Canal Ins. Co. v. Moore Freight Servs., Inc.
| Decision Date | 16 June 2015 |
| Docket Number | No.: 3:13-CV-447-TAV-HBG,: 3:13-CV-447-TAV-HBG |
| Parties | CANAL INSURANCE COMPANY, Plaintiff, v. MOORE FREIGHT SERVICES, INC., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Tennessee |
This declaratory judgment action is before the Court on Plaintiff's Motion for Summary Judgment [Doc. 68]. Defendants TA Operating LLC and Treston Harris, filed a response indicating no opposition [Doc. 69].1 Defendant Patty Wilson, individually and as administrator for the Estate of Jerry Wilson, filed a response in opposition [Doc. 70], to which plaintiff replied [Doc. 71]. After careful consideration of the record and relevant law, and for the reasons set forth herein, the Court will grant plaintiff's motion for summary judgment.
This declaratory judgment action arises out of tort litigation filed by Patty C. Wilson ("Mrs. Wilson"), individually and as administrator of the Estate of Jerry Wilson, in the United States District Court for the Eastern District of Pennsylvania, civil action number 2:13-cv-01093 (the "underlying tort action") [Doc. 27 ¶ 13]. The underlying tortaction arises from the alleged personal injury and wrongful death of Jerry Wilson ("Mr. Wilson") on or about October 17, 2011 [Id. ¶ 16].
According to the allegations in the underlying tort action, Moore Freight Service Inc. ("Moore Freight") hired Mr. Wilson to haul glass [Id. ¶ 17]. Moore Freight provided Mr. Wilson with trailer #211857 TN Reg #U256293 to transport the glass [Id.]. Mr. Wilson "was using the trailer . . . in the course and scope of occupation" [Doc. 27-2 ¶ 38].
On October 27, 2011, Mr. Wilson allegedly noticed that "the braking system of his trailer started smoking and/or caught fire" [Id. ¶ 30]. Mr. Wilson "pulled to the side of the road, got out of his vehicle and while responding to the stressful emergency his heart stopped beating and he died" [Id.].
Prior to October 27, 2011, plaintiff Canal Insurance Company issued a commercial automobile policy, policy number PIA0639650, to defendant Moore Freight (the "Policy") [Doc. 27 ¶ 20]. The Policy is the subject of this motion for summary judgment. Plaintiff asserts that, under two exclusions in the Policy, it has no duty to defend or indemnify Moore Freight in the underlying tort action.
Summary judgment under Rule 56 of the Federal Rules of Civil Procedure is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Catrett, 477 U.S. 317, 330 n.2 (1986); Moore v. Philip MorrisCos., Inc., 8 F.3d 335, 339 (6th Cir. 1993). All facts and all inferences to be drawn therefrom must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 301 F.3d 937, 942 (6th Cir. 2002). Yet, "[o]nce the moving party presents evidence sufficient to support a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations." Curtis Through Curtis v. Universal Match Corp., 778 F. Supp. 1421, 1423 (E.D. Tenn. 1991) (citing Celotex, 477 U.S. at 317). To establish a genuine issue as to the existence of a particular element, the nonmoving party must point to evidence in the record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that might affect the outcome of the suit under the governing law. Id.
The Court's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper question for the factfinder. Anderson, 477 U.S. at 250. The Court does not weigh the evidence or determine the truth of the matter. Id. at 249. Nor does the Court search the record "to establish that it is bereft of a genuine issue of material fact." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989). Thus, "the inquiry performed is the threshold inquiry of determining whether there is a need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250.
Plaintiff argues it has no duty to defend or indemnify in the underlying tort action because the Policy's employee-indemnification exclusion excludes coverage for injuries sustained by an employee of Moore Freight, and Mr. Wilson was an employee of Moore Freight. Plaintiff also argues it has no duty to defend or indemnify in the underlying tort action because the Policy's workers' compensation exclusion excludes coverage for injuries eligible for workers' compensation benefits, and Mr. Wilson's injuries were so eligible.
Before the Court addresses the Policy, the Court must examine what law governs this dispute. Plaintiff advocates for Tennessee law, while Mrs. Wilson advocates for Pennsylvania law.
