Transportation Insurance Company v. Ritts Distributing Company, Inc., No. 3:94CV46-B-A (N.D. Miss. 1995)
| Decision Date | 01 April 1995 |
| Docket Number | No. 3:94CV46-B-A.,No. 3:94CV93-B-A.,3:94CV46-B-A.,3:94CV93-B-A. |
| Parties | TRANSPORTATION INSURANCE COMPANY, Plaintiff, v. RITTS DISTRIBUTING COMPANY, INC., JOANNE HUFF-RITTS and SPENCER RITTS, Defendants. JOANNE HUFF-RITTS and SPENCER RITTS, Plaintiffs, v. TRANSPORTATION INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Mississippi |
This cause comes before the court on cross-motions for summary judgment1. The court has duly considered the parties' memoranda and exhibits and is ready to rule.
Transportation Insurance Company ("Transportation") provided automobile insurance coverage for Ritts Distributing Company, Inc. ("RDC"). Joanne Huff-Ritts ("Ritts"), the secretary/treasurer of RDC, was injured in an automobile collision while driving her personal automobile. She filed suit against Transportation (Cause No. 3:94CV93-B-A) seeking to collect on the uninsured motorist provisions of the policy. Transportation filed a declaratory judgment action (Cause No. 3:94CV46-B-A) to determine whether or not Ritts was covered under the policy issued to RDC.
Transportation issued an automobile insurance policy, which provided uninsured motorist coverage, to RDC on or about March 15, 1992. RDC was the only named insured on the policy; no individuals were named as insured.
When RDC began the process of acquiring insurance through Transportation, it showed Transportation the Amerisure Insurance Company ("Amerisure") policy it had at that time and asked for a rate quote on the same terms. Transportation quoted RDC a cheaper rate and RDC accepted. When Transportation issued the new policy to RDC, it failed to include the symbol for which automobiles were covered under the uninsured motorist provisions. The policy should have included a "2," indicating "owned autos only," or a "7," indicating "specifically described autos."
Ritts is the secretary/treasurer of RDC. At one time she was also an employee of the company, but not at any time relevant hereto. Ritts is married to Spencer Ritts, who is the president and sole stockholder of RDC.
Ritts was injured in an automobile collision with an uninsured motorist on August 10, 1992, while driving a 1988 Dodge Caravan. The Dodge Caravan had, at one time, been owned by the company and listed on the Transportation policy. However, prior to the collision of August 10, 1992, Ritts had purchased the automobile from the company and had obtained personal insurance coverage on the Dodge Caravan from Nationwide Insurance Company ("Nationwide").2 Therefore, by August 10, 1992, the Dodge Caravan had been deleted from the Transportation policy.
The issues before the court are whether or not Ritts can collect uninsured motorist coverage from Transportation under the policy issued to RDC and whether or not the policy should be reformed to include the symbol for "owned autos only" as the covered auto symbol for uninsured motorist coverage.
On a motion for summary judgment, the movant has the initial burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 275 (1986) (). Under Rule 56(e) of the Federal Rules of Civil Procedure, the burden shifts to the non-movant to "go beyond the pleadings and by...affidavits, or by the `depositions answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp., 477 U.S. at 324, 91 L. Ed. 2d at 274. That burden is not discharged by "mere allegations or denials." Rule 56(e). All legitimate factual inferences must be made in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 216 (1986). Rule 56(c) mandates the entry of summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322, 91 L. Ed. 2d at 273. Before finding that no genuine issue for trial exists, the court must first be satisfied that no reasonable trier of fact could find for the non-movant. Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 552 (1986).
To collect on the uninsured motorist provisions of the Transportation policy, Ritts must either be personally insured under the policy or be a permissive user or guest in an automobile insured under the policy. It is undisputed that Ritts was driving her personal automobile at the time of the collision and that the Dodge Caravan had been deleted from the schedule of covered automobiles under the Transportation policy. Therefore, Ritts cannot collect uninsured motorist benefits as a permissive user or guest of a covered automobile.
The remaining question is whether Ritts is an insured under the policy. The policy defines "insured" as :
(1) you, and
(2) if you are an individual, then any family member.
The term "you" as used in the definition of "insured" is defined as the named insured, which was RDC.
