Gaskill et al v. Travelers Insurance Company, et al, No. 3:2011cv05847 - Document 108 (W.D. Wash. 2012)

Court Description: ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT, granting 91 . All claims against Patriot General Insurance Company are DISMISSED WITH PREJUDICE. Signed by Judge Robert J. Bryan.(JL)

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Gaskill et al v. Travelers Insurance Company, et al Doc. 108 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 8 9 10 11 12 KIM GASKILL and KAREN GASKILL, husband and wife, and the marital community consisting thereof, Plaintiffs, 13 14 15 16 17 18 19 CASE NO. C11-5847 RJB ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT v. TRAVELERS INSURANCE COMPANY, a foreign insurance company; SENTRY INSURANCE, a foreign insurance company; and JOHN DOE INSURANCE, an unknown insurer, Defendants. This matter comes before the Court on Patriot General Insurance Company’s Motion for 20 Summary Judgment. Dkt. 91. The Court has considered the pleadings in support of and in 21 opposition to the motion and the record herein. 22 23 INTRODUCTION AND BACKGROUND Plaintiffs filed the instant action in Mason County Superior Court, State of Washington, 24 on September 2, 2011. Dkt. 1 pp.12-18. The Complaint names as Defendants Travelers ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 1 Dockets.Justia.com 1 Insurance Company, a foreign insurance company, and Sentry Insurance Company, a foreign 2 insurance company.1 Dkt. 1 pp. 12. Travelers Indemnity removed the case to this Court. Dkt. 1. 3 Plaintiffs’ Complaint alleges that on December 8, 2008, Plaintiff Kim Gaskill was driving 4 a vehicle owned by Michael Gaskill. Kim Gaskill observed Christmas trees fall off a trailer 5 being towed by another vehicle owned and driven by Michael Gaskill. Plaintiff stopped on the 6 roadway to pull the trees off the roadway. While on the roadway, Plaintiff was struck by a 7 vehicle operated by Gregory Clearly and owned by Tri-State Construction. Dkt. 1 pp. 13. 8 The Complaint alleges that Michael Gaskill was insured with respect to both of his 9 vehicles by Sentry Insurance, a foreign insurance company, d/b/a Dairyland Insurance and 10 Viking Insurance. Dkt. 1 pp. 13. The Complaint further alleges that the Tri-State vehicle was 11 insured by Travelers Insurance Company, a foreign insurance company. 12 The Complaint asserts that Plaintiff was using the vehicles owned by Michael Gaskill and 13 Tri-State Construction and was, therefore, a class 2 insured under Sentry and Travelers’ 14 underinsured motorist (UIM) coverages. Dkt. 1 pp. 13-14. 15 The request for relief provides that “Plaintiffs request a judgment declaring insurance 16 coverage, awarding damages for bad faith, and for pre-judgment interest, enforcing contractual 17 provisions such as arbitration clauses and policy limits, and awarding plaintiffs their costs and 18 reasonable attorneys' fees, and such other relief as the court deems just and equitable in the 19 premises.” Dkt. 1 pp. 14. 20 On December 2, 2011, Plaintiffs received discovery showing that Michael Gaskill’s auto 21 insurer was not Sentry Insurance, but Patriot General Insurance Company. Dkt. 56 pp. 2, 15-16 22 1 An Amended Complaint was filed on December 12, 2011, adding Gregory Clearly, TriState Construction, Inc. and Michael Gaskill as defendants and asserting claims of negligence 24 against these defendants. 23 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 2 1 and Dkt. 46 pp. 2. This Court granted Patriot General Insurance Company’s motion to intervene 2 as the proper entity that issued the insurance policy under which Plaintiffs seek coverage. Dkt. 3 77. 4 Patriot General Insurance Company moves for summary judgment seeking dismissal of 5 Plaintiff’ claims in their entirety. 6 SUMMARY JUDGMENT STANDARDS 7 Summary judgment is appropriate only when the pleadings, depositions, answers to 8 interrogatories, affidavits or declarations, stipulations, admissions, answers to interrogatories, 9 and other materials in the record show that “there is no genuine issue as to any material fact and 10 the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In assessing a 11 motion for summary judgment, the evidence, together with all inferences that can reasonably be 12 drawn therefrom, must be read in the light most favorable to the party opposing the motion. 13 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); County of 14 Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001). 15 The moving party bears the initial burden of informing the court of the basis for its 16 motion, along with evidence showing the absence of any genuine issue of material fact. Celotex 17 Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of 18 proof, the moving party must make a showing that is sufficient for the court to hold that no 19 reasonable trier of fact could find other than for the moving party. Idema v. Dreamworks, Inc., 20 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001). 21 To successfully rebut a motion for summary judgment, the non-moving party must point 22 to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. 