Bitton v. State Farm Mutual Automobile Insurance Company

Filing 55

ORDER granting 35 Motion for Partial Summary Judgment; denying 39 Motion for Partial Summary Judgment; granting 40 Motion for Partial Summary Judgment. Signed by Judge Jay C. Zainey. (JRC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
MICHAEL BITTON

CIVIL ACTION

VERSUS

NO: 11-338

STATE FARM MUTUAL AUTOMOBILE
INSURANCE CO.

JUDGE JAY C. ZAINEY
MAGISTRATE CHASEZ

ORDER AND REASONS
The following motions are before the Court on the briefs
without oral argument:

Plaintiff’s Motion for Partial Summary

Judgment (Rec. Doc. 35); State Farm’s Motion for Partial Summary
Judgment as to Coverage (Rec. Doc. 39); and State Farm’s Motion
for Partial Summary Judgment as to Application of Damages Cap as
to Non-Pecuniary Damages (Rec. Doc. 40).
opposed.

All motions are

The motions, submitted for consideration on April 25,

2012, are before the Court on the briefs without oral argument.
I.

BACKGROUND
Plaintiff Michael Bitton is a resident of Listowel, Ontario,

Canada, who attends graduate school at Louisiana State
University.

In Listowel, Bitton lives with his parents, Steve

and Anna Bitton.

On May 15, 2010, Bitton was riding his bicycle

on State Highway 327, also known as River Road, when he was
struck by a 2005 Toyota Tundra truck driven by Marshall Hahn.
Hahn fled the scene leaving Bitton with life threatening

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injuries.

Bitton was transported to Baton Rouge General Medical

Center where he received life saving treatment.

Bitton’s medical

bills from the accident exceeded $204,045.78, and Bitton claims
to have sustained permanent disabling injuries as a result of the
accident.1

Bitton’s injury claim exhausted Hahn’s liability

limits ($50,000.00) and the limits ($15,000.00) of Bitton’s own
Louisiana Uninsured Motorist Coverage, purchased on the vehicle
that Bitton drove while away from home at college.2
Bitton filed this lawsuit to recover under the Family
Protection Coverage endorsement or “OPCF 44R,”3 which is part of

1

State Farm disputes whether Plaintiff has in fact sustained
permanent disabling injuries. (State Farm’s Statement of
Contested Facts, Rec. Doc. 45-1, ¶ 1).
2

The foregoing factual background was taken from Plaintiff’s
memorandum in support of his coverage motion and opposition to
State Farm’s coverage motion. (Rec. Docs. 35-1 & 43).
3

Ontario Policy Change Form 44R. The coverage available
pursuant to OPCF 44R is strictly optional and may be purchased in
addition to the mandatory coverages imposed by the law of Ontario.
Uninsured motorist coverage is mandatory in Ontario. But OPCF 44R
offers additional optional coverage to protect the insured and
other family members when an accident involves an inadequately or
underinsured driver. See Despotopoulos v. Jackson, [1991] O.J.
No. 1472. The Canadian insurance decisions reviewed by the Court
suggest that in Ontario uninsured motorist coverage and family
protection coverage are clearly recognized as two very distinct
types of coverage. Protection from an inadequately or
underinsured tortfeasor comes only with the payment of an extra
premium beyond that paid for mandatory uninsured motorist
coverage. Of course, in Louisiana we meld the two coverages
together, pay a single premium for them, and simply refer to
“uninsured” motorist coverage to designate coverage that applies
in both the un- and under- insured situations. See La. Rev. Stat.
Ann. § 22:1295(1)(a)(i) (West Supp. 2012).

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his father’s automobile insurance policy.4

State Farm issued

this policy to Mr. Bitton in the province of Ontario, in Canada,
where the Bittons reside.

Mr. Bitton’s 44R endorsement has a

$1,000,000.00 limit.
Less than a month after invoking jurisdiction in federal
court, State Farm moved to dismiss the lawsuit based on a forum
selection clause contained in Mr. Bitton’s Ontario policy.
Doc. 6).

(Rec.

State Farm argued that the forum selection clause

contained in the policy was mandatory such that Plaintiff’s suit
should be dismissed and re-filed in an Ontario court.

At the

initial status conference held on November 10, 2011, the Court
advised counsel for the parties that it would deny State Farm’s
motion with written reasons to follow.5
1.

(Rec. Doc. 27).

The Parties’ Cross Motions as to Coverage (Rec. Docs.

