Nationwide Mut. Fire Ins. Co. v. Stanley

• Citation: 403 F.Supp.2d 638
• Decision Date: 07 December 2005
• Docket Number: No. 1:03-CV-259.,1:03-CV-259.
• Parties: NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Plaintiff, v. Willie L. STANLEY, individually and d/b/a Stanley Paving, and the Estate of Charles N. McDowell, through administrator, Connie V. McDowell, Defendants.
• Court: U.S. District Court — Eastern District of Tennessee

403 F.Supp.2d 638

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Plaintiff, v. Willie L. STANLEY, individually and d/b/a Stanley Paving, and the Estate of Charles N. McDowell, through administrator, Connie V. McDowell, Defendants.

No. 1:03-CV-259.

United States District Court, E.D. Tennessee, at Chattanooga.

December 7, 2005.

Parks T. Chastain, Brewer, Krause & Brooks, Nashville, TN, for Plaintiff.

Ronald J. Berke, Berke, Berke & Berke, Chattanooga, TN, for Defendants.

MEMORANDUM

EDGAR, District Judge.

Plaintiff Nationwide Mutual Fire Insurance Company ("Nationwide") brings this declaratory judgment action against defendants Willie L. Stanley and the Estate of Charles N. McDowell ("Estate") pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, and Federal Rule of Civil Procedure 57. Nationwide seeks a declaration from this Court that Nationwide Policy No. 63 BA 133-121-0001 issued to defendant Stanley provides no coverage for the injury and death of Charles N. McDowell. It further seeks a declaration that the death of Charles N. McDowell did not arise from an "accident" as defined by Nationwide's policy and is therefore excluded by the terms of the policy.

Nationwide moves for summary judgment on its claims and requests that this Court hold that the incident occurring between Stanley and Charles McDowell was not an event covered by the terms of its insurance policy with Stanley and that the damages to McDowell are excluded by the policy's exclusion for intentional or expected injuries. [Court Doc. No. 46]. The Estate opposes Nationwide's motion for summary judgment and cross-moves for summary judgment. [Court Doc. Nos. 52-1, 49]. It requests that this Court hold that Nationwide is precluded from claiming an exclusion from coverage for damages to the Estate due to its alleged breach of its duty to defend Stanley in a state court action filed by the Estate against Stanley.

After reviewing the record, the Court finds that Nationwide's motion for summary judgment will be GRANTED and the Estate's motion for summary judgment will be DENIED.

I. Background

Based on the undisputed record, the material facts are as follows. On August 30, 2002 Nationwide issued a Business Auto Coverage Form, Policy No. 63 BA 133-121-0001, to defendant Stanley d/b/a Stanley Paving. [Court Doc. Nos. 53; 1, Ex. 1]. The insurance policy provision relating to "liability coverage" states:

SECTION II — LIABILITY COVERAGE

A. Coverage

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"....

We have the right and duty to defend any "insured" against a "suit" asking for such damages or a "covered pollution cost or expense." However, we have no duty to defend any "insured" against a "suit" seeking damages for "bodily injury" or "property damage" or a "covered pollution cost or expense" to which this insurance does not apply. We may investigate and settle any claim or "suit" as we consider appropriate. Our duty to defend or settle ends when the Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements.

[Court Doc. No. 1, Ex. 1, p. 34]. The insurance policy also contains the following definition:

DEFINITIONS

"Accident" includes continuous or repeated exposure to the same conditions resulting in "bodily injury" or "property damage".

[Court Doc. No. 1, Ex. 1, p. 41]. Further, the policy contains the following exclusion from coverage:

B. Exclusions

This insurance does not apply to any of the following:

1. Expected or Intended Injury

"Bodily injury" or "property damage" expected or intended from the standpoint of the "insured".

[Court Doc. No. 1, Ex. 1, p. 35].

On March 18, 2003 Stanley's truck collided with Charles McDowell's truck, and the collision resulted in McDowell's death. [Court Doc. No. 53]. Following the collision between the two vehicles, a grand jury in Bradley County Criminal Court indicted Stanley for first degree murder. [Court Doc. No. 53; Court Doc. No. 47]. On June 22, 2004 following a trial, a jury found Stanley guilty of voluntary manslaughter. [Court Doc. No. 53; Court Doc. No. 47].

