MIKAEL HUGENBERG v. WEST AMERICAN INSURANCE COMPANY/ OHIO CASUALTY GROUP
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APRIL 7, 2006; 2:00 P.M.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-001472-MR
MIKAEL HUGENBERG
v.
APPELLANT
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE GREGORY M. BARTLETT, JUDGE
CIVIL ACTION NO. 00-CI-02584
WEST AMERICAN INSURANCE COMPANY/
OHIO CASUALTY GROUP
AND
NO. 2004-CA-001490-MR
DONALD FRITZ; PEGGY FRITZ;
AND BRADLEY J. FRITZ, A MINOR,
BY AND THROUGH HIS PARENTS,
DONALD AND PEGGY FRITZ
v.
APPELLEE
APPELLANTS
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE GREGORY M. BARTLETT, JUDGE
CIVIL ACTION NO. 00-CI-02269
MIKAEL J. HUGENBERG, A MINOR;
JACK HUGENBERG; SUSAN HUGENBERG;
RANDY DAUWE; THOMAS HONEBRINK;
AND THE HIGHLAND CEMETERY
APPELLEES
AND
NO. 2004-CA-001491-MR
DONALD FRITZ; PEGGY FRITZ;
AND BRADLEY J. FRITZ, A MINOR,
BY AND THROUGH HIS PARENTS,
DONALD AND PEGGY FRITZ
v.
APPELLANTS
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE GREGORY M. BARTLETT, JUDGE
CIVIL ACTION NO. 00-CI-02584
WEST AMERICAN INSURANCE COMPANY/
OHIO CASUALTY GROUP;
MIKAEL J. HUGENBERG, A MINOR;
JACK HUGENBERG; SUSAN HUGENBERG;
RANDY DAUWE; THOMAS HONEBRINK;
AND THE HIGHLAND CEMETERY
AND
NO. 2004-CA-002127-MR
DONALD FRITZ; PEGGY FRITZ;
AND BRADLEY J. FRITZ, A MINOR,
BY AND THROUGH HIS PARENTS,
DONALD AND PEGGY FRITZ
v.
APPELLEES
APPELLANTS
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE DOUGLAS M. STEPHENS, JUDGE
CIVIL ACTION NO. 01-CI-00209
LIBERTY MUTUAL INSURANCE COMPANY;
MIKAEL J. HUGENBERG, A MINOR;
JACK HUGENBERG; SUSAN HUGENBERG;
RANDY DAUWE; THOMAS HONEBRINK;
AND THE HIGHLAND CEMETERY
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APPELLEES
AND
NO. 2004-CA-002172-MR
JACK HUGENBERG; SUSAN HUGENBERG;
AND MIKAEL J. HUGENBERG, A MINOR,
BY AND THROUGH HIS PARENTS,
JACK AND SUSAN HUGENBERG
APPELLANTS
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE DOUGLAS M. STEPHENS, JUDGE
CIVIL ACTION NO. 01-CI-00209
v.
LIBERTY MUTUAL INSURANCE COMPANY;
PEGGY FRITZ; DONALD FRITZ;
BRADLEY J. FRITZ, A MINOR,
BY AND THROUGH HIS PARENTS,
DONALD AND PEGGY FRITZ;
RANDY DAUWE; THOMAS HONEBRINK;
AND THE HIGHLAND CEMETERY
APPELLEES
OPINION
AFFIRMING IN PART AND
REVERSING AND REMANDING IN PART
** ** ** ** **
BEFORE:
BARBER, MINTON, AND TACKETT, JUDGES.
MINTON, JUDGE:
appeals.
The matter before us concerns five separate
They have not been consolidated, but we heard them
together because all arise from three interrelated Kenton
Circuit Court cases concerning the same motor vehicle accident.
We affirm the summary judgments entered in Case Nos. 2004-CA001490-MR, 2004-CA-001472-MR, and 2004-CA-001491-MR.
We reverse
the summary judgments entered in Case Nos. 2004-CA-002127-MR and
-3-
2004-CA-002172-MR and remand to the trial court for further
proceedings.
I.
FACTUAL AND PROCEDURAL HISTORY.
On Saturday, September 18, 1999, fifteen-year-old
Mikael Hugenberg (Mikael)1 convinced Randy Dauwe (Dauwe) to buy
him two twelve-packs of beer.
Dauwe was the boyfriend of Annie
Hugenberg (Annie), Mikael’s older sister.
Dauwe left the beer
in the trunk of his unlocked car, which was parked on the street
near the Hugenbergs’ house, and departed with Annie in her car.
Although Mikael had no driver’s license or learner’s permit, he
decided that he would drive Dauwe’s car rather than walk to his
destination carrying the beer.2
That night, Mikael, Bradley
Fritz (Brad),3 and Blake Gehring (Gehring) each drank some of the
beer at the home of Ryan Arlinghaus (Arlinghaus), whose parents
were out for the evening.4
Mikael then drove Brad and Gehring to
another teen gathering in The Highland Cemetery (the cemetery)
1
Mikael’s name has been misspelled at times in the record as
“Michael.”
2
There is some dispute over how Mikael obtained Dauwe’s car keys,
which will be discussed below. Mikael did not want to carry the
beer because it was bagged in clear plastic, which did not
adequately conceal the contents.
3
We have referred to Bradley Fritz as “Brad” because this is the
nickname used in the briefs filed by his parents on their own behalf
and on his behalf.
4
Brad, Gehring, and Arlinghaus were all fifteen at the time.
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near the resident caretaker’s house.
may have drunk more beer there.
Mikael, Brad, and Gehring
Later, Mikael drove through the
cemetery with Brad and Gehring as passengers when he lost
control of the car, hitting a tree.
As a result of the crash,
Brad suffered serious and permanent injuries, including brain
damage.
Brad’s parents, Donald and Peggy Fritz (the Fritzes),
filed suit on their own behalf and on Brad’s behalf demanding
judgment for Brad’s injuries against Mikael; his parents, Jack
and Susan Hugenberg (the Hugenbergs); Dauwe; the cemetery; and
Thomas Honebrink,5 the cemetery caretaker.6
The only claim
against the Hugenbergs was for negligent supervision of Mikael.
After summary judgment was granted in the Hugenbergs’ favor, the
Fritzes appealed (collectively, “the Fritz appellants”).7
At the time of the accident, the Hugenbergs had both a
homeowner’s insurance policy and an auto insurance policy with
West American Insurance Company/Ohio Casualty Group (West
American).
West American filed a separate declaratory judgment
5
Mikael’s friend Bo Honebrink was the son of the cemetery’s
caretaker.
6
A number of additional parties were brought into this case; and
additional claims were raised as a result of the filing of crossclaims, a counterclaim, and a third-party complaint.
These
additional parties and claims are not relevant to the summary
judgment orders on appeal.
7
This appeal is Case No. 2004-CA-001490-MR.
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action (Case No. 00-CI-02584), seeking a declaration that there
was no liability coverage available under either policy for the
Hugenbergs or Mikael for the claims raised against them in the
underlying personal injury suit.