This is a diversity action; thus, state substantive law governs. Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 894 (6th Cir. 1997) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). The Court is required to apply the choice-of-law rules of the state in which it sits. Montgomery v. Wyeth, 580 F.3d 455, 459 (6th Cir. 2009) (citation omitted). "In Tennessee, absent a valid choice of law provision, the rights and obligations under an insurance policy are governed by the law of the state where the insurance policy was 'made and delivered.'" Charles Hampton's A—1 Signs, Inc. v. Am. States Ins. Co., 225 S.W.3d 482, 485 n.1 (Tenn. Ct. App. 2006) (quoting Ohio Cas. Ins. Co. v. Travelers Indem. Co., 493 S.W.2d 465, 467 (Tenn. 1973)); accord Yarnell v. Transamerica Life Ins. Co., 694 F. Supp. 2d 857, 861 (E.D. Tenn. 2010). This ruleembodies the traditional "lex loci contractu" choice-of-law theory. See Std. Fire Ins. Co. v. Chester O'Donley & Assocs., Inc., 972 S.W.2d 1, 5 n.1 (Tenn. Ct. App. 1998).
No party has identified any choice-of-law provision in the Policy, but plaintiff asserts the Policy was "negotiated, drafted, entered into, and issued to Moore Freight in Knoxville, Tennessee" [Doc. 68-2 p. 7-8]. Mrs. Wilson asserts she is "without sufficient information or belief as to whether this factual averment is true" [Doc. 70 p. 2]. Mrs. Wilson, however, fails to demonstrate a genuine dispute in this regard, and she does not request additional discovery so that she may obtain this information. See Fed. R. Civ. P. 56(c), (d). Plaintiff, on the other hand, has submitted an affidavit made on personal knowledge that sets out facts demonstrating the Policy was made and delivered in Tennessee [Doc. 68-2 p. 7-9]. The Court therefore determines there is no genuine dispute regarding where the Policy was made and delivered; that is, Tennessee. See Fed. R. Civ. P. 56(e)(2) (). Thus, the Court will apply Tennessee law.
Under Tennessee law, "[t]he question of the extent of insurance coverage is a question of law involving the interpretation of contractual language[.]" Clark v. Sputniks, LLC, 368 S.W.3d 431, 441 (Tenn. 2012). "Insurance contracts are 'subject to the same rules of construction as contracts generally,' and in the absence of fraud or mistake, the contractual terms 'should be given their plain and ordinary meaning, for the primary rule of contract interpretation is to ascertain and giveeffect to the intent of the parties.'" Id. (quoting U.S. Bank, N.A. v. Tenn. Farmers Mut. Ins. Co., 277 S.W.3d 381, 386-87 (Tenn. 2009)). As the Sixth Circuit has noted:
If the language is clear and unambiguous, the literal meaning controls the outcome of the dispute. If, however, the words in a contract are susceptible to more than one reasonable interpretation, the parties' intent cannot be determined by a literal interpretation of the language, and any uncertainties or ambiguities in an insurance policy must be construed strongly against the insurer and in favor of the insured. A strained construction may not be placed on the language used to find ambiguity where none exists, and a contract is not rendered ambiguous simply because the parties disagree as to the interpretation of one or more of its provisions.
Cracker Barrel Old Country Store, Inc. v. Cincinnati Ins. Co., 499 F. App'x 559, 562 (6th Cir. 2012) (alterations, quotation marks, and citations omitted).
Regarding clauses that exclude coverage, Tennessee has determined they "should be strictly construed against the insurer but in light of their apparent purpose." Nat'l Ins. Ass'n v. Simpson, 155 S.W.3d 134, 138 (Tenn. Ct. App. 2004) (citations omitted). "When the purpose of an exclusion can be ascertained, the courts should avoid construing the language of the exclusion so narrowly that its purpose is undermined." Id. (footnote omitted) (citing Std. Fire, 972 S.W.2d at 8).
Plaintiff asserts it has no duty to defend Moore Freight in the underlying tort action because the Policy excludes coverage for "bodily injury" to "[a]n 'employee' of the 'insured' arising out of and in the course of: (1) [e]mployment by the 'insured'; or (2) [p]erforming the duties related to the conduct of the 'insured's' business" [Doc. 1-2 p.35]. The exclusion applies "[w]hether the 'insured may be liable as an employer or in any other capacity" [Id.]. "Employee" is defined in the Policy as the following:
"Employee" includes a "leased worker". "Employee" also includes...
To continue reading
Request your trial