Neighbors v. Shelter Mutual Insurance Company

Filing 33

OPINION AND ORDER granting 8 Shelter's motion for partial summary judgment. Signed by Judge Kristine G. Baker on 3/26/2019. (cmn)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
EASTERN DIVISION
DONNA NEIGHBORS, Administratrix of the
Estate of Joshua Wade Smith, deceased
v.

PLAINTIFF

Case No. 2:18-cv-00081-KGB

SHELTER MUTUAL
INSURANCE COMPANY

DEFENDANT
OPINION AND ORDER

Before the Court is a motion for partial summary judgment filed by defendant Shelter
Mutual Insurance Company (“Shelter”) (Dkt. No. 8). Plaintiff Donna Neighbors, Administratrix
of the Estate of Joshua Wade Smith, deceased, responded in opposition (Dkt. No. 13). Shelter
replied (Dkt. No. 16). Also before the Court is a motion to quash plaintiff’s notice of Rule 30(b)(6)
deposition of Shelter Mutual Insurance Company filed by Shelter (Dkt. No. 22), to which Ms.
Neighbors responded in opposition (Dkt. No. 24). For the reasons that follow, the Court grants
the motion for partial summary judgment (Dkt. No. 8). The Court holds under advisement the
motion to quash plaintiff’s notice of Rule 30(b)(6) deposition (Dkt. No. 22).
I.

Ripeness Of Motion For Partial Summary Judgment

As a threshold matter, Ms. Neighbors argues that Shelter’s motion for partial summary
judgment is premature (Dkt. No. 15, at 4). She asserts that no discovery has been conducted in
this matter and that only a limited amount of discovery was conducted in her prior filing in Phillips
County Case 54-CV-2017-96 (Id.). Ms. Neighbors contends that she should have the opportunity
to arm herself with whatever facts discovery would yield prior to facing summary judgment (Id.).
Under Federal Rule of Civil Procedure 56(d), if a nonmovant shows by affidavit or declaration
that, for specified reasons, it cannot present facts essential to justify its opposition to a motion for

summary judgment, the court may: (1) defer considering the motion or deny it; (2) allow time to
obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.
“As a general rule, summary judgment is proper only after the nonmovant has had adequate
time for discovery.” Hamilton v. Bangs, McCullen, Butler, Foye & Simmons, L.L.P., 687 F.3d
1045, 1049 (8th Cir. 2012) (internal quotations omitted). “This option [under Rule 56(d)] exists
to prevent a party from being unfairly thrown out of court by a premature motion for summary
judgment.” Id. at 1050. However, Rule 56 “does not require trial courts to allow parties to conduct
discovery before entering summary judgment.” United States ex rel. Small Bus. Admin. v. Light,
766 F.2d 394, 397 (8th Cir.1985) (per curiam). Thus, district courts possess “wide discretion in
denying” Rule 56(d) motions. Anzaldua v. Ne. Ambulance & Fire Prot. Dist., 793 F.3d 822, 836
(8th Cir. 2015).
A Rule 56(d) affidavit “must set forth specific facts further discovery might uncover, or
what information further discovery might reveal.” Hamilton, 687 F.3d at 1049 (affirming denial
of Rule 56(d) motion where district court stayed discovery and then ruled on motion for summary
judgment, determining plaintiff failed to show what further facts he would uncover through a Rule
56(d) extension). A nonmovant seeking relief under Rule 56(d) must do more than speculate that
it may discover additional facts that would overcome a motion for summary judgment, see
Stanback v. Best Diversified Prods., 180 F.3d 903, 911 (8th Cir.1999), and must submit an affidavit
showing “‘what specific facts further discovery might unveil.’” Id. (quoting Dulany v. Carnahan,
132 F.3d 1234, 1238 (8th Cir.1997)). “Where a party fails to carry [his] burden under Rule [56(d)],
‘postponement of a ruling on a motion for summary judgment is unjustified.’” Id. (quoting
Humphreys v. Roche Biomedical Labs., Inc., 990 F.2d 1078, 1081 (8th Cir.1993)).

2

Ms. Neighbors failed to submit an affidavit or declaration explaining what facts or
information further discovery might uncover and why she cannot present facts essential to justify
her opposition to Shelter’s motion for partial summary judgment at this time. Therefore, the Court
rejects Ms. Neighbors’ argument that Shelter’s motion for partial summary judgment is premature
(Dkt. No. 15, at 4).
II.

Motion For Partial Summary Judgment
A.

Factual Background

Unless otherwise noted, the following facts are taken from Shelter’s statement of
undisputed material facts in support of Shelter’s motion for partial summary judgment and from
Ms. Neighbors’ statement of disputed and undisputed facts (Dkt. Nos. 10, 14). The Court notes
that Local Rule 56.1 of the Local Rules of the United States District Court for the Eastern and
Western Districts of Arkansas provides that all material facts set forth in the statement filed by the
moving party shall be deemed admitted unless controverted by the statement filed by the nonmoving party. Local Rule 56.1(c). As such, the Court deems admitted each parties’ statement of
material facts to the extent statements are not controverted by the opposing party.
1.

The Motor Vehicle Accident

The motor vehicle accident that is the subject of this lawsuit occurred on or about March
24, 2017, in Hazen, Prairie County, Arkansas (Dkt. No. 14, ¶ 1). Shelter alleges that Joshua Wade
Smith, deceased, occupied the insured vehicle solely as the driver (Dkt. No. 10, ¶ 1). Ms.
Neighbors asserts that Mr. Smith occupied the insured vehicle as the driver prior to the first impact
of the accident (Dkt. No. 14, ¶ 1). The vehicle driven by Mr. Smith was owned by the named
insured, Gretchen Brannon Ferebee, and was insured by Shelter (Id., ¶ 2). Mr. Smith was not listed
as an insured on the Declarations, nor was he related to the named insured, Ms. Ferebee, at the