The trial court granted
summary judgment in favor of West American.
Mikael and the
Fritz appellants have separately appealed this summary judgment.8
Dauwe had an auto insurance policy with Liberty Mutual
Insurance Company (Liberty Mutual) at the time of the accident.
Liberty Mutual also filed a separate declaratory judgment action
(Case No. 01-CI-00209), seeking a declaration that there was no
liability coverage under Dauwe’s auto policy for the claims
raised against Mikael.
Liberty Mutual also sought a declaration
that it owed no contractual duty to defend Mikael.
judgment was granted in favor of Liberty Mutual.
Summary
The Hugenbergs
have filed an appeal of this summary judgment on their own
behalf and on behalf of Mikael (collectively, “the Hugenberg
appellants”).9
The Fritz appellants have also separately
appealed.10
The general issues before the Court in these five
appeals are:
8
Mikael’s appeal is Case No. 2004-CA-001472-MR. The Fritz
appellants’ appeal is Case No. 2004-CA-001491-MR.
9
The appeal by the Hugenberg appellants is Case No. 2004-CA-002172MR.
10
The Fritz appellants’ appeal is Case No. 2004-CA-002127-MR.
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1)
Whether a genuine issue of material fact exists
as to the alleged negligence of the Hugenbergs in supervising
their son, Mikael;
2)
Whether a genuine issue of material fact exists
as to coverage under the Hugenbergs’ homeowner’s insurance
policy with West American;
3)
Whether a genuine issue of material fact exists
as to coverage under the Hugenbergs’ auto insurance policy with
West American; and
4)
Whether a genuine issue of material fact exists
as to coverage under Dauwe’s auto insurance policy with Liberty
Mutual.
II.
STANDARD OF REVIEW.
Summary judgment is proper only if the movant
demonstrates “that the adverse party could not prevail under any
circumstances.”11
However, “a party opposing a properly
supported summary judgment motion cannot defeat that motion
without presenting at least some affirmative evidence
demonstrating that there is a genuine issue of material fact
requiring trial.”12
“In the analysis, the focus should be on
what is of record rather than what might be presented at
11
Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476,
480 (Ky. 1991).
12
Hubble v. Johnson, 841 S.W.2d 169, 171 (Ky. 1992).
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trial.”13
In ruling on a motion for summary judgment, the trial
court must view the facts and all inferences reasonably drawn
from them in the light most favorable to the party opposing the
motion.14
And, on appeal, we must determine whether the trial
court correctly found that there were no genuine issues of
material fact and that the moving party was entitled to summary
judgment as a matter of law.15
Because findings of fact are not
at issue, we need not defer to the trial court.16
III.
ANALYSIS.
A. There is no Genuine Issue of Material Fact Regarding
the Summary Judgment Claim in Favor of the Hugenbergs on the
Negligent Supervision Claim.
The Fritz appellants assert that the trial court erred
in granting summary judgment on the negligent supervision claim
because there are material questions of fact concerning whether
the Hugenbergs were negligent in their supervision of their
minor son, Mikael, and whether this negligence contributed to
the injuries suffered by Brad.
While negligent parental
supervision can give rise to a viable cause of action, the Fritz
13
Welch v. American Publishing Co. of Kentucky, 3 S.W.3d 724, 730 (Ky.
1999).
14
Steelvest, 807 S.W.2d at 480; Smith v. O’Dea, 939 S.W.2d 353, 356
(Ky.App. 1997).
15
Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App. 1996).
16
Id.
-8-
appellants have failed to present any facts that raise a jury
question.
1.
The Elements of the Tort of Negligent Supervision.
The essence of a negligent supervision claim is that
the parent’s “failure to exercise due care has made it possible
and probable that the child would injure another.”17
negligence action requires proof of:
A
(1) a duty on the part of
the defendant; (2) a breach of that duty; and (3) a consequent
injury, which consists of actual injury or harm, plus legal
causation linking the defendant's breach with the plaintiff's
injury.18
Kentucky’s highest court has cited, with approval, the
following description of a parent’s duty to supervise or control
the minor child:
A parent is under a duty to exercise
reasonable care so to control his minor
child as to prevent it from intentionally
harming others or from so conducting itself
as to create an unreasonable risk of bodily
harm to them, if the parent
(a)
knows or has reason to know that he has
the ability to control his child, and
(b)
knows or should know of the necessity
and opportunity for exercising such
control.19
17
Moore v. Lexington Transit Corp., 418 S.W.2d 245, 248 (Ky. 1967).
18
Pathways, Inc. v. Hammons, 113 S.W.3d 85, 88-89 (Ky. 2003).
19
Moore, 418 S.W.2d at 248 (quoting RESTATEMENT (SECOND) OF TORTS § 16
(1965)).
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The existence of a parent’s duty to control a minor
child largely turns on the foreseeability of the child’s
injurious conduct.
For a child’s act to be foreseeable, it is
not necessary that the child have committed that same act
before.
A duty to control the child may also arise where the
child previously has committed a very similar act and there are
circumstances making it foreseeable that the child might later
commit the specific act at issue.
In Moore v. Lexington Transit Corp., the Court found
that a material question of fact existed regarding a mother’s
negligence in failing to prevent her eight-year-old child from
opening a car door into a moving bus, even though the child
allegedly had never opened his door without direction before.20
But, on multiple occasions, the mother had let the child open
the door into the bus lane and exit the car at the dangerous
intersection where the accident happened.21
Also, at the time of
the accident, there were children in the crosswalk at the
intersection.22
Under these circumstances, the Court reasoned
that the mother might well have foreseen that her young son
20
418 S.W.2d at 246-247.
21
Id. at 247-248.
22
Id. at 248.
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might anticipate and open the door without her direction in his
eagerness to join the other children on the way to school.23
Parents are not required to be prescient, however.
Thus, in James v. Wilson,24 this Court affirmed a summary
judgment in favor of the parents of a high-school student, who
shot several classmates, on the claim of negligent supervision
because there was no evidence that the son had exhibited any
behavior that should have placed his parents on notice that they
needed to prevent him from shooting his classmates.25
When determining whether a child’s injurious conduct
was foreseeable, the trial court should consider only those
facts that the parents knew, or should have known, about before
the incident at issue.26
This determination must be made
considering the facts from the perspective of the parents before
23
Id.
24
95 S.W.3d 875 (Ky.App. 2002).
25
Id. at 887-888 (stating that the son’s occasional practice of taking
out his frustrations by beating a barrel did not indicate any
proclivity toward violence against people or likelihood of him
shooting his fellow students).
26
See, e.g., id. at 887 (discounting as factors to be considered in
determining whether the son’s school shootings were foreseeable the
facts that he had previously stolen a gun from his father to sell at
school and had accessed violent and pornographic materials on the
internet where there was no evidence that the parents knew, or
should have known, of these incidents until after the shootings).
-11-
the incident with every attempt to eliminate the distorting
effects of hindsight.27
2.
