IDS Property and Casualty Insurance Company v. Mullins et al
Filing
45
OPINION AND ORDER: Defendant's Motion for Partial Summary Judgment 29 is Granted in Part and Denied in Part and Defendant's Motion in Limine to exclude evidence 35 is Granted in Part and Denied in Part. The parties shall confe r to determine whether an amended complaint is necessary. If an agreement is not reached, IDS shall submit an amended complaint clarifying its sought declaratory relief within thirty days of the date of this order. Signed on 5/12/2015 by Judge Michael J. McShane. (cp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
IDS PROPERTY CASUALTY
INSURANCE COMPANY, a foreign
msurance company
Plaintiff,
v.
Civ. No. 6:14-cv-01344-MC
OPINION AND ORDER
MICHELLE MULLINS and RYAN
MULLINS,
Defendants,
MCSHANE, Judge:
On January 31, 2014, defendant Ryan Mullins (Mr. Mullins) was involved in a serious
car accident as a passenger. Mr. Mullins exhausted the driver's policy limits and subsequently
sought Underinsured Motorist (UIM) benefits as a "resident relative" 1 under a policy issued to
his mother, defendant Michelle Mullins (Ms. Mullins). The insurance provider, plaintiffiDS
Property Casualty Insurance Company (IDS), filed this action for declaratory relief seeking a
rescission and no coverage.
This Court is asked to consider whether alleged misrepresentations made by Ms. Mullins
may preclude coverage as to Mr. Mullins under the fraud provision of the insurance policy.
Because the fraud provision is limited to the insured party who commits the fraudulent act,
alleged misrepresentations made by Ms. Mullins do not preclude coverage as to Mr. Mullins
1
"Resident relative means a person related to you by blood, marriage, or adoption who resides in your household.
This includes a ward or foster child." Compl. 9, ECF No. 1-2 (emphasis in original).
1 -OPINION AND ORDER
under that provision. Thus, defendant's motion for partial summary judgment, ECF No. 29, is
GRANTED IN PART and DENIED IN PART, and defendant's motion in limine to exclude
evidence, ECF No. 35, is GRANTED IN PART and DENIED IN PART.
PROCEDURALANDFACTUALBACKGROUND
This action arises out of an insurance claim under a motor vehicle policy, which was
effective from October 6, 2013 to April6, 2014. See Compl. 1, ECF No. 1-2.
On October 5, 2013, Ms. Mullins contacted IDS to contract a motor vehicle policy. See
id. at 2, ECF No. 1. During that telephone conversation, Ms. Mullins informed IDS that her son,
Mr. Mullins, did not live at her residence. !d. at 3; Notice of Conventional Filing Ex. B, ECF No.
36 (compact disk filed conventionally).
On January 24, 2014, Ms. Mullins contacted IDS to add an additional vehicle and update
her address. Compl. 3, ECF No. 1. Ms. Mullins again informed IDS that Mr. Mullins did not live
at her residence. !d. at 3; Notice of Conventional Filing Ex. D, ECF No. 37 (compact disk filed
conventionally).
On January 31, 2014, Mr. Mullins was involved in a motor vehicle 2 collision as a
passenger and sustained severe injuries. See Ryan Mullins's Answer 4, ECF No.7. Mr. Mullins
exhausted the driver's policy limits and subsequently sought UIM as a "resident relative" under
Ms. Mullins's policy. See id.
On May 20,2014, IDS examined Ms. Mullins and Mr. Mullins under oath. Ms. Mullins
testified that Mr. Mullins moved in with her in December 2013. See Decl. of Daniel E. Thenell
4-6, 10, ECF No. 33-1. Mr. Mullins also testified that he moved in with Ms. Mullins in
December 2013. See Decl. of Daniel E. Thenell4-5, ECF No. 33-2.
2
The vehicle at issue was owned and driven by Jason Ray Gibbs. See id.
2- OPINION AND ORDER
On August 20, 2014, IDS filed this action seeking two counts of declaratory relief:
rescission and no coverage. See Compl. 6-8, ECF No. 1.
