Blake v. Nationwide Insurance Co., No. 120-3-03 Wmcv (Carroll, J., Jan. 13, 2005)


[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the
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                                   STATE OF VERMONT
                                  WINDHAM COUNTY, SS.

CLIFTON BLAKE,
          Plaintiff,

v.                                                   WINDHAM SUPERIOR COURT
                                                     DOCKET NO. 120-3-03 Wmcv

NATIONWIDE INSURANCE CO.,
         Defendant.



     ORDERS ON MOTION FOR SUMMARY JUDGEMENT, MOTION TO ENFORCE
                 JUDGMENT AND MOTION TO RECONSIDER


       Plaintiff Clifton Blake was seriously injured in an automobile accident on a public

highway for which, in a previous law suit, he received a default judgment against Clifford

Riddle, the automobile driver. At the time of the accident, both Blake and Riddle were

employees of Donald Harlow d/b/a Harlow’s Sugar House and Blake is currently receiving

workers’ compensation benefits for his injuries. In this action, Blake seeks to enforce the default

judgment against Defendant Nationwide, Harlow’s automobile insurer, on account of Riddle’s

insolvency. Nationwide moves for summary judgment asserting that coverage is barred by

applicable employment-related exclusions in Harlow’s policy. Concluding that it cannot

determine as a matter of law whether those exclusions apply, the Court DENIES Nationwide’s
motion. Blake moves for the second time to enforce judgment. Because the facts related to

Nationwide’s defense remain disputed and because Riddle’s insolvency has not yet been

established beyond dispute, as well as those reasons previously applied to Plaintiff’s first motion

to enforce, the Court again DENIES the Motion to Enforce Judgment.

       At the commencement of this litigation, Nationwide moved to dismiss for failure to state

a claim for relief. In a September 4, 2003 Order denying the motion, the Court determined that

Blake had standing to enforce the underlying judgment against Nationwide up to the amount of

the policy limits so long as he was able to establish that Riddle is insolvent. It also determined,

based on a failure of communication between Blake and Nationwide regarding Blake’s initial

dispute of Nationwide’s decision not to provide coverage, that Nationwide was not estopped

from raising a defense to the instant claim based on the employment related exclusions in

Harlow’s policy. To the extent that Blake had claimed a right to damages for Nationwide’s

alleged bad faith in refusing to defend Riddle, the Court found no applicable cause of action.

Nationwide’s Motion for Summary Judgment

       Summary judgment is appropriate if, viewing the evidence favorably to the non-moving

party and giving it the benefit of all reasonable doubts and inferences, the Court determines that

there are no genuine questions of material fact and the moving party is entitled to judgment as a

matter of law. See Select Designs, Ltd. v. Union Mut. Fire Ins. Co., 165 Vt. 69, 72 (1996).           In the instant M

       (5) It [the Nationwide Policy] does not cover bodily injury to others for which any
       insured may be held liable under a workmen’s compensation, unemployment
       compensation, disability benefits or similar law.

       (6) It does not cover bodily injury to an employee of any insured, while the
       employee is engaged in activities of employment. However, it does cover any
       occurrence involving a household employee who is not covered or is not required
       to be covered by any workmen’s compensation law.
According to Nationwide it is undisputed both that Blake’s injuries were compensable under

Vermont’s worker’s compensation scheme and that Blake was engaged in activities of his

employment for Harlow when the accident occurred. While the Court agrees that Nationwide

would be entitled to judgment as a matter of law if these facts were undisputed and that there is

evidence to support both factual conclusions, giving Blake the benefit of reasonable doubt and

inferences the Court does not agree that the factual issues are beyond dispute.

       Although Plaintiff concedes that he is receiving workers’ compensation benefits for the

injuries incurred in the automobile accident there is no indication that those benefits were the

result of any contested process. Pursuant to 21 V.S.A. § 662, an employer may enter into an

agreement with an injured employee with regard to compensation that represents a compromise

of interests. Id. (“[A] compromise agreement may be approved by the commissioner when h is

clearly of the opinion that the best interests of such employee or such dependents will be served

thereby.”) 1 As this section makes clear, an employer who has a viable defense to liability

might, in its own self-interest elect to settle a worker’s compensation claim rather than face

litigation. Since a contract is the drafting product of the insurer, its provisions are construed

most strongly against the company in questionable cases. American Fidelity v. Elkins, 125 Vt.

313, 315 (1965). Because of its drafting, section (5) depends on an insured’s liability rather than

the insured’s voluntary decision to settle a claim. Had it wished, Nationwide’s policy could have

expressly excluded coverage not only in situations where any insured was liable but also in


       1
      The Court acknowledges that Plaintiff has not produced any evidence that workers’
compensation benefits in his case were the result of a negotiated settlement. Nor has Defendant,

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situations where any insured agreed to accept a financial settlement without admitting liability.

