Seaco Insurance Co. v. Davis-Irish

United States Court of Appeals
For the First Circuit

No. 02-1143

SEACO INSURANCE COMPANY,
Plaintiff, Appellee,

v.

LAURA DAVIS-IRISH,
Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Selya, Circuit Judge,

Gibson* and Greenberg,** Senior Circuit Judges.

William D. Robitzek, with whom Paul F. Macri and Berman &
Simmons, P.A. were on brief, for appellant.
John S. Whitman, with whom Richardson, Whitman, Large & Badger
was on brief, for appellee.
Randall B. Weill and Preti, Flaherty, Beliveau, Pachios &
Haley, LLC on brief for National Union Fire Insurance Company,
amicus curiae.

August 20, 2002

____________
*Of the Eighth Circuit, sitting by designation.
**Of the Third Circuit, sitting by designation.
 Selya, Circuit Judge. This appeal arises out of an

automobile accident in which a vehicle operated by an uninsured

motorist collided with a vehicle driven by Lorraine Wark. The

negligence of the uninsured motorist was the principal cause of the

accident. A passenger in Wark's vehicle, appellant Laura Davis-

Irish, sustained serious injuries. At the time of the crash,

Davis-Irish was in the course of her employment with Garrand &

Company (Garrand).

Garrand owned a vehicle, not involved in the accident,1

for which it had purchased a business auto policy underwritten by

Seaco Insurance Company (Seaco). That policy contained uninsured

motorist (UM) coverage. The UM endorsement delineated who was

insured for purposes of that coverage. It read in pertinent part:

B. Who Is An Insured

1. You.

2. If you are an individual, any
"family member".

3. Anyone else "occupying" a
covered "auto" or a temporary
substitute for a covered "auto".
The covered "auto" must be out
of service because of its
breakdown, repair, servicing,
loss or destruction.

4. Anyone for damages he or she
is entitled to recover because

1
Despite the fact that it owned a vehicle, Garrand generally
required its employees to use their own cars for business travel.

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 of "bodily injury" sustained by
another "insured".

The policy's declaration page lists the named insured as "Garrand

& Company, Inc." and the form of business as "Corporation". The

first page of the policy form explains that, throughout the policy,

the word "you" refers to the named insured shown in the

declarations.

Undeterred by the seemingly clear definition of the key

pronoun ("you"), the appellant sought compensation for her injuries

under paragraph 1 of the UM endorsement. She posited that "you,"

as used in this endorsement, reasonably could be understood to

include Garrand's employees while acting in the course of their

employment. Seaco disagreed. It not only disclaimed coverage for

the appellant's injuries but also brought a diversity action in

Maine's federal district court seeking a declaratory judgment as to

whether the appellant was an insured for purposes of the UM

endorsement. The parties stipulated to the critical facts and then

cross-moved for summary judgment. See Fed. R. Civ. P. 56. The

district court granted Seaco's motion and denied the appellant's.2

Seaco Ins. Co. v. Davis-Irish, 180 F. Supp. 2d 235 (D. Me. 2002).

This appeal followed.

2
The court also denied the appellant's request to certify the
coverage question to the Maine Supreme Judicial Court. That order
is not challenged on appeal.

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 We need not tarry. The district court's opinion rests on

its conclusion that "you," as used in the UM endorsement, is

unambiguous and reasonably can be understood to refer only to

Garrand. See id. at 236-37. Having carefully considered the

record, the policy language, the briefs, and the parties'

arguments, we conclude, without serious question, that the district

court was correct. We have said before, and today reaffirm, that

when a lower court accurately takes the measure of a case and

articulates a cogent rationale, it serves no useful purpose for a

reviewing court to write at length. See, e.g., Maurice v. State

Farm Mut. Auto Ins. Co. 235 F.3d 7, 9-10 (1st Cir. 2000); Chico-

Velez v. Roche Prods., Inc., 139 F.3d 56, 58 (1st Cir. 1995);

Lawton v. State Mut. Life Assur. Co., 101 F.3d 218, 220 (1st Cir.

1996); Ayala v. Union de Tronquistas de P.R., 74 F.3d 344, 345 (1st

Cir. 1996); In re San Juan Dupont Plaza Hotel Fire Litig., 989 F.2d

36, 38 (1st Cir. 1993). Because this is such a case, we affirm the

district court's judgment for substantially the reasons elucidated

in that court's thoughtful opinion. We add only three brief

comments.

First: The appellant alleges that the policy provision

quoted above is ambiguous and should therefore be construed against

Seaco. The appellant's premise is correct in the sense that, under

Maine law, ambiguous language in an insurance policy ordinarily is

construed against the insurer. E.g., Pine Ridge Realty, Inc. v.

