Court Opinion

ID: 2672866
Source: CourtListenerOpinion
Date Created: 2014-05-07 18:41:20.824276+00
Date Added: 2024-06-11T13:06:23.507259
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 13-1613

ROLF KAMP,

                Plaintiff – Appellant,

           v.

EMPIRE FIRE AND MARINE INSURANCE COMPANY,

                Defendant – Appellee.

Appeal from the United States District Court for the District of
South Carolina, at Rock Hill. Joseph F. Anderson, Jr., District
Judge. (0:12-cv-00904-JFA)

Argued:   March 18, 2014                      Decided:   May 7, 2014

Before WILKINSON, MOTZ, and DIAZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Ashley White Creech, MCGOWAN, HOOD & FELDER, LLC, Rock
Hill, South Carolina, for Appellant.    Theodore David Rheney,
GALLIVAN, WHITE & BOYD, P.A., Greenville, South Carolina, for
Appellee.   ON BRIEF: Chad A. McGowan, MCGOWAN, HOOD & FELDER,
LLC, Rock Hill, South Carolina, for Appellant.     Jennifer D.
Eubanks, GALLIVAN, WHITE & BOYD, P.A., Greenville, South
Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Rolf Kamp sued Empire Fire and Marine Insurance Company

seeking     insurance       coverage      for     injuries     he    suffered    in    an

accident caused by an uninsured motorist.                       The district court

determined that the policy at issue did not include the coverage

Kamp sought and granted summary judgment for Empire.                          We agree

with the district court and therefore affirm.

                                             I.

                                             A.

     On April 8, 2011, Kamp rented a motorcycle from R&K Harley-

Davidson,    Inc.,     in    Charlotte,          North   Carolina.       Through      the

written rental agreement, which Kamp signed, he automatically

received automobile insurance coverage up to the minimum limits

required    by   North      Carolina      law.         Kamp   separately      purchased

supplemental     insurance,          which       provided     coverage     beyond     the

minimum     limits.         Both    the   minimum-coverage           policy   and     the

supplemental policy were issued by Empire.

     Later that same day, while driving the motorcycle in South

Carolina,    Kamp     was   involved      in      an   accident.      Another    driver

turned    left   in    front       of   him,      striking     his    motorcycle      and

severely injuring him.             The driver who caused the accident was

uninsured.       Kamp sued her in South Carolina state court and

eventually    obtained       a     $2,500,000      default     judgment.        He   then

                                             2
filed an insurance claim with Empire, seeking uninsured motorist

(“UM”) coverage under both the minimum-coverage and supplemental

policies.         Empire    paid       Kamp     $30,000       in    accordance         with    the

minimum-coverage          policy,       but     denied       any    additional          coverage

under     the     supplemental         policy.          According          to     Empire,      the

supplemental policy excluded UM coverage.

                                               B.

        Because    this    case        turns    on     the    scope    of        the    coverage

offered by Empire in the two policies, we briefly summarize the

relevant documents and provisions.

        Empire     issued        the     minimum-coverage             and         supplemental

policies to Harley-Davidson Financial Services, Inc.                                    Separate

documents extend each policy to R&K, the North Carolina-based

franchise       from    which    Kamp    rented        the    motorcycle.              Under   the

minimum-coverage          policy,        R&K        rentees    automatically             receive

liability insurance coverage up to the minimum limits required

by North Carolina law: $30,000 per person for bodily injury;

$60,000 per accident for bodily injury; and $25,000 per accident

for   property         damage.      Rentees          receive       equal    amounts       of    UM

coverage.        At issue in this case is the supplemental policy,

which     offers       additional       coverage        beyond       what        the    minimum-

coverage policy provides.

        The      supplemental       policy          includes       three        categories      of

coverage:        Supplemental          Rental        Liability       Insurance          (“SLI”);

                                                3
Personal Accident Coverage; and Personal Property Coverage.                          A

rentee     may   purchase   coverage       under    any    or    all       of    these

categories by paying an associated premium.                 Kamp purchased all

three, and he contends that the SLI category includes up to

$1,000,000 in additional UM coverage.

     The    supplemental    policy’s       terms    are    set       out   in    three

component documents.        The first is a master document, titled

“Policy Provisions,” and it applies nationwide.                  With respect to

SLI, the master document states that the policy “provides excess

auto liability insurance and only applies to a loss involving

bodily   injury   and   property   damage     caused      by    an    accident     and

resulting from the use of a covered rental vehicle.”                        J.A. 63

(internal quotation marks omitted).           The master document further

states that “the most [Empire] will pay for ‘ultimate net loss’

is the difference between the limits of liability provided by

the ‘underlying insurance’ 1 and the [SLI] limit shown in the

Declarations.”      Id. at 64.     A separate provision in the master

document expressly      excludes   coverage        for    “[l]iability          arising

out of or benefits payable under any uninsured or underinsured

motorists law, in any state.”       Id.

     1
       “Underlying insurance” refers to the separate minimum-
coverage policy, which provides the minimum amounts of coverage
required by law. See J.A. 68.

