Union Ins. Co. v. Scholz
| Decision Date | 20 July 2020 |
| Docket Number | CIV 18-4160 |
| Citation | 473 F.Supp.3d 978 |
| Parties | UNION INSURANCE COMPANY, Plaintiff, v. Bruce SCHOLZ, Defendant. |
| Court | U.S. District Court — District of South Dakota |
Michael L. Luce, Steven J. Oberg, Lynn, Jackson, Shultz & Lebrun, P.C., Sioux Falls, SD, Adam P. Joffe, Pro Hac Vice, Dana A. Rice, Pro Hac Vice, Traub Lieberman Straus & Shrewsberry LLP, Chicago, IL, for Plaintiff.
Casey W. Fideler, Christopherson, Anderson, Paulson & Fideler, LLP, Sioux Falls, SD, for Defendant.
Pending before the Court is Plaintiff, Union Insurance Company's ("Union Insurance"), Motion for Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure (Doc. 18.) The Court has considered all filings and for the following reasons, Plaintiff's motion is granted.
Plaintiff Union Insurance is a corporation incorporated in Iowa and with its principal place of business in Iowa. Defendant Bruce Scholz ("Scholz") is a citizen of Minnehaha County, South Dakota. Jurisdiction over this insurance coverage dispute is premised on diversity of citizenship. See 28 U.S.C. § 1332(a)(1).
On December 1, 2017, Scholz was involved in an automobile accident and suffered personal injuries. The personal auto insurance carrier for the other driver tendered its full policy limit of $50,000.00 on the claim brought by Scholz. At the time of the accident Scholz was employed by DC Automotive and Kooiman Automotive Inc. d/b/a Ultimate Automotive and Sioux Falls Truck & Auto Accessories ("DC Automotive") as a service technician in Sioux Falls, South Dakota. In the course of his employment with DC Automotive, Scholz was test driving a vehicle owned by Kevin Kontz, a customer of DC Automotive ("Customer Vehicle"), after completing mechanical repairs on the Customer Vehicle.
Union Insurance issued a multi-peril commercial lines insurance policy to Scholz's employer, DC Automotive, under policy number GO 3115324-21 ("Policy"), which provided coverage for the period of December 5, 2016 to December 5, 2017. Scholz requested underinsured motorist ("UIM") coverage under the Policy. Union Insurance denied his claim.
Union Insurance brought this action seeking a declaratory judgment as to whether Scholz qualifies as an "insured" for purposes of collecting UIM benefits under the Policy issued to DC Automotive. See 28 U.S.C. §§ 2201 – 02.
Rule 12(h)(2) of the Federal Rules of Civil Procedure specifically instructs that motions to dismiss for failure to state a claim may alternatively be brought by a motion for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure. See Fed.R.Civ.P. 12(h)(2). The difference between a Rule 12(b)(6) motion to dismiss and a Rule 12(c) motion for judgment on the pleadings is timing. A party may move for judgment on the pleadings after the pleadings have closed. Fed.R.Civ.P. 12(c). In deciding a Rule 12(c) motion, courts apply the same legal standard used for a motion to dismiss under Rule 12(b)(6). Ashley Cnty., Ark. v. Pfizer, Inc. , 552 F.3d 659, 665 (8th Cir. 2009). The Eighth Circuit has explained the interplay between Rule 12(b)(6), Rule 12(c) and Rule 12(h). See Westcott v. City of Omaha , 901 F.2d 1486, 1488 (8th Cir. 1990). In Westcott , the defendant brought a motion to dismiss based on sovereign immunity after it had filed its answer, so the court treated the motion as a motion for judgment on the pleadings pursuant to Rule 12(c) and ultimately dismissed the case for failure to state a claim upon which relief could be granted. Id. at 1490. In affirming the district court's dismissal, the Eighth Circuit noted:
The parties agree that this case should be analyzed under the rubric of Federal Rule of Civil Procedure 12(b)(6). Technically, however, a Rule 12(b)(6) motion cannot be filed after an answer has been submitted. See Fed.R.Civ.P. 12(b). But since Rule 12(h)(2) provides that "[a] defense of failure to state a claim upon which relief can be granted" may be advanced in a motion for judgment on the pleadings under Rule 12(c), we will treat the City's motion as if it had been styled a 12(c) motion. St. Paul Ramsey County Med. Ctr. v. Pennington County , 857 F.2d 1185, 1187 (8th Cir. 1988). This distinction is purely formal, because we review this 12(c) motion under the standard that governs 12(b)(6) motions. Id. ; accord Morgan v. Church's Fried Chicken , 829 F.2d 10, 11 (6th Cir. 1987) (collecting cases).
A plaintiff may move for judgment on the pleadings to obtain a declaratory judgment where the parties’ only dispute is the proper interpretation of contractual terms. See , e.g. , Hous. Auth. Risk Retention Group, Inc. v. Chicago Hous. Auth. , 378 F.3d 596 (7th Cir. 2004) ().
