Durrant v. Unigard Insurance Company, No. 1:2012cv00115 - Document 24 (D. Idaho 2012)
Court Description: MEMORANDUM DECISION AND ORDER denying 11 Defendant's Motion for Summary Judgment; granting 16 Plaintiff's Cross Motion for Partial Summary Judgment. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO NEIL T. DURRANT, Case No. 1:12-cv-00115-BLW Plaintiff, MEMORANDUM DECISION AND ORDER v. UNIGARD INSURANCE COMPANY, Defendant. INTRODUCTION Before the Court are the parties cross-motions for summary judgment (Dkts. 11 & 15). The Court heard oral argument on October 9, 2012, and took the matter under advisement. For the reasons set forth below the Court will deny Defendant Unigard Insurance Company s Motion for Summary Judgment (Dkt. 11), and grant Plaintiff Neil T. Durrant s Cross-Motion for Partial Summary Judgment (Dkt. 16). BACKGROUND Plaintiff Neil T. Durrant seeks underinsured motorist (UIM) coverage based on an insurance policy with the defendant, Unigard Insurance Company. Durrant, while driving a tractor owned by Big D Ranch, was struck by a drunk driver. Durrant filed suit against the negligent driver, and he recovered the $100,000 limit on the driver s automobile insurance policy. Because this amount did not cover the full measure of MEMORANDUM DECISION AND ORDER - 1 Durrant s damages, Durrant filed an underinsured motorist claim with Unigard, his insurer, for the remaining, unpaid compensatory damages. Unigard denied the claim. It contends that Durrant s UIM coverage does not apply to the accident. Durrant contends that Unigard wrongfully denied him UIM coverage, and he therefore filed this lawsuit. Now both parties seek summary judgment. LEGAL STANDARD Summary judgment is appropriate where a party can show that, as to any claim or defense, 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). One of the principal purposes of summary judgment is to isolate and dispose of factually unsupported claims .... Celotex Corp. v. Catrett, 477 U.S. 317, 323 24 (1986). It is not a disfavored procedural shortcut, but is instead the principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources. Id. at 327. [T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 48 (1986). There must be a genuine dispute as to any material fact-a fact that may affect the outcome of the case. Id. at 248. The evidence must be viewed in the light most favorable to the non-moving party, and the Court must not make credibility findings. Id. at 255. Direct testimony of the nonmovant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, MEMORANDUM DECISION AND ORDER - 2 1159 (9th Cir.1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir.1988). When cross-motions for summary judgment are filed, the Court must independently search the record for factual disputes. Fair Housing Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). The filing of crossmotions for summary judgment where both parties essentially assert that there are no material factual disputes-does not vitiate the court's responsibility to determine whether disputes as to material fact are present. Id. The moving party bears the initial burden of demonstrating the absence of a genuine dispute as to material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000). This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Id. at 256 57. The non-moving party must go beyond the pleadings and show by her affidavits, or by the depositions, answers to interrogatories, or admissions on file that a genuine dispute of material fact exists. Celotex, 477 U.S. at 324. MEMORANDUM DECISION AND ORDER - 3 ANALYSIS The Idaho Supreme Court has made clear that the question of whether an insurance policy is ambiguous is a question of law for the court to determine. Farm Bureau Mutual Insurance Co. Of Idaho v. Schrock, 252 P.3d 98, 102 (Idaho 2011) (citing Cherry v. Coregis Insurance Co., 204 P.3d 522, 524 (Idaho 2009)). A court must ask whether a policy is reasonably subject to conflicting interpretations in order to determine whether it is ambiguous. Id. If the language of the policy is clear and unambiguous, then it will be given its ordinary and plain meaning. Id. Insurance contracts, however, are subject to certain special canons of construction. Clark v. Prudential Property And Casualty Ins. Co., P.3d 242, 244 (Idaho 2003). Those special canons of construction include the admonition that ambiguities must be construed most strongly against the insurer, and [t]he burden is on the insurer to use clear and precise language if it wishes to restrict the scope of coverage, and exclusions not stated with specificity will not be presumed or inferred. Id. at 245. The Idaho Supreme Court therefore instructs that any apparent ambiguities in the policy terms should be resolved in favor of coverage. Cherry, 204 P.3d at 524. The Unigard policy in dispute was issued to Big D Ranch as part of a comprehensive Multi-Farm Commercial Package Policy. Unigard Policy at 2, Dkt. 121. Durrant is an employee of Big D Ranch and was listed as a Named Insured under the policy. The policy package includes a Business Auto coverage portion. The Business MEMORANDUM DECISION AND ORDER - 4 Auto coverage contains fifteen separate forms and endorsements, including ID Underinsured Motorist Coverage. Id. at 4. The Underinsured Motorist endorsement provides: We will pay the sums the 'insured' is legally entitled to recover as compensatory damages from the owner or driver of an 'underinsured motor vehicle.' The damages must result from 'bodily injury' sustained by the 'insured' caused by an 'accident.' The owner's or driver's liability for these damages must result from the ownership, maintenance or use of the 'underinsured motor vehicle.' Unigard Policy at 38. The UIM endorsement defines insured individuals as: (1) The Named Insured and any family members ; (2) Anyone else occupying a covered auto or a temporary substitute for a covered auto ; or (3) Anyone for damages he or she is entitled to recover because of bodily injury sustained by another insured. Id. at 39. It