Boyd Motors, Inc. v. Employers Ins. of Wausau, Civ. A. No. 85-2370-S.
| Decision Date | 08 July 1987 |
| Docket Number | Civ. A. No. 85-2370-S. |
| Citation | 670 F. Supp. 310 |
| Parties | BOYD MOTORS, INC., Plaintiff, v. EMPLOYERS INSURANCE OF WAUSAU, Defendant. |
| Court | U.S. District Court — District of Kansas |
Eldon Boisseau, Hal D. Meltzer/Len Frischer, Turner & Boisseau, Wichita, Kan., for plaintiff.
Paul Hasty, Jr., Wallace, Saunders, Austin, Brown and Enochs, Chtd., Overland Park, Kan., for defendant.
This matter is before the court on various motions of the parties. The court will first address the defendant's motion in limine. While the motion is captioned Motion in Limine, essentially the motion constitutes a motion for summary judgment. The court will therefore treat it as such.
A moving party is entitled to summary judgment only when the evidence indicates that no genuine issue of material fact exists. Fed.R.Civ.P. 56(c); Maughan v. SW Servicing, Inc., 758 F.2d 1381, 1387 (10th Cir.1985). An issue of fact is "material" only when the dispute is over facts that might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). The requirement of a "genuine" issue of fact means that the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. Thus, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id. The court must consider factual inferences tending to show triable issues in the light most favorable to the existence of those issues. United States v. O'Block, 788 F.2d 1433, 1435 (10th Cir.1986). The court must also consider the record in the light most favorable to the party opposing the motion. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir. 1984), cert. denied, 469 U.S. 1214, 105 S.Ct. 1187, 84 L.Ed.2d 334 (1985). The language of Rule 56(a) mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552-54, 91 L.Ed.2d 265 (1986).
For purposes of this motion, the following facts are uncontroverted:
1. The defendant, Employers Insurance of Wausau, issued a commercial inland marine insurance policy to Volkswagen Credit, Inc.
2. Volkswagen purchased the policy so it could surcharge the policy and thereby provide coverage to automobile dealers who floor-planned their new car inventory with Volkswagen Credit, Inc.
3. Plaintiff claims coverage under the policy for certain vehicles that plaintiff floor-planned with Volkswagen Credit, Inc.
4. Plaintiff is an automobile dealer whose new-car inventory was severely damaged by hail.
5. The defendant paid $103,160.41 to Volkswagen Credit, Inc. on plaintiff's claim for the floor-planned automobiles, based on the cost of repairing the damaged vehicles.
6. Plaintiff seeks an additional $40,609.48 based on its claim that the vehicles are worth less after the damage and repairs than the vehicles were worth before the damage.
7. Plaintiff claims that the repairs do not put the vehicles in the same condition as they were when they were new.
8. The policy at issue in this case is the inland marine insurance policy. The terms of the insurance policy provide the following:
Id. (Emphasis Added).
It is the position of the defendant that plaintiff's claim for $40,609.48 does not fall within the terms of coverage of the insurance policy because the claim is not "direct physical loss or damage." In addition, the defendant contends that even if such a claim would be considered direct physical loss or damage, the policy specifically excludes such loss because it is a "loss or market" within the meaning of the exclusionary provisions of the policy.
In response to defendant's motion in limine, the plaintiff claims that the repairs paid for by the defendant did not put the vehicles in the same condition as they were when new. The plaintiff then cites the decision in Venable v. Import Volkswagen, Inc., 214 Kan. 43, 519 P.2d 667 (1974) for the proposition that when an insurance company elects to repair a vehicle, and the repair fails to restore the vehicle to the condition it was in prior to the damage, the insurance company is liable for the dimunition in value of the vehicle. Plaintiff states that it is seeking to recover the wholesale value of the automobiles immediately before the damage, less the value of the automobiles after the repairs. Plaintiff claims this is covered under the policy as it is a "direct physical loss." Plaintiff further contends that the term of exclusion, "loss of market," is an ambiguous term and should not be construed to mean loss in market value. Based on plaintiff's contention that loss of market is an ambiguous term, plaintiff argues that the policy must be construed in favor of the plaintiff.
After reviewing analogous case law, the court finds that as a general rule, recovery in cases of damages to an automobile is limited to the cost of repair. Volkswagen of America, Inc. v. Robertson, 713 F.2d 1151, 1168 (5th Cir.1983). Where an award of cost of repair is a measure of damages to an automobile, additional damages may be recovered for the dimunition of value by virtue of the vehicle having been involved in an accident, provided proof of such diminished value may be made. Id. (quoting Traders & General Insurance Co. v. Robison, 289 So.2d 178, 185 (La.App. 1st Cir.1973)). The court finds that the decision cited by the plaintiff, Venable v. Import Volkswagen, Inc., 214 Kan. 43, 519 P.2d 667 (1974) is instructive on the issue before this court. In Venable, the court stated that when an insurer makes an election to repair or rebuild under a "repair, restore or replace clause" in its policy, the insurer is then obligated to put the vehicle in substantially the same condition as it was prior to the collision so as to render it as valuable and as serviceable as before. Id. at 48, 519 P.2d 667. See also MFA Insurance Co. v. Citizens National Bank of Hope, 260 Ark. 849, 545 S.W.2d 70 (1977) (). A distinction must be made, however, between the case law dealing with a consumer and its insurance company and the present case which involves dealings between a car dealer and the inland marine insurer.
The parties are correct in stating that there is no case law which directly addresses the issue presently before this court. As stated in the decision of Venable, the liability of an insurer is based on its contract, subject to conditions imposed on the contracting parties by regulation and statute. Based on the fact that the insurer's liability is contractual, it follows that in an action for damages brought upon a contract of insurance, the provisions of the contract generally govern the measure of recovery, rather than rules relating to damages and tort cases. Venable, 214 Kan. at 46-47, 519 P.2d 667. In construing an insurance policy, the overriding principle pertaining to the construction and interpretation of the contract is that the intention of the parties should control. The insurance policy is a contract and thus any action based thereon must be governed by the terms of the policy.
Where the provisions of the contract are plain and unambiguous upon their face, they must be applied as written, and the court will not pervert or do violence to the language used, or expand it beyond its plain or ordinary meaning or add something to the contract which the parties have not put there.
Cagle v. Home Insurance Co., 14 Ariz. App. 360, 483 P.2d 592, 595 (1971) (quoting D.M.A.F.B. Federal Credit Union v. Employers Mutual Liability Insurance Co. of Wisconsin, 96 Ariz. 399, 396 P.2d 20, 23 (1964)). Under the rules of construction, it is necessary to read the basic policy as a whole to arrive at the intent of the parties. Id. 483 P.2d at 597.
The court has reviewed the policy at issue. Paragraph 4 of the commercial inland marine policy states:
THE COMPANY SHALL NOT BE LIABLE BEYOND THE ACTUAL CASH VALUE OF THE PROPERTY AT THE TIME ANY LOSS OR DAMAGE OCCURS AND THE LOSS OR DAMAGE SHALL BE ASCERTAINED OR ESTIMATED ACCORDING TO SUCH ACTUAL CASH VALUE WITH PROPER DEDUCTION FOR DEPRECIATION, HOWEVER CAUSED, AND SHALL IN NO EVENT EXCEED WHAT IT WOULD THEN COST TO REPAIR OR REPLACE THE SAME WITH MATERIAL OF LIKE KIND AND QUALITY.
The rider, which governs the floor plan insurance, further provides in paragraph 5:
Paragraph 6 of the floor plan insurance policy states that a limit of liability under the policy shall not exceed the amount required to be reported...
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