Amica Mut. Ins. Co. v. Moak
| Citation | 55 F.3d 1093 |
| Decision Date | 28 June 1995 |
| Docket Number | No. 94-20479,94-20479 |
| Parties | AMICA MUTUAL INSURANCE COMPANY, Plaintiff-Counter-Defendant, Cross-Defendant-Appellee, v. Donna MOAK, Individually and as Independent Executrix of The Estate of David Moak and a/n/f of Blake Moak, Et Al., Defendants, Donna Moak, Individually and as Independent Executrix of The Estate of David Moak and a/n/f of Blake Moak, Defendant-Counter-Plaintiff, Cross-Plaintiff-Appellant, Jayson Moak, Joel Moak, Jerome Moak, Dorothy Moffett and Blake Moak, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Melvin L. Smith, Jr., Karen S. Cook, Domingue & Smith, Houston, TX, for appellant.
Joel C. Thompson, Berry & Thompson, Houston, TX, for Jerome Moak and Dorothy Moffett.
Robert L. LeBoeuf, LeBoeuf, Wittenmyer, Underwood & Williams, Angleton, TX, for Jayson Moak and Joel Moak.
Kenneth M. Slack, Bellaire, TX, for Blake Moak.
Amanda S. Hilty, Chalker, Bair & Associates, Houston, TX, for Amica.
Appeal from the United States District Court for the Southern District of Texas.
Before JONES, DUHE and STEWART, Circuit Judges.
This case arises out of an automobile accident that killed David Moak (David). In probate court, David's estate and family members divided one million dollars in insurance proceeds deposited by the negligent driver's insurance company. At issue in this case is an additional five hundred thousand dollars in underinsured motorist proceeds deposited into the court registry by David's insurer. Interpreting the policy to cover all of David's immediate family, the magistrate judge held that principles of collateral estoppel applied and the parties were entitled to recover damages in the same proportion as in the probate court. We affirm the magistrate judge's interpretation of the policy, but reverse the finding that the apportionment of damages in the probate court collaterally estops further litigation on that issue.
On May 8, 1992, David was killed when his car was struck by a truck driven by David Bohuslav while in the course and scope of his employment for Bohuslav Trucking, Inc. David was survived by his wife Donna, their son Blake, his sons from a previous marriage Jayson and Joel, and his parents Dorothy and Jerome. Each of the survivors brought a wrongful death action against Bohuslav and his trucking company in probate court.
Because Truck Insurance Exchange (TIE), Bohuslav's insurer, was unable to settle the lawsuits, it filed an interpleader action in the federal court and deposited the one million dollars in policy proceeds into the registry of the court. The claimants reached an agreement for the division of the proceeds and submitted the agreement to the probate court. The probate judge, however, rejected the proposed distribution and, after hearing evidence, suggested his own apportionment, which the parties approved and the interpleader court adopted.
In addition to the Bohuslav insurance coverage, David and Donna had purchased five hundred thousand dollars worth of uninsured/underinsured motorist coverage from Amica Mutual Insurance Company (Amica). Prior to the distribution of the Bohuslav proceeds, Amica also filed an interpleader action against all of the claimants and deposited its proceeds into the registry of the court. Aware of the additional Amica proceeds, the claimants did not include any reference to the Amica proceeds in the Bohuslav settlement. 1
In this case, all claimants brought summary judgment motions asserting their rights to the Amica proceeds. Donna contended that she, and possibly Blake, 2 were the only individuals entitled to the Amica money because the others were not "covered persons" under the policy. The other claimants argued in their motions that they were "covered persons" under the policy and that principles of collateral estoppel entitled them to recover in the same proportion as in the earlier Bohuslav case. The magistrate judge denied Donna's motion and granted summary judgment in favor of the other claimants. Donna now appeals.
Insurance policies are contracts and are governed by the principles of interpretation applicable to contracts. Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex.1987). State law rules of construction govern in diversity cases. Ideal Mut. Ins. Co. v. Last Days Evangelical Ass'n, Inc., 783 F.2d 1234, 1238 (5th Cir.1986). The court's role in determining whether to grant summary judgment in a case involving the construction of an insurance policy is to determine whether there is ambiguity in the applicable terms of the policy. Yancey v. Floyd West & Co., 755 S.W.2d 914, 917 (Tex.Ct.App.1988, writ denied). When the terms of an insurance policy are unambiguous, a court may not vary those terms. Royal Indem. Co. v. Marshall, 388 S.W.2d 176, 181 (Tex.1965). We review determinations of law de novo. We agree with the magistrate judge that the terms of the policy are not ambiguous.
The key provision of the policy reads:
INSURING AGREEMENT:
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.
The policy also includes the following definition:
'Covered Person' as used in this part means:
1. You or any family member; 3
2. Any other person occupying your covered auto;
3. Any person for damages that person is entitled to recover because of bodily injury to which this coverage applies sustained by a person described in 1. or 2. above.
Blake, Jayson, Joel, Dorothy, and Jerome are "covered persons" as defined in category 3. Under the Texas wrongful death statute, they are persons entitled to recover damages because of bodily injury sustained by David, who is a person described in category 1. 4 Blake is also a "covered person" under category 1., because he was a resident of David's household at the time of the accident. Donna's arguments to the contrary are unconvincing.
The crux of Donna's argument is that the definition of "covered persons" is exclusionary in nature acting as a limitation on persons covered. She contends that any blood relative not included in category 1. is forever excluded and thus cannot be a "covered person" under any other category. The plain language of the policy belies such a strained reading. An individual need only be included in one of the three categories to achieve "covered person" status. Donna cites Liberty Mut. Ins. Co. v. Am. Ins. Co., 556 S.W.2d 242, 244 (Tex.1977), as support for the proposition that the other claimants are excluded from coverage. However, her reliance on Liberty is misplaced because, unlike Liberty, the definition of "covered person" here at issue is not an exclusion or limitation of liability, but a recitation of those who are included under the policy. The Amica policy at issue contains within the Uninsured Motorist portion of the policy separate sections entitled "Exclusions" and "Limit of Liability," neither of which excludes or limits in any way coverage of the other claimants.
Donna next argues that no one other than David sustained a "bodily injury" because loss of consortium and mental anguish are not "bodily injuries" under Texas law. See McGovern v. Williams, 741 S.W.2d 373, 374-75 (Tex.1987). However, this contention is without consequence because the language of the policy does not require the other claimants to have suffered bodily injury. The policy only requires them to be entitled to damages because of bodily injury sustained by a person described in category 1. or 2. Since David is described in category 1. and the bodily injury to David entitles them to recover damages under Texas wrongful death law, under the policy it is irrelevant that they themselves did not sustain bodily injury.
Donna next contends that the language in the policy agreeing to transfer a named insured's interest in the policy upon death to that person's spouse evidences that only she is entitled to the proceeds. However, this provision does not mention or suggest in any way that it pertains to distribution of the proceeds. It is merely the mechanism to change the named...
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