Duncan v. Simon et al
Filing
34
ORDER granting 10 Motion for Partial Summary Judgment; denying 16 Motion for Partial Summary Judgment; denying 18 Motion for Summary Judgment Signed by Chief District Judge Louis Guirola, Jr on 06/25/2015 (Guirola, Louis)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
TEAGUE A. DUNCAN
PLAINTIFF
v.
CAUSE NO. 1:14CV332-LG-JCG
GABRIEL J. SIMON, II; USAA CASUALTY
INSURANCE COMPANY; and LM GENERAL
INSURANCE COMPANY
DEFENDANTS
MEMORANDUM OPINION AND ORDER CONCERNING
THE PARTIES’ MOTIONS FOR SUMMARY JUDGMENT
BEFORE THE COURT are the Motion for Partial Summary Judgment [10]
filed by LM General Insurance Company, the Motion for Partial Summary
Judgment [16] filed by Teague A. Duncan, and the Motion for Summary Judgment
[18] filed by USAA Casualty Insurance Company. The Motions filed by LM General
and Duncan have been fully briefed by the parties, but USAA did not file a reply in
support of its Motion. After reviewing the submissions of the parties, the record in
this matter, and the applicable law, the Court finds that the Motion for Partial
Summary Judgment filed by LM General should be granted. The Motion for Partial
Summary Judgment filed by Duncan and the Motion for Summary Judgment filed
by USAA are denied.
FACTS
On February 7, 2014, Duncan suffered serious injuries in a single-vehicle
automobile accident that occurred on Interstate 59 in Pearl River County,
Mississippi. When the accident occurred, Duncan was a passenger in a vehicle
owned and operated by Gabriel J. Simon, II. It is undisputed that the accident was
caused solely by the negligence of Simon.
Simon’s vehicle is insured by a USAA Casualty Insurance Company policy
providing $25,000 in liability coverage and $25,000 in underinsured motorists
(“UM”) coverage. The USAA policy provides:
The limits of liability under [UM bodily injury] coverage (each person
and each accident) . . . shall be reduced by all sums paid because of the
[bodily injury] . . by or on behalf of the owner or operator of the
uninsured motor vehicle. This includes all sums paid under Part A.
(USAA’s Mot., Ex. B at 12, ECF No. 18-2). Part A of the policy provides liability
coverage. (Id. at 4).
Duncan is the named insured on a LM General policy providing $100,000 in
UM coverage. (LM’s Mot., Ex. C at LM-050, ECF No. 10-3). Duncan is also an
insured under his father’s LM General policy, which insures three vehicles and
provides $250,000 in UM coverage. (LM’s Mot., Ex. D at LM-002, ECF No. 10-4).
Both LM General policies at issue provide:
We will pay, in accordance with Va. Code Ann. Section 38.2-2206,
damages which an “insured” . . . is legally entitled to recover from the
owner or operator of an . . . “underinsured motor vehicle” because of:
1. “Bodily injury” sustained by an “insured” and caused by an accident
....
(LM’s Mot., Ex. C at LM-075, ECF No. 10-3; LM’s Mot., Ex. D at LM-027, ECF No.
10-4). Both LM General policies also contain the following clause:
B. Any damages payable under this coverage:
1. Shall be reduced by all sums paid because of “bodily injury” or
“property damage” by or on behalf of persons or organizations who may
be legally responsible.
(LM’s Mot., Ex. C at LM-076, ECF No. 10-3; LM’s Mot., Ex. D at LM-028, ECF No.
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10-4). Duncan’s father’s policy, which insures three vehicles, contains the following
clause:
LIMIT OF LIABILITY
A. The Limit of Bodily Injury Liability shown in the Declarations for
each person for Uninsured Motorists Coverage is our maximum limit of
liability for all damages, including damages for care, loss of services or
death, arising out of “bodily injury” sustained by any one person in any
one accident . . . . This is the most we will pay regardless of the
number of:
1. “Insureds”;
2. Claims made; or
3. Vehicles or premiums shown in the Declarations.
(LM’s Mot., Ex. D at LM-028, ECF No. 10-4). Stacking of vehicles is also prohibited
by notices contained on the declarations page of the policy and on the policy notice
referred to as “Form C.” (LM’s Mot., Ex. D at LM-002, LM-043, ECF No. 10-4).
