Safeco Ins. Co. of Ill. v. Palazzolo

• Decision Date: 20 August 2020
• Docket Number: Case No. 4:18CV1326HEA
• Citation: 481 F.Supp.3d 921
• Parties: SAFECO INSURANCE COMPANY OF ILLINOIS, et al., Plaintiffs, v. Joseph A. PALAZZOLO, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

481 F.Supp.3d 921

SAFECO INSURANCE COMPANY OF ILLINOIS, et al., Plaintiffs,

v.Joseph A. PALAZZOLO, et al., Defendants.

Case No. 4:18CV1326HEA

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

Signed August 20, 2020

Bruce A. Moothart, Nicholas Rex Daugherty, Seyferth Blumenthal LLC, Kansas City, MO, for Plaintiffs.

Antoinette T. Schlapprizzi, Craig Anthony Schlapprizzi, Donald L. Schlapprizzi, Donald L. Schlapprizzi PC, St. Louis, MO, for Defendants.

OPINION, MEMORANDUM AND ORDER

HENRY EDWARD AUTREY, UNITED STATES DISTRICT JUDGE

This matter is before the court on Plaintiffs’ Motion for Summary Judgment, [Doc. No. 39], and Defendants’ Motion for Summary Judgment, [Doc. No. 46]. The motions have been fully briefed by the parties. For the reasons articulated below, Plaintiffs’ Motion for Summary Judgment will be granted, and Defendants’ Motion for Summary Judgment will be denied.

Facts and Background

This case arises out of a coverage dispute between Plaintiffs Safeco Insurance Company of Illinois and Safeco Insurance Company of America ("Plaintiffs") and Defendants Joseph Palazzolo ("Joseph"), Nancy Palazzolo ("Nancy"), and minor R.P. (collectively, "Defendants") concerning the accidental death of Lauren Palazzolo ("Lauren"). Lauren was Joseph and Nancy's daughter and R.P.’s mother.

The following facts are undisputed:

On April 9, 2017, Lauren Palazzolo was killed in an accident when a 2007 Suzuki GSX-R600 motorcycle (the "Motorcycle") on which she was riding as a passenger collided with a 2008 Chevrolet Impala driven by Isaiah Davis (the "Accident"). Lauren owned the Motorcycle, having purchased it on December 14, 2016. Davis’ 2008 Chevrolet Impala was not covered by any liability insurance at the time of the Accident.

Safeco Insurance Company of Illinois issued an automobile policy to named insureds Joseph Palazzolo and Nancy Palazzolo, Policy No. Z4839785, with effective dates of November 15, 2016 through November 15, 2017 (the "Auto Policy"). Safeco Insurance Company of America also issued a personal umbrella policy to named insureds Joseph Palazzolo and Nancy Palazzolo, Policy No. UZ4779378 (the "Umbrella Policy").

The Auto Policy identified three covered vehicles: a 2010 Jeep Compass, a 2008 Nissan Altima, and a 2007 Ford Edge. None of the vehicles listed on the Auto Policy's declarations page were involved in the Accident. At the time the Auto Policy was issued, Defendants resided in Missouri and, therefore, the vehicles covered under the Auto Policy were primarily garaged in Missouri. The Motorcycle is not listed as a covered vehicle in the Auto Policy's declarations page, and no premium was charged to cover the Motorcycle.

The Auto Policy includes uninsured motorist ("UM") coverage, with a limit of $500,000 for "Each Accident" and also includes underinsured motorist ("UIM") coverage, with a limit of $500,000 for "Each Accident." Although Defendants previously made demand for payment under both the Auto Policy and Umbrella Policy for both UM and UIM coverage, Defendants now state in their memorandum in opposition to summary judgment that they do not seek to recover UIM coverage under the Auto Policy or any coverage under the Umbrella Policy. In other words, Defendants seek only to recover the Auto Policy's UM coverage limits.

The Auto Policy's UM coverage part provides:

PART C – UNINSURED MOTORISTS COVERAGE

INSURING AGREEMENT

A. We will pay damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by that insured . The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.

The Auto Policy defines the term "insured" for purposes of UM coverage as follows:

C. "Insured" as used in this Part C — Uninsured Motorists Coverage means:

1. You.

2. Any family member who does not own an auto.

3. Any family member who owns an auto, but only while occupying your covered auto.

4. Any other person occupying your covered auto with your express or implied permission. The actual use must be within the scope of that permission.

5. Any person entitled to recover damages because of bodily injury to which this coverage applies sustained by a person described in B.1., B.2., B.3., or B.4. above.

The Auto policy defines the terms "you" and "your" in pertinent part as follows:

DEFINITIONS

A. Throughout this policy, "you" and "your" refer to:

1. The "named insured" shown in the Declarations;

2. The spouse if a resident of the same household;

...

