Hostettler v. Auto-Owners Insurance Company

Filing 19

MEMORANDUM AND OPINION. Signed by District Judge James R. Spencer on 10/7/10. (jtho, )

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION FRANKI LYNN HOSTETTLER, Plaintiff, v. AUTOOWNERS INSURANCE COMPANY, Defendant. Civil Action No. 3:10CV279

MEMORANDUM OPINION THIS MATTER is before the Court on crossmotions for summary judgment (Dock. Nos. 9, 12). For the reasons that follow, the Court will GRANT AutoOwners's Motion and DENY Hostettler's Motion. I. BACKGROUND The following facts are not in dispute. Franki Lynn Hostettler was injured in a motor vehicle accident in Sussex County, Virginia, on August 29, 2009. Pavel David Titon Goska, the driver of the vehicle in which Hostettler was riding as a passenger, was allegedly responsible for the accident. Goska is insured under an automobile liability insurance policy issued by Liberty Mutual Insurance Company. The limit of liability coverage under that policy is $100,000 for injury to each person. Liberty Mutual has offered its policy limit

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to Hostettler. The damages Hostet t l e r i s l e g a l l y e n t i t l e d t o r e cover allegedly exceed the a v a i l a b l e l i a b i l i t y c o v e r a g e o f the Liberty Mutual policy. Hostettler's grandparents, Frank Wayne and Clara G. Mayton, are the named insureds under an automobile poli cy issued by AutoOwners. Host e t t l e r w a s a l l e g e d l y a r e s i d e n t o f h e r g r a n d p a r e n t s ' h o usehold at the time of the acci d e n t a n d t h e r e f o r e w o u l d qualify as an insured under the AutoOwners policy for purposes of uninsured and u n d e r i n s u r e d ( U M / U I M ) c o v e r a g e . The AutoOwners policy issued t o Hostettler's grandparents insures four motor vehicles, and the limit of UM/UIM coverage for each vehicle is $100,000. The insurance policy contains a "Limit of Liability" section that includes the following statements: A. T he 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. Subject to this limit for each person, the limit of Bodily Injury shown in the Declarations for each accident for Uninsured Motorists Coverage is our maximum limit of liability for all damages for "bodily injury" resulting from any one accident. The limit of Property Dama ge Liability shown in the Declarations for each accident for Uninsured Motorists Coverage is our maximum limi t f o r a l l " p r o p e r t y d a m a g e " resulting from any one accident.

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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.

(Joint Stipulation of Facts (Joi n t S t i p u l a t i o n ) , E x . A , p t . 3 , at 1112). For each of the four vehicles covered under the AutoOwners policy, the "Automobile Policy Declarations" lists the limit of uninsured motorist bodily injury coverage as "$100,000 ea pers/$300,000 ea acc." (Joint Stipulation, Ex. A, pt. 1, at 46). Hostettler contends that the AutoOwners policy is not ambiguous and affirmatively promises to provide $400,000 in stacked UM/UIM limits. In the a l t e r n a t i v e , H o s t e t t l e r asserts that the policy is at worse ambiguous and therefore provides $400,000 in stacked UM/UIM limits. AutoOwners argues that the policy is not ambigu ous, that UM/UIM coverage on each of the four vehicles cannot be stacked, and that the limit of UM/UIM coverage is $100,000. The parties seek a declaration as to whether the UM/UIM limit of the AutoOwners policy is $100,000 or $400,000 and have filed crossmotions for summary judgment. II. LEGAL STANDARD A m o t i o n f o r s u m m a r y j u d g m e n t l i e s o n l y w h e r e " t h e r e i s n o g e n ui n e i s s u e a s t o a n y material fact" and where "the moving party is entitled to judgm ent as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). All "factual disputes and any competing, rational inferences [are resolved] in the light most favorable to the party opposing that motion." Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 3

