Allied Property and Casualty Insurance Company v. Bourisaw
MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that the Motion for Summary Judgment filed by Third-Party Defendant State Farm Mutual Automobile Insurance Company (Doc. 31) is GRANTED. IT IS FURTHER ORDERED that Third-Party Plaintiff Karen Bourisaw's Third-Party Claim against Third-Party Defendant State Farm Mutual Automobile Insurance Company is DISMISSED. Signed by Magistrate Judge Shirley P. Mensah on 11/16/17. (LGK)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
ALLIED PROPERTY AND CASUALTY
Third Party Plaintiff,
STATE FARM MUTUAL AUTOMOBILE
Third Party Defendant.
Case No. 4:16-cv-01486-SPM
MEMORANDUM AND ORDER
This matter is before the Court on the Motion for Summary Judgment filed by Third-Party
Defendant State Farm Mutual Automobile Insurance Company (“State Farm”). (Doc. 31). State
Farm seeks summary judgment on the claim for a declaratory judgment brought against it by ThirdParty Plaintiff Karin Bourisaw (“Bourisaw”) and on State Farm’s own counterclaim for a
declaratory judgment against Bourisaw. Bourisaw has not filed any response. 1 The parties have
Bourisaw’s response to the motion for summary judgment was initially due on September 28,
2017. (Doc. 27). On September 29, 2017, the Court granted Bourisaw until October 13, 2017 to
file a response. (Doc. 32). Bourisaw did not file a response.
consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28
U.S.C. § 636(c). (Doc. 24). For the reasons stated below, the Court will grant State Farm’s motion
for summary judgment.
FACTUAL BACKGROUND 2
The facts are not in dispute. On July 17, 2014, Bourisaw was injured in a car accident while
a passenger in a vehicle operated by Penny Carlyon. The vehicle in which Bourisaw was a
passenger was rear-ended by a vehicle operated by a driver (the “tortfeasor”), who is alleged to be
at fault for the accident. At the time of the accident, the tortfeasor had liability insurance with a
limit in the amount of $100,000 per person. Bourisaw recovered the full limit of the tortfeasor’s
insurance policy. Two other insurance policies are also relevant. Carlyon had a policy of insurance
on her vehicle with Allied Property and Casualty Insurance Company (the “Allied Policy”), with
a limit for Underinsured Motorist Coverage in the amount of $100,000 per person. In addition,
Bourisaw had a policy of insurance with State Farm, Policy Number 407 0142-D01-13C (the
“State Farm Policy”), with a limit for Underinsured Motor Vehicle Coverage in the amount of
$100,000 per person.
The instant lawsuit began as a dispute between Allied and Bourisaw over whether
Bourisaw was entitled to underinsured motor vehicle coverage under the Allied Policy. The Court
has already granted summary judgment in Allied’s favor on the claims relevant to that dispute,
finding that Bourisaw was not entitled to coverage under the Allied Policy because the tortfeasor’s
vehicle was not an “underinsured motor vehicle” as defined in the Allied Policy. (Doc. 30).
Unless otherwise specified, these facts are taken from State Farm’s Statement of Uncontroverted
Material Facts in Support of Summary Judgment, Doc. 31-2, to which Bourisaw has not filed a
On October 16, 2016, Bourisaw filed a third-party complaint against State Farm, seeking
a declaratory judgment that she is entitled to underinsured motor vehicle coverage under the State
Farm Policy. On March 27, 2017, State Farm filed a counterclaim, seeking a declaratory judgment
stating that Bourisaw is not entitled to underinsured motor vehicle coverage under the State Farm
Policy. State Farm now moves for summary judgment on Bourisaw’s third-party complaint and on
its counterclaim against Bourisaw.
The standards applicable to summary judgment motions are well settled. Summary
judgment is proper “if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). See also Hill v.
Walker, 737 F.3d 1209, 1216 (8th Cir. 2013). “The movant ‘bears the initial responsibility of
informing the district court of the basis for its motion’ and must identify ‘those portions of [the
record] . . . which it believes demonstrate the absence of a genuine issue of material fact.’”
Progressive Cas. Ins. Co. v. Morton, 140 F. Supp. 3d 856, 860 (E.D. Mo. 2015) (quoting Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the movant meets its burden, then the burden shifts
to the nonmovant to submit evidentiary materials that “designate specific facts showing that there
is a genuine issue for trial.” Celotex, 477 U.S. at 324 (quotation marks omitted).
