Neighbors v. Shelter Mutual Insurance Co.

          OPINION AND ORDER

          KRISTINE G. BAKER UNITED STATES DISTRICT JUDGE

         Before the Court is a motion for partial summary judgment filed by defendant Shelter Mutual Insurance Company (“Shelter”) (Dkt. No. 8). Plaintiff Donna Neighbors, Administratrix of the Estate of Joshua Wade Smith, deceased, responded in opposition (Dkt. No. 13). Shelter replied (Dkt. No. 16). Also before the Court is a motion to quash plaintiff's notice of Rule 30(b)(6) deposition of Shelter Mutual Insurance Company filed by Shelter (Dkt. No. 22), to which Ms. Neighbors responded in opposition (Dkt. No. 24). For the reasons that follow, the Court grants the motion for partial summary judgment (Dkt. No. 8). The Court holds under advisement the motion to quash plaintiff's notice of Rule 30(b)(6) deposition (Dkt. No. 22).

         I. Ripeness Of Motion For Partial Summary Judgment

         As a threshold matter, Ms. Neighbors argues that Shelter's motion for partial summary judgment is premature (Dkt. No. 15, at 4). She asserts that no discovery has been conducted in this matter and that only a limited amount of discovery was conducted in her prior filing in Phillips County Case 54-CV-2017-96 (Id.). Ms. Neighbors contends that she should have the opportunity to arm herself with whatever facts discovery would yield prior to facing summary judgment (Id.). Under Federal Rule of Civil Procedure 56(d), if a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition to a motion for summary judgment, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.

         “As a general rule, summary judgment is proper only after the nonmovant has had adequate time for discovery.” Hamilton v. Bangs, McCullen, Butler, Foye & Simmons, L.L.P., 687 F.3d 1045, 1049 (8th Cir. 2012) (internal quotations omitted). “This option [under Rule 56(d)] exists to prevent a party from being unfairly thrown out of court by a premature motion for summary judgment.” Id. at 1050. However, Rule 56 “does not require trial courts to allow parties to conduct discovery before entering summary judgment.” United States ex rel. Small Bus. Admin. v. Light, 766 F.2d 394, 397 (8th Cir.1985) (per curiam). Thus, district courts possess “wide discretion in denying” Rule 56(d) motions. Anzaldua v. Ne. Ambulance & Fire Prot. Dist., 793 F.3d 822, 836 (8th Cir. 2015).

         A Rule 56(d) affidavit “must set forth specific facts further discovery might uncover, or what information further discovery might reveal.” Hamilton, 687 F.3d at 1049 (affirming denial of Rule 56(d) motion where district court stayed discovery and then ruled on motion for summary judgment, determining plaintiff failed to show what further facts he would uncover through a Rule 56(d) extension). A nonmovant seeking relief under Rule 56(d) must do more than speculate that it may discover additional facts that would overcome a motion for summary judgment, see Stanback v. Best Diversified Prods., 180 F.3d 903, 911 (8th Cir.1999), and must submit an affidavit showing “‘what specific facts further discovery might unveil.'” Id. (quoting Dulany v. Carnahan, 132 F.3d 1234, 1238 (8th Cir.1997)). “Where a party fails to carry [his] burden under Rule [56(d)], ‘postponement of a ruling on a motion for summary judgment is unjustified.'” Id. (quoting Humphreys v. Roche Biomedical Labs., Inc., 990 F.2d 1078, 1081 (8th Cir.1993)).

         Ms. Neighbors failed to submit an affidavit or declaration explaining what facts or information further discovery might uncover and why she cannot present facts essential to justify her opposition to Shelter's motion for partial summary judgment at this time. Therefore, the Court rejects Ms. Neighbors' argument that Shelter's motion for partial summary judgment is premature (Dkt. No. 15, at 4).

         II. Motion For Partial Summary Judgment

         A. Factual Background

         Unless otherwise noted, the following facts are taken from Shelter's statement of undisputed material facts in support of Shelter's motion for partial summary judgment and from Ms. Neighbors' statement of disputed and undisputed facts (Dkt. Nos. 10, 14). The Court notes that Local Rule 56.1 of the Local Rules of the United States District Court for the Eastern and Western Districts of Arkansas provides that all material facts set forth in the statement filed by the moving party shall be deemed admitted unless controverted by the statement filed by the non-moving party. Local Rule 56.1(c). As such, the Court deems admitted each parties' statement of material facts to the extent statements are not controverted by the opposing party.

