Geico Insurance Co. v. Larson

• Decision Date: 20 February 2008
• Docket Number: No. 5:06-CV-505-BR.,5:06-CV-505-BR.
• Citation: 542 F.Supp.2d 441
• Parties: GEICO INSURANCE COMPANY, Plaintiff, v. Mark Eric LARSON, Executor of the Estate of Ana Beatriz Larson, deceased, Defendant.
• Court: U.S. District Court — Eastern District of North Carolina

542 F.Supp.2d 441

GEICO INSURANCE COMPANY, Plaintiff, v. Mark Eric LARSON, Executor of the Estate of Ana Beatriz Larson, deceased, Defendant.

No. 5:06-CV-505-BR.

United States District Court, E.D. North Carolina, Western Division.

February 20, 2008.

Brady Allen Yntema, David G. Harris, II, Pinto, Coates, Kyre & Brown, PLLC, Greensboro, NC, for Plaintiff.

Jerome P. Trehy, Jr., Twiggs Beskin Strickland, Raleigh, NC, for Defendant.

ORDER

W. EARL BRITT, Senior District Judge.

This matter is before the court on two motions: (1) plaintiff's 1 October 2007 motion for summary judgment; and (2) defendant's 27 November 2007 motion to dismiss or stay the instant action. With regard to plaintiff's motion for summary judgment, defendant filed a response in opposition and plaintiff filed a reply. With regard to defendant's motion to dismiss or stay, plaintiff filed a response in opposition, defendant did not file a reply, and the time within which to do so has expired. The motions are ripe for disposition.

I. PROCEDURAL AND FACTUAL BACKGROUND¹

This is a declaratory judgment action seeking a determination of whether plaintiff is obligated to provide uninsured motorist coverage for the claim of defendant, arising out of a fatal motor vehicle incident that occurred on 20 July 2005. (Br. Supp. Mot. Summ. J. at 1.) Plaintiff issued a personal automobile insurance policy, number 0638-78-32-09 ("the UM policy"), with a $300,000 single limit of uninsured motorist coverage to Ana Beatriz Larson ("Ana Larson"). (Stip.¶ 3.) On 20 July 2005, Ana Larson was driving on Highway 55 near Morrisville, North Carolina, when a large rock passed through the windshield of her vehicle and struck her, causing her vehicle to cross the centerline of the highway and come to rest at the bottom of an embankment. (Id. ¶ 4). Ana Larson died as a result of injuries suffered in the incident. (Id. ¶ 7).

Defendant submitted a claim to plaintiff on the policy for uninsured motorist coverage, contending that the rock that struck Ana Larson fell and escaped from a presently unidentified dump truck that was hauling rocks from a quarry to a highway construction project. (Stip.¶ 5). It is undisputed that the vehicle operated by Ana Larson at the time of the incident did not make direct contact with the unidentified dump truck or with any other vehicle. (Id. ¶ 6). Plaintiff denied the claim on the ground that the UM policy did not cover the claim, (Id. ¶ 9 & Tab 2), and filed the instant action on 8 December 2006. Defendant has filed a counterclaim for wrongful death under N.C. Gen.Stat. § 20-279.21 (b)(3)b.²

Defendant also filed a state court action on 8 August 2007 against "all parties who are potentially responsible for the death of Ana Larson[,]" including plaintiff. (Br. Supp. Mot. Dismiss at 3.) By order filed 11 January 2008, the state court action has been "abated" as to plaintiff in light of the instant action "until the Federal Court Action is resolved, dismissed or otherwise disposed of in its entirety." (Pl. Suppl. Opp. Mot. Dismiss, Tab 1 at 1-2 (state court order).)

II. DISCUSSION

A. Defendant's Motion to Dismiss or Stay

Defendant contends that this court should abstain from proceeding in the instant action because the determination of coverage under an insurance policy "is a matter of state law and state concern" in general, and in this particular case, there is no North Carolina case law on point. (Br. Supp. Mot. Dismiss at 6.) Plaintiff opposes the motion on the grounds that it was filed almost two months after the dispositive motions deadline set forth in the scheduling order and the state court action does not seek to litigate the UM policy coverage dispute. (Br. Opp. Mot. Dismiss at 5, 9.)

The parties argue this motion under a four-factor analysis set out by the Fourth Circuit in Nautilus Ins. Co. v. Winchester Homes, Inc., 15 F.3d 371, 377 (4th Cir. 1994), rev'd on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). (Br. Supp. Mot. Dismiss at 8; Br. Opp. Mot. Dismiss at 10.³) Those factors include: (1) whether the state has a strong interest in having the issues presented in the instant action decided in its courts; (2) whether the state court could resolve the issues more efficiently than the federal court; (3) whether the presence of "overlapping issues of fact or law" might create unnecessary "entanglement" between the state and federal courts; and (4) whether the federal action is mere "procedural fencing," or forum-shopping.

