Cornwell v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 02 June 2005 |
| Docket Number | No. 4:03-CV-40650.,4:03-CV-40650. |
| Citation | 396 F.Supp.2d 1020 |
| Parties | Amy CORNWELL and Darren Cornwell, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Iowa |
Charles E Gribble, Parrish Kruidenier Moss Dunn Boles Gribble & Cook LLP, Des Moines, IA, for Plaintiffs.
Henry A Harmon, Grefe & Sidney PLC, Des Moines, IA, for Defendant.
ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on Defendant's Motion for Summary Judgment (Clerk's No. 9). Plaintiffs resist the requested action. Attorney for the Plaintiffs is Charles Gribble; attorney for the Defendant is Henry Harmon. Neither party has requested a hearing on the motion, and the Court finds none is necessary. Accordingly, the Court considers the motion fully submitted and ready for ruling.
The Plaintiffs, Amy Cornwell ("Cornwell") and Darren Cornwell (collectively, "the Cornwells"), commenced this action against Defendant, State Farm Mutual Automobile Insurance Company ("State Farm"), in the Iowa District Court for Polk County. The case was then removed by Defendant to this Court on November 18, 2003. Jurisdiction is appropriate pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332.
The lawsuit consists of two claims, breach of insurance contract (Count I) and bad faith (or breach of duty of good faith) (Count II), arising out of State Farm's alleged failure to fulfill its contractual duties in paying underinsured motorist benefits to Plaintiffs for injuries from an accident Amy Cornwell was involved in while on duty as a police officer. Defendant has moved for summary judgment on both counts.
Plaintiff Amy Cornwell was at all relevant times an individual residing in Urbandale Iowa. She was employed as a police officer by the Des Moines Police Department ("DMPD") and was acting within the course and scope of her employment at the time of the accident here in issue. Plaintiff Darren Cornwell is the legal spouse of Amy Cornwell and is also an Iowa resident. State Farm is an insurance company incorporated in Illinois with its principal place of business in Illinois. The Plaintiffs and State Farm were parties to an automobile insurance policy, which included the underinsured motorist provision at issue.
On March 21, 2001, while in the course of her duties as a DMPD police officer, Cornwell was a passenger in a patrol car driven by fellow DMPD police officer, Officer Jason Bennett.1 At roll call that evening, the officers were advised to be on the lookout for burglary suspects in a stolen vehicle. During Cornwell's shift, Officer Tim Morgan spotted the stolen vehicle and notified dispatch he was in pursuit of the burglary suspects. Officers Bennett and Cornwell were nearby and activated their lights and sirens to assist Officer Morgan in the pursuit of the suspects.
During the pursuit, Officers Bennett and Cornwell reached a speed of fifty miles per hour ("mph") in a residential area with a posted speed limit of twenty-five or thirty mph.2 While in the course of the pursuit, Officers Bennett and Cornwell were traveling parallel to the suspect vehicle and other pursuing officers on an adjacent street when they were advised the suspect vehicle had turned and was now headed toward them. Officer Cornwell advised Officer Bennett to angle the patrol vehicle in such a manner that the front of the vehicle was approximately three feet from the curb and the rear of the vehicle was approximately two feet from the opposite curb. This maneuver essentially blocked the street, though the suspect vehicle had room to drive over the curb and around the patrol car.
According to Cornwell, as the suspect vehicle approached, the driver of the suspect vehicle drove over the curb as if to go around the patrol car and then turned the wheel and aimed directly at the patrol vehicle. The two vehicles impacted, and the suspect vehicle flipped over. The driver of the vehicle fled on foot and was pursued by Officers Bennett and Morgan. Meanwhile, Cornwell drew her weapon on the two remaining passengers inside the suspect vehicle and was able to apprehend these suspects at the site of the accident.
As a result of the pursuit and ensuing accident, Cornwell's knee was injured, most likely as a result of twisting the knee.3 Cornwell claims she experienced pain in her knee immediately after the incident but did not seek medical attention until three days later. She continued to experience pain in the knee even after her doctor, Dr. Davick, prescribed an anti-inflammatory. Cornwell subsequently underwent arthroscopic surgery on May 1, 2001, during which time her doctor discovered a hole in the cartilage of her knee. While Cornwell initially did not remember a specific injury to her knee, she did note swelling and pain after the accident. Dr. Davick believed that Cornwell braced herself during the impact of the March 21 accident, causing her cartilage to tear away from the bone.
