United States District Court, W.D. Tennessee, Eastern Division
PROGRESSIVE HAWAII INSURANCE CORP. Plaintiff,
JOSHUA SKIBA, TIFFANY GAMBLE, and STEVEN HOLMES Defendants.
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY
THOMAS ANDERSON, CHIEF UNITED STATES DISTRICT JUDGE
Progressive Hawaii Insurance Corp.
(“Progressive”) brought this declaratory judgment
action seeking a declaration that it is not obligated to
provide coverage under a policy held by Defendants Joshua
Skiba and Steven Holmes for injuries allegedly sustained by
Defendant Tiffany Gamble in an automobile accident. (ECF No.
1.) Before the Court is Plaintiff's Motion for Summary
Judgment filed on September 6, 2016. (ECF No. 31.) Tiffany
Gamble has filed a response (ECF No. 35), to which Plaintiff
has replied (ECF No. 36), making the matter ripe for
adjudication. For the reasons set forth below, the
Motion is GRANTED. The parties have also filed a joint motion
to continue the trial date. (ECF No. 42.) Because the grant
of summary judgment dispenses with this case without a trial,
that motion is DENIED AS MOOT.
following facts are undisputed unless otherwise noted.
(See ECF Nos. 35-2 & 36 at 1-6.) On March 3,
2015, Steven Holmes and Joshua Skiba of Union City, Tennessee
purchased an automobile insurance policy, underwritten by
Plaintiff, through the Alexander Insurance Group.
(See ECF No. 1-1.) Alexander Insurance Group is an
independent insurance agency that sells policies for multiple
insurance companies. (Alexander Dep., ECF No. 35-2 at
37:14-24.) The terms, conditions, and limitations of the
policy were set forth in a policy agreement. (ECF No. 1-1 at
2-37.) Both Skiba and Holmes were listed on the policy, the
latter as an excluded driver. The effective dates of coverage
for the policy ran from March 3, 2015, through September 3,
2015, subject to renewal. The premiums for the policy were to
be paid in monthly installments on the fourth day of each
month by automatic electronic funds transfer from the
insureds' bank account.
arrangement progressed without incident until July 15, 2015,
when Plaintiff received a notice of insufficient funds after
it attempted to debit Holmes and Skiba's account for the
monthly premium payment. The next day, Plaintiff sent an
email to Joshua Skiba informing him that the insurance policy
would be canceled on July 27, 2015. (See ECF No. 1-1
at 45.) Plaintiff also prepared a written notice of
cancellation, but Defendant disputes whether this and several
other documents were ever mailed to Skiba and Holmes,
asserting that their address had changed from the one
Plaintiff had on file. (ECF No. 35-2 at 2-4.) Plaintiff also
created a “final bill, ” dated July 28, 2015,
stating that the policy was canceled but an outstanding
balance of $76.92 remains. (ECF No. 1-1 at 44.) Defendant
also disputes that this document was ever mailed to and
received by the insureds.
August 11, 2015, Holmes or Skiba went to the office of the
Alexander Insurance Group to reinstate the policy, armed with
a check for $121.60. There he spoke with Roger Alexander, who
accepted the payment on Plaintiff's behalf. Alexander and
Skiba both apparently believed that the payment had
successfully reinstated the canceled policy. Once the payment
had been entered into Plaintiff's online system, however,
Plaintiff credited the outstanding balance of $76.92 and
refunded the remainder back to Holmes and Skiba's
account.Neither Holmes nor Skiba made any
subsequent payments to Plaintiff, and Plaintiff did not
attempt to withdraw any more payments from their account via
electronic funds transfer.
November 12, 2015, Joshua Skiba and Tiffany Gamble were
involved in an auto accident in Fulton County, Kentucky.
Gamble was a passenger in an automobile driven by Skiba.
Gamble filed a claim with Plaintiff soon after, seeking
compensation for injuries she allegedly suffered in the
accident, under the policy held by Holmes and Skiba.
Plaintiff contends that it is not obligated to provide
coverage for this claim because the policy had been
previously canceled. Defendant argues that the policy had
been successfully reinstated and was in effect on the date of
the accident. On February 4, 2016, Plaintiff filed this
action under the Federal Declaratory Judgment Act seeking a
declaration of rights, obligations, and legal relations
vis-à-vis itself and all three Defendants. (ECF No. 1;
see 28 U.S.C. §§ 2201-02.)
judgment is proper “if the movant shows 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). In reviewing a motion for summary judgment, the Court
views the evidence in the light most favorable to the
nonmoving party, and it “may not make credibility
determinations or weigh the evidence.” Laster v.
City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014).
The Court must also draw all reasonable inferences in favor
of the non-movant. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986). When the motion
is supported by documentary proof such as depositions and
affidavits, the nonmoving party may not rest on its pleadings
but, rather, must present some “specific facts showing
that there is a genuine issue for trial.” Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986); see
Eastham v. Chesapeake Appalachia, L.L.C., 754 F.3d 356,
360 (6th Cir. 2014).
facts must be more than a scintilla of evidence and must meet
the standard of whether a reasonable juror could find by a
preponderance of the evidence that the nonmoving party is
entitled to a verdict. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986). When determining if
summary judgment is appropriate, the Court should ask
“whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of
law.” Id. at 251-52. The Court must enter
summary judgment “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.”
Celotex, 477 U.S. at 322.
district court sitting in diversity must apply the law of the
state in which it sits. Erie R.R. Co. v. Tompkins,
304 U.S. 64, 78 (1938). In this case, “[j]urisdiction
is based on diversity of citizenship and the law of Tennessee
controls.” Rolane Sportswear, Inc. v. U.S. Fid.
& Guar. Co., 407 F.2d 1091, 1094 (6th Cir. 1969). In
Tennessee, “[a]n insurance policy is a contract of
adhesion drafted by the insurer, ” Bill Brown
Constr. Co., Inc. v. Glens Falls Ins. Co., 818 S.W.2d 1,
12 (Tenn. 1991), and is subject to the same rules and canons
of construction as other contracts, Clark v. Sputniks,
LLC, 368 S.W.3d 431, 441 (Tenn. 2012) (citations and
internal quotation marks omitted). A policy “should be
construed as a whole in a reasonable and logical
manner.” Travelers Indem. Co. of Am. v. Moore &
Assocs., Inc., 216 S.W.3d 302, 306 (Tenn. 2007)
(internal quotation marks omitted). In this case, the
controlling insurance contract is the Tennessee Auto Policy
Insuring Agreement, drafted by Plaintiff and agreed to by
Holmes and Skiba. (ECF No. 1-1 at 2-37.) “‘[T]he
insured is conclusively presumed to have knowledge of, and to
have assented to, all the terms, conditions, limitations,
provisions or recitals in the policy, ' irrespective of
whether the insured actually read, or could read, the
insurance contract.” Webber v. State Farm Mut.
Auto. Ins. Co., 49 S.W.3d 265, 274 (Tenn. 2001) (quoting
Gen. Am. Life Ins. Co. v. Armstrong, 185 S.W.2d 505,
507 (Tenn. 1945)) (emphasis omitted).
Initial Cancellation of the Policy
policy terms make clear that Plaintiff “may cancel this
policy during the policy period by mailing a notice of
cancellation to the named insured shown on the declarations
page at the last known address appearing in [its]
records.” (ECF No. 1-1 at 32.) If the reason for the
cancellation be nonpayment of a premium, the agreement
requires ten days' notice. (Id.) Plaintiff
adhered to this time period by ...