Opinion
CIVIL ACTION NUMBER 99-1350 (REF: ALL CASES) SECTION "L"(3).
February 21, 2001.
ORDER AND REASONS
Pending before the Court is the motion of Defendant National Union Fire Insurance Company of Pittsburgh, Pennsylvania ("NUFIC") for summary judgment. After a review of the briefs and the applicable law, the Court finds that the issues raised in this motion involve questions of fact and, therefore, summary judgment is DENIED.
Background
The Plaintiffs in this consolidated case were employed on the M/V C-Searcher by PGS Exploration (US), Inc. ("PGS"). PGS arranged for a van to transport PGS employees from Port Fourchon, Louisiana to the New Orleans airport for transport back to their homes. Eric Leibold, who was employed by Edison Chouest Offshore, was also riding in the van. The van was traveling northbound on Louisiana Highway 1 in Lafourche Parish, Louisiana. Around milepost 28.7, a Mack truck heading southbound on Louisiana Highway 1 collided with the van. As a result of the collision, the vehicle rolled over several times, coming to a rest overturned on the highway. One of the passengers, Wallace Loper, was killed in the accident and others were seriously injured.
NUFIC had issued an automobile insurance policy to Petroleum Geo-Services, Inc. that lists PGS as a named insured. The Plaintiffs assert that this policy provides uninsured/underinsured motorist coverage for their injuries arising out of this accident. NUFIC filed this motion for summary judgment arguing that the policy does not provide uninsured/underinsured motorist coverage to the Plaintiffs in this case.
Summary Judgment Standard
Summary judgment will be granted only when there are no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. When evidence of contradictory facts has been submitted, "the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Willis v. Roche Biomedical Laboratories, Inc., 61 F.3d 313, 315 (5th Cir. 1995) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). However, the nonmovant cannot rest on mere allegations or denials but must set forth specific facts showing that there is a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 321-22 (1986).
Choice of Law
The preliminary issue is whether Texas law or Louisiana law should be applied to interpret NUFIC's policy. Federal courts apply the choice of law provisions of the forum state, here, Louisiana. See Duhon v. Union Pac. Resources Co., 43 F.3d 1011, 1013 (5th Cir. 1995).
Louisiana choice of law provisions are set forth in Civil Code articles 3515 and 3537. These two articles instruct courts to apply the law of the state whose policies would be the most seriously impaired if its law was not applied. See Shell Oil Co. v. Hollywood Marine, Inc., 701 So.2d 1038, 1040 (La.App. 5 Cir. 1997) ( citing Sentilles Optical Services, Div. of Senasco, Inc. v. Phillips, 651 So.2d 395 (La.App. 2 Cir. 1995)).
La. C.C. art. 3515 provides:
Except as otherwise provided in this Book, an issue in a case having contacts with other states is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of all involved states in the light of: (1) the relationship of each state to the parties and the dispute; and (2) the policies and needs of the interstate and international systems, including the policies of upholding the justified expectations of parties and of minimizing the adverse consequences that might follow from subjecting a party to the law of more than one state.
La. C.C. art. 3537 provides:
Except as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in Article 3515, as well as the policies of facilitating the orderly planning of transactions, of promoting multistate commercial intercourse, and of protecting one party from undue imposition by the other.
In this case, the policy in question was issued to Petroleum Geo-Services, Inc., a corporation with a mailing address in Houston, Texas. PGS is an additional named insured on the policy which was delivered to PGS at its office in Houston, Texas. Texas clearly has a legitimate interest, in regulating an insurance contract delivered to Texas businesses. See Shell Oil Co., 701 So.2d at 1041. The Court agrees with both parties that, although the injury occurred in Louisiana, the policies of Texas would be most seriously impaired if its law was not applied.
Policy Provisions
Under Texas law, if a provision of an insurance policy is ambiguous, the ambiguity is resolved in favor of coverage. See Empire Fire Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir. 2000). Further, in a motion for summary judgment, all doubts are resolved in favor of the nonmovant.
The Uninsured/Underinsured Motorists Insurance endorsement form of the NUFIC policy number TE 04 09D contains the following three provisions:
Coverage
We will pay damages which an Insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by an insured, or property damages caused by an accident. The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.
