United States District Court, N.D. Mississippi, Oxford Division
MICHAEL P. MILLS UNITED STATES DISTRICT JUDGE
matter comes before the Court on Allstate Insurance
Company's (“Allstate”) Motion for Partial
Summary Judgment as to the Automobile Liability Policy of
Robert and Denise Scarbrough . John Robert
Scarbrough (“John”) and Kimberly and Rachel
Holloway (collectively “the Holloways”) have
responded in opposition to the motion, to which Allstate
filed a reply. Having reviewed the submissions of the
parties, in addition to relevant evidence and authorities,
the Court is now prepared to rule.
Factual and Procedural Background
growing up in Georgia, John Robert Scarbrough began attending
the University of Mississippi in 2006 and eventually received
his degree in December 2013. On April 6, 2012, John was
involved in an automobile accident in Oxford, Mississippi. At
the time of the accident, John was driving his white 2004
Toyota Tundra truck, which was titled in his name. Kimberly
Holloway, one of John's co-workers at Proud Larry's
restaurant in Oxford, and her sister, Rachel Holloway, were
passengers in the truck at the time of the accident and
allegedly suffered multiple injuries.
time of the accident, John maintained an automobile liability
policy issued by GEICO Insurance Company
(“GEICO”). Moreover, John's parents, Robert
and Denise Scarbrough, maintained two insurance policies with
Allstate-an automobile liability policy and an umbrella
policy. Both policies were undisputedly in effect at the time
of the accident. Moreover, the Holloways' parents, Lewis
and Starlyn Holloway, maintained a policy with State Farm
Mutual Automobile Insurance Company (“State
Farm”) that provided uninsured motorist coverage for
both Lewis and Starlyn, along with any resident relatives.
year later, on April 26, 2013, the Holloways filed an action
in state court in Hinds County, Mississippi, attempting to
obtain recovery for the injuries they sustained in the
accident. In their complaint, the Holloways asserted
negligence and gross negligence against John and negligent
entrustment against Robert and Denise-his parents. The
Holloways also asserted gross negligence and malicious
conduct claims against GEICO and its agent, Dawn Lawson, due
to GEICO's failure to provide payment to the Holloways
under John's automobile liability policy. In addition,
the Holloways asserted claims against State Farm for its
failure to provide timely payment for their injuries under
the uninsured motorist policy.
case was later transferred to the Circuit Court of Lafayette
County, Mississippi. At some point thereafter, the Holloways
became aware of the Allstate policies that had been issued to
Robert and Denise. The Holloways believed that the Allstate
policies provided coverage for their injuries and that
Allstate had unlawfully attempted to the hide existence of
the policies from them. Thus, on July 3, 2015, the Holloways
filed a motion to amend their complaint to add Allstate as a
8, 2015, Allstate filed a separate action in this Court,
requesting that it issue a declaratory judgment that neither
of the policies issued to Robert and Denise provided coverage
for the Holloways' injuries. Specifically, Allstate
asserted that the policies had not been triggered because
“various requirements of the policies are not met. For
one, the alleged tortfeasor, John Scarbrough, was not a
resident of the household of the insureds at the time of the
accident.” In the amended complaint, Allstate asserts
that it filed this action because “it has become
evident that [Rachel and Kimberly Holloway] will seek to
invoke the Allstate policies of Robert M. and Denise
Scarbrough.” Allstate joined the Holloways as necessary
parties to the action, asserting that their rights may be
affected by the case's outcome.
on July 16, 2015, the Holloways filed their amended complaint
in the Lafayette County Circuit Court action adding Allstate
as a defendant, seeking a declaration that the Allstate
policies issued to Robert and Denise do, in fact, provide
coverage for their injuries and further alleging bad faith
breach of contract and fraud.
to the present action, on April 4, 2016, the Holloways filed
an answer to the amended complaint, a crossclaim against John
Scarbrough, a counterclaim against Allstate, and a third
party complaint against GEICO, Dawn Lawson, and State Farm.
