Whitney v. Shelter Mut. Ins.

• Decision Date: 09 November 2004
• Docket Number: No. 04-2079.,04-2079.
• Citation: 383 F.Supp.2d 1112
• Parties: Amanda Leigh WHITNEY Plaintiff v. SHELTER MUTUAL INSURANCE Defendant
• Court: U.S. District Court — Western District of Arkansas

383 F.Supp.2d 1112

Amanda Leigh WHITNEY Plaintiff v. SHELTER MUTUAL INSURANCE Defendant

No. 04-2079.

United States District Court, W.D. Arkansas, Fort Smith Division.

November 9, 2004.

J. Randolph Shock, Fort Smith, AR, for Plaintiff.

Thomas B. Pryor, Fort Smith, AR, for Defendant.

ORDER

DAWSON, District Judge.

The Plaintiff instituted this action in state court, asserting that Defendant breached an insurance contract entered into by the parties. Defendant removed the action to this Court based on diversity jurisdiction. (Doc. 1 & Attach.) Currently before the Court is Defendant's Motion for Summary Judgment, Plaintiff's Response and Counter Motion for Partial Summary Judgement, Defendant's Reply, Defendant's Response to Plaintiff's Counter Motion for Partial Summary Judgment, Plaintiff's Reply to Defendant's Response to Plaintiff's Counter Motion for Partial Summary Judgment, and Defendant's Supplemental Reply. (Docs. 10, 13, 16, 17, 18, and 20.) For the reasons that follow, Defendant's motion is GRANTED, and Plaintiff's motion is DENIED.

This is a diversity action brought by Amanda Leigh Whitney (hereinafter "Whitney") who qualifies as an "additional insured" seeking to recover from Defendant, Shelter Mutual Insurance Company (hereinafter "Shelter"), under the provisions of Uninsured Motorists Coverage (hereinafter "UM") contained in policies of insurance written by Shelter. The facts of this case are not in dispute. (Doc. 9.) On September 29, 2002, Plaintiff was involved in a serious accident while riding as a passenger on a four-wheeler all-terrain vehicle owned by an uninsured and negligent party. As a result of the accident, Plaintiff sustained injuries with resulting damages in an amount over $100,000. At the time of the accident, there were in effect four policies of automobile insurance issued by Shelter; except for the declarations, the four Shelter policies are identical. Each policy reflects a charge for each listing of the UM coverage. The vehicle in question was an uninsured motor vehicle within the meaning of the UM coverage of the Shelter policies. Shelter agrees that Whitney is entitled to recover the total sum of $100,000 under the UM coverage for injuries sustained in the September 29, 2002 accident. (Doc. 9.)

The crux of the disputed matter is straightforward and provides the basis for the parties' motions for summary judgement. Whitney claims that she is entitled to "stack" the UM coverages of the four Shelter policies (Doc. 13), and Shelter denies that Whitney may "stack" her UM coverages under the four policies. (Doc. 10.)

The term "stacking" is used to describe a situation where all available policies are totaled to create a larger pool from which the injured party may draw in order to compensate him or her for the actual loss where a single policy is not sufficient to render one whole. Stacking does not allow an insured to obtain a double recovery or a windfall of any sort, but rather increases the pool of insurance money available to an insured who becomes injured. To obtain that money, the insured must prove that his injuries justify the recovery sought. See Neil Chamberlin and J. Stephen Holt, Why Arkansas Should Overturn Its Anti-Stacking Precedent: A Look At Aggregating Uninsured and Underinsured Motorist Coverage, 21 U. Ark. Little Rock L.J. 413 (1999). Here, each of Whitney's four policies with Shelter have $100,000 in UM coverage. (Doc. 1. Attach.) As reflected above, the parties have stipulated that Whitney's injuries are not less than the $100,000 Shelter has agreed to pay (representing the policy limits of one policy). Whitney argues that she should be entitled to a pool of $400,000 from which to be made whole. Shelter asserts that, as a matter of law, Whitney is not entitled to stack the coverages.

This Court's function at the summary judgment stage is not to weigh the evidence, but to determine whether the record, when viewed in the light most favorable to the non-moving party, leaves no genuine issue of material fact to be decided, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Johnson v. Enron Corp., 906 F.2d 1234, 1237 (8th Cir.1990). To survive a motion for summary judgment, the non-moving party need only show sufficient evidence that supports a material factual dispute that would require resolution by a trier of fact. Anderson, 477 U.S. at 248-49, 106 S.Ct. 2505 (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.... Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505.

