-RJJ Encompass Insurance Company of America v. Macadangdang et al, No. 2:2009cv02070 - Document 45 (D. Nev. 2011)

Court Description: ORDER Granting 35 Motion for Summary Judgment. The Policy issued by Encompass to Cindy and Donald Lebie provides only the $100,000.00 per person limits for the Macadangdang claims. FURTHER ORDERED that judgment should be entered in favor of Encompass and against the Macadangdangs. Signed by Judge Gloria M. Navarro on 7/12/11. (Copies have been distributed pursuant to the NEF - MMM)

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-RJJ Encompass Insurance Company of America v. Macadangdang et al Doc. 45 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 4 5 6 7 8 9 10 11 12 13 14 15 ENCOMPASS INSURANCE COMPANY OF AMERICA, ) ) ) Plaintiff, ) vs. ) ) WENDY MACADANGDANG as Special ) Administrator on behalf of the Estate of DANNY ) MACADANGDANG, Deceased; WENDY ) MACADANGDANG, Individually, and as Guardian ) ad Litem for SIERRA MACADANGDANG, a Minor, ) JORDAN DON LEBIE, an Individual; CINDY ) LEBIE, an Individual; DONALD LEBIE, an ) Individual, ) ) Defendants. ) ) Case No.: 2:09-cv-2070-GMN-RJJ ORDER INTRODUCTION Before the Court is Plaintiff Encompass Insurance Company of America s 16 (“Encompass”) Motion for Summary Judgment (ECF No. 35). Three Defendants, Wendy 17 Macadangdang, as Special Administrator of the Estate of Danny Macadangdang, deceased; 18 Wendy Macadangdang, individually, and as Guardian ad Litem for Sierra Macadangdang, a 19 minor (collectively “Macadangdangs”) filed a Response (ECF No. 38). Plaintiff filed a Reply 20 (ECF No. 39). This Court held a hearing on the motion on July 12, 2011 (ECF No. 44). 21 FACTS AND BACKGROUND 22 This is a declaratory relief action filed by Plaintiff to determine the coverage of an 23 insurance policy. The insurance coverage action arises out of claims made by the 24 Macadangdangs related to a motor vehicle accident involving Jordan Don Lebie and Danny 25 Macadangdang, where Jordan was the driver and Danny was a passenger. The accident Page 1 of 8 Dockets.Justia.com 1 resulted in significant injuries to Danny and ultimately his death. On August 26, 2005, Danny s wife and daughter filed a lawsuit against Jordan s parents, 2 3 Cindy Lebie and Jordan Don Lebie in state court. (Case No. A509128, Macadangdang, et al., 4 v. Lebie, et al.) In that action, the Macadangdangs sought damages for negligence, wrongful 5 death, and punitive damages. (See Amended Complaint in Case No. A509128, Ex. A, ECF No. 6 35-1.) In the non-jury bench trial the court found in favor of the Macadangdangs1 but, no 7 punitive damages were awarded. (See Amended Judgment in Case No. A509128, Ex. C, ECF 8 No. 35-3). The Lebies Encompass automobile insurance policy (“Policy”) provided liability limits 9 10 of $100,000 “per person” and $300,000 “per occurrence”. Therefore, Encompass made the 11 tender of the “per person” limit of $100,000 to the Macadangdangs to settle the underlying 12 action. (Complaint, ¶29, ECF No. 1.) However, the Macadangdangs refused the tender 13 claiming they are entitled to the $300,000 “per occurrence” limits. (Id.) Encompass filed this declaratory relief action seeking an order from this Court declaring 14 15 that the total limit of the Policy was $100,000. Before the Court is the instant motion for 16 summary judgment seeking a declaration from the Court that there are no genuine issues of 17 material fact and that as a matter of law the $100,000 “per person” policy limit applies to the 18 Macadangdangs claim against the Policy2. The only parties remaining are Encompass and the 19 Macadangdangs because the Lebies and Encompass entered into a stipulation and order signed 20 by this Court agreeing to the following: 21 /// 22 23 24 25 1 The Macadangdangs originally sued Jordan, Don, and Cindy Lebie in the underlying action. Cindy was dismissed from the underlying action. (See Order for Partial Summary Judgment, Ex. B, ECF No. 35-2.) 