Cоrte B. ADAMS, Plaintiff-Appellant, v. TRAVELERS INDEMNITY COMPANY OF CONNECTICUT; Travelers Property & Casualty Co.; Travelers Insurance Co.; Goodyear Tire & Rubber Co., Defendants-Appellees.
No. 04-20734.
United States Court of Appeals, Fifth Circuit.
Sept. 12, 2006.
David Norman Kitner (argued), Christine D. Roseveare, Strasburger & Price, Dallas, TX, for Defendants-Appellees.
Before JOLLY, HIGGINBOTHAM and SMITH, Circuit Judges.
PATRICK E. 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
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, Adаms 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 tirеs 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 5:30 p.m. After he delivered the tires to the Houston shop at approximately 7:00 p.m., Adams stopped for Chinese take-out and drove to his father‘s house, where he arrived by approximately 8:30 p.m. There, Adams ate supper, consumed four or five beers, and slept for approximately four hours. Sometime between 1:00 and 2:00 a.m., Adams awoke and drove the Goodyear truck to a convenience store in order to purchase cigarettes for his father.1 On his way back tо 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
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
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 es-
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.
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 pаrty 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
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 reasоnable jury to return a verdict for the nonmoving party.26 “Rule 56 does 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, thе 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 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 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, 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
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, 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, respectively.50
Thus, we consider the purpose of the errand, assess the distance and time involved, and weigh the additional factor of
Travelers heavily relies upon the time of day when the accident occurred to place the event outside the policy requirement of permissive use. Admittedly, Adams stands on shaky grоund, here.53 The inference that Goodyear‘s acquiescence to Adams‘s personal use during his lunch hour created implied permission to pur- chase 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 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 commоn 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 or-
REVERSED AND REMANDED.
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 Hоuston (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 hаd 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 deviation 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 involve 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 Coronado held that the trip was “wholly unrelated by time, place, or purpose from the objectives for which he was granted use of the vehicle.” Id. 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 home in order that she follow him and drive him back to his residence. As that court repeatеdly 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 purpose and time of the deviation were unrelated to the objectives for which Adams was granted the use of thе 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: