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QBE Insurance Corp. v. Burckhard

United States District Court, D. North Dakota

August 23, 2017

QBE Insurance Corporation, Plaintiff,
v.
Corrie Burckhard, as Personal Representative for the estate of Todd Burckhard; Maria Mack, as Personal Representative for the estate of Blaine H. Mack; BNSF Railway Company, a Delaware corporation; CUSA ES, LLC, d/b/a Coach America Crew Transport; and Timothy P. Rennick, Defendants,
v.
BNSF Railway Company, a Delaware Corporation and CUSA ES, LLC, d/b/a Coach America Crew Transport, Counter-Claimants,
v.
QBE Insurance Corporation, Counter-Defendant.

          AMENDED ORDER GRANTING BNSF AND COACH AMERICA'S MOTION FOR SUMMARY JUDGMENT AND DENYING QBE INSURANCE'S MOTION FOR SUMMARY JUDGMENT.

          Daniel L. Hovland, Chief Judge United States District Court.

         Before the Court are cross-motions for summary judgment filed by the Plaintiff and Counter-Defendant QBE Insurance Corporation (“QBE Insurance”) and Defendants and Counter-Claimants BNSF Railway Company (“BNSF”) and CUSA ES, LLC d/b/a Coach America Crew Transport (“Coach America”) on June 15, 2016. See Docket Nos. 104 and 110. QBE Insurance and BNSF/Coach America contemporaneously filed responses to the opposing party's motion on July 22, 2016. See Docket Nos. 114 and 115. For the reasons set forth below, BNSF and Coach America's motion for summary judgment is granted and QBE Insurance's motion for summary judgment is denied.

         I. BACKGROUND

         This case arises out of an underlying action in which Corrie Burckhard, as Personal Representative for the Estate of Todd Burckhard, and Maria Mack, as Personal Representative for the Estate of Blaine H. Mack filed suit against BNSF and Coach America to recover for the wrongful deaths of their husbands. See Case No. 4:13-cv-038 (D.N.D. March 28, 2013). On August 19, 2011, Timothy P. Rennick was driving a motor vehicle and transporting the decedents, Todd Burckhard and Blaine Mack, both employees of BNSF, to Glasgow, Montana. While traveling west on Highway 2, a vehicle driven by Ronald Keiser collided with the vehicle Rennick was driving. As a result of the collision, both Burckhard and Mack were killed. At the time of the accident, Keiser had an insurance policy with QBE Insurance Corporation (“QBE Insurance”).

         On November 1, 2013, QBE Insurance Corporation filed this interpleader action in an effort to resolve any claims against it arising from the underlying action. See Docket No. 3. Coach America and BNSF filed a counterclaim against QBE Insurance on April 11, 2014. See Docket No. 13. In their counterclaim, BNSF and Coach America sought a declaration as to the allocation of the QBE Insurance policy proceeds (count 1) and alleged claims against QBE Insurance for violations of unfair trade practices under Montana law, common law bad faith, indemnification, and attorney's fees (counts 2 through 5). On October 17, 2014, the Court dismissed without prejudice counts 2 through 5 of Coach America and BNSF's counterclaim against QBE Insurance. See Docket No. 46.

         The underlying action proceeded to trial on December 11, 2014. See Docket No. 167 (Case No. 4:13-cv-038). At the conclusion of eight days of trial, the jury returned a verdict and found BNSF was negligent under FELA and such negligence caused the deaths of Todd Burckhard and Blaine Mack. The jury awarded damages in the amount of $2, 668, 943.00 to Corrie Burckhard and damages in the amount of $987, 690.00 to Maria Mack. The jury further found Coach America and/or its employee, Timothy Rennick, were negligent, but such negligence did not play a substantial role in causing the deaths of Todd Burckhard and Blaine Mack. After conclusion of the jury trial in the underlying action, Coach America and BNSF then filed a renewed counterclaim against QBE Insurance on February 18, 2015. See Docket No. 49. In this second counterclaim, Coach America and BNSF allege QBE Insurance's policy is subject to stacking in count 1, and asserted claims against QBE Insurance for unfair trade practices (count 2), common law bad faith (count 3), tort of another doctrine (count 4), and attorney's fees (count 5) .

