United States District Court, N.D. California
ORDER RE SUMMARY JUDGMENT
DONATO, United States District Judge.
Financial Casualty Company (“UFCC”) brought this
declaratory judgment action for a determination of its
obligations in an underlying California state lawsuit based
on a commercial auto insurance policy issued to defendant
Joshua Smith. The underlying case involves a car accident on
August 5, 2014, in which Joshua's son, Brenton Smith, was
driving his 1999 Subaru back home from the beach with
friends. Brenton worked for his father's concrete company
and had his work tools in the car. The main dispute is
whether the “non-owned auto” provision in
Joshua's commercial policy covered the Subaru at the time
of the accident.
of the defendants named by UFCC defaulted, including Brenton,
Joshua, Jennie Smith, Joshua's business entities
(Smith's Concrete, Inc. and/or Smiths Concrete
Construction, Inc.), and Lariza Gonzalez. Dkt. Nos. 36, 37,
44, 76. UFCC filed a motion for summary judgment against the
two remaining defendants, Nathan Richard and Chonondra
Gialdini, who were injured passengers and are the plaintiffs
in the state action. Dkt. No. 74. The motion is granted.
Smith is a licensed cement contractor and the owner of Smiths
Concrete Construction, Inc., which he incorporated as a
business in 2013. Joshua Smith Dep. (Dkt. No. 74- 2) at
10:3-11:8. At the time of the accident, the company had
approximately 10-14 employees, including his son Brenton
Smith who worked as a cement mason. Id. at
14:5-15:6, 20:1-4. The employees used their own vehicles to
get to jobsites and were required to have their own masonry
tools. Id. at 20:5-24. Brenton drove his 1999 Subaru
for this purpose and generally kept his tools in his car at
all times during the work week, even during personal use.
Dkt. No. 71 ¶¶ 5-7. He was a registered owner of
the 1999 Subaru, along with his mother Jennie Smith.
Id. ¶ 4.
August 5, 2014, Brenton was working at a jobsite for Smiths
Concrete Construction, Inc. Id. ¶ 8. He left
work around 2:00 p.m. and drove home where he lived with his
parents in Ukiah. Id. ¶¶ 8-9. Later that
night, he went to a beach near Fort Bragg with friends in his
Subaru. Id. ¶ 15. Before midnight, Brenton
drove Chonondra Gialdini, Nathan Richard, and Lariza Gonzalez
home from the beach. Id. ¶¶ 19-20. He lost
control of the Subaru and it crashed. Id. ¶ 21.
He was not working when he left for the beach, at the beach,
or on his way back to Ukiah before the accident. Id.
¶¶ 13, 18, 24. At the scene of the accident,
Brenton reported to a California Highway Patrol officer that
the weight of the tools and equipment in the Subaru
“caused the car to bottom out.” Id.
2015, Richard and Gialdini filed personal injury lawsuits in
Mendocino County Superior Court against Joshua, Jennie,
Brenton, and Smiths Concrete Construction, Inc. Id.
¶¶ 29-30; see also Dkt. No. 71-2 at 1-7.
The cases have been consolidated for all purposes and are
referred to here as the Richard litigation. Dkt. No.
71 ¶ 31.
day of the accident, Joshua Smith carried a commercial auto
insurance policy issued by UFCC. Id. ¶ 2.
Joshua was the only named insured on the declarations page.
Id.; Dkt. No. 71-1 at 5. The scheduled insured
vehicles on the policy were a 2000 Ford F350, a 2011 Dodge
Ram 3500, and a 1998 Chevrolet C3500/K3500. Dkt. No. 71-1 at
6. The rated drivers on the policy included Joshua, Jennie,
and Jeremiah Douglas. Id. Under the liability
coverage part of the policy, UFCC promised to defend and
indemnify an “insured” against bodily injury and
property damage claims arising out of the ownership,
maintenance or use of an “insured auto.”
Id. at 16.
added an Employer's Non-Ownership Liability Endorsement
so that the definition of an “insured auto” was
modified to include a “non-owned auto.”
Id. at 38-39. A “non-owned auto” is
an auto that you do not own, lease, hire, rent, or borrow,
and that is used in connection with your business. This
includes autos owned by your employees, partners (if you are
a partnership), members (if you are a limited liability
company), or members of their households, but only while such
autos are used in your business or your personal affairs.
Id. at 39. “You, ” “your”
and “yours” refer to the named insured shown on
the declarations page, Joshua Smith. Id. at 15
filed this action for a declaration that it has no duty to
defend or indemnify the Smith family members or the corporate
entities against claims arising out of the car accident. Dkt.
Nos. 1, 55. Richard and Gialdini filed counterclaims seeking
competing declarations. Dkt. Nos. 20, 66.
parties' primary dispute is whether the “non-owned
auto” provision covered the 1999 Subaru at the time of
the accident. A plain ...