ACUITY, Plaintiff-Appellee, v. SOUTHWEST SPRING, INC., JAMES G. CRUTCHER, AUTO-OWNERS INSURANCE COMPANY, Defendants-Appellants, and SKYLINE DISPOSAL COMPANY, ROBERT BLAKE, and SHARON BLAKE, Defendants. AUTO-OWNERS INSURANCE COMPANY, SOUTHWEST SPRINGS, INC., and JAMES G. CRUTCHER, Counter-Plaintiffs-Appellants, v. ACUITY, Counter-Defendant-Appellee, and SKYLINE DISPOSAL COMPANY, ROBERT BLAKE, and SHARON BLAKE, Counter-Defendants.

 

No. 1-14-2380

 

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

 

2016 IL App (1st) 142380-U; 2016 Ill. App. Unpub. LEXIS 100

 

 

January 20, 2016, Decided

 

 

NOTICE:    THIS ORDER WAS FILED UNDER SUPREME COURT RULE 23 AND MAY NOT BE CITED AS PRECEDENT BY ANY PARTY EXCEPT IN LIMITED CIRCUMSTANCES ALLOWED UNDER RULE 23(e)(1).

 

PRIOR HISTORY:     [**1] Appeal from the Circuit Court of Cook County, Illinois. No. 09CH51545. The Honorable David B. Atkins, Judge Presiding.

 

DISPOSITION:    Affirmed.

 

JUDGES: JUSTICE FITZGERALD SMITH delivered the judgment of the court. Presiding Justice Mason and Justice Pucinski concur in the judgment.

 

OPINION BY: FITZGERALD SMITH

 

OPINION

 

ORDER

[*P1] Held: Where insurer accepted the defense of an underlying lawsuit with no reservation of rights and then actively worked on defense for over three years, during which time it reviewed coverage and still did not notify second insurer that it was considering seeking its involvement, yet tendered the defense to second insurer on the eve of trial, insurer waived its right to second insurer’s contribution. Circuit court affirmed.

[*P2]  This is an insurance coverage action arising from an automobile collision that led to an underlying tort action. Defendants-Appellants Southwest Spring, Inc. (Southwest), James G. Crutcher (Crutcher), and Auto-Owners Insurance Company (Auto-Owners) appeal from a partial grant of summary judgment wherein the circuit court agreed Plaintiff-Appellee insurer Acuity breached its duty to defend Crutcher, but that it had no duty to defend Southwest because Southwest was not an insured on the Acuity [**2]  policy, and held that Auto-Owners had waived its right to recover from Acuity in equitable subrogation and contribution. In this cause, we are asked to determine whether Acuity had an obligation to its insureds Southwest Spring and James Crutcher, who are also insureds on Auto-Owners policies, and whether Acuity breached that obligation. For the following reasons, we affirm.

 

[*P3]  I. BACKGROUND

[*P4]  This case stems from a vehicular collision that occurred on May 26, 2006. Because there are a large number of parties and pertinent relationships involved here, we first describe the parties and their respective relationships. Southwest is an automotive parts repairer and rebuilder. Crutcher was Southwest’s employee. He was a mechanic who was driving a garbage truck owned by defendant Skyline Disposal Company, Inc. (Skyline). Skyline is a waste disposal company. It was also a “long-standing” Southwest customer that brought its vehicles to Southwest for servicing several times per year.

[*P5]  Auto-Owners is an insurance company. It issued insurance policies to Southwest for garage liability, commercial general liability, and umbrella coverage. Antoinette Nastali is the owner and chief operating officer of [**3]  Southwest, and had sole responsibility for Southwest’s insurance decisions. Acuity is also an insurance company. It issued a commercial auto and commercial umbrella policy to Skyline.

[*P6]  The Acuity policy identified Skyline Disposal as the named insured. It provided that the word “you” referred to the named insured. The policy set forth, in pertinent part, the following:

 

 

“SECTION II–LIABILTY COVERAGE    A. Coverage

We will pay all sums an insured legally must pay as damages because of bodily injury . . . to which this insurance applies, caused by an accident and resulting from the . . . use of a covered auto

* * *

1. Who is an Insured:

The following are insureds:

* * *

(b) Anyone else while using with your permission a covered auto you own, hire or borrow [. . .]”1

* * *

(c) Anyone liable for the conduct of an insured described above but only to the extent of that liability.”

 

 

 

 

1   Although this section, A(1)(b), includes an exception for: “(3) Someone using a covered auto while he or she is working in a business of selling, servicing, repairing, parking or storing autos unless the business is yours,” appellants point out that an “Illinois Changes” endorsement to the policy removed that exception. That endorsement [**4]  provides, in relevant part:

 

“1. CHANGES IN LIABILITY COVERAGE

 

 

 

1. Paragraph 1(b)(3) of the Who Is an Insured provision in the Business Auto, Motor Carrier and Truckers Coverage Forms . . . do[es] not apply.”

 

 

[*P7]  On the day of the collision, Skyline’s garbage truck was at Southwest for servicing. Crutcher was working that day. He backed Skyline’s truck out of Southwest’s garage and into the nearby road. When he did so, the truck hit a vehicle occupied by Robert Blake, injuring Blake. Southwest notified its insurer, Auto-Owners, of the accident that same day. Auto-Owners field claims adjuster Sherese Nubin was assigned to handle the claim.

[*P8]  In June 2006, Blake and his wife, Sharon Blake (the Blakes) filed a lawsuit (the Blake lawsuit) against Crutcher, Southwest, and Skyline alleging negligence and seeking compensation for injuries sustained in the collision. Specifically, the Blakes alleged that Crutcher, acting as an agent of either Skyline or Southwest, caused the accident through his negligent driving. The Blakes’ complaint also alleged that Southwest was liable for poor safety practices on its premises.

[*P9]  Nastali testified at deposition that she expected the Auto-Owners garage liability policy [**5]  would cover an accident in which a Southwest employee was operating a customer’s vehicle as part of service provided by Southwest. During the course of litigating the underlying Blake lawsuit, Nastali learned that Skyline was named a defendant along with Southwest and Crutcher. She believed her garage liability insurance would cover her company, her employee, and her customers. It was desirable to her from a business standpoint that the three work together as a unit to defend against the Blake lawsuit. Nastali made a business decision that Southwest would pay for the physical repair of the damaged Skyline truck.