2003) (internal quotation marks a nd citations omitted). In maki ng its decision, a court must look to the affidavits or other specific facts pled to determine whether a triable issue exists. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 24749 (1996). "[I]f the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine i s s u e a s t o a n y m a t e r i a l f a c t a n d t h a t t h e m o v a n t i s e n t i t l e d t o judgment as a matter of law," Fed. R. Civ. P. 56(c), it is the "affirmative obligation of the trial judge to prevent factually unsupported claims and defenses from proceeding to trial." Drewitt v. Pratt, 999 F.2d 774, 77879 (4th Cir. 1993) (internal quotation marks omitted). "Mere unsupported speculation is not sufficient to defeat a summary judgment motion if the undisputed evidence indicates the other party should win as a matter of law." Francis v. Booz , Allen & Hamilton, Inc. , 4 5 2 F.3d 299, 308 (4th Cir. 2006). Summary judgment should not be granted, however, "if the e v i d e n c e i s s u c h t h a t a r e a s o n a b le jury could return a verdict f o r t h e n o n m o v i n g p a r t y . " Anderson , 477 U.S. at 248. When faced with crossmotions for summary judgment, the standard is the same as that applied to individual motions for summary judgment. The court must consider "each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Rossignol , 3 1 6 F . 3 d a t 5 2 3 ( i n t e r n a l q u o t a t i o n m a r k s omitted). If the court finds that there is a genuine issue of material fact, both motions must be denied. 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2720 (3d ed. 2010). However, "if there is no genuine issue and one or the other party is entitled to prevail as a matter of law, the court will render judgment." Id.

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III. DISCUSSION The Supreme Court of Virginia announced the rule regarding stacking UM/UIM coverage in Goodville Mutual Casualty Co. v. Borror (Borror), 275 S.E.2d 625 (Va. 1981). The court in that case held that " i t i s n o w t h e r u l e i n V i r g i n i a t h a t t h e s t a c k i n g o f U M c o v e r a g e w i l l b e p e r m i t t e d u n l e s s clear and unambiguous languag e e x i s t s o n t h e f a c e o f t h e policy to prevent such multiple coverage." Borror, 275 S.E.2d at 627. The Borror court determined that "any ambiguity contained within a policy will be construed against the insurer." Id. at 627. The Supreme Court of Virginia later emphasized in Virginia Farm Bureau Mutual Insurance Co. v. Williams (Williams) the requirement that antistacking language must be considered in context of other policy language. 677 S.E.2d 299, 303 (Va. 2009). Under Virginia law, "[c]ourts interpret insurance policies, like other contracts, in a c c o r d a n c e w i t h t h e i n t e n t i o n o f t h e p a r t i e s g l e a n e d f r o m t h e w ords they have used in the document." Copp v. Nationwide Mut. Ins. Co., 692 S.E.2d 220, 224 (Va. 2010). After setting out the Virginia insurance stacking rule and considering antistacking language in Borror in 1981, the Supreme Court of Virginia again considered antistacking l a n g u a g e i n W i l l i a m s i n 2 0 0 9 . T h e c o u r t r e a c h e d d i f f e r e n t d e c i s i o n s i n t h e t w o c a s e s, finding clear and unambiguous antistacking language in Borror b u t f i n d i n g s u f f i c i e n t ambiguity in Williams to allow stacking.The policy at issue in Borror p r o v i d e d c o v e r a g e f o r two vehicles, with separate and unequal premiums for each vehicle. The policy did not identify separate premiums for UM coverage. Borror, 275 S.E.2d at 626. The policy also included the following antistacking policy provision in its "L i m i t s o f L i a b i l i t y " s e c t i o n :