3

time of the accident (Id., ¶ 3). Ms. Neighbors alleges that Mr. Smith did reside with the named
insured on the night prior to the accident (Id.). Ms. Neighbors asserts that she has had insufficient
time to discover the extent of the residence other than that provided in Ms. Ferebee’s deposition
given in a related matter involving the same accident as at issue herein (Id.). The Court notes that,
in her deposition given in another matter, Ms. Ferebee was asked whether she and Mr. Smith lived
together at the time of the accident or before and replied that they did not (Dkt. No. 8-2, at 2).
Further, Ms. Neighbors contends that Mr. Smith had no insurance coverage other than that on Ms.
Ferebee’s vehicle (Dkt. No. 14, ¶ 3).
Mr. Smith and his passengers, Ms. Ferebee and non-party Courtney Young, were traveling
west on Interstate 40 when Mr. Smith lost control of the vehicle and then crossed onto the shoulder
and struck the adjacent guardrail (Id., ¶ 4). Ms. Neighbors alleges that Mr. Smith lost control of
the vehicle due to impact by another vehicle (Id.). Shelter contends that the vehicle overturned
and, in the process of overturning, Mr. Smith and Ms. Ferebee were ejected from the vehicle – Mr.
Smith from the driver’s seat and Ms. Ferebee from the passenger seat (Dkt. No. 10, ¶ 4). Shelter
asserts that, after being ejected, the vehicle then rolled over Mr. Smith, and Mr. Smith was
pronounced dead at the scene by the Prairie County Coroner (Id.). Ms. Neighbors disputes the
location from where Shelter asserts Mr. Smith was ejected. Ms. Neighbors contends that, “at the
instance of his ejectment, after striking the guard rail, it is impossible to know [Mr. Smith’s] exact
location inside or even outside the vehicle at this time” (Dkt. No. 14, ¶ 4). However, Ms.
Neighbors does not dispute that, at the instant that Ms. Ferebee’s vehicle was struck by the
unknown vehicle, Mr. Smith was occupying the driver’s seat in Ms. Ferebee’s vehicle (Id.).
The parties disagree about what the Prairie County Coroner’s certificate of death states
about how Mr. Smith died. According to Shelter, the chain of events listed on the death certificate

4

indicates that Mr. Smith’s death occurred prior to the vehicle rolling over him (Dkt. No. 10, ¶ 5)
(emphasis omitted). Citing the Prairie County Coroner Byrum Kelly’s affidavit, Ms. Neighbors
disputes Shelter’s interpretation of the death certificate (Dkt. No. 14, ¶ 5).
The parties also disagree about a letter sent by counsel for Ms. Neighbors to Shelter on
April 21, 2017. Shelter asserts that, on April 21, 2017, Ms. Neighbors submitted a demand on
Shelter for payment of “Med-pay/PIP Uninsured Motorist and Accidental Death [sic] benefits”
(Dkt. No. 10, ¶ 6) (edit in original). Shelter submits that absent from the demand letter was any
proof of any damages, including medical or funeral expenses, incurred by Mr. Smith (Id.). Ms.
Neighbors disputes that she submitted a “demand” letter for payment (Dkt. No. 14, ¶ 6). Instead,
she maintains that the April 21, 2017, letter was merely a letter of representation with no “demand”
for payment; she readily admits that said letter of representation contained no proof of medical or
funeral expenses (Id.). It is undisputed that Mr. Smith did not incur medical expenses and that no
such expenses were submitted to Shelter (Id., ¶ 7). Ms. Neighbors argues that Mr. Smith incurred
funeral expenses (Id.).
Shelter maintains that it responded to Ms. Neighbors’ demand on May 2, 2017, denying
Ms. Neighbors’ claim for medical payments or accidental death benefits as Mr. Smith did not meet
the definition of an “insured” under the Policy (Dkt. No. 10, ¶ 8). According to Shelter, it included
with this correspondence its previous letter to Ms. Neighbors from April 5, 2017, regarding its
investigation into and denial of the claim for the same reasons (Id.). Ms. Neighbors does not
dispute that Shelter responded to her letter of representation on May 2, 2017, denying Ms.
Neighbors’ claim and coverage therefore (Dkt. No. 14, ¶ 8).

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2.

The Policy

Ms. Neighbors filed her complaint on May 12, 2017, alleging entitlement to medical
payments and funeral expense benefits, accidental death benefits, and uninsured motorist benefits,
in addition to damages for Shelter’s alleged bad faith denial of payments of these benefits (Id., ¶
9). The Policy issued by Shelter and under which Ms. Neighbors claims entitlement to the limits
of the medical payments and accidental death benefits contains the following provisions:
INSURANCE AGREEMENT FOR COVERAGE C
Subject to all conditions, exclusions, and limitations of our liability, stated in this
policy, we will pay the reasonable charges for necessary goods and services for
the treatment of bodily injury sustained by an insured, if such bodily injury
directly results from an accident caused by the occupancy, use, or maintenance
of an auto. The reasonable charges must be incurred within two years of the
accident date.
Subject to the limit of our liability for this coverage stated in the Declarations, we
will pay the reasonable charges for funeral services of an insured, if death directly
results from an accident caused by the occupancy, use, or maintenance of an
auto. The reasonable charges must be incurred within two years of the accident
date.
(Dkt. No. 14, ¶ 9) (emphasis in original).
The Policy of insurance contains the following definition of an “insured” applicable to
medical payments coverage:
DEFINITION OF INSURED USED IN COVERAGE C
In Coverage C insured means you or a relative.
Insured also means:
***
(2)

Individuals, other than those occupying a vehicle, who are struck by the
described auto, while they are:
(a) Pedestrians;
(b) Bicyclists;
(c) Motorcyclists;
(d) In a horse-drawn wagon or cart; or
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(e) Riding on an animal.
(Id.) (emphasis in original).
Shelter asserts that the definition of an “insured” applicable to accident death benefits
coverage is the same as the definition applicable to medical payments coverage:
DEFINITION OF INSURED USED IN COVERAGE D
In Coverage D insured means you or a relative.
Insured can also mean:
***
(2)

Individuals, other than those occupying a vehicle, who are struck by the
described auto, while they are:
(a) Pedestrians;
(b) Bicyclists;
(c) Motorcyclists;
(d) In a horse-drawn wagon or cart; or
(e) Riding on an animal.

(Dkt. No. 10, ¶ 12) (emphasis in original).
Shelter further asserts that the Policy also contains the following definitions applicable to
medical payments and funeral benefits, accidental death benefits, as well as uninsured motorist
benefits:
“You” is defined in the Policy as “any person listed as a named insured in the
Declarations and, if that person is an individual, his or her spouse.”
“Relative”[] as defined in the Policy “means an individual related to you by blood,
marriage, or adoption, who is a resident of your household.”
“Passenger” is also defined as an “insured” under the Policy, but the terms does
[sic] not include the driver:
“Passenger means an individual who is occupying one of the seats of a vehicle
with permission but does not include the operator of a vehicle.”
(Id., ¶ 13) (emphasis in original).

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Shelter contends that there is no dispute that Mr. Smith was occupying the insured vehicle
as the driver but was not the named insured, a relative of the named insured, a member of the
named insured’s household, nor a “passenger,” “pedestrian,” “bicyclist,” “motorcyclist,” or
traveling “in a horse-drawn wagon or cart” (Dkt. No. 10, ¶ 17). Ms. Neighbors disputes whether
Mr. Smith was a member of the insured’s household at the time of the accident as she claims that
she has been unable to investigate adequately that aspect of Ms. Ferebee and Mr. Smith’s
relationship (Dkt. No. 14, ¶ 14). Ms. Neighbors does not dispute that Mr. Smith was occupying
the insured vehicle as the driver just prior to the accident, but she disputes that Mr. Smith was
occupying the vehicle as a driver at all subsequent times and at the time he was struck by Ms.
Ferebee’s insured vehicle as alleged in paragraph 17 of Shelter’s statement of undisputed material
facts (Id.).