         On November 9, 2015, the Court dismissed count 4 (“tort of another doctrine”) and count 5 (attorney's fees) of Coach America and BNSF's renewed counterclaim. See Docket No. 83. However, the Court declined QBE Insurance's request to dismiss count 1 (declaratory relief) of the renewed counterclaim. See Docket No. 85. QBE Insurance then requested the Court reconsider the portion of its November 9, 2015, order that did not dismiss count 2 and count 3 of Coach America/BNSF's renewed counterclaim. See Docket No. 88. Alternatively, QBE Insurance asked the Court to bifurcate Coach America/BNSF's claims against QBE Insurance for unfair trade practices and common law bad faith from Coach America and BNSF's claim the policy QBE Insurance issued to Keiser is subject to stacking of liability coverages. The Court denied reconsideration. See Docket No. 101. In its order denying QBE Insurance's motion to reconsider, the Court, recognizing the need to resolve the stacking of liability coverages, ordered the parties to “file simultaneous briefs addressing the stacking of liability coverages on or before June 15, 2016, that set forth their positions and arguments for the same.” See Docket No. 101, p. 6. The parties' cross motions for summary judgment are now before the Court.

         II. STANDARD OF REVIEW

         Summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, indicates no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Davison v. City of Minneapolis, Minn., 490 F.3d 648, 654 (8th Cir. 2007); Fed.R.Civ.P. 56(a). Summary judgment is not appropriate if there are factual disputes that may affect the outcome of the case under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is genuine if the evidence would allow a reasonable jury to return a verdict for the non-moving party. Id.

         The Court must inquire into whether the evidence presents sufficient disagreement to require the submission of the case to a jury or if it is so one-sided that one party must prevail as a matter of law. Diesel Mach., Inc. v. B.R. Lee Indus., Inc., 418 F.3d 820, 832 (8th Cir. 2005). The moving party bears the burden of demonstrating an absence of a genuine issue of material fact. Forrest v. Kraft Foods, Inc., 285 F.3d 688, 691 (8th Cir. 2002). The non-moving party may not rely merely on allegations or denials; rather, it must set out specific facts showing a genuine issue for trial. Id.

         III. LEGAL DISCUSSION

         In its motion, QBE Insurance contends that BNSF, Coach America, Mack, and Burckhard lack ‘standing' to seek the stacking of liability coverages of the policy QBE Insurance issued to Keiser. Alternatively, QBE Insurance argues the policy issued to Keiser is not subject to stacking of liability coverages and has a limit of $300, 000 because Montana courts have rejected the stacking of liability coverages. Coach America and BNSF disagree and contend the policy is subject to stacking of liability coverages. According to Coach America and BNSF, the stacked policy limit is $1.5 million, the aggregate of $300, 000 liability coverage limits for each of the five vehicles insured under the policy. In support of their contention that liability coverages for the separate vehicles stack, BNSF and Coach America cite to several recent Montana state district court decisions in which claimants were permitted to stack liability coverages. See Gunderson v. Safeco Ins. Co. of Ill., No. BDV-16-133 (Mont. 8th Judicial Dist. Sep. 1, 2016); Safeco Ins. Co. of Ill. v. Petersen, No. DV-29-14-70 (Mont. 5th Judicial Dist. Oct. 5, 2015); Great Northwest Ins. Co. v. Erickson, No. DV-13-32 (Mont. 22nd Judicial Dist. Jan. 15, 2014). However, QBE Insurance contends this court should instead follow the Montana Supreme Court's decision of Christensen v. Mountain West Farm Bureau, 22 P.3d 624 (Mont. 2000) as it is the binding precedent on stacking liability coverages in Montana.

         It is undisputed that at the time of the collision, Keiser was insured by a policy issued to him by QBE Insurance. The policy covered four separate vehicles.[1] See Docket Nos. 108-1, pp. 18-20 and 148-1. For each of the four vehicles, the policy provides liability limits of “$300, 000 each accident.” Id. The policy also lists separate premiums for liability coverage for each vehicle covered by the policy. Id. In “Section II - Liability Coverage, ” QBE Insurance agreed to “pay all sums an ‘insured' legally must pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance, or use of a covered ‘auto.'” Id. at 34. A covered “auto” included the auto which Kesier was driving at the time of the collision. The Court is tasked with determining whether the liability limits of the policy issued by QBE Insurance to Keiser is subject to stacking under Montana Law. In other words, whether the policy limit for the collision is $300, 000 or $1.2 million, the aggregate of $300, 000 liability coverage limits for each of the four vehicles insured under the policy.

         The Court begins its analysis by considering Montana's ‘anti-stacking' statute, including its legislative history. Prior to 2007, Section 33-23-203 of the Montana Code Annotated, commonly referred to as an ‘anti-stacking' statute, prescribed the limitations of liability in insurance policies as follows:

(1) Unless a motor vehicle liability policy specifically provides otherwise, the limits of insurance coverage available under each part of the policy must be determined as follows, regardless of the number of motor vehicles insured under the policy, the number of policies issued by the same ...

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