Plumley et al v. Progressive Classic Insurance Company
Filing
42
MEMORANDUM OPINION AND ORDER granting defendant Progressive Classic Insurance Company's 19 MOTION for Summary Judgment with respect to the contract claim and denied in all other respects. Signed by Judge John T. Copenhaver, Jr. on 5/8/2012. (cc: attys; any unrepresented parties) (taq)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
JAMES PLUMLEY and
TRESHA PLUMLEY
Plaintiffs
v.
Civil Action No. 2:11-00311
PROGRESSIVE CLASSIC INSURANCE CO.,
Defendant
MEMORANDUM OPINION AND ORDER
Pending is defendant Progressive Classic Insurance
Company's ("Progressive") motion for summary judgment, filed
February 22, 2012.
I.
Plaintiffs James and Tresha Plumley are West
Virginia citizens.
Progressive is a Wisconsin citizen.
Ronald Kanouse, a nonparty, is an Ohio citizen.
On July 7,
2009, Mr. Plumley was operating his 2007 Harley Davidson.
Mr. Kanouse was driving his 2009 Ford F-350.
The two
motorists were near the intersection of South Eisenhower
Drive and New Jersey Avenue in Beckley when Mr. Kanouse
collided with Mr. Plumley.
motorist.
Mr. Kanouse was an underinsured
Mr. Plumley suffered serious and permanent injuries to
his left tibia, left thumb, and left knee.
He incurred medical
expenses exceeding $35,000, with more outlays expected in the
future.
Mr. Plumley also expects to suffer future pain,
suffering, emotional distress, and a diminished capacity to
enjoy life as a result of the collision.
Mrs. Plumley alleges
that she will suffer the loss of her spouse's consortium.
The Plumley's settled their claim with Mr. Kanouse's
insurance carrier for the $50,000 policy limits.
On the date of
the collision, the Plumleys were party to a policy of insurance
issued by Progressive.
The policy included underinsured
motorist coverage in the amount of $100,000.
Prior to retaining counsel, the Plumleys, on a date
unstated in the briefing, submitted the applicable medical
records to Progressive in support of their underinsurance claim.
Progressive declined to offer the policy limits at that time.
The Plumleys then retained counsel.
On August 5, 2010, the
Plumleys provided Progressive with an estimate for Mr. Plumley's
knee-replacement surgery, along with copies of two letters from
his treating physician.
On August 27, 2010, Progressive offered
the $100,000 policy limits to the Plumleys.
As an apparent
condition of the settlement, the Plumleys, on September 2, 2010,
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signed a Release of Contractual Liability ("release"), which
states materially as follows:
For and in consideration of the payment of the sum of
one hundred thousand Dollars ($100,000.00) . . . to
James Plumley and Tresha Plumley, individually and as
husband and wife, only, hereinafter, "Insured," the
receipt and sufficiency of which is hereby
acknowledged, Insured does hereby release, discharge
and forever acquit Progressive of and from any and all
claims, demands, sums of money, actions, rights,
causes of action, obligations and liabilities of any
kind or nature whatsoever pursuant or under the PART
III-UNINSURED/UNDERINSURED MOTORIST COVERAGE
provisions of Policy Number 17071236 which arise out
of or are in any manner whatsoever, directly
or indirectly, connected with or related to a
vehicular collision or incident which took place on
July 7, 2009, in Beckley, WV. This instrument is
intended as a release of contractual liability only
and not a release of tort liability of any person who
may have been at fault or liable for the referenced
vehicular collision or incident.
(Ex. B, Def.'s Mot. Summ. J.)
On April 4, 2011, the Plumleys instituted this action.
Their claims are found in the following three paragraphs of the
complaint:
At all times pertinent hereto, Defendant Progressive
Classic Insurance Company engaged in unfair trade
practices as proscribed by West Virginia Code §33-114[(9)] subsections (a), (f), (g), (h), (m), and (n),
and West Virginia Insurance Regulations §114-14-1, et
seq., with such frequency as to constitute a general
business practice in connection with claims for
insurance proceeds. Further, Defendant refused to
negotiate in good faith or make a fair offer of
settlement to Plaintiffs.
