Opinion
No. 1:02-cv-231 Edgar, No. 1:02-cv-298 Edgar, No. 1:03-cv-083 Edgar.
Filed March 5, 2004
MEMORANDUM AND ORDER
Currently pending before the Court is the motion of Trinity Universal Insurance Company ("Trinity") for reconsideration under Fed.R.Civ.P. 59(e) of this Court's December 12, 2003 order, which denied, in part, Trinity's Motion for Summary Judgment of Non-Coverage. [Court File No. 63].
Trinity seeks reconsideration of the Court's rulings that (1) Trinity has a duty to defend the Turner defendants in the underlying action under its professional liability and commercial umbrella policies and (2) Trinity has a duty to indemnify the Turner defendants for breach of contract causes of action in the underlying actions under its professional liability and commercial umbrella policies, and to rule that it does not. [Court File No. 63]. Trinity also seeks reconsideration of the Court's ruling that Trinity has a duty to reimburse National Grange Mutual Insurance Company ("NGMIC") for some of the sums it has expended in defendant the Turner defendants in the underlying actions. Id.
NGMIC has filed a response to Trinity's Rule 59(e) motion for reconsideration. [Court File No. 65]. The Turner defendants likewise have filed a response to Trinity's reconsideration motion. [Court File No. 66]. Trinity has filed a reply to the response of NGMIC and the Turner defendants [Court File No. 68].
In its response to Trinity's motion to amend, NGMIC essentially invites the Court to reconsider its decision, which is set forth in the December 12, 2003 Order, to hold in abeyance any action to determine the nature and extent of the reimbursement, if any, due from Trinity to NGMIC for the cost of defending the Turner defendants in the underlying actions. [Court File No. 61, ¶ 9]. Not only is this issue not properly before the Court at this time, but even assuming arguendo that the issue had been properly raised, the Court would decline NGMIC's invitation to reconsider its decision to hold such issue in abeyance.
Trinity's Rule 59(e) motion to reconsider [Court File No. 63] is now ripe for review.
Trinity has referred to its motion as a motion to reconsider. However, in its pleadings it refers to Fed.R.Civ.P. 59(e), which governs motions to alter or amend judgment. Moreover, as required by Rule 59(e), Trinity's motion was filed within 10 days of this Court's December 12, 2003 Order. Thus, the Court will treat Trinity's motion as a motion to alter or amend judgment under Rule 59(e), rather than as a motion to reconsider under Rule 60(b).
A motion to alter or amend judgment may be granted if there is a clear error of law, newly discovered evidence, an intervening change in controlling law, or to prevent manifest injustice. GenCorp, Inc. v. American Intern. Underwriters, 178 F.3d 804, 834 (6th Cir. 1999). In this instance, Trinity does not assert either that it is in possession of newly discovered evidence or that there has been an intervening change in controlling law. Having reviewed in detail Trinity's Fed.R.Civ.P. 59(e) motion and the pleadings of the parties in support of or opposition thereto, the Court finds that none of the factors necessary for the granting of Trinity's Rule 59 motion to alter or amend this Court's December 12, 2003 order are present in this action.
The Court notes that whether it treated Trinity's motion as a motion to reconsider under Fed.R.Civ.P. 60(b) or a motion to alter or amend under Fed.R.Civ.P. 59(e), it would review the motion under the same standard. Whether the motion is a motion under Fed.R.Civ.P. 59(e) or 60(b), the relief/result sought is effectively the same, the motion seeks either to correct what Trinity asserts is an error of law or to prevent a manifest injustice by modifying this Court's December 12, 3002 Order. See Resolution Trust Corp. v. Gaudet, 1996 WL 125591, *2-*3 (E.D. La. Jan. 29, 1996).
