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Country Mutual Insurance Co. v. Leffler

United States District Court, D. Alaska

May 19, 2016

Country Mutual Insurance Company, Plaintiff,
Ashley E. Leffler, Defendant.




         Before the court are the parties’ cross-motions for summary judgment filed under Rule 56 of the Federal Rules of Civil Procedure. Defendant Ashley E. Leffler (“Leffler”) moves for summary judgment at docket 36. Plaintiff Country Mutual Insurance Company (“Country”) opposes at docket 40 and cross-moves for summary judgment at docket 39. Leffler opposes Country’s motion at docket 44 and replies in support of her motion at docket 43. Country replies in support of its motion at docket 45.

         Oral argument was heard on May 18, 2016.


         Leffler suffered injuries as a passenger in an all-terrain vehicle (“ATV”) that flipped over and crashed while driving alongside Badger Road in North Pole, Alaska. The ATV’s driver, Jacob Wegner (“Wegner”), was not insured, but Leffler was covered by a policy issued by Country that included uninsured motorist (“UM”) and medical payments coverage. In pertinent part, Leffler’s UM coverage provides that Country will pay Leffler for injuries caused by the operator of an uninsured “motor vehicle.”[1] Similarly, Leffler’s medical payments coverage will pay Leffler reasonable medical expenses related to bodily injuries she sustains while occupying “a non-owned vehicle.”[2] Thus, Leffler’s eligibility for coverage under both sections depends on whether the ATV is a “motor vehicle” or “vehicle, ” as those terms are used in the policy.

         Country’s amended complaint seeks a declaratory judgment that the ATV is not a vehicle and, therefore, Leffler is not entitled to either UM or medical expenses coverage.[3] Both parties move for summary judgment.


         Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[4] The materiality requirement ensures that “only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”[5] Ultimately, “summary judgment will not lie if the . . . evidence is such that a reasonable jury could return a verdict for the nonmoving party.”[6] However, summary judgment is mandated under Rule 56(c) “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.”[7]

         The moving party has the burden of showing that there is no genuine dispute as to any material fact.[8] Where the nonmoving party will bear the burden of proof at trial on a dispositive issue, the moving party need not present evidence to show that summary judgment is warranted; it need only point out the lack of any genuine dispute as to material fact.[9] Once the moving party has met this burden, the nonmoving party must set forth evidence of specific facts showing the existence of a genuine issue for trial.[10] All evidence presented by the non-movant must be believed for purposes of summary judgment and all justifiable inferences must be drawn in favor of the non-movant.[11] However, the non-moving party may not rest upon mere allegations or denials, but must show that there is sufficient evidence supporting the claimed factual dispute to require a fact-finder to resolve the parties’ differing versions of the truth at trial.[12]


         A. Principles of Insurance Policy Interpretation

         Interpreting insurance policy language is a matter of law for the court.[13] Because insurance policies are contracts of adhesion, the court’s goal is to honor the “lay insured’s reasonable expectations.”[14] “In other words, ‘[t]he objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations.’”[15]

         When determining the insured’s reasonable expectations, courts look to “(1) the language of the disputed provisions in the policy, (2) other provisions in the policy, (3) extrinsic evidence, and (4) case law interpreting similar provisions.”[16] “Policy language is construed in accordance with ordinary and customary usage.”[17] Where the plain language of the policy limits coverage, courts must honor those limitations.[18] Such limitations are interpreted narrowly, whereas grants of coverage are interpreted broadly.[19] If there are two or more reasonable interpretations of particular policy language, the court applies the interpretation that most favors the insured.[20]

         B. UM Coverage

         As set out above, Leffler’s entitlement to UM coverage depends on whether the ATV is a “motor vehicle” under the policy.[21] The policy defines “motor vehicle” in two places, first, in the general “definitions” section and second, in the UM coverage section (Section 2) specifically. The general definition of “motor vehicle” would preclude coverage because it defines “motor vehicle” as “a land motor vehicle designed for use principally on public roads.”[22] The parties agree that the ATV was not designed for use principally on public roads.[23]

         But the parties also agree that the UM-coverage-specific definition, not the general definition, controls. This specific definition lists various types of motor vehicles that are not “motor vehicles” for UM coverage purposes.[24] Included on this list is a motor vehicle described as “self-propelled equipment designed principally for use off public roads, ” but only when such equipment is not “on public roads.”[25] The parties agree that, under this definition, Leffler is entitled to UM coverage if the ATV accident occurred “on a public road.”[26]

         The policy does not define “public road.” The Alaska Supreme Court has defined this term generally as “a road that the public may freely use, ”[27] but that definition is not helpful here because it only expands on the meaning of the word “public, ” which is not in dispute here. Instead, the parties dispute the m eaning of the word “road.”

         Leffler argues that, based on the Alaska Supreme Court’s decision in Sowinski, [28]“road” is ambiguous and, therefore, the court should adopt the reasonable interpretation of that term that is most in her favor. Leffler argues that the court should adopt a dictionary definition of “public road” that defines the term as a “way established and adopted . . . for the use of the general public . . . for all purposes of travel or transportation to which it is adopted and devoted.”[29] Country disagrees that “road” is an ambiguous word, but it contradicts its own argument by supplying an alternative definition of road that differs from Leffler’s definition.[30]

         Leffler reads too much into Sowinski. There, the Alaska Supreme Court was focusing on the “public” nature of the road in question, as the parties disputed whether the state or a private property owner was responsible for maintaining an access road.[31]The court did not conclude, as Leffler suggests, that the word “road” is an ambiguous term. Regardless, even if “road” is ambiguous and, therefore, Leffler’s definition of the term applies, her claim for UM benefits still fails.

         The court’s task is not to interpret the phrase “public roads” in the abstract, but rather to determine the objectively reasonable expectation of a lay insured regarding the meaning of that phrase in the context of the coverage exclusion in Leffler’s policy. Courts that have considered similar exclusions have held that a reasonable insured would understand that the phrase “public roads” is used to distinguish between public roads, on one hand, and terrain that is suitable only for specially designed vehicles, on the other.[32] In other words, if one is using a farming tractor or an off-road vehicle in a location where one ordinarily uses such a vehicle, coverage is excluded. But, if such a vehicle is instead being used on a public road, coverage exists. Given this context, even if an ATV trail could be considered to be a “road” in some general sense, the policy excludes coverage if vehicular travel on that road is suitable only for specially designed vehicles.

         According to Leffler, it is undisputed that the ATV accident occurred “between a paved parallel bike path and the paved portion of Badger Road itself.”[33] Leffler supports this statement by her own affidavit[34] and Wegner’s affidavit.[35] It is also confirmed by the Alaska State Troopers’ collision report;[36] Alaska Department of Public Safety’s incident report;[37] Leffler’s deposition testimony;[38] Wegner’s deposition testimony;[39] and photos from the scene of the accident.[40] ...

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