[*P10]  At her deposition, Auto-Owners field claims adjuster Nubin testified that Auto-Owners received notice of the Blake’s lawsuit in July 2006, and she assigned Auto-Owners’ ‘panel counsel’ to defend Southwest, Crutcher, and Skyline. Panel counsel are attorneys or law firms selected by Auto-Owners to defend cases that do not involve a reservation of rights. Nubin admitted Auto-Owners did not reserve its rights.

[*P11]  Nubin also testified that, by September 2006, Auto-Owners was aware that Acuity had issued an insurance policy to kyline. Subsequently, there were discussions between Acuity [**6]  and Auto-Owners regarding the coverage and defense of Skyline. Nubin agreed that, by September 22, 2006, “there was already an agreement between Acuity and Auto-Owners that all of the defense obligations under the Skyline policy from Acuity are going to get transferred over to Auto-Owners, and Auto-Owners is going to go ahead and defend these defendants without reservation of rights against the Blake lawsuit.” Nubin testified that, as the Auto-Owners representative for the file, she informed Acuity that Auto-Owners was accepting the tender, that is, “accepting all of Acuity’s defense and indemnity obligations.” She testified she did not inform Acuity that Auto-Owners was reserving any rights to later seek to recover from Acuity, nor did she inform panel counsel or any other attorneys paid by Auto-Owners to do so.

[*P12]  Nubin specifically agreed that her expectation was “if there was ever going to have to be an indemnity payment made on the Blake lawsuit, it would come from the Auto-Owners policy, without Acuity’s involvement,” and that her expectation, “through [her] agreement with Acuity, was that if there needs to be an indemnity payment for Skyline Disposal, Southwest Spring and/or James [**7]  Crutcher to the Blakes, either in settlement or judgment, that Skyline — strike that — Southwest Spring’s policy with Auto-Owners would answer to that, paying its primary layers [of coverage] and then going directly into its excess layers, up to the $3 million available[.]” To that end, in October 2006, Nubin directed Auto-Owners’ panel counsel to defend Skyline, Southwest Spring, and Crutcher “fully and completely under the Auto-Owners policy, without reservation of rights and without any involvement of Acuity[.]”

[*P13]  Over the next few years, the Blake lawsuit proceeded through litigation, defended by Auto-Owners panel counsel. During this time, Nubin was promoted to claims manager at Auto-Owners Insurance. Auto-Owners then assigned claims adjuster Chad McGuire to assume direct file-handling responsibilities for the Blake lawsuit. Thereafter, Nubin, as manager, reviewed the file every six months. Nubin never determined the Blake case would need a subrogated recovery of defense or indemnity costs expended.

[*P14]  McGuire testified at his deposition that, after Nubin was promoted to manager, he took over responsibility of the Blake lawsuit file. He confirmed that Auto-Owners panel counsel fully [**8]  controlled the defense of Southwest Spring, Crutcher, and Skyline Disposal in the Blake litigation.2 McGuire received a copy of the Acuity policy around December 2007, which he forwarded to the Auto-Owners’ home office. Despite receipt of the Acuity policy, Auto-Owners took no action to place Acuity on notice that it intended to seek contribution of any kind.

 

2   Southwest Spring and Crutcher were represented by a separate law firm than was Skyline Disposal, but both firms were assigned by Auto-Owners Insurance.

[*P15]  McGuire confirmed that, by May 2009, Auto-Owners was “at least paying two different panel counsel law firms for their coverage analysis and research as to how the Blake lawsuit might affect Skyline’s policy and the loss ratio for Skyline itself.” In May 2009, Auto-Owners panel counsel analyzed whether Acuity should provide coverage for all three defendants. At this time, McGuire’s “working assumption” was that Auto-Owners policy would primarily pay for the loss, and Auto-Owners would directly access its excess policy to pay any indemnity over primary limits. At this time, no reservation, conflict, or excess letters were issued to place Acuity on notice that Auto-Owners would potentially [**9]  expect contribution.

[*P16]  In July 2009, the Blake lawsuit was officially set for trial, to begin January 21, 2010. In October 2009, Auto-Owners again had its panel counsel analyze whether Acuity’s policy was primary. Also in October 2009, Auto-Owners panel counsel conferred with the Blakes’ counsel.

[*P17]  McGuire confirmed that he, Auto-Owners, and panel counsel “decided to issue a targeted tender letter to Acuity for the defense and indemnity of Southwest Spring” in November 2009.

[*P18]  Southwest owner Nastali testified that neither Auto-Owners nor its panel counsel ever informed her what a “targeted tender” involved, or what potential risks and benefits could arise from such a tender. Specifically, Nastali confirmed she was never informed that, by making a targeted tender of the “defense of Southwest Spring to Acuity within about two months of the trial date, would mean that [Southwest] would be turning off or deactivating the millions of dollars of protection that [it] had with Auto-Owners” or that there “was a risk that [Southwest Springs was] not going to be defended by attorneys trusted by Auto-Owners any longer and that [Southwest] might be putting the fate of [the] company in the hands of Acuity.” [**10]  Nastali did not receive notice that making a targeted tender to Acuity could mean deactivating the Auto-Owners insurance policy or the potential of Acuity assigning new defense counsel. Nor did Auto-Owners inform Nastali that there was a potential conflict of interest and Southwest might want to talk to outside counsel “whose loyalty was solely to [Southwest] as a business.” Nastali testified that, when she signed the proposed tender letter, she did so not knowing what it was, but only at the direction of Auto-Owners’ panel counsel. Nastali complied because she thought the insurance company was “working for our best interest.”

[*P19]  In an undated letter that Acuity received on November 18, 2009, Southwest tendered its defense to Acuity. This was two months before the cause was scheduled to go to trial, and three and one-half years after the accident itself. After describing the automobile collision which occurred on May 26, 2006, the letter stated in part:

 

“Southwest Spring selectively tenders its defense and indemnity of [the Blake lawsuit] to Acuity under both the commercial auto and commercial umbrella policies. As you may know, trial of the captioned case is scheduled for January 21, [**11]  2010. Consequently, Acuity’s prompt attention and response to Southwest Spring’s tender is requested.”

