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Bennett v. Hartford Insurance Company of Midwest

United States Court of Appeals, Fifth Circuit

May 18, 2018

VERONICA BENNETT, Plaintiff - Appellee
v.
HARTFORD INSURANCE COMPANY OF THE MIDWEST, Defendant-Appellant
v.
AXIS SURPLUS INSURANCE COMPANY, Defendant-Appellee and STATE OF LOUISIANA THROUGH DIVISION OF ADMINISTRATION, OFFICE OF RISK MANAGEMENT, Intervenor - Appellee TERRON WHITE; GLORIA WHITE, Plaintiff - Appellee
v.
HARTFORD INSURANCE COMPANY OF THE MIDWEST, Defendant-Appellant and STATE OF LOUISIANA THROUGH DIVISION OF ADMINISTRATION, OFFICE OF RISK MANAGEMENT, Intervenor - Appellee CLASS CODE OR DESCRIPTION STATE ESTIMATED # OWNED AUTOS RATE PER OWNED “AUTO” ESTIMATED PREMIUM

          Appeal from the United States District Court for the Middle District of Louisiana

          Before STEWART, Chief Judge, and HAYNES and WILLETT, Circuit Judges.

          CARL E. STEWART, Chief Judge:

         Defendant-Appellant Hartford Insurance Company of the Midwest ("Hartford") appeals the district court's order denying its motion for summary judgment and granting that of Defendant-Appellee Axis Surplus Insurance Company ("Axis"). Hartford also challenges the district court's grant of Axis's motion to strike an affidavit submitted in support of its motion for summary judgment as untimely. For the reasons that follow, we AFFIRM.

         BACKGROUND

         On October 17, 2012, Plaintiffs-Appellees Terron White and Veronica Bennett were rear-ended by a truck operated by James Lee while traveling southbound on Louisiana Highway 61 in East Baton Rouge Parish.[1] At the time of the accident, Lee was operating a truck in the course and scope of his employment with Suttles Truck Leasing, Inc. ("Suttles") and Dana Transport, LLC ("Dana Transport"). Bennett and the Whites[2] separately sued Lee, Suttles, Dana Transport, and others for injuries and damages they sustained as a result of the accident. They also sued various insurance companies, including Great West Casualty Insurance Company ("Great West"), American Guarantee and Liability Insurance Company ("AGLIC"), Hartford, and Axis under Louisiana's Direct Action Statute, La. Rev. Stat. Ann. § 22:655, as the alleged primary and excess liability insurers.[3] The lawsuits, which were initially filed in Louisiana state court, were removed to federal court and subsequently consolidated.

         Over the course of this litigation, it became apparent that Great West was liable as a primary liability insurer, and Axis and AGLIC were liable as excess liability insurers. Although Hartford issued a primary automobile liability policy that was effective at the time of the accident, it has disputed whether the terms of its policy provide coverage in this case. The Hartford policy identifies eighteen (18) named insureds, including Suttles and Dana Transport. The Insuring Agreement states Hartford's obligation to "pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which [the policy] applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto.'" The policy provides for $2, 000, 000 in underlying liability coverage. Section I of the Business Auto Coverage Form identifies "Item Two of the Declarations Page" as specifying "the 'autos' that are covered 'autos' for each of the insured's coverages." In turn, "Item Two - Schedule of Coverages and Covered Autos" ("Item Two") defines the scope of coverage as follows:

         "This policy provides only those coverages where a charge is shown in the advance premium column . . . Each of these coverages will apply only to those 'autos' shown as covered 'autos.' 'Autos' are shown as covered 'autos' for a particular coverage by the entry of one or more symbols from the COVERED AUTO Section of the Business Auto Coverage Form next to the name of the coverage."

         The Business Auto Coverage Form includes a table defining the various designated auto symbols, with relevant descriptions providing as follows:

Symbol

Description of Covered Auto Designation Symbols

1

Any "Auto"

2

Owned "Autos" Only: Only those "autos" you own (and for Liability Coverage any "trailers" you don't own while attached to power units you own). This includes those "autos" you acquire ownership of after the policy begins.

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).[4]

         Importantly, Item Two of the Hartford policy lists the symbol "01" as describing which autos are afforded liability coverage under the policy; under the "Description Of Covered Auto Designation Symbols" portion of the Business Auto Coverage Form, the symbol "01" represents "any 'auto.'" A charge of $92, 954 is shown in the advance premium column providing liability coverage for all autos. Thus, the Hartford policy defines "covered auto, " for purposes of liability coverage, as "any 'auto'" without further qualification or limitation.[5]

         Appended to the Hartford policy is a Composite Rating Basis Endorsement ("CRB Endorsement") which explains that the premium was calculated "by applying a composite rate per covered auto." The CRB Endorsement also notes that it "does not change the policy except as shown, " expressly modifies the policy's Premium Audit condition by providing additional explanation for how the premium is calculated for "covered autos, "[6]and states that the vehicles identified therein are "[o]wned 'autos' for liability composite rating premium adjustment purposes." The CRB Endorsement does not otherwise refer to the policy's "covered auto" designation symbol as indicative of or relevant to the premium audit calculation. The CRB Endorsement also contains the following table explaining the premium calculation for "owned 'autos'" relevant to this policy:

         This endorsement modifies insurance provided under the following:

         BUSINESS AUTO COVERAGE PART

         SCHEDULE FOR COMPOSITE RATING BASIS-AUTOMOBILE LIABILITY COVERAGE

         IT IS AGREED THAT THE PREMIUM FOR THIS INSURANCE SHALL BE DETERMINED BY APPLYING A COMPOSITE RATE PER COVERED AUTO.

         SCHEDULE

CLASS CODE OR DESCRIPTION
STATE
ESTIMATED # OWNED AUTOS
RATE PER OWNED “AUTO”
ESTIMATED PREMIUM
LIGHT-MEDIUM TRUCKS
ALL
48
$1, 176.45
$56, 470
HEAVY-EXTRA HEAVY TRUCKS [7]
ALL
TRUCK-TRACTORS
PRIVATE PASSENGER
ALL
37
$950.41
$35, 165
TRAILERS
ALL
1
INCL
INCL
TOTAL PREMIUM
86
$91, 635

         After the close of discovery, Hartford and Axis both filed motions for summary judgment disputing whether the Hartford policy provides coverage. Axis sought a declaration that Hartford's policy provided primary coverage for Bennett and the White's claims, and that the Axis policy was excess to the Hartford policy. In so arguing, Axis maintained that the terms of the Business Coverage Auto Form unambiguously dictate what qualifies as a "covered 'auto'" for purposes of the Hartford policy's liability coverage provision, and because Item Two of the Declarations states that the policy covers "any 'auto, '" the truck involved in the accident is clearly covered. Further, because the Hartford policy provides primary coverage, Axis argued ...


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