U.S. Fire Ins. Co. v. Barker Car Rental
| Decision Date | 04 October 1996 |
| Docket Number | No. IP-94 1336-C B/S.,IP-94 1336-C B/S. |
| Citation | 944 F.Supp. 739 |
| Parties | UNITED STATES FIRE INSURANCE COMPANY, Plaintiff, v. BARKER CAR RENTAL d/b/a National Car Rental, the Estate of Bade Alkhuaini, the Estate of Barry L. Lawrence, Verna L. Lawrence, Kimberly A. Creech, David J. Davies, Transamerica Insurance Group, and Old Dominion Insurance Company, Defendants. |
| Court | U.S. District Court — Southern District of Indiana |
Stephen J. Peters, Stewart & Irwin, Indianapolis, IN, for Plaintiff.
David T. Kasper, Locke Reynolds Boyd & Weisell, Indianapolis, IN, Mark C. Ladendorf, Yosha Ladendorf Krahulic & Weddle, Indianapolis, IN, James L. Petersen, Ice Miller Donadio & Ryan, Indianapolis, IN, R.D. Zink, Henderson Daily Withrow & Devoe, Indianapolis, IN, for Defendants.
ENTRY GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT IN PART AND DEFENDANTS' CROSS-MOTIONS FOR SUMMARY JUDGMENT IN PART
Plaintiff, United States Fire Insurance Company, filed a complaint for interpleader and declaratory judgment on its liability under three insurance policies issued to Barker Car Rental d/b/a National Car Rental. It then filed this motion for summary judgment. Defendants Transamerica Insurance Group, Verna Lawrence and the Estate of Barry Lawrence filed cross-motions for summary judgment. For the reasons discussed below, Plaintiff's motion for summary judgment is granted on the question of its liability under the Business Auto Policy and the Second Excess Insurance Policy. Defendants' motions are granted to the extent discussed on the question of liability under the First Excess Insurance Policy. In addition, Plaintiff's motion that those actions that implicate the interpled Business Auto Policy monies deposited in this court and that are presently stayed, remain stayed until the issues raised in this action are resolved, is granted.
The facts in this case are largely undisputed. Plaintiff, United States Fire Insurance Company ("U.S. Fire"), is an insurance corporation, organized under the laws of New York, with its principal place of business in New Jersey. Stipulations ¶ 1. It is authorized to issue policies in Illinois and West Virginia, as well as to do business in Indiana. Id. Barker Car Rental, d/b/a National Car Rental ("Barker"), is a corporation organized under the laws of Delaware, with its principal place of business in Illinois. Id. at ¶ 2. Bader Alkhuaini ("Alkhuaini") was a Kuwaiti subject and citizen residing in West Virginia. Id. at ¶ 3. His driver's license was issued by Kentucky. Id. at ¶ 15.
On November 24, 1993, Alkhuaini rented a car from Barker in West Virginia. Id. at ¶ 13. The car rented to Alkhuaini was licensed in Illinois. Id.
On November 26, 1993, Alkhuaini was driving in Brown County, Indiana, when he was in a car accident with Barry and Verna Lawrence, Kimberly Creech ("Creech"), and David Davies ("Davies"). Id. at ¶ 17. Alkhuaini and Barry Lawrence died as a result of the accident. Id. at ¶ 18.
An estate was established on behalf of Alkhuaini in Brown County, Indiana for purposes solely related to this litigation. Stipulations ¶ 3. Defendant Verna Lawrence ("Lawrence") is an Indiana citizen, and the Estate of Barry Lawrence was established in Delaware County, Indiana, also solely for purposes of this litigation. Id. at ¶¶ 4-5. The Lawrences' insurance company, Transamerica Insurance Group ("Transamerica"), is another defendant in this action. Id. at ¶ 6. Defendants Creech and Davies were dismissed from this lawsuit. Id. at ¶ 8-9. However, Creech's insurance company, Old Dominion Insurance Group, remains in this action, with a subrogated interest for seven thousand seven hundred seven dollars ($7,707.00) already paid to Creech as a result of damage to her car from the Alkhuaini accident. Stipulations ¶ 22. Old Dominion has agreed to stay prosecution of its cross-claims until final resolution of this action. Id.
U.S. Fire issued three insurance policies implicated in this litigation: a Business Auto Policy, a First Excess Policy and a Second Excess Policy. Stipulations ¶¶ 10-12. Barker is the named insured on all three policies. Id. at ¶ 25. All three policies were issued on November 1, 1993 for a period extending through November 1, 1994. Id. at ¶¶ 10-12.
