Opinion
Case No. 3:19-cv-01740-SB
08-05-2020
KENNETH HUMBERT, Plaintiff, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.
FINDINGS AND RECOMMENDATION
BECKERMAN, U.S. Magistrate Judge.
Plaintiff Kenneth Humbert ("Humbert") filed this action against Liberty Mutual Fire Insurance Company ("Liberty Mutual"), alleging breach of an insurance contract and seeking a declaratory judgment that the applicable underinsured motorist ("UIM") coverage limit is two million dollars. Humbert and Liberty Mutual filed cross motions for summary judgment. This Court has jurisdiction over Humbert's action pursuant to 28 U.S.C. § 1332. For the reasons discussed below, the district judge should grant Liberty Mutual's motion for summary judgment and deny Humbert's motion for summary judgment.
BACKGROUND
I. THE POLICY
Liberty Mutual issued renewal Motor Carrier Policy No. A12-641-005097-058 to MDU Resources Group, Inc. ("MDU"), the first "Named Insured," with a policy period of January 1, 2018 to January 1, 2019 (the "Policy"). (Decl. of Mark Coel ("Coel Decl.") Ex. 1.) Loy Clark Pipeline Company, Inc. ("Loy Clark"), Humbert's employer, is also a "Named Insured" under the Policy. (Coel Decl. Ex. 1 at 18.)
MDU selected a $25,000 "each-person" UIM coverage limit under the Policy by signing a form titled Uninsured/Underinsured Motorists Coverage and Limit Options Oregon (the "Election Form"), on February 7, 2017. (Coel Decl. Ex. 6.) The Policy provides that "[t]he First Named Insured is authorized to act and agrees to act on behalf of all persons or organizations insured under this policy with respect to all matters pertaining to the insurance afforded by the policy." (Coel Decl. Ex. 1 at 18.)
Vicky Kunz ("Kunz"), MDU's risk manager, signed the Election Form, and she was "authorized to execute agreements relating to insurance on behalf of [MDU], and its subsidiaries, including Loy Clark[.]" (Decl. of Daniel S. Kuntz ("Kuntz Decl.") ¶ 2.) Kunz acknowledged by signing the Election Form that Liberty Mutual had "offered Uninsured Motorists—Bodily Injury Coverage at a limit equal to that for Bodily Injury Liability Coverage[,]" and that MDU's election of "$25,000 each person" would "remain in force until a named insured rescinds it in writing or until the motor vehicle bodily injury liability limits are changed." (Kuntz Decl. Ex. 1 at 3.) Liberty Mutual did not receive a request to rescind the election from MDU or Loy Clark. (Coel Decl. ¶ 8.) In 2018, MDU renewed the Policy and made no changes to its UIM coverage. (Coel Decl. Ex. 3.) ///
II. THE ACCIDENT
On July 9, 2018, while working for Loy Clark, Humbert was sitting in a parked commercial dump truck when an underinsured motorist lost control of her vehicle and struck the dump truck. (Decl. of Jacob Johnstun ("Johnstun Decl.") Ex. 6 at 1.) Humbert received worker's compensation benefits as a result of the accident. (Decl. of Matthew C. Casey, Ex. 1.) The underinsured motorist's insurance company tendered to Humbert its liability policy limit of $100,000. (Johnstun Decl. Ex. 9.) On June 26, 2019, Liberty Mutual tendered the $25,000 each-person UIM coverage limit under the Policy. (Johnstun Decl. Ex. 11 at 2.) Humbert rejected the $25,000 tender, and continues to maintain that the Policy's UIM coverage limit is two million dollars. (Pl.'s Mot. Summ. J. at 4.)
Liberty Mutual objects to the exhibits attached to the Johnstun Declaration because Humbert did not separately file the declaration and because the declaration does not establish an appropriate foundation for the exhibits attached thereto. (Def.'s Mot. Summ. J. at 3.) The Court relies herein on those exhibits only for facts that appear to be undisputed by Liberty Mutual, and therefore denies as moot Liberty Mutual's objections.
ANALYSIS
I. STANDARD OF REVIEW
Summary judgment is appropriate if "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). On a motion for summary judgment, the court must view the facts in the light most favorable to the non-moving party, and draw all reasonable inferences in favor of that party. Porter v. Cal. Dep't of Corr., 419 F.3d 885, 891 (9th Cir. 2005). The court does not assess the credibility of witnesses, weigh evidence, or determine the truth of matters in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and internal quotation marks omitted).