Ms. Neighbors submits that the applicable statutes do not define “passenger,”

“pedestrian,” “bicyclist,” “motorcyclist,” or traveling “in a horse-drawn wagon or cart” but merely
provide coverage to “persons other than those occupying another vehicle struck by the insured
motor vehicle” (Id.).
Shelter argues that Ms. Neighbors does not allege that Shelter wrongfully applied the terms
of the Policy with regard to the definition of “insured” under the medical payments or accidental
death benefits (Dkt. No. 10, ¶ 21). Ms. Neighbors disputes that assertion and contends that
Shelter’s actions and its policy are contrary, on their face, to the requirements of Arkansas law
(Dkt. No. 14, ¶ 19).
3.

Applicable Arkansas Statutes

Shelter argues that the Policy at issue mirrors the requirements of the applicable statutes,
Arkansas Code Annotated §§ 23-89-202 and 23-89-204 (Dkt. No. 10, ¶ 14). According to Shelter,
for coverage to apply, the applicable statute Arkansas Code Annotated § 23-89-202 requires that

8

the deceased be “the named insured,” a “member[] of the [named insured’s] family residing in the
same household,” a “passenger[] injured while occupying the insured motor vehicle,” and a
“person[] other than those occupying another vehicle struck by the insured motor vehicle” (Id., ¶
15). Shelter asserts that, in order for accidental death benefits to apply, the statute continues to
require that the deceased be an “insured” under the Policy (Id.). Shelter submits that the statute
states, in pertinent part, that “[t]he sum of five thousand dollars ($5,000)[] to be paid to the personal
representative of the insured . . . []” (Id.) (emphasis in original). Shelter further submits that
coverage required to be provided to “insured” under Arkansas Code Annotated § 23-89-202 also
applies “only to occupants of the insured vehicle and to persons struck by the insured vehicle,
including pedestrians, bicyclists, motorcyclists, persons in a horse-drawn wagon or cart, and
persons riding on an animal, and to none other” (Id., ¶ 16) (emphasis in original).
Ms. Neighbors does not dispute that the definition in the Policy at issue provides that an
“insured” for accidental death benefits is the same as the definition applicable to medical payments
coverage, but she disputes that the definition is co-extensive with the requirements of Arkansas
law and asserts that it is contrary to Arkansas Code Annotated §§ 23-89-202 and 23-89-204 (Dkt.
No. 14, ¶ 10). Similarly, Ms. Neighbors does not dispute that such language is contained in the
Policy at issue but disputes that the cited language is co-extensive with the requirements of
Arkansas law and asserts that it is contrary to Arkansas Code Annotated §§ 23-89-202 and 23-89204 (Id., ¶ 11). Ms. Neighbors disputes that the Policy at issue mirrors the requirements of the
applicable statutes Arkansas Code Annotated §§ 23-89-202 and 23-89-204 because, for coverage
to apply, the applicable statute Arkansas Code Annotated § 23-89-202 requires that Mr. Smith be
“the named insured,” “members of [the named insured’s] family residing in the same household,”

9

a “passenger[] injured while occupying the insured motor vehicle, and a “person[] other than those
occupying another vehicle struck by the insured motor vehicle” (Id., ¶ 12).
Ms. Neighbors submits that, specifically, Mr. Smith need only meet one of these classes of
persons to be insured pursuant to the statute, not all as indicated by Shelter’s misquoting of the
statute (Id.). Ms. Neighbors asserts that Mr. Smith becomes an insured under Arkansas law by
meeting any one of the definitions provided in the statute, just as he does for the accidental death
benefits to apply (Id.). Further, Ms. Neighbors submits that coverage required to be provided to
an “insured” under Arkansas Code Annotated § 23-89-202 also applies “only to occupants of the
insured vehicle and to persons struck by the insured vehicle, including pedestrians, bicyclists,
motorcyclists, persons in a horse-drawn wagon or cart, and persons riding on an animal, and to
none other” (Id., ¶ 13).
According to Ms. Neighbors, Arkansas Code Annotated § 23-89-204(a) speaks for itself
(Id.). Ms. Neighbors argues that Shelter encourages a strained reading of the statute that by
“including” certain classes of persons, it excludes all others (Id.). Ms. Neighbors asserts that
Shelter’s strained interpretation of Arkansas Code Annotated § 23-89-204(a)’s meaning as set out
in paragraph 16 of its statement of undisputed material facts is disputed, citing the affidavit and
resume of Robin Bryant, an English professor at the University of Arkansas, Phillips County
Community College (Id.).
Shelter contends that, under the express terms of the Policy and the applicable statutes, Mr.
Smith was not an “insured,” and there is no coverage for medical payments, funeral benefits, or
accidental death benefits (Dkt. No. 10, ¶ 18). Ms. Neighbors disputes this contention and instead
maintains that Mr. Smith meets the definition of an insured under Arkansas Code Annotated § 23-

10

89-202 as an occupant/passenger and as a person “other than those occupying another vehicle
struck by the insured motor vehicle” (Dkt. No. 14, ¶ 15).
4.

Reasonable Proof

Arkansas Code Annotated § 23-89-202 requires that reasonable and necessary medical and
funeral expenses be “incurred” within two years of the accident (Id., ¶ 16). Ms. Neighbors did not
provide Shelter with reasonable proof of entitlement to benefits prior to filing suit (Id.). Ms.
Neighbors submits that the suit was filed only after Shelter responded to her letter of representation
that “no” benefits or coverage were owed to Mr. Smith (Id.).
Shelter further contends that, under Arkansas law and the conditions set forth in the Policy,
Ms. Neighbors failed to provide reasonable proof of entitlement to medical payments, funeral
benefits, or accidental death benefits at the time the demand on Shelter was made or at any time
prior to filing suit (Dkt. No. 10, ¶ 20). Ms. Neighbors disputes these assertions and submits that
all of Mr. Smith’s funeral expenses pursuant to Arkansas Code Annotated § 23-89-202 are
reasonable and necessary and incurred within two years of the accident (Dkt. No. 14, ¶ 17). Ms.
Neighbors asserts that proof of said funeral expenses was provided to Shelter immediately upon
request but only after Shelter had unequivocally denied responsibility for any expenses, alleging
that Mr. Smith was not an insured and therefore entitled to no benefits under the Policy (Id.).
Further, Ms. Neighbors disputes Shelter’s assertion that Arkansas law and the conditions set forth
in the Policy require Ms. Neighbors to provide reasonable proof of the amount of Mr. Smith’s
entitlement to medical payments, funeral benefits, or accidental death benefits at the time the
demand on Shelter was made or at any time prior to filing suit as a condition precedent to Ms.
Neighbors’ right to seek redress with the Court (Id., ¶ 18). Ms. Neighbors maintains that this is
especially true in the light of Shelter’s previous denial of any benefits or coverage (Id.).

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5.