 

 

[*P20]  Acuity rejected the tender by letter on December 22, 2009, noting:

 

“This is a response to your undated letter tendering the defense and indemnification of Southwest Spring relative to [the Blake lawsuit]. This letter was received by ACUITY on November 18, 2009. No prior communications of any kind seeking to tender the defense of Southwest Spring to Acuity had been made prior to that date.”

 

 

Acuity claimed: Southwest Spring was not an insured because the Acuity policy “Who is an Insured” section pertained only to natural persons and not to corporate entities; Southwest Spring failed to make a timely formal tender of its defense, as the tender was made “on the eve of trial after relevant parties understood and in effect agreed that Acuity would not be involved in defense or indemnification of any defendants in the underlying litigation”; Southwest Spring breached the policy’s notice and cooperation provisions by failing to promptly forward lawsuit papers, failing to give notice to seek intent to seek coverage as soon as practicable, and failing to cooperate in Acuity’s investigation of [**12]  the claims made against Southwest Spring; and there was inadequate tender where Acuity’s duties under the policy were not properly triggered and/or conditions precedent to coverage were breached.

[*P21]  Eventually, Skyline was dismissed from the underlying action. Auto-Owners settled the remaining claims against Southwest and Crutcher for $2.5 million, exhausting the $1 million limit of its garage liability policy and paying an additional $1.5 million under its commercial liability policy.

[*P22]  Southwest, Crutcher, and Auto-Owners jointly filed a counterclaim seeking declaratory judgment that Southwest and Crutcher were insureds on the Acuity policy issued to Skyline, and Acuity had a duty to defend them in the underlying action

[*P23]  Acuity filed a motion for summary judgment, arguing that Auto-Owners had no right to contribution from Acuity for Auto-Owners’ settlement payment, or reimbursement for the defense costs incurred, because the tender was made shortly before a scheduled trial date and was, therefore, untimely; and Auto-Owners waived its right to recover from Acuity by defending the underlying action without reserving those rights.

[*P24]  Southwest Spring, Crutcher, and Auto-Owners3 filed a cross-motion [**13]  for summary judgment, arguing that Acuity’s policy provided primary liability coverage to Southwest and Crutcher as omnibus additional insureds, and that no tender was necessary to trigger Acuity’s obligations to them because Acuity had actual notice of the claim against them when it learned of the underlying complaint against Skyline, including the allegations that they were using a vehicle owned by Acuity’s named insured, Skyline. They maintained that Southwest had properly target-tendered its defense to Acuity under both its commercial auto and commercial umbrella coverage, effectively deselecting the Auto-Owners policies issued to Southwest by requesting defense and indemnity from Acuity alone. They further argued that Acuity had breached its duty to defend Southwest and Crutcher, and therefore should be estopped from asserting policy defenses to coverage.

 

3   This appeal is limited to the dispute between Acuity and Auto-Owners Insurance.

[*P25]  In a memorandum opinion, the circuit granted and denied various aspects of the two motions. In pertinent part, the court found that: Southwest’s tender letter to Acuity was invalid and unenforceable; Southwest was not an insured under the Acuity policy; [**14]  Acuity did not have a duty to defend Southwest in the underlying Blake lawsuit; Auto-Owners and Acuity both provided concurrent primary coverage, such that they covered the same risk, making equitable subrogation unavailable; and Auto-Owners waived its right to contribution from Acuity by providing a defense for their mutual insureds for two and a half years without seeking involvement from Acuity. The court held: “Therefore, normally applicable claims for equitable contribution or subrogation are rendered null and Auto-Owners may not otherwise seek contribution from Acuity.”

 

[*P26]  II. ANALYSIS

[*P27]  On appeal, Auto-Owners first contends the circuit court erred in determining that Acuity had no duty to defend Southwest. Specifically, Auto-Owners argues that the circuit court erred because: (1) Acuity had actual notice of a claim against Southwest as an omnibus insured; and (2) Acuity breached its duty to defend Southwest. Auto-Owners also contends that, even if Acuity were not estopped from raising its coverage defenses, Acuity’s coverage defenses would have no merit. Acuity responds, in part, that the targeted tender was, in fact, invalid because Nastali did not desire to tender the defense, [**15]  did not understand what she was signing, and merely signed the tender letter because Auto-Owners’ panel counsel instructed her to do so. Acuity also argues, in part, that Auto-Owners waived any right to seek contribution from Acuity by failing to reserve its rights and waiting too long to tender the defense, and Acuity did not breach its duty to defend because its duty was never triggered by a valid tender.

[*P28]  While the parties present us with these myriad issues on appeal, the primary issue here is actually whether Auto-Owners has a right to equitable recovery from Acuity. We find that it does not, and affirm the ruling of the circuit court.

[*P29]  Summary judgment is proper when the pleadings, affidavits, depositions and admissions of record, construed strictly against the moving party, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Morris v. Margulis, 197 Ill. 2d 28, 35, 754 N.E.2d 314, 257 Ill. Dec. 656 (2001). This relief is an appropriate tool to employ in the expeditious disposition of a lawsuit in which “‘the right of the moving party is clear and free from doubt.'” Morris, 197 Ill. 2d at 35 (quoting Purtill v. Hess, 111 Ill. 2d 229, 240, 489 N.E.2d 867, 95 Ill. Dec. 305 (1986)); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204, 180 Ill. Dec. 691 (1992). “[T]he construction of an insurance policy and a determination of the rights and obligations thereunder are [**16]  questions of law for the court and appropriate subjects for disposition by summary judgment.” Konami (America), Inc. v. Hartford Insurance Co. of Illinois, 326 Ill. App. 3d 874, 877, 761 N.E.2d 1277, 260 Ill. Dec. 721 (2002).

[*P30]  Where cross-motions for summary judgment are filed in an insurance case, the parties acknowledge that no material questions of fact exist and only the issue of law regarding the construction of an insurance policy is present. American Family Mutual Insurance Co. v. Fisher Development, Inc., 391 Ill. App. 3d 521, 525, 909 N.E.2d 274, 330 Ill. Dec. 561 (2009) (citing Liberty Mutual Fire Insurance Co. v. St. Paul Fire & Marine Insurance Co., 363 Ill. App. 3d 335, 338-39, 842 N.E.2d 170, 299 Ill. Dec. 431 (2005). We review the circuit court’s decision to grant or deny such a motion for summary judgment de novo (Virginia Surety Co. v. Northern Insurance Co. of New York, 224 Ill. 2d 550, 556, 866 N.E.2d 149, 310 Ill. Dec. 338 (2007), and we will only disturb the decision of the trial court where we find that a genuine issue of material fact exists (Addison v. Whittenberg, 124 Ill. 2d 287, 294, 529 N.E.2d 552, 124 Ill. Dec. 571 (1988)).

