AUTO-OWNERS INSURANCE COMPANY v. SMITH Et Al.
340 Ga. App. 574
| Ga. Ct. App. | 2017Background
- CSYG, Inc. operated an Avis rental lot; CSYG employee Byron Perry stole (or aided in stealing) a Ford Edge after hours, which crashed; Adrienne Smith was injured and sued multiple parties.
- Auto-Owners issued a commercial general liability policy to CSYG and filed a declaratory judgment action asserting Smith’s claims were not covered by the policy or were excluded.
- The policy named CSYG as the insured and included an endorsement naming Avis Rent A Car and Budget Rent A Car as additional insureds "only with respect to their liability as grantor of a franchise to [CSYG]."
- Perry pled guilty to crimes arising from the theft and crash but in deposition claimed a third party may have been the driver; Perry admitted his conduct was unrelated to his employment.
- Auto-Owners moved for summary judgment as to all defendants; the trial court denied the motion. The Court of Appeals affirmed in part and reversed in part.
Issues
| Issue | Plaintiff's Argument (Auto-Owners) | Defendant's Argument | Held |
|---|---|---|---|
| Whether Byron Perry was an insured under CSYG’s policy | Perry not insured because his actions were outside scope of employment | Perry argued factual dispute (who was driving) but conceded not acting for CSYG | Perry not an insured; summary judgment for Auto-Owners granted |
| Whether Avis Budget Group, PV Holding, and Peter Duca were insureds | None were named or shown to be additional insureds under policy/endorsement | They failed to produce specific evidence they qualified as insureds | Not insured; summary judgment for Auto-Owners granted |
| Whether Avis Rent A Car was an additional insured under the endorsement | Avis not entitled because endorsement covers only "grantor of a franchise" and CSYG was, per operating agreement, "not a franchisee" | Endorsement plainly names Avis Rent A Car as additional insured; terms not defined and should be construed to give coverage | Genuine factual issues exist as to whether Avis Rent A Car is an insured; summary judgment denied |
| Whether the policy exclusion for autos rented/loaned to an insured bars coverage (for Avis / CSYG / PV Holding) | Exclusion applies because vehicles were owned by PV Holding and leased/loaned to Avis/CSYG | Evidence does not show the specific Ford Edge was rented/loaned to an insured; factual disputes remain | Auto-Owners failed to meet burden to show exclusion as a matter of law; genuine issues of material fact exist; summary judgment denied as to these issues |
Key Cases Cited
- GEICO Gen. Ins. Co. v. Wright, 299 Ga. App. 280 (discussing summary judgment standard and view of evidence)
- Hankerson v. Hammett, 285 Ga. App. 610 (employee use of employer vehicle for personal trip not within scope of employment)
- Hicks v. Heard, 297 Ga. App. 689 (insured status hinges on scope of employment under policy terms)
- Travelers Home and Marine Ins. Co. v. Castellanos, 297 Ga. 174 (party resisting summary judgment must produce specific evidence of triable issue)
- Grange Mut. Cas. Co. v. Snipes, 298 Ga. App. 405 (insurance policies construed to effectuate parties’ intent; avoid forfeiture)
- Hoover v. Maxum Indem. Co., 291 Ga. 402 (courts do not favor forfeitures in construing insurance contracts)
- ALEA London Ltd. v. Woodstock, 286 Ga. App. 572 (avoid interpretations that render contract language meaningless)
- Interstate Life & Accident Ins. Co. v. Wilmont, 123 Ga. App. 337 (insurer bears burden to prove an exclusion applies)