         1. The Motor Vehicle Accident

         The motor vehicle accident that is the subject of this lawsuit occurred on or about March 24, 2017, in Hazen, Prairie County, Arkansas (Dkt. No. 14, ¶ 1). Shelter alleges that Joshua Wade Smith, deceased, occupied the insured vehicle solely as the driver (Dkt. No. 10, ¶ 1). Ms. Neighbors asserts that Mr. Smith occupied the insured vehicle as the driver prior to the first impact of the accident (Dkt. No. 14, ¶ 1). The vehicle driven by Mr. Smith was owned by the named insured, Gretchen Brannon Ferebee, and was insured by Shelter (Id., ¶ 2). Mr. Smith was not listed as an insured on the Declarations, nor was he related to the named insured, Ms. Ferebee, at the time of the accident (Id., ¶ 3). Ms. Neighbors alleges that Mr. Smith did reside with the named insured on the night prior to the accident (Id.). Ms. Neighbors asserts that she has had insufficient time to discover the extent of the residence other than that provided in Ms. Ferebee's deposition given in a related matter involving the same accident as at issue herein (Id.). The Court notes that, in her deposition given in another matter, Ms. Ferebee was asked whether she and Mr. Smith lived together at the time of the accident or before and replied that they did not (Dkt. No. 8-2, at 2). Further, Ms. Neighbors contends that Mr. Smith had no insurance coverage other than that on Ms. Ferebee's vehicle (Dkt. No. 14, ¶ 3).

         Mr. Smith and his passengers, Ms. Ferebee and non-party Courtney Young, were traveling west on Interstate 40 when Mr. Smith lost control of the vehicle and then crossed onto the shoulder and struck the adjacent guardrail (Id., ¶ 4). Ms. Neighbors alleges that Mr. Smith lost control of the vehicle due to impact by another vehicle (Id.). Shelter contends that the vehicle overturned and, in the process of overturning, Mr. Smith and Ms. Ferebee were ejected from the vehicle - Mr. Smith from the driver's seat and Ms. Ferebee from the passenger seat (Dkt. No. 10, ¶ 4). Shelter asserts that, after being ejected, the vehicle then rolled over Mr. Smith, and Mr. Smith was pronounced dead at the scene by the Prairie County Coroner (Id.). Ms. Neighbors disputes the location from where Shelter asserts Mr. Smith was ejected. Ms. Neighbors contends that, “at the instance of his ejectment, after striking the guard rail, it is impossible to know [Mr. Smith's] exact location inside or even outside the vehicle at this time” (Dkt. No. 14, ¶ 4). However, Ms. Neighbors does not dispute that, at the instant that Ms. Ferebee's vehicle was struck by the unknown vehicle, Mr. Smith was occupying the driver's seat in Ms. Ferebee's vehicle (Id.).

         The parties disagree about what the Prairie County Coroner's certificate of death states about how Mr. Smith died. According to Shelter, the chain of events listed on the death certificate indicates that Mr. Smith's death occurred prior to the vehicle rolling over him (Dkt. No. 10, ¶ 5) (emphasis omitted). Citing the Prairie County Coroner Byrum Kelly's affidavit, Ms. Neighbors disputes Shelter's interpretation of the death certificate (Dkt. No. 14, ¶ 5).

         The parties also disagree about a letter sent by counsel for Ms. Neighbors to Shelter on April 21, 2017. Shelter asserts that, on April 21, 2017, Ms. Neighbors submitted a demand on Shelter for payment of “Med-pay/PIP Uninsured Motorist and Accidental Death [sic] benefits” (Dkt. No. 10, ¶ 6) (edit in original). Shelter submits that absent from the demand letter was any proof of any damages, including medical or funeral expenses, incurred by Mr. Smith (Id.). Ms. Neighbors disputes that she submitted a “demand” letter for payment (Dkt. No. 14, ¶ 6). Instead, she maintains that the April 21, 2017, letter was merely a letter of representation with no “demand” for payment; she readily admits that said letter of representation contained no proof of medical or funeral expenses (Id.). It is undisputed that Mr. Smith did not incur medical expenses and that no such expenses were submitted to Shelter (Id., ¶ 7). Ms. Neighbors argues that Mr. Smith incurred funeral expenses (Id.).

