Tokley v. State Farm Ins. Companies

• Decision Date: 28 January 1992
• Docket Number: Civ. No. 91-5071.
• Parties: Pete J. TOKLEY, a/k/a Peter J. Tokley, individually and as Special Administrator of the Estate of Peter Tokley Jr., Plaintiff, v. STATE FARM INSURANCE COMPANIES, Defendant.
• Court: U.S. District Court — District of South Dakota

782 F. Supp. 1375

Pete J. TOKLEY, a/k/a Peter J. Tokley, individually and as Special Administrator of the Estate of Peter Tokley Jr., Plaintiff, v. STATE FARM INSURANCE COMPANIES, Defendant.

Civ. No. 91-5071.

United States District Court, D. South Dakota, W.D.

January 28, 1992.

Timothy J. Vander Heide, Bakewell, Hauge & Vander Heide, Custer, S.D., for plaintiff.

Curtis D. Ireland, Rapid City, S.D., for defendant.

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

BATTEY, District Judge.

INTRODUCTION

This case arises from a collision which occurred on March 5, 1989, involving an automobile driven by an uninsured motorist, Deanna Jo Stetter, and two young children, Peter Tokley Jr. and Richard Perry, who were playing on their sleds when they were struck by Deanna Stetter's car. At the time of the collision, Deanna Stetter was heavily intoxicated. Both children were killed as a result of the accident.

Peter Tokley Jr. (Peter), who was ten years old at the time of the accident, was the only child of plaintiff Peter J. Tokley (Tokley) and Dawn Marie Tokley. The boy's father and mother were divorced in May of 1988 and custody of the child was awarded to the mother subject to reasonable rights of visitation with the father. Dawn Marie Tokley eventually married Calvin Griffin and, until the time of the accident, Peter continued to live primarily with his mother and stepfather.

After the accident, Tokley, individually and as administrator of the estate of his son, filed a claim with his insurer, defendant State Farm Insurance Company (State Farm), to recover for bodily injuries to Peter under the uninsured motorist provision of Tokley's policy. State Farm denied the claim and Tokley commenced this action for a declaratory judgment that his claim falls within the coverage provided by the uninsured motorist provision of his insurance policy. Tokley and State Farm have filed cross-motions for summary judgment and have agreed to permit the legal and factual issues raised in the motions to be decided by summary disposition. Nielsen v. Western Elec. Co., 603 F.2d 741, 743 (8th Cir.1979). State Farm has moved for summary judgment on the grounds that Peter Tokley Jr. was not a relative of Peter J. Tokley within the meaning of Tokley's policy. Under this interpretation, neither Peter nor his estate would be insureds entitled to recovery under the policy issued by State Farm. For the reasons set forth below, this Court does not accept State Farm's arguments and therefore denies its motion for summary judgment and grants Tokley's cross-motion for summary judgment.

DISCUSSION

The United States Supreme Court has instructed district courts hearing diversity cases that "except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state." Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).¹ The Erie court noted that in a diversity contest, the "law of the state" includes state statutes and interpretive law as pronounced by the state courts. Erie, 304 U.S. at 78, 58 S.Ct. at 817.

The question presented by the defendant's motion of whether an unemancipated child of divorced parents may be considered an insured relative of the noncustodial parent is one of first impression for this jurisdiction. The United States Court of Appeals for the Eighth Circuit in Stoner v. State Farm Mut. Auto. Ins. Co., 780 F.2d 1414 (8th Cir.1986), had an opportunity to rule on an issue related to the one presented in this case, although, as discussed below, Stoner is distinguishable from the case now before the Court and therefore does not provide this Court with clear controlling precedent on the question presented.

In the absence of a definitive expression of state law on any matter presented to a federal district court, it is the duty of the court to conscientiously apply state law as the court believes it would be applied in the state courts in order that the court may "make its own determination of what the Supreme Court of the State would probably rule in a similar case." King v. Order of United Commercial Travelers, 333 U.S. 153, 161, 68 S.Ct. 488, 492, 92 L.Ed. 608; Wright & Miller, Federal Practice and Procedure § 4507 (1982). Accordingly, this Court will endeavor to follow the guidance provided by the South Dakota uninsured motorist statute, and decisions of the South Dakota Supreme Court interpreting that statute, to resolve this dispute as this Court conscientiously believes it would be resolved by the South Dakota Supreme Court. King, 333 U.S. at 161, 68 S.Ct. at 492.

