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Davis v. Farmers Insurance Co., Inc.

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

October 20, 2017

GEORGE DAVIS, Plaintiff,
v.
FARMERS INSURANCE CO., INC., Defendant.

          MEMORANDUM AND ORDER

          RODNEY W. SIPPEL UNITED STATES DISTRICT JUDGE

         Plaintiff George Davis and Defendant Farmers Insurance Co., Inc., (“Farmers”) move for summary judgment in this personal injury insurance case. Davis seeks a declaratory judgment that his insurance policy with Farmers (the “Policy”) is ambiguous and therefore should be read to provide underinsured motorist (UIM) coverage for his motorcycle. He also argues that his Policy allows stacking and that this conflict is ripe for adjudication. Farmers argues that the Policy unambiguously denies coverage, that “anti-stacking” provisions also deny coverage, and that Davis' case is not ripe. For the reasons below, I will rule that Davis' claim is ripe, but that he is not entitled to declaratory relief, and I will dismiss his claims.

         BACKGROUND

         On April 23, 2016, Davis suffered bodily injuries after being struck by an automobile while riding his Harley Davidson motorcycle. (Joint Stipulation of Fact ¶ 2-3, ECF No. 1.) Mary Cleary, the driver of the automobile was deemed at fault, and her insurance company, Travelers Insurance (“Travelers”), offered to pay $100, 000, its liability limit, in exchange for a release from all claims. Id. at ¶ 5. As a result of the motorcycle accident, Davis has incurred medical expenses greater than the $100, 000 policy limit that Travelers offered to pay. Id. at ¶ 7. As a result, Davis sought underinsured motorist (UIM) coverage payments he believes he is owed pursuant to two insurance policies. Foremost Insurance Company (“Foremost”) insures Davis' motorcycle and has offered to pay its UIM limits of $25, 000 to him. Id. at ¶ 6. Farmers also provides UIM coverage for Davis. Id. at ¶ 1. However, Davis and Farmers disagree about whether his Farmers Policy covers his motorcycle, because only two personal vehicles, and not a motorcycle, are listed on the declarations page of the Farmers Policy.

         For the purpose of deciding summary judgment, the parties stipulate that Davis has incurred medical expenses from the motorcycle accident greater than the total insurance limit of $125, 000 offered to him by Travelers and Foremost. Id. at ¶ 7. To cover this gap, Davis notified Farmers on June 9, 2016 that he sought additional UIM coverage from Farmers. (See Defendant Farmers Insurance Company, Inc.'s Statement of Uncontroverted Material Facts in Support of its Motion for Summary Judgment, ¶ 26, ECF No. 15-1.) On June 11, 2016, Farmers sent a letter to Davis, stating that Farmers was denying UIM coverage under the Policy. Id. at ¶ 27.

         On February 3, 2017, Davis filed his Petition for Declaratory Judgment with the Circuit Court of Saint Louis County, Missouri. No. 17SL-CC00473 (ECF No. 1-2). Less than thirty days after being served with or receiving a copy of the petition, Farmers filed a notice of removal to this court. Davis and Farmers filed opposing motions for summary judgment. Davis argues that the UIM policy, owned vehicle exclusion, and anti-stacking provisions are ambiguous and that they should be interpreted to provide UIM coverage for his motorcycle. Farmers argues that the same provisions are unambiguous, and that they preclude Davis' recovery under the Policy. Farmers also argues that Davis' petition for declaratory judgment is not ripe, because Davis has not accepted payment offered by Travelers and Foremost.

         LEGAL STANDARD

         Pursuant to Federal Rule of Civil Procedure 56(c), I only grant a motion for summary judgment if, based upon the pleadings, admissions, depositions and affidavits, there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a), (c). “Where parties file cross-motions for summary judgment, ” I must evaluate “each summary judgment motion … independently to determine whether a genuine dispute 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). In this evaluation, I view all facts and factual inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The moving party has the burden of establishing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in its pleadings, but by affidavit or other evidence, must set forth specific facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(c)(1), (e).

