Roberts v. New Hampshire Insurance Company
MEMORANDUM OPINION AND ORDER: As further set out in order, the court DENIES Plaintiff's motion for summary judgment, but GRANTS Defendant's motion. Accordingly, Plaintiff is not entitled to recover from Defendant under its insurance policy with C&S, and Plaintiff's claim is DISMISSED with prejudice. Signed by Judge Abdul K Kallon on 04/23/13. (CVA)
2013 Apr-23 AM 10:40
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
Civil Action Number
MEMORANDUM OPINION AND ORDER
Tommy Roberts filed this action in the Circuit Court of Jefferson County,
Alabama seeking a declaratory judgment regarding the availability and amount of
uninsured motorist coverage under an applicable liability insurance policy with
Defendant New Hampshire Insurance Company. Doc. 1 at 11-12. Defendant
subsequently removed the action to this court, doc. 1 at 1-4, and both parties now
seek summary judgment, docs. 9 and 12. The motions are fully briefed and ripe for
review. Docs. 10, 15-18. For the reasons discussed below, the court DENIES
Plaintiff’s motion and GRANTS Defendant’s motion.1
Additionally, the court did not rely upon the declaration of Sarah Haynes in reviewing
the parties’ motions. Therefore, Plaintiff’s motion to strike this declaration, doc. 19, is
I. SUMMARY JUDGMENT STANDARD OF REVIEW
Under Rule 56(c)(2) of the Federal Rules of Civil Procedure, summary
judgment is proper “if the pleadings, the discovery and disclosure materials on file,
and any affidavits show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.” “Rule 56(c) mandates
the entry of summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the existence of
an element essential to that party’s case, and on which that party will bear the
burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The
moving party bears the initial burden of proving the absence of a genuine issue of
material fact. Id. at 323. The burden then shifts to the nonmoving party, who is
required to “go beyond the pleadings” to establish that there is a “genuine issue for
trial.” Id. at 324 (citation and internal quotation marks omitted). A dispute about a
material fact is genuine “if the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
The court must construe the evidence and all reasonable inferences arising
from it in the light most favorable to the non-moving party. Adickes v. S. H. Kress
& Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all justifiable
inferences must be drawn in the non-moving party’s favor). Any factual disputes
will be resolved in Plaintiffs’ favor when sufficient competent evidence supports
Plaintiffs’ version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275,
1276, 1278 (11th Cir. 2002) (a court is not required to resolve disputes in the nonmoving party’s favor when that party’s version of events is supported by
insufficient evidence). However, “mere conclusions and unsupported factual
allegations are legally insufficient to defeat a summary judgment motion.” Ellis v.
England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald Mountain
Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere
‘scintilla’ of evidence supporting the opposing party’s position will not suffice;
there must be enough of a showing that the jury could reasonably find for that
party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson,
477 U.S. at 252)).
II. FACTUAL BACKGROUND
AIG American International Companies (“AIG”) affiliate American Home
Assurance Company (“American Home”) issued commercial auto insurance policy
CA 301-77-91 to C&S Wholesale Grocers, Inc. (“C&S”), for a one year period
beginning in September 2005.2 Doc. 12-7 at 3. When C&S received this policy, it
“reject[ed] Uninsured Motorists Coverage in its entirety.” Doc. 12-8 at 2.
American Home renewed the policy for the following two years, resulting in policy
CA 583-65-62 and subsequently policy CA 160-71-59. Docs. 12-5, 12-6.
Thereafter, Defendant, rather than American Home, renewed the auto policy with
C&S for the following two years, resulting in policy CA 160-78-12 and CA 66473-01. Docs. 12-4 at 3, 12-2 at 15. The original policy and each subsequent
renewal was issued to C&S at its corporate address in New Hampshire. See docs.
12-2 at 15, 12-4 at 3, 12-5 at 3, 12-6 at 3, 12-7 at 3.
In February 2010, while driving a vehicle registered in Alabama and covered
by renewal policy CA 664-73-01, Plaintiff sustained injuries in an auto accident
caused by a third-party. Docs. 10 at 16, 12-2 at 15. The third party’s insurer, State
Farm, offered Plaintiff the $25,000 policy limit “as full and final settlement of
Plaintiff’s bodily injury claims against [its insured].” Doc. 1 at 11. However,
Plaintiff sent a letter to State Farm stating that his medical expenses totaled $53,
460.64 and demanding $500,000.00 “as full and final settlement of [Plaintiff’s]
Plaintiff disputes that American Home and Defendant are affiliates. However, the
insurance policies attached to Defendant’s motion clearly indicate that both are affiliates of AIG.
