Dolly v. Old Republic Ins. Co.
Decision Date | 08 May 2002 |
Docket Number | No. 5:00CV1685.,5:00CV1685. |
Citation | 200 F.Supp.2d 823 |
Parties | Donna M. DOLLY, Adm., et al., Plaintiffs, v. OLD REPUBLIC INS. CO., Defendant. |
Court | U.S. District Court — Northern District of Ohio |
Kenneth L. Gibson, Weick, Gibson & Lowry, Cuyahoga Falls, Stanley P. Aronson, Aronson & Associates, Akron, OH, for Plaintiffs.
Paul D. Eklund, Davis & Young, Cleveland, OH, for Defendant.
This case involves a claim for wrongful death damages and seeks coverage under two insurance policies issued by the defendant to plaintiff's decedent's employer. Fully-briefed cross-motions for summary judgment are presently before the Court. For the reasons and in the manner discussed below, defendant's motion (Doc. No. 23) is denied and plaintiff's motion (Doc. No. 19) is granted.
On or about June 20, 1999, the plaintiff's decedent, Warren D. Dolly, an employee of Con-Way Central Express ("Con-Way")1 and an insured under the policies at issue here,2 was severely injured as a result of a motor vehicle accident caused by the negligence of Everette Yoho in Summit County, Ohio.3 Yoho had coverage for $100,000 under a policy provided by The Hartford Insurance Co. Mr. Dolly died on or about June 29, 1999 as a result of the injuries he sustained. At the time he was 47 years old and was survived by the plaintiff (his wife of 23 years), his 19 year old son Eric, his mother Lita Dolly, and numerous brothers, sisters, nieces and nephews.
On July 6, 2000, plaintiff Donna M. Dolly, administratrix of the Estate of Warren Dolly, filed this case for wrongful death damages against defendant Old Republic Insurance Company. In her complaint, amended on May 18, 2001 (see Doc. No. 32), plaintiff alleged that on or about October 1, 1998, the defendant, a citizen of the State of Pennsylvania, issued two policies of insurance to CNF. The primary insurance policy is Trucker's Policy No. MWTT13026 ("the primary layer"), effective October 1, 1998 to October 1, 2001. This primary layer provides the insureds with liability coverage for claims up to $3 million per accident. In addition to the primary layer, there is an Umbrella and Excess Liability Policy No. MWZU15641 ("the excess layer"), effective for the same period. This excess layer has limits of $5 million. Both policies insure vehicles, including vehicles registered in and primarily located in the State of Ohio.
The primary policy also provides $500,000 in uninsured/underinsured motorist ("UM/UIM") coverage. It is plaintiff's position that this policy is governed by O.R.C. § 3937.18 which, at the time, required the defendant to offer UM/UIM coverage in the same amount as the liability coverage. Plaintiff argues that, because defendant offered only $500,000 in coverage, this was a violation of the statute, which results in $3 million of UM/UIM coverage being read into the policy by operation of law. Defendant, however, asserts that this primary policy is not subject to the statute because it is self-insurance and that there was, therefore, no requirement to offer UM/UIM coverage in any amount, even though defendant did offer $500,000 of such coverage. Therefore, in defendant's view, UM/UIM coverage in the amount of $3 million cannot be read into the primary policy by operation of law.
With respect to the excess policy, there is no dispute that there was no offer of UM/UIM coverage, even though there should have been under the provisions of the relevant statute. Therefore, by operation of law, UM/UIM coverage of $5 million is read into the excess policy. Abate v. Pioneer Mut. Cas. Co., 22 Ohio St.2d 161, 258 N.E.2d 429 (1970). The question with respect to that policy is whether the retained limits in the liability portion also operate to limit the UM/UIM coverage implied by operation of law. In other words: when is the excess layer of insurance triggered?
The parties have stipulated that damages are in the amount of $2.35 million. The defendant admitted coverage (under the express UM/UIM provisions of the primary layer) in the amount of $500,000, less a $100,000 set-off for recovery under the tortfeasor's policy.4 Defendant has paid the sum of $400,000 to the Estate of Dolly, with interest being waived. Therefore, plaintiff now seeks to recover from the defendant the difference between $500,000 and $2.35 million.
Although this case was assigned to the expedited track, resolution has taken longer than anticipated because the Court has struggled with a couple of threshold issues, one being whether there is truly diversity jurisdiction.
This case was filed under 28 U.S.C. § 1332. Ohio's Scott-Pontzer decision has spawned a multiplicity of cases filed in federal court under the diversity jurisdiction statute, since the insurance company defendants are often citizens of other states. For purposes of diversity, an entity such as an insurance company is a citizen of both its state of incorporation and the state where it has its principal place of business. 28 U.S.C. § 1332(c)(1).
