Adams v. Travelers Indemnity Co.

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT September 12, 2006

Charles R. Fulbruge III
Clerk
No. 04-20734

CORTE B. ADAMS,

Plaintiff-Appellant,

versus

TRAVELERS INDEMNITY COMPANY OF CONNECTICUT;
TRAVELERS PROPERTY & CASUALTY CO.;
TRAVELERS INSURANCE CO.;
GOODYEAR TIRE & RUBBER CO.,

Defendants-Appellees.

____________________

Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:03-CV-1333
____________________

Before JOLLY, HIGGINBOTHAM, and SMITH, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

This case brings questions of whether an employee acted within

the permissive use authorized by his employer, Goodyear Tires, when

he fell asleep at the wheel of a company truck. Applying Texas

law, we conclude that genuine issues of material fact remain, and

we reverse and remand.

I

Goodyear Tire and Rubber Company hired Corte Adams in April

1998 as a service technician to change tires and fix flats in its
Houston, Texas shop. In September 1998, Adams transferred to the

Bryan, Texas shop, which specializes as a commercial truck tire

center; he was trained and promoted to the position of truck

alignment specialist. After the transfer, Adams continued to live

in Houston and commuted four hours each day to and from Bryan.

Though Adams owned a car, Goodyear allowed him to use a

company-owned one-ton GMC pickup truck in his travel between

Houston and Bryan. Goodyear did not hire Adams as a driver.

Nevertheless, once or twice a week Adams dropped off or picked up

tires at the Houston shop on his way home from Bryan in the

evenings or on the way back to Bryan the next morning. When he had

a delivery or a pick-up, Adams was “on the clock” for Goodyear

until he dropped the tires off at the Houston shop in the evening

or after he arrived at the Houston shop in the morning to pick up

tires. When making a delivery or a pick-up, Adams was paid for the

driving time. In addition, Goodyear required Adams to carry a

pager at all times. Adams often used the company truck, with his

boss’s knowledge, during working hours to run small personal

errands such as picking up lunch.

On Friday February 26, 1999, Adams left Bryan in the late

afternoon, approximately 5:30pm. After he delivered the tires to

the Houston shop at approximately 7:00 pm, Adams stopped for

Chinese take-out and drove to his father's house, where he arrived

by approximately 8:30 pm. There, Adams ate supper, consumed four

2
or five beers, and slept for approximately four hours. Sometime

between 1:00 and 2:00 am, Adams awoke and drove the Goodyear truck

to a convenience store in order to purchase cigarettes for his

father.1 On his way back to his father’s home from the store,

Adams caused a traffic accident when he fell asleep at the wheel

and crossed the center stripe into oncoming traffic. He collided

with a vehicle driven by Patrick Mayes, severely injuring Mayes.2

Adams, too, was injured and unable to work. Two months later,

Goodyear fired Adams for using the truck in an unauthorized manner.

After Mayes sued Adams and Goodyear, Goodyear’s insurer,

Appellees Travelers Indemnity Company of Connecticut, Travelers

Property & Casualty Insurance Company, Travelers Insurance

Corporation (collectively “Travelers”), refused to cover Adams,

thereby refusing to recompense his damages or defend and indemnify

1
Adams’s home, his father’s house, and the convenience store are all
within a ten minute drive of one another.

2
Mayes sued Goodyear in state court under the theory of respondeat
superior, contending that Adams was within the course and scope of his employment
when the accident happened. The court granted summary judgment in favor of
Goodyear. In an opinion released June 10, 2004, the state court of appeals
reversed, finding that the proof of workers’ compensation payments and the
following facts created a genuine issue of material fact regarding whether Adams
“was acting within the course and scope of his employment,” despite being on a
personal errand:

that Adams (1) was driving a Goodyear truck filled with Goodyear
tires he had undertaken to deliver after leaving Bryan the previous
evening and before returning the next morning, and was “on the
clock” when he was making deliveries; (2) had a delivery to make
that morning because he had been unable to deliver the tires the
night before; (3) was available via pager 24 hours a day; and (4)
was not restricted in any way from using the truck for personal
business.