Ritts argues that the policy, as written, creates an ambiguity by using the terms "you" and "family member" in defining the terms of a corporate policy. Since a corporation has no family members, one cannot be clear as to who is insured under the policy.
While the court recognizes that the uninsured motorist statute requires policies to be liberally construed in favor of coverage, Harris v. Magee, 573 So. 2d 646, 651 (Miss. 1990), and any ambiguities should be resolved in favor of the insured, Government Employees Ins. Co. v. Brown, 446 So. 2d 1002, 1006 (Miss. 1984), it should not create an ambiguity where none exists. Ware v. Carrom Health Care Prods., Inc., 727 F. Supp. 300, 304-05 (N.D. Miss. 1989); Brander v. Nabors, 443 F. Supp. 764, 769 (N.D. Miss. 1978), aff'd, 579 F.2d 888 (5th Cir. 1978). The language of the policy is clear in that family members are only covered if the named insured is an individual. The terms of the policy show a specific intent to recognize that if the named insured is a corporation, then family coverage does not apply.
Ritts relies upon Hager v. American West Insurance Co., 732 F. Supp. 1072 (D. Mont. 1989) for the proposition that officers and shareholders of a closely held corporation to which an automobile insurance policy is issued containing family member terminology fall within the purview of that terminology for uninsured motorist coverage. The policy in Hager defined "insured" as "you or any family member." Indeed, some courts, when faced with a policy defining "insured" as "you or any family member" without distinguishing whether or not the term "you" refers to an individual, have found an ambiguity, which therefore mandates coverage of the officers, shareholders, or employees. Hawkeye-Security Ins. Co. v. Lambrecht & Sons, Inc., 852 P.2d 1317 (Colo. Ct. App. 1993); Ceci v. National Indem. Co., 225 Conn. 165, 622 A.2d 545 (1993). However, a greater number of courts, when interpreting the terms of a policy which does not make a distinction regarding whether or not the "you" is an individual, have held that no ambiguity exists, and therefore no individuals are covered under the uninsured motorist provisions. Sheppard v. Allstate Ins. Co., 21 F.3d 1010 (10th Cir. 1994); Sears v. Wilson, 10 Kan. App. 2d 494, 704 P.2d 389 (1985); Davis v. Brock, 602 So. 2d 104 (La. Ct. App. 1992); Meche v. Thibodeaux, 550 So. 2d 346 (La. Ct. App. 1989); General Ins. Co. of Am. v. Icelandic Builders Inc., 24 Wash. App. 656, 604 P.2d 966 (1979).
Even more persuasive are the cases which involve policies containing language which includes family members only if the named insured is an individual. Each of the courts in these cases have held that no individual, regardless of their status as an officer, shareholder or employee, is covered under the terms of the policy relating to the uninsured motorist provisions. Benns v. Continental Casualty Co., 982 F.2d 461 (10th Cir. 1993); General Ins. Co. of Am. v. Smith, 874 P.2d 412 (Colo. Ct. App. 1993); See also Jensen v. United Fire & Casualty Co., 524 N.W.2d 536 (Minn. Ct. App. 1994) (). No state court in Mississippi has addressed this issue, but the United States District Court for the Southern District of Mississippi has interpreted similar language in Berry v. Aetna Casualty & Surety Co., 607 F. Supp. 397 (S.D. Miss. 1985). In Berry, the court held that no ambiguity existed in the policy and therefore there was no coverage for the president and sole stockholder of the corporation. Berry, 607 F. Supp. at 398. The court has not found any case, and Ritts has not cited any in her brief, which involves language similar to the Transportation policy and which finds that coverage exists.
To find that an individual is personally covered under a policy which lists a corporation as the only named insured would not make good sense. A corporation is a legal personality, separate and apart from its owners. United States v. State Tax Comm'n of Miss., 505 F.2d 633, 637 (5th Cir. 1974); Pemberton v. State Farm Mut. Auto. Ins. Co., 803 F. Supp. 1187, 1191 (S.D. Miss. 1992). If officers of a corporation were considered to be personally insured under a corporate policy, there would be no need for those officers or their families to obtain any automobile insurance coverage themselves.3 In the present case, Ritts would not have purchased a policy with Nationwide had she truly believed that she was insured under the policy with Transportation.
Ritts also contends that she should be covered as the personal representative of the named insured. Mississippi Code Ann. § 83-11-103 defines...
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