Opinion
Case No. 2:01CV00410TC
October 7, 2003
ORDER
Plaintiff Travelers Indemnity Company of Illinois ("Travelers") filed this declaratory judgment action against Defendants Foulger-Pratt Construction, Inc. ("Foulger-Pratt"), Julieanne Pratt, and Brent Pratt (collectively, the "Pratt Defendants"). Travelers is seeking a determination of the respective rights of the parties under the commercial automobile insurance policy number DT-810-665K2121-TIL-00 (the "Policy"). This action focuses on whether Travelers must provide insurance coverage to the Pratt Defendants in connection with a February 10, 2001 multi-car accident in Utah.
The Pratt Defendants have asserted counterclaims against Travelers and have brought a third-party action against insurance brokers CIMA Companies, Inc. and its subsidiary Corporate Insurance Management, Inc. (collectively "CIMA") (CIMA arranged for the Pratt Defendants to obtain automobile insurance coverage from Travelers). Travelers and CIMA each asserted claims for contractual and equitable indemnity against the other.
This matter is before the court on a series of cross-motions for summary judgment. Travelers requests summary judgment against the Pratt Defendants denying coverage. The Pratt Defendants seek summary judgment against Travelers granting coverage, or, in the alternative, against CIMA for negligence, CIMA seeks summary judgment dismissing the Pratt Defendants' Third Party Complaint against CIMA.
The other Defendants — Rosa Guanana, Jenny Guanana, Stephanie Guanana, Rebecca Chase, and Allen Steele — were involved in the multi-car accident, but the motions currently before the court do not involve them.
For the reasons set forth below, the court finds that Travelers is obligated to provide insurance coverage to the Pratt Defendants in connection with the February 10, 2001 accident. The court DENIES Travelers' motion, GRANTS in part and DENIES in part the Pratt Defendants' motion, and GRANTS CIMA's motion.
BACKGROUND
The relevant facts are not in dispute. In October 2000, Travelers renewed a commercial automobile insurance policy covering Foulger-Pratt Construction, Inc. ("Foulger-Pratt") and others. Brent Pratt is the vice-president of Foulger-Pratt. For several years, Foulger-Pratt has obtained all of Brent Pratt's family auto insurance from Travelers through CIMA, the insurance broker.
On February 10, 2001, Julianne Pratt (Brent Pratt's daughter) was involved in a multi-car accident in Provo, Utah, where she was enrolled as a student at Brigham Young University. At the time of the accident, Ms. Pratt was driving a 1995 Chevrolet Blazer (the "Chevy Blazer") owned by her father, Brent Pratt. The Chevy Blazer was registered in Maryland but garaged in Utah at the time of the accident. Ms. Pratt was not an employee of Foulger-Pratt and was not conducting any Foulger-Pratt business at the time of the accident.
The accident victims filed a lawsuit in state court against Ms. Pratt. The Pratts tendered a request to Travelers for liability coverage and for accident and physical damage coverage for the Chevy Blazer. For liability coverage, Travelers `Will pay all sums an `insured' legally must pay as damages because of `bodily injury' or `property damage' to which this insurance applies, caused by an `accident' and resulting from the ownership, maintenance or use of a covered `auto.'" (Policy Business Auto Coverage Form CA 00 01 12 93 at p. 2, Part II.A.) Travelers also has the "duty to defend any `insured' against a `suit' asking for such damages. . . . " (Id.) Travelers denied coverage to the Pratts on the basis that Brent Pratt was not an insured, Julieanne Pratt was not an insured, and the Chevy Blazer was not a "covered auto" under the Policy.
The Policy and its Contents
The Policy is composed of Common Policy Declarations and Conditions, modified by a series of pages called declarations, coverage forms, schedules, or endorsements.
1. "Named Insureds"
The Common Policy Declarations incorporates a list (see Policy Endorsement IL T8 00 10 00) of "Named Insureds." The Named Insureds are listed as a group of related commercial entities, including Foulger-Pratt Construction, Inc. (collectively referred to herein as the "FP Entities").
