Wells Fargo Equip. Fin., Inc. v. State Farm Fire & Cas. Co.
Decision Date | 06 April 2011 |
Docket Number | Civil Case No. 1:10–cv–1246. |
Citation | 805 F.Supp.2d 213 |
Parties | WELLS FARGO EQUIPMENT FINANCE, INC., Plaintiff, v. STATE FARM FIRE AND CASUALTY COMPANY, et al., Defendants. |
Court | U.S. District Court — Eastern District of Virginia |
OPINION TEXT STARTS HERE
Timothy Stephen Baird, Kutak Rock LLP, Richmond, VA, for Plaintiff.
Dawn Elizabeth Boyce, Bancroft McGavin Horvath & Judkins PC, Fairfax, VA, Todd A. Pilot, Alexandria, VA, for Defendants.
On November 2, 2010, Plaintiff Wells Fargo Equipment Finance, Inc. (“Wells Fargo”) initiated a breach of contract action against five defendants. The matter now comes before this Court on Wells Fargo's Motion for Judgment against two of those defendants, State Farm Fire and Casualty Company (“State Farm Fire”) and State Farm Mutual Automobile Insurance Company (“State Farm Auto”) (collectively “State Farm”). The parties have fully briefed and argued the Motion, and the matter is ripe for disposition. For reasons set forth below, this Court grants Wells Fargo's Motion for Judgment.
Wells Fargo is a Minnesota corporation that maintains its principal place of business in Minneapolis, Minnesota. State Farm Fire and State Farm Auto are Illinois corporations with their principal places of business in Bloomington, Illinois. All three corporations are authorized to conduct business in the Commonwealth of Virginia.
Defendant RODO, Inc. (“RODO”) is a Virginia corporation with its principal place of business in Loudoun County, Virginia. Defendant Miriam Trucking (“Miriam Trucking”) was at all times relevant a Virginia corporation with its principal place of business in Loudoun County, Virginia. Defendant Rodolfo Tekle is a resident and citizen of the Commonwealth of Virginia.
The amount in controversy, exclusive of interest and costs, exceeds $75,000, and complete diversity exists between Wells Fargo and Defendants. The Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1332. Venue is proper pursuant to 28 U.S.C. § 1391.
The undisputed facts are as follows. In April 2008, Wells Fargo loaned RODO $265,318.00 for the purchase of two 2006 Peterbilt Trucks, Model 378, with vehicle identification numbers ending in 182 (“Truck 182”) and 186 (“Truck 186”). Am. Compl. ¶ 14; Answer ¶ 14. The following month, Wells Fargo loaned RODO $79,318.00 to finance the purchase of one 2005 Peterbilt Truck, Model 378, with a vehicle identification number ending in 923 (“Truck 923”). Am. Compl. ¶ 14; Answer ¶ 14. Pursuant to two loan contracts, RODO granted Wells Fargo a security interest in the three trucks. Am. Compl. ¶ 15; Answer ¶ 15. RODO assigned the loan contracts and the trucks to Miriam Trucking on July 17, 2008. Am. Compl. ¶ 17; Answer ¶ 17.
In August 2008, State Farm Fire issued an insurance policy to Miriam Trucking covering Trucks 182 and 186 during the coverage period of August 5, 2008 through March 1, 2009 (“State Farm Fire Policy”). Am. Compl. ¶ 18; Answer ¶ 18. The State Farm Fire Policy named Wells Fargo as loss payee with respect to both trucks. Am. Compl. ¶ 18; Answer ¶ 18. The same month, State Farm Auto issued an insurance policy to Miriam Trucking covering Truck 923 from August 13, 2008 through January 19, 2009 (“State Farm Auto Policy”). Am. Compl. ¶ 19; Answer ¶ 19. The State Farm Auto Policy named Wells Fargo as loss payee with respect to Truck 923.
On December 13, 2008, a fire destroyed Truck 186 and Truck 923. Am. Compl. ¶ 20; Answer ¶ 20. Wells Fargo, acting as loss payee under the two policies, filed claims with State Farm. State Farm refused to pay Wells Fargo's claims, and Wells Fargo brought suit in this Court. Wells Fargo now seeks judgment on the first two counts of its Amended Complaint. In Count I, Wells Fargo alleges that State Farm Fire's failure to provide coverage for Wells Fargo's loss of Truck 186 constitutes a breach of contract. In Count II, Wells Fargo alleges that State Farm Auto's failure to cover the loss of Truck 923 likewise constitutes a breach of contract.