35 & 39)
The issue presented by the parties’ cross motions as to

4

The OPCF 44 endorsement, called Family Protection Coverage,
is optional coverage for Ontario drivers, though most have it.
Schneider v. Doe, [2001] 51 O.R.3d 90, at ¶ 4. The purpose of
Family Protection Coverage is to provide coverage for insured
parties who are injured and where the at-fault driver’s insurance
coverage is insufficient to meet the extent of the insured’s
injuries. Green v. State Farm Mut. Auto. Ins. Co., [2009] 75
C.C.L.I.4th 141, at ¶ 16.
5

The Court’s reasons for denying State Farm’ motion are
simple: The Court was not persuaded that the forum selection
language that State Farm relied upon was mandatory so as to render
this an invalid venue. Moreover, the Court was not persuaded that
the Insurance Act’s more potent language should control in lieu of
the more permissive policy language itself.

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coverage is whether certain exclusionary language contained in
the Ontario policy voids coverage as to one of the two avenues in
which Bitton seeks “dependent relative” coverage under the Family
Protection Coverage of his father’s policy.6

In particular, OPCF

44R § 1.2(c) defines a “dependent relative” as “a relative of the
named insured or of his or her spouse, who resides in the same
dwelling premises as the named insured.”
6).

(Rec. Doc. 35-2, Exh.

But § 1.2(c) applies “only where the person injured or

killed is not an insured as defined in the family protection
coverage of any other policy of insurance or does not own, or
lease for more than 30 days, an automobile which is licensed in
any jurisdiction of Canada where family protection coverage is
available.”
Exh. 6).

(OPCF 44R § 1.2 (emphasis added), Rec. Doc. 35-2,

OPCF 44R defines family protection coverage as “the

insurance provided by this change form and any similar indemnity
provided under any other contract of insurance.”
6

(OPCF 44R § 1.4

Again, the policy at issue is Plaintiff’s father’s policy
so Michael Bitton is not a named insured. The policy provides,
however, coverage to a “dependent relative,” a term that the OPCF
44R endorsement specifically defines. In this lawsuit Bitton is
relying upon two aspects of the dependent relative definition, one
involving financial dependence on the named insured, and another
which simply applies to any relative of the named insured, who
resides in the same dwelling as the named insured (regardless of
financial dependence). It is the latter aspect of “dependent
relative” coverage, which presents a question of pure law, that is
at issue in these motions. Whether Bitton can claim Family
Protection Coverage as a financial dependent is not at issue at
this time. Plaintiff suggests that adjudication of the issue of
financial dependence will require extensive discovery and likely a
trial on the merits. (Plaintiff’s reply, Rec. Doc. 54, at 1).

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(emphasis added)).

State Farm’s contention is that Plaintiff’s

$15,000.00 Louisiana UM policy constitutes “similar indemnity”
thereby depriving Michael Bitton of dependent relative status
under § 1.2(c).
Plaintiff does not dispute that the law of Ontario, Canada
governs the interpretation of the policy.

(Plaintiff’s

memorandum in support, Rec. Doc. 35-1, at 1).

Moreover, the

parties are in agreement that the rules of contract
interpretation applicable in Ontario are in accord with the rules
of contract interpretation in Louisiana.

(Plaintiff’s memorandum

in support, Rec. Doc. 35-1, at 5; State Farm’s memorandum in
support, Rec. Doc. 39-1, at 6).
Insurance policies, like other contracts, are to be
interpreted based on the plain and ordinary meaning of the
language used therein absent any special or defined meanings set
out in the contract.
[2006] 82 O.R.3d 490.

RBC Travel Ins. Co. v. Aviva Can. Ltd.,
As a general rule, clauses in an insurance

policy providing coverage are interpreted liberally or broadly in
favor of the insured and those clauses excluding coverage are
construed strictly against the insurer.

Chilton v. Co-Operators

Gen. Ins. Co., [1997] 32 O.R.3d 161, at ¶ 19 (citing Lloyd’s
London Non Marine Under. v. Chu, [1977] 2 S.C.R. 400).
In Ontario, the basic automobile insurance policy and
optional endorsements are comprised of standard forms drafted by

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the insurance industry and approved by the Commissioner of
Insurance.

Id. at ¶¶ 11, 25.

resolved against the insurer.

Any ambiguities are therefore
Id. at ¶ 25.

The ambiguity

principle resolves conflicts between two reasonable but differing
interpretations of the policy.

Id. at ¶ 26.

of the policy language should be respected.

The plain meaning
Ambiguities should

not be judge-made--they should be apparent from a reasonable
reading of the policy.

RBC Travel, 82 O.R.3d 490, at ¶ 10.

It

might be appropriate to consider the reasonable expectations of
the parties when an ambiguity must be resolved.
O.R.3d 161, at ¶ 28.