Mayes v. Goodyear Tire and Rubber Company, 144 S.W.3d 50 (Tex. App. 2004, pet.
filed).

3
him. Adams sued Travelers and Goodyear in state court, alleging

violations of the Texas Insurance Code and the Texas Deceptive

Trade Practices Act and common-law bad faith, fraud, and breach of

contract for refusal to provide coverage.3 Appellees removed

Adams's suit to federal court on diversity grounds. Thereafter,

Travelers moved for summary judgment on all claims. Adams failed

to timely respond to Appellees' motion despite receiving two

extensions, totaling more than 97 days, and the District Court

denied both Adams's motion for leave to file out of time and his

motion for a continuance. The District Court, then, granted

Travelers’s uncontested motion for summary judgment. The district

court denied Adams’s motion for a new trial, and this appeal

followed.

II

Adams argues that the District Court erred by not relying upon

his untimely response in opposition to Travelers’s filing for

summary judgment, by not granting an extension under Rule 6(b)(2),4

and by not granting a continuance for further discovery under Rule

3
As the District Court concluded, Goodyear is not a proper party to this
suit; it is not an insurance provider and the fraud allegation stems from
representations purportedly made by Travelers.

4
See FED.R.CIV.P. 6(b)(2):

When by these rules or by a notice given thereunder or by order of
court an act is required or allowed to be done at or within a
specified time, the court for cause shown may at any time in its
discretion...upon motion made after the expiration of the specified
period permit the act to be done where the failure to act was the
result of excusable neglect....

4
56(f).5 We review for abuse of discretion.6 After two extensions

beyond the initial February 2004 deadline, Adams filed both his

response to Travelers motion for summary judgment and a request for

a third extension on June 9, 2004, the day following the final due

date.7 The District Court did not abuse its discretion by refusing

to apply Adams’s untimely response to Travelers’ motion for summary

judgment, despite having read it, or by denying an extension

because Adams failed to demonstrate excusable neglect.8 Adams had

5
FED.R.CIV.P. 56(f):

Should it appear from the affidavits of a party opposing the
motion that the party cannot for reasons stated present by
affidavit facts essential to justify the party's opposition, the
court may refuse the application for judgment or may order a
continuance to permit affidavits to be obtained or depositions to
be taken or discovery to be had or make such other order as is
just.

6
See Bernhard v. Richardson-Merrell, Inc., 892 F.2d 440, 444 (5th Cir.
1990) (stating that “absent an affirmative showing by the non-moving party of
excusable neglect according to Rule 6(b), a court does not abuse its discretion
when it refuses out-of-time affidavits”).
7
Adams’s attorney cited personal and financial reasons related to his
divorce and an emergency room visit in October 2003 for the habitual tardiness.
See Spears v. City of Indianapolis, 74 F.3d 153, 157 (7th Cir. 1996) (denying an
additional extension of “twenty-four little hours” given the totality of the
circumstances, including two prior extensions for nearly three times the allotted
period for compliance); but cf. Hibernia National bank v. Administracion Central
Sociedad, 776 F.2d 1277, 1280 (5th Cir. 1985) (finding excusable neglect where
“the district judge’s notice of the filing deadline did not reach the [non-
movant] until the day after the deadline had passed”).
8
Relevant factors to the excusable neglect inquiry include: “the danger
of prejudice to the [non-movant], the length of the delay and its potential
impact on the judicial proceedings, the reason for the delay, including whether
it was within the reasonable control of the movant, and whether the movant acted
in good faith.” See Farina v. Mission Inv. Trust, 615 F.2d 1068, 1076 (5th Cir.
1980); Pioneer Inv. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395-97
(1993).

5
ample time to comply with the extended deadline.9

Rule 56(f) authorizes a district court to “order a continuance

to permit affidavits to be taken or depositions to be taken or

discovery to be had,” if the non-movant files affidavits showing

that he or she “cannot for reasons stated present by affidavit

facts necessary to justify the party's opposition.”10 A non-movant

seeking relief under Rule 56(f) must show: (1) why he needs

additional discovery and (2) how that discovery will create a

genuine issue of material fact.11 A party “cannot evade summary

judgment simply by arguing that additional discovery is needed,”12

and may not “simply rely on vague assertions that additional

discovery will produce needed, but unspecified, facts.”13 Adams did

not provide reason enough to warrant a continuance, relying solely

9

[S]uch delays are a particularly abhorrent feature of today’s
trial practice. They increase the cost of litigation, to the
detriment of the parties enmeshed in it; they are one factor
causing disrespect for lawyers and the judicial process; and
they fuel the increasing resort to means of non-judicial
dispute resolution. Adherence to reasonable deadlines is
critical to restoring integrity in court proceedings.