2 Encompass further contends that the subject insurance policy does not provide coverage for punitive damages that were claimed by the Macadangdangs. However the underlying action brought by the Macadangdangs did not result in any punitive damages being assessed. (See, Ex. C, ECF No. 35-3.) The parties agreed at the hearing that since the state court did not award punitive damages this Court does not need to determine if the punitive damages can be claimed by the Macadangdangs. Page 2 of 8 1 2 3 4 1. The subject policy provides coverage in the amount of the per person limits, only, i.e. $100,000, for the claims brought by the Macadangdangs against the Lebies; and, 2. Judgment be entered in favor of Encompass in the present action. (See, Joint Stipulation and Order, ECF No. 22). 5 6 7 8 9 10 The Policy includes the following language which is at issue in this case: DEFINITIONS ... 3. Bodily Injury means bodily harm, sickness or disease, including death resulting therefrom. ... LIMIT OF LIABILITY – PERSONAL LIABLITY 11 12 The limit of liability shown in the Coverage Summary for “Bodily Injury Each Person” is our total limit of liability for damages because of bodily injury sustained by any one person in any one motor vehicle accident, including damages sustained by anyone else as a result of the bodily injury. 1. 13 14 Subject to this limit for each person, the limit of liability shown in the Coverage Summary for “Bodily Injury Each Accident” is our total limit of liability for all damages for bodily injury sustained by two or more persons in any one motor vehicle accident. 15 16 17 ... 18 19 This is the most we will pay regardless of the number of: 20 a. Covered persons; 21 b. Claims or suits made; 22 ... 23 c. 24 25 Persons who sustain injury or damage. (See Policy, Ex. E, ECF No. 35-5). Also relevant is the portion of the policy which the Macadangdangs argue is ambiguous. Page 3 of 8 1 Under the “AMENDMENT OF MOTOR VEHICLE PROVISIONS – NEVADA BASIC 2 VALUE” to the Policy, Section 2 provides: 3 2. 4 LIMITS IN EXCESS OF FINANCIAL RESPONSIBILITY LIMITS – BODILY INJURY AND PROPERTY DAMAGE: ... 5 Any claims for care, loss of services, loss of consortium and injury to any interpersonal relationship shall be included in the limit. 6 7 8 (See Id. Amendment, Ex. E-2, ECF No. 35-7, page 5.). 9 DISCUSSION 10 A. The Macadangdangs are Proper Parties Before the Court looks at the merits of the Motion for Summary Judgment, the Court 11 12 must address the Macadangdangs argument in their Response that they are not a proper party 13 to this suit. The Macadangdangs argue that since it is not an insured under the policy of 14 liability insurance it should not be a party to this suit. The Court has considered the parties 15 pleadings and arguments at the hearing on this matter and concludes that the Macadangdangs 16 are proper parties to this suit. Judge Jones denied the Macadangdangs prior Motion to Dismiss 17 and at the July 12, 2011 hearing, counsel for the Macadangdangs agreed and conceded that the 18 issue of whether they were proper parties to the suit had already been decided by Judge Jones 19 and while it had merit at the earlier stages of this case, the argument lacks merit at this time. 20 Accordingly, the Court finds that the Macadangdangs are proper parties to this suit. 21 B. Summary Judgment 22 1. Legal Standard 23 The Federal Rules of Civil Procedure provide for summary adjudication when the 24 pleadings, depositions, answers to interrogatories, and admissions on file, together with the 25 affidavits, if any, show that “there is no genuine issue as to any material fact and that the Page 4 of 8 1 movant is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c)(2).3 Material facts 2 are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 3 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a 4 reasonable jury to return a verdict for the nonmoving party. See id. “Summary judgment is 5 inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, 6 could return a verdict in the nonmoving party=s favor.” Diaz v. Eagle Produce Ltd. P’ship, 521 7 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 8 (9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of 9 factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). 