Olson, D. v. State Auto Property and Casualty ( 2020 )


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  • J-A02019-20
    NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
    DONNA M. OLSON AND DENNIS               :   IN THE SUPERIOR COURT OF
    OLSON, HUSBAND AND WIFE                 :        PENNSYLVANIA
    :
    :
    v.                         :
    :
    :
    STATE AUTO PROPERTY AND                 :
    CASUALTY INSURANCE COMPANY;             :   No. 737 WDA 2019
    MICHAEL SAYRE, JR.; AND                 :
    INTERNATIONAL TITANIUM CORP.            :
    :
    :
    APPEAL OF: STATE AUTO PROPERTY          :
    AND CASUALTY INSURANCE                  :
    COMPANY AND INTERNATIONAL               :
    TITANIUM CORP.                          :
    Appeal from the Order Entered April 16, 2019
    In the Court of Common Pleas of Beaver County Civil Division at No(s):
    10835 of 2017
    BEFORE: SHOGAN, J., OLSON, J., and FORD ELLIOTT, P.J.E.
    MEMORANDUM BY OLSON, J.:                           FILED MARCH 03, 2020
    Appellants, State Auto Property and Casualty Insurance Company
    (“State Auto”) and International Titanium Corp. (“International”), appeal from
    the April 16, 2019 order granting summary judgment in favor of Michael Sayre
    Jr., (“Sayre”), Donna M. Olson, and Dennis Olson (collectively, “the Olsons”)
    and denying a summary judgment motion filed by State Auto and
    International. We affirm.
    The trial court summarized the relevant factual and procedural history
    of this case as follows.
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    The underlying accident occurred on August 2, 2012, in New
    Brighton, Beaver County, Pennsylvania. Donna Olson was a
    passenger in a motor vehicle driven by a third party[,] and was
    traveling on Sixth Avenue. [] Sayre was operating his own motor
    vehicle, acting in the course and scope of his employment with
    [International] for the purpose of picking up the company’s mail,
    and traveling directly in front of the vehicle in which [Donna]
    Olson was a passenger. [] Sayre proceeded to back his vehicle
    up and struck the front of the vehicle in which [Donna] Olson was
    a passenger. At the time of the accident, [] Sayre was the general
    manager of [International.]
    ***
    [Following the accident, the Olsons filed a tort action against
    Sayre for personal injury]. While that case was pending, [the
    Olsons] initiated [the instant] action for declaratory relief,
    asserting that there should be additional insurance coverage
    available in the underlying action[.] [Specifically, the Olsons]
    contended [] that [] Sayre should also be covered by the auto
    insurance policy issued by [State Auto to International].
    [Thereafter, State Auto, International, and Sayre] filed
    preliminary objections to the [Olsons’] [c]omplaint for
    [d]eclaratory [r]elief, challenging [the Olsons’] standing to initiate
    the action. Prior to [] argument on the preliminary objections, []
    Sayre filed an [a]nswer, [n]ew [m]atter, and [c]ross-[c]laims,
    including a cross-claim asserting his own claim for coverage under
    the State Auto policy. Judge Deborah Kunselman[1] . . . [held]
    that the preliminary objections [regarding the Olsons’] standing
    were sustained, without comment. [In the same order, Judge
    Kunselman permitted the declaratory judgment action to proceed
    as Sayre had standing to pursue a claim for coverage against
    International and its carrier, State Auto].
    Trial Court Order and Opinion, 4/16/19, at 3-4 (footnote added).
    On November 26, 2018, Sayre filed a motion for summary judgment.
    Sayre’s Motion for Summary Judgment, 11/26/18, at 1-6.                State Auto,
    ____________________________________________
    1In November 2017, Judge Deborah Kunselman was sitting as a judge in the
    Court of Common Pleas of Beaver County. She is currently a judge on this
    Court, but is not a panel member in this case.