Geiserman v. MacDonald, 893 F.2d 787, 792 (5th Cir. 1990) (addressing a missed
discovery deadline).
10
Wichita Falls Office Assoc. v. Banc One Corp., 978 F.2d 915, 919 (5th
Cir. 1992) (reversing the district court and granting a continuance).

11
Beattie v. Madison County School Dist., 254 F.3d 595, 605 (5th Cir.
2001) (reviewing for an abuse of discretion the denial of a motion for
continuance to allow for additional discovery).

12
See Brown v. Mississippi Valley State Univ., 311 F.3d 328, 333, n.5
(5th Cir. 2002).
13
Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
364 F.3d 274, 305 (5th Cir. 2004).

6
on his personal problems to excuse the failure to rebut Travelers’

assertion that no genuine issue of material fact existed. Though

relevant, the evidence he wished to acquire, including deposition

testimony relating to a corporate policy allowing limited personal

use of company vehicles, was available throughout the 100 days of

extra time granted by the District Court.14 The District Court did

not abuse its discretion in denying Adams’s Motion for Continuance

to conduct specific limited discovery in response to Travelers’

motion for summary judgment. We, therefore, make our determination

regarding the appropriateness of summary judgment based on the

record as developed primarily by Travelers.

III

Adams attempts to imbue the instant case with the result

reached by the Texas appellate court in Mayes v. Goodyear,15 tacitly

invoking both collateral estoppel16 and the principle of diversity

14
“[T]he non-movant must diligently pursue relevant discovery--the trial
court need not aid non-movants who have occasioned their own predicament through
sloth.” Wichita Falls Office Assoc., 978 F.2d at 919; American Lease Plans, Inc.
v. Silver Sand Co., 637 F.2d 311, 318 (5th Cir. 1981) (stating that “Silver Sand
has proffered no reasons why the discovery the company now deems essential was
not conducted earlier during the long course of this lawsuit; the company does
not argue that this information was in any way inaccessible”).
15
Mayes, 144 S.W.3d 50.
16
“Collateral estoppel applies when, in the initial litigation, (1) the
issue at stake in the pending litigation is the same, (2) the issue was actually
litigated, and (3) the determination of the issue in the initial litigation was
a necessary part of the judgment.” Harvey Specialty & Supply, Inc. v. Anson
Flowline Equip., Inc., 434 F.3d 320, 323 (5th Cir. 2005); see Minter v. Great
American Insurance Company of New York, 423 F.3d 460, 464-65 (5th Cir. 2005)
(noting that the district court found the driver collaterally estopped from
arguing that he was operating the vehicle within the course and scope of his

7
jurisdiction which requires this Court to apply the law of the

state in which it resides.17 Mayes issued on the same day as final

judgment was entered in the instant case, and, thereafter, Adams

filed a Motion for New Trial and/or Motion for Reconsideration.18

The District Court denied the motion; we review for abuse of

discretion.19

Mayes does not benefit Adams. As an intermediate appellate

decision pending appeal to the Texas Supreme Court, it does not

control and cannot be relied upon as binding state authority or as

preclusive given the divergent records.20 Therefore, the District

Court did not abuse its discretion by denying Adams’s motion for

reconsideration in light of Mayes.

employment at the time of the collision and that the insurance company was not
estopped from arguing that the driver was without permission because the issue
had not been vigorously litigated during the suit by an injured third party).
17
Erie R.R. v Tompkins, 304 U.S. 64, 78-79 (1938). “In order to
determine questions of state law, federal courts look to final decisions of the
state's highest court. While decisions of intermediate state appellate courts
provide guidance, they are not controlling. If a state's highest court has not
ruled on the issue in question, a federal court must determine, to the best of
its ability, what the highest court of the state would decide.” United Teacher
Assocs. Ins. Co v. Union Labor Life Ins. Co., 414 F.3d 558, 565-566 (5th Cir.
2005) (internal citations omitted).