The Hugenbergs Owed No Duty to the Fritz Appellants
Because Mikael’s Actions Were Not Foreseeable.
There is insufficient evidence to raise a material
question of fact about whether the Hugenbergs were aware, or
should have been aware, of the need to prevent their fifteenyear-old son from drinking and driving under the influence of
alcohol on September 18, 1999.
The Fritz appellants do not
assert that the Hugenbergs had actual knowledge that Mikael was
drinking alcohol or driving, much less both, on the night of the
accident.
And they offer no evidence showing that Mikael had
ever driven under the influence of alcohol before.
Neverthe-
less, the Fritz appellants assert that the accident was
foreseeable based on a few previous incidents when Mikael had
drunk alcohol or had driven a car.
The Hugenbergs only knew of Mikael drinking on two
occasions.
Once, possibly as long as eleven months earlier,
Mikael and some other teenagers drank beer in the woods behind
the cemetery.
One of the boys called the Hugenbergs to fetch
Mikael because he was acting strangely.
27
The Hugenbergs could
See, e.g., id. at 887-888 (describing as “reasonable under the
circumstances” the son’s explanation to his parents that the noises
from his room the night before the shootings and the large bundle he
was taking to class that day were due to a school project, even
though the noises were actually part of his preparations for the
shootings, and the bundle contained guns).
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tell that Mikael had been drinking but thought his condition was
due as much to being extremely cold as to being intoxicated.
He
was lectured by both parents about drinking before he was of
legal age.
a time.
He was grounded and had his privileges curtailed for
He was also warned that if he drank again, his parents
would not sign the permission form for him to get his learner’s
permit when he turned sixteen.
They later learned that Mikael also drank alcohol at a
party thrown by a girl whose parents were out of town.28
confronted, he admitted that he drank at the party.
When
And he was
again punished.
On another occasion, Thomas Honebrink called the
Hugenbergs to inform them that Mikael was at a particular girl’s
house; that he had heard that there were no parents present; and
that some of the teens, apparently, planned to drink alcohol.
Mikael’s father picked him up immediately.
He saw no alcohol
present, and Mikael had not been drinking.
Nevertheless, Mikael
was punished by his parents, apparently for being at a house
without parental supervision and for not being where he said he
was going to be.
The Fritzes have presented some testimony indicating
that Mikael drank alcohol on other occasions and that he may
28
They were called after the fact by the girl’s mother. Having
learned of the unauthorized party, she was apparently calling all of
the parents of the children who attended.
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have been reckless or out of control when he drank.
But they
have offered no evidence showing that the Hugenbergs knew, or
should have known, of these incidents.
Regarding Mikael’s driving, Jack Hugenberg testified
that he was not aware until after the accident that Mikael had
ever driven a car before.
Susan Hugenberg testified that she
knew of only one incident when she let Mikael practice driving
in the cemetery with her in the passenger seat several weeks
before the accident.
Some of the appellants have presented some
evidence indicating that Mikael may have driven on other
occasions; but they have offered no evidence indicating that the
Hugenbergs knew, or should have known, about these other
incidents.
The Fritz appellants assert that “[a]ny reasonable
person or parent should have foreseen that if a child with this
drinking problem is allowed to continue to drink and is also
allowed to operate a motor vehicle, both in violation of the
law, that the two illegal acts would inevitably and eventually
combine, causing injury to someone.”
We disagree.
We do not
think that the knowledge of one driving lesson with his mother,
two isolated incidents of drinking, and one incident of being in
an unsupervised house with peers who may have intended to drink
were sufficient to render Mikael’s conduct on the night of
September 18, 1999, foreseeable.
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The Fritz appellants have criticized the Hugenbergs’
efforts to discipline Mikael for drinking as ineffectual,
pointing out other steps they might have taken.
But parents are
under no duty “to take precautionary disciplinary measures or to
regulate their children’s behavior on an ongoing basis . . . to
prevent their children from ever entering into a situation where
they might commit a negligent act[,]”29 unless they know, or
should know, of a specific need to prevent their child from
committing an injurious act.
This is true even when the child’s
prior conduct has not been perfect.30
Even if drastic punitive
measures might have prevented the automobile accident in this
case, this does not mean that the Hugenbergs’ failure to impose
such measures constitutes negligent supervision.
Because
Mikael’s conduct on the night of the accident was not
foreseeable, the Hugenbergs were under no duty to take measures
to prevent this conduct.
3.
The Hugenbergs Owed No Duty to the Fritz Appellants
Because Mikael Was Not Under the Hugenbergs’
Immediate Control.
We also find that the Fritz appellants have presented
no evidence establishing that the Hugenbergs had the actual
ability to control Mikael sufficiently to prevent him from
29
Lott v. Strang, 727 N.E.2d 407, 409-410 (Ill.App.Ct. 2000).
30
See id. at 409 (holding that the fact that the minor had had an
automobile accident one year earlier did not place the parents on
notice that another accident was likely to occur.)
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drinking alcohol and driving under the influence on the night of
the accident.
The duty to control one’s child and prevent
injurious behavior depends, in part, on the actual, physical
ability to do so.
In Moore, the court held that the mother’s actual
ability to control her son and prevent him from opening the car
door could not be disputed because she was in the vehicle with
him.31
In contrast, this Court found in James that the fact that
the son was not in the “immediate control of his parents” when
he stole the gun and ammunition used in the shootings from a
third party, nor when the actual shootings occurred at school,
served as an additional reason for upholding the summary
judgment dismissing the negligent supervision claim against the
parents.32
The Fritz appellants try to distinguish James on the
ground that the shootings happened at school where the parents
were required by law to send their son but were not permitted to
supervise him.
The Hugenbergs were not required by law to
permit Mikael to go out and socialize with his friends on a
Saturday night.
Therefore, the Fritz appellants reason that the
fact that Mikael was not in his parents’ immediate control when
all the relevant acts occurred on the night of the accident is
31
418 S.W.2d at 248.
32
95 S.W.3d at 887-888.
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proof of the Hugenbergs’ negligent supervision.
This argument
ignores the fact that part of the negligence claim in James was
based on the fact that the son was able to steal the gun and
ammunition from a third party without his parents noticing.
Thus, the Court’s decision affirming the summary judgment in
favor of the parents on the negligent supervision claim did not
turn on the fact that the shootings occurred at school where the
parents were unable to supervise their son personally.
It is not negligent supervision per se for parents to
fail to monitor their teenager twenty-four hours a day when the
parents are not aware of, and have no reason to be aware of, any
particular risk necessitating such intensive monitoring.
Parents owe no duty to third parties to supervise or control
their minor child to prevent the child from harming others
unless the parents know, or should know, of the need and
opportunity to exercise such control and the parents have the
ability to exercise such control.
The mere fact that the
parents do not have the ability to exercise control is not, in
and of itself, proof that the parents violated a duty to control
their child to prevent him from harming others.