II. DISCUSSION
The issue before the Court is whether first named insured MDU's election of the $25,000 UIM coverage limit pursuant to OR. REV. STAT. § 742.502 binds named insured Loy Clark to the same coverage limit. It does.
OR. REV. STAT. § 742.502 requires that insureds carry UIM coverage equal to their bodily injury liability coverage, "unless a named insured in writing elects to lower limits." OR. REV. STAT. § 742.502(2)(a). To make a valid election of the lower limits, a named insured must sign a statement confirming that the insurance company offered UIM coverage with limits equal to bodily injury liability, and providing the price delta between the coverage limits:
If a named insured elects lower limits, the named insured shall sign a statement to elect lower limits within 60 days after the time the named insured makes the election. The statement must acknowledge that a named insured was offered uninsured motorist coverage with the limits equal to those for bodily injury liability. The statement must have a brief summary that is not part of the insurance contract and that describes what uninsured motorist coverage provides and what the underinsured coverage provides. The summary must also state the price for coverage with limits equal to the named insured's bodily injury liability limits and the price for coverage with the lower limits the named insured requested. The statement remains in force until a named insured rescinds the statement in writing or until the motor vehicle bodily injury liability limits are changed.OR. REV. STAT. § 742.502(2)(b). The statute provides that "[a] statement electing lower limits need not be signed if . . . the policy is . . . renewed . . . or replaced by the same insurer . . . unless the liability limits of the policy are changed." OR. REV. STAT. § 742.502(2)(c).
The parties agree here that MDU is the first named insured on the Policy and that Loy Clark is also a named insured; MDU signed a valid Election Form opting for the $25,000 UIM coverage limit; MDU renewed the Policy in 2018 and did not elect to change the UIM coverage limit; and the Policy was in effect at the time of Humbert's accident. Humbert argues that MDU was not authorized to make the lower limit election on Loy Clark's behalf, but the Policy expressly allowed MDU to do just that: "The First Named Insured [i.e., UIM] is authorized to act and agrees to act on behalf of all persons or organizations insured under this policy [i.e., Loy Clark] with respect to all matters pertaining to the insurance afforded by the policy." (Coel Decl. Ex. 1 at 18.)
There is nothing in the statutory text of OR. REV. STAT. § 742.502, or its context, to suggest that the valid election of the first named insured cannot bind other insureds where the policy so allows. Humbert acknowledges that OR. REV. STAT. § 742.502 "is plain and unambiguous" and if "the Court would only need answer 1) 'Was MDU a named insured on the policy?' and 2) 'Did MDU elect in writing lower [UIM] policy limits?' [b]oth questions would easily be answered in the affirmative, the analysis would end, and [Liberty Mutual] would prevail in its assertion that Plaintiff's upper limit of [UIM] recovery is $25,000." (Pl.'s Mot. Summ. J. at 5.) Thus, the parties agree that the text and context of OR. REV. STAT. § 742.502 is plain and unambiguous. See DCIPA, LLC v. Lucile Slater Packard Children's Hosp. at Stanford, 868 F. Supp. 2d 1042, 1055 (D. Or. 2011) (finding that a statute's text is the "best evidence of the legislature's intent" (citing In re Marriage of Polacek, 349 Or. 278, 284 (2010) and State v. Gaines, 346 Or. 160, 171-72 (2009))).
Under Oregon law, courts may consider the legislative history of a statute, regardless of whether the statute is ambiguous, if the legislative history is useful to the court's analysis. See Gessele v. Jack in the Box, Inc., 427 F. Supp. 3d 1276, 1299 (D. Or. 2019) (applying the Oregon Supreme Court's methodology for interpreting a statute: (1) "'examination of text and context[;]'" (2) "'consideration of pertinent legislative history that a party may proffer . . . [which] the court will consult . . . after examining text and context, even if the court does not perceive an ambiguity in the statute's text, where that legislative history appears useful to the court's analysis'" and (3) "'[i]f the legislature's intent remains unclear after examining text, context, and legislative history, the court may resort to general maxims of statutory construction to aid in resolving the remaining uncertainty.'" (quoting Gaines, 346 Or. at 171-72)).
