Lewis v. Government Employees Insurance Company

[5] 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA [8] 9 CLAIRE LEWIS, an individual, Case No.: 3:19-cv-02035-H-AGS 10 Plaintiff, ORDER DENYING DEFENDANT 11 v. GEICO’S MOTION FOR SUMMARY JUDGMENT 12 GOVERNMENT EMPLOYEES INSURANCE COMPANY, 13 [Doc. No. 11.] Defendant. [15] On February 20, 2020, Defendant Government Employees Insurance Company [16] (“Defendant” or “GEICO”) filed a motion for summary judgment. (Doc. No. 11.) On [17] April 15, 2020, Plaintiff Claire Lewis (“Plaintiff”) filed a response in opposition to [18] Defendant’s motion. (Doc. No. 14.) On April 22, 2020, Defendant filed its reply.1 (Doc. [19] No. 15.) For the reasons below, the Court denies Defendant’s motion for summary [20] judgment. [21] Background [22] This case asks whether Plaintiff, named as one of the “Additional Drivers” on her [23] parents’ car insurance policy, is someone “named in the declarations” of that policy for [24] purposes of receiving coverage for injuries caused by an underinsured motorist. On [27] 1 In Defendant’s reply, Defendant also objected to certain statements Plaintiff made in the 28 declaration she filed in her opposition to the motion for summary judgment. (Doc. No. 15-2.) The Court, 1 September 23, 2015, Plaintiff and her sister were walking across a street intersection in San 2 Diego when an automobile struck Plaintiff. (Doc. No. 11-13, Ex. 8 at RT9:15–11:4.) 3 Plaintiff suffered several injuries, incurring over $6,000 in medical expenses. (Doc. No. 4 11-11, Ex. 6 at 5–7.) After the accident, Plaintiff filed an insurance claim against the driver 5 who hit her and recovered $15,000 from the driver’s insurer. (Id.) Plaintiff also sought 6 compensation for her injury through her parents’ automobile insurance policy with 7 Defendant, Policy No. 0987-71-22-05 (the “Policy”), invoking its provisions covering 8 injuries produced by uninsured or underinsured motorists (“UM/UIM”). (Doc. No. 11-3, 9 Martinez Decl. ¶¶ 7–8.) 10 The Policy limits its UM/UIM coverage to “insured” individuals, whom the Policy 11 defines as: 12 (a) the individual named in the declarations and his or her spouse; (b) relatives of (a) above if residents of his household; [13] (c) any other person while occupying an owned auto; [14] (d) any person who is entitled to recover damages because of bodily injury 15 sustained by an insured under (a), (b), and (c) above. [16] (Doc. No. 11-6, Ex. 1 at 15.) The Policy’s declarations page names Plaintiff’s parents, [17] Brian and Susan Lewis, as the “Named Insureds,” and it names Plaintiff and her sister as [18] “Additional Drivers.” (Id. at 4.) [19] When Plaintiff filed a claim for coverage through her parents’ insurance, Defendant [20] initiated an investigation of her claim. (Doc. No. 11-3, Martinez Decl. ¶¶ 4–24.) On [21] October 7, 2015, Defendant denied Plaintiff’s claim for insurance coverage after [22] determining that Plaintiff was not a “resident” of her parents’ household. (Id. ¶ 25; Doc. [23] No. 11-15, Ex. 10.) [24] On November 13, 2017, Plaintiff sent a letter to Defendant demanding arbitration of [25] Plaintiff’s claim for coverage. (Doc. No. 11-10, Ex. 5.) Upon receipt of Plaintiff’s letter, [26] Defendant initiated arbitration proceedings. (Doc. No. 11-3, Martinez Decl. ¶ 19.) During [27] arbitration, Defendant conducted discovery, served interrogatories, and examined Plaintiff [28] 1 under oath. (Id. ¶¶ 20–24.) On November 19, 2018, Defendant sent Plaintiff a letter 2 denying coverage. (Id. ¶ 25; Doc. No. 11-15, Ex. 10.) 3 On June 25, 2019, Plaintiff filed a complaint in the San Diego Superior Court 4 alleging breach of contract and breach of the implied covenant of good faith and fair 5 dealing. (Doc. No. 1-2.) On October 22, 2019, Defendant removed the action to federal 6 court.2 (Doc. No. 1.) 7 Discussion 8 I. Legal Standards 9 Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil 10 Procedure if the moving party demonstrates that there is no genuine issue of material fact 11 and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. 