Ovian v. Gen. Ins. Co. of Am.
| Decision Date | 30 September 2020 |
| Docket Number | Case No. 2:18-cv-229 |
| Court | U.S. District Court — District of Vermont |
| Parties | ROSEMARIE OVIAN AND MATTHEW OVIAN, Plaintiffs, v. GENERAL INSURANCE CO. OF AMERICA AND PROGRESSIVE NORTHERN INSURANCE CO., Defendants. |
Plaintiffs Rosemarie and Matthew Ovian bring claims for breach of contract against Defendants General Insurance Company, d/b/a Safeco Insurance ("Safeco"), and Progressive Northern Insurance Company ("Progressive"). Pending before the Court are cross-motions for summary judgment with respect to the underinsured motorist ("UIM") policy issued by Progressive to Plaintiffs' deceased parents, both of whom died as the result of a motor vehicle accident. Progressive claims that, pursuant to language in its policy, it is entitled to offset payments made by a separate insurer. Plaintiffs argue that the offset/reduction language in the UIM policy is unenforceable because it is contrary to the public policy underlying Vermont's UIM statute, and because it is ambiguous.
In addition to filing for summary judgment, Progressive moves in the alternative for the case to be certified to the Vermont Supreme Court. For the reasons set forth below, Plaintiffs' motion for summary judgment is denied and Progressive's motion for summary judgment is granted. Progressive's motion for certification to the Vermont Supreme Court is denied.
This suit arises out of a motor vehicle accident that occurred on December 28, 2016. Sally and Charles Ovian were driving a vehicle that was struck by a pick-up truck. The truck was operated by Ryan Kennelly, and there is no dispute that Mr. Kennelly was at fault. The Ovians died as a result of their injuries. Both deceased individuals' estates ("Estates") incurred various medical bills as a result of the accident. The Ovians are survived by their three adult children: Jeffrey Ovian, Plaintiff Matthew Ovian, and Plaintiff Rosemarie Ovian.
Mr. Kennelly's vehicle was covered under an automobile insurance policy issued by Travelers Property Casualty Insurance Company ("Travelers"). The Travelers policy allowed for up to $250,000 bodily injury liability per person, and up to $500,000 of bodily injury liability per accident. Travelers entered into settlement agreements with the Estates of both Sally Ovian andCharles Ovian and paid $250,000 to each. Plaintiffs contend that their damages for the wrongful death and survival claims exceed the $250,000 per person and $500,000 combined limit of the Travelers policy.
The Ovians were insured under a primary automobile insurance policy issued by Progressive, and an excess policy issued by Safeco. The Progressive policy states that "an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle because of bodily injury." It is undisputed that Mr. Kennelly's vehicle meets the definition of an "underinsured motor vehicle" under the Progressive policy and that Plaintiffs are "insured persons." There is also no dispute that the damages in Plaintiffs' wrongful death and survival claims arise out of "bodily injury" under the Progressive policy's terms. The Progressive UIM Policy affords a combined single unit of $500,000 in underinsured motorist insurance benefits. The Safeco policy provides an additional $500,000 of coverage.
The Progressive policy contains an offset provision stating that UIM insurance limits will be reduced by "all sums ... paid because of bodily injury by or on behalf of any persons or organizations that may be legally responsible." Plaintiffs contend that Progressive must treat each Estate's UIM claimseparately when offsetting the sums paid. Calculated that way, the policy's $500,000 UIM insurance benefits would apply to each Estate individually, recovery by each Estate would be reduced by the $250,000 already paid, and Plaintiffs would collect the remaining $250,000 of UIM benefits per Estate. Progressive argues that Travelers' combined payment of $500,000 to both Estates, $250,000 per Estate, should be aggregated and offset from the combined policy limit of $500,000. Under this theory, $500,000 has been paid to the Plaintiffs and the $500,000 UIM coverage has been completely offset.
