IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS



DIVISION OF ST. CROIX



GUARDIAN INSURANCE



Plaintiff )



CASE NO. SX-08-CV-0000481



COMPANY



ACTION FOR: DECLARATORY



JUDGMENT



vs



ADNAN RAHHAL



Defendant



NOTICE OF ENTRY OF



MEMORANDUM OPINION



AND JUDGMENT



TO



MARIA TANKENSON HODGE, ESQ.



EDWARD BARRY, ESQ.



ALL JUDGES (STX AND STT DISTRICT)



ALL MAGISTRATES (STX AND STT DISTRICT)



ALL LAW CLERKS (STX AND STT DISTRICT)



LAW LIBRARY



Please take notice that on September 28, 2015 a(n) MEMORANDUM



OPINION AND JUDGMENT dated September 25, 2015 was entered by the



Clerk in the above-entitled matter.



Dated: September 28, 2015



trella H. George



of the Court



[aa yN



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TISHA LAURENCIN-ORTIZ



COURT CLERK II

IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. CROIX



GUARDIAN INSURANCE, INC, )

)

Plaintiff, ) CIVIL NO. SX-08-CV-481

)

V. ) ACTION FOR DECLARATORY

) JUDGMENT

ADNAN RAHHAL, )

)

Defendant. )

)

APPEARANCES:

MARIA TANKENSON HODGE, ESQ. EDWARD L. BARRY, ESQ.

Hodge & Hodge Law Offices of Edward L. Barry

St. Thomas, VI Christiansted, St. Croix, VI

Attorney for Plaintiff Attorney for Defendant

MEMORAND PINION

MOLLOY, Judge.



THIS MATTER comes before the Court on Plaintiff's Motion for Summary Judgment

filed on May 7, 2009. Defendant filed an opposition on July 27, 2009. For the reasons stated

below, the Court will grant Plaintiff's motion.



I. FACTUAL BACKGROUND



This action for declaratory judgment stems from an automobile liability insurance

policy issued by Plaintiff Guardian Insurance, Inc. (“Guardian”) to Defendant Adnan Rahhal

(“Rahhal”). Rahhal was in the business of buying and selling vehicles through his dealership

that he purchased from various sources, including auctions. He bought the vehicle at issue in

this matter, a 2002 Ford Escape (“Vehicle”), at a February 2005 auction in St. Thomas, U.S.

Virgin Islands. When Rahhal purchased the Vehicle, it was registered to Metro Motors of St.



Thomas. During this time, Rahhal carried automobile liability insurance issued by Guardian

Guardian Ins., Inc. v. Rahhal

Civil No. SX-08-CV-481

Memorandum Opinion

Page 2 of 9



which would provide coverage for Rahhal’s motor vehicles when operated on the public

roadways. Rahhal never registered the Vehicle with the Virgin Islands Bureau of Motor

Vehicles (“BMV”) to record change of ownership. Instead, Rahhal possessed a single dealer

plate which he placed on the Ford Escape sometime after he bought it. On April 8, 2005,

Rahhal sold the Vehicle to Richard Daley (“Daley”), at which time the dealer plate was

removed and replaced with the original plate which was still registered to Metro Motors.

Rahhal prepared and executed a bill of sale for the Vehicle between himself and Daley,

reciting that Rahhal was selling the vehicle described therein to Daley. There is no indication

that Daley ever registered the Vehicle with the BMV.



On October 28, 2005, Daley was involved in a collision with Tammy Stevens while

driving the Vehicle. At the time of the collision, Rahhal’s dealer plate was not on the Vehicle,

and the police report indicated that the Vehicle was still registered to Metro Motors of St.

Thomas. On or about August 16, 2006, Rahhal was sued by Tammy Stevens and Jacyline

Gerson as a result of damages allegedly sustained in the collision (“Damages Action”) in the

matter styled Stevens, et al. v. Daley, et al., Super. Ct. Civ. No. SX-06-CV-525.1 In that lawsuit,

Stevens and Gerson alleged that the automobile Daley was driving at the time of the accident

had been sold to Daley without a proper transfer of title. Although Guardian initially

obtained legal counsel to represent Rahhal in the Damages Action, Guardian later refused to

continue with its representation after a review of the lawsuit. Rahhal objected to Guardian’s



refusal to provide representation in the Damages Action.