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    International, and the Olsons followed suit, filing motions for summary
    judgment on January 17, 2019.            State Auto and International’s Motion for
    Summary Judgment, 1/17/19, at 1-6; Olsons’ Motion for Summary Judgment,
    1/17/19, at 1-5. The trial court entertained oral argument on the motions on
    March 20, 2019.         N.T. Summary Judgment Hearing, 3/20/19, at 1-23.
    Thereafter, on April 16, 2019, the trial court entered summary judgment in
    favor of Sayre and the Olsons but denied the motion for summary judgment
    filed on behalf of Appellants. Trial Court Order and Opinion, 4/16/19, at 1-15.
    This timely appeal followed.2
    Appellants raise the following issue for our consideration:
    Did the trial court commit an error of law in granting summary
    judgment in favor of [the Olsons] and Sayre where Sayre’s Dodge
    Ram was a borrowed vehicle such that neither Sayre nor his
    vehicle were covered under [International’s business auto p]olicy
    at the time of the accident?
    Appellants’ Brief at 4.
    Our standard of review is as follows:
    A reviewing court may disturb the order of the trial court only
    where it is established that the court committed an error of law or
    abused its discretion. As with all questions of law, our review is
    plenary.
    ____________________________________________
    2 Appellants filed a notice of appeal on May 13, 2019. On May 22, 2019, the
    trial court issued an order directing Appellants to file a concise statement of
    matters complained of on appeal pursuant to Pa.R.A.P. 1925(b)(1).
    Appellants timely complied. The trial court issued an opinion pursuant to
    Pa.R.A.P. 1925(a) on June 13, 2019, expressly noting that it relied on its April
    16, 2019 opinion for this appeal.
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    In evaluating the trial court's decision to enter summary
    judgment, we focus on the legal standard articulated in the
    summary judgment rule. The rule states that where there is no
    genuine issue of material fact and the moving party is entitled to
    relief as a matter of law, summary judgment may be entered.
    Where the non-moving party bears the burden of proof on an
    issue, he may not merely rely on his pleadings or answers in order
    to survive summary judgment. Failure of a nonmoving party to
    adduce sufficient evidence on an issue essential to his case and
    on which it bears the burden of proof establishes the entitlement
    of the moving party to judgment as a matter of law. Lastly, we
    will view the record in the light most favorable to the [nonmoving]
    party, and all doubts as to the existence of a genuine issue of
    material fact must be resolved against the moving party.
    Additionally, we note that the interpretation of an insurance policy
    is a question of law that we will review de novo.
    State Farm Mut. Auto. Ins. Co. v. Dooner, 
    189 A.3d 479
    , 481–482 (Pa.
    Super. 2018) (internal citations omitted).
    Herein, Appellants argue that the trial court erred in granting the
    motions for summary judgment filed by Sayre and the Olsons because Sayre
    “consented    to   temporarily   using   his   personal   vehicle   to   perform
    [International’s] business.” Appellant’s Brief at 12. As such, International
    “borrowed” Sayre’s vehicle at the time of the accident and, therefore, “neither
    Sayre nor his vehicle were covered under [International’s] [p]olicy at the time
    of the accident.” 
    Id.
    We note:
    The goal in construing and applying the language of an insurance
    contract is to effectuate the intent of the parties as manifested by
    the language of the specific policy. When the language of an
    insurance policy is plain and unambiguous, a court is bound by
    that language. Alternatively, if an insurance policy contains an
    ambiguous term, “the policy is to be construed in favor of the
    insured to further the contract's prime purpose of indemnification
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    and against the insurer, as the insurer drafts the policy, and
    controls coverage.” Contract language is ambiguous if it is
    reasonably susceptible to more than one construction and
    meaning. Finally, the language of the policy must be construed in
    its plain and ordinary sense, and the policy must be read in its
    entirety.
    Pennsylvania Nat. Mut. Cas. Ins. Co. v. St. John, 
    106 A.3d 1
    , 14 (Pa.
    2014) (internal and parallel citations omitted).