In its December 12, 2003 memorandum, this Court noted that Trinity issued twelve policies of insurance to Turner Funeral Home: (1) four Businessowners Policies, (2) four Professional Liability Policies, and (3) four Commercial Umbrella Policies. [Court File No. 60, p. 2]. The Court also noted, it its December 12, 2003 memorandum, that the four Commercial Umbrella policies were follow form policies. Id. at 10. With regard to the professional liability policies, the Commercial Umbrella follow form provided that: "[t]he insurance afforded by this policy does not apply to any claim for loss or expense for which insurance is not afforded by the professional liability insurance described in the schedule of `underlying insurance or by any renewals or replacements thereof.'" Id. at 10-11.
Further, with regard to the four businessowners policies issued by Trinity to Turner, the Court declared under 28 U.S.C. § 2201 that Trinity had no duty to defend or indemnify the Turner defendants under the four businessowners policies [Court File No. 61, ¶ (1)(a)]. Likewise, insofar as the Commercial Umbrella Policies are follow form policies, the Court also declared under 28 U.S.C. § 2201 that Trinity had no duty to defend or indemnify the Turner defendants under the four commercial umbrella policies to the extent they were follow form to the businessowners policies. Id. at ¶ (1)(b).
With regard to the four professional liability policies, the Court declared under 28 U.S.C. § 2201 that Trinity had a duty to defend the Turner defendants with regard to the claims of the plaintiffs in the underlying actions, except with regard to certain of the underlying actions which are enumerated in the December 12, 3003 Order. [Court File No. 6, ¶ 2(a)]. Likewise, with regard to the four Commercial Liability Policies as they follow form to the Professional Liability policies, the Court found that Trinity had a duty to defend the Turner defendants with regard to the claims of the plaintiffs in the underlying actions under the Commercial Liability Policies to the same extent it had a duty to defend under the Professional Liability Policies. Id. at ¶ 2(b). Further, with regard to duty of Trinity to indemnify the Turner defendants, the Court noted that it could not answer that question with specificity because the claims asserted by the plaintiffs in the underlying actions were not pending before the Court. However, the Court noted that with regard to certain of the claims of the plaintiffs in the underlying actions, which are identified with specificity in ¶ 2(c) of this Court's December 12, 2003 Order, that Trinity may have a duty to indemnify the Turner defendants provided that they prevail on those claims in the underlying actions. Id. at ¶ 2(c).
In its motion to reconsider, Trinity asserts that this Court misread the contractual liability coverage in its professional liability policies. [Court File No. 64]. As the Court noted in its December 12, 2003 memorandum, the four professional liability policies issued by Trinity to Turner obligate Trinity to
pay on behalf of [Turner]: . . . (3) such sums which the insured becomes legally obligated to pay as damages because of liability assumed under any contract made in the usual course of the insured's business as a funeral director for the embalming, burial, care, handling or disposition of a deceased human body or the transportation thereof by another.
[Court File No. 60, p 31, citing Court File No. 5, Exhibits C(1), C(2), C(3) and (C)(4)].
Trinity asserts that this Court erred when it found that this language would apply to claims for breach of contract. Rather, Trinity asserts that this language only applies to "tort liability assumed in a contract." [Court File No. 64, p. 4].
The Court rejects this interpretation of the language in the Professional Liability Policies as an attempt to place an ambiguity in the language set forth above where no ambiguity exists. First, the language as set forth above does not expressly limit coverage to "tort" liability it applies to any "liability assumed under any contract made in the usual course of the insured's business as a funeral director for the embalming, burial, care, handling or disposition of a deceased human body . . ." [Court File No. 60, p. 3].
Trinity argues that:
The term "assume" means "[t]o take on, become bound as another is bound, or to put onself in the place of another as to any obligation or liability." See Black's Law Dictionary 122 (6th ed. 1990). See also Merriam Webster's Collegiate Dictionary 70 (19th ed. 1994) (the term "assume" means to "take over . . . as one's own.").
[Court File No. 64, p. 4].