As a direct and proximate result of the unfair claims
settlement practices and unlawful acts of Defendant
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Progressive Classic Insurance Company, the Plaintiffs
suffered a delay in the settlement of his underinsured
personal injury claim with Progressive Classic
Insurance Company and otherwise suffered annoyance,
inconvenience and aggravation, as well as a loss of
the use of the proceeds of settlement, consistent with
the damages provided by Hayseeds, Inc. v. State Farm
Fire & Casualty, 352 S.E.2d 73 (1986) and its progeny
of first-party bad faith cases.
The Defendant breached its contract of insurance with
Plaintiffs.
(Compl. ¶¶ 17-19).
The court understands these allegations to state
claims for (1) multiple violations of that portion of the
West Virginia Insurance Code, West Virginia Code section
33-11-4(9), dealing with unfair claim settlement practices,
sometimes referred to as the West Virginia Unfair Trade
Practices Act (“WVUTPA”), (2) recovery of damages pursuant
to Hayseeds, Inc. v. State Farm Fire & Casualty, 177 W. Va.
323, 324, 352 S.E.2d 73, 74 (1986), and (3) breach of
contract.
On May 6, 2011, Progressive removed.
It now
seeks summary judgment based upon the release language.
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II.
A.
Summary Judgment Standard
A party is entitled to summary judgment “if the
pleadings, the discovery and disclosure materials on file, and
any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a
matter of law.”
Fed. R. Civ. P. 56(c).
Material facts are
those necessary to establish the elements of a party’s cause of
action.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
A genuine issue of material fact exists if, in viewing
the record and all reasonable inferences drawn therefrom in a
light most favorable to the non-moving party, a reasonable factfinder could return a verdict for the non-movant. Id.
The
moving party has the burden of showing -- “that is, pointing out
to the district court -- that there is an absence of evidence to
support the nonmoving party’s case.”
477 U.S. 317, 325 (1986).
Celotex Corp. v. Catrett,
If the movant satisfies this burden,
then the non-movant must set forth specific facts as would be
admissible in evidence that demonstrate the existence of a
genuine issue of fact for trial.
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Fed. R. Civ. P. 56(c); id. at
322-23.
A party is entitled to summary judgment if the record
as a whole could not lead a rational trier of fact to find in
favor of the non-movant.
Williams v. Griffin, 952 F.2d 820, 823
(4th Cir. 1991).
Conversely, summary judgment is inappropriate if the
evidence is sufficient for a reasonable fact-finder to return a
verdict in favor of the non-moving party.
248.
Anderson, 477 U.S. at
Even if there is no dispute as to the evidentiary facts,
summary judgment is also not appropriate where the ultimate
factual conclusions to be drawn are in dispute.
Overstreet v.
Ky. Cent. Life Ins. Co., 950 F.2d 931, 937 (4th Cir. 1991).
A court must neither resolve disputed facts nor weigh
the evidence, Russell v. Microdyne Corp., 65 F.3d 1229, 1239
(4th Cir. 1995), nor make determinations of credibility.
Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986).
Rather,
the party opposing the motion is entitled to have his or her
version of the facts accepted as true and, moreover, to have all
internal conflicts resolved in his or her favor.
Charbonnages
de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979).
Inferences that are “drawn from the underlying facts . . . must
be viewed in the light most favorable to the party opposing the
motion.”
United States v. Diebold, Inc., 369 U.S. 654, 655
(1962).
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B.
Analysis
The release qualifies as a contract, bearing some of
the hallmarks of a settlement agreement.
That characterization
is significant inasmuch as a “[s]ettlement agreement is favored
by law and is to be construed as any other contract.” Floyd v.
Watson, 163 W. Va. 65, 68, 254 S.E.2d 687, 690 (1979) (internal
citations omitted).
As with any type of accord, “[a] valid
written instrument which expresses the intent of the parties in
plain and unambiguous language is not subject to judicial
construction or interpretation but will be applied and enforced
according to such intent.”
Syl. pt. 1, Wellington Power Corp.
v. CNA Sur. Corp., 217 W. Va. 33, 35, 614 S.E.2d 680, 682 (2005)
(quoting Syl. Pt. 1, Cotiga Development Co. v. United Fuel Gas
Co., 147 W. Va. 484, 488, 128 S.E.2d 626, 628 (1962)).
The same is true in the insurance setting: "'Where the
provisions of an insurance policy contract are clear and
unambiguous they are not subject to judicial construction or
interpretation, but full effect will be given to the plain
meaning intended.’"
