State Farm Mut. Auto. Ins. Co. v. Duckworth

• Decision Date: 05 October 2009
• Docket Number: Case No. 6:08-cv-377-Orl-22GJK.
• Citation: 660 F.Supp.2d 1323
• Parties: STATE FARM MUTUAL AUTOMBILE INSURANCE COMPNY, Plaintiff, v. Anna N. DUCKWORTH, Personal Representative of the Estate of Aquila E. Duckworth, Defendant.
• Court: U.S. District Court — Middle District of Florida

660 F.Supp.2d 1323

STATE FARM MUTUAL AUTOMBILE INSURANCE COMPNY, Plaintiff, v. Anna N. DUCKWORTH, Personal Representative of the Estate of Aquila E. Duckworth, Defendant.

Case No. 6:08-cv-377-Orl-22GJK.

United States District Court, M.D. Florida, Orlando Division.

October 5, 2009.

COPYRIGHT MATERIAL OMITTED

Carol M. Bishop and Reed W. Grimm, Taylor, Day, Currie, Boyd & Johnson, Jacksonville, FL, for State Farm.

ORDER

ANNE C. CONWAY, District Judge.

I. INTRODUCTION

Plaintiff State Farm Mutual Automobile Insurance Company ("State Farm") filed this declaratory judgment action against Defendant Anna N. Duckworth ("Duckworth") as Personal Representative of the Estate of Aquila E. Duckworth. The dispute arises from a motorcycle accident involving an uninsured motorist that occurred on March 27, 2007, which took the life of Defendant's husband, Aquila Duckworth. Aquila Duckworth was driving his 2001 Yamaha motorcycle, insured through State Farm, Policy No. 52-5759-F13-20 (the "Yamaha Policy"). State Farm distributed to Duckworth the uninsured motorist benefits available under the Yamaha policy. Duckworth also maintained two additional automobile insurance policies through State Farm: Policy No. 81-4031-C20-20, for a 1998 Chevrolet Cavalier (the "Chevrolet Policy"), and Policy No. 52-5758-A15-20, for a 1993 Ford Probe (the "Ford Policy"). Duckworth claims that State Farm is also liable for the uninsured motorist benefits under the Chevrolet and Ford policies.

State Farm seeks a declaratory judgment pursuant to 28 U.S.C.A. § 2201, interpreting the automobile insurance policies according to Maryland law and finding no uninsured motorist coverage available to Duckworth under either the Chevrolet Policy or Ford Policy for the claim arising from the accident. Duckworth contends that the policies should be interpreted according to Florida law, yielding uninsured motorist benefits under both policies. Duckworth brought counterclaims against State Farm for breach of contract and statutory bad faith regarding the Chevrolet and Ford policies, reformation of the insurance contracts, and breach of fiduciary duty as to State Farm's agents. (Doc. No. 14.) The Court dismissed the counterclaims for statutory bad faith without prejudice. (Doc. No. 23.)

The parties have filed cross motions for summary judgment. Duckworth filed her Motion for Partial Summary Judgment (Doc. No. 39) on May 1, 2009, and State Farm filed its response to the motion (Doc. No. 44) on June 1, 2009. State Farm filed its Revised Motion for Summary Judgment (Doc. No. 41) on May 1, 2009, and Duckworth filed her response (Doc. No 43) on May 18, 2009. After careful analysis of both motions and the parties' submissions, the Court has determined that no genuine issue of material fact remains in dispute and State Farm is entitled to judgment as a matter of law.

II. BACKGROUND

The parties do not dispute the following facts. On March 27, 2007, Aquila Duckworth was fatally injured in an automobile accident while operating his 2001 Yamaha motorcycle on U.S. Highway 1 in Edgewater, Florida. On the date of the accident, Aquila and/or Anna Duckworth (the "Duckworths") maintained separate automobile policies on the 2001 Yamaha motorcycle, the 1998 Chevrolet Cavalier, and the 1993 Ford Probe. Each policy contained uninsured motorist benefits. The Duckworths obtained the three policies through the Connie Davis Agency located in Germantown, Maryland. Connie Davis is a captive State Farm insurance agent. State Farm tendered the $100,000 uninsured motorist benefits under the Yamaha Policy for liability claims arising from the use of the motorcycle during the accident.

Anna and Aquila Duckworth "stayed" at 125 West Loop, Oak Hill, Florida (the "Florida address"), which was the home of Anna Duckworth's daughter, from June 1, 2006, through March 26, 2007.¹ The Duckworths had not lodged or dwelled in Maryland during the six consecutive months immediately preceding March 26, 2007.² The State Farm Move Center sent a letter (the "Move Center letter") dated December 15, 2006, to Aquila Duckworth at the Florida address. The Move Center letter gave Aquila Duckworth the address of a State Farm agent in his "new area." (State Farm's Ex. 4.) The letter also included the following paragraph:

"If your new address is temporary or a change only of your `mailing address,' please contact me or your current agent. In these situations, your current agent may continue to serve your insurance needs." Id.