Courts deciding a Rule 12(c) motion are required to accept as true the well-pled allegations and must resolve all inferences in the non-moving parties’ favor. Wishnatsky v. Rovner , 433 F.3d 608, 610 (8th Cir. 2006). However, this tenet does not apply to legal conclusions, "formulaic recitation of the elements of a cause of action," or factual assertions which are so indeterminate as to require further factual enhancement. Braden v. Wal-Mart Stores, Inc. , 588 F.3d 585, 594 (8th Cir. 2009). "Judgment on the pleadings is appropriate only when there is no dispute as to any material facts and the moving party is entitled to judgment as a matter of law." Wishnatsky , 433 F.3d at 610.
When considering a motion for judgment on the pleadings, a court generally must ignore all materials outside the pleadings. Porous Media Corp. v. Pall Corp. , 186 F.3d 1077, 1079 (8th Cir. 1999). However, courts may consider "some materials that are part of the public record or do not contradict the complaint ... as well as materials that are necessarily embraced by the pleadings." Id. (internal quotation marks omitted). Accordingly, the Court will consider the certified copy of the Policy attached to the Complaint at Exhibit A.
In his brief in response to the motion for judgment on the pleadings, Scholz contended that he did not receive copies of an "Auto Dealer's Coverage Form" or a "Motor Carrier Coverage Form." (Doc. 32 at 4.) Both are mentioned as being modified by the UIM endorsement along with the "Business Auto Coverage." (Id. ) In its reply, Union Insurance points out that Exhibit A of its Complaint is a true and complete copy of the Policy issued to DC Automotive, and the Policy does not include either an "Auto Dealer Coverage Form" or a "Motor Carrier Coverage Form." (Doc. 31 at 4.) According to Union Insurance, the UIM endorsement it uses is a standard form in the insurance industry, and the fact that three types of coverage are listed does not mean that the insurance policy necessarily includes all of those coverage parts. Here, the Union Insurance Policy incorporates the Business Auto Coverage, which is modified by the UIM endorsement. (Doc. 31 at 5).
Scholz has not responded with a showing that Exhibit A is anything but a complete and true copy of the Policy. Thus, there is nothing more than Scholz's initial naked assertion that an Auto Dealer's and a Motor Carrier form might be missing simply because they are mentioned in the UIM endorsement. That is not sufficient to call into question the authenticity of the certified copy of the Policy in Exhibit A, and the Court concludes that there is no dispute of material fact that would preclude judgment on the pleadings in this case.
The parties agree that since this is a federal diversity action, South Dakota substantive law applies. See Bell v. Allstate Life Ins. Co. , 160 F.3d 452, 455 (8th Cir. 1998) ().
Interpretation of an insurance contract is a question of law. Ass Kickin Ranch, LLC, v. North Star Mut. Ins. Co. , 822 N.W.2d 724, 726 (S.D. 2012) (quoting De Smet Ins. Co. of S.D. v. Gibson , 552 N.W.2d 98, 99 (S.D. 1996) ). In South Dakota, " ‘the scope of coverage of an insurance policy is determined from the contractual intent and the objectives of the parties as expressed in the contract.’ " Id. at 727 (quoting St. Paul Fire & Marine Ins. Co. v. Schilling , 520 N.W.2d 884, 887 (S.D. 1994) ) (alteration omitted). " ‘An insurance contract's language must be construed according to its plain and ordinary meaning and a court cannot make a forced construction or a new contract for the parties.’ " North Star , 822 N.W.2d at 727 (quoting Stene v. State Farm Mut. Auto. Ins. Co. , 583 N.W.2d 399, 402 (S.D. 1998) ).
Thus, when a contract's terms are plain and unambiguous, the terms’ ordinary meanings are to be applied without judicial construction. See id. (quoting Am. Family Mut. Ins. v. Elliot , 523 N.W.2d 100, 102 (S.D. 1994) ). See also Munroe v. Continental Western Ins. Co. , 735 F.3d 783, 786 (8th Cir. 2013) (). On the other hand, when contract provisions are ambiguous, the interpretation favoring coverage for the claimant is to be adopted. North Star , 822 N.W.2d at 727 (quoting Nat'l Sun Indus., Inc. v. S.D. Farm Bureau Ins. Co. , 596 N.W.2d 45, 48 (S.D. 1999) ). In order to be found ambiguous, the contract language must be fairly susceptible to different interpretations and " ‘[t]he fact that the parties differ as to the contract's interpretation does not create an ambiguity.’ " Id. (quoting Zochert v. Nat'l Farmer Union Prop. & Cas. Co. , 576 N.W.2d 531, 532 (S.D. 1998) ). Finally, contract provisions should not...
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