The sole issue presented by State Farm's motion for summary judgment concerns whether Peter was insured under the uninsured motorist provision of his father's automobile liability policy. The policy covered the period from January 4, 1989, to July 4, 1989, and was issued to Peter J. Tokley and Lori I. Tokley. Tokley's policy (# 083 9997-41D) provides, in relevant part:

SECTION III — UNINSURED MOTOR VEHICLE — COVERAGE U AND

UNDERINSURED MOTOR VEHICLE — COVERAGE W

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

An "insured" for purposes of the policy's uninsured motorist provision is defined as follows:

INSURED — means the person or persons covered by uninsured motor vehicle or underinsured motor vehicle coverage.

This is:

1. The first person named in the declarations;

2. His or her spouse;

3. Their relatives ...

It is undisputed that Peter is a "person" who sustained "bodily injury" within the meaning of the State Farm insurance policy. Any right of recovery that Peter may have had centers upon whether he is an "insured" under the policy, which in turn involves determining whether he is a "relative" of Peter J. Tokley as that term is defined in the policy. The State Farm policy defines relative as follows:

RELATIVE — means a person related to you or your spouse by blood, marriage or adoption who lives with you. It includes your unmarried and unemancipated child away at school.

The parties agree that Peter was related to the plaintiff by blood, but under State Farm's policy a relative is not merely a person with a blood relationship, that person must also "live with" the insured to fall within the coverage provided by the policy. In the Court's view, Peter was an insured relative who lived with the plaintiff Tokley and was entitled to coverage under his father's State Farm policy.

The South Dakota legislature's intent in requiring uninsured motorist coverage as a part of every automobile liability policy was to increase, rather than decrease, the protection available to South Dakota motorists. Helmbolt v. LeMars Mut. Ins. Co., 404 N.W.2d 55, 59 (S.D. 1987). Uninsured motorist insurance is thus designed for the benefit of insureds and not insurers. Baker v. Continental W. Ins. Co., 748 F.Supp. 716, 721 (D.S.D. 1990).

The purpose of uninsured motorist protection is to provide compensation to an insured who is the victim of an uninsured motorist's negligence to the same extent as if the uninsured motorist were properly insured. Baker, 748 F.Supp. at 718; Radlein v. Industrial Fire & Casualty Ins. Co., 117 Wis.2d 605, 345 N.W.2d 874, 884 (1984); State Farm Mut. Auto. Ins. Co. v. Baldwin, 764 F.2d 773, 778 (11th Cir.1985). To accomplish the purposes of uninsured motorist coverage, policy provisions are construed liberally in favor of coverage. Sprung v. State Farm Mut. Auto. Ins. Co., 715 F.Supp. 282, 285 (D.S.D.1989); Clark v. Regent Ins. Co., 270 N.W.2d 26, 29 (S.D.1978).

In Stoner v. State Farm Mut. Auto. Ins. Co., 780 F.2d 1414 (8th Cir.1986), the Eighth Circuit Court of Appeals interpreted the very language at issue in this case and found that an emancipated woman stationed at a naval base in Texas could not be found to live with her parents in South Dakota and was therefore not covered under her father's uninsured motorist policy for injuries she sustained while on a short visit to the family home. The circuit court found the phrase "lives with you" to be unambiguous and therefore not within the prevailing practice among courts to interpret ambiguous policy language in favor of coverage. Stoner, 780 F.2d at 1416-17.

This Court agrees that the State Farm policy language is not ambiguous and would not interpret the phrase "lives with you" in favor of coverage for that reason. However, the uninsured motorist provision and corresponding definitions contained in the State Farm policy are provisions that define the persons to whom coverage is extended, as opposed to defining persons excluded from coverage, and are therefore inclusionary clauses. Widiss, A Guide to Uninsured Motorist Coverage, §§ 4.7, 33.4 (2d ed.); Row v. United Servs. Auto. Ass'n, 474 So.2d 348, 349 (Fla.1985). The South Dakota Supreme Court has instructed that:

Where the policy provision under examination relates to the inclusion of persons other than the named insured within the protection afforded, a broad and liberal view is taken of the coverage extended.

Novak v. State Farm Mut. Auto. Ins. Co., 293 N.W.2d 452, 455 (S.D.1980) (quoting Crossfield v. Phoenix Ins. Co., 77 N.J.Super. 476, 187 A.2d 20 (1962)). As early as 1958 the Eighth Circuit recognized that:

The word "family" is a very flexible term. It has frequently been defined as such persons as habitually reside under one roof and form one domestic circle.... The term "family" or "household" cannot be so limited and strait-jacketed as always to mean, regardless of facts and circumstances, a collective body of persons who live in one house under one common head or manager.

Johnson v. State Farm Mut. Auto. Ins. Co., 252 F.2d 158, 161 (8th Cir.1958). Since that time this nation has experienced an exponential...