However, Trinity's argument ignores the situation at issue in this case. As the Court noted in its December 12, 2003 memorandum, Tennessee law recognized "that a quasi-property right in dead bodies vests in the nearest relatives, and arises from their duty to bury their dead." Tinsley v. Dudley, 915 S.W.2d 806, 807 (Tenn.Ct.App. 1995) (citing Barela v. Frank A. Hubbell Co., 355 P.2d 133, 67 N.M. 319 (1966) (emphasis added).
Thus, when Turner Funeral Homes entered into an agreement with the plaintiff's in the underlying actions to provide funeral services, including the proper disposition of the bodies of their next-of-kin by cremation, it did assume an obligation or duty of the plaintiffs as its own. Namely, in exchange for the payment of money by the plaintiffs it undertook or assumed as its own the duty of the decedent's nearest relatives to bury their dead. See Tinsley, 915 S.W.2d at 806. It is plaintiff's contention that Turner Funeral Homes breached its contract, i.e., failed to properly perform the duty which it had assumed on their behalf to properly dispose of the bodies of their deceased next-of-kin by cremation.
Under Tennessee law, "[w]here these is no ambiguity in an insurance policy, it is the duty of the Court to apply the words used in their ordinary meaning and neither party is to be favored in their construction." Beef N' Bird of America, Inc. for Use and Benefit of Galbreath v. Continental Cas. Co., 803 S.W.2d 234, 237 (Tenn.Ct.App. 1990). Moreover, assuming arguendo that the relevant language of the Professional Liability Policies could be said to be ambiguous, under Tennessee law such ambiguity would generally be construed in favor of the insured and against the insurer. See Tennessee Farmers Mut. Ins. Co. v. Witt, 857 S.W.2d 26, 29 (Tenn. 1993). See also Drexel Chem. Co. v. Bituminous Ins. Co., 933 S.W.2d 471, 480 (Tenn.Ct.App. 1996) ("An insurer may not properly refuse to defend an action against its insured unless it is plain from the fact of the complaint that the allegations fail to state facts that bring the case within or potentially within the policies coverage.").
Trinity also argues that the Court's interpretation of the policy language in the Professional Liability Policies is clear error because the language would make Trinity the guarantor of Turner's work. Under Tennessee law, "a commercial general liability policy should not be construed in a manner that makes the insurer a guarantor of the insured's work product." State Auto Ins. Companies v. Gordon Const., Inc., 2001 WL 513884, *3 (Tenn.Ct.App. May 15, 2001).
However, the Professional Liability Policy at issue in this action is not a commercial general liability policy. In Merlin B. Smith, Inc. v. Travelers Property Cas., 811 So.2d 1097 (La.App. 2d Cir. 2002), the court discussed the difference in the coverage provided between a commercial general liability policy and a professional liability policy. It stated:
The exclusion of professional services is typically found in comprehensive business liability policies, because coverage for such exposure is provided by special policies. See McCarthy v. Berman, 9501456 (La. 2/28/960, 668 So.2s 721, citing William Shelby McKenzie H. Alston Johnson III, Insurance Law and Practice, 15 Louisiana Civil Law Treatise §§ 201 (1986). Special policies covering professional liability do not replace comprehensive general liability insurance, but provide protection for professional errors and omissions that are usually excluded by comprehensive general liability policies. McCarthy, supra.
"Professional services, in its usual connotation means services performed by one in the ordinary course of the practice of his profession, on behalf of another, pursuant to some agreement, express or implied, and for which it could reasonably be expected some compensation would be due." Natural Gas Pipeline Co. of America v. Odom Offshore Surveys, Inc., 889 F.2d 633 (5th Cir. 1989), citing Aker v. Sabatier, 200 So.2d 94 (La.App. 1st Cir. 1967). Furthermore, professional services are those that require the specialized training judgment and the use of specialized tools or instruments. See Natural Gas Pipeline Co. of America, supra.Merlin B. Smith, Inc., 811 So.2d at 1101.