Alleged Failure To Investigate

Shelter maintains that the allegations that Shelter failed to investigate Ms. Neighbors’ claim
are untrue, as demonstrated by the evidence, and fatally insufficient under Arkansas law to sustain
a claim of bad faith (Dkt. No. 10, ¶ 21). Ms. Neighbors contends that Shelter’s denial of coverage
on April 5, 2017, prior to even receiving the accident report on April 6, 2017, is an intentional and
bad faith attempt to avoid coverage of a valid claim because Shelter sent a denial to the “Joshua
Smith Estate C/O Personal Representative” within 12 days of the accident but without benefit of
the accident report and never addressing the fact that Mr. Smith was struck by the insured vehicle
(Dkt. No. 14, ¶ 19).
B.

Standard Of Review

Summary judgment is proper if the evidence, when viewed in the light most favorable to
the nonmoving party, shows that there is no genuine issue of material fact in dispute and that the
defendant is entitled to entry of judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). A factual dispute is genuine if the evidence could cause a
reasonable jury to return a verdict for either party. Miner v. Local 373, 513 F.3d 854, 860 (8th
Cir. 2008). “The mere existence of a factual dispute is insufficient alone to bar summary judgment;
rather, the dispute must be outcome determinative under prevailing law.” Holloway v. Pigman,
884 F.2d 365, 366 (8th Cir. 1989). However, parties opposing a summary judgment motion may
not rest merely upon the allegations in their pleadings. Buford v. Tremayne, 747 F.2d 445, 447
(8th Cir. 1984). The initial burden is on the moving party to demonstrate the absence of a genuine
issue of material fact. Celotex Corp., 477 U.S. at 323. The burden then shifts to the nonmoving
party to establish that there is a genuine issue to be determined at trial. Prudential Ins. Co. v.
Hinkel, 121 F.3d 364, 366 (8th Cir. 1997). “The evidence of the non-movant is to be believed,

12

and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986).
C.

Discussion: Coverage Under Shelter Policy

Shelter moves for partial summary judgment on Ms. Neighbors’ claims for entitlement to:
(1) medical payments, funeral benefits, or accidental death benefits; (2) damages for breach of
contract, statutory penalties, and attorney’s fees; and (3) bad faith and punitive damages (Dkt. No.
8, ¶ 1). According to Shelter, Mr. Smith does not qualify as an “insured” under the medical
payments and accidental death benefits provisions of the Policy (Dkt. No. 9, at 4). Shelter argues
that the evidence demonstrates that Mr. Smith was driving the insured vehicle when he lost control
of it and that Mr. Smith’s status as the driver/operator of the insured vehicle never changed despite
being ejected (Dkt. No. 9, at 7). Shelter contends that Mr. Smith was not an “insured” under the
clear definition of the Policy and, as such, there is no coverage (Id., at 8).
The Court finds no response in Ms. Neighbors’ filings to Shelter’s argument that Mr. Smith
is not covered under the Policy. Instead, Ms. Neighbors argues that Shelter’s Policy illegally limits
classes of insureds through its definitions, in contravention of Arkansas Code Annotated §§ 2389-202 and 23-89-204 (Dkt. No. 15, at 4-7). The Court will address this argument in the next
section. First, the Court looks to the language of the Policy to determine if it covers the claims
alleged by Ms. Neighbors against Shelter. The Court determines the language of the Policy is
unambiguous and affords Mr. Smith under the circumstances no coverage for purposes of medical
payments coverage or accident death benefits coverage under the Policy.
1.

Arkansas Law Applicable To Coverage Disputes

Arkansas law “regarding the construction of an insurance contract is well settled.” Norris
v. State Farm Fire & Cas. Co., 16 S.W.3d 242, 244 (Ark. 2000). “The language in an insurance

13

policy is to be construed in its plain, ordinary, popular sense.” Id. (citing CNA Ins. Co. v.
McGinnis, 666 S.W.2d 689, 691 (Ark. 1984). “Exclusionary endorsements must adhere to the
general requirements that the insurance terms must be expressed in clear and unambiguous
language.” Castaneda v. Progressive Classic Ins. Co., 166 S.W.3d 556, 560 (Ark. 2004) (citing
Norris, 16 S.W.2d at 242). “If the language of the policy is unambiguous,” then the Court must
“give effect to the plain language of the policy without resorting to the rules of construction.” Id.
(citing Elam v. First Unum Life Ins. Co., 57 S.W.3d 165, 169 (Ark. 2001)). Alternatively, if the
language of the policy is ambiguous, the Court must “construe the policy liberally in favor of the
insured and strictly against the insurer.” Id. (citing Elam, 57 S.W.3d at 169). “The terms of an
insurance contract are not to be rewritten under the rule of strict construction against the company
issuing it so as to bind the insurer to a risk which is plainly excluded and for which it was not
paid.” Castaneda, 166 S.W.3d at 561 (Ark. 2004) (citing Southern Farm Bureau Casualty Ins.
Co. v. Williams, 543 S.W.2d 467 (Ark. 1976)).
“Language is ambiguous if there is doubt or uncertainty as to its meaning and it is fairly
susceptible to more than one reasonable interpretation.” Id. (citing Harasyn v. St. Paul Guardian
Ins. Co., 75 S.W.3d 696, 701 (Ark. 2002)). Whether an insurance policy is ambiguous is a question
of law to be resolved by the Court. Id. Although the meaning of an ambiguity may become a
question for the fact-finder if parole evidence has been admitted to resolve that ambiguity, see
Minerva Enterprises, Inc. v. Bituminous Casualty Corp., 851 S.W.2d 403 (1993), “where the
meaning of the language of a written contract does not depend on disputed extrinsic evidence, the
construction and legal effect of the contract are questions of law.” Smith v. Prudential Prop. &
Cas. Ins. Co., 10 S.W.3d 846, 850 (2000) (citing Duvall v. Massachusetts Indem. & Life Ins. Co.,
748 S.W.2d 650 (1988); Security Ins. Co. v. Owen, 480 S.W.2d 558 (1972)).

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2.

Relevant Policy Language

Although the parties submitted excerpts of the Policy with their summary judgment
briefing, the Court requested that Shelter submit a copy of the Policy in its entirety for the Court’s
consideration, which is attached to the Court’s Notice entered on March 26, 2019, as Exhibit A
(Dkt. No. 32). The Policy contains the following provisions:
INSURING AGREEMENT FOR COVERAGE C
Subject to all conditions, exclusions, and limitations of our liability, stated in this
policy, we will pay the reasonable charges for necessary goods and services for
the treatment of bodily injury sustained by an insured, if such bodily injury
directly results from an accident caused by the occupancy, use, or maintenance
of an auto. The reasonable charges must be incurred within two years of the
accident date.
Subject to the limit of our liability for this coverage stated in the Declarations, we
will pay the reasonable charges for funeral services of an insured, if death directly
results from an accident caused by the occupancy, use, or maintenance of an
auto. The reasonable charges must be incurred within two years of the accident
date.
(Dkt. No. 8-4, at 5) (emphasis in original).
The definition of “insured” applicable to medical payments coverage is as follows:
DEFINITION OF INSURED USED IN COVERAGE C
In Coverage C insured means you or a relative. Insured also means:
(1)

(2)

Passengers in the described auto; but these individuals become insureds
only after the limits of all other motor vehicle medical and hospital
benefits insurance in which they are specifically named as insureds have
been exhausted; and
Individuals, other than those occupying a vehicle, who are struck by the
described auto, while they are:
(a)
Pedestrians;
(b)
Bicyclists;
(c)
Motorcyclists;
(d)
In a horse-drawn wagon or cart; or
(e)
Riding on an animal . . .