                                       4
       The     second       component     of       the     master       document        is    the

“Declarations,” which detail the specific coverage limits for

each       category    of     coverage.         Within      the     SLI        category,      the

Declarations list limits of $1,000,000 for both “Bodily Injury

and     Property       Damage     Liability”          and    “Uninsured/Underinsured

Motorist Coverage.”             Id. at 57.           The Declarations specify that

the premium for each of these coverages is “PER CERT.” 2                              Id.

       State-specific          endorsements,         the    final       component        of   the

supplemental policy, modify the master document as it applies to

particular          states.       The     endorsement             for     North         Carolina

(applicable to R&K) does not include any modifications relevant

to this appeal, nor does it mention UM coverage.                                 Endorsements

for     six    other    states,        however,       purport       to        “add[]”    to    or

“modif[y]” the master document by providing UM coverage.                                      See,

e.g.,         id.       at       125          (“Florida           Endorsement             Adding

Uninsured/Underinsured             Motorist           Coverage           to      Supplemental

Liability Insurance Policy”).                   According to Empire, these six

states--Florida,             Louisiana,        New       Hampshire,           North      Dakota,

Vermont, and West Virginia--“all require [that] UM coverage be

offered       in     connection        with     an       excess     liability           policy.”

       2
        The  parties  agree  that  this  notation  refers   to
certificates of insurance, the separate documents that extend
the   supplemental   policy   to  individual   Harley-Davidson
franchises.

                                               5
Appellee’s          Br.    at     25.      Accordingly,              Empire    asserts,       the

endorsements modify the master document (which Empire contends

does    not    generally         include    UM      coverage)         to    make    the    policy

compliant with the respective state laws.                                  The limit for UM

coverage in these endorsements is generally the same $1,000,000

limit    listed       in   the     Declarations,         but     a    few,    such    as    North

Dakota’s, specify lower limits.                      Each of the six endorsements

expressly overrides the master document’s UM-related exclusion.

        Individual Harley-Davidson franchises become policyholders

of the supplemental policy through certificates of insurance.

R&K’s    certificate            states   that       it   “neither          affirmatively      nor

negatively amends, extends or alters the coverage provided by

the [supplemental policy],” and further provides as follows:

        [R&K]   is   an  additional                 Policyholder            under   [the
        supplemental      policy]                    for     the               following
        coverages/limits[:] . . .

       Supplemental Liability Insurance[:]

       Excess Auto Liability[:] $1,000,000.

J.A. 53.       Additionally, the certificate states that “the maximum

Limit     of    Liability          for   the        Supplemental           Rental    Liability

Coverage       is    the    difference      between            the    Limit    of    Liability

indicated       on        the     Declarations           and     the       [minimum-coverage

policy].”           Id. at 53-54.          The certificate does not expressly

mention UM coverage.

                                               C.

                                                6
       After Empire denied Kamp’s claim for UM coverage under the

supplemental policy, Kamp sued Empire in South Carolina state

court.        Kamp’s      complaint       alleged    that    Empire     breached      the

supplemental policy by refusing to pay him UM benefits up to

$1,000,000.         Invoking diversity jurisdiction, Empire removed the

case    to    the      U.S.    District    Court    for    the    District    of     South

Carolina.

       The parties engaged in discovery and filed cross-motions

for     summary        judgment.        Relying      on    the     master    document’s

reference         to     the     Declarations,       Kamp        asserted     that     the

supplemental policy unambiguously provides him $1,000,000 in UM

coverage.         And even if the policy is ambiguous, he argued, North

Carolina rules of construction require resolving any ambiguity

in     his    favor.           Alternatively,       Kamp    contended       that     North

Carolina’s Motor Vehicle Safety and Financial Responsibility Act

(the “MVSFRA”) requires reformation of the policy to include the

coverage.         Empire, on the other hand, argued that Kamp was not

entitled to UM coverage because no such coverage was provided by

the North Carolina endorsement.                  Empire further argued that the

MVSFRA did not apply.

       The    district        court   granted    summary     judgment       for    Empire.

See Kamp v. Empire Fire & Marine Ins. Co., No. 3:12-cv-904-JFA,

2013 WL 310357 (D.S.C. Jan. 25, 2013).                       Citing the exclusion

clause       in    the    master      document,     the     court    held     that    the

                                             7
supplemental policy “unambiguously excludes UM coverage.”                                   Id.

at *5.     The court acknowledged that the Declarations include a

$1,000,000 limit for UM coverage, but it determined that this

limit is merely a maximum.               As such, the court concluded, it

pertains    only    to    those    states          for   which       a    state-specific

endorsement    expressly     provides         UM    coverage.            In   the    court’s

view, this understanding of the policy was consistent with the

master document’s description of the limits in the Declarations

as   representing    “the   most    [Empire]         will    pay.”            See    J.A.   64

(emphasis added).        As neither the North Carolina endorsement nor

R&K’s certificate mentions UM coverage, the court concluded that

Kamp was not entitled to it.