These claims mirror the claims made by the Holloways in the
underlying state court action, largely containing language
identical to their state court complaint. On November 7,
2016, this Court issued an order denying motions to dismiss
filed by Allstate and John but granting GEICO and Dawn
Lawson's motions to dismiss since those parties were
improperly joined in this action pursuant to Federal Rule of
Civil Procedure 14. Moreover, the Court also issued an order
on December 15, 2016, separating the trials for the
Holloways' personal injury claims against John and the
claims concerning the coverage issues associated with the
has filed two motions for partial summary judgment-one
concerning the automobile liability policy and one concerning
the umbrella policy. This order will address Allstate's
motion as to the automobile liability policy, and the Court
will consider the motion as to the umbrella policy in a
separate order. The present motion has been fully briefed by
the parties, and upon due consideration of the parties'
arguments, in addition to relevant case law and evidence, the
Court finds that the motion should be granted.
Summary Judgment Standard
judgment is proper “if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). A genuine dispute of material fact exists “if
the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
91 L.Ed.2d 202 (1986). At the summary judgment stage, the
court must “draw all reasonable inferences in favor of
the nonmoving party, and it may not make credibility
determinations or weigh the evidence.” Reeves v.
Sanderson Plumbing Prods., 530 U.S. 133, 150, 120 S.Ct.
2097, 147 L.Ed.2d 105 (2000). Once the moving party shows
there is no genuine dispute as to any material fact, the
nonmoving party “must come forward with specific facts
showing a genuine factual issue for trial.” Harris
ex rel. Harris v. Pontotoc Cty. Sch. Dist., 635 F.3d
685, 690 (5th Cir. 2011). “[A] party cannot defeat
summary judgment with conclusory allegations, unsubstantiated
assertions, or ‘only a scintilla of evidence.'
” Turner v. Baylor Richardson Med. Ctr., 476
F.3d 337, 343 (5th Cir. 2007) (quoting Little v. Liquid
Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).
“If the nonmoving party fails to meet this burden, the
motion for summary judgment must be granted.”
Little, 37 F.3d at 1075.
preliminary matter, the Court notes that the contract at
issue-the Allstate liability policy-contains a choice of law
clause, specifically stating that “any and all claims
or disputes in any way related to this policy shall be
governed by the laws of Georgia.” This Court has
previously recognized that when a contract contains a choice
of law clause, the law of the chosen state will be applied to
govern the parties' contractual rights and duties unless:
“(1) the chosen state has no substantial relationship
to the parties or the transaction and there is no other
reasonable basis for the parties' choice, or (2) applying
the chosen state's law would be contrary to a fundamental
policy of a state which has a materially greater interest
than the chosen state in the determination of the particular
issue and which, under the rule of § 188, would be the
state of the applicable law in the absence of an effective
choice of law by the parties.” Lagrone Const., LLC
v. Landmark, LLC, 40 F.Supp.3d 769, 777 (N.D. Miss.
2014) (quoting Restatement (Second) of Conflict of Laws
§ 187 (1971)).
this standard, the Court finds that Georgia law-the law
chosen by the parties-should govern this dispute. The two
policyholders, Robert and Denise, are Georgia citizens.
Additionally, the parties have not identified any fundamental
policy of Mississippi that the application of Georgia law
would violate. In fact, none of the parties raise this issue
in their arguments whatsoever. The Court will therefore apply
Georgia contract law to the extent that such law is necessary
in deciding this matter but notes that Georgia and
Mississippi law appear to be largely similar in the areas
relevant to this case.
Georgia law, “[w]hen an insurance contract is deemed to
be ambiguous, it will be construed liberally against the
insurer and most favorably for the insured.” State
Farm Mut. Auto Ins. Co. v. Staton, 685 S.E.2d 263, 265
(2009). However, the court “may not strain the
construction of the policy so as to discover an
ambiguity.” Id. at 265-66 (quoting Shaw v.
State Farm Mut. Ins. Co., 129 S.E.2d 85 (1962)). The
rule of liberal construction cannot be used to create an
ambiguity where one does not exist, and “where the
language fixing the extent of liability of an insurer is
unambiguous and but one ...