Ingalls v. Gov't Emps. Ins. Co.

• Citation: 903 F.Supp.2d 1049
• Decision Date: 18 October 2012
• Docket Number: Civil Nos. 11–00244 JMS/RLP, 11–00488 JMS/KSC.
• Parties: Chad INGALLS, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, John Does 1–50, et al., Defendants. GEICO (Government Employees Insurance Company), Plaintiff, v. Chad J. Ingalls and Pearl Ingalls, et al., Defendants.
• Court: United States District Courts. 9th Circuit. United States District Court (Hawaii)

903 F.Supp.2d 1049

Chad INGALLS, Plaintiff,

v.GOVERNMENT EMPLOYEES INSURANCE COMPANY, John Does 1–50, et al., Defendants.

GEICO (Government Employees Insurance Company), Plaintiff,

v.Chad J. Ingalls and Pearl Ingalls, et al., Defendants.

Civil Nos. 11–00244 JMS/RLP, 11–00488 JMS/KSC.

United States District Court, D. Hawai‘i.

Oct. 18, 2012.

William H. Lawson, Honolulu, HI, for Plaintiff.

Kathy K. Higham, Dwyer Schraff Meyer Grant & Green, Honolulu, HI, for Defendants.

ORDER (1) GRANTING CHAD INGALLS' AND PEARL INGALLS' SECOND MOTION FOR SUMMARY JUDGMENT, DOC. NO. 86; AND (2) DENYING GOVERNMENT EMPLOYEES INSURANCE COMPANY'S MOTION FOR PARTIAL SUMMARY JUDGMENT, DOC. NO. 90

J. MICHAEL SEABRIGHT, District Judge.

I. INTRODUCTION

On January 12, 2009, Plaintiff Chad Ingalls, who was in the midst of moving his household from California to Hawaii, was driving a rented vehicle on Oahu when he was rear-ended by Jung Yun Song (“Song”). Chad Ingalls suffered various injuries and subsequently sought uninsured/underinsured motorist (“UM/UIM”) benefits under his insurance policy with Government Employees Insurance Company (“GEICO”).

GEICO has refused to make any payments under the policy, and the parties dispute (1) whether Chad Ingalls' claim is governed by his California policy or the Hawaii policy GEICO issued after the accident; and (2) if the dispute if governed by the California policy, whether Hawaii substantive law applies even though the policy provides that coverage is governed by California law. And the difference between Hawaii law and California law is significant—if Hawaii law applies, Chad and Pearl Ingalls (the “Ingalls”) may be entitled to “stack” their UM/UIM coverage by the number of vehicles insured under the policy such that even though the policy provides UM/UIM coverage in the amount of $100,000 per person, it would provide a total of $200,000 in benefits because the policy covers two vehicles. If California law applies, the Ingalls cannot stack the UM/UIM coverage and the amount that they would otherwise be entitled to under the policy ($100,000) must be offset by what they received from Song ($100,000), meaning that they are not entitled to any benefits.

On July 12, 2012, the court denied a first round of summary judgment motions directed to whether the California policy or Hawaii policy applies. See Ingalls v. GEICO, 2012 WL 2873562 (D.Haw. July 12, 2012) (the “July 12 Order”). The July 12 Order further denied summary judgment on the Ingalls' alternative argument that Hawaii law would apply even if the California policy was in effect at the time of the accident. The July 12 Order determined that Hawaii law choice-of-law principles apply, but found that the parties had not adequately briefed application of those principles to the California policy. Id. at *11–12. The court therefore provided the parties the opportunity to submit Motions addressing this issue, which are now before the court.

Based on the following, the court finds that even if the California policy was in effect at the time of the accident, Hawaii substantive law still applies. The court therefore GRANTS the Ingalls' Second Motion for Summary Judgment, Doc. No. 86, and DENIES GEICO's Motion for Partial Summary Judgment, Doc. No. 90.

II. BACKGROUND

A. Factual Background¹1. The Ingalls' Automobile Insurance With GEICO

Chad Ingalls first obtained automobile insurance with GEICO in 1992 while he was a Hawaii resident. Doc. No. 48, Ingalls' Concise Statement of Facts (“CSF”) ¶ 1.² Chad Ingalls added his wife Pearl Ingalls to the policy in 1996, and maintained coverage with GEICO during their moves within Hawaii, multiple moves between Hawaii and Arizona, a move from Arizona to California, and a move from California to Hawaii. See Doc. No. 48–10, Ingalls Ex. 7 at 22, 23, 28, 41. Although each move resulted in different insurance coverage, premiums, and terms and conditions,³ Doc. No. 44–15, Akin Decl. ¶ 5, Chad Ingalls' policy number changed only twice,⁴ and there was never a cancellation of coverage. Doc. No. 48, Ingalls CSF ¶ 23; see also Doc. No. 48–2, Ingalls Decl. ¶ 32. Ingalls' GEICO coverage was continuous during the course of these moves and throughout these years. Doc. No. 44–1, Langley Decl. ¶ 10(a).

2. The Ingalls' Move to California and the California Policy

In June 2008, the Ingalls moved from Arizona to Blythe, California (their first and only move to California). Doc. No. 48–9, Ingalls Ex. 6 at 33, 83. As was his practice, Chad Ingalls notified GEICO of this move, resulting in GEICO recording their mailing and rated address as of June 6, 2008 as 460 North 8th Street, Blythe, California 92225–1811. Doc. No. 44–1, Langley Decl. ¶ 10(e). Thereafter, premiums for the Ingalls' insured vehicles (a 2008 Honda Civic and a 2005 Lincoln Navigator) were based on California law. Doc. No. 44–1, Langley Decl. ¶ 10(e).