    “Mindful of the foregoing legal principles, it is clear that the focal point
    of our inquiry is the language of [International’s] insurance policy.” State
    Farm Mut. Auto. Ins. Co., 189 A.3d at 483. Under the terms of the policy,
    State Auto will “pay all sums an ‘insured’ legally must pay as damages because
    of ‘bodily injury’ or ‘property damage’ to which [the] insurance applies, caused
    by an ‘accident’ and resulting from the ownership, maintenance, or use of a
    covered ‘auto.’” R.R. 60a. Thus, for coverage to attach under International’s
    policy, Sayre’s vehicle must qualify as a “covered auto” and Sayre must have
    been an “insured” at the time of the accident.
    First, we examine the terms of International’s policy defining whether a
    vehicle constitutes a “covered auto.”      Under International’s policy, liability
    coverage extends to those “autos” within Category “1.” R.R. 56a. Category
    “1” includes “any auto.” Id. at 59(a). “Any auto,” however, is not defined in
    the policy.   Nonetheless, we conclude, as this Court did in Bamber v.
    Lumbermens Mut. Cas. Co., 
    680 A.2d 901
    , 903 (Pa. Super. 1996), that the
    term “any auto” “as it is used in the policy, logically refers to all autos falling
    within the subsequent limited categories ‘2’ through ‘9.’” Bamber, 680 A.2d
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    at 903; see also R.R. 59(a). Category “9,” entitled “non-owned ‘autos,’” is
    relevant in this case. Category “9” reads as follows:
    9 = NONOWNED “AUTOS” ONLY. Only those “autos” you do not
    own, lease, hire, rent or borrow that are used in connection with
    your business. This includes “autos” owned by your employees or
    partners or members of their households but only while used in
    your business or your personal affairs.
    R.R. 59(a).     Accordingly, any autos not owned, leased, or borrowed by
    International but used in connection with its business are considered “covered
    autos” pursuant to Category “9.” 
    Id.
    We now turn to the terms of International’s policy detailing who qualifies
    as an “insured.”    It is undisputed that, at the time of the accident, Sayre
    served as International’s general manager. As such, we note the following
    relevant provisions. In Section II(A)(1), the policy defines insureds as follows:
    1. WHO IS AN INSURED
    The following are “insureds”:
    a. You for any covered “auto.”
    b. Anyone else while using with your permission a covered
    “auto” you own, hire or borrow except:
    ******
    2) Your employee if the covered “auto” is owned by that
    employee or a member of his or her household.
    R.R. 60(a).     We also note the following provision included within the
    endorsement section of International’s policy.
    G. EMPLOYEES AS INSUREDS
    The following is added to SECTION II – LIABILITY COVERAGE,
    Paragraph A.1. Who Is An Insured provision: Any “employee” of
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    yours is an “insured” while using a covered “auto” you do [not]
    own, hire, or borrow in your business of personal affairs.
    R.R. 87(a).
    Pursuant to the aforementioned provisions, whether Sayre’s vehicle
    qualifies as a “covered auto,” and whether Sayre himself is an “insured,”
    depends upon whether, at the time of the accident, International “borrowed”
    his vehicle.
    The policy does not define the term “borrowed.” Nonetheless, because
    “borrowed” is a “[w]ord[] of common usage,” it is to be “construed in [its]
    natural, plain, and ordinary sense” and “we may inform our understanding of
    [this] term[] by considering [its] dictionary definition.” Wagner v. Erie Ins.
    Co., 
    801 A.2d 1226
    , 1231 (Pa. Super. 2002).          Merriam-Webster defines
    “borrow” to mean “to receive with the implied or expressed intention of
    returning the same or an equivalent.”          MERRIAM WEBSTER’S COLLEGIATE
    DICTIONARY 144 (11th ed. 2003). Black’s Law Dictionary defines “borrow” as
    “tak[ing] something for temporary use.” BLACK’S LAW DICTIONARY 196 (8th ed.
    2004).
    Herein, it is undisputed that, on the day of the accident, Sayre served
    as International’s general manager. After initially reporting to International’s
    office, Sayre then drove his own vehicle to pick up the mail for the company.