The "FP Entities" are Foulger-Pratt Construction, Inc., Foulger Land Limited Partnership, Perm Belt South Associates, Foulger Pratt Development, Inc., Silver Spring Building V Limited Partnership, Centre Limited Partnership, Foulger Pratt Management, Inc., Sid Foulger, Inc., Foulger Contracting, Inc., F.P. Rockville Limited Partnership, F P Rockledge LLC, and Hunters Branch Partners LLC. Foulger-Pratt Construction, Inc.'s principals and shareholders are Sid Foulger, Clayton Foulger, Brian Foulger, and Brent Pratt.
2. "Covered Auto"
The Policy extends insurance to "covered autos." The Policy's definition of covered auto varies depending on the type of coverage at stake. For example, for Liability coverage, a covered auto is defined as "any `auto,'" (Policy's Business Auto Coverage Part Declarations Form CA TO 01 01 87 at Item Two; Policy's Business Auto Coverage Form CA 00 01 12 93 at p. 1.) The Policy generally defines auto as "a land motor vehicle, trailer or semitrailer designed for travel on public roads. . . ." (Policy's Business Auto Coverage Form CA 00 01 12 93 at p. 9, Section V.B.) The Personal Injury Protection (No Fault) coverage is available for "those `autos' you own that are required to have No-Fault benefits in the state where they are licensed or principally garaged." (Policy's Business Auto Coverage Part Declarations Form CA TO 01 01 87 at Item Two; Policy's Business Auto Coverage Form CA 00 01 12 93 at p. 1 (emphasis added).) A vehicle that is principally garaged in a certain state is permanently located there. (See CIMA's Memo, in Opp'n to Travelers' Motion for Summary Judgment at p. 8, ¶ 31.)
3. "Who Is An Insured" and the "Individual Named Insured Endorsement"
The Policy defines "Who Is An Insured" at multiple points throughout the document. An "insured" includes "[y]ou for any covered `auto'" and "[a]nyone else while using with your permission a covered `auto' you own, hire or borrow. . . ." (Policy's Business Auto Coverage Form CA 00 01 12 93 at p. 1 (emphasis added).) The Definitions section of the Business Auto Coverage Form simply defines "insured" as "any person or organization qualifying as an insured in the Who Is An Insured provision." (Id. at p. 9.) At one point in the Policy, "you" is defined as the Named Insured: "Throughout this policy the words `you' and `your' refer to the Named Insured shown in the Declarations," (See Policy's Business Auto Coverage Form CA 00 01 12 93 at p. 1.) This definition of "you" as the Named Insured commercial entities becomes problematic when applied in other parts of the Policy.
For example, the Utah Personal Injury Protection endorsement ("Utah PIP Endorsement") defines Who Is An Insured as follows:
1. You, unless you are injured in an "accident" which resulted from the use or operation of any motor vehicle which is owned by you and which is not a covered "auto".
2. If you are an individual, any "family member". . . .
(Utah PIP Endorsement at p. 2.) It continues by defining "family member" as "a person related to you by blood, marriage or adoption, including a ward or foster child, who is a resident of your household, whether or not temporarily residing elsewhere." (Id. at p. 3.) The Utah PIP Endorsement provides that Travelers "will pay Personal Injury Protection benefits . . .; to or for an `insured' who sustains `bodily injury' caused by an `accident' arising out of the use of an `auto' as an auto." (Id. (emphasis added).) The Utah PEP benefits include, among other things, the insured's medical expenses and loss of earnings during the insured's lifetime. (Id.)
The Utah Changes Endorsement modifies liability coverage by adding a section to the Who Is An Insured provision for covered autos principally garaged in Utah. Specifically, it states that "Paragraph b.(6) is added to the Who Is An Insured Provision in the Business Auto Coverage Form by the following and supersedes any provision to the contrary b. Anyone else while using with your permission a covered `auto' you own, hire or borrow. . . ." (Policy's Utah Changes Endorsement Form CA 01 59 03 99 at 1.)
The Policy includes an "Individual Named Insured Endorsement." That Endorsement says:
If you are an individual, the policy is changed as follows: . . . The following is added to WHO IS AN INSURED: "Family members" are "insureds" for any covered "auto" you own of the "private passenger type" and any other "auto" described [elsewhere in] this endorsement.
(Individual Named Insured Endorsement Form CA 99 17 12 93 at p. 1.) The Endorsement also defines "family member" to mean "a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or foster child." (Id.) The Endorsement does not contain a specific list of names.
