Hartford Underwriters Ins. Co. v. The Cincinnati Ins. Co., File No. 1:09-cv-00267-jgm

CourtUnited States District Courts. 2nd Circuit. District of Vermont
Writing for the CourtHon. J. Garvan Murtha
Docket NumberFile No. 1:09-cv-00267-jgm
Decision Date11 January 2011


File No. 1:09-cv-00267-jgm


Filed: January 11, 2011

(Docs. 27, 36, 44)

Plaintiffs Hartford Underwriters Insurance Co. and Toby A. Young, and Defendant Cincinnati Insurance Co., have cross-moved for summary judgment on the question of whether Ms. Young was "occupying" a van insured by Cincinnati Insurance Co. Ms. Young had been loading her skis into the back of the van, which was parked in a snowy roadway, and intended to proceed to a passenger door when she was struck by an oncoming pick-up truck. The truck pinned her to the van, causing grave injuries to her legs and pelvis.

For the reasons that follow, this Court holds the definition of "occupying" under Cincinnati's policy is ambiguous when applied to these facts, and the latent ambiguity should be construed against Cincinnati in favor of coverage. Even if ambiguity did not call for construing the policy in Young's favor, of the two competing interpretations advanced by the

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parties, the more reasonable reading of the Cincinnati policy includes Young's claim for under-insured motorist coverage. Cincinnati's coverage is therefore primary, and Hartford's is excess, and once Cincinnati's obligations as primary insurer are determined, Hartford may be reimbursed for sums paid that exceed its obligations as excess insurer.

I. Background

The following facts in the record are undisputed for the purposes of both motions. On the date of the accident, March 7, 2007, Toby Young was participating in a five-day cross-country ski and yoga program with Elderhostel, contracted with Craftsbury Center, Inc. Young, a healthy, active 70-year-old woman, spent the afternoon cross-country skiing with a Craftsbury group that had departed the Craftsbury Cross-Country Ski Center. A Craftsbury employee, Corrine Royer, drove a Craftsbury van to pick up Young's group at the end of their ski trail. The van already contained a few skiers Royer had picked up from a different trailhead. Royer parked the van in the southbound lane of a roadway, at the bottom of a slick, snow-covered hill. Following Royer's instructions, Young took off her skis and went to the rear of the van, where the rear double doors were open, and loaded her skis. Cincinnati does not dispute that Young, after loading her equipment, planned to walk around the open rear

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van doors to a passenger door with the intent of getting into the van.1

The accident occurred when Jesse Peters, driving a pickup truck insured by Peerless Insurance Company, crested the hill and saw the van below, blocking his lane. Peters lost control as he descended and struck Young, pinning her between the pick-up and the back of the van. Young's legs and pelvis were crushed. She sustained injuries to her liver, multiple fractures, and a degloving of her upper left thigh, and ultimately incurred $422,427 in medical expenses.

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Young, through counsel, made a claim against Peters and Peerless Insurance Co. and settled for its $100,000 policy limit. Before settling, Young, who had a personal auto insurance and umbrella policy with Hartford, notified it of her intent to make a claim against Cincinnati for under-insured motorist ("UIM") benefits. Cincinnati's letter of July 29, 2008, however, "questioned" whether Young qualified as an "insured" for coverage based on information she was "loading" the van at the time of the accident, and it refused coverage.

Under Cincinnati's policy, Young is an "insured" for purposes of under-insured motorist coverage if she was, at the time of her accident and injury, "occupying" the Craftsbury van. Cincinnati's policy defines "occupying" as "in, upon, getting in, on, out or off." (Doc 1-3, Compl. Ex. 3, p. 4 of Uninsured Motorists Coverage Endorsement.)

Young then presented a UIM claim to Hartford and filed suit for those benefits in Young v. Hartford, 1:08-cv-182-jgm-jmc. More than three months after Hartford filed its answer, Young's deposition suggested Cincinnati may have improperly denied coverage. Hartford sought leave to implead Cincinnati in the action, seeking a declaration Cincinnati was the primary insurer. Magistrate Judge Conroy denied the request in an Opinion and Order docketed August 3, 2009. See Doc. 30 in 1:08-cv-182-jgm-jmc. Judge Conroy reasoned Young was not required to first

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exhaust all other potential coverage before recovering from Hartford, noted the overriding purpose of the UIM statute was to ensure swift recovery for victims of under-insured drivers, and concluded impleader would cause Young prejudicial delay in recovering on her claim for those benefits and complicate the trial. Judge Conroy noted Hartford could rely on the UIM policy's "other insurance" clause to seek subrogation or indemnification from other available liability insurance after it provided coverage to Young.

Hartford ultimately agreed to settle with Young for $750,000. Hartford now brings this action to recover from Cincinnati as subrogee of Young, asserting Cincinnati wrongfully denied Young's UIM claim and breached its policy, because Young was occupying the Craftsbury van and is therefore considered an "insured" for the purpose of UIM benefits under the Cincinnati policy. Hartford's Complaint seeks declaratory judgment that Cincinnati owes primary under-insured motorist benefits to Young, Hartford's coverage is excess, and asserts claims for breach of contract and unjust enrichment. Hartford seeks recovery of $750,000 in damages together with fees and costs.

Hartford has moved for partial summary judgment, asserting there is no genuine dispute of material fact that Toby Young was "occupying" the van such that she would be entitled to UIM benefits under the Cincinnati policy, Cincinnati's UIM coverage

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is primary and Hartford's coverage is excess, and Hartford, therefore, as subrogee of Young, is entitled to summary judgment on its claim Cincinnati breached its contract by wrongful denial of coverage and its claim for unjust enrichment. (Doc. 27.)

Cincinnati cross-moves for summary judgment on grounds Young was not "occupying" the insured van, even accepting Plaintiffs' allegations and taking the facts in a light most favorable to Plaintiffs, because although Young intended to walk around the back of the van to a passenger door to get in, she had not yet done so at the time of impact. (Doc. 36.)

Toby Young joins in Hartford's motion for summary judgment and in its opposition to Cincinnati's motion. (Doc. 44.)

II. Summary Judgment Standard

Summary judgment should be granted only when there is "no genuine issue as to any material fact" and the moving party "is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "[F]acts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380 (2007). "[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

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issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

"Where both parties have moved for summary judgment, 'the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.'" Murray v. Int'l Bus. Machs. Corps., 557 F. Supp. 2d 444, 448 (D. Vt. 2008) (citing Schwabenbauer v. Bd. of Educ. of Olean, 667 F.2d 305, 314 (2d Cir. 1981)).

III. Discussion

A. Hartford's Motion for Summary Judgment

1. Whether Young was "Occupying" the Craftsbury Van

For Hartford's motion, even if the parties dispute whether Young was touching or leaning into the van at the moment she was pinned between the van and the pickup truck, the parties do not dispute that at the moment she was struck, she was at the rear of the van, the rear van doors were open, she had just loaded her skis, and she intended to proceed to a passenger door to enter the van.

Hartford's motion presents a question of law regarding whether an injured party can be said to be "occupying" a vehicle under Cincinnati's policy definition when a party has begun the process of "getting in" the vehicle by loading equipment onto it with an intent to enter the vehicle via a passenger door.

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Cincinnati argues the policy's definition of "occupying" is clear and unambiguous. Under the policy, "occupying" means "in, upon, getting in, on, out or off." The terms comprised in this definition of "occupying" are not further defined by the policy. Terms of an...

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