The parties in this case both agree that the facts are not disputed. (Docs. 11 and 14.) What remains is a question of law. The parties have both briefed the issues in this case. Succinctly, this case is about the interpretation of an insurance contract and the application of Arkansas law. It is important to analyze the policies in question to ascertain what they provide with respect to UM coverage.

The parties have stipulated that the policies in question are attached to Shelter's original answer to the complaint. (Doc. 9.) They each consist of four Declarations Pages showing $100,000 in UM coverage for "each person" on each policy. Also attached is a copy of the policy provisions that apply to all four policies. (Doc. 1 Attach. Shelter Form A-283-A). Coverage "E" of the provisions is entitled UNINSURED MOTORISTS (DAMAGES FOR BODILY INJURY) and pertains to UM. It states that Shelter will pay for damages relating to bodily injury arising out of an accident with an uninsured motorist. Under the EXCLUSIONS section of Coverage "E", entitled "LIMITS OF LIABILITY" the policy states in pertinent part:

"(1) The limit of liability stated in the Declarations for "each person" is the limit of our liability for all damages for care or loss of services or consortium, because of bodily injury sustained by one person as the result of any one accident." (Doc. 1 Attach, Shelter Form A-283-A.)

Still within the EXCLUSIONS section of coverage "E", under the heading "OTHER INSURANCE", the policy states:

"With respect to injury to an insured while in an auto not owned by you, this insurance shall apply only as excess insurance over any other similar insurance available to the insured as primary insurance. This insurance will then apply only in the amount that its limits of liability exceed the limits of liability of the other insurance. Except as above, if the insured has other insurance available, the damages shall not exceed the limits of liability of this insurance or of the other insurance, whichever is larger. We will not be liable for a greater proportion of any loss to which this coverage applies than the limits of liability of this insurance bear to the sum of the limits of liability of this insurance and any other similar insurance available to the insured." Id.

In PART VII, entitled "CONDITIONS", under the heading "APPLICATION OF POLICY PROVISIONS", the policy states in pertinent part:

"Policy provisions apply separately to each of two or more autos insured under this policy." Id.

Still within the CONDITIONS section, under the heading "OTHER AUTO INSURANCE IN THE COMPANY", the policy states:

"With respect to any occurrence, accident, death, or loss to which this and any other auto insurance policy issued to you by us also applies, the total limit of our liability under these policies won't exceed the highest applicable limit of liability or benefit under any one policy." Id.

Given the foregoing policy provisions, the Court examines applicable Arkansas law, as we are obliged to apply Arkansas law. The Court must examine any issue of ambiguity, construction, and the legality of applying anti-stacking clauses in contracts of insurance in Arkansas.

The initial determination of the existence of an ambiguity rests with the Court and, when a contract is unambiguous, its construction is a question of law for the court. Kanning v. Allstate Ins. Cos., 67 Ark.App. 135, 992 S.W.2d 831 (1999). An insurance policy is unambiguous and its construction and legal effect are questions of law when its terms are not susceptible to more than one equally reasonable construction. See id. The language in an insurance policy is to be construed in its plain, ordinary, and popular sense. Tri-State Ins. Co. v. Sing, 41 Ark.App. 142, 850 S.W.2d 6 (1993). Contracts of insurance should receive a practical, reasonable, and fair interpretation consonant with the apparent object and intent of the parties in the light of their general object and purpose. See id. Insurance policy provisions must be construed most strongly against the insurance company which prepared the policy. Smith v. Prudential Property and Cas. Ins. Co. 340 Ark. 335, 10 S.W.3d 846 (2000). If a reasonable construction would justify recovery under an insurance policy, it is the duty of the court to give that construction to the policy. Id. If the language in an insurance policy is ambiguous or if there is doubt or uncertainty as to its meaning and it is fairly susceptible of two interpretations, one favorable to the insured and the other favorable to the insurer, the former will be adopted. Id.

Shelter directs this Court to Shelter Mutual Ins. Co. v. Williams, 69 Ark.App. 35, 9 S.W.3d 545 (2000) where the Arkansas Court of Appeals had occasion to interpret the identical language set forth above under the heading "OTHER...