[*P31]  “An insurance policy is a contract, and the general rules governing the interpretation of other types of contracts also govern the interpretation of insurance policies.” Hobbs v. Hartford Ins. Co. of the Midwest, 214 Ill. 2d 11, 17, 823 N.E.2d 561, 291 Ill. Dec. 269 (2005). “In construing an insurance policy, the primary function of the court is to ascertain and enforce the intentions of the parties as expressed in the agreement. [Citation.] To ascertain the intent of the parties and the meaning of the words used in the insurance policy, the court must construe the policy as a whole, taking into account the type of insurance for which the parties have contracted, the risks undertaken and purchased, the subject matter that is insured and the [**17]  purposes of the entire contract. [Citation.] If the words in the policy are plain and unambiguous, the court will afford them their plain, ordinary meaning and will apply them as written.” Crum & Forster Managers Corporation v. Resolution Trust Corporation, 156 Ill. 2d 384, 391, 620 N.E.2d 1073, 189 Ill. Dec. 756 (1993). If the insurer relies on an exclusionary provision, it must be “clear and free from doubt” that the policy’s exclusion prevents coverage. Country Mutual Insurance Company v. Olsak, 391 Ill. App. 3d 295, 305, 908 N.E.2d 1091, 330 Ill. Dec. 433 (2009). An omnibus clause is a “provision in an automobile insurance policy extending liability coverage to persons who use the named insured’s vehicle with his or her permission.” State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 182 Ill. 2d 240, 243-44, 695 N.E.2d 848, 231 Ill. Dec. 75 (1998).

[*P32]  When multiple insurance policies are available to the insured, that insured has the paramount right to choose or knowingly forego an insurer’s participation in a claim. John Burns Construction Co. v. Indiana Insurance Co., 189 Ill. 2d 570, 574-76, 727 N.E.2d 211, 244 Ill. Dec. 912 (2000) (insured general contractor had the right to select a single carrier to provide exclusive coverage for a loss); American National Fire Insurance Co. v. National Union Fire Insurance Co. of Pittsburgh, PA, 343 Ill. App. 3d 93, 101, 796 N.E.2d 1133, 277 Ill. Dec. 767 (2003) (general contractor had the right to choose between three insurers to defend and indemnify it where the general contractor was the named insured on its own policy and the additional insured on two subcontractors’ policies). The insured may choose to forego an insurer’s assistance for various reasons, such as the insured’s fear that premiums would be increased or the policy cancelled in the future, and the insured’s [**18]  ability to forego a particular insurer’s assistance should be protected. Cincinnati Cos. v. West American Insurance Co., 183 Ill. 2d 317, 326, 701 N.E.2d 499, 233 Ill. Dec. 649 (1998).

[*P33]  Here, Auto-Owners alone paid the defense costs in the Blake lawsuit, as well as the settlement amount, in the underlying case. Auto-Owners then brought an action for contribution against Acuity seeking to recover a portion of these costs. The issue presented here, then, is whether Acuity was liable to Auto-Owners such that it must contribute to the cost of the defense and settlement of the underlying lawsuit. “‘In insurance law, contribution is “an equitable principle arising among coinsurers which permits one who has paid the entire loss to receive reimbursement from the other insurer liable for the loss.” ‘” Cincinnati Companies, 183 Ill. 2d at 322 (quoting Aetna Casualty & Surety Co. v. James J. Benes & Associates, Inc., 229 Ill. App. 3d 413, 417, 593 N.E.2d 1087, 171 Ill. Dec. 267 (1992) (quoting Hall v. Country Casualty Insurance Co., 204 Ill. App. 3d 765, 772, 562 N.E.2d 640, 150 Ill. Dec. 110 (1990))).

[*P34]  The parties do not dispute that Auto-Owners agreed to provide a defense to Skyline, Southwest, and Crutcher in the underlying Blake lawsuit. As noted above, Auto-Owners Insurance field claims adjuster Sherese Nubin, who handled the claim over many years first as a claims adjuster and later as a manager, specifically testified that, in 2006, she informed Acuity that Auto-Owners was accepting the tender, that is, “accepting all of Acuity’s defense and indemnity obligations.” To that [**19]  end, in October 2006, Nubin directed Auto-Owners’ panel counsel to defend Skyline, Southwest Spring, and Crutcher “fully and completely under the Auto-Owners policy, without reservation of rights and without any involvement of Acuity[.]” She testified she did not inform Acuity that Auto-Owners was reserving any rights to later seek to recover from Acuity, nor did she inform panel counsel or any other attorneys paid by Auto-Owners to do so. Then, once Nubin was promoted to manager, Chad McGuire assumed direct file handling responsibilities of the Blake lawsuit. McGuire testified that Auto-Owners panel counsel fully controlled the defense of Southwest Spring, Crutcher, and Skyline in the Blake litigation. Thereafter, in May 2009, Auto-Owners panel counsel analyzed whether Acuity should provide coverage for Southwest, Crutcher, and Skyline. McGuire’s “working assumption” was that Auto-Owners policy would pay for the loss, and Auto-Owners would directly access its excess policy to pay any indemnity over primary limits. As of May 2009, no reservation, conflict, or excess letters were issued to place Acuity on notice that Auto-Owners would potentially expect contribution from it. Auto-Owners [**20]  neither reserved its rights nor attempted to tender the defense until mid-November 2009.

[*P35]  The collision occurred in May 2006. Southwest immediately gave notice of the collision to its primary carrier, Auto-Owners, which covered Southwest under garage liability, commercial general liability, and umbrella liability policies. The Blake lawsuit was filed in June 2006. Auto-Owners received notice of the Blake lawsuit the following month. Auto-Owners assigned panel counsel to defend Southwest, Crutcher, and Skyline by July 2006. Auto-Owners then proceeded to “fully control” the defense of Southwest, Crutcher, and Skyline from October 2006 until the case settled in early 2010. However, in November 2009, just two months prior to trial, Auto-Owners Insurance tendered the defense to Acuity. Throughout these intervening months and years during which Auto-Owners fully controlled the defense, it failed to inform Acuity at any time that it was planning to tender the defense to Acuity.

