG’s business. Whether he was

the driver or a passenger at that time, his use of the vehicle had no connection

whatsoever with his employment. Accordingly, under the plain terms of the policy,

he was not an insured entitled to coverage and the trial court therefore erred in

denying summary judgment to Auto-Owners on this ground. See Hicks v. Heard, 297

Ga. App. 689, 691 (1) (678 SE2d 145) (2009).

2. Avis Budget Group, PV Holding, and Peter Duca.

Auto-Owners asserts that the trial court erred in denying summary judgment

in its favor as to defendants Avis Budget Group, PV Holding, and Peter Duca because

none of them were insureds under the policy or an endorsement to the policy that

named additional insured entities. We agree.

Auto-Owners has pointed to the undisputed fact that Avis Budget Group, PV

Holding, and Duca were not named insureds under the policy, which, as noted above,

named only CSYG as an insured. Likewise, none of those three defendants was

named in an endorsement which amended the policy to include Avis Rent A Car and

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Budget Rent A Car as additional insured entities under the section of the policy

entitled “WHO IS AN INSURED.” Moreover, those three defendants have not

pointed to any evidence showing that they were otherwise included within the WHO

IS AN INSURED section, which identified additional insured parties, such as

employees or executive officers. We note that Avis Budget Group has attempted to

show that it was an additional insured because Avis Rent A Car was named as an

insured under the policy endorsement discussed above, and the policy provided that

the members of a limited liability company such as Avis Rent A Car were also

insureds. However, Avis Budget Group, while claiming that it was the parent

company of Avis Rent A Car, has not pointed to any evidence establishing as a matter

of fact that in that corporate structure it was also a member of Avis Rent A Car, LLC.

When a motion for summary judgment is made and supported by evidence, “an

adverse party may not rest upon the mere allegations or denials of his pleading, but

his response . . . must set forth specific facts showing that there is a genuine issue for

trial. If he does not so respond, summary judgment, if appropriate, shall be entered

against him.” OCGA § 9-11-56 (e). Thus, “[t]o withstand [Auto-Owners’] motion for

summary judgment, [Avis Budget Group, PV Holdings, and Duca] must come

forward with specific evidence giving rise to a triable issue on [their being insured

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under the policy].” Travelers Home and Marine Ins. Co. v. Castellanos, 297 Ga. 174,

177 (1) (773 SE2d 184) (2015) (citation and punctuation omitted). Because they have

failed to do so, Auto-Owners is entitled to summary judgment as to Avis Budget

Group, PV Holdings, and Duca.

3. Avis Rent A Car.

Although Avis Rent A Car was expressly named as an additional insured in the

policy endorsement discussed above, Auto-Owners argues that Avis Rent A Car was

still not entitled to coverage under the policy. Auto-Owners cites language in the

endorsement providing that Avis Rent A Car was insured “only with respect to their

liability as grantor of a franchise to [CSYG].” Auto-Owners then points to an

operating agreement between Avis Rent A Car and CSYG which provided that CSYG

was not a franchisee. Thus, Auto-Owners reasons, because that agreement stated that

CSYG was not a franchisee and the insurance policy endorsement provided that Avis

Rent A Car was insured only with respect to liability as grantor of a franchise, then

“Avis Rent A Car cannot be an insured under the terms of the [e]ndorsement.” We

disagree.

As an initial matter, Auto-Owners has not pointed to any definitions of the

terms “grantor of a franchise,” which appears in the insurance policy endorsement

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between Auto-Owners and CSYG, or the term “franchisee” which appears in the

operating agreement between Avis Rent A Car and CSYG. And without citing any

authority, Auto-Owners contends that the word “franchisee” is capable of only one

commonly understood meaning. However, Auto-Owners has failed to provide any

such common meaning for us. Given the lack of pertinent definitions in the two

separate contracts and the failure to provide a purportedly common definition for

either the word “franchise” or “franchisee,” Auto-Owners has not definitively shown

that those similar, but different, terms were intended by the different parties of those

two contracts to mean precisely the same thing.

