Hall v. Travelers Cas. Ins. Co. of Am.
| Decision Date | 27 September 2016 |
| Docket Number | Case No.: 1:16-cv-00173 (GBL) |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | ROBERT HALL, SR., et al., Plaintiffs, v. TRAVELERS CASUALTY INSURANCE COMPANY OF AMERICA, et al., Defendants. |
THIS MATTER is before the Court on Plaintiff Robert Hall's Motion for Summary Judgment (Dkt. No. 47), and Defendant Travelers Property Casualty Company of America ("Travelers")'s Motion for Summary Judgment (Dkt. No. 48).1 This case concerns Plaintiff's Complaint for Declaratory Judgment to establish the limit of commercial automobile insurance to the extent a third-party tortfeasor is deemed underinsured.
The issue before the Court is whether the Travelers' insurance policy entitles Plaintiff to underinsured motorist coverage under the Virginia or Maryland limit, which turns on what state the vehicle involved in a collision was "principally garaged." The Court holds that Plaintiff is entitled to up to $2,000,000 in underinsured motorist coverage under the Virginia limit because the vehicle was principally garaged in Virginia while covered under the policy.
Accordingly, the Court GRANTS Plaintiff's Motion for Summary Judgment and DENIES Defendant's Motion for Summary Judgment.
On May 15, 2014, Plaintiff was injured in an automobile accident. (Stip. ¶ 1, Dkt. No. 42.) Plaintiff brought a negligence action in Fairfax Circuit Court styled as Hall v. El-Ibrahimy, No. CL 2015-02384 (the "Ibrahimy Lawsuit"). (Stip. ¶ 2.) The defendant in the Ibrahimy Lawsuit has automobile insurance coverage with bodily injury limits of $25,000. (Stip. ¶ 15.) Although the Ibrahimy Lawsuit is not scheduled for trial until November 2016, the parties expect that Plaintiff's damages will exceed $25,000. (Stip. ¶ 15.) At the time of the accident, Plaintiff was employed by WP Company, LLC ("WP Company"), which publishes The Washington Post. (Stip. ¶ 3.) In the course of his employment with WP Company, Plaintiff was driving a tractor truck (the "Truck") owned by Penske Truck Leasing Company, L.P. ("Penske"). (Stip. ¶¶ 4-5.)
Travelers issued to Nash Holdings, LLC a commercial insurance policy effective from October 1, 2013 to October 1, 2014 (the "Policy"). (Stip. ¶ 12.) WP Company is a subsidiary of Nash Holdings, LLC, and as a WP Company employee, Plaintiff was an "insured" under the Policy at the time of the accident. (Stip. ¶ 13.) The Policy contains separate uninsured ("UM") and underinsured ("UIM") endorsements for several states with varying coverage of up to $2,000,000. (See Def.'s Opp'n at 8, Dkt. No. 55; Pl.'s Opp'n at 8, Dkt. No. 57.) According to the Policy, "The LIMIT OF INSURANCE for the coverages shown below is the LIMIT OF INSURANCE shown for the State where a covered 'auto' is principally garaged." (Stip. ¶ 16.) Both parties agree that the Policy does not define "principally garaged." (See Def.'s Br. 12-14; Pl.'s Br. at 16.) The Policy provides that the limit for Virginia is $2,000,000, whereas the limit for Maryland is $75,000. (Stip. ¶ 16.) The applicable coverage is for "Owned 'Autos' Only," and a "Leased Auto" is considered the same as an "auto" owned by the named insured. (Policy at 40, 69, Dkt. No. 42-4.)
WP Company and Penske were parties to a lease agreement under which Penske leased various tractor trucks to WP Company for use in WP Company's regular business operations. (Stip. ¶ 7.) As part of the lease agreement, if one of the leased trucks was temporarily unavailable due to maintenance or repair, Penske provided a substitute vehicle to WP Company during the period of unavailability. (Stip. ¶ 8.) Penske provided the Truck to WP Company on May 14, 2014 as a substitute due to the temporary unavailability of a vehicle being serviced (i.e., Unit #574863). (Stip. ¶ 8.) WP Company took possession of the Truck at a Penske rental facility located in Virginia. (Stip. ¶ 10.) WP Company also garaged its leased trucks at its facility in Virginia. (Stip. ¶ 11.) Thus, both the Truck and the insured vehicle being serviced were garaged in Virginia.