1 This lawsuit was initiated on August 16, 2006, but Plaintiff filed its First Amended Complaint on November

19, 2007.

Guardian Ins., Inc. v. Rahhal

Civil No. SX-08-CV-481

Memorandum Opinion

Page 3 of 9



Guardian filed this action for declaratory judgment on October 8, 2008, seeking a

determination that the business automobile coverage policy does not provide coverage for

Rahhal’s claim and that Guardian is not required to provide representation for Rahhal in the

Damages Action.



Il. LEGAL STANDARD



Summary Judgment is appropriate where “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law. FED.

R. Civ. P. 56(a). “Facts that could alter the outcome are ‘material facts’ and disputes are

‘genuine’ if evidence exists from which a rational person could conclude that the position of

the person with the burden of proof on the disputed issue is correct.” Clark v. Modern Group,

Ltd., 9 F.3d 321, 326 (3d Cir. 1993). Moreover, a factual dispute is deemed genuine if “the

evidence is such that a reasonable jury could return a verdict for the nonmoving

party.” Anderson v. Liberty Lobby, Inc, 477 U.S. 242, 248 (1986). “The mere existence of

some alleged factual dispute between the parties will not defeat an otherwise properly

supported motion for summary judgment.” Jd. at 247-48. The Court may not make credibility

determinations or weigh evidence. Id. at 255. If the record thus construed could not lead

the trier of fact to find for the non-moving party, there is no genuine issue for trial. Matsushita

Elec. Indus. Co., 475 U.S. at 587.



The moving party must support the motion by “identify[ing] those portions of the

record that demonstrate the absence of a genuine issue of material fact.” Chapman v.

Cornwall, 58 V.I. 431, 436 (V.I. 2013). If the moving party does so, “the burden shifts to the



non-moving party to present ‘affirmative evidence’ from which a jury might reasonably

Guardian Ins., Inc. v. Rahhal

Civil No. SX-08-CV-481

Memorandum Opinion

Page 4 of 9



return a verdict in his favor.” Jd. The Court must draw all reasonable inferences from the

underlying facts in the light most favorable to the non-moving party. Joseph v. Daily News

Publishing Co., Inc., 57 V.I. 566, 581 (V.I. 2012). All allegations of the non-moving party

supported by proper proofs must be accepted by the Court as true for the purposes of

deciding the motion. Id. The Court’s role in deciding a motion for summary judgment is not

to determine truth, but rather to determine whether a factual dispute exists that warrants a

trial on the merits. Williams v. United Corp., 50 V.1. 191, 195 (V.I. 2008). Where such a factual

dispute exists, the Court must deny summary judgment.

III. DISCUSSION



Under Virgin Islands law, “[e]very insurance contract shall be construed according to

the entirety of its terms and conditions as set forth in the policy, and as amplified, extended,

or modified by any rider, endorsement, or application attached to and made a part of the

policy.” 22 V.LC. § 846. Furthermore, “[i]Jn the Virgin Islands ‘[t]he interpretation,

construction and legal effect of an insurance policy is a question to be determined by the

court as a matter of law.”” James v. Guardian Ins. Co., 2015 V.I. LEXIS 85, at *10 (V.L. Super. Ct.

July 14, 2015) (citations omitted). Additionally, “[c]ourts ‘should read policy provisions to

avoid ambiguities, if possible, and not torture the language to create them.” Jd. at *11. Finally,

“[i]f the terms of a policy are unambiguous, it must be construed according to its plain

language.” Id.



Accordingly, the Court evaluates the terms of the policy to determine whether they

are ambiguous. Lucker Mfg. v. Home Ins. Co., 23 F.3d 808, 814 (3d Cir. 1994). A term is



ambiguous if more than one reasonable interpretation of the term exists. Id. If the court finds

Guardian Ins., Inc. v. Rahhal

Civil No. SX-08-CV-481

Memorandum Opinion

Page 5 of 9



that the policy is unambiguous, the court must give effect to the terms as stated on the face

of the policy. However, if the court identifies an ambiguity in the policy, the court must

resolve the ambiguity by giving effect to the interpretation of the term that is most favorable

to the insured, as the non-drafting party. J.C. Penney Life Ins. Co. v. Pilosi, 393 F.3d 356, 364

(3d Cir. 2004).