10 At summary judgment, a court s function is not to weigh the evidence and determine the 11 truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. 12 The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn 13 in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is 14 not significantly probative, summary judgment may be granted. See id. at 249–50. Interpretation of an insurance contract is a question of law. Farmers Ins. Exch. v. Neal, 15 16 64 P.3d 472, 473 (Nev. 2003). “An insurance policy is a contract that must be enforced to its 17 terms to accomplish the intent of the parties.” Id. Any ambiguity in an insurance policy should 18 be interpreted against the drafting party, the insurer, and in favor of the insured. Neumann v. 19 Standard Fire Ins., 699 P.2d 101, 104 (1985)(citing Yosemite Ins. Co. v. State Farm Mut. Auto. 20 Ins., 653 P.2d 149 (1982). However, unambiguous terms should not be rewritten. Neal, 64 P.3d 21 22 3 23 24 25 Federal Rule of Civil Procedure 56 was recently amended, effective December 1, 2010. See Fed. R. Civ. P. 56 Advisory Committee Notes, 2010 Amendments. The standard for granting summary judgment remains the same. Id. Amendments to the Federal Rules of Civil Procedure govern proceedings that are pending at the time the amendments become effective, as long as the Supreme Court does not specify otherwise and the application would not be infeasible or work an injustice. Fed. R. Civ. P. 86(a)(2). Here, to prevent against any injustice to the parties, the Court will apply the language of Rule 56 that was in use prior to the new December 1, 2010 amendments. This earlier language was the language that was applicable when the Motion for Summary Judgment was filed, and when the Response and Reply were submitted and, therefore, would be the most apt language to apply. Page 5 of 8 1 at 473. “An insurance policy is to be judged from the perspective of one not trained in law or 2 in insurance, with the terms of the contract viewed in their plain, ordinary and popular sense.” 3 Nat’l Union Fire Ins. Co. v. Reno’s Executive Air, 682 P.2d 1380, 1382 (1984). 4 2. Analysis 5 Encompass argues that the Macadangdangs are only entitled to the “per person” policy 6 limit of $100,000. Encompass argues that the Nevada Supreme Court has determined that “per 7 person” limits apply in scenarios such as this, where the additional plaintiffs claims are wholly 8 derivative of an injured party. See Nationwide v. Moya, 837 P.2d 426 (Nev. 1992). 9 In Nationwide, the insured sustained injuries in a car accident caused by a drunk driver, 10 which ultimately resulted in her death. Id. at 427. The insured s survivors sought the “each 11 occurrence” limit under an uninsured motorist provision of the insured s automobile policy. Id. 12 The pertinent policy provisions provided that “bodily injury” included “bodily injury, sickness, 13 disease, or death” and payments under the policy were limited such that “[b ]odily injury limits 14 shown for any one person are for all legal damages, including care or loss of services claimed 15 to anyone for bodily injury to one person as a result of one occurrence.” Id., at 427-28. The 16 survivors argued that their grief and sorrow amounted to a claim of “sickness” under the 17 “bodily injury” definition in the policy so that their wrongful death claims were independent in 18 nature and did not fall within the “each person” limits of the policy. Id. at 428-29. 19 The Nevada Supreme Court in the Nationwide case was not persuaded by the survivors 20 arguments. The court determined that “sickness” referred to the “sickness or disease contracted 21 by the insured injured in the accident.” Id. The court adopted the view that “damages for . . . 22 wrongful death – resulting from „bodily injury to one person – are subject to the „each person 23 limit and held that “where one person is injured in an accident, the each person limit applied, 24 regardless of the number of persons damaged as a result of the accident. Id. at 430. 