Nat'l Cas. Co. v. W. Express

• Decision Date: 19 November 2018
• Docket Number: Case No. CIV-15-1222-R
• Citation: 356 F.Supp.3d 1288
• Parties: NATIONAL CASUALTY COMPANY, Plaintiff, v. WESTERN EXPRESS, et al., Defendants.
• Court: U.S. District Court — Western District of Oklahoma

356 F.Supp.3d 1288

NATIONAL CASUALTY COMPANY, Plaintiff,

v.WESTERN EXPRESS, et al., Defendants.

Case No. CIV-15-1222-R

United States District Court, W.D. Oklahoma.

Signed November 19, 2018

Peter L. Wheeler, John C. Lennon, Pierce Couch Hendrickson Baysinger & Green, Oklahoma City, OK, Jon M. Hughes, Scott W. McMickle, McMickle Kurey & Branch LLP, Alpharetta, GA, for Plaintiff.

Casper J. den Harder, Kelsie M. Sullivan, Phil R. Richards, Richards & Connor, Randall J. Lewin, Moyers Martin LLP, Tulsa, OK, Andrew R. Davis, Rabindranath Ramana, Calvert Law Firm, Matthew B. Wade, Timothy L. Abel, Abel Law Firm, Chad W.P. Kelliher, Law Office of Daniel M. Davis, Rex K. Travis, Travis Law Office, L Mark Bonner, Norman & Edem PLLC, David Proctor, Goolsby Proctor Heefner & Gibbs PC, Darren M. Tawwater, The Tawwater Law Firm PLLC, Oklahoma City, OK, Chandra L. Holmes, John P. Zelbst Law Firm, David L. Butler, John P. Zelbst, Zelbst Holmes & Butler, Lawton, OK, for Defendants.

ORDER

DAVID L. RUSSELL, UNITED STATES DISTRICT JUDGE

This action arises out of a pileup on March 31, 2012, involving multiple vehicles. The underlying tort liability of the various participants is the subject of multiple federal and state court actions and certain of the involved persons have settled their claims. National Casualty Company filed this action seeking a declaratory judgment regarding the limits of its liability under a policy of insurance issued to Defendant Western Express. Presently before the Court are three motions for summary judgment. Plaintiff National Casualty argues that based on the language of the Policy its liability is limited to $1,000,000 and further seeks a declaration that its limits of coverage were exhausted by the settlement of certain claims arising from the accident and thus it has no further obligation thereunder (Doc. No. 90). Defendants Butler, Cardenas, Chmil, Crittenden, Factor, Fisher, and Ori (hereinafter "injured-party Defendants") responded in opposition to the motion and filed their own motion seeking a declaration that the Policy issued by Plaintiff provides the full amount of coverage for each person injured or killed in what they consider a series of accidents. (Doc. Nos. 93 and 104). Each injured-party Defendant was either involved in or is the personal representative of a person killed in the March 31, 2012 incident. Defendant Schneider and his employer, Defendant Western Express, the insured, seek summary judgment as well. They argue that despite the number of impacts, there was but a single "accident" under the Policy, giving rise to only a single $900,000 self-retention obligation under the Policy. (Doc. Nos. 88, 102, and 103). Western Express and Schneider responded to the Plaintiff's motion and to that of its co-defendants. (Doc. Nos. 103, 106). The Court has considered the parties' various positions and finds as follows.

At the outset the Court disposes of the suggestion by the injured-party Defendants that this Court await the termination of proceedings in the state court regarding the enforceability of an alleged settlement of the claims in the underlying tort litigation, Western Express v. Factor , Case No. DF-114498. The Oklahoma Court of Civil Appeals issued its decision on May 11, 2018, overturning and vacating the order of the District Court of Oklahoma County wherein that court concluded that a valid and binding settlement had been reached. On October 22, 2018, the Oklahoma Supreme Court denied Adam Factor's Petition for Writ of Certiorari, thereby mooting any argument that this Court should abstain from considering the instant motions. Accordingly, the injured-party Defendants' request that this Court await a decision from the Oklahoma state courts is denied as moot.

Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact" and that it is "entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc. , 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, speedy and inexpensive determination of every action.’ " Celotex Corp. v. Catrett , 477 U.S. 317, 326, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R. Civ. P. 1 ).

