United States District Court, W.D. Virginia, Roanoke Division
ENCOMPASS INDEPENDENT INSURANCE COMPANY, Plaintiff/Counterdefendant,
TANYA N. DOMBROSKY, Defendant/Crossdefendant
MATTHEW T. GREEN Defendant/Crossclaimant/Counterclaimant
Glen E. Conrad Chief United States District Judge.
insurance coverage dispute, Encompass Independent Insurance
Company ("Encompass") seeks a declaratory judgment
that it has no obligation to defend or indemnify Tanya
Dombrosky ("Dombrosky") in connection with a
personal injury action that Matthew Green ("Green")
filed against Dombrosky in Virginia state court. The case is
presently before the court on cross-motions for partial
summary judgment filed by Encompass, Dombrosky, and Green.
For the reasons set forth below, each motion will be granted
in part and denied in part.
Statement of Facts
facts in this case are not heavily disputed. In 2007,
Dombrosky and her mother, Jo Ann Dunn ("Jo Ann"),
moved in with Dombrosky's grandparents, Betty Dunn
("Betty") and Joe Dunn ("Joe"). At that
time, Joe, who had a career in insurance, emailed a
representative from Encompass inquiring about their existing
policies. Jo Ann Dep. 45:15-46:23. Joe received an email
stating, "According to Policy definitions the
daughter/granddaughter are considered family members/resident
relatives and therefore coverage will extend to them as long
as they are residing in the household at the time of a
loss." Email from RMC-East to Peggy Pettrey, Wed. Oct.
31, 2007, Docket No. 17-5. Joe gave the email chain to Jo
Ann, told Jo Ann that she and Dombrosky were covered, and
told Jo Ann that she should keep the email exchange for her
records. See Jo Ann Dep. 45:15-46:23. Joe passed away prior
to the events giving rise to the instant dispute.
5, 2015, Dombrosky and Betty visited First Team Hyundai in
Roanoke, Virginia, where Betty purchased a 2013 Hyundai
Veloster (the "Veloster") for Dombrosky. Betty paid
the full purchase price, which included the vehicle's
first oil change and a limited warranty. See
Harstock Dep., Ex. 1, p. 0000069, Docket 21-4. Jo Ann picked
up the Veloster from First Team Hyundai three days later, on
June 8, 2015.
the next nine days, Betty drove the vehicle two, possibly
three times. Each time she used the Veloster, she drove it to
the grocery store, which was about four or five miles away.
See Betty Dunn Dep. 9:3-10:2, Docket No. 21-6. Betty
also paid to put gas in the car once or twice. See
id. 8:9-9:2. Jo Ann put gas in the vehicle once. See
Jo Ann Dep. 26:19-20, Docket No. 21-3. At some point, Jo Ann
drove the Veloster to West Virginia. Betty paid for the gas
used on that trip. See id. 58:6-19. When not in use,
the vehicle was kept in the garage, and the keys were kept in
the car. See Id. 21:21-22:20.
felt that Betty needed permission to drive to Veloster, but
Betty did inform Dombrosky of any planned use. See Jo Ann
Dunn Dep. 54:2-6; Betty Dunn Dep. 29:6-8; Dombrosky Dep.
31:14-19. Despite Betty purchasing the Veloster for
Dombrosky's use, and Betty considering the Veloster to be
Dombrosky's vehicle, Dombrosky needed permission to drive
the Veloster. See Betty Dunn Dep. 16:4-6; Jo Ann Dep.
54:13-15. Dombrosky drove the vehicle at least three times
prior to the accident. See Dombrosky Dep.
19:8-22:24. In addition to the Veloster, a Toyota RAV4 titled
in Jo Ann's name and a Toyota Avalon titled in
Betty's name were kept in the garage. See Jo Ann Dunn
Dep. 13:16-22. The family considered the RAV4 to be Jo
Ann's vehicle and the Avalon to be Betty's vehicle.
See Betty Dunn Dep. 15:22-16:3.
17, 2015, nine days after her mother picked up the Veloster
from First Team Hyundai, Dombrosky was involved in a motor
vehicle accident while driving the Veloster. The accident
left Green permanently paralyzed from the chest down. He
subsequently commenced a personal injury suit in Virginia
state court, claiming $7.5 million in damages. At the time of
the accident, the Veloster was titled in Jo Ann's name
and insured by an USAA auto policy. When USAA paid for the
totaled Veloster, Jo Ann specified that the check be paid to
Betty. Id. 64:1-2.
The Insurance Policies
times relevant, Betty maintained a $2.5 million personal
umbrella policy (the "Umbrella Policy") and a
$250,000 auto policy (the "Auto Policy"), which
included an "Extended Non-Owned Coverage"
endorsement (the "Endorsement"). The Umbrella
Policy obligates Encompass to "pay damages for which a
covered person becomes legally liable due to an occurrence
resulting in personal injury, bodily injury, or property
damage, up to the limit of liability shown in the Coverage
Summary . . . ." Encompass Umbrella Policy Insuring
Agreement 3, Docket No. 1-1 (emphasis omitted). The Umbrella
Policy enumerated certain losses that the policy does not
cover. In pertinent part, the Umbrella Policy does not cover:
12. Bodily injury or property damage
arising out of the ownership; maintenance; use; occupancy;
renting; loaning; entrusting; loading or unloading of any
motor vehicle ..., other than: . ..
e. A motor vehicle you maintain or regularly use
(1) Owned by a family member and not shown in the
Coverage Summary; or
(2) Furnished or available for the regular use of any
Umbrella Policy Insuring Agreement 6 (emphasis denotes
defined terms). There is no debate that Dombrosky is a
"family member" or that the Veloster is a
"motor vehicle" as defined by the policy.
Auto Policy states, in relevant part:
A. We will pay damages for bodily injury or
property damage for which any insured
becomes legally responsible because of an auto accident. We
will settle or defend, as we consider appropriate, any claim
or suit asking for damages which are payable under the terms
of this policy ....
B. We do not provide Liability Coverage for the ownership,