Barnhill v. Liberty Mut. Fire Ins. Co., 1:00-CV-12.

• Decision Date: 12 February 2001
• Docket Number: No. 1:00-CV-12.,1:00-CV-12.
• Citation: 129 F.Supp.2d 1192
• Parties: Louis Jeane BARNHILL, as Personal Representative of the Estate of Peter V. Barnhill, deceased, Plaintiff, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Indiana

129 F.Supp.2d 1192

Louis Jeane BARNHILL, as Personal Representative of the Estate of Peter V. Barnhill, deceased, Plaintiff, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.

No. 1:00-CV-12.

United States District Court, N.D. Indiana, Fort Wayne Division.

February 12, 2001.

John F. Lyons, Barrett & McNagny, Fort Wayne, IN, for John F. Lyons, mediator.

John O. Feighner, Haller and Colvin, Fort Wayne, IN, for Lois Jeane Barnhill, Personal Representative of the Estate of Paul V. Barnhill, deceased plaintiff.

Robert T. Keen, Jr., Miller Carson Boxberger and Murphy, Fort Wayne, IN, for Liberty Mutual Insurance Company, defendant.

MEMORANDUM OF DECISION AND ORDER

WILLIAM C. LEE, Chief Judge.

This matter is before the Court on a Motion for Summary Judgment filed by the defendant Liberty Mutual Life Insurance Company on December 15, 2000. Plaintiff Lois Barnhill as personal representative of the estate of Paul Barnhill filed a response to that motion on January 16, 2001 to which defendant filed a reply on January 25, 2001. For the following reasons, the Motion for Summary Judgment will be granted.

Factual Background

The facts underlying this litigation, while interesting from a legal perspective, are tragic. Paul V. Barnhill ("Mr.Barnhill") was a retired body-shop operator who worked as an independent contractor for Kelly Leasing, Kelly Cars, and Kelly Automotive Group ("Kelly Cars") for approximately three years before his death. In that capacity, Mr. Barnhill delivered and returned leased vehicles throughout the United States and was paid for each trip based either upon mileage or an agreed rate.

On December 16, 1995, Mr. Barnhill, as agent for Kelly Cars, delivered a new van to an employee of Franklin Electric (which was the lessee) in Pennsylvania. Mr. Barnhill was then to return the old leased Franklin Electric van back to Kelly Cars in Fort Wayne.

While returning the leased van to Indiana, Mr. Barnhill was involved in a single car property damage accident along a remote stretch of Interstate 80 in Carbon County, Pennsylvania. Apparently slipping on the snow,¹ the van went across the highway, rode up over a highway guardrail and down a snow-covered embankment.²

Pennsylvania State Trooper Mark Michael was dispatched to the scene of the accident. He parked his State Police Jeep alongside the berm of the highway, approximately 60 feet West and 30 feet North of the location of the van driven by Mr. Barnhill. The Jeep's emergency lights were activated.

Trooper Michael was interviewing Mr. Barnhill regarding the accident. While the two were in the process of discussing the accident, the Jeep was struck by a tractor-trailer driven by Harley Branstad. The impact of the collision caused the Jeep to vault over the guardrail and plunge down the embankment until it ended up striking the van which had been driven by Mr. Barnhill. Trooper Michael received severe personal injuries. Mr. Barnhill was pronounced dead at the scene.³

As a result of the second accident, suit was filed in the United States District Court for the Middle District of Pennsylvania. Plaintiff Lois Jeane Barnhill, the personal representative and surviving spouse of Mr. Barnhill sued for wrongful death while a claim was brought for the severe injuries received by Trooper Michael. The truck driver, Mr. Branstad, was insured by Harco Insurance Company under a policy with a single limit liability of one million dollars. That case was settled for policy limits with present plaintiff receiving approximately $200,000 and Trooper Michael receiving approximately $800,000.

Plaintiff Lois Barnhill then filed this declaratory judgement action against Liberty Mutual Fire Insurance Company⁴ alleging that the leased van was insured by that company and that she was entitled to recover under the policy's underinsured motorist benefits. Liberty Mutual disputes this claim.

At the time of the collision, there was in effect a "Master Lease Agreement" between Kelly Cars and Franklin Electric which provided a procedure whereby Kelly Cars would lease vehicles to Franklin Electric employees in Indiana and elsewhere in the United States. Article 13 of the Master Lease Agreement required that insurance coverage be obtained by the lessee with Kelly Cars named as the insured. The provision went on to require that the insurance policy provided by the lessee was to "be in force and protect the Lessor, its agents or representatives while operating such vehicles for or on the direction of the Lessee."

