Mize v. Travelers Cas. Co. Of Conn.

• Decision Date: 11 March 2011
• Docket Number: Civil Action No.: 4:09-cv-0076-TLW-TER
• Court: U.S. District Court — District of South Carolina
• Parties: CINDY MIZE, Plaintiff, v. TRAVELERS CASUALTY COMPANY OF CONNECTICUT, Defendant.

CINDY MIZE, Plaintiff,

v.TRAVELERS CASUALTY COMPANY OF CONNECTICUT, Defendant.

Civil Action No.: 4:09-cv-0076-TLW-TER

UNITED STATES DISTRICT COURT

DISTRICT OF SOUTH CAROLINA

FLORENCE DIVISION

Dated: March 11, 2011

ORDER

I. INTRODUCTION

This is a declaratory judgment action in which Plaintiff seeks a determination that she is entitled to uninsured boater's coverage under an insurance policy (the Policy) issued by Defendant Travelers Casualty Company of Connecticut (Travelers or Defendant) to Troy Mitchell. Plaintiff originally filed this action in the Court of Common Pleas, Horry County, South Carolina. Defendant removed the action to this court on January 12, 2009. Plaintiff previously filed a Motion to Certify (Document # 32) the question presented in the case to the South Carolina Supreme Court. The Motion was denied by the district judge. Presently before the Court are cross-Motions for Summary Judgment (Defendant's Motion for Summary Judgment (Document # 39) and Plaintiff's Motion for Summary Judgment (Document # 43)). These Motions have been referred to the undersigned for disposition pursuant to 28 U.S.C. § 636(c).

II. FACTS

A. The Boating Accident

This case arises out of a boating accident that occurred on June 10, 2007, when Troy Mitchell (Mitchell), the insured under the Policy at issue here, was operating his 2000 19 foot Maxum in the Intercoastal Waterway near North Myrtle Beach, South Carolina. On that day, Plaintiff was invitedby another passenger to ride on Mitchell's boat as a guest. Plaintiff Dep. p. 12 (attached as Ex. B to Defendant's Motion). Plaintiffhad not met Mitchell prior to June 10, 2007. Id. Plaintiff was one of five passengers on Mitchell's boat. Immediately prior to the accident, Plaintiff was standing in the stern of the boat looking at scenery. Id.. at pp. 13, 18. At that time, an uninsured boat driven by Haim Shamah (Shamah) struck the rear of the Mitchell boat, injuring Plaintiff and two other passengers. Plaintiff never saw Shamah's boat prior to impact. Id.. at p. 14. Shamah was arrested for felony DWI. Plaintiff was immediately taken to the hospital and later to the Medical University of South Carolina where she was diagnosed and treated for quadriplegia.¹ See Plaintiff's Response at p. 1. Plaintiff is permanently paralyzed.

Mitchell is the only person who drove, steered or navigated the boat on June 10, 2007. Mitchell Affidavit (attached as Ex. C to Defendant's Motion). No other passenger had charge or command of the boat. Id.. At no time did Mitchell provide consent to any of his passengers to operate the boat. Id.. Plaintiff does not dispute that Mitchell drove the boat nor does she claim that she ever assisted him in putting the boat in the water. Plaintiff Dep. at p. 18. However, Plaintiff does aver in her Affidavit that, as a passenger on the boat, she had specific duties and responsibilities, including looking for obstructions to navigation and advising the boat driver of any dangerous conditions. Plaintiff Aff. ¶ 3.

Although Mitchell denies any liability for the boating accident, Defendant settled Plaintiff's tort claim against him, which was paid through Mitchell's liability coverage from Defendant under the same Policy at issue in this case. See Release (attached as Ex. D to Defendant's Motion).Plaintiff filed a separate lawsuit against Shamah in Horry County, which has been resolved.²

B. The Policy

The Policy at issue here contains an endorsement entitled "Uninsured Boat Coverage" which provides:

We will pay damage which you or any insured are legally entitled to recover from the owner or operator of an uninsured boat because of bodily injury caused by a collision/allision with the uninsured boat. The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured boat. "Allision" means the striking of a fixed object such as a dock, pier, buoy or a vessel at anchor by a moving vessel.

The certified copy of the Traveler's boat policy defines "Insured" as follows:

"Insured" refers to (1) you; (2) your spouse and/or relatives who reside in your household (resident relative); and (3) any person or legal entity while operating your boat with an insured's permission and without a charge or fee. "INSURED" DOES NOT INCLUDE (A) A PAID CAPTAIN OR CREW MEMBER; OR (B) ANY PERSON OR ORGANIZATION OPERATING, EMPLOYED BY, OR THE AGENT OF A MARINA, BOAT REPAIR YARD, YACHT CLUB, SALES AGENCY, BOAT SERVICE STATION, OR OTHER SIMILAR ORGANIZATION.