STANDARD OF REVIEW
This Court must grant summary judgment if there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter oflaw. Fed. R. Civ. P. 56( a). An issue is
"genuine" if a reasonable jury could return a verdict in favor of the non-moving party. Rivera v.
Phillip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005) (citing Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)). A fact is "material" if it could affect the outcome of the case. !d. The
court reviews evidence and draws inferences in the light most favorable to the non-moving party.
Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 988 (9th Cir. 2006) (quoting Hunt v.
Cromartie, 526 U.S. 541, 552 (1999)). When the moving party has met its burden, the nonmoving party must present "specific facts showing that there is a genuine issue for trial."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (emphasis in
original) (quoting Fed. R. Civ. P. 56( e)).
DISCUSSION
Mr. Mullins moves for summary judgment as to both of plaintiffs declaratory relief
counts: rescission and no coverage. Mr. Mullins asserts that he is entitled to judgment in his
favor as to both claims under ORS § 742.456, 3 Walker v. Fireman's Fund Ins. Co., 114 Or. 545
3
ORS § 742.456 provides:
The liability of an insurer with respect to the motor vehicle liability insurance policy
required by ORS 806.060, 806.240 or 806.270 shall become absolute whenever injury or
damage covered by the policy occurs. The policy may not be canceled or annulled as to
such liability by any agreement between the insurer and the insured after the occurrence
of the injury or damage. No statement made by the insured or on behalf of the insured
and in violation of the policy shall defeat or void the policy. This section does not apply
to motor vehicle liability insurance policies other than those required in connection with
ORS 806.060, 806.240 or 806.270.
3 - OPINION AND ORDER
(1925), and the terms of the contract. Because this Court finds that the terms of the contract are
sufficient to settle the issue, this Court's inquiry focuses on those terms and Mr. Mullins's
related motion in limine.
I. The Contract
Interpretation of an insurance policy is a question of law, and this Court's task is to
ascertain the intention of the parties to the insurance policy. Hoffman v. Foremost Signature Ins.
Co., 989 F. Supp. 2d 1070, 1079 (D. Or. 2013) (citation and internal quotation marks omitted).
The parties' intent is determined by the terms and conditions of the underlying policy. See
Holloway v. Republic Indemnity Co. ofAm .. 341 Or. 642, 649-50 (2006) (citation omitted). "If
the policy does not define the phrase in question, [this Court] resort[s] to various aids of
interpretation to discern the parties' intended meaning." !d. at 650 (citation and internal quotation
marks omitted). Under that framework, this Court first considers whether the phrase in question
has a plain meaning. !d. (citation omitted). "If the phrase in question has more than one plausible
interpretation," this Court will then '"examine the phrase in light of the particular context in
which that [phrase] is used in the policy and the broader context of the policy as a whole."' !d.
(citations omitted). "lfthe ambiguity remains after [this Court] has engaged in those analytical
exercises, then any reasonable doubt as to the intended meaning of such [a] term[ ] will be
resolved against the insurance company." Id. (citations and internal quotation marks omitted).
However, "a term is ambiguous ... only if two or more plausible interpretations of that term
withstand scrutiny." !d. (emphasis in original) (citations and internal quotation marks omitted).
The contract provides, in relevant part:
Fraud
4- OPINION AND ORDER
We do not provide coverage for any insured 4 or person making claim
under this policy who, whether before or after a loss, has:
1. Intentionally concealed or misrepresented any material fact or
circumstance;
2. Engaged in fraudulent conduct; or
3. Made false representations;
relating to this insurance and/or in connection with any accident or loss for
which coverage is sought under this policy.
Compl. 22, ECF No. 1-2 (emphasis in original). The parties dispute whether Ms. Mullins's
alleged misrepresentations preclude coverage as to Mr. Mullins under this fraud provision. This
Court, having reviewed the terms and conditions of the underlying policy, can only derive a
single reasonable plain meaning from the terms of the fraud provision: coverage is not provided
to an insured party who commits a fraudulent act. As a result, this provision only applies to Mr.