Following her surgery, Cornwell underwent physical therapy and was assigned light duty. Her doctor later advised her that she would not be able to run as a result of the injury and consequently could not return to work as a police officer. As a result, Cornwell applied for disability benefits.
Due to her injuries and inability to return to work, Cornwell was compensated pursuant to the provisions of the Des Moines Municipal Fire and Police Retirement System, from which she continues to draw a pension. In addition, the Cornwells effected a settlement of claims with the Progressive Insurance Company, which purportedly insured the fleeing suspect, in the amount of $100,000.00, i.e., the policy limit. As a result of a subrogation claim by the Des Moines Municipal Fire and Police Retirement System, Amy Cornwell ultimately received $5,297.77 of the initial settlement, and David Cornwell received $20,000 of the initial settlement amount for his loss of consortium claim. Plaintiffs insists the $100,000.00 tendered by the driver's insurer is insufficient to compensate the Cornwells for their damages, even considering the disability benefits Amy Cornwell receives.
Due to the resulting injuries, Cornwell is unable to return to her former job as a police officer with the DMPD. She has, however, returned to the work force, being most recently employed as an office assistant at Central Iowa Orthopaedics, where she works 40 hours per week.
On March 21, 2001, Cornwell was a named insured under a policy of motor vehicle insurance issued by State Farm. That policy, Policy No. 5 0712-E29-15C, provided, inter alia, underinsured motorist coverage ("UIM") in the limits of $100,000.00 for each person with an aggregate limit of $300,000.00 per accident. Section III of the policy of insurance is entitled "Uninsured Motor Vehicle and Under-insured Motor Vehicle Coverages." This provision provides the following:
We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle. The bodily injury must be caused by the accident arising out of the operation, maintenance or use of an underinsured motor vehicle.
By definition in the policy, underinsured motorist coverage is denominated as Coverages W and W4. Pursuant to the policy of insurance,
Two questions must be decided by agreement between the insured and us:
1. Is the insured legally entitled to collect damages from the owner or driver of the uninsured motor vehicle or underinsured motor vehicle; and
2. If so, in what amount?
The policy then proceeds to outline arbitration procedures in case the parties cannot agree, though in the present case Plaintiffs have elected not to pursue arbitration.
In connection with the Limits of Liability, the policy of insurance further states regarding Coverages W and W4 that
2. Any amount payable under this coverage shall be reduced by any amount paid or payable to or for the insured under any workers' compensation, disability benefits, or similar law.
3. The most we will pay will be the lesser of:
a. the amount by which the insured's damages for bodily injury exceed the amount paid to the insured by or for any person or organization who is or may be held legally liable for the bodily injury or;
b. the limits of liability of this coverage.
The policy of insurance further sets forth circumstances under which there is no coverage as follows relating to Coverages W and W4:
a. ANY WORKERS' COMPENSATION OR DISABILITY BENEFITS INSURANCE COMPANY;
b. A SELF INSURER UNDER ANY WORKERS' COMPENSATION OR DISABILITY BENEFITS OR SIMILAR LAW;
c. ANY GOVERNMENTAL BODY OR AGENCY.
Based on these offset provisions of the policy and other legal considerations, State Farm denied UIM benefits to Cornwell under the terms of the policy. State Farm cited the Fireman's Rule and the previous benefits and settlements received by the Cornwells as reasons for the denial of coverage. The Cornwells subsequently brought suit seeking UIM coverage from State Farm pursuant to the policy of insurance and further alleging bad faith on the part of State Farm in denying their initial claim for the benefits.
State Farm filed a motion for summary judgment on essentially the same grounds it cites as the reasons for its denial of underinsured motorist benefits to Plaintiffs. State Farm claims the Fireman's Rule precludes payment under the under-insured motorist coverage provisions of its policy. In addition, State Farm argues the offset provisions of its policy preclude payment. State Farm further denies any bad faith. The Cornwells resist Defendant's motion.
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