Loomis v. ACE Am. Ins. Co.

• Decision Date: 24 March 2022
• 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

593 F.Supp.3d 34

William LOOMIS, Plaintiff,

v.ACE AMERICAN INSURANCE COMPANY, Defendant.

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

United States District Court, N.D. New York.

Signed March 24, 2022

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.

MEMORANDUM-DECISION AND ORDER

Brenda K. Sannes, United States District Judge:

I. INTRODUCTION

In this action, Plaintiff William Loomis challenges 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 Defendant insured. (Dkt. No. 2). Following the parties’ cross-motions for summary judgment (Dkt. Nos. 20, 23), the Court concluded, as a matter of law, that Defendant's failure to obtain explicit written rejection of uninsured and underinsured motorist coverage ("UM" and "UIM") before excluding it from the $7 million policy it issued to the vehicle owner—Plaintiff's employer, XPO Logistics—violated Indiana's Uninsured Motorist Coverage and Underinsured Motorist Statute, ("UM/UIM Statute"), Indiana Code § 27-7-5-2(a) ("IC 27-7-5-2(a)"). Loomis v. Ace Am. Ins. Co. , 517 F. Supp. 3d 95 (N.D.N.Y. 2021).¹ The Court further concluded that in the absence of a written rejection of coverage, "the requirements of the UM/UIM Statute must be ‘considered a part of [Defendant's] policy the same as if written therein.’ " Loomis , 517 F. Supp. 3d at 114 (N.D.N.Y. 2021) (quoting United Nat. Ins. Co. v. DePrizio , 705 N.E.2d 455, 460 (Ind. 1999) ). According to the policy, Plaintiff's employer "must pay" a $3 million "Retained Limit"—"before the Limits of Insurance become applicable." (Dkt. No. 20-15, at 28–29, 51). As neither party briefed the impact of this provision, the Court noted the issue but did not address it. Loomis , 517 F. Supp. 3d at 114 n.16. Following the Court's ruling, the parties submitted a series of letter briefs reflecting different positions regarding the impact of the $3 million "Retained Limit" on this case. (Dkt. Nos. 32, 33). Identifying the "remaining issue" as "an issue of law" and observing that "Plaintiff has not identified any discovery that would be relevant to that issue," the Court construed "Defendant's letter brief as a supplemental motion for summary judgment" and allowed additional briefing. (Dkt. No. 34). For the reasons that follow, the Court grants Defendant's supplemental motion for summary judgment.

II. FACTS²

A. Factual Background

Plaintiff, a New York resident, was injured in a motor vehicle accident while driving a truck owned by his employer, XPO Logistics ("XPO") in 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 truck head-on: both vehicles were traveling at approximately 50 miles per hour. (Dkt. No. 20-23, ¶ 2; Dkt. No. 23-7, ¶ 2; Dkt. No. 20-19, ¶ 4). Plaintiff suffered multiple injuries; the driver of the other vehicle died at the scene. (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 Indiana and garaged in New York. (Dkt. No. 20-23; 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 of the 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). There is no dispute that Plaintiff's damages exceed $50,000. 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; Defendant denied coverage on the grounds that "there is no Uninsured/Underinsured Motorist Coverage in New York State"³ 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 the 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).⁴ The Declarations page of the XSA Policy states that it provides liability coverage for "covered autos," and that the "Limit," that is, "[t]he most [it] will pay for any one Accident or Loss," is $7 million and that the "Retained Limit," that is, "the amount [XPO] must pay before the Limits of Insurance become applicable," "for any one ‘accident’ or ‘loss’ " is $3 million. (Dkt. No. 20-15, at 29, 51).

The section of the XSA Policy titled "Liability Coverage" provides that Defendant "will pay the ‘insured’ for the ‘ultimate net loss’ 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). The XSA Policy defines "ultimate net loss" as "the total amount the ‘insured’ is legally obligated to pay as damages for a covered claim or ‘suit’ either by adjudication or a settlement to which we agree in writing, and includes deductions for recoveries and salvages which have or will be paid." (Id. at 51). "Retained limit" is defined as:

[T]he limit shown in the Declarations and is the amount you must pay before the Limits of Insurance become applicable. In the event there is other insurance, whether or not applicable to an "accident", claim or "suit" within the "retained limit," you will continue to be responsible for the full amount of the "retained limit" before the Limits of Insurance under this policy apply. In no case will we be required to pay the "retained limit" or any portion thereof.

(Id. at 51).

The XSA Policy's "Limit of Insurance" provision states:

Regardless of the number of covered "autos", "insureds", premiums paid, claims made or vehicles involved in the "accident", the most we will pay for "ultimate net loss" in excess of the "retained limit" for damages ... resulting from any one "accident" is the Limit of Insurance for Liability Coverage shown in the Declarations.

....

You agree to assume payment of the "retained limit" before the Limits of Insurance become applicable.⁵

(Id. at 44).

III. STANDARD OF REVIEW

Under Rule 56(a), summary judgment may be granted only if all the submissions taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the initial burden of demonstrating "the absence of a genuine issue of material fact." Celotex , 477 U.S. at 323, 106 S.Ct. 2548. A fact is "material" if it "might affect the outcome of the suit under the governing law," and is genuinely in dispute "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson , 477 U.S. at 248, 106 S.Ct. 2505 ; see also Jeffreys v. City of New York , 426 F.3d 549, 553 (2d Cir. 2005) (citing Anderson ). The movant may meet this burden by showing that the nonmoving party has "fail[ed] to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex , 477 U.S. at 322, 106 S.Ct. 2548 ; see also Selevan v. N.Y. Thruway Auth. , 711 F.3d 253, 256 (2d Cir. 2013) (explaining that summary judgment is appropriate where the nonmoving party fails to " ‘come forth with evidence sufficient to permit a reasonable juror to return a verdict in his or her favor on’ an essential element of a claim" (quoting In re Omnicom Grp., Inc. Sec. Litig. , 597 F.3d 501, 509 (2d Cir. 2010) )).

If the moving party meets this burden, the nonmoving party must "set out specific facts showing a genuine issue for trial." Anderson , 477 U.S. at 248, 250, 106 S.Ct. 2505 ; see also Celotex , 477 U.S. at 323-24, 106 S.Ct. 2548 ; Wright v. Goord , 554 F.3d 255, 266 (2d Cir. 2009). "When ruling on a summary judgment motion, the district court must construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant." Dallas Aerospace, Inc. v. CIS Air Corp. , 352 F.3d 775, 780 (2d Cir. 2003). Still, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), and cannot rely on "mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," Knight v. U.S. Fire Ins. Co. , 804 F.2d 9, 12 (2d Cir. 1986) (quoting Quarles v. Gen. Motors Corp. , 758 F.2d 839, 840 (2d Cir. 1985) ). Furthermore, "[m]ere conclusory allegations or denials ... cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines , 593 F.3d 159, 166 (2d Cir. 2010) (quoting Fletcher v. Atex, Inc. , 68 F.3d 1451, 1456 (2d Cir. 1995) ).

IV. DISCUSSION

For purposes of the supplemental summary judgment motion, the parties do not dispute that the XSA Policy covered the vehicle Plaintiff was driving at the time of his accident; that Plaintiff was using XPO's covered "auto" with XPO's permission...