United States District Court, D. Alaska
ORDER
H.
Russel Holland United States District Judge
Cross-motions
for Summary Judgment
Plaintiff
moves for summary judgment.[1] This motion is unopposed
by defendant Alaska Sales & Service.[2] The motion is
opposed by defendant Charlene Marie Seamon, [3] and she
cross-moves for summary judgment.[4] The cross-motion is
opposed.[5] Oral argument was not requested and is
not deemed necessary.
Facts
Plaintiff
is National Casualty Company. Defendants are Jessie L.
Barksdale;[6] Alaska Sales & Service, Inc.,
d/b/a National Car Rental/Alamo;[7] and Charlene Marie
Seamon.
Barksdale,
who is retired, lives in Virginia. In the summer of 2016,
Barksdale, his wife, and other relatives traveled to Alaska
for a vacation. Barksdale rented a minivan from Alamo Car
Rental in Anchorage on July 21, 2016. The rental was part of
a package deal that Barksdale's travel agent, Linda
Sizemore, arranged through Alaska Airlines for Barksdale and
his wife. Barksdale declined additional insurance at the time
of the rental[8] because he had $300, 000 in liability
insurance through his own liability carrier, USAA, that he
understood applied to rental vehicles.[9] The rental agreement
number was 534326725.[10] The rental agreement had a line
that read: ACCOUNT Alaska Airlines” and a line that
read: “EXT REF # ALG2D240[.]”[11] The
rental agreement listed two forms of payment: 1) an external
tour voucher ALG2D240 and 2) a Visa.[12]
The
rental agreement stated that the agreement included all
provisions “contained within Alamo's rental
agreement jacket. . . .”[13] The rental agreement
jacket contained the following provision:
Owner complies with applicable motor vehicle financial
responsibility laws as a state-certified self-insurer,
bondholder, or cash depositor. Except to the extent required
by the motor financial responsibility laws of the applicable
state or otherwise by law, Owner does not extend any of its
motor vehicle financial responsibility or provide insurance
coverage to Renter, [additional drivers], passengers or third
parties through this Agreement. If valid automobile liability
insurance or self insurance is available on any basis to
Renter, [additional drivers] or any other driver and such
insurance or self insurance satisfies the applicable state
motor vehicle financial responsibility law, then Owner
extends none of its motor vehicle financial responsibility.
However, if Renter and [additional drivers] are in compliance
with the terms and conditions of this Agreement and if Owner
is obligated to extend its motor vehicle financial
responsibility to renter, [additional drivers] or third
parties, then Owner's obligation is limited to the
applicable state minimum financial responsibility
amounts.[14]
On July
27, 2016, Barksdale, while driving the rented minivan in
Fairbanks, Alaska, was involved in an automobile accident.
Seamon was seriously injured in the accident.
Plaintiff
had issued an insurance policy to Alaska Sales & Service,
d/b/a Alamo, Policy Number CA07766664, which contained a
Daily Auto Rental Endorsement.[15] The Endorsement
provides that an “insured” includes a
“‘rentee[, ]'” who is defined as
“a holder of a ‘rental agreement' with you
which provides for the holder's use of an
‘auto' for a period of less than one
year.”[16] A “rental agreement” is
defined as “the ‘auto' rental contract
between you and the ‘rentee.' This agreement states
the limit of liability you are providing the
‘rentee.'”[17]
Paragraph
C in Section II of the Endorsement provides that the
“Limit of Insurance” for a “rentee”
“is the limit shown in the SCHEDULE of this endorsement
or the limits specified by a compulsory or financial
responsibility law of the jurisdiction in which the accident
occurred.”[18] The Schedule shows that the limit
for “bodily injury” liability is $50, 000 for
each person and $100, 000 for each accident and that the
limit for “property damage” liability is $25, 000
for each accident.[19] This complies with the mandatory
minimum for bodily injury liability under Alaska law. AS
28.22.101(d).
The
Endorsement further provides:
With respect to specific commercial accounts, if the
Corporate Schedule below is filled in, the Limit Of Insurance
for Liability Coverage for the “rentee” as stated
in Item C. Limit Of Insurance of this endorsement is replaced
by the following:
C. Limit Of Insurance
The ârenteeâ limit of liability contained in a written
âinsured contractâ between the âInsuredâ and specific
commercial accounts designated by the âInsuredâ shall be
considered to be the Limit of Liability contained in the
ârental agreementâ; however, our Limit of Liability for any
ârenteeâ shall not exceed the limit stated in the Corporate
Schedule of this endorsement.[20]
The
Corporate Schedule is filled in on the Endorsement and
provides for a Limit of Liability for bodily injury and
property damage combined of $2, 000, 000 for each
accident.[21]
Finally,
the Endorsement provides:
The Insurance provided by this policy for the
“rentee” and any other person authorized by the
“rental agreement” held by the “rentee,
” is subject to the terms, conditions, restrictions and
limitations contained in the “rental agreement, ”
provided however, that our Limit of Insurance for Liability
Coverage will not exceed the limit shown in Section C. Limit
Of Insurance of this endorsement.[22]
Seamon
contends that plaintiff sold Alaska Sales & Service the
policy that contained the Endorsement because in 2008, Alaska
Sales & Service was directed by Alamo's parent
company to obtain additional insurance coverage for certain
commercial accounts that rented with Alamo.[23] More
specifically, Alaska Sales & Service was to have an
insurance policy that contained “[a]n endorsement
providing coverage over the minimum financial
responsibility limits to all commercial accounts that we
have, by separate contract, agreed to provide. . .