ANALYSIS
A. Legal Standard
Under Federal Rule of Civil Procedure 56, a court may enter summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Fed.R.Civ.P. 56(c);see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986); Adler v. Wal-Mart Stores. Inc., 144 F.3d 664, 670 (10th Cir. 1998).
B. What Substantive Law Applies?
Either Utah or Maryland law applies in this case. To the extent a conflict exists, the court must determine which state's law to apply.
A federal court, sitting in diversity, will look to the conflict of laws rules of the forum state to determine which state's laws will be controlling. Mountain Fuel Supply v. Reliance Ins. Co., 933 F.2d 882, 887-88 (10th Cir. 1991). In Utah, a conflict of law exists if the substantive law of the competing state is different than the forum state's substantive law on the issue being considered. American Nat'l Fire Ins. Co. v. Farmers Ins. Exch., 927 P.2d 186, 188 (Utah 1996).
It appears that most of the legal issues in this insurance contract case do not raise a conflict between the substantive laws of Utah and Maryland. If a conflict exists, however, the court must determine which state has the most significant relationship to the transaction and the parties. Id. (citing to Restatement (Second) Conflict of Laws § 188). The contacts to consider include the place of contracting, the place where the contract was negotiated, the place where the contract was performed, the location of the subject matter of the contract, and the residence and place of business of the parties.Id.
Here, the State of Maryland's relationship to the transaction and the parties outweighs Utah's relationship. Utah's only connections to this case are that the accident occurred in Utah and the Chevy Blazer was garaged in Utah. The rest of the contacts favor Maryland. Brent and Julieanne Pratt are Maryland residents. Foulger-Pratt is a District of Columbia corporation with its principal place of business in Rockville, Maryland, The Chevy Blazer was licensed and registered in Maryland. The Policy was negotiated by and delivered to CIMA in Maryland, where CIMA has its principal office. Foulger-Pratt paid the insurance premium in Maryland. Accordingly, when there is a conflict of law, the law of Maryland will govern. See American Nat'l Fire Ins. Co., 927 P.2d at 190-91 (applying other state's law in declaratory judgment action interpreting automobile insurance contract, and holding that location of accident in Utah did not outweigh other state's contacts with the insurance contract and contracting parties).
C. Were the Pratt Defendants Covered Under the Policy at the Time of the Accident?
When interpreting a contract, the courts looks primarily to the contract's language to determine the parties' intentions. Collier V. MD-Individual Practice Ass'n. Inc., 607 A.2d 537, 539 (Md. 1992);Bakowski v. Mountain States Steel. Inc., 52 P.3d 1179,1184 (Utah 2002). If the Policy is ambiguous, extrinsic evidence is admissible to establish the parties' intentions. E.g., Collier v. MD-Individual Practice Ass'n. Inc., 607 A.2d at 539.
Whether the Policy is ambiguous is a question of law for the court.Sanpete Water Conservancy Dist. v. Carbon Water Conservancy Dist., 226 F.3d 1170,1178 (10th Cir. 2000); Calomiris v. Woods. 727 A.2d 358, 362 (Md. 1999); S.W. Energy Corp. v. Continental Ins. Co., 974 P.2d 1239, 1242 (Utah 1999). "The determination of whether language is susceptible to more than one meaning [i.e., ambiguous] includes consideration of `the character of the contract, its purpose, and the facts and circumstances of the parties at the time of execution.'" Mamsi Life Health Ins. Co. v. Callaway, 825 A.2d 995, 1005 (Md. 2003) (internal citation omitted); see also Ward v. Intermountain Farmers Ass'n. 907 P.2d 264, 268 (Utah 1995) ("When determining whether a contract is ambiguous, any relevant evidence must be considered. . . . [The court] is to consider the writing in light of the surrounding circumstances").
