582 F.Supp.3d 701
D. Ariz.2022Background
- On November 24, 2017 Plaintiff was injured in a collision with a dune buggy on California sand dunes driven by Renee Denney; both Denneys were seriously injured.
- Plaintiff sued the Denneys in federal court in California; the parties stipulated to a $1.5 million judgment against the Denneys, assigned the Denneys’ claims under their State Farm homeowners policy to Plaintiff, and Plaintiff covenanted not to collect the judgment from the Denneys.
- Plaintiff then sued State Farm in Arizona for breach of contract and related bad-faith and tort claims, asserting the Policy covers his bodily injuries, medical and first-aid expenses, and property damage.
- The Policy expressly excludes bodily injury or property damage “arising out of the ownership, maintenance, use… of a motor vehicle owned or operated by … any insured,” and defines “motor vehicle” to include recreational vehicles such as a dune buggy.
- The parties agree the dispositive fact is ownership of the dune buggy in November 2017. State Farm offers testimony and an affidavit from Jerry and Renee that Jerry built, possessed, stored, transported, and used the dune buggy; Plaintiff points to the absence of documentary indicia of ownership (title, VIN, registration, bills of sale, insurance, maintenance records) and certain conduct in the California litigation and claims handling.
- The court applied Arizona law (ownership turns on possession and control; title is not dispositive) and the summary-judgment burden rules (insurer bears burden to prove an exclusion applies) and concluded no genuine dispute of material fact on ownership. Summary judgment for State Farm granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the dune buggy was owned by insured Jerry Denney in Nov. 2017 (determines applicability of motor-vehicle exclusion). | Denneys’ ownership is disputed: no title/VIN/registration/insurance/bill of sale or other objective documentary evidence; statements in California litigation and claims file cast doubt on Jerry’s credibility — jury should decide. | Jerry and Renee’s uncontradicted sworn testimony and Jerry’s affidavit establish he built, possessed, stored, transported, and used the dune buggy; Arizona law determines ownership by possession and control, not title. | Court: Denney testimony establishes possession/control; absence of documentary proof is consistent with Jerry’s account and does not create a genuine factual dispute. Summary judgment for State Farm (no coverage). |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary-judgment standard; party with burden must show essential elements)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (genuine dispute as to material fact analysis)
- Reinke v. Alliance Towing, 88 P.3d 1154 (Ariz. Ct. App.) (title not dispositive; ownership determined by possession and control)
- Wallace v. Employers Cas. Co., 418 F.2d 1323 (9th Cir.) (ownership independent of title)
- Keggi v. Northbrook Prop. & Cas. Ins. Co., 13 P.3d 785 (Ariz. Ct. App.) (insured bears burden to prove coverage; insurer bears burden to prove exclusions)
- Fidelity Nat’l Title Ins. Co. v. Osborn III Partners LLC, 483 P.3d 237 (Ariz. Ct. App.) (insurer burden re exclusions)
- Hotel 71 Mezz Lender LLC v. Nat’l Ret. Fund, 778 F.3d 593 (7th Cir.) (movant bearing burden must show the record is one-sided)
- Helget v. City of Hays, Kansas, 844 F.3d 1216 (10th Cir.) (nonmoving party with the burden cannot defeat summary judgment merely by attacking credibility)
- Nationwide Prop. & Cas. Ins. Co. v. Faircloth, 845 F.3d 378 (8th Cir.) (when credence of a witness is essential, specific facts undermining credibility can preclude summary judgment)