On March 27, 2007, Aquila and Anna Duckworth each maintained a Florida driver's license, which had been reissued to them on May 24, 2001. The residence address listed on the licenses was 1969 Ilex Avenue, Apt. 205, San Diego, California. On March 27, 2007, the Ford Probe remained titled and registered in California, and the 1998 Chevrolet Cavalier remained titled and registered in Maryland. On or before March 27, 2007, the 2001 Yamaha Motorcycle had been titled and registered in Florida.

Aquila Duckworth obtained a Florida Concealed Weapon or Firearm License on December 19, 2006. The license listed Aquila Duckworth's address as 125 West Loop, Oak Hill, Florida. Aquila Duckworth's application for American Legion Membership, dated May 31, 2006, also listed the Florida address. Neither the license nor the application was provided to State Farm on or before March 27, 2007.

On March 12, 2008, State Farm filed the present declaratory action. (Doc. No. 1.) In Counts I and II of its complaint, State Farm alleges that neither the Chevrolet Policy nor the Ford Policy covers any claims arising out of the accident. (Id. at ¶¶ 18, 22). State Farm seeks a declaratory judgment that interprets the Chevrolet and Ford policies according to Maryland law; applies the Court's interpretations to the facts of the case; determines the respective rights, status, duties, and other equitable or legal relations of the parties to the action; and specifically declares no uninsured motorist coverage is available to Duckworth under the Chevrolet and Ford policies for the claims arising from the accident. (Id. at pp. 6-8.)

The relevant portion of the Chevrolet and Ford policies states:

SECTION III—UNINSURED MOTOR VEHICLE—COVERAGE U

We will pay damages for bodily injury and property damage an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be sustained by an insured. The bodily injury or property damage must be caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle.

When Coverage U Does Not Apply

THERE IS NO COVERAGE:

2. FOR BODILY INJURY TO YOU, YOUR SPOUSE, OR ANY RELTIVE WHILE OCCUPYING OR STRUCK AS A PEDESTRIAN BY A MOTOR VEHICLE OWNED BY YOU, YOUR SPOUSE, OR ANY RELATIVE, and which is not insured under the liability coverage of this policy.

(State Farm's Ex. 2-3 p. 14.) State Farm's position is that the Chevrolet and Ford policies were Maryland policies because they were issued in Maryland when the insureds, Aquila and Anna Duckworth, were Maryland residents; therefore, the policies should be interpreted under Maryland law. (Doc. No. 1 ¶ 14.)

On May 6, 2008, Duckworth filed affirmative defenses and a counterclaim against State Farm. (Doc. No. 14.) Duck-worth argues in her affirmative defenses that coverage is available under all three policies, that Florida law applies to the construction of the policies because they were reissued for delivery in the State of Florida, and that the policies should be reformed because they fail to reflect the intent of the parties and because the State Farm agent violated a fiduciary duty owed to the insureds. (Id. at pp. 5-7.) In her counterclaim, Duckworth argues that although the Chevy and Ford policies were originally issued in Maryland, both were reissued for delivery in Florida prior to the date of the accident. Duckworth also claims both automobiles were "principally garaged" in Florida. (Id. at 8-9.) Duckworth argues that because the policies were "issued for delivery in the State of Florida," Florida law applies to her claims under the policies for uninsured motorist benefits. (Id. at 9-10.)

In Counts I and III of the counterclaim, Duckworth alleges breach of contract regarding the Chevy and Ford policies. (Id. at 10-13.) In both Counts, Duckworth argues that to the extent Florida law applies to the construction and enforcement of the policies, State Farm breached its contract by failing to provide and obtain acceptance as required by Fla. Stat. § 627.727(9) (2006). (Id.) Duckworth also argues insofar as Maryland law applies to the construction and enforcement of the policies, the exclusion upon which State Farm denied coverage is unenforceable because it is not one of the "enumerated exclusions which an insurer may include in a policy of uninsured motorist." (Id.) In Count V, Duckworth seeks reformation of the insurance contracts. (Doc. 14 at 14-15.) Duckworth argues that the Chevrolet and Ford policies should be reformed to remove the non-stacking exclusion because the policies "fail to reflect the mutual intent of the parties that the policies be issued in compliance with applicable law and that the coverages be stackable." (Id. at 15.) Duckworth argues that reformation should be granted on the grounds that the agent who advised the Duckworths concerning their policies was a dual agent of both State Farm and the insureds who violated his or her fiduciary duty to "ascertain the insureds' needs and desires for stacked coverage" and to inform the insureds of such coverage. (Id.) Finally, in Count VI, Duckworth asserts breach of fiduciary duty. (Id. at 16.) Duckworth argues that the State Farm agent was an agent of the insureds, that the agent owed them a fiduciary duty to fully investigate the insureds' "needs and desires for insurance coverage" and to fully inform them as to the meaning of policy provisions and existence of excess coverage, that the agent...