18
See FED.R.CIV.P. 60(b). This motion was filed 14 days after the District
Court entered final judgment.
19
McCorvey v. Hill, 385 F.3d 846, 848 (5th Cir. 2004). “A district court
abuses its discretion if it bases its decision on an erroneous view of the law
or on a clearly erroneous assessment of the evidence.” Hesling v. CSX Transp.,
Inc., 396 F.3d 632, 638 (5th Cir. 2005).
20
Since Adams failed to timely file a response, the record is not
identical to that relied upon by the state court. See supra n.2 (describing the
pertinent facts in the record of the state case). For example, the record in the
instant case does not contain evidence regarding workers compensation or
unrestricted personal use of the vehicle.

8
 IV

We review de novo a district court’s grant of summary

judgment, applying the same standard as below.21 Summary judgment

is proper “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.”22 The moving party bears the initial burden

of “informing the Court of the basis of its motion” and identifying

those portions of the record “which it believes demonstrate the

absence of a genuine issue of material fact.”23 In adjudicating a

motion for summary judgment, the court must view all facts in the

light most favorable to the non-movant.24

Once the moving party meets this burden, the nonmoving party

must “go beyond the pleadings” and designate “specific facts” in

the record “showing that there is a genuine issue for trial.”25 An

issue is “genuine” if the evidence is sufficient for a reasonable

jury to return a verdict for the nonmoving party.26 “Rule 56 does

21
Ford Motor Co. v. Tex. Dep’t of Transp., 264 F.3d 493, 498 (5th Cir.
2001).
22
FED.R.CIV.P. 56(c).

23
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

24
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986).
25
Celotex, 777 U.S. at 324.

26
Anderson v. Libby Lobby, Inc., 477 U.S. 242, 247-49 (1986).

9
not impose upon the district court a duty to sift through the

record in search of evidence to support a party's opposition to

summary judgment."27 A failure on the part of the nonmoving party

to offer proof concerning an essential element of its case

necessarily renders all other facts immaterial and mandates a

finding that no genuine issue of fact exists.28 As the District

Court, therefore, explained: “[s]ince the plaintiff failed to

respond to the defendant’s motion for summary judgment, the inquiry

must be whether the facts presented by the defendants create an

appropriate basis to enter summary judgment against the

plaintiff.”29

V

In defending the District Court’s grant of summary judgment,

Travelers contends that Adams does not qualify as an insured. The

policy defines an insured as, inter alia: “Anyone else while using

with your permission a covered auto you own, hire, or borrow...”

(emphasis added).30 It is uncontested that the Goodyear truck is

27
Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.
1998)(internal quotations omitted).
28
Saunders v. Michelin Tire Corp., 942 F.2d 299, 301 (5th Cir. 1991).
29
See FED.R.CIV.P. 56(e).
30
This permissive-user clause is commonly referred to as an “omnibus
clause.” See BLACK’S LAW DICTIONARY 1121 (8th ed. 2004) (defining “omnibus clause”
as a provision in an automobile insurance policy that extends coverage to all
drivers operating the insured vehicle with the owner’s permission). Adams
unpersuasively argues that the clause is an exclusion rather than an affirmative
prerequisite to coverage, thereby shifting the burden of proof to Travelers. See
Marshall, 388 S.W.2d at 181 (distinguishing policy prerequisites and exclusions).

10
a “covered auto.” Travelers instead argues that Adams’s accident

occurred while without permissive use of Goodyear’s truck and,

therefore, that Adams is not entitled to defense or indemnification

because he cannot prove coverage.31

A. Nature of permission

In Texas, permission is “consent to use the vehicle at the

time and place in question and in a manner authorized by the owner,

either express or implied.”32 In Royal Indemnity Company v. H. E.

