Kroeger v. GEICO Gen. Ins. Co.

• Decision Date: 28 April 2020
• Docket Number: CIVIL ACTION NO. 3:19-CV-00050-NBB-JMV
• Parties: LAWRENCE D. KROEGER PLAINTIFF v. GEICO GENERAL INSURANCE COMPANY DEFENDANT
• Court: U.S. District Court — Northern District of Mississippi

LAWRENCE D. KROEGER PLAINTIFF v. GEICO GENERAL INSURANCE COMPANY DEFENDANT

CIVIL ACTION NO. 3:19-CV-00050-NBB-JMV

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI OXFORD DIVISION

April 28, 2020

MEMORANDUM OPINION

This cause comes before the court upon the parties' motions for partial summary judgment. Upon due consideration of the motions, responses, exhibits and applicable authority, the court is ready to rule.

Facts and Procedural Posture

This action arises from an accident involving a motorcycle and automobile which occurred on March 28, 2017, in Olive Branch, Mississippi. Plaintiff Lawrence Kroeger was riding his motorcycle to work when Jason Woods, a non-party to this lawsuit, allegedly crossed into Plaintiff's lane in his automobile causing Plaintiff to lose control of his motorcycle and crash, though apparently no contact was made.

Plaintiff alleges that as a result of the accident he suffered life-threatening injuries including a broken clavicle, fractures to several ribs resulting in a collapsed lung, and a heart attack while under treatment for his injuries. Defendant contests that Plaintiff's heart attack resulted from the accident. Plaintiff was hospitalized at Region One Medical Center and subsequently Methodist Hospital Olive Branch from the date of the accident until April 10, 2017. Plaintiff alleges he has incurred medical expenses to date in excess of $228,000.00 and that he will continue to incur substantial hospital, doctor, physical therapy, drug, and other medical expenses in the future. He asserts the injuries left his clavicle deformed, his left lung with a reduced diameter, and his breathing capacity diminished. He alleges the injuries he suffered have required numerous surgical procedures and extensive physical therapy. He further asserts that the injuries resulting from the accident are of a permanent nature, that he continues to suffer from these injuries and will require substantial additional medical treatment in the future, and that he will continue to suffer from the injuries for the remainder of his natural life.

Jason Woods was insured by Mississippi Farm Bureau, which tendered its liability limits of $100,000.00. Plaintiff accepted Farm Bureau's offer after obtaining consent from Defendant GEICO General Insurance Company ("GEICO"), and then released Woods from further liability. The parties agree Woods was an underinsured motorist for purposes of Mississippi law and the GEICO policies at issue. See Miss. Code Ann. §§ 83-11-101, et seq.

At the time of the accident, Plaintiff, a resident of Olive Branch, was insured by three automobile policies issued by Defendant GEICO. The first policy named Plaintiff and his wife, Katherine Kroeger, as the insureds. The second policy named Plaintiff's son Erik Kroeger, a college student at the University of Mississippi, as the insured, and the third, a West Virginia policy, named Plaintiff's son Adam Kroeger, who was at the time a college student at West Virginia University.

Defendant admits that Plaintiff is an insured under all three policies and that the first two policies, issued as Mississippi policies, may be stacked to provide combined coverage. Defendant asserts, however, that the third policy, issued to Adam Kroeger in West Virginia, cannot be stacked. Unlike the two Mississippi policies, the West Virginia policy contains two significant exclusionary clauses. First, the policy prevents the stacking of uninsured motorist coverage; and second, the policy excludes coverage of "owned but not insured" vehicles, whichexcludes coverage for vehicles not listed in the policy. Defendant maintains that West Virginia law controls that policy.

Each GEICO policy was purchased by Katherine Kroeger from the Kroeger's home in Olive Branch, and each policy was issued to the Kroegers' home address at 4828 Antebellum Lane, Olive Branch, Mississippi. Each licensed driver, including Adam Kroeger, was licensed in Mississippi, and all automobiles under the policies were licensed in DeSoto County, Mississippi. Plaintiff and his wife paid for the automobiles' license plates and paid all premiums on the GEICO policies.

Plaintiff does not contest that Adam Kroeger's policy was issued as a West Virginia policy, but he asserts the Kroegers never requested that the policy be issued in West Virginia and indeed had no knowledge that the policy was a West Virginia policy until after this action was filed. Plaintiff's only connection to West Virginia is that his son was a student at West Virginia University, and his automobile was temporarily located in West Virginia while college was in session.

