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Kwiecinski v. Illinois Farmers Insurance Co.

United States District Court, N.D. Indiana

January 22, 2019

JANIE KWIECINSKI, Plaintiff,
v.
ILLINOIS FARMERS INSURANCE COMPANY, Defendant.

          OPINION AND ORDER

          THERESA L. SPRINGMANN CHIEF JUDGE

         Plaintiff Janie Kweicinski was working in the course and scope of her employment with the United States Postal Service (USPS) as a rural postal carrier when she was rear-ended by another vehicle. The Plaintiff filed a lawsuit against the driver of that vehicle and sought underinsured motorist coverage from her auto insurance provider, Defendant Illinois Farmers Insurance Company. When the Defendant denied the claim, the Plaintiff filed this action for breach of contract and bad faith. The Defendant has moved for summary judgment, asserting that a “regular use” exclusion within the policy of insurance precludes coverage for the USPS vehicle, and that the Defendant's well-reasoned position related to coverage cannot support a claim for bad faith.

         FACTUAL BACKGROUND

         On October 7, 2014, the Plaintiff was driving her normal route as a letter carrier, the same route she had been driving for nine years, six days a week. She had also been driving the same USPS vehicle for between six and seven years. In the course of delivering the mail, another vehicle hit her USPS truck from behind and she suffered personal injuries.

         At the time of the accident, the Plaintiff had an auto insurance policy with the Defendant. Part II of the policy provided certain coverage for bodily injury sustained in an accident with an uninsured motor vehicle. The policy included an Endorsement Adding Regular and Frequent Use Exclusion to Part II:

It is agreed that the following exclusion is added to the Exclusions under Part II of your policy.
Uninsured Motorist Coverage (and Underinsured Motorist Coverage if applicable) does not apply to damages arising out of the ownership, maintenance, or use of any vehicle other than your insured car . . . which is owned by or furnished or available for the regular use by you or a family member.

(ECF No. 17-3 at 31.)[1] The Liability portion of the policy, Part I, contained a similar provision, which declared that coverage did not apply to “[b]odily injury or property damage arising out of the ownership, maintenance or use of any vehicle other than your insured car, which is owned by or furnished or available for regular use by you or a family member.” (ECF No. 17-3 at 10.)

         After the accident, the Plaintiff sought coverage under Part II of the policy. The Defendant denied coverage for the Plaintiff's bodily injuries, and the Plaintiff filed suit. In the first count, the Plaintiff seeks coverage under a breach of contract theory. In the second count, the Plaintiff asserts that the Defendant denied her claim in bad faith. The Defendant removed this action to federal court on the basis of diversity jurisdiction, and moved for summary judgment.

         ANALYSIS

         A. Standard of Review

         Summary Judgment is appropriate when the record before the Court establishes that 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). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether genuine issues of material fact exist, the Court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. Id. at 255.

         In deciding issues of insurance coverage, the Court must apply Indiana law for contract interpretation. Allstate Ins. Co. v. Keca, 368 F.3d 793, 796 (7th Cir. 2004) (“A federal court sitting in diversity has the obligation to apply the law of the state as it believes the highest court of the state would apply it if presented with the issue.”); State Farm Mut. Auto Ins. Co. v. Pate, 275 F.3d 666, 669 (7th Cir. 2001) (“When the state Supreme Court has not decided the issue, the rulings of the state intermediate appellate courts must be accorded great weight, unless there are persuasive indications that the state's highest court would decide the case differently.”). An insurance contract “is subject to the same rules of interpretation as are other contracts.” Morris v. Econ. Fire & Cas. Co., 848 N.E.2d 663, 666 (Ind. 2006) (citing USA Life One Ins. Co. of Ind. v. Nuckolls, 682 N.E.2d 534, 537-38 (Ind. 1997)). As with other contracts, the interpretation of an insurance contract is a question of law. Cinergy Corp. v. Associated Elec. & Gas Ins. Servs., 865 N.E.2d 571, 574 (Ind. 2007).

         B. ...


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