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Lawrence v. Ace American Insurance Co.

United States District Court, M.D. Florida, Tampa Division

September 20, 2019

WILLIAM LAWRENCE, Plaintiff,
v.
ACE AMERICAN INSURANCE COMPANY, Defendant. USAA CASUALTY INSURANCE COMPANY, Intervenor,
v.
ACE AMERICAN INSURANCE COMPANY, Intervenor-Defendant.

          ORDER

          SUSAN C. BUCKLEW UNITED STATES DISTRICT JUDGE.

         This cause comes before the Court after a trial on the issue of whether Jacobs Technology (“Jacobs”) co-rented a vehicle rented by its employee, Benjamin Wintersteen, that was involved in a car accident. The resolution of that issue is necessary to determine whether Jacobs’ automobile insurance policy issued by ACE American Insurance Company (“ACE”) provides coverage for the accident. The Court held a three-day jury trial on the underlying factual issues that support the Court’s ultimate determination regarding insurance coverage. As explained below, the Court finds that Jacobs co-rented the car involved in the accident, and therefore, ACE’s policy provides coverage for the accident.

         I. Background

         In March of 2014, Jacobs offered Wintersteen a job that was to be performed in Germany. Wintersteen’s job was connected to a government contract between the United States and Jacobs. Wintersteen was given an initial duty location of Tampa at the MacDill Air Force Base while his paperwork was being approved by the German government. Because Wintersteen would be relocating from New Mexico, he was given a $20, 000 relocation allowance in order to assist him in moving his family and household goods, personal effects, and car to Germany. Wintersteen could choose how to spend the $20, 000 relocation allowance as long as his specific expenditures were within the contractual guidelines authorized by the United States government, because the government would be reimbursing Jacobs for the reimbursements that Jacobs made to Wintersteen from the relocation allowance.

         Jennifer Petr, a finance and accounting manager for Jacobs, recommended to Wintersteen that he ship his personal car to Germany prior to leaving Tampa and use part of his relocation allowance to rent a car in Tampa, because it was cheaper to rent a car in Tampa than to rent one in Germany and the shipping process took several weeks. Jacobs had an arrangement with Hertz to supply discounted rental cars to its employees, even if the rental car was to be used for personal, rather than business, purposes. Specifically Jacobs and Hertz had entered into a Corporate Customer Agreement (“CCA”), in which Jacobs agreed to use Hertz as its primary preferred rental car supplier. (Doc. No. 71-4, p. 2, 8). The CCA provided that Hertz would provide $100, 000 in bodily injury coverage for Jacobs’ employee-renters that rent a car for business purposes.[1] The CCA also provided that Jacobs, on behalf of itself and its employee-renters, rejects the inclusion of any supplementary insurance coverage in Hertz’s rental agreements.

         While in Tampa, Wintersteen was driving rental cars from Hertz while his wife drove their personal car before it was shipped to Germany.[2] Wintersteen did not need a car to perform his job in Tampa, but he did need transportation to get to and from work (whether it be his personal car, a rental car, or a taxi/Uber/Lyft). Wintersteen’s personal car was shipped to Germany on August 4, 2014.

         On the morning of August 12, 2014, Wintersteen drove a Hertz rental car in Tampa to pick up orange juice and fruit for his sick daughter. Wintersteen intended to drop the orange juice and fruit at home and then go into work. However, on his way to the store, Wintersteen was involved in a car accident with William Lawrence. Wintersteen pulled out in front of Lawrence and caused Lawrence’s car to flip over twice.

         As a result of the car accident, Lawrence sued Wintersteen in state court in May of 2015. Wintersteen made a claim for coverage under ACE’s commercial automobile insurance policy issued to Jacobs. ACE denied Wintersteen a defense and coverage under the policy.

         Wintersteen had personal automobile insurance through USAA Casualty Insurance Company (“USAA”). There was also insurance coverage for the rental car through Hertz, which existed due to the CCA between Hertz and Jacobs.

         In May of 2017, Lawrence, Wintersteen, and USAA (collectively referred to as “the Settling Parties”) stipulated to an entry of a consent judgment to resolve Lawrence’s claims from the car accident and to provide a means to collect part of the consent judgment from ACE. Specifically, the Settling Parties stated in their Settlement Agreement that they intended that ACE would be required to pay the amount of the consent judgment that it was legally required to pay had it honored its coverage obligations under the insurance policy.

         The Settling Parties stipulated that Lawrence’s damages from the car accident were $750, 000, and they agreed to the entry of a $750, 000 consent judgment in favor of Lawrence and against Wintersteen. In partial satisfaction of the consent judgment, Hertz paid Lawrence $100, 000 and USAA paid Lawrence $250, 000. Thus, $350, 000 was paid by Hertz and USAA on Wintersteen’s behalf. In exchange for the $350, 000 and an agreement not to execute against Wintersteen on the unpaid $400, 000 remaining, Wintersteen assigned to Lawrence all of his rights against ACE.

         Thereafter, Lawrence filed a declaratory judgment lawsuit against ACE in state court. In March of 2018, Lawrence’s declaratory judgment lawsuit was removed to this Court. In Lawrence’s second amended complaint, he asserted two claims against ACE: (1) a claim for a declaratory judgment of coverage and damages, and (2) a claim for insurance coverage based on promissory estoppel.[3] (Doc. No. 72).

         In May of 2018, this Court granted USAA’s motion to intervene to pursue its related claims against ACE. (Doc. No. 27). In USAA’s second amended complaint in intervention, USAA asserted four claims against ACE: (1) equitable contribution; (2) unjust enrichment; (3) declaratory judgment of coverage and damages; and (4) insurance coverage based on promissory estoppel.[4] (Doc. No. 71).

         All three parties-Lawrence, USAA, and ACE-filed motions for summary judgment on these claims. However, the Court found that genuine issues of material fact precluded summary judgment on all but the promissory estoppel claims. Specifically, the Court found that issues of material fact remained as to whether Jacobs co-rented the car Wintersteen was driving at the time of the accident (a necessary precondition for coverage under the Hired Autos provision of ACE’s policy). Therefore, a trial was held to resolve these factual issues. The parties agreed that the decision as to whether coverage existed under the Hired Autos provision of the ACE policy was a legal decision for the Court, and the jury would be empaneled to resolve the factual disputes.

         II. Hired Autos Provision

         The ACE policy was issued in California, and the parties agree that California law applies in construing the ACE policy. The California Supreme Court has explained the ...


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