Richards v. Vt Mutual

VERMONT SUPERIOR COURT CIVIL DIVISION
Washington Unit Case No. 24-CV-00773
65 State Street
Montpelier VT 05602
802-828-2091
www.vermontjudiciary.org

Tanya Richards v. Vermont Mutual Insurance Company

Opinion and Order on VMIC’s Motion for Summary Judgment

In the underlying tort suit, Plaintiff Tanya Richards and her daughters claimed

that they were injured in an automobile collision caused by Ms. Cassidy Murdock’s

negligent driving. Richards v. Murdock, No. 21-CV-1397 (Vt. Super. Ct.). An insurance

provider other than Defendant Vermont Mutual Insurance Company (VMIC) is providing

Ms. Murdock a defense in that case. At the time of the collision, Ms. Murdock had

exclusive use of and was driving a vehicle owned by her mother, who lives in Arizona,

while living in a camper on property owned by her father in Vermont. In this case, Ms.

Richards seeks to establish that Ms. Murdock has coverage under a VMIC auto policy

principally insuring Ms. Murdock’s father and his vehicles. The parties disagree as to:

(1) whether Ms. Richards has any sufficient interest in the VMIC policy enabling her to

sue to establish coverage; (2) whether Ms. Murdock was her father’s “family member,” for

coverage purposes, at the time of the collision; and (3) whether a particular exclusion

forecloses coverage. VMIC has filed a motion for summary judgment addressing the first

and third issues only, which Ms. Richards opposes.

I. Procedural Standard

Summary judgment procedure is “an integral part of the . . . Rules as a whole,

which are designed ‘to secure the just, speedy and inexpensive determination of every
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action.’” Morrisseau v. Fayette, 164 Vt. 358, 363 (1995) (quoting Celotex Corp. v. Catrett,

477 U.S. 317, 327 (1986)). Summary judgment is appropriate if the evidence in the

record, referred to in the statements required by Vt. R. Civ. P. 56(c), shows that there is

no genuine issue as to any material fact and that the movant is entitled to judgment as a

matter of law. Vt. R. Civ. P. 56(a); Gallipo v. City of Rutland, 163 Vt. 83, 86 (1994)

(summary judgment will be granted if, after adequate time for discovery, a party fails to

make a showing sufficient to establish an essential element of the case on which the

party will bear the burden of proof at trial). The Court derives the undisputed facts from

the parties’ statements of fact and the supporting documents. Boulton v. CLD

Consulting Engineers, Inc., 2003 VT 72, ¶ 29, 175 Vt. 413, 427. A party opposing

summary judgment may not simply rely on allegations in the pleadings to establish a

genuine issue of material fact. Instead, it must come forward with deposition excerpts,

affidavits, or other evidence to establish such a dispute. Murray v. White, 155 Vt. 621,

628 (1991). Speculation is insufficient. Palmer v. Furlan, 2019 VT 42, ¶ 10, 210 Vt. 375,

380.

The basic facts as set forth above are undisputed.

II. Analysis

Substantial nonbinding authority supports VMIC’s argument that Ms. Richards is

not properly treated as an intended third-party beneficiary of the policy at issue and, at

least without a judgment against VMIC’s insured in hand, lacks authority to pursue this

direct action against VMIC to establish coverage. See Roberts v. ADA Traffic Control,

Ltd., No. 21-CV-1101, 2022 WL 17960121, at *5–6 (Vt. Super. Ct. Nov. 18, 2022)

(analyzing this question and concluding that tort-plaintiff lacks authority to establish

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coverage in direct action against tortfeasor’s insurer). The Vermont Supreme Court has

never ruled on that issue, however, while it has clearly authorized tort-plaintiffs, as

defendants in coverage actions, to appeal adverse coverage determinations, recognizing

that the “most real dispute” is between the tort-plaintiff and the tortfeasor’s insurer. See

Coop. Fire Ins. Ass’n of Vermont v. Bizon, 166 Vt. 326, 330 (1997) (“no difficulty” allowing

tort-plaintiff to appeal in those circumstances).

While the Court believes VMIC likely has the better of the third-party beneficiary

argument, the Court need not make a definitive ruling to that effect because the VMIC

policy plainly provides no coverage in the circumstances of the case.

The basic principles of interpreting insurance policies are as follows:

When interpreting an insurance policy, this Court follows well-
established principles . . . . “An insurance policy is construed according to
‘its terms and the evident intent of the parties as expressed in the policy
language.’” An insurance policy “is to be strictly construed against the
insurer.” . . . .

