Lunge v. National Cas. Co.

• Decision Date: 06 October 1997
• Docket Number: No. 2:96-CV-286.,2:96-CV-286.
• Citation: 977 F.Supp. 672
• Parties: Tonya LUNGE, Administratrix of the Estate of Dean Marquis, Sr., Plaintiff, v. NATIONAL CASUALTY COMPANY, Defendant.
• Court: U.S. District Court — District of Vermont

977 F.Supp. 672

Tonya LUNGE, Administratrix of the Estate of Dean Marquis, Sr., Plaintiff, v. NATIONAL CASUALTY COMPANY, Defendant.

No. 2:96-CV-286.

United States District Court, D. Vermont.

October 6, 1997.

Richard Irving Rubin, Rubin, Kidney, Myer & DeWolfe, Barre, VT, for Plaintiff.

Samuel Hoar, Jr., Dinse, Erdmann, Knapp & McAndrew, Burlington, VT, for Defendant.

OPINION AND ORDER

SESSIONS, District Judge.

This matter is before the court on cross motions for summary judgment pursuant to Federal Rule of Civil Procedure 56(c). National Casualty Company ("National Casualty") has filed a motion for summary judgment on its claim that Plaintiff Tonya Lunge's ("Lunge") decedent is not a family member of the "insured" under the terms of National Casualty's insurance policy, and is therefore ineligible for uninsured motorist benefits. Lunge has filed a cross-motion for summary judgment in her favor, stating that she is entitled to recover benefits on behalf of the estate of Dean A. Marquis Sr. under the terms of National Casualty's policy. For the reasons that follow, both National Casualty's and Lunge's motions for summary judgment are denied.

FACTUAL BACKGROUND

The following facts are undisputed. Elaine Lussier ("Lussier") has been the Director of Finance and Administration at Washington County Mental Health Services, Inc. ("WCMHS") in Montpelier, Vermont for 15 years. She is one of three executives at WCMHS who have the unrestricted use of vehicles leased by WCMHS. In December, 1995, Lussier was driving a 1993 Chrysler Lebaron insured by National Casualty under the WCMHS corporate business auto policy. The car was garaged at her house, and because she had the unrestricted use of the car, she owned no other vehicle. Lussier's son, Dean A. Marquis, Sr. ("Marquis, Sr.") and her grandson, Dean Marquis, Jr. ("Marquis, Jr.") had both been living in her house continuously for six months when Marquis Sr. was killed while riding as a passenger in a friend's car. The friend, who was uninsured, was drunk and drove into the path of an oncoming car. Marquis, Sr. had no driver's license, and owned no vehicle or insurance of his own at the time of his death.

The Business Auto Coverage Form of the insurance contract issued by National Casualty to WCMHS provides in pertinent part:

1. WHO IS AN INSURED

a. You for any covered "auto"

b. Anyone else while using with your permission a covered "auto" you own, hire or borrow ...

The words "You" and "your" in the policy are defined in the Business Auto Coverage Form as the "Named Insured" shown in the Declarations. The "Named Insured" is listed as Washington County Mental Health Services, Inc. Six cars are listed in the schedule of autos, including the Chrysler Lebaron driven by Lussier. Lussier's name does not appear anywhere on the contract.

The Vermont Uninsured Motorists (UM) Coverage Form, which provides for uninsured motorist coverage in the policy, reads:¹

B. WHO IS AN INSURED

1. You

2. If you are an individual, any "family member"

3. Anyone else occupying a covered "auto" or a temporary substitute for a covered "auto".

In addition to the phrase "If you are an individual, any family member" contained in Paragraph B(2), the UM provision also contains other individual-oriented and family-oriented language. Section A contains the phrase "The damages must result from "bodily injury" sustained by the "insured".... Under Section C "EXCLUSIONS", the policy refers to `any property contained in or struck by any vehicle owned by you or any `family member'"...²

In an affidavit submitted to the Court, Lussier stated that she believed the insurance policy issued to WCMHS by National Casualty was as broad and as comprehensive as the liability and Uninsured Motorist coverage that would have been available to her had she owned and insured the Lebaron herself. She stated:

I certainly did not believe that the automobile coverage available under the National Casualty Company Policy was less comprehensive than automobile insurance I could have purchased in my own name.

Lussier Affidavit at 2 (Paper 14).