Guardian argues that it is not bound to cover Rahhal or Daley for the October 28, 2005

collision involving the Vehicle. Specifically, Guardian claims that the insurance policy that it

issued Rahhal did not cover the Vehicle at the time of this collision. Guardian contends that

the language of the policy prohibits coverage where the dealer’s plate is not affixed to the

Vehicle, the Vehicle is not owned by the policy holder, and where the Vehicle is sold,

including a “de facto” transfer. Guardian further contends that Rahhal’s policy “clearly

provides liability coverage only for a vehicle owned by Rahhal that bears his single Dealer

Plate.” Pl.’s Mot. for Summ. J. at 2.



In response, Rahhal argues that the policy identification of a “covered auto” in the

policy is ambiguous in nature and that there is a genuine dispute of material fact as to the

parties’ understanding and intent with regards to insurance coverage. Def.’s Opp’n to Pl.’s

Mot. for Summ. J. at 5. Rahhal also argues that the policy does not indicate that the “Dealer

Plate” must be attached to the Vehicle in order for the Vehicle to be covered under the policy.

Id. at 3. Although Rahhal admits that he sold the Vehicle to Daley, he states that he did so

without a proper transfer of title and that any de facto transfer is void against public policy.



Both parties cite to Rivera v. National Car Rental Sys., 14 V.1. 481 (D.V.I. 1978)—a case



with facts similar to the instant matter—in their respective briefs. In Rivera, National Car

Guardian Ins, Inc. v. Rahhal



Civil No. SX-08-CV-481 Ny

Memorandum Opinion



Page 6 of 9



Rental Systems sold an automobile to Rivera. National failed to register the transfer of

ownership as required by 20 V.LC. § 335, as it was then written. Id. at 483. Then, while the

car was still registered to National, Rivera negligently caused a car accident. Pursuant to 20

V.I.C. § 335, the court determined that National was still liable for injuries caused by the

operation of the car which was still registered in National’s name. /d. at 485-86 (finding that

section 335 mandated that “the seller must register such change with the Commissioner of

Public Safety before the buyer is allowed to operate the vehicle on the public highways.”).

The court found that section 335 imposed a duty on National to register the change of

ownership with the Commissioner of Public Safety, and that National’s failure to do so made

them liable for damages caused by the operation of that car. Id. The Rivera court reasoned

that “a vendor who fails to comply with the dictates of § 335 must stand the consequences,

which is, to be deemed the owner of the vehicle and be liable for any injury caused by its

operation, given negligence, even though the purchase price has been paid and delivery

completed.” /d. at 486.



After Rivera, the Legislature revised 20 V.LC. § 335, and “took out the language on

which the Rivera court based its holding that the registered owner of a vehicle, having sold

that vehicle without officially registering the change of ownership, is liable to a third party

in a personal injury action involving that vehicle.” Krind v. Barlow, 44 V.I. 293, 297 (V.I. Terr.

Ct. 2002). Because the provision the Rivera court relied on to void the transfer in that case

is no longer in section 335, a seller’s noncompliance with section 335 no longer voids the

transfer for liability purposes. Jd. at 297 (“section 335 no longer declares that non-



compliance with its provisions makes the transfer void for liability purposes, since it no

Guardian Ins., Inc. v. Rahhal

Civil No. SX-08-CV-481

Memorandum Opinion

Page 7 of 9



longer requires that a seller fully comply with the statute before he is released from

liability.”). The Krind court further determined that, for liability purposes, the transfer

occurred “at the time and place physical delivery was completed.” Id. at 298. The Krind court

applied the Virgin Islands uniform commercial Code, codified at 11A V.I.C. § 2-401, to reach

this conclusion.



In this matter, the Court finds that Guardian is entitled to summary judgment. First,

under 11A V.I.C. § 2-401 the title of the Vehicle passed from Rahhal to Daley before the

Vehicle was involved in the collision while Daley was driving it. The undisputed facts make

clear that on April 8, 2005, Rahhal sold the Vehicle to Daley, and this sale was accompanied

by a bill of sale signed by both Rahhal and Daley. See Bill of Sale attached as Ex. 4 to Pl.’s

Motion for Summ. J. This Bill of Sale stated that the Vehicle was being sold “as is where is.”