23 Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A “material fact” is a fact that might 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 3 1 affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 2 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, 3 summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A 4 dispute regarding a material fact is considered genuine “if the evidence is such that a reasonable 5 jury could return a verdict for the nonmoving party.” Anderson, at 248. The mere existence of a 6 scintilla of evidence in support of the party's position is insufficient to establish a genuine 7 dispute; there must be evidence on which a jury could reasonably find for the party. Id., at 252. 8 The instant action was removed to this Court based on diversity of the parties. 9 Accordingly, the issues presented are governed by Washington State law. See Insurance Co. N. 10 Am. v. Federal Express Corp., 189 F.3d 914, 919 (9th Cir. 1999). Washington State law is clear 11 that the interpretation of policy language contained in an insurance contract is a question of law. 12 Butzberger v. Foster, 151 Wn.2d 396, 401 (2004); State Farm General Ins. Co. v. Emerson, 102 13 Wn.2d 477, 480 (1984). Where there are no material facts in dispute, interpretation of the 14 language at issue is appropriately decided on summary judgment. See American Bankers Ins. v. 15 N.W. Nat. Ins., 198 F.3d 1332 (11th Cir. 1999). 16 17 UNDERINSURED MOTORIST COVERAGE In Washington, interpretation of an insurance contract is a matter of law which requires 18 the Court to consider the contract in its entirety and to give effect to each policy provision. 19 Allstate Ins. Co. v. Peasley, 131 Wn.2d 420, 423-24 (1997); PUD No. 1 of Klickitat County v. 20 International Ins. Co., 124 Wn.2d 789, 881 (1994). Insurance contracts are interpreted using 21 ordinary contract interpretation principles. Generally, insurance contracts are interpreted in the 22 manner understood by the average purchaser of the policy. Boeing Co. v. Aetna Cas. & Sur. Co., 23 113 Wn.2d 869, 877 (1990); State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 480 (1984). 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 4 1 Thus, terms contained in an insurance policy are given their plain, ordinary, and popular 2 meanings. 3 A policy is ambiguous only if its provisions are susceptible to two different 4 interpretations, both of which are reasonable. Id., at 424; McDonald Industries v. Rollins Leasing 5 Corp., 95 Wash 2d 909, 913 (1981). In determining whether an ambiguity exists, the Court 6 views the language the way it would be read by the average insurance purchaser, and will give 7 any undefined terms their ordinary meanings, not technical, legal meanings. Allstate Ins., 131 8 Wn.2d at 424. Ambiguous provisions are generally construed against the insurer; however, “[a]n 9 ambiguity will not be read into a contract where it can be reasonably avoided by reading the 10 contract as a whole.” Universal/Land Const. Co. v. City of Spokane, 49 Wn.App. 634, 637 11 (1987). 12 Determining whether coverage exists under a policy is a two-step process. The burden 13 first falls on the insured to show its loss is within the scope of the policy's insured losses. If such 14 a showing has been made, the insurer can nevertheless avoid liability by showing the loss is 15 excluded by specific policy language. National Clothing Co., Inc. v. Hartford Cas. Ins. Co., 135 16 Wn.App. 578, 582 (2006); Overton v. Consolidated Ins. Co., 145 Wn.2d 417, 431-32 (2002). 17 Plaintiffs’ Complaint seeks underinsured motorist (UIM) coverage under a policy of 18 insurance issued to Michael Gaskill. Patriot issued automobile insurance policy no. 475736946 19 to Michael Gaskill for the period December 4, 2008, to June 4, 2009. Dkt. 92-1 pp. 2-25. The 20 Policy Declarations page identifies the insured as "Michael Ellis Gaskill." Dkt. 92-1 pp. 2. The 21 Declarations page also states that the policy provides underinsured motorist (UIM) coverage. Id. 22 The Broad Form Named Driver Endorsement defines the terms "you" and "your insured 23 car" as follows: 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 5 1 DEFINITIONS USED THROUGHOUT THIS POLICY 2 The following definitions are replaced in their entirety by the following: 3 (2) "You" and "your" mean the persons shown as the named insured on the Declarations Page. (9) "Your insured car" means: 4 5 (A) A car or utility trailer owned or leased by you which you are using. (B) A car or utility trailer owned by you which is not being used by any person. (C) A car not owned or leased by you which you are using. 6 7 8 9 Dkt. 92-1 pp. 21 10 The Broad Form Named Drive Endorsement also sets forth the scope of liability 11 coverage: 12 PART I —LIABILITY COVERAGE 13 We will pay damages for which you are legally liable because of bodily injury and/or property damage caused by a car accident arising out of your use of your insured car. 14 15 Dkt. 92-1 pp. 21 16 The Underinsured Motorists Coverage Endorsement—Washington sets for the UIM 17 coverage and defines the term "insured person": 18 PART III —UNDERINSURED MOTORIST COVERAGE 19 21 We will pay damages for bodily injury or property damage which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle. The bodily injury or property damage must be caused by a car accident and result from the ownership, maintenance or use of an underinsured motor vehicle. 