Abbott & Sons, Inc., the Texas Supreme Court wrote:

While express permission must be affirmatively
stated, implied permission may be inferred from a
course of conduct or relationship between the
parties in which there is mutual acquiescence or
lack of objection signifying consent. It is usually
shown by usage and practice of the parties over a
period of time preceding the occasion on which the
automobile was being used.33

Therefore, permission, sufficient to support coverage under an

omnibus clause of an insurance policy, may be either express or

implied.

1. Express permission

Adams contended at the hearing on summary judgment and now

argues on appeal that he had express authority to use the Goodyear

truck for personal use, inclusive of the contested time period

31
An insured bears the burden of proving coverage. See Royal Indemnity
Co. v. Marshall, 388 S.W.2d 176, 181 (Tex. 1965).
32
Minter, 423 F.3d at 466 (citing Hartford Accident & Indem. Corp. v.
Lowery, 490 S.W.2d 935, 937 (Tex. App. 1973)).
33
399 S.W.2d 343, 345 (Tex. 1966).

11
during which the accident occurred. Adams relies on language in a

company handbook detailing the operating standards for using

company vehicles, referred to as the Commercial Tire and Service

Center’s Associate’s Expectation (“CT & SC”). It reads: “Personal

use of company vehicles is to be kept to a minimum. Company

vehicles are not to be used for vacation travel.” The CT & SC was

not, however, properly before the District Court since it was filed

on June 9, 2004, one day after the expiration of Adams’s final

extension.34 Thus, regarding express permission, Adams fails to

raise a genuine issue of material fact on the record before the

District Court, in response to Traveler’s motion for summary

judgment.

2. Implied permission

Adams also argues that a pattern of tolerated personal use

creates implied permission.35 Deposition testimony shows that Adams

used the company truck on his lunch break, with the knowledge of

his supervisors, to pick up food and dry cleaning—that he had at

least implied permission to use the truck for personal errands.36

We are persuaded that a fact question exists as to whether Adams,

34
See supra II.
35
“[M]utual acquiescence or lack of objection signifying assent may be
evidence of implied permission.” Coronado v. Employers' Nat'l Ins. Co., 596
S.W.2d 502, 505 (Tex. 1979).
36
See Old. Am. County Mut. Fire Ins. Co. v. Renfrow, 130 S.W.3d 70, 72
(Tex. 2004) (stating that even though employee did not have express permission,
he might have had implied permission to drive to his girlfriend’s house
approximately one mile from his place of work).

12
as a general matter, had implied permission for personal use of the

Goodyear truck. But this does not end the inquiry.

B. Scope of permission

The question remains whether Adams necessarily exceeded the

scope of his implied permission. The District Court held that

Adams exceeded the sum of his permission—vitiating any express or

implied permission as a matter of law.

As the District Court noted, Texas courts apply the minor

deviation rule when determining whether an individual qualifies as

an insured under a policy that covers permitted drivers.37 Texas

courts have rejected the notion that any deviation from a company

policy constitutes a gross violation.38 Under the minor deviation

rule, “a person may deviate from the permitted usage of an insured

vehicle and still be covered under an omnibus provision ‘if the use

is not a material or gross violation of the terms of the initial

permission.’”39 Considerations for finding a deviation material

include “the extent of deviation in actual distance or time, the

purposes for which the vehicle was given, and other factors...”40

Consumption of alcohol constitutes an “other factor.”41 “Some

37
See Coronado, 596 S.W.2d at 505.
38
Tull v. Chubb Group of Ins. Cos., 146 S.W.3d 689, 696 (Tex. App. 2004).
39
Renfrow, 130 S.W.3d at 72 (quoting Coronado, 596 S.W.2d at 504).
40
Id.