The endorsement goes on to provide the following definitions:
C. Who is an Insured
1. You and any designated person and any family member of either.
2. Any other person occupying a covered auto.
3. Any person or organization for damage that person or organization is entitled to recover because of bodily injury sustained by a person described in 1. or 2. above. . . .
F. Additional Definitions . . . .
4. "Covered auto" means an auto:
a. owned or leased by you or
b. while temporarily used as a substitute for an owned covered auto that has been withdrawn from normal use because of its breakdown repair, servicing, loss or destruction.
Analysis
NUFIC moves for summary judgment on the grounds that the Plaintiffs are not entitled to coverage under this endorsement. Plaintiffs argue that they are insured as "any other person occupying a covered auto" because the van they were occupying was leased by PGS.At least one Texas Court has found that the terms "lease" and "hire" are interchangeable for the purposes of analyzing insurance coverage. See Griffin v. Travelers Indem. Co. of Rhode Island, 4 S.W.3d 915, 918 (Tex.App. 1999). The Griffin Court analyzed an insurance provision covering "leased" vehicles by applying the Federal case law interpreting the term "hired" for coverage purposes. See Griffin, 4 S.W.3d at 917-18.
Under Texas and Federal case law, a vehicle is "hired" when: (1) a separate contract for hiring or leasing exists between the named insured and the owner of the vehicle, and (2) the vehicle is subject to the exclusive use and control of the named insured. See Toops v. Gulf Coast Marine, Inc., 72 F.3d 483, 487-88 (5th Cir. 1996) (construing Texas law); Sprow v. Hartford Ins. Co., 594 F.2d 418 (5th Cir. 1979) (construing Mississippi law and citing numerous federal cases construing a variety of state laws); Griffin, 4 S.W.2d at 918. In Toops, the Fifth Circuit made a clear distinction between a hired auto and an independent contractor. See 72 F.3d 483 at 488. The Court found that "hiring an independent contractor will not create insurance coverage under a `hired auto' clause." Id. It is the Plaintiff's burden to show that there was a separate agreement to hire the vehicle and that the driver was operating the vehicle with the insured's permission. See id. Further, a Plaintiff is required to disprove that the insured hired an independent contractor. See id.
After reviewing the summary judgment evidence in this case, the Court finds that the Plaintiffs evidence creates a genuine dispute as to whether an agreement existed between PGS and the van's owner, Central Dispatch Inc. ("CDI"), to lease the van and whether the van was under the exclusive use and control of PGS.
Plaintiffs cite the deposition testimony of two PGS employees, Thomas Moore and Christopher Simon, as evidence of an agreement between PGS and CDI to lease the van. The employees state that PGS normally provided transportation to its employees at the end of their hitches. CDI's president, Joni Gravolet, stated in her deposition that while that there was no written agreement between CDI and PGS, CDI provided transportation for PGS crew according to CDI's tariff. Plaintiffs further rely on the testimony of William Dean, the driver of the van at the time of the accident. Dean testified that he transported a PGS crew from New Orleans to the helipad and waited a number of hours while the helicopter dropped that crew off and returned with the PGS crew that was involved in the accident. Clearly, Dean's actions show that there was some agreement between the parties for CDI to transport PGS employees. Whether this evidence is sufficient to prove that a separate agreement existed between PGS and CDI to lease or hire the van will have to be decided at trial.
The second issue is whether the van was under the exclusive use and control of PGS. NUFIC argues that it was not. NUFIC points out that one of the van passengers, Eric Liebold, was not even a PGS employee and that the van was a commercial vehicle that could transport anyone who wished to use it.
Plaintiffs rely on Dean's testimony that he waited at the helipad for PGS's crew for hours to show exclusive use and control of the van. Plaintiffs also point to the fact that Eric Liebold, asked for and received permission from PGS' crew chief, not Dean, to ride in the van. While this evidence does not prove that POS had exclusive use or control of the van, it is sufficient to create a genuine issue of material fact on this question.
Conclusion
Accordingly, the Court finds that NUFIC's Motion for Summary Judgment is DENIED because factual questions remain as to whether the PGS had leased the CDI van for the purposes of the uninsured/underinsured motorists insurance endorsement of the NUFIC's policy.