is undisputed that Durrant meets each of these UIM coverage requirements. First, he is a Named Insured under the policy. Second, he is legally entitled to recover compensatory damages from a negligent driver of an underinsured motor vehicle. Third, Durrant s damage resulted from bodily injuries caused by an accident. Fourth, the negligent driver s liability resulted from the ownership, maintenance or use of an underinsured motor vehicle. And, finally, the UIM coverage was triggered because the negligent driver s liability limits were exhausted. Thus, it is undisputed that Durrant satisfies each of the express condition for coverage under the UIM Endorsement. Unigard responds that language contained in the Schedule of Coverages and Covered Autos, as well as the introductory paragraph to the UIM endorsement, restricts MEMORANDUM DECISION AND ORDER - 5 coverage to covered autos only. And this language, according to UIM, provides the lens through which the language of the Underinsured Motorist Endorsement must be viewed. The Schedule of Coverages and Covered Autos consists of a four column table listing the coverages available, the covered autos, the policy limit for each coverage type, and the premium amount for each coverage type. At the top of this table there is language suggesting that coverage only applies to covered autos: This policy provides only those coverages where a charge is shown in the premium column below. Each of these coverages will apply only to those autos shown as covered autos. Unigard Policy at 7, Dkt. 12-1. A charge is shown in the premium column for the following coverages: Liability, Medical Payments, Uninsured Motorists, UIM, Physical Damage Comprehensive Coverage, and Physical Damage Collision Coverage. So, presumably, these coverages would only apply to covered autos. Similarly, the introductory language to the UIM endorsement states For a covered auto licensed or principally garaged ¦in Idaho, this endorsement modifies insurance provided under the following: Business Auto Coverage Form ¦. These provisions, standing alone, appear to restrict UIM coverage to covered autos. But when read in the context of the entire contract, the language in the Schedule and introductory paragraph to the UIM endorsement creates an ambiguity. As noted above, the Business Auto Coverage in this policy includes five different coverage types: Liability, Physical Damage, Uninsured Motorist, UIM, and Medical Payments. Liability MEMORANDUM DECISION AND ORDER - 6 and Physical damage are part of the main policy, and Uninsured, UIM, and Medical Payments Coverage are added to the policy through endorsements. Each of these coverages defines who is Insured and under what circumstances. Liability Coverage, for example, specifically limits coverage to covered autos. It provides that Unigard 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 ownership, maintenance or use of a covered auto. Unigard Policy at 19. In addition, insured is separately defined as [y]ou for any covered auto. Id. at 20. The Physical Damage coverage provision also limits coverage to a covered auto: We will pay for loss to a covered auto or its equipment ¦. Id. at 23. By contrast, the Auto Medical Payments Coverage provision does not restrict coverage to accidents involving covered autos only. It states that Unigard will pay reasonable expenses incurred for necessary medical and funeral services to or for an insured who sustains bodily injury caused by accident. It defines insured as an individual Named Insured while occupying or, while a pedestrian, when struck by an auto. Id. at 42. Alternatively, this provision defines insured as Anyone else occupying a covered auto or a temporary substitute for a covered auto. Id. Thus, a Named Insured receives Medical Payments coverage under the policy if he is sustains bodily injuries while walking, but anyone else only receives such coverage while occupying a covered auto. As these two definitions of insured demonstrate, when MEMORANDUM DECISION AND ORDER - 7 Unigard intends to limit coverage to persons occupying covered autos, it states so explicitly. The broad language contained in the in the UIM provision more closely parallels the Medical Payments language than the narrower Liability or Physical Damages language. As already discussed, UIM provision extends to an insured who sustains bodily injury caused by an accident. Unlike the Liability or Physical Damages provisions, nothing in the UIM provision restricts coverage to a covered auto. It would have been simple for Unigard to make it clear that UIM coverage only applied to covered autos. All Unigard had to say in the policy was that UIM coverage applies to a Named Insured only while occupying a covered auto, or something to that effect. But it did not. Indeed, Unigard included a specific exclusion that restricts coverage for Bodily injury sustained by an Individual Named Insured or family member while occupying any vehicle owned by that Named Insured or family member that is not a covered auto. Id. at 42 (emphasis added). If Unigard intended to restrict UIM coverage in every instance to accidents involving covered autos, why would it include this exclusion? It would be superfluous. At worst, Unigard s failure to make clear UIM coverage was restricted to covered autos and its insertion of this specific exclusion suggest it never intended to restrict UIM coverage to covered autos. At best, it creates an ambiguity. Given that Idaho law requires that all ambiguities be construed in favor of coverage, the Court finds that the Unigard policy provides UIM coverage for Durrant in the circumstances of this case. MEMORANDUM DECISION AND ORDER - 8 ORDER IT IS ORDERED that: 1. Defendant s Motion for Summary Judgment (Dkt. 11) is DENIED. 2. Plaintiff s Cross- Motion for Partial Summary Judgment (Dkt. 16) is GRANTED. DATED: October 15, 2012 _________________________ B. Lynn Winmill Chief Judge United States District Court MEMORANDUM DECISION AND ORDER - 9
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