(Id.) (emphasis in original).
15

The definition of an “insured” applicable to accident death benefits coverage is the same
as the definition applicable to medical payments coverage:
DEFINITION OF INSURED USED IN COVERAGE D
In Coverage D insured means you or a relative. Insured can also mean:
(1)

(2)

Passengers in the described auto; but these individuals become insureds
only after the limits of all other motor vehicle accidental death benefits
insurance in which they are specifically named as insureds have been
exhausted; and
Individuals, other than those occupying a vehicle, who are struck by the
described auto, while they are:
(a)
Pedestrians;
(b)
Bicyclists;
(c)
Motorcyclists;
(d)
In a horse-drawn wagon or cart; or
(e)
Riding on an animal . . .

(Id., at 6) (emphasis in original).
The Policy contains the following definitions applicable to medical payments and funeral
benefits, accidental death benefits, and uninsured motorist benefits:
(1)

Accident means an occurrence that was neither expected nor intended. The
following types of occurrences are excluded from the definition of accident:
(a)
Any occurrence that an insured intended to result in bodily injury or
property damage; and
(b)
Any occurrence that was intended by an insured, if a reasonable
individual would have expected it to result in bodily injury or property
damage.

...
(5)

Claim means a request by any person for benefits under a coverage provided by
this policy as a result of a single accident. It includes lawsuits, requests for the
payment of money, requests that we take any action, or extend the benefits of any
coverage provided by this policy.

...
(23)

Named insured means any person listed in the Declarations under the
heading “Named Insured.” Persons listed under other headings are not
named insureds unless they are also listed under the heading “Named
Insured” (Dkt. No. 8-4, at 2) (emphasis in original).

...
16

(26)

Occupy means being in physical contact with a vehicle while:
(a)
In it;
(b)
Getting into it; or
(c)
Getting out of it.
An individual who is not in physical contact with a vehicle is not
occupying it (Id.) (emphasis in original).

(27)

Occurrence means an action or event, or a series of actions or events, that:
(a)
Started abruptly;
(b)
During the policy period;
(c)
Directly resulted in bodily injury or property damage; and
(d)
May result in a claim.

(28)

Operator means an individual who is using a vehicle (Id.) (emphasis in
original).

...
(31)

Passenger means an individual who is occupying one of the seats of a
vehicle with permission but does not include the operator of a vehicle (Id.)
(emphasis in original).

...
(40)

Relative means an individual related to you by blood, marriage, or
adoption, who is a resident of your household . . . (Id., at 3) (emphasis in
original).

...
(44)

Reside means to actually live in a location with the intent to make that place,
and no other, one’s primary, and permanent, home . . . (Id.) (emphasis in
original).

(45)

Spouse means the lawful husband or wife of any individual defined as an
insured under the applicable part of this policy, if he or she is a resident of
the same household as that insured (Id.) (emphasis in original).

...
(54)

Use means physically controlling, or attempting to physically control, the
movements of a vehicle. It includes any emergency repairs performed in
the course of a trip, if those repairs are necessary to the continued use of the
vehicle (Id., at 4) (emphasis in original).

...
(58)

You means any person listed as a named insured in the Declarations and,
if that person is an individual, his or her spouse (Id.) (emphasis in
original).
17

(Dkt. No. 32, Exhibit A, at 5-8).
3.

Named Insured Or Relative

Based on the unambiguous, plain language of the Policy, the Court determines Mr. Smith
does not qualify as an “insured” as a named insured or as a relative. In this case, it is undisputed
that Ms. Ferebee is the named insured and owner of the insured vehicle involved in the accident
on March 24, 2017 (Dkt. No. 14, ¶ 2). Ms. Neighbors admits that Mr. Smith was not listed as an
insured on the Declarations, nor was he related to the named insured, Ms. Ferebee, at the time of
the accident (Id., ¶ 3).
Ms. Neighbors does not argue in her brief but submits in her statement of disputed and
undisputed facts that Mr. Smith did reside with the named insured on the night prior to the accident
(Id.). In support of this assertion, Ms. Neighbors submits the following excerpt from Ms. Ferebee’s
deposition testimony:
Q: And how long were the three of you together at your brother’s house
that evening?
A: It was a while before we left from there that morning, so hours, you
know. I slept a little bit.
Q: Okay. So the three of you were together beginning when the night
before?
A: I’m going to say 11:00 o’clock. I’m not for sure.
Q: P.M.?
A: P.M., yes, sir. I’m not for sure. We were there at his house.
(Dkt. No. 13-1). In the statement of disputed and undisputed facts, Ms. Neighbors also asserts that
she has had insufficient time to discover the extent of the residence other than that provided in Ms.
Ferebee’s deposition given in a related matter involving the same accident as at issue herein (Id.).

18

The Court notes that, in her deposition given in another matter, Ms. Ferebee was asked whether
she and Mr. Smith lived together at the time of the accident or before and replied that they did not
(Dkt. No. 8-2, at 2).
Based on the plain language of the Policy, and construing the record evidence and all
reasonable inferences in favor of Ms. Neighbors, the Court finds the fact that Mr. Smith spent the
night before the accident in the same residence as Ms. Ferebee irrelevant to the issue of coverage.
Under the Policy, “reside” means actually to live in a location with the intent to make that place,
and no other, one’s primary, and permanent, home (Dkt. No. 8-4, at 3). Further, as the Court
discussed supra, Ms. Neighbors failed to follow Federal Rule of Civil Procedure 56(d); she may
not defeat summary judgment by relying on the argument that she has had insufficient time to
discover the extent of the residence other than the description provided in Ms. Ferebee’s deposition
given in a related matter involving the March 24, 2017, accident. The Court concludes that Mr.
Smith was not an “insured” as a named insured or as a relative for purposes of medical payments
coverage or accident death benefits coverage under the Policy.
4.