Generally, the facts underlying the March 31, 2012 incident are not disputed. At approximately 8:27 a.m. while driving through fog in the westbound lanes of Interstate 40 near the Oklahoma/Texas border, Defendant Schneider's truck hit a BMW being driven by Gorgis Ori. The two vehicles pulled off into the center median, although there are contentions that Defendant Schneider's vehicle was not completely cleared from the inside westbound lane.¹ Regardless, James Crittenden, who was behind Schneider, hit Schneider's truck, which pushed Schneider's trailer into the roadway further. This relocation set off a chain reaction of impacts that took place over the course of minutes, not all with Schneider. Schneider was employed by Western Express, the insured herein, giving rise to this declaratory judgment action.

National Casualty Company issued Policy Number CTO0124407 to Western Express, Inc. of Nashville, Tennessee for the period October 1, 2011 through October 1, 2012, providing commercial auto coverage. (Doc. No. 90-1, p. 3). The Policy included a "Commercial Auto Coverage Part Motor Carrier Coverage Form Supplemental Declarations" page, which contained a list of coverages. Id. at p. 9. The Policy includes liability coverage for 61 covered autos and identified the limit, that is, "[t]he Most We Will Pay for Any One Accident or Loss" as $1,000,000.² The dispute herein revolves around certain Policy language, set forth in more detail below, because the parties disagree regarding how many "Accidents" resulted from the events on March 31, 2012.

Plaintiff argues the initial impact between Defendant Schneider and the BMW driven by Ori as well as all subsequent impacts constitute a single "Accident" and therefore its exposure is limited to $1,000,000. The injured-party Defendants argue that National Casualty's exposure under the Policy is $1,000,000 per injured or deceased person, because each is a separate "Accident" when viewed from the standpoint of the injured or deceased.³

Plaintiff National Casualty and Defendants Western Express and Schneider contend the Declaration establishes the limits of coverage for all events of March 31, 2012 between the parties.

The Policy under "Section II – Liability Coverage, A. Coverage" provides:

We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto".

Doc. No. 90-1, p. 15. It provides for a "Limit of Insurance:"

Regardless of the number of covered "autos", "insureds", premiums paid, claims made or vehicles involved in the "accident", the most we will pay for the total of all damages and "covered pollution cost or expense" combined, resulting from any one "accident" is the Limit of Insurance for Liability Coverage shown in the Declarations.

All "bodily injury", "property damage" and "covered pollution cost or expense" resulting from continuous or repeated exposure to substantially the same conditions will be considered as resulting from one "accident."

Id. at p. 19. "Accident," "includes continuous or repeated exposure to the same conditions resulting in ‘bodily injury’ or ‘property damage’." Id. at 25.

Before addressing the interpretation of the Policy, the Court addresses the admissibility of certain evidence submitted by the parties. The injured-party Defendants would have the Court adopt in toto a report submitted to the District Court of Oklahoma County in certain of the underlying tort litigation drafted by a court-appointed Special Master, former United States District Judge Michael Burrage. Plaintiff insurer and Defendant insured, Western Express and its employee Thomas Schneider, object to the Court's consideration of the Special Master's report. The injured parties do not address the admissibility of the Special Master's report in any of their briefs.

The Court will not adopt the legal opinion of the Special Master and the facts as set forth therein are based on allegations, not evidence. See, e.g. , Doc. No. 91-1, pp. 13, 15-16 ("it is alleged by plaintiffs (and denied by defendants)"). The legal conclusions offered by the Special Master are inappropriate for the same reasons an expert witness is not permitted to offer legal conclusions. See Anderson v. Suiters , 499 F.3d 1228, 1237 (10th Cir. 2007) ("While expert witnesses may testify as to the ultimate matter at issue, Fed. R. Evid. 704(a), this refers to testimony on ultimate facts; testimony on ultimate questions of law, i.e., legal opinions or conclusions, is not favored.") (citing Specht v. Jensen , 853 F.2d 805, 808 (10th Cir. 1988) ). It is the Court's obligation to determine the applicable law; issues related to the interpretation of written contracts, including insurance policies, are legal, not factual. Standard Fire Ins. Co. v. Chester O'Donley & Assoc. , 972 S.W.2d 1, 5-6 (Tenn. Ct. App. 1998). The Court is unwilling to abdicate its role to either the Special Master appointed by the District Court of Oklahoma County or the expert witness, Richard Dykstra, whose report the injured-party Defendants also submitted in support of their position. (Doc. No. 93-7).

Additionally, the opinion offered by the Special Master has no legal effect in Oklahoma state court following the...