Rundman v. Allstate Fire & Cas. Ins. Co.

LISA RUNDMAN, Personal Representativeof the ESTATE OF TYLER JAMES HARTZELL, Plaintiff, v. ALLSTATE FIRE AND CASUALTYINSURANCE COMPANY, et al., Defendants.

Case No. 1:20-cv-860

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

July 12, 2021

Hon. Hala Y. Jarbou

OPINION

This a diversity action seeking recovery of insurance benefits under two separate insurance policies, one issued by Defendant Allstate Fire and Casualty Insurance Company ("Allstate Fire"), and one issued by Defendant Allstate Property and Casualty Insurance Company ("Allstate Property"). Plaintiff Lisa Rundman is the mother of Tyler James Hartzell. Tragically, Hartzell died in an automobile accident on April 23, 2019. She brings this claim on behalf of his estate. Both defendants filed a motion for summary judgment and Allstate Fire subsequently filed a motion to dismiss for failure to state a claim. The Court granted Defendants' motions in part, dismissing Allstate Fire. Before the Court is Plaintiff's motion for reconsideration (ECF No. 36). For the reasons herein, the Court will grant the motion for reconsideration. Upon reconsideration, the Court will deny Defendants' motions for dismissal and for summary judgment.

I. BACKGROUND

Plaintiff and her husband live in Constantine, Michigan. Hartzell grew up in their household and continued living with them intermittently as an adult. Allstate Fire issued Plaintiff and her husband an automobile insurance policy. They added Hartzell to the policy as a "listed driver" when he turned 16 years old, and he remained listed as such until his death at the age of 20.

Plaintiff avers that Hartzell moved out of her home on three separate occasions for brief periods of time before returning home again. (Rundman Aff., ECF No. 28, PageID.328.) He moved back into her home a third time in October 2018. A few months later, the family acquired a 1999 GMC Yukon for Hartzell to drive. Plaintiff added this vehicle to the Allstate Fire policy on January 16, 2019.

On January 27, 2019, Hartzell moved to North Carolina, renting a cabin at a campground and obtaining local employment. He took the Yukon and some of his belongings with him. He left many of his belongings behind at Plaintiff's house and at his aunt's storage shed in Constantine, Michigan, including the following: a bed, a table and chairs, end tables, lamps, appliances, tools, dressers, pots, pans, and dishes. (Id.) Also, Plaintiff and her husband continued to provide some support for Hartzell, buying groceries for him, paying utility bills and rent deposits, and making payments on his motorcycle. (Id.)

In late February 2019, Hartzell allegedly told his landlord that he intended to move back to Michigan because he was homesick. She allegedly agreed to let him out of his lease and later refunded some of his rent.

On March 18, 2019, Hartzell texted his mother, telling her

I'm coming home . . . . I just don't belong here[.] It will be a w[h]ile before I come but I just wanna go home[.] [I]mma save up enough to get a trailer or something started when I get home[.]"

(Text message, ECF No. 28, PageID.326.)

In late March, Hartzell's Yukon broke down, so he took over payments on his friend's Nissan Xterra. On March 27, Plaintiff dropped the Yukon from her policy with Allstate Fire.

On March 29, 2019, Hartzell obtained a North Carolina driver's license. The following day, he obtained an insurance policy from Allstate Property in North Carolina to cover the Xterra.

Hartzell allegedly received a rent refund check on April 15, 2019, packed his belongings into the Xterra, and then drove to Plaintiff's home in Michigan. He stayed there for a week but then returned to North Carolina on April 22, 2019, allegedly to finish a workweek and pick up some paychecks.

Hartzell died in an automobile accident in North Carolina on April 23, 2019, while riding as a passenger in a vehicle driven by his friend. The vehicle driven by Hartzell's friend was insured by State Farm Insurance. Apparently, the driver of the other vehicle involved in the accident was insured by Geico Insurance Company. Geico and State Farm each tendered their respective policy limits of $30,000, a total of $60,000, to Hartzell's estate. (See Compl. ¶ 41, ECF No. 2-1.)

Plaintiff now seeks to recover on behalf of Hartzell's estate under the policies issued by Allstate Fire and Allstate Property to pay for Hartzell's medical and funeral expenses. Specifically, Plaintiff relies on coverage provided by the policies for personal injury (or medical payments) and for damages caused by underinsured motorists. For the most part, Defendants have denied or refused to pay the claims by Hartzell's estate. Count I of the complaint seeks a declaration as to the priority of coverage between the insurance policies. Count II seeks recovery of "no fault" benefits. (See Compl., ECF No. 2-1, PageID.37.) Count III seeks recovery of "underinsured motorist" benefits. (Id., PageID.39.)

