Long v. St. Paul Fire and Marine Ins. Co., 05-1272-JTM.

• Decision Date: 06 April 2006
• Docket Number: No. 05-1272-JTM.,05-1272-JTM.
• Citation: 423 F.Supp.2d 1219
• Court: U.S. District Court — District of Kansas
• Parties: Natalie LONG, Individually, as Heir at Law, and as Special Administrator of the Estate of Charles Rhoten, Jr., a Deceased Minor, and as Parent and Natural Guardian of Jennifer Rhoten, a Minor, Plaintiff, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant.

423 F.Supp.2d 1219

Natalie LONG, Individually, as Heir at Law, and as Special Administrator of the Estate of Charles Rhoten, Jr., a Deceased Minor, and as Parent and Natural Guardian of Jennifer Rhoten, a Minor, Plaintiff, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant.

No. 05-1272-JTM.

United States District Court, D. Kansas.

April 6, 2006.

Deborah B. Mcllhenny, J. Darin Hayes, Hutton & Hutton, Wichita, KS, for Plaintiff.

Marc A. Powell, Powell, Brewer & Reddick LLP, Wichita, KS, for Defendant.

AMENDED MEMORANDUM AND ORDER

MARTEN, District Judge.

This is an action to collect uninsured motorist benefits arising from a traffic accident in Wichita, Kansas. The action was removed here by the defendants St. Paul Fire & Marine Insurance Company. The matter is before the court on the motion to remand by the plaintiff, and by the plaintiff's motion for summary judgment.

Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the court must examine all evidence in a light most favorable to the opposing party. McKenzie v. Mercy Hospital, 854 F.2d 365, 367 (10th Cir.1988). The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir.1985). The moving party need not disprove plaintiffs claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir. 1987).

In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather, the nonmoving party must come forward with specific facts showing the presence of a genuine issue of material fact for trial and significant probative evidence supporting the allegation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Once the moving party has carried its burden under Rule 56(c), the party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. "In the language of the Rule, the nonmoving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed. R.Civ.P. 56(e)) (emphasis in Matsushita). One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and the rule should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The court has carefully reviewed the extensive pleadings submitted by both sides and is prepared to rule. A motion for reconsideration is neither encouraged nor required. Any such motion shall not repeat any argument previously made in the existing pleadings, and shall not exceed five double-spaced pages in length.

Findings of Fact

On September 5, 2004, C.J. Rhoten was 14 years old; his sister Jennifer Rhoten was 15 years old. Both were traveling as passengers in a pick-up truck driven by Jack T. Nowak, a minor. The truck left the road and overturned at approximately 1:50 p.m., while traveling south on 231st Street West in Sedgwick County, Kansas. The Rhotens were both ejected from the truck; C.J. Rhoten died as a result of injuries he sustained in the accident.

It is uncontroverted that the driver Jack T. Nowak negligently operated the truck, causing severe injuries and death to C.J. Rhoten and severe injuries to Jennifer Rhoten. Defendant contends that factual issues remain, however, as to whether the Rhotens were also negligent.

The defendant, St. Paul, insured the pick-up truck. Nowak Construction Company is the policy holder.

On September 30, 2004, St. Paul wrote to Jack Nowak in care of his parents, Joe and Yolanda Nowak, stating that the company denied direct liability coverage because its investigation revealed that Jack Nowak was not a permissive user of the vehicle at the time of the accident.

On January 24, 2005, counsel for plaintiff sent a demand letter to the defendant. The letter was also sent to the attorneys for Jack Nowak and Nowak Construction. Counsel for Nowak Construction responded on February 28, 2005. Counsel for Jack Nowak responded on March 1, and advanced arguments why uninsured motorist coverage should be available to the plaintiff under the terms of the St. Paul policy of insurance. On March 10, 2005, counsel for the plaintiff forwarded these letters to St. Paul, along with a letter specifically demanding settlement under the uninsured motorist coverage provisions of the policy. Due to a clerical error, this letter sought a response to the demand by May 28, 2005, instead of an intended deadline date of March 28, 2005. Plaintiffs attorney corrected this oversight by letter dated March 22, 2005.