U.S. Fire filed this interpleader and declaratory judgment action to determine its obligations under these three insurance policies. All of the parties stipulated that, under the Business Auto Policy, the liability limits are twenty-five thousand dollars ($25,000.00) per person, fifty thousand dollars ($50,000.00) per occurrence, and ten thousand dollars ($10,000.00) for property damage. Stipulations ¶ 19. The parties also agreed that U.S. Fire, prior to initiating this action, had already paid a total of four thousand six hundred five dollars and thirty-one cents ($4,605.31) under the property damage limits of the Business Auto Policy. Id. at ¶ 20. The parties acknowledge that U.S. Fire deposited into this court the sum of fifty-five thousand three hundred twenty-four dollars and sixty-nine cents ($55,324.69), which is the remaining liability and property damage limit available under the Business Auto Policy. Id. at ¶ 21. Plaintiff and Defendants Lawrence, Estate of Lawrence and Transamerica have filed motions and cross-motions for summary judgment on the declaratory judgment action.
None of the parties disputes that this court has jurisdiction over, and is an appropriate venue for, the claims at issue in this case. 28 U.S.C. § 2201; 28 U.S.C. § 1335(a); 28 U.S.C. 1367(a); Nationwide Ins. v. Zavalis, 52 F.3d 689, 691-92 (7th Cir.1995); General Railway Signal Co. v. Corcoran, 921 F.2d 700, 703 (7th Cir.1991). Because these claims are indeed properly before this court, we turn to the issues raised by the parties.
All of the parties agree that because Indiana is the forum state for this dispute, Indiana's choice of law rules govern. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); S.A. Healy Co. v. Milwaukee Metro. Sewerage Dist., 50 F.3d 476, 478 (7th Cir.1995). The parties also agree that, for choice of law purposes, Indiana treats insurance contract questions as those of contract, regardless of whether the cause of the underlying dispute rests in tort. American Family Mut. Ins. Co. v. Williams, 839 F.Supp. 579, 583 (S.D.Ind.1993); Travelers Ins. Cos. v. Rogers, 579 N.E.2d 1328, 1330 (Ind.Ct.App.1991). Accordingly, all parties acknowledge that the "most significant contacts" test controls the choice of law question presently before this court. American Family, 839 F.Supp. at 582; Travelers, 579 N.E.2d at 1330-31.
Not surprisingly, the parties agree on little else. Plaintiff maintains that, applying the most significant contacts test, Illinois law applies generally in this action. It maintains that Illinois has the most significant contacts with this action because (1) Barker's principal place of business is in Illinois, (2) the three insurance policies were negotiated by and delivered to Barker in Illinois, and (3) the rented vehicle was licensed in Illinois and carried Illinois plates. Defendants, on the other hand, maintain that the most significant contacts test would direct this court to apply West Virginia law. They maintain that West Virginia is the state where the rental agreements were executed by Barker and Alkhuaini, and that this is the correct point upon which this court should fix its choice of law inquiry. Defendants also point out that Barker does business in West Virginia and that Alkhuaini was domiciled in West Virginia at the time he rented the car from Barker.1
This court will apply Illinois law in this action.
The determination of which state law applies is aided by consideration of several factors: the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the parties' place of business. In conflict of law cases involving the interpretation of insurance contracts, the law of the state where the contract is executed controls.
Pennington v. American Family Ins. Group, 626 N.E.2d 461, 465 (Ind.Ct.App.1993) (citation omitted); see also Eby v. York-Div., Borg-Warner, 455 N.E.2d 623, 626 (Ind.Ct. App.1983) (listing factors).
U.S. Fire's liability in this case arises not from the rental agreement entered into by Alkhuaini and Barker, but from the insurance contracts between it and Barker. Barker is the named insured on all three of the insurance policies, with its principal place of business in Illinois. Stipulations ¶¶ 2, 25. All three policies were effective November 1, 1993 through November 1, 1994, Stipulations ¶¶ 10-12, thus, the policies existed before Alkhuaini ever walked into Barker's West Virginia rental office on November 24, 1993. Although it is true that without the rental agreement, U.S. Fire would have no link to Alkhuaini, it is the insurance contracts negotiated between U.S. Fire and Barker that form the basis of U.S. Fire's liability in this case — not the rental agreement. Cf. Pafco Gen. Ins. Co. v. Providence Washington Ins. Co., 587 N.E.2d 728, 729 n. 1 (Ind.Ct.App. 1992) ( ). These contracts were negotiated and delivered in Illinois. See Exs. A, B, C; Anderson Aff. at ¶¶ 3-5. Accordingly, this court will apply Illinois law in this case.
Although Illinois law governs the construction of the three insurance policies at issue in this case, Indiana law determines the statutory minimum required under the Business Auto Policy. Plaintiff argues that the Business Auto Policy is the only policy through which it has any liability in this case, and that it has satisfied its...
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...us whether the insurer admitted liability or relinquished any claim to the interpleaded funds. See United States Fire Insurance Co. v. Barker Car Rental, 944 F.Supp. 739, 744 (S.D.Ind.1996), rev'd on other grounds, 132 F.3d 1153 (7th Cir.1997). However, assuming such a construction is reaso......
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