    Trial Court Opinion, 4/16/19, at 3. In doing so, Sayre embarked, in essence,
    on a company errand. The record reflects that International often dispatched
    Sayre for this purpose. Indeed, during Sayre’s deposition, he testified that he
    frequently used his own vehicle to retrieve the company mail or “haul[] things”
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    for the company.       Id. at 4.   Notably, Sayre also testified that, when he
    performed such duties, he would submit “receipts for gas and some repairs to
    his vehicle” and would, in turn, be “reimbursed by [International].” Id. When
    considering these facts, it is relatively clear that, at the time of the accident,
    International temporarily utilized Sayre’s vehicle with the implied intention of
    returning it. This conclusion is consistent with case law in other jurisdictions.
    See Andresen v. Employers Mut. Cas. Co., 
    461 N.W.2d 181
    , 185 (Iowa
    1990) (holding that when an employer “temporarily gain[s] the use of [an
    employee’s] vehicle,” this “arrangement falls within the ordinary meaning of
    the term ‘borrow’” even though the employee “drove [his own] car on the
    [employer’s] business.”); Atl. Mut. Ins. Co. v. Palisades Safety & Ins.
    Ass'n, 
    837 A.2d 1096
    , 1100 (N.J. Super. Ct. App. Div. 2003) (holding that an
    employer “borrowed” an employee owned and operated vehicle when it gained
    “substantial dominion or control” of the vehicle by requiring the employee to
    run an “errand” for the company while “remain[ing] on the clock and
    reciev[ing] pay.”); Travelers Indem. Co. v. Swearinger, 
    169 Cal. App. 3d 779
    , 785 (Cal. Ct. App. 1985) (holding that a “borrowing can occur [when an
    entity] permits [its] employee[] [to] use [] his or her [own] vehicle on [the
    entity’s] errand” because, in doing so, the entity “properly gains the use of
    [the employee’s] vehicle for its purposes[,] whatever may be said of the
    employee’s dominion over the vehicle (by ownership) or physical possession
    of it (by driving it).”).
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    Notwithstanding legal precedents applying the common definition of
    “borrow,” the trial court held that “Sayre’s automobile was not a borrowed
    vehicle at the time of the accident.” Trial Court Opinion, 4/16/19, at 11. In
    reaching this conclusion, the court apparently rejected the notion that an
    employee can “borrow” his own vehicle.          We note, however, that this
    determination is at odds with the aforementioned case law applying the
    definition of “borrow” to similar facts.   Indeed, the fact that International
    reimbursed Sayre for gas and vehicle repairs strongly suggests that
    International “borrowed” Sayre’s vehicle when he used it for company
    errands. See Travelers Indem. Co., 169 Cal. App. 3d at 785. Furthermore,
    the trial court opined that Sayre’s vehicle could not be “borrowed” because he
    “used his vehicle on an almost daily basis to pick up the mail as part of his
    employment performance” and, as such, Sayre’s use was not “temporary.”
    Trial Court Opinion, 4/16/19, at 11.       Thus, in applying the definition of
    “borrow” to the present circumstance, the trial court appears to have conflated
    the frequency of occurrence with duration of use. This conclusion is contrary
    to the common usage of the term “borrow.”
    Nonetheless, we are constrained to affirm the trial court’s ruling because
    “[i]t is beyond the power of a Superior Court panel to overrule a prior decision
    of the Superior Court.” Czimmer v. Janssen Pharm., Inc., 
    122 A.3d 1043
    ,
    1064 n.19 (Pa. Super. 2015), quoting Commonwealth v. Hull, 
    705 A.2d 911
    , 912 (Pa. Super. 1998). Herein, we are bound by this Court’s previous
    decision in Bamber.
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    In Bamber, this Court interpreted a nearly identical insurance policy
    under factually similar circumstances. The facts of the case are as follows.
