United States District Court, N.D. Alabama, Northwestern Division
MEMORANDUM OPINION AND ORDER
K. KALLON, UNITED STATES DISTRICT JUDGE
Balentine and Nichole Meyers were injured in a motorcycle
accident and filed a claim for uninsured motorist benefits
with Direct General Insurance Company. Doc. 1. After Direct
General denied the claim, doc. 28-1, Balentine and Meyers
filed suit in state court, doc. 1-4, which Direct General
removed to this court based on diversity jurisdiction, doc.
1. Direct General now moves for summary judgment, arguing
that it is entitled to rescind the policy in question because
the insured's application for insurance failed to include
purportedly material information. Doc. 26. The motion is
fully briefed and ripe for adjudication. Docs. 26 & 28.
After reading the briefs, viewing the evidence, and
considering the relevant law, the court finds that the motion
is due to be denied.
LEGAL STANDARD FOR SUMMARY JUDGMENT
Rule 56(a) of the Federal Rules of Civil Procedure, summary
judgment is proper “if the movant shows that 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. “Rule 56 mandates the entry of summary judgment,
after adequate time for discovery and upon motion, against a
party who fails to make a showing sufficient to establish the
existence of an element essential to that party's case,
and on which that party will bear the burden of proof at
trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986) (alteration in original). The moving party
bears the initial burden of proving the absence of a genuine
issue of material fact. Id. at 323. The burden then
shifts to the nonmoving party, who is required to “go
beyond the pleadings” to establish that there is a
“genuine issue for trial.” Id. at 324
(internal quotations omitted). A dispute about a material
fact is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
summary judgment, the court must construe the evidence and
all reasonable inferences arising from it in the light most
favorable to the non-moving party. Adickes v. S. H. Kress
& Co., 398 U.S. 144, 157 (1970); see also
Anderson, 477 U.S. at 255. Any factual disputes will be
resolved in the non-moving party's favor when sufficient
competent evidence supports the non-moving party's
version of the disputed facts. See Pace v.
Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir. 2002).
However, “mere conclusions and unsupported factual
allegations are legally insufficient to defeat a summary
judgment motion.” Ellis v. England, 432 F.3d
1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald
Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th
Cir. 1989)). Moreover, “[a] mere ‘scintilla'
of evidence supporting the opposing party's position will
not suffice; there must be enough of a showing that the jury
could reasonably find for that party.” Walker v.
Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing
Anderson, 477 U.S. at 252)).
General issued an auto insurance policy to Cynthia Glover
that contained uninsured motorist coverage. Doc. 26-2. Glover
signed a one-page application which contains an
acknowledgement that “ALL PERSONS AGES 14 AND OLDER WHO
LIVE WITH ME HAVE BEEN REPORTED TO THE COMPANY.” Doc.
26-2 at 7. The application also included an agreement that
the policy “may be null and void and no coverage
provided if the information provided in this application is
false or misleading and would materially affect acceptance or
rating of the risk by the Company.” Id.
after Glover obtained the policy, her son, Balentine, and his
girlfriend, Meyers, were riding Balentine's motorcycle
when an allegedly negligent driver collided with them,
causing them serious injuries. Docs. 1; 1-4. Balentine and
Meyers filed suit in state court against the driver and the
driver's insurance company, Progressive Specialty
Insurance Company. Doc. 1-4. Progressive paid Balentine and
Meyers $25, 000 each, which represented the full liability
limit available under the driver's policy. Doc. 1-9.
Because their bills totaled more than $100, 000, Balentine
and Meyers filed an uninsured motorist claim with Direct
General, asserting that they qualified as “family
members” under Glover's policy. Doc. 1-1 at 4.
Direct General denied the claim after learning that Glover
had failed to disclose that Balentine was living with Glover
when she applied for the policy, docs. 26-1 at 3; 28-1 at 1,
and now seeks to rescind the policy.
law regulates insurance policies, and “where a statute
governs the rights, obligations, and duties of an insurer or
insured, that statute is read into and becomes a part of the
insurance contract.” Thomas v. Liberty Nat. Life
Ins. Co., 368 So.2d 254, 258 (Ala. 1979). The statute at
issue here states, in relevant part, that:
omissions, concealment of facts and incorrect statements [in
an application for insurance] shall not prevent a recovery
under the policy or contract unless either:
(2) Material either to the acceptance of the risk or to the
hazard assumed by the insurer; or
(3) The insurer in good faith would either not have issued
the policy or contract, or would not have issued a policy or
contract at the premium rate as applied for, or would not
have issued a policy or contract in as large an amount or
would not have provided coverage with respect to the hazard
resulting in the loss if the true facts had been made known