As noted previously in this memorandum and in the Court's December 12, 2003 memorandum, Trinity issued twelve policies of insurance to Turner Funeral Home: (1) four Businessowners Policies; (2) for Professional Liability Policies; and (3) for Commercial Umbrella Policies. The four Businessowners Policies were in effect for various policy periods from September 15, 1997 through March 1, 2001. [Court File No. 60, p. 7]. The policy period for each of the four Businessowners Policies is described in detail in this Court's December 12, 2003 memorandum. Id., pp. 7-8.
Likewise, the four Professional Liability Policies were in effect from September 15, 1997 through March 1, 2001. [Court File No. 60, p. 9]. The policy period for each of the four Professional Liability Polices is also described in detail in this Court's December 12, 2003 memorandum. Id. at 9.
Further, a comparison shows that four policy periods for each of the four Businessowners Policies and the four Professional Liability Polices were identical. Id., pp. 7-8, 9. Thus, during each of the four policy periods from September 15, 1997 through March 1, 2001, Turner issued both a Businessowners Policy and Professional Liability Policy to Turner Funeral Homes.
Further, the four Commercial Umbrella Policies issued by Trinity to Turner also were in effect during the same four policy periods as the four Businessowners Policies and the four Professional Liability Policies. Thus, during each of the four policy periods which spanned the time from September 15, 1997 through March 3, 2001, Turner was covered by a Businessowners Policy, a Professional Liability Policy and a Commercial Umbrella Policy. The Commercial Umbrella Policies were follow form policies to both the Businessowners Policies and the Professional Liability Policies and had the effect of increasing the amount of coverage under either the Businessowners or Professional Liability Policies. Id. at 10-11.
In its December 12, 2003 order, this Court found that the four Businessowners Policies which Trinity issued to Turner were commercial general liability policies. Id. at 13. Moreover, the four Businessowners policies contained clauses which explicitly excluded coverage for claims based upon professional services rendered by Turner. Id. at 15.
Thus, the question becomes since Turner already had a commercial liability policy from Trinity, what was the purpose, i.e., the intention of Turner, and Trinity, in also issuing a Professional Liability Policy to Turner. The only logical interpretation is that since the commercial general liability policies, the Businessowners Policies, excluded coverage for the professional services rendered by Turner to its customers, Turner wanted coverage for those professional services. Namely, the only reasonable conclusion is that Turner was seeking insurance coverage for the professional errors and omissions which were excluded by the Businessowners policies. See, e.g., Merlin B. Smith, 811 So.2d at 1101.
This conclusion is buttressed by several factors. First, the policies are denominated as professional liability policies. Second, the relevant language of the Professional Liability Policies explicitly refers to the professional services rendered in the usual course of Turner's business. Hence, the policies obligate Trinity to:
pay on behalf of [Turner]: . . . (3) such sums which the insured becomes legally obligated to pay as damages because of liability assumed under any contract made the usual course of the insured's business as a funeral director for the embalming, burial, care, handling or disposition of a deceased human body or the transportation thereof by another.
[Court File No. 60, p. 3]. Not only does this language refer to the usual course of the insured's business as a funeral director, it also explicitly identifies the professional services provided by Turner to its customers which are intended to be covered by the policy; namely, "the embalming, burial, care, handling or disposition of a deceased human body . . ." Id. Clearly, these are the types of professional services provided by funeral homes for which compensation is usually paid by their customers; and, they also involve services which require specialized training, judgment and the use of special tools or instruments. Merlin B. Smith, Inc., 811 So.2d at 1101.
Therefore, the Court concludes that Trinity's assertion that in its December 12, 2003 memorandum and order this Court misread the contractual liability coverage in the Professional Liability Policies it issued to Turner is without merit. Accordingly, Trinity's Fed.R.Civ.P. 59 motion to alter or amend this Court's December 12, 2003 memorandum and order [Court File No. 63] is DENIED.
SO ORDERED.