The Fritz appellants have not presented any evidence
to establish either that the Hugenbergs knew, or should have
known, of a need to prevent Mikael from drinking and driving and
of an opportunity to prevent him from doing so or that the
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Hugenbergs had the actual, physical ability to have prevented
Mikael from drinking and driving on the evening of September 18,
1999.
Therefore, summary judgment was properly granted on the
negligent supervision claim.
B.
There is no Genuine Issue of Material Fact
Regarding the Coverage Under the Hugenbergs’
Homeowner’s Insurance Policy with West American.
Mikael and the Fritz appellants separately have
appealed the trial court’s summary judgment in favor of West
American on the issue of the lack of coverage under the
homeowner’s policy for Mikael or the Hugenbergs based on “the
motor vehicle exclusion” in the policy.
The provision states,
in relevant part, that the policy’s coverage provisions for
personal liability and medical payment to others “do not apply
to ‘bodily injury’ . . . [a]rising out of . . . [t]he ownership,
maintenance, use, loading or unloading of motor vehicles . . .
owned or operated by or rented or loaned to an ‘insured.’”
In their briefs, both sets of appellants assert that
the motor vehicle exclusion does not apply to the Hugenbergs
because the negligent supervision claim against them is not one
“arising out of” their use of a motor vehicle.
We will address
the appeals of this summary judgment separately because there
are procedural issues complicating the appeal filed by Mikael.
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1.
a.
Appeal by the Fritz Appellants.
Standards for Interpreting Insurance Contracts.
Interpretation of insurance contracts is generally a
matter of law to be decided by the court.33
subject to de novo review on appeal.34
As such, it is
Under the reasonable
expectation doctrine, ambiguous terms in an insurance contract
must be interpreted in favor of the insured’s reasonable
expectations and construed as an average person would construe
them.35
But “[o]nly actual ambiguities, not fanciful ones, will
trigger application of the doctrine.”36
Absent ambiguity, terms
in an insurance contract are to be construed according to their
“plain and ordinary meaning.”37
Insurance polices should be
construed according to the parties’ mutual understanding at the
time they entered into the contract, with this mutual
understanding to be deduced, if at all possible, from the
language of the contract itself.38
Exceptions and exclusions in
33
Stone v. Kentucky Farm Bureau Mutual Insurance Co., 34 S.W.3d 809,
810 (Ky.App. 2000).
34
MGA Insurance Co., Inc. v. Glass, 131 S.W.3d 775, 777 (Ky.App.
2004).
35
True v. Raines, 99 S.W.3d 439, 443 (Ky. 2003).
36
Id.
37
Nationwide Mutual Insurance Co. v. Nolan, 10 S.W.3d 129, 131-132
(Ky. 1999).
38
Id.
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insurance policies are to be narrowly construed to effectuate
insurance coverage.39
But “[r]easonable conditions,
restrictions, and limitations on insurance coverage are not
deemed per se to be contrary to public policy.”40
b.
The Motor Vehicle Exclusion is Clear and Unambiguous.
The doctrine of reasonable expectation does not come
into play in the instant case because the motor vehicle
exclusion in the Hugenbergs’ homeowner’s policy with West
American is clear and unambiguous.
It is true that the
Hugenbergs did not use or operate a motor vehicle.
But the
policy does not just deny liability coverage to an insured for
any bodily injury arising out of the use of a motor vehicle
operated by that same insured.
Instead, it denies liability
coverage for a bodily injury arising out of the use of a motor
vehicle “operated by . . . an ‘insured.’”
Based on the plain
meaning of this exclusion, coverage for any and all insureds
would be denied where the claim was for bodily injury arising
out of the use of a motor vehicle operated by any insured.
c.
“Arising Out of . . .” Requires a Causal Connection.
It is undisputed that Mikael used a motor vehicle.
It
is also clear that he is “an ‘insured’” within the meaning of
39
Eyler v. Nationwide Mutual Fire Insurance Co., 824 S.W.2d 855, 859
(Ky. 1992).
40
Snow v. West American Insurance Co., 161 S.W.3d 338, 341 (Ky.App.
2004).
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the motor vehicle exclusion.
the policy as follows:
your household who are:
The term “insured” is defined in
“‘Insured’ means you and residents of
a. Your relatives; or b. Other persons
under the age of 21 and in the care of any person named above.”
Elsewhere in the definitions section, the policy states as
follows:
“In this policy ‘you’ and ‘your’ refer to the ‘named
insured’ shown in the Declarations and the spouse if a resident
of the same household.”
insureds.
Both the Hugenbergs are listed as named
It is undisputed that Mikael is their son and that at
the time of the accident, he lived in their household and was
under the age of 21.
Therefore, according to the homeowner’s
policy, Mikael is an “insured.”
The only remaining question is whether the negligent
supervision claim against the Hugenbergs is a claim for
“‘bodily injury’ . . . [a]rising out of . . . [t]he ownership,
maintenance, use, loading or unloading of motor vehicles . . .
owned or operated by or rented or loaned to an ‘insured[.]’”
The answer turns largely on the meaning of the phrase
“arising out of.”
This phrase has been construed expansively:
The words ‘arising out of * * * use’ in
an automobile liability insurance policy,
are broad, general and comprehensive terms
meaning ‘originating from,’ or ‘having its
origin in,’ ‘growing out of’ or ‘flowing
from’ . . . . All that is required to come
within the meaning of the words ‘arising out
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of the * * * use of the automobile’ is a
causal connection with the accident.41
Thus, we must determine whether the negligent entrustment claim
against the Hugenbergs is causally connected with Mikael’s
automobile accident.
d.
The Negligent Supervision Claim is a Claim “Arising
Out of” the Use of a Motor Vehicle by an Insured.
The Hugenberg appellants assert that the negligent
supervision claim is not a claim arising out of the use of a
motor vehicle because the negligent acts or omissions asserted
against them do not necessarily involve the use of a motor
vehicle, as would be the case if they were accused of
negligently entrusting Mikael with a car, for example.
But no
cause of action lies for negligence unless the plaintiff has
suffered a legally-cognizable injury or damage.
The negligent
supervision claim against the Hugenbergs is based on the bodily
injury suffered by Brad in the motor vehicle accident.
If not
for Mikael’s losing control of the car and injuring his
passenger, Brad, there could be no claim for negligent
supervision against the Hugenbergs because Brad and the Fritzes
would have suffered no injury, an essential element of the tort.
The negligent supervision claim is based upon Brad’s injuries,
41
Insurance Co. of North America v. Royal Indemnity Co., 429 F.2d
1014, 1017-1018 (6th Cir. 1970). Citations omitted. Asterisks in
original. See also 43 AM.JUR.2D Insurance § 708 (2005) (stating that
“‘[a]rising out of’ the use or occupancy of a motor vehicle requires
a causal connection between the injuries and the vehicle.”).
-22-
and Brad’s injuries were caused by Mikael’s use of Dauwe’s car.
This satisfies the causal connection between the use of the
motor vehicle and the negligent supervision claim, which is
required by the “arising out of” language in the motor vehicle
exclusion.