41
Minter, 423 F.3d at 468-69.

13
deviations may be so minor that they do not create a fact issue

whether permission was revoked; other more significant deviations

may create such an issue; and some deviations may be so material

that they revoke permission as a matter of law.”42

Both the District Court and the defendants rely on cases,

Coronado and Renfrow, that apply the minor deviation rule to

situations involving express prohibitions against any personal use

of company vehicles. No such express prohibition against personal

use exists in the instant case. In Minter, explaining the existing

Texas precedent, we recently applied the minor deviation rule to a

situation in which the driver had permission to drive the truck to

and from work and to park it overnight at his apartment.43 The

employer explicitly warned the driver employee that the vehicle was

not to be used for personal errands.44 The driver was given

permission to deliver the truck to a facility in Decatur, Texas for

scheduled maintenance on a Sunday morning.45 On Saturday evening

the employee drove to his sister’s home so that she could follow

him and drive him back to his residence in Bridgeport the following

morning.46 It developed that his sister could not give him a ride,

42
Coronado, 596 S.W.2d at 506.
43
Minter, 423 F.3d at 462.
44
Id. at 466.
45
Id. at 462.

46
Id.

14
and, returning to his residence, the employee was involved in a

traffic accident.47

Reversing the District Court’s grant of summary judgment in

favor of the insurer, we found a genuine issue of material fact as

to whether the employee had express permission to drive the company

truck to his sister’s home, as testimony suggested that his boss

had consented to the trip. We went on to say that a fact question

also existed as to whether the driver had implied permission

because the driver would presumably need to secure return

transportation–arguably imparting implied permission to do so.

Importantly, we noted that the driver’s errand to his sister’s home

was not purely personal, as it related to the delivery of the truck

in the morning.48

After analyzing the nature of the permission, we applied the

minor deviation rule, stating that the driver’s intoxication did

not, as a matter of law, necessarily cause him to exceed the scope

of his permission to use the company truck, for the purposes of

insurance coverage under a similar omnibus clause.49 Furthermore,

we stated that the minimal time and distance involved weighed in

the driver’s favor, distinguishing both Royal Indemnity and Renfrow

in which the distances traveled were forty and fifty miles,

47
Id.
48
Id. at 469.

49
Minter, 423 F.3d at 468-70.

15
respectively.50

Thus, we consider the purpose of the errand, assess the

distance and time involved, and weigh the additional factor of

alcohol consumption. The errand itself, purchasing cigarettes for

his father, was personal in nature. But the distances traveled

were not so significant as to eviscerate Adams’s implied

permission—a matter of a few stop lights—particularly where Adams

had express permission to drive the vehicle between Bryan and

Houston. Also, though Adams assumed that he should not drink and

drive a company vehicle, reasonable people may disagree as to

whether four hours of intervening sleep sufficiently reinvigorated

Adams’s implied permission.51 Moreover, though consumption of

alcohol while driving is expressly prohibited in the driver’s

handbook,52 drinking with a meal and subsequently driving is not

proscribed. Rather, the determinative factor is the driver’s

judgment and impairment. Therefore, the simple fact that Adams

consumed alcohol earlier that night, alone on these facts, is

insufficient to sustain summary judgment.

Travelers heavily relies upon the time of day when the

accident occurred to place the event outside the policy requirement

50
Id. at 468.

51
In Royal Indemnity, affirming the denial of coverage, the court did not
rely on the fact that the driver had consumed several alcoholic beverages
immediately prior to driving. Minter, 423 F.3d at 469.
52
Travelers entered the driver’s handbook into the record; it is distinct
from the CT & SC. See supra V(A)(1).

16
of permissive use. Admittedly, Adams stands on shaky ground,

here.53 The inference that Goodyear’s acquiescence to Adams’s

personal use during his lunch hour created implied permission to

purchase cigarettes at one or two in the morning is tenuous under

Texas law. Still, we are not persuaded that the deviation is so

egregious as to demand summary judgment given the lack of an

express prohibition on personal use, the arguably implied

permission to use the vehicle for personal errands during Adams’s

lunch break, and the minimal distances involved. No fact in the

record, alone or in combination, necessitates a conclusion as a

matter of law that Adams acted outside the scope of permissive use.

