Debating the meaning of “use”
On August 2, 2014, David Hernandez, the minor son of Jose Servando Hernandez and Rosa Hernandez, was driving a 2012 Toyota Sienna van when he crashed into and damaged the home of Justin and Courtney Johnson. Before the accident, David was at the home of his aunt, Maritza Hernandez, and her husband, Mauricio Bendeck, who owned the van. At the time of the accident, David did not have permission to operate the van.
On January 27, 2015, Geovera Specialty Insurance Company, the Johnsons’ homeowners insurer, filed a petition for damages as subrogee of the Johnsons against Rosa Hernandez, seeking reimbursement for the amounts paid under the Johnsons’ policy. The petition alleged a claim of negligent entrustment.
On August 6, 2015, Geovera filed an amended petition adding David Hernandez as a party to the suit. On October 15, 2015, Geovera filed a second amended petition adding Allstate Property and Casualty Insurance Company as a defendant. The second amended petition alleged that Allstate was liable to Geovera pursuant to the following policies issued by Allstate: an automobile policy that covered Rosa Hernandez, a homeowners policy issued to Rosa Hernandez, and an automobile policy that covered the vehicle driven by David Hernandez.
On December 9, 2016, Allstate, as the homeowners insurer for Jose and Rosa Hernandez, filed a motion for summary judgment on the grounds that the policy excluded coverage for property damage arising out of “the ownership, maintenance, use occupancy, renting, loaning, entrusting, loading or unloading of any motor vehicle or trailer.” (Emphasis added.) Allstate argued that the property damages Geovera alleged it paid under the Johnsons’ homeowners policy arose from David Hernandez’s unauthorized use of a motor vehicle, so the Allstate homeowners policy expressly excluded Geovera’s claims for damages.
In opposition, Geovera argued that Allstate wrote and issued both automobile and homeowners policies to Jose and Rosa Hernandez. Geovera showed that the automobile policy covered permissive use and excluded “use” without permission. Geovera reasoned that it was reasonable that the automobile exclusion in the homeowners policy included only permissive “use” otherwise covered under the auto policy. If it didn’t, Geovera argued, there would be no coverage under either policy for non-permissive use of the vehicle. Geovera contended that the term “use” in the homeowners policy could be construed as providing coverage for use with permission, use without permission, or both. Geovera argued that this rendered the term “use” ambiguous and thus the policy should be construed in favor of the insured so as to provide coverage.
On April 21, 2017, the court granted Allstate’s motion for summary judgment and dismissed with prejudice the claims against it regarding the homeowners policy. The court found that the term “use” in the policy was not ambiguous, stating that the word “use” in the policy was “reasonably understood as the operation of a vehicle and no differentiation between use with and without permission is warranted given the plain meaning of the policy.” Geovera appealed.
On appeal, Geovera argued that the term “use” in the automobile exclusion of the Allstate homeowners policy was ambiguous because it could be construed to be use with or without permission, or both. Geovera asserted that because the Allstate automobile policy provided coverage only if there was a “use” with permission, the term “use” in the automobile exclusion in the homeowners policy likewise should be construed such that non-authorized use of a non-owned vehicle would be covered. According to Geovera, if the appellate court found otherwise, there would be a gap in the coverage provided by both policies.
The Allstate homeowners policy’s family liability protection section contained this wording:
We do not cover bodily injury or property damage arising out of the ownership, maintenance, use, occupancy, renting, loaning, entrusting, loading or unloading of any motor vehicle or trailer.
The court found that the term “use” in the homeowners policy was unambiguous and should be applied as written. The court stated that Allstate had met its burden of proving that the claims brought by Geovera fell within the automobile exclusion in the homeowners policy and that the trial court had properly granted Allstate’s motion for summary judgment.
Geovera Specialty Insurance Company v. Hernandez-Court of Appeal of Louisiana, Fifth Circuit-December 19, 2018-No.18-CA-330.