To prevail on a motion for summary judgment, the movant must show "that there is no genuine dispute as to any material fact and [that it] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The movant bears the burden of demonstrating the absence of a question of material fact. In making this determination, the Court must view all facts "in the light most favorable" to the non-moving party. Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d Cir. 2008). If the movant fails to meet his initial burden, the motion will fail even if the opponent does not submit any evidentiary matter to establish a genuine factual issue for trial. BBS Norwalk One, Inc. v. Raccolta, Inc., 117F.3d 674, 677-78 (2d Cir. 1997).
If the movant meets its burden, "the nonmoving party must come forward with admissible evidence sufficient to raise a genuine issue of fact for trial in order to avoid summary judgment." Jaramillo v. Weyerhauser Co., 536 F.3d 140, 145 (2d Cir. 2008). In doing so, the opposing party must come forward with sufficient evidence that would justify a reasonable jury in returning a verdict in its favor. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). If "the party opposing summary judgment propounds a reasonable conflicting interpretation of a material disputed fact," summary judgment must be denied. Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9-10 (2d Cir. 1983). "Where, as here, there are cross motions for summary judgment, 'each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration.'" Lumbermens Mut. Cas. Co. v. RGIS Inventory Specialists, LLC, 628 F.3d 46, 51 (2d Cir. 2010) (quoting Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001).
Also before the Court is the question of certification. Local Rule 74 provides that, "when authorized by state law, the court may certify to the state's highest court an unsettled and significant question of state law that will control the outcomeof a pending case." L.R. 74. "Certification is a discretionary device, both for the certifying court and for the court requested to answer the certified question[s]." Riordan v. Nationwide Mut. Fire Ins. Co., 977 F.2d 47, 51 (2d Cir. 1992).
Plaintiffs move for summary judgment on the issue of whether the Estates of Charles and Sally Ovian are entitled to each offset the $250,000 sum paid by Travelers, or whether, as Progressive contends, those payments should be combined and considered a complete offset of the $500,000 UIM policy limit. Plaintiffs make two arguments in favor of summary judgment: first, that the policy's "all sums" language is contrary to the public policy underlying Vermont's UM/UIM Statute, and second, that the policy is vague and thus unenforceable. Progressive has filed a cross-motion for summary judgment on both issues.
As discussed below, the ambiguity issue was recently addressed by the Vermont Supreme Court in a case involving similar policy language. At a status conference held before the Court on September 28, 2020, the parties agreed that the ambiguity question no longer requires certification, and counsel for Progressive opined that the public policy issue does not clearly present a novel question under Vermont law. The Court therefore denies Progressive's motion to certify.
In their motion for summary judgment, Plaintiffs submit that Progressive's position is contrary to the purpose of Vermont's UM/UIM statute, 23 V.S.A. § 941(f). They rely in part upon the Vermont Supreme Court's ruling in Progressive Cas. Ins. Co. v. MMG Ins. Co., 2014 VT 70, ¶ 11 (2014) (hereinafter "Progressive"), which interpreted the Vermont legislature's amendment of Section 941(f). Under the pre-amendment statute, when a negligent party's liability coverage equaled or exceeded the injured party's UIM coverage, the injured party would be denied UIM coverage because the liable party was not under-insured. This approach is known as a "limits to limits" comparison. Progressive, 2014 VT 70, ¶ 1. In Colwell v. Allstate Ins. Co., 2003 VT 5, ¶¶ 12-13, the Vermont Supreme Court recognized that an "anomoly" can occur when the liable party has a policy limit equal to or exceeding the injured party's UIM limit, but is forced make payments to multiple victims. As a result of those multiple payments, the injured insured might recover less than the limit of his or her UIM policy.
Because the law at that time required a strict "limits to limits" comparison, a party could be denied the benefits of a UIM policy that he purchased even though he did not recover the "limits" of a tortfeasor's liability policy. Thus, in some multi-victim cases, a party was better off if injured by an uninsured, rather than underinsured, tortfeasor. Given the plainlanguage of the statute, we left it to the Legislature to decide whether, and how, to address this issue. Id. ¶ 15. The Legislature responded by amending 23 V.S.A. § 941(f) to specifically address UIM recovery in multi-victim accidents.
Progressive, 2014 VT 70, ¶ 1. Section 941(f), as amended by the Vermont legislature in 2005, now reads:
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