See docs. 12-7, 12-2. Since Plaintiff does not dispute that these exhibits are true and correct
copies of the insurance policy and its subsequent renewals, the court presumes that American
Home and Defendant are, in fact, affiliates.
bodily injury claim.” Id. at 18-19. Thereafter, Plaintiff filed this declaratory
judgment action seeking coverage under the uninsured motorists provision of C&S
and Defendant’s insurance policy. Id. at 11.
The Alabama uninsured motorists statute provides that
[n]o automobile liability or motor vehicle liability policy insuring
against loss resulting from liability imposed by law for bodily injury or
death suffered by any person arising out of the ownership, maintenance,
or use of a motor vehicle shall be delivered or issued for delivery in
this state unless coverage is provided therein or supplemental thereto,
in limits for bodily injury or death set forth in subsection (c) of Section
32-7-6, under provision approved by the Commissioner of Insurance for
the protection of persons insured thereunder who are legally entitled to
recover damages from owners or operators of uninsured motor vehicles
because of bodily injury, sickness or disease, including death, resulting
therefrom; provided, that the named insured shall have the right to
reject such coverage; and provided further, that unless the named
insured requests such coverage in writing, such coverage need not be
provided in or supplemental to a renewal policy where the named
insured had rejected the coverage in connection with the policy
previously issued to him or her by the same insurer.
Ala. Code § 32-7-23(a) (emphasis added). Based on this language, Plaintiff argues
that he is due summary judgment because Defendant failed to produce a valid
rejection of uninsured motorist coverage. Doc.10 at 2-3; see also doc.16.
Defendant counters that it is due summary judgment on three grounds: (1) the
Alabama statute is inapplicable, (2) the insured rejected coverage, and (3) the
policy language exempts coverage because the Alabama statute is not compulsory.
Docs. 15, 12. The court discusses these contentions below.
Non-compulsory Language Policy Exception – “the right to reject”
Irrespective of whether the Alabama statute applies here, Defendant
contends that it is due summary judgment because the insured vehicle is not a
“covered auto” under the insurance policy’s uninsured motorists provision. Doc.
15 at 10-11. The business auto coverage form for the disputed policy states that
“[o]nly those ‘autos’ you own that because of the law in the state where they are
licensed or principally garaged are required to have and cannot reject Uninsured
Motorists Coverage” are “covered autos” under the policy’s uninsured motorists
provision. Doc. 12-2 at 28 (emphasis added). Consequently, because the vehicle
driven by Plaintiff was registered in Alabama, which has an uninsured motorist
statute that states that “the named insured shall have the right to reject such
coverage,” Ala. Code § 32-7-23(a) (emphasis added), Defendant contends that the
insured vehicle is not a “covered auto.” Since the court must give contract terms
“their ordinary, plain, and natural meaning” in instances “[w]here there is no
indication that the terms . . . are used in a special or technical sense[,]” Homes of
Legend, Inc. v. McCollough, 776 So. 2d 741, 746 (Ala. 2000), the court agrees that
the car Plaintiff drove was not a “covered auto.”
Plaintiff asserts that, despite the plain language of the policy, this provision
is unenforceable under Alabama law. Specifically, Plaintiff asserts that “§ 32-7-23
demands that [uninsured motorists] coverage exists regardless, so long as there is
no valid waiver of such coverage” and that, accordingly, the term defining
“covered autos” for uninsured motorists coverage is void unless there is an explicit
rejection of coverage. Doc.16 at 8. This is essentially a public policy argument
asking the court to interpret the statute as requiring a formal coverage rejection
form rather than allowing rejection by agreeing to a policy exclusion. However,
have made clear that, in the context of an insurance contract, if there is
one thing which more than another public policy requires it is that men
of full age and competent understanding shall have the utmost liberty of
contracting, and that their contracts, when entered into freely and
voluntarily, shall be enforced by courts of justice.
Federated Mut. Ins. Co., Inc. v. Vaughn, 96 So. 2d 816, 819-20 (Ala. 2007)
(quoting Ex parte Life Ins. Co. of Georgia, 810 So. 2d 744, 751 (Ala. 2001)
(quoting other cases in turn)). Moreover, Alabama courts only deem policy
exclusions void and unenforceable if they are more restrictive than § 32-7-23,
which generally occurs only when the policy purports to reduce the amount payable
under the policy to an amount below the uninsured motorists statutory requirement.
Continental Cas. Co. v. Pinkston, 941 So. 2d 926, 929 (Ala. 2006) (citing State
Farm Auto. Ins. Co. v. Reaves, 292 So. 2d 95 (Ala. 1974)).