12 v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing 13 substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., [14] 477 U.S. 242, 248 (1986); Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., 15 Inc., 618 F.3d 1025, 1031 (9th Cir. 2010). “A genuine issue of material fact exists when 16 the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” 17 Fortune Dynamic, 618 F.3d at 1031 (internal quotation marks and citations omitted); 18 accord Anderson, 477 U.S. at 248 . “Disputes over irrelevant or unnecessary facts will not 19 preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors 20 Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 21 A party seeking summary judgment always bears the initial burden of establishing [23] 24 2 “[A]s specified in § 1446(a), a defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. Evidence establishing the 25 amount is required by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant’s allegation.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81 , 89 (2014). 26 Though Plaintiff did not specify an amount in controversy in the complaint (Doc. No. 1-2), Defendant offered evidence suggesting that Plaintiff sought an amount greater than $75,000 (Doc. No. 1), and [27] Plaintiff did not contest Defendant’s removal of the case to federal court. [28] 1 the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323 . The moving 2 party can satisfy this burden in two ways: (1) by presenting evidence that negates an 3 essential element of the nonmoving party’s case; or (2) by demonstrating that the 4 nonmoving party failed to establish an essential element of the nonmoving party’s case that 5 the nonmoving party bears the burden of proving at trial. Id. at 322–23; Jones v. Williams, [6] 791 F.3d 1023, 1030 (9th Cir. 2015). Once the moving party establishes the absence of a 7 genuine issue of material fact, the burden shifts to the nonmoving party to “set forth, by 8 affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine 9 issue for trial.’” T.W. Elec. Serv., 809 F.2d at 630 (quoting former Fed. R. Civ. P. 56(e)); 10 accord Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007). To carry 11 this burden, the non-moving party “may not rest upon mere allegation or denials of his 12 pleadings.” Anderson, 477 U.S. at 256 ; see also Behrens v. Pelletier, 516 U.S. 299 , 309 13 (1996) (“On summary judgment, . . . the plaintiff can no longer rest on the pleadings.”). 14 Rather, the nonmoving party “must present affirmative evidence . . . from which a jury 15 might return a verdict in his favor.” Anderson, 477 U.S. at 256 . 16 When ruling on a summary judgment motion, the court must view the facts and draw 17 all reasonable inferences in the light most favorable to the non-moving party. Scott v. 18 Harris, 550 U.S. 372, 378 (2007). The court should not weigh the evidence or make 19 credibility determinations. See Anderson, 477 U.S. at 255 . “The evidence of the non20 movant is to be believed.” Id. Further, the Court may consider other materials in the record 21 not cited to by the parties, but it is not required to do so. See Fed. R. Civ. P. 56(c)(3); 22 Simmons v. Navajo Cnty., 609 F.3d 1011, 1017 (9th Cir. 2010). 23 II. Analysis 24 Defendant seeks summary judgment, arguing that Plaintiff was not a resident of her 25 parents’ home and therefore not within the UM/UIM coverage of her parents’ insurance 26 policy. (Doc. No. 11-1.) Plaintiff argues that she qualifies for coverage under a separate 27 clause that extends coverage to “the individual named in the declarations.” (Doc. No. 14 28 at 6.) Plaintiff also claims that there is at least a triable issue of fact over whether she was 1 a resident of her parents’ home. (Id. at 6–10.) The Court agrees that Plaintiff qualifies for 2 coverage under the Policy as an individual named in the Policy’s declarations. 3 The interpretation of an insurance policy is a question of law.3 Hartford Cas. Ins. 4 Co. v. Swift Distribution, Inc., 326 P.3d 253, 259 (Cal. 2014). Such interpretation must 5 give effect to “the mutual intention of the parties at the time the contract is formed . . . .” 