         Shelter maintains that it responded to Ms. Neighbors' demand on May 2, 2017, denying Ms. Neighbors' claim for medical payments or accidental death benefits as Mr. Smith did not meet the definition of an “insured” under the Policy (Dkt. No. 10, ¶ 8). According to Shelter, it included with this correspondence its previous letter to Ms. Neighbors from April 5, 2017, regarding its investigation into and denial of the claim for the same reasons (Id.). Ms. Neighbors does not dispute that Shelter responded to her letter of representation on May 2, 2017, denying Ms. Neighbors' claim and coverage therefore (Dkt. No. 14, ¶ 8).

         2. The Policy

         Ms. Neighbors filed her complaint on May 12, 2017, alleging entitlement to medical payments and funeral expense benefits, accidental death benefits, and uninsured motorist benefits, in addition to damages for Shelter's alleged bad faith denial of payments of these benefits (Id., ¶ 9). The Policy issued by Shelter and under which Ms. Neighbors claims entitlement to the limits of the medical payments and accidental death benefits contains the following provisions:

         INSURANCE AGREEMENT FOR COVERAGE C

Subject to all conditions, exclusions, and limitations of our liability, stated in this policy, we will pay the reasonable charges for necessary goods and services for the treatment of bodily injury sustained by an insured, if such bodily injury directly results from an accident caused by the occupancy, use, or maintenance of an auto. The reasonable charges must be incurred within two years of the accident date.

Subject to the limit of our liability for this coverage stated in the Declarations, we will pay the reasonable charges for funeral services of an insured, if death directly results from an accident caused by the occupancy, use, or maintenance of an auto. The reasonable charges must be incurred within two years of the accident date.

(Dkt. No. 14, ¶ 9) (emphasis in original).

         The Policy of insurance contains the following definition of an “insured” applicable to medical payments coverage:

DEFINITION OF INSURED USED IN COVERAGE C

In Coverage C insured means you or a relative.

Insured also means:

***

(2) Individuals, other than those occupying a vehicle, who are struck by the described auto, while they are:

(a) Pedestrians;

(b) Bicyclists;

(c) Motorcyclists;

(d) In a horse-drawn wagon or cart; or

(e) Riding on an animal.

(Id.) (emphasis in original).

         Shelter asserts that the definition of an “insured” applicable to accident death benefits coverage is the same as the definition applicable to medical payments coverage:

DEFINITION OF INSURED USED IN COVERAGE D

In Coverage D insured means you or a relative.

Insured can also mean:

***

(2) Individuals, other than those occupying a vehicle, who are struck by the described auto, while they are:

(a) Pedestrians;

(b) Bicyclists;

(c) Motorcyclists;

(d) In a horse-drawn wagon or cart; or

(e) Riding on an animal.

(Dkt. No. 10, ¶ 12) (emphasis in original).

         Shelter further asserts that the Policy also contains the following definitions applicable to medical payments and funeral benefits, accidental death benefits, as well as uninsured motorist benefits:

“You” is defined in the Policy as “any person listed as a named insured in the Declarations and, if that person is an individual, his or her spouse.”

“Relative”[] as defined in the Policy “means an individual related to you by blood, marriage, or adoption, who is a resident of your household.” “Passenger” is also defined as an “insured” under the Policy, but the terms does [sic] not include the driver:

“Passenger means an individual who is occupying one of the seats of a vehicle with permission but does not include the operator of a vehicle.”

(Id., ¶ 13) (emphasis in original).

         Shelter contends that there is no dispute that Mr. Smith was occupying the insured vehicle as the driver but was not the named insured, a relative of the named insured, a member of the named insured's household, nor a “passenger, ” “pedestrian, ” “bicyclist, ” “motorcyclist, ” or traveling “in a horse-drawn wagon or cart” (Dkt. No. 10, ¶ 17). Ms. Neighbors disputes whether Mr. Smith was a member of the insured's household at the time of the accident as she claims that she has been unable to investigate adequately that aspect of Ms. Ferebee and Mr. Smith's relationship (Dkt. No. 14, ¶ 14). Ms. Neighbors does not dispute that Mr. Smith was occupying the insured vehicle as the driver just prior to the accident, but she disputes that Mr. Smith was occupying the vehicle as a driver at all subsequent times and at the time he was struck by Ms. Ferebee's insured vehicle as alleged in paragraph 17 of Shelter's statement of undisputed material facts (Id.). Ms. Neighbors submits that the applicable statutes do not define “passenger, ” “pedestrian, ” “bicyclist, ” “motorcyclist, ” or traveling “in a horse-drawn wagon or cart” but merely provide coverage to “persons other than those occupying another vehicle struck by the insured motor vehicle” (Id.).