Passenger Or Struck By Insured Vehicle

The Court next determines whether Mr. Smith is an “insured” for purposes of medical
payments coverage or accident death benefits coverage under the Policy as a passenger or as an
individual, other than one occupying the vehicle, who is struck by the insured vehicle, while he is
a pedestrian, bicyclist, motorcyclist, in a horse-drawn wagon or cart, or riding on an animal (Id.,
at 5-6).
As a threshold matter, neither party cites this Court to authority for the proposition that,
even though it is undisputed that Mr. Smith was driving the insured vehicle just prior to and at the
moment of the accident, during the course of the accident and solely through the circumstances of

19

the accident, not through conscious choice or conduct, he can change roles under the terms of the
Policy. In other words, neither party cites this Court to authority that permits Mr. Smith’s status
as driver or operator of the vehicle to transform into a “passenger” because he was ejected from
the vehicle during the accident. Similarly, neither party cites this Court to authority that permits
Mr. Smith’s status as driver or operator to transform into a “an individual, other than one occupying
the vehicle, who is struck by the insured vehicle, while he is a pedestrian, bicyclist, motorcyclist,
in a horse-drawn wagon or cart, or riding on an animal” because he was ejected from the vehicle
and struck by it during the accident.
Shelter contends that Mr. Smith was not simply occupying the insured vehicle prior to and
at the moment the accident occurred but was in fact driving the insured vehicle when he lost control
of it (Dkt. No. 9, at 7). Shelter argues that Mr. Smith’s status as the driver of the vehicle cannot
change to a passenger (Dkt. No. 16, at 3). According to Shelter, Mr. Smith would need to have
formed an intent to cease operating or physically controlling the vehicle and relinquish that control
to another, and Shelter contends that there is no proof that occurred here (Id.). Shelter further
submits that the Policy’s definition of “passenger” specifically states that it “does not include the
operator of a vehicle” (Id.). The Policy defines “passenger” as an individual who is occupying
one of the seats of a vehicle with permission but does not include the operator of a vehicle (Id., at
2). It is undisputed that Mr. Smith was driving the insured vehicle just prior to and at the moment
of the accident (Dkt. No. 14, ¶ 14).
The parties cite no Arkansas authority, and this Court could find no Arkansas authority,
addressing this issue. When examining this issue, the Court reviewed the following cases and
finds the reasoning instructive.

20

In Pemco Mutual Insurance Co. v. Utterback, 960 P.2d 453 (Wash. Ct. App. 1998), the
court determined that an incident in which a pedestrian was injured in two separate impacts when
a car lurched forward, backed up, and lurched forward again was a single accident for purposes of
automobile insurance coverage, part of a continuous sequence set in motion by the driver’s original
negligent conduct.1 In the case, James Utterback was injured when the insured’s car lurched
forward, jumped the curb, and knocked Mr. Utterback against the wall of a building as he was
walking on the sidewalk. Id. at 453-54. The insured driver backed up several feet. Id. at 454.
Then, the car lurched forward again pinning Mr. Utterback to the wall and injuring him again. Id.
Mr. Utterback sued the insurer Pemco Mutual Insurance Company (“Pemco”) to recover
for his injuries, asserting two causes of action for what he alleged were two separate accidents. Id.
The insured’s automobile policy imposed a $110,000.00 maximum for a single accident. Id.
Pemco denied that two separate accidents had occurred and filed an action for declaratory
judgment to that effect. Id. The trial court granted summary judgment in favor of Pemco, and the
Washington Court of Appeals affirmed. Id. at 457.
The court determined that the insured’s original negligent conduct caused the second
impact with Mr. Utterback in a continuous sequence and that the incident was therefore a single
accident for coverage purposes. Id. Although no Washington state court had previously examined
whether one or two accidents occur when a single vehicle strikes the same person twice in rapid
succession, the Washington Supreme Court had adopted in a prior case a “cause” analysis for
determining the number of accidents, holding that all injuries or damage within the scope of a

1

This Court notes that, to interpret other policy language, the Arkansas Supreme Court
has cited to and relied upon precedent from Washington State. See Smith v. Southern Farm Bureau
Casualty Ins. Co., 114 S.W.3d 205 (Ark. 2003) (quoting and citing with approval Matthews v.
Penn-American Ins. Co., 25 F.3d 451 (Wash. Ct. App. 2001), regarding the phrase “immediate
family” as used in policy language).
21

single, “proximate, uninterrupted, and continuing cause” must be treated as arising from a single
accident. Id. at 454. The trial court determined that the interdependent nature of the two impacts
and their continuity and proximity in time and location all lead to the conclusion that just one
accident occurred. Id. at 456. The insured never regained control of the car’s injury inflicting
potential or the situation in general following the first impact, based on the record evidence. Id. at
456-57. The Washington Court of Appeals determined that there was just one proximate and
continuing cause of both impacts – the insured’s initial negligence that caused her to lose control
of the vehicle. Id. at 457.
Likewise, in Unigard Insurance Co. v. U.S. Fidelity and Guaranty Co., the Idaho Court of
Appeals examined a similar situation and acknowledged the case presented an issue of first
impression in Idaho. 728 P.2d 780 (Idaho Ct. App. 1986). The court was asked to decide whether
multiple incidents of damage, produced by a closely related series of repetitive events, constitute
a single “occurrence” within the meaning of a liability insurance policy. Id. at 781.
The court first determined that the plain language of the policy did not resolve the dispute.
Id. at 783. Then, the court examined essentially three approaches to the issue of whether an event
is a single occurrence or multiple occurrences for purposes of coverage. Id. at 782. There, the
court explained:
The cases tend to revolve around specific fact patterns. The courts have directed
attention to the relationship among the acts causing injury and to the temporal and
spatial proximity of the injuries themselves. Three methodologies have emerged.
The earliest, but now largely discredited, approach equates the number of parties
suffering bodily injury or property damage with the number of accidents or
occurrences. This has since been labeled the “result” or “effect” approach. Other
courts have used a “proximate cause” or “causation” approach. It treats all damage
or injuries within the scope of a single proximate cause as arising from one accident
or occurrence. The most recent formulation, and the approach that we find most
useful for cases of the present type, has been termed the “functional event” or
“continuous process” test. It focuses not upon the individual events of damage but
upon the underlying cause. The critical inquiry is whether or not the damage22

causing process was continuous and repetitive. See, e.g., Champion International
Corp. v. Continental Casualty Co., 546 F.2d 502 (2nd Cir.1976); E.B. Michaels v.
Mutual Marine Office, Inc., 472 F.Supp. 26 (S.D.N.Y.1979).
Unigard, 728 P.2d at 782 (internal citations omitted).
The Unigard court determined that the continuous process approach best reflected an
insured’s reasonable expectation of coverage. Id. at 782. In other words, “a lay person is likely
to view the harm caused by a single, continuous process as one ‘occurrence.’” Id..
Here, Shelter’s policy defines accident, claim, and occurrence as follows.
(2)

Accident means an occurrence that was neither expected nor intended. The
following types of occurrences are excluded from the definition of accident:
(a)
Any occurrence that an insured intended to result in bodily injury or
property damage; and
(b)
Any occurrence that was intended by an insured, if a reasonable
individual would have expected it to result in bodily injury or property
damage.