[*P36]  Waiver is an express or implied relinquishment of a known right. Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 326-27, 821 N.E.2d 269, 290 Ill. Dec. 218 (2004); Lumbermen’s Mutual Casualty Co. v. Sykes, 384 Ill. App. 3d 207, 219, 890 N.E.2d 1086, 322 Ill. Dec. 167 (2008) (“Waiver is an equitable principle invoked to further the interests of justice whenever a party initially relinquishes a known right or acts in such [**21]  a manner as to warrant an inference of such relinquishment”). Our supreme court has addressed waiver in the context of insurance coverage and subrogation claims:

 

“Waiver arises from an affirmative act, is consensual, and consists of an intentional relinquishment of a known right. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 396, 620 N.E.2d 1073, 189 Ill. Dec. 756 (1993). A waiver may be either express or implied, arising from acts, words, conduct, or knowledge of the insurer. Crum & Forster Managers Corp., 156 Ill. 2d at 396; Western Casualty & Surety Co. v. Brochu, 105 Ill. 2d 486, 499, 475 N.E.2d 872, 86 Ill. Dec. 493 (1985). An implied waiver arises when conduct of the person against whom waiver is asserted is inconsistent with any intention other than to waive it. Liberty Mutual Insurance Co. v. Westfield Insurance Co., 301 Ill. App. 3d 49, 53, 703 N.E.2d 439, 234 Ill. Dec. 578 (1998). Where there is no dispute as to the material facts and only one reasonable inference can be drawn, it is a question of law as to whether waiver has been established. Liberty Mutual, 301 Ill. App. 3d at 53. The failure of a paying insurer to reserve its rights against a nonpaying insurer may constitute a waiver of the right to equitable remedies. 15 Couch on Insurance 3d § 218:32 (rev. 2004). An insurer desiring to reserve its rights against a second insurer must make this position clear in its correspondence with the second insurer[.]”

 

 

Home Insurance Co., 213 Ill. 2d at 326-26.

[*P37]  Because Auto-Owners accepted the defense with no reservation of rights, and then actively worked on said defense through panel counsel for over three years, during [**22]  which time it reviewed coverage and still did not notify Acuity it was considering seeking Acuity’s involvement, Auto-Owners waived its right to Acuity’s contribution. Any responsibility Acuity may have had was relinquished when Auto-Owners took over the defense without reserving any rights and then made no attempt to tender the defense until the eve of trial.

[*P38]  Because Auto-Owners waived its right to seek contribution from Acuity, the circuit court is affirmed.

 

[*P39]  III. CONCLUSION

[*P40]  For all of the foregoing reasons, the decision of the circuit court of Cook County is affirmed.

[*P41]  Affirmed.

DIANE K. STINTON, Individually and as Administrator of the Estate of Gene Allan Stinton, Deceased, Plaintiff, vs. OLD REPUBLIC INSURANCE COMPANY, Defendant.

 

No. C15-4019-LTS

 

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA, WESTERN DIVISION

 

2016 U.S. Dist. LEXIS 15921

 

 

February 10, 2016, Decided

 

 

COUNSEL:  [*1] For Diane K Stinton, Individually and as Administrator of the Estate of Gene Allan Stinton, Deceased, Plaintiff: Scott L Bixenman, LEAD ATTORNEY, Murphy, Collins & Bixenman, PLC, LeMars, IA.

 

For Old Republic Insurance Company, Defendant: Jeffrey L Goodman, LEAD ATTORNEY, Goodman & O’Brien, PC, West Des Moines, IA; William D Howard, LEAD ATTORNEY, PRO HAC VICE, Howard Law Group, Grand Rapids, MI.

 

JUDGES: LEONARD T. STRAND, UNITED STATES MAGISTRATE JUDGE.

 

OPINION BY: LEONARD T. STRAND

 

OPINION

 

ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

 

1. INTRODUCTION

This case is before me on a motion (Doc. No. 16) for summary judgment filed by defendant Old Republic Insurance Company (Old Republic). Plaintiff Diana K. Stinton, individually and as administrator of the estate of Gene Allan Stinton, deceased (Ms. Stinton) has filed a resistance (Doc. No. 17) and Old Republic has filed a reply (Doc. No. 18). While Old Republic has requested oral argument, I find that the issues have been thoroughly briefed such that oral argument is not necessary and would serve only to delay these proceedings. See N.D. Ia. L.R. 7(c). The motion is fully submitted and ready for decision.

 

1. PROCEDURAL HISTORY

Ms. Stinton commenced this action by filing a petition [*2]  (Doc. No. 3) in the Iowa District Court for Plymouth County on February 6, 2015. In general, Ms. Stinton alleges that Old Republic is obligated under a policy of insurance to pay underinsured motorist (UIM) benefits as a result of the death of her husband, Gene Allan Stinton (Mr. Stinton). Doc. No. 3 at 4-6. Old Republic filed a notice (Doc. No. 2) of removal to this court on March 13, 2015, invoking this court’s diversity jurisdiction pursuant to 28 U.S.C. § 1332. Old Republic then filed an answer in which it denied Ms. Stinton’s claim and raised certain defenses.

Upon the unanimous consent of the parties, this case was assigned to me on June 16, 2015, pursuant to 28 U.S.C. § 636(c)(3). Doc. No. 13. Trial is scheduled to begin April 18, 2016. Doc. No. 14. On December 18, 2015, Old Republic filed its motion for summary judgment.

 

III. RELEVANT FACTS

The following facts are undisputed:1

 

1   Certain facts are deemed undisputed by operation of Local Rule 56(b), which provides as follows in relevant part:

 

A response to an individual statement of material fact that is not expressly admitted must be supported by references to those specific pages, paragraphs, or parts of the pleadings, depositions, answers to interrogatories, admissions, exhibits, and [*3]  affidavits that support the resisting party’s refusal to admit the statement, with citations to the appendix containing that part of the record. The failure to respond, with appropriate citations to the appendix, to an individual statement of material fact constitutes an admission of that fact.