Travelers Policy No. 979599829-830-1 (attached as Ex. A to Defendant's Motion).

III. STANDARD OF REVIEW

The moving party bears the burden of showing that summary judgment is proper. Summary judgment is proper if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment is proper if the non-moving party fails to establish an essential element of any cause of action upon which the non-moving party has the burden of proof. Celotex, 477 U.S. 317. Once the moving party has brought into question whether there is a genuine dispute for trial on a material element of the non-moving party's claims, the non-moving party bears the burden of comingforward with specific facts which show a genuine dispute for trial. Fed.R.Civ.P. 56(e); Matsushita Electrical Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986). The non-moving party must come forward with enough evidence, beyond a mere scintilla, upon which the fact finder could reasonably find for it. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The facts and inferences to be drawn therefrom must be viewed in the light most favorable to the non-moving party. Shealy v. Winston, 929 F.2d 1009, 1011 (4^th Cir. 1991). However, the non-moving party may not rely on beliefs, conjecture, speculation, or conclusory allegations to defeat a motion for summary judgment. Barber v. Hosp. Corp. of Am., 977 F.2d 874-75 (4^th Cir. 1992). The evidence relied on must meet "the substantive evidentiary standard of proof that would apply at a trial on the merits." Mitchell v. Data General Corp., 12 F.3d 1310, 1316 (4^th Cir. 1993).

To show that a genuine dispute of material fact exists, a party may not rest upon the mere allegations or denials of his pleadings. See Celotex, 477 U.S. at 324. Rather, the party must present evidence supporting his or her position by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1)(A); see also Cray Communications, Inc. v. Novatel Computer Systems, Inc., 33 F.3d 390 (4^th Cir. 1994); Orsi v. Kickwood, 999 F.2d 86 (4^th Cir. 1993); Local Rules 7.04, 7.05, D.S.C.

IV. DISCUSSION

A. Arguments of the Parties

Defendant argues that Plaintiff (1) does not qualify for uninsured benefits because her claim has been paid under the liability portion of Mitchell's Policy and (2) does not qualify as an insured under the Policy because she was a passenger and not the operator of the boat. Plaintiff argues that (1) she does qualify for uninsured benefits despite the fact that Mitchell settled her claim of liabilityagainst him, (2) she qualifies as an insured under the Policy because South Carolina law defines "operator" to include a person who uses the boat, (3) the Policy is ambiguous and should be construed in her favor, and (4) the Doctrine of Reasonable Expectations should apply to allow coverage for Plaintiff under the Policy.

B. Policy Construction

Insurance policies are subject to general rules of contract construction. B.L.G. Enterprises, Inc. v. First Financial Ins. Co., 334 S.C. 529, 514 S.E.2d 327 (1999).³ Courts must enforce, not write, contracts of insurance and must give policy language its plain, ordinary, and popular meaning. Fritz-Pontiac-Cadillac-Buick v. Goforth, 312 S.C. 315, 440 S.E.2d 367 (1994). "When the contract is unambiguous, clear, and explicit, it must be construed according to the terms used by the parties." Myers v. National States Ins. Co., 606 S.E.2d 486, 488 (S.C.Ct.App.2004). "The judicial function of a court of law is to enforce an insurance contract as made by the parties, and not to rewrite or to distort, under the guise of judicial construction, contracts, the terms of which are plain and unambiguous." Stewart v. State Farm Mut. Auto. Ins. Co., 533 S.E.2d 597, 601 (S.C.Ct.App.2000). "Where language used in an insurance contract is ambiguous, or where it is capable of two reasonable interpretations, that construction which is most favorable to the insured will be adopted." Poston v. National Fid. Life Ins. Co., 399 S.E.2d 770, 772 (S.C.1990) (internal quotation marks omitted). In other words, "when an insurance policy... is susceptible to more than one reasonable interpretation, one of which would provide coverage, th[e] Court must hold as a matter of law in favor of coverage." Gaskins v. Blue Cross-Blue Shield of South Carolina, 245 S.E.2d 598, 602 (S.C.1978).

Both parties assert that, in the absence of South Carolina law interpreting or addressingboaters' insurance coverage, the court should look to South Carolina case law addressing or interpreting uninsured motorists' coverage. The undersigned agrees to the extent that the case law interpreting uninsured motorists' coverage addresses policy language that is similar to the language included in the Policy at issue here.

C. Whether Plaintiff is an Insured as Defined by the Policy⁴

As stated above, the Policy provides coverage for "damage which you or any insured are legally entitled to recover from the owner or operator of an uninsured boat because of bodily injury caused by a collision/allision with the uninsured boat" and defines "insured" as, among...