B. Reach and Apply Statute
Under 24-A M.R.S. § 2904, when a person has received a favorable judgment, he or
she may seek to satisfy that judgment through any available insurance money "if when
the right of action accrued, the judgment debtor was insured against such liability and if
before the recovery of the judgment the insurer had had notice of such accident, injury
or damage." Neither North East nor Dairyland argue lack of notice, but each argues
that Jackson was not covered by the particular policy in question when the accident
occurred.
C. North East's Motion for Summary Judgment
1. Liability
The first issue presented is whether the North East Insurance policy covering
vehicles at Colonial Autos Sales protected Jackson against liability when he operated
the Harley Davidson motorcycle owned by Akers. To answer this question, the court
3 must first determine whether or not the policy is ambiguous, which is a question of law.
American Protection Insurance Co. v. Acadia Insurance Co. 2003 ME 6, <]I 11, 814 A.2d 989,
993. If the language in the policy is "reasonably susceptible of different interpretations"
it is considered ambiguous. Id. If the court finds that the language is unambiguous, "its
interpretation is also a question of law," and the court will look at the "plain meaning of
the language used and from the four corners of the instrument without resort to
extrinsic evidence." Id. If the language is ambiguous, it is interpreted strictly against
the insurance company. Hall v. Patriot Mutual Insurance Co., 2007 ME 104, <]I 21,
_A.2d_.
Under the terms of the policy, liability only attaches when the insured, or
someone with the insured's permission!, uses a vehicle in connection with "garage
operations," which are defined as follows:
"Garage operations" means the ownership, maintenance or use of locations for garage business and that portion of the roads or other accesses that adjoin these locations. "Garage operations" includes the ownership, maintenance or use of the "autos" indicated in SECTION I of this Coverage Form as covered "autos". "Garage operations" also include all operations necessary or incidental to a garage business.
According to the plain language of the policy, it is clear that North East would not cover
any liability resulting from the operation of a vehicle that was not being used as part of
the garage business for Colonial.
Duggan argues that Jackson did not need permission from Flanigan to drive
Akers' motorcycle because Jackson, as an employee of Colonial, was an insured under
the policy. Furthermore, Duggan claims that Jackson was engaged in garage operations
on the night that Jackson drove the Harley. Duggan contends that he was interested in
purchasing the Harley Davidson motorcycle owned by Akers, and that Jackson
1 The named insured on the policy is Colonial Auto Sales, et al.
4 represented to him that he would be able to test-drive it. He points to the ability of
Jackson to access the shop after hours as evidence that Jackson was entitled to bring
customers to the shop late at night in order to test drive vehicles. Although Duggan did
not actually drive the motorcycle that he claims he was interested in buying, he
maintains that Jackson said he was only going to "warm up" the Harley before allowing
Duggan to drive it. Finally, he asserts that it is up to the fad-finder to decide if these
circumstances constitute garage operations.
North East disagrees with Duggan's claim that Jackson is an insured under the
policy and thus did not need permission to operate Flanigan's motorcycle. They note
that Jackson himself signed a mutual release with Colonial admitting that Flanigan did
not give him permission to be at the business after hours or to operate the motorcycles.
Furthermore, although North East admits that test-driving a vehicle would be
considered garage operations, they argue that the circumstances of the night in question
were so far removed from a test drive that it is impossible to assert otherwise. They
point out that Duggan drove the Yamaha all evening, not the Harley that he wanted to
buy. Additionally, they stress the late hour of the alleged test drive, and the fact that
both men were drinking alcohol as proof that this could not be considered a test drive.
2. Is Jackson as an Insured
The language of the policy that defines who is an insured for purposes of liability
is as follows:
(1) You for any covered "auto." (2) Anyone else while using with your permission a covered "auto" you own, hire or borrow except: ... (b) Your "employee" if the covered "auto" is owned by that "employee" or a member of his or her household.
The unambiguous language of the § 2(b) exception makes it clear that employees are
not considered insured unless they have permission from Colonial, because they cannot
5 simultaneously fit into the "You" category and the "Anyone else" category. This
exception would not make any sense if employees were intended to be included in the
definition of "You." If that were the intended meaning, the exception would simply
state that "You" could not be considered an insured when "You" or "a member of
[your] household" owns the covered auto. Because the policy clearly treats employees
as "Anyone else," Jackson would need Flanigan's permission to operate the Harley to
be covered for liability?
North East has presented evidence in the fonn of testimony from Flanigan and
the mutual release signed by Jackson to show that Jackson did not have permission
from Flanigan to use either motorcycle or to go into the shop after business hours.
