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Carpenter v. Grinnell Mutual Reinsurance Co.

United States District Court, D. North Dakota, Eastern Division

December 31, 2019

Jared M. Carpenter, Plaintiff,
v.
Grinnell Mutual Reinsurance Company, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          Peter D. Welte, Chief Judge

         Before the Court is a motion for summary judgment filed by Defendant Grinnell Mutual Reinsurance Company (“Grinnell”) on October 11, 2019. Doc. No. 27. Plaintiff Jared M. Carpenter (“Carpenter”) responded in opposition on November 1, 2019. Doc. No. 29. Grinnell filed a reply brief on November 15, 2019. Doc. No. 30. Grinnell requests that the Court rule as a matter of law that Grinnell is not obligated to provide coverage and benefits to Carpenter under the commercial insurance policy that it issued to Frosty's Carpet Center, Inc. (“Frosty's Carpet”), a business partly owned by Carpenter. For the reasons below, Grinnell's motion for summary judgment is granted.

         I. BACKGROUND

         A. The Accident

         This insurance coverage dispute arises out of an automobile accident that occurred on April 10, 2016, near Buxton, North Dakota. Doc. No. 1-2, ¶ 5. On that day, Carpenter planned to run a personal errand-going to Detroit Lakes, Minnesota, to purchase a snowmobile for the personal use of he and his family. Doc. No. 28-9 at 17:8-10, 17:24-18:19, 19:10-14. Carpenter asked his friend Steven Ballintine to join and drive him to Detroit Lakes because of Ballintine's knowledge about snowmobiles. Id. at 17:16-19. Two of Carpenter's children also came along. Id. at 8:25-9:2, 17:20-23.

         The group headed south on Interstate 29 in Ballintine's vehicle, with Carpenter in the passenger seat. Id. at 18:20-23; Doc. No. 1-2, ¶ 5. The vehicle was owned by Ballintine, who had no ownership interest in Frosty's Carpet and was not being paid by Frosty's Carpet for assisting Carpenter in picking up the snowmobile. Doc. No. 28-9 at 18:24-19:9, 37:19-38:4. Ballintine's vehicle was not covered by any liability bond or insurance policy. Doc. No. 1-2, ¶ 14.

         Near mile marker 113, Ballintine lost control of the vehicle, and it rolled into the west ditch of I-29. Id. ¶ 6. Carpenter was ejected from the vehicle and sustained serious injuries to his spine and several internal organs. Id. ¶ 7; Doc. No. 28-9 at 23:16-25:13. Carpenter first became aware of his injuries when he regained consciousness approximately one month after the accident. Doc. No. 28-9 at 20:6-18, 58:22-59:3.

         B. The Policy

         At the time of the accident, Carpenter co-owned Frosty's Carpet, a floor covering sale and installation business in Grand Forks, North Dakota, with his father, Howard Carpenter. Id. at 10:25- 11:6, 12:19-13:15, 51:12-23. Frosty's Carpet held a commercial insurance policy issued by Grinnell for the policy period of December 6, 2015, to December 6, 2016. Doc. No. 28-1 at DEF000002. Relevant here are the Business Auto Coverage Form, the “North Dakota Uninsured Motorists Coverage” Endorsement (“UM Endorsement”), and the “North Dakota Personal Injury Protection Endorsement” (“P.I.P. Endorsement”).

         The policy lists “FROSTY'S CARPET CENTER INC” as the “Named Insured.” Id. at DEF000003. The mailing address of the Named Insured is stated as:

FROSTY'S CARPET CENTER INC C/O HOWARD & JARED CARPENTER 1903 S WASHINGTON ST GRAND FORKS ND 58201

Id. at DEF000002.

         The Business Auto Coverage Form Declarations list personal injury protection coverage subject to Covered Auto Designation Symbol Nos. 5 and 7 and uninsured motorist coverage subject to Covered Auto Designation Symbol No. 6. Id. at DEF000003. The relevant Covered Auto Designation Symbols are described as follows:

5

Owned “Autos” Subject To No-Fault

Only those “autos” you own that are required to have No-Fault benefits in the state where they are licensed or principally garaged. This includes those “autos” you acquire ownership of after the policy begins provided they are required to have No-Fault benefits in the state where they are licensed or principally garaged.

6

Owned “Autos” Subject To A Compulsory Un-Insured Motorists Law

Only those “autos” you own that because of the law in the state where they are licensed or principally garaged are required to have and cannot reject Uninsured Motorists Coverage. This includes those “autos” you acquire ownership of after the policy begins provided they are subject to the same state uninsured motorists requirement.

7

Specifically Described “Autos”

Only those “autos” described in Item Three of the Declarations for which a premium charge is shown (and for Liability Coverage any “trailers” you don't own while attached to any power unit described in Item Three).

Id. at DEF000011. The Business Auto Coverage Form states, “The symbols entered next to a coverage on the Declarations designate the only ‘autos' that are covered ‘autos.'” Id.

         The “Specifically Described ‘Autos'” are listed in Item Three of the Declarations, Schedule of Covered Autos You Own: a 2013 Ford F-150 S/C 4x4 and a 2014 Chrysler Town & Country. Id. at DEF000004. Carpenter testified during his deposition that the Ford was his personal vehicle, which was in his father's name. Doc. No. 28-9 at 31:9-32:2. The Chrysler, meanwhile, was his wife's personal vehicle, which was in his name. Id. at 32:10-33:10, 34:20-35:4.

         The words “you” and “your” in the policy refer to the Named Insured, Frosty's Carpet. Doc. No. 28-1 at DEF000011. The Business Auto Coverage Form additionally defines “insured” as “any person or organization qualifying as an insured in the Who Is An Insured provision of the applicable coverage.” Id. at DEF000020.

         Carpenter seeks coverage under the UM Endorsement. Under that endorsement, Grinnell agrees to “pay all sums the ‘insured' is legally entitled to recover as compensatory damages from the owner or driver of an ‘uninsured motor vehicle.'” Id. at DEF000023. The endorsement defines “Who Is An Insured” as follows:

         If the Named Insured is designated in the Declarations as:

         1. An individual, then the following are “insureds”:

a. The Named Insured and any “family members”.
b. Anyone else “occupying” a covered “auto” or a temporary substitute for a covered “auto”. The covered “auto” must be out of service because of its breakdown, repair, servicing, “loss” or destruction.
c. Anyone for damages he or she is entitled to recover because of “bodily injury” sustained by another “insured”.

         2. A partnership, limited liability company, corporation or any other form of organization, then the following are “insureds”:

a. Anyone “occupying a covered “auto” or a temporary substitute for a covered “auto”. The covered “auto” must be out of service because of its breakdown, repair, servicing, “loss” or destruction.
b. Anyone for damages he or she is entitled to recover because of “bodily injury” sustained by another ...

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