Duncan filed this lawsuit against Simon, USAA, and LM General, seeking
payment for damages he suffered in the February 7, 2014, accident. He also seeks
extra-contractual and punitive damages from LM General. Simon has not made an
appearance in this lawsuit, but USAA has filed a Motion for Summary Judgment,
and Duncan and LM General have each filed Motions for Partial Summary
Judgment. The issues presented by these three Motions are: (1) whether Duncan is
entitled to recover UM coverage under the USAA policy; (2) whether the amount of
UM coverage provided by the USAA policy should be considered when determining
the extent to which Simon was underinsured under Duncan’s LM General policy;
and (3) whether the three vehicles insured by Duncan’s father’s policy can be
stacked to increase the amount of UM coverage provided under that policy.
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DISCUSSION
A motion for summary judgment may be filed by any party asserting that
there is no genuine issue of material fact and that the movant is entitled to prevail
as a matter of law on any claim. Fed. R. Civ. P. 56. The movant bears the initial
burden of identifying those portions of the pleadings and discovery on file, together
with any affidavits, which it believes demonstrate the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the movant
carries its burden, the burden shifts to the non-movant to show that summary
judgment should not be granted. Id. at 324-25. The non-movant may not rest upon
mere allegations or denials in its pleadings but must set forth specific facts showing
the existence of a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 256-57 (1986).
I. WHETHER DUNCAN IS ENTITLED TO UM COVERAGE UNDER THE
USAA POLICY
In its Motion for Summary Judgment, USAA argues that Duncan’s claims
filed should be dismissed, because Duncan is not entitled to UM coverage under the
USAA policy. The parties agree that Mississippi law should be applied when
interpreting the USAA policy. Pursuant to the plain language of the USAA policy,
any liability payment made under the policy would offset the UM coverage
available under the policy. (See USAA’s Mot., Ex. B at 12, ECF No. 18-2). This
offset provision is enforceable under Mississippi law. See Jeffcoat v. Amer. Nat’l
Prop. & Cas. Co., 919 So. 2d 982, 986 (¶17) (Miss. Ct. App. 2005); see also State
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Farm Mut. Auto. Ins. Co. v. Kuehling, 475 So. 2d 1159, 1163 (Miss. 1985) (reversed
on other grounds).
In his response to USAA’s Motion, Duncan does not dispute that he would be
unable to recover under both the liability and UM portions of the policy. However,
Duncan asserts that USAA has not made any payment under the policy at this
time. Although USAA tendered the policy limits under the portion of its policy
providing liability coverage, Duncan states that he did not accept the offer because
settlement with USAA would impair Duncan’s right to seek benefits from USAA’s
insured and others. USAA did not file a reply to Duncan’s response, and thus, it
has not disputed Duncan’s argument that he has not been paid pursuant to the
USAA policy. The Court cannot award USAA any form of credit for making a
liability payment under the policy, where no such payment has been made. As a
result, the Court finds that USAA’s Motion for Summary Judgment is premature
and must be denied at this time.
II. WHETHER THE AMOUNT OF UM COVERAGE PROVIDED BY THE
USAA POLICY SHOULD BE CONSIDERED WHEN DETERMINING THE
EXTENT TO WHICH SIMON WAS UNDERINSURED UNDER DUNCAN’S
LM GENERAL POLICY
Duncan and LM General have filed cross-motions seeking partial summary
judgment regarding the amount of UM coverage provided under Duncan’s LM
General policy. Duncan is a Virginia resident, and the parties do not dispute that
Virginia law applies to the interpretation of Duncan’s policy. In the policy, LM
General agrees to pay UM benefits in accordance with Va. Code Ann. § 38.2-2206,
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which provides:
A motor vehicle is “underinsured” when, and to the extent that, the
total amount of bodily injury and property damage coverage applicable
to the operation or use of the motor vehicle and available for payment
for such bodily injury or property damage . . . is less than the total
amount of uninsured motorist coverage afforded any person injured as
a result of the operation or use of the vehicle.
Va. Code Ann. § 38.2-2206(B). The Virginia Supreme Court has held that “in
applying § 38.2-2206(B), a passenger in a single vehicle accident is not entitled to
include the [UM] coverage contained in the tortfeasor’s automobile liability
insurance policy when determining the extent to which the tortfeasor’s vehicle was
underinsured.” Trisvan v. Agway, 492 S.E.2d 628, 630 (Va. 1997). Thus, a
passenger cannot stack his own UM coverage with the UM coverage contained in
the tortfeasor’s policy in order to increase the amount of UM coverage payable
under the passenger’s policy. See id.
