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Berkley National Insurance Co. v. Franklin

United States District Court, D. Minnesota

January 7, 2019

Berkley National Insurance Company, Plaintiff,
v.
Janice Franklin, as Trustee for the Heirs and Next-of-Kin of William Franklin, Deceased, Defendant.

          Dana A. Rice, Esq., and Suzanne L. Jones, Esq., Hinshaw & Culbertson LLP, counsel for Plaintiff.

          Scott M. Strand, Esq., Cahill Law Office, counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on cross motions for partial summary judgment brought by Plaintiff Berkley National Insurance Company (“Berkley”) (Doc. No. 31) and Defendant Janice Franklin, as trustee for the heirs and next-of-kin of William Franklin, deceased (“Franklin Estate”) (Doc. No. 27). For the reasons set forth below, the Court grants Franklin Estate's motion and denies Berkley's motion.

         BACKGROUND

         On April 25, 2017, William Franklin was involved in a car accident in Duluth, Minnesota (“Accident”). (Doc. No. 21 (“Am. Compl.”) ¶¶ 6, 8; Doc. No. 22 (“Answer”) ¶ 4.) At the time of the Accident, Mr. Franklin was on a business trip for his employer, ISD 152 Moorhead (“School District”), and was driving a car that the School District rented from Enterprise Rent-A-Car. (Am. Compl. ¶¶ 6-7; Answer ¶ 4.) Mr. Franklin died on May 3, 2017, and the Franklin Estate alleges that the cause of Mr. Franklin's death was the injuries he suffered in the Accident. (Am. Compl. ¶ 13; Answer ¶ 4.)

         At the time of the Accident, the driver of the vehicle that struck Mr. Franklin's car was insured with American Family Insurance, providing up to $100, 000 of bodily injury liability coverage. (Doc. No. 30 (“Strand Aff.”) ¶ 2, Ex. 4.) The Franklin Estate agreed to a release of all claims against American Family Insurance and the driver of the vehicle that struck Mr. Franklin's car in exchange for the $100, 000 bodily injury coverage. (Strand Aff. ¶ 2, Ex. 5.) The release specifically reserved all claims for future underinsured motorist benefits. (Id.)

         The Franklin Estate contends that $100, 000 is insufficient to fully compensate the Franklin Estate for damages caused by the accident. (Answer at 5 ¶ 12.) The Franklin Estate therefore filed a claim with Berkley requesting that Berkley provide underinsured motorist coverage to the Franklin Estate pursuant to an insurance policy that Berkley issued to the School District, i.e. Business Auto Policy number HMP 8525242-10 for the policy period of July 1, 2016 to July 1, 2017 (“Franklin Claim”). (Am. Compl. ¶ 21, Ex. A (“Berkley Policy”); Answer at 2 ¶ 9, at 5 ¶ 3.) The parties disagree, however, as to whether the Berkley Policy is required to extend underinsured motorist (“UIM”) coverage to the rental vehicle that Mr. Franklin was driving at the time of the Accident.

         The Berkley Policy provides business auto liability coverage and $1, 000, 000 of UIM coverage for each covered accident. (Berkley Policy at 36 (“UIM Endorsement”).) Specifically, the UIM Endorsement states:

We will pay all sums the “insured” is legally entitled to recover as compensatory damages from the owner or driver of an “uninsured motor vehicle” or “underinsured motor vehicle”. The damages must result from “bodily injury” sustained by the “insured” caused by an “accident.” The owner's or driver's liability for these damages must result from the ownership, maintenance or use of the “uninsured motor vehicle” or “underinsured motor vehicle”.

(Am. Compl. ¶ 22; Berkley Policy at 36; Answer ¶ 9.) The Berkley Policy further provides that coverages only extend to “those ‘autos' shown as covered ‘autos', ” as designated by “one or more of the symbols from the Covered Autos Section” of the Berkley Policy. (Am. Compl. ¶ 27; Berkley Policy at 14; Answer ¶ 9.) Regarding UIM coverage, the Berkley Policy specifically defines a “covered ‘auto'” through the use of Symbol 6. (Id.) The Berkley Policy defines Symbol 6 as:

Only those “autos” you own because of the law in the state where they are licensed or principally garaged are required to have and cannot reject Uninsured Motorist Coverage. This includes those “autos” you acquire ownership of after the policy begins provided they are subject to the same state uninsured motorists requirement.

(Id.) The parties agree that the School District does not own the car that Mr. Franklin was driving at the ...


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