Allstate Ins. Co. v. Johnston

• Decision Date: 07 October 2004
• Docket Number: No. CIV.A. 04-2363-GTV.,CIV.A. 04-2363-GTV.
• Citation: 339 F.Supp.2d 1191
• Parties: ALLSTATE INSURANCE COMPANY, Plaintiff, v. Jared JOHNSTON, Bruce Johnston, and Kathy Johnston, co-guardians of Jared Johnston and co-conservators of the Estate of Jared Johnston, Defendants.
• Court: U.S. District Court — District of Kansas

339 F.Supp.2d 1191

ALLSTATE INSURANCE COMPANY, Plaintiff, v. Jared JOHNSTON, Bruce Johnston, and Kathy Johnston, co-guardians of Jared Johnston and co-conservators of the Estate of Jared Johnston, Defendants.

No. CIV.A. 04-2363-GTV.

United States District Court, D. Kansas.

October 7, 2004.

Paul P. Hasty, Jr., Wallace, Saunders, Austin, Brown & Enochs, Chtd., Overland Park, KS, for Plaintiff.

Michelle Reinert Mahieu, David J. Rebein, Rebein Bangerter, PA, Dodge City, KS, for Defendants.

MEMORANDUM AND ORDER

VANBEBBER, Senior District Judge.

Plaintiff Allstate Insurance Company brings this interpleader and declaratory judgment action against Defendants Jared Johnston, Bruce Johnston, and Kathy Johnston.¹ Plaintiff seeks resolution of uninsured motorist claims Defendants filed against Plaintiff arising out of an automobile accident. This action is before the court on Plaintiff's motion for summary judgment (Doc. 13). Specifically, Plaintiff requests a determination as to whether the personal umbrella policy Defendants purchased from Plaintiff provides for uninsured motorist coverage. For the following reasons, the court holds that the umbrella policy provides only excess liability coverage, and does not provide uninsured motorist coverage.

I. FACTUAL BACKGROUND

The facts in this case are not controverted. On April 6, 2004, twenty-two year old Defendant Jared Johnston, the son of Defendants Bruce and Kathy Johnston, was severely injured in a one vehicle accident in the state of Florida.² At the time, Jared Johnston was riding in an automobile operated by Steven Ritter, an uninsured motorist. As a result of the injuries Jared Johnston suffered in the accident, Defendants Bruce and Kathy Johnston filed claims with Allstate under their automobile insurance policy and their personal umbrella policy.

In response to those claims, Plaintiff has made payments to Jared Johnston's health care providers for P.I.P. medical and rehabilitation benefits under the parents' automobile insurance policy. Plaintiff has also deposited $100,000 in the registry of the Court. That deposit represents the amount of the automobile insurance policy's limit for uninsured motorist benefits. Plaintiff, however, denies that Defendants' personal umbrella policy provides uninsured motorist coverage.

II. STANDARD OF REVIEW

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Lack of a genuine issue of material fact means that the evidence is such that no reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. 2505.

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. "[A] party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. Therefore, 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 the record in the light most favorable to the nonmoving party. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir.1984).

III. DISCUSSION

The parties agree that Kansas law applies to the insurance policy at issue. The parties further agree that Kansas law does not require Plaintiff to provide uninsured motorist coverage in the personal umbrella policy.³ Thus, the sole issue before the court is whether the terms of Plaintiff's personal umbrella policy do in fact provide uninsured motorist coverage to Defendants.

The "[i]nterpretation of an insurance policy is a question of law." Atchison, Topeka & Santa Fe Ry. Co. v. Stonewall Ins. Co., 275 Kan. 698, 71 P.3d 1097, 1120 (2003). A court must construe an insurance policy to carry out the intention of the parties. Colfax v. Johnson, 270 Kan. 7, 11 P.3d 1171, 1175 (2000) (citing Brumley v. Lee, 265 Kan. 810, 963 P.2d 1224, 1226 (1998)). Absent ambiguity, the court will enforce the policy as written. Stonewall Ins. Co., 71 P.3d at 1120. "Where the terms of a policy of insurance are ambiguous or uncertain, conflicting, or susceptible of more than one construction, the construction most favorable to the insured must prevail." Catholic Diocese of Dodge City v. Raymer, 251 Kan. 689, 840 P.2d 456, 459 (1992). "The test to determine whether an insurance contract is ambiguous is not what the insurer intends the language to mean, but what a reasonably prudent insured would understand the language to mean." Colfax, 11 P.3d at 1175 (citing Associated Wholesale Grocers, Inc. v. Americold Corp., 261 Kan. 806, 934 P.2d 65, 78 (1997)). "All pertinent provisions of an insurance policy must be considered together, rather than in isolation, and given effect." Stonewall Ins. Co., 71 P.3d at 1120 (citing Brumley, 963 P.2d at 1227).

Plaintiff contends that the personal umbrella policy at issue only provides excess liability insurance. Plaintiff's position is that the policy covers Defendants when they are legally obligated to pay damages to a third party. Noticeably absent, Plaintiff asserts, is a provision indemnifying Defendants when a third party is legally obligated to pay damages to them. Plaintiff cites to portions of the umbrella policy to support its position. First, under the section entitled "Excess Liability Insurance," Plaintiff directs the court to the policy's main coverage and payment provisions:

This policy provides only excess insurance. It does not contribute with any Required Underlying Insurance or other insurance which applies to an occurrence. It also is excess to any Retained Limit an insured assumes.

Coverage — When We Pay

Allstate will pay when an insured becomes legally obligated to pay for personal injury or property damage caused by an occurrence.

...

Amounts We Pay

Allstate will pay only those amounts within our limit of liability which exceed the sum of:

1. The limits of liability of any Required Underlying Insurance which apply to the occurrence; plus

2. The limits of any other liability insurance available to an insured which apply to the occurrence.

...

If no other insurance is required and no other insurance applies to the occurrence, we will pay only those amounts which exceed the Retained Limit.

Plaintiff also notes that because the umbrella policy provides "excess" liability coverage, the policy requires an insured to maintain underlying liability coverage "if that [insured] has the liability exposure listed." (emphasis added). Among the list of "Required Underlying Insurance," Plaintiff points out that automobile liability coverage of $100,000/$300,000 for bodily injury and $50,000 for property damage, or a single limit of $300,000 is required. Stated simply, Plaintiff asserts that the umbrella policy does not mention uninsured motorist coverage because the policy does not provide it.

Defendants claim that the umbrella policy provides uninsured motorist coverage. Defendants suggest that Plaintiff could have used clear and unambiguous language expressing its intention to exclude uninsured motorist coverage from the umbrella policy. Because Plaintiff failed to do so, Defendants request the court to interpret the policy in their favor. Furthermore, Defendants maintain that the umbrella policy does not exclude uninsured motorist coverage simply because the policy does not require them to maintain underlying uninsured motorist insurance. Defendants maintain that the "Required Underlying Insurance" section specifies the minimum coverage the insured is required to maintain with respect to certain categories of claims. In particular, they argue that "[t]he umbrella policy expressly contemplates that certain claims will be covered by the umbrella policy (e.g., primary coverage) even though they are not covered by an underlying required insurance policy." Defendants support this statement by citing a portion of the umbrella policy, quoted above, that states: "If no other insurance is required and no other insurance applies to the...