Progressive Cas. Ins. Co. v. Morton

• Decision Date: 26 October 2015
• Docket Number: Case No. 1:14CV00078 ACL
• Parties: Progressive Casualty Insurance Company, Plaintiff, v. Marshia Morton and Delton Morton, Defendants.
• Court: U.S. District Court — Eastern District of Missouri

140 F.Supp.3d 856

Progressive Casualty Insurance Company, Plaintiff,

v.Marshia Morton and Delton Morton, Defendants.

Case No. 1:14CV00078 ACL

United States District Court, E.D. Missouri, Southeastern Division.

Signed October 26, 2015

Nikki Eckland Cannezzaro, Franke and Schultz, Kansas City, MO, for Plaintiff.

James F. Waltz, Oliver Oliver & Waltz PC, Cape Girardeau, MO, for Defendants.

MEMORANDUM AND ORDER

ABBIE CRITES–LEONI

, UNITED STATES MAGISTRATE JUDGE

This matter is before the Court on Defendants Marshia Morton and Delton Morton's ("Mortons") Partial Motion for Summary Judgment and Plaintiff Progressive Casualty Insurance Company's ("Progressive") cross Motion for Summary Judgment in this insurance coverage dispute. Also pending are the following motions filed by the Mortons: Motion for Oral Argument and Testimony Regarding Plaintiff's Motion for Summary Judgment (Doc. 39); and Request for Leave to File First Request for Production Directed to Plaintiff (Doc. 43). The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c)(1)

. For the following reasons, the Court will grant Progressive's Motion for Summary Judgment and deny the Mortons' Motion for Summary Judgment.

Background

On December 29, 2013, Marshia Morton was operating a 1994 Ford Probe in Scott County, Missouri, when the Probe was struck by a vehicle operated by Edith Grainger. The vehicle operated by Grainger was insured by a Progressive auto policy which had policy limits of $100,000 per person, $300,000 per accident. Marshia Morton asserted a claim against Grainger due to the injuries she sustained in the accident. Her claim ultimately settled for the total single person policy limit of $100,000 under the Progressive policy issued to Grainger.

Because the uncompensated damages as a result of the injuries sustained in the accident exceeded $100,000, Morton sought additional coverage under an "underinsured motorist" ("UIM") provision of Progressive's Personal Auto Policy ("Policy") issued to her husband, Delton Morton. The Policy provided coverage for the 1994 Ford Probe and Marshia Morton was listed on the Policy as a driver and household resident. The Policy provided UIM coverage in the amount of $100,000 per person and $300,000 per accident. The Mortons made demand on Progressive for payment under the UIM provisions. Progressive refused to make payment, and Progressive brought this action for declaratory judgment.

In Count I of its Petition for Declaratory Judgment, Progressive alleges that there is no UIM coverage available to the Mortons under the Policy because Grainger's vehicle did not qualify as an "underinsured motor vehicle" under the definition of the Policy. In Count II, Progressive contends that stacking of UIM coverage under the Policy is prohibited by the Policy. In Counts III and IV, Progressive makes the same arguments regarding the definition of an underinsured motor vehicle and stacking with respect to a separate commercial auto insurance policy issued to Delton Morton ("Commercial Policy").

The Mortons filed a counterclaim against Progressive, in which they assert vexatious refusal to pay UIM coverage (Count I); and vexatious refusal to pay with regard to the stacking of the Mortons' UIM policies on three separate vehicles (Count II).

The Mortons filed a Partial Motion for Summary Judgment, contending that they are entitled to judgment as a matter of law with respect to Counts I and II of Progressive's Petition for Declaratory Judgment because the Policy, taken as a whole, is vague, misleading, illusory, contradictory and ambiguous in that the definition of "underinsured motor vehicle" takes away coverage promised in the Declarations Page, the Insuring Agreement, the Limits of Liability section, and the "Other Insurance" clause, requiring the Policy to be construed in favor of the insured.

Progressive filed a cross Motion for Summary Judgment, contending that Progressive is entitled to judgment as a matter of law with respect to all claims for declaratory judgment because the UIM coverages of the Policy and the Commercial Policy are not triggered and the language of the policies is not ambiguous. Progressive further argues that the policies at issue expressly prohibit stacking of UIM coverage.