In its motion for summary judgment, State Farm argues that Bourisaw is not entitled to
underinsured motorist coverage under the State Farm Policy because the tortfeasor’s vehicle is not
an “underinsured motor vehicle” under the terms of the State Farm Policy or the applicable law.
A. Choice of Law
The Court begins with a discussion of what state’s law applies to this dispute. State Farm
argues that Illinois law applies, and Bourisaw has filed nothing to indicate that the law of any other
state applies. The Court agrees that Illinois law applies.
The Court’s review of the State Farm Policy reveals that it contains a choice-of-law
provision stating, “Illinois will control in the event of any disagreement as to the interpretation and
application of any provision in the policy . . .” State Farm Policy Booklet, General Terms ¶ 14(a),
Doc. 22-3, at 20. 3 However, State Farm does not mention that choice-of-law provision or rely on
that provision in making its argument that Illinois law applies; instead, State Farm relies on the
choice-of-law principles that apply in the absence of a choice-of-law provision. It is unclear
whether State Farm’s decision not to mention this provision was merely an oversight, or whether
there is some reason why that provision does not apply (or would not be enforceable) in this case.
Regardless, even assuming arguendo that the Illinois choice-of-law provision in the State Farm
Policy does not require the application of Illinois law, the Court agrees with State Farm that the
relevant choice-of-law principles would require the application of Illinois law.
Where, as here, federal jurisdiction is based on diversity of citizenship, the district court
applies the choice of law rules of the state in which it sits. Winter v. Novartis Pharms. Corp., 739
F.3d 405, 410 (8th Cir. 2014); Heating & Air Specialists, Inc. v. Jones, 180 F.3d 923, 928 (8th Cir.
1999). “Missouri has adopted sections 188 and 193 of the Restatement (Second) Conflict of Laws
(1971) for determining choice of law issues as they relate to insurance contracts.” Accurso v. Amco
Ins. Co., 295 S.W.3d 548, 551 (Mo. Ct. App. 2009) (citing Hartzler v. Am. Fam. Mut. Ins. Co.,
881 S.W.2d 653, 655 (Mo. Ct. App. 1994)). Section 188 provides that in the absence of an effective
Page numbers refer to the numbering in the electronically filed document.
choice of law by the parties, the law that applies is that of the state that “has the most significant
relationship to the transaction and the parties under the principles stated in § 6.” Restatement
(Second) of Conflict of Laws, § 188(1). “[T]he contacts to be taken into account in applying the
principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting,
(b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the
subject matter of the contract, and (e) the domicil, residence, nationality, place of incorporation
and place of business of the parties.” Id. § 188(2). Section 193 provides that the rights created by
an insurance contract “are determined by the local law of the state which the parties understood
was to be the principal location of the insured risk during the term of the policy, unless with respect
to the particular issue, some other state has a more significant relationship under the principles
stated in § 6 to the transaction and the parties, in which event the local law of the other state will
be applied.” Id. § 193. Comment b to Section 193 also states that “[t]he location of the insured risk
will be given greater weight than any other single contact in determining the state of the applicable
law provided that the risk can be located, at least principally, in a single state” and that “in the case
of an automobile liability policy, the parties will usually know beforehand where the automobile
will be garaged at least during most of the period in question.” Id. § 193, cmt. b.
Missouri courts applying the above principles have found that where the parties to a vehicle
insurance contract understood that the principal location of the vehicle during the term of the policy
would be in a particular state, the law of that state governs a dispute about that insurance contract,at
Section 6 directs the court to consider factors including the needs of the interstate and
international systems; the relevant policies of the forum; the relevant policies of other interested
states and the relative interests of those states in the determination of the particular issue; the
protection of justified expectations; the basic policies underlying the particular field of law;
certainty, predictability and uniformity of result; and ease in the determination and application of
the law to be applied.
