Travelers Prop. Cas. Co. of Am. v. Seretta Constr. Mid-Atlantic, LLC
| Decision Date | 06 August 2018 |
| Docket Number | DOCKET NO. 3:17-cv-00269-MOC-DJK |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Plaintiff, v. SERETTA CONSTRUCTION MID-ATLANTIC, LLC, and R. Michael Allen, Administrator of the Estate of Juan Vargas Martinez, Defendants. |
Mark A. Michael, Hedrick Gardner Kincheloe & Garofalo, Charlotte, NC, for Plaintiff.
John T. Jeffries, McAngus, Goudelock & Courie, PLLC, Charlotte, NC, B. Danforth Morton, Hedrick & Morton, LLP, Wilmington, NC, for Defendants.
THIS MATTER is before the court on plaintiff's Motion for Summary Judgment (# 22) and defendant's Motion for Summary Judgment (# 25). Having considered the parties' motions and reviewed the pleadings, the court enters the following Order.
On May 23, 2016, Juan Vargas Martinez, was fatally injured while driving a truck insured under a commercial auto policy issued by plaintiff. The accident was caused by a negligent driver who was operating a truck that was also insured by plaintiff. The at-fault party's policy had $1,000,000 liability limits which were exhausted by payments of $7,890.49 to N.C. Wheels, Inc., for its property damage, $1,752.90 to the owner of a third vehicle that was also damaged in the accident, and a third payment of $990,354.66 to Mr. Martinez's estate, a defendant herein. The commercial auto policy also provided underinsured motorist coverage with a policy limit of $1,000,000.
Plaintiff filed this action seeking a declaratory judgment that its policy of business automobile insurance does not provide underinsured motorist coverage for the estate's wrongful death claim. Defendant's estate counterclaimed and is seeking a declaration that plaintiff's policy does provide underinsured motorist coverage for its wrongful death claim. Although the total damages sustained by the estate of the decedent have yet to be determined, defendant's estate maintains they have a right to Underinsured Motorists Benefits ("UIM") under the policy provided by plaintiff.
Summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A factual dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material only if it may affect the suit's outcome under governing law. Id. The movant has 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, together with the affidavits, 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, 91 L.Ed.2d 265 (1986) (internal citations omitted). The burden then shifts to the nonmoving party. That party "must set forth specific facts showing that there is a genuine issue for trial." Id. at 322, 106 S.Ct. 2548 n.3. The nonmoving party may not rely upon mere allegations or denials of allegations in pleadings to defeat a motion for summary judgment. Id. at 324, 106 S.Ct. 2548. Instead, that party must present sufficient evidence from which "a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ; accord Sylvia Dev. Corp. v. Calvert Cnty., Md., 48 F.3d 810, 818 (4th Cir. 1995).
The Court views evidence and any inferences from evidence in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. " ‘Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.’ " Ricci v. DeStefano, 557 U.S. 557, 586, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) (quoting Matsushita v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). The question posed by summary judgment is whether the evidence "is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
Where insurance policies are concerned, the courts of the State of North Carolina have long held that insurance policy provisions should be "construed liberally so as to provide coverage, whenever possible by reasonable construction." State Capital Ins. Co. v. Nationwide Mut. Ins. Co., 318 N.C. 534, 539, 350 S.E.2d 66 (1986) (citing Moore v. Hartford Fire Ins. Co., 270 N.C. 532, 155 S.E.2d 128 (1967) ). The effect is to broaden coverage available to the insured, such that "provisions which exclude liability of insurance companies are not favored and therefore all ambiguous provisions will be construed against the insurer and in favor of the insured." Id. (citing Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348, 172 S.E.2d 518 (1970) ).