Based on the plain meaning of the clear and
unambiguous language of the policy, the claim for negligent
supervision is a claim seeking coverage for bodily injury
arising out of the use of a motor vehicle.
The trial court
properly entered summary judgment in favor of West American
regarding the homeowner’s policy.
Therefore, we affirm in that
appeal brought by the Fritz appellants.
2.
Any Claims Regarding Coverage for Mikael Under
the Homeowner’s Policy Have Been Abandoned,
and Any Claims Regarding Coverage for the
Hugenbergs are not Properly Before this Court.
With regard to both Mikael and the Hugenbergs, there
are procedural problems barring us from considering the merits
regarding coverage under the West American homeowner’s policy.
The notice of appeal lists Mikael as the only appellant, both in
the caption and the body.
And the only issue presented in that
notice of appeal concerns Mikael’s coverage under the policy
“for his liability arising out of his negligent operation of a
non-owned automobile which was involved in an accident on
09/18/99.”
Moreover, the agreed statement filed by counsel for
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Mikael and counsel for West American under Kentucky Rules of
Civil Procedure (CR) 75.15 and the prehearing statement filed by
Mikael also list Mikael as the only appellant, both in the
caption and the body.
And both refer to the only issues on
appeal as whether Mikael was entitled to liability insurance
coverage and a defense under the homeowner’s policy with West
American.
Yet, the brief filed in this appeal listed “Mikael J.
Hugenberg, a minor, and Jack and Susan Hugenberg, his parents,”
as “Appellants.”
This brief exclusively addresses the issue of
liability coverage under the West American homeowner’s policy
for the Hugenbergs on the claim of negligent supervision and
whether they were entitled to a defense against this claim.
Nowhere in the brief are the issues of liability coverage for
Mikael or a duty to provide a defense for him addressed.
“An appellant’s failure to discuss particular errors
in his brief is the same as if no brief at all had been filed on
those issues.”42
Because Mikael has failed to raise the issue of
the availability of liability coverage and a defense for him and
his actions under the homeowner’s policy with West American, we
deem these issues to be waived or abandoned.43
42
Milby v. Mears, 580 S.W.2d 724, 727 (Ky.App. 1979).
43
C.f., Grange Mutual Insurance Co. v. Trude, 151 S.W.3d 803, 815 (Ky.
2004).
-24-
As for those claims that were raised in the
appellant’s brief regarding the Hugenbergs’ liability coverage
under the homeowner’s policy for the claim of negligent
supervision and their entitlement to a defense, these issues are
not properly before the Court.
the Hugenbergs in this case.
We do not have jurisdiction over
This is not a case where the
Hugenbergs substantially complied with CR 73.03.
They were not
identified as appellants anywhere until the brief.
And the
claims raised in the brief are not remotely the same as those
identified in the prehearing statement, notice of appeal, or
agreed statement under CR 75.15.
Therefore, the issues of the
availability of a defense and liability coverage for the
Hugenbergs on the negligent supervision claim under the
homeowner’s policy with West American are, also, not properly
before this Court in the appeal by Mikael.
For these procedural
reasons, we affirm in the appeal filed by Mikael.44
C.
There is no Genuine Issue of Material Fact
Regarding Coverage Under the Hugenbergs’ Auto
Policy with West American.
In the summary judgment in favor of West American, the
trial court concluded that Mikael was an insured under the
Hugenbergs’ automobile policy but was, nevertheless, denied
coverage based on the following policy exclusion:
44
“We do not
We note that the arguments which the Hugenbergs attempted to raise
concerning coverage under the homeowner’s policy for the negligent
supervision claim were substantially the same as those rejected on
the merits in the appeal filed by the Fritz appellants.
-25-
provide Liability Coverage for any ‘insured’:
. . . [u]sing a
vehicle without a reasonable belief that that ‘insured’ is
entitled to do so” (hereinafter “the entitlement exclusion”).
The Fritz appellants assert that there are material questions of
fact concerning whether the exclusion applies to Mikael and
whether he used Dauwe’s vehicle without a reasonable belief that
he was entitled to do so.
1.
The Entitlement Exclusion is not Ambiguous.
It is clear that Mikael is an “insured” within the
terms of the Hugenbergs’ auto policy with West American, despite
the fact that he had no driver’s license or learner’s permit.45
The question is whether he is excluded from coverage,
nevertheless, because he used the vehicle without a reasonable
belief that he was entitled to do so.
45
Although the Fritz
In an endorsement to the policy, “[i]nsured” is defined as:
“The ‘named insured’ or any ‘family member’ while:
. . .
‘[o]ccupying’ . . . any ‘motor vehicle.’”
In the same endorsement, “[f]amily member” is defined, in relevant
part, as follows:
“the spouse and any person related to the ‘named
insured’ by blood, marriage or adoption . . . who
is a resident of the ‘named insured’s’ household . . . .”
The Hugenbergs and Annie are all named insureds. Since Mikael was
related by blood to the Hugenbergs and Annie and resided in the same
household, he was a family member of a named insured and, hence, an
insured himself.
-26-
appellants assert that the exclusion is inherently ambiguous,
the Kentucky Supreme Court has held otherwise with regard to a
very similar exclusion in York v. Kentucky Farm Bureau Mutual
Insurance Co.46
The issue in that case was whether a user of a
vehicle had coverage under his father’s auto insurance policy
for which he was a listed driver covered during his use of “any
auto” or whether he was subject to the following exclusion:
“B.
We do not provide Liability Coverage
for any person:
. . . .
4.
Using a vehicle without a reasonable belief that a person is
entitled to do so.”47
The Court found “no ambiguity in the non-permissive user
exclusion[,]” stating that “[t]he clear and unambiguous words of
an insurance contract should be given their plain and ordinary
meaning.”48
It held that the plain meaning of the exclusion
showed it be “an overarching exception to the policy coverage as
a whole,” which excluded liability coverage for the driver.49
However, the court never addressed what it means to use a
vehicle without a reasonable belief that a person is entitled to
46
156 S.W.3d 291 (Ky. 2005).
47
Id. at 293.
48
Id.
49
Id.
-27-
do so.
Presumably this issue was not contested because, under
the facts of that case, the driver did not have a reasonable
belief that he was entitled to use the vehicle under any
possible meaning of that phrase.
2.
The History of Entitlement Exclusion Clauses.
Although the Supreme Court referred to the clause in
York as a “non-permissive user exclusion,” a more useful
designation for the type of clause is an “entitlement
exclusion.”50
Entitlement exclusion clauses are a later
development in the history of insurance than traditional omnibus
clauses, also known as “permissive use clauses,” which typically
provided coverage for any person provided that the actual use of
the vehicle was with the permission of the named insured.51
Because the issue with regard to a permissive use clause was
whether the owner of the vehicle gave the user express or
implied permission to use the vehicle, “the focus was solely on
the actions of the policyholder.”52
Entitlement exclusion
clauses gradually came to replace permissive use clauses as part
of a trend toward more expansive coverage.