least where other factors do not show that another state has a more significant relationship to the
parties and the transaction. See Hartzler, 881 S.W.2d at 655-67 (relying on § 193 and holding that
Kansas law applied to a dispute between insureds and insurer where although the automobile
accident at issue occurred in Missouri, the insureds were Kansas residents at the time the insurance
policy was issued, the policy was denominated “Kansas Family Car Policy” and contained several
references to Kansas and Kansas law, and the insured vehicles were registered and principally
garaged in Kansas; noting that Kansas was “the principal location of the insured risk” and finding
that Kansas had the most significant relationship to the parties and transaction); Accurso, 295
S.W.3d at 552-54 (relying on § 193 and holding that Missouri law applied to an insurance dispute
where the motor vehicles at issue were primarily located in Missouri; noting that “the location of
the insured risk is given greater weight than any other single contact” and finding that other factors
did not show that some other state had a more significant relationship to the parties and the policies
Here, the State Farm Policy was issued to a resident of Illinois, living at an Illinois address,
suggesting that the parties understood that the vehicle would be located primarily in Illinois. See
State Farm Policy Declarations Page, Doc. 22-1, at 1. Bourisaw provides no basis for any contrary
finding. Moreover, other factors show that Illinois has a significant relationship to the State Farm
Policy: the Policy was issued by an agent with an Illinois address, the policy explicitly references
the Illinois Insurance Code and Illinois Department of Insurance, and the cover of the policy
booklet states that it is “Illinois Policy Form 9813B.” See id.; see also State Farm Policy Booklet,
Doc. 22-2, at 1.
For all of the above reasons, the Court agrees that Illinois law applies to the issues presented
in State Farm’s motion.
B. Under Illinois Law, Bourisaw Is Not Entitled to Underinsured Motor Vehicle
Coverage Under the State Farm Policy
Bourisaw seeks a declaration that State Farm owes underinsured motor vehicle coverage
to her under the State Farm Policy. State Farm contends that because the limit of liability under
the tortfeasor’s policy is $100,000 and the State Farm Policy’s limit of liability for underinsured
motorist coverage is also $100,000, the tortfeasor’s vehicle does not qualify as an “underinsured
motor vehicle” under the State Farm Policy and Illinois law, and thus Bourisaw is not entitled to
underinsured motor vehicle coverage under the State Farm Policy.
Under Illinois law, “the general rules governing the interpretation of other types of
contracts also govern the interpretation of insurance policies.” Hobbs v. Hartford Ins. Co. of the
Midwest, 823 N.E.2d 561, 564 (Ill. 2005). “The court’s primary objective when construing an
insurance policy is to ascertain and give effect to the intention of the parties, as expressed in the
policy language.” State Farm Mut. Auto Ins. Co. v. Coe, 855 N.E .2d 173, 176 (Ill. Ct. App. 2006)
(quotation marks omitted). “If the policy language is unambiguous, the policy will be applied as
written, unless it contravenes public policy.” Hobbs, 823 N.E.2d at 564.
The “Underinsured Motor Vehicle Coverage” section of the State Farm Policy states:
We will pay compensatory damages for bodily injury an insured is legally
entitled to recover from the owner or driver of an underinsured motor
State Farm Policy, Doc. 22-3, at 3.
The State Farm Policy defines “underinsured motor vehicle,” in relevant part, as
Underinsured Motor Vehicle means a land motor vehicle:
for which the total limits of insurance, bonds, and self-insurance for
bodily injury liability from all sources:
are less than the Underinsured Motor Vehicle Coverage
limits of this policy; or
have been reduced by payments to persons other than you
and resident relatives to less than the Underinsured Motor
Vehicle Coverage limits of this policy.
Id. at 2-3.
The Underinsured Motor Vehicle Coverage limit of the State Farm Policy is $100,000. The
total limit of the insurance for bodily injury liability for the tortfeasor’s vehicle was $100,000.
That entire amount was paid to Bourisaw; the amount was not reduced by payments to others.
Thus, based on the clear language of the State Farm Policy, the tortfeasor’s vehicle is not one for
which the limit of insurance for bodily liability is “less than” the Underinsured Motor Vehicle
Coverage limits in the State Farm Policy, nor is it one for which the limit of insurance has been
reduced by payments to persons other than Bourisaw. Under the clear language of the State Farm
Policy, the tortfeasor’s vehicle is not an “underinsured motor vehicle,” and thus Bourisaw is not
entitled to underinsured motor vehicle coverage under the State Farm Policy.
The plain language of the State Farm Policy is consistent with well-established Illinois law.