If a contract is susceptible to more than one reasonable meaning, then it is ambiguous. "If a court, after considering `credible evidence offered to show the parties' intention' in entering the contract, determines the various interpretations put forth by the parties `are reasonably supported by the language of the contract,' then the contract is ambiguous." Sanpete Water Conservancy Dist., 226 F.3d at 1176; see also Bollech v. Charles County. Maryland, 166 F. Supp.2d 443, 455 (D. Md. 2001) (citing toTruck Ins. Exch. v. Marks Rentals. Inc., 418 A.2d 1187 (Md. 1980) for proposition that ambiguity arises if language is susceptible of more than one meaning to a reasonably prudent layman);Bakowski, 52 P.3d at 1184 ("A contract provision is ambiguous if it is capable of more than one reasonable interpretation because of `uncertain meanings of terms, missing terms, or other facial deficiencies'") (internal citation omitted); Plateau Mining Co. v. Utah Div. of State Lands Forestry, 802 P.2d 720, 725 (Utah 1990) ("To demonstrate ambiguity, the contrary positions of the parties must each be tenable").
1. The Parties' Interpretations of the Policy
Travelers argues that there is no insurance coverage for the February 10, 2001 accident because the Policy clearly and unambiguously provides coverage only to "named insureds, employees of named insureds and vehicles owned by named insureds," and that neither the individual Pratt Defendants nor the Chevy Blazer fall within those parameters of coverage. (See Travelers' Memo, in Supp. at 10.) The basis of Travelers' argument for no coverage is an interpretation of the Who Is Insured provision of the Business Auto Coverage Form, which lists only commercial entities as Named Insureds.
Travelers argues further that the Individual Named Insured Endorsement, even though physically within the "four corners" of the Policy, does not apply because it only triggers coverage if the Named Insured is an individual. According to Travelers, the Individual Named Insured Endorsement was mistakenly included in the Policy and should be disregarded by the court, In addition, Travelers argues that the Pratt Defendants' reliance on the broad definition of a covered auto for Liability coverage as set forth in the Business Auto Coverage Form, i.e., that a covered auto is "any auto," is unreasonable. Travelers contends:
The Policy cannot logically provide coverage to "any auto," which would include any automobile in the world. Rather, coverage must be construed in accordance with other limiting language in the policy. Section n, paragraph A of the Business Auto Coverage Form . . . states, "We will pay all sums an `insured' legally must pay as damages because of `bodily injury' or `property damage' to which this insurance applies, caused by an `accident' and resulting from the ownership, maintenance or use of a covered `auto.'" Again, being a covered auto is only one of the prerequisites to coverage. For coverage to exist, an "insured" must be liable in connection with the use of a covered auto.
(Travelers' Combined Reply Memo, at p. 12 ¶ 48.)
The Pratt Defendants argue that the Policy's Individual Named Insured Endorsement provides automobile insurance coverage to Brent Pratt, Ins spouse and other family members even though it does not specifically name the individual Pratt Defendants. They maintain that the Individual Named Insured Endorsement is a key provision of the Policy and should not be ignored. According to the Pratt Defendants, Travelers' interpretation of the Policy is unreasonable because it renders the Individual Named Insured Endorsement superfluous. They also point to Travelers' interpretation of the Policy's endorsement entitled "Drive Other Car Coverage — Broadened Coverage for Named Individuals." That endorsement modifies, among other things, the Business Auto Coverage Form by extending coverage to certain individuals specifically named in that endorsement. Brent Pratt is one of those individuals. Nevertheless, according to Travelers, the Drive Other Car Endorsement "only provides coverage to named insureds and family members of individual named insureds when driving non-owned vehicles. Mr. Pratt was not a named insured, or a family member of a named insured." (Travelers' Combined Reply Memo, at p. 13 ¶ 50.) The Pratt Defendants point out that, "if Travelers is correct in their legal argument, then this is yet another endorsement which provides no coverage, even though it names 17 individuals, including Brent Pratt." (Pratt Defendants' Reply Memo, at 10 ¶ 50.)
Both parties have raised legitimate points in support of their own interpretations. But the nature of the Policy as a whole makes it difficult to conjure up a coherent reading of the Policy without resorting to extrinsic evidence. Travelers' interpretation renders meaningless not only the Individual Named Insured Endorsement, but other endorsements that essentially apply only if a Named Insured is an individual rather than a commercial entity. For example, the Policy's Utah PIP Endorsement provides that Travelers "will pay Personal Injury Protection benefits . . . to or for an `insured' who sustains `bodily injury' caused by an `accident'. . . ." (Policy's Utah PIP Endorsement Form CA 22 44 03 99 at p. 1.) Because a corporation, by definition, cannot "sustain bodily injury," and because the coverage only is payable to an Insured (which Travelers defines as a commercial entity), this endorsement would never apply. Under Travelers' interpretation, it is superfluous. Other similar endorsements in the Policy would be rendered superfluous under Travelers' interpretation.