See Chilton, 32

But any attempt to delve into the intent of

the parties to an Ontario auto insurance policy is rather
fictional because the policy is based on standard forms, the
terms of which are not subject to negotiation.
O.R.3d 90 at ¶ 13.

See Schneider, 51

The driving public can either accept or

reject the coverage that is available but it cannot modify the
words of the policy.

Id.

Turning now to the instant case, Plaintiff’s ability to
qualify as a “dependent relative” under § 1.2(c) of OPCF 44R
depends on whether or not Michael Bitton is an insured person as
defined in the family protection coverage of any other policy of
insurance.7

“Family Protection Coverage” is the formal name that

7

The exclusionary language that constrains § 1.2(c) also
encompasses the situation where the injured person owns, or
leases for more than 30 days, an automobile which is licensed in

6

the Canadian insurance industry has given to the underinsured
motorist coverage provided by OPCF 44R, and it is undisputed that
Michael Bitton is not an insured person under any other Canadian
auto policy, much less one including another OPCF 44R option.
But OPCF 44R expressly defines the term “family protection
coverage” so as to be broader than the specific Family Protection
Coverage provided by OPCF 44R.

For purposes of determining

“dependent relative” status under § 1.2(c) “family protection
coverage” means the insurance provided by OPCF 44R and “any
similar indemnity provided under any other contract of
insurance.”

Thus, dependent relative status in this case turns

on whether Michael Bitton’s $15,000.00 Louisiana UM policy
constitutes “similar indemnity” to the coverage provided by OPCF
44R.
State Farm, as the proponent of the “similar indemnity”
exclusion, advises that a Canadian court of appeal has not
specifically considered the meaning of the phrase “similar
indemnity.”
at 11).

(State Farm memorandum in support, Rec. Doc. 39-1,

But State Farm does direct the Court’s attention to

Gurniak v. Nordquist, [2003] 2 S.C.R. 652, a decision issued by
Canada’s highest court, wherein it considered the meaning of the

any jurisdiction of Canada where family protection coverage is
available. (OPCF 44R § 1.2, Rec. Doc. 35-2, Exh. 6). This
second aspect of the exclusionary language is not at issue in this
case.
7

descriptor “similar” for purposes of applying § 25 of the
Insurance Act of British Columbia.

Section 25 of the Act allowed

for tort recovery for motor vehicle injuries subject to a
deduction for similar benefits received under other plans or
policies.

The plaintiffs in Gurniak had already received various

benefits under Quebec’s no fault insurance scheme.
noted that “similar” does not mean “identical.”

The majority

Id. at ¶ 31.

Further, “similar” does not refer to the system of law in which
the benefits originate, the overall regime under which they are
administered, or the legal process by which they are claimed.
Id.

For purposes of § 25 of the Insurance Act, “similar” simply

means that the benefits in question must be of the same general
nature or character as the benefits described in the analogous
sections of British Columbia’s Insurance Act.

Id.

Meanwhile Plaintiff directs the Court’s attention to the
decision in Graham v. Ontario (Superintendent, Financial Services
Commission), [2010] O.J. No. 5602, which was issued by a trial
court in Ontario.

In Graham, the presiding judge considered

whether the Family Protection Endorsement available in Nova
Scotia constituted “similar indemnity” so as to trigger the §
12(c) exclusion in an Ontario OPCF 44R.8

8

The court began by

Graham specifically dealt with the second aspect of the §
12(c) exclusionary language that is not at issue in this case.
See note 7, supra. In Graham, the plaintiff owned a car that was
registered in Nova Scotia thereby potentially triggering the
second aspect of the § 12(c) exclusionary language. The trial

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recognizing that two coverages can be similar without being
identical.

Id. at ¶ 21.

The court concluded that the family

protection endorsements of Ontario and Nova Scotia were not
similar because the version available in Nova Scotia did not
apply to accidents involving unidentified drivers, whereas in
Ontario it did.

Id.

The Graham plaintiff had been injured by an

unidentified hit-and-run driver so the coverage that might have
been available for the plaintiff to purchase in Nova Scotia would
not have covered her injuries.

Id.

To be sure, UM coverage under Louisiana law and Family
Protection Coverage under Ontario law are not “identical”
coverages but of course they need not be for purposes of the §
12(c) exclusion because similarity is not nearly as high a hurdle
to clear as being identical.