    “In 1991, appellant[,] John Bamber[,] sustained a number of injuries following
    an automobile accident that allegedly occurred during the course of his
    employment” at the Chamber of Commerce of the United States of America
    (“Chamber of Commerce”). Bamber, 
    680 A.2d at 902
    . After the accident,
    Bamber sought underinsured motorist (“UIM”) benefits under the Chamber of
    Commerce’s business auto insurance policy (“Chamber policy”).         
    Id.
       The
    insurance company, Kemper National Insurance Company (“Kemper”), denied
    coverage and successfully moved for summary judgment against Bamber in
    subsequent litigation. 
    Id.
    On appeal, Bamber argued that “he [was] entitled to UIM benefits”
    under Chamber’s policy with Kemper. 
    Id.
     He specifically claimed that “his
    vehicle was a ‘covered auto’ under [] Chamber[’s] policy when [it] was used
    in the course of Bamber’s employment.” 
    Id.
     This Court agreed.
    First, the Bamber Court determined that the vehicle qualified as a
    “covered auto” under Chamber’s policy.       In particular, the Court held that
    Bamber’s vehicle fell within the following category:
    9 = NONOWNED “AUTOS” ONLY. Only those “autos” you do not
    own, lease, hire, rent or borrow that are used in connection with
    your business. This includes “autos” owned by your employees or
    partners or members of their households but only while used in
    your business or your personal affairs.
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    Id. at 903
    .    After citing this provision, the Court simply concluded that
    “Bamber’s personal vehicle clearly [fell] into this category when it [was] used
    in the course of his employment with the Chamber of Commerce” and, as
    such, the vehicle was a “‘covered auto’ for purposes of liability coverage.” 
    Id.
    The Court, however, did not consider whether Bamber’s vehicle was owned,
    hired, or borrowed by the Chamber of Commerce at the time of the accident.
    The Court then addressed whether Bamber himself was “specifically
    excluded from coverage” by the language within the policy detailing who is an
    “insured.” 
    Id.
     The specific provision is as follows:
    1. WHO IS AN INSURED
    The following are “insureds”:
    a. You for any covered “auto.”
    b. Anyone else while using with your permission a covered
    “auto” you own, hire or borrow except:
    ******
    2) Your employee if the covered “auto” is owned by that
    employee or a member of his or her household.
    
    Id.
       Without providing any analysis, the Bamber Court concluded that
    “Bamber cannot be excluded by [Section II(A)(1)(b)(2)] when he is not in the
    relevant class of people included in section (b). Section (b) states that it will
    insure permissive users of covered autos that are owned, hired, or
    borrowed by the Chamber of Commerce. As Bamber’s personal vehicle was
    not owned, hired or borrowed by the Chamber of Commerce, this entire
    section, including the exclusions, does not apply.” 
    Id.
     (emphasis in original).
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    The Bamber Court, therefore, overlooked the possibility that the definition of
    “insured” applied, but that Bamber himself was not included within its
    meaning; thus, barring coverage.
    Pursuant to Bamber, an employee using his or her own vehicle during
    the course and scope of employment is using a “covered auto” and is an
    “insured.” We have serious misgivings about Bamber’s interpretation of the
    Chamber’s policy and its application thereof. Indeed, it appears that the Court
    concluded that the Chamber of Commerce did not own, hire, or borrow
    Bamber’s vehicle for purposes of finding that it was a “covered auto.” 3 If,
    however, Bamber’s vehicle were not owned, hired, or borrowed, Bamber could
    not qualify as an “insured” because an “insured” is one who engages in the
    permissive use of a “covered auto” that the “Named Insured,” i.e., the
    Chamber of Commerce, owns, hires, or borrows.4 Instead of carrying out the
    ____________________________________________
    3 The Bamber Court focused on the second sentence of Category “9” to
    conclude that Bamber’s vehicle was a “covered auto.” Bamber, 
    680 A.2d at 903
    . This sentence included those “‘autos’ owned by [the Chamber of
    Commerce’s] employees . . . used in [the course of employment].” 
    Id.
     In
    doing so, the Court ignored the preceding language which excluded those
    “autos” that the Chamber of Commerce “own[ed] . . . hire[d] . . . or
    borrow[ed].” 
