21ST Century N. Am. Ins. Co. v. Nationwide Gen. Ins. Co.
| Decision Date | 09 April 2015 |
| Docket Number | Case No. 1:14-cv-00557 (AK) |
| Parties | 21st CENTURY NORTH AMERICA INSURANCE COMPANY Plaintiff, v. NATIONWIDE GENERAL INSURANCE COMPANY Defendant. |
| Court | U.S. District Court — District of Columbia |
Plaintiff 21st Century North America Insurance Company ("Plaintiff" or 21st Century") and Defendant Nationwide General Insurance Company ("Defendant" or "Nationwide") have consented to proceed before the undersigned for all purposes and trial. (See Docket Entry [7].) Currently before the Court is Plaintiff's Motion for Summary Judgment ("Motion") [20], Nationwide's Memorandum of Points and Authorities in opposition to the Motion ("Opposition") [19] and 21st Century's reply ("Reply") [21]. For the reasons explained herein, Plaintiff's Motion will be DENIED. A separate Order accompanies this Memorandum Opinion.
This case arises from an underlying civil action brought in the Superior Court for the District of Columbia, which resulted in a partial settlement. (Mot. at 1, 3.) Plaintiff in that civil action was Paul Washington.(Id.) Defendants were Jose Chacon, Felipe Perez, and 21st Century. (Id.) Mr. Washington brought suit for damages arising under a motor vehicle accident ("MVA") in the District of Columbia ("DC") involving Mr. Perez's automobile.(Id.) The circumstances of the MVA are as follows: Mr. Perez lent his automobile, which was insured under a policy issuedby Nationwide, to Mr. Chacon. (Mot. Attach. 1 ¶ 1, 4.) Mr. Chacon was operating the vehicle in DC when he was involved in an accident with Mr. Washington. (Mot. Attach. 1 ¶ 4.) Mr. Washington filed a claim with Nationwide seeking coverage for the incident. (Mot. Attach. 1 ¶ 9.) Nationwide denied coverage because, while the insurance policy at issue included liability insurance for personal injury up to $300,000, Nationwide determined that Mr. Perez had made a material misrepresentation in his application and declared the policy void ab initio. (Opp'n at 2.)
Upon denial of coverage from Nationwide, Mr. Washington sued Mr. Chacon for alleged negligence, Mr. Perez alleging vicarious liability, and 21st Century for an alleged breach of his insurance policy. (Mot. Attach. 1, Statement of Facts, ¶ 10, 11.) 21st Century settled with Mr. Washington for $100,000 in exchange for release of claims against 21st Century. (Mot. Attach. ¶ 13.)
Upon settlement with 21st Century, Mr. Washington obtained coverage through his own insurance policy under the uninsured/underinsured ("UM/UIM") provision, which had a limit of $100,000. (Mot. Attach. 1 at 2, 4.) 21st Century avers that the UM/UIM liability coverage only applies when the limits of liability to the uninsured motor vehicle have been exhausted or where the insurance company of the uninsured motor vehicle, in this case Nationwide, legally denied coverage. (Mot. Attach.1 ¶ 8.)
In the instant case, Plaintiff 21st Century seeks a declaration that Defendant Nationwide is obligated to provide primary coverage and pay for the alleged damages sought by Mr. Wasington. (Mot. at 1); (Compl. ¶ 2.)1 Specifically, Plaintiff seeks a judicial declaration that the Mr. Perez's Nationwide policy was in effect at the time of the MVA, that Nationwide had anobligation to indemnify Mr. Perez and Mr. Chacon in connection with the claims made by Mr. Washington, and that Nationwide must indemnify 21st Century for the $100,000 settlement payment to Mr. Washington. (Mot. at 1.) Plaintiff's Motion claims, first, that District of Columbia law applies to this case, and second, that under District of Columbia law, Defendant was not legally able to rescind Mr. Perez's insurance policy under the District's compulsory/no-fault motor vehicle insurance law ("No-Fault Law"). (Mot. at 2) (citing D.C. Code §§ 31-2406, 35-2403(b)).
Defendant challenges the application of District of Columbia law, and instead contends that Virginia law applies. (Opp'n at 4.) If Virginia law applies, the Defendant argues, the insurance policy issued to Mr. Perez was legally declared void ab initio and Nationwide has no obligation to provide primary coverage or to indemnify the parties for claims pursued by Mr. Washington. (Opp'n at 3.)