Duggan admits that Jackson signed the release, but claims that the issue of permission
"is a matter of law to be decided by a trier of fact.,,3 However, Duggan has not pointed
to anything in the record that would show Flanigan's permission to operate the
motorcycles on the night in question other than the fact that Jackson had a key to the
shop and the access code to disarm the alarm. It is irrelevant to the question of
permission that Duggan believed the Harley was for sale. Also, although Duggan
asserts that it is reasonable to believe that Jackson thought he had permission to be on
the premises after hours in order to sell a motorcycle, he does not provide any factual
support for his assertion. 4 Nor does he explain why what Jackson might have thought
is relevant to the question of whether he actually had permission. In any event, the
mutual release states otherwise.
2 This assumes that Akers' Harley is even considered a covered vehicle under the North East policy.
3 The court assumes that Duggan made a mistake in this characterization and means that it is a question of fact.
4There is no deposition of Jackson included in the record, the court cannot discern what exactly Jackson thought and does not speculate on that fact.
6 3. Garage Operations
Even if an argument could be made that Jackson somehow had permission from
Flanigan to operate a motorcycle owned by Flanigan's friend after business hours,
which the record before the court does not support, Duggan would still have to show
that Jackson was engaged in garage operations at the time of the accident. Although
Duggan argues that this is a question of fact, it is difficult to imagine how the activities
of Duggan and Jackson could be characterized as garage operations. Even if Duggan
was interested in buying the Harley and in test-driving it, he exclusively drove the
Yamaha on the night of the accident. Both men had been drinking before they got to
Colonial, and continued to do so after picking up the motorcycles. Contrary to claims
made by Duggan, these facts preclude a finding that Jackson could have been engaged
in garage operations at the time of the accident.
4. Uninsured Motorists Provision
Under the terms of the policy governing uninsured motorists coverage, recovery
is prohibited when a person " us [es] a vehicle without a reasonable belief that the person
is entitled to do so." According to the Law Court, " a person lacks a reasonable belief if
that person: (i) knows that he or she is not entitled to use the vehicle; or (ii) lacks
objectively reasonable grounds for believing that he or she is entitled to use the
vehicle." Craig v. Barnes, 1998 ME 110, err 7,710 A.2d 258,260. When actual knowledge
that one was not permitted to drive is absent, but a person believed he Or she was
entitled to drive,
[t]he court must consider any fact relevant to the objective reasonableness of that person's belief. Relevant facts may include his or her ownership of the vehicle, receipt of permission for use from the named insured, relationship to the named insured, prior usage of the vehicle, and legal entitlement to drive. No one fact is dispositive. Id. err 8, 710 A.2d at 260.
7 Therefore, contrary to Duggan's claim that the question of his reasonable belief belongs
solely to the fact finder, this court is expected to engage in an analysis of whether the
facts support a finding of an objectively reasonable belief.
Here, Duggan argues that it was reasonable for him to believe that he was
entitled to operate the Yamaha because he knew that Jackson was an employee of
Colonial and thought that Jackson was a sales and service manager. He asserts that
they both went to Colonial together, that Jackson got the keys to the motorcycles, put
license plates on them, and told Duggan he could drive the Yamaha. North East again
points to the circumstances of the evening in question to rebut the argument that
Duggan had any such reasonable belief. They argue that there is no way that Duggan
could have reasonably believed that he was entitled to operate Flanigan's motorcycle
because, in addition to the late hour and the alcohol involved, Duggan's license was
under a restriction that prohibited him from operating a motor vehicle with any amount
of alcohol in his blood.
This is not a situation where the shop was in the middle of closing or had
recently closed. At the time the two men arrived at Colonial to get the motorcycles, the
shop had been closed for approximately six hours. Both men had been drinking when
they took the motorcycles and they continued to drink after they left the shop with the
motorcycles, visiting two bars and a friend's house with the motorcycles. They even
tried to pick a woman up at the restaurant they ate dinner and consumed alcohol earlier
that evening. Their late night adventure had more characteristics of a joy ride than a tes
drive; especially considering the fact that Duggan never even drove the motorcycle he
was purportedly interested in buying. Furthermore, Duggan should not have been
driving that night at all because of the restriction on his license. Given these
8 circumstances, any belief that Duggan may have had about his entitlement to operate
Flanigan's motorcycle was not objectively reasonable.
D. Dairyland's Motion for Summary Judgment
The issue to be decided on Dairyland's motion is whether Jackson was an
insured under the motorcycle insurance policy issued to Akers. See Taylor v. U.S.
