Summary 2006 WY 56

Summary of Decision issued May 10, 2006

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Case Name: Lawrence v. State Farm Fire and Casualty Co.

Citation: 2006 WY 56

Docket Number: 05-191

Appeal from the District Court of Sheridan County, the Honorable Gary P. Hartman, Judge.

Representing Appellant (Plaintiff): Michael C. Steel of Lonabaugh and Riggs, LLP, Sheridan, Wyoming.

Representing Appellee (Defendant): George E. Powers Jr., of Sundahl, Powers, Kapp & Martin, Cheyenne, Wyoming.

Date of Decision: May 10, 2006

Issue: Whether State Farm breached the subject insurance policy by refusing to defend its insured, Valerie Johnson, against the negligence claim alleged in the underlying action.

Holding: Appellant is the mother and personal representative of Cody Lee Holt who died from injuries suffered in a one-car crash that occurred south of Billings, Montana on July 4, 2003. Valerie Johnson owned the car that was involved in the accident. She gave money for gas to her daughter, D’Andra Amende. There were four teenagers involved in the incident and none held a valid driver’s license. The insurance company which covered the car as well as the insurance company that covered the driver, settled claims filed by Lawrence on behalf of her son’s estate. Lawrence filed an additional claim against Johnson giving notice to State Farm on the theory that Johnson’s act of giving gas money to her daughter was the negligent act that ultimately led to Holt’s death. State Farm informed Lawrence’s attorney that it would not participate in the mediation conference because the policy did not provide coverage for the accident. Johnson and Amende entered into a settlement agreement with Lawrence resolving Lawrence’s wrongful death claims against them. The parties entered into an Assignment of Rights and Claims in which Johnson and Amende confessed judgment in favor of Lawrence in an aggregate amount of $750,000 and Lawrence agreed to not execute on those judgments except against State Farm. The district court entered a partial summary judgment in favor of State Farm and denied Lawrence’s motion for partial summary judgment.
When the Court reviews a summary judgment, they review the same materials as did the district court and follow the same standards which applied to the proceedings below. The propriety of granting a motion for summary judgment depends upon the correctness of the dual findings that there is no genuine issue as to any material fact and that the prevailing party is entitled to judgment as a matter of law. In Matlack, the Court stated that the insurer is obligated to afford a defense as long as the alleged claim rationally falls within the policy coverage. The Court reviewed the language of the policy in question. Next, they examined the complaint to ascertain if any claim alleged was potentially covered under the policy. The Court stated that the negligent act, if any, was Johnson giving her daughter gas money so that she could operate the motor vehicle in question. Hence, Johnson’s acts were inextricably related to the operation of the motor vehicle and within an exception to the insurance coverage at issue. Neither the Court nor the Appellant could cite a case that could be viewed as pertinent authority that supported Appellant’s argument. At oral argument, Appellant cited Oliver and Sarp but the court was not persuaded that they supported Appellant’s position because the use of the car was an essential element in the theory of liability.

The Court held that the district court did not err in granting summary judgment in favor of State Farm. The Court affirmed.

C.J. Hill delivered the opinion for the court.

Link to the case: http://tinyurl.com/mfmn8 .