    Id.
     Thus, by summarily stating that Bamber’s vehicle “clearly
    f[ell] into [C]ategory [9],” it implicitly found that the Chamber of Commerce
    did not own, hire, or borrow Bamber’s vehicle. 
    Id.
    4 Pursuant to the terms of Chamber’s policy, to qualify as an “insured” an
    individual/entity must have met the definitions set forth in Section II (A)(1)(a)
    or Section II (A)(1)(b). Bamber, 
    680 A.2d at 903
    . Section II (A)(1)(a) covers
    only the “Named Insured,” which, in Bamber, was the Chamber of Commerce.
    Thus, Bamber had to meet the definition provided in Section II (A)(1)(b) to
    qualify as an “insured.” Section II (A)(1)(b) explicitly states that an “insured”
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    logical consequence of its prior determination, the Bamber Court elected not
    to apply the definition of “insured” to its coverage analysis.
    For the foregoing reasons, we have serious reservations regarding
    Bamber’s analysis and interpretation of the Chamber’s policy. Nonetheless,
    we are bound by Bamber.             See Regis Insurance Co. v. All American
    Rathskeller, Inc., 
    976 A.2d 1157
    , 1161 n. 6 (Pa. Super. 2009) (explaining
    that a Superior Court panel lacked power to disregard and overrule a binding
    prior decision). Indeed, a panel of this Court recently followed the Bamber
    Court’s analysis while interpreting a similar insurance policy in Lightner v.
    Carlevale’s Custom Cars, LLC, 
    2017 WL 6396084
    , *1, *5 (Pa. Super. Dec.
    15, 2017) (explaining that if an employee was driving the vehicle in question,
    pursuant to Bamber, the employer “would have been covered” because the
    purpose of “coverage for non[-]owned autos” is to “protect[] the policyholder
    ____________________________________________
    is “anyone else” that is using “with [the Named Insured’s] permission, a
    covered ‘auto’ that [the Named Insured] own[s], hire[s], or borrow[s].” 
    Id.
    Thus, for Bamber to qualify, he needed to be engaged in a permissive use of
    a “covered auto” that the Chamber of Commerce owned, hired, or borrowed.
    As explained in footnote three, the Bamber Court implicitly determined that
    the Chamber of Commerce did not own, hire, or borrow Bamber’s vehicle when
    it concluded that Bamber’s vehicle was a “covered auto.” 
    Id.
     It is therefore
    inconsistent to conclude that the Chamber of Commerce did not own, hire, or
    borrow Bamber’s vehicle for purposes of finding that it was a “covered auto,”
    only    to   turn    around    and   conclude     that    Bamber     was    an
    “insured” because the Chamber of Commerce owned, hired, or borrowed
    Bamber’s vehicle. To avoid this inconsistency, the Bamber Court determined,
    without explanation, that it would not apply the definition of an “insured” to
    its coverage analysis. Thus, the Court failed to “give effect” to the language
    of the policy as required when interpreting an insurance contract. Erie Ins.
    Exchange v. Conley, 
    29 A.3d 389
    , 392 (Pa. Super. 2001).
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    in cases of respondeat superior.”). Accordingly, until this Court grants en banc
    review,5 we are bound by the decision in Bamber and, as such, we are
    constrained to affirm the trial court’s April 16, 2019 order.
    Order affirmed.
    Judge Shogan joins.
    President Judge Emeritus Ford Elliott concurs in the result.
    Judgment Entered.
    Joseph D. Seletyn, Esq.
    Prothonotary
    Date: 3/03/2020
    ____________________________________________
    5 “It is well-settled that this Court, sitting en banc, may overrule the decision
    of a three-judge panel of this Court.” Commonwealth v. Morris, 
    958 A.2d 569
    , 581 n.2 (Pa. Super. 2008) (en banc); see also Commonwealth v.
    Jacobs, 
    900 A.2d 368
    , 377 n.9 (Pa. Super. 2006) (en banc).
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