Loomis v. ACE Am. Ins. Co.

• Decision Date: 05 February 2021
• Docket Number: 6:19-cv-1131 (BKS/ATB)
• Parties: WILLIAM LOOMIS, Plaintiff, v. ACE AMERICAN INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of New York

WILLIAM LOOMIS, Plaintiff, v. ACE AMERICAN INSURANCE COMPANY, Defendant.

6:19-cv-1131 (BKS/ATB)

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK

February 5, 2021

Appearances:

For Plaintiff:

Martha L. Berry

Michael J. Longstreet

Longstreet & Berry, LLP

P.O. Box 249

Fayetteville, NY 13066

For Defendant:

Kacey Houston Walker

Kurt M. Mullen

Nixon Peabody LLP

Exchange Place

53 State Street

Boston, MA 02109

Hon. Brenda K. Sannes, United States District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiff William Loomis commenced this action in Oneida County Supreme Court challenging Defendant ACE American Insurance Company's rejection of his claim for underinsured motorists benefits in connection with an accident that occurred while Plaintiff was driving a vehicle insured by Defendant. (Dkt. No. 2). Defendant subsequently removed the action to this Court, invoking this Court's federal diversity jurisdiction. (Dkt. No. 1). Presently before the Court are the parties' cross-motions for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. (Dkt. Nos. 20, 23). The Court heard oral argument on the motions on February 5, 2020. For the reasons that follow, the Court grants Plaintiff's motion and denies Defendant's motion with respect to Plaintiff's claim under Indiana law, and grants Defendant's motion and denies Plaintiff's motion with respect to Plaintiff's claim under New York law.

II. FACTS¹

A. Factual Background

Plaintiff, a resident of Oneida County, New York, was injured on October 2, 2017 while driving a truck owned by his employer, XPO Logistics ("XPO") in the Town of Annsville, New York. (Dkt. No. 20-23, ¶¶ 1-2, 6; Dkt. No. 23-7, ¶¶ 1-2, 6; Dkt. No. 20-19, ¶¶ 2-3). The accident occurred when another vehicle crossed over the center lane and crashed into Plaintiff's vehicle head-on, with both vehicles traveling at approximately 50 miles per hour. (Dkt. No. 20-23, ¶ 2; Dkt. No. 23-7, ¶ 2; Dkt. No. 20-19, ¶ 4). The driver of the other vehicle died at the scene, while Plaintiff was taken away by ambulance. (Dkt. No. 20-23, ¶ 3; Dkt. No. 23-7, ¶ 3; Dkt. No. 20-19, ¶¶ 6-7). At the time of the accident, the truck that Plaintiff was driving was registered in the State of Indiana and garaged in the State of New York. (Dkt. No. 20-23, ¶ 5; Dkt. No. 23-7, ¶ 5).

The other vehicle involved in Plaintiff's accident was insured by State Farm Mutual Automobile Insurance Company ("State Farm"). (Dkt. No. 20-23, ¶ 4; Dkt. No. 23-7, ¶ 4). Plaintiff made a claim against the other driver's estate for the injuries he suffered as a result ofthe accident. (Dkt. No. 20-23, ¶ 7; Dkt. No. 23-7, ¶ 7). Plaintiff's claim was settled for $50,000—the full amount of the State Farm policy limit—and State Farm paid that amount to Plaintiff. (Dkt. No. 20-23, ¶ 8; Dkt. No. 23-7, ¶ 8; Dkt. No. 20-7; Dkt. No. 20-8). Plaintiff notified Defendant, the insurer of the XPO-owned vehicle he was driving, of his intent to pursue a claim for supplemental underinsured motorist coverage, and this coverage was denied in writing on the grounds that "there is no Uninsured/Underinsured Motorist Coverage in New York State"² under the relevant policies. (Dkt. No. 20-23, ¶ 19; Dkt. No. 23-7, ¶ 19; Dkt. No. 20-4; Dkt. No. 20-6).

B. The XSA Policy

At the time of his accident, the vehicle Plaintiff was driving was insured by a policy Defendant issued to XPO, with the policy number XSA H25097257 (the "XSA Policy"). (Dkt. No. 20-23, ¶¶ 10-11; Dkt. No. 23-7, ¶¶ 10-11; Dkt. No. 20-15). The XSA Policy provides coverage for "[a]ny auto excluding Private Passenger Type Vehicles; and excluding any auto while involved in intrastate operations . . . in the states of GA, KS, KY, MS and TX." (Dkt. No. 20-15, at 65). The key terms of the XSA policy are included in a form titled "Excess Business Auto Coverage Form." (Id. at 39). The XSA Policy also includes declarations describing it as an "Excess Business Auto Policy" and "Excess Truckers Liability Policy." (Id. at 28). The XSA Policy applies to the period from October 1, 2017 to October 1, 2018, and provides for a $7 million Limit of Insurance for any one accident or loss. (Id. at 28-29). The XSA Policy also includes a $3 million self-insured "Retained Limit," defined as "the amount [XPO] must pay before the Limits of Insurance become applicable." (Id. at 29, 51). The XSA Policy provides thatDefendant "will pay the 'insured' for the 'ultimate net loss'³ in excess of the 'retained limit' because of 'bodily injury' or 'property damage' to which [the XSA Policy] applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto.'" (Id. at 39).⁴ The XSA Policy "does not apply to defense, investigation, settlement or legal expenses, or prejudgment interest arising out of any 'accident', but [Defendant] shall have the right and opportunity to assume from the insured the defense and control of any claim or 'suit', including any appeal from a judgment, seeking payment of damages covered under [the XSA Policy] arising out of such 'accident' that [Defendant] believe[s is] likely to exceed the 'retained limit.'" (Id.).