...
(5)

Claim means a request by any person for benefits under a coverage provided by
this policy as a result of a single accident. It includes lawsuits, requests for the
payment of money, requests that we take any action, or extend the benefits of any
coverage provided by this policy.

...
(27)

Occurrence means an action or event, or a series of actions or events, that:
(a)
Started abruptly;
(b)
During the policy period;
(c)
Directly resulted in bodily injury or property damage; and
(d)
May result in a claim.

(Dkt. No. 32, Exhibit A, at 5, 6).
The Policy language is unambiguous, but the Court concedes that the Policy language does
not clearly resolve this issue. The Court also notes that Arkansas specifically recognizes and
retains in the context of insurance coverage concepts of tort liability. See Ark. Code Ann. § 2389-206. It is undisputed that Mr. Smith was driving the insured vehicle just prior to and at the
moment of the accident. There is no evidence that Mr. Smith ever regained control of the vehicle
23

or brought the vehicle under control during the event. It is undisputed that Mr. Smith was ejected
from the vehicle and that no one else qualifies as a driver or operator of the vehicle during this
event. This Court rejects Ms. Neighbors’ argument that, during the course of the accident and
solely through the circumstances of the accident, not through conscious choice or conduct, Mr.
Smith can change roles under the terms of the Policy. In other words, neither party cites this Court
to authority that permits Mr. Smith’s status as driver or operator of the vehicle to transform into
“passenger” or “a person struck by the insured vehicle” because he was ejected from the vehicle
during the accident. In his capacity as the driver or operator of the vehicle, Mr. Smith is not
covered by the Policy. The Court declines to rewrite the terms of the Policy under the rule of strict
construction against Shelter so as to bind Shelter to a risk which is plainly excluded and for which
Shelter was not paid. See Castaneda, 166 S.W.3d at 561. Based on the plain language of the
Policy, and construing the record evidence and all reasonable inferences in favor of Ms. Neighbors,
the Court finds that Mr. Smith is not an “insured” under the Policy for purposes of medical
payments coverage or accident death benefits as a “passenger” or as “an individual, other than one
occupying the vehicle, who is struck by the insured vehicle, while he is a pedestrian, bicyclist,
motorcyclist, in a horse-drawn wagon or cart, or riding on an animal.”
For these reasons, after carefully considering the Policy’s language in its “plain, ordinary,
[and] popular sense,” and considering the record evidence in the light most favorable to Ms.
Neighbors as required at the summary judgment stage, the Court determines that Mr. Smith is not
covered under the Policy for purposes of medical payments coverage or accident death benefits
coverage. Norris, 16 S.W.2d at 244.

24

D.

Discussion: Arkansas Statutes And Public Policy

Instead of arguing directly against the language of the Policy, Ms. Neighbors argues that
Shelter’s Policy illegally limits classes of insureds through its definitions, in contravention of
Arkansas Code Annotated §§ 23-89-202 and 23-89-204 (Dkt. No. 15, at 4-7). Ms. Neighbors
asserts that Mr. Smith is covered by the medical payments and accidental death benefits as a
passenger and occupant in the insured vehicle and as a person struck by the insured vehicle
pursuant to Arkansas law (Dkt. No. 13, at 4, 6). The Court determines that Mr. Smith is not
covered by the Policy for the reasons explained. The Court also rejects Ms. Neighbors’ arguments
that the Policy language is in contravention of applicable Arkansas law, to the extent the Court has
construed the Policy language in making a ruling on the threshold issue of whether Mr. Smith can
change roles under the terms of the Policy. The Court declines to reach the remaining issues raised
by the parties with respect to Policy language and applicable Arkansas law.
In making this limited assessment of applicable Arkansas law as applied to the Policy
language construed by the Court in this case, the Court relies on the following Arkansas cases. In
Shelter General Insurance Co. v. Williams, 867 S.W.2d 457 (Ark. 1993), the trial court granted
summary judgment in favor of plaintiffs, determining that plaintiffs were entitled to recover
benefits under an insurance policy pursuant to Arkansas Code Annotated § 23-89-202. The trial
court reasoned that any exclusion that attempted to limit the no-fault benefits beyond the scope of
Arkansas statutory law was void as against public policy. Id. at 457. The Arkansas Supreme Court
reversed the trial court. The Arkansas Supreme Court determined that “[t]he statutes encompass
the mandatory offering of coverage accompanied by the right to reject such coverage in whole or
in part, not mandatory coverage of any and all risks.” Id. at 458.

25

Under Arkansas law, an insurer may contract with its insured upon whatever terms the
parties may agree upon which are not contrary to statute or public policy. Id. (citing Aetna Ins. C.
v. Smith, 568 S.W.2d 11 (Ark. 1978)). The Arkansas Supreme Court observed in Williams that
the premium paid reflected the lesser coverage as accepted by the insured. Though there is a
mandatory minimum, which may be increased by the insurer, there is also a statutory right by the
insured to reject the coverages as long as it is accomplished in writing, which had been done in the
case. The Arkansas Supreme Court reasoned that, if an insured has the right under Arkansas Code
Annotated § 23-89-203 to reject the coverages enumerated in Arkansas Code Annotated § 23-89202, exclusions that limit the no-fault benefits beyond the scope of statutory law are not void as
against public policy. Id. at 458. Further, the Arkansas Supreme Court has determined that,
“[u]nless the legislature has specifically prohibited exclusions, courts will not find the restrictions
void as against public policy. An exclusion to coverage cannot violate public policy when one
considers that a driver can opt out of the coverage altogether.” Harasyn v. St. Paul Guardian Ins.
Co., 75 S.W.3d 696, 699 (Ark. 2002). For these reasons, the Court rejects Ms. Neighbors’ public
policy arguments as applied to the narrow threshold issue resolved by the Court in this case.
E.

Bad Faith Allegations And Punitive Damages

Shelter argues that summary judgment on Ms. Neighbors’ bad faith claim is appropriate
because Shelter had investigated the claim and applied the terms within the Policy as they were
written before it sent a denial of benefits letter (Dkt. Nos. 9, at 10; 16, at 10). In support of this
claim, Shelter submits its May 2, 2017, and April 5, 2017, letters to counsel for Ms. Neighbors
(Dkt. No. 9-7). Shelter argues that, even if the allegations that Shelter failed to investigate the
claim prior to its denial are true, such allegations are insufficient to sustain a claim of bad faith in
Arkansas (Dkt. No. 9, at 10). Shelter also argues that summary judgment is appropriate on Ms.