Both Joseph and Nancy, who are listed as named insureds in the Auto Policy's declarations page, qualify as "you" under the Auto Policy. Lauren is not listed as a named insured and does not qualify as "you" under the Auto Policy's definition.

The Auto Policy defines the term "family member" as follows:

G. "Family member" means a person related to you by blood, marriage, civil union, domestic partnership or adoption who is a resident of your household. This includes a ward or foster child who is a resident of your household.

The Auto Policy contains the following pertinent definition of the term "your covered auto":

M. "Your covered auto" means:

1. Any vehicle shown in the Declarations.

2. a. Any newly acquired vehicle, whether operational or not, on the date you become the owner, subject to conditions for Newly Acquired Replacement Vehicle and Newly Acquired Additional Vehicle under M.2.b. below. Any newly acquired vehicle must be of the following types:

(1) a private passenger auto;

(2) a pickup or van that: ...

(3) a motorhome or trailer .

...

3. Any auto or trailer you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its:

a. breakdown;

b. repair;

c. servicing;

d. loss; or

e. destruction.

The Auto Policy contains the following pertinent Exclusions in its UM coverage part:

EXCLUSIONS

A. We do not provided Uninsured Motorists Coverage for bodily injury sustained by a family member who does not own an auto, while occupying, or when struck by, any motor vehicle you own which is insured for this coverage on a primary basis under any other policy.

B. We do not provide Uninsured Motorists Coverage for bodily injury sustained by any insured:

...

5. While occupying or operating an owned motorcycle or moped.

The term "owned" is not defined in the Auto Policy.

The Auto Policy lists Lauren as a "rated driver." Nancy and Joseph were charged premiums for each type of coverage and each vehicle on the Auto Policy to account for Lauren's inclusion as a "rated driver" on the Auto Policy. Nancy and Joseph paid all premiums related to the Auto Policy as of the date of Lauren's death.

Nancy and Joseph reside at 9749 Tesson Creek Estates Drive in St. Louis, Missouri (the "Tesson residence"). In April 2014, Lauren bought her own home at 10718 Cathy Drive in St. Louis, Missouri (the "Cathy residence"). The Cathy residence and the Tesson residence are approximately two miles apart. After purchasing the Cathy residence, Lauren periodically visited the Tesson residence. Lauren and R.P. each had their own room in the Tesson Residence. Lauren kept some clothes and toiletries at the Tesson residence and Lauren stayed overnight there on a regular basis, sometimes two to three nights a week. Lauren would stay at the Tesson residence when Joseph and Nancy were not there. On a regular basis, Lauren shared family meals, cooked, did laundry, contributed to household chores and abided by household rules at the Tesson residence.

Lauren had a joint bank account with Nancy for the benefit of R.P. that held a balance at the time of her death. The addressed used for the joint bank account was that of the Tesson residence. Lauren's driver's license, with an expiration date of November 17, 2018, listed the Tesson residence as her address. Lauren's 2016 pay stubs show as her address the Tesson residence, as does her W-2 that year.

Lauren did not pay any of Joseph and Nancy's bills for the Tesson residence. She did not have any input regarding repairs or decisions relating to the Tesson residence. Lauren only received junk mail at the Tesson residence; she did not receive bills there. Following her death, however, Nancy and Joseph received the following mail addressed to Lauren at the Tesson residence: official correspondence from the Missouri Department of Social Services Family Support Division; a medical bill for emergency medical services rendered to Lauren on the date of her death; and, financial card services account information.

Lauren made mortgage payments on the Cathy residence with assistance from Joseph and Nancy. Joseph and Nancy contributed money to Lauren on a regular basis during the last years of her life, but they did not pay Lauren's monthly bills directly. Lauren managed her own checking account and paid the utility bills for the Cathy residence including electric and heat. The Cathy residence was furnished and most of Lauren's possessions were kept there. Lauren selected R.P.’s pediatrician and made the decisions regarding his care. In April 2016, Lauren listed the Cathy Residence as the "Address where you live" on an application for childcare assistance. Lauren's Missouri death certificate listed the Cathy residence as her "Residence Address."

Neither Joseph nor Nancy was aware of any plan for Lauren to move into the Tesson residence permanently or for Lauren to sell the Cathy residence, although Joseph and Nancy contend that "Lauren continued to be a permanent part of the Tesson home."

In October 2014, Lauren completed a food stamp application for which she was required to list "all the people who live in your household." Lauren listed only herself and R.P. as the people living in her household. In January 2017, Lauren once again listed only R.P. and herself as members of her household in an application for food stamp benefits. In a February 2017 application for Temporary Assistance Cash Benefits,...