GEICO v. Fetisoff, 91-7065

• Decision Date: 20 March 1992
• Docket Number: No. 91-7065,91-7065
• Citation: 294 U.S.App. D.C. 279,958 F.2d 1137
• Parties: GEICO, Appellant, v. Valentine FETISOFF, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1137

958 F.2d 1137

294 U.S.App.D.C. 279

GEICO, Appellant, v. Valentine FETISOFF, Appellee.

No. 91-7065.

United States Court of Appeals District of Columbia Circuit.

Argued Jan. 31, 1992.

Decided March 20, 1992.

Appeal from the United States District Court for the District of Columbia (Civil Action No. 90-2499).

Sanford A. Friedman, Washington, D.C. (Laurence T. Scott, was on the brief), for appellant.

Paul Terrence O'Grady, Washington, D.C., for appellee.

Before EDWARDS, SILBERMAN and HENDERSON, Circuit Judges.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

In March 1990, a personal injury action arising out of an automobile accident was brought against appellee Valentine Fetisoff. The GEICO insurance company ("GEICO"), which insured Fetisoff, subsequently initiated a declaratory judgment action in the District Court, seeking to obtain a determination of its liability under the insurance policy it had issued to Fetisoff. The issue dividing GEICO and Fetisoff was the proper interpretation of the policy's limitation of liability provision; GEICO contended that the so-called "each person" limitation was applicable to the underlying tort action, while Fetisoff believed that the higher "each occurrence" limitation applied.

The District Court held that the limitation of liability provision was ambiguous and therefore granted summary judgment to Fetisoff. GEICO v. Fetisoff, Civ. No. 90-2499, 1991 WL 35521 (D.D.C. Feb. 28, 1991), reprinted in Appendix ("App.") 100. Because we find that the provision is not ambiguous, and that its plain language is in accord with GEICO's position in this litigation, we reverse the judgment of the District Court and remand with instructions that judgment be entered in favor of GEICO.

I. BACKGROUND

The facts of this case are straightforward and undisputed. On November 13, 1988, Tamara Fetisoff was involved in an automobile accident in which the driver of another car, Linda Whitney, was injured. Linda Whitney and her husband, John, subsequently filed a personal injury action in the District Court against Tamara Fetisoff and her husband, Valentine, who owned the automobile that Mrs. Fetisoff had been driving. Whitney v. Fetisoff, Civ. No. 90-0708 (D.D.C. filed Mar. 27, 1990). Linda Whitney sought $750,000 for injuries sustained in the accident; John Whitney asserted a separate claim for loss of consortium, seeking damages of $250,000. The District Court had subject matter jurisdiction over the action because the Whitneys are citizens of the District of Columbia, while the Fetisoffs are citizens of Virginia. See 28 U.S.C. § 1332(a)(1), (d) (1988).

At the time of the accident, Valentine Fetisoff was insured by GEICO under a so-called "$100,000/$300,000" automobile liability insurance policy--that is, a policy providing $100,000 of coverage for "each person" who suffers bodily injury in an accident, up to a maximum of $300,000 for "each occurrence." See Family Combination Automobile Insurance Policy ("GEICO Policy"), reprinted in App. 9. As settlement negotiations in the underlying tort action progressed, a dispute developed between GEICO and the Fetisoffs regarding the meaning of the language contained in the limitation of liability provision of the GEICO policy. GEICO contended that because only one person--Linda Whitney--suffered physical injury in the accident, its total liability on the underlying claim was the "each person" limitation of $100,000. The Fetisoffs believed that because both Linda and John Whitney had asserted claims against them, the higher "each occurrence" limitation was applicable.

On October 10, 1990, GEICO brought suit in the District Court against Valentine Fetisoff, seeking a declaratory judgment that its reading of the relevant policy language was correct. In its amended complaint, GEICO named Fetisoff and the Whitneys as defendants. Although the jurisdictional allegations in the amended complaint were unclear, the complaint appeared to assert that GEICO is a District of Columbia corporation; it went on to state, correctly, that the Whitneys also are citizens of the District. See Amended Complaint for Declaratory Judgment pp 2, 4, reprinted in App. 36. Notwithstanding the apparent lack of diversity between GEICO and the Whitneys, the amended complaint premised jurisdiction on diversity of citizenship. ¹ Id. pp 5-6. None of the parties brought this apparent jurisdictional defect to the attention of the District Court.