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, (1986); Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C.Cir.1995). To determine which facts are "material," a court must look to the substantive law on which each claim rests. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" is one whose resolution could establish an element of a claim or defense and, therefore, affect the outcome of the action. Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 248.
When considering a motion for summary judgment, the court may not make credibility determinations or weigh the evidence; the evidence must be analyzed in the light most favorable to the nonmoving party, with all justifiable inferences drawn in their favor. Anderson, 477 U.S. at 255. The nonmoving party must establish more than the "mere scintilla of evidence" in support of its position. Id. at 252. The nonmoving party, however, cannot rely on "mere allegations or denials ..., but ... must set forth specific facts" Anderson, 477 U.S. at 248.
The parties disagree as to whether the law of Virginia or the law of the District of Columbia governs the case. In a diversity case, the Court must apply the choice of law principles of the forum state which, in this case, is the District of Columbia. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941) (citing Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)). The District "chooses between jurisdictions by inquiring 'into the relations of the two jurisdictions to the controversy, the interests involved, and whether application of foreign law would offend a strong and clearly defined policy.'" Gray v. Grain Dealers Mut. Ins. Co., 871 F.2d 1128, 1129-30 (D.C. Cir. 1989) (citing Mazza v. Mazza, 475 F.2d 385, 391 (D.C. Cir. 1973)). When interpreting an automobile liability policy, the District adopts:
the law of the state which the parties understood was to be the principal location of the insured risk [the auto] during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship ... to the transaction and the parties, in which event the local law of the other state will be applied.
National Union Fire Inc. Co. v. Binker, 665 F.Supp. 35, 40 (D.D.C. 1987) ().
Plaintiff argues that the District of Columbia has a more significant relationship to the transaction and the parties because the MVA occurred in the District and because the District hasenacted the No-Fault Law regarding vehicles operated in the District. (Mot. at 4, 5.) Plaintiff relies on Navigators Ins. Co. v. Baylor & Jackson, PLLC, 888 F.Supp.2d 55, 61 (D.D.C. 2012), which found that "the jurisdiction with the most significant interest has been interpreted to be either the place of the occurrence ... or the insured's headquarters." See also, Nationwide Mut. Ins. Co. v. National REO Management, Inc., 205 F.R.D. 1, 9 (D.D.C. 2000) (citing Potomac Elec. Power Co. v. California Union Ins. Co., 777 F.Supp. 968, 972-73 (D.D.C. 1991)).
Plaintiff contends that the District's interest in preserving its public policy under the No-Fault Law, "holding the owner of a vehicle financially responsible to any injured victims resulting from the negligence of the permissive driver the vehicle," is a more substantial interest than that of Virginia. (Mot. at 5) (citing Sharp v. Ward, 2004 WL 1835102). For these reasons, Plaintiff argues that the place of the occurrence should control the choice of law determination. (Mot. at 4, 5.) Plaintiff further argues that, even if the District does not have a more substantial interest, the District's interest is at least equal to Virginia's and, therefore, the District's law should be applied pursuant to Washkoviak v. Student Loan Marketing Ass'n, 900 A.2d 168 (D.C. 2006) (). (Id.)
Defendant argues that, under the governmental interest analysis in Adolph Coors Co. v. Truck Ins. Exch., 960 A.2d 617 (D.C. 2008), Virginia has a more significant relationship to the transaction and the parties. Defendant contends that the six Adolph factors—(1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; (5) the residence and place of business of the parties; and (6) the principal location of the insured risk—all result in a finding for application of Virginia law. (Opp. At 5, 6.) Further, Defendant argues that the "place of the occurrence" shouldnot dictate the choice of law because it would lead to anomalous results: "[an] insurance policy could be subject to a different interpretation by the laws of each state and every state, district and territory where the insured vehicles might be driven." (Mot. at 7) (citing Potomac, 777 F.Supp. at 972). For these reasons, the Defendant contends that the law of "the location of the subject matter of the contract, and the principal location of the insured risk must apply." (Mot. at 4) (citing Chicago Ins. Co. v. Paulson & Nace, PLLC, 37 F.Supp.3d 281, 291 (D.D.C. 2014)).
At the outset, the undersigned finds that Plaintiff's argument, that Washkoviak controls in insurance contract disputes where the interest of the states is equal, is unavailing. 900 A.2d at 180. There is a presumption that the...
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