The parties' dispute centers on the XSA Policy's provisions related to Uninsured and Underinsured Motorist Coverage, a type of insurance that is triggered when an insured driver is in an accident with an at-fault driver who does not have insurance ("Uninsured," or "UM," coverage) or whose insurance is insufficient to fully cover the other driver's damages ("Underinsured," or "UIM," coverage). The XSA Policy expressly states that it does not cover damage "caused by an 'accident' with an uninsured or underinsured 'auto,'" but also contains language suggesting that that exclusion may be modified by a separate endorsement: "No one will be entitled to receive duplicate payments for the same elements of 'loss' under this coverage form and any Uninsured Motorists Coverage endorsement or Underinsured Motorists Coverageendorsement attached to this policy." (Id. at 44 (emphasis added)). On a page titled "Uninsured Motorists/Underinsured Motorist Coverage Summary," the policy states that "[n]o coverage is offered or provided for vehicles principally garaged or registered in . . . [a]ll states except AK, FL, LA, NH, VT, WV"; that "[XPO has] rejected coverage in . . . AK, FL, LA, NH, WV"; and that coverage is provided in Vermont. (Id. at 25; see also id. at 96 (endorsement providing a $100,000 uninsured/underinsured motorists insurance limit for vehicles principally garaged in Vermont)).

In connection with its cross-motion, Defendant submitted a declaration from Sean Fellows, a Senior Manager of Global Risk Management at XPO who was "authorized to sign automobile coverage selection/rejection forms on behalf of XPO" in connection with XPO's purchase of the XSA Policy. (Dkt. No. 23-4, ¶¶ 1-2). The declaration attaches the "coverage selection/rejection forms for excess uninsured and excess underinsured motorist coverage that [Fellows] signed or received on or about September 29, 2017" in connection with the XSA Policy. (Id. ¶ 3). These forms include a form asking the generalized questions "[d]o you wish to reject Excess Uninsured Motorist Coverage" and "[d]o you wish to reject Excess Underinsured Motorist Coverage," as well as various state-specific forms explaining and offering such coverage pursuant to the laws of each state. (Dkt. No. 23-5). The generalized form reflects that Fellows answered 'yes" to both questions, and the state-specific forms reflect that he rejected coverage for each state for which it was offered. (Id.). No state-specific notices or offers to purchase coverage for New York or Indiana were included in the forms Fellows received in connection with the XSA Policy. (Id.).

C. The MMT Policy

XPO also purchased another insurance policy from Defendant with the policy number MMT H2509721A (the "MMT Policy"), which, during the same policy period covered by theXSA Policy, provided coverage for vehicles not covered by the XSA Policy, i.e. those "involved in intrastate operations . . . in the states of GA, KS, KY, MS and TX." (Dkt. No. 20-14, at 10, 60). The MMT Policy has a liability limit of $10 million per accident or loss, with a $3 million deductible. (Id. at 11, 53). Unlike the XSA Policy, under which Defendant has no obligation until XPO satisfies the $3 million Retained Amount, the MMT Policy provides that Defendant "will pay all sums an 'insured' legally must pay as damages because of 'bodily injury' . . . to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto'," and also "will have the right and duty to defend any 'insured' against a 'suit' asking for such damages." (Id. at 24-25). XPO is then obligated to reimburse Defendant for any amounts paid up to the deductible amount. (Id. at 53).

As with the XSA Policy, the Fellows declaration states that Fellows was "authorized to sign automobile coverage selection/rejection forms on behalf of XPO" in connection with XPO's purchase of the MMT Policy, and attaches the "coverage selection/rejection forms for excess uninsured and excess underinsured motorist coverage that [Fellows] signed or received on or about September 29, 2017" in connection with the MMT Policy. (Dkt. No. 23-4, ¶¶ 2, 4). As with the XSA Policy, this set of forms includes a generalized form in which Fellows indicated his intent to reject uninsured and underinsured motorist coverage; however, the questions on this form are more numerous and detailed than on the form used in connection with the XSA Policy. (Dkt. No. 23-6, at 3).

Unlike the XSA Policy, this set of forms includes a form titled "Indiana Uninsured Motorists Coverage and Underinsured Motorists Coverage Selection/Rejection," which explains options for uninsured/underinsured motorists coverage and gives the insured the option to select or reject the coverage. (Id. at 4-8). The form indicates that Fellows rejected all offered...