Syl. pt. 2, West Virginia Fire & Cas. Co.
v. Stanley, 216 W. Va. 40, 43, 602 S.E.2d 483, 486 (2004)
(quoting syl., Keffer v. Prudential Ins. Co., 153 W. Va. 813,
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813, 172 S.E.2d 714, 714 (1970)).
When the parties disagree
respecting the terms of a contract, the court must ascertain if
the disputed portions of the accord are ambiguous.
A
contractual term is ambiguous if it "is reasonably susceptible
of two different meanings or is of such doubtful meaning that
reasonable minds might be uncertain or disagree as to its
meaning . . . .”
Mylan Laboratories Inc. v. American Motorists
Ins. Co., 226 W. Va. 307, 313-14, 700 S.E.2d 518, 524-25 (2010)
(quoting syl. pt. 1, Prete v. Merchants Property Ins. Co., 159
W. Va. 508, 508, 223 S.E.2d 441, 442 (1976)).
When an ambiguity
is found in an insurance contract, certain rules of construction
apply:
If a court determines that a policy provision is
ambiguous, “[i]t is well settled law in West Virginia
that ambiguous terms in insurance contracts are to be
strictly construed against the insurance company and
in favor of the insured.”
Id. at 314, 700 S.E.2d at 525.
Progressive relies upon the broad language releasing
it "of and from any and all claims, demands, sums of money,
actions, rights, causes of action, obligations and liabilities
of any kind or nature whatsoever pursuant or under the PART IIIUNINSURED/UNDERINSURED MOTORIST COVERAGE provisions of Policy
Number 17071236 which arise out of or are in any manner
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whatsoever, directly or indirectly, connected with or related
to" the collision.
Uncertainty arises, however, when this paragraph of
the release is read in its entirety.
The next sentence of the
release provides as follows: "This instrument is intended as a
release of contractual liability only and not a release of tort
liability of any person who may have been at fault or liable for
the referenced vehicular collision or incident."
(emphasis
added).
One might reasonably read this provision, in a
confined context, as a narrow carve out to reassure the Plumleys
that they were not abandoning any potential future tort claims
against Mr. Kanouse, although as a practical matter his exposure
may have terminated when his insurer paid his policy limits to
the Plumleys.
An additional and more reasonable reading of this
somewhat ambiguous provision is that the release does not reach
tort claims at all, including those that might be pled against
Progressive.
In light of this ambiguity, and that Progressive
drafted the release, the aforementioned language is construed
against Progressive so as to permit the Plumleys to raise any
extracontractual claims that they may have pled despite the
release.
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The foregoing discussion thus requires that each
of the three claims pled by the Plumleys be analyzed to
ascertain if they sound in contract and are barred by the
release or are instead of a tort variety and unaffected by
the release.
The breach of contract claim is obviously
barred by the release.
The WVUTPA claim is not.
The
Supreme Court of Appeals of West Virginia has stated as
follows:
We first address the nature of a claim brought under
the [West Virginia Unfair Claims Settlement Practices]
Act. While Plaintiffs contend that unfair settlement
claims are contractual in nature, this Court made
clear in Poling v. Motorists Mutual Insurance Co., 192
W.Va. 46, 450 S.E.2d 635 (1994), that a “[v]iolation
of ... [the Act] is tortious conduct.” Id. at 49, 450
S.E.2d at 638.
Wilt v. State Auto. Mut. Ins. Co., 203 W. Va. 165, 166, 506
S.E.2d 608, 609 (1998) (emphasis added).
It appears that the
same rule applies to the Hayseeds component.
See, e.g., Noland
v. Virginia Ins. Reciprocal, 224 W. Va. 372, 382-83, 686 S.E.2d
23, 33-34 (2009) (noting first that "[a] common law bad faith
cause of action was first recognized in Hayseeds" and later
observing that "[t]he prior decisions of this Court have clearly
indicated that a common law bad faith claim sounds in tort.").
The court, accordingly, ORDERS that Progressive's
motion for summary judgment be, and it hereby is granted with
respect to the contract claim and denied in all other respects.
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The Clerk is directed to transmit a copy of this
written opinion and order to counsel of record and any
unrepresented parties.
DATED:
May 8, 2012
John T. Copenhaver, Jr.
United States District Judge
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