Liberty Mutual Fire Insurance v. Kyle Beach

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0395n.06
No. 10-2568
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LIBERTY MUTUAL FIRE INSURANCE ) FILED
COMPANY, ) Apr 12, 2012
)
Plaintiff-Appellee, ) LEONARD GREEN, Clerk
)
v. )
) ON APPEAL FROM THE
KYLE MICHAEL BEACH; CHARLES ) UNITED STATES DISTRICT
KURT BEACH; DANIEL REISS, ) COURT FOR THE EASTERN
) DISTRICT OF MICHIGAN
Defendants, )
) OPINION
JUDITH REISS, as Next Friend of SDR, VR )
& NR, minors, )
)
Defendant-Appellant. )
)
BEFORE: SUHRHEINRICH, STRANCH, and DONALD, Circuit Judges.
PER CURIAM. Judith Reiss, acting as next friend to three minors, appeals the district
court’s judgment granting summary judgment to Liberty Mutual Fire Insurance Company (“Liberty
Mutual”).
In 2007, Kyle Beach caused an automobile accident in which Daniel Reiss suffered serious
physical injuries. Beach was driving a vehicle owned by his father, Charles Beach, and he was
insured under an automobile insurance policy issued by Liberty Mutual to his father. Daniel Reiss
No. 10-2568
Liberty Mutual Fire Ins. Co. v. Beach, et al.
filed suit in state court against several defendants, including Kyle and Charles Beach, seeking
damages for his injuries. Reiss’s ex-wife, Judith Reiss, filed a separate suit in state court on behalf
of their three children against several defendants, including Kyle and Charles Beach, seeking
damages for pain and suffering, mental anguish, emotional distress, loss of consortium, and loss of
support resulting from the injuries to Daniel Reiss. The state courts resolved all relevant issues other
than the extent of Liberty Mutual’s liability under the insurance policy.
Liberty Mutual filed a complaint in the district court, seeking a declaration that, under the
circumstances, its liability under the policy was limited to $100,000. The district court granted
summary judgment to Liberty Mutual and issued the requested declaration. Judith Reiss appealed
on behalf of the three children, arguing that the district court erred by determining that Liberty
Mutual’s liability under the policy was limited to $100,000.
“When, as here, federal jurisdiction is based upon diversity of citizenship, we must apply the
law of the forum state.” Estate of Riddle ex rel. Riddle v. S. Farm Bureau Life Ins. Co., 421 F.3d
400, 404 (6th Cir. 2005). “We apply the relevant state law in accordance with the controlling
decisions of the highest court of that state.” Telxon Corp. v. Fed. Ins. Co., 309 F.3d 386, 391 (6th
Cir. 2002). Further, “we will accept the holding of a state intermediate appellate court with respect
to state law unless we determine the highest court of the state would decide otherwise.” Bennett v.
MIS Corp., 607 F.3d 1076, 1095 (6th Cir. 2010) (internal alteration and quotation marks omitted).
Under Michigan law, which applies to the dispute in this case, “insurance policies are subject to the
same contract construction principles that apply to any other species of contract.” Rory v. Cont’l Ins.
Co., 703 N.W.2d 23, 26 (Mich. 2005).
-2-
No. 10-2568
Liberty Mutual Fire Ins. Co. v. Beach, et al.
Under the automobile insurance policy at issue, Liberty Mutual agreed to pay damages for
“bodily injury” for which an insured became responsible because of an automobile accident. “Bodily
injury” means “bodily harm, sickness or disease, including death that results.” The relevant “limit
of liability” provision provides as follows:
The limit of liability shown in the Schedule or in the Declarations for each person for
Bodily Injury Liability is our maximum limit of liability for all damages, including
damages for care, loss of services or death, arising out of “bodily injury” sustained
by any one person in any one auto accident. Subject to this limit for each person, the
limit of liability shown in the Schedule or in the Declarations for each accident for
Bodily Injury Liability is our maximum limit of liability for all damages for “ bodily
injury” resulting from any one auto accident.
The policy declarations state that the limit for bodily injury liability is $100,000 for each person and
$300,000 for each accident.
Defendant argues that the district court relied on non-binding and non-persuasive case law.
Liberty Mutual counters that Defendant’s attempt to recover multiple per-person limits under the
Liberty policy fails for two reasons: (1) the minors’ claims, which are in the nature of loss of
consortium claims, do not constitute bodily injury; and (2) even if the minors had sustained bodily
injury, their claims are clearly derivative of the bodily injury sustained by their father, and therefore
do not trigger a separate per-person limit under the Liberty policy.
As the district court recognized, there is a Michigan Court of Appeals opinion from 1989,
directly on point, holding that a claim of loss of consortium by a minor based on the bodily injury
of a parent is not a bodily injury. See State Farm Mut. Auto. Ins. Co. v. Descheemaeker, 444 N.W.2d
153, 155 (Mich. Ct. App. 1989). There appear to be no conflicting decisions, so the conflict
procedure of Michigan Court Rule 7.215(J) does not apply. Further, because the children’s alleged
-3-
No. 10-2568
Liberty Mutual Fire Ins. Co. v. Beach, et al.
injuries are derivative of the physical injuries sustained by Daniel Reiss in the accident, a single per-
person limit would apply. See id. at 155.
Accordingly, we affirm the district court’s judgment.
-4-