Fidelity and Guar. Co., 519 A.2d 182, 182 (Me. 1986). Again, this court must first decide
whether or not the policy is ambiguous. American Protection Insurance Co., 2003 ME 6, l:JI
11, 814 A.2d at 993. In addition to coverage for operation by Akers, under the terms of
the Dairyland policy regarding both liability and uninsured motorist insurance,
coverage extends to those who operate the insured motorcycle when they have
permission to do so from Akers. Duggan argues that the language of the policy is
ambiguous, because it does not define whether permission must be express, or whether
it can also be implied. Dairyland asserts that the Law Court has previously upheld a
grant of summary judgment for a defendant insurance company when a virtually
identical provision was at issue. See Taylor, 519 A.2d at 182. Dairyland points out that
the Court in Taylor did not hold the language to be ambiguous.
In Taylor, the cousin of an employee who had limited permission from his
employer to use a company car took the car without the employee's permission and
was later involved in an accident. Id. One of the passengers was killed and the others
were injured. Id. The surviving passengers and the personal representative of the
deceased passenger brought suit against the employer's insurance company to satisfy
default judgments against the driver. Id. The Law Court determined that there was
nothing in the record to support the claim that the scope of the employer's permission,
whether express or implied, to allow the employee to use the vehicle extended to "a
9 member of an employee's household to use the vehicle for that third person's social
purposes." Id. at 184.
The circumstances in this case are not exactly identical to those in Taylor, because
here the employee himself was operating a motorcycle that was not owned by his
employer. However, it is still necessary to determine whether there is anything in the
record before this court that would suggest that Jackson had either express or implied
permission to operate the motorcycle owned by Akers. Dairyland has presented
evidence that Akers did not give permission to Jackson or anyone else to operate his
motorcycle, and that he retained the only set of keys because he did not want anyone
driving it. s Additionally, Dairyland asserts, and Duggan admits, that Flanigan never
told him that he had permission to operate the motorcycle.
Duggan argues that there are genuine issues of material fact as to whether Akers
gave implied permission to Colonial to operate his motorcycle, and whether Jackson, as
an employee, exceeded the scope of that permission. He asserts that it is possible that
the motorcycle was not in fact being stored on the premises for Akers, but was actually
for sale, because he had seen it on display at Colonial in a manner that suggested as
such. He claims that he believed that Jackson was the sales and service manager at
Colonial, and that they were at Colonial on the night of the accident to test the
motorcycle. At the very least, he argues, Akers surely knew that his motorcycle would
be moved as needed by employees. 6
According to the Law Court, "implied permission differs little from express
permission except that it is proved circumstantially from conduct which evidences an
5 Duggan claims that there was a set of keys to the Harley at Colonial because Jackson used them to start it.
6 Duggan does not provide any factual support for this claim.
10 actual intent to permit certain actions." American Motorists Insurance Co. v. LaCourse, 314
A.2d 813, 817 n. 1 (Me. 1974). Therefore, even if the term "permission" in the policy
included implied permission, Duggan would still have to present evidence that Akers'
behavior indicated that he intended to allow Jackson to use his motorcycle in order to
survive summary judgment. Even assuming for purposes of argument that Akers had
delivered his motorcycle to Colonial for sale instead of mere storage, and that in doing
so, he impliedly authorized Colonial employees to use the motorcycle for that purpose,
there is nothing in the record that supports the claim that Akers' impliedly permitted
Jackson (or any other Colonial employees) to take his motorcycle out after business
hours and after he had been drinking, let alone drive it to a restaurant, Jackson's house,
a beach, two bars and a friend's house?
IV. DECISION AND JUDGMENT
The clerk will make the following entries as the Decisio~ and Judgment of the
court:
A. Defendant North East Insurance Company's Motion for Summary Judgment is granted.
B. Defendant Dairyland Insurance Company's Motion for Summary Judgment is granted.
c. Judgment is entered for each defendant. D. No costs awarded.
Dated: N4(V!"(U""'''~,~- ~ ~
7 Additionally, Duggan has admitted all but four of Dairyland's statements of material fact. None of the four statements qualified by Duggan were properly controverted under Rule 56(h)(4), which requires a record citation for each qualification or denial. Absent such a citation, the court may deem the improperly controverted statements admitted.
11 COURTS d County x 287 ~ 04112-0287
MICHAEL WELCH ESQ - ~ HARDY WOLF & DOWNING PO BOX 3065 LEWISTON ME 04243-3065
fll~-U~Of
,
KEVIN LIBBY ESQ '~~ /\Je: J;, J ' MONAGHAN LEAHY U PO BOX 7046 PORTLAND ME 04112-7046
MARTICA DOUGLAS ESQ '~" C~Q , '- :/ I ~ d DOUGLAS DENHAM BUCCINA & ER~ST PO BOX 7108 PORTLAND ME 04112-7108