Coverage based on
50
We borrow this term from Darla L. Keen, Note, The Entitlement
Exclusion in the Personal Auto Policy: The Road to Reducing
Litigation in Permissive Use Cases or a Dead End? 84 KY.L.J. 349,
350 (1995).
51
Id.
52
Id.
-28-
the user’s reasonable belief of entitlement is broader in scope
and more liberal than coverage based on the express or implied
permission to operate the vehicle.53
An exclusionary provision in an
automobile liability insurance policy which
provides that no liability coverage is
provided for any person using a vehicle
without a reasonable belief that that person
is entitled to do so differs from the
traditional “omnibus” clause which
authorizes coverage for a non-owner’s
permissive use of a vehicle; the
exclusionary clause in question is couched
in terms of entitlement rather than
permission, causing a shift in the inquiry
from an objective determination (whether the
owner or one in legal possession of the car
gave the user permission) to a mixed
objective/subjective determination of the
user’s state of mind⎯the reasonableness of
the user’s subjective belief of entitlement.54
3.
The Two-Pronged Test to Analyze an Entitlement Exclusion
Has a Subjective Component and an Objective Component.
In General Accident Fire & Life Assurance Corp.
Ltd. v. Perry,55 a Maryland court analyzed how entitlement
exclusions, similar to the one in the instant case, have been
construed and applied by courts of many different jurisdictions.
The court concluded that an exclusion barring liability coverage
“for any person . . . [u]sing a vehicle without a reasonable
53
Id. at 351.
54
7 AM.JUR.2D Automobile Insurance § 242 (2005).
55
541 A.2d 1340 (Md.Ct.Spec.App. 1988).
-29-
belief that that person is entitled to do so” is not ambiguous.56
Moreover, the court reasoned that the appropriate way to analyze
the entitlement exclusion is with a two-pronged test.
The first
prong looks at whether the driver had a subjective belief that
he was entitled to use the car, and the second prong looks at
whether this belief was objectively reasonable.57
As the court
explained, “it is clear that coverage is excluded if the driver
(a) knew he was not entitled to drive the vehicle, or (b) if he
claimed he believed he was entitled to drive the vehicle, but
was without reasonable grounds for such belief or claim.”58
We find this two-pronged test consistent with the
plain meaning of the language of the entitlement exclusion
clause in the instant case because “belief” comports with a
subjective standard while “reasonable” comports with an
objective standard.
56
Id. at 1342, 1347-1349.
57
Id. at 1348-1350.
58
Id. at 1349. See also, Allstate Insurance Co. v. United States
Fidelity and Guaranty Co., 663 F.Supp. 548, 553 (W.D.Ark. 1987)
(holding that the phrase “‘using a vehicle without a reasonable
belief that the person is entitled to do so’” means that “the trier
of fact must find that the person using the vehicle believed that he
was entitled to do so and that such belief was reasonable”); Omaha
Property & Casualty Insurance Co. v. Peterson, 865 S.W.2d 789, 790
(Mo.Ct.App. 1993) (stating that to avoid the application of the
entitlement exclusion, “[the driver] not only had to believe that
she had a right to drive the car, but her belief had to be
rational.”).
-30-
4.
Mikael Did Not Believe that He was Entitled
to Use Dauwe’s Car.
The best indication of Mikael’s subjective belief at
the time he took the car came from his testimony.59
Q.
At the time you took Randy Dauwe’s
car, . . . did you feel like that was
really okay with Randy?
. . . .
A.
Yes. I just figured⎯he wasn’t a real
strict person, yes, I just figured that
he would have just maybe have, you know,
said don’t do that or don’t do that
again, but I mean would have understood
my reasoning for doing it, not wanting
to get caught walking down the street
with beer.
. . . .
Q.
Did you feel like you were stealing
anything when you took Randy’s car or
did you feel like⎯
A.
No.
Q.
Or did you believe it was really okay?
. . . .
A.
No. I did not feel like I was stealing
anything.
. . . .
Q.
59
At the moment you got into Randy’s car,
drove it down the street to Ryan
Arlinghaus’ so that you wouldn’t be seen
walking down the street with the beer
Although we do not attempt to weigh the credibility of the evidence,
we note that it would have been in Mikael’s best interest to assert
that he believed that he was entitled to drive Dauwe’s car.
-31-
that Randy bought you, did you believe
at the time that what you were doing was
okay with Randy Dauwe?
A.
I knew it was wrong to take the car, but
I just assumed that he wouldn’t make
that big of a deal of it and get that
angry about it to where I should be
really concerned like how would he react
so I figured⎯I didn’t give too much
thought to the situation which⎯in a
whole, which, you know⎯that led up to
the whole accident in general, but I
would have thought that he wouldn’t have
cared that much.60
In later testimony, Mikael further clarified as follows:
Q.
A.
Correct.
Q.
Correct? And you also testified that
you didn’t think Randy would be, quote
unquote, “upset” because you knew he
didn’t want you driving the car, is that
correct?
A.
Correct.
Q.
When you say he wouldn’t be upset, do
you mean he wouldn’t come up and try to
start a fight with you or start yelling
at you? You just knew he wouldn’t be
screaming and yelling at you, is that
what you mean?
A.
60
You testified that you knew that evening
you didn’t⎯you shouldn’t be driving the
car? This is on previous depositions.
I knew it wouldn’t be like just a
confrontation or like anything involved
with, you know, him being mad like, you
know, angry or⎯
Mikael Hugenberg Deposition, 07/16/2002, pp. 259-262.
-32-
Q.
Verbally or physically⎯
A.
Correct.
Q.
⎯upset?
A.
It would be just on a calmer plane.
Q.
But you understood that he did not want
you to drive his car, is that correct?
A.
Correct.61
The appellants make much of the fact that Mikael did
not think that he was “stealing” Dauwe’s car, but we think this
may be a question of semantics.
To a layperson, “stealing” may
connote an intent permanently to deprive someone of a
possession.
Mikael intended to return the car.
In fact, he did
not necessarily intend to tell Dauwe about using the car.62
Whether or not Mikael considered what he was doing stealing is
irrelevant.
Nothing Mikael said or did indicates that he
thought he was entitled to use the car.
Indeed, he testified
that he knew at the time he took the car that it was wrong to do
so.
The Fritz appellants also point to statements by
Gehring in an affidavit to the effect that he believed that
Mikael was entitled to use Dauwe’s car.
If Gehring’s belief was
61
Mikael Hugenberg Deposition, 08/09/2002, pp. 106-107. This
deposition is also captioned as occurring on 08/09/2000, but this
earlier date is an error.
62
Mikael Hugenberg Deposition, 08/09/2002.
-33-
based on some indication by Mikael of Mikael’s belief in his
entitlement to use the car, then this might raise a material
question of fact.
But a closer examination of Gehring’s
testimony shows that he simply assumed that Mikael was
authorized to use the car, based on his own belief that Mikael
would not steal and the fact that Mikael had the car keys.63
Gehring’s assumptions do not raise a material question of fact
because they do not go to the critical question of Mikael’s
subjective belief.
