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Wesco Insurance Co. v. AAA Cab Service Incorporated

United States District Court, D. Arizona

September 30, 2019

Wesco Insurance Company, Plaintiff,
AAA Cab Service Incorporated, et al., Defendants.


          Douglas L. Rayes, United States District Judge.

         This is an insurance coverage dispute arising out of the death of Antonio Graciano Rivera (“Graciano”). During an earlier scheduling conference, the parties advised the Court that they believed certain potentially case dispositive issues could be resolved without discovery. The Court therefore postponed setting a case management schedule and instead authorized the parties to file pre-discovery summary judgment motions on discrete issues discussed during the conference. This resulted in five separate motions for summary judgment (Docs. 42, 46, 49, 78, 80), all of which more or less ask for the same thing: a determination of whether Graciano’s death arose out of the use of an automobile. The Court received full briefing on all motions, heard oral argument, and thereafter took the matter under advisement. For the following reasons, the Court concludes that Graciano’s death did not arise out of the use of an automobile.

         I. Background

         A. The Parties

         Plaintiff is Wesco Insurance Company (“Wesco”). Defendants are AAA Cab Service Incorporated a/b/a AAA Full Transportations Systems Incorporated d/b/a Yellow Cab of Arizona d/b/a Yellow Cab Company of Phoenix (“AAA”); Mohammed Shahin; Nebco Associated Incorporated d/b/a Medical Transportation Brokerage of Arizona (“Nebco”); Graciano’s surviving daughter, Paolo Graciano, and Stephan Wirkus as personal representative of Graciano’s Estate (collectively “the Estate”); Atain Specialty Insurance Company (“Atain”); and Nationwide E&S/Specialty. Shahin, Nebco, Atain, and AAA have also asserted counterclaims against Wesco.

         B. The Underlying Action[1]

         Graciano was an elderly wheelchair-bound man who suffered from numerous medical issues, including renal disease. Before his death, Graciano received regular dialysis treatments at DaVita Desert Dialysis (“DaVita”) in Sun City, Arizona, for which Nebco/AAA was hired to provide his non-emergency medical transportation.

         On May 19, 2015, Nebco/AAA dispatched Shahin to transport Graciano to and from his dialysis appointment at DaVita. When returning Graciano home, Shahin removed Graciano and his wheelchair from the cab, pushed Graciano to the front door of his house, knocked or rang the doorbell, and, after no one answered, left Graciano alone outside his home and drove away. Because Graciano was unable to move on his own, he remained outside in the heat until a neighbor saw him, moved him into the shade, gave him water, and supervised him until his wife came home. Following this incident, the Graciano family called Nebco/AAA to report and complain about Shahin’s actions. To the family’s knowledge, however, Shahin was not terminated, disciplined, counseled, or retrained.

         In June 2015, Graciano was admitted as a resident at an assisted living facility in Peoria, Arizona. On July 17, 2015, Nebco/AAA dispatched a driver to transport Graciano to DaVita for dialysis.[2] When Graciano’s treatment concluded around 12:15 p.m., Nebco/AAA dispatched Shahin to transport Graciano back to the assisted living facility.

         Instead of returning Graciano to the assisted living facility, however, Shahin erroneously drove Graciano to his personal residence. After discovering that no one was home to accept Graciano, Shahin made one unsuccessful phone call to one of Graciano’s relatives before abandoning Graciano outside the home. This time, Shahin left Graciano in a secluded area where he could not be seen by neighbors or passersby. As a result, Graciano remained undiscovered until nearly midnight, by which time he had died from exposure to the brutal summer heart.

         In February 2017, the Estate brought the Underlying Action against Shahin, Nebco, AAA, and others. In relevant part, the Underlying Action alleges that Shahin was negligent and violated Arizona’s Adult Protective Services Act, A.R.S. § 46-455, and that Nebco and AAA are directly and vicariously liable for Graciano’s death. As of the latest update to the Court, this action remains pending.

         C. The Insurance Policies

         1. The Wesco Policy

         Wesco issued an insurance policy to AAA for the policy period from October 1, 2014 to October 1, 2015 (“Wesco Policy”). The Coverage Agreement of the Liability Coverage provision the Wesco Policy states, in relevant part:

A. Coverage
We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ...

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