Mullins to the extent that he committed a fraudulent act as defined in the contract.
II. Motion in Limine
Mr. Mullins also moves to exclude audio recordings of conversations between Ms.
Mullins and IDS on October 5, 2013 (Ex. B) and January 24, 2014 (Ex. D) under ORS §§
4
Insured means:
1. You or a resident relative.
2. Any person using your insured vehicle.
3. Any person or organization but only with respect to legal responsibility for acts or
omissions of:
a. A person covered under this Part while using your insured vehicle; or
b. You or a resident relative covered under this Part while using a vehicle or trailer
other than your insured vehicle if the vehicle or trailer is not owned or hired by
that person or organization ....
Compl. 10, ECF No. 1-2.
5- OPINION AND ORDER
742.013 and 742.016. See Def. Ryan Mullins's Mot. in Limine 1-4, ECF No. 35. Those statutory
provisions provide in relevant part:
ORS § 742.013
(1) All statements and descriptions in any application for an insurance
policy by or in behalf of the insured, shall be deemed to be representations
and not warranties. Misrepresentations, omissions, concealments of facts
and incorrect statements shall not prevent a recovery under the policy
unless the misrepresentations, omissions, concealments of fact and
incorrect statements:
(a) Are contained in a written application for the insurance policy, and
a copy of the application is indorsed upon or attached to the insurance
policy when iss11ed;
(b) Are shown by the insurer to be material, and the insurer also shows
reliance thereon; and
(c) Are either:
(A) Fraudulent; or
(B) Material either to the acceptance of the risk or to the hazard
assumed by the insurer.
ORS § 742.016
(1) Except as provided in ORS 742.043, every contract of insurance shall
be construed according to the terms and conditions of the policy. When
the contract is made pursuant to a written application therefor, if the
insurer delivers a copy of such application with the policy to the insured,
thereupon such application shall become a part of the insurance policy.
Any application that is not so delivered to the insured shall not be a part of
the insurance policy and the insurer shall be precluded from introducing
such application as evidence in any action based upon or involving the
policy. Any oral representations by the insured that are not included in an
application shall not be a part of the insurance policy and the insurer shall
be precluded from introducing such representations as evidence in any
action based upon or involving the policy.
Mr. Mullins, in reliance on these provisions, contends that IDS "is not entitled to use" the
exhibits because they "are oral representations that were not included in a written application
6 - OPINION AND ORDER
which was made part of the insurance policy when issued." Def. Ryan Mullins's Mot. in Limine
2, ECF No. 35. In response, IDS argues that these provisions are not rules of evidence and that
the recordings are relevant as to whether Mr. Mullins qualifies as a "resident relative" at the time
of the accident. Because of limitations in the briefings and IDS's evolving theory of the case, this
Court declines to exclude all consideration of these exhibits at this time. 5 For example, if Mr.
Mullins did not reside in Ms. Mullins's household at the time of the accident, then these
recordings, particularly exhibit D, support IDS's theory independent of any contract
interpretation relating to misrepresentation.
CONCLUSION
For these reasons, defendant's motion for partial summary judgment, ECF No. 29, is
GRANTED IN PART and DENIED IN PART, and defendant's motion in limine to exclude
evidence, ECF No. 35, is GRANTED IN PART and DENIED IN PART. The parties shall confer
to determine whether an amended complaint is necessary. If an agreement is not reached, IDS
shall submit an amended complaint clarifying its sought declaratory relief within thirty days of
the date of this order.
IT IS SO ORDERED.
DATED this 12th day of May, 2015.
Michael J. McShane
United States District Judge
5
This Court notes that § 742.0 13( 1) "limits the circumstances under which an insurer may rescind the insurance
contract." James River Ins. Co. v. Breitenbush Hot Springs & Conference Ctr., No. Civ. 04-6139-HO, 2005 WL
1278942, at *1 (D. Or. May 25, 2005).
7 - OPINION AND ORDER
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