Vincent v. Wendy Smith Vick, Nationwide Mut. Ins. Co., Allied Prop. & Cas. Ins. Co., Amco Ins. Co., Liberty Mut. Ins. Co. & Safeco Ins. Co. of Am.
| Decision Date | 10 August 2018 |
| Docket Number | 1:17CV762 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | DAVID TODD VINCENT and SUSAN T. VINCENT, Plaintiffs, v. WENDY SMITH VICK, NATIONWIDE MUTUAL INSURANCE COMPANY, ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, AMCO INSURANCE COMPANY, LIBERTY MUTUAL INSURANCE COMPANY and SAFECO INSURANCE COMPANY OF AMERICA, Defendants. |
Plaintiffs initiated this action in the Superior Court of Alamance County, North Carolina, alleging four claims: (1) personal injury, (2) loss of consortium, (3) notice and demand for arbitration, and (4) a request for declaratory judgment. (ECF No. 5.) Defendant AMCO ("AMCO") Insurance Company, one of six Defendants in this case, removed the action to this Court pursuant to 28 U.S.C. § 1332.1 (ECF No. 1.) AMCO filed its Answer in this Court, along with a counterclaim for a declaratory judgment. (ECF No. 8.) State FarmMutual Automobile Insurance Company ("State Farm") was granted leave to intervene in this lawsuit. (ECF Nos. 33; 36.) Before the Court are the following three motions: (1) Consent Motion of State Farm Mutual Automobile Insurance Company to Be Relieved, (ECF No. 34), of its duty to defend, (2) Plaintiffs' Motion for Judgment on the Pleadings, (ECF No. 37), and (3) Defendant AMCO Insurance Company's Motion for Judgment on the Pleadings, (ECF No. 41). For the reasons stated below, State Farm's motion will be granted, Plaintiffs' motion will be granted, and AMCO's motion will be denied.
This action arises from a traffic accident between Plaintiff, David Todd Vincent ("Mr. Vincent") and Defendant Wendy Smith Vick ("Ms. Vick"). (See ECF No. 5 ¶¶ 19-31.) Plaintiffs allege that on October 17, 2016, Mr. Vincent was traveling west on U.S. 70 in Alamance County on his 2015 Harley Davidson motorcycle when he collided with Ms. Vick's vehicle. (Id. ¶¶ 19-25.) As a result of the collision, Mr. Vincent "sustained severe, life threatening injuries." (Id. ¶ 26.) Ms. Vick pleaded responsible to the traffic violation brought against her as a result of the collision. (ECF Nos. 38 at 4; 38-1 at 2; 38-3.) At the time of the accident, Ms. Vick was insured by State Farm, under a liability insurance policy with limits of $30,000 per person and $60,000 per occurrence. (ECF No. 34 ¶ 2.) Prior to the filing of this action by Plaintiffs, State Farm tendered the full amount of Ms. Vick's liability insurance policy to Mr. Vincent "in exchange for a limited release and covenant not to enforce judgment against" Ms. Vick. (Id.; see ECF No. 5 ¶ 44.)
In their Complaint, Plaintiffs allege that they have available to them underinsured motorist coverage ("UIM") pursuant to three separate insurance policies issued by DefendantsAMCO, SAFECO Insurance Company of America ("SAFECO"), and Allied Property and Casualty Insurance Company ("Allied"), respectively.2 (ECF No. 5 ¶ 45.) AMCO issued a policy to Mr. Vincent's business, TSPC, LLC, which extended underinsured motorist coverage to Mr. Vincent pursuant to an endorsement. (Id. ¶¶ 55-57.) According to the Complaint, AMCO has disclaimed coverage under the policy for the accident on the ground that the insurance policy's owned-vehicle exclusion 3 barred coverage for Mr. Vincent's injuries because he was traveling in a vehicle that he personally owned at the time of the accident. (Id. ¶¶ 54, 60; see ECF No. 8-2 at 1.) Plaintiffs further allege that the SAFECO and Allied insurance policies may be stacked, "[h]owever, because AMCO has disclaimed coverage, neither SAFECO nor Allied knows how much money to tender in full and final satisfaction of [Mr. Vincent's] UIM claims against them." (ECF No. 5 ¶ 62.)
Plaintiffs request a declaratory judgment as to the rights and obligations of AMCO and SAFECO, as well as Defendants Nationwide Mutual Insurance Company and Defendant Liberty Mutual Insurance Company. (Id. at 8.) AMCO, in its counterclaim against Plaintiffs, similarly requests a declaratory judgment "concerning the rights, obligations and liabilities of the parties with respect to [Plaintiffs'] claim that they are entitled to UIM coverage under the policy of insurance issued by AMCO to TSPC, LLC." (ECF No. 8 at 13.) Plaintiffs and AMCO have both moved for judgment on the pleadings as to their respective claims fordeclaratory judgment. (ECF Nos. 37; 41.) The Court will begin its discussion by considering these cross-motions.