A few days after the amended complaint was filed, both GEICO and Fetisoff moved for summary judgment. Both parties asserted that there were no material issues of fact in dispute, and each argued that its interpretation of the policy was correct as a matter of law. GEICO claimed that the relevant policy language plainly indicated that the $100,000 "each person" limitation encompassed both Linda Whitney's personal injury claim and John Whitney's loss of consortium claim; Fetisoff contended that the policy language was ambiguous and should be construed in his favor.

On February 28, 1991, the District Court issued a Memorandum and Order granting Fetisoff's motion for summary judgment. Applying District of Columbia law, the trial court concluded that the limitation of liability provision in the GEICO policy contained a "real ambiguity," although no precise ambiguity was identified. GEICO, slip op. at 7. Accordingly, relying upon the rule of contra proferentem, the District Court construed the provision against GEICO and held that the higher "each occurrence" coverage amount was available to satisfy the Whitneys' underlying claims. Id. at 2, 7. GEICO filed a timely appeal of the District Court's order. ²

Shortly after the briefing of this appeal was completed, this court, sua sponte, issued an order which noted the jurisdictional problem created by the apparent lack of diversity between GEICO and the Whitneys, and directed the parties to be prepared to address the issue at oral argument. GEICO subsequently filed motion papers in this court in which it acknowledged that the requisite diversity of citizenship did not exist; the motion requested that we dismiss the Whitneys as parties to this case and permit GEICO to file a second amended complaint. Fetisoff opposed GEICO's motion in a submission filed on January 29, 1992.

At oral argument, counsel for GEICO unexpectedly withdrew the motion to dismiss the Whitneys, stating that upon investigation he had discovered that GEICO's corporate headquarters are in Maryland, and that GEICO is incorporated in that state as well. Counsel thus contended that GEICO is a Maryland citizen, and that therefore complete diversity exists between the parties. At our direction, GEICO subsequently submitted an affidavit attesting to the location of GEICO's headquarters and its state of incorporation. Fetisoff was afforded an opportunity to contest the statements attested to in GEICO's affidavit, but he chose not to do so.

Given Fetisoff's acquiescence in the facts presented in the GEICO affidavit, we are persuaded that the requisite diversity of citizenship exists in this case. ³ We therefore have jurisdiction to hear this appeal under 28 U.S.C. §§ 1291, 1332 (1988). ⁴

II. DISCUSSION

On appeal, GEICO argues that the language of the relevant policy provision is not ambiguous, and that under the plain language of the provision, the "each person" limitation controls GEICO's liability with respect to the underlying tort litigation. Fetisoff counters that the District Court properly found real ambiguity to exist in the policy language. We begin by considering which state's law applies in this case ⁵ and then proceed to address the substance of the parties' contentions. We conclude that under District of Columbia law, which governs this dispute, the limitation of liability provision is not ambiguous and the "each person" limitation applies to Mr. Whitney's loss of consortium claim.

A. Choice of Law

The District Court, without making an explicit choice of law determination, applied District of Columbia law in addressing the merits of this case. Our independent examination of the choice of law question reveals no reason to disturb the District Court's implicit choice of District of Columbia law.

In diversity cases, a federal court must apply the choice of law rules of the jurisdiction in which it sits. See, e.g., Eli Lilly & Co. v. Home Ins. Co., 764 F.2d 876, 882 (D.C.Cir.1985), later proceeding, 794 F.2d 710 (D.C.Cir.1986), cert. denied, 479 U.S. 1060, 107 S.Ct. 940, 93 L.Ed.2d 991 (1987). The District of Columbia follows a modified "interest analysis" approach to choice of law. Under this approach, the first step is to determine whether a "true conflict" exists--that is, whether more than one jurisdiction has a potential interest in having its law applied and, if so, whether the law of the competing jurisdictions is different. See id.; Fowler v. A & A Co., 262 A.2d 344, 348 (D.C.1970). If there is a true conflict, the court must go on to determine which of the relevant jurisdictions has the "more substantial interest" in having its law applied to the case under review. Eli Lilly & Co., 764 F.2d at 882.

The first step of the analysis is dispositive in this case. There are three potentially "interested" jurisdictions: the District of Columbia, where the Whitneys reside and where the automobile accident took place; Maryland, where GEICO is incorporated and has its principal place of business; and Virginia, where the Fetisoffs are domiciled. The law in each of these jurisdictions is the same with respect to the interpretation of insurance contracts--in all three, the plain meaning of the policy language controls, and any ambiguities are resolved in favor of the insured. See Meade v. Prudential Ins. Co. of America, 477 A.2d 726, 728 (D.C.1984); Howell v. Harleysville Mut. Ins. Co., 305 Md. 435, 505 A.2d 109, 113 (1986); Virginia Farm Bureau Mut. Ins. Co....