Based on these facts, Defendant’s policy does not attempt to lower the
amount payable under the uninsured motorists provision. Instead, it provides a
waiver of coverage for vehicles maintained in states that allow for rejection of
uninsured motorists benefits. Since Alabama courts favor enforcing insurance
contracts as written, the court finds that the uninsured motorist provision in this
policy acts as a valid rejection of coverage for vehicles in states that allow for such
rejection. Accordingly, Defendant’s motion is due to be granted.
Rejection of Coverage – “the same insurer”
Alternatively, Defendant’s motion is due to be granted based on the
existence of a form providing an affirmative rejection of uninsured motorists
coverage. Plaintiff does not deny the existence of a valid rejection form, see doc.
10 at 25, but instead contends that Defendant cannot rely on the form because it
was originally executed with American Home. Doc. 10 at 2-3. In other words,
Plaintiff claims that Defendant is not the “same insurer” under the Alabama statute.
Although Alabama courts have not settled whether affiliated companies are
considered the “same insurer” under its uninsured motorist statute, this
determination is unnecessary here because of the policy language. Specifically,
each renewal policy C&S signed with American Home and with Defendant states
that “THESE DECLARATIONS AND THE COMMON POLICY DECLARATIONS, IF
APPLICABLE, TOGETHER WITH THE COMMON POLICY CONDITIONS, COVERAGE
FORMS, AND FORMS AND ENDORSEMENTS IF ANY ISSUED TO FORM A PART THEREOF
COMPLETE THE ABOVE NUMBERED POLICY.”
See doc. 12-2 at 15 (emphasis
added). “When interpreting a contract, a court should give the terms of the
agreement their clear and plain meaning and should presume that the parties
intended what the terms of the agreement clearly state.” Fidelity & Deposit Co. of
Maryland v. Jefferson Cnty Com’ns, No. 2:09-cv-247-JHH, 2010 WL 5487397 at
*5 (N.D. Ala. 2010); Southland Quality Homes, Inc. v. Williams, 781 So. 2d 949,
953 (Ala. 2000). Based on this rule of contract interpretation and the plain
language of the policy at issue, the parties unambiguously incorporated all prior
coverage forms, including the uninsured motorists coverage rejection form, into the
renewal policy by reference. Incorporating this form into the final renewal policy
holds the same effect as signing an entirely new form – C&S rejected uninsured
motorist coverage for the 2009-2010 coverage year. Accordingly, the uninsured
motorist coverage rejection form is valid and enforceable and thus prevents
Applicability of the Alabama Statute – “delivered or issued for delivery”
Defendant contends lastly that it is due summary judgment because the
Alabama uninsured motorist statute is inapplicable to its insurance policy with
C&S. The Alabama statute provides that it is only applicable to insurance policies
that were “delivered or issued for delivery in this state.” Ala. Code § 32-7-23(a).
This statutory requirement recognizes Alabama’s conflicts of laws lex loci
contractus rule that the law of the place where the contract was made governs
contractual disputes when the contract itself is silent as to choice of law. Cherokee
Ins. Co., Inc. v. Sanches, 975 So. 2d 287, 292 (Ala. 2007) (quoting Stovall v.
Universal Constr. Co., 893 So. 2d 1090, 1102 (Ala. 2004)). In that regard, the
parties dispute where the insurance policy was “delivered or issued for delivery.”
Plaintiff contends that an endorsement on the policy naming Birmingham Logistics
LLC of Alabama is definitive proof that the insurance policy was issued in
Alabama. Doc. 10 at 4. In contrast, Defendant contends that the original policy
and each renewal was issued and delivered to C&S at its corporate office in New
Hampshire, and that the subsequent endorsement naming Birmingham Logistics as
an insured does not change the place of original delivery. Doc. 15 at 6-7.
Based on the evidence presented, Defendant in fact executed an
“ENDORSEMENT FOR MOTOR CARRIER POLICIES OF INSURANCE FOR PUBLIC
LIABILITY UNDER SECTIONS 29 AND 30 OF THE MOTOR CARRIER ACT OF 1980,”
naming Birmingham Logistics LLC of Birmingham, Alabama as a covered entity
under the public liability provisions of policy CA 664-73-01. Doc. 10 at 27; Doc.
12-3 at 101.3 The endorsement itself, also referred to as a “MCS-90 form,”
[t]he insurance policy to which this endorsement is attached provides
automobile liability insurance and is amended to assure compliance by
the insured, within the limits stated herein, as a motor carrier of
property, with Sections 29 and 30 of the Motor Carrier Act of 1980
and the rules and regulations of the Federal Highway
Administration (FHWA) and the Interstate Commerce Commission
In consideration of the premium stated in the policy to which this
endorsement is attached, the insurer (the company) agrees to pay,
within the limits of liability described herein, any final judgment
recovered against the insured for public liability resulting from
negligence in the operation, maintenance or use of motor vehicles
subject to the financial responsibility requirements of Sections 29
and 30 of the Motor Carrier Act of 1980 regardless of whether or not
each motor vehicle is specifically described in the policy and whether
or not such negligence occurs on any route or in any territory authorized
to be served by the insured or elsewhere. Such insurance as is afforded
for public liability does not apply to injury to or death of the
insured’s employees while engaged in the course of their employment,
or property transported by the insured, designated as cargo.