Liberty Mutual insured Franklin Electric's leased vehicles. On December 16, 1995 (the date of the accident) there was in effect a policy⁵ that provided for a one million dollar property injury and property damage combined single limit coverage. The policy also included endorsements for underinsured motorist coverage for both Indiana and Pennsylvania. The Declaration Sheet shows that the policy limits for uninsured/underinsured motorist coverage was one million dollars in Indiana and $35,000 in Pennsylvania.

After the accident, Liberty Mutual paid $2,818.84 to the State of Pennsylvania for the damage which occurred when the van driven by Mr. Barnhill ran up over the guardrail. It has also paid Kelly Cars $10,102.99 for the property damage to the van. Liberty Mutual has refused to pay the Estate of Mr. Barnhill, resulting in this lawsuit.

Application of Law

The present motion for summary judgment is based upon Liberty Mutual's assertion that the estate should not recover for either of two reasons. First, it asserts that Mr. Barnhill was not "occupying" the insured vehicle at the time of the second collision and therefore, under the terms of the policy, was not covered. Second, Liberty Mutual contends that the policy's benefits do not inure to Mr. Barnhill because the insurance provided by Liberty Mutual ceased at the time Mr. Barnhill took possession of the leased vehicles. After a determination of which law governs this dispute as well as a brief review of the standards governing summary judgment, these argument will be considered in turn under separate headings.

Governing Law

A district court applies the choice of law rules of its forum. Klaxon v. Stentor Electric Mfg., Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Although the accident at issue in this case occurred in Pennsylvania, the parties agree that the substantive issues in this diversity case should be governed by Indiana law and this Court can accept such an agreement so long as it is reasonable. See, Speakers of Sport, Inc. v. ProServ, Inc., 178 F.3d 862, 864 (7th Cir.1999). The parties' agreement that Indiana law should control is a reasonable one⁶ and hence this Court will apply that substantive law to this case.

While Indiana law will govern the substantive law in this case, the procedural law, is of course, governed by federal law. Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate if the pleadings, affidavits and other material of record show that "there exists `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).

"Indiana courts have recognized that `[c]onstruction of an insurance policy is a question of law for which summary judgment is particularly appropriate'" since [t]he interpretation of `an insurance policy involves the same rules of construction and interpretation as other contracts.' Myles v. General Agents Ins. Co. of America, 197 F.3d 866, 868 (7th Cir.1999) (citations omitted). "Summary judgment is appropriate `if, as a matter of law, it is apparent that extrinsic evidence is unnecessary to ascertain the meaning of the policy[,]'" and hence, "[i]f an insurance policy's terms `are clear and unambiguous, the language of the policy must be given its plain and ordinary meaning.'" Id.

With the foregoing principles in mind, the Court now turns to the specific terms of the insurance policy at issue in this case.

"Occupying the Vehicle" Under the Terms of the Policy

Both the Indiana and Pennsylvania underinsured motorist coverage⁷ endorsement of the policy issued by Liberty Mutual to Franklin Electric provide identical requirements that a person be "occupying" a covered auto to be covered under the policy. Specifically, the policy provides:

A. Coverage

We will pay all sums the insured is legally entitled to recover as compensatory damages from the owner or driver of an underinsured motor vehicle. The damage must result from injury sustained by the insured and caused by an accident with an underinsured motor vehicle ...

B. Who Is An Insured

1. You.

2. If you are an individual, any `family member'.

3. Anyone else `occupying a covered `auto' or a temporary substitute for a covered `auto.' The covered `auto' must be out of service because of its repair, servicing, loss or destruction.

Under "Additional Definitions," the policy defines the term "occupying" as follows:

2. `Occupying' means in, upon, getting in, on, out or off."

(Pf. ex. 7, Indiana Motorists Coverage Endorsement). The term "temporary substitute for a covered `auto'" is not defined in the policy.

As a basis for claiming that it is entitled to summary judgment, defendant first argues that Mr. Barnhill was not "covered" under the policy because he was not, as required by the policy, "in, getting in, on, out or off" of the van. A review of cases which have construed such language leads this Court to agree.

Whether an individual is "in or about" — or as often used in insurance policies "alighting from" — a motor vehicle has been the subject of very many cases. Some courts look merely at the relationship between the injured party and the insured automobile in terms of time and distance in order to determine whether there should be coverage. See, e.g., Crear v. National Fire & Marine Ins. Co., 469 So.2d 329 (La.App.1985); Menchaca v. Farmers, 59 Cal.App.3d 117, 130 Cal.Rptr. 607 (1976). Other courts look at...