The defendant did not seek any extension of the provided deadline of March 28, 2005, within which to respond to the uninsured motorist settlement demand. On March 28, 2005, and in conformance with the plaintiffs deadline, the defendant sent a letter to plaintiffs attorney denying coverage under the uninsured motorist provisions of the policy.

The denial letter, Exhibit 11, states:

I have reviewed your claim for UM benefits arising out of the insurance policy held by Nowak Construction, and have determined that no coverage is available for that claim in these circumstances. Our policy form, a standard St. Paul Fire and Marine Insurance Company form W029 (3-01 edition) contains the following "grant of coverage" language:

"We'll pay all sums any protected person is legally entitled to recover from the owner or driver of an uninsured or underinsured vehicle ..."

We have previously denied coverage responsibility for any claims against the liability of the driver of the vehicle at issue, because that person was not a permitted driver of that vehicle, and so his use of the vehicle was outside of the bounds of our coverage. However, that denial of coverage did not mean that the vehicle itself was an uninsured vehicle. In fact, it was an insured vehicle.

The Kansas courts have specifically held that this situation does not invoke UM or UIM coverage. In Grimmett v. Burke, 21 Kan.App.2d 638, 906 P.2d 156 (1995), the court stated as follows:

"Grimmett appears to argue that under K.S.A. 40-284, uninsured motorist coverage is available when the operator is uninsured even though the owner of the automobile is covered by a policy. Grimmett is wrong. The majority view in this country, which we adopt in the present case, is that a vehicle of which either the owner or driver is covered by minimum insurance coverage is not `uninsured' even though one of those persons has no insurance." State Farm Mut. Auto. Ins. Co. v. Cummings, 13 Kan.App.2d 630, 634, 778 P.2d 370, rev. denied 245 Ks. 786 (1989).

So, St. Paul Travelers is not denying that there is coverage for this vehicle. We have denied coverage for the driver who caused the accident. Kansas law recognizes this difference. For these reasons, we must deny your claim for UM benefits arising from the Nowak Construction policy.

Should you have any information that you believe would affect or change our determination, please bring it to my attention.

(Plf.Exh. 11) (emphasis in original).

To the date of the filed Petition in this matter (July 27, 2005), St. Paul had not made any offer to settle plaintiff's claims for uninsured motorist benefits, denied that Jack Nowak was negligent, stated that it was refusing to negotiate a settlement on the grounds that Jack Nowak was without culpability for the accident, stated that it was refusing to negotiate a settlement on the grounds that the Rhoten children had any fault in the accident or that they knew Jack Nowak was driving the truck without permission, or explicitly raised the "unauthorized use" exclusion. The defenses at issue in this motion are set forth at paragraphs 2 and 3 under the Defenses section of Defendant's Amended Answer. Those paragraphs read as follows:

2. Plaintiffs are not entitled to UM coverage due to the "unauthorized use" exclusion in the policy. (Form 44029, page 4.) Jack Nowak was an unlicenced and under-aged driver, without parental permission for this "joyride" with 8 other teenagers.

3. Plaintiffs are not entitled to UM protection because the driver was not operating an uninsured vehicle. The vehicle in question was insured to the extent necessary under Kansas Law. (Form 44029, page 1.)

(Plf.Exh. 3.)

Plaintiff Natalie Long is a resident of Sedgwick County, Kansas. She is the natural mother of both Charles (C.J.) Rhoten Jr. and Jennifer Rhoten; she also is the administrator of the estate of Charles Rhoten, Jr. Nowak Construction Company is a Kansas for-profit corporation with its principal place of business in Sedgwick County, Kansas.

Plaintiff filed this action in state court contending that St. Paul is responsible for paying uninsured motorist benefits for C.J. Rhoten's injuries and death and Jennifer Rhoten's injuries. (Sedgwick County District Court, Case No. 05CV2882.) St. Paul removed this action to this court.

Conclusions of Law

Plaintiff first moves to remand the present action, arguing that the case was improperly removed since all the parties are residents of Kansas. Specifically, plaintiff argues that pursuant to 28 U.S.C. § 1332(c)(1), defendant St. Paul, which would otherwise be a resident of Minnesota, should be deemed a resident the state where its insured lives, Kansas.

Under 28 U.S.C. §...