State Farm Mut. Auto. Ins. Co. v. Stanley, CV 489-254.

• Decision Date: 18 March 1991
• Docket Number: No. CV 489-254.,CV 489-254.
• Citation: 773 F. Supp. 1539
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, v. J.H. STANLEY, Individually and as Temporary Administrator of the Estate of Mary Ann Stanley, Deceased, Betty B. Blocker, Merriam Kenneth Blocker, and Spencer Youngblood, Defendants.
• Court: U.S. District Court — Southern District of Georgia

773 F. Supp. 1539

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, v. J.H. STANLEY, Individually and as Temporary Administrator of the Estate of Mary Ann Stanley, Deceased, Betty B. Blocker, Merriam Kenneth Blocker, and Spencer Youngblood, Defendants.

No. CV 489-254.

United States District Court, S.D. Georgia, Savannah Division.

March 18, 1991.

COPYRIGHT MATERIAL OMITTED

Joseph H. Barrow, Beckmann & Pinson, Savannah, Ga., for State Farm Mut. Auto. Ins. Co. plaintiff.

B. Daniel Dubberly, Jr., Glennville, Ga., for Betty B. Blocker and Merriam Kenneth Blocker, defendants.

EDENFIELD, Chief Judge.

ORDER

At issue in this declaratory judgment are various provisions of an insurance policy. Before the Court are the parties' cross-motions for summary judgment. There are no genuine issues of material fact, and the case is ripe for decision. As a matter of law, the Court holds that State Farm's motion should be GRANTED and the defendant's, DENIED.

BACKGROUND

The parties do not disagree about many factual matters, only legal questions. Except as noted, the facts recited here are uncontroverted. In September 1988, Mary Ann Stanley, terminally ill with cancer, moved out of the home of her husband, J.H. Stanley. She never again stayed at Mr. Stanley's house. When not hospitalized, she apparently stayed with her mother; her friend, Becky Horn; or defendant Spencer Youngblood. At the end of September, Mr. Stanley filed for divorce in Tattnall County Superior Court. One month later, Mrs. Stanley filed an answer and counterclaim for divorce in that court.

On November 16, Mrs. Stanley was involved in a two-car automobile wreck. At the time, she was driving Spencer Youngblood's car, and Youngblood was a passenger in the vehicle. The occupants of the other vehicle, defendants Betty and Merriam Blocker, were injured in the accident, and each separately sued Mrs. Stanley and Spencer Youngblood in state court. State Farm Mutual Automobile Insurance Company ("State Farm"), with whom Mr. Stanley had an automobile insurance policy, received a demand that it defend Mrs. Stanley. The Blockers' attorney in the state suits notified State Farm that, "should a verdict be returned against the Estate of Mary Ann Stanley, the Blockers would seek to recover from State Farm for the amount of that verdict."¹ State Farm immediately filed this action for a declaratory judgment that, because Mr. Stanley's policy did not cover Mrs. Stanley at the time of her accident, State Farm had no duty to defend or indemnify Mrs. Stanley. In April 1989, Mrs. Stanley died from the terminal illness. Mr. Stanley was appointed temporary administrator of her estate, and in September 1989, he dismissed his divorce action.

ANALYSIS

A. At the Threshold: Should the Court Address the Merits?

Although neither party has addressed the issue of abstention, the Court, sua sponte, addresses the issue and holds that it cannot abstain from deciding the merits of this action. In the usual case, a district court has discretion to decline to entertain a declaratory judgment action on the merits when a pending proceeding in another court may fully resolve the controversy between the parties. E.g., Ven-Fuel, Inc. v. Department of the Treasury, 673 F.2d 1194, 1195 (11th Cir.1982). As a general rule, a declaratory judgment action should not be used "to interfere with an action which has already been instituted." Allied-General Nuclear Servs. v. Commonwealth Edison Co., 675 F.2d 610, 611 (4th Cir.1982). Indeed, in cases indistinguishable from this one, most federal courts have held that federal courts should not resolve the merits of the insurer's declaratory judgment action. E.g., American Home Insurance Co. v. Evans, 791 F.2d 61, 63-64 (6th Cir.1986); Employers Ins. of Wausau v. Gulf Island Marine, Inc., 718 F.Supp. 17, 18-19 (E.D.La.1989); Government Employees Ins. Co. v. Sellers, 667 F.Supp. 850, 852 (S.D.Fla.1987); Carey v. East Detroit Jaycees, Inc., 660 F.Supp. 1577, 1578-79 (E.D.Mich.1987). The Eleventh Circuit, however, recently has decided otherwise. In Cincinnati Insurance Co. v. Holbrook, 867 F.2d 1330 (11th Cir.1989), the court held, in a per curiam opinion, that a district court may not abstain in these circumstances. Id. at 1333. Although the Holbrook court did not cite any of the above-listed cases holding to the contrary, its decision is, of course, binding on this Court. The Court will therefore proceed to the merits.