25 Encompass argues that the per person limits apply to the Macadangdangs claims in this Page 6 of 8 1 case because only Danny Macadangdang suffered “bodily injury” in the accident and Wendy 2 and Sierra Macadangdang were not involved in the subject accident; Wendy and Sierra s claims 3 resulted from the “bodily injury” suffered by Danny. Encompass also argues that their policy s 4 definition of “bodily injury” includes “sickness,” but does not extend to grief or sorrow. 5 Moreover, the Policy restricts compensation for all damages resulting from an individual s 6 bodily injuries to the per person limits of $100,000. See, Exhibit “E”. 7 The Macadangdangs argue that the insurance contract is ambiguous and therefore should 8 be construed in their favor. In support of this argument the Macadangdangs point to the section 9 of the policy entitled “AMENDMENT OF MOTOR VEHICLE PROVISIONS – NEVADA 10 11 BASIC VALUE” (See Exhibit E-2). Under this heading, Section 2 provides: 2. LIMITS IN EXCESS OF FINANCIAL RESPONSIBILITY LIMITS – BODILY INJURY AND PROPERTY DAMAGE: 12 13 ... 14 “Any claims for care, loss of services, loss of consortium and injury to any interpersonal relationship shall be included in the limit.” 15 16 The Macadangdangs argue that this language means the term “bodily injury” includes “any 17 claims for care, loss of services, loss of consortium and injury and to any interpersonal 18 relationship.” Thus, the “per occurrence” limit of $300,000 is applicable to this case because 19 there are damages for bodily injury sustained by two or more persons. (See Exhibit E-2). 20 The Court has reviewed the Encompass Policy and finds that while there could be some 21 ambiguity in the policy, the interpretation favored by the Defendants is not reasonable. The 22 Macadangdangs point to one clause in the insurance policy. However, this clause must be read 23 in context and in conjunction with the “Limit of Liability” section of the Policy which states, 24 “„Bodily Injury Each Person is [the] total limit of liability for damages because of bodily 25 injury sustained by any one person in any one motor vehicle accident.” The phrase the Page 7 of 8 1 Macadangdangs rely upon merely appears to clarify that the person physically injured in the 2 accident can also present claims for a loss of consortium and injury to any interpersonal 3 relationship, etc. in his or her claim against the policy. The mention of those types of damages 4 (loss of consortium and injury and to any interpersonal relationship) in the Policy does not 5 create a new separate policy claim nor separate coverage under the policy for loss of 6 consortium or loss of relationship for someone other than the person who was physically 7 present and injured in the accident at issue. 8 9 Moreover, under Nevada law it is clear that “where one person is injured in the accident, the each person limit applied, regardless of the number of persons damaged as a result of the 10 accident.” Nationwide, 837 P.2d at 439. The language of this Policy is very similar to the 11 language in the Nationwide policy. Although two additional people were certainly damaged as 12 a result of this tragic accident, only Danny Macadangdang was injured under the language of 13 the policy. Accordingly, the Court finds that there are no genuine issues of material fact to be 14 addressed and that as a matter of law the “per person” limit not the “per occurrence” limit 15 applies to the Macadangdangs claims against the insurance policy. CONCLUSION 16 17 18 19 20 21 22 23 24 25 IT IS HEREBY ORDERED that Plaintiff Encompass Insurance Company of America s (“Encompass”) Motion for Summary Judgment (ECF No. 35) is GRANTED. The Policy issued by Encompass to Cindy and Donald Lebie provides only the $100,000.00 per person limits for the Macadangdang claims. IT IS FURTHER ORDERED that judgment should be entered in favor of Encompass and against the Macadangdangs. DATED this 12th day of July, 2011. ________________________________ Gloria M. Navarro United States District Judge Page 8 of 8

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