In 2003, Auto Club Group Insurance issued an automobile insurance policy to Deborah Lee on a 2001 Oldsmobile. On December 10, 2003, Alvin Taylor, who lived with Lee, borrowed the car with Lee’s permission. The car ended up in the possession of Kelly Rose Brooks. Brooks collided with a car driven by Mira Abay, who was killed in the accident. Subsequent toxicology testing established that Brooks was under the influence of alcohol at the time of the accident, and that she had drugs in her system. Brooks did not have automobile insurance, but her father, James Trent, was covered under a policy issued by DaimlerChrysler Insurance Company. The policy is referred to as a “fronted” policy. Its declarations sheet lists DaimlerChrysler Corporation as the named insured, but the policy provides coverage for DaimlerChrysler Corporation’s company car program lessees, including Trent. DaimlerChrysler Corporation pays DaimlerChrysler Insurance an annual fronting fee to use the insurance company’s license, and DaimlerChrysler Corporation performs all insurer functions, including paying all eligible claims made under the policy.
In September 2005, Maria Abay, as personal representative of the Estate of Mira Abay, filed a wrongful death action against Brooks, Lee, and Taylor. A default was entered against Brooks because she failed to answer the complaint. DaimlerChrysler Insurance eventually retained counsel for Brooks, but it did so under a reservation of rights, allowing for the possibility that the insurer would deny that its policy covered Brooks. As a result, Abay filed this declaratory judgment action, asking the trial court to declare that the DaimlerChrysler Insurance’s policy provided liability coverage to Brooks in the wrongful death lawsuit.
The parties’ arguments regarding the scope of the policy’s coverage focus on two sections of the policy. First, on page 1, the policy states that, “[t]hroughout this policy the words ‘you’ and ‘your’ refer to the Named Insured shown in the Declarations. The words ‘we’, ‘us’ and ‘our’ refer to the Company providing this insurance.” DaimlerChrysler Corporation is the named insured in the declarations. Second, Endorsement No. 19, entitled “Individual Named Insured,” states in part that “ ‘[f]amily members’ are ‘insureds’ for any covered ‘auto’ you own of the ‘private passenger type’ and any other ‘auto’ described in Paragraph 2.b. of this endorsement.” Paragraph 2.b states that any auto that “you don’t own is a covered ‘auto’ while being used by you or by any ‘family member,’ ” with certain exceptions. According to Abay, Endorsement No. 19 extends liability coverage to vehicle lessees and their family members when they operate non-owned vehicles.
The DaimlerChrysler defendants filed a motion for summary disposition, arguing that Brooks was not an “insured” under Endorsement No. 19. Abay countered with her own motion for summary disposition. The trial court denied the DaimlerChrysler defendants’ motion and granted Abay’s motion, holding that Endorsement No. 19 provides liability coverage for Brooks in the underlying lawsuit. The DaimlerChrysler defendants appealed. In a split unpublished opinion, the Court of Appeals reversed the trial court’s grant of summary disposition to Abay and remanded the case to the trial court, directing the lower court to grant summary disposition to the DaimlerChrysler defendants. The Court of Appeals majority concluded that the insurance policy did not extend to Trent or his family members when they used an automobile not owned by DaimlerChrysler Corporation. The dissenting judge agreed with the trial court that Endorsement No. 19 provides coverage to Trent and his family members. Abay appeals.