Gray v. Progressive Direct Ins. Co.

1

DARYL GRAY, ET AL. v. PROGRESSIVE DIRECT INSURANCE COMPANY

Civil Action No. 23-1430

United States District Court, E.D. Louisiana

August 22, 2024

SECTION “R” (4)

ORDER AND REASONS

SARAH S. VANCE, UNITED STATES DISTRICT JUDGE

Before the Court is defendant Progressive Direct Insurance Company's (“Progressive”) opposed^[1] motion for partial summary judgment on choice of law.^[2] For the following reasons, the Court grants the motion.

I. BACKGROUND

The Court has reviewed the record on summary judgment and the undisputed facts are as follows. On March 5, 2021, an unknown vehicle struck Daryl Gray's 2018 Porsche from behind while it was stopped near the intersection of St. Anthony and Johnson Streets in New Orleans, Louisiana.^[3]Plaintiffs William Robertson and Chaz Young, citizens of Louisiana, were passengers in the car. Gray's vehicle was covered by a Tennessee insurance policy issued by defendant Progressive that included uninsured/underinsured motorist (“UM”) coverage. The policy provided that “[a]ny disputes as to the coverages provided or the provisions of this policy shall be governed by the law of the state listed on your application as your residence.”^[4] Gray, who is a resident of both Tennessee and Louisiana, listed an address in Tennessee as his residence on his application for insurance with Progressive.^[5] Gray had a Tennessee driver's license.^[6] The car that was involved in the accident was garaged in Tennessee.^[7] The Porsche is registered in Louisiana but in a deposition Gray stated that this was a clerical mistake and that the car was supposed to be registered in Tennessee.^[8] Gray also said that when he traveled to Louisiana, “a lot of times” he left his Porsche in Tennessee.^[9]

Following the accident, plaintiffs filed a petition in state court against Progressive invoking the UM coverage in Gray's insurance policy.^[10] Plaintiffs also seek to recover penalties under Louisiana's bad faith statutes, La. Rev. Stats. §§ 22:1892 and 22:1973.^[11] Progressive removed the case on the grounds of diversity jurisdiction.^[12] Progressive now moves for summary judgment on the issue of choice of law, contending that Tennessee law should govern this dispute, and that, as a result, the Court must dismiss plaintiffs' claims for bad faith under Louisiana bad faith statutes, because Tennessee does not permit recovery under its bad faith statute when the underlying insurance policy provides automobile liability coverage.^[13]

The Court considers the motion below.

II. LEGAL STANDARD

Summary judgment is warranted when “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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). “When assessing whether a dispute to any material fact exists, [the Court] consider[s] all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins., 530 F.3d 395, 398-99 (5th Cir. 2008) (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); and Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2738 (2d ed. 1983)); see also Little, 37 F.3d at 1075 (noting that the moving party's “burden is not satisfied with ‘some metaphysical doubt as to the material facts,' by ‘conclusory allegations,' by ‘unsubstantiated assertions,' or by only a ‘scintilla' of evidence” (citations omitted)). “No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” EEOC v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party must put forth evidence that would “entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991) (quoting Golden Rule Ins. v. Lease, 755 F.Supp. 948, 951 (D. Colo. 1991) (internal quotation marks omitted)). “[T]he nonmoving party can defeat the motion” by either countering with evidence sufficient to demonstrate the “existence of a genuine dispute of material fact,” or by “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may not rest upon the pleadings but must identify specific facts that establish a genuine issue for resolution. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 ‘mandates the entry of summary judgment, after adequate time for discovery and upon motion, 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.'” (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION

Defendant contends that Tennessee law should govern this dispute because (1) the insurance policy contains a choice of law provision, and (2) even if the choice of law provision were unenforceable, the Court should apply Tennessee law under Louisiana's general conflict of laws statutes, La. Civ. Code arts. 3515 and 3537.

Because the Court sits in diversity, it applies Louisiana conflict of laws rules. Mumblow v. Monroe Broadcasting, Inc., 401 F.3d 616, 620 (5th Cir. 2005). As to the choice of law provision, Louisiana law provides that “where the parties stipulate to the state law governing the contract, Louisiana conflict of laws principles require that the stipulation be given effect, unless there is statutory or jurisprudential law to the contrary or strong public policy considerations justify not honoring the contract as written.” Tucker v. Thornton, 363 So.3d 1276, 1280 (La.App. 5 Cir. 2023). But Louisiana Revised Statute section 22:868 provides that “[n]o insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state . . . shall contain any condition, stipulation, or agreement . . . [r]equiring it to be construed according to the laws of any other state.” Other courts “have declined to enforce choice of law provisions in insurance contracts due to the public policy concern expressed in Section 22:868(A)(1).” Al Copeland Invs., LLC v. First Specialty Ins. Corp., 2017 WL 2831689, at *11 (E.D. La. June 29, 2017), aff'd sub nom. Al Copeland Invs., L.L.C. v. First Specialty Ins. Corp., 884 F.3d 540 (5th Cir. 2018); see Town of Vinton v. Certain Underwriters at Lloyds London, 2023 WL 8655270, at *9 (W.D. La. Dec. 14, 2023) (holding that a commercial insurance policy's choice of law provision was prohibited under La. Rev. Stat. § 22:868(A)(1)); Chennault Int'l Airport Auth. v. Starr Surplus Lines Ins. Co., 2023 U.S. Dist. LEXIS 172004, at *4 (W.D. La. Sep. 26, 2023) (invalidating a surplus lines insurance policy's choice of law provision under La. Rev. Stat. § 22:868(A)(1)). La. Rev. Stat. § 22:868(A)(1) applies when there is no issue of material fact regarding where the policy was issued and delivered. See Thomas v. Reliance Standard Life Ins. Co., 136 F.3d 138 (5th Cir. 1998) (declining to apply the predecessor to La. R.S. 22:868 when the claimant had not raised an issue of fact over the policy being issued and delivered in Massachusetts). While the insurance policy, labeled “Tennessee Auto Policy,” was issued in Tennessee, the policyholder, Gray, states that he digitally signed the policy in Louisiana.^[14] There is no evidence on how or where the policy was delivered, although Gray's address in the policy is in Tennessee. Additionally, because Gray stated on his application that he resided in Tennessee,^[15] and the Porsche was garaged in Memphis,^[16] the facts do not indicate that the automobile insurance policy was intended to cover subjects located or resident in Louisiana. Nevertheless, the Court need not resolve these issues to determine La. Rev. Stat. § 22:868's applicability, because the Court reaches the same result under the choice of law provision in the insurance policy and the conflict of laws analysis under Louisiana law.

Under Louisiana's general conflict of law statutes, La. Civ Code arts. 3515 and 3537, the Court must apply “the law of the state whose policies would be most seriously impaired if its law were not applied.” In Champagne v. Ward, the Louisiana Supreme Court laid out the appropriate conflict of law analysis for UM policy litigation involving multiple states. The Court must first identify the relevant policies of the two states and determine if they differ. Champagne v. Ward, 893 So.2d 773, 786 (La. 2005). In this case, there is a conflict...