See, e.g., Policy's Auto Medical Payments Coverage at p. 1 ¶ A ("We will pay reasonable expenses incurred for necessary medical and funeral services to or for an `insured' who sustains `bodily injury' caused by `accident'") (emphasis added); Policy's Maryland Personal Injury Protection Endorsement at p. 1 (containing similar language); Policy's Personal Injury Protection Endorsement — Texas at p. 1 (containing similar language).
The court should avoid an interpretation of the Policy that renders a provision of the contract meaningless. Calomiris v. Woods. 727 A.2d 358, 441-42 (Md. 1999); see also Philadelphia Indem. Ins. Co. v. Maryland Yacht Club. Inc., 742 A.2d 79, 86 (Md.Ct.Spec.App. 1999) ("A contract must be construed as a whole, and effect given to every clause and phrase, so as not to omit an important part of the agreement") (internal citation omitted) (emphasis added); Nielsen v. O'Reilly, 848 P.2d 664, 665 (Utah 1992) ("the terms of insurance contracts . . . should be read as a whole, in an attempt to harmonize and give effect to all of the contract provisions") (emphasis added).
Another problem with Travelers' interpretation is revealed in Travelers' statement in its Combined Reply Memorandum, where it states that the phrase "any auto" must be construed in accordance with the limiting language in the Policy. Travelers says that "[f]or coverage to exist, an `insured' must be liable in connection with the use of a covered auto." (Travelers' Combined Reply Memo, at p. 12 ¶ 48 (emphasis added).) Travelers' argument is circular if one looks at the supposedly unambiguous language of the Policy. The "plain language" of the Policy defines a covered auto as "any auto" with respect to liability coverage.
Equally problematic is the Pratt Defendants' literal reading of the Policy's definition of a covered auto as "any auto." As Travelers pointed out, this would essentially provide coverage to any automobile.
The Policy, when read as a whole, raises more questions than it answers. For that reason, the Policy is ambiguous, and reliance on extrinsic evidence is necessary to determine the parties' intentions.
2. Extrinsic Evidence of the Parties' Intent
The following facts are not in dispute. Since 1996, Travelers has provided various insurance coverage to the FP Entities and principals, including construction bonds, workers compensation coverage, commercial general liability and business auto coverage. The FP Entities provided Travelers with a substantial amount of business. Under the previous policies, Travelers was willing to, and did, provide coverage for the FP Entities' principals and their families as a perk for providing the insurance business of the FP Entities.
Travelers prefers for family members to be insured under a Personal Auto Policy. However, we realize receiving personal auto coverage is a perk many insureds have come to expect. We are willing to make exceptions when the historical loss experience indicates the exposure does not jeopardize the profitability of the account. For this reason, I was willing to make the exception on this account.
(1997 Memorandum from Tracy McGuire, Underwriter, Travelers Construction Unit, to Erica Noon, Alton Insurance Agency, Inc. (predecessor to CIMA) (attached as Exhibit H to Pratt Defendants' Memo, in Opp'n).)
The Pratts had always obtained personal auto liability through the company insurance policy. The FP Entities' principals did not have separate automobile policies for their personally owned vehicles because they looked to the business auto policy as the sole source of coverage. Indeed, CIMA had always been instructed to obtain personal coverage for the Pratts. To accomplish that objective, the policies included, among other things, an Individual Named Insured Endorsement. The purpose of the Individual Named Insured Endorsement is to extend business auto coverage to individuals and family members while driving vehicles owned by the Named Insured. It essentially provides the same coverage as a personal policy would provide.
The 2000-2001 Policy was a renewal of the 1999-2000 policy, which was in turn a renewal of preceding policies. For the new policy period, Travelers essentially doubled the premium, increasing it from approximately $65,000 to approximately $127,000.