National Casualty argues that the language in the policy is clear and unambiguous. Because the term "you" in Paragraph 1 of the Vermont UM Coverage Form refers to the "named insured", listed only as WCMHS, it argues that "you" is not an individual, and family member coverage in Paragraph B(2) does not apply. Lunge essentially has two arguments. First, she argues that the individual-oriented and family-oriented language throughout the UM endorsement renders the policy ambiguous and creates uncertainty about who constitutes "you" and the "insured" under the UM endorsement. Second, she claims that the limitation of UM coverage in section B(3) to "persons occupying a covered auto" runs afoul of the requirements of the Vermont Uninsured Motorist statute, and is inconsistent with Vermont law. National Casualty rejects this second argument, claiming that the statute only mandates coverage for "persons insured" under a policy.

DISCUSSION

A. Diversity Jurisdiction

Before addressing the merits, the Court considers whether diversity jurisdiction over the subject matter of the case has been properly established. Plaintiff brings suit under 28 U.S.C. § 1332 alleging as her sole jurisdictional basis the parties' diversity of citizenship. However, there is no statement in the complaint concerning the plaintiff's state of citizenship. Similarly, while a corporation is a citizen of both the state in which it is incorporated and the state in which it has its principal state of business see 28 U.S.C. § 1332(c), the complaint informs us only that the defendant's principal place of business is Scottsdale, Arizona. The plaintiff's complaint thus fails to comply with Fed.R.Civ.P. 8(a), which requires pleadings to contain a "short and plain statement of the grounds upon which the court's jurisdiction depends." Fed.R.Civ.P. 8(a).

A failure to allege facts establishing jurisdiction need not prove fatal to a complaint. By statute, "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts," 28 U.S.C. § 1653. The plaintiff will thus be given thirty days to amend her complaint to comply with Fed. R.Civ.P. 8(a). Failure to amend the complaint within that period will result in the dismissal of this action.

B. Summary Judgment Standard

Summary judgment is appropriate if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. CIV.. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A party seeking summary judgment bears the burden of demonstrating the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. at 2552-53. The party opposing summary judgment may not rest on its pleadings, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The evidence of the nonmoving party is to be believed, and all justifiable inferences are to be drawn in its favor. Id. at 255, 106 S.Ct. at 2513 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970)).

C. Vermont Uninsured Motorist Statute

The Court turns first to the Vermont Uninsured Motorist statute. Vermont law requires that any person who is an insured under the terms of an automobile liability policy must also be an insured for injuries or death caused by uninsured drivers. Section 941(a) of Title 23 of the Vermont Statutes Annotated provides:

No policy insuring against liability arising out of the ownership, maintenance, or use of any motor vehicle may be ... issued ... unless coverage is provided therein ... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured ... motor vehicles, for bodily injury, including death.

Vt. Stat. Ann. tit. 23, § 941(a) (1987).

The Vermont Supreme Court has interpreted the UM statute in a number of recent opinions. In Monteith v. Jefferson Insurance Co., 159 Vt. 378, 618 A.2d 488 (1992), the Court emphasized the portability of UM coverage under the statute and prohibited restrictions placed upon that coverage by insurance contracts:

The essence of UM coverage under § 941 is its portability. The statute does not allow insurers to condition coverage on the location of the insured nor the insured's status as a motorist, a passenger in a private or public vehicle, or as a pedestrian.

159 Vt. at 381, 618 A.2d at 491.

However, in Norman v. King, 163 Vt. 612, 659 A.2d 1123 (1995), the Court indicated that such unrestricted UM coverage was applicable only to persons covered by the policy:

While uninsured coverage is mandated by the statute and coverage which is mandated may not be reduced or eliminated by policy provisions, these protections extend only to those insured under the policy.

163 Vt. at 614-615, 659 A.2d at 1125-1126.

Lunge argues that defining the "named insured" as WCMHS and thereby restricting UM coverage to persons "occupying a covered auto" is inconsistent with the requirements of Section 941(a). Based upon Norman v. King, the United States Court of Appeals for the Second Circuit specifically rejected that position in Canedy v. Liberty Mutual Insurance Co., 126 F.3d 100 (2d Cir.1997). In Canedy, the plaintiff had rented a vehicle from a rental car company insured by Liberty Mutual. The policy used a Business Auto Coverage Form similar to the one used in the instant case. The plaintiff was struck by an underinsured driver after she had exited the vehicle and was walking across a street. She had requested an insurance policy with the rental company, and sought UM coverage under that policy. The Second Circuit held that the "named insured" in the insurance policy was the rental company, and not ...