The Ingalls' California policy provided for UM/UIM coverage, with limits of $100,000 per person and $300,000 per occurrence. Doc. No. 89–1, at page 3 of 29. The California policy, in its amendments, also includes a provision offsetting GEICO's liability for underinsured motorist coverage by the amount paid by any person liable for the injury:

REIMBURSEMENT AGREEMENT AND OFFSET PROVISION. OUR RIGHT TO RECOVER PAYMENT.

... If an award or judgment against, or settlement with, any party that the insured claimed was responsible for the bodily injury has been concluded, then the amounts we owe under this coverage shall be reduced by the amount of that award, judgment, or settlement.

Id. at page 22 of 29. Finally, another amendment to the policy includes a governing law provision,⁵ providing that “[t]he policy and any amendment(s) and endorsement(s) are to be interpreted pursuant to the laws of the state of California.” Id. at page 24 of 29.

The Ingalls renewed this policy on November 1, 2009, with coverage running from December 6, 2008 through June 6, 2009. Doc. No. 44–1, Langley Decl. ¶ 10(f). An invoice was sent to the Ingalls' California address in December 2009, see id. ¶ 10(g); Doc. No. 44–3, Langley Decl. Ex. B, and the Ingalls paid the amount via Auto Pay on December 31, 2008. Doc. No. 55–1, Chad Ingalls Suppl. Decl. ¶ 7.

3. The Ingalls' Move From California to Hawaii

The Ingalls' move to California was ultimately short-lived-by December 2008, the Ingalls were planning to return to Hawaii in early January 2009.⁶See Doc. No. 48, Ingalls CSF ¶ 9. To that end, sometime in December 2008, when Chad Ingalls renewed his California policy, he told GEICO that he planned to move to Hawaii (although the parties dispute the actual nature of this notice). Doc. No. 79, GEICO Pretrial Statement at 15. The Ingalls also took their two vehicles to shipping companies on January 7 and 8, 2009 to have them shipped to Hawaii. Doc. Nos. 48–14, –15, Ingalls Exs. 11–12. On January 9, 2009, the Ingalls returned to Hawaii and became permanent residents. Doc. No. 48, Ingalls CSF ¶ 14.

On January 12, 2009, Chad Ingalls was driving a Hawaii rental car in Kapolei, Hawaii when he was rear-ended by Song. Id. ¶¶ 18–19. At the time of the accident, Chad Ingalls had a Hawaii driver's license, and Song likewise was a Hawaii resident with a Hawaii driver's license and driving a car licensed and garaged in Hawaii. Doc. No. 48–4, Ingalls Ex. 1; Doc. No. 48, Ingalls CSF ¶¶ 19–20. Chad Ingalls suffered various injuries resulting in medical expenses in excess of $100,000, and additional losses for lost earnings, loss of earning capacity, and loss of household services. Doc. No. 48–2, Ingalls Decl. ¶¶ 22–23.

Chad Ingalls ultimately received $100,000 from Song's insurance carrier for the accident. See Doc. No. 44, GEICO CSF ¶ 47. GEICO has refused to provide any UM/UIM coverage to Chad Ingalls for the accident on the basis that the California policy applies and does not allow stacking of UM/UIM coverage per vehicle, and that the $100,000 coverage he would otherwise be entitled to is offset by the $100,0000 he received from Song's insurance.

B. Procedural Background

The Ingalls filed their Complaint in the First Circuit Court of the State of Hawaii on August 31, 2010, and GEICO removed the action to this court on April 12, 2011. The Amended Complaint seeks declaratory relief that Chad Ingalls is entitled to “stacked” UM/UIM coverage of at least $200,000 on the basis that his Hawaii insurance policy applies to his January 12, 2009 accident.

In the meantime, on December 21, 2010, GEICO filed its own action against the Ingalls in California state court seeking declaratory relief that California law applies to the interpretation of the Ingalls' policy and that Chad Ingalls is not entitled to “stacked” UM/UIM because he did not purchase such coverage until after the accident. On April 29, 2011, the Ingalls removed GEICO's California state action to the Central District of California, and subsequently brought a Motion to Transfer to the District of Hawaii pursuant to 28 U.S.C. § 1404. On August 5, 2011, Judge S. James Otero granted the Ingalls' Motion to Transfer. On September 15, 2011, the two actions were consolidated.

In April 2012, the parties filed their first round of Motions for Summary Judgment. During the July 9, 2012 hearing on those Motions, the court explained that the Motions would be denied, without prejudice to the parties filing motions for summary judgment addressing application of Hawaii choice-of-law principles to the California policy. Specifically, the court identified the issue as: Assuming the California policy was in effect at the time of the January 12, 2009 accident, does Hawaii substantive law apply to determine the amount of coverage under the California policy? Doc. No. 80. The July 12 Order followed.

The Ingalls filed their Second Motion for Summary Judgment on August 31, 2012, and GEICO filed its Motion for Partial Summary Judgment on September 4, 2012. Oppositions were filed on September 17, 2012, GEICO filed a Reply on September...