Summary Judgment Standard

Because this is a diversity case, the Court applies state substantive law and federal procedural law. Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996)

; see also Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). "When a federal court sits in diversity, it must apply the governing precedent from the state's highest court, and when there is no case directly on point, the federal court must predict how the state supreme court would rule if faced with the same question." Jordan v. Safeco Ins. Co. of Ill . , 741 F.3d 882, 887 (8th Cir.2014).

Pursuant to Federal Rule of Civil Procedure 56(a)

, a district court may grant a motion for summary judgment if all of the information before the court demonstrates that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden is on the moving party. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op. Inc., 838 F.2d 268, 273 (8th Cir.1988). The movant "bears the initial responsibility of informing the district court of the basis for its motion" and must identify "those portions of [the record] ... which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. If the movant does so, the nonmovant must respond by submitting evidentiary materials that set out "specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548 (quotation marks omitted).

"Where parties file cross-motions for summary judgment, each summary judgment motion must be evaluated independently to determine whether a genuine issue of material fact exists and whether the movant is entitled to judgment as a matter of law." Jaudes v. Progressive Preferred Ins. Co., 11 F.Supp.3d 943, 947 (E.D.Mo.2014)

(citing Husinga v. Federal–Mogul Ignition Co., 519 F.Supp.2d 929, 942 (S.D.Iowa 2007) ). Because "the interpretation and construction of insurance policies is a matter of law, ... such cases are particularly amenable to summary judgment." John Deere Ins. Co. v. Shamrock Indus., Inc., 929 F.2d 413, 417 (8th Cir.1991).

Discussion

"State law governs the interpretation of insurance policies when federal jurisdiction is based on diversity of citizenship." Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857, 861 (8th Cir.2012)

. Missouri law governs this insurance contract. Under Missouri law, the interpretation of the meaning of an insurance policy is a question of law. Capitol Indem. Corp. v. 1405 Associates, Inc., 340 F.3d 547, 547 (8th Cir.2003). There is no statute in Missouri that requires drivers to purchase UIM coverage. See Noll v. Shelter Ins. Companies, 774 S.W.2d 147, 151 (Mo.1989). Accordingly, the limits of UIM coverage are determined by the insurance contract. Id.

The general rules for interpretation of contracts apply to insurance policies. Peters v. Employers Mut. Cas. Co., 853 S.W.2d 300, 301–02 (Mo.1993)

(en banc). When "construing the terms of an insurance policy, this Court applies the meaning which would be attached by an ordinary person of average understanding if purchasing insurance, and resolves ambiguities in favor of the insured." Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo.2009). Courts should not interpret policy provisions in isolation but rather evaluate policies as a whole. Id. Courts must "endeavor to give each provision a reasonable meaning and to avoid an interpretation that renders some provisions useless or redundant."

Dibben v. Shelter Ins. Co., 261 S.W.3d 553, 556 (Mo.Ct.App.2008)

.

If the policy language is unambiguous, it must be enforced as written. Id.

But if the language is ambiguous, courts should construe the policy in favor of the insured. Id. The fact that the parties disagree over the policy's interpretation does not render a term ambiguous. O'Rourke v. Esurance Ins. Co., 325 S.W.3d 395, 398 (Mo.Ct.App.2010). "[A]mbiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language in the policy. Language is ambiguous if it is reasonably open to different constructions." Seeck v. Geico General Ins. Co., 212 S.W.3d 129, 132 (Mo. banc.2007). If an insurance clause "appears to provide coverage but other clauses indicate that such coverage is not provided, then the policy is ambiguous." Id. at 134. However, a court must not "unreasonably distort the language of a policy or exercise inventive powers for the purpose of creating an ambiguity when none exists." Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 163 (Mo.2007).

I. The Personal Auto Policy¹

The "Declarations Page" of the Progressive Policy states:

Auto Insurance Coverage Summary²

This is your Renewal

Declarations Page

* * *

Your insurance policy and any policy endorsements contain a full explanation of your coverage. The policy limits shown for a vehicle may not be combined with the limits for the same coverage on another vehicle....

The Declarations Page contains a section titled "Outline of coverage " that lists each of the Mortons' vehicles. Immediately after the "Outline of Coverage " heading, the Declarations Page states "All Limits listed below are subject to all terms, conditions, exclusions and applicable reductions described in the policy. " With respect to the 1994 Ford Probe, there is a line indicating that the coverage includes "Underinsured Motorist" with "Limits" of "$100,000 each person/$300,000 each accident."

The Policy provides the following definition of "Declarations Page":

"

...