In light of the state court's decision to abstain from proceeding on defendant's claims against plaintiff, the court concludes that the Nautilus factors do not favor any stay or dismissal. With regard to the first and second factors, the state has essentially determined that it does not have a strong interest in deciding the UM policy coverage issues before this court, nor can it resolve such issues more efficiently than this court. With regard to the third factor, there is no danger of unnecessary "entanglement" between the instant action and the state court action. Finally, with regard to the fourth factor, although defendant questions plaintiff's motives in filing the instant action, defendant acknowledges that "forum-shopping" is not at issue here. (Br. Supp. Mot. Dismiss at 11-12 ("On the strength of the other previous three factors, whether the plaintiff's federal action may be `procedural fencing" and `merely the product of forum-shopping' need not be considered.").) Defendant's motion to dismiss or stay is DENIED.

B. Plaintiff's Motion for Summary Judgment

Summary judgment is appropriate in those cases in which there is no genuine issue of material fact, and in which it appears that the moving party is entitled to judgment as a matter of law. See Fed. R.Civ.P. 56(c); Haavistola v. Community Fire Co. of Rising Sun, Inc., 6 F.3d 211, 214 (4th Cir.1993). Summary judgment should only be granted in cases "in which it is perfectly clear that no genuine issue of material fact remains unresolved and inquiry into the facts is unnecessary to clarify the application of the law." Haavistola, 6 F.3d at 214.

Insurance policies are contracts under North Carolina law, and as such, their interpretation is a question of law for the court. See Barbee v. The Harford Mut. Ins. Co., 330 N.C. 100, 102, 408 S.E.2d 840 (1991).

As with all contracts, the goal of construction is to arrive at the intent of the parties when the policy was issued. Where a policy defines a term, that definition is to be used. If no definition is given, non-technical words are to be given their meaning in ordinary speech, unless the context clearly indicates another meaning was intended. The various terms of the policy are to be harmoniously construed, and if possible, every word and every provision is to be given effect. If, however, the meaning of words or the effect of provisions is uncertain or capable of several reasonable interpretations, the doubts will be resolved against the insurance company and in favor of the policyholder. Whereas, if the meaning of the policy is clear and only one reasonable interpretation exists, the courts must enforce the contract as written; they may not, under the guise of construing an ambiguous term, rewrite the contract or impose liabilities on the parties not bargained for and found therein.

Gaston County Dyeing Mack. Co. v. Northfield Ins. Co., 351 N.C. 293, 299-300, 524 S.E.2d 558 (2000) (citations omitted).

The dispute between the parties in the instant action centers around whether the stipulated facts constitute a claim that is covered under the terms of the UM policy issued by plaintiff to Ana Larson; specifically, whether an unidentified dump truck "hits" the insured's vehicle under the terms of the UM policy when a rock flies off the truck and crashes directly into the windshield of the insured's vehicle. The policy provides (in relevant part) that plaintiff:

will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of:

1. Bodily injury sustained by an insured and caused by an accident; and

2. Property damage caused by an accident.

The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.

(Br. Supp. Mot. Summ. J., Tab 1 (UM Policy) at 1 (emphases in original).) The policy goes on to define "uninsured motor vehicle" as

a land motor vehicle or trailer of any type ...

3. Which, with respect to damages for bodily injury only, is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:

a. you or any family member;

b. a vehicle which you or any family member are occupying; or

c. your covered auto.

(Id. (italics added; emphases in original not supplied).)

Plaintiff contends that the language of the UM policy "requires physical contact between the insured's vehicle and the `hit-and-run' vehicle" and therefore there is no coverage because the dump truck did not make direct contact with Ana Larson's vehicle. (Br. Supp. Mot. Summ. J. at 8.) Both parties acknowledge that there is no North Carolina case law directly on point, although plaintiff contends that several North Carolina cases and N.C. Gen.Stat. § 20-279.21 (b)(3) "require[] that physical contact must be made with an unidentified vehicle and another, vehicle for uninsured motorist coverage to exist." (Br. Supp. Mot. Summ. J. at 11-12.)

In Andersen v. Baccus, 335 N.C. 526, 528, 439 S.E.2d 136 (1994), the North Carolina Supreme Court held that the terms of a UM insurance policy⁴ "clearly required that the unidentified vehicle make contact with the insured or the insured's auto" (quotation, citation, and alteration in original omitted), and that this result was supported by the language of N.C. Gen. Stat. § 20-279.21, which (in relevant part) requires insurers to provide coverage in their policies...