 

 

N.D. Ia. L.R. 56(b). In resisting Old Republic’s motion for summary judgment, Ms. Stinton filed a response to Old Republic’s statement of undisputed facts in which she purported to deny the facts set forth in paragraphs 13, 16, 17, 19, 23 and 24 of Old Republic’s statement. See Doc. No. 17-1 at 3-4. However, Ms. Stinton did not provide citations to the record in support of her denials. As such, she is deemed to have admitted all such facts.

On or about September 12, 2013, Mr. Stinton, while employed by Archer Daniels Midland Alliance Nutrition Inc. (Alliance), was operating a grain truck when a semi-tractor and trailer owned by American Outlaw Transportation, Inc. (American Outlaw), and driven by Tom Laidlaw, ran a stop sign, striking and killing Mr. Stinton. As of the date of the accident, a policy of insurance issued by Artisan’s and Trucker’s Casualty Company insured the vehicle owned by American Outlaw. [*4]  That policy included bodily injury limits of $1,000,000. That amount has been paid to Mr. Stinton’s estate.

Mr. Stinton also had an underinsured policy of insurance through Farm Bureau with bodily limits of $100,000. That amount has been paid to Ms. Stinton. Ms. Stinton has also received workers’ compensation benefits through Alliance in the amount of approximately $85,000.

The Alliance grain truck that Mr. Stinton was operating at the time of his death was licensed in South Dakota but was principally garaged, maintained and loaded in Iowa. As of the date of the accident, Alliance was insured through Old Republic by policy number MWTB 21963 and MWTB 21604, with a policy period of July 1, 2013, to July 1, 2014 (the Policy). The declarations page shows “Archer Daniels Midland Co.” (ADM) as the Named Insured under the Policy. An endorsement to the Policy states that the Named Insured, as shown on the declarations page, is extended to include the Named Insured and any and all owned, controlled, associated, affiliated or subsidiary companies or corporations. Mr. Stinton’s employer, Alliance, is a subsidiary of ADM. Thus, Alliance is an additional Named Insured under the Policy.

On April 12, [*5]  2013, Michael Lusk, as Vice-President of Insurance and Risk Management of ADM, executed a form entitled “Rejection of Uninsured Motorists Coverage and/or Underinsured Motorists Coverage (Iowa).” Doc. No. 16-5 at 210. The form was furnished by Old Republic and was contained on a separate sheet of paper that included only the rejection and information directly related to the rejection. Mr. Lusk checked a box “agreeing that the Underinsured Motorists Coverage afforded in the policy is hereby rejected.” Id. Mr. Lusk knowingly rejected UIM coverage for all insureds under the policy. He was acting with the express authority of ADM when he executed the UIM selection form at issue.

The UIM form stated, as follows: “The individual signing this Rejection expressly represents and warrants that he/she is duly authorized to do so on behalf of the named insured and all additional insureds…” Doc. No. 16-5 at 210. Mr. Lusk was, in fact, duly authorized to represent the Named Insured as well as all additional insureds in signing the Rejection of Uninsured Motorists Coverage and/or Underinsured Motorists Coverage (Iowa).

Under Section II of the Policy (Liability), Mr. Stinton, as an employee of Alliance, [*6]  was an additional insured under the Policy. On the Policy’s declarations page, the “Limit” section for UIM coverage stated: “$ See UIM Forms”. Doc. No. 16-3 at 6. The Policy contained UIM coverage forms for each of the 50 states. Those forms varied according to each state’s respective laws. ADM rejected underinsured and uninsured motorist coverage in every state it was permitted to do so.

 

1. SUMMARY JUDGMENT STANDARDS

Any party may move for summary judgment regarding all or any part of the claims asserted in a case. Fed. R. Civ. P. 56(a). Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).

A material fact is one that “‘might affect the outcome of the suit under the governing law.'” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). Thus, “the substantive law will identify which facts are material.” Id. Facts that are “critical” under the substantive law are material, while facts that are “irrelevant or unnecessary” are not. Id.

An issue of material fact is genuine if it has a real basis in the record, Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)), or when “‘a reasonable [*7]  jury could return a verdict for the nonmoving party’ on the question,” Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (quoting Anderson, 477 U.S. at 248). Evidence that only provides “some metaphysical doubt as to the material facts,” Matsushita, 475 U.S. at 586, or evidence that is “merely colorable” or “not significantly probative,” Anderson, 477 U.S. at 249-50, does not make an issue of material fact genuine.

As such, a genuine issue of material fact requires “sufficient evidence supporting the claimed factual dispute” so as to “require a jury or judge to resolve the parties’ differing versions of the truth at trial.” Anderson, 477 U.S. at 248-49. The party moving for entry of summary judgment bears “the initial responsibility of informing the court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue.” Hartnagel, 953 F.2d at 395 (citing Celotex, 477 U.S. at 323). Once the moving party has met this burden, the nonmoving party must go beyond the pleadings and by depositions, affidavits, or otherwise, designate specific facts showing that there is a genuine issue for trial. Mosley v. City of Northwoods, 415 F.3d 908, 910 (8th Cir. 2005). The nonmovant must show an alleged issue of fact is genuine and material as it relates to the substantive law. If a party fails to make a sufficient showing of an essential element of a claim or defense with respect to which that party has the burden of [*8]  proof, then the opposing party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 322.

In determining if a genuine issue of material fact is present, I must view the evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88. Further, I must give the nonmoving party the benefit of all reasonable inferences that can be drawn from the facts. Id. However, “because we view the facts in the light most favorable to the nonmoving party, we do not weigh the evidence or attempt to determine the credibility of the witnesses.” Kammueller v. Loomis, Fargo & Co., 383 F.3d 779, 784 (8th Cir. 2004). Instead, “the court’s function is to determine whether a dispute about a material fact is genuine.” Quick v. Donaldson Co., Inc., 90 F.3d 1372, 1376-77 (8th Cir. 1996).

 

1. ANALYSIS

In seeking the entry of summary judgment in its favor, Old Republic argues that UIM benefits are not payable under the Policy because ADM expressly rejected UIM coverage when it purchased the Policy. Old Republic contends that this rejection occurred in accordance with Iowa law. Old Republic also contends that even if UIM coverage was not effectively rejected, Iowa law provides that the coverage limits would be just $20,000, an amount far below what Mr. Stinton’s estate has already recovered. Finally, Old Republic argues that because the two contracting parties (Old [*9]  Republic and ADM) agree that the Policy does not provide UIM coverage, the court may not write such unintended coverage into the Policy.