However, all terms, conditions, and limitations in the policy to which
the endorsement is attached shall remain in full force and effect as
binding between the insured and the company.
Although Defendant also executed identical endorsements for Collington Services of
Maryland, Fire Logistics LLC of New York, and Ocean Logistics LLC of Pennsylvania, Plaintiff
does not contend that the insurance policy was issued or delivered in those states. See doc. 12-3
at 103, 105, 107.
Doc. 12-3 at 101-02 (emphasis added). The plain language of the endorsement
indicates that Defendant correctly contends that the endorsement was executed
merely to ensure compliance with federal law.4 This position is supported by
several circuits, which have noted that the purpose of such an endorsement is to
ensure that a carrier “has [proof of] independent financial responsibility to pay for
losses sustained by the general public arising out of its trucking operations.”
Travelers Ins. Co. v. Transport Ins. Co., 787 F.2d 1133, 1140 (7th Cir. 1986); see
also Canal Ins. Co. v. First General Ins. Co., 889 F.2d 604, 611 (5th Cir. 1989),
mandate recalled and reformed, 901 F.2d 45 (5th Cir. 1990); John Deere Ins. Co.
v. Nueva, 229 F.3d 853, 857 (9th Cir. 2000), cert. denied, 534 U.S. 1127 (2002);
Empire Fire and Marine Ins. v. Guaranty Nat’l Ins., 868 F.2d 357, 362 (10th Cir.
1989). The insurance policy endorsement “protect[s] the public from loss due to
negligent acts, . . . [but] do[es] not alter or affect the obligations between the
insured and the insurer[.]” Empire Fire and Marine Ins. Co. v. J. Transport, Inc.,
880 F.2d 1291, 1298 (11th Cir. 1989). In other words, the inclusion of a MCS-90
form may expand the definition of a “covered auto” or “insured” under the policy
The federal regulations require a motor carrier to maintain proof of financial
responsibility at its principal place of business. 49 C.F.R. § 387.7(d). This proof may include
“Endorsement(s) for Motor Carrier Policies of Insurance for Public Liability Under Sections 29
and 30 of the Motor Carrier Act of 1980 (Form MCS-90) issued by an insurer(s)[.]” Id.
to ensure coverage for public loss, but it does not necessarily change the preexisting terms of the underlying policy.
Moreover, the plain language of the endorsement at issue states
unequivocally that it does not change the “terms, conditions and limitations” of the
policy to which it is attached. Doc. 12-3 at 102. Relatedly, the original terms of the
policy indicate that it was issued to C&S and delivered to C&S’s corporate office
in New Hampshire. See docs. 12-2 at 15, 12-4 at 3, 12-5 at 3, 12-6 at 3, 12-7 at 3.
Accordingly, Plaintiff has no proper basis to contend that the endorsement altered
the location of the contract’s original execution. Indeed, if Plaintiff can make such
a contention, then an argument exists that the underlying insurance policy was
executed in Maryland, New York, and Pennsylvania since endorsements issued to
those states were executed on the same date as Birmingham Logistics’
endorsement. See doc. 12-3 at 101-02. This would create a clear inconsistency
between the terms of the original insurance policy and its later endorsements.
However, where such an inconsistency exists, “the inconsistency must be resolved
in favor of the prior clause, unless an intention to thereafter qualify is plainly
expressed.” McLemore v. Hyundai Motor Mfg. Alabama, LLC, 7 So. 3d 318, 333
(Ala. 2008). Under Alabama law, since Plaintiff failed to present evidence that the
parties intended to change the location of the contract’s execution through any of
these later MCS-90 forms, the original issuance term of the insurance policy still
governs. In other words, the insurance policy was “delivered or issued for
delivery” in New Hampshire and the Alabama uninsured motorist statute is
inapplicable. Accordingly, Defendant’s motion is due to be granted.
For the reasons stated more fully above, the court DENIES Plaintiff’s
motion for summary judgment, but GRANTS Defendant’s motion. Accordingly,
Plaintiff is not entitled to recover from Defendant under its insurance policy with
C&S, and Plaintiff’s claim is DISMISSED with prejudice.
DONE this 23rd day of April, 2013.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
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