On September 22, 2020, the parties consented to dismissal of Plaintiff's claim against Allstate Property for underinsured motorist benefits. (See Consent Order, ECF No. 11.)

Both Defendants filed a joint motion for summary judgment (ECF No. 20), contending that Hartzell's estate has already received that to which it is entitled under the policies. Allstate Fire also filed a motion to dismiss the complaint for failure to state a claim (ECF No. 25).

II. PRIOR OPINION

In its May 13, 2021, opinion, the Court concluded that

there is no genuine dispute of material fact that (1) Allstate Property's policy ha[s] priority; (2) Allstate Property is liable for only $1,000 in benefits; and (3) Hartzell's estate is not entitled to benefits from Allstate Fire.

(5/13/2021 Op. 8, ECF No. 34.) Accordingly, the Court dismissed Allstate Fire. Plaintiff seeks reconsideration of that decision. In particular, Plaintiff contends that the Court erred when it determined that Allstate Property's policy has priority and that Plaintiff cannot recover from Allstate Fire.

III. RECONSIDERATION STANDARD

Under Rule 54(b) of the Federal Rules of Civil Procedure, a non-final order is subject to reconsideration at any time before entry of a final judgment. Id.; see also ACLU v. McCreary Cnty., 607 F.3d 439, 450 (6th Cir. 2010). In addition, Western District of Michigan Local Civil Rule 7.4(a) provides that reconsideration is appropriate only when the movant "demonstrate[s] a palpable defect by which the court and the parties have been misled . . . [and] that a different disposition of the case must result from a correction thereof." Id.

IV. ANALYSIS OF RECONSIDERATION MOTION

In its opinion, the Court relied upon Mich. Comp. Laws § 500.3114, which provides that when

personal protection insurance benefits or personal injury benefits described in section 3103(2) are payable to or for the benefit of an injured person under his or her own policy and would also be payable under the policy of his or her spouse, relative, or relative's spouse, the injured person's insurer shall pay all of thebenefits up to the coverage level applicable under section 3107c to the injured person's policy, and is not entitled to recoupment from the other insurer.

Mich. Comp. Laws § 500.3114(1) (emphasis added). The Court determined that Hartzell was insured under his own policy issued by Allstate Property; consequently, under Mich. Comp. Laws § 500.3114, he was not entitled to benefits under the policy issued by Allstate Fire to Hartzell's mother.

Plaintiff argues, and Defendants apparently agree (see Allstate Fire's Br. in Opp'n to Reconsid. 6, ECF No. 40), that the priority provision in Mich. Comp. Laws § 500.3114(1) does not apply to this case because Hartzell's policy from Allstate Property was not a policy that provides "personal protection benefits or personal injury benefits described in section 3103(2)." See id. The Michigan insurance statute requires "the owner or registrant of a motor vehicle required to be registered in [Michigan] [to] maintain security for payment of benefits under personal protection insurance and property protection insurance as required under this chapter[.]" Mich. Comp. Laws § 500.3101(1). The statute also requires insurers of Michigan residents to provide no-fault personal protection and personal injury benefits. See Mich. Comp. Laws § 500.3101(2) ("[A]ll automobile insurance policies offered in this state must include benefits under personal protection insurance, and property protection insurance as provided in this chapter, and residual liability insurance.").

Plaintiff argues that, because Allstate Property's policy was not issued in Michigan for a Michigan vehicle, it does not provide no-fault "personal protection benefits or personal injury benefits" as described by Mich. Comp. Laws § 500.3114(1). Plaintiff's argument is supported by the Michigan Supreme Court's decision in Turner by Sakowski v. Farmers Insurance Exchange, 953 N.W.2d 204 (Mich. 2021). There, the court held that a different provision in Mich. Comp. Laws § 500.3114 did not apply to an out-of-state insurer because that insurer had not agreed toprovide no-fault insurance benefits under Mich. Comp. Laws § 500.3101. Turner, 953 N.W.2d at 206. Similarly, Allstate Property, the North Carolina insurer of Hartzell's Xterra, did not agree to provide "personal protection benefits" to Hartzell as described in Michigan's automobile insurance statute. Consequently, the priority provision in the statute does not apply to Allstate Property's policy and does not limit Plaintiff to recovery from that policy alone.

In short, the Court agrees with Plaintiff that Mich. Comp. Laws § 500.3114(1) does not resolve whether Plaintiff is entitled to benefits from Allstate Fire. Consequently, the Court will grant Plaintiff's motion for reconsideration and vacate the Court's opinion and order resolving Defendants' motions for dismissal and for summary judgment.

In those motions, Defendants raised other arguments in support of...