For example, in Trisvan, the tortfeasor’s policy provided up to $25,000 in
liability coverage and up to $25,000 in UM coverage, while the passenger was
insured under a policy providing up to $100,000 in UM coverage. Id. at 628. The
passenger argued that the $100,000 in UM coverage available under his own policy
should be combined with the $25,000 limits of UM coverage contained in the
tortfeasor’s policy, and then the total figure of $125,000 should be compared with
the tortfeasor’s $25,000 liability limits, leaving $100,000 recoverable under the
passenger’s policy. Id. The Virginia Supreme Court disagreed, holding that the
tortfeasor’s $25,000 liability limits should be subtracted from the passenger’s
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$100,000 limits, leaving $75,000 in UM coverage available under the passenger’s
policy, because only one vehicle was involved in the accident. Id. at 630.
Duncan attempts to recast Trisvan as a decision that concerned which
insurer is entitled to an offset, but Trisvan actually considered the proper
calculation for determining the extent to which a vehicle is underinsured. See id.
The court held that the tortfeasor’s UM limits should not be considered in this
analysis. Id. One of the considerations behind the decision was that “[p]olicy
provisions prohibiting recovery under both the liability and [UM] portions in a
single vehicle accident have been upheld on both statutory and public policy
grounds” in other jurisdictions. Id. Thus, the Trisvan court contemplated the exact
scenario presented by Duncan’s lawsuit– a situation in which the tortfeasor’s
insurance policy prohibits an insured from recovering under both the liability and
UM sections of the policy. See id. The Trisvan court reasoned that the tortfeasor’s
vehicle could never be considered underinsured if its liability limits are subtracted
from its UM limits, because the Virginia UM statute prohibits UM coverage from
exceeding the amount of liability coverage offered under a single policy. Id. at 629.
Since the present case arose out of a single-vehicle accident, the Trisvan
decision is binding precedent. To determine the extent to which Simon was
underinsured, this Court must subtract Simon’s $25,000 in liability coverage from
Duncan’s $100,000 in UM coverage, leaving $75,000 in coverage available under
Duncan’s LM General policy. LM General’s Motion for Partial Summary Judgment
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is granted with respect to this issue, and Duncan’s Motion is denied.
III. WHETHER THE THREE VEHICLES INSURED BY DUNCAN’S
FATHER’S POLICY CAN BE STACKED TO INCREASE THE AMOUNT OF
UM COVERAGE PROVIDED UNDER THAT POLICY
Duncan and LM General have also filed cross-motions seeking partial
summary judgment concerning whether stacking is permitted under Duncan’s
father’s LM General policy. The parties do not dispute that Virginia law applies to
the policy. The Virginia Supreme Court has held that “it is now the rule in Virginia
that the stacking of UM coverage will be permitted unless clear and unambiguous
language exists on the face of the policy to prevent such multiple coverage.”
Goodville Mut. Cas. Co. v. Borror, 275 S.E.2d 625, 627 (Va. 1981); see also Dooley v.
Hartford Accident & Indem. Co., 716 F.3d 131, 137 (4th Cir. 2013). In Goodville,
the court held that an automobile policy unambiguously prohibited stacking even
though two vehicles were insured and two separate premiums were charged for UM
coverage. Id. at 628.
The LM General policy at issue in the present case provides:
LIMIT OF LIABILITY
A. The Limit of Bodily Injury Liability shown in the Declarations for
each person for Uninsured Motorists Coverage is our maximum limit of
liability for all damages, including damages for care, loss of services or
death, arising out of “bodily injury” sustained by any one person in any
one accident . . . . This is the most we will pay regardless of the
number of:
1. “Insureds”;
2. Claims made; or
3. Vehicles or premiums shown in the Declarations.
(LM’s Mot., Ex. D at LM-028, ECF No. 10-4). The Declarations page states: “Please
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note: Coverages and limits shown are specific to a covered vehicle. Regardless of
the number of vehicles listed, Bodily Injury Limits in Part C of this Declarations
page may not be aggregated or ‘stacked’ to increase your overall insured limits.”
(Id. at LM-002). The Declarations page provides the following limits of coverage:
COVERAGE
LIMITS
PREMIUM PER VEHICLE
VEH 1
VEH 2
VEH 3
$243
$239
$578
A. Liability
Bodily Injury
$ 250,000
Each Person
$ 500,000
Each Accident
$ 100,000
Each Accident
$167
$153
$548
Uninsured Motorists
$ 250,000
Each Person
$33
$30
$112
Bodily Injury
$ 500,000
Each Accident
Property Damage
$ 50,000
Each Accident
Property Damage
C. Uninsured Motorists
(Id.) (emphasis added).
