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Bone v. Navistar, Inc.

United States District Court, W.D. Arkansas, Hot Springs Division

May 10, 2018




         Before the Court are Defendant American Casualty Company of Reading, PA's (“ACC”) motion for summary judgment (Doc. 118), brief in support of its motion (Doc. 119), and statement of facts in support of its motion (Doc. 120). Plaintiff Jason Bone filed a response in opposition to summary judgment (Doc. 122) and a response to ACC's statement of facts (Doc. 123). ACC filed a reply (Doc. 124) and Mr. Bone filed a sur-reply (Doc. 127). For the reasons stated herein, ACC's motion (Doc. 118) will be denied.

         I. Background

         Mr. Bone, a citizen and resident of Louisiana, was injured as a result of a vehicle collision that occurred in Clark County, Arkansas. At the time of the collision, Mr. Bone was driving a rental vehicle to conduct depositions in the course and scope of his employment with a Louisiana law firm. ACC issued a commercial and general liability policy to Mr. Bone's employer which provides automobile liability coverage for “Hired Auto and Non-Owned Auto Liability, ” if an employee uses such a vehicle in the course and scope of his or her employment. The policy was issued in Louisiana. Mr. Bone contends that ACC is liable for his damages to the extent they were caused by an uninsured motorist.[1]

         II. Legal Standard for Summary Judgment

         When a party moves for summary judgment, it must establish both the absence of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Nat'l Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co., 165 F.3d 602, 606 (8th Cir. 1999). In order for there to be a genuine issue of material fact, the nonmoving party must produce evidence “such that a reasonable jury could return a verdict for the nonmoving party.” Allison v. Flexway Trucking, Inc., 28 F.3d 64, 66-67 (8th Cir. 1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Only facts “that might affect the outcome of the suit under the governing law” need be considered. Anderson, 477 U.S. at 248. “[T]he non-movant must make a sufficient showing on every essential element of its claim on which it bears the burden of proof.” P.H. v. Sch. Dist. of Kan. City, Mo., 265 F.3d 653, 658 (8th Cir. 2001). Facts asserted by the nonmoving party “must be properly supported by the record, ” in which case those “facts and the inferences to be drawn from them [are viewed] in the light most favorable to the nonmoving party.” Id. at 656- 57.

         III. Analysis

         ACC moves for summary judgment, arguing that uninsured motorist (“UM”) coverage is not available to Mr. Bone under the policy because the accident occurred in Arkansas and, therefore, ACC is entitled to judgment as a matter of law.

         Both parties agree that Louisiana law applies to Mr. Bone's claim against ACC. Arkansas choice-of-law principles control in this diversity case because the district court sits in Arkansas. See Whirlpool Corp. v. Ritter, 929 F.2d 1318, 1320 (8th Cir. 1991) (“Federal district courts must apply the choice of law rules of the state in which they sit when jurisdiction is based on diversity of citizenship.”). Under Arkansas choice-of-law principles, Louisiana law applies to this case because Mr. Bone's employer was located there. See Hoosier v. Interinsurance Exchange of the Automobile Club, 451 S.W.3d 206, 209 (Ark. 2014) (“[W]ith respect to an automobile-insurance policy ... unless some other state has a more significant relationship to the transaction and the parties, the law of the state which the parties understood to be the principal location of the insured risk during the term of policy controls.”).

         Under Louisiana law, “UM coverage will be read into any automobile liability policy ‘unless validly rejected.'” Gray v. Am. Nat'l Prop. & Cas. Co., 977 So.2d 839, 845 (La. 2008) (citations omitted).

No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state ... unless coverage is provided therein or supplemental thereto ... for the protection of persons insured thereunder who are legally entitled to recover nonpunitive damages from owners or operators of uninsured or underinsured motor vehicles ... however, the coverage required under this Section is not applicable when any insured named in the policy either rejects coverage, selects lower limits, or selects economic-only coverage.

La. Stat. Ann. § 22:1295(1)(a)(i). “This Subparagraph and its requirement for uninsured motorist coverage shall apply to any liability insurance covering any accident which occurs in this state and involves a resident of this state.” La. Stat. Ann. § 22:1295(1)(a)(iii).

         Both parties agree that no UM coverage was offered or rejected in writing, and, therefore, UM coverage was implied in the policy issued to Mr. Bone's employer. Accordingly, the only question before the Court is whether Mr. Bone is entitled to UM coverage for an accident that occurred in Arkansas.

         ACC argues that under Section 1295(1)(a)(iii), the mandate to provide UM coverage only applies when the accident occurs in Louisiana and involves a Louisiana resident. In making this argument, ACC relies heavily on a Louisiana Court of Appeals case which states that “section l(a)(iii) plainly states that the statute's application is limited to accidents occurring ‘in this ...

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