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Marnita Goddard v. City of Deadwood and South Dakota Public Assurance Alliance

September 29, 2011

MARNITA GODDARD,
PLAINTIFF,
v.
CITY OF DEADWOOD AND SOUTH DAKOTA PUBLIC ASSURANCE ALLIANCE, DEFENDANTS.



The opinion of the court was delivered by: Jeffrey L. VIKEN United States District Judge

ORDER DENYING PARTIES' OBJECTIONS AND ADOPTING REPORT AND RECOMMENDATION

INTRODUCTION

Plaintiff Marnita Goddard originally brought a personal injury claim against the City of Deadwood, South Dakota (the "City"), arising from the crash of a city operated trolley. (Docket 1). The court granted plaintiff leave to amend her complaint to include a claim against the South Dakota Public Assurance Alliance ("SDPAA"). (Docket 22). Plaintiff's second corrected amended complaint ("complaint") included a direct claim against the City for the negligence of its trolley operator (Count 1) and a claim against SDPAA for the negligence of an unidentified vehicle ("phantom driver") as an uninsured motorist (Count II). (Docket 26). Both defendants filed answers and SDPAA filed a cross-claim against the City. (Dockets 27 and 31). Ms. Goddard subsequently settled her claim against the City. (Docket 70). The court granted the City's unopposed motion to dismiss the complaint against the City. (Docket 72). SDPAA's cross-claim against the City remains intact. (Docket 70).

SDPAA moved for summary judgment on all of plaintiff's claims. (Docket 41). Plaintiff moved for partial summary judgment on two issues:

(1) she was not barred from recovery on the theories of assumption of the risk or contributory negligence; and (2) she was, in fact, injured as a result of the crash of the trolley. (Docket 56). The court referred the motions to Magistrate Judge Veronica L. Duffy for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). (Docket 69).

On June 3, 2011, Magistrate Judge Duffy filed a report and recommendation concluding that the court should grant SDPAA's motion for summary judgment. (Docket 73). The report and recommendation also provided alternative recommendations on separate issues raised during briefing. Both plaintiff and SDPAA timely filed objections. (Dockets 75 and 77). The court reviews de novo those portions of the report and recommendation which are the subject of objections. Thompson v. Nix, 897 F.2d 356, 357-58 (8th Cir. 1990); 28 U.S.C. § 636(b)(1). The court may then "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). For the reasons stated below, the parties' objections are overruled and the report and recommendation of the magistrate judge is adopted in its entirety.

DISCUSSION

A. MAGISTRATE JUDGE'S FINDINGS OF FACT

Neither party objected to the magistrate judge's findings of fact. See Dockets 75 and 77. The magistrate judge's findings of fact are adopted by the court in accordance with 28 U.S.C. § 636(b)(1)(C).

B. MAGISTRATE JUDGE'S CONCLUSIONS OF LAW

Plaintiff's objections to the magistrate judge's conclusions of law and recommendations are summarized as follows:

1. The magistrate judge erred as a matter of law in concluding Goddard is not a member under the SDPAA policy.*fn1

2. The magistrate judge erred in applying the doctrine of ejusdem generis when interpreting the SDPAA policy.

3. The magistrate judge erred in concluding collateral estoppel does not apply to the legal question of whether Goddard is a member under the SDPAA policy.

(Docket 75 at pp. 1-2). SDPAA's objection to the magistrate judge's conclusions of law and recommendations is summarized as follows:

If plaintiff is a "member" entitled to SDPAA coverage, then the magistrate judge erred in concluding there was insufficient evidence presented to determine plaintiff is not entitled to duplicate coverage under both the liability and the uninsured motorist coverages of the SDPAA policy. (Docket 77). Each of these objections will be addressed separately.

1. THE MAGISTRATE JUDGE ERRED AS A MATTER OF LAW IN CONCLUDING GODDARD IS NOT A MEMBER UNDER THE SDPAA POLICY.

The magistrate judge concluded the language of the SDPAA policy was not ambiguous. (Docket 73 at p. 31). The magistrate judge determined Ms. Goddard was not a "member" as that term is defined in the SDPAA policy.

Id. at p. 27. Based on this conclusion, the magistrate judge recommended SDPAA's motion for summary judgment be granted. Id. at p. 46.

"State law controls the construction of insurance policies when a federal court is exercising diversity jurisdiction." Bell v. Allstate Life Ins. Co., 160 F.3d 452, 455 (8th Cir. 1998). "Because this case is in federal court based on diversity jurisdiction, [South Dakota's] substantive law controls . . . analysis of the insurance policy." Babinski v. American Family Ins. Group, 569 F.3d 349, 351-52 (8th Cir. 2009). In a diversity action, the court uses South Dakota "state law to construe insurance policies." Hawkeye-Security Insurance Co. v. Bunch, 643 F.3d 646, 649 (8th Cir. 2011).

Ms. Goddard must be a "member," as defined in the SDPAA policy, before she can invoke the uninsured motorist provision of the policy. (Docket 73 at p. 17). The uninsured motorist coverage provision of the SDPAA policy provides as follows:

We will pay those amounts that a member is legally entitled to recover as damages from the owner or operator of an uninsured automobile . . . . The damages must result from injury sustained by the member and caused by an occurrence resulting from the . . . use of, or when stuck by, an uninsured automobile . . . . Use includes operating the vehicle as well as getting into or out of, or being in or on the vehicle. . . . (Docket 44-1, p. 13).

In order to analyze Ms. Goddard's claim that she is a "member" and entitled to coverage under the uninsured coverage section of the SDPAA policy, the court must interpret the relevant portions of the policy. First, the introduction to the SDPAA policy declares:

Throughout this Agreement, words and phrases . . . have special meaning. You and your refer to the Named Member shown in the Declarations. Member means any person or organization qualifying as such under Section II - WHO RECEIVES COVERAGES of this Agreement. We, us, and our refer to the South ...


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