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McDonald v. Geico General Insurance Co.

United States District Court, E.D. Missouri, Eastern Division

July 16, 2015

TIMOTHY J. McDONALD, Plaintiff,
v.
GEICO GENERAL INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER

STEPHEN N. LIMBAUGH, Jr., District Judge.

This matter is before the Court on cross-motions for summary judgment seeking a determination as to whether plaintiff is entitled to underinsured motorist coverage under his insurance policy with defendant. The motions are fully briefed and the matter is ripe for disposition. For the following reasons, the Court will grant defendant's motion and deny plaintiff's motion.

I. Background

Plaintiff Timothy McDonald was injured while operating his 1986 Honda motorcycle on July 19, 2013 when a vehicle operated by Heather Kraml made a left turn in front of him causing a collision. Following the accident, plaintiff received $50, 000 from Kraml's liability insurer, which was the full limit of liability coverage available under her policy. Additionally, he received $100, 000 in underinsured motorist (UIM) coverage from a Progressive policy covering his motorcycle. Plaintiff made a claim for UIM benefits under his GEICO General Insurance Company policy covering two motor vehicles that he owned. GEICO denied his claim. Plaintiff then filed this action in state court alleging breach of contract and seeking $100, 000 in UIM benefits under the GEICO policy. Defendant removed the matter to this Court based on diversity jurisdiction.

The parties have filed cross-motions for summary judgment as to the UIM coverage in the GEICO policy. Defendant argues that plaintiff is not entitled to UIM coverage because Kraml's vehicle does not meet the definition of " underinsured motor vehicle" in the GEICO policy. Defendant further argues that an exclusion in the policy as to an owned but not insured vehicle[1] precludes UIM coverage. Plaintiff contends that an ambiguity regarding the UIM limits in the GEICO policy allows for stacking and, when the two UIM limits in the policy are stacked, the UIM coverage is triggered and he is entitled to $100, 000 in UIM benefits. Plaintiff further argues that, based on the definition of " owned auto " in the GEICO policy, the owned but not insured vehicle exclusion is not applicable.

II. Summary Judgment Standard

Because this is a diversity case, the Court applies state substantive law and federal procedural law. Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427 (1996); see also Erie R. Co. v. Tompkins, 304 U.S. 64 (1938). Pursuant to Federal Rule of Civil Procedure 56(a), a district court may grant a motion for summary judgment if all of the information before the court demonstrates that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The burden is on the moving party. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op. Inc., 838 F.2d 268, 273 (8th Cir.1988). "Where parties file cross-motions for summary judgment, each summary judgment motion must be evaluated independently to determine whether a genuine issue of material fact exists and whether the movant is entitled to judgment as a matter of law." Jaudes v. Progressive Preferred Ins. Co., 11 F.Supp.3d 943, 947 (E.D. Mo. 2014) (citing Husinga v. Federal-Mogul Ignition Co., 519 F.Supp.2d 929, 942 (S.D. Iowa 2007)). Because "the interpretation and construction of insurance policies is a matter of law, ... such cases are particularly amenable to summary judgment." John Deere Ins. Co. v. Shamrock Indus., Inc., 929 F.2d 413, 417 (8th Cir. 1991).

III. Facts

The material facts are not in dispute. On July 19, 2013, plaintiff Timothy J. McDonald was driving a 1986 Honda motorcycle, which he owned. As plaintiff approached the intersection of North Outer Road of Interstate 70 and Cannonball Lane, in O'Fallon, Missouri, a vehicle operated by Heather Kraml made a left turn in front of plaintiff, causing a collision. Plaintiff's damages from the collision exceed the sum of $250, 000.

Following the accident, Kraml's liability insurer, Shelter Mutual Insurance Company, paid plaintiff $50, 000 in settlement funds, the full limit of liability coverage available under Kraml's policy. Additionally, plaintiff received $100, 000 in settlement funds from his UIM coverage under his Progressive insurance policy, which covered the Honda motorcycle that he was operating at the time of the accident. The $100, 000 payment represented the per person limit of UIM coverage available under that policy.

At the time of the accident, plaintiff was a named insured on a GEICO automobile insurance policy issued on two motor vehicles he owned that were not involved in the accident. The Honda motorcycle that plaintiff was operating at the time of the accident is not described on the declarations pages of the GEICO policy. Subject to certain provisions, conditions, and exclusions, the GEICO policy provides UIM coverage in the amount of $50, 000 per person. The GEICO policy contains the following relevant UIM provisions:

Automobile Policy Amendment Underinsured Motorist Coverage Missouri
Your policy is amended to provide Underinsured Motorist Coverage subject to the following:
DEFINITIONS
The definitions of terms in Section I - Liability Coverages, of your policy apply to this coverage except for the following special definitions:
* * *
2. Insured auto is an auto:
(a) Described in the declarations and covered by the bodily injury liability coverage of this policy.
(b) Of the private passenger, farm or utility auto type, ownership of which you acquire during the policy period, if (i) it replaces an owned auto; or (ii) we insure all private passenger, farm and utility autos owned by you on the date of the acquisition, and you ask us to add it to the policy no more than 30 days later.
(c) Temporarily substituted for an insured auto when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.
(d) Operated by you or your spouse if a resident of the same household.
* * *
3. Occupying means in, upon, entering into or alighting from.
* * *
5. Underinsured Motor Vehicle means a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage.
* * *
LOSSES WE PAY
We will also pay damages the insured is legally entitled to recover for bodily injury caused by an accident and arising out of the ownership, maintenance, or use of an underinsured motor vehicle. However, we will not pay until the total of all bodily injury liability ...

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