The Truck was a "covered" auto under the Policy at the time of the accident. (Stip. ¶ 14.) The Truck was not a "covered" auto outside the three-day rental period between May 14, 2014 and May 16, 2014. (Stip. ¶ 14.) From approximately April 17, 2013 through June 30, 2014, including the date of the accident, the Truck was titled and registered in Maryland and had a Maryland license plate. (Stip. ¶ 6.) Plaintiff "stipulate[d] that, if the period of time from June 2013 through the date of the Accident is the relevant period of time, the Truck was 'principally garaged' at Penske's Capitol Heights, Maryland facility during that time." (Stip. ¶ 18.)
On January 8, 2016, Plaintiff filed a Complaint for Declaratory Judgment pursuant to Va. Code § 8.01-184. Travelers removed this action based on diversity jurisdiction. On August 1, 2016, the parties filed the Motions for Summary Judgment now before the Court.
Under Federal Rule of Civil Procedure 56, the Court must grant summary judgment "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). In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Askew v. HRFC, LLC, 810 F.3d 263, 266 (4th Cir. 2016).
Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-48. A fact is "material" if it "might affect the outcome of the suit under the governing law." Id.; Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (citations omitted). A dispute is "genuine" if "a reasonable jury could return a verdict for the nonmoving party." Libertarian Party of Va., 718 F.3d at 313 (citation omitted).
Because the parties filed cross-motions for summary judgment, the Court considers "each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Defs. of Wildlife v. N. Carolina Dep't of Transp., 762 F.3d 374, 392-93 (4th Cir. 2014) (citation and internal quotation marks omitted).
In this diversity action, the Court must apply Virginia's choice-of-law rules because Virginia is the jurisdiction in which this Court sits. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Seabulk Offshore, Ltd. v. Am. Home Assur. Co., 377 F.3d 408, 418 (4th Cir. 2004). "Questions concerning the validity, effect, and interpretation of a contract are resolved according to the law of the state where the contract was made." Seabulk, 377 F.3d at 419. "Under Virginia law, a contract is made when the last act to complete it is performed, and in the context of an insurance policy, the last act is the delivery of the policy to the insured." Id. (citations omitted). Here, Virginia's choice-of-law rules lead to the application of District of Columbia substantive law because the District is where the Policy was delivered. (See Pl.'s Br. at 12; Def.'s Br. at 9.2)
When a case involves solely state-law matters, the Court's "role is to apply the governing state law, or, if necessary, predict how the state's highest court would rule on an unsettled issue." Askew, 810 F.3d at 266 (citation and internal quotation marks omitted).
The Court GRANTS Plaintiff's Motion for Summary Judgment and DENIES Travelers' Motion for Summary Judgment. There is no genuine dispute as to any material fact, and Plaintiff is entitled to judgment as a matter of law because the Policy unambiguously provides Virginia underinsured motorist coverage under the circumstances of this case. Because the Policy unambiguously provides Virginia coverage, and because the Policy would be construed against Travelers even if the Policy were ambiguous, Travelers is not entitled to judgment as a matter of law.
The issue is whether the Policy clearly and unambiguously provides underinsured motorist coverage up to the Virginia limit. This issue turns on whether the Policy establishes where the Truck qualifies as being "principally garaged."
Whether a contract is ambiguous is a question of law to be determined by the Court. Dist. No. 1-Pac. Coast Dist. v. Travelers Cas. & Sur. Co., 782 A.2d 269, 274 (D.C. 2001) (citation omitted). On the one hand, "[a] contract is not ambiguous merely because the parties dispute its meaning" or could have drafted clearer terms. Id. (citations omitted). Similarly, a contract "is not ambiguous where the court can determine its meaning without any other guide than a knowledge of the simple facts on which, from the nature of language in general, its meaning depends." Wash. Props., Inc. v. Chin, Inc., 760 A.2d 546, 548 (D.C. 2000) (citations and internal quotation marks omitted). When insurance contracts "are clear and unambiguous, they will be enforced by the courts as written, so long as they do not violate a statute or public policy." Cameron v. USAA Prop. & Cas. Ins. Co., 733 A.2d 965, 968-69 (D.C. 1999) (citation and internal quotation marks omitted).
On the other hand, a contract is ambiguous when provisions in controversy are "reasonably or fairly susceptible of different constructions or interpretations[.]" Wash. Props., 760 A.2d at 548 (citation and internal quotation marks...
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