Richardson v. Zurich American Insurance Company et al

Filing 39

ORDER & REASONS that Defendant Zurich's 33 Motion for Summary Judgment is hereby DENIED. IT IS FURTHER ORDERED that Defendant GAAC's 34 Motion for Summary Judgment is hereby GRANTED. Signed by Judge Eldon E. Fallon on 3/21/2018. (cms)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

RONALD RICHARDSON

CIVIL ACTION

VERSUS

NO. 17-571

ZURICH AMERICAN INSURANCE COMPANY ET AL

SECTION "L" (2)

ORDER & REASONS
Before the Court are Defendants’ cross motions for summary judgment. R. Docs. 33, 34.
Each motion is opposed. R. Docs. 37, 38. Having considered the parties’ arguments and the
applicable law, the Court now issues this Order and Reasons.
I.

BACKGROUND
This case arises from injuries Plaintiff Ronald Richardson (“Richardson”) allegedly

sustained in a collision between two 18-wheelers. On January 14, 2016, Plaintiff was sitting inside
his truck waiting to refuel when an unknown driver in an 18-wheeler struck Plaintiff’s vehicle. R.
Doc. 1-4 at 1. The unknown driver then fled the scene.
At the time of the accident, Plaintiff was working on behalf of 1845 Oilfield Transport,
LLC (“D & T Holdings”). Plaintiff alleges Defendant Zurich American Insurance Company
(“Zurich”) provided insurance coverage to and on behalf of D & T Holdings. Defendant Great
American Assurance Company (“American”) provided underinsured/uninsured insurance
coverage to Plaintiff. R. Doc. 1-4 at 2. Plaintiff claims that both insurance companies have refused
to make any tender under the policies despite receiving adequate proof of loss. R. Doc. 1-4 at 3.
Plaintiff claims that Defendants Zurich and American’s failure to make tender on his claim is in
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bad faith and therefore he is entitled to statutory damages and attorney’s fees. R. Doc. 1-4 at 4.
Defendant Zurich answers and denies all allegations in Plaintiff’s complaint. R. Doc. 5 at
1-2. Zurich admits it was the insurer for D & T Holdings and provided coverage to Plaintiff while
his truck was being used by or for D & T Holdings. R. Doc. 5 at 2. Defendant American answers
and denies the allegations in Plaintiff’s complaint. R. Doc. 6 at 1-3. Defendant asserts that Plaintiff
has not provided adequate proof that the driver in the alleged accident was uninsured. Therefore
American contends it cannot be held liable until it receives proof that Plaintiffs injuries and
damages exhaust the limits of the tortfeasor’s coverage. R. Doc. 6 at 1-3.
Defendants Zurich and American claim that any assertion of bad faith is barred because
Plaintiff only recently provided identifying information regarding the tortfeasor’s vehicle to the
Defendants. R. Doc. 6 at 5-6; R. Doc. 5 at 12. Defendants also raise various affirmative defenses,
including contributory negligence because of where Plaintiff chose to park his vehicle. R. Doc. 6
at 6; R. Doc. 5 at 13.
II.

PRESENT MOTIONS
a. Defendant Zurich’s Motion for Summary Judgment (R. Doc. 33)
Defendant Zurich moves for summary judgment on the ranking of the Defendants’

uninsured motorist (“UM”) coverage. R. Doc. 33. Zurich alleges that the policy provided by
GAAC is the primary coverage for Plaintiff Richardson and the Zurich policy is only available as
excess when the GAAC policy is exhausted. R. Doc. 33-1 at 1, 3. Zurich argues that the GAAC
policy has a limit of $1,000,000 and lists the truck in question as a covered auto. R. Doc. 33-1 at
5. Zurich argues that this is coverage on the vehicle; in contrast, the Zurich policy is not coverage
on the vehicle but is based on the status of the vehicle at the time of the accident. R. Doc. 33-1 at
6. Therefore, because the GAAC policy is coverage on the vehicle, Zurich argues that under
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Louisiana law it is the primary UM coverage in this accident. R. Doc. 33-1 at 7.
b. Defendant GAAC’s Motion for Summary Judgment (R. Doc. 34)
Defendant GAAC also moves for summary judgment on the ranking of the Defendants’
UM coverage. R. Doc. 34. GAAC alleges that the policies provided by Zurich and GAAC are coprimary. R. Doc. 34-1 at 1. GAAC argues that the truck in question is a covered auto under the
Zurich policy because it was under lease for a year. R. Doc. 34-1 at 8. GAAC argues that because
it lists the truck as a covered auto Louisiana law makes Zurich’s coverage primary for Plaintiff
Richardson’s injuries because they occurred in a covered auto that he did not own. R. Doc. 34-1
at 9. Furthermore, GAAC argues that because both policies have language apportioning coverage
this language should be applied and each Defendant should be liable proportionate to the
applicable limits of their policies. R. Doc. 34-1 at 14.
III.