An insurer's citizenship can also be predicated on the citizenship of the insured. For that reason, some judges of this district have recently remanded cases to state courts from which they were removed, finding that the employer/insured was a citizen of Ohio, which destroys complete diversity. See e.g., Kormanik v. St. Paul Fire and Marine Ins., Co., 2001 WL 1850890 (N.D.Ohio Oct. 19, 2001) (Polster, J.) ( ); accord, Verhovec v. Wausau Ins. Co., No. 5:01 CV 0662, slip op. (N.D.Ohio Nov. 14, 2001) (Polster, J.); Kohus v. Hartford Ins. Co., 2001 WL 1850889 (N.D.Ohio Nov. 19, 2001) (Matia, J.); Comella v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001) (O'Malley, J.), appeal dismissed 2002 WL 467940, 33 Fed.Appx. 737 (6th Cir.2002); Stubbins v. Nationwide Agribusiness, 181 F.Supp.2d 805 (N.D.Ohio 2002) (Carr, J.); Griffin v. Wausau Ins. Co., — F.Supp.2d —, 2002 WL 312819, No. 3:01 CV 7611 (N.D.Ohio Feb. 15, 2002) (Katz, J.); Butler v. Zurich American Ins. Co., 184 F.Supp.2d 695 (N.D.Ohio 2002) (Katz, J.). See also, Monahan v. American States Ins. Co., No. 5:00 CV 1191, slip op. (N.D.Ohio Dec. 20, 2001) (Economus, J.) (. for lack of subject matter jurisdiction)5 But see, Redmon v. Sumitomo Marine Management (U.S.A.), Inc., 179 F.Supp.2d 787 (N.D.Ohio 2001) (Aldrich, J.) ( );6 Fidelity & Guaranty Ins. Underwriters, Inc. v. Nocero, 2001 WL 1792448 (N.D.Ohio Dec. 13, 2001) (Gaughan, J.)7 ( ).8
This Court recently adopted the reasoning of Kormanik and its progeny for instances where the employer/insured was a citizen of Ohio. See Jividen v. United States Fire Insurance Co., No. 4:01 CV 0726, slip op. (N.D.Ohio Apr. 29, 2002); Jividen v. St. Paul Fire & Marine Ins Co., No. 1:02 CV 191 (N.D.Ohio Apr. 29, 2002).
There is no doubt that the instant defendant, in its own corporate capacity, is not a citizen of Ohio. An inquiry by the Court has established (see Doc. Nos. 48 and 49) that CNF and Con-Way, both employer/insureds under the relevant policies, are citizens of California and of Delaware and Michigan, respectively. Therefore, considering the citizenship of these entities alone there is complete diversity.
The question here is whether the citizenship of the decedent, also deemed an "insured" under Scott-Pontzer, can be applied to defeat diversity jurisdiction. Given the problem that Scott-Pontzer cases are becoming for federal courts,9 this is an attractive theory since, like the cases where the Ohio citizenship of the employer/insured destroys diversity, the Ohio citizenship of the employee/insured would also destroy diversity and require either remand or dismissal. However, this Court has recently adopted the view that this interpretation of Scott-Pontzer, even if arguably a justifiable interpretation, would carry that case too far. See, Fellows-Knox v. Genesis Insurance Co., 2002 WL 857217 (N.D.Ohio 2002).10
Therefore, the Court is satisfied that, under the facts of this case, there is true diversity of citizenship which precludes dismissal under Kormanik and its progeny.
The Court had also raised the possibility of certifying issues to the Ohio Supreme Court.11 On October 11, 2001, after the parties had stipulated that the damages in this case are $2.35 million, the Court outlined its view of the issues which remain to be resolved in this case:
(1) Is the Old Republic Trucker's Policy No. MWTT 13026 an "automobile liability or motor vehicle liability policy of insurance" as defined in Ohio Rev. Code § 3937.18(L) or is it "practical self-insurance" not subject to that statute?
(2) If the Policy is subject to Ohio Rev.Code § 3937.18(L), is the Limit of Liability for UM/UIM contained in the policy (i.e., $500,000) valid?
(3) Is the UM/UIM coverage implied into defendant's umbrella policy No. MWZU 15641 by operation of law subject to the Retained Limits provisions in the liability portion of that policy?
(4) If the UM/UIM coverage implied into defendant's umbrella policy by operation of law is subject to the Retained Limits in the liability portion of that policy does the coverage begin after exhaustion of the $500,000 Limit of Liability in the primary policy or does it begin only after the damages exceed $3 million?
(Doc. No. 46). The Court asked the parties "to jointly propose to this Court a question or questions, based on the issues remaining for resolution, which they believe can be certified to the Ohio Supreme Court." Neither party responded and, of course, the issues above are not in...
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