After the pleadings close, a party may move for judgment on the pleadings. Fed.R.Civ.P. 12(c). “A Rule 12(c) motion for judgment on the pleadings is appropriate when all material allegations of fact are admitted in the pleadings and only questions of law remain.” Republic Ins. Co. v. Culbertson, 717 F.Supp. 415, 418 (E.D.Va.1989); see also King v. Gemini Food Servs., Inc., 438 F.Supp. 964, 966 (E.D.Va.1976) ( ). In the present matter, no issues of material fact exist to necessitate trial. Rather, the only contested issue is whether the relevant insurance policies obligate State Farm to pay Wells Fargo for the loss of the damaged trucks. The interpretation of an insurance policy presents a question of law “well suited for resolution by the court.” St. Paul Fire and Marine Ins. Co. v. Jacobson, 826 F.Supp. 155, 157 (E.D.Va.1993); see also Plunkett v. Plunkett, 271 Va. 162, 624 S.E.2d 39, 41 (2006) ().
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332, so it must apply state law in interpreting the relevant contract provisions. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). To determine which state's laws should apply, the Court applies the choice-of-law rules of the Commonwealth of Virginia. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). “Under Virginia law, a contract is made when the last act to complete it is performed, and in the context of an insurance policy, the last act is the delivery of the policy to the insured.” Seabulk Offshore, Ltd. v. Am. Home Assur. Co., 377 F.3d 408, 419 (4th Cir.2004); Buchanan v. Doe, 246 Va. 67, 431 S.E.2d 289, 291 (1993) (). The policies in the present case were delivered to defendants located in Virginia. Therefore, Virginia contract law will govern this Court's interpretation of the insurance policy between Wells Fargo and State Farm.
Virginia law treats insurance policies as any other contract. To determine the intent of the contracting parties, the court must consider the words the parties have used in the instrument. Virginia Farm Bureau Mut. Ins. Co. v. Williams, 278 Va. 75, 677 S.E.2d 299, 302 (2009). These words are assigned their “ordinary and customary meaning when they are susceptible of such construction.” Hill v. State Farm Mut. Auto. Ins. Co., 237 Va. 148, 375 S.E.2d 727, 729 (1989). “Provisions of an insurance policy must be considered and construed together, and any internal conflicts between provisions must be harmonized, if reasonably possible, to effectuate the parties' intent.” Williams, 677 S.E.2d at 302.
Where the terms of a policy are “plain and clear and not in violation of law or inconsistent with public policy,” a court is “bound to adhere to [them].” Pilot Life Ins. Co. v. Crosswhite, 206 Va. 558, 145 S.E.2d 143, 146 (1965); see also P'ship Umbrella, Inc. v. Fed. Ins. Co., 260 Va. 123, 530 S.E.2d 154, 160 (.2000) (“when the language in an insurance policy is clear and unambiguous, courts do not employ rules of construction; rather, they give the language its plain and ordinary meaning and enforce the policy as written”). If, however, “disputed policy language is ambiguous and can be understood to have more than one meaning,” the court must “construe the language in favor of coverage and against the insurer.” Williams, 677 S.E.2d at 302; see also United Serv. Auto. Ass'n v. Pinkard, 356 F.2d 35, 37 (4th Cir.1966) () (quoting Ayres v. Harleysville Mut. Cas. Co., 172 Va. 383, 2 S.E.2d 303, 305 (1939)); Hill, 375 S.E.2d at 730 (). “Where two interpretations equally fair may be made, the one which permits a greater indemnity will prevail because indemnity is the ultimate object of insurance.” Cent. Sur. & Ins. Corp. v. Elder, 204 Va. 192, 129 S.E.2d 651, 655 (1963).
Policy language that purports to exclude specific events from coverage is “construed most strongly against the insurer.” St. Paul Fire & Marine Ins. Co. v. S.L. Nusbaum & Co., Inc., 227 Va. 407, 316 S.E.2d 734, 736 (1984) (emphasis added); see also Pinkard, 356 F.2d at 37 () (quoting Ayres, 2 S.E.2d at 305); Williams, 677 S.E.2d at 302 (). For this reason, an insurer seeking to limit coverage through an exclusion must use language that is “reasonable, clear, and unambiguous.” Id.; see also Floyd v. N. Neck Ins. Co., 245 Va. 153, 427 S.E.2d 193, 196 (1993) ( ); Virginia Elec. & Power Co. v. Northbrook Prop. & Cas. Ins. Co., 252 Va. 265, 475 S.E.2d 264, 266 (1996) ().
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