Ms. Stinton argues that there are genuine issues of material fact as to whether ADM actually and effectively rejected UIM coverage. She further contends that if no rejection occurred, then UIM coverage exists with a limit of $10,000,000, which is the Policy’s general liability limit.2

 

2   In the “Factual Background” section of her brief, Ms. Stinton includes a discussion of the fact that the truck Mr. Stinton was driving at the time of the accident was licensed in South Dakota. Doc. No. 17-4 at 8-10. However, the “Argument” section of her brief includes no argument that South Dakota law applies, or that UIM benefits are owing under South Dakota law. Id. at 10-16. As such, I will analyze Ms. Stinton’s claim, and Old Republic’s motion, only under Iowa law.

 

1. Overview of Applicable Iowa Law

 

1. Insurance Contracts in General

The Iowa Supreme Court recently summarized Iowa law as follows:

 

Our rules governing the construction and interpretation of insurance policies are well-settled. “The cardinal principle … is that the intent of the parties at the time the policy was sold [*10]  must control.” LeMars Mut. Ins. Co. v. Joffer, 574 N.W.2d 303, 307 (Iowa 1998). Except in cases of ambiguity, we determine “the intent of the parties by looking at what the policy itself says.” Boelman, 826 N.W.2d at 501. If a term is not defined in the policy, we give the words their ordinary meaning. Id. “We will not strain the words or phrases of the policy in order to find liability that the policy did not intend and the insured did not purchase.” Id.

“[A] policy is ambiguous if the language is susceptible to two reasonable interpretations” when the contract is read as a whole. Id. “If the policy is ambiguous, we adopt the construction most favorable to the insured.” Id. at 502. “An insurance policy is not ambiguous, however, just because the parties disagree as to the meaning of its terms.” Id. Moreover, “‘[a]mbiguity is not present merely because the provision “could have been worded more clearly or precisely than it in fact was.”‘” Am. Family Mut. Ins. Co. v. Corrigan, 697 N.W.2d 108, 114 (Iowa 2005) (quoting Cairns v. Grinnell Mut. Reins. Co., 398 N.W.2d 821, 824 (Iowa 1987)). “If an insurance policy and its exclusions are clear, the court ‘will not “write a new contract of insurance”‘ for the parties.” Boelman, 826 N.W.2d at 502 (quoting Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d 678, 682 (Iowa 2008)). We construe exclusions strictly against the insurer. Id. Nevertheless, “we must enforce unambiguous exclusions as written.” Bituminous Cas. Corp. v. Sand Livestock Sys., Inc., 728 N.W.2d 216, 222 (Iowa 2007).

 

 

Amish Connection, Inc. v. State Farm Fire and Cas. Co., 861 N.W.2d 230, 236 (Iowa 2015).

 

2. UIM Coverage

The Iowa Code includes the following provision:

 

 

516A.1 Coverage Included [*11]  In Every Liability Policy — Rejection By Insured.    No automobile liability or motor vehicle liability insurance policy insuring against liability for bodily injury or death arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, unless coverage is provided in such policy or supplemental thereto, for the protection of persons insured under such policy who are legally entitled to recover damages from the owner or operator of an uninsured motor vehicle or a hit-and-run motor vehicle or an underinsured motor vehicle because of bodily injury, sickness, or disease, including death resulting therefrom, caused by accident and arising out of the ownership, maintenance, or use of such uninsured or underinsured motor vehicle, or arising out of physical contact of such hit-and-run motor vehicle with the person insured or with a motor vehicle which the person insured is occupying at the time of the accident. Both the uninsured motor vehicle or hit-and-run motor vehicle coverage, and the underinsured motor vehicle coverage shall include limits for [*12]  bodily injury or death at least equal to those stated in section 321A.1, subsection 11. The form and provisions of such coverage shall be examined and approved by the commissioner of insurance.

However, the named insured may reject all of such coverage, or reject the uninsured motor vehicle (hit-and-run motor vehicle) coverage, or reject the underinsured motor vehicle coverage, by written rejections signed by the named insured. If rejection is made on a form or document furnished by an insurance company or insurance producer, it shall be on a separate sheet of paper which contains only the rejection and information directly related to it. Such coverage need not be provided in or supplemental to a renewal policy if the named insured has rejected the coverage in connection with a policy previously issued to the named insured by the same insurer.

 

 

Iowa Code § 516A.1. Uninsured or underinsured coverage is required only with regard to those who are protected by a policy’s liability coverage. Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d 678, 686 (Iowa 2008). As the statute indicates, only the named insured may effectively reject such coverage. Preferred Risk Ins. Co. v. Cooper, 638 N.W.2d 717, 719-20 (Iowa 2002).

 

1. Did the Named Insured Reject UIM Coverage Under the Policy?

As noted above, Alliance was insured under the Policy on the date of the accident. The Policy’s [*13]  declarations page indicates that the Named Insured was ADM, along with “any and all owned, controlled, associated, affiliated or subsidiary companies or corporations.” Doc. No. 16-3 at 35. The record includes a form entitled “Rejection of Uninsured Motorists Coverage and/or Underinsured Motorists Coverage (Iowa)” (the Rejection). Doc. No. 16-5 at 210. As required by Section 516A.1, the Rejection was “a separate sheet of paper which contains only the rejection and information directly related to it.” Id. The Rejection indicates that both underinsured motorist coverage and uninsured motorist coverage were being rejected and contains a signature dated April 12, 2013. Id.

By affidavit, Mr. Lusk states that he was the Vice-President of Insurance and Risk Management for ADM at the relevant time and that he is the person who signed the Rejection. Doc. No. 16-3 at 3-4. He states that he was acting with ADM’s express authority, as well as with the authorization of all other named insureds, when he signed the form. Id. at 4-5. He further states that by signing the form, he “knowingly rejected UIM coverage for all insureds under the policy.” Id. at 4. Mr. Lusk explains that ADM rejected underinsured and uninsured coverage in [*14]  every state in which it was permitted to do so. Id.