The Illinois Insurance Code defines an underinsured motor vehicle as follows:
For the purpose of this Code the term “underinsured motor vehicle” means a motor
vehicle whose ownership, maintenance or use has resulted in bodily injury or death
of the insured, as defined in the policy, and for which the sum of the limits of
liability under all bodily injury liability insurance policies or under bonds or other
security required to be maintained under Illinois law applicable to the driver or to
the person or organization legally responsible for such vehicle and applicable to the
vehicle, is less than the limits for underinsured coverage provided the insured
as defined in the policy at the time of the accident. The limits of liability for an
insurer providing underinsured motorist coverage shall be the limits of such
coverage, less those amounts actually recovered under the applicable bodily injury
insurance policies, bonds or other security maintained on the underinsured motor
215 Ill. Comp. Stat. 5/143a-2(4) (emphasis added). Because the tortfeasor’s vehicle had a liability
limit ($100,000) that is not less than the limit for underinsured coverage in the State Farm Policy
($100,000), the tortfeasor’s vehicle is not an underinsured motor vehicle under either this
definition or the State Farm Policy’s definition, and Bourisaw is not entitled to underinsured motor
The result required by the plain language of the State Farm Policy is also consistent with
the purpose of underinsured motorist coverage under Illinois law. The Illinois Supreme Court has
recognized that “[t]he purpose of underinsured coverage is to put the insured in the same position
he or she would have occupied had the at-fault vehicle carried liability coverage in the same
amount as selected by the insured in his or her underinsured motor vehicle policy.” State Farm
Mut. Ins. Co. v. Villicana, 692 N.E.2d 1196, 1201 (Ill. 1998). “Underinsured motorist coverage is
not intended to allow the insured to recover amounts from the insurer over and above the insured’s
underinsured-motorist policy limit.” Illinois Emcasco Ins. Co. v. Tufano, 63 N.E.3d 985, 991 (Ill.
Ct. App. 2016). See also Safeway Ins. Co. v. Hadary, 48 N.E.3d 732, 738 (Ill. Ct. App. 2016)
(“[U]nderinsured motorist coverage is intended only to assure compensation for insureds’ injuries
in an amount equal to their policy limit for coverage; it is not intended to allow insureds to recover
amounts from an insurer over and above coverage provided by the underinsured motorist policy.”).
Here, Bourisaw has already been compensated in an amount equal to her underinsured motorist
policy limit ($100,000). Underinsured motorist coverage is not intended to allow her to recover
amounts over and above that amount.
In her Third-Party Complaint, Bourisaw also suggests that she is entitled to coverage under
the “If Other Underinsured Motor Vehicle Coverage Applies” section of the State Farm Policy.
That provision states, in relevant part:
If Other Underinsured Motor Vehicle Coverage Applies
The Underinsured Motor Vehicle Coverage provided by this policy
applies as primary coverage for an insured who sustains bodily
injury while occupying your car. . . .
Except as provided in 2. above, the Underinsured Motor Vehicle
Coverage provided by this policy applies as excess coverage.
(1) this is the only vehicle policy issued to you or any
resident relative by the State Farm Companies that
provides Underinsured Motor Vehicle Coverage which
applies to the accident as excess coverage; and
(2) underinsured motor vehicle coverage provided by one
or more sources other than the State Farm Companies
also applies as excess coverage for the same accident,
then we will pay the proportion of our damages payable as
excess that our applicable limit bears to the sum of our
applicable limit and the limits of all other underinsured
motor vehicle coverage that apply as excess coverage.
Doc. 22-3, at 5-6. Bourisaw’s position appears to be that this provision indicates that the State
Farm Policy’s coverage should be “excess” over the amounts paid by the tortfeasor.
This provision is inapplicable here. As State Farm points out, this provision is triggered
only “If Other Underinsured Motor Vehicle Coverage Applies.” Bourisaw initially contended that
other underinsured motorist coverage was provide by the Allied Policy. However, in ruling on
Allied’s motion for summary judgment, the Court found that the Allied Policy did not provide any
underinsured motor vehicle coverage that applies to the accident here. Bourisaw identifies no other
“underinsured motor vehicle coverage” that might apply. Thus, this provision simply does not
apply to this case. See Katz. v. State Farm Mut. Auto. Ins. Co., 965 N.E.2d 636, 644 (Ill. Ct. App.
2012) (“[T]he plaintiff’s] reliance on the provisions of the State Farm policy titled, ‘If There Is
Other Underinsured Motor Vehicle Coverage’ is misplaced because there is not any other
underinsured motor vehicle coverage, only the State Farm policy.”).
For all of the above reasons, the Court finds that Bourisaw is not entitled to underinsured
motorist coverage under the State Farm Policy. Accordingly,
IT IS HEREBY ORDERED that the Motion for Summary Judgment filed by Third-Party
Defendant State Farm Mutual Automobile Insurance Company (Doc. 31) is GRANTED.
IT IS FURTHER ORDERED that Third-Party Plaintiff Karen Bourisaw’s Third-Party
Claim against Third-Party Defendant State Farm Mutual Automobile Insurance Company is
SHIRLEY PADMORE MENSAH
UNITED STATES MAGISTRATE JUDGE
Dated this 16th day of November, 2017.
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