         ANALYSIS

         I. SUBJECT MATTER JURISDICTION

         a. Ripeness

         If a claim is not ripe, I do not have subject matter jurisdiction to hear the case. See Wax ‘n Words v. City of St. Paul, 213 F.3d 1016, 1020 (8th Cir. 2000) (“This dismissal could more properly have been made pursuant to Fed.R.Civ.P. 12(b)(1) because the case is not ripe for adjudication.”). Ripeness is a constitutional requirement that serves “to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements.” Pub. Water Supply Dist. No. 10 of Cass Cnty., Mo. v. City of Peculiar, 345 F.3d 570, 572 (8th Cir. 2003) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967)). When determining ripeness, courts should look to “the fitness of the issues for judicial decision” and “the hardship to the parties of withholding court consideration.” Neb. Public Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 38 (8th Cir. 2000) (emphasis added) (quoting Abbott Labs, 387 U.S. 136, 149).

         The fitness requirement is designed to “safeguard[] against judicial review of hypothetical or speculative disagreements.” Id. at 1038. “Courts shy from settling disputes contingent in part on future possibilities.” Id. If a dispute is contingent, it still may be ripe “where [1] an issue is largely legal in nature, [2] may be resolved without further factual development, or [3] where judicial resolution will largely settle the parties' dispute.” Id. (citing Abbott Labs at 149; Pacific Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 190, 203 (1983)). In evaluating the hardship requirement, courts ask whether delaying review will cause injury to the parties. Id. Injury includes “both the traditional concept of actual damages-pecuniary or otherwise-and also the heightened uncertainty and resulting behavior modification that may result from delayed resolution.” Id. (citing Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 733-34 (1998)).

         In this case, defendant Farmers argues that Davis' claims are not ripe because a clause in the Policy creates an unfulfilled contingency. The UIM section of the Policy states that “[Farmers] will pay under this coverage only after the limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements.” (See Endorsement Adding Underinsured Motorist Coverage - Missouri (MO025 - 1st Edition), 37, ECF No. 1-3, Exh. B.) Farmers alleges that Davis has not yet accepted the tortfeasor's offered settlement of $100, 000. (See Defendant Farmers Insurance Company, Inc.'s Statement of Uncontroverted Material Facts in Support of its Motion for Summary Judgment, ¶ 7-9, ECF No. 15-1.) In Farmers' view, “a ruling by this Court would … [be] contingent on future acts of third-parties, ” namely Davis' acceptance of the settlement amount from Travelers Insurance. (See Reply to Plaintiff's Memorandum, p. 7, ECF No. 20.)

         I reject these arguments and find that Davis' claims are ripe. His claims meet the “fitness” requirement because the factual record need not be developed any further. Davis has been physically injured and has sought recovery through his Policy. Farmers has denied coverage based on its reading of the Policy. The only remaining task is contract interpretation, which is a question of law. See Neb. Public Power Dist. at 1038. Accordingly, Davis' claim for declaratory relief is not contingent or speculative. See id. at 1038. His claim is based on an actual dispute that needs no further factual development.

         Davis' claim also meets the “hardship” requirement because denying review would constitute “significant harm.” See id. Denying review would subject Davis to “heightened uncertainty and … behavior modification.” See Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 733-34. He would be forced to either accept an insurance settlement with Travelers that does not fully compensate him for his injuries, or else abandon his claim against Farmers.[1] Because Davis' claims meet the “fitness” and “hardship” requirements, they are ripe and I can rule on this matter.

         b. Diversity Jurisdiction

         To exercise subject matter jurisdiction over this state law claim, I must also find that the parties are citizens of different states and that the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332. “[A] complaint that alleges the jurisdictional amount in good faith will suffice to confer jurisdiction, ” provided there is no apparent legal certainty to the contrary. Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002). In support of the notice of removal, Farmers states on information and belief that Davis is a citizen of the State of Missouri and that Farmers is a foreign company existing under the laws of, and with its principal place of business in, the state of Kansas. Farmers also claims that the amount in controversy is $500, 000, which is the coverage limit of Davis' UIM policy. ...


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