Allstate Ins. Co. v. James Garrett , 1 F. App'x 615 ( 2001 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 00-1917
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Allstate Insurance Company,
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Western District of Arkansas.
James Garrett; Linda Garrett, * [UNPUBLISHED]
*
Appellants. *
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Submitted: January 8, 2001
Filed: January 23, 2001
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Before WOLLMAN, Chief Judge, BYE, Circuit Judge, and JONES,1 District
Judge.
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PER CURIAM.
Allstate Insurance Company (Allstate) brought this action in federal district court
pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, seeking a declaration that
the boat owners’ insurance policy purchased by married couple James and Linda
Garrett does not cover losses associated with the injuries Linda Garrett sustained on
1
The Honorable John B. Jones, United States District Judge for the District of
South Dakota, sitting by designation.
August 2, 1998, when her husband was piloting their boat and she was a passenger.
The district court2 granted summary judgment in favor of Allstate after determining that
the policy unambiguously excludes coverage for such injuries. We affirm.
On appeal, the Garretts contend: (1) that the court should have stayed the
federal action until a state court action filed by Linda Garrett against her husband and
Allstate has been concluded, (2) that the contract provision relied upon by Allstate is
ambiguous and therefore must be construed in favor of the Garretts, and (3) that the
provision is unenforceable as contrary to Arkansas public policy.
First, we conclude that it was proper for the district court to deny the Garretts’
motion for a stay. We review the district court’s decision to entertain a declaratory
judgment action for abuse of discretion. Capitol Indem. Corp. v. Haverfield, 218 F.3d
872, 874 (8th Cir. 2000). The district court “must consider the scope and nature of the
pending state court proceeding to ascertain whether the issues in controversy between
the parties to the federal action . . . can be better settled by the state court.” Id. In
Haverfield, we held that a district court had abused its discretion by allowing a federal
declaratory judgment suit to proceed when a state court was considering the same issue
between the same parties. Haverfield, 218 F.3d at 875. In that case, the parties, issue,
and arguments were the same in the pending state and federal actions, while the
relevant state law, decisive in the case, was unclear and the subject of a split in the
decisions of the courts within the state. Id.
In this case, Linda Garrett is suing in state court to establish her husband’s
liability to her for her injuries. The case has not yet reached a conclusion, and although
Allstate is named in the state court action, no indemnity action against Allstate has been
filed. In contrast, this federal declaratory action seeks a ruling on the scope of the
2
The Honorable Harry F. Barnes, United States District Judge for the Western
District of Arkansas.
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policy’s coverage. Thus, the arguments and the relevant issues are not the same.
Additionally, unlike the situation in Haverfield, Arkansas law is settled on the general
status of exclusionary clauses like the one at issue in this case. Accordingly, we
conclude that the district court did not abuse its discretion in declining to grant the
Garretts’ motion to stay.
Second, we agree with the district court that Allstate relies on a contractual
provision that is unambiguous and excludes coverage for Linda Garrett’s injuries.
Section II of the insurance policy states that Allstate will pay “all sums arising from an
accidental loss which an insured person becomes legally obligated to pay as damages
because of bodily injury or property damage resulting” from the ownership,
maintenance, or use of covered property. Appellants’ App. at tab 2, boat owners’
policy at 12 (emphasis omitted). Section II also lists those losses that are excluded
from coverage and includes the following provision: “2. We do not cover bodily injury
to an insured person or property damage to property owned by an insured person.” Id.
at 13 (emphasis omitted). The definitions section of the policy provides that: an
“insured person” means “you and, if a resident of your household: (a) any relative . .
. .” “You” or “your” under the policy “means the person named on the declarations
page as the insured and that person’s resident spouse.” Id. at 3 (emphasis omitted).
It is undisputed that the Garretts are both named on the declarations page of the
policy as insured persons. Linda Garrett’s injuries are therefore excluded from
coverage. The Garretts contend, however, that the exclusionary provision at issue
could be interpreted as excluding coverage only for those losses that are self-inflicted
by an insured person. We agree with the district court that the clause is unambiguous
and not reasonably susceptible to the interpretation offered by the Garretts.
Finally, we reject the Garretts’ contention that state statutes requiring boat
owners to obtain general liability insurance on their watercraft indicate that public
policy forbids exclusionary clauses like the one in question. The Arkansas Supreme
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Court has concluded, however, that in the context of automobile insurance neither
public policy nor the statutory requirement of liability insurance prohibits exclusionary
clauses similar to the one in this case. See Cook v. Wausau Underwriters Ins. Co., 772
S.W.2d 614, 615-16 (Ark. 1989); State Farm Mut. Auto. Ins. Co. v. Cartmel, 463
S.W.2d 648, 650 (Ark. 1971) (“Although [such exclusionary clauses] are quite far
reaching and at times appear to have unfortunate effects, such clauses, absent statutory
strictures to the contrary, are generally enforced according to their terms.”). In the light
of these decisions, we conclude that the exclusionary clause in the Garretts’ policy is
valid.
The judgment is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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