.”[24]
After
the accident involving Barksdale and Seamon, plaintiff
contends that, on Barksdale's account, it offered the
$50, 000 bodily injury limit of liability to Seamon.
Plaintiff further contends that Seamon rejected that offer
and demanded the $2 million limit of liability contained in
the Corporate Schedule in the Endorsement.
Plaintiff
commenced this action for declaratory relief on October 16,
2017. Plaintiff seeks a declaration “that the
applicable liability limit under the National Casualty policy
issued to Alamo, for vehicle renter Jessie L. Barksdale, is
$50, 000 for each person, as stated in the National Casualty
policy, and not $2, 000, 000 as alluded to by defendant
Seamon.”[25]
Plaintiff
now moves for summary judgment on its claim for declaratory
relief. Seamon cross-moves for summary judgment that the
applicable liability limit for Barksdale is $2, 000,
000.[26]
Discussion
Summary
judgment is appropriate when there are no genuine issues of
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a).
This
case involves the interpretation of an insurance contract
under Alaska law. “The interpretation of contract
language is a question of law. . . .” Dugan v.
Atlanta Cas. Companies, 113 P.3d 652, 654 (Alaska 2005).
“‘In addressing the proper interpretation of an
insurance policy, ” the court “‘look[s] 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.'”
Hahn v. GEICO Choice Ins. Co., 420 P.3d 1160, 1170
(Alaska 2018) (quoting State Farm Mut. Auto. Ins. Co. v.
Houle, 269 P.3d 654, 657-58 (Alaska 2011)).
“‘Because an insurance policy is a contract of
adhesion, [the court] construe[s] grants of coverage broadly
and interpret[s] exclusions narrowly.'”
Id. (quoting Houle, 269 P.3d at 658).
“Under Alaska law, ‘[i]nsurance contracts are
interpreted in accordance with the reasonable expectations of
the insured. This is true even if painstaking study of the
policy provisions would have negated those
expectations.'” Id. (quoting Safety
Nat'l Cas. Corp. v. Pac. Emp'rs Ins. Co., 927
P.2d 748, 750 (Alaska 1996)). “Insurance contracts are
also construed according to ‘ordinary and customary
usage.'” Id. at 1171 (quoting
Houle, 269 P.3d at 658). “Any ambiguous terms
are to be construed in favor of the insured.”
Id. “However, ‘ambiguities only exist
when there are two or more reasonable interpretations of
particular policy language.'” Id. (quoting
Houle, 269 P.3d at 658).
Although
the definition section of the Endorsement does not contain a
definition for “specific commercial account, ”
the Endorsement is not ambiguous. The Limit of Insurance for
Liability Coverage is stated in Paragraph C of Section II of
the Endorsement. Paragraph C provides that the limit for
liability coverage for a “‘rentee' is the
limit shown in the SCHEDULE of this endorsement. . .
.”[27]The SCHEDULE shows a $50, 000 limit for
bodily injury liability for each person.[28]
The
Endorsement further provides:
With respect to specific commercial accounts, if the
Corporate Schedule below is filled in, the Limit Of Insurance
for Liability Coverage for the “rentee” as stated
in Item C. Limit Of Insurance of this endorsement is replaced
by the following:
C. Limit Of Insurance
The ârenteeâ limit of liability contained in a written
âInsured contractâ between the âInsuredâ and specific
commercial accounts designated by the âInsuredâ shall be
considered to be the Limit of Liability contained in the
ârental agreementâ; however, our Limit of Liability for any
ârenteeâ shall not exceed the limit stated in the Corporate
Schedule of this endorsement.[29]
The
Corporate Schedule in the Endorsement provides for a Limit of
Liability for bodily injury and property damage combined of
$2, 000, 000 for each accident.[30] Paragraph C, as it
pertains to “specific commercial accounts[, ]”
unambiguously states that in order for the limit of liability
in the Corporate Schedule to apply there must be a written
...