22 Additional Definitions Used in This Part Only 23 As used in this Part: 20 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 6 1 (1) "Insured Person" means: 2 (A) You. 3 (B) Any other person occupying your insured car with your permission. (C) Any person for damages that person is entitled to recover because of bodily injury to you or another occupant of your car. 4 5 6 Dkt. 92-1 pp. 22. 7 The Named Driver Endorsement defines "your insured car" as: 8 (A) A car or utility trailer owned or leased by you which you are using. 9 (B) A car or utility trailer owned by you which is not being used by any person. (C) A car not owned or leased by you which you are using. 10 11 Dkt. 92-1 pp. 21 12 The Underinsured Motorists Coverage Endorsement provides that Patriot will pay 13 damages for bodily injury or property damage that "an insured person is legally entitled to 14 recover from the owner or operator of an underinsured motor vehicle." Thus, UIM coverage is 15 available only to someone who meets the definition of an "insured person." An insured person is 16 defined as (A) You; (B) any other person occupying your insured car with your permission; 17 or (C) any person for damages that person is entitled to recover because of bodily injury to you 18 or another occupant of your car. 19 The Plaintiff Kim Gaskill argues that he is an insured person under subpart B, as “any 20 other person occupying your insured car with your permission.” Dkt. 99 pp. 4-7; Dkt. 103 pp. 21 1-2. This is a two-part test. Plaintiff must be any other person occupying the vehicle with 22 permission and the vehicle must be an insured car. The definition of an “insured car” is a car 23 which the named insured, Michael Gaskill, is using. 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 7 1 Plaintiffs argue that Michael Gaskill was “using” the vehicle that had been driven by Kim 2 Gaskill because Kim Gaskill was transporting the vehicle to his father’s (Michael’s) residence. 3 This argument is unpersuasive. The named insured, Michael Gaskill was operating another 4 vehicle at the time of the accident and had traveled down the road, unaware of the subsequent 5 accident injuring his son, Plaintiff Kim Gaskill. Under the plain and ordinary definition of 6 "using," the named insured Michael Gaskill was not using the vehicle that was being driven by 7 Kim Gaskill just prior to the accident. Michael Gaskill was not present at the scene of the 8 accident, having continued on his trip home. There is no causal relationship between Michael 9 Gaskill and the vehicle being driven by Kim Gaskill. Nor was Michael Gaskill in reasonable 10 proximity to the vehicle at the time of the accident. Finally, Michael Gaskill was not engaged in 11 a transaction essential to the use of the vehicle at the time of the accident. See Butzberger v. 12 Foster, 151 Wn.2d 396 (2004). Michael Gaskill was not using the vehicle and as such, the 13 vehicle operated by Plaintiff Kim Gaskill was not an “insured vehicle.” 14 Plaintiff Kim Gaskill also fails to satisfy the “permissive occupancy” requirement for 15 being an insured. Kim Gaskill was not a passenger in a vehicle operated by the named insured. 16 At best, he was a permissive user of the vehicle prior to his exiting the vehicle to remove the 17 fallen trees from the roadway. As acknowledged by Plaintiffs, the Patriot insurance policy 18 involves a broad form policy which is intended to cover any vehicle that the named insured 19 (Michael Gaskill) uses, but does not cover permissive users of the named insured’s vehicles. See 20 Dkt. 99 pp. 5. Plaintiff was simply a permissive user of the vehicle and not an insured for the 21 purpose of underinsured motorist coverage. 22 There are no genuine issues of material fact. Plaintiff Kim Gaskill is not an insured and 23 not entitled to underinsured motorist coverage. 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 8 1 2 3 4 BAD FAITH An insurer does not have a duty of good faith to third parties. See Tank v. State Farm 5 Fire & Cas. Co., 105 Wn.2d 381, 393, 715 P.2d 1133 (1986). While an insured may make a 6 claim against his insurer for bad faith, it does not follow that a person injured by the insured and 7 who is not a party to the insurance contract may complain of the bad faith of the insurer. Kim 8 Gaskill does not qualify as an insured person under the Patriot General policy. Because he is not 9 an insured, he cannot maintain a claim for bad faith against Patriot General. See Planet Ins. Co. 10 v. Wong, 74 Wn.App. 905, 909 (1994)(injured third party has no right of action against insurance 11 company for bad faith). 12 There are no genuine issues of material fact and Patriot General is entitled to summary 13 judgment. 14 CONCLUSION 15 Therefore, it is hereby ORDERED: 16 Patriot General Insurance Company’s Motion for Summary Judgment (Dkt. 91) is 17 GRANTED. All claims against Patriot General Insurance Company are DISMISSED 18 WITH PREJUDICE. 19 Dated this 17th day of April, 2012. 20 21 22 A ROBERT J. BRYAN United States District Judge 23 24 ORDER GRANTING PATRIOT GENERAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT- 9

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