LAW & ANALYSIS
a. Summary Judgment Standard (Fed. R. Civ. P. 56)
Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). “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 the party will bear the burden of proof at trial.” Id. A party moving for
summary judgment bears the initial burden of demonstrating the basis for summary judgment and
identifying those portions of the record, discovery, and any affidavits supporting the conclusion
that there is no genuine issue of material fact. Id. at 323. If the moving party meets that burden,
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then the nonmoving party must use evidence cognizable under Rule 56 to demonstrate the
existence of a genuine issue of material fact. Id. at 324.
A genuine issue of material fact exists if a reasonable jury could return a verdict for the
nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1996).
“[U]nsubstantiated assertions,” “conclusory allegations,” and merely colorable factual bases are
insufficient to defeat a motion for summary judgment. See Hopper v. Frank, 16 F.3d 92, 97 (5th
Cir. 1994); Anderson, 477 U.S. at 249-50. In ruling on a summary judgment motion, a court may
not resolve credibility issues or weigh evidence. See Int’l Shortstop, Inc. v. Rally’s Inc., 939 F.2d
1257, 1263 (5th Cir. 1991). Furthermore, a court must assess the evidence, review the facts and
draw any appropriate inferences based on the evidence in the light most favorable to the party
opposing summary judgment. See Daniels v. City of Arlington, Tex., 246 F.3d 500, 502 (5th Cir.
2001); Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986).
b. Interpretation of Insurance Policies
The basis of this Court’s jurisdiction is diversity of citizenship. Thus, Louisiana law
applies. Under Louisiana law, insurance policies must be interpreted in accordance with the rules
for interpreting contracts in general. Cadwallader v. Allstate Ins. Co., 02–1637, p. 3 (La. 6/27/03);
848 So.2d 577, 580 (“An insurance policy is a contract between the parties and should be construed
using the general rules of interpretation set forth in the Louisiana Civil Code.”). Additionally, the
words and phrases used in an insurance policy are to be construed using their plain, ordinary, and
generally prevailing meaning. La. Civ. Code art. 2047 (“The words of a contract must be given
their generally prevailing meaning.”). Courts applying Louisiana law are not permitted to interpret
an insurance policy in a manner that would threaten to modify what is reasonably contemplated
by the policy’s unambiguous terms. La. Civ. Code art. 2046 (“When the words of a contract are
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clear and explicit and lead to no absurd consequences, no further interpretation may be made in
search of the parties’ intent.”).
When language in a contract is clear and unambiguous, it is enforced as written. Smith v.
Matthews, 611 So.2d 1377, 1379 (La. 1993). But, if there are ambiguous provisions they are
interpreted in favor of coverage and against the insurer who issued or wrote the policy. Id.
Additionally, “[e]ach provision in a contract must be interpreted in light of the other provisions so
that each is given the meaning suggested by the contract as a whole.” La. Civ. Code art. 2050.
c. Discussion
Louisiana uninsured motorist laws seek to ensure that an innocent motorist or passenger is
able to recover damages when they are the victim of an accident resulting from the negligence of
an uninsured motorist. Boudreaux v. Optimum Ins. Co., 854 F.2d 88, 90 (5th Cir. 1988) (quoting
Roger v. Estate of Moulton, 513 So.2d 1126, 1130 (La. 1987). Louisiana law also provides
direction for ranking UM policies when multiple policies are available.
[W]ith respect to other insurance available, the policy of insurance or endorsement
shall provide the following with respect to bodily injury to an injured party while
occupying an automobile not owned by said injured party, resident spouse, or
resident relative, and the following priorities of recovery under uninsured motorist
coverage shall apply:
(i) The uninsured motorist coverage on the vehicle in which the injured party was
an occupant is primary.
(ii) Should that primary uninsured motorist coverage be exhausted due to the extent
of damages, then the injured occupant may recover as excess from other uninsured
motorist coverage available to him. In no instance shall more than one coverage
from more than one uninsured motorist policy be available as excess over and above
the primary coverage available to the injured occupant.
La. Rev. Stat. 22:1295(1)(c)(ii). As held by the Fifth Circuit, when “the injured party is
occupying an automobile not owned by him[,] the [UM] coverage on the vehicle on which
the injured party was an occupant is primary.” Boudreaux, 854 F.2d at 91.
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Here, both GAAC’s and Zurich’s policies cover the truck in question. The issue is
which coverage is primary. Mr. Richardson was injured in a vehicle not owned by him.
Therefore, the question is which UM coverages are on the vehicle. It is clear, and
undisputed, that GAAC’s policy is on the vehicle, the truck in question.
Regarding the Zurich policy, the Court previously found that the Zurich policy
covers the truck and Mr. Richardson’s personal injury claims because Mr. Richardson was
“in the business” of his employer (to which Zurich provided the insurance policy) at the
time of the accident. R. Doc. 24. The Fifth Circuit has held that when an accident occurs
while the plaintiff is in the scope of his employment, the “employer’s insurance carrier is
also a primary carrier.” Boudreaux, 854 F.2d at 92. Zurich argues that its UM coverage
does not fall within the Louisiana statute because it is not “coverage on the vehicle.” Rather
Zurich argues that the vehicle and its occupants are only covered when they are under a
certain status, “in the business” of the employer.
The Court disagrees. Zurich may not use a limiting condition to argue that its policy
is not coverage on the vehicle, the truck involved in the accident. All insurance policies
have requirements for coverage. UM coverage in general has two limiting conditions such
that it is not triggered unless 1) the plaintiff is not at fault and rather the other driver is at
fault and 2) the at fault driver has no coverage or insufficient coverage. Likewise, these
limitations do not mean that the policy does not provide coverage on the vehicle. Therefore,
the Court finds that the Zurich policy provides coverage on the truck and is co-primary
with the GAAC policy.
Furthermore, because both policies contain language apportioning coverage based
on proportion of coverage, the Court will respect these provisions. Therefore, GAAC and
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Zurich will be responsible for their respective shares of any damages proven by Plaintiff
based on their respective coverage amounts.
IV.

CONCLUSION
For the foregoing reasons, IT IS ORDERED that Defendant Zurich’s Motion for

Summary Judgment, R. Doc. 33, is hereby DENIED.
IT IS FURTHER ORDERED that Defendant GAAC’s Motion for Summary Judgment,
R. Doc. 34, is hereby GRANTED.

New Orleans, Louisiana this 21st day of March, 2018.

________________________________
UNITED STATES DISTRICT JUDGE

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