Given this drafting omission, Plaintiff has the opportunity to dispute the fact of Harlow’s liability

in this proceeding.

       In prior pleadings, Blake raised two issues which his employer might have invoked to

contest liability. See Plaintiff’s Reply to Defendant’s Opposition to Motion to Compel, filed

7/2/04. The first issue concerns the possible role of alcohol consumption in the accident and is

presumably based on 21 V.S.A. § 649.2 As the Court interprets this statute only to bar workers’

compensation recovery to an employee who was injured by or during his own alcohol

consumption and there is only evidence that Riddle may have been drinking before the accident

occurred, no reasonable inference of viable defense is raised by this issue.

       The second possible defense for Harlow’s liability depends on 21 V.S.A. § 618, in which

workers’ compensation is limited to accidents “arising out of and in the course of employment”

under what Blake has termed a “coming and going” exclusion. Assuming for lack of explanation

that this invokes the premises rule adopted in Miller v. IBM Corp., 161 Vt. 213, 216 (1993),

limiting liability for commuting injuries to those occurring within the physical area of an

employer’s control, the Court acknowledges that neither party has attempted to resolve what

Blake and Riddle were doing when the accident occurred. Until this fact is undisputed, Harlow’s

workers’ compensation liability remains uncertain.

       Similarly, with regard to Nationwide’s claim that Plaintiff admits he was engaged in

activities of employment at the time of accident, there is merely evidence but not a undisputed


who bears the burden of proving that the exclusion is applicable, introduced proof that it was not.


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2
    Plaintiff’s effort to explain possible defenses did not include any legal citations.

                                             5
fact. In all the citations to the record which Nationwide has brought to the Court’s attention,

Plaintiff only goes so far as to admit that both he and Riddle were employed by Harlow at the

relevant time. To equate this admission with a finding that the exclusionary language quoted

above in section (6) applied, the Court would have to conclude that an employee is at all times

during their period of employment engaged in the activities of employment. Clearly this cannot

be the case. The intent of section (6), like 21 V.S.A. § 618, is to delineate work related injuries

from those which merely befall one who is employed. Plaintiff’s admissions only reach the fact

of employment but do not concede the substance of Blake’s engagement at the time of injury.

As explained above, at this time there are insufficient facts available from which the Court can

conclude whether Blake was engaged in the activities of his employment or whether he was

otherwise occupied.

       Therefore, the Court concludes that Nationwide has not yet established that coverage is

excluded under policy terms nor that it is entitled to judgment as a matter of law.

Blake’s Motion to Enforce

       Blake filed its second Motion to Enforce Judgment as part of his opposition to

Nationwide’s Motion for Summary Judgment. A review of Blake’s memorandum reveals that it

fails to raise any substantive legal arguments which were not already raised and rejected in the

Court’s September 4th Order. Moreover, it represents what can better be described as a Cross

Motion for Summary Judgment. As the Court has already determined the presence of material,

factual disputes central to Nationwide’s defense and in light of Plaintiff’s concession that

Riddle’s solvency has yet to be resolved as a question of fact, the motion cannot be granted.

Motion for Reconsideration

                                                 6
        The Court previously ordered that Nationwide produce for inspection its file relating to

the instant claim. The Court made this order in reliance on Nationwide’s prior agreement to

produce the materials. However, now that the Court has been able to more clearly determine the

pending issues in this case, after a review of the filings relating to Nationwide’s Motion for

Summary Judgment, the Court will reconsider this order and not require Nationwide to produce

the files.

        Judge Wesley’s previous order has narrowed the issues in this case. He determined that

Plaintiff had no applicable cause of action against Nationwide based upon alleged bad faith in

refusing to defend Riddle. Judge Wesley further delineated the issue in this case was whether

the employment related exclusion applied to Plaintiff’s claim.

        Further production of Nationwide’s files would not be relevant nor lead to relevant

material, given that the sole issue left to be resolved in this case is the scope of employment of

Plaintiff at the time of the accident and whether the exclusion in the insurance policy applies.

Nationwide’s motives in denying the claim are not at issue. Therefore, the Court reconsiders its

previous order and denies the Motion to Compel filed by Plaintiff.

                                             ORDER

Nationwide’s Motion for Summary Judgment is DENIED.

Blake’s Motion to Enforce Judgment is DENIED.

Nationwide’s Motion for Reconsideration is GRANTED.

        Dated at Brattleboro, Vermont, this ___ day of January, 2004.



                                              _______________________

                                                 7
Karen R. Carroll
Presiding Judge




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