Mountain Laurel Assurance Company v. Wortham et al, No. 2:2017cv02660 - Document 53 (W.D. Tenn. 2018)
Court Description: ORDER Granting 45 Motion for Summary Judgment. Signed by Judge Thomas L. Parker on 10/23/2018. (pab)
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ntract and for which there is a potential basis for recovery.” Moore & Assocs, 7 Inc., 216 S.W.3d at 305. “This so-called ‘pleadings test’ does not depend on the actual facts on which the claimants base their claim, but only the allegations in the pleadings.” Mandrill Corp., 243 F. App’x at 964 (citing Torpoco, 879 S.W.2d at 835)). Doubts over whether allegations fall within the coverage of the policy are resolved in favor of the insured. Moore & Assocs, Inc., 216 S.W.3d at 305. The insurer’s duty to defend is much broader than the duty to indemnify. To determine whether the duty to indemnify exists, courts look to the “true facts” of the claims, not just the allegations. Torpoco, 879 S.W.2d at 835 (citing Policyholders’ Ins. Co. v. Cumberland Cold Storage Co., 373 A.2d 247 (Me. 1977)). An insurer typically does not have a duty to indemnify the insured if it does not also have a duty to defend that party. See Place v. P.F. Chang’s China Bistro, Inc., No. 2:12-cv-2656-SHL-cgc, 2015 WL 11145058, at *8 (W.D. Tenn. Mar. 23, 2015). Insurance policies are interpreted like other contracts. So an unambiguous policy provision is interpreted in accordance with its express terms. Charles Hampton’s A-1 Signs, Inc. v. American States Ins. Co., 225 S.W.3d 482, 487 (Tenn. Ct. App. 2006). If susceptible to more than one reasonable interpretation, the terms of an insurance policy are ambiguous. Tata v. Nichols, 848 S.W.2d 649, 650 (Tenn. 1993). And ambiguous terms are construed against the insurance company and in favor of the insured. Id. (citing Allstate Ins. Co. v. Watts, 811 S.W.2d 883, 886 (Tenn. 1991). “Absent fraud or mistake, the terms of a contract should be given their plain and ordinary meaning, for the primary rule of contract interpretation is to ascertain and give effect to the intent of the parties.” U.S. Bank, N.A. v. Tennessee Farmers Mutl. Ins. Co., 277 S.W.3d 381, 386–87 (Tenn. 2009) (citing Christenberry v. Tipton, 160 S.W.3d 487, 494 (Tenn. 2005)). The Court cannot rewrite the 8 policy because it finds the provisions unfavorable or harsh to the insured. Angus v. Western Heritage Ins. Co., 48 S.W.3d 728, 731 (2000). III. Mountain Laurel’s Duty to Defend or Indemnify The Court first looks at the Policy to determine what claims it covers.6 The Policy provides coverage for a 2013 Ford Focus and a 2009 Cadillac Escalade. (ECF No. 8-12 at PageID 175.) The Escalade was in the accident. (ECF No. 9-14 at PageID 215.) The Policy consists of the contract, the insurance application, and the declarations page. (ECF No. 8-13 at PageID 182.) The Policy covers bodily injury or property damages for which the Rayfords become legally responsible because of an accident. (Id. at PageID 184.) At the same time, however, the Policy unambiguously states that “[t]his policy applies only to accidents and losses occurring during the policy period shown on the declarations page . . . .” (Id. at PageID 206.) The declarations page, in turn, states that “[y]our coverage began on March 9, 2016 at the later of 12:01 a.m. or the effective time shown on your application.” (ECF No. 812 at PageID 175) (emphasis added). And the applications page lists the effective date and time as “Mar 9, 2016 at [12:14 P.M. CST].”7 (ECF No. 8-11 at PageID 169.) The Court finds these terms to be unambiguous. Mountain Laurel is thus not liable to defend the Rayfords in any action related to an automobile accident occurring before 12:14 P.M. (CST) on March 9, 2016. 6 The Rayfords had held, though for a short time, an insurance policy that would have covered liability arising from the Underlying Litigation. (ECF No. 46 at PageID 327.) That policy was cancelled however on January 23, 2016, for nonpayment of the premium. (Id. at PageID 328); (ECF No. 46-2 at PageID 340.) 7 The application lists the eastern standard time of 1:14 P.M. (See ECF No. 8-11 at PageID 169.) 9 The Court should next look to the allegations in the Underlying Litigation to determine whether the Policy covers the claims. See Mandrill Corp., Inc., 243 F. App’x at 964. The allegations in the Underlying Litigation flow from the vehicle accident that occurred at about 11:26 a.m. (CST) on March 9, 2016. (See ECF No. 8-10.) There is no dispute about that fact. The complaints allege negligence on behalf of Mr. Rayford and liability for personal injury and other damages resulting from that accident. (Id.) The allegations in the Underlying Litigation do not fall within the coverage provided under the Policy. Thus, Mountain Laurel owes no duty to defend the Rayfords here. An insurer’s duty to defend is broader than the duty to indemnify. See Torpoco, 879 S.W.2d at 835. While the duty to defend is based on the allegations in the pleadings, the duty to indemnify turns on the “true facts” of the claims. Id. The “true facts” here demonstrate that the accident occurred about an hour before the insurance policy took effect. Thus, Mountain Laurel has no duty to indemnify the Rayfords for liability arising from the Underlying Litigation. Having reviewed the allegations in the Underlying Complaint in the light most favorable to the non-moving parties, the Court determines that Mountain Laurel has no duty to defend or indemnify the Rayfords. Mountain Laurel’s Motion for Summary Judgment is GRANTED. CONCLUSION Based on the foregoing analysis, Mountain Laurel’s Motion for Summary Judgment (ECF No. 45) is GRANTED 10 SO ORDERED, this 23rd day of October, 2018. s/Thomas L. Parker THOMAS L. PARKER UNITED STATES DISTRICT JUDGE 11
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