517 F.Supp.3d 95
N.D.N.Y.2021Background
- Plaintiff William Loomis was injured on Oct. 2, 2017 while driving an XPO-owned truck (registered in Indiana, principally garaged in New York); he settled with the at-fault driver’s insurer (State Farm) for $50,000.
- The vehicle was covered by ACE under the XSA Policy (Excess Business Auto Policy): $7,000,000 BI limit; $3,000,000 self‑insured retained limit; XSA applies only after the retained limit is exhausted.
- XPO also purchased a separate MMT Policy from ACE for other vehicles; MMT paperwork included Indiana and New York state-specific UM/UIM/SUM selection/rejection forms, while XSA paperwork did not.
- ACE denied Loomis’s claim for underinsured/supplementary UM benefits based on XSA policy language stating no UM/UIM/SUM coverage was offered for vehicles garaged/registered in those states.
- Legal dispute: (1) whether Indiana law’s UM/UIM requirement applies to XSA or the policy is exempt as a “commercial excess liability policy”; and (2) whether ACE complied with New York’s SUM notice/offer requirements and, if not, what remedy follows.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Indiana’s UM/UIM statute requires XSA to provide UM/UIM (i.e., is XSA a "commercial excess liability policy" exempt from the statute?) | XPO/Loomis: XSA is not the statutory "commercial excess liability policy" exemption because it is excess only of a self‑insured retention (not excess over a primary insurer), so Indiana law requires UM/UIM in limits equal to BI limits ($7M). | ACE: XSA is an "excess" policy (no obligation until retained limit is exhausted) and therefore falls within the §27‑7‑5‑2(d) exemption for commercial excess liability policies. | Court: Statute ambiguous; construing remedially and in favor of insured, XSA is not exempt. XSA must provide UM/UIM by operation of law in limits equal to its BI limit ($7M). |
| Whether New York law required ACE to offer SUM for the XSA Policy and, if ACE failed to do so, whether the court should read SUM (up to $7M) into the XSA Policy | Loomis: XSA unambiguously shows no SUM offered; NY insurance law and Reg. 35‑D require an offer/notice per policy, so ACE violated NY law and relief is warranted. | ACE: Provided the required SUM notice with the MMT policy; any rejection/notice evidence shows XPO’s intent to reject SUM; SUM is optional so failure to offer on XSA does not entitle Loomis to SUM coverage inserted into XSA. | Court: XSA did not contain the required SUM offer/notice; ACE violated NY statute/regulation. But SUM is optional and New York law does not authorize judicial reformation to read optional SUM limits into the policy; NY claim dismissed with prejudice. |
Key Cases Cited
- United Nat. Ins. Co. v. DePrizio, 705 N.E.2d 455 (Ind. 1999) (Indiana UM/UIM statute is remedial, "full recovery" statute; umbrella/excess policies fall within statute absent express legislative exemption)
- City of Gary v. Allstate Ins. Co., 612 N.E.2d 115 (Ind. 1993) (self‑insurers are not "insurers" for purposes of UM/UIM statute)
- Lakes v. Grange Mut. Cas. Co., 964 N.E.2d 796 (Ind. 2012) (statutory ambiguities in UM/UIM law resolved in favor of the insured)
- DiBella v. Hopkins, 403 F.3d 102 (2d Cir. 2005) (federal courts must predict state supreme court decisions on unsettled state‑law questions)
- J.P. Morgan Sec. Inc. v. Vigilant Ins. Co., 21 N.Y.3d 324 (2013) (insurance policies are contracts; unambiguous terms given plain meaning)
- In re Viking Pump, Inc., 27 N.Y.3d 244 (2016) (ambiguities in insurance contracts resolved for insured)
- Royal Indem. Co. v. Providence Washington Ins. Co., 92 N.Y.2d 653 (1998) (policy provisions void as against public policy must be read as if the excluded coverage were included)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard: movant bears initial burden to show absence of genuine dispute)