Nationwide filed this declaratory judgment action on July 28, 2003. [Court Doc. No. 1]. On February 2, 2004 the Estate filed suit in Bradley County Circuit Court against Stanley for the death of Charles McDowell, alleging that Stanley's negligent acts caused McDowell's death. [Court Doc. Nos. 51, Ex. 4; 55]. Nationwide did not defend Stanley in the state court lawsuit, and the state court entered a default judgment against Stanley. [Court Doc. Nos. 51, Ex. 6; 55]. The January 26^th 2005 order of the Bradley County court states:

This cause came to be heard on the 26^th day of January, 2005 before the Honorable John B. Hagler, Jr., Judge of the Circuit Court of Bradley County, Tennessee upon the Complaint filed by Connie McDowell against the defendant Willie L. Stanley for the death of Charles McDowell in a motor vehicle accident with the defendant on or about the 18^th day of March, 2003, upon the waiver of a jury trial by the parties, upon the various pleadings, upon oral evidence introduced in open Court and upon the entire record in this cause from all of which the Court finds that the defendant Willie L. Stanley was negligent and that said negligence was the proximate cause of the death of Charles McDowell the husband of the plaintiff, Connie McDowell. The Court specifically finds that the defendant was guilty of negligence and further finds, from the proof, that the defendant's conduct was not voluntary or intentional. The Court finds that the sole cause of the death of Charles McDowell was the negligence of Willie L. Stanley and that said negligence was an accident under Tennessee law. The Court further finds that the accident and subsequent death of Charles McDowell was not an expected or intended result by Willie Stanley. The Court further finds that Connie McDowell is entitled to a judgment in the amount of Nine Hundred and Thirty Five Thousand Dollars.

[Court Doc. No. 51, Ex. 6]. The order also indicates that Nationwide did not defend Stanley in the action. Id.

The parties dispute whether Stanley intended to kill McDowell. [Court Doc. No. 53]. The parties agree that Stanley is diagnosed with bi-polar disorder and that he was not taking his prescribed medications on the date of the collision with McDowell. [Court Doc. No. 55]. The Estate argues that Stanley did not intend or expect to injure McDowell and that his behavior was affected by his bi-polar disorder and his failure to take his medication. [Court Doc. No. 55]. The Estate relies on Stanley's deposition testimony in which Stanley states that he had no intention of harming McDowell and that he did not recall any part of the time leading up to the collision, except for seeing "red tail lights and tree limbs." [Court Doc. Nos. 47, 52-5, Deposition of Willie L. Stanley ("Stanley Dep."), pp. 10, 40].

II. Standard of Review

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). The burden is on the moving party to show conclusively that no genuine issue of material fact exists, and the Court must view the facts and all inferences to be drawn therefrom in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Morris v. Crete Carrier Corp., 105 F.3d 279, 280-81 (6th Cir.1997); White v. Turfway Park Racing Ass'n, Inc., 909 F.2d 941, 943 (6th Cir.1990); 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987).

Once the moving party presents evidence sufficient to support a motion under Fed.R.Civ.P. 56, the nonmoving party is not entitled to a trial merely on the basis of allegations. The nonmoving party is required to come forward with some significant probative evidence which makes it necessary to resolve the factual dispute at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); White, 909 F.2d at 943-44; 60 Ivy Street, 822 F.2d at 1435. The moving party is entitled to summary judgment if the nonmoving party fails to make a sufficient showing on an essential element of the nonmoving party's case with respect to which the nonmoving party has the burden of proof. Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Collyer v. Darling, 98 F.3d 211, 220 (6th Cir.1996).

The judge's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper jury question, and not to weigh the evidence, judge the credibility of the witnesses, and determine the truth of the matter. Anderson v. Liberty Lobby, 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); 60 Ivy Street, 822 F.2d at 1435-36. "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. 2505; see also Bailey v. Floyd County Bd. of Educ., 106 F.3d 135, 140 (6th Cir.1997). If the Court concludes that a fair-minded jury could not return a verdict in favor of the nonmoving party based on the evidence presented, it may enter a summary judgment. Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505; University of Cincinnati v. Arkwright Mut. Ins. Co., 51 F.3d 1277, 1280 (6th Cir.1995); LaPointe v. UAW, Local 600, 8 F.3d 376, 378 (6th Cir.1993).

III. Analysis

The Declaratory Judgments Act provides that "[i]n a case of actual controversy within its jurisdiction, ... any court of the United States, ... may declare the rights and other legal relations of any interested party seeking such declaration,...