Humbert urges the Court to consider the statute's legislative history to determine the legislature's intent. However, the only legislative history Humbert offers is a statement by a representative of the Oregon Trial Lawyers Association ("OTLA"), i.e., not a legislator, who stated that the purpose of the written election form is "'so they are aware of what they're purchasing and what they're giving up.'" (Pl.'s Mot. Summ. J. at 6) (quoting Kathleen Eyman, OTLA's Executive Director). According to Humbert, Eyman's statement reflects that the "Oregon legislature intended insureds to weigh their own conflicting interests" and therefore allowing the first named insured to elect the lowest UIM coverage on behalf of all the named insureds contravenes legislative intent. (Pl.'s Mot. Summ. J. at 9.)
Liberty Mutual objects to Exhibit 13 (an audio recording), and any arguments referring thereto, because it did not appear on the face of Humbert's motion that Humbert filed a copy of Exhibit 13. (Def.'s Mot. Summ. J at 3.) The Court confirms that Humbert conventionally filed a CD containing the audio file at issue.
The only legislative history Humbert cites is not useful to the Court's analysis. "Cherry-picked quotations from single legislators or of nonlegislator witnesses, are likely to be given little weight, as the likelihood that such scraps of legislative history represent the views of the institution as a whole is slim." State v. Kelly, 229 Or. App. 461, 466 (2009) (citations omitted); see also State v. Stamper, 197 Or. App. 413, 424-25 (2005) ("[W]e are hesitant to ascribe to the Legislative Assembly as a whole the single remark of a single nonlegislator at a committee hearing."). "[T]he testimony of the nonlegislator witness[] . . . adds little to, the textual analysis of the statute." Matter of Comp. of Muliro, 359 Or. 736, 753 (2016).
Even if the Court were to consider the non-legislator's statement about the purpose of the written election, the statement does not address the specific issue in dispute here: whether the first named insured may bind other named insureds to the election where the policy expressly authorizes the first named insured to act on behalf of the other insureds. Perhaps the Oregon Legislature should have required all named insureds to sign the election form (as opposed to "a named insured"), or prohibited policy provisions authorizing the first named insured to elect on behalf of other named insureds, but there is nothing in the statute's text, context, or legislative history to reflect that this is the law that the Oregon Legislature passed or intended to pass. See State v. Richards, 277 Or. App. 128, 130 (2016) ("Where a statute's plain meaning is unambiguous, we adopt that meaning to give effect to the legislature's intent.); see also DCIPA, 868 F. Supp. 2d at 1055 ("When the statute's language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms.") (citation and quotation marks omitted).
The statute requires that an insured carry UIM coverage that is equal to their bodily injury liability coverage, "unless a named insured in writing elects to lower limits." OR. REV. STAT. § 742.502(2)(a). Here, there is no dispute that the first named insured, MDU, satisfied the statutory requirement by electing in writing to lower the Policy's UIM limit to $25,000. Nothing in the text, context, or legislative history of OR. REV. STAT. § 742.502(2)(a) requires a signed writing from every named insured, or prohibits MDU from making the election of behalf of the other named insureds where the Policy expressly authorized MDU to do so. Accordingly, the Policy's UIM coverage limit is $25,000, and the Court recommends that the district judge grant Liberty Mutual's motion for summary judgment.
The analysis would be different if the Policy did not expressly authorize MDU to act on behalf of the other named insureds, or if Loy Clark had expressly disavowed MDU's election. See, e.g., Krum v. Hartford Underwriters Ins. Co., No. 3:11-cv-01017-ST, 2012 WL 2721877, at *6 (D. Or. July 9, 2012) (holding that a husband may not elect lower UIM limits under OR. REV. STAT. § 742.502 on behalf of his wife where the insurance company instructed that both spouses must sign the election form and the wife crossed out the husband's signature).
CONCLUSION
For the reasons stated, the Court recommends that the district judge GRANT Liberty Mutual's motion for summary judgment (ECF No. 9), and DENY Humbert's motion for summary judgment (ECF No. 12).
SCHEDULING ORDER
The Court will refer its Findings and Recommendation to a district judge. Objections, if any, are due within fourteen (14) days. If no objections are filed, the Findings and Recommendation will go under advisement on that date. If objections are filed, a response is due within fourteen (14) days. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.
DATED this 5th day of August, 2020.
/s/_________
HON. STACIE F. BECKERMAN
United States Magistrate Judge