Moreover, “[a]n insurance policy is governed by the ordinary rules of contract

construction, and the cardinal rule of construction is to ascertain the intent of the

parties.” Grange Mutual Cas. Co. v. Snipes, 298 Ga. App. 405, 407-408 (2) (680

SE2d 438) (2009) (citations omitted). Here, the clear intent of CSYG and Auto-

Owners, as evinced in the plain language of the endorsement, was to include Avis

Rent A Car as an additional insured under certain circumstances. However, Auto-

Owners’ interpretation would contravene that clear intent by forfeiting any coverage

for Avis Rent A Car under any circumstances, which “would violate the rule that an

insurance policy is construed liberally to provide coverage and avoid forfeitures.” Id.

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at 408 (2) (citation and punctuation omitted). See also Hoover v. Maxum Indem. Co.,

291 Ga. 402, 407 (3) (730 SE2d 413) (2012) (“Georgia courts do not favor forfeitures

in construing insurance contracts.”) (citation omitted). Similarly, Auto-Owners’

interpretation of the insurance policy endorsement would render it meaningless and

“it is well established that a court should avoid an interpretation of a contract which

renders portions of the language of the contract meaningless.” ALEA London Ltd. v.

Woodstock, 286 Ga. App. 572, 576 (2) (649 SE2d 740) (2007) (citation and

punctuation omitted). Accordingly, Auto-Owners has failed to show that there exist

no genuine issues of material fact and that it is entitled to judgment as a matter of law

as to Avis Rent A Car being an insured under the policy.

Alternatively, Auto-Owners argues that if Avis Rent A Car was an insured

under the policy, then an exclusion from coverage applied because the car in question

was rented or loaned to Avis Rent A Car. That exclusion provided, in pertinent part,

that “[t]his insurance does not apply to . . . ‘[b]odily injury’ or ‘property damage’

arising out of the ownership, maintenance, use or entrustment to others of any . . .

‘auto’ . . . owned or operated by or rented or loaned to any insured.” (Emphasis

supplied). In support of its argument, the only evidence cited by Auto-Owners is

deposition testimony by an Avis representative who stated that cars in the local

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market were owned by PV Holding and were leased to Avis. This testimony did not

explicitly clarify the local market being referred to; did not specify that “Avis”

necessarily meant Avis Rent A Car, as opposed to some other Avis entity; and did not

expressly state that the specific vehicle in question, the Ford Edge involved in this

case, was in fact “loaned or rented” to Avis Rent A Car.

“Where the insurer seeks to invoke an exclusion contained in its policy, it has

the burden of proving the facts come within the exclusion.” Interstate Life & Accident

Ins. Co. v. Wilmont, 123 Ga. App. 337 (1) (180 SE2d 913) (1971) (citations omitted).

At most, the evidence relied on by Auto-Owners creates genuine issues of material

fact as to whether or not the specific vehicle at issue in this case was loaned or rented

to an insured and thus triggered the exclusion. Because there exist genuine issues of

material fact, summary judgment was not appropriate on this basis. See OCGA § 9-

11-56 (c).

4. CSYG.

Auto-Owners argues that even though CSYG is the named insured covered by

the policy, the trial court should have entered summary judgment against CSYG and

its sole owner on the ground that the exclusion discussed above was triggered

because the Ford Edge at issue in this case was rented to CSYG. In support of this

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contention, Auto-Owners cites language in the operating agreement between CSYG

and Avis Rent A Car indicating that Avis vehicles “may be rented by [CSYG]” and

that Avis Rent A Car will “furnish” vehicles to CSYG. However, this general

contractual language does not necessarily prove that the Ford Edge involved in this

case was, without question, rented to CSYG. While this contractual language may,

at most, create a question of fact as to whether or not that particular vehicle was

rented to CSYG, the existence of such a genuine issue of material fact supports the

trial court’s denial of summary judgment in favor of Auto-Owners as to CSYG and

its sole owner on this basis. See OCGA § 9-11-56 (c).

Judgment affirmed in part and reversed in part. McMillian, J., concurs.

Miller, P. J., concurs in the judgment only.

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