6 Waller v. Truck Ins. Exch., Inc., 900 P.2d 619, 627 (Cal. 1995). To determine the intent 7 of the parties behind an insurance contract, the Court “look[s] first to the language of the 8 contract in order to ascertain its plain meaning,” reading the language in its “ordinary and 9 popular sense, unless used by the parties in a technical sense or a special meaning is given 10 to them by usage.” Id. (internal citations and quotation marks omitted). Language in an 11 insurance contract “must be interpreted as a whole, and in the circumstances of the case, 12 and cannot be found to be ambiguous in the abstract.” Id. 13 Reading the Policy’s plain language, Plaintiff qualifies for UM/UIM coverage. The 14 Policy extends such coverage to “the individual named in the declarations,”4 and Plaintiff 15 is named as one of the “Additional Drivers” at the top of the declarations page, parallel to 16 where her parents’ names are listed. (Doc. No. 11-6, Ex. 1 at 4, 15.) Thus, Plaintiff is an 17 “individual named in the declarations.” See Giovanna v. Vigilant Ins. Co., 202 Cal. Rptr. 18 364, 365–66 (Cal. Ct. App. 1984) (appellant’s daughter, an “occasional driver,” did not 19 qualify for coverage as a “named insured” because her name “does not appear anywhere 20 on the declarations page or elsewhere in the policy or the endorsements thereto”). This 21 reading of the Policy’s plain language is confirmed when reading the Policy as a whole. 22 Courts “should give effect to every provision,” and “an interpretation which renders part 23 of the instrument to be surplusage should be avoided.” Flores v. Barr, 934 F.3d 910 , 915 [25] 3 In this diversity action, the law of the forum state, California, governs interpretation of the 26 insurance policy. See Bell Lavalin, Inc. v. Simcoe & Erie Gen. Ins. Co., 61 F.3d 742, 745 (9th Cir. 1995). [27] 4 A strict reading of “the individual” to refer to only one person makes little sense in this case 28 because the Policy lists, at minimum, two individuals, Brian and Susan Lewis, as “Named Insured.” (Doc. 1 (9th Cir. 2019) (internal citations and quotation marks omitted) (applying California law). 2 Here, the Policy makes no reference to “Additional Drivers” other than when it names them 3 in the declarations. Thus, to construe the Policy as Defendant does would render the 4 “Additional Drivers” mere “surplusage,” since the Policy otherwise does not grant any 5 express coverage to the “Additional Drivers.” For the “Additional Drivers” to have any 6 meaning in the Policy, they must count as individuals “named in the declarations.” 7 Accordingly, Plaintiff qualifies for UM/UIM coverage as a person named in the 8 declarations. 9 Defendant contends that the Policy’s UM/UIM provision emerges from statute and 10 must be construed to implement the statute’s intent. See Prudential-LMI Com. Ins. v. 11 Superior Court, 798 P.2d 1230, 1236 (Cal. 1990), as modified (Dec. 13, 1990). Even when 12 doing so, however, the Court’s analysis remains the same.5 The UM/UIM provision at 13 issue here is required by California’s uninsured motorist statute, California Insurance Code 14 § 11580.2. The statute is designed “to protect one lawfully using the highway by assuring 15 him of payment of a minimum amount of an award to him for bodily injury caused by the 16 actionable fault of another driver.” Hartford Fire Ins. Co. v. Macri, 842 P.2d 112, 114 (Cal. 17 1992). Consequently, “courts are required to construe the uninsured motorist statute . . . in 18 favor of coverage wherever possible. Any doubtful language in the statute should be 19 resolved in favor of the insured.” Craft v. State Farm Mut. Auto. Ins. Co., 18 Cal. Rptr. 2d 20 293, 298 (Cal. Ct. App. 1993); see also Borders v. Great Falls Yosemite Ins. Co., 140 Cal. 21 [22] 5 A policy provision required by law may fall under different rules of construction, those governing [23] the construction of statutes. See Galanty v. Paul Revere Life Ins. Co., 23 Cal. 4th 368, 374 , 1 P.3d 658 , 24 662 (Cal. 2000). However, the rules of statutory interpretation bear close similarities to the rules for constructing insurance contracts. Compare State Farm Mut. Auto. Ins. Co. v. Garamendi, 88 P.3d 71 , 78 25 (Cal. 2004), as modified (June 9, 2004) with Waller v. Truck Ins. Exch., Inc., 900 P.2d 619, 627 (Cal. 1995). In this case, shifting to the rules of statutory construction would only have the effect of nullifying 26 the default rule that ambiguities in insurance policies are construed in favor of coverage. See Interinsurance Exch. v. Marquez, 172 Cal. Rptr. 263, 264 (Cal. Ct. App. 1981). But even then, the [27] insurance rule in favor of coverage is replaced by the statutory rule that also resolves any “doubtful 28 language in [California Insurance Code § 11580.2]” in “favor of coverage.” Craft v. State Farm Mut. 1 