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R e g a r d l e s s o f t h e n u m b e r o f . . . motor vehicles to which this insurance applies, (a) the limit of liability for bodily injury stated in the schedule as applicable to "each person" is the limit of the company's liability for all damages because of bodily injury sustained by one person as the r e s u l t o f a n y o n e a c c i d e n t a n d , subject to the above provision r e s p e c t i n g " e a c h p e r s o n " , [ s i c ] t h e l i m i t o f l i a b i l i t y s t a t e d i n the schedule as applicable to "each accident" is the total limit of the company's liability for a l l d a m a g e s b e c a u s e o f b o d i l y i n jury sustained by two or more persons as the result of any one accident. Id. at 627 (emphasis added by Borror court). The court noted that other jurisdictions were s p l i t o v e r w h e t h e r t h a t l a n g u a g e w a s a m b i g u o u s , i d . at 62728, but "conclude[d] that the language of [the] policy, viz., `[r]egardless of the number of . . . motor vehicles to which this insurance applies,' is clear and unambiguous and requires the construction that stacking is not permissible." Id. at 628. The court held that "[t]h e m e r e f a c t t h a t t w o v e h i c l e s a r e i n s u r e d a n d t w o s e p a r a t e p r e m i u m s a r e c h a r g e d i s o f n o c o n s e q u en c e i n l i g h t o f t h e express language of the policy." Id. The Supreme Court of Virginia reached the opposite conclusion in Williams, where the following antistacki ng language was at issue: Limits of Liability. Regardless of the number of . . . motor vehicles to which this insurance applies, a) [i]f the schedule or declarations indicates split limits of liability, the limit of l i a b i l i t y f o r b o d i l y i n j u r y s t a t e d a s a p p l i c a b l e t o " e a c h p e r s on " is the limit of the company's liability for all damages because of bodily injury sustained by one person as the result of any one accident . . . . Williams, 677 S.E.2d at 30001. Although the court reached a different outcome in Williams than it did in Borror, it did not do so by overturning Borror or by determining that the anti 6

s t a c k i n g l a n g u a g e i t s e l f w a s u n c l e a r o r a m b i g u o u s . R a t h e r , t h e c o u r t d e t e r m i n e d t h a t t h e Williams policy "contain[ed] a significant difference" from the Borror policy; specifically, the Williams a n t i s t a c k i n g l a n g u a g e d i d n o t i n d i c a t e i t s l i m i t s f o r e a c h p e r s o n b u t r e f e r r e d the insured to the declarations page to determine the applicable limits. Id. at 303. While that difference in form was "significant," it did not create the ambiguity that led the court to a l l o w s t a c k i n g . T h e W i l l i a m s policy's declarations page, whi c h s p e c i f i e d t h e p r e m i u m s a n d limits for three different vehicles, identified two different levels of "each person" limits for UM/UIM coverage. Two vehicles had UM/UIM "each person" limits of $300,000, while the third vehicle had an "each person" limit of $250,000. Id. at 301. The court determined that the fact that the declarations page provided inconsistent levels of coverage, when c o m b i n e d w i t h t h e a n t i s t a c k i n g language, "[left] unresolved th e question whether all three separate limits for `each person' apply." Id. at 303. Thus, it was "[t]his disparity in the stated limits of liability for ` each person' [that] manifest[ed ] an ambiguity regarding the extent of total coverage for `each person' under the policy." Id. Since ambiguities are resolved against the insurer, the court allowed Williams to stack the three "each person" limits. Id. T h e A u t o O w n e r s a n t i s t a c k i n g l a n g u a g e i s n o t i d e n t i c a l t o e i t h er the language deemed unambiguous in Borror or that found to be ambiguous in Williams ; r a t h e r , i t c o n t a i n s e l e m e n t s o f b o t h . A s i n b o t h c a s e s , i t i n d i c a t e s t h a t t h e r e l e v a n t l i m i t a p p l i e s " r e g a r d l e s s o f t h e n u m b e r o f . . . [ v ] e h i c l e s " i n s u r e d . ( J o i n t S t i p u l a t i o n , E x . A , p t . 3 , a t 1 1 1 2 ) . U n l i k e t h e B o r r o r policy language, however, it do e s n o t s t a t e a n " e a c h p e r s o n " l i m i t o n a schedule of limitations but instead refers the insured to a separate declarations