The combination of the Rejection and Mr. Lusk’s testimony appears to establish beyond dispute that the named insureds under the Policy rejected UIM coverage in the manner provided by Iowa law. This is especially true in light of Ms. Stinton’s failure to comply with Local Rule 56(b), which operates as an admission of all facts set forth in Old Republic’s statement of undisputed facts. See Note 1, supra. Even without considering Local Rule 56(b), however, I find that Ms. Stinton has failed to raise a genuine issue of material fact as to whether ADM effectively rejected UIM coverage.

In resisting the entry of summary judgment, Ms. Stinton suggests that the Rejection may have been created after-the-fact to support Old Republic’s denial of her claim. See, e.g., Doc. No. 17-4 at 14 (“The admission by Mr. Farr coupled with the compelling circumstantial evidence surrounding the rejection of UIM coverage in Iowa raises substantial doubt as to the validity of the alleged declination of coverage form.”). That is, she appears to argue that reasonable jurors could find that Mr. Lusk conspired with others at ADM and Old Republic, after Mr. Stinton’s death, to create a back-dated [*15]  written rejection of UIM coverage. In other words, and while she does not say so quite so strongly, Ms. Stinton contends that Old Republic (and others) are perpetrating a fraud on her and the court. In making this argument, Ms. Stinton relies on certain actions and statements that occurred after the accident.

First, Ms. Stinton recites the history of efforts by W.E. Collins, an attorney representing her and Mr. Stinton’s estate, to obtain copies of relevant Policy materials from ADM. Those efforts commenced in October 2013. Ms. Stinton finds it suspicious that a copy of the Rejection was not provided to her until July 24, 2014, only after Mr. Collins wrote a letter to Old Republic demanding payment of $5 million in UIM benefits. Moreover, Ms. Stinton states:

 

ADM’s own Insurance and Risk Management Coordinator, Greg Farr, who presumably would have a say in the decision to elect or decline coverage, drug his feet when asked for confirmation of UIM coverage under the Old Republic Policy, and eventually flatly admitted that there were no rejections of Iowa UIM coverage.

 

 

Doc. No. 17-4 at 13.3 Ms. Stinton is referring to an email message Mr. Farr sent on December 19, 2013, in response to an [*16]  inquiry from Mr. Collins. Mr. Farr wrote:

In Iowa the UND4 policy is not required by the state as such ADM has not taken out coverage. The dec page that I sent you was for our national auto liability policy and if we have UND coverage in certain states there is a separate endorsement for that state providing coverage. There is no such endorsement in Iowa and we do not have UND coverage or any rejection letters. I hope that this helps to explain, but if I can provide additional information that will help please don’t hesitate to let me know.

 

 

Doc. No. 17-3 at 4. While this communication confirmed ADM’s position that it did not have UIM coverage in Iowa, Ms. Stinton finds significance in Farr’s statement that ADM had no “rejection letters.”

 

3   Mr. Farr has provided an affidavit in which he states that he was employed as a claims coordinator for ADM and that his primary role in this matter was to obtain reimbursement from American Outlaw. Doc. No. 18-1 at 27-28. He states that the determination of ADM’s insurance coverage was not within the scope of his job responsibilities. Id.

4   The parties appear to agree that “UND” is another abbreviation for underinsured motorist coverage.

In the context of [*17]  the email thread between Mr. Farr and Mr. Collins, it is quite possible that Mr. Farr intended to communicate that ADM did not have a copy of the Rejection in its possession. However, such a statement would not mean that the Rejection did not exist. Old Republic, the other party to the insurance contract, has produced the Rejection in this litigation and has provided sworn testimony that the Rejection was contained in its underwriting file. Doc. No. 16-5 at 208-10; Doc. No. 18-1 at 35. Even interpreting Mr. Farr’s comment as favorably to Ms. Stinton as possible, it is not an admission that ADM failed to reject UIM coverage in the manner required by Iowa law.

Ms. Stinton also finds significance in the fact the Rejection is not listed in various indices of Policy forms and notices. In particular, the Policy contains a “Policy Holder Notice Index,” which lists various state-specific documents, and a “Forms Index” that purports to list all forms made part of the Policy at the time of issuance. Doc. No. 16-3 at 11-34. Neither index includes the Rejection. Id.

Ms. Stinton cites no authority for the proposition that Old Republic was required to list the Rejection in either index, or that the [*18]  Rejection is invalid if not so listed. The Iowa statute contains no requirement that a written rejection of UIM coverage be identified in a policy index. See Iowa Code § 516A.1. Instead, Ms. Stinton’s argument appears to be that the failure to list the Rejection is evidence that the document did not exist when the Policy took effect. In other words, she argues that the jury can infer from the omissions that the Rejection is a fraudulent, back-dated document.

While Ms. Stinton is entitled to have all reasonable inferences drawn in her favor, I find that the summary judgment record does not come close to allowing such an inference. As noted above, Old Republic has produced the Rejection itself, along with sworn testimony supporting its authenticity. The various forms listed in the “Forms Index,” and attached to the Policy, are almost-uniformly identified as being endorsements that change the terms of the Policy. See, e.g., Doc. No. 16-3 at 70-211. The Rejection is not. Doc. 16-5 at 208-10. Absent authority indicating that Old Republic had a legal obligation to identify the Rejection in the Policy’s lists of notices and forms, I find that the lack of such identification falls short of permitting a reasonable [*19]  inference that the Rejection did not exist.

Ms. Stinton had a full opportunity to conduct discovery in this case. She has not come forward with evidence giving rise to a genuine issue of material fact as to whether ADM properly rejected UIM coverage as permitted by Iowa law. As such, Old Republic is entitled to judgment in its favor as a matter of law.5

 

5   Because I have found in Old Republic’s favor on this issue, I need not address its alternative arguments.

 

1. CONCLUSION

For the reasons set forth herein:

1. Defendant’s motion (Doc. No. 16) for summary judgment is granted.
2. Judgment shall enter in favor of defendant Old Republic Insurance Company and against plaintiff Diane K. Stinton, individually and as administrator of the estate of Gene Allan Stinton, deceased.
3. Trial, which is currently scheduled to begin April 18, 2016, is canceled.
4. Because this order disposes of all pending claims, this case is closed.

IT IS SO ORDERED.

DATED this 10th day of February, 2016.

/s/ Leonard T. Strand

LEONARD T. STRAND

UNITED STATES MAGISTRATE JUDGE