As part of the renewal process, CIMA prepared and submitted an application on behalf of the FP Entities and the individual principals of the FP Entities, including Brent Pratt. It was the intention of Brent Pratt and Foulger-Pratt that the company-owned vehicles and the principals' personally-owned vehicles be covered under one company policy, including coverage for spouses and children who might drive the vehicles.
In the application, the Chevy Blazer was listed as a scheduled vehicle. The Chevy Blazer was also listed on the vehicle schedules for the previous policies, and premiums were charged for the Chevy Blazer including for the 2000-01 policy period at issue. The vehicle schedule designated Utah as the state in which the Chevy Blazer was principally garaged.
Brent Pratt and Julieanne Pratt were listed as drivers in the application. Julieanne was under the age of twenty-one during the 2000-01 policy period. Brent and Julieanne had been on the list of scheduled drivers since at least 1997 for the previous policies. Other drivers included other principals of the FP Entities, their spouses, and their minor children. Travelers checked the motor vehicle rating for Julieanne Pratt as well as the other listed drivers. The Policy premium increase was due in large part to the driving records of the minor children of the FP Entities' principals and the claim Instory being generated by family member drivers.
For the three preceding policies issued by Travelers, Brent Pratt was listed on the Named Insured Endorsement. Brent Pratt was added as a Named Insured for the 1997-1998 policy, at least in part because Mr. Pratt needed coverage for Ins child who was attending school in Houston, Texas, and driving a vehicle owned by Brent Pratt.
During those policy years, the only individual ever listed on the Named Insured declaration was Brent Pratt. The Individual Named Insured Endorsement was included in policies for the years 1996-97 through 2000-01. During those policy years, numerous claims were paid by Travelers for accidents in which the family members of Foulger-Pratt principals were driving vehicles owned by the principals.
Of particular significance is the fact that, during the period of the 2000-2001 Policy (the policy period at issue in this case), Travelers paid a claim submitted by Bryant Foulger and Marianne Foulger. Both Bryant and Marianne Foulger are individuals, and neither was listed in the 2000-2001 Policy Named Insured declaration.
Travelers knew that at least some of the scheduled vehicles were being driven by family members, including children under 21, for personal use. This was a significant reason for doubling the Policy premium. Travelers also knew that some of the vehicles were personally owned. Travelers knew that at least one vehicle was garaged in Utah, and was being driven by family members, including minors. Travelers did not know of any business of Foulger-Pratt being conducted in Utah. Nevertheless, Travelers issued a state specific endorsement for the vehicles in Utah (and issued one for Texas as well).
Some time after CIMA received the Policy from Travelers, CIMA noticed that there were inconsistencies between the application and the Policy and that some things had been left out of the Policy, At CIMA's request, Travelers issued a change endorsement effective April 4, 2001. The change endorsement amended the Named Insured Endorsement and the Business Auto Coverage part to add the names of the Foulger-Pratt principals, including Brent Pratt. Although Travelers suggests that the addition of the individuals on the Policy significantly increased Travelers' risk under the Policy, Travelers charged a premium of only $247.00 for the amendment to a Policy whose premium was $127,000.00. This "correction" is another bit of evidence signifying the parties' original intent to provide personal auto liability coverage to the principals and their family members.
The case of Greenbaum v. Travelers Ins. Co., 705 F. Supp. 1138 (E.D. Va. 1989), is persuasive, Greenbaum presents a factual situation and insurance policy language very similar to this case. InGreenbaum, Travelers was the defendant that unsuccessfully argued that an individual named insured endorsement was meaningless because the named insured was a partnership and the individual named insured endorsement was not applicable because the partnership, by definition, was not an individual. 705 F. Supp. at 1142. The court stated that it "must give meaning and effect to the individual named insured endorsement as an integral part of the agreement between the parties. Having appended the endorsement to the policy, Travelers cannot be allowed to now argue it is meaningless." Id. TheGreenbaum court held that the partner of the partnership named in the automobile insurance policy was a named insured and that the policy afforded liability coverage to the partner's son under the individual named insured endorsement. Id. at 1143.