Rptr. 33, 40 (Cal. Ct. App. 1977). However, “the principle of liberal interpretation should 2 not be applied to give a forced construction or one which inserts a requirement not 3 contained in the statute where the statute is clear in the context of the factual situation.” Id. 4 Defendant argues that the language of California Insurance Code § 11580.2 excludes 5 additional drivers from UM/UIM coverage. The Court disagrees. The statute uses the 6 same language as the Policy’s provisions. It defines “insured” persons as: (1) “the named 7 insured and the spouse of the named insured and, while residents of the same household, 8 relatives of either while occupants of a motor vehicle or otherwise,” and (2) “any other 9 person while in or upon or entering into or alighting from an insured motor vehicle.” Id. § 10 11580.2(b). The statute then defines the “named insured” as “the individual or organization 11 named in the declarations of the policy . . . .” Id. In short, the statute simply defines a 12 “named insured” as someone “named in the declarations.” Id. As stated above, Plaintiff 13 is someone “named in the declarations,” and § 11580.2 provides no language that 14 contradicts this conclusion. 15 Additionally, Defendant cites two cases, Shaw v. GEICO and Mercury Insurance 16 Company v. Pearson, to claim that “Additional Drivers” do not receive UM/UIM coverage. 17 But neither case applies here. In Shaw v. GEICO, the plaintiff conceded that 18 California Insurance Code § 11580.2 would have excluded her from coverage, and Shaw 19 did not analyze the language in either the policy or in § 11580.2. No. CV-187601-DSFF20 FMX, 2019 WL 2610958 , at *3 (C.D. Cal. June 4, 2019). Meanwhile, Mercury Insurance 21 Company v. Pearson held that a plaintiff did not receive UM/UIM coverage because of the 22 specific language of the policy at issue there. In Mercury, the plaintiff received coverage 23 from the policy through a “Designated Person Endorsement.” 87 Cal. Rptr. 3d 310 , 315 24 (Cal. Ct. App. 2008). The Endorsement amended the section of an insurance policy 25 providing protections against third party liability to include “the person(s) designated by 26 name in this endorsement” as one of the “persons insured.” Id. The Endorsement did not 27 make a similar amendment to the section of the policy providing UM/UIM coverage. Id. 28 Further, the Endorsement added language expressly limiting the policy’s coverage of the 1 || designated person, stating: 2 It is agreed that the designated person(s) resides with the ‘Named Insured’ but 3 is not a ‘relative’ as the words ‘Named Insured,’ and ‘relative’ are defined in the Policy. .. . The uninsured motorist coverage does not provide coverage 4 for bodily injured sustained by a resident of the same household as the Named 5 Insured, who is not a relative, unless such person(s) is occupying a motor vehicle listed in the policy declarations. It is agreed the designated person(s) 6 is a resident of the same household as the Named Insured, is not a relative, 4 and is only provided coverage when operating or occupying a motor vehicle listed in the policy declarations. [9] Id. (emphasis omitted). Thus, Mercury involved a policy that expressly limited the 10 plaintiff's coverage to when the plaintiff was operating or occupying a motor vehicle. In ll contrast, the Policy here does not involve any provision that expressly limits the coverage 12 received by the “Additional Drivers.” 3 Given the plain language of the Policy, as well as the need to construe uninsured 14 motorist provisions in favor of coverage, Craft, 18 Cal. Rptr. 2d at 298, the Court finds that 15 Plaintiff qualifies for coverage under the Policy’s UM/UIM provisions. Accordingly, 16 Defendant is not entitled to judgment as a matter of law,° and the Court denies Defendant’s 7 motion for summary judgment. 18 Conclusion 19 For the reasons above, the Court denies Defendant’s motion for summary judgment. 20 IT IS SO ORDERED. DATED: May 7, 2020 21 H isaLo thf 22 MARILYN E. HUFF, Distric ge 3 UNITED STATES DISTRICT COURT [25] 26 || —_______ 27 Because the Court finds that Plaintiff qualifies for coverage as an individual named in the 28 declarations, the Court need not address whether Plaintiff qualifies under the Policy’s clause providing coverage for resident relatives. (Doc. No. 11-6, Ex. 1 at 15.) Qo