When interpreting a policy's language and terms, "[i]f no definition is given, non-technical words are to be given their meaning in ordinary speech, unless the context clearly indicates another meaning was intended." Woods v. Nationwide Mut. Ins. Co., 295 N.C. 500, 506, 246 S.E.2d 773 (1978). Should words or provisions be ambiguous or "capable of several reasonable interpretations, the doubts will be resolved against the insurance company and in favor of the policyholder." Id. In determining the meaning of a policy's terms, the court must strive for consistency, and ensure that the "various terms of the policy are to be harmoniously construed, and if possible, every word and every provision is to be given effect." Id. Finally, determining the meaning of policy language is a question of law for the court. Wachovia, 276 N.C. at 354, 172 S.E.2d 518 (citations omitted).
The court has reviewed the parties' pleadings and the rest of the record. Plaintiff seeks declaratory relief against the estate on three issues, as asserted in its Complaint (# 1-1): (1) the insurance policy is subject to the mandatory provisions of the North Carolina Financial Responsibility Act, and under that act any available underinsured motorist benefits are limited to $9,643.39; (2) setting aside the UM statute, there is either no coverage or limited coverage under the provisions of the UM or UIM endorsement to the policy; and (3) under the other insurance provisions of the UM or UIM endorsement, any potential underinsured motorist benefits are limited to $9,643.39. The court will consider plaintiffs' claims in turn.
First, the court will consider whether the policy issued to the employer (the "Seretta policy") is subject to the mandatory provisions of North Carolina's Motor Vehicle Safety and Financial Responsibility Act 20-279.21(b)(4) (hereinafter the "FRA"). Although the Seretta policy was issued in Florida, it is undisputed that the Seretta policy should be interpreted under the laws of North Carolina. "All contracts of insurance on the property, lives or interests in this State shall be deemed to be made therein, and all contracts of insurance the application of which are taken within the State shall be deemed to have been made within this State and are subject to the laws thereof." N.C.G.S. § 58-3-1. As such, North Carolina law applies.
The FRA requires that carriers provide underinsured motorist coverage as part of certain policies of automobile insurance. N.C.G.S. § 20-279.21. The Act also lays out several exceptions to the policy:
Notwithstanding the provisions of this subsection, no policy of motor vehicle liability insurance applicable solely to commercial motor vehicles as defined in G.S. 20-4.01(3d) or applicable solely to fleet vehicles shall be required to provide underinsured motorist coverage ... Any motor vehicle liability policy that insures both commercial motor vehicles as defined in G.S. 20-4.01(3d) and noncommercial motor vehicles shall provide underinsured motorist coverage in accordance with the provisions of this subsection in an amount equal to the highest limits of bodily injury liability coverage for any one noncommercial motor vehicle insured under the policy, subject to the right of the insured to purchase greater or lesser underinsured motorist bodily injury liability coverage limits as set forth in this subsection. For the purpose of the preceding sentence, noncommercial vehicle shall mean any motor vehicle that is not a commercial motor vehicle as defined in G.S. 20-4.01 (3d, but that is otherwise subject to the requirements of this subsection.
N.C.Gen.Stat. § 20-279.21(b)(4). Where the provisions of a statute apply to an insurance policy, the statutory provisions control. Sutton v. Aetna Cas. & Sur.Co., 325 N.C. 259, 382 S.E.2d 759 (1989). Even so, insurance carriers are at liberty to provide more generous coverage than is required by statue. Hlasnick v. Federated Mutual Ins. Co., 353 N.C. 240, 539 S.E.2d 274, 276 (2000). Therefore, whether the Seretta policy has exceeded the requirements laid out by the FRA will ultimately determine plaintiff's coverage limits, as the Act allows underinsured motorist carriers to take a credit against their coverage limits for amounts paid under applicable liability policies. In other words, if the Seretta policy does not exceed the requirements of the FRA, then the provisions of the statute would apply and would limit any available Underinsured Motorist benefits to $9,643.39, as opposed to a limit of $1,000,000.
Plaintiff argues that the Seretta policy supplies the mandatory amount of coverage required by the Financial Responsibility Act and supplies no coverage in excess of what is required. Specifically, plaintiff evaluates the language "any motor vehicle liability policy...
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