The decision in Home Folks Mobil Homes. Inc. v. Meridian Mutual Ins. Co., 744 S.W.2d 749 (Ky.Ct.App. 1987), is also significant here. The court in Home Folks held that inclusion of an Individual Named Insured Endorsement in a corporate insurance policy gave rise to an ambiguity. 744 S.W.2d at 750. The court rejected the insurer's explanation that the endorsement simply did not apply in that instance. The court stated:
This explanation [of the insurance carrier] is nonsensical as the insurance carrier was obviously aware that the named insured was not an individual but a corporation. [The insurance carrier] has simply offered no reason, nor can we think of any, for including the endorsement unless it was to provide the expanded personal coverage as requested by the insured.Id. Here, Travelers has not provided any explanation regarding why it included the Individual Named Insured Endorsement in the Policy if that Endorsement has no application.
The record leaves little, if any, doubt as to the parties' intentions, but to the extent it does, the court must resolve any doubt in favor of coverage for the Pratt Defendants. See Mamsi Life Health Ins. Co. v. Callaway. 825 A.2d 995, 1005-06 (Md. 2003) ("[W]hen a term in an insurance policy is found to be ambiguous, the court will construe that term against the drafter of the contract which is usually the insurer"); Perkins v. Great-West Life Assurance Co., 814 P.2d 1125, 1129 (Utah Ct.App. 1991) ("any doubt [in an ambiguous insurance policy] should be resolved in favor of insurance coverage") (quoting American Cas. Co. v. Eagle Star Ins. Co., Ltd., 568 P.2d 731, 734 (Utah 1977)).
Based on the above, it is clear that the parties intended to include Brent Pratt as a Named Insured and that no reasonable jury could find otherwise. Travelers is obligated to provide coverage to the Pratt Defendants for damages and costs arising out of the February 10, 2001 multi-car accident.
D. Mistake and Reformation of the Policy
As an alternative ground, the Pratt Defendants contend that the Policy should be reformed to include the name of Brent Pratt on the Named Insured list. Reformation of a contract is a proceeding in equity. It is appropriate where there is a mistake in how the agreement was reduced to writing and the agreement fails to show the true intent of agreement between the parties, demons v. American Casualty Co., 841 F. Supp. 160, 163-64 (D. Md. 1993); Hottinger v. Jensen. 684 P.2d 1271, 1273 (Utah 1984).
As discussed above, the facts demonstrate that Travelers, CIMA, and Foulger-Pratt all intended that Brent Pratt be listed as a Named Insured for purposes of automobile coverage. They intended to provide coverage under the Policy to Brent Pratt and Ins family members under the Individual Named Insured Endorsement.
To the extent a mistake was made, it was made by either CIMA or Travelers, not the Pratt Defendants. The mistake, clerical or otherwise, should not defeat the Pratt Defendants' reasonable expectations under the Policy. Reformation of the Policy by effectively adding Brent Pratt's name to the Named Insured declaration for the period of October 1, 2000, to April 4, 2001, is equitable. Travelers calculated and collected a doubled premium based on the known risk of individuals driving personally owned automobiles. It cannot now rely on a mistake to disavow its obligations under the Policy for which Foulger-Pratt provided full payment. Moreover, there is not sufficient evidence that Travelers, through its employees or CIMA's acts or testimony, intended to delete Brent Pratt's name from the Named Insured Endorsement to eliminate Ins or Ins family's automobile insurance coverage.
The Policy is hereby "reformed" to include Brent Pratt's name on the Named Insured list effective on October 1, 2000. Brent Pratt is a Named Insured under the Policy, and the Chevy Blazer is a covered auto. The Pratt Defendants are entitled to automobile coverage under the Individual Named Insured Endorsement for the February 10, 2001 multi-car accident.
ORDER
For the foregoing reasons, the court ORDERS:
1. The Pratt Defendants' cross-motion for summary judgment is GRANTED as against Travelers. Travelers is obligated to provide insurance coverage to the Pratt Defendants for the subject accident.
2. The Pratt Defendants' cross-motion for summary judgment is DENIED as against CIMA.
3. Travelers' motion for summary judgment is DENIED as against Foulger-Pratt, Brent Pratt, and Julieanne Pratt as to its request for a declaration that the Pratt Defendants are not covered under the Policy for the subject accident,
4. CIMA's motion for summary judgment is GRANTED.
5. To the extent any claims remain in CIMA's, Travelers', and the Pratt Defendants' cross-motions for summary judgment, they are DENIED as moot.
IT IS SO ORDERED.