26

Neighbors’ claim for punitive damages (Id., at 12). Shelter submits that the basis for Ms.
Neighbors’ lawsuit has never been anything more than a dispute over whether coverage for medical
payments and accidental death benefits exists (Id., at 13). Shelter argues that it is undisputed that
Shelter applied the terms and conditions of the Policy as they were written and that Ms. Neighbors
has not and cannot show that she has been harmed or damaged in any way (Id.).
Ms. Neighbors contends that Shelter’s denial of coverage on April 5, 2017, prior to even
receiving the accident report on April 6, 2017, is an intentional and bad faith attempt to avoid
coverage of a valid claim because Shelter sent a denial to the “Joshua Smith Estate C/O Personal
Representative” within 12 days of the accident but without benefit of the accident report and never
addressing the fact that Mr. Smith was struck by the insured vehicle (Dkt. No. 14, ¶ 19).
Ms. Neighbors also argues that Shelter’s motion for summary judgment regarding its
alleged bad faith and to prevent an award of punitive damages is premature (Dkt. No. 15, at 8).
Ms. Neighbors requests, pursuant to Rule 56(d)(1)-(3), that the Court deny Shelter’s motion or
grant other appropriate relief to allow her to conduct more discovery (Id.). As discussed supra,
the Court rejects Ms. Neighbors’ argument that the motion is premature because she failed to
submit an affidavit or declaration explaining why she cannot present facts essential to justify her
opposition to Shelter’s motion for partial summary judgment. Fed. R. Civ. P. 56(d).
In Arkansas, the tort of bad faith requires affirmative misconduct, without a good faith
defense; the affirmative misconduct must be dishonest, malicious, or oppressive in an attempt to
avoid the insurer’s liability under an insurance policy. Reynolds v. Shelter Mut. Ins. Co., 852
S.W.2d 799, 801 (Ark. 1993) (citing Findley v. Time Ins. Co., 573 S.W.2d 908 (Ark. 1978)). The
mere failure to investigate a claim is not the sort of affirmative misconduct that gives rise to a
cause of action in tort for bad faith. Id.

27

In Reynolds, the Arkansas Supreme Court determined that the only argument the plaintiffappellants made concerning bad faith was the defendant-appellee insurance company’s failure to
investigate adequately their claim, and the Court concluded that such conduct did not give rise to
a cause of action for bad faith under Findley. Id. The plaintiff-appellants in Reynolds responded
to the motion for summary judgment with affidavits and depositions, but the Court determined that
none of the evidentiary items presented indicated that the insurance company engaged in
affirmative conduct that was malicious, dishonest, or oppressive in order to avoid paying the claim.
Id.
Here, Ms. Neighbors submitted Shelter’s claim file timeline in response to summary
judgment (Dkt. No. 13-8). The claim file timeline demonstrates that Shelter determined that Mr.
Smith was a permissive driver and was not listed on the Policy and was a “non-resident” before
sending the denial letter on April 5, 2017 (Id.). Shelter also submitted an exhibit indicating that
Shelter spoke with Ms. Ferebee on March 29, 2017, and Ms. Ferebee informed Shelter that “Joshua
Smith was a friend of hers and was driving with permission” (Dkt. No. 16-1). The exhibit further
indicates that Shelter had discovered that Mr. Smith was a “driver, non-resident, not listed on
policy, [and] friend of insured” (Id.). Viewing all evidence in the light most favorable to Ms.
Neighbors, to the extent the bad faith claim is premised on whether there is coverage for medical
payments and accidental death benefits, the Court cannot conclude that Shelter’s actions were
“malicious, dishonest, or oppressive” “affirmative misconduct.” Reynolds, 852 S.W.2d at 801.
The Court grants summary judgment on Ms. Neighbors’ claim against Shelter for punitive
damages based on allegations of bad faith to the extent that claim is premised on whether there is
coverage for medical payments and accidental death benefits.

28

III.

Motion To Quash Plaintiff’s Notice Of Rule 30(b)(6) Deposition Of Shelter
Mutual Insurance Company

Counsel for Ms. Neighbors sent Shelter a notice of Rule 30(b)(6) deposition on December
20, 2018, along with specific requests for certain items to be produced by the Rule 30(b)(6)
representative at the deposition (Dkt. No. 22-1). Shelter filed a motion to quash plaintiff’s notice
of Rule 30(b)(6) deposition of Shelter Mutual Insurance Company on January 2, 2019 (Dkt. No.
22). In the motion, Shelter objects to the notice and the request for production of documents on
several grounds (Id., ¶ 2).
First, Shelter argues that it has produced portions of its claim file, including its adjuster’s
notes and its investigation up to the date the complaint was originally filed in state court on May
12, 2017 (Id.). Second, Shelter asserts that any portion of its claim file and investigation created
after the complaint was filed on May 12, 2017, was done in the light of the pending litigation and
is privileged as it contains Shelter’s mental impressions and legal conclusions (Id., ¶ 3). Third,
Shelter argues that its opinions and conclusions, internal policies and procedures regarding adjuster
training, and claims evaluation policies and procedures are irrelevant and seek confidential
proprietary information not subject to disclosure (Id.). Fourth, Shelter objects to producing a
representative or the requested privileged materials in the light of the pending motion for partial
summary judgment (Id., ¶ 4). Shelter submits that it agrees to produce its representative if the
Court deems there is coverage under the relevant provisions for Mr. Smith and that Shelter
committed bad faith by denying the claims for medical payments and accidental death benefits to
the Estate (Id.). Finally, Shelter argues that the notice is an improper fishing expedition used as a
retaliatory tool to seek corroborative evidence of a claim that fails as a matter of law (Id., ¶ 5).
Shelter asks the Court to quash the notice and to enter a protective order pursuant to Rule 26(c)

29

forbidding the proposed discovery and requiring that trade secrets and other confidential
information not be revealed (Id., ¶ 6).
Ms. Neighbors responded in opposition to the motion (Dkt. No. 24). Ms. Neighbors
counters that Shelter should be required to produce its entire claim file, including all notes,
correspondence, and information compiled or created prior to the initiation of litigation in the
Phillips County matter (Id., ¶ 2). Ms. Neighbors concedes that any portion of the claims file
produced after litigation commenced in the previous Phillips County matter is not subject to
discovery in this matter (Id., ¶ 3). Ms. Neighbors submits that she is aware of no rule that allows
Shelter to determine that it will only produce or designate its Rule 30(b)(6) representative or its
employee witnesses upon an adverse ruling from the Court (Id., ¶ 4). Ms. Neighbors represents
that she will agree to a protective order for any trade secrets that may be discovered (Id., ¶ 6).
The Court holds Shelter’s motion to quash under advisement at this time. Because the
Court grants Shelter’s motion for partial summary judgment, Ms. Neighbors’ only remaining claim
is for the uninsured motorist benefit (Dkt. No. 3, at 3). To the extent that Ms. Neighbors determines
that the requested document production continues to be relevant to her uninsured motorist claim,
the Court directs Ms. Neighbors to submit a filing explaining such.
IV.

Conclusion

For the foregoing reasons, the Court grants Shelter’s motion for partial summary judgment
(Dkt. No. 8). The Court holds under advisement the motion to quash plaintiff’s notice of Rule
30(b)(6) deposition (Dkt. No. 22).
It is so ordered this 26th day of March, 2019.
________________________________
Kristine G. Baker
United States District Judge

30