Adam was a minor licensed driver of the State of Mississippi. Lawrence and Katherine claimed Adam as a dependent for tax purposes, and Adam's permanent address was 4828 Antebellum Lane, Olive Branch, Mississippi, as listed on his driver's license and the license plate registration for the GEICO-insured vehicle he drove.

Plaintiff filed this action against Defendant GEICO on March 13, 2019, invoking this court's diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332. The existence of complete diversity is uncontested, and Plaintiff seeks damages in excess of the jurisdictional threshold of $75,000.00. Plaintiff asserts he is entitled to stacked underinsured motorist coverage under the three GEICO policies in the total amount of $2,050,000.00 for compensatory damages,which represents the total stacked coverage available from the three policies,¹ less any contractual reduction for the $100,000.00 payment made by Farm Bureau. Plaintiff and Defendant have each filed motions for partial summary judgment as to the insurance coverage issue.

Standard of Review

"The court shall 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). On a motion for summary judgment, the movant has the initial burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the movant makes such a showing, the burden then shifts to the non-movant to "go beyond the pleadings and . . . designate specific facts showing that there is a genuine issue for trial." Id. at 324. The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

When deciding a motion for summary judgment, the court must view the underlying facts in the "light most favorable to the party opposing the motion." United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). As such, all reasonable inferences must be drawn in favor of the non-movant. Id. Before finding that no genuine issue for trial exists, the court must first be satisfied that no rational trier of fact could find for the non-movant. Matsushita, 475 U.S. at 587 (1986). "Summary judgment, although a useful device, must be employed cautiously because it is a final adjudication on the merits." Jackson v. Cain, 864 F.2d 1235, 1241 (5th Cir. 1989).Analysis

Plaintiff and Defendant agree that a conflict of law issue is at play in this action. Defendant asserts, however, that the plain language of the West Virginia policy, which includes a choice of law provision, should control. The West Virginia policy provides that it "and any amendment(s) and endorsement(s) are to be interpreted pursuant to the law of the state of West Virginia."

West Virginia law allows anti-stacking provisions in insurance contracts. See Findley v. State Farm Mut. Auto. Ins. Co., 576 S.E. 2d 807, 825 (W. Va. 2002) ("There is no common law right to stack coverage available for multiple vehicles under the same policy or under two or more insurance policies. The right to stack must arise from the insurance contract itself ... or from a statute...."). Further, under West Virginia law, an "owned but not insured" exclusion, which excludes all coverage for vehicles not listed in the policy, is valid for any coverage above the minimum amount of underinsured motorist coverage required by law. See Erie Ins. Co. v. Dolly, 811 S.E. 2d 875, 881-82 (W. Va. 2018). The GEICO West Virginia policy at issue in the present case includes both exclusions.

Such exclusions are not, however, allowed under Mississippi law. As to anti-stacking exclusions, the Mississippi Supreme Court has held:

We now affirmatively declare that the public policy of this State mandates stacking of UM coverage for every vehicle covered under a policy, regardless of the number or amount of the premium(s) paid for UM coverage. We hereby hold that anti-stacking clauses as applied to UM coverage are against public policy, and contracts contrary to public policy are unenforceable. We point to the language of our earliest stacking case to show that the intent of our uninsured motorist law is to provide the insured with adequate protection against injury caused by an uninsured motorist:

After a careful consideration of the authorities from other jurisdictions and the requirements of our statute, we hold that the uninsured motorist coverage of each policy of liability insurance isavailable to the injured insured until all sums which he shall be entitled to recover from the uninsured motorist have been recovered. The coverage is mandatory on the insurer and this undertaking cannot be diminished by a provision in the policy. We find no words in the statute indicating that one policy providing minimum coverage is all the statute requires. The statute requiring the coverage does not say how much uninsured motorist coverage shall be provided for each accident or each vehicle or each uninsured motorist. It requires each policy to provide the minimum coverage.

Harthcock [v. State Farm Mut. Auto. Ins. Co.], 248 So. 2d [456] at 461-62 [(Miss. 1971)]. More recently, this Court reiterated its positive stand in favor of stacking:

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