The Fritz appellants have also attempted to say that
since Mikael’s mother let him drive in the cemetery once with
her and since he knew that some other unlicensed drivers drove
in the cemetery, then he, Mikael, may have reasonably believed
that he, too, was entitled to drive in the cemetery.
But the
question is not whether he believed he was entitled to drive in
the cemetery but whether he believed he was entitled to drive
Dauwe’s car.
The Fritz appellants also point to testimony by Susan
Grout that she had seen Mikael driving Dauwe’s car on a previous
occasion in the street in front of the Hugenbergs’ house with
Dauwe standing outside watching Mikael.
We do not think that
evidence that Mikael had used the car on another occasion in
Dauwe’s presence even raises an inference that Mikael
63
Blake Gehring Affidavit, 07/02/2004.
-34-
subjectively believed that he was entitled to use the vehicle on
this occasion.
Similarly, any evidence suggesting that Dauwe might
have given Mikael the keys does not show that Mikael
subjectively believed that he was entitled to drive the car.64
It is clear from the record that at the time he took Dauwe’s
vehicle, Mikael did not believe that he was entitled to use it.
And, based on the evidence presented, no reasonable jury could
conclude otherwise.
Because Mikael did not satisfy the first prong of the
test, there is no need to continue further.
When the driver has
made it clear that he did not believe that he was entitled to
operate the vehicle under the circumstances just before the
accident, “[t]he question of whether or not, if the operator had
believed that he was entitled to operate the vehicle, that
belief was reasonable, is irrelevant.”65
Where Mikael held no
belief in his entitlement to use Dauwe’s car, we need not
determine the reasonableness of this nonexistent belief.
For
all these reasons, the trial court properly determined that the
entitlement exclusion precluded liability coverage for Mikael
64
If Mikael had believed that he was entitled to drive the car, any
evidence suggesting that Dauwe gave him the car keys would go toward
showing the reasonableness of that belief.
65
Donegal Mutual Insurance Co. v. Eyler, 519 A.2d 1005, 1010
(Pa.Super.Ct. 1987).
-35-
under the Hugenbergs’ auto policy.
The summary judgment in
favor of West American was proper.
D.
There is a Material Question of Fact as to Dauwe’s
Coverage Under the Liberty Mutual Policy.
The Fritz appellants and the Hugenberg appellants have
each separately appealed from the summary judgment granted in
favor of Liberty Mutual in its declaratory judgment action.
The
trial court’s decision was based on its ruling that there could
be no liability coverage for Mikael under Dauwe’s auto insurance
policy because of an entitlement exclusion.
question reads as follows:
Coverage for any ‘insured:’
The exclusion in
“We do not provide Liability
. . . [u]sing a vehicle without a
reasonable belief that that ‘insured’ is entitled to do so.”66
As with the entitlement exclusion in the West American policy,
both sets of appellants assert that there are material questions
of fact concerning whether Mikael used Dauwe’s vehicle without a
reasonable belief that he was entitled to do so.
Mikael is clearly an “insured” within the meaning of
66
This provision was contained within an endorsement to the policy,
but it was also found in the original policy. It was merely
designated by a new number and letter. This policy, along with
several other documents, including Liberty Mutual’s motion for
summary judgment, was misfiled in Case No. 00-CI-02269 rather than
Case No. 01-CI-00209. However, the trial court in Case No. 01-CI00209 was aware of this misfiling and considered these documents
anyway.
-36-
the Liberty Mutual policy.67
Because this provision is identical
to the one in the Hugenbergs’ West American auto insurance
policy and the facts are identical, our holding would be the
same with regard to coverage under the Liberty Mutual Policy,
except for the possible effect of the Motor Vehicle Reparations
Act (MVRA).68
1.
The Minimum Liability Coverage Requirements
of the MVRA.
The question is whether the entitlement exclusion by
Liberty Mutual is in derogation of the minimum liability
coverage required by the MVRA.
The effect of the MVRA was
properly before the trial court.
The Fritz appellants, in their
answer to Liberty Mutual’s complaint for declaratory judgment,
incorporated “any special or affirmative defense provided for
under the Kentucky No-Fault Motor Vehicle Reparations Act,
[KRS] 304.39-010 [et seq.] and all subsequent amendments and
case law interpretations thereof.”
Also, the Hugenberg
appellants raised the issue more plainly, stating that the court
had to address whether the policy exclusion relied upon by
Liberty Mutual derogates from the minimum liability coverage
required by the MVRA and, hence, is void as against the
67
The policy defines “insured” as including “[a]ny person using ‘your
covered auto.’”
68
KRS 304.39, et seq.
-37-
expressed public policy of the MVRA.
By enacting the MVRA, the
legislature “intended to create a comprehensive compulsory
insurance system that requires owners to provide vehicle
security covering basic reparation benefits and that imposes
legal liability on vehicle owners for damages or injuries
arising out of ownership of or use of the vehicle.”69
KRS 304.39-080 states, in relevant part, as follows:
[E]very owner of a motor vehicle registered
in this Commonwealth or operated in this
Commonwealth by him or with his permission
shall continuously provide with respect to
the motor vehicle while it is either present
or registered in this Commonwealth, and any
other person may provide with respect to any
motor vehicle, by a contract of insurance or
by qualifying as a self-insurer, security
for the payment of basic reparation benefits
in accordance with this subtitle and
security for payment of tort liabilities,
arising from maintenance or use of the motor
vehicle. . . .
This statute creates an affirmative duty for the owner of every
vehicle operated in the Commonwealth “by him [the owner] or with
his permission” to obtain insurance coverage for basic
reparation benefits and the required minimum tort liability
coverage.
“Owner” is defined within the MVRA as “a person,
other than a lienholder or secured party, who owns or has title
to a motor vehicle or is entitled to the use and possession of a
motor vehicle subject to a security interest held by another
69
McGrew v. Stone, 998 S.W.2d 5, 6 (Ky. 1999).
-38-
person[,]” excluding “a lessee under a lease not intended as
security.”70
Under KRS 304.39-100(1), “[a]n insurance contract
which purports to provide coverage for basic reparation benefits
or is sold with representation that it provides security
covering a motor vehicle has the legal effect of including all
coverages required by this subtitle.”
Thus, auto liability
insurance contracts sold in Kentucky cannot cover less than the
minimum coverage required by the MVRA.
Based on the evidence in the record, Dauwe was an
owner of a motor vehicle within the MVRA.
So he had an
obligation to obtain insurance coverage for the payment of basic
reparation benefits and tort liabilities “arising from
maintenance or use of the motor vehicle”71 for any motor vehicle
“operated in this Commonwealth by him or with his permission[.]”72
And, under KRS 304.39-100, Liberty Mutual would not
be permitted to offer Dauwe less coverage than the minimum
required by the MVRA.
2.
York is Distinguishable from the Instant Case.