Vermont law “requires that policy language be accorded its plain,
ordinary meaning consistent with the reasonable expectation of the insured,
and that terms that are ambiguous or unclear be construed broadly in favor
of coverage.” “Words or phrases in an insurance policy are ambiguous if
they are fairly susceptible to more than one reasonable interpretation.”
Further, “[w]hen a provision is ambiguous or may reasonably be interpreted
in more than one way, then we will construe it according to the reasonable
expectations of the insured, based on the policy language.” However, “the
fact that a dispute has arisen as to proper interpretation does not
automatically render the language ambiguous.” And, “we will not deprive
the insurer of unambiguous terms placed in the contract for its benefit.”

Rainforest Chocolate, LLC v. Sentinel Insurance Company, Ltd., 2018 VT 140, ¶¶ 6–7,

209 Vt. 232, 235–36 (citations omitted).

Here, the named insured on the VMIC policy is James Murdock, Ms. Murdock’s

father. Covered autos described in the declarations include a 2001 Jeep and a 2019 Ram.

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Ms. Murdock was driving her mother’s 2017 Acura. The policy includes liability coverage

for “‘bodily injury’ or ‘property damage’ for which any ‘insured’ becomes legally

responsible because of an auto accident.” Policy, Insuring Agreement ¶ A at 2. “Insured”

includes, in relevant part, a “family member.” Id. ¶ B at 2. “‘Family member’ means a

person related to you by blood, marriage or adoption who is a resident of your household.”

Policy, Definitions ¶ F at 1. “You” and “your” refer specifically to the named insured, Mr.

Murdock. See id. ¶ A at 1. Whether Ms. Murdock was a resident of Mr. Murdock’s

household, and thus a family member, is disputed but assumed for purposes of VMIC’s

motion.

Exclusion B.3 is principally at issue here. Exclusions B.2–3 provide as follows:

B. We do not provide Liability Coverage for the ownership, maintenance or
use of:
. . .

2. Any vehicle, other than “your covered auto”, which is:
a. Owned by you; or
b. Furnished or available for your regular use.

3. Any vehicle, other than “your covered auto”, which is:
a. Owned by any “family member”: or
b. Furnished or available for the regular use of any “family member”.

However, this Exclusion (B.3.) does not apply to you while you are
maintaining or “occupying” any vehicle which is:
a. Owned by a “family member”; or
b, Furnished or available for the regular use of a "family member".

Policy, Exclusions ¶¶ B.2–3 at 3. As it applies to this case, “your covered auto” refers to

Mr. Murdock’s vehicles as described in the declarations. See Policy, Definitions ¶ J at 1.

Ms. Richards contends that, “[w]hile the policy excludes coverage for ‘any vehicle’

other than the vehicles identified within the policy, this exclusion does not apply when

the vehicle in question is ‘furnished or available for the regular use of any ‘family
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member.’” Ms. Richards’ Memorandum in Opposition 6–7. VMIC counters that the

exception to Exclusion B.3 only applies to the insured, i.e., James Murdock. The Court

agrees with VMIC.

Looking first to Exclusion B.2, it is clear on its face that its meaning and purpose

is to exclude coverage in relation to the use of a vehicle not listed in the declarations if

the named insured owns or regularly uses that vehicle. Exclusion B.3 is the same

exclusion applied to family members. The “however” exception to Exclusion B.3, which

Ms. Richards seeks to rely upon, simply does not apply to anyone other than “you,” i.e.,

the named insured. In other words, James Murdock would have coverage if he were

maintaining or occupying a family vehicle.

Ms. Richards points to nothing in the Policy that could possibly reveal that it

provides coverage in the context of this case.1 Ms. Richards’ interpretation of the Policy

would eliminate the “to you” language out of the exception. It would also be tautological

in that Exemption B.3 would exempt vehicles provided for use by family members and, in

the next breath, take back the exemption for those same persons. Such a construction

makes no sense.

These provisions of the Policy are plain and nonambiguous. Even accepting for

these purposes that she was a “family member” under the Policy, at the time of the

collision, Ms. Murdock was driving a car other than one described in the declarations of

the VMIC policy that was furnished for her regular use by her mother. Under Exclusion

1
Ms. Richards suggests that, in a letter to her, VMIC supported her interpretation of the
Policy. The Court has reviewed the letter and sees no such concession. In any event, it is
the language of the Policy that controls the result in this case.
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B.3 there is no coverage for her under such circumstances. Both she and her mother’s

car are strangers to the Policy.

Conclusion

For the foregoing reasons, VMIC’s motion for summary judgment is granted.

Electronically signed on Wednesday, November 6, 2024, per V.R.E.F. 9(d).

_______________________
Timothy B. Tomasi
Superior Court Judge

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