         Shelter argues that Ms. Neighbors does not allege that Shelter wrongfully applied the terms of the Policy with regard to the definition of “insured” under the medical payments or accidental death benefits (Dkt. No. 10, ¶ 21). Ms. Neighbors disputes that assertion and contends that Shelter's actions and its policy are contrary, on their face, to the requirements of Arkansas law (Dkt. No. 14, ¶ 19).

         3. Applicable Arkansas Statutes

         Shelter argues that the Policy at issue mirrors the requirements of the applicable statutes, Arkansas Code Annotated §§ 23-89-202 and 23-89-204 (Dkt. No. 10, ¶ 14). According to Shelter, for coverage to apply, the applicable statute Arkansas Code Annotated § 23-89-202 requires that the deceased be “the named insured, ” a “member[] of the [named insured's] family residing in the same household, ” a “passenger[] injured while occupying the insured motor vehicle, ” and a “person[] other than those occupying another vehicle struck by the insured motor vehicle” (Id., ¶ 15). Shelter asserts that, in order for accidental death benefits to apply, the statute continues to require that the deceased be an “insured” under the Policy (Id.). Shelter submits that the statute states, in pertinent part, that “[t]he sum of five thousand dollars ($5, 000)[] to be paid to the personal representative of the insured . . . []” (Id.) (emphasis in original). Shelter further submits that coverage required to be provided to “insured” under Arkansas Code Annotated § 23-89-202 also applies “only to occupants of the insured vehicle and to persons struck by the insured vehicle, including pedestrians, bicyclists, motorcyclists, persons in a horse-drawn wagon or cart, and persons riding on an animal, and to none other” (Id., ¶ 16) (emphasis in original).

         Ms. Neighbors does not dispute that the definition in the Policy at issue provides that an “insured” for accidental death benefits is the same as the definition applicable to medical payments coverage, but she disputes that the definition is co-extensive with the requirements of Arkansas law and asserts that it is contrary to Arkansas Code Annotated §§ 23-89-202 and 23-89-204 (Dkt. No. 14, ¶ 10). Similarly, Ms. Neighbors does not dispute that such language is contained in the Policy at issue but disputes that the cited language is co-extensive with the requirements of Arkansas law and asserts that it is contrary to Arkansas Code Annotated §§ 23-89-202 and 23-89-204 (Id., ¶ 11). Ms. Neighbors disputes that the Policy at issue mirrors the requirements of the applicable statutes Arkansas Code Annotated §§ 23-89-202 and 23-89-204 because, for coverage to apply, the applicable statute Arkansas Code Annotated § 23-89-202 requires that Mr. Smith be “the named insured, ” “members of [the named insured's] family residing in the same household, ” a “passenger[] injured while occupying the insured motor vehicle, and a “person[] other than those occupying another vehicle struck by the insured motor vehicle” (Id., ¶ 12).

         Ms. Neighbors submits that, specifically, Mr. Smith need only meet one of these classes of persons to be insured pursuant to the statute, not all as indicated by Shelter's misquoting of the statute (Id.). Ms. Neighbors asserts that Mr. Smith becomes an insured under Arkansas law by meeting any one of the definitions provided in the statute, just as he does for the accidental death benefits to apply (Id.). Further, Ms. Neighbors submits that coverage required to be provided to an “insured” under Arkansas Code Annotated § 23-89-202 also applies “only to occupants of the insured vehicle and to persons struck by the insured vehicle, including pedestrians, bicyclists, motorcyclists, persons in a horse-drawn wagon or cart, and persons riding on an animal, and to none other” (Id., ¶ 13).

         According to Ms. Neighbors, Arkansas Code Annotated § 23-89-204(a) speaks for itself (Id.). Ms. Neighbors argues that Shelter encourages a strained reading of the statute that by “including” certain classes of persons, it excludes all others (Id.). Ms. Neighbors asserts that Shelter's strained interpretation of Arkansas Code Annotated § 23-89-204(a)'s meaning as set out in paragraph 16 of its statement of undisputed material facts is disputed, citing ...