Id. After the Bill of Sale was fully executed, Daley drove off with the Vehicle. Pl.’s Mot. for

Summ. J. Ex. 1. This transfer of ownership represents a valid transfer of title of the Vehicle

under 11A V.I.C. § 2-401(2) because “title passe[d] to the buyer at the time and place at which

the seller complete[d] his performance with reference to the physical delivery of the goods.”

Furthermore, the unambiguous terms of Rahhal’s insurance policy state that “[a]ny

insurance coverage with respect to a vehicle, if provided by the policy, will be terminated

and void as to that vehicle the moment the insured sells it and this includes a de facto transfer.”

See Business Automobile Policy - GIC-3 Mandatory Endorsement, J 4 attached as Ex. 3 to Pl.’s

Mot. for Summ. J. (emphasis added). Under these undisputed facts, title of the Vehicle passed

from Rahhal to Daley when these parties effectuated the sale between them on April 8, 2005.



Therefore, under 11A V.LC. § 2-401, Krind, and a plain reading of Rahhal’s business

Guardian Ins., Inc. v. Rahhal

Civil No. SX-08-CV-481

Memorandum Opinion

Page 8 of 9



automobile policy written by Guardian, the automobile policy ceased to cover the Vehicle

when Rahhal sold it to Daley.



Second, Guardian is entitled to judgment as a matter of law under the undisputed facts

of this case because the plain terms of Rahhal’s Guardian-issued business automobile policy

covered the Vehicle on the roadways only if it displayed the dealer plate associated with that

policy. The undisputed evidence in this case demonstrates that from December 29, 2004

until December 29, 2005, Rahhal held a Guardian-issued business automobile policy which

listed “dealer plate” under covered autos. Rahhal placed the dealer plate on the Vehicle while

he owned it. When Rahhal sold the Vehicle to Daley he removed his dealer license plate at

that time and replaced it with the original license place. Daley was involved in a traffic

collision during which he was driving the Vehicle on October 28, 2005. The Vehicle bore a

license plate registered to Metro Motors of St. Thomas at the time of Daley’s collision.

Because the Vehicle belonged to Daley at the time of the collision and did not bear the “dealer

plate” belonging to Rahhal, the Court holds that Guardian is entitled to a declaratory

judgment finding that there is no coverage afforded to Rahhal, or any person, under Rahhal’s

policy for claims arising from the October 28, 2005 accident involving the Vehicle.



IV. CONCLUSION

For the reasons stated above the Court will grant summary judgment in favor of



Guardian. An appropriate Judgment follows.



Dated: September 25, 2015 ie | Of HEE



ROBERT LT ad

Judge of the Superidr Court

Guardian Ins., Inc. v. Rahhal



Civil No. SX-08-CV-481



Memorandum Opinion



Page 9 of 9



ATTEST:



ESTRELLA GEORGE



Acting Clerk of the Court



See



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upervisor



Dated



13S.

IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. CROIX



GUARDIAN INSURANCE, INC., )

)

Plaintiff, ) CIVIL NO. SX-08-CV-481

)

v. ) ACTION FOR DECLARATORY

) JUDGMENT

ADNAN RAHHAL, )

)

Defendant. )

)

JUDGMENT



THIS MATTER came before the Court on Plaintiff Guardian Insurance Company’s

Motion for Summary Judgment filed on May 7, 2009. For the reasons stated in the

accompanying Memorandum Opinion of even date, it is hereby



ORDERED, ADJUDGED, AND DECREED that Plaintiff Guardian Insurance Company’s

Motion for Summary Judgment filed on May 7, 2009, is GRANTED; it is further



ORDERED, ADJUDGED, AND DECREED that the judgment is awarded in favor of

Plaintiff Guardian Insurance Company and against Defendant Adnan Rahhal on the claims

raised in the Complaint filed on October 2, 2008; it is further



ORDERED, ADJUDGED, AND DECREED that it is hereby declared that there is no

coverage afforded to Adnan Rahhal, or any other person or party, under the Business

Automobile Policy issued by Guardian Insurance, Inc. for claims arising from the October 28,

2005 accident; it is finally



ORDERED that copies of this Judgment shall be provided to Attorney Maria T. Hodge

and Attorney Edward L. Barry.



Dated: September 25, 2015 LK GLEE



ROBERTA. A. MOL

ATTEST: Judge of the Superior Court



ESTRELLA GEORGE

Acting Clerk of the Court



Dated: i