In short, we are persuaded that there is a genuine issue of

material fact whether Adams qualifies as an insured under the

policy. We need not make an Erie guess.54

VI

Adams also alleges non-contractual claims depending on the yet

53
See Coronado, 596 S.W.2d at 505 (Tex. 1980) (“Petitioner urges that
Sotelo had implied permission to use the vehicle for this purely personal mission
because of his employer's acquiescence or failure to object to similar use of the
vehicle on prior occasions.... [W]e cannot say that these two incidents [seen
drinking while using the company truck] justify an inference that the employer,
by not taking more affirmative action in response thereto, impliedly granted
Sotelo permission to use the company vehicle for an eight hour drinking spree
wholly unrelated by time, place, or purpose from the objectives for which he was
granted use of the vehicle”).
54
Minter, F.3d at 460, 470 (stating that “on this summary judgment
record, genuine issues of material fact preclude reaching [the] Erie question”).

17
unresolved coverage question.55 Therefore, summary judgment is

inappropriate as to the claims pursuant to the Texas Insurance

Code, the Texas Deceptive Trade Practices Act, and common law bad

faith. Additionally, Travelers gave only cursory attention to the

allegation of fraud in its motion for summary judgment, and the

District Court’s memorandum opinion accompanying its order made no

mention of it.56 This claim remains to be adjudicated.

REVERSED AND REMANDED.

55
Provident Am. Ins. Co. v. Castaneda, 988 S.W.2d 189 (Tex. 1998);
Republic Ins. Co. v. Stoker, 903 S.W.2d 338 (Tex. 1995); Lennar Corp. v. Great
Am. Ins. Co., 2005 Tex. App. LEXIS 4214.
56
See Johnson & Higgins v. Kenneco Energy, 962 S.W.2d 507, 524 (Tex.
1998) (explaining the elements of common law fraud).

18
JERRY E. SMITH, Circuit Judge, dissenting:

I respectfully dissent, because the panel majority errs in

holding that there is a genuine issue of material fact as to

whether Adams had implied permission to use the truck in the manner

that he did at the time of the accident. Adams only had implied

permission to use the truck for personal purposes or errands during

“lunch hour,” not during the drive between Bryan and Houston or

after he arrived home in Houston (i.e., not after hours or before

work).

There is no evidence whatsoever of implied permission to use

the truck for personal errands after hours; the only permission to

use it after hours was the express permission to drive home, which

was not a permission to run errands on the way home or once Adams

arrived home. Adams admitted that his supervisors were unaware

that he was using the company vehicle after hours for the purpose

of shopping; he testified that no one at Goodyear knew he had been

driving the truck to his father’s house or had authorized him to do

so.

The opinion also hinges on “the minimal distances involved,”

but that is not a significant fact here, where, as the majority

admits, the timing and the purpose of the trip suggest that the de-

viation is not minor. Although Old Am. County Mut. Fire Ins. Co.

v. Renfrow, 130 S.W.3d 70, 72 (Tex. 2004), and other cases did in-

volve more significant distances, deviations material as a matter
of law have been found in cases with distances similar to those

here.

For instance, in Coronado v. Employers’ Nat’l Ins. Co., 596

S.W.2d 502, 503 (Tex. 1979), the distance was three to four miles.

Here the distances appear to be similar; as the majority explains,

Adams’s house, his father’s house, and the convenience store are

all within a ten-minute drive of one another. Looking at distances

as “minimal” as those in this case, the Texas Supreme Court in Cor-

onado held that the trip was “wholly unrelated by time, place, or

purpose from the objectives for which he was granted use of the

vehicle.” 596 S.W.2d at 505 (emphasis added).

Although the majority devotes significant consideration to

Minter, 423 F.3d at 468–70, which also involved minimal distances,

that case is distinguishable: There, the employee had to deliver

the truck to a facility in Decatur for scheduled maintenance, so

the employee drove it to his sister’s house in order that she fol-

low him and drive him back to his residence. As that court repeat-

edly stressed, the drive to the sister’s home involved a business

purpose, because it was in the interest of the employer that the

vehicle be serviced and that the employee receive a ride back from

the service location.

In contrast, here the late-night errand was a purely personal

trip, as the majority acknowledges; Adams no longer had any tires

in his possession. Because the majority acknowledges that the pur-

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pose and time of the deviation were unrelated to the objectives for

which Adams was granted the use of the vehicle, and given that the

same distance is involved as in Coronado, I do not see how that

case can be distinguished: The test for a material deviation is

precisely based on these three elements: time, place and purpose.

For that reason, I respectfully dissent.

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