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page--where limits are listed for each vehicle--to determine the relevant limit, as in Williams. Specifically, the antistacking provision at issue indicates that the "limits of Bodily Injury Liability shown in the Declarations for each person for Uninsured Motorists Coverage is [the] maximum limit of liability for all damages" and that "[t]his is the most [AutoOwners] will pay regardless of the number of . . . [v]ehicles or premiums shown in the Declarations." Id. T h e d e c l a r a t i o n s p a g e s l i s t t he "$100,000 ea pers" limit for e ach vehicle. Although this antistacking provision's construction most closely resembles that found to be ambiguous in Williams, the AutoOwners policy clearly and consistently lays out the "each person" UM/UIM limit of $100,000 for each of the four vehicles identified in the declarations using language found to be unambiguous in Borror. The ambiguity created in Williams f r o m i n c o n s i s t e n t l y d e c l a r e d l i m i t s i s a b s e n t h e r e . Hostettler sets forth numerous unpersuasive arguments. First, she argues that Auto Owners expressly promised $400,000 in "each person" UM limits because the "$100,000 ea pers" language appears on the declarations pages four times, once for each vehicle. This interpretation is inconsistent with the Virginia Supreme Court's approach in Williams, where the court allowed stacking based on inconsistencies on the declarations page, not based on the number of times the limits appeared. S h e a l s o a r g u e s t h a t t h e A u t o O w ners policy is not unambiguous b e c a u s e i t d o e s n o t specify any limit lower than $400,000. No authority supports the assertion that Auto Owners must state specifically that it will not provide $400,000 in UM/UIM coverage. The Virginia Supreme Court has held that the"regardless of the number of . . . [v]ehicles"

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insured language is sufficient to indicate the maximum coverage and prevent stacking, absent any ambiguity. See Borror, 275 S.E.2d at 628. That language is present here. Finally, she attacks the construction of the antistacking prov i s i o n , a r g u i n g t h a t i t i s not unambiguous because it is not identical to the Borror polic y l a n g u a g e , b e c a u s e i t contains three paragraphs instead of two, and because the paragraph with the numberof vehicles limitations language follows a paragraph on property damage liability, not bodily injury liability. The Williams c o u r t c l e a r l y e m p h a s i z e d c o n t e n t a n d c o n t e x t o v e r construction in antistacking provisions, and it did not find the Williams provision to be ambiguous because it was formatted differently than the one found to be unambiguous in Borror. When the numberofvehicles limitations language is considered in the context of the entire "Limit of Liability" section, see Williams, 677 S.E.2d at 303, it is clear that the numberofvehicles provision applies to both bodily injury and property damage liability. The internal inconsistencies that created the ambiguity in Williams are simply not present here, regardless of any similarities in construction. T h e a n t i s t a c k i n g l a n g u a g e i n t he A u t o O w n e r s p o l i c y , w h i l e n o t i d e n t i c a l t o t h e Borror policy language, clearly and unambiguously communicates that the "each person" l i m i t i d e n t i f i e d i n t h e d e c l a r a t i o n s i s t h e m o s t c o v e r a g e p r o v i ded, "regardless of the number of . . . [v]ehicles or premiums shown in the Declarations." Hostettler's arguments to the contrary neither comport with the Supreme Court of Virginia's analysis of antistacking provisions nor follow from a reasonable reading of the policy.

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IV. CONCLUSION For the foregoing reasons, the Court GRANTS AutoOwners's Motion for Summary Judgment and DENIES Hostettler's Motion. Let the Clerk send a copy of this Memorandum to all counsel of record. An appropriate order will issue. It is SO ORDERED.

/s/ James R. Spencer Chief United States District Judge

ENTERED this 7th day of October 2010

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