The MVRA requires Dauwe to provide insurance coverage
for basic reparation benefits and tort liabilities arising out
of the use of the motor vehicle to anyone operating the motor
70
KRS 304.39-020(12).
71
KRS 304.39-080(5).
72
Id.
(Emphasis added.)
-39-
vehicle “with his [Dauwe’s] permission.”
Yet, the entitlement
provision in Dauwe’s policy with Liberty Mutual excludes
liability coverage “for any ‘insured:’
. . . . [u]sing a
vehicle without a reasonable belief that that ‘insured’ is
entitled to do so.”
In York, the Kentucky Supreme Court held
that an insurance company was not required to provide liability
coverage for its insured, who was excluded from coverage by his
auto insurance policy based on a similar entitlement exclusion.73
But the insurance company in question was the insurer for the
driver of the vehicle, not the owner.74
crucial to the holding of the case.
And this distinction was
The Court determined “that
the language of KRS 304.39-080(5) regarding liability insurance
on non-owned vehicles is merely permissive, as it reads ‘any
other person may provide’ liability insurance.”75
Thus, the
exclusion was valid because the driver, who did not own the car,
was under no obligation under the MVRA to provide any insurance
coverage for anyone using the car.
This explains why the MVRA
was not relevant to the question of whether there was liability
coverage under the Hugenbergs’ auto insurance policy.
We also note that York was distinguishable from the
instant case in another way.
73
156 S.W.3d at 294.
74
Id. at 292, 293.
75
In York, there was no question
Id. at 294.
-40-
over whether the driver had permission to use the vehicle; all
the parties acknowledge that he did not.76
Since the MVRA only
requires coverage for a car used with the owner’s permission,
this also meant that there was no obligation under the MVRA to
provide liability coverage.
York does not address the question
of whether the MVRA requires the owner of a car to provide
minimum coverage for a driver who used the owner’s car without a
reasonable belief that he was entitled to do so but with the
owner’s permission.
3.
The MVRA and the Entitlement Exclusion Apply
Different Standards to Determine Coverage.
The difficulty lies in the fact that the entitlement
exclusion and the MVRA use different standards.
The insurance
policy excludes liability coverage for an insured using the car
without a reasonable belief that he is entitled to do so while
the MVRA mandates that Dauwe and his auto insurer provide
minimum coverage, including liability coverage, for anyone using
Dauwe’s car with Dauwe’s permission.
Just as one might have a
reasonable belief in his entitlement to use a vehicle, even
though he has no permission to do so, one might have the owner’s
permission to use a vehicle but still have no reasonable belief
that he is entitled to do so.
Thus, we must determine if there
is a question of fact regarding whether Dauwe gave Mikael
76
Id. at 293-294.
-41-
permission to use his car.
This question is material because,
to the extent that the entitlement clause of Dauwe’s insurance
contract with Liberty Mutual tried to deny liability coverage
for a driver using Dauwe’s vehicle with Dauwe’s permission, it
would be void and unenforceable.
4.
There is a Material Question of Fact Regarding
Whether Mikael had Dauwe’s Express or Implied
Permission to Operate Dauwe’s Car.
Mikael and Dauwe both testified in depositions to the
following points:
(1) Mikael had never driven Dauwe’s car
before the night of the accident; (2) Dauwe had refused Mikael’s
previous requests to drive; (3) Mikael did not ask to drive
Dauwe’s car on that night; (4) Dauwe did not tell Mikael that he
could drive his car on that night; and (5) Dauwe did not give
Mikael his car keys, nor tell him where he left them.
Dauwe testified that he habitually left the car keys
in the closed console of his unlocked car.
He stated that he
did not know that Mikael was aware of his habit of leaving his
keys in the car.
Mikael, on the other hand, testified that he
knew of Dauwe’s habit of leaving the keys in his car.
Mikael
stated that he did not decide to drive until he went with
Gehring and Joe Brady to retrieve the beer from the trunk on the
way to the Arlinghauses.
Mikael said he got the keys from the
-42-
open console and, then, went to remove the beer from the trunk.77
Mikael said he decided to drive Dauwe’s car only when he saw
that the beer was in clear plastic bags.
But Gehring testified
in his deposition and stated in an affidavit that Mikael already
had Dauwe’s car keys in his hand and was discussing driving
Dauwe’s car before they ever arrived at the car, meaning that
Mikael did not get them from the console when he said that he
did.
This creates a possible inference that Dauwe gave Mikael
the keys to his car, which further suggests that he gave Mikael
express or implied permission to drive the car.
This inference is supported by testimony by Susan
Grout that she had seen Mikael driving Dauwe’s car on an earlier
occasion while Dauwe watched.
Because the facts must be
interpreted in the light most favorable to the nonmoving party,
we perceive a question of fact concerning whether Mikael had
permission to use Dauwe’s car.
Based on these facts, we cannot
say that it would be impossible for the Fritz appellants or the
Hugenberg appellants to prove that Mikael operated Dauwe’s
vehicle with Dauwe’s permission.
If they succeeded in
establishing this point, the plain language of the MVRA would
require Dauwe’s insurer to provide liability coverage for
Mikael, despite the language of the entitlement clause.
77
So the
Mikael did not recall if he used the keys to unlock the trunk or
used the trunk release button.
-43-
trial court’s grant of summary judgment in favor of Liberty
Mutual on the issue of coverage for Mikael under Dauwe’s auto
insurance policy was premature.
We reverse and remand on this
point for further proceedings.
IV.
A.
DISPOSITION.
Based on the merits, we affirm the underlying
summary judgments in the following cases:
1.
2.
B.
Case No. 2004-CA-001490-MR; and
Case No. 2004-CA-001491-MR;
We also affirm in Case No. 2004-CA-001472-MR on
procedural grounds because the only issues properly before this
Court on appeal were abandoned or waived; and
C.
We reverse and remand for further proceedings
consistent with this opinion in the following cases:
1.
Case No. 2004-CA-002127-MR; and
2.
Case No. 2004-CA-002172-MR.
ALL CONCUR.
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BRIEFS AND ORAL ARGUMENT FOR
APPELLANTS AND APPELLEES
JACK HUGENBERG; SUSAN
HUGENBERG; AND MIKAEL J.
HUGENBERG, A MINOR, BY AND
THROUGH HIS PARENTS, JACK
AND SUSAN HUGENBERG:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE WEST AMERICAN
INSURANCE COMPANY/ OHIO
CASUALTY GROUP:
Jeffrey A. Stepner
Donald L. Stepner
Covington, Kentucky
E. André Busald
Florence, Kentucky
BRIEFS AND ORAL ARGUMENT FOR
APPELLANTS AND APPELLEES
DONALD FRITZ; PEGGY FRITZ;
AND BRADLEY J. FRITZ, A
MINOR, BY AND THROUGH HIS
PARENTS, DONALD AND PEGGY
FRITZ:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE LIBERTY MUTUAL
INSURANCE COMPANY:
Michael P. Foley
Cincinnati, Ohio
Robert E. Sanders
Delana S. Pierce
Covington, Kentucky
-45-
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