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Mass. Bay Ins. Co., 752 A.2d 595, 600-01 (Me. 2000); Union Mut.

Fire Ins. Co. v. Commercial Union Ins. Co., 521 A.2d 308, 310 (Me.

1987). But that premise has no application here. The policy

language to which the appellant adverts simply is not ambiguous.

See Alternative Energy, Inc. v. St. Paul Fire & Marine Ins. Co.,

267 F.3d 30, 35 (1st Cir. 2001) ("A contract need not negate every

possible construction of its terms in order to be unambiguous.")

(citation omitted); see also Colford v. Chubb Ins Co., 687 A.2d

609, 614 (Me. 1996) (holding that the contra proferentem principle

does not mean that the insured must prevail every time that the

insured and the insurer "disagree on the meaning of the contract").

Ambiguity, like beauty, may lie solely in the eye of the beholder

– and so it is here.

Second: The appellant also asservates that Seaco's

definition of "you" renders the disputed provision – specifically,

numbered paragraphs 1 and 2 of that provision – superfluous. That

asserveration erroneously assumes that this type of policy is

issued exclusively to corporations. The contrary is true. The

insurance industry often uses standard forms, and this is a

standard form, multi-purpose business auto policy designed for

issuance to a variety of insurable entities. The purchaser (and,

thus, the named insured) may be a corporation, a partnership, or an

individual doing business as a sole proprietor. There is nothing

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sinister about an insurer's use of such a "one size fits all"

policy form.

Not surprisingly, the provisions of such a policy

function somewhat differently depending upon the identity and

status of the named insured. When the named insured is an

individual, paragraphs 1 and 2 of the UM endorsement are fully

operative. The fact that those paragraphs, by their plain

language, are not apposite when the named insured is a corporation

does not afford us license to stretch the words of the policy and

give them an unintended effect. See Langer v. U.S. Fid. & Guar.

Co., 552 A.2d 20, 22 (Me. 1988) (declining to give a "strained and

unnatural construction" to a provision in a standard business auto

policy). In short, the appellant's position confuses superfluity

with inapplicability.

Third: The appellant relies heavily on the Ohio Supreme

Court's decision in Scott-Pontzer v. Liberty Mutual Fire Ins. Co.,

710 N.E. 2d 1116 (Ohio 1999). That court examined the language of

a substantially similar UM endorsement and determined that the term

"you" was ambiguous. Id. at 1119. The court stated:

It would be nonsensical to limit protection
solely to a corporate entity, since a
corporation, itself, cannot occupy an
automobile, suffer bodily injury or death, or
operate a motor vehicle. Here, naming the
corporation as the insured is meaningless
unless the coverage extends to some person or
persons – including to the corporation's
employees.

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Id.

We consider Scott-Pontzer an anomaly and we therefore

decline to follow it. We have two main reasons for this view. We

list them in ascending order of importance.

First, the Scott-Pontzer court was sharply divided (this

was a 4-3 decision), and the majority opinion has had a rude

reception in its birthplace. The Ohio legislature lost little time

in superseding it due to its destabilizing effect on the automobile

insurance market. See Ohio Rev. Code Ann. § 3937.18 (Anderson

2002). Moreover, the majority opinion has come under fire in the

Ohio courts. See, e.g., Bianchi v. Moore, 2001 Ohio App. LEXIS

2105, at *20-21 (May 11, 2001).

Second, the majority opinion in Scott-Pontzer appears to

deviate from well-established tenets of contract interpretation.

The Maine courts have held, with a regularity bordering on the

monotonous, that contracts of insurance ought to be construed in a

manner consistent with the intent of the parties. See, e.g., Pine

Ridge, 752 A.2d at 601 (explaining that "[t]he touchstone of

contract interpretation is the intent of the parties"). The Ohio

Supreme Court consciously departed from this tenet. See Scott-

Pontzer, 710 N.E. 2d at 1120 (conceding that the conclusion reached

by the majority "may be viewed by some as a result that was not

intended by the parities to the insurance contract"). Inasmuch as

Maine law controls in this diversity case, see Crellin Tech., Inc.

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v. Equipmentlease Corp., 18 F.3d 1, 4 (1st Cir. 1994), adherence to

Scott-Pontzer would be improvident. See Daigle v. Maine Med.

Ctr., 14 F.3d 684, 689 (1st Cir. 1994) (describing the proper role

of a federal court sitting in diversity jurisdiction).

We need go no further. For the reasons stated both here

and in the opinion below, we reject the appellant's suggested

interpretation of the UM endorsement. As the district court

explained, that interpretation "is not a reasonable reading of the

[policy] language, and runs contrary to the thrust of Maine . . .

precedent." Seaco Ins., 180 F. Supp. 2d at 237.

Affirmed.

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