But the problem with the phrase

“similar indemnity,” as Plaintiff points out in his ambiguity
argument, is that the term “similar” can encompass limitless
degrees of likeness that fall anywhere short of being identical.
Regardless of how one defines the term “similar,” similarity is a
subjective determination subject to differences of opinion.
For instance, State Farm is certainly correct in its
assertion that the coverages provided by OPCF 44R and Plaintiff’s

court’s consideration of the phrase “similar indemnity” in Graham
is still relevant to this case, even if not binding, because the
“family protection coverage” definition from OPCF 44R § 1.4
applies to both § 12(c) exclusions.

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Louisiana UM policy are of the same general nature or character
because both provide extra protection when the tortfeasor’s
liability limits are insufficient to pay for damages sustained in
a motor vehicle accident.

But the coverages are also subject to

many differences one of which is the fact that OPCF 44R is a
completely optional coverage that the insured must affirmatively
elect to purchase whereas underinsured coverage in Louisiana
comes bundled with mandatory liability insurance unless the
insured affirmatively rejects it.

Thus, the subjective

determination of similarity will turn on which characteristics
one chooses to ignore.

A given coverage situation can arguably

involve a “similar indemnity” situation, without changing any
facts but again simply by arbitrarily choosing to ignore certain
characteristics of the policies.

If enough characteristics are

ignored virtually any another other type of insurance can
constitute “similar indemnity.”
Based on the foregoing the Court is persuaded that this case
presents a situation where there is a conflict between two
reasonable but differing interpretations of the policy.

Simply,

the term “similar indemnity” is ambiguous under the facts of this
case.

It therefore must be interpreted against the insurer,

State Farm.
Accordingly, Michael Bitton can obtain dependent relative
status under § 1.2(c).

State Farm’s motion for partial summary

10

judgment is DENIED and Plaintiff’s is GRANTED.
2.

Applicability of the Canadian Damages Cap

State Farm moves for partial summary judgment on the
application of Canada’s limitation or cap on non-pecuniary
damages.

The Family Protection Coverage endorsement provides:

“In determining the amount that an eligible claimant is entitled
to recover from the inadequately insured motorist, issues of
quantum are to be determined by the law of Ontario, and issues of
liability shall be decided in accordance with the law of the
place where the accident occurred.”

(Rec. Doc. 40-4, State Farm

Exh. A, § 10 (emphasis added)).
Plaintiff concedes that the damages cap is well-established
jurisprudential law in Canada.
memorandum in support, at 2).

(Rec. Doc. 44, Plaintiff’s
But Plaintiff contends that under

the plain language of § 10 of OPCF 44R, the damages cap is not
triggered because Plaintiff is trying to recover from State
Farm–-not an “inadequately insured motorist.”
This argument is not persuasive because when seeking
coverage under OPCR 44R the eligible claimant will always be
pursuing his insurer.

But for the other driver being

“inadequately insured,” the claimant would not be making a claim
against the insurer.

In other words, a coverage claim under OPCF

44R will never be brought against the other inadequately insured
driver.

Thus, Plaintiff’s argument that the cap does not apply
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in this case because the actual defendant is not an inadequately
insured driver is unpersuasive.
Alternatively, Plaintiff argues that if the Court finds the
damages cap to be applicable then choice of law rules mandate
that the Court apply Louisiana law.
unpersuasive.

This argument is likewise

Plaintiff is not suing the tortfeasor in this case

but rather his father’s underinsured motorist insurer.

As

Plaintiff himself points out, Family Protection Coverage is a
variety of first-party coverage.
Doc. 44, at 3).

(Plaintiff’s opposition, Rec.

If Plaintiff can establish himself as an

“eligible claimant” under OPCF 44R then he will have standing to
sue to enforce his contractual rights under his father’s policy.
The contract between the parties clearly requires that quantum be
determined under the laws of Ontario.

Plaintiff has already

recognized that the laws of Ontario govern interpretation of the
policy.

If the Court had granted State Farm’s motion to dismiss

and forced Plaintiff to refile this lawsuit in an Ontario court
then there would have been no question as to whether the damages
cap applies.

Plaintiff cannot alter the parties’ contractual

agreement in so substantive a manner simply because he has been
allowed to pursue his claim in this venue.

State Farm’s motion

for partial summary judgment as to the damages cap is GRANTED.
Accordingly, and for the foregoing reasons;
IT IS ORDERED that Plaintiffs’ Motion for Partial Summary

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Judgment (Rec. Doc. 35) is GRANTED;
IT IS FURTHER ORDERED that State Farm’s Motion for Partial
Summary Judgment as to Coverage (Rec. Doc. 39) is DENIED;
IT IS FURTHER ORDERED that State Farm’s Motion for Partial
Summary Judgment as to Application of Damages Cap as to NonPecuniary Damages (Rec. Doc. 40) is GRANTED.
July 26, 2012
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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