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Empire Fire and Marine Insurance Co. v. Patton

United States District Court, D. Arizona

September 11, 2019

Empire Fire and Marine Insurance Company, Plaintiff,
v.
Sean Edward Patton, et al., Defendants.

          ORDER

          Honorable John J. Tuchi, United States District Judge.

         At issue is Plaintiff's Motion for Summary Judgment (Doc. 56, MSJ), supported by Plaintiff's Statement of Facts (Doc. 57, PSOF), to which Defendant Neetan Mandalia filed a Response (Doc. 58, Resp.) and responsive Statement of Facts (Doc. 59, DSOF), and Plaintiff filed a Reply (Doc. 61, Reply). For the reasons that follow, the Court grants Plaintiff's Motion.

         I.BACKGROUND

         A. The SLP policy with Empire

         On March 16, 2015, Defendant Sean Patton (“Patton”) rented a car from Enterprise Rent-a-Car Company (“Enterprise”) at its Indio, California location. (PSOF, Ex. 2-A.) Patton signed a four-page rental agreement with Enterprise. (PSOF, Ex. 2-A.) Page one contains the bolded and capitalized headline ACKNOWLEDGMENT OF THE ENTIRE AGREEMENT, WHICH CONSISTS OF PAGES 1 THROUGH 4. Below is smaller capitalized print that states “I HAVE READ AND AGREE TO THE TERMS AND CONDITIONS ON PAGES 1 THROUGH 4.” Patton signed underneath this. (PSOF, Ex. 2-A.)

         On its third page, the rental agreement contains a bolded and underlined heading “Limits on Use and Termination of Right to Use.” Directly underneath is the following:

         Renter agrees to the following limits on use:

(4) Vehicle shall not be used for: any illegal purposes; in any illegal or reckless manner; in a race or speed contest; or to tow or push anything.
(7) Vehicle shall not be driven by any person impaired by the use of alcohol, narcotics, intoxicants, or drugs, used with or without a prescription.

(9) Vehicle shall not be driven or taken outside the states authorized on Page 1.

         The center of page one contained the following in all capitals: “PERMISSION GRANTED TO OPERATE VEHICLE IN THE STATE OF RENTAL AND THE FOLLOWING STATE(S): CA ONLY.” (PSOF, Ex. 2-A.)

         Patton also elected to purchase separate supplemental liability protection (“SLP”) provided by Plaintiff Empire Fire and Marine Insurance Company (“Empire”). (PSOF, Ex. 2-A.) He did so by initialing the following, on page one of the Enterprise rental agreement: “RENTER ACCEPTS OPTIONAL SUPPLEMENTAL LIABILITY PROTECTION (SLP) AT FEE SHOW IN COLUMN TO RIGHT. SEE PARAGRAPH 17.”

         Paragraph 17 is located on page three of the rental agreement and provides a summary of both the SLP coverage and its exclusions. Under the headline Optional Supplemental Liability Protection, the agreement says “THIS IS A SUMMARY ONLY AND IS SUBJECT TO ALL PROVISIONS, LIMITATIONS, EXCEPTIONS AND EXCLUSIONS OF THE SLP POLICY. UPON REQUEST, A COPY OF THE POLICY IS AVAILABLE FOR REVIEW.” Paragraph 17 also contains the bolded and underlined headings SLP Benefits and SLP Exclusions. The latter directs the renter to refer to the SLP for a complete list of exclusions. However, it lists, among others, the following “key exclusions” from coverage:

(a) Loss arising out of an accident which occurs while Renter . . . is under the influence of alcohol or drugs, or other substances unless prescribed by a physician;
(j) Loss arising out of the use of Vehicle when such use is otherwise in violation of the terms and conditions of the Rental Agreement.

         B. The SLP policy with Empire

         The SLP is a separate document.[1] The declarations page lists “Empire Fire and Marine Insurance Company” as the insurer and “ENTERPRISE HOLDINGS INC” as the policyholder. (PSOF, Ex. 2-C at 3.) Section I of the SLP provisions contains a heading titled EXCLUSIONS. (PSOF, Ex. 2-C at 7.) Underneath, it states:

In addition to the exclusions contained in the “underlying insurance”, this insurance does not apply to the following:
(1) Loss arising out of an “accident” which occurs while the “insured” is under the influence of alcohol or drugs, or other substances unless prescribed by a physician.
(2) Loss arising out of the use of a “rental vehicle” when such use is in violation of the terms and conditions of the “rental agreement.”

         C. The incident with Mandalia and subsequent litigation

         After Patton signed the rental agreement and elected to purchase the SLP policy, he drove from Indio to Arizona. He met his girlfriend in Tempe and the two went to a bar. After leaving the bar, they drove off in the rental car. A heated argument ensued, and Patton pulled the car over in a parking lot. He then noticed a group of people pointing and laughing at them. Patton drove toward the group to confront them and hit Defendant Neetan Mandalia (“Mandalia”) with the car. (PSOF ¶ 24; DSOF ¶ 24.) The police report states that at 2:39 a.m., after Patton struck Mandalia, a breathalyzer showed Patton's blood alcohol content (“BAC”) to be 0.098. (PSOF ¶ 25; DSOF ¶ 25.) Police ...


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