      The court also observed that Kamp’s construction of the

supplemental policy would extend $1,000,000 of UM coverage to

all rentees, in every state.             In the court’s view, this reading

failed to account for the varying UM coverage provisions of the

state-specific      endorsements.         For       example,     a       reading     of     the

master document extending $1,000,000 in UM coverage to every

rentee     would    conflict      with    the        North     Dakota          endorsement

providing UM coverage only for a lesser amount.                               By contrast,

when the supplemental policy is read to generally exclude UM

coverage, “there is no inconsistency in this or any other state-

specific    situation.”        Kamp,     2013 WL 310357,         at    *6.        This

                                          8
consideration,        the    court      held,      “resolve[s]”          “[a]ny    perceived

ambiguity in the contract.”              Id.

       Finally,       rejecting         Kamp’s          alternative        argument,          the

district      court    declined       to    reform         the     supplemental             policy

pursuant      to    the     MVSFRA,      which          requires       certain     insurance

policies      to   offer     UM   coverage         in    equal    amounts      with     general

liability      coverage.          See      N.C.         Gen.   Stat.      §§ 20-279.21(a),

(b)(3).       Relying on the text of the statute, as well as North

Carolina case law, the court determined that the MVSFRA applies

only    to    an   underlying        insurance           policy    that     satisfies         the

state’s       minimum-coverage          requirements,             not     to      an        excess

liability policy like the supplemental policy here.

       Kamp appealed, arguing that the district court misconstrued

both    the     supplemental         policy         and    the     MVSFRA.             We    have

jurisdiction pursuant to 28 U.S.C. § 1291.

                                            II.

       We    review    the     district        court’s         order     granting       summary

judgment      de    novo,     “viewing         the       facts     and    the     reasonable

inferences therefrom in the light most favorable to [Kamp].”

Bonds v. Leavitt, 629 F.3d 369, 380 (4th Cir. 2011).                                    Summary

judgment is appropriate when “there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a

matter of law.”        Fed. R. Civ. P. 56(a).

                                               9
                                       A.

     Because     our    jurisdiction        in     this       case     derives     from

diversity of citizenship, we apply South Carolina’s choice-of-

law rules.     See   CACI Int’l, Inc. v. St. Paul Fire & Marine Ins.

Co., 566 F.3d 150, 154 (4th Cir. 2009).                In a contract dispute,

South Carolina law requires courts to apply the substantive law

of the place where the contract was made.                     See Unisun Ins. Co.

v. Hertz Rental Corp., 436 S.E.2d 182, 184 (S.C. Ct. App. 1993).

Based on these principles, the parties agree that North Carolina

law governs construction of the supplemental policy.

     Under     North    Carolina      law,       “courts       must     examine      [an

insurance]     policy   from    the   point       of   view     of     a   reasonable

insured.”     Register v. White, 599 S.E.2d 549, 553 (N.C. 2004).

“Where the immediate context in which words are used is not

clearly indicative of the meaning intended, resort may be had to

other portions of the policy and all clauses of it are to be

construed, if possible, so as to bring them into harmony.”                           Id.

(internal     quotation       marks   omitted).               Ambiguous       coverage

provisions “must be construed liberally so as to afford coverage

whenever possible by reasonable construction.”                        See N.C. Farm

Bureau Mut. Ins. Co. v. Stox, 412 S.E.2d 318, 321 (N.C. 1992).

Conversely,    ambiguous      “exclusionary        provisions         . . .   will   be

construed    against    the    insurer.”         Id.      A   policy’s     terms     are

ambiguous when they are “fairly and reasonably susceptible to

                                       10
either   of   the    constructions    for    which    the    parties   contend.”

Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 172
S.E.2d 518, 522 (N.C. 1970).

                                       B.

       After having the benefit of oral argument and carefully

reviewing the briefs, record, and controlling legal authorities,

we conclude that the district court’s analysis was correct.                  As

the district court’s order thoroughly explained, Kamp’s proposed

construction of the supplemental policy is incompatible with the

state-specific endorsements.           Six of these endorsements, after

all, purport to “modif[y]” or “add[]” to the master document by

providing the same UM coverage that Kamp contends it already

includes.     Only Empire’s reading of the policy “bring[s] . . .

into harmony” all of its clauses.              See Register, 599 S.E.2d at

553.     Accordingly,       we   conclude    that   the   supplemental    policy

unambiguously excludes UM coverage as applied to Kamp.

       Moreover, because North Carolina’s MVSFRA does not apply to

policies,     like   this   one,   that     provide   only    excess   liability

coverage, no reformation of the supplemental policy is required.

See Progressive Am. Ins. Co. v. Vasquez, 515 S.E.2d 8, 13 (N.C.

1999) (“Where there are separate and distinct excess liability

and underlying policies, [UM] coverage is not written into the

excess liability policy by operation of law and exists only if

it is provided by the contractual terms of the excess policy.”);

                                       11
see also Piazza v. Little, 515 S.E.2d 219, 220 (N.C. 1999) (per

curiam) (same).

     In sum, we agree with the district court’s determination to

award Empire summary judgment.

                                 III.

     The district court’s judgment is therefore

                                                       AFFIRMED.

                                  12