In his Response filed in opposition to LM General’s Motion, Duncan argues:
“All three vehicles have UM coverage, since a premium was paid for each vehicle for
UM coverage. Since coverages are specific to a covered vehicle, each covered vehicle
for UM coverage would have UM coverage specific to that vehicle.” (Pl.’s Resp. at
12, ECF No. 15). Duncan asserts that the sentence in the Declarations that
prohibits stacking creates ambiguity, because it contradicts the preceding sentence
providing that “[c]overage and limits are specific to a covered vehicle.” (LM’s Mot.,
Ex. D at LM-002, ECF No. 10-4). Duncan further argues that the prohibition of
stacking only applies to the $500,000 each accident limit, because the $500,000
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each accident limit is placed next to “Bodily Injury”under Coverage C in the
Declarations. Duncan claims, “At a minimum, the [D]eclarations page must be
found to be ambiguous and interpreted in favor of Mr. Duncan.” (Pl.’s Resp. at 14,
ECF No. 15).
The Virginia Supreme Court has provided the following guidance for
interpreting insurance policies:
It is axiomatic that when the terms in a contract are clear and
unambiguous, the contract is construed according to its plain meaning.
Words that the parties used are normally given their usual, ordinary,
and popular meaning. No word or clause in the contract will be
treated as meaningless if a reasonable meaning can be given to it, and
there is a presumption that the parties have not used words
needlessly. Courts interpret insurance policies, like other contracts, in
accordance with the intention of the parties gleaned from the words
they have used in the document. Each phrase and clause of an
insurance contract should be considered and construed together and
seemingly conflicting provisions harmonized when that can be
reasonably done, so as to effectuate the intention of the parties as
expressed therein . . . . Where two constructions are equally possible,
that most favorable to the insured will be adopted. Language in a
policy purporting to exclude certain events from coverage will be
construed most strongly against the insurer.
TravCo Ins. Co. v. Ward, 736 S.E.2d 321, 325 (Va. 2012) (internal quotation marks
and citations omitted). Courts are required to “construe insurance policies in their
entirety and harmonize all provisions when reasonably possible.” Dooley, 716 F.3d
at 137 (citing Va. Farm Bureau Mut. Ins. Co. v. Williams, 677 S.E.2d 299, 302 (Va.
2009)).
The only reasonable interpretation of the Declarations page in the LM
General policy at issue is that the $250,000 each person policy limit refers to UM
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bodily injury coverage. There is no other type of coverage to which this limit could
refer. The prohibitions of stacking included on the Declarations page of the policy
and in the limit of liability section of the UM coverage form clearly state that the
bodily injury limits of the three vehicles cannot be stacked to increase UM coverage,
regardless of the number of vehicles covered or premiums charged. The Virginia
Supreme Court has held that an insurer may prohibit stacking even while charging
separate premiums for UM coverage. See Goodville, 275 S.E.2d at 628. As a result,
the LM General policy, when read in its entirety, unambiguously prohibits stacking,
and Duncan can recover no more than $250,000 in UM coverage under his father’s
policy. LM General’s Motion for Partial Summary Judgment as to this issue is
granted, and Duncan’s Motion for Partial Summary Judgment is denied.
CONCLUSION
For the foregoing reasons, the Court finds that USAA’s Motion for Summary
Judgment and Duncan’s Motion for Partial Summary Judgment should be denied.
LM General’s Motion for Partial Summary Judgment is granted. The maximum
amount of coverage that Duncan can recover under his own LM General policy is
$75,000, and the maximum amount of coverage he can recover under his father’s
policy is $250,000.
IT IS, THEREFORE, ORDERED AND ADJUDGED that the Motion for
Partial Summary Judgment [10] filed by LM General Insurance Company is
GRANTED.
IT IS, FURTHER, ORDERED AND ADJUDGED that the Motion for
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Partial Summary Judgment [16] filed by Teague A. Duncan, and the Motion for
Summary Judgment [18] filed by USAA Casualty Insurance Company are
DENIED.
SO ORDERED AND ADJUDGED this the 25th day of June, 2015.
s/
Louis Guirola, Jr.
LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE
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