Plaintiffs state that they move for judgment on the pleadings on the ground that "Defendants have failed to contest relevant facts or put forward issues of relevant law which support their disclaiming of UIM coverage for Plaintiffs in light of North Carolina's public policy prohibition against the application of 'owned vehicle' exclusions to named insureds." (ECF No. 37 at 1.) Plaintiffs appear to bring their motion against all Defendants. (See id.) However, Plaintiffs only discuss their claim as against AMCO in the brief supporting their motion; Plaintiffs do not direct the Court to the insurance policies issued by the remaining Defendants; and only AMCO has responded to Plaintiffs' motion. AMCO is also the only Defendant who, according to the Complaint, disclaimed UIM coverage to Mr. Vincent. (See ECF No. 5 ¶ 60.) Thus, in considering Plaintiffs' motion, the Court will only determine whether Mr. Vincent is entitled to underinsured motorist coverage under the policy issued by AMCO to TSPC, LLC. Likewise, this is the sole issue raised by AMCO in its motion, and therefore both motions will turn on the resolution of this question.
A motion for judgment on the pleadings is brought pursuant to Federal Rule of Civil Procedure 12(c). Fed. R. Civ. P. 12(c). A court reviewing a motion for judgment on the pleadings applies the same standards that apply to motions brought pursuant to Rule 12(b)(6). Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A motion made under Rule 12(b)(6) challenges the legal sufficiency of a pleading, specifically whether the pleading satisfiesthe standards set forth in Rule 8. Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). Rule 8(a)(2) requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A pleading will satisfy Rule 8(a)(2) only when it contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
When considering a motion for judgment on the pleadings, "a [district] court evaluates the complaint in its entirety, as well as documents attached [to] or incorporated into the complaint." E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011). A district court may also "consider a document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity." Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016). Going "beyond these documents . . . converts the motion into one for summary judgment," and "[s]uch conversion is not appropriate where the parties have not had an opportunity for reasonable discovery." E.I. du Pont de Nemours & Co., 637 F.3d at 448-49.
Under North Carolina law, an insurance policy is a contract, and its terms govern the parties' rights and duties.4 Fid. Bankers Life Ins. Co. v. Dortch, 348 S.E.2d 794, 796 (N.C. 1986).Courts are to construe a policy's provisions with the goal of determining the parties' intent at the time the policy was issued. Woods v. Nationwide Mut. Ins. Co., 246 S.E.2d 773, 777 (N.C. 1978). The party seeking benefits under the policy bears the burden of demonstrating coverage. Fortune Ins. Co. v. Owens, 526 S.E.2d 463, 467 (N.C. 2000). Interpretation of an insurance policy is a question of law for the court. Allstate Ins. Co. v. Runyon Chatterton, 518 S.E.2d 814, 816 (N.C. Ct. App. 1999). Where the terms of an insurance policy conflict with an applicable statute, the statute prevails. Sutton v. Aetna Cas. & Sur. Co., 382 S.E.2d 759, 762 (N.C. 1989). In North Carolina, the provision of underinsured motorist coverage is regulated under the Motor Vehicle Safety and Financial Responsibility Act of 1953 (the "Financial Responsibility Act"), N.C. Gen. Stat. § 20-279.21(b)(4). Lunsford v. Mills, 766 S.E.2d 297, 301 (N.C. 2014).
The AMCO policy issued to TSPC, LLC, extended underinsured motorist coverage to Mr. Vincent pursuant to an endorsement titled, "Drive Other Car Coverage - Broadened Coverage for Named Individuals" ("Broadened Coverage Endorsement"). (ECF No. 8-1 at 64.) The Broadened Coverage Endorsement explicitly amends the policy's underinsured motorist coverage as follows:
(Id. at 65.) Both Plaintiffs, Mr. and Mrs. Vincent, appear in the "Schedule" contained within the Broadened Coverage Endorsement. (Id. at 64.) The above language in the policy purporting to exclude coverage for circumstances where an insured is injured in a vehicle he owns is the owned-vehicle exclusion.
The plain language of the owned-vehicle exclusion would appear to yield the conclusion that Mr. Vincent is not entitled to UIM coverage under the AMCO policy. The Broadened Coverage Endorsement, including the owned-vehicle exclusion, purportedly extends UIM...
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