B. Summary Judgment

Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509, 91 L.Ed.2d 202 (1986). "A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); see Brown v. Crawford, 906 F.2d 667, 670 (11th Cir.1990). "The burden on the moving party may be discharged by `showing' — that is, pointing out ... — that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S.Ct. at 2554.

It is then the nonmovant's burden to establish, by going beyond the pleadings, that there is a genuine issue as to facts material to the nonmovant's case. Earley v. Champion Int'l Corp., 907 F.2d 1077, 1080 (11th Cir.1990); Rollins v. TechSouth, Inc., 833 F.2d 1525, 1528 (11th Cir.1987). "Factual disputes that are irrelevant or unnecessary will not be counted." United States v. Gilbert, 920 F.2d 878, 883 (11th Cir.1991) (citation omitted). The nonmovant "must present affirmative evidence in order to defeat a properly supported motion for summary judgment." Liberty Lobby, 477 U.S. at 257, 106 S.Ct. at 2514; Gilbert, 920 F.2d at 882. This evidence must be sufficient to support a jury verdict in the nonmovant's favor. E.g., United of Omaha Life Ins. Co. v. Sun Life Ins. Co., 894 F.2d 1555, 1558 (11th Cir.1990). The nonmovant may do this by "coming forward with sufficient evidence on each element that must be proved," e.g., Kee v. National Reserve Life Ins. Co., 918 F.2d 1538, 1543 (11th Cir.1990) (quoting Earley, 907 F.2d at 1080), or pointing to specific facts which contradict essential facts shown by the movant. Walker v. Darby, 911 F.2d 1573, 1576 (11th Cir.1990).

In assessing whether the movant is entitled to summary judgment in its favor, the district court must review the evidence and all reasonable factual inferences arising from it in the light most favorable to the nonmoving party. E.g., Gilbert, 920 F.2d at 882; Hoffman v. Allied Corp., 912 F.2d 1379, 1383 (11th Cir.1990). "Where the record, taken as a whole could not lead a rational trier of fact to find for the nonmoving party, then there is no genuine issue for trial." Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); see Anderson, 477 U.S. at 252, 106 S.Ct. at 2512; Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir.1989). The Court, however, must avoid weighing conflicting evidence, Liberty Lobby, 477 U.S. at 255, 106 S.Ct. at 2513; Brown v. Hughes, 894 F.2d 1533, 1536 (11th Cir.), cert. denied, ___ U.S. ___, 110 S.Ct. 2624, 110 L.Ed.2d 645 (1990), or making credibility determinations. Liberty Lobby, 477 U.S. at 255, 106 S.Ct. at 2513; McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 934 (11th Cir.1987).

C. Interpretation of Insurance Contracts

Ordinarily, interpretation of contract is a question of law for the Court to resolve. O.C.G.A. § 13-2-1 (1982). A court's primary goal in interpreting an insurance policy is to ascertain the parties' intent. O.C.G.A. § 13-2-3 (1982); see Fidelity & Deposit Co. v. Sun Life Ins. Co. of Amer., 174 Ga.App. 258, 260, 329 S.E.2d 517 (1985); Purcell v. Allstate Ins. Co., 168 Ga.App. 863, 864, 310 S.E.2d 530 (1983). An insurance policy is a contract, and the construing court must therefore view it as a whole, in light of the usual rules of contract construction. E.g., National Hills Shopping Center, Inc. v. Liberty Mut. Ins. Co., 551 F.2d 655, 657 (5th Cir. 1977) (applying Georgia law); Dixon v. Midland Ins. Co., 168 Ga.App. 319, 322, 309 S.E.2d 147 (1983). This Court has recently explained that Georgia courts use a three-step test to determine the parties' intent. See Dickens v. Principle Mut. Life Ins. Co., No. CV 487-130, slip op. at 4, 1987 WL 109904 (S.D.Ga. Nov. 18, 1987) (available on Lexis); see also United of Omaha, 894 F.2d at 1564. First, a court must "decide whether the contract language is ambiguous; if it is, then the court must apply the applicable rules of construction; and if an ambiguity still remains, the jury may resolve it." United States Fire Ins. Co. v. Cowley & Assoc., 183 Ga.App. 478, 479, 359 S.E.2d 160 (1987); see Copy Sys. of Savannah, Inc. v. Page, 197 Ga.App. 435, 436, 398 S.E.2d 784 (1990); United of Omaha, 894 F.2d at 1564; Dickens, slip op. at 4. Thus, before submitting an insurance contract to the jury for construction, a court first should attempt to construe it as a matter of law. E.g., Travelers Ins. Co. v. Blakey, 255 Ga. 699, 700, 342 S.E.2d 308 (1986). Even if an insurance policy appears ambiguous, the courts must try to interpret it by applying the pertinent canons of contract construction. If applying those canons does not clarify the ambiguity, only then is a jury question presented. E.g., Guest v